AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH , 1994
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
CAPITAL AUTO RECEIVABLES, INC.
(ORIGINATOR OF THE TRUSTS DESCRIBED HEREIN)
A DELAWARE CORPORATION-I.R.S. EMPLOYER IDENTIFICATION NO. 38-2963650
_________________________
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(302-658-7851)
AGENT FOR SERVICE
F. A. HENDERSON, VICE PRESIDENT
CAPITAL AUTO RECEIVABLES, INC.
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
(313-556-1508)
WITH A COPY TO:
ROBERT L. SCHWARTZ, GENERAL COUNSEL
CAPITAL AUTO RECEIVABLES, INC.
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
_________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. /X/
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Securities Amount to be Price Per Offering Registration
Being Registered Registered (1) Unit(2) Price(2) Fee
___________________________________________________________________________
Asset Backed
Securities . . . $6,193,150,815.02 100% $6,193,150,815.02 $2,135,584.20
___________________________________________________________________________
(1) $1,806,849,184.98 aggregate principal amount of Asset Backed Securities
registered by the Registrant under Registration Statement No. 33-49307
referred to below and not previously sold are consolidated in this
Registration Statement pursuant to Rule 429. All registration fees in
connection with such unsold amount of Asset Backed Securities have
previously been paid under Registration Statement No. 33-49307. The
total amount registered under this Registration Statement as so
consolidated as of the date of this filing is $8,000,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
_________________________
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
WHICH IS PART OF THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS AND
INCLUDES ALL OF THE INFORMATION CURRENTLY REQUIRED IN A PROSPECTUS RELATING
TO THE SECURITIES COVERED BY REGISTRATION STATEMENT NO. 33-49307 PREVIOUSLY
FILED BY THE REGISTRANT. THIS REGISTRATION STATEMENT, WHICH RELATES TO
$8,000,000,000 AGGREGATE PRINCIPAL AMOUNT OF ASSET BACKED SECURITIES,
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-
49307.
SUBJECT TO COMPLETION, DATED MARCH , 1994
CAPITAL AUTO RECEIVABLES ASSET TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
_________________________
CAPITAL AUTO RECEIVABLES, INC.
SELLER
_________________________
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
_________________________
The Asset Backed Notes (the "Notes") and the Asset Backed Certificates
(the "Certificates" and, collectively with the Notes, the "Securities")
described herein may be sold from time to time in one or more series, in
amounts, at prices and on terms to be determined at the time of sale and to
be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
Each series of Securities will include one or more classes of Notes and one
or more classes of Certificates.
The Notes and the Certificates of each series will be issued by a trust
to be formed with respect to such series (each, a "Trust"). The property of
each Trust will include a pool of retail instalment sale contracts secured by
automobiles and light trucks (the "Receivables"), certain monies due or
received thereunder on and after the Cutoff Date set forth in the related
Prospectus Supplement, security interests in the vehicles financed thereby and
certain other property. Each Trust will be formed pursuant to a Trust
Agreement (the "Trust Agreement") to be entered into between Capital Auto
Receivables, Inc., as Seller (the "Seller"), and the Owner Trustee specified
in the related Prospectus Supplement (the "Owner Trustee"). The Notes of each
series will be issued and secured pursuant to an Indenture (the "Indenture")
between the Trust and the Indenture Trustee specified in the related
Prospectus Supplement (the "Indenture Trustee").
Except as otherwise provided in the related Prospectus Supplement, each
class of Securities of any series will represent the right to receive a
specified amount of payments of principal and interest on the related
Receivables in the manner described herein and in the related Prospectus
Supplement. The right of each class of Securities to receive payments may be
senior or subordinate to the rights of one or more of the other classes of
such series. A series may include two or more classes of Notes or
Certificates which differ as to the timing and priority of payment, interest
rate or amount of distributions in respect of principal or Certificate
Balance, as applicable, or interest or both. A series may include one or more
classes of Notes or Certificates entitled to principal payments or
distributions in respect of Certificate Balance, with disproportionate,
nominal or no interest distributions, or to interest distributions, with
disproportionate, nominal or no principal payments or distributions in respect
of Certificate Balance. Distributions on Certificates of a series will be
subordinated in priority to payments due on the related Notes to the extent
described herein and in the related Prospectus Supplement. The Certificates
will represent fractional undivided interests in the related Trust. At the
time of issuance, each series will be rated investment grade by at least one
Rating Agency.
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EXCEPT AS OTHERWISE PROVIDED IN THE RELATED PROSPECTUS SUPPLEMENT, THE
ONLY OBLIGATIONS OF THE SELLER OR OF GENERAL MOTORS ACCEPTANCE CORPORATION AS
ORIGINATOR OF RECEIVABLES WITH RESPECT TO A SERIES OF SECURITIES WILL BE
PURSUANT TO CERTAIN REPRESENTATIONS AND WARRANTIES MADE BY SUCH PARTY.
GENERAL MOTORS ACCEPTANCE CORPORATION WILL BE THE SERVICER (THE "SERVICER")
FOR EACH SERIES. THE OBLIGATIONS OF THE SERVICER WILL BE LIMITED TO ITS
CONTRACTUAL SERVICING OBLIGATIONS (WHICH INCLUDE ITS LIMITED OBLIGATION TO
MAKE CERTAIN ADVANCES IN THE EVENT OF DELINQUENCIES IN PAYMENTS ON
RECEIVABLES).
Each class of Securities will represent the right to receive payments or
distributions in the amounts, at the rates, and on the dates set forth in the
related Prospectus Supplement. The rate of payment in respect of principal
on Notes and distributions in respect of Certificate Balance on Certificates
of any class will depend on the priority of payment of such class and the rate
and timing of payments (including prepayments, defaults, liquidations and
repurchases of Receivables) on the related Receivables. A rate of payment
lower or higher than that anticipated may affect the weighted average life of
each class of Securities in the manner described herein and in the related
Prospectus Supplement.
There will be no secondary market for the Notes or the Certificates prior
to the offering thereof. There can be no assurance that a secondary market
for the Notes or the Certificates will develop or, if it does develop, that
it will continue. The Notes and the Certificates will not be listed on any
securities exchange.
Unless otherwise provided in the related Prospectus Supplement, the Notes
and the Certificates initially will be represented by Notes and Certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Notes and
Certificates will be represented by book entries on the records of DTC and
participating members thereof. Definitive Notes and Definitive Certificates
will be available only under limited circumstances.
_________________________
EXCEPT AS OTHERWISE PROVIDED IN THE RELATED PROSPECTUS SUPPLEMENT, PROCEEDS
OF THE ASSETS OF THE TRUST FOR ANY SERIES AND LIMITED AMOUNTS ON DEPOSIT IN
THE RESERVE ACCOUNT ARE THE SOLE SOURCES OF PAYMENTS ON THE NOTES AND THE
CERTIFICATES FOR SUCH SERIES. NEITHER THE NOTES NOR THE CERTIFICATES WILL
REPRESENT AN INTEREST IN OR OBLIGATION OF, AND ARE NOT INSURED OR GUARANTEED
BY, GENERAL MOTORS ACCEPTANCE CORPORATION, CAPITAL AUTO RECEIVABLES, INC., ANY
OTHER TRUST OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS SET FORTH IN THE
RELATED PROSPECTUS SUPPLEMENT.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Retain this Prospectus for future reference. This Prospectus may not be
used to consummate sales of securities offered hereby unless accompanied by
a Prospectus Supplement.
The date of this Prospectus is March , 1994.
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
/INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A /
/REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH /
/THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD/
/NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION /
/STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN /
/OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE /
/ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, /
/SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR /
/QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. /
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
<PAGE>
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AVAILABLE INFORMATION
Capital Auto Receivables, Inc., as originator of each Trust, has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement (together with all amendments and exhibits thereto, referred to
herein as the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Notes and the Certificates
offered pursuant to this Prospectus. This Prospectus, which forms part of the
Registration Statement, does not contain all of the information contained in
the Registration Statement and is qualified in its entirety by reference to
the Registration Statement. The Registration Statement is available for
inspection without charge at the public reference facilities of the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission at 7 World Trade Center, 13th Floor, New
York, New York 10048 and the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such information
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549, at prescribed rates.
REPORTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
Unless otherwise provided in the related Prospectus Supplement,unless and
until Definitive Notes or Definitive Certificates are issued, monthly,
quarterly and annual unaudited reports containing information concerning the
Receivables will be prepared by the Servicer and sent on behalf of each Trust
only to Cede & Co. ("Cede"), as nominee of DTC and registered holder of the
Notes and the Certificates. See "Certain Information Regarding The
Securities-Book-Entry Registration;" and "-Reports to Securityholders." Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles. Each Trust will file with the
Commission such periodic reports as are required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
of the Commission thereunder. The Seller will provide, without charge, to
each person to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any such document incorporated by reference
herein, other than exhibits to such documents not specifically described
above. Requests should be directed to the Seller, in care of General Motors
Acceptance Corporation, as Servicer, 3044 West Grand Boulevard, Detroit,
Michigan 48202 (telephone number (313) 556-1281).
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<PAGE>5
PROSPECTUS SUMMARY
This Prospectus Summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference
to the information with respect to the Securities contained in the related
Prospectus Supplement to be prepared and delivered in connection with the
offering of such Securities. Certain capitalized terms used in this
Prospectus Summary are defined elsewhere in this Prospectus and in the related
Prospectus Supplement. A listing of the pages on which some of such terms are
defined is found in the "Index of Terms."
Issuer . . . . . . . . . . . .With respect to each series of Notes and
Certificates, the Trust to be formed by
the Seller and the Owner Trustee pursuant
to the Trust Agreement.
Seller . . . . . . . . . . . .Capital Auto Receivables, Inc., a wholly-
owned subsidiary of General Motors
Acceptance Corporation.
Servicer . . . . . . . . . . .General Motors Acceptance Corporation, a
wholly-owned subsidiary of General Motors
Corporation.
Indenture Trustee. . . . . . .The Indenture Trustee specified in the
related Prospectus Supplement.
Owner Trustee. . . . . . . . .The Owner Trustee specified in the
related Prospectus Supplement.
The Notes. . . . . . . . . . .Each series of Securities will include one
or more classes of Notes and will be
issued pursuant to an Indenture between
the Trust and the Indenture Trustee.
Unless otherwise specified in the related
Prospectus Supplement, Notes will be
available for purchase in denominations of
$1,000 and integral multiples thereof, and
will be available in book-entry form only.
Unless otherwise specified in the related
Prospectus Supplement, Noteholders will be
able to receive Definitive Notes only in
the limited circumstances described herein
or in the related Prospectus Supplement.
See "Certain Information Regarding the
Securities-Definitive Securities."
Unless otherwise specified in the related
Prospectus Supplement, each class of
Notes will have a stated principal amount
and will bear interest at a specified rate
or rates (with respect to each class of
Notes, the "Interest Rate"). Each class
of Notes may have a different Interest
Rate, which may be a fixed, variable or
adjustable Interest Rate, or any
combination of the foregoing. The related
Prospectus Supplement will specify the
Interest Rate for each class of Notes, or
the initial Interest Rate and the method
for determining subsequent changes to the
Interest Rate.
A series may include two or more classes
of Notes which differ as to the timing
and priority of payment, seniority,
3 <PAGE>
<PAGE>6
allocations of loss, Interest Rate or
amount of payments of principal or
interest, or as to which payments of
principal or interest may or may not be
made upon the occurrence of specified
events or on the basis of collections from
designated portions of the Receivables
Pool. In addition, a series may include
one or more classes of Notes ("Strip
Notes") entitled to (i) principal payments
with disproportionate, nominal or no
interest payments, or (ii) interest
payments with disproportionate, nominal or
no principal payments.
If the Servicer exercises its option to
purchase the Receivables of a Trust on
the terms and conditions described below
under "The Transfer and Servicing
Agreements-Termination," the outstanding
Notes will be redeemed as set forth in the
related Prospectus Supplement.
The Certificates . . . . . . .Each series of Securities will include one
or more classes of Certificates and will
be issued pursuant to a Trust Agreement
between the Seller and the Owner Trustee.
Unless otherwise specified in the related
Prospectus Supplement, Certificates will
be available for purchase in a minimum
denomination of $20,000 and in integral
multiples of $1,000 in excess thereof and
will be available in book-entry form only.
Unless otherwise specified in the related
Prospectus Supplement, Certificateholders
will be able to receive Definitive
Certificates only in the limited
circumstances described herein or in the
related Prospectus Supplement. See
"Certain Information Regarding the
Securities-Definitive Securities."
Unless otherwise specified in the related
Prospectus Supplement, each class of
Certificates will have a stated
Certificate Balance (as defined in the
related Prospectus Supplement) and will
accrue interest on such Certificate
Balance at a specified rate (with respect
to each class of Certificates, the "Pass
Through Rate"). Each class of
Certificates may have a different Pass
Through Rate, which may be a fixed,
variable or adjustable Pass Through Rate,
or any combination of the foregoing. The
related Prospectus Supplement will specify
the Pass Through Rate for each class of
Certificates, or the initial Pass Through
Rate and the method for determining
subsequent changes to the Pass Through
Rate.
4 <PAGE>
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A series may include two or more classes
of Certificates which differ as to
timing of distributions, sequential order,
priority of payment, seniority, allocation
of loss, Pass Through Rate or amount of
distributions in respect of Certificate
Balance or interest, or as to which
distributions in respect of Certificate
Balance or interest on any class may or
may not be made upon the occurrence of
specified events or on the basis of
collections from designated portions of
the Receivables Pool. In addition, a
series may include one or more classes of
Certificates ("Strip Certificates")
entitled to (i) distributions in respect
of Certificate Balance with
disproportionate, nominal or no interest
distributions, or (ii) interest
distributions, with disproportionate,
nominal or no distributions in respect of
Certificate Balance.
To the extent specified in the related
Prospectus Supplement, distributions in
respect of the Certificates will be
subordinated in priority of payment to
payments on the Notes.
If the Servicer exercises its option to
purchase the Receivables of a Trust on
the terms and conditions described below
under "The Transfer and Servicing
Agreement-Termination," Certificateholders
will receive an amount in respect of the
Certificates as specified in the related
Prospectus Supplement.
The Trust Property . . . . . . The property of each Trust will include a
for automobiles and light trucks, certain
monies due or received thereunder on and
after the Cutoff Date specified in the
related Prospectus Supplement (a "Cutoff
Date"), security interests in the vehicles
financed thereby, certain accounts and the
proceeds thereof, any proceeds from claims
on certain insurance policies and certain
rights of the Seller under the related
Pooling and Servicing Agreement. The
aggregate Amount Financed under the
Receivables held by a Trust (the
"Aggregate Amount Financed") will be
specified in the related Prospectus
Supplement.
Credit Enhancement . . . . . .If and to the extent specified in the
related Prospectus Supplement, credit
enhancement with respect to a Trust or any
class of Securities may include any one or
more of the following: subordination of
one or more other classes of Securities,
a Reserve Account, overcollateralization,
letters
5 <PAGE>
<PAGE>8
of credit, credit or liquidity facilities,
repurchase obligations, third party
payments or other support, cash deposits
or other arrangements. Unless otherwise
specified in the related Prospectus
Supplement, any form of credit enhancement
will have certain limitations and
exclusions from coverage thereunder, which
will be described in the related
Prospectus Supplement.
Reserve Account. . . . . . . .Unless otherwise specified in the related
Prospectus Supplement, a Reserve Account
will be created for each Trust with an
initial deposit by the Seller of cash or
certain investments having a value of the
Reserve Account Initial Deposit (the
amount of which will be specified in the
related Prospectus Supplement). To the
extent specified in the related Prospectus
Supplement, the funds in the Reserve
Account will thereafter be supplemented by
the deposit of amounts remaining after
payment to the Servicer of the Total
Servicing Fee and providing for amounts to
be distributed to the Noteholders and the
Certificateholders. Unless otherwise
provided in the related Prospectus
Supplement, amounts in the Reserve Account
(after giving effect to all distributions
to be made to the Servicer, the
Noteholders and the Certificateholders) in
excess of the Specified Reserve Account
Balance (as defined in the related
Prospectus Supplement) may be paid to the
Seller.
Transfer and Servicing
Agreements . . . . . . . . . With respect to each series of Securities,
the Seller will purchase the Receivables
from General Motors Acceptance Corporation
("GMAC") pursuant to a Pooling and
Servicing Agreement and the Seller will
transfer such Receivables to the related
Trust pursuant to a Trust Sale and
Servicing Agreement. The rights and
benefits of the Seller under the Pooling
and Servicing Agreement and of the Trust
under the Trust Sale and Servicing
Agreement will be assigned to the
Indenture Trustee as collateral for the
related Securities. The Servicer will
agree to be responsible for servicing,
managing and making collections on
Receivables and GMAC, as Custodian, will
maintain custody of the Receivables. Each
Trust will be created pursuant to a Trust
Agreement and GMAC, as Administrator, will
undertake certain administrative duties
with respect to the Trust under an
Administration Agreement.
Monthly Advances . . . . . . . Unless otherwise specified in the related
Prospectus Supplement, the Servicer will
make Monthly Advances to the Trust.
6 <PAGE>
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With respect to each Scheduled Interest
Receivable, the Servicer will make a
Scheduled Interest Advance of that portion
of Scheduled Payments that was not timely
made. The Servicer will be entitled to
reimbursement of all Scheduled Interest
Advances from subsequent payments and
collections on or with respect to the
Receivables. The Servicer will not be
required to make any Scheduled Interest
Advance to the extent that it does not
expect to recover such advance from
subsequent collections or recoveries on
the Receivables. With respect to Simple
Interest Receivables, the Servicer will
make a Simple Interest Advance of the
aggregate interest shortfall, if any,
resulting from payments being received
other than on their respective due dates.
Any monthly surplus resulting from
payments on Simple Interest Receivables
being received other than on their due
dates will be paid to the Servicer. See
"The Transfer and Servicing Agreements-
Monthly Advances."
Servicing Fee. . . . . . . . .Unless otherwise specified in the related
Prospectus Supplement, the Servicer will
be entitled to receive a monthly fee for
servicing the Receivables of each Trust
equal to the sum of (i) the product of
one-twelfth of the Basic Servicing Fee
Rate specified in the related Prospectus
Supplement and the Aggregate Principal
Balance of such Receivables as of the
first day of such Monthly Period and (ii)
to the extent payable as provided herein
and in the related Prospectus Supplement,
Additional Servicing. In addition, the
Servicer will be entitled each month to
Supplemental Servicing Fees and Investment
Earnings. See "The Transfer and Servicing
Agreements-Servicing Compensation and
Payment of Expenses."
Certain Federal Income
Tax Consequences . . . . . . Upon the issuance of each series of
Securities, except as otherwise provided
in the related Prospectus Supplement,
Kirkland & Ellis, special tax counsel to
the Seller, will deliver an opinion to the
effect that, for federal income tax
purposes: (1) the Notes will constitute
indebtedness; (2) the Certificates of such
series will constitute interests in a
trust fund which will not be treated as an
association taxable as a corporation or
publicly traded partnership taxable as a
corporation; (3) such Certificates, if
identified as Partnership Certificates,
will constitute interests in a
partnership;
7 <PAGE>
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and (4) such Certificates, if identified
as Trust Certificates, should constitute
interests in a grantor trust. See
"Certain Federal Income Tax Consequences"
and "State and Local Tax Consequences" for
additional information concerning the
application of federal, state and local
laws.
ERISA Considerations . . . . .Subject to the considerations discussed
under "ERISA Considerations" herein and in
the related Prospectus Supplement, and
unless otherwise specified in the
Prospectus Supplement, the Notes are
eligible for purchase by employee benefit
plans.
Unless otherwise specified in the related
Prospectus Supplement, the Certificates
may not be acquired by any employee
benefit plan subject to ERISA or by an
individual retirement account. See "ERISA
Considerations" herein and in the related
Prospectus Supplement.
8 <PAGE>
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THE TRUSTS
With respect to each series of Securities, the Seller will establish a
Trust by selling and assigning the Trust Property to the Trust in exchange for
the related Securities. The Trust Property of each Trust will include (i) a
pool (a "Receivables Pool") of retail instalment sales contracts for new and
used automobiles and light trucks (the "Receivables"), all Scheduled Payments
due thereunder on and after the Cutoff Date (in the case of Scheduled Interest
Receivables) and all payments received thereunder on and after the Cutoff Date
(in the case of Simple Interest Receivables), in each case exclusive of any
amount allocable to the premium for physical damage insurance force-placed by
the Servicer, (ii) such amounts as from time to time may be held in separate
trust accounts established and maintained pursuant to the related Trust Sale
and Servicing Agreement and the proceeds of such accounts, (iii) security
interests in vehicles financed by the Receivables (the "Financed Vehicles")
and, to the extent permitted by law, any accessions thereto, (iv) any recourse
against dealers with respect to the Receivables, (v) except for those
Receivables originated in Wisconsin, the right to proceeds of credit life,
credit disability, physical damage or other insurance policies covering the
Financed Vehicles and (vi) certain rights of the Seller under the related
Pooling and Servicing Agreement. To the extent specified in the related
Prospectus Supplement, a Reserve Account or other form of credit enhancement
may be held by the Owner Trustee or the Indenture Trustee for the benefit of
holders of the Securities. The Reserve Account, if any, for a series of
Securities may not be included in the property of the related Trust but will
be a segregated trust account held by the Indenture Trustee for the benefit
of the holders of such related Securities.
Except as otherwise set forth in the related Prospectus Supplement, the
activities of each Trust will be limited to (i) acquiring, managing and
holding the related Receivables and the other assets contemplated herein and
in the related Prospectus Supplement and proceeds therefrom, (ii) issuing the
related Securities and making payments and distributions thereon and (iii)
engaging in other activities that are necessary, suitable or convenient to
accomplish any of the foregoing or are incidental thereto or connected
therewith.
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "The Transfer and Servicing
Agreements-Servicing Compensation and Payment of Expenses." To facilitate the
servicing of the Receivables, the Owner Trustee will authorize GMAC, as
Custodian, to retain physical possession of the Receivables held by each Trust
and other documents relating thereto as custodian for the Owner Trustee. Due
to the administrative burden and expense, the certificates of title to the
Financed Vehicles will not be amended to reflect the sale and assignment of
the security interest in the Financed Vehicles to the Owner Trustee. In the
absence of such an amendment, the Owner Trustee may not have a perfected
security interest in the Financed Vehicles in all states. Neither the Trust
nor the Owner Trustee will be responsible for the legality, validity or
enforceability of any security interest in any Financed Vehicle. See "Certain
Legal Aspects of the Receivables" and "The Transfer and Servicing Agreements-
Sale and Assignment of Receivables."
If the protection provided to Noteholders by the subordination of the
related Certificates and by the Reserve Account or other credit enhancement
for such series or the protection provided to Certificateholders by such
Reserve Account or other credit enhancement is insufficient, Noteholders or
Certificateholders, as the case may be, would have to look principally to the
obligors on the related Receivables, the proceeds from the repossession and
sale of Financed Vehicles which secure defaulted Receivables and the proceeds
from any recourse against dealers with respect to such Receivables. In such
event, certain factors, such as the Owner Trustee's not having perfected
security interests in the Financed Vehicles in all states, may affect the
ability to repossess and sell the collateral securing the Receivables, and
thus may reduce the proceeds to be distributed to the holders of the
Securities. See "The Transfer and Servicing Agreements-Distributions," "-
Credit Enhancement" and "Certain Legal Aspects of the Receivables."
The principal offices of each Trust will be specified in the related
Prospectus Supplement.
9
<PAGE>12
THE OWNER TRUSTEE
The Owner Trustee for each Trust will be specified in the related
Prospectus Supplement. The Owner Trustee's liability in connection with the
issuance and sale of the Notes and the Certificates is limited solely to the
express obligations of such Owner Trustee set forth in the related Trust
Agreement. An Owner Trustee may resign at any time, in which event the
Servicer, or its successor, will be obligated to appoint a successor trustee.
The Administrator of a Trust may also remove the Owner Trustee if the Owner
Trustee ceases to be eligible to continue as Owner Trustee under the related
Trust Agreement or if the Owner Trustee becomes insolvent. In such
circumstances, the Administrator will be obligated to appoint a successor
trustee. Any resignation or removal of an Owner Trustee and appointment of
a successor trustee will not become effective until acceptance of the
appointment by the successor trustee.
THE RECEIVABLES POOLS
The Receivables in each Receivables Pool have been or will be acquired
by General Motors Acceptance Corporation ("GMAC") through its nationwide
branch system, directly or through General Motors Corporation ("General
Motors"), from automobile and light truck dealers pursuant to agreements with
General Motors dealers and dealerships affiliated with General Motors dealers.
See "The Seller" and "The Servicer."
The Receivables have been or will be originated by participating dealers
in accordance with GMAC's requirements under the dealer agreements. The
Receivables have been or will be acquired in accordance with GMAC's
underwriting standards, which evaluate the prospective purchaser's ability to
pay and creditworthiness, as well as the value of the vehicle to be financed.
GMAC's standards also require physical damage insurance to be maintained on
each Financed Vehicle. The Receivables have been or will be acquired by GMAC
in the ordinary course of business.
The Receivables to be held by each Trust will be selected from GMAC's
portfolio for inclusion in a Receivables Pool by several criteria, including
that, unless otherwise provided in the related Prospectus Supplement, each
Receivable (i) is secured by a new or used vehicle, (ii) was originated in the
United States, (iii) provides for level monthly payments (except for the first
and last payments which may be different from the level payments) that fully
amortize the amount financed over its original term to maturity and (iv)
satisfies the other criteria set forth in the related Prospectus Supplement.
The "Amount Financed" with respect to a Receivable will equal the aggregate
amount advanced toward the purchase price of the Financed Vehicle, including
accessories, insurance premiums, service and warranty contracts and other
items customarily financed as part of retail automobile instalment sale
contracts and related costs, exclusive of any amount allocable to the premium
for physical damage insurance covering the Financed Vehicle force-placed by
GMAC, less, in the case of a Scheduled Interest Receivable, payments due from
the related obligor prior to the related Cutoff Date allocable to principal
and, in the case of a Simple Interest Receivable, payments received from the
obligor prior to the related Cutoff Date allocable to principal.
"Scheduled Interest Receivables" are Receivables pursuant to which the
payments due from the Obligors during any month (the "Scheduled Payments") are
allocated between finance charges and principal on a scheduled basis, without
regard to the period of time which has elapsed since the preceding payment was
made, using the actuarial method or the method known as the Rule of 78s or
sum-of-the-digits method. If an obligor elects to prepay a Scheduled Interest
Receivable in full, the obligor is entitled to a rebate of the portion of the
Scheduled Payments attributable to unearned finance charges. The amount of
the rebate is determined with reference to the contract type and applicable
state law. With minor variations based on state law, actuarial rebates are
calculated on the basis of a constant interest rate. Rebates calculated on
a Rule of 78s or sum-of-the-digits basis are smaller than the corresponding
rebates under the actuarial method. Scheduled Interest Receivables provide
for Rule of 78s rebates except in states that require the actuarial method.
Distributions to Noteholders and Certificateholders will not be affected by
Rule of 78s rebates, because all allocations with respect to Scheduled
Interest Receivables for purposes of the related Trust are made using the
actuarial method. The portion of a Receivables Pool which consists of
Scheduled Interest Receivables will be specified in the related Prospectus
Supplement.
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<PAGE>13
"Simple Interest Receivables" are Receivables which provide for
allocation of payments between finance charges and principal based on the
actual date on which a payment is received. Late payments (or early payments)
on a Simple Interest Receivable may result in the obligor making a greater (or
smaller) number of payments than originally scheduled. The amount of any such
additional payments required to pay the outstanding principal balance in full
generally will not exceed the amount of an originally scheduled payment. If
an obligor elects to prepay a Simple Interest Receivable in full, the obligor
will not receive a rebate attributable to unearned finance charges. Instead,
the obligor is required to pay finance charges only to, but not including, the
date of prepayment. The amount of finance charges on a Simple Interest
Receivable that would have accrued from and after the date of prepayment if
all monthly payments had been made as scheduled will generally be greater than
the rebate on a Scheduled Interest Receivable that provides for a Rule of 78s
rebate, and will generally be equal to the rebate on a Scheduled Interest
Receivable that provides for an actuarial rebate. The portion of a
Receivables Pool which consists of Simple Interest Receivables will be
specified in the related Prospectus Supplement.
With respect to each Trust, the "Aggregate Principal Balance," as of any
date, means the sum of the Principal Balances of all outstanding Receivables
(other than Liquidating Receivables) held by the Trust on such date. The
"Principal Balance," as of any date with respect to any Receivable, is equal
to the Amount Financed minus the sum of either (a) in the case of a Scheduled
Interest Receivable, (i) that portion of all Scheduled Payments due on or
prior to such date allocable to principal, (ii) that portion of any Warranty
Payment or Administrative Purchase Payment with respect to such Receivable
allocable to principal and (iii) any Prepayment applied by the Servicer to
reduce the Principal Balance of such Receivable, or (b) in the case of a
Simple Interest Receivable, (i) that portion of all payments received on or
prior to such date allocable to principal and (ii) that portion of any
Warranty Payment or Administrative Purchase Payment with respect to such
Receivable allocable to principal.
Information with respect to each Receivables Pool will be set forth in
the related Prospectus Supplement, including, to the extent appropriate, the
composition, distribution by annual percentage rate ("APR"), states of
origination and portion of such Receivables Pool secured by new vehicles and
by used vehicles.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of Notes and Certificates will generally be
influenced by the rate at which the principal balances of the related
Receivables are paid, which payment may be in the form of scheduled
amortization or prepayments (for this purpose, the term "prepayment" includes
charge-offs, liquidations due to defaults and repurchases by the Seller or
GMAC pursuant to the related Trust Sale and Servicing Agreement, as well as
receipt of proceeds from credit life and casualty insurance policies). All
of the Receivables are prepayable at any time without penalty to the obligor.
The rate of prepayment of automotive receivables is influenced by a variety
of economic, social and other factors, including the fact that an obligor
generally may not sell or transfer the Financed Vehicle securing a Receivable
without the consent of the Servicer. See also "Certain Legal Aspects of the
Receivables-Transfer of Vehicles."
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit
decimal which the Servicer will compute prior to each distribution with
respect to such Notes indicating the remaining outstanding principal balance
of such Notes, as of the close of such date, as a fraction of the initial
outstanding principal balance of such Notes. The "Certificate Pool Factor"
for each class of Certificates will be a seven-digit decimal which the
Servicer will compute prior to each distribution with respect to such
Certificates indicating the remaining Certificate Balance as of the close of
such date, as a fraction of the initial Certificate Balance. Each Note Pool
Factor and each Certificate Pool Factor will initially be 1.0000000;
thereafter the Note Pool Factor and the Certificate Pool Factor will decline
to reflect reductions in the outstanding principal balance of the Notes,
11 <PAGE>
<PAGE>14
or the reduction of the Certificate Balance of the Certificates, as the case
may be. A Noteholder's portion of the aggregate outstanding principal balance
of the related class of Notes is the product of (i) the original denomination
of such Noteholder's Note and (ii) the Note Pool Factor. A
Certificateholder's portion of the aggregate outstanding Certificate Balance
for the related class of Certificates is the product of (a) the original
denomination of the Certificateholder's Certificate and (b) the Certificate
Pool Factor.
With respect to each Trust, the holder or holders of record of the Notes
(the "Noteholders") will receive reports on or about each Payment Date
concerning payments received on the Receivables, the Aggregate Principal
Balance, each Note Pool Factor, and various other items of information.
Noteholders of record during any calendar year will be furnished information
for tax reporting purposes not later than the latest date permitted by law.
See "Certain Information Regarding the Securities-Reports to Securityholders."
Unless otherwise provided in the related Prospectus Supplement, with respect
to the Trust, the holder or holders of record of the Certificates (the
"Certificateholders") will receive reports on or about each Distribution Date
concerning payments received on the Receivables, the Aggregate Principal
Balance, each Certificate Pool Factor and various other items of information.
Certificateholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date
permitted by law. See "Certain Information Regarding the Securities-Reports
to Securityholders."
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds to be received by the Seller from the sale of the Notes and the
Certificates will be applied to the purchase of the Receivables from GMAC.
THE SELLER
The Seller, a wholly-owned subsidiary of GMAC, was incorporated in the
State of Delaware on November 6, 1992. The Seller is organized for the
limited purposes of purchasing receivables from GMAC, transferring such
receivables to third parties, forming trusts and engaging in related
activities. The principal executive offices of the Seller are located at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to make it unlikely that the voluntary or involuntary
application for relief by GMAC under the United States Bankruptcy Code or
similar applicable state laws ("Insolvency Laws") will result in consolidation
of the assets and liabilities of the Seller with those of GMAC. These steps
include the creation of the Seller as a separate, limited-purpose subsidiary
pursuant to a certificate of incorporation containing certain limitations
(including restrictions on the nature of the Seller's business and a
restriction on the Seller's ability to commence a voluntary case or proceeding
under any Insolvency Law without the unanimous affirmative vote of all of its
directors). The Seller's By-laws include a provision that, under certain
circumstances, requires the Seller to have two directors who qualify under the
By-laws as "Independent Directors."
If, notwithstanding the foregoing measures, a court concluded that the
assets and liabilities of the Seller should be consolidated with the assets
and liabilities of GMAC in the event of the application of the federal
bankruptcy laws to GMAC, a filing were made under any Insolvency Law by or
against the Seller, or an attempt were made to litigate the consolidation
issue, then delays in distributions on the Notes and the Certificates (and
possible reductions in the amount of such distributions) could occur. See
also "Certain Legal Aspects of the Receivables-Sale of Receivables by GMAC."
The Seller will retain a portion of the Certificates issued by each
Trust as described in the related Prospectus Supplement. Certain of the
Securities issued by a Trust may be sold by the Seller in private placements
or other transactions and will not be offered hereby and by the related
Prospectus Supplement.
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<PAGE>15
THE SERVICER
GMAC, a wholly-owned subsidiary of General Motors, was incorporated in
1919 under the New York Banking Law relating to investment companies.
Operating directly and through subsidiaries and associated companies in which
it has equity investments, GMAC provides a wide variety of automotive
financial services to and through franchised General Motors dealers in many
countries throughout the world. Financial services also are offered to other
dealerships in which General Motors dealers have an interest and to the
customers of those dealerships. Other financial services offered by GMAC or
its subsidiaries include insurance, mortgage banking and investment services.
The principal business of GMAC and its subsidiaries is to finance the
acquisition and resale by franchised General Motors dealers of various new
automotive and nonautomotive products manufactured by General Motors or
certain of its subsidiaries and associates, and to acquire from such dealers,
either directly or indirectly, instalment obligations covering retail sales
and leases of new General Motors products as well as used units of any make.
In addition, new products of other manufacturers are financed. GMAC also
leases motor vehicles and certain types of capital equipment to others.
GMAC has its principal office at 767 Fifth Avenue, New York, New York
10153 (Tel. No. 212-418-6120) and administrative offices at 3044 West Grand
Boulevard, Detroit, Michigan 48202 (Tel. No. 313-556-5000).
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information concerning GMAC's experience in the United States
pertaining to delinquencies on new and used retail automobile and light truck
receivables and repossessions and net loss information relating to its entire
vehicle portfolio (including receivables previously sold which GMAC continues
to service) will be set forth in each Prospectus Supplement. There can be no
assurance that the delinquency, repossession and net loss experience on any
Receivables Pool will be comparable to prior experience.
THE NOTES
GENERAL
With respect to each Trust, one or more classes of Notes will be issued
pursuant to the terms of an Indenture, a form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
The following summary does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all of the provisions of the
Notes and the Indenture. Where particular provisions or terms used in the
Indenture are referred to, the actual provisions (including definitions of
terms) are incorporated by reference as part of this summary.
Unless otherwise specified in the related Prospectus Supplement, each
class of Notes will initially be represented by one or more Notes, in each
case registered in the name of the nominee of DTC (together with any successor
depository selected by the Trust, the "Depository") except as set forth below.
Unless otherwise specified in the related Prospectus Supplement, Notes will
be available for purchase in denominations of $1,000 and integral multiples
thereof in book-entry form only. The Seller has been informed by DTC that
DTC's nominee will be Cede. Accordingly, Cede is expected to be the holder
of record of the Notes. Unless and until Definitive Notes are issued under
the limited circumstances described herein or in the related Prospectus
Supplement, no Noteholder will be entitled to receive a physical certificate
representing a Note. All references herein to actions by Noteholders refer
to actions taken by DTC upon instructions from its participating organizations
(the "Participants") and all references herein to distributions, notices,
reports and statements to Noteholders refer to distributions, notices, reports
and statements to DTC or Cede, as the registered holder of the Notes, as the
case may be, for distribution to Noteholders in accordance with DTC's
procedures with respect thereto. See "Certain Information Regarding the
Securities-Book-Entry Registration" and "-Definitive Securities."
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PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of loss,
Interest Rate and amount of or method of determining payments of principal and
interest on the Notes will be described in the related Prospectus Supplement.
The right of holders of any class of Notes to receive payments of principal
and interest may be senior or subordinate to the rights of holders of any
other class or classes of Notes in the series, as described in the related
Prospectus Supplement. Unless otherwise provided in the related Prospectus
Supplement, payments of interest on the Notes will be made prior to payments
of principal thereon. A series may include one or more classes of Strip Notes
entitled to (i) principal payments with disproportionate, nominal or no
interest payment or (ii) interest payments with disproportionate, nominal or
no principal payments. Each class of Notes may have a different Interest
Rate, which may be a fixed, variable or adjustable Interest Rate (and which
may be zero for certain classes of Strip Notes), or any combination of the
foregoing. The related Prospectus Supplement will specify the Interest Rate
for each class of Notes, or the initial Interest Rate and the method for
determining the Interest Rate. One or more classes of Notes of a series may
be redeemable under the circumstances specified in the related Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement,
payments to Noteholders of all classes within a series in respect of interest
will have the same priority. Under certain circumstances, the amount
available for such payments could be less than the amount of interest payable
on the Notes on any of the dates specified for payments on any class of Notes
in the related Prospectus Supplement (each, a "Payment Date"). In which case,
each such class of Noteholders will receive their ratable share (based upon
the aggregate amount of interest due to such class of Noteholders) of the
aggregate amount available to be distributed in respect of interest on the
Notes. See "The Transfer and Servicing Agreements-Distributions" and "-Credit
Enhancement."
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal
and interest, and any schedule or formula or other provisions applicable to
the determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, payments in respect of principal and interest of any class of
Notes will be made on a pro rata basis among all of the Notes of such class.
THE INDENTURE
A form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Seller will provide a
copy of the applicable Indenture (without exhibits) upon request to a holder
of Notes issued thereunder.
Modification of Indenture Without Noteholder Consent. Each Trust and
related Indenture Trustee (on behalf of such Trust) may, without consent of
the related Noteholders, enter into one or more supplemental indentures for
any of the following purposes: (i) to correct or amplify the description of
the collateral or add additional collateral; (ii) to provide for the
assumption of the Notes and the Indenture obligations by a permitted successor
to the Trust; (iii) to add additional covenants for the benefit of the related
Noteholders, or to surrender any rights or power conferred upon the Trust;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee; (v) to cure any ambiguity or correct or supplement any
provision in the Indenture or in any supplemental indenture which may be
inconsistent with any other provision of the Indenture or in any supplemental
indenture; (vi) to provide for the acceptance of the appointment of a
successor Indenture Trustee or to add to or change any of the provisions of
the Indenture as shall be necessary and permitted to facilitate the
administration by more than one trustee; (vii) to modify, eliminate or add to
the provisions of the Indenture in order to comply with the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"); and (viii) to add any
provisions to, change in any manner, or eliminate any of the provisions of,
the Indenture or modify in any manner the rights of Noteholders under such
Indenture; provided that any action specified in this clause (viii) shall
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<PAGE>17
not, as evidenced by an opinion of counsel, adversely affect in any material
respect the interests of any related Noteholder unless Noteholder consent is
otherwise obtained as described below.
Modification of Indenture With Noteholder Consent. With respect to each
Trust, with the consent of the holders of a majority of the outstanding
related Notes, the Trust and the Indenture Trustee may execute a supplemental
indenture to add provisions to, change in any manner or eliminate any
provisions of, the related Indenture, or modify in any manner the rights of
the related Noteholders.
Without the consent of the holder of each outstanding related Note
affected thereby, however, no supplemental indenture will: (i) change the due
date of any instalment of principal of or interest on any Note or reduce the
principal amount thereof, the interest rate specified thereon or the
redemption price with respect thereto or change any place of payment where or
the coin or currency in which any Note or any interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of certain
provisions of the Indenture regarding payment; (iii) reduce the percentage of
the aggregate amount of the outstanding Notes the consent of the holders of
which is required for any such supplemental indenture or the consent of the
holders of which is required for any waiver of compliance with certain
provisions of the Indenture or of certain defaults thereunder and their
consequences as provided for in the Indenture; (iv) modify any of the
provisions of the Indenture in such manner as to affect the calculation of the
amount of any payment of interest or principal due on any Note on any Payment
Date or regarding the voting of Notes held by the related Trust, any other
obligor on the Notes, the Seller or an affiliate of any of them; (v) reduce
the percentage of the aggregate outstanding amount of the Notes the consent
of the holders of which is required to direct the Indenture Trustee to sell
or liquidate the Receivables if the proceeds of such sale would be
insufficient to pay the principal amount and accrued but unpaid interest on
the outstanding Notes; (vi) decrease the percentage of the aggregate principal
amount of the Notes required to amend the sections of the Indenture which
specify the applicable percentage of aggregate principal amount of the Notes
necessary to amend the Indenture or certain other related agreements; or (vii)
permit the creation of any lien ranking prior to or on a parity with the lien
of the Indenture with respect to any of the collateral for the Notes or,
except as otherwise permitted or contemplated in the Indenture, terminate the
lien of the Indenture on any such collateral or deprive the holder of any Note
of the security afforded by the lien of the Indenture.
Events of Default; Rights Upon Event of Default. With respect to each
Trust, unless otherwise specified in the related Prospectus Supplement,
"Events of Default" under the Indenture will consist of: (i) any failure to
pay interest on the related Notes as and when the same becomes due and
payable, which failure continues unremedied for five days; (ii) any failure
(a) to make any required payment of principal on the Notes or (b) to observe
or perform in any material respect any other covenants or agreements in the
Indenture, which failure in the case of a default under clause (ii)(b)
materially and adversely affects the rights of related Noteholders, and which
failure in either case continues for 30 days after the giving of written
notice of such failure to the Seller or the Servicer, as applicable, by the
Indenture Trustee or to the Seller or the Servicer, as applicable, and the
Indenture Trustee by the holders of not less than 25% of the principal amount
of the related Notes; (iii) failure to pay the unpaid principal balance of any
related class of Notes on or prior to the respective final scheduled Payment
Date for such class; and (iv) certain events of insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings and certain
actions by the Trust indicating its insolvency, reorganization pursuant to
bankruptcy proceedings or inability to pay its obligations. However, the
amount of principal required to be paid to Noteholders under the related
Indenture will generally be limited to amounts available to be deposited in
the Note Distribution Account. Therefore, unless otherwise specified in the
related Prospectus Supplement, the failure to pay principal on a class of
Notes generally will not result in the occurrence of an Event of Default
unless such class of Notes has a final scheduled Payment Date, and then not
until such final scheduled Payment Date for such class of Notes.
<PAGE>
<PAGE>18
If an Event of Default should occur and be continuing with respect to
the Notes of any series, the related Indenture Trustee or holders of a
majority in principal amount of such Notes then outstanding may declare the
principal of the Notes to be immediately due and payable. Such declaration
may, under certain circumstances, be rescinded by the holders of a majority
in principal amount of the Notes then outstanding.
If the Notes of any series are due and payable following an Event of
Default with respect thereto, the related Indenture Trustee may institute
proceedings to collect amounts due or foreclose on Trust property,
15
exercise remedies as a secured party, sell the related Receivables or elect
to have the Trust maintain possession of such Receivables and continue to
apply collections on such Receivables as if there had been no declaration of
acceleration. The Indenture Trustee, however, is prohibited from selling the
related Receivables following an Event of Default, unless (i) the holders of
all the outstanding related Notes consent to such sale, (ii) the proceeds of
such sale are sufficient to pay in full the principal of and the accrued
interest on such outstanding Securities at the date of such sale or (iii) in
certain cases, the Indenture Trustee determines that the Receivables will not
continue to provide sufficient funds on an ongoing basis to make all payments
on the Notes as such payments would have become due if such obligations had
not been declared due and payable, and the Indenture Trustee obtains the
consent of the holders of a majority of the aggregate outstanding amount of
the Notes. Following a declaration upon an Event of Default that the Notes
are immediately due and payable, (i) Noteholders will be entitled to ratable
repayment of principal on the basis of their respective unpaid principal
balances and (ii) repayment in full of the accrued interest on and unpaid
principal balances of the Notes will be made prior to any further payment of
interest on the Certificates or in respect of the Certificate Balance.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee, if an Event of Default occurs and is continuing with
respect to a series of Notes, the Indenture Trustee will be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the holders of such Notes, if the Indenture
Trustee reasonably believes it will not be adequately indemnified against the
costs, expenses and liabilities which might be incurred by it in complying
with such request. Subject to the provisions for indemnification and certain
limitations contained in the Indenture, the holders of a majority in principal
amount of the outstanding Notes in a series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee and the holders of a majority in principal amount of
such Notes then outstanding may, in certain cases, waive any default with
respect thereto, except a default in the payment of principal or interest or
a default in respect of a covenant or provision of the Indenture that cannot
be modified without the waiver or consent of all of the holders of such
outstanding Notes.
No holder of a Note of any series will have the right to institute any
proceeding with respect to the related Indenture, unless (i) such holder
previously has given to the Indenture Trustee written notice of a continuing
Event of Default, (ii) the holders of not less than 25% in principal amount
of the outstanding Notes of such series have made written request of the
Indenture Trustee to institute such proceeding in its own name as Indenture
Trustee, (iii) such holder or holders have offered the Indenture Trustee
reasonable indemnity, (iv) the Indenture Trustee has for 60 days failed to
institute such proceeding and (v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day period by
the holders of a majority in principal amount of such outstanding Notes.
If an Event of Default occurs and is continuing and if it is known to
the Indenture Trustee, the Indenture Trustee will mail to each Noteholder
notice of the Event of Default within 90 days after it occurs. Except in the
case of a failure to pay principal of or interest on any Note, the Indenture
Trustee may withhold the notice if and so long as it determines in good faith
that withholding the notice is in the interests of Noteholders.
<PAGE>19
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not, for a period
of one year and one day after the payment in full of the Certificate Balance
of all related Certificates, institute against the related Trust or Seller,
any bankruptcy, reorganization or other proceeding under any federal or state
bankruptcy or similar law.
Neither the Indenture Trustee nor the Owner Trustee in its individual
capacity, nor any holder of a Certificate including, without limitation, the
Seller, nor any of their respective owners, beneficiaries, agents, officers,
directors, employees, affiliates, or any successors or assigns of the
Indenture Trustee or the Owner Trustee will, in the absence of an express
16
agreement to the contrary, be personally liable for the payment of the
principal of or interest on the related Notes or for the agreements of the
related Trust contained in the Indenture.
Certain Covenants. Each Indenture provides that the related Trust may
not consolidate with or merge into any other entity, unless, (i) the entity
formed by or surviving such consolidation or merger is organized under the
laws of the United States, any state or the District of Columbia, (ii) such
entity expressly assumes the Trust's obligation to make due and punctual
payments upon the Notes and the performance or observance of every agreement
and covenant of the Trust under the Indenture, (iii) no Event of Default shall
have occurred and be continuing immediately after giving effect to such merger
or consolidation, (iv) the Trust has been advised that the rating of the
related Notes or Certificates then in effect would not be reduced or withdrawn
by the Rating Agencies as a result of such merger or consolidation, (v) any
action necessary to maintain the lien and security interest created by the
related Indenture shall have been taken and (vi) the Trust has received an
opinion of counsel to the effect that such consolidation or merger would have
no material adverse tax consequence to the Trust or to any related Noteholder
or Certificateholder.
Each Trust will not, among other things, (i) except as expressly
permitted by the Indenture, the Transfer and Servicing Agreements or certain
related documents for such Trust (collectively, the "Related Documents"),
sell, transfer, exchange or otherwise dispose of any of the assets of the
Trust, (ii) claim any credit on or make any deduction from the principal and
interest payable in respect of the related Notes (other than amounts withheld
under the Code or applicable state law) or assert any claim against any
present or former holder of such Notes because of the payment of taxes levied
or assessed upon the Trust, (iii) dissolve or liquidate in whole or in part,
(iv) permit the validity or effectiveness of the related Indenture to be
impaired or permit any person to be released from any covenants or obligations
with respect to the related Notes under such Indenture except as may be
expressly permitted thereby or (v) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance to be created on or extend
to or otherwise arise upon or burden the assets of the Trust or any part
thereof, or any interest therein or the proceeds thereof.
No Trust may engage in any activity other than as specified under "The
Trusts" above. No Trust will incur, assume or guarantee any indebtedness other
than indebtedness incurred pursuant to the related Notes and the related
Indenture or otherwise in accordance with the Related Documents.
Annual Compliance Statement. Each Trust will be required to file
annually with the related Indenture Trustee a written statement as to the
fulfillment of its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee will be
required to mail each year to all related Noteholders, to the extent required
under the Trust Indenture Act, a brief report relating to its eligibility and
qualification to continue as Indenture Trustee under the related Indenture,
any amounts advanced by it under the Indenture, the amount, interest rate and
maturity date of certain indebtedness owing by the Trust to the Indenture
Trustee in its individual capacity, the property and funds physically held by
the Indenture Trustee as such and any action taken by it that materially
affects the Notes and that has not been previously reported.
<PAGE>20
Satisfaction and Discharge of Indenture. The Indenture will be
discharged with respect to the related Notes upon the delivery to the related
Indenture Trustee for cancellation of all such Notes or, with certain
limitations, upon deposit with the Indenture Trustee of funds sufficient for
the payment in full of all of such Notes. The Indenture Trustee will continue
to act as Indenture Trustee under the Indenture and the related Trust Sale and
Servicing Agreement for the benefit of the related Certificateholders until
such time as all payments in respect of Certificate Balance and interest due
to such Certificateholders have been paid in full.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the
related Prospectus Supplement. The Indenture Trustee may give notice of its
intent to resign at any time, in which event the Trust will be obligated to
appoint a successor trustee. The Trust may also remove the Indenture Trustee
if the Indenture Trustee ceases to be eligible to continue as such
17
under the Indenture or if the Indenture Trustee becomes insolvent or otherwise
becomes incapable of acting. In such circumstances, the Trust will be
obligated to appoint a successor trustee. The holders of a majority of Notes
outstanding also have the right to remove the Indenture Trustee and appoint
a successor. Any resignation or removal of the Indenture Trustee and
appointment of a successor trustee does not become effective until acceptance
of the appointment by the successor trustee.
THE CERTIFICATES
GENERAL
With respect to each Trust, the Certificates will be issued pursuant to
the terms of a Trust Agreement, a form of which has been filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. The
following summary does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the
Certificates and the Trust Agreement. Where particular provisions or terms
used in the Trust Agreement are referred to, the actual provisions (including
definitions of terms) are incorporated by reference as part of this summary.
Each class of Certificates to be sold by the Certificate Underwriters
(as defined in the related Prospectus Supplement) will initially be
represented by a single Certificate registered in the name of the Depository,
except as set forth below. Unless otherwise specified in the related
Prospectus Supplement, the Certificates will be available for purchase in
minimum denominations of $20,000 and integral multiples of $1,000 in excess
thereof in book-entry form only and resales or other transfers will not be
permitted in amounts of less than $20,000. The Seller has been informed by
DTC that DTC's nominee will be Cede. Accordingly, Cede is expected to be the
holder of record of the Certificates that are not retained by the Seller.
Unless and until Definitive Certificates are issued under the limited
circumstances described herein or in the related Prospectus Supplement, no
Certificateholder (other than the Seller) will be entitled to receive a
physical certificate representing a Certificate. All references herein to
actions by Certificateholders refer to actions taken by DTC upon instructions
from the Participants and all references herein to distributions, notices,
reports and statements to Certificateholders refer to distributions, notices,
reports and statements to DTC or Cede, as the registered holder of the
Certificates, as the case may be, for distribution to Certificateholders in
accordance with DTC's procedures with respect thereto. See "Certain
Information Regarding the Securities-Book Entry Registration" and "-Definitive
Securities." Certificates owned by the Seller or its affiliates will be
entitled to equal and proportionate benefits under the Trust Agreement, except
that such Certificates will be deemed not to be outstanding for the purpose
of determining whether the requisite percentage of Certificateholders have
given any request, demand, authorization, direction, notice, consent or other
action under the Related Documents (other than the commencement by the Trust
of a voluntary proceeding in bankruptcy as described in "The Transfer and
Servicing Agreements-Insolvency Event").
Under the Trust Agreement, the Trust (and the Owner Trustee on its
behalf) and the related Certificateholders, by accepting the related
Certificates, will covenant that they will not, for a period of one year and
one day after the termination of the Trust Agreement, institute against the
Seller any bankruptcy, reorganization or other proceeding under any federal
or state bankruptcy or similar law.
<PAGE>21
DISTRIBUTIONS OF INTEREST AND CERTIFICATE BALANCE
The timing and priority of distributions, seniority, allocations of
loss, Pass Through Rate and amount of or method of determining distributions
with respect to Certificate Balance and interest (or, where applicable, with
respect to Certificate Balance only or interest only) on the Certificates of
any series will be described in the related Prospectus Supplement.
Distributions of interest on the Certificates will be made on the dates
specified in the related Prospectus Supplement (each, a "Distribution Date")
and will be made prior to distributions with respect to Certificate Balance.
A series may include one or more classes of Strip Certificates
18
entitled to (i) distributions in respect of Certificate Balance with
disproportionate, nominal or no interest distributions, or (ii) interest
distributions, with disproportionate, nominal or no distributions in respect
of Certificate Balance. Each class of Certificates may have a different Pass
Through Rate, which may be a fixed, variable or adjustable Pass Through Rate
(and which may be zero for certain classes of Strip Certificates), or any
combination of the foregoing. The related Prospectus Supplement will specify
the Pass Through Rate for each class of Certificate, or the initial Pass
Through Rate and the method for determining the Pass Through Rate. Unless
otherwise specified in the related Prospectus Supplement, interest on the
Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Distributions in respect of the Certificates will be
subordinate to payments in respect of the Notes as more fully described in the
related Prospectus Supplement. Distributions in respect of Certificate
Balance of any class of Certificates will be made on a pro rata basis among
all of the Certificateholders of such class.
In the case of a series of Certificates which includes two or more
classes of Certificates, the timing, sequential order, priority of payment or
amount of distributions in respect of principal, and any schedule or formula
or other provisions applicable to the determination thereof, of each such
class shall be as set forth in the related Prospectus Supplement.
CERTAIN INFORMATION REGARDING THE SECURITIES
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC was created to
hold securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
book-entries, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Unless otherwise specified in the related Prospectus Supplement, owners
of beneficial interest in Notes and Certificates ("Note Owners" and
"Certificate Owners", respectively) that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Notes or Certificates may do so only through
Participants and Indirect Participants. In addition, Note Owners will receive
all distributions of principal and interest and Certificate Owners will
receive all distributions of interest and in respect of Certificate Balance
through DTC Participants. Under a book-entry format, Note Owners and
Certificate Owners may experience some delay in their receipt of payments,
since such payments will be forwarded by the trustees to Cede, as nominee for
DTC. DTC will forward such payments to its Participants, which thereafter
will forward them to Indirect Participants, Note Owners or Certificate Owners.
Except for the Seller, it is anticipated that the only "Noteholder" and
"Certificateholder" will be Cede, as nominee of DTC. Note Owners will not be
recognized by the Indenture Trustee as Noteholders, as such term is used in
the Indenture, and Note Owners will be permitted to exercise the rights of
Noteholders only indirectly through DTC and its Participants. Likewise,
Certificate Owners will not be recognized by the Owner Trustee as
Certificateholders as such term is used in the Trust Agreement, and
<PAGE>22
Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and its Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
of Notes and Certificates among Participants on whose behalf it acts with
respect to the Notes and Certificates and to receive and transmit
distributions of principal of, and interest on, the Notes and distributions
in respect of interest and Certificate Balance on the Certificates.
Participants and Indirect Participants with which Note Owners and Certificate
Owners have accounts with respect to the Notes and Certificates similarly are
required to make book-entry transfers and receive and transmit such payments
19
on behalf of their respective Note Owners and Certificate Owners.
Accordingly, although Note Owners and Certificate Owners will not possess
Notes or Certificates, the Rules provide a mechanism by which Note Owners and
Certificate Owners will receive payments and will be able to transfer their
Note or Certificate interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Note Owner
or Certificate Owner to pledge Notes or Certificates to persons or entities
that do not participate in the DTC system, or to otherwise act with respect
to such Notes or Certificates, may be limited due to the lack of a physical
certificate for such Notes and Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Noteholder under the related Indenture or a Certificateholder under
the related Trust Agreement only at the direction of one or more Participants
to whose accounts with DTC the Notes or Certificates are credited. DTC may
take conflicting actions with respect to other undivided interests to the
extent that such actions are taken on behalf of Participants whose holdings
include such undivided interests.
Except as required by law, neither the Administrator, the Owner Trustee
nor the Indenture Trustee will have any liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Notes or the Certificates of any series held by Cede, as
nominee for DTC, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
DEFINITIVE SECURITIES
Unless otherwise specified in the related Prospectus Supplement, Notes
and Certificates will be issued in fully registered, certificated form
("Definitive Notes" or "Definitive Certificates," as the case may be, and,
collectively, the "Definitive Securities") to Noteholders, Certificateholders
or their respective nominees, rather than to DTC or its nominee, only if (i)
the related Administrator advises the appropriate trustee in writing that DTC
is no longer willing or able to discharge properly its responsibilities as
depository with respect to such Securities and the Trust is unable to locate
a qualified successor, (ii) the Administrator, at its option, elects to
terminate the book-entry system through DTC or (iii) after the occurrence of
an Event of Default or a Servicer Default, holders representing at least a
majority of the outstanding principal amount of such Securities advise the
appropriate trustee through DTC in writing that the continuation of a book-
entry system through DTC (or a successor thereto) is no longer in the best
interest of the holders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the appropriate trustee will be required to notify DTC of the
availability of Definitive Notes or Definitive Certificates, as the case may
be. DTC shall notify all the Note Owners or Certificate Owners, as
applicable, of the availability of Definitive Notes or Definitive
Certificates, as the case may be. Upon surrender by DTC of the definitive
certificates representing the Securities and receipt of instructions for re-
registration, the appropriate trustee will reissue such Securities as
Definitive Notes or Definitive Certificates, as the case may be, to holders
thereof.
<PAGE>23
Distributions of principal of, and interest on, the Definitive
Securities will thereafter be made in accordance with the procedures set forth
in the related Indenture or related Trust Agreement, as applicable, directly
to holders of Definitive Securities in whose names the Definitive Securities
were registered at the close of business on the last day of the preceding
Monthly Period. Such distributions will be made by check mailed to the
address of such holder as it appears on the register maintained by the
Indenture Trustee or Owner Trustee, as applicable. The final payment on any
Definitive Security, however, will be made only upon presentation and
surrender of such Definitive Security at the office or agency specified in the
notice of final distribution to the holders of such class.
Definitive Securities will be transferable and exchangeable at the
offices of the appropriate trustee or of a registrar named in a notice
delivered to holders of Definitive Securities. No service charge will be
20
imposed for any registration of transfer or exchange, but the appropriate
trustee may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
REPORTS TO SECURITYHOLDERS
With respect to each Trust, on or prior to each Payment Date, the
Servicer will prepare and provide to the Indenture Trustee a statement to be
delivered to the related Noteholders on such Payment Date and on or prior to
each Distribution Date, the Servicer will prepare and provide to the Owner
Trustee a statement to be delivered to the related Certificateholders. With
respect to each series (to the extent applicable) each such statement to be
delivered to Noteholders will include the following information as to the
Notes with respect to such Payment Date or the period since the previous
Payment Date on such Notes, as applicable, and each such statement to be
delivered to Certificateholders will include the following information as to
the Certificates with respect to such Distribution Date or the period since
the previous Distribution Date, as applicable:
(i) the amount of the distribution allocable to principal of each
class of the Notes and to the Certificate Balance of each class of
Certificates;
(ii) the amount of the distribution allocable to interest on or
with respect to each class of securities;
(iii) the Aggregate Principal Balance as of the close of business
on the last day of the preceding Monthly Period;
(iv) the aggregate outstanding principal balance and the Note Pool
Factor for each class of Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of Certificates, each after
giving effect to all payments reported under (i) above on such date;
(v) the aggregate amount in the Payment Ahead Servicing Account
or on deposit with the Servicer as Payments Ahead and the change in such
amount from the previous statement, as the case may be;
(vi) the amount of outstanding Monthly Advances on such date;
(vii) the amount of the Total Servicing Fee paid to the Servicer
with respect to the related Monthly Period or Periods, as the case may
be;
(viii) the Interest Rate or Pass Through Rate for the next period
for any class of Notes or Certificates with variable or adjustable
rates;
(ix) the amount, if any, distributed to Noteholders and
Certificateholders from amounts on deposit in the Reserve Account or
from other forms of credit enhancement;
(x) the Noteholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall and the Certificateholders' Principal
Carryover Shortfall (each as defined in the related Prospectus
Supplement), if any, and the change in such amounts from the preceding
statement; and
<PAGE>24
(xi) the balance of the Reserve Account, if any, on such date,
after giving effect to changes therein on such date.
Each amount set forth pursuant to subclauses (i), (ii), (vii), (ix) and
(x) with respect to Notes or Certificates will be expressed as a dollar amount
per $1,000 of the initial principal balance of the Notes or the initial
Certificate Balance, as applicable.
Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of the Trust, the trustees will
mail to each holder of a class of Securities who at any time during such
calendar year has been a securityholder, and received any payment thereon, a
statement containing certain information for the purposes of such
securityholder's preparation of federal income tax returns. As long as the
holder of record of the Securities is Cede, as nominee of DTC, beneficial
owners of the Securities will receive tax and other information from
Participants and Indirect Participants rather than from the trustees. See
"Certain Federal Income Tax Consequences."
THE TRANSFER AND SERVICING AGREEMENTS
Except as otherwise specified in the related Prospectus Supplement, the
following summary describes certain terms of the Pooling and Servicing
Agreement pursuant to which the Seller will purchase Receivables
21
from GMAC, the Servicer will agree to service such Receivables, and GMAC, as
Custodian, will agree to act as custodian for the documents evidencing the
Receivables, the Trust Sale and Servicing Agreement pursuant to which a Trust
will acquire such Receivables from the Seller and agree to the servicing
thereof by the Servicer and the appointment of GMAC as Custodian, the Trust
Agreement pursuant to which such Trust will be created and Certificates will
be issued and the Administration Agreement pursuant to which GMAC will
undertake certain administrative duties with respect to such Trust
(collectively, the "Transfer and Servicing Agreements"). Forms of the
Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The Seller will
provide a copy of the Transfer and Servicing Agreements (without exhibits)
upon request to a holder of Securities described therein. This summary does
not purport to be complete and is subject to, and qualified in its entirety
by reference to, all of the provisions of the Transfer and Servicing
Agreements. Where particular provisions or terms used in the Transfer and
Servicing Agreements are referred to, the actual provisions (including
definitions of terms) are incorporated by reference as part of such summary.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified in the related Prospectus Supplement (the
"Closing Date"), GMAC will sell and assign to the Seller, without recourse,
its entire interest in the related Receivables, including its security
interests in the Financed Vehicles, pursuant to a Pooling and Servicing
Agreement between GMAC and the Seller (a "Pooling and Servicing Agreement").
On the Closing Date, the Seller will transfer and assign to the applicable
Owner Trustee, without recourse, its entire interest in the related
Receivables, including its security interests in the Financed Vehicles,
pursuant to a Trust Sale and Servicing Agreement among the Seller, the
Servicer and the Trust (a "Trust Sale and Servicing Agreement"). Each
Receivable with respect to a Trust will be identified in a schedule which will
be on file at the locations set forth in an exhibit to the related Trust Sale
and Servicing Agreement (a "Schedule of Receivables"). The Owner Trustee
will, concurrently with such transfer and assignment, execute and deliver the
related Notes and Certificates to the Seller in exchange for such Receivables.
Except as set forth in the related Prospectus Supplement, the Seller will sell
the Certificates (other than those Certificates it is retaining) and the Notes
to the respective underwriters set forth in the related Prospectus Supplement.
See "Plan of Distribution." Unless otherwise provided in the related
Prospectus Supplement, the Seller will apply the net proceeds received from
the sale of the Certificates and the Notes to the purchase of the related
Receivables from GMAC.
<PAGE>25
In each Pooling and Servicing Agreement, GMAC will represent and warrant
to the Seller, among other things, that: (i) the information provided in the
related Schedule of Receivables is correct in all material respects; (ii) the
obligor on each Receivable is required to maintain physical damage insurance
covering the Financed Vehicle in accordance with GMAC's normal requirements;
(iii) as of the Closing Date, to the best of its knowledge, the related
Receivables are free and clear of all filed security interests, liens, charges
and encumbrances on account of work, labor or materials (other than tax liens
and other liens that arise by operation of law) and no offsets, defenses or
counterclaims have been asserted or threatened; (iv) as of the Closing Date,
each Receivable is or will be secured by a first perfected security interest
in favor of GMAC in the Financed Vehicle; and (v) each related Receivable, at
the time it was originated complied, and as of the Closing Date complies, in
all material respects with applicable federal and state laws, including,
without limitation, consumer credit, truth-in-lending, equal credit
opportunity and disclosure laws. In the related Trust Sale and Servicing
Agreement, the Seller will assign the representations and warranties of GMAC,
as set forth above, to the Trust, and will represent and warrant to the Trust
that the Seller has taken no action which would cause such representations and
warranties of GMAC to be false in any material respect as of the Closing Date.
As of the last day of the second (or, if the Seller elects, the first)
month following the discovery by the Seller, the Servicer, the Owner Trustee
or the Indenture Trustee of a breach of any representation or warranty of the
Seller or GMAC that materially and adversely affects the interests of the
related Securityholders in any Receivable, the Seller, unless the breach is
cured in all material respects, will repurchase (or, together with the
Servicer, will use reasonable efforts to enforce the obligation of GMAC under
the Pooling and Servicing Agreement to repurchase) such Receivable (a
"Warranty Receivable") from the Trust at a price equal to: (a) in the case
22
of a Scheduled Interest Receivable, the sum of all remaining Scheduled
Payments on such Receivable, plus all past due Scheduled Payments with respect
to which a Scheduled Interest Advance has not been made, plus all outstanding
Scheduled Interest Advances on such Receivable, plus an amount equal to any
reimbursements of outstanding Scheduled Interest Advances made to the Servicer
with respect to such Receivable from the proceeds of other Receivables, minus
(i) the rebate that would be payable to the obligor on such Receivable were
the obligor to prepay such Receivable in full on such day and (ii) any
Liquidation Proceeds with respect to such Receivable previously received (to
the extent applied to reduce the Principal Balance of such Receivable); or (b)
in the case of a Simple Interest Receivable, the Amount Financed minus (i)
that portion of all payments received on or prior to the last day of the
related Monthly Period allocable to principal and (ii) any Liquidation
Proceeds with respect to such Receivable (to the extent applied to reduce the
Principal Balance of such Receivable) (in either case, the "Warranty
Payment"). The Seller or GMAC, as applicable, will be entitled to receive any
amounts held by the Servicer or in the Payment Ahead Servicing Account with
respect to such Warranty Receivable. The repurchase obligation constitutes
the sole remedy available to the Trust, the Noteholders, the Indenture
Trustee, the Certificateholders or the Owner Trustee for any such uncured
breach.
In each Pooling and Servicing Agreement, the Servicer will covenant that
(i) except as contemplated in such Agreement, the Servicer will not release
any Financed Vehicle from the security interest securing the related
Receivable, (ii) the Servicer will do nothing to impair the rights of the
Indenture Trustee, the Owner Trustee, the Noteholders or the
Certificateholders in the related Receivables and (iii) the Servicer will not
amend or otherwise modify any such Receivable such that the Amount Financed,
the APR, the total number of Scheduled Payments (in the case of a Scheduled
Interest Receivable) or the number of originally scheduled due dates (in the
case of a Simple Interest Receivable) is altered or such that the last
Scheduled Payment (in the case of a Scheduled Interest Receivable) or the last
scheduled due date (in the case of a Simple Interest Receivable) occurs after
the final scheduled Distribution Date. As of the last day of the second (or,
if the Servicer so elects, the first) month following the discovery by the
Servicer, the Owner Trustee or the Indenture Trustee of a breach of any
covenant that materially and adversely affects any Receivable and unless such
breach is cured in all material respects, the Servicer will, with respect to
such Receivable (an "Administrative Receivable"): (i) in the case of a
Scheduled Interest Receivable, (a) release all claims for
<PAGE>26
reimbursement of Scheduled Interest Advances made on such Receivable and (b)
purchase such Receivable from the Trust at a price equal to the sum of all
remaining Scheduled Payments on such Receivable plus an amount equal to any
reimbursements of outstanding Scheduled Interest Advances made to the Servicer
with respect to such Receivable from the proceeds of other Receivables, plus
all past due Scheduled Payments with respect to which a Scheduled Interest
Advance has not been made, minus the rebate that would be payable to the
obligor on such Receivable were the obligor to prepay such Receivable in full
on such day; or (ii) in the case of a Simple Interest Receivable, purchase
such Receivable from the Trust at a price equal to the Amount Financed minus
that portion of all payments made on or prior to the last day of the related
Monthly Period allocable to principal (in either case, the "Administrative
Purchase Payment"). The Servicer will be entitled to receive any amounts held
by the Servicer or in the Payment Ahead Servicing Account with respect to such
Administrative Receivable. This repurchase obligation constitutes the sole
remedy available to the Trust, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders for any such uncured breach.
Pursuant to each Trust Sale and Servicing Agreement, the Trust will
agree to GMAC acting as custodian to maintain possession, as the Trust's
agent, of the related retail instalment sale contracts and any other documents
relating to the Receivables. To assure uniform quality in servicing both the
Receivables and the GMAC's own portfolio of receivables, as well as to
facilitate servicing and save administrative costs, the documents will not be
physically segregated from other similar documents that are in GMAC's
possession or otherwise stamped or marked to reflect the transfer to the
related Trust so long as GMAC is the custodian of such documents. However,
Uniform Commercial Code ("UCC") financing statements reflecting the sale and
assignment of such Receivables to the Trust will be filed, and the Servicer's
accounting records and computer files will reflect such sale and assignment.
Because such Receivables will remain in the possession of GMAC, as Custodian,
and will not be stamped or otherwise
23
marked to reflect the assignment to the Trust, if a subsequent purchaser were
able to take physical possession of the Receivables without knowledge of the
assignment, the Trust's interests in such Receivables could be defeated.
ACCOUNTS
With respect to each Trust, the Servicer will establish and maintain one
or more accounts, in the name of the Indenture Trustee on behalf of the
related Noteholders and the Certificateholders, into which all payments made
on or with respect to the related Receivables will be deposited (the
"Collection Account"). The Servicer will establish and maintain with respect
to each Trust an account, in the name of the Indenture Trustee on behalf of
the related Noteholders, in which amounts released from the Collection Account
and any Reserve Account or other credit enhancement for payment to such
Noteholders will be deposited and from which all distributions to such
Noteholders will be made (the "Note Distribution Account"). The Servicer will
establish and maintain with respect to each Trust an account, in the name of
the Owner Trustee on behalf of the related Certificateholders, in which
amounts released from the Collection Account and any Reserve Account or other
credit enhancement for distribution to such Certificateholders will be
deposited and from which all distributions to such Certificateholders will be
made (the "Certificate Distribution Account"). The Servicer will establish
for each Trust an additional account (the "Payment Ahead Servicing Account")
in the name of the Indenture Trustee, into which to the extent required by the
Trust Sale and Servicing Agreement, early payments by or on behalf of obligors
on Scheduled Interest Receivables which do not constitute either Scheduled
Payments or Prepayments will be deposited until such time as payment becomes
due. The Payment Ahead Servicing Account will not be property of the related
Trust. Unless otherwise provided in the related Prospectus Supplement, the
Payment Ahead Servicing Account will initially be maintained in the trust
department of the Indenture Trustee.
For any series, funds in the Collection Account, the Note Distribution
Account and any Reserve Account and other accounts identified as such in the
related Prospectus Supplement (collectively, the "Designated Accounts") will
<PAGE>27
be invested as provided in the Trust Sale and Servicing Agreement in Eligible
Investments. "Eligible Investments" are generally limited to investments
acceptable to the rating agencies then rating the related Notes and
Certificates at the request of the Seller (the "Rating Agencies") as being
consistent with the rating of such Notes. Except as described below or in the
related Prospectus Supplement, Eligible Investments are limited to obligations
or securities that mature on or before the date of the next distribution or,
in the case of the Note Distribution Account, the date of the next
distribution with respect to the Notes. To the extent permitted by the Rating
Agencies, funds in any Reserve Account may be invested in related Notes that
will not mature prior to the date of the next distribution with respect to the
Notes. Except as otherwise specified in the related Prospectus Supplement,
such Notes will not be sold to meet any shortfalls unless they are sold at a
price equal to or greater than the unpaid principal balance thereof if,
following such sale, the amount on deposit in such Reserve Account would be
less than the related Specified Reserve Account Balance. Thus, the amount of
cash in any Reserve Account at any time may be less than the balance of the
Reserve Account. If the amount required to be withdrawn from any Reserve
Account to cover shortfalls in collections on the Receivables (as provided in
the related Prospectus Supplement) exceeds the amount of cash in the Reserve
Account, a temporary shortfall in the amounts distributed to the Noteholders
or Certificateholders could result, which could, in turn, increase the average
life of the Notes or the Certificates. Except as otherwise specified in the
related Prospectus Supplement, investment earnings on funds deposited in the
Designated Accounts and the Payment Ahead Servicing Account, net of losses and
investment expenses (collectively, "Investment Earnings"), will be payable to
the Servicer.
The Designated Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution have a credit rating from
each Rating Agency then rating such institution in one
24
of its generic rating categories which signifies investment grade. "Eligible
Institution" means, with respect to a Trust, (a) the corporate trust
department of the related Indenture Trustee or the Owner Trustee, as
applicable, or (b) a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (i) which has either (A)
a long-term unsecured debt rating acceptable to the Rating Agencies or (B) a
short-term unsecured debt rating or certificate of deposit rating acceptable
to the Rating Agencies and (ii) whose deposits are insured by the Federal
Deposit Insurance Corporation or any successor thereto.
Any other accounts to be established with respect to a Trust will be
described in the related Prospectus Supplement.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
With respect to each Trust, unless otherwise provided in the related
Prospectus Supplement, on each Distribution Date, the Servicer will receive
a servicing fee (the "Basic Servicing Fee") for the preceding Monthly Period
equal to one-twelfth of the Basic Servicing Fee Rate specified in the related
Prospectus Supplement multiplied by the Aggregate Principal Balance of all
Receivables held by such Trust as of the first day of such Monthly Period.
Unless otherwise specified in the related Prospectus Supplement, on each
Distribution Date, the Servicer will also receive with respect to each Trust
an additional amount (the "Additional Servicing") equal to the lesser of (i)
the amount by which (A) the amount equal to the aggregate amount of the Basic
Servicing Fee for such Distribution Date and all prior Distribution Dates
exceeds (B) the aggregate amount of Additional Servicing paid to the Servicer
on all prior Distribution Dates and (ii) the amount by which the amount on
deposit in the Reserve Account on such Distribution Date (after giving effect
to all deposits, withdrawals and payments affecting any such Reserve Account
other than the Additional Servicing and payments to the Seller) exceeds the
<PAGE>28
Specified Reserve Account Balance. On each Distribution Date, the Servicer
will be paid the Basic Servicing Fee, any unpaid Basic Servicing Fees from all
prior Distribution Dates and the Additional Servicing (collectively, the
"Total Servicing Fee") to the extent of funds available therefor. In
addition, unless otherwise provided in the related Prospectus Supplement, with
respect to each Trust the Servicer will be entitled to retain any late fees,
prepayment charges or certain similar fees and charges collected during a
Monthly Period (the "Supplemental Servicing Fee") and any Investment Earnings
during a Monthly Period.
The foregoing amounts with respect to each Trust are intended to
compensate the Servicer for performing the functions of a third party servicer
of automobile receivables as an agent for their beneficial owner, including
collecting and posting all payments, responding to inquiries of obligors on
the Receivables, investigating delinquencies, sending payment coupons to
obligors, reporting tax information to obligors, paying costs of collections
and policing the collateral. Such amounts will also compensate the Servicer
for its services as the Receivables Pool administrator, including making
Monthly Advances, accounting for collections, furnishing monthly and annual
statements to the Owner Trustee and the Indenture Trustee with respect to
distributions and generating federal income tax information for the Trust, the
Certificateholders and the Noteholders. Such amounts also will reimburse the
Servicer for certain taxes, the fees of the Owner Trustee and the Indenture
Trustee, accounting fees, outside auditor fees, data processing costs and
other costs incurred in connection with administering the Receivables Pool.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due
with respect to the Receivables held by any Trust and will, consistent with
the related Pooling and Servicing Agreement and Trust Sale and Servicing
Agreement, follow such collection procedures as it follows with respect to
comparable automobile receivables that it services for itself or others. See
"Certain Legal Aspects of the Receivables." The Servicer is authorized to
grant certain rebates, adjustments or extensions with respect to a Receivable.
However, if any such modification of a Receivable alters the Amount Financed,
the APR, the total number of Scheduled Payments (in the case of a Scheduled
Interest Receivable) or the number of originally scheduled due 25
dates (in the case of a Simple Interest Receivable) such that the last
Scheduled Payment (in the case of a Scheduled Interest Receivable) or the last
scheduled due date (in the case of a Simple Interest Receivable) occurs after
the final scheduled Distribution Date, the Servicer will be obligated to
purchase such Receivable.
If the Servicer determines that eventual payment in full of a Receivable
is unlikely, the Servicer will follow its normal practices and procedures to
realize upon the Receivable, including the repossession and disposition of the
Financed Vehicle securing the Receivable at a public or private sale, or the
taking of any other action permitted by applicable law. The Servicer will be
entitled to receive an amount specified in the Pooling and Servicing Agreement
as an allowance for amounts charged to the account of the obligor, in keeping
with the Servicer's customary procedures, for refurbishing and disposition of
the Financed Vehicle and other out-of-pocket costs related to the liquidation
("Liquidation Expenses").
COLLECTIONS
With respect to each Trust, the Servicer will deposit all payments on
the related Receivables received from obligors and all proceeds of Receivables
collected during each calendar month (each, a "Monthly Period") into the
related Collection Account not later than two Business Days after receipt.
However, at any time that (i) GMAC is the Servicer, (ii) there exists no
Servicer Default and (iii) either (A) the short-term unsecured debt of the
Servicer is rated at least A-1 by Standard & Poor's Corporation and P-1 by
Moody's Investors Service, Inc., or (B) certain arrangements are made which
are acceptable to the Rating Agencies, the Servicer may retain such amounts
until the related Distribution Date. Pending deposit into the Collection
Account, collections may be employed by the Servicer at its own risk and for
its own benefit and will not be segregated from its own funds.
<PAGE>
<PAGE>29
Collections on a Scheduled Interest Receivable made during a Monthly
Period (other than an Administrative Receivable or a Warranty Receivable)
which are not late fees, prepayment charges or certain other similar fees or
charges will be applied first to any outstanding Scheduled Interest Advances
made by the Servicer with respect to such Receivable and then to the Scheduled
Payment. Any collections on such a Receivable remaining after such
applications will be considered an "Excess Payment." Such Excess Payment will
be held by the Servicer (or, if the Servicer has not satisfied conditions (ii)
and (iii) described in the preceding paragraph, will be deposited in the
Payment Ahead Servicing Account), and will be deemed a "Payment Ahead," except
as described in the following sentence. If and to the extent that an Excess
Payment (i) together with any unapplied Payments Ahead exceeds the sum of
three Scheduled Payments, or (ii) constitutes, either alone or together with
any previous unapplied Payments Ahead, full prepayment, then such portion of
such Excess Payment shall not be deemed a Payment Ahead and shall instead be
applied as a full or partial prepayment of such Receivable (a "Prepayment").
Collections made during a Monthly Period with respect to Simple Interest
Receivables (other than Administrative Receivables and Warranty Receivables)
which are not late fees or certain other similar fees or charges will be
applied first to the payment to the Servicer of Excess Simple Interest
Collections, if any, and next to principal and interest on all such
Receivables. With respect to a Monthly Period, "Excess Simple Interest
Collections" represent the excess, if any, of (i) all payments received during
such Monthly Period on all Simple Interest Receivables held by the Trust to
the extent allocable to interest over (ii) the amount of interest that would
be due during such Monthly Period on all Simple Interest Receivables held by
the Trust, assuming that the payment on each such Receivable was received on
its respective due date.
Collections on Administrative Receivables and Warranty Receivables
(including Administrative Purchase Payments and Warranty Payments) will
generally be applied in the manner described above, except that unapplied
Payments Ahead on a Scheduled Interest Receivable will be made to the Servicer
or the Seller, as applicable, and Administrative Purchase Payments and
Warranty Payments on a Simple Interest Receivable will not be applied to
Excess Simple Interest Collections.
MONTHLY ADVANCES
Unless otherwise provided in the related Prospectus Supplement, if the
full Scheduled Payment due on a Scheduled Interest Receivable is not received
by the end of the month in which it is due, whether as the result of any
26
extension granted to the obligor or otherwise, the amount of Payments Ahead,
if any, not previously applied with respect to such Receivable will be applied
by the Servicer to the extent of the shortfall and the Payments Ahead will be
reduced accordingly. If any shortfall remains, the Servicer will advance an
amount (a "Scheduled Interest Advance") equal to the amount of such shortfall.
The Servicer will be obligated to make a Scheduled Interest Advance only to
the extent that the Servicer, in its sole discretion, expects to recoup such
advance from subsequent collections or recoveries on any Receivable. The
Servicer will be reimbursed for any Scheduled Interest Advances with respect
to a Receivable from subsequent payments or collections relating to such
Receivable. Upon the determination that reimbursement from the preceding
sources is unlikely, the Servicer will be entitled to recoup its Scheduled
Interest Advances from collections from other related Receivables.
Unless otherwise provided in the related Prospectus Supplement, with
respect to each Trust, as of the last day of each Monthly Period, the Servicer
will advance an amount (a "Simple Interest Advance" and, collectively with a
Scheduled Interest Advance, a "Monthly Advance") equal to the excess, if any,
of (i) the amount of interest that would be due during such Monthly Period on
all Simple Interest Receivables held by the Trust assuming that the payment
on each such Receivable was received on its respective due date over (ii) all
payments received during such Monthly Period on all Simple Interest
Receivables held by the Trust to the extent allocable to interest. In
addition, with respect to each Trust, the Servicer
<PAGE>
<PAGE>30
will be paid, to the extent all previously made Simple Interest Advances
exceed all Excess Simple Interest Collections previously paid to the Servicer,
all Liquidation Proceeds realized with respect to Simple Interest Receivables
allocable to accrued and unpaid interest thereon (but not including interest
for the then current Monthly Period). The Servicer will not make any advance
with respect to principal on any Simple Interest Receivable.
DISTRIBUTIONS
With respect to each Trust, beginning on the Payment Date or
Distribution Date, as applicable, specified in the related Prospectus
Supplement, distributions of principal and interest (or, where applicable, of
principal or interest only) (with respect to the Notes) and distributions in
respect of Certificate Balance and interest (or, where applicable, of
Certificate Balance or interest only) (with respect to the Certificates) on
each class of Securities entitled thereto will be made by the Indenture
Trustee or the Owner Trustee, as applicable, to the Noteholders and the
Certificateholders. The timing, calculation, allocation, order, source,
priorities of and requirements for all payments to each class of Noteholders
and all distributions to each class of Certificateholders will be set forth
in the related Prospectus Supplement.
With respect to each Trust, on each Payment Date and Distribution Date,
collections on the Receivables will be transferred from the Collection Account
to the Note Distribution Account and the Certificate Distribution Account for
distribution to Noteholders and Certificateholders as and to the extent
described in the related Prospectus Supplement. Credit enhancement, such as
a Reserve Account, will be available to cover any shortfalls in the amount
available for distribution on such date to the extent specified in the related
Prospectus Supplement. Distributions in respect of principal and Certificate
Balance will be subordinate to distributions in respect of interest, and
distributions in respect of the Certificates will be subordinate to payments
in respect of the Notes, as more fully described in the related Prospectus
Supplement.
CREDIT ENHANCEMENT
The amounts and types of credit enhancement arrangements and the
provider thereof, if applicable, with respect to each class of Securities will
be set forth in the related Prospectus Supplement. If and to the extent
provided in the related Prospectus Supplement, credit enhancement may be in
the form of subordination of one or more classes of Securities, Reserve
Accounts, overcollateralization, letters of credit, credit or liquidity
facilities, repurchase obligations, third party payments or other support,
cash deposits or such other arrangements as may be described in the related
Prospectus Supplement or any combination of two or more of the foregoing. If
specified in the applicable Prospectus Supplement, credit enhancement for a
series of Securities may cover one or more other series of Securities.
27
The presence of a Reserve Account and other forms of credit enhancement
is intended to enhance the likelihood of receipt by the Noteholders and the
Certificateholders of the full amount of principal or Certificate Balance, as
the case may be, and interest due thereon and to decrease the likelihood that
the Noteholders and the Certificateholders will experience losses. Unless
otherwise specified in the related Prospectus Supplement, the credit
enhancement for a class of Securities will not provide protection against all
risks of loss and will not guarantee repayment of the entire principal balance
or Certificate Balance, as the case may be, and interest thereon. If losses
occur which exceed the amount covered by any credit enhancement or which are
not covered by any credit enhancement, securityholders will bear their
allocable share of deficiencies. In addition, if a form of credit enhancement
covers more than one series of Securities, securityholders of any such series
will be subject to the risk that such credit enhancement will be exhausted by
the claims of securityholders of other series.
Reserve Account. If so provided in the related Prospectus Supplement,
pursuant to the Trust Sale and Servicing Agreement, the Seller will establish
for a series an account, as specified in the related Prospectus Supplement
(the "Reserve Account"), which will be maintained with the Indenture Trustee.
<PAGE>31
Unless otherwise provided in the related Prospectus Supplement, the Reserve
Account will not be included in the property of the related Trust but will be
a segregated trust account held by the Indenture Trustee for the benefit of
Noteholders and Certificateholders. Unless otherwise provided in the related
Prospectus Supplement, the Reserve Account will be funded by an initial
deposit by the Seller on the Closing Date of the Reserve Account Initial
Deposit (in the amount set forth in the related Prospectus Supplement). As
further described in the related Prospectus Supplement, the amount on deposit
in the Reserve Account will be increased on each Distribution Date thereafter
up to the Specified Reserve Account Balance (as defined in the related
Prospectus Supplement) by the deposit therein of the amount of collections on
the related Receivables remaining on each such Distribution Date after the
payment of the Total Servicing Fee and the distributions and allocations to
the Noteholders and the Certificateholders required on such date. Unless
otherwise provided in the related Prospectus Supplement or agreed by the
Seller, amounts on deposit in the Reserve Account after payments to
Noteholders, Certificateholders and the Servicer may be paid to the Seller to
the extent that such amounts exceed the Specified Reserve Account Balance.
Upon any distribution to the Seller of amounts from the Reserve Account,
neither the Noteholders nor the Certificateholders will have any rights in,
or claims to, such amounts.
NET DEPOSITS
As an administrative convenience the Servicer will be permitted to make
the deposit of collections, aggregate Monthly Advances, Warranty Purchase
Payments and Administrative Purchase Payments for any Trust for or with
respect to the Monthly Period net of distributions to be made to the Servicer
for such Trust with respect to the Monthly Period. Similarly, the Servicer
may cause to be made a single, net transfer from the Collection Account to the
related Payment Ahead Servicing Account, or vice versa. The Servicer,
however, will account to the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders with respect to each Trust as if all
deposits, distributions and transfers were made individually. In addition,
in connection with any Trust at any time that the Servicer is not required to
remit collections on a daily basis, the Servicer may retain collections
allocable to the Notes or the Note Distribution Account until the related
Payment Date, and pending deposit into the Collection Account or the Note
Distribution Account, such collections may be employed by the Servicer at its
own risk and for its own benefit and will not be segregated from its own
funds. On each Payment Date, the Servicer, the Seller, the Indenture Trustee
and the Owner Trustee will make all distributions, deposits and other
remittances with respect to the Notes or the Note Distribution Account of a
Trust for the periods since the previous distribution was to have been made.
If Payment Dates do not coincide with Distribution Dates, all distributions,
deposits or other remittances made on a Payment Date will be treated as having
been distributed, deposited or remitted on the Distribution Date for the
applicable Monthly Period for purposes of determining other amounts required
to be distributed, deposited or otherwise remitted on such Distribution Date.
28
STATEMENTS TO TRUSTEES AND TRUST
Prior to each Payment Date and Distribution Date, with respect to each
Trust the Servicer will provide to the Indenture Trustee and the Owner Trustee
as of the close of business on the last day of the preceding Monthly Period
a statement setting forth substantially the same information as is required
to be provided in the periodic reports provided to securityholders on such
date described under "Certain Information Regarding the Securities-Reports to
Securityholders."
EVIDENCE AS TO COMPLIANCE
Each Trust Sale and Servicing Agreement will provide that a firm of
independent public accountants will furnish to the Owner Trustee and the
Indenture Trustee on or before August 15 of each year, beginning the first
August 15 which is at least twelve months after the related Closing Date, a
statement as to compliance by the Servicer during the preceding twelve months
ended June 30 (or in the case of the first such certificate, the period from
the Closing Date to the June 30 of such year) with certain standards relating
to the servicing of the Receivables, the Servicer's accounting records and
computer files with respect thereto and certain other matters.
<PAGE>32
Each Trust Sale and Servicing Agreement will also provide for delivery
to the Owner Trustee and the Indenture Trustee, on or before August 15 of each
year, beginning the first August 15 which is at least twelve months after the
related Closing Date, of a certificate signed by an officer of the Servicer
stating that the Servicer has fulfilled its obligations under the Trust Sale
and Servicing Agreement throughout the preceding twelve months ended June 30
(or in the case of the first such certificate, the period from the Closing
Date to the June 30 of such year) or, if there has been a default in the
fulfillment of any such obligation, describing each such default. Such
certificate may be provided as a single certificate making the required
statements as to more than one Trust Sale and Servicing Agreement.
Copies of such statements and certificates may be obtained by
securityholders by a request in writing addressed to the applicable Indenture
Trustee or Owner Trustee.
In each Trust Sale and Servicing Agreement, the Seller will agree to
give the Indenture Trustee and the Owner Trustee notice of any event which
with the giving of notice or the lapse of time, or both, would become a
Servicer Default. In addition, the Seller will agree to give the Indenture
Trustee, the Owner Trustee and the Trust notice of certain covenant breaches
which with the giving of notice or lapse of time, or both, would constitute
a Servicer Default.
CERTAIN MATTERS REGARDING THE SERVICER
Each Trust Sale and Servicing Agreement will provide that GMAC may not
resign from its obligations and duties as Servicer thereunder and under the
Pooling and Servicing Agreement, except upon determination that GMAC's
performance of such duties is no longer permissible under applicable law. No
such resignation will become effective until the related Indenture Trustee or
a successor servicer has assumed GMAC's servicing obligations and duties under
the related Transfer and Servicing Agreements.
Each Trust Sale and Servicing Agreement will further provide that
neither the Servicer nor any of its directors, officers, employees and agents
will be under any liability to the related Trust or the related Noteholders
or Certificateholders for taking any action or for refraining from taking any
action pursuant to the related Transfer and Servicing Agreements or the
related Indenture or for errors in judgment; except that neither the Servicer
nor any such person will be protected against any liability that would
otherwise be imposed by reason of wilful misfeasance, bad faith or negligence
(except errors in judgment) in the performance of the Servicer's duties
thereunder or by reason of reckless disregard of its obligations and duties
thereunder. Each Trust Sale and Servicing Agreement will further provide that
the Servicer and its directors, officers, employees and agents will be
reimbursed by the Indenture Trustee or the Owner Trustee for any contractual
damages, liability or expense incurred by reason of such trustee's wilful
misfeasance, bad faith or negligence (except errors in judgment) in the
29
performance of such trustee's duties thereunder or by reason of reckless
disregard of its obligations and duties thereunder or under the related Trust
Agreement or the related Indenture. In addition, each Trust Sale and
Servicing Agreement will provide that the Servicer is under no obligation to
appear in, prosecute or defend any legal action that is not incidental to the
Servicer's servicing responsibilities under the related Transfer and Servicing
Agreements and that, in its opinion, may cause it to incur any expense or
liability. The Servicer may, however, undertake any reasonable action that
it may deem necessary or desirable in respect of the related Transfer and
Servicing Agreements and the rights and duties of the parties thereto and the
interests of the Noteholders and the Certificateholders thereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom will be expenses, costs and liabilities of the related Trust, and
the Servicer will be entitled to be reimbursed therefor out of the related
Collection Account. Any such indemnification or reimbursement will reduce the
amount otherwise available for distribution to the Noteholders and the
Certificateholders.
<PAGE>33
Under the circumstances specified in each Trust Sale and Servicing
Agreement, any entity into which the Servicer may be merged or consolidated,
or any entity resulting from any merger or consolidation to which the Servicer
is a party, or any entity succeeding to the business of the Servicer or, with
respect to its obligations as Servicer, any entity 50% or more of the voting
interests of which are owned, directly or indirectly, by General Motors, which
entity in each of the foregoing cases assumes the obligations of the Servicer,
will be the successor of the Servicer under such Trust Sale and Servicing
Agreement. The Servicer may at any time subcontract any duties as Servicer
under any Trust Sale and Servicing Agreement and the Pooling and Servicing
Agreement to any entity in which more than 50% of the voting interests are
owned, directly or indirectly, by General Motors. In the event of any such
subcontract, the Servicer will remain responsible for the subcontractor's
performance in accordance with such Trust Sale and Servicing Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement,
"Servicer Default" under each Trust Sale and Servicing Agreement will consist
of (i) any failure by the Servicer to deliver to the Indenture Trustee for
deposit in any of the Designated Accounts or to the Owner Trustee for deposit
in the Certificate Distribution Account any required payment or to direct the
Indenture Trustee to make any required distributions therefrom, which failure
continues unremedied for five Business Days after written notice from the
Indenture Trustee or the Owner Trustee is received by the Servicer or after
discovery of such failure by an officer of the Servicer; (ii) any failure by
the Servicer to duly observe or perform in any material respect any other
covenant or agreement in such Trust Sale and Servicing Agreement, the related
Pooling and Servicing Agreement, the related Trust Agreement or the related
Indenture which failure materially and adversely affects the rights of the
Noteholders or the Certificateholders and which continues unremedied for 90
days after the giving of written notice of such failure (A) to the Servicer
or the Seller, as the case may be, by the Indenture Trustee or the Owner
Trustee or (B) to the Servicer or the Seller, as the case may be, and to the
Indenture Trustee and the Owner Trustee by holders of Notes or Certificates,
as applicable, evidencing not less than 25% in principal amount of such
outstanding Notes or of such Certificate Balance; and (iii) certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings with respect to the Servicer and certain actions by the
Servicer indicating its insolvency, reorganization pursuant to bankruptcy
proceedings, or inability to pay its obligations (each, an "Insolvency
Event").
Notwithstanding the foregoing, there will be no Servicer Default where
a Servicer Default would otherwise exist under clause (i) above for a period
of ten Business Days or under clause (ii) for a period of 60 days if the delay
or failure giving rise to such Servicer Default was caused by an act of God
or other similar occurrence. Upon the occurrence of any such event, the
Servicer will not be relieved from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of the Pooling and
Servicing Agreement and the Trust Sale and Servicing Agreement and the
Servicer will provide the Indenture Trustee, the Owner Trustee, the Seller and
the Securityholders prompt notice of such failure or delay by it, together
with a description of its efforts to so perform its obligations.
30
RIGHTS UPON SERVICER DEFAULT
As long as a Servicer Default under a Trust Sale and Servicing Agreement
remains unremedied, the related Indenture Trustee or holders of related Notes
evidencing not less than a majority in principal amount of such then
outstanding Notes (or, if the Notes have been paid in full and the Indenture
has been discharged with respect thereto, the related Owner Trustee or the
holders of related Certificates evidencing not less than a majority of the
aggregate outstanding Certificate Balance of all Certificates other than
Certificates owned by the Trust, the Seller, GMAC or any of their affiliates)
may terminate all the rights and obligations of the Servicer under such Trust
Sale and Servicing Agreement and the related Pooling and Servicing Agreement,
<PAGE>
<PAGE>34
whereupon such Indenture Trustee will succeed to all the responsibilities,
duties and liabilities of the Servicer under such agreements and will be
entitled to similar compensation arrangements. If, however, a bankruptcy
trustee or similar official has been appointed for the Servicer, and no
Servicer Default other than such appointment has occurred, such trustee or
official may have the power to prevent the Indenture Trustee or the
Noteholders from effecting a transfer of servicing. In the event that the
Indenture Trustee is unwilling to so act, it may, and if it is unable to so
act, it shall appoint, or petition a court of competent jurisdiction for the
appointment of, a successor with a net worth of at least $100,000,000 and
whose regular business includes the servicing of automotive receivables and
which satisfies the other criteria set forth in the Trust Sale and Servicing
Agreement. The Indenture Trustee may make such arrangements for compensation
to be paid, which in no event may be greater than the servicing compensation
to the Servicer under such Trust Sale and Servicing Agreement.
WAIVER OF PAST DEFAULTS
With respect to each Trust, the holders of Notes evidencing at least a
majority in principal amount of the then outstanding related Notes (or the
holders of the related Certificates evidencing not less than a majority of the
outstanding Certificate Balance, in the case of any Servicer Default which
does not adversely affect the Indenture Trustee or the Noteholders) may, on
behalf of all such Noteholders and Certificateholders, waive any default by
the Servicer in the performance of its obligations under the Pooling and
Servicing Agreement and the Trust Sale and Servicing Agreement and its
consequences, except a Servicer Default in making any required deposits to or
payments from any of the Designated Accounts or the Certificate Distribution
Account in accordance with the Trust Sale and Servicing Agreement. No such
waiver will impair such Noteholders' or Certificateholders' rights with
respect to subsequent defaults.
AMENDMENT
Each of the Transfer and Servicing Agreements may be amended by the
parties thereto without the consent of the related Noteholders or
Certificateholders (i) to cure any ambiguity, (ii) to correct or supplement
any provision therein that may be defective or inconsistent with any other
provision therein, (iii) to add or supplement any credit enhancement for the
benefit of Noteholders or Certificateholders (provided that if any such
addition affects any class of Noteholders or Certificateholders differently
than any other class of Noteholders or Certificateholders, then such addition
will not, as evidenced by an opinion of counsel, adversely affect in any
material respect the interests of any class of Noteholders or
Certificateholders), (iv) to add to the covenants, restrictions or obligations
of the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or (v)
to add, change or eliminate any other provisions of such Agreement in any
manner that will not, as evidenced by an opinion of counsel, adversely affect
in any material respect the interests of the Noteholders or the
Certificateholders. Each such Agreement may also be amended by the parties
thereto with the consent of the holders of at least a majority in principal
amount of such then outstanding Notes and the holders of such Certificates
evidencing at least a majority of the Certificate Balance for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of such Agreement or of modifying in any manner the rights of such
Noteholders or Certificateholders; except that no such amendment may (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collection of payments on Receivables or distributions that are
required to be made on any Note or Certificate, any Interest Rate, any Pass
Through Rate or the Specified Reserve Account Balance or (ii) reduce the
aforesaid percentage required of Noteholders or Certificateholders to consent
to any such amendment without the consent of all of the Noteholders or
Certificateholders, as the case may be.
31
INSOLVENCY EVENT
With respect to each Trust, if an Insolvency Event occurs with respect
to the Seller, the related Trust will be terminated. In such event, the Trust
will be liquidated 90 days after the date of such Insolvency Event, unless,
before the end of such 90-day period, the Owner Trustee shall have
<PAGE>35
received written instructions from (i) each of the Certificateholders (other
than the Seller) and (ii) each of the Noteholders to the effect that each such
party disapproves of the liquidation of such Receivables and termination of
such Trust. Promptly after the occurrence of any Insolvency Event with
respect to the Seller, notice thereof is required to be given to Noteholders
and Certificateholders; except that any failure to give such required notice
will not prevent or delay termination of any Trust. Upon termination of any
Trust, the Owner Trustee shall direct the Indenture Trustee promptly to sell
the assets of such Trust (other than the Designated Accounts and the
Certificate Distribution Account) in a commercially reasonable manner and on
commercially reasonable terms. The proceeds from any such sale, disposition
or liquidation of the Receivables will be treated as collections on the
Receivables and deposited in the related Collection Account. With respect to
any series, if the proceeds from the liquidation of the Receivables and any
other available assets and any amounts on deposit in the Reserve Account, the
Payment Ahead Servicing Account, the Note Distribution Account and the
Certificate Distribution Account are not sufficient to pay the Notes in full,
the amount of principal returned to Noteholders and Certificateholders will
be reduced and the Noteholders and the Certificateholders will incur a loss.
Each Trust Agreement will provide that the Owner Trustee does not have
the power to commence a voluntary proceeding in bankruptcy relating to the
related Trust without the unanimous prior approval of all related
Certificateholders (including the Seller) and the delivery to the Owner
Trustee by each such Certificateholder (including the Seller) of a certificate
certifying that such Certificateholder reasonably believes that such Trust is
insolvent. In the Trust Sale and Servicing Agreement, the Servicer and the
Seller will covenant that they will not, for a period of one year and one day
after the final distribution with respect to the related Notes and the related
Certificates to the Note Distribution Account or the Certificate Distribution
Account, as applicable, institute against the related Trust any bankruptcy,
reorganization or other proceeding under any federal or state bankruptcy or
similar law.
SELLER LIABILITY
Under each Trust Agreement, the Seller will agree to be liable directly
to an injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a Noteholder or a Certificateholder
in the capacity of an investor) arising out of or based on the arrangement
created by such Trust Agreement as though such arrangement created a
partnership under the Delaware Revised Uniform Limited Partnership Act in
which the Seller were a general partner.
TERMINATION
Each Trust will terminate on the earlier to occur of (a) the final
distributions by the Indenture Trustee and the Owner Trustee of all monies and
other property of the Trust in accordance with the terms of the Trust
Agreement, the Indenture and the Trust Sale and Servicing Agreement (including
in the case of the exercise by the Servicer of its repurchase option as
described above in "Optional Repurchase by the Servicer") and (b) in the event
of certain insolvency events with respect to the Seller as described above
under "Insolvency Event." Upon termination of the Trust and payment (or
deposit into the Note Distribution Account and the Certificate Distribution
Account) of all amounts to be paid to the related Securityholders, any
remaining assets of the Trust and any amounts remaining on deposit in the
related Reserve Account will be paid to the Seller. Unless otherwise provided
in the related Prospectus Supplement, in order to avoid excessive
administrative expense, the Servicer, or its successor, will be permitted at
its option to purchase from each Trust, as of the last day of any Monthly
Period, if the then outstanding Aggregate Principal Balance of the Receivables
held by such Trust is 10% or less of the Aggregate Amount Financed, all
remaining related Receivables at a price equal to the aggregate Administrative
Purchase Payments for such Receivables plus the appraised value of any other
property held as part of the Trust less Liquidation Expenses, all as of the
end of such Monthly Period. As more fully described in the related Prospectus
Supplement, any related outstanding Notes will be
32
redeemed concurrently therewith and the subsequent distribution to related
Certificateholders of all amounts required to be distributed to them pursuant
<PAGE>36
to the Trust Agreement will effect early retirement of the Certificates. The
Indenture Trustee will give written notice of redemption to each related
Noteholder of record and the Owner Trustee will give written notice of
termination to each related Certificateholder of record. The final
distribution to any Noteholder or Certificateholder will be made only upon
surrender and cancellation of such Noteholder's Note at an office or agency
of the Indenture Trustee specified in the notice of redemption or such
Certificateholder's Certificate at an office or agency of the Owner Trustee
specified in the notice of termination.
ADMINISTRATION AGREEMENT
GMAC, in its capacity as administrator (the "Administrator"), will enter
into an agreement (an "Administration Agreement") with each Trust and the
related Indenture Trustee pursuant to which the Administrator will agree, to
the extent provided in such Administration Agreement, to provide the notices
and to perform other administrative obligations required by the related
Indenture. With respect to each Trust, as compensation for the performance
of the Administrator's obligations under the Administration Agreement and as
reimbursement for its expenses related thereto, the Administrator will be
entitled to an administration fee in an amount equal to $1,500 per month,
which fee will be paid by the Servicer.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In all states in which the Receivables have been originated, retail
instalment sale contracts such as the Receivables evidence the credit sale of
automobiles and light trucks by dealers to purchasers. The contracts also
constitute personal property security agreements and include grants of
security interests in the vehicles under the UCC. Perfection of security
interests in the vehicles is generally governed by the motor vehicle
registration laws of the state in which the vehicle is located. In all states
in which the Receivables have been originated, a security interest in a
vehicle is perfected by notation of the secured party's lien on the vehicle's
certificate of title.
With respect to each Trust, pursuant to the Pooling and Servicing
Agreement, GMAC will assign its security interest in the Financed Vehicles
securing the related Receivables to the Seller and pursuant to the Trust Sale
and Servicing Agreement, the Seller will assign its security interest in the
Financed Vehicles securing such Receivables to the Trust. However, because
of the administrative burden and expense, neither the Servicer nor the Owner
Trustee will amend any certificate of title to identify the Trust as the new
secured party on such certificate of title relating to a Financed Vehicle.
Also, GMAC will continue to hold any certificates of title relating to the
vehicles in its possession as custodian for the Seller and the Owner Trustee
pursuant to a custodian agreement entered into pursuant to the related Pooling
and Servicing Agreement and Trust Sale and Servicing Agreement. See "The
Transfer and Servicing Agreements-Sale and Assignment of Receivables."
In most states, an assignment such as that under both the related
Pooling and Servicing Agreement and the related Trust Sale and Servicing
Agreement is an effective conveyance of a security interest without amendment
of any lien noted on a vehicle's certificate of title, and the assignee
succeeds thereby to the assignor's rights as secured party. In the absence
of fraud or forgery by the vehicle owner or GMAC or administrative error by
state or local agencies, in most states the notation of GMAC's lien on the
certificates of title will be sufficient to protect the related Trust against
the rights of subsequent purchasers of a Financed Vehicle from an obligor or
subsequent lenders to an obligor who take a security interest in a Financed
Vehicle. If there are any Financed Vehicles as to which GMAC failed to obtain
a perfected security interest, its security interest would be subordinate to,
among others, subsequent purchasers of the Financed Vehicles and holders of
perfected security interests. Such a failure, however, would constitute a
breach of the warranties of GMAC under the related Pooling and Servicing
Agreement and, if the interests of the Securityholders in the related
Receivable are materially and adversely affected, would create an obligation
of GMAC to repurchase such Receivable unless the breach is cured. Similarly,
the security interest of the related Trust in the vehicle could be
defeated through fraud or negligence and, because the Trust is not identified
33
<PAGE>37
as the secured party on the certificate of title, by the bankruptcy petition
of the obligor.
Under the laws of most states, the perfected security interest in a
vehicle would continue for four months after a vehicle is moved to a state
other than the state in which it is initially registered and thereafter until
the vehicle owner re-registers the vehicle in the new state. A majority of
states generally require surrender of a certificate of title to re-register
a vehicle. Accordingly, a secured party must surrender possession if it holds
the certificate of title to the vehicle or, in the case of vehicles registered
in states providing for the notation of a lien on the certificate of title but
not possession by the secured party, the secured party would receive notice
of surrender if the security interest is noted on the certificate of title.
Thus, the secured party would receive notice of surrender if the security
interest is noted on the certificate of title. Thus, the secured party would
have the opportunity to re-perfect its security interest in the vehicles in
the state of relocation. In states that do not require surrender of a
certificate of title for registration of a motor vehicle, re-registration
could defeat perfection. In the ordinary course of servicing receivables, the
Servicer takes steps to effect re-perfection upon receipt of notice of re-
registration or information from the obligors as to relocation. Similarly,
when an obligor sells a vehicle, the Servicer must surrender possession of the
certificate of title or will receive notice as a result of its lien noted
thereon and accordingly will have an opportunity to require satisfaction of
the related Receivables before release of the lien. Under each Pooling and
Servicing Agreement, the Servicer is obligated to take appropriate steps, at
the Servicer's expense, to maintain perfection of security interests in the
Financed Vehicles.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected
security interest in a financed vehicle. The Code also grants priority to
certain federal tax liens over the lien of a secured party. The laws of
certain states and federal law permit the confiscation of motor vehicles by
governmental authorities under certain circumstances if used in unlawful
activities, which may result in the loss of a secured party's perfected
security interest in the confiscated motor vehicle. Under each Pooling and
Servicing Agreement, GMAC will have represented to the Seller that, as of the
Closing Date, each Receivable is or will be secured by a first perfected
security interest in favor of GMAC in the Financed Vehicle. The Seller will
have assigned such representation, among others, to the Owner Trustee pursuant
to the related Trust Sale and Servicing Agreement. However, liens for repairs
or taxes, or the confiscation of a Financed Vehicle, could arise at any time
during the term of a Receivable. No notice will be given to the Owner
Trustee, the Indenture Trustee, the Noteholder or the Certificateholder if
such a lien or confiscation arises.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the retail
instalment sale contract has all the remedies of a secured party under the
UCC, except where specifically limited by other state laws. Among the UCC
remedies, the secured party has the right to perform self-help repossession
unless such act would constitute a breach of the peace. Self-help is the
method employed by the Servicer in most cases and is accomplished simply by
retaking possession of the financed vehicle. In the event of default by the
obligor, some jurisdictions require that the obligor be notified of the
default and be given a time period within which he may cure the default prior
to repossession. Generally, the right of reinstatement may be exercised on
a limited number of occasions in any one-year period. In cases where the
obligor objects or raises a defense to repossession, or if otherwise required
by applicable state law, a court order must be obtained from the appropriate
state court, and the vehicle must then be repossessed in accordance with that
order. A secured party may be held responsible for damages caused by a
wrongful repossession of a vehicle.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held.
In addition, a consent order between the Servicer and the Federal Trade
Commission ("FTC Repossession Consent Order") imposes similar requirements
34
<PAGE>38
for the giving of notice for any such sale. The obligor has the right to
redeem the collateral prior to actual sale by paying the secured party the
unpaid principal balance of the obligation plus reasonable expenses for
repossessing, holding and preparing the collateral for disposition and
arranging for its sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent instalments or the unpaid
balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the Financed Vehicles generally will be
applied first to the expenses of resale and repossession and then to the
satisfaction of the indebtedness. In many instances, the remaining principal
amount of such indebtedness will exceed such proceeds. While some states
impose prohibitions or limitations on deficiency judgments if the net proceeds
from resale do not cover the full amount of the indebtedness, a deficiency
judgment can be sought in those states that do not prohibit or limit such
judgments. However, the deficiency judgment would be a personal judgment
against the obligor for the shortfall, and a defaulting obligor can be
expected to have very little capital or sources of income available following
repossession. Therefore, in many cases, it may not be useful to seek a
deficiency judgment or, if one is obtained, it may be settled at a significant
discount.
Occasionally, after resale of a vehicle and payment of all expenses and
all indebtedness, there is a surplus of funds. In that case, the UCC requires
the creditor to remit the surplus to any holder of a lien with respect to the
vehicle or if no such lienholder exists or there are remaining funds, the UCC
and the FTC Repossession Consent Order require the creditor to remit the
surplus to the former owner of the vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders and servicers
involved in consumer finance. These laws include the Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair
Credit Reporting Act, the Fair Debt Collection Procedures Act, the Magnuson-
Moss Warranty Act, the Federal Reserve Board's Regulations B and Z, the
Soldiers' and Sailors' Civil Relief Act of 1940, the Texas Consumer Credit
Code, state adoptions of the National Consumer Act and of the Uniform Consumer
Credit Code (the "UCCC") and state sales finance and other similar laws.
Also, state laws impose finance charge ceilings and other restrictions on
consumer transactions and require contract disclosures in addition to those
required under federal law. These requirements impose specific statutory
liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts such as the Receivables (or, if a seller with respect to a
Receivable is not liable for indemnifying the Trust as assignee of the
Receivables from the Seller, failure to comply could impose liability on an
assignee in excess of the amount of the Receivable).
The so-called "Holder-in-Due-Course" Rule of the Federal Trade
Commission (the "FTC Rule"), the provisions of which are generally duplicated
by the UCC, other state statutes or the common law, has the effect of
subjecting a seller in a consumer credit transaction (and certain related
creditors and their assignees) to all claims and defenses which the obligor
in the transaction could assert against the seller. Liability under the FTC
Rule is limited to the amounts paid by the obligor under the contract and the
holder of the contract may also be unable to collect any balance remaining due
thereunder from the obligor.
Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, the Owner Trustee of a Trust, as holder of the related
Receivables, will be subject to any claims or defenses that the purchaser of
the Financed Vehicle may assert against the seller of the Financed Vehicle.
Such claims are limited to a maximum liability equal to the amounts paid by
the obligor on the Receivable. If an obligor were successful in asserting any
such claim or defense, such claim or defense would constitute a breach of
GMAC's warranties under the related Pooling and Servicing Agreement and may
create an obligation of GMAC to repurchase the Receivable unless the breach
is cured. See "The Transfer and Servicing Agreements-Sale and Assignment of
Receivables."
<PAGE>39
Courts have imposed general equitable principles upon secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
35
In several cases, consumers have asserted that the self-help remedies
of secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the
United States. Courts have generally upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale
by the creditor do not involve sufficient state action to afford
constitutional protection to consumers.
Under each Pooling and Servicing Agreement, GMAC will represent to the
Seller that each Receivable complies with all requirements of law in all
material respects. The Seller will have assigned such representation, among
others, to the related Trust. Accordingly, if an obligor has a claim against
the Trust for violation of any law and such claim materially and adversely
affects the related Trust's interest in a Receivable, such violation would
constitute a breach of representation and would create an obligation to
repurchase the Receivable unless the breach is cured. See "The Transfer and
Servicing Agreements-Sale and Assignment of the Receivables."
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured
party to realize upon collateral or to enforce a deficiency judgment. For
example, in a Chapter 13 proceeding under the federal bankruptcy law, a court
may prevent a creditor from repossessing the Financed Vehicle, and, as part
of the rehabilitation plan, reduce the amount of the secured indebtedness to
the market value of the Financed Vehicle at the time of bankruptcy, leaving
the creditor as a general unsecured creditor for the remainder of the
indebtedness. A bankruptcy court may also reduce the monthly payments due
under a contract or change the rate of finance charge and time of repayment
of the indebtedness.
TRANSFER OF VEHICLES
The Receivables prohibit the sale or transfer of a Financed Vehicle
without the Servicer's consent and permit the Servicer to accelerate the
maturity of the Receivable upon a sale or transfer without the Servicer's
consent. The Servicer will not consent to a sale or transfer and will require
prepayment of the Receivable. Although the Servicer, as agent of each Owner
Trustee, may enter into a transfer of equity agreement with the secondary
purchaser for the purpose of effecting the transfer of the vehicle, the new
obligation will not be included in the related Receivables Pool.
SALE OF RECEIVABLES BY GMAC
As described herein, the transaction of the Receivables that are being
sold by GMAC to the Seller and from the Seller to the Trust have been
structured as, and will be treated by the parties as, sales. The United
States Court of Appeals for the Tenth Circuit recently found that accounts
sold prior to a bankruptcy should be treated as property of the bankruptcy
estate. In the event that GMAC or the Seller were a debtor in a bankruptcy
proceeding and the bankruptcy court applied this analysis, delays or
reductions in receipt of collections on the Receivables to the related Trust
and distributions on the related Securities to Securityholders could occur.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Set forth below is a discussion of the anticipated material United
States federal income tax consequences of the purchase, ownership and
disposition of the Notes and Certificates. This discussion is based upon
current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), existing and proposed Treasury Regulations thereunder, current
administrative rulings, judicial decisions and other applicable authorities.
There are no cases or Internal Revenue Service ("IRS") rulings on similar
transactions involving both debt and equity interests issued by a trust with
terms similar to those of the Notes and the Certificates. As a result, there
36
<PAGE>40
can be no assurance that the IRS will not challenge the conclusions reached
herein, and no ruling from the IRS has been or will be sought on any of the
issues discussed below. Furthermore, legislative, judicial or administrative
changes may occur, perhaps with retroactive effect, which could affect the
accuracy of the statements and conclusions set forth herein as well as the tax
consequences to Noteholders and Certificateholders.
This discussion does not purport to deal with all aspects of federal
income taxation that may be relevant to the Noteholders and Certificateholders
in light of their personal investment circumstances nor, except for certain
limited discussions of particular topics, to certain types of holders subject
to special treatment under the federal income tax laws (e.g., financial
institutions, broker-dealers, life insurance companies and tax-exempt
organizations). This information is directed to prospective purchasers who
purchase Notes or Certificates in the initial distribution thereof, who are
citizens or residents of the United States, including domestic corporations
and partnerships, and who hold the Notes or Certificates as "capital assets"
within the meaning of Section 1221 of the Code. Taxpayers and preparers of
tax returns (including those filed by any partnership or other issuer) should
be aware that under applicable Treasury regulations a provider of advice on
specific issues of law is not considered an income tax return preparer unless
the advice is (i) given with respect to events that have occurred at the time
the advice is rendered and is not given with respect to the consequences of
contemplated actions, and (ii) is directly relevant to the determination of
an entry on a tax return. Accordingly, taxpayers should consult their own tax
advisors and tax return preparers regarding the preparation of any item on a
tax return, even where the anticipated tax treatment has been discussed
herein. PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS
TO THE FEDERAL, STATE, LOCAL, FOREIGN AND ANY OTHER TAX CONSEQUENCES TO THEM
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES OR CERTIFICATES.
The following discussion addresses Securities falling into three general
categories: (i) Notes (other than Strip Notes or any other series of Notes
specifically identified as receiving different tax treatment in the related
Prospectus Supplement) which the Seller, the Servicer and the Noteholders will
agree to treat as indebtedness secured by the related Receivables, (ii)
Certificates representing interests in a trust fund which the Seller, the
Servicer and the applicable Certificateholders will agree to treat as equity
interests in a grantor trust (a "Tax Trust"), and (iii) Certificates
(including Strip Certificates) and Strip Notes, representing interests in a
trust fund which the Seller, the Servicer and the applicable holders will
agree to treat as equity interests in a partnership (a "Tax Partnership"), in
each case for purposes of federal, state and local income and franchise taxes.
Certificates issued by a Tax Trust are referred to herein as "Trust
Certificates", and Certificates (including Strip Certificates) and Strip Notes
issued by a Tax Partnership are referred to herein as "Partnership
Certificates." The Prospectus Supplement for each series of Certificates will
indicate whether the related trust fund is a Tax Trust or a Tax Partnership.
For purposes of this discussion, references to a "Certificateholder" or a
"holder" are to the beneficial owner of a Trust Certificate, Partnership
Certificate, or both, as the context may require.
The following discussion is based in part upon the rules governing
original issue discount ("OID") that are set forth in Sections 1271-1275 of
the Code and in proposed Treasury regulations issued under the OID provisions
of the Code (the "Recently Enacted OID Regulations"). The Recently Enacted
OID Regulations are subject to change through the adoption of final
regulations.
THE NOTES
Characterization as Debt. With respect to each series of Notes (except
for Strip Notes and any series which is specifically identified as receiving
different tax treatment in the applicable Prospectus Supplement), regardless
of whether such Notes are issued by a Tax Trust or a Tax Partnership, Kirkland
& Ellis, special tax counsel to the Seller ("Tax Counsel"), will deliver its
opinion to the effect that, although no specific authority exists with respect
to the characterization for federal income tax purposes of securities having
the same terms as the Notes, based on the terms of the Notes, the transactions
relating to the Receivables as set forth herein, and the discussions of Trust
Certificates and Partnership Certificates below, the
37
<PAGE>41
Notes will be treated as debt for federal income tax purposes. The Seller,
the Servicer and each Noteholder, by acquiring an interest in a Note, will
agree to treat the Notes as indebtedness for federal, state and local income
and franchise tax purposes. See "Trust Certificates-Classification of Trusts
and Trust Certificates" or "Partnership Certificates-Classification of
Partnerships and Partnership Certificates" for a discussion of the potential
federal income tax consequences to Noteholders if the IRS were successful in
challenging the characterization of a Tax Trust or a Tax Partnership for
federal income tax purposes.
Treatment of Stated Interest. Based on the foregoing opinion, the stated
interest on the Notes will be taxable to a Noteholder as ordinary income when
received or accrued in accordance with such Noteholder's method of tax
accounting. Except to the extent indicated in the related Prospectus
Supplement, no series of Notes will be issued with OID. A holder who
purchases a Note after the initial distribution thereof at a discount that
exceeds a statutorily defined de minimis amount will be subject to the "market
discount" rules of the Code, and a holder who purchases a Note at a premium
will be subject to the bond premium amortization rules of the Code.
If any Notes were treated as being issued with OID, a Noteholder would
be required to include OID in income as interest over the term of the Notes
under a constant yield method. In general, OID must be included in income in
advance of the receipt of cash representing that income. Thus, each cash
distribution would be treated as an amount already included in income (to the
extent OID has accrued as of the date of the interest distribution and is not
allocated to prior distributions), or as a repayment of principal. This
treatment would have no significant effect on Noteholders using the accrual
method of accounting. However, cash method Noteholders may be required to
report income with respect to the Notes in advance of the receipt of cash
attributable to such income.
A holder of a Note which has a fixed maturity date not more than one
year from the issue date of such Note (a "Short-Term Note") will generally not
be required to include market discount on the Note in income as it accrues,
provided such holder is not an accrual method taxpayer, a bank, a broker or
dealer that holds the Note as inventory, a regulated investment company or
common trust fund, or the beneficial owner of certain pass-through entities
specified in the Code, or provided such holder does not hold the instrument
as part of a hedging transaction, or as a stripped bond or stripped coupon.
Instead, the holder of a Short-Term Note would include the market discount
accrued on the Note in gross income upon sale or exchange or at maturity, or
if such Note is payable in installments, as principal is paid thereon. Such
a holder would be required to defer deductions for any interest expense on an
obligation incurred to purchase or carry the Short-Term Note to the extent it
exceeds the sum of the interest income, if any, and market discount accrued
on such Note. However, a holder may elect to include market discount in
income as it accrues on all obligations having a maturity of one year or less
held by the holder in that taxable year or thereafter, in which case the
deferral rule of the preceding sentence will not apply. For purposes of this
paragraph, market discount accrues on a Short-Term Note on a ratable
(straight-line) basis, unless the holder irrevocably elects (under regulations
to be issued by the Treasury Department) with respect to such obligation to
apply a constant interest method, using the holder's yield to maturity and
daily compounding.
Disposition of Notes. If a Noteholder sells a Note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of the Note to a particular Noteholder will equal the
holder's cost for the Note, increased by any OID, market discount and gain
previously included by such Noteholder in income with respect to the Note and
decreased by any bond premium previously amortized and any principal payments
previously received by such Noteholder with respect to such Note. Subject to
the market discount rules of the Code, any such gain or loss will be capital
gain or loss if the Note was held as a capital asset. Capital gain or loss
will be long-term if the Note was held by the holder for more than one year
and otherwise will be short-term. Any capital losses realized generally may
be used by a corporate taxpayer only to offset capital gains, and by an
individual taxpayer only to the extent of capital gains plus $3,000 of other
income.
<PAGE>42
Information Reporting and Backup Withholding. Each Tax Trust or Tax
Partnership will be required to report annually to the IRS, and to each
related Noteholder of record, the amount of interest paid on the Notes
38
(and the amount of interest withheld for federal income taxes, if any) for
each calendar year, except as to exempt holders (generally, corporations, tax-
exempt organizations, qualified pension and profit-sharing trusts, individual
retirement accounts, or nonresident aliens who provide certification as to
their status). Each holder (other than holders who are not subject to the
reporting requirements) will be required to provide to the related Tax Trust
or Tax Partnership, under penalties of perjury, a certificate containing the
holder's name, address, correct federal taxpayer identification number and a
statement that the holder is not subject to backup withholding. Should a
nonexempt Noteholder fail to provide the required certification, the Tax Trust
or Tax Partnership will be required to withhold, from interest otherwise
payable to the holder, 31% of such interest and remit the withheld amount to
the IRS as a credit against the holder's federal income tax liability.
Because the Seller will treat each Tax Trust as a grantor trust, each
Tax Partnership as a partnership and all Notes (except Strip Notes and others
as specifically identified in the related Prospectus Supplement) as
indebtedness for federal income tax purposes, the Seller will not comply with
the tax reporting requirements that would apply under any alternative
characterizations of a Tax Trust or Tax Partnership.
Tax Consequences to Foreign Noteholders. If interest paid (or accrued)
to a Noteholder who is a nonresident alien, foreign corporation or other non-
United States person (a "foreign person") is not effectively connected with
the conduct of a trade or business within the United States by the foreign
person, the interest generally will be considered "portfolio interest," and
generally will not be subject to United States federal income tax and
withholding tax, as long as the foreign person (i) is not actually or
constructively a "10 percent shareholder" of the related Tax Trust, Tax
Partnership, or the Seller (including a holder of 10% of the applicable
outstanding Certificates) or a "controlled foreign corporation" with respect
to which the related Tax Trust, Tax Partnership or the Seller is a "related
person" within the meaning of the Code, and (ii) provides an appropriate
statement, signed under penalties of perjury, certifying that the beneficial
owner of the Note is a foreign person and providing that foreign person's name
and address. If the information provided in this statement changes, the
foreign person must so inform the related Tax Trust or Tax Partnership within
30 days of such change. The statement generally must be provided in the year
a payment occurs or in either of the two preceding years. If such interest
were not portfolio interest, then it would be subject to United States federal
income and withholding tax at a rate of 30 percent unless reduced or
eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) the gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person, and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days
or more in the taxable year.
If the interest, gain or income on a Note held by a foreign person is
effectively connected with the conduct of a trade or business in the United
States by the foreign person, the holder (although exempt from the withholding
tax previously discussed if an appropriate statement is furnished) generally
will be subject to United States federal income tax on the interest, gain or
income at regular federal income tax rates. In addition, if the foreign
person is a foreign corporation, it may be subject to a branch profits tax
equal to 30 percent of its "effectively connected earnings and profits" within
the meaning of the Code for the taxable year, as adjusted for certain items,
unless it qualifies for a lower rate under an applicable tax treaty.
<PAGE>43
TRUST CERTIFICATES
Classification of Trusts and Trust Certificates. With respect to each
series of Certificates identified in the related Prospectus Supplement as
Trust Certificates, Tax Counsel will deliver its opinion to the effect that
the related Tax Trust will not be taxable as an association or publicly traded
partnership taxable as a corporation, but should be classified as a grantor
trust under Sections 671 through 679 of the Code. For each such series, the
Seller and the Certificateholders will express in the Trust
39
Agreement and on the Trust Certificates their intent that, for federal, state
and local income and franchise tax purposes, the Trust Certificates will
represent an equity interest in a grantor trust. The Seller and each
Certificateholder, by acquiring an interest in any such Trust Certificate,
will agree to treat such Trust Certificates as an equity interest in the Tax
Trust, for federal, state and local income and franchise tax purposes.
However, the proper characterization of the arrangement involving the Tax
Trust, the Trust Certificates, the Seller and the Servicer is not clear
because there is no authority on transactions closely comparable to that
contemplated herein.
Although, as described above, Tax Counsel will opine that each such Tax
Trust should properly be characterized as a grantor trust for federal income
tax purposes, such opinion is not binding on the IRS or the courts and no
assurance can be given that this characterization would prevail. If the IRS
were to contend successfully that any such Tax Trust is not a grantor trust,
such Tax Trust should be classified for federal income tax purposes as a
partnership which is not taxable as a corporation. The income reportable by
the holders of such Trust Certificates as partners could differ from the
income reportable by the holders of such Trust Certificates as grantors of a
grantor trust. However, it is not expected that such differences would be
material. See discussion of Partnership Certificates below.
If, however, the IRS were to contend successfully that a Tax Trust is
an association taxable as a corporation for federal income tax purposes, such
Tax Trust would be subject to federal and state income tax at corporate rates
on the income from the Receivables (reduced by deductions, including interest
on any Notes unless the Notes were treated as an equity interest). Any such
corporate income tax could materially reduce or eliminate cash that would
otherwise be distributable with respect to the related Trust Certificates and
any related Notes. The Certificateholders and, if the Notes were also treated
as an equity interest in the taxable corporation, the Noteholders could be
liable for any such tax to the extent it is not paid by the related Tax Trust.
However, as described above, in the opinion of Tax Counsel, each Tax Trust
will not be classified as an association taxable as a corporation because it
will not have certain characteristics necessary for a trust to constitute an
association taxable as a corporation.
If a Tax Trust were classified for federal income tax purposes as a
partnership, the IRS might contend that it is a "publicly traded partnership"
taxable as a corporation. However, in the opinion of Tax Counsel, even if a
Tax Trust were treated as a publicly traded partnership, such Tax Trust would
not be taxable as a corporation because it would meet certain qualifying
income tests. Nonetheless, if the Tax Trust were treated as a publicly traded
partnership and the Notes were treated as equity interests in such a
partnership, certain holders could suffer adverse tax consequences. For
example, income to certain tax-exempt entities (including pension funds) would
be "unrelated business taxable income," and individual holders might be
subject to certain limitations on their ability to deduct their share of such
Tax Trust's expenses.
Despite Tax Counsel's opinion that a Tax Trust should be classified as
a grantor trust, the lack of cases or rulings on similar transactions, as
discussed above, permits a variety of alternative characterizations in
addition to the position to be taken that the Trust Certificates represent
equity interests in a grantor trust. For example, because Trust Certificates
will have certain features characteristic of debt, the Trust Certificates
might be considered indebtedness of a Tax Trust, the Seller or the Issuer.
Except as described above, any such characterization would not result in
materially adverse tax consequences to Certificateholders as compared to the
consequences from treatment of Trust Certificates as equity in a trust,
described below. The following discussion assumes that Trust Certificates
represent equity interests in a grantor trust.
<PAGE>44
Grantor Trust Treatment. As a grantor trust, a Tax Trust will not be
subject to federal income tax. Assuming that the Receivables are not
characterized as "stripped bonds" or otherwise recharacterized, in Tax
Counsel's opinion each Certificateholder will be required to report on its
federal income tax return its pro rata share of the entire income from the
Receivables and any other property in the related Tax Trust for the period
during which it owns a Trust Certificate, including interest or finance
charges earned on the Receivables and any gain or loss upon collection or
disposition of the Receivables, in accordance with such Certificateholder's
method of accounting. A Certificateholder using the cash method of
40
accounting should take into account its pro rata share of income as and when
received by the Owner Trustee. A Certificateholder using an accrual method
of accounting should take into account its pro rata share of income as it
accrues or is received by the Owner Trustee, whichever is earlier.
Assuming that the market discount rules do not apply, the portion of
each payment to a Certificateholder that is allocable to principal on the
Receivables will represent a recovery of capital, which will reduce the tax
basis of such Certificateholder's undivided interest in the Receivables. In
computing its federal income tax liability, a Certificateholder will be
entitled to deduct, consistent with its method of accounting, its pro rata
share of interest paid on any related Notes, reasonable servicing fees, and
other fees paid or incurred by the related Tax Trust as provided in Section
162 or 212 of the Code. If a Certificateholder is an individual, estate or
trust, the deduction for such Certificateholder's pro rata share of such fees
will be allowed only to the extent that all of such Certificateholder's
miscellaneous itemized deductions, including such fees, exceed 2% of such
Certificateholder's adjusted gross income. In addition, in the case of
Certificateholders who are individuals, certain otherwise allowable itemized
deductions will be reduced, but not by more than 80%, by an amount equal to
3% of the Certificateholder's adjusted gross income in excess of a statutorily
defined threshold (which was $105,250 in the case of a married couple filing
jointly for a taxable year beginning in 1992). Because the Servicer will not
report to Certificateholders the amount of income or deductions attributable
to miscellaneous charges, such a Certificateholder may effectively underreport
its net taxable income. See "Recharacterization of Fees" below for a
discussion of other possible consequences if amounts paid to the Servicer
exceed reasonable compensation for services rendered.
Recharacterization of Fees. The Servicer intends to report income to
Certificateholders on the assumption that the Certificateholders own a 100%
interest in all of the principal and interest derived from the related
Receivables. However, a portion of the amounts paid to the Servicer or the
Seller may exceed reasonable fees for services rendered, by reason of the
extent to which either the weighted average APR of the Receivables, or the
individual stated APRs of some of the Receivables, exceed the Pass Through
Rate. There are no authoritative guidelines, for federal income tax purposes,
as to the maximum amount of compensation that may be considered reasonable for
servicing the Receivables or performing other services, in the context of this
or similar transactions; accordingly, Tax Counsel is unable to give an opinion
on this issue. If amounts paid to the Servicer or the Seller exceed
reasonable compensation for services provided, the Servicer or the Seller or
both may be viewed as having retained, for federal income tax purposes, an
ownership interest in a portion of each interest payment with respect to
certain Receivables. As a result, such Receivables may be treated as
"stripped bonds" within the meaning of the Code.
To the extent that the Receivables are characterized as "stripped
bonds," the income and deductions of the related Tax Trust allocable to
Certificateholders would not include the portion of the interest on the
Receivables treated as having been retained by the Servicer or the Seller, as
the case may be, and such Tax Trust's deductions would be limited to
reasonable servicing fees, interest paid on any related Notes and other fees.
In addition, a Certificateholder would not be subject to the market discount
and premium rules discussed below with respect to the stripped Receivables,
but instead would be subject to the OID rules of the Code. However, if the
price at which a Certificateholder were deemed to have acquired a stripped
Receivable is less than the remaining principal balance of such Receivable by
<PAGE>45
an amount which is less than a statutorily defined de minimis amount, such
Receivable would not be treated as having OID. In general, under Temporary
Regulations it appears that the amount of OID on a Receivable treated as a
"stripped bond" will be de minimis if it is less than 1/4 of 1% for each full
year remaining after the purchase date until the final maturity of the
Receivable, although the IRS could take the position that the weighted average
maturity date, rather than the final maturity date, should be used in
performing this calculation. If the amount of OID was de minimis under this
rule, the actual amount of discount on such a Receivable would be includible
in income as principal payments are received on the Receivable.
If the OID on a Receivable were not treated as de minimis, a
Certificateholder would be required to include any OID in income as it
accrues, regardless of when cash payments are received, using a method
reflecting a constant yield on the Receivables. It is possible that the IRS
41
could assert that a prepayment assumption should be used in computing the
yield of a stripped Receivable. If a stripped Receivable is deemed to be
acquired by a Certificateholder at a significant discount, such prepayment
assumption could accelerate the accrual of income by a Certificateholder. No
representation is made, nor is Tax Counsel able to give an opinion, that
Receivables will prepay at any particular rate. Prospective investors are
urged to consult their own tax advisors regarding the likelihood that a
portion of the amounts paid to the Servicer or Seller might be characterized
other than as compensation for services rendered for federal income tax
purposes.
It is also possible that any fees deemed to be excessive could be
recharacterized as deferred purchase price payable to the Seller by
Certificateholders in exchange for the related Receivables. The likely effect
of such recharacterization would be to increase current taxable income to a
Certificateholder.
Discount and Premium. The following discussion generally assumes that
the fees and other amounts payable to the Servicer and the Seller will not be
recharacterized as being retained ownership interests in the Receivables (as
discussed above). A purchaser of a Trust Certificate should be treated as
purchasing an interest in each Receivable and any other property in the
related Tax Trust at a price determined by allocating the purchase price paid
for the Trust Certificate among the Receivables and other property in
proportion to their fair market values at the time of purchase of the Trust
Certificate.
It is believed that the Receivables were not and will not be issued with
OID and, therefore, that a Tax Trust should not have OID income. However, the
purchase price paid by said Tax Trust for the Receivables may be greater or
less than the remaining principal balance of the Receivables at the time of
purchase. If so, the Receivables will have been acquired at a premium or
market discount, as the case may be. The market discount on a Receivable will
be considered to be zero if it is less than the statutorily defined de minimis
amount.
Any gain on the sale of a Trust Certificate attributable to the holder's
share of unrecognized accrued market discount on the related Receivables would
generally be treated as ordinary income to the holder and would give rise to
special tax reporting requirements. Moreover, a holder who acquires a Trust
Certificate representing an interest in Receivables acquired at a market
discount may be required to defer a portion of any interest expense otherwise
deductible with respect to indebtedness incurred or maintained to purchase or
carry the Trust Certificate until the holder disposes of the Trust Certificate
in a taxable transaction. Instead of recognizing market discount, if any,
upon a disposition of Trust Certificates (and deferring any applicable
interest expense), a holder may elect to include market discount in income
currently as the discount accrues. The current inclusion election, once made,
applies to all market discount obligations acquired on or after the first day
of the first taxable year to which the election applies, and may not be
revoked without the consent of the IRS.
<PAGE>46
In the event that a Receivable is treated as purchased at a premium
(i.e., the allocable portion of the Certificateholder's purchase price for the
related Trust Certificate exceeds the remaining principal balance of the
Receivable), such premium will be amortizable by a Certificateholder as an
offset to interest income (with a corresponding reduction in basis) under a
constant yield method over the term of the Receivable if the Certificateholder
makes an election under Section 171 of the Code with respect to the
Receivables. Any such election will also apply to debt instruments held by
the Certificateholder during the year in which the election is made and to all
debt instruments acquired thereafter.
Disposition of Trust Certificates. Generally, capital gain or loss will
be recognized on a sale of Trust Certificates in an amount equal to the
difference between the amount realized and the seller's tax basis in the Trust
Certificates sold. A Certificateholder's tax basis in a Trust Certificate
will generally equal his cost increased by his share of the Tax Trust's income
(includible in his income) and decreased by any distributions received with
respect to such Trust Certificate. Any gain on the sale of a Trust
Certificate attributable to the holder's share of unrecognized accrued market
discount on the related Receivables would generally be treated as ordinary
income to the holder and would give rise to special tax reporting
requirements, unless a Certificateholder makes the special election described
under "Discount and Premium" above.
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If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Trust Certificates that exceeds the
aggregate cash distributions with respect thereto, such excess will generally
give rise to a capital loss upon the retirement of the Trust Certificates.
Backup Withholding. Distributions made on Trust Certificates and
proceeds from the sale of the Certificates will be subject to a "backup"
withholding tax of 31% if, as discussed above with respect to the Notes, the
Certificateholder fails to comply with certain identification procedures,
unless the holder is an exempt recipient under applicable provisions of the
Code.
Tax Consequences to Foreign Trust Certificateholders. Interest
attributable to Receivables which is received by a Certificateholder which is
a foreign person will generally not be subject to the normal 30% withholding
tax imposed with respect to such payments, provided that such
Certificateholder is not engaged in a trade or business in the United States
and that such Certificateholder fulfills the certification requirements
discussed above under "The Notes-Tax Consequences to Foreign Noteholders."
PARTNERSHIP CERTIFICATES
Classification of Partnerships and Partnership Certificates. With
respect to each series of Certificates identified in the related Prospectus
Supplement as Partnership Certificates, the Seller and the Servicer will
agree, and the Certificateholders will agree by their purchase of such
Partnership Certificates, to treat the Tax Partnership as a partnership for
purposes of federal, state and local income and franchise tax purposes, with
the partners of such Partnership being the Certificateholders and the Seller
(in its capacity as recipient of distributions from the Reserve Account), and
any related Notes being debt of such Tax Partnership. However, the proper
characterization of the arrangement involving the Tax Partnership, the
Partnership Certificates, the Seller and the Servicer is not clear because
there is no authority on transactions closely comparable to that contemplated
herein.
If the Tax Partnership were an association taxable as a corporation for
federal income tax purposes, such Tax Partnership would be subject to
corporate income tax. Any such corporate income tax could materially reduce
or eliminate cash that would otherwise be distributable with respect to the
Partnership Certificates (and Certificateholders could be liable for any such
tax that is unpaid by such Tax Partnership). However, upon the issuance of
each series of Partnership Certificates, Tax Counsel will deliver its opinion
generally to the effect that such Tax Partnership will not be classified as
an association taxable as a corporation because it will not have certain
characteristics necessary for a trust to be an association taxable as a
corporation.
<PAGE>47
Even if a Tax Partnership were not an association taxable as a
corporation, it would be subject to corporate income tax if it were a
"publicly traded partnership" taxable as a corporation. However, in the
opinion of Tax Counsel, even if such Tax Partnership were treated as a
publicly traded partnership, it would not be taxable as a corporation because
it would meet certain qualifying income tests. Nonetheless, if a Tax
Partnership were treated as a publicly traded partnership and the Partnership
Certificates were treated as equity interests in such a partnership, certain
holders could suffer adverse consequences. For example, income to certain
tax-exempt entities (including pension funds) would be "unrelated business
taxable income," and individual holders might be subject to certain
limitations on their ability to deduct their share of the Tax Partnership's
expenses.
Despite Tax Counsel's opinion that a Tax Partnership will be classified
as a partnership and not as an association or publicly traded partnership
taxable as a corporation, the lack of cases or rulings on similar
transactions, as discussed above, permits a variety of alternative
characterizations in addition to the position to be taken that the Partnership
Certificates represent equity interests in a partnership. For example,
because the Partnership Certificates will have certain features characteristic
of debt, the Partnership Certificates might be considered indebtedness of the
Tax Partnership, the Seller or the Issuer. Except as
43
described above, any such characterization would not result in materially
adverse tax consequences to Certificateholders as compared to the consequences
from treatment of the Partnership Certificates as equity in a partnership,
described below. The following discussion assumes that the Partnership
Certificates represent equity interests in a partnership.
Partnership Taxation. As a partnership, a Tax Partnership will not be
subject to federal income tax, but each Certificateholder will be required to
separately take into account such holder's allocated share of income, gains,
losses, deductions and credits of such Tax Partnership. The Tax Partnership's
income will consist primarily of interest and finance charges earned on the
related Receivables (including appropriate adjustments for market discount,
OID, and bond premium) and any gain upon collection or disposition of such
Receivables. The Tax Partnership's deductions will consist primarily of
interest accruing with respect to any related Notes, servicing and other fees,
and losses or deductions upon collection or disposition of the related
Receivables.
The tax items of a partnership are allocable to the partners in
accordance with the Code, Treasury regulations and the partnership agreement
(with respect to any series of Partnership Certificates, the Trust Agreement
and related documents). Each Trust Agreement for a Tax Partnership will
provide that the Certificateholders will be allocated taxable income of the
related Tax Partnership for each month equal to the sum of (i) the Pass
Through Rate on the related Partnership Certificates for such month; (ii) an
amount equivalent to interest that accrues during such month on amounts
previously due on such Partnership Certificates but not yet distributed; (iii)
any Tax Partnership income attributable to discount on the related Receivables
that corresponds to any excess of the principal amount of the Partnership
Certificates over their initial issue price; and (iv) any Prepayment Surplus
(as defined in the related Prospectus Supplement) payable to the Partnership
Certificates for such month. If the Tax Partnership issues any Strip Notes
or Strip Certificates, it will also provide that the related
Certificateholders will be allocated taxable income of such Tax Partnership
for each month in the amounts described in the related Prospectus Supplement.
All taxable income of the Tax Partnership remaining after the allocations to
the Certificateholders will be allocated to the Seller. It is believed that
the allocations to Certificateholders will be valid under applicable Treasury
regulations, although no assurance can be given that the IRS would not require
a greater amount of income to be allocated to Certificateholders. Moreover,
even under the foregoing method of allocation, Certificateholders may be
allocated income equal to the entire Pass Through Rate plus the other items
described above, and holders of Strip Notes or Strip Certificates may be
allocated income equal to the amount described in the related Prospectus
Supplement, even though the related Tax Partnership might not have sufficient
cash to make current cash distributions of such
<PAGE>48
amount. Thus, cash basis holders will in effect be required to report income
from the Partnership Certificates on the accrual basis. In addition, because
tax allocations and tax reporting will be done on a uniform basis for all
Certificateholders but Certificateholders may be purchasing Partnership
Certificates at different times and at different prices, Certificateholders
may be required to report on their tax returns taxable income that is greater
or less than the amount reported to them by the related Tax Partnership.
Additionally, all of the taxable income allocated to a Certificateholder
that is a pension, profit sharing or employee benefit plan or other tax-exempt
entity (including an individual retirement account) will constitute "unrelated
business taxable income" generally taxable to such a holder under the Code.
An individual taxpayer may generally deduct miscellaneous itemized
deductions (which do not include interest expense) only to the extent they
exceed two percent of adjusted gross income, and, in addition, certain other
limitations may apply. Those limitations would apply to an individual
Certificateholder's share of expenses of a Tax Partnership (including fees to
the Servicer) and might result in such holder being taxed on an amount of
income that exceeds the amount of cash actually distributed to such holder
over the life of such Tax Partnership.
Each Tax Partnership intends to make all tax calculations relating to
income and allocations to Certificateholders on an aggregate basis. If the
IRS were to require that such calculations be made separately for each
44
Receivable, a Tax Partnership might be required to incur additional expense
but it is believed that there would not be a material adverse effect on
Certificateholders.
Discount and Premium. It is believed that the Receivables were not and
will not be issued with OID and, therefore, that a Tax Partnership should not
have OID income. However, the purchase price paid by such Tax Partnership for
the related Receivables may be greater or less than the remaining principal
balance of such Receivables at the time of purchase. If so, such Receivables
will have been acquired at a premium or discount, as the case may be. (As
indicated above, each Tax Partnership will make this calculation on an
aggregate basis, but might be required to recompute it on a Receivable by
Receivable basis.)
Each Tax Partnership will make an election that will result in any
market discount on the related Receivables being included in income currently
as such discount accrues over the life of such Receivables. As indicated
above, a portion of such market discount income will be allocated to
Certificateholders.
Section 708 Termination. Under Section 708 of the Code, a Tax
Partnership will be deemed to terminate for federal income tax purposes if 50%
or more of the capital and profits interests in such Tax Partnership are sold
or exchanged within a 12-month period. If such a termination occurs, a Tax
Partnership will be considered to distribute its assets to the partners (i.e.,
Certificateholders and the Seller), who would then be treated as
recontributing those assets to a Tax Partnership, as a new partnership. A Tax
Partnership will not comply with certain technical requirements that might
apply when such a constructive termination occurs. As a result, such Tax
Partnership may be subject to certain tax penalties and may incur additional
expenses if it is required to comply with those requirements. Furthermore,
a Tax Partnership might not be able to comply due to lack of data.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Partnership Certificates in an amount equal to the
difference between the amount realized and the seller's tax basis in the
Partnership Certificates sold. A Certificateholder's tax basis in a
Partnership Certificate will generally equal his cost increased by his share
of the related Tax Partnership's income (includible in his income) and
decreased by any distributions received with respect to such Partnership
Certificate. In addition, both tax basis in the Partnership Certificates and
the amount realized on a sale of a Partnership Certificate would include the
<PAGE>49
holder's share of any related Notes and other liabilities of such Tax
Partnership. A holder acquiring Partnership Certificates of the same series
at different prices may be required to maintain a single aggregate adjusted
tax basis in such Partnership Certificates, and, upon sale or other
disposition of some of the Partnership Certificates, allocate a pro rata
portion of such aggregate tax basis to the Partnership Certificates sold
(rather than maintaining a separate tax basis in each Partnership Certificate
for purposes of computing gain or loss on a sale of that Partnership
Certificate).
Any gain on the sale of a Partnership Certificate attributable to the
holder's share of unrecognized accrued market discount on the related
Receivables would generally be treated as ordinary income to the holder and
would give rise to special tax reporting requirements. Each Tax Partnership
does not expect to have any other assets that would give rise to such special
reporting requirements. Thus, to avoid those special reporting requirements,
each Tax Partnership will elect to include market discount in income as it
accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Partnership Certificates that exceeds
the aggregate cash distributions with respect thereto, such excess will
generally give rise to a capital loss upon the retirement of the Partnership
Certificates.
Allocations Between Transferors and Transferees. In general, each Tax
Partnership's taxable income and losses will be determined monthly and the tax
items for a particular calendar month will be apportioned among the
Certificateholders in proportion to the principal amount of the Partnership
Certificates or a fractional share of the Strip Notes or Strip Certificates
owned by them as of the first Record Date following the end of such month.
As a result, a holder purchasing Partnership Certificates may be allocated tax
items (which will affect its tax liability and tax basis) attributable to
periods before the actual transaction.
45
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or
losses of a Tax Partnership might be reallocated among the Certificateholders.
The Trustee is authorized to revise a Tax Partnership's method of allocation
between transferors and transferees to conform to a method permitted by future
regulations.
Section 754 Election. In the event that a Certificateholder sells its
Partnership Certificate at a profit (loss), the purchasing Certificateholder
will have a higher (lower) basis in the Partnership Certificates than the
selling Certificateholder had. The tax basis of the related Tax Partnership's
assets will not be adjusted to reflect that higher (or lower) basis unless
such Tax Partnership were to file an election under Section 754 of the Code.
In order to avoid the administrative complexities that would be involved in
keeping accurate accounting records, as well as potentially onerous
information reporting requirements, a Tax Partnership will not make such
election. As a result, Certificateholders might be allocated a greater or
lesser amount of Tax Partnership income than would be based on their own
purchase price for Partnership Certificates.
Administrative Matters. For each Tax Partnership, the related Owner
Trustee is required to keep or have kept complete and accurate books of such
Tax Partnership. Such books will be maintained for financial reporting and
tax purposes on an accrual basis and the fiscal year of each Tax Partnership
will be the calendar year. The Owner Trustee will file a partnership
information return (IRS Form 1065) with the IRS for each taxable year of such
Tax Partnership and will report each Certificateholder's allocable share of
items of Tax Partnership income and expense to holders and the IRS on Schedule
K-1. Each Tax Partnership will provide the Schedule K-1 information to
nominees that fail to provide such Tax Partnership with the information
statement described below and such nominees will be required to forward such
information to the beneficial owners of the related Partnership Certificates.
Generally, holders must file tax returns that are consistent with the
information return filed by the related Tax Partnership or be subject to
penalties unless the holder notifies the IRS of all such inconsistencies.
<PAGE>50
Under Code Section 6031, any person that holds Partnership Certificates
as a nominee at any time during a calendar year is required to furnish the
related Tax Partnership with a statement containing certain information on the
nominee, the beneficial owners and the Partnership Certificates so held. Such
information includes (i) the name, address and taxpayer identification number
of the nominee and (ii) as to each beneficial owner (x) the name, address and
taxpayer identification number of such person, (y) whether such person is a
United States person, a tax-exempt entity or a foreign government, an
international organization, or any wholly-owned agency or instrumentality of
either of the foregoing, and (z) certain information on Partnership
Certificates that were held, bought or sold on behalf of such person
throughout the year. In addition, brokers and financial institutions that
hold Partnership Certificates through a nominee are required to furnish
directly to the related Tax Partnership information as to themselves and their
ownership of Partnership Certificates. A clearing agency registered under
Section 17A of the Exchange Act is not required to furnish any such
information statement to a Tax Partnership. The information referred to above
for any calendar year must be furnished to the related Tax Partnership on or
before the following January 31. Nominees, brokers and financial institutions
that fail to provide the Tax Partnership with the information described above
may be subject to penalties.
The Seller, as the tax matters partner for each Tax Partnership, will
be responsible for representing the Certificateholders in any dispute with the
IRS. The Code provides for administrative examination of a partnership as if
the partnership were a separate taxpayer. Generally, the statute of
limitations for partnership items does not expire until three years after the
date on which the partnership information return is filed or deemed filed.
Any adverse determination following an audit of the return of a Tax
Partnership by the appropriate taxing authorities could result in an
adjustment of the returns of the Certificateholders and, under certain
circumstances, a Certificateholder may be precluded from separately litigating
a proposed adjustment to the items of the related Tax Partnership. An
adjustment could result in an audit of a Certificateholder's returns and
adjustments of items not related to the income and losses of the related Tax
Partnership.
46
Tax Consequences to Foreign Certificateholders. It is not clear whether
any Tax Partnership would be considered to be engaged in a trade or business
in the United States for purposes of Federal withholding taxes with respect
to non-U.S. persons because there is no clear authority regarding that issue
under facts substantially similar to those described herein. Although it is
not expected that any Tax Partnership would be engaged in a trade or business
in the United States for such purposes, such Tax Partnership will withhold as
if it were so engaged in order to protect such Tax Partnership from possible
adverse consequences of a failure to withhold. It is expected that each Tax
Partnership will withhold on the portion of its taxable income that is
allocable to foreign Certificateholders pursuant to Code Section 1446, as if
such income were effectively connected to a U.S. trade or business, at a rate
of 35% for foreign holders that are taxable as corporations and 39.6% for all
other foreign holders. Subsequent adoption of Treasury regulations or
issuance of other administrative pronouncements may require a Tax Partnership
to change its withholding procedures. In determining a holder's nonforeign
status, a Tax Partnership may rely on IRS Form W-8, IRS Form W-9 or the
holder's certification of nonforeign status signed under penalties of perjury.
Each foreign holder might be required to file a U.S. individual or
corporate income tax return and pay tax (including, in the case of a
corporation, the branch profits tax) on its share of the related Tax
Partnership's income. Each foreign holder must obtain a taxpayer
identification number from the IRS and submit that number to the related Tax
Partnership on Form W-8 in order to assure appropriate crediting of the taxes
withheld. A foreign holder generally would be entitled to file with the IRS
a claim for refund with respect to taxes withheld by the related Partnership,
taking the position that no taxes were due because such Tax Partnership was
not engaged in a U.S. trade or business. However, the IRS may assert that
the tax liability should be based on gross income, and no assurance can be
given as to the appropriate amount of tax liability.
<PAGE>51
Backup Withholding. Distributions made on any Partnership Certificates
and proceeds from sale of such Partnership Certificates will be subject to a
"backup" withholding tax of 31% if, as discussed above with respect to the
Notes, the Certificateholder fails to comply with certain identification
procedures, unless the holder is an exempt recipient under applicable
provisions of the Code.
STATE AND LOCAL TAX CONSEQUENCES
The above discussion does not address the tax treatment of any Tax
Trust, Tax Partnership, Notes, Certificates, Noteholders or Certificateholders
under any state or local tax laws. The activities to be undertaken by the
Servicer in servicing and collecting the Receivables will take place
throughout the United States and, therefore, many different tax regimes
potentially apply to different portions of these transactions. Prospective
investors are urged to consult with their own tax advisors regarding the state
and local tax treatment of any Tax Trust or Tax Partnership as well as any
state and local tax consequences to them of purchasing, holding and disposing
of Notes or Certificates.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension, profit-
sharing or other employee benefit plan, as well as individual retirement
accounts and certain types of Keogh Plans (each a "Benefit Plan"), from
engaging in certain transactions with persons that are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to such
Benefit Plan. A violation of these "prohibited transaction" rules may result
in an excise tax or other penalties and liabilities under ERISA and the Code
for such persons.
Certain transactions involving the Trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit
Plan that purchased Notes or Certificates if assets of the Trust were deemed
to be assets of the Benefit Plan. Under a regulation issued by the United
States Department of Labor (the "Plan Assets Regulation"), the assets of the
Trust would be treated as plan assets of a Benefit Plan for the purposes of
47
ERISA and the Code only if the Benefit Plan acquired an "equity interest" in
the Trust and none of the exceptions contained in the Plan Assets Regulation
was applicable. An equity interest is defined under the Plan Assets
Regulation as an interest other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features. The likely treatment of Notes and Certificates is discussed in the
related Prospectus Supplement.
Employee benefit plans that are governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33)
of ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Notes should consult its
tax and/or legal advisors regarding whether the assets of the Trust would be
considered plan assets, the possibility of exemptive relief from the
prohibited transaction rules and other issues and their potential
consequences.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in one or more underwriting
agreements (each an "Underwriting Agreement") with respect to each Trust, the
Seller will agree to sell to each of the underwriters named therein and in the
related Prospectus Supplement, and each of such underwriters will severally
agree to purchase from the Seller, the principal amount of each class of
Securities of the related series set forth therein and in the related
Prospectus Supplement.
<PAGE>52
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the
Securities described therein which are offered hereby and by the related
Prospectus Supplement if any of such Securities are purchased. In the event
of a default by any such underwriter, each Underwriting Agreement will provide
that, in certain circumstances, purchase commitments of the nondefaulting
underwriters may be increased or the Underwriting Agreement may be terminated.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Securities being offered thereby will be offered to the public
and any concessions that may be offered to certain dealers participating in
the offering of such Securities or (ii) specify that the related Securities
are to be resold by the Underwriters in negotiated transactions at varying
prices to be determined at the time of such sale. After the initial public
offering of any Securities, the public offering price and such concessions may
be changed.
Each Underwriting Agreement will provide that the Seller will indemnify
the underwriters against certain liabilities, including liabilities under the
Securities Act.
The Indenture Trustee may, from time to time, invest the funds in the
Designated Accounts in Eligible Investments acquired from the underwriters.
Under each Underwriting Agreement, except as otherwise provided in the
related Prospectus Supplement, the closing of the sale of any class of
Securities subject thereto will be conditioned on the closing of the sale of
all other such classes.
The place and time of delivery for the Securities in respect of which
this Prospectus is delivered will be set forth in the related Prospectus
Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Notes and the Certificates will
be passed upon for each Trust, the Seller and GMAC by Richard B. Wagner,
Esq., General Counsel of GMAC, and by Kirkland & Ellis, special counsel to the
Seller, each Trust and GMAC. Mr. Wagner owns shares of each of the classes
of General Motors common stock and has options to purchase shares of General
Motors common stock, $123 par value. Certain federal income tax matters will
be passed upon for GMAC, each Trust and the Seller by Kirkland & Ellis.
48
<PAGE>53
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus
and the pages on which the definitions of such terms may be found herein.
Page
Additional Servicing . . . . . . . . . . . . . . . . . . . 25
Administration Agreement . . . . . . . . . . . . . . . . . 33
Administrative Purchase Payment. . . . . . . . . . . . . . 23
Administrative Receivable. . . . . . . . . . . . . . . . . 23
Administrator. . . . . . . . . . . . . . . . . . . . . . . 33
Aggregate Amount Financed. . . . . . . . . . . . . . . . . 5
Aggregate Principal Balance. . . . . . . . . . . . . . . . 11
Amount Financed. . . . . . . . . . . . . . . . . . . . . . 10
APR. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Basic Servicing Fee. . . . . . . . . . . . . . . . . . . . 25
Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . 47
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Certificate Distribution Account . . . . . . . . . . . . . 24
Certificate Pool Factor. . . . . . . . . . . . . . . . . . 11
Certificateholder. . . . . . . . . . . . . . . . . . . . . 12
Certificates . . . . . . . . . . . . . . . . . . . . . . . 1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . 22
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Collection Account . . . . . . . . . . . . . . . . . . . . 24
Commission . . . . . . . . . . . . . . . . . . . . . . . . 2
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . . 5
Definitive Certificates. . . . . . . . . . . . . . . . . . 20
Definitive Notes . . . . . . . . . . . . . . . . . . . . . 20
Definitive Securities. . . . . . . . . . . . . . . . . . . 20
Depository . . . . . . . . . . . . . . . . . . . . . . . . 13
Designated Accounts. . . . . . . . . . . . . . . . . . . . 24
Distribution Date. . . . . . . . . . . . . . . . . . . . . 18
DTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligible Deposit Account . . . . . . . . . . . . . . . . . 24
Eligible Institution . . . . . . . . . . . . . . . . . . . 25
Eligible Investment. . . . . . . . . . . . . . . . . . . . 24
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Event of Default . . . . . . . . . . . . . . . . . . . . . 15
Excess Payment . . . . . . . . . . . . . . . . . . . . . . 26
Excess Simple Interest Collections . . . . . . . . . . . . 26
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . 2
Financed Vehicles. . . . . . . . . . . . . . . . . . . . . 9
FTC Repossession Consent Order . . . . . . . . . . . . . . 34
FTC Rule . . . . . . . . . . . . . . . . . . . . . . . . . 35
General Motors . . . . . . . . . . . . . . . . . . . . . . 10
GMAC . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . 1
Indenture Trustee. . . . . . . . . . . . . . . . . . . . . 1
Indirect Participants. . . . . . . . . . . . . . . . . . . 19
Insolvency Event . . . . . . . . . . . . . . . . . . . . . 30
Insolvency Laws. . . . . . . . . . . . . . . . . . . . . . 12
Interest Rate. . . . . . . . . . . . . . . . . . . . . . . 3
49
<PAGE>54
Page
Investment Earnings. . . . . . . . . . . . . . . . . . . . 24
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Liquidation Expenses . . . . . . . . . . . . . . . . . . . 26
Monthly Advance. . . . . . . . . . . . . . . . . . . . . . 27
Monthly Period . . . . . . . . . . . . . . . . . . . . . . 26
Note Distribution Account. . . . . . . . . . . . . . . . . 24
Note Pool Factor . . . . . . . . . . . . . . . . . . . . . 11
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . 12
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
OID. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . 1
Participants . . . . . . . . . . . . . . . . . . . . . . . 13
Partnership Certificates . . . . . . . . . . . . . . . . . 37
Pass Through Rate. . . . . . . . . . . . . . . . . . . . . 4
Payment Ahead. . . . . . . . . . . . . . . . . . . . . . . 26
Payment Ahead Servicing Account. . . . . . . . . . . . . . 24
Payment Date . . . . . . . . . . . . . . . . . . . . . . . 14
Plan Assets Regulation . . . . . . . . . . . . . . . . . . 47
Pooling and Servicing Agreement. . . . . . . . . . . . . . 22
Prepayment . . . . . . . . . . . . . . . . . . . . . . . . 26
Principal Balance. . . . . . . . . . . . . . . . . . . . . 11
Prospectus Supplement. . . . . . . . . . . . . . . . . . . 1
Rating Agency. . . . . . . . . . . . . . . . . . . . . . . 24
Receivables. . . . . . . . . . . . . . . . . . . . . . . . 1
Receivables Pool . . . . . . . . . . . . . . . . . . . . . 9
Recently Enacted OID Regulations . . . . . . . . . . . . . 37
Registration Statement . . . . . . . . . . . . . . . . . . 2
Related Documents. . . . . . . . . . . . . . . . . . . . . 17
Reserve Account. . . . . . . . . . . . . . . . . . . . . . 28
Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Schedule of Receivables. . . . . . . . . . . . . . . . . . 22
Scheduled Interest Advance . . . . . . . . . . . . . . . . 27
Scheduled Interest Receivables . . . . . . . . . . . . . . 10
Scheduled Payments . . . . . . . . . . . . . . . . . . . . 10
Securities . . . . . . . . . . . . . . . . . . . . . . . . 1
Securities Act . . . . . . . . . . . . . . . . . . . . . . 2
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 1
Servicer Default . . . . . . . . . . . . . . . . . . . . . 30
Short-Term Note. . . . . . . . . . . . . . . . . . . . . . 38
Simple Interest Advance. . . . . . . . . . . . . . . . . . 27
Simple Interest Receivables. . . . . . . . . . . . . . . . 11
Strip Certificates . . . . . . . . . . . . . . . . . . . . 5
Strip Notes. . . . . . . . . . . . . . . . . . . . . . . . 4
Supplemental Servicing Fee . . . . . . . . . . . . . . . . 25
Tax Counsel. . . . . . . . . . . . . . . . . . . . . . . . 37
Tax Partnership. . . . . . . . . . . . . . . . . . . . . . 37
Tax Trust. . . . . . . . . . . . . . . . . . . . . . . . . 37
Total Servicing Fee. . . . . . . . . . . . . . . . . . . . 22
Transfer and Servicing Agreements. . . . . . . . . . . . . 21
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Trust Agreement. . . . . . . . . . . . . . . . . . . . . . 1
Trust Certificates . . . . . . . . . . . . . . . . . . . . 37
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . 14
Trust Sale and Servicing Agreement . . . . . . . . . . . . 22
UCC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
UCCC . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Underwriting Agreement . . . . . . . . . . . . . . . . . . 48
Warranty Payment . . . . . . . . . . . . . . . . . . . . . 23
Warranty Receivable. . . . . . . . . . . . . . . . . . . . 22
50
<PAGE>55
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the offering of the Notes and the Certificates, other than
underwriting discounts and commissions, described in this Registration
Statement:
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . . . . . .$2,135,584.20
Printing Expenses. . . . . . . . . . . . . . . . .200,000.00*
Legal Fees and Expenses. . . . . . . . . . . . . .175,000.00*
Blue Sky Filing and Counsel Fees . . . . . . . . .20,000.00*
Accountants' Fees. . . . . . . . . . . . . . . . .225,000.00*
Trustee Fees and Expenses. . . . . . . . . . . . .125,000.00*
Rating Agencies' Fees. . . . . . . . . . . . . . .1,200,000.00*
Miscellaneous. . . . . . . . . . . . . . . . . . .19,415.80*
______________
Total. $4,100,000.00
==============
_______________
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Capital Auto Receivables, Inc. is incorporated under the laws of
Delaware. Section 145 of the Delaware General Corporation Law provides that
a Delaware corporation may indemnify any persons, including officers and
directors, who are, or are threatened to be made, parties to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation, by reason of the fact that such person was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of
another corporation or enterprise). The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such person acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests and, for criminal proceedings, had no reasonable cause to
believe that his conduct was illegal. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director actually and
reasonably incurred.
Capital Auto Receivables, Inc.'s By-laws provide, in effect, that,
subject to certain limited exceptions, such corporation shall indemnify and
advance expenses to its directors and officers in the manner and to the full
extent permitted by applicable law against any and all amounts reasonably
incurred by reason of the fact that such person is or was a director or
officer of such corporation. General Motors Acceptance Corporation has agreed
to satisfy such indemnification obligations of Capital Auto Receivables, Inc.
if and to the extent that Capital Auto Receivables, Inc. fails to do so.
Certain controlling persons of the registrant may also be entitled to
indemnification from General Motors Acceptance Corporation, the parent of the
registrant. Under sections 7015 and 7018-7023 of the New York Banking Law,
General Motors Acceptance Corporation may or shall, subject to various
exceptions and limitations, indemnify its directors or officers and may
purchase and maintain insurance as follows:
(a) If the director is made or threatened to be made a party to
an action by or in the right of General Motors Acceptance Corporation
to procure a judgment in its favor, by reason of the fact that he is or
was a director or officer of General Motors Acceptance Corporation or
<PAGE>56
is or was serving at the request of General Motors Acceptance
Corporation as a director or officer of some other enterprise
(including, without limitation, an employee benefit plan), General
Motors Acceptance Corporation may indemnify him against amounts paid
II-1
in settlement and reasonable expenses, including attorneys' fees,
incurred in the defense or settlement of such action or an appeal
therein, if such director or officer acted, in good faith, for a purpose
which he reasonably believed to be in (or, in the case of service for
any other enterprise, not opposed to) the best interests of General
Motors Acceptance Corporation, except that no indemnification is
available under such statutory provisions in respect of a threatened
action or a pending action which is settled or otherwise disposed of,
or any claim or issue or matter as to which such person is found liable
to General Motors Acceptance Corporation, unless in each such case a
court determines that such person is fairly and reasonably entitled to
indemnity for such amount as the court deems proper.
(b) With respect to any action or proceeding other than one by or
in the right of General Motors Acceptance Corporation to procure a
judgment in its favor, if a director or officer is made or threatened
to be made a party by reason of the fact that he was a director or
officer of General Motors Acceptance Corporation, or served some other
enterprise (including, without limitation, an employee benefit plan) at
the request of General Motors Acceptance Corporation, General Motors
Acceptance Corporation may indemnify him against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys'
fees, incurred as a result of such action or proceeding or an appeal
therein, if he acted in good faith for a purpose which he reasonably
believed to be in (or, in the case of service for any other enterprise,
not opposed to) the best interests of General Motors Acceptance
Corporation and, in criminal actions or proceedings, in addition, had
no reasonable cause to believe that his conduct was unlawful.
(c) A director or officer who has been wholly successful, on the
merits or otherwise, in the defense of a civil or criminal action or
proceeding of the character described in paragraphs (a) or (b) above,
shall be entitled to indemnification as authorized in such paragraphs.
(d) General Motors Acceptance Corporation may purchase and
maintain insurance to indemnify directors and officers in instances in
which they may not otherwise be indemnified by General Motors Acceptance
Corporation under the provisions of the New York Banking Law, provided
that the contract of insurance provides for a retention amount and for
co-insurance, except that no such insurance may provide for any payment,
other than cost of defense, to or on behalf of any director or officer
if a judgment or other final adjudication adverse to such director or
officer establishes that his acts of active and deliberate dishonesty
were material to the cause of action so adjudicated or that he
personally gained in fact a financial profit or other advantage to which
he was not legally entitled.
The foregoing statement is subject to the detailed provisions of
sections 7015 and 7018-7023 of the New York Banking Law.
As a subsidiary of General Motors Corporation, General Motors Acceptance
Corporation is insured against liabilities which it may incur by reason of the
foregoing provisions of the New York Banking Law and directors and officers
of General Motors Acceptance Corporation are insured against some liabilities
which might arise out of their employment and not be subject to
indemnification under said Banking Law.
Pursuant to resolutions adopted by the Board of Directors of General
Motors Corporation, that company to the fullest extent permissible under law
will indemnify, and has purchased insurance on behalf of, directors or
officers of the company, or any of them, who incur or are threatened with
personal liability, including expenses, under Employee Retirement Income
Security Act of 1974 or any amendatory or comparable legislation or regulation
thereunder.
<PAGE>57
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
1.1** Form of Underwriting Agreement for the Notes
3.1* Certificate of Incorporation of the Seller
3.2** By-laws of the Seller
4.1 Form of Indenture between the Trust and the Indenture Trustee
II-2
4.2 Form of Trust Agreement between the Seller and the Owner
Trustee
5.1*** Opinion of Kirkland & Ellis with respect to legality
8.1*** Opinion of Kirkland & Ellis with respect to tax matters
23.1*** Consent of Kirkland & Ellis (included as part of Exhibit 5.1)
24.1 Power of Attorney
99.1 Form of Trust Sale and Servicing Agreement among the Trust,
the Seller and the Servicer
99.2 Form of Pooling and Servicing Agreement between General Motors
Acceptance Corporation and the Seller
99.3** Form of Administration Agreement among the Servicer, the Owner
Trustee and the Indenture Trustee
99.4** Form of Custodian Agreement
99.5** Form of Prospectus Supplement
* Incorporated by reference to registrant's Registration Statement No. 33-
49169
** Incorporated by reference to registrant's Registration Statement No.
33-49307
*** To be filed by Amendment
<PAGE>58
ITEM 17. UNDERTAKINGS.
The Undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration Statement
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors and officers of the Company pursuant
to the provisions discussed in Item 15 above, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director or officer of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director or
officer in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the Indenture Trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
section 305(b)(2) of the Act.
II-3
<PAGE>59
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF DETROIT, STATE OF MICHIGAN, ON THE
____ DAY OF MARCH, 1994.
Capital Auto Receivables, Inc.
Robert T. O'Connell*
By_________________________________________
Robert T. O'Connell, Chairman of the Board
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON MARCH , 1994 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE TITLE
--------- -----
ROBERT T. O'CONNELL*
- ------------------------------ Chairman of the Board and Director
Robert T. O'Connell
JOHN R. RINES*
- ------------------------------ President and Director
John R. Rines
JOHN D. FINNEGAN*
- ------------------------------ Vice President and Director
John D. Finnegan
JOHN E. GIBSON*
- ------------------------------ Vice President and Director
John E. Gibson
FREDERICK A. HENDERSON*
- ------------------------------ Vice President and Director
Frederick A. Henderson
JOHN RAKOLTA, JR.*
- ------------------------------ Director
John Rakolta, Jr.
RAYMOND R. REILLY*
- ------------------------------ Director
Raymond R. Reilly
CHRISTOPHER J. RUTKOWSKI*
- ------------------------------ Vice President and Director
Christopher J. Rutkowski
JEROME B. VAN ORMAN, JR.*
- ------------------------------ Vice President and Director
Jerome B. Van Orman, Jr.
s/ GERALD E. GROSS
- ------------------------------ Comptroller
Gerald E. Gross
*By: s/ GERALD E. GROSS
- ------------------------------
Gerald E. Gross
Attorney-in-Fact
II-4
Exhibit 4.1
CAPITAL AUTO RECEIVABLES ASSET TRUST _______
[Class A-1 _.__% Asset Backed Notes
Class A-2 _.__% Asset Backed Notes
Class A-3 _.__% Asset Backed Notes
Class A-4 _.__% Asset Backed Notes
Class A-5 _.__% Asset Backed Notes
Class A-6 _.__% Asset Backed Notes]
INDENTURE
Dated as of ____________, 1994
__________________________________,
a ____________________________,
Indenture Trustee
<PAGE>
<PAGE>2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ----------
310(a)(1) 6.11
(a)(2) . 6.11
(a)(3) 6.10
(a)(4) 6.14
(b) 6.11
(c) N.A.
311(a) 6.12
(b) 6.12
(c) N.A.
312(a) 7.1, 7.2
(b) 7.2
(c) 7.2
313(a) 7.4(a), 7.4(b)
(b)(1) 7.4(a)
(b)(2) 7.4(a)
(c) 7.4(a)
(d) 7.4(a)
314(a) 7.3(a), 3.9
(b) 3.6
(c)(1) 2.2, 2.9, 4.1, 11.1(a)
(c)(2) 11.1(a)
(c)(3) 11.1(a)
(d) 2.9, 11.1(b)
(e) 11.1(a)
(f) 11.1(a)
315(a) 6.1(b)
(b) 6.5
(c) 6.1(a)
(d) 6.2, 6.1(c)
(e) 5.13
316(a)last
sentence 1.1
(a)(1)(A) 5.11
(a)(1)(B) 5.12
(a)(2) Omitted
316(b), (c) 5.7
317(a)(1) 5.3(b)
(a)(2) 5.3(d)
(b) 3.3
318(a) 11.7
N.A. means Not Applicable.
Note: This cross reference table shall not, for any
purpose, be deemed to be part of this Indenture.
i
<PAGE>3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
THE NOTES . . . . . . . . . . . . . . . 3
2.1 Form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Execution, Authentication and Delivery. . . . . . . . . . . . 3
2.3 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Registration; Registration of Transfer and
Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Mutilated, Destroyed, Lost or Stolen Notes. . . . . . . . . . 6
2.6 Persons Deemed Noteholders. . . . . . . . . . . . . . . . . . 7
2.7 Payment of Principal and Interest . . . . . . . . . . . . . . 7
2.8 Cancellation of Notes . . . . . . . . . . . . . . . . . . . . 9
2.9 Release of Collateral . . . . . . . . . . . . . . . . . . . . 10
2.10 Book-Entry Notes. . . . . . . . . . . . . . . . . . . . . . . 10
2.11 Notices to Clearing Agency. . . . . . . . . . . . . . . . . . 11
2.12 Definitive Notes. . . . . . . . . . . . . . . . . . . . . . . 11
2.13 Seller as Noteholder. . . . . . . . . . . . . . . . . . . . . 11
2.14 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
COVENANTS . . . . . . . . . . . . . . . 12
3.1 Payment of Principal and Interest . . . . . . . . . . . . . . 12
3.2 Maintenance of Agency Office. . . . . . . . . . . . . . . . . 12
3.3 Money for Payments To Be Held in Trust. . . . . . . . . . . . 14
3.4 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 Protection of Trust Estate; Acknowledgment of
Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Opinions as to Trust Estate . . . . . . . . . . . . . . . . . 15
3.7 Performance of Obligations; Servicing of
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.8 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . 17
3.9 Annual Statement as to Compliance . . . . . . . . . . . . . . 18
3.10 Consolidation, Merger, etc., of Issuer;
Disposition of Trust Assets.. . . . . . . . . . . . . . . . . 19
3.11 Successor or Transferee . . . . . . . . . . . . . . . . . . . 21
3.12 No Other Business . . . . . . . . . . . . . . . . . . . . . . 21
3.13 No Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14 Guarantees, Loans, Advances and Other
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15 Servicer's Obligations. . . . . . . . . . . . . . . . . . . . 22
3.16 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . 22
3.17 Removal of Administrator. . . . . . . . . . . . . . . . . . . 22
3.18 Restricted Payments . . . . . . . . . . . . . . . . . . . . . 22
ii<PAGE>
<PAGE>4
3.19 Notice of Events of Default . . . . . . . . . . . . . . . . . 23
3.20 Further Instruments and Acts. . . . . . . . . . . . . . . . . 23
3.21 Trustee's Assignment of Administrative
Receivables and Warranty Receivables. . . . . . . . . . . . . 23
3.22 Representations and Warranties by the Issuer to
the Indenture Trustee . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
SATISFACTION AND DISCHARGE . . . . . . . . . . . 24
4.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . 24
4.2 Application of Trust Money. . . . . . . . . . . . . . . . . . 25
4.3 Repayment of Monies Held by Paying Agent. . . . . . . . . . . 25
4.4 Duration of Position of Indenture Trustee . . . . . . . . . . 26
ARTICLE V
DEFAULT AND REMEDIES. . . . . . . . . . . . . 26
5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee. . . . . . . . . . . . . . . 28
5.4 Remedies; Priorities. . . . . . . . . . . . . . . . . . . . . 31
5.5 Optional Preservation of the Receivables. . . . . . . . . . . 32
5.6 Limitation of Suits . . . . . . . . . . . . . . . . . . . . . 33
5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest. . . . . . . . . . . . . . . . . . . . 33
5.8 Restoration of Rights and Remedies. . . . . . . . . . . . . . 34
5.9 Rights and Remedies Cumulative. . . . . . . . . . . . . . . . 34
5.10 Delay or Omission Not a Waiver. . . . . . . . . . . . . . . . 34
5.11 Control by Noteholders. . . . . . . . . . . . . . . . . . . . 34
5.12 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 35
5.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 35
5.14 Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . 36
5.15 Action on Notes . . . . . . . . . . . . . . . . . . . . . . . 36
5.16 Performance and Enforcement of Certain
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . . 38
6.1 Duties of Indenture Trustee . . . . . . . . . . . . . . . . . 38
6.2 Rights of Indenture Trustee . . . . . . . . . . . . . . . . . 39
6.3 Indenture Trustee May Own Notes . . . . . . . . . . . . . . . 40
6.4 Indenture Trustee's Disclaimer. . . . . . . . . . . . . . . . 40
6.5 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 40
6.6 Reports by Indenture Trustee to Holders . . . . . . . . . . . 40
6.7 Compensation; Indemnity . . . . . . . . . . . . . . . . . . . 40
6.8 Replacement of Indenture Trustee. . . . . . . . . . . . . . . 41
6.9 Merger or Consolidation of Indenture Trustee. . . . . . . . . 42
6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . 43
6.11 Eligibility; Disqualification . . . . . . . . . . . . . . . . 44
6.12 Preferential Collection of Claims Against Issuer. . . . . . . 44
iii
<PAGE>5
6.13 Representations and Warranties of Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.14 Indenture Trustee May Enforce Claims Without
Possession of Notes . . . . . . . . . . . . . . . . . . . . . 45
6.15 Suit for Enforcement. . . . . . . . . . . . . . . . . . . . . 45
6.16 Rights of Noteholders to Direct Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS . . . . . . . . . . 46
7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. . . . . . . . . . . . . . . . . . . 46
7.2 Preservation of Information, Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.3 Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . 47
7.4 Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES. . . . . . . . . 48
8.1 Collection of Money . . . . . . . . . . . . . . . . . . . . . 48
8.2 Designated Accounts; Payments . . . . . . . . . . . . . . . . 48
8.3 General Provisions Regarding Accounts . . . . . . . . . . . . 51
8.4 Release of Trust Estate . . . . . . . . . . . . . . . . . . . 52
8.5 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . 53
9.1 Supplemental Indentures Without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2 Supplemental Indentures With Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.3 Execution of Supplemental Indentures. . . . . . . . . . . . . 56
9.4 Effect of Supplemental Indenture. . . . . . . . . . . . . . . 56
9.5 Conformity with Trust Indenture Act . . . . . . . . . . . . . 56
9.6 Reference in Notes to Supplemental Indentures . . . . . . . . 56
ARTICLE X
REDEMPTION OF NOTES. . . . . . . . . . . . . 57
10.1 Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.2 Form of Redemption Notice . . . . . . . . . . . . . . . . . . 57
10.3 Notes Payable on Redemption Date. . . . . . . . . . . . . . . 58
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . 58
11.1 Compliance Certificates and Opinions, etc.. . . . . . . . . . 58
11.2 Form of Documents Delivered to Indenture Trustee. . . . . . . 60
11.3 Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . 61
11.4 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . 62
11.5 Notices to Noteholders; Waiver. . . . . . . . . . . . . . . . 63
11.6 Alternate Payment and Notice Provisions . . . . . . . . . . . 63
11.7 Conflict with Trust Indenture Act . . . . . . . . . . . . . . 64
11.8 Effect of Headings and Table of Contents. . . . . . . . . . . 64
iv<PAGE>
<PAGE>6
11.9 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 64
11.10 Separability. . . . . . . . . . . . . . . . . . . . . . . 64
11.11 Benefits of Indenture . . . . . . . . . . . . . . . . . . 64
11.12 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 64
11.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 65
11.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 65
11.15 Recording of Indenture. . . . . . . . . . . . . . . . . . 65
11.16 No Recourse . . . . . . . . . . . . . . . . . . . . . . . 65
11.17 No Petition . . . . . . . . . . . . . . . . . . . . . . . 66
11.18 Inspection. . . . . . . . . . . . . . . . . . . . . . . . 66
11.19 Indemnification by and Reimbursement of the
Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Exhibit A - Location of Schedule of Receivables
Exhibit B - Form of Note Depository Agreement
Exhibit C - Form of Asset Backed Note
Exhibit D - Rule 144A Certificate
Exhibit E - Undertaking Letter
v<PAGE>
<PAGE>7
INDENTURE, dated as of __________, 1994, between
CAPITAL AUTO RECEIVABLES ASSET TRUST 199_-_, a Delaware business
trust (the "Issuer"), and _____________________________a
_________________________, as trustee and not in its individual
capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders
of the Notes and (only to the extent expressly provided herein)
the Certificates:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at
the Closing Date, as trustee for the benefit of the Noteholders
and (only to the extent expressly provided herein) the
Certificateholders, all of the Issuer's right, title and
interest in, to and under (a) the Receivables listed on the
Schedule of Receivables which is on file at the locations listed
on EXHIBIT A hereto and (i) in the case of Scheduled Interest
Receivables, all monies due thereon on and after the Cutoff Date
and (ii) in the case of Simple Interest Receivables, all monies
received thereon on and after the Cutoff Date, in each case
exclusive of any amounts allocable to the premium for physical
damage insurance force-placed by the Servicer and covering any
related Financed Vehicle; (b) the interest of the Issuer in the
security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and, where permitted by law, any
accessions thereto; (c) the interest of the Issuer in any
proceeds with respect to the Receivables from claims on any
physical damage, credit life, credit disability or other
insurance policies covering Financed Vehicles or Obligors
(except for those Receivables originated in Wisconsin); (d) the
interest of the Issuer in any proceeds with respect to the
Receivables from recourse against dealers thereon; (e) all
right, title and interest in all funds on deposit from time to
time in the Collection Account, the Note Distribution Account
and the Certificate Distribution Account; (f) the Trust Sale and
Servicing Agreement (including all rights of Capital Auto
Receivables, Inc. ("CARI") under the Pooling and Servicing
Agreement assigned to the Issuer pursuant to the Trust Sale and
Servicing Agreement); and (g) all present and future claims,
demands, causes and choses in action in respect of any or all of
the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary
or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
<PAGE>
<PAGE>8
The foregoing Grant is made in trust to secure the
payment of principal of and interest on, and any other amounts
owing in respect of, the Notes, equally and ratably without
prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under
this Indenture in accordance with the provisions of this
Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS. Certain capitalized terms
used in this Indenture shall have the respective meanings
assigned them in Appendix A to the Trust Sale and Servicing
Agreement (the "Trust Sale and Servicing Agreement") dated as of
__________, 1994 among the Issuer, CARI and General Motors
Acceptance Corporation ("GMAC"). All references in this
Indenture to Articles, Sections, subsections and exhibits are to
the same contained in or attached to this Indenture unless
otherwise specified. All terms defined in this Indenture shall
have the defined meanings when used in any certificate, notice,
Note or other document made or delivered pursuant hereto unless
otherwise defined therein.
SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT. Whenever this Indenture refers to a provision of
the TIA, such provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"indenture securities" means the Notes.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by a Commission rule have the respective meanings
assigned to them by such definitions.
2
<PAGE>9
ARTICLE II
THE NOTES
SECTION 2.1 FORM.
(a) [Each of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5
Notes and the Class A-6 Notes, together, in each case,] with the
Indenture Trustee's certificate of authentication, shall be
substantially in the form set forth in EXHIBIT C, with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and
each such class may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on
the face of the Note.
(b) The Definitive Notes shall be typewritten, print-
ed, lithographed or engraved or produced by any combination of
these methods (with or without steel engraved borders), all as
determined by the officers executing such Notes, as evidenced by
their execution of such Notes.
(c) The terms of each class of Notes as provided for
in Exhibit C hereto are part of the terms of this Indenture.
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) Each Note shall be dated the date of its
authentication and shall be issuable as a registered Note in the
minimum denomination of $1,000 and in integral multiples
thereof; [provided that the Class A-6 Notes shall be issuable in
denominations of $100,000 or any amount in excess thereof.]
(b) The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of any
such Authorized Officer on the Notes may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature
of individuals who were at any time Authorized Officers of the
Issuer shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such office prior
to the authentication and delivery of such Notes or did not hold
such office at the date of such Notes.
(d) The Indenture Trustee, in exchange for the Grant
of the Receivables and the other components of the Trust,
simultaneously with the Grant to the Indenture Trustee of the
Receivables, and the constructive delivery to the Indenture
Trustee of the Receivables Files and the other components and
assets of the Trust, shall cause to be authenticated and
3
<PAGE>10
delivered to or upon the order of the Issuer, the Notes for
original issue in aggregate principal amount of
_________________, [comprised of (i) Class A-1 Notes in the
aggregate principal amount of $_________, (ii) Class A-2 Notes
in the aggregate principal amount of $__________, (iii) Class A-
3 Notes in the aggregate principal amount of $__________, (iv)
Class A-4 Notes in the aggregate principal amount of
$___________, (v) Class A-5 Notes in the aggregate principal
amount of $___________ and (vi) Class A-6 Notes in the aggregate
principal amount of $________________.] The aggregate principal
amount of all Notes outstanding at any time may not exceed
$________________ except as provided in Section 2.5. The Notes
shall be duly authenticated by the Indenture Trustee, in
authorized denominations in the aggregate initial principal
amount equal to _____% of the Aggregate Amount Financed.
(e) No Notes shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose, unless
there appears on such Note a certificate of authentication
substantially in the form set forth in Exhibit C, executed by
the Indenture Trustee by the manual signature of one of its
Authorized Officers, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.
SECTION 2.3 TEMPORARY NOTES.
(a) Pending the preparation of Definitive Notes, if
any, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, such
Temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, of the tenor of the
Definitive Notes in lieu of which they are issued and with such
variations as are consistent with the terms of this Indenture as
the officers executing such Notes may determine, as evidenced by
their execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall
cause Definitive Notes to be prepared without unreasonable
delay. After the preparation of Definitive Notes, the Temporary
Notes shall be exchangeable for Definitive Notes upon surrender
of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the
Noteholder. Upon surrender for cancellation of any one or more
Temporary Notes, the Issuer shall execute and the Indenture
Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized
denominations. Until so delivered in exchange, the Temporary
Notes shall in all respects be entitled to the same benefits
under this Indenture as Definitive Notes.
4
<PAGE>11
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER
AND EXCHANGE OF NOTES.
(a) The Issuer shall cause to be kept the Note
Register, comprising separate registers for each class of Notes,
in which, subject to such reasonable regulations as the Issuer
may prescribe, the Issuer shall provide for the registration of
the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Regis-
trar for the purpose of registering the Notes and transfers of
the Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor Note
Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.
(b) If a Person other than the Indenture Trustee is
appointed by the Issuer as Note Registrar, the Issuer will give
the Indenture Trustee prompt written notice of the appointment
of such Note Registrar and of the location, and any change in
the location, of the Note Register. The Indenture Trustee shall
have the right to inspect the Note Register at all reasonable
times and to obtain copies thereof. The Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the
names and addresses of the Noteholders and the principal amounts
and number of such Notes.
(c) Upon surrender for registration of transfer of
any Note at the Corporate Trust Office of the Indenture Trustee
or the Agency Office of the Issuer (and following the delivery,
in the former case, of such Notes to the Issuer by the Indenture
Trustee), the Issuer shall execute, the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized
denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be ex-
changed for other Notes of the same class in any authorized
denominations, of a like aggregate principal amount, upon
surrender of such Notes to be exchanged at the Corporate Trust
Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such
Notes to the Issuer by the Indenture Trustee), the Issuer shall
execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, such Notes
which the Noteholder making the exchange is entitled to receive.
(e) All Notes issued upon any registration of
transfer or exchange of other Notes shall be the valid
obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
5
<PAGE>12
(f) Every Note presented or surrendered for registra-
tion of transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in form satis-
factory to the Indenture Trustee and the Note Registrar, duly
executed by the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by a
commercial bank or trust company located, or having a
correspondent located, in the City of New York or the city in
which the Corporate Trust Office of the Indenture Trustee is
located, or by a member firm of a national securities exchange,
and such other documents as the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for
any registration of transfer or exchange of Notes, but the
Issuer or Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer
or exchange of Notes, other than exchanges pursuant to Sections
2.3 or 9.6 not involving any transfer.
(h) The preceding provisions of this Section 2.4
notwithstanding, the Issuer shall not be required to transfer or
make exchanges, and the Note Registrar need not register
transfers or exchanges, of Notes that: (i) have been selected
for redemption pursuant to Article X, if applicable; or (ii) are
due for repayment within 15 days of submission to the Corporate
Trust Office or the Agency Office.
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN
NOTES.
(a) If (i) any mutilated Note is surrendered to the
Indenture Trustee, or the Indenture Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note,
and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the
Issuer and the Indenture Trustee harmless, then, in the absence
of notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon the Issuer's
request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a replacement Note of a like class and aggregate
principal amount; PROVIDED, HOWEVER, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become
or within seven days shall be due and payable, or shall have
been called for redemption, instead of issuing a replacement
Note, the Issuer may make payment to the Holder of such
destroyed, lost or stolen Note when so due or payable or upon
the Redemption Date, if applicable, without surrender thereof.
6
<PAGE>13
(b) If, after the delivery of a replacement Note or
payment in respect of a destroyed, lost or stolen Note pursuant
to subsection (a), a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such
payment) from (i) any Person to whom it was delivered, (ii) the
Person taking such replacement Note from the Person to whom such
replacement Note was delivered; or (iii) any assignee of such
Person, except a bona fide purchaser, and the Issuer and the
Indenture Trustee shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
(c) In connection with the issuance of any
replacement Note under this Section 2.5, the Issuer may require
the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including
all fees and expenses of the Indenture Trustee) connected
therewith.
(d) Any duplicate Note issued pursuant to this
Section 2.5 in replacement for any mutilated, destroyed, lost or
stolen Note shall constitute an original additional contractual
obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be found at any time or be
enforced by any Person, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.
(e) The provisions of this Section 2.5 are exclusive
and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 PERSONS DEEMED NOTEHOLDERS. Prior to
due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the Noteholder
for the purpose of receiving payments of principal of and
interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST.
(a) Interest on each class of Notes will accrue at
the applicable Interest Rate for such class. Interest on the
[Class ___ Notes and the Class ___ Notes will be payable on each
Distribution Date and interest on the Class A-2 Notes, the Class
7
<PAGE>14
A-3 Notes, the Class A-4 Notes and the Class A-6 Notes will be
payable] on each Payment Date, in each case, in the amounts set
forth in Section 8.2(c)(i). All interest payments on each class
of Notes on any Distribution Date or Payment Date, as
applicable, shall be made pro rata to the Noteholders of such
class entitled thereto. Any instalment of interest payable on
any Note shall be punctually paid or duly provided for by a
deposit by or at the direction of the Issuer into the Note
Distribution Account on the applicable Distribution Date or
Payment Date, as appropriate, and shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date, by check mailed first-
class, postage prepaid to such Person's address as it appears on
the Note Register on such Record Date; PROVIDED, HOWEVER, that,
unless and until Definitive Notes have been issued pursuant to
Section 2.12, with respect to Notes registered on the applicable
Record Date in the name of the Note Depository (initially,
Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account designated by the
Note Depository.
(b) Prior to the occurrence of an Event of Default
and a declaration in accordance with Section 5.2 that the Notes
have become immediately due and payable, principal [of
$_____________ (or, if less, the Outstanding Amount attributable
to the Class A-1 Notes) shall be payable in full on the Class A-
1 Notes on each] Distribution Date through and including the
____________, 1994 Distribution Date, together with any
additional amount determined pursuant to Section 8.2(c)(ii), and
the principal of each class of Notes shall be payable in full on
the Final Scheduled Payment Date for such class and, to the
extent of funds available therefor, in instalments on the
Distribution Dates or Payment Dates (if any) preceding the Final
Scheduled Payment Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(c)(ii).
All principal payments on each class of Notes on any
Distribution Date or Payment Date, as applicable, shall be made
pro rata to the Noteholders of such class entitled thereto. Any
instalment of principal payable on any Note shall be punctually
paid or duly provided for by a deposit by or at the direction of
the Issuer into the Note Distribution Account on the applicable
Distribution Date or Payment Date, as appropriate, and shall be
paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the applicable Record Date,
by check mailed first-class, postage prepaid to such Person's
address as it appears on the Note Register on such Record Date;
PROVIDED, HOWEVER, that, unless and until Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the Note Depository
(initially, Cede & Co.), payment shall be made by wire transfer
in immediately available funds to the account designated by the
Note Depository, except for: (i) the final instalment of
principal on any Note; and (ii) the Redemption Price for any
[Class A-6 Notes,] if so called, which, in each case, shall be
payable as provided herein. The funds represented by any such
checks in respect of interest or principal returned undelivered
shall be held in accordance with Section 3.3.
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<PAGE>15
(c) The entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, if:
(i) an Event of Default shall have occurred and
be continuing; and
(ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in
Section 5.2.
(d) Following an Event of Default and the
acceleration of the Notes as aforesaid, until such time as all
Events of Default have been cured or waived as provided in
Section 5.2(b), all principal payments shall be allocated among
the Holders of all of the Notes pro rata on the basis of the
respective aggregate unpaid principal balances of Notes held by
such Holders.
(e) With respect to any Distribution Date or Payment
Date on which the final instalment of principal and interest on
a class of Notes is to be paid, the Indenture Trustee shall
notify each Noteholder of such class of record as of the Record
Date for such Distribution Date or Payment Date, as applicable,
of the fact that the final instalment of principal of and
interest on such Note is to be paid on such Distribution Date or
Payment Date, as applicable. With respect to any such class of
Notes, such notice shall be sent (i) on such Record Date by
facsimile, if Book-Entry Notes are outstanding; or (ii) not
later than three Business Days after such Record Date in
accordance with Section 11.5(a) if Definitive Notes are
outstanding, and shall specify that such final instalment shall
be payable only upon presentation and surrender of such Note and
shall specify the place where such Note may be presented and
surrendered for payment of such instalment. Notices in
connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
SECTION 2.8 CANCELLATION OF NOTES. All Notes
surrendered for payment, redemption, exchange or registration of
transfer shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and
shall be promptly canceled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for
cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section 2.8, except as expressly permitted
by this Indenture. All canceled Notes may be held or disposed
of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Order that they be destroyed or
returned to it; PROVIDED, HOWEVER, that such Issuer Order is
timely and the Notes have not been previously disposed of by the
Indenture Trustee.
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SECTION 2.9 RELEASE OF COLLATERAL. Subject to
Sections 8.4 and 11.1, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an
Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and Independent Certificates in accordance
with TIA 314(c) and 314(d)(1) or an Opinion of Counsel in lieu
of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
SECTION 2.10 BOOK-ENTRY NOTES. Subject to Section
2.15, the Notes, upon original issuance, shall be issued in the
form of a typewritten Note or Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the
initial Clearing Agency by or on behalf of the Issuer. Such
Note or Notes shall be registered on the Note Register in the
name of the Note Depository, and no Note Owner shall receive a
Definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.12. Unless and until the
Definitive Notes have been issued to Note Owners pursuant to
Section 2.12:
(a) the provisions of this Section 2.10 shall be
in full force and effect;
(b) the Note Registrar and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for all
purposes of this Indenture (including the payment of
principal of and interest on such Notes and the giving of
instructions or directions hereunder) as the sole Holder of
such Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this
Section 2.10 conflict with any other provisions of this
Indenture, the provisions of this Section 2.10 shall con-
trol;
(d) the rights of the Note Owners shall be exer-
cised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Note Owners and the Clearing Agency and/or the Clearing
Agency Participants. Unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing
Agency shall make book-entry transfers between the Clearing
Agency Participants and receive and transmit payments of
principal of and interest on such Notes to such Clearing
Agency Participants, pursuant to the Note Depository
Agreement; and
(e) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions
of Holders of Notes evidencing a specified percentage of
the Outstanding Amount of the Notes, the Clearing Agency
shall be deemed to represent such percentage only to the
extent that it has (i) received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning
or representing, respectively, such required percentage of
the beneficial interest in the Notes; and (ii) has
delivered such instructions to the Indenture Trustee.
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<PAGE>17
SECTION 2.11 NOTICES TO CLEARING AGENCY. Subject to
Section 2.15, whenever a notice or other communication to the
Noteholders is required under this Indenture, unless and until
Definitive Notes shall have been issued to Note Owners pursuant
to Section 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to be given to
Noteholders to the Clearing Agency and shall have no other
obligation to the Note Owners.
SECTION 2.12 DEFINITIVE NOTES.
If (i) the Administrator advises the Indenture Trustee
in writing that the Clearing Agency is no longer willing or able
to properly discharge its responsibilities with respect to the
Notes and the Issuer is unable to locate a qualified successor;
(ii) the Administrator, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency; or (iii) after the
occurrence of an Event of Default or a Servicer Default, Note
Owners representing beneficial interests aggregating at least a
majority of the Outstanding Amount of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best
interests of the Note Owners, then the Clearing Agency shall
notify all Note Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Defini-
tive Notes to Note Owners requesting the same. Upon surrender
to the Indenture Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
SECTION 2.13 SELLER AS NOTEHOLDER. The Seller in
its individual or any other capacity may become the owner or
pledgee of Notes of any class and may otherwise deal with the
Issuer or its affiliates with the same rights it would have if
it were not the Seller.
SECTION 2.14 TAX TREATMENT. The Seller and the
Indenture Trustee, by entering into this Indenture, and the
Noteholders, by acquiring any Note or interest therein,
(i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Receivables,
and (ii) unless otherwise required by appropriate taxing
authorities, agree to treat the Notes as indebtedness secured by
the Receivables for the purpose of federal income taxes, state
and local income and franchise taxes, Michigan single business
tax, and any other taxes imposed upon, measured by or based upon
gross or net income.
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<PAGE>18
ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The
Issuer shall duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes
and this Indenture. On each Distribution Date or Payment Date,
as applicable, and on the Redemption Date (if applicable), the
Issuer shall cause amounts on deposit in the Note Distribution
Account to be distributed to the Noteholders in accordance with
Sections 2.7 and 8.2, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest
and/or principal. Any amounts so withheld shall be considered
as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.2 MAINTENANCE OF AGENCY OFFICE. As long
as any of the Notes remains outstanding, the Issuer shall
maintain in the Borough of Manhattan, the City of New York, an
office (the "Agency Office"), being an office or agency where
Notes may be surrendered to the Issuer for registration of
transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The
Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust
Office of the Indenture Trustee, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) As provided in Section 8.2(a) and (b), all
payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Note
Distribution Account pursuant to Section 8.2(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another
Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payments of Notes shall be paid over to
the Issuer except as provided in this Section 3.3.
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<PAGE>19
(b) On or before each Distribution Date or the
Redemption Date (if applicable), the Issuer shall deposit or
cause to be deposited in the Note Distribution Account
(including pursuant to Section 4.06 of the Trust Sale and
Servicing Agreement) an aggregate sum sufficient to pay the
amounts then becoming due with respect to the Notes, such sum to
be held in trust for the benefit of the Persons entitled
thereto.
(c) The Issuer shall cause each Paying Agent other
than the Indenture Trustee to execute and deliver to the
Indenture Trustee an instrument in which such Paying Agent shall
agree with the Indenture Trustee (and if the Indenture Trustee
acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any default
by the Issuer (or any other obligor upon the Notes) of
which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in
trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it
in trust for the payment of Notes if at any time it ceases
to meet the standards required to be met by a Paying Agent
in effect at the time of determination; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting
requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or
for any other purpose, by Issuer Order direct any Paying Agent
to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
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<PAGE>20
(e) Subject to applicable laws with respect to
escheat of funds, any money held by the Indenture Trustee or any
Paying Agent in trust for the payment of any amount due with
respect to any Note and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only
to the extent of the amounts so paid to the Issuer), and all
liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; PROVIDED,
HOWEVER, that the Indenture Trustee or such Paying Agent, before
being required to make any such payment, may at the expense of
the Issuer cause to be published once, in a newspaper published
in the English language, customarily published on each Business
Day and of general circulation in the City of New York, notice
that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money
then remaining shall be paid to the Issuer. The Indenture
Trustee may also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment
to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in
monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the
last address of record for each such Holder).
SECTION 3.4 EXISTENCE. The Issuer shall keep in
full effect its existence, rights and franchises as a business
trust under the laws of the State of Delaware (unless it
becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United
States of America, in which case the Issuer shall keep in full
effect its existence, rights and franchises under the laws of
such other jurisdiction) and shall obtain and preserve its
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity
and enforceability of this Indenture, the Notes, the Collateral
and each other instrument or agreement included in the Trust
Estate.
SECTION 3.5 PROTECTION OF TRUST ESTATE; ACKNOWLEDG-
MENT OF PLEDGE.
(a) The Issuer shall from time to time execute and
deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of
further assurance and other instruments, and shall take such
other action necessary or advisable to:
14<PAGE>
<PAGE>21
(i) maintain or preserve the lien and security
interest (and the priority thereof) of this Indenture or
carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iii) enforce the rights of the Indenture Trustee and
the Noteholders in any of the Collateral; or
(iv) preserve and defend title to the Trust Estate
and the rights of the Indenture Trustee and the Noteholders
in such Trust Estate against the claims of all persons and
parties,
and the Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, contin-
uation statement or other instrument required by the Indenture
Trustee pursuant to this Section 3.5.
(b) The Indenture Trustee acknowledges the pledge by
the Seller to the Indenture Trustee pursuant to Section 4.07(c)
of the Trust Sale and Servicing Agreement of (i) all of the
Seller's right, title and interest in and to the Reserve Account
and all proceeds thereof (other than the Investment Earnings
thereon), including, without limitation, all other accounts and
investments held from time to time in the Reserve Account
(whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise)
and (ii) the Reserve Account Initial Deposit and all proceeds
thereof (other than the Investment Earnings thereon) in order to
provide for the timely payment to the Noteholders, the
Certificateholders and the Servicer in accordance with Sections
4.06(c) and (d) of the Trust Sale and Servicing Agreement, to
assure availability of the amounts maintained in the Reserve
Account for the benefit of the Noteholders, the
Certificateholders and the Servicer, and as security for the
performance by the Seller of its obligations under the Basic
Documents.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall furnish to
the Indenture Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any
indentures supplemental hereto and any other requisite
documents, and with respect to the execution and filing of any
financing statements and continuation statements as are
necessary to perfect and make effective the lien and security
interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest
effective.
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<PAGE>22
(b) On or before August 15 in each calendar year,
beginning August 15, ____, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either stating that, in
the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is
necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is
necessary to maintain the lien and security interest created by
this Indenture. Such Opinion of Counsel shall also describe the
recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion
of such counsel, be required to maintain the lien and security
interest of this Indenture until August 15 in the following
calendar year.
SECTION 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING
OF RECEIVABLES.
(a) The Issuer shall not take any action and shall
use its reasonable efforts not to permit any action to be taken
by others that would release any Person from any of such
Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result
in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any
such instrument or agreement, except as otherwise expressly
provided in this Indenture, the Trust Sale and Servicing
Agreement, the Pooling and Servicing Agreement, the
Administration Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to
assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the
Indenture Trustee in the Basic Documents or an Officers'
Certificate of the Issuer shall be deemed to be action taken by
the Issuer. Initially, the Issuer has contracted with the
Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe
all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by
the terms of this Indenture, the Trust Sale and Servicing
Agreement and the Pooling and Servicing Agreement in accordance
with and within the time periods provided for herein and
therein.
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<PAGE>23
(d) If the Issuer shall have knowledge of the
occurrence of a Servicer Default under the Trust Sale and -
Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the response or action, if any, the
Issuer has taken or is taking with respect of such default. If
a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Trust Sale
and Servicing Agreement or the Pooling and Servicing Agreement
with respect to the Receivables, the Issuer and the Indenture
Trustee shall take all reasonable steps available to them
pursuant to the Trust Sale and Servicing Agreement and the
Pooling and Servicing Agreement to remedy such failure.
(e) Without derogating from the absolute nature of
the assignment granted to the Indenture Trustee under this
Indenture or the rights of the Indenture Trustee hereunder, the
Issuer agrees that it shall not, without the prior written
consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Notes, as applicable in
accordance with the terms thereof, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of,
the terms of any Collateral or any of the Basic Documents, or
waive timely performance or observance by the Servicer or the
Seller under the Trust Sale and Servicing Agreement or the
Pooling and Servicing Agreement, the Administrator under the
Administration Agreement or GMAC under the Pooling and Servicing
Agreement. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee or such
Holders, as applicable, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and
deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the
circumstances.
SECTION 3.8 NEGATIVE COVENANTS. So long as any
Notes are Outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, except the
Issuer may (i) collect, liquidate, sell or otherwise
dispose of Receivables (including Warranty Receivables,
Administrative Receivables and Liquidating Receivables),
(ii) make cash payments out of the Designated Accounts and
(iii) take other actions, in each case as contemplated by
the Basic Documents;
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<PAGE>24
(b) claim any credit on, or make any deduction from
the principal or interest payable in respect of the Notes
(other than amounts properly withheld from such payments
under the Code or applicable state law) or assert any claim
against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of
the Trust Estate;
(c) voluntarily commence any insolvency, readjustment
of debt, marshalling of assets and liabilities or other
proceeding, or apply for an order by a court or agency or
supervisory authority for the winding-up or liquidation of
its affairs or any other event specified in Section 5.1(f);
or
(d) either (i) permit the validity or effectiveness
of this Indenture to be impaired, or permit the lien of
this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly
permitted hereby, (ii) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or
extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens
and other liens that arise by operation of law, in each
case on a Financed Vehicle and arising solely as a result
of an action or omission of the related Obligor), or
(iii) permit the lien of this Indenture not to constitute
a valid first priority security interest in the Trust
Estate (other than with respect to any such tax, mechanics'
or other lien).
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The
Issuer shall deliver to the Indenture Trustee, on or before
August 15 of each year, beginning August 15, ____, an Officer's
Certificate signed by an Authorized Officer, dated as of June 30
of such year, stating that:
(a) a review of the activities of the Issuer during
such fiscal year and of performance under this Indenture
has been made under such Authorized Officer's supervision;
and
(b) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has fulfilled
all of its obligations under this Indenture throughout such
year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to
such Authorized Officer and the nature and status thereof.
A copy of such certificate may be obtained by any
Noteholder by a request in writing to the Issuer addressed
to the Corporate Trust Office of the Indenture Trustee.
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SECTION 3.10 CONSOLIDATION, MERGER, ETC., OF ISSUER;
DISPOSITION OF TRUST ASSETS.
(a) The Issuer shall not consolidate or merge with or
into any other Person, unless:
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States
of America, or any State and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to
the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and timely payment of the
principal of and interest on all Notes and the performance
or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such merger
or consolidation, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction and such Person;
(iv) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken; and
(v) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel
addressed to the Issuer, each stating:
(A) that such consolidation or merger and such
supplemental indenture comply with this Section 3.10;
(B) that such consolidation or merger and such
supplemental indenture shall have no material adverse
tax consequence to the Trust or any Noteholder or
Certificateholder; and
(C) that all conditions precedent herein
provided for in this Section 3.10 have been complied
with, which shall include any filing required by the
Exchange Act.
(b) Except as otherwise expressly permitted by this
Indenture or the other Basic Documents, the Issuer shall not
sell, convey, exchange, transfer or otherwise dispose of any of
its properties or assets, including those included in the Trust
Estate, to any Person, unless:
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(i) the Person that acquires such properties or
assets of the Issuer (A) shall be a United States citizen
or a Person organized and existing under the laws of the
United States of America or any State and (B) by an
indenture supplemental hereto, executed and delivered to
the Indenture Trustee, in form satisfactory to the
Indenture Trustee:
(1) expressly assumes the due and punctual
payment of the principal of and interest on all Notes
and the performance or observance of every agreement
and covenant of this Indenture on the part of the
Issuer to be performed or observed, all as provided
herein;
(2) expressly agrees that all right, title
and interest so sold, conveyed, exchanged, transferred
or otherwise disposed of shall be subject and
subordinate to the rights of Noteholders;
(3) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify,
defend and hold harmless the Issuer against and from
any loss, liability or expense arising under or
related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or
if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act
in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction and such Person;
(iv) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken; and
(v) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel
addressed to the Issuer, each stating that:
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(A) such sale, conveyance, exchange,
transfer or disposition and such supplemental
indenture comply with this Section 3.10;
(B) such sale, conveyance, exchange,
transfer or disposition and such supplemental
indenture have no material adverse tax consequence to
the Trust or to any Noteholders or Certificateholders;
and
(C) that all conditions precedent herein
provided for in this Section 3.10 have been complied
with, which shall include any filing required by the
Exchange Act.
SECTION 3.11 SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this
Indenture with the same effect as if such Person had been named
as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets
and properties of the Issuer pursuant to Section 3.10(b), the
Issuer shall be released from every covenant and agreement of
this Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery
of written notice to the Indenture Trustee from the Person
acquiring such assets and properties stating that Trust is to be
so released.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall
not engage in any business or activity other than acquiring,
holding and managing the Receivables and the other assets of the
Trust Estate and the proceeds therefrom in the manner
contemplated by the Basic Documents, issuing the Notes and the
Certificates, making payments on the Notes and the Certificates
and such other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental
thereto, as set forth in Section 2.3 of the Trust Agreement.
SECTION 3.13 NO BORROWING. The Issuer shall not
issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any indebtedness for money borrowed
other than indebtedness for money borrowed in respect of the
Notes or in accordance with the Basic Documents.
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER
LIABILITIES. Except as contemplated by this Indenture or the
other Basic Documents, the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly or by
an instrument having the effect of assuring another's payment or
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performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable,
directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets
or securities of, or any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.15 SERVICER'S OBLIGATIONS. The Issuer
shall use its best efforts to cause the Servicer to comply with
its obligations under Section 3.10 of the Pooling and Servicing
Agreement and Sections 4.01 and 4.02 of the Trust Sale and
Servicing Agreement.
SECTION 3.16 CAPITAL EXPENDITURES. The Issuer shall
not make any expenditure (whether by long-term or operating
lease or otherwise) for capital assets (either real, personal or
intangible property) other than the purchase of the Receivables
and other property and rights from the Seller pursuant to the
Trust Sale and Servicing Agreement.
SECTION 3.17 REMOVAL OF ADMINISTRATOR. So long as
any Notes are Outstanding, the Issuer shall not remove the
Administrator without cause unless the Rating Agency Condition
shall have been satisfied in connection with such removal.
SECTION 3.18 RESTRICTED PAYMENTS. Except for
payments of principal or interest on or redemption of the Notes,
so long as any Notes are Outstanding, the Issuer shall not,
directly or indirectly:
(a) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer
or otherwise, in each case with respect to any ownership or
equity interest or similar security in or of the Issuer or
to the Servicer;
(b) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or similar
security; or
(c) set aside or otherwise segregate any amounts for
any such purpose;
PROVIDED, HOWEVER, that the Issuer may make, or cause to be
made, distributions to the Servicer, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are
available for such purpose under, the Trust Sale and Servicing
Agreement or the Trust Agreement. The Issuer shall not,
directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with the Basic
Documents.
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SECTION 3.19 NOTICE OF EVENTS OF DEFAULT. The
Issuer agrees to give the Indenture Trustee and the Rating
Agencies prompt written notice of each Event of Default
hereunder, each Servicer Default, any Insolvency Event with
respect to the Seller, each default on the part of the Seller of
its obligations under the Trust Sale and Servicing Agreement and
each default on the part of GMAC of its obligations under the
Pooling and Servicing Agreement.
SECTION 3.20 FURTHER INSTRUMENTS AND ACTS. Upon
request of the Indenture Trustee, the Issuer shall execute and
deliver such further instruments and do such further acts as may
be reasonably necessary or proper to carry out more effectively
the purpose of this Indenture.
SECTION 3.21 TRUSTEE'S ASSIGNMENT OF ADMINISTRATIVE
RECEIVABLES AND WARRANTY RECEIVABLES. Upon receipt of the
Administrative Purchase Payment or the Warranty Payment with
respect to an Administrative Receivable or a Warranty
Receivable, as the case may be, the Indenture Trustee shall
assign, without recourse, representation or warranty, to the
Servicer or the Warranty Purchaser, as the case may be, all the
Indenture Trustee's right, title and interest in and to such
repurchased Receivable, all monies due thereon, the security
interest in the related Financed Vehicle, proceeds from any
Insurance Policies, proceeds from recourse against the Dealer on
such Receivable and the interests of the Indenture Trustee in
certain rebates of premiums and other amounts relating to the
Insurance Policies and any documents relating thereto, such
assignment being an assignment outright and not for security;
and the Servicer or the Warranty Purchaser, as applicable, shall
thereupon own such Receivable, and all such security and
documents, free of any further obligation to the Indenture
Trustee, the Noteholders or the Certificateholders with respect
thereto. If in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Receivable on the
ground that it is not a real party in interest or a holder
entitled to enforce the Receivable, the Indenture Trustee shall,
at the Servicer's expense, take such steps as the Servicer deems
necessary to enforce the Receivable, including bringing suit in
the Indenture Trustee's name or the names of the Noteholders or
the Certificateholders.
SECTION 3.22 REPRESENTATIONS AND WARRANTIES BY THE
ISSUER TO THE INDENTURE TRUSTEE. The Issuer hereby represents
and warrants to the Indenture Trustee as follows:
(a) GOOD TITLE. No Receivable has been sold,
transferred, assigned or pledged by the Issuer to any Person
other than the Indenture Trustee; immediately prior to the
conveyance of the Receivables pursuant to this Indenture, the
Issuer had good and marketable title thereto, free of any Lien;
and, upon execution and delivery of this Indenture by the
Issuer, the Indenture Trustee shall have all of the right, title
and interest of the Issuer in, to and under the Receivables, the
unpaid indebtedness evidenced thereby and the collateral
security therefor, free of any Lien; and
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(b) ALL FILINGS MADE. All filings (including,
without limitation, UCC filings) necessary in any jurisdiction
to give the Indenture Trustee a first perfected security
interest in the Receivables shall have been made.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF
INDENTURE. This Indenture shall cease to be of further effect
with respect to the Notes except as to: (i) rights of
registration of transfer and exchange; (ii) substitution of
mutilated, destroyed, lost or stolen Notes; (iii) rights of
Noteholders to receive payments of principal thereof and
interest thereon; (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12,
3.13, 3.19 and 3.21; (v) the rights, obligations and immunities
of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the
Indenture Trustee under Sections 4.2 and 4.4); and (vi) the
rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Indenture Trustee payable to
all or any of them, and the Indenture Trustee, on demand of and
at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and
delivered (other than (A) Notes that have been
destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.5 and (B) Notes for
whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Issuer
and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been
delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to
the Indenture Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on
their respective Final Scheduled Payment Dates
within one year, or
(C) are to be called for redemption
within one year under arrangements satisfactory
to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the
name, and at the expense, of the Issuer,
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and the Issuer, in the case of (A), (B) or (C) of
subsection 4.1(a)(2) above, has irrevocably deposited
or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America
(which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire unpaid
principal and accrued interest on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation when due on the Final Scheduled Payment
Date for such Notes or the Redemption Date for such
Notes (if such Notes have been called for redemption
pursuant to Section 10.1(a)), as the case may be;
(b) the Issuer has paid or caused to be paid all
other sums payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture
Trustee an Officer's Certificate, an Opinion of
Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the
applicable requirements of Section 11.1(a) and each
stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.2 APPLICATION OF TRUST MONEY. All monies
deposited with the Indenture Trustee pursuant to Section 4.1
shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent, as the Indenture
Trustee may determine, to the Holders of the particular Notes
for the payment or redemption of which such monies have been
deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such monies
need not be segregated from other funds except to the extent
required herein or in the Trust Sale and Servicing Agreement or
required by law.
SECTION 4.3 REPAYMENT OF MONIES HELD BY PAYING
AGENT. In connection with the satisfaction and discharge of
this Indenture with respect to the Notes, all monies then held
by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to
be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with
respect to such monies.
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SECTION 4.4 DURATION OF POSITION OF INDENTURE
TRUSTEE. Notwithstanding the earlier payment in full of all
principal and interest due to the Noteholders under the terms of
the Notes and the cancellation of the Notes pursuant to Section
3.1, the Indenture Trustee shall continue to act in the capacity
as Indenture Trustee hereunder and, for the benefit of the
Certificateholders, shall comply with its obligations under
Sections 5.01(a), 7.02 and 7.03 of the Trust Sale and Servicing
Agreement, as appropriate, until such time as all payments in
respect of Certificate Balance and interest due to the
Certificateholders have been paid in full.
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. For the purposes of
this Indenture, "Event of Default" wherever used herein, means
any one of the following events:
(a) failure to pay any interest on any Note as and
when the same becomes due and payable, and such default
shall continue for a period of five (5) days; or
(b) except as set forth in Section 5.1(c), failure to
pay any instalment of the principal of any Note as and when
the same becomes due and payable, and such default
continues unremedied for a period of thirty (30) days after
there shall have been given, by registered or certified
mail, written notice thereof to the Servicer by the
Indenture Trustee or to the Servicer and the Indenture
Trustee by the Holders of not less than 25% of the
Outstanding Amount of the Notes; or
[ (c) failure to pay in full a principal instalment of
$_______________ (or, if less, the Outstanding Amount
attributable to the Class A-1 Notes) on the Class A-1 Notes
on any Distribution Date through and including the ________
________ Distribution Date; or failure to pay in full the
outstanding principal balance of any class of Notes on or
prior to the Final Scheduled Payment Date for such class;
or ]
(d) default in the observance or performance in any
material respect of any covenant or agreement of the Issuer
made in this Indenture (other than a covenant or agreement,
a default in the observance or performance of which is
elsewhere in this specifically dealt with in this Section
5.1) which failure materially and adversely affects the
rights of the Noteholders, and such default shall continue
or not be cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the
Issuer and the Seller (or the Servicer, as applicable) by
the Indenture Trustee or to the Issuer and the Seller (or
the Servicer, as applicable) and the Indenture Trustee by
the Holders of at least 25% of the Outstanding Amount of
the Notes, a written notice specifying such default and
requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
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(e) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the
Issuer or any substantial part of the Trust Estate 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 of the Issuer or for any substantial part of the
Trust Estate, or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days;
or
(f) the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect,
or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or
for any substantial part of the Trust Estate, or the making
by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of action
by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five
Business Days after learning of the occurrence thereof, written
notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would
become an Event of Default under Section 5.1(d), its status and
what action the Issuer is taking or proposes to take with
respect thereto.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION
AND ANNULMENT.
(a) If an Event of Default should occur and be
continuing, then and in every such case, unless the principal
amount of the Notes shall have already become due and payable,
either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount
of the Notes may declare all the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by the Noteholders) setting forth
the Event or Events of Default, and upon any such declaration
the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration,
shall become immediately due and payable.
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(b) At any time after such declaration of acceleration
of maturity has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture
Trustee as hereinafter provided in this Article V, the Holders
of Notes representing a majority of the Outstanding Amount of
the Notes, by written notice to the Issuer and the Indenture
Trustee, may waive all Defaults set forth in the notice
delivered pursuant to Section 5.2(a), and rescind and annul such
declaration and its consequences; PROVIDED, that no such
rescission and annulment shall extend to or affect any
subsequent Event of Default or impair any right consequent
thereto; and PROVIDED FURTHER, that if the Indenture Trustee
shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned
because of such rescission and annulment or for any other
reason, or shall have been determined adversely to the Indenture
Trustee, then and in every such case, the Indenture Trustee, the
Issuer and the Noteholders, as the case may be, shall be
restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Indenture
Trustee, the Issuer and the Noteholders, as the case may be,
shall continue as though no such proceedings had been taken.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS
FOR ENFORCEMENT BY INDENTURE TRUSTEE.
(a) The Issuer covenants that if:
(i) default is made in the payment of any
instalment of interest on any Note when the same becomes
due and payable, and such default continues unremedied for
a period of five (5) days;
(ii) except as set forth in Section 5.3(a)(iii),
default is made in the payment of the principal of or any
instalment of the principal of any Note when the same
becomes due and payable, and such default continues
unremedied for a period of thirty (30) days after there
shall have been given, by registered or certified mail,
written notice thereof to the Servicer by the Indenture
Trustee or to the Servicer and the Indenture Trustee by the
holders of not less than 25% of the Outstanding Amount of
the Notes; or
[ (iii) a principal instalment of $_____________
(or, if less, the Outstanding Amount attributable to the
Class A-1 Notes) on the Class A-1 Notes is not paid in full
on any Distribution Date through and including the November
15, 1994 Distribution Date; or the aggregate outstanding
principal balance of any class of Notes is not paid in full
on or prior to the Final Scheduled Payment Date for such
class; ]
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the Issuer shall, upon demand of the Indenture Trustee, pay to
the Indenture Trustee, for the ratable benefit of the
Noteholders in accordance with their respective outstanding
principal amounts, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue
principal, at the rate borne by the Notes and in addition
thereto such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name
and as trustee of an express trust, may institute a Proceeding
for the collection of the sums so due and unpaid, and may
prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such
Notes and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Notes,
wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing,
the Indenture Trustee may, as more particularly provided in
Section 5.4, in its discretion, proceed to protect and enforce
its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by
law.
(d) If there shall be pending, relative to the Issuer
or any other obligor upon the Notes or any Person having or
claiming an ownership interest in the Trust Estate, proceedings
under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or other similar law, or
if a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer
or its property or such other obligor or Person, or in case of
any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property
of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be
due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this
Section 5.3, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:
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(i) to file and prove a claim or claims for the
whole amount of principal and interest owing and unpaid in
respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and
each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made,
by the Indenture Trustee and each predecessor Trustee,
except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes in
any election of a trustee, a standby trustee or Person
performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims
of the Noteholders and of the Indenture Trustee on their
behalf; and
(iv) to file such proofs of claim and other
papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee or the
Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by
each of such Noteholders to make payments to the Indenture
Trustee, and, if the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the
Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each
predecessor trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor
trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to or
vote for or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim
of any Noteholder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All rights of action and of asserting claims
under this Indenture, or under any of the Notes, may be enforced
by the Indenture Trustee without the possession of any of the
Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such Proceedings
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instituted by the Indenture rustee shall be brought in its own
name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements
and compensation of the Indenture Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for
the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture
Trustee (and also any Proceedings involving the interpretation
of any provision of this Indenture to which the Indenture
Trustee shall be a party), the Indenture Trustee shall be held
to represent all the Noteholders, and it shall not be necessary
to make any Noteholder a party to any such Proceedings.
SECTION 5.4 REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be
continuing and the Notes have been accelerated under Section
5.2(a), the Indenture Trustee may do one or more of the
following (subject to Section 5.5):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration of
acceleration or otherwise, enforce any judgment obtained,
and collect from the Issuer and any other obligor upon such
Notes monies adjudged due;
(ii) institute Proceedings from time to time
for the complete or partial foreclosure of this Indenture
with respect to the Trust Estate;
(iii) exercise any remedies of a secured party
under the UCC and take any other appropriate action to
protect and enforce the rights and remedies of the
Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more
public or private sales called and conducted in any manner
permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell
or otherwise liquidate the Trust Estate following an Event
of Default, unless (i) either (A) the Holders of all of the
aggregate Outstanding Amount of the Notes consent thereto,
(B) the proceeds of such sale or liquidation distributable
to the Noteholders are sufficient to discharge in full the
principal of and the accrued interest on the Notes at the
date of such sale or liquidation or (C) the Indenture
Trustee determines that the Trust Estate will not continue
to provide sufficient funds for the payment of principal of
and interest on the Notes as and when they would have
become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of
Holders of a majority of the aggregate Outstanding Amount
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of the Notes and (ii) 10 days' prior written notice of sale
or liquidation has been given to the Rating Agencies. In
determining such sufficiency or insufficiency with respect
to clauses (B) and (C), the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national
reputation as to the feasibility of such proposed action
and as to the sufficiency of the Trust Estate for such
purpose.
(b) If the Indenture Trustee collects any money or
property pursuant to this Article V, it shall pay out the money
or property in the following order:
FIRST: to the Indenture Trustee for amounts due
under Section 6.7;
SECOND: to Noteholders for amounts due and unpaid
on the Notes for interest, ratably among all Noteholders,
without preference or priority of any kind, according to
the amounts due and payable on all the Notes for interest;
THIRD: to Noteholders for amounts due and unpaid
on the Notes for principal, ratably among all Noteholders,
without preference or priority of any kind, according to
the amounts due and payable on all the Notes for principal;
and
FOURTH: to the Issuer for distribution to the
Certificateholders.
The Indenture Trustee may fix a record date and
payment date for any payment to Noteholders pursuant to this
Section 5.4. At least 15 days before such record date, the
Indenture Trustee shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the
payment date and the amount to be paid.
SECTION 5.5 OPTIONAL PRESERVATION OF THE
RECEIVABLES. If the Notes have been declared to be due and
payable under Section 5.2 following an Event of Default and such
declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take
and maintain possession of the Trust Estate. It is the desire
of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such
desire into account when determining whether or not to take and
maintain possession of the Trust Estate. In determining whether
to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such
purpose.
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SECTION 5.6 LIMITATION OF SUITS. No Holder of any
Note shall have any right to institute any Proceeding, judicial
or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) such Holder has previously given written
notice to the Indenture Trustee of a continuing Event of
Default;
(ii) the Holders of not less than 25% of the
Outstanding Amount of the Notes have made written request
to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with
such request;
(iv) the Indenture Trustee for 60 days after
its receipt of such notice, request and offer of indemnity
has failed to institute such Proceedings; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such
60-day period by the Holders of a majority of the
Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of Notes or
to obtain or to seek to obtain priority or preference over any
other Holders of Notes or to enforce any right under this
Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes. For
the protection and enforcement of the provisions of this Section
5.6, each and every Noteholder shall be entitled to such relief
as can be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of
Holders of Notes, each representing less than a majority of the
Outstanding Amount of the Notes, the Indenture Trustee in its
sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO
RECEIVE PRINCIPAL AND INTEREST. Notwithstanding any other
provisions in this Indenture, the Holder of any Note shall have
the right, which is absolute and unconditional, to receive
payment of the principal of and interest, on such Note on or
after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, if applicable,
on or after the Redemption Date) and to institute suit for the
enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
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SECTION 5.8 RESTORATION OF RIGHTS AND REMEDIES. If
the Indenture Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee
or to such Noteholder, then and in every such case the Issuer,
the Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the
Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE. No
right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No
delay or omission of the Indenture Trustee or any Holder of any
Note to exercise any right or remedy accruing upon any Default
or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or
an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Notehold-
ers may be exercised from time to time, and as often as may be
deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
SECTION 5.11 CONTROL BY NOTEHOLDERS. The Holders of
a majority of the Outstanding Amount of the Notes shall, subject
to provision being made for indemnification against costs,
expenses and liabilities in a form satisfactory to the Indenture
Trustee, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; PROVIDED,
HOWEVER, that:
(i) such direction shall not be in conflict with
any rule of law or with this Indenture;
(ii) subject to the express terms of Section
5.4, any direction to the Indenture Trustee to sell or
liquidate the Trust Estate shall be by the Holders of Notes
representing not less than 100% of the Outstanding Amount
of the Notes;
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(iii) if the conditions set forth in Section 5.5
have been satisfied and the Indenture Trustee elects to
retain the Trust Estate pursuant to Section 5.5, then any
direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of
the Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other
action deemed proper by the Indenture Trustee that is not
inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to Section 6.1, the Indenture
Trustee need not take any action that it determines might cause
it to incur any liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS.
(a) Prior to the declaration of the acceleration of
the maturity of the Notes as provided in Section 5.2, the
Holders of not less than a majority of the Outstanding Amount of
the Notes may waive any past Default or Event of Default and its
consequences except a Default (i) in the payment of principal of
or interest on any of the Notes or (ii) in respect of a covenant
or provision hereof which cannot be modified or amended without
the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Noteholders
shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent
thereto.
(b) Upon any such waiver, such Default shall cease to
exist and be deemed to have been cured and not to have occurred,
and any Event of Default arising therefrom shall be deemed to
have been cured and not to have occurred, for every purpose of
this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 5.13 UNDERTAKING FOR COSTS. All parties to
this Indenture agree, and each Holder of any Note by such
Holder's acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any Proceeding for
the enforcement of any right or remedy under this Indenture, or
in any Proceeding against the Indenture Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such Proceeding of an undertaking to pay the
costs of such Proceeding, and that such court may in its discre-
tion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such Proceeding, having due
regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section
5.13 shall not apply to:
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(a) any Proceeding instituted by the Indenture
Trustee;
(b) any Proceeding instituted by any Noteholder, or
group of Noteholders, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes; or
(c) any Proceeding instituted by any Noteholder for
the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such
Note and in this Indenture (or, in the case of redemption, on or
after the Redemption Date).
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS. The
Issuer covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of
this Indenture. The Issuer (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the
Indenture Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15 ACTION ON NOTES. The Indenture
Trustee's right to seek and recover judgment on the Notes or
under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture
nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by
the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer.
SECTION 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN
OBLIGATIONS.
(a) Promptly following a request from the Indenture
Trustee to do so and at the Administrator's expense, the Issuer
agrees to take all such lawful action as the Indenture Trustee
may request to compel or secure the performance and observance
by the Seller and the Servicer of their respective obligations
to the Issuer under or in connection with the Trust Sale and
Servicing Agreement and the Pooling and Servicing Agreement or
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by GMAC of its obligations under or in connection with the
Pooling and Servicing Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer under or in
connection with the Trust Sale and Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of
the Seller or the Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of
their obligations under the Trust Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is
continuing, the Indenture Trustee may, and, at the direction
(which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter)) of the Holders of 66-2/3% of
the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against
the Seller or the Servicer under or in connection with the Trust
Sale and Servicing Agreement, including the right or power to
take any action to compel or secure performance or observance by
the Seller or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Trust Sale
and Servicing Agreement, and any right of the Issuer to take
such action shall be suspended.
(c) Promptly following a request from the Indenture
Trustee to do so and at the Administrator's expense, the Issuer
agrees to take all such lawful action as the Indenture Trustee
may request to compel or secure the performance and observance
by GMAC of each of its obligations to the Seller under or in
connection with the Pooling and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to
the Issuer under or in connection with the Pooling and Servicing
Agreement to the extent and in the manner directed by the
Indenture Trustee, including the transmission of notices of
default on the part of the Seller thereunder and the institution
of legal or administrative actions or proceedings to compel or
secure performance by GMAC of each of its obligations under the
Pooling and Servicing Agreement.
(d) If an Event of Default has occurred and is
continuing, the Indenture Trustee may, and, at the direction
(which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter)) of the Holders of 66-2/3% of
the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Seller against
GMAC under or in connection with the Pooling and Servicing
Agreement, including the right or power to take any action to
compel or secure performance or observance by GMAC of each of
its obligations to the Seller thereunder and to give any
consent, request, notice, direction, approval, extension or
waiver under the Pooling and Servicing Agreement, and any right
of the Seller to take such action shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such
person's own affairs.
(b) Except during the continuance of an Event of
Default:
(i) the Indenture Trustee undertakes to perform
such duties and only such duties as are specifically set
forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part,
the Indenture Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished
to the Indenture Trustee and conforming to the requirements
of this Indenture; PROVIDED, HOWEVER, that the Indenture
Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements
of this Indenture.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that:
(i) this Section 6.1(c) does not limit the
effect of Section 6.1(b);
(ii) the Indenture Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Indenture Trustee shall not be liable
with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it
pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for
interest on any money received by it except as the Indenture
Trustee may agree in writing with the Issuer.
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(e) Money held in trust by the Indenture Trustee need
not be segregated from other funds except to the extent required
by law or the terms of this Indenture or the Trust Sale and
Servicing Agreement or the Trust Agreement.
(f) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the
Indenture Trustee shall be subject to the provisions of this
Section 6.1 and to the provisions of the TIA.
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on any document
believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains
from acting, it may require an Officer's Certificate or an Opin-
ion of Counsel. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance
on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys or a
custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or
for the supervision of, any such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers; PROVIDED,
HOWEVER, that the Indenture Trustee's conduct does not
constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel,
and the advice or opinion of counsel with respect to legal
matters relating to this Indenture and the Notes shall be full
and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of
such counsel.
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SECTION 6.3 INDENTURE TRUSTEE MAY OWN NOTES. The
Indenture Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with
the Issuer, the Servicer or any of their respective Affiliates
with the same rights it would have if it were not Indenture
Trustee; PROVIDED, HOWEVER, that the Indenture Trustee shall
comply with Sections 6.10 and 6.11. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with
like rights.
SECTION 6.4 INDENTURE TRUSTEE'S DISCLAIMER. The
Indenture Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture
or the Notes, it shall not be accountable for the Issuer's use
of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in
the Notes other than the Indenture Trustee's certificate of
authentication.
SECTION 6.5 NOTICE OF DEFAULTS. If a Default
occurs and is continuing and if it is known to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall
mail to each Noteholder notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note, the Indenture Trustee may
withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.6 REPORTS BY INDENTURE TRUSTEE TO
HOLDERS. The Indenture Trustee shall deliver to each Noteholder
the information and documents set forth in Article VII, and, in
addition, all such information with respect to the Notes as may
be required to enable such Holder to prepare its federal and
state income tax returns.
SECTION 6.7 COMPENSATION; INDEMNITY.
(a) The Issuer shall cause the Servicer pursuant to
Section 3.09 of the Pooling and Servicing Agreement to pay to
the Indenture Trustee from time to time reasonable compensation
for its services. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall cause the Servicer pursuant to
Section 3.09 of the Pooling and Servicing Agreement to reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall cause the
Servicer to indemnify the Indenture Trustee in accordance with
Section 6.01 of the Trust Sale and Servicing Agreement.
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(b) The Issuer's obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the discharge of this
Indenture. When the Indenture Trustee incurs expenses after the
occurrence of a Default specified in Section 5.1(d) or (e) with
respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States
Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may resign at any time by
so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. Such resignation or removal shall
become effective in accordance with Section 6.8(c). The Issuer
shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) the Indenture Trustee is adjudged a
bankrupt or insolvent;
(iii) a receiver or other public officer takes
charge of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
(b) If the Indenture Trustee resigns or is removed or
if a vacancy exists in the office of Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to
herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture
Trustee and to the Issuer. Thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective, and
the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture.
The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee
to the successor Indenture Trustee.
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(d) If a successor Indenture Trustee does not take
office within 60 days after the retiring Indenture Trustee
resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority of the Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with
Section 6.11, any Noteholder may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture
Trustee pursuant to this Section 6.8, the Issuer's obligations
under Section 6.7 and the Servicer's corresponding obligations
under the Trust Sale and Servicing Agreement shall continue for
the benefit of the retiring Indenture Trustee.
SECTION 6.9 MERGER OR CONSOLIDATION OF INDENTURE
TRUSTEE.
(a) Any corporation into which the Indenture Trustee
may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which
the Indenture Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Indenture
Trustee, shall be the successor of the Indenture Trustee under
this Indenture; PROVIDED, HOWEVER, that such corporation shall
be eligible under the provisions of Section 6.11, without the
execution or filing of any instrument or any further act on the
part of any of the parties to this Indenture, anything in this
Indenture to the contrary notwithstanding.
(b) If at the time such successor or successors by
merger or consolidation to the Indenture Trustee shall succeed
to the trusts created by this Indenture, any of the Notes shall
have been authenticated but not delivered, any such successor to
the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the
Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name
of any predecessor hereunder or in the name of the successor to
the Indenture Trustee. In all such cases such certificate of
authentication shall have the same full force as is provided
anywhere in the Notes or herein with respect to the certificate
of authentication of the Indenture Trustee.
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SECTION 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR
SEPARATE INDENTURE TRUSTEE.
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Trust
or any Financed Vehicle may at the time be located, the
Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Noteholders and (only to the extent expressly provided herein)
the Certificateholders, such title to the Trust, or any part
hereof, and, subject to the other provisions of this Section
6.10, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-
trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-
trustee or separate trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or
any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally
liable by reason of any act or omission of any other
trustee hereunder; and
(iii) the Indenture Trustee may at any time
accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of
the then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate
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trustee or co-trustee shall refer to this Indenture and the
conditions of this Article VI. Each separate trustee and co-
trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument
of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of,
affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any
time constitute the Indenture Trustee, its agent or attorney-in-
fact with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 ELIGIBILITY; DISQUALIFICATION. The
Indenture Trustee shall at all times satisfy the requirements of
TIA 310(a). The Indenture Trustee shall have a combined capital
and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it shall have a
long term unsecured debt rating of Baa3 or better by Moody's
Investors Service, Inc. The Indenture Trustee shall comply with
TIA 310(b); PROVIDED, HOWEVER, that there shall be excluded from
the operation of TIA 310(b)(1) any indenture or indentures under
which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA 310(b)(1) are
met.
SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST ISSUER. The Indenture Trustee shall comply with
TIA 311(a), excluding any creditor relationship listed in
TIA 311(b). A trustee who has resigned or been removed shall be
subject to TIA 311(a) to the extent indicated.
SECTION 6.13 REPRESENTATIONS AND WARRANTIES OF
INDENTURE TRUSTEE. The Indenture Trustee represents and
warrants as of the Closing Date that:
(a) the Indenture Trustee is a national banking
association duly organized, validly existing and in good
standing under the laws of the United States of America;
(b) the Indenture Trustee has full power, authority
and legal right to execute, deliver and perform this Indenture,
and has taken all necessary action to authorize the execution,
delivery and performance by it of this Indenture;
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(c) the execution, delivery and performance by the
Indenture Trustee of this Indenture (i) shall not violate any
provision of any law or regulation governing the banking and
trust powers of the Indenture Trustee or any order, writ,
judgment or decree of any court, arbitrator, or governmental
authority applicable to the Indenture Trustee or any of its
assets, (ii) shall not violate any provision of the corporate
charter or by-laws of the Indenture Trustee, or (iii) shall not
violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust
pursuant to the provisions of any mortgage, indenture, contract,
agreement or other undertaking to which it is a party, which
violation, default or lien could reasonably be expected to have
a materially adverse effect on the Indenture Trustee's
performance or ability to perform its duties under this
Indenture or on the transactions contemplated in this Indenture;
(d) the execution, delivery and performance by the
Indenture Trustee of this Indenture shall not require the
authorization, consent or approval of, the giving of notice to,
the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency
regulating the banking and corporate trust activities of the
Indenture Trustee; and
(e) this Indenture has been duly executed and
delivered by the Indenture Trustee and constitutes the legal,
valid and binding agreement of the Indenture Trustee,
enforceable in accordance with its terms.
SECTION 6.14 INDENTURE TRUSTEE MAY ENFORCE CLAIMS
WITHOUT POSSESSION OF NOTES. All rights of action and claims
under this Indenture or the Notes may be prosecuted and enforced
by the Indenture Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Indenture
Trustee shall be brought in its own name as Indenture Trustee.
Any recovery of judgment shall, after provision for the payment
of the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders and (only to the
extent expressly provided herein) the Certificateholders in
respect of which such judgment has been obtained.
SECTION 6.15 SUIT FOR ENFORCEMENT. If an Event of
Default shall occur and be continuing, the Indenture Trustee, in
its discretion may, subject to the provisions of Section 6.1,
proceed to protect and enforce its rights and the rights of the
Noteholders under this Indenture by Proceeding whether for the
specific performance of any covenant or agreement contained in
this Indenture or in aid of the execution of any power granted
in this Indenture or for the enforcement of any other legal,
equitable or other remedy as the Indenture Trustee, being
advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the
Noteholders.
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SECTION 6.16 RIGHTS OF NOTEHOLDERS TO DIRECT
INDENTURE TRUSTEE. Holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes shall have the
right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture
Trustee; PROVIDED, HOWEVER, that subject to Section 6.1, the
Indenture Trustee shall have the right to decline to follow any
such direction if the Indenture Trustee being advised by counsel
determines that the action so directed may not lawfully be
taken, or if the Indenture Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed
would be illegal or subject it to personal liability or be
unduly prejudicial to the rights of Noteholders not parties to
such direction; and PROVIDED, FURTHER, that nothing in this
Indenture shall impair the right of the Indenture Trustee to
take any action deemed proper by the Indenture Trustee and which
is not inconsistent with such direction by the Noteholders.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 ISSUER TO FURNISH INDENTURE TRUSTEE
NAMES AND ADDRESSES OF NOTEHOLDERS. The Issuer shall furnish or
cause to be furnished by the Servicer to the Indenture Trustee
(a) not more than five days before each Distribution Date or
Payment Date, as applicable, a list, in such form as the
Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of the close of business on
the related Record Date, and (b) at such other times as the
Indenture Trustee may request in writing, within 14 days after
receipt by the Issuer of any such request, a list of similar
form and content as of a date not more than 10 days prior to the
time such list is furnished; PROVIDED, HOWEVER, that so long as
the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.2 PRESERVATION OF INFORMATION, COMMUNICA-
TIONS TO NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as
current a form as is reasonably practicable, the names and
addresses of the Holders of Notes contained in the most recent
list furnished to the Indenture Trustee as provided in Section
7.1 and the names and addresses of Holders of Notes received by
the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so fur-
nished.
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(b) Noteholders may communicate pursuant to TIA
312(b) with other Noteholders with respect to their rights under
this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA 312(c).
SECTION 7.3 REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15
days after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the
Commission in accordance with rules and regulations
prescribed from time to time by the Commission such
additional information, documents and reports with respect
to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to
time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders
described in TIA 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) as
may be required by rules and regulations prescribed from
time to time by the Commission.
(b) Unless the Issuer otherwise determines, the
fiscal year of the Issuer shall end on December 31 of such year.
SECTION 7.4 REPORTS BY TRUSTEE.
(a) If required by TIA 313(a), within 60 days after
each February 1, beginning with __________, ____, the Indenture
Trustee shall mail to each Noteholder as required by TIA 313(c)
a brief report dated as of such date that complies with TIA
313(a). The Indenture Trustee also shall comply with TIA
313(b). A copy of any report delivered pursuant to this Section
7.4(a) shall, at the time of its mailing to Noteholders, be
filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The
Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
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(b) On each Distribution Date or Payment Date, as
applicable, the Indenture Trustee shall include with each
payment to each Noteholder a copy of the statement for the
Monthly Period or Periods applicable to such Distribution Date
or Payment Date as required pursuant to Section 4.09 of the
Trust Sale and Servicing Agreement.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 COLLECTION OF MONEY. Except as
otherwise expressly provided herein, the Indenture Trustee may
demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal
agent or other intermediary, all money and other property
payable to or receivable by the Indenture Trustee pursuant to
this Indenture. The Indenture Trustee shall apply all such
money received by it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default
occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim a Default or
Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2 DESIGNATED ACCOUNTS; PAYMENTS.
(a) On or prior to the Closing Date, the Issuer shall
cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, the Designated Accounts as provided in
Articles IV and V of the Trust Sale and Servicing Agreement.
(b) On or before each Distribution Date, (i) amounts
shall be deposited in the Collection Account as provided in
Section 4.06 of the Trust Sale and Servicing Agreement and (ii)
the Aggregate Noteholders' Interest Distributable Amount and the
Aggregate Noteholders' Principal Distributable Amount shall be
transferred from the Collection Account to the Note Distribution
Account as and to the extent provided in Section 4.06 of the
Trust Sale and Servicing Agreement. Notwithstanding the
preceding sentence, to the extent permitted and as provided by
Section 4.08 of the Trust Sale and Servicing Agreement, deposits
may be netted against amounts owing to the depositor and all
distributions, deposits or other remittances in respect of the
[Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes or
the Class A-6 Notes which are otherwise required to be made on
or with respect to an Exempt Deposit Date may be made on the
next succeeding Payment Date, on which Payment Date the
cumulative amount of all such distributions, deposits and other
remittances for such Payment Date and the immediately preceding
Exempt Deposit Date or Dates shall be made.]
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(c) On each Distribution Date, the Indenture Trustee
shall apply and, as required, distribute to the Noteholders all
amounts on deposit in the Note Distribution Account (subject to
the Servicer's rights under Section 5.03 of the Trust Sale and
Servicing Agreement to Investment Earnings) in the following
order of priority and in the amounts determined as described
below:
(i) The Aggregate Noteholders' Interest
Distributable Amount shall be applied to each class of
Notes in an amount equal to the sum of (A) the Noteholders'
Interest Distributable Amount for such class of Notes for
such Distribution Date plus (B) if there was any
Noteholders' Interest Carryover Shortfall as of the close
of the immediately preceding Distribution Date, a pro rata
portion thereof determined on the basis of the amount of
interest that was to be applied to such class on such
preceding Distribution Date; PROVIDED, HOWEVER, that if
there are not sufficient funds in the Note Distribution
Account to so apply the entire Aggregate Noteholders'
Interest Distributable Amount, the amount available in the
Note Distribution Account for such purpose shall be applied
to each class of Notes pro rata on the basis of the
respective amount otherwise to be applied to such class
pursuant to this clause (i). The amount so applied to each
class of Notes shall be paid to the Holders thereof on such
Distribution Date; [PROVIDED that, with respect to the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes
and the Class A-6 Notes,] if such Distribution Date is not
a Payment Date, such amount shall be retained in the Note
Distribution Account and paid on the next succeeding
Payment Date.
(ii) Unless otherwise provided in clause (iii)
below, an amount equal to the sum of (x) the aggregate
Undistributed Amount for the immediately preceding
Distribution Date and (y) the Noteholders' Percentage of
the Principal Distributable Amount shall be applied to each
class of Notes in the following amounts and in the
following order of priority and, unless otherwise provided
below, any amount so applied shall be paid on such
Distribution Date to the Holders of such class of Notes:
[(A) First, to the Class A-1 Notes, the
lesser of $_____________ and the Outstanding Amount
attributable to such class;]
[(B) Second, to the Class A-2 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero, provided, that on each Distribution
Date that is prior to the Final Scheduled Payment Date
for the Class A-2 Notes, such amount shall be held in
the Note Distribution Account as an Undistributed
Amount;]
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[(C) Third, on each Distribution Date that
is on or after February 15, 1994, to the Class A-3
Notes, until the Outstanding Amount attributable to
such class is reduced to zero, provided, that on each
Distribution Date that is prior to the Final Scheduled
Payment Date for the Class A-3 Notes, such amount
shall be held in the Note Distribution Account as an
Undistributed Amount;]
[(D) Fourth, to the Class A-4 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero, provided, that on each Distribution
Date that is not a Payment Date, such amount shall be
held in the Note Distribution Account as an
Undistributed Amount;]
[(E) Fifth, to the Class A-5 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero;]
[(F) Sixth, to the Class A-6 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero, provided, that on each Distribution
Date that is not a Payment Date such amount shall be
held in the Note Distribution Account as an
Undistributed Amount;]
[(G) Seventh, to the Class A-3 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero; and]
[(H) Eighth, to the Class A-1 Notes, until
the Outstanding Amount attributable to such class is
reduced to zero;]
[PROVIDED, HOWEVER, that on any Distribution
Date on which payments are made pursuant to clause (G)
or (H) above, all amounts allocated to a class of
Notes pursuant to clauses (B), (C), (D) and (F) shall
be paid on such Distribution Date and shall not be
held as an Undistributed Amount and (ii) in the event
monthly Payment Dates have commenced and are
continuing, principal shall be paid on the Notes in
the priority of the order set forth in clauses (A)
through (F) above without regard to any of the
provisos or date limitations in such clauses.]
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(iii) If the Notes have been declared immediately due
and payable following an Event of Default as provided in Section
5.2, until such time as all Events of Default have been cured or
waived as provided in Section 5.2(b), any amounts remaining in
the Note Distribution Account after the applications described
in Section 8.2(c)(i) and any amounts then on deposit or
deposited into the Note Distribution Account thereafter shall be
applied to the repayment of principal on each of the Notes pro
rata on the basis of the respective unpaid principal amount of
each such Note and paid to the Holders thereof on such
Distribution Date.
SECTION 8.3 GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall
have occurred and be continuing, all or a portion of the funds
in the Designated Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee upon Issuer
Order, subject to the provisions of Section 5.01(b) of the Trust
Sale and Servicing Agreement. The Issuer shall not direct the
Indenture Trustee to make any investment of any funds or to sell
any investment held in any of the Designated Accounts unless the
security interest granted and perfected in such account shall
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 Issuer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture
Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee
shall not in any way be held liable by reason of any
insufficiency in any of the Designated Accounts resulting from
any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture
Trustee, in its commercial capacity as principal obligor and not
as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give
investment directions for any funds on deposit in the Designated
Accounts to the Indenture Trustee by 11:00 a.m., New York City
Time (or such other time as may be agreed by the Issuer and the
Indenture Trustee) on any Business Day; or (ii) 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 Section 5.2, or, if such 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 in accordance with Section 5.5 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 Designated Accounts in one or more
Eligible Investments selected by the Indenture Trustee.
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SECTION 8.4 RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses
pursuant to Section 6.7, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture,
or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are consistent with the
provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as
there are no Notes Outstanding and all sums due to the Indenture
Trustee pursuant to Section 6.7 have been paid, release any
remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture and release to the Issuer or any
other Person entitled thereto any funds then on deposit in the
Designated Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this
Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in
accordance with TIA 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
SECTION 8.5 OPINION OF COUNSEL. The Indenture
Trustee shall receive at least seven days' notice when requested
by the Issuer to take any action pursuant to Section 8.4(a),
accompanied by copies of any instruments involved, and the
Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect
of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking
of such action have been complied with and such action shall not
materially and adversely impair the security for the Notes or
the rights of the Noteholders in contravention of the provisions
of this Indenture; PROVIDED, HOWEVER, that such Opinion of
Counsel shall not be required to express an opinion as to the
fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument
delivered to the Indenture Trustee in connection with any such
action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT
OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes
but with prior notice to the Rating Agencies, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of
the execution thereof), in form satisfactory to the Indenture
Trustee, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture,
or better to assure, convey and confirm unto the Indenture
Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to additional
property to the lien of this Indenture;
(ii) to evidence the succession, in compliance
with Section 3.10 and the applicable provisions hereof, of
another person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer contained
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for
the benefit of the Noteholders, or to surrender any right
or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or
pledge any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supple-
ment any provision herein or in any supplemental indenture
which may be inconsistent with any other provision herein
or in any supplemental indenture;
(vi) to evidence and provide for the acceptance
of the appointment hereunder by a successor trustee with
respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the
provisions of this Indenture to such extent as shall be
necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA, and the
Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make
any further appropriate agreements and stipulations that
may be therein contained.
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(b) The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, may, also without the consent of
any of the Noteholders but with prior notice to the Rating
Agencies, at any time and from time to time enter into one or
more indentures supplemental hereto for the purpose of adding
any provisions to, changing in any manner, or eliminating any of
the provisions of, this Indenture or modifying in any manner the
rights of the Noteholders under this Indenture; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the
interests of any Noteholder.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS.
(a) The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with prior notice to
the Rating Agencies and with the consent of the Holders of not
less than a majority of the Outstanding Amount of the Notes, by
Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, changing in
any manner, or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the
Noteholders under this Indenture; PROVIDED, HOWEVER, that no
such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(i) change the due date of any instalment of
principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate applicable
thereto, or the Redemption Price with respect thereto,
change any place of payment where, or the coin or currency
in which, any Note or any interest thereon is payable, or
impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application
of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding
Amount of the Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver
of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences as
provided for in this Indenture;
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(iii) modify or alter the provisions of the
proviso to the definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding
Amount of the Notes required to direct the Indenture
Trustee to sell or liquidate the Trust Estate pursuant to
Section 5.4 if the proceeds of such sale would be
insufficient to pay the principal amount of and accrued but
unpaid interest on the Outstanding Notes;
(v) modify any provision of this Section 9.2 to
decrease the required minimum percentage necessary to
approve any amendments to any provisions of this Indenture
or any of the Basic Documents;
(vi) modify any of the provisions of this
Indenture in such manner as to affect the calculation of
the amount of any payment of interest or principal due on
any Note on any Distribution Date or Payment Date
(including the calculation of any of the individual
components of such calculation), or modify or alter the
provisions of the Indenture regarding the voting of Notes
held by the Issuer, the Seller or any Affiliate of either
of them; or
(vii) permit the creation of any Lien ranking
prior to or on a parity with the lien of this Indenture
with respect to any part of the Trust Estate or, except as
otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security
afforded by the lien of this Indenture.
(b) The Indenture Trustee may in its discretion
determine whether or not any Notes would be affected (such that
the consent of each Noteholder would be required) by any
supplemental indenture proposed pursuant to this Section 9.2 and
any such determination shall be conclusive upon the Holders of
all Notes, whether authenticated and delivered thereunder before
or after the date upon which such supplemental indenture become
effective. The Indenture Trustee shall not be liable for any
such determination made in good faith.
(c) It shall be sufficient if an Act of Noteholders
approves the substance, but not the form, of any proposed
supplemental indenture.
(d) Promptly after the execution by the Issuer and
the Indenture Trustee of any supplemental indenture pursuant to
this Section 9.2, the Indenture Trustee shall mail to the
Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such
supplemental indenture.
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SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or permitting the additional trusts created by,
any supplemental indenture permitted by this Article IX or the
modifications thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.1 and 6.2, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities
or immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURE. Upon
the execution of any supplemental indenture pursuant to the
provisions hereof, this Indenture shall be modified and amended
in accordance therewith with respect to the Notes affected
thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the
Noteholders shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.
Every amendment of this Indenture and every supplemental
indenture executed pursuant to this Article IX shall conform to
the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
SECTION 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL
INDENTURES. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article
IX may, and if required by the Indenture Trustee shall, bear a
notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so
modified as to conform, in the opinion of the Indenture Trustee
and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding
Notes of the same class.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 REDEMPTION.
(a) The Class ____ Notes are subject to redemption in
whole, but not in part, upon the exercise by the Servicer of its
option to purchase the Receivables pursuant to Section 8.01(a)
of the Trust Sale and Servicing Agreement. Such redemption
shall occur on any Distribution Date after all other classes of
Notes have been paid in full. The purchase price for the Class
A-6 Notes shall be equal to the applicable Redemption Price,
provided the Issuer has available funds sufficient to pay such
amount. The Issuer shall furnish the Rating Agencies notice of
such redemption. If the Class ____ Notes are to be redeemed
pursuant to this Section 10.1(a), the Issuer shall furnish
notice thereof to the Indenture Trustee not later than 25 days
prior to the Redemption Date and the Issuer shall deposit into
the Note Distribution Account, on or before the Redemption Date,
the aggregate Redemption Price of the Class ____ Notes to be
redeemed, whereupon all such Notes shall be due and payable on
the Redemption Date.
(b) If the assets of the Trust are sold pursuant to
Section 7.2 of the Trust Agreement, all amounts deposited in the
Note Distribution Account pursuant to the Trust Sale and
Servicing Agreement as a result thereof shall be paid to the
Noteholders. If amounts are to be paid to Noteholders pursuant
to this Section 10.1(b), the Servicer or the Issuer shall, to
the extent practicable, furnish notice of such event to the
Indenture Trustee not later than 25 days prior to the Redemption
Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.2 FORM OF REDEMPTION NOTICE.
(a) Notice of redemption of the Class ____ Notes
under Section 10.1(a) shall be given by the Indenture Trustee by
first-class mail, postage prepaid, mailed not less than five
days prior to the applicable Redemption Date to each Noteholder
of Class ____ Notes of record at such Noteholder's address
appearing in the Note Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price; and
(iii) the place where Class ____ Notes are to be
surrendered for payment of the Redemption Price (which
shall be the Agency Office of the Indenture Trustee to be
maintained as provided in Section 3.2).
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(c) Notice of redemption of the Class ____ Notes
shall be given by the Indenture Trustee in the name and at the
expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Class ____ Note shall
not impair or affect the validity of the redemption of any other
Class ____ Note.
(d) Prior notice of redemption under Section 10.1(b)
is not required to be given to Noteholders.
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE.
The Class ____ Notes shall, following notice of
redemption as required by Section 10.2 (in the case of
redemption pursuant to Section 10.1(a)), on the Redemption Date
cease to be Outstanding for purposes of this Indenture and shall
thereafter represent only the right to receive the applicable
Redemption Price and (unless the Issuer shall default in the
payment of such Redemption Price) no interest shall accrue on
such Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating such
Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS,
ETC.
(a) Upon any application or request by the Issuer to
the Indenture Trustee to take any action under any provision of
this Indenture, the Issuer shall furnish to the Indenture
Trustee: (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with
and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the
applicable requirements of this Section 11.1, except that, in
the case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or
opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for
in this Indenture shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read
such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
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(iii) a statement that, in the judgment of each
such signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion
of each such signatory, such condition or covenant has been
complied with.
(b) (i) Prior to the deposit with the Indenture
Trustee of any Collateral or other property or securities that
is to be made the basis for the release of any property or
securities subject to the lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section 11.1(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee
an Officers' Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish
to the Indenture Trustee an Officers' Certificate
certifying or stating the opinion of any signer thereof as
to the matters described in clause (b)(i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal
or release since the commencement of the then current
fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause
(b)(ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value
thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of
any Warranty Receivables, Administrative Receivables or
Liquidating Receivables, whenever any property or
securities are to be released from the lien of this
Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the
opinion of each Person signing such certificate as to the
fair value (within 90 days of such release) of the property
or securities proposed to be released and stating that in
the opinion of such person the proposed release will not
impair the security under this Indenture in contravention
of the provisions hereof.
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(iv) Whenever the Issuer is required to furnish
to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of any signatory thereof
as to the matters described in clause (b)(iii) above, the
Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair
value of the property or securities and of all other
property, other than Warranty Receivables, Administrative
Receivables and Liquidating Receivables, or securities
released from the lien of this Indenture since the
commencement of the then current calendar year, as set
forth in the certificates required by clause (b)(iii) above
and this clause (b)(iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need
not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the
Notes.
(v) Notwithstanding Section 2.9 or any other
provision of this Section 11.1, the Issuer may (A) collect,
liquidate, sell or otherwise dispose of Receivables as and
to the extent permitted or required by the Basic Documents,
(B) make cash payments out of the Designated Accounts as
and to the extent permitted or required by the Basic
Documents and (C) take any other action not inconsistent
with the TIA.
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO
INDENTURE TRUSTEE.
(a) In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such
matters in one or several documents.
(b) Any certificate or opinion of an Authorized
Officer of the Issuer may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or repre-
sentations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any
such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such
factual matters is in the possession of the Servicer, the
Seller, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to
such matters are erroneous.
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(c) Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated and form
one instrument.
(d) Whenever in this Indenture, in connection with
any application or certificate or report to the Indenture
Trustee, it is provided that the Issuer shall deliver any
document as a condition of the granting of such application, or
as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or
report. The foregoing shall not, however, be construed to
affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such
document as provided in Article VI.
SECTION 11.3 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Noteholders or a class of
Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Noteholders in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action
shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided
in this Section 11.3.
(b) The fact and date of the execution by any person
of any such instrument or writing may be proved in any manner
that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the
Note Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
Notes shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
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SECTION 11.4 NOTICES, ETC., TO INDENTURE TRUSTEE,
ISSUER AND RATING AGENCIES. Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or
other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Indenture
Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and either sent by electronic facsimile transmission
(with hard copy to follow via first class mail) or mailed, by
certified mail, return receipt requested to the Issuer and the
Owner Trustee, care of the Owner Trustee at its Corporate Trust
Office, with copies to _________________, _____________________,
Attention: Corporate Trust and Agency Group, and to Capital Auto
Receivables, Inc., 3044 West Grand Boulevard, Detroit, Michigan
48202, Attention: J. B. Van Orman, Vice President or at any
other address previously furnished in writing to the Indenture
Trustee by the Issuer.
The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee and the
Indenture Trustee shall likewise promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
(c) Notices required to be given to the Rating Agen-
cies by the Issuer, the Indenture Trustee or the Owner Trustee
shall be in writing, personally delivered, sent by electronic
facsimile transmission (with hard copy to follow via first class
mail) or mailed by certified mail, return receipt requested to:
(i) in the case of Moody's Investors Service, Inc., at the
following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York
10007; (ii) in the case of Standard & Poor's Ratings Group, at
the following address: Standard & Poor's Corporation, 26
Broadway (20th Floor), New York, New York 10004, Attn: Asset
Backed Surveillance Department; (iii) in the case of Fitch
Investors Service, Inc. at the following address: Fitch
Investors Service, Inc., One State Street Plaza, New York, N.Y.
10004, Attn: Structured Finance Surveillance; and (iv) in the
case of Duff & Phelps Credit Rating Co., at the following
address: Duff & Phelps Credit Rating Co., 55 East Monroe
Street, Chicago, Illinois 60603, Attn: Structured Finance
Research and Monitoring; or as to each of the foregoing, at such
other address as shall be designated by written notice to the
other parties.
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SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to
Noteholders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if it is in
writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at such Person's address as
it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the
giving of such notice. If notice to Noteholders is given by
mail, neither the failure to mail such notice nor any defect in
any notice so mailed to any particular Noteholder shall affect
the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.
(b) Where this Indenture provides for notice in any
manner, such notice may be waived in writing by any Person
entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the
Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such a waiver.
(c) In case, by reason of the suspension of regular
mail service as a result of a strike, work stoppage or similar
activity, it shall be impractical to mail notice of any event of
Noteholders when such notice is required to be given pursuant to
any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall
be deemed to be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the
Rating Agencies, failure to give such notice shall not affect
any other rights or obligations created hereunder, and shall not
under any circumstance constitute an Event of Default.
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE
PROVISIONS.
Notwithstanding any provision of this Indenture or any
of the Notes to the contrary, the Issuer may enter into any
agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent
to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices. The Issuer
shall furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee shall cause payments to be
made and notices to be given in accordance with such agreements.
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SECTION 11.7 CONFLICT WITH TRUST INDENTURE ACT.
(a) If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be
included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
(b) The provisions of TIA 310 through 317 that impose
duties on any Person (including the provisions automatically
deemed included herein unless expressly excluded by this
Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
SECTION 11.8 EFFECT OF HEADINGS AND TABLE OF
CONTENTS.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 11.9 SUCCESSORS AND ASSIGNS.
(a) All covenants and agreements in this Indenture
and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture
Trustee in this Indenture shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.10 SEPARABILITY.
In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 11.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto
and their successors hereunder, the Noteholders, the
Certificateholders (only to the extent expressly provided
herein) and any other party secured hereunder, and any other
Person with an ownership interest in any part of the Trust
Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12 LEGAL HOLIDAYS.
If the date on which any payment is due shall not be
a Business Day, then (notwithstanding any other provision of the
Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the
same force and effect as if made on the date on which nominally
due, and no interest shall accrue for the period from and after
any such nominal date.
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SECTION 11.13 GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 COUNTERPARTS.
This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 11.15 RECORDING OF INDENTURE.
If this Indenture is subject to recording in any
appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an
Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the
Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16 NO RECOURSE.
No recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or
any certificate or other writing delivered in connection
herewith or therewith, against:
(i) the Indenture Trustee or the Owner Trustee in its
individual capacity;
(ii) any owner of a beneficial interest in the Issuer;
or
(iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the
Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay
any instalment or call owing to such entity. For all
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purposes of this Indenture, 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 11.17 NO PETITION.
The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note issued
hereunder, hereby covenant and agree that they shall not, prior
to the date which is one year and one day after the termination
of this Indenture with respect to the Issuer pursuant to Section
4.1, acquiesce, petition or otherwise invoke or cause the Seller
or the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case
against the Seller or 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 Seller or the Issuer or any substantial
part of its property, or ordering the winding up or liquidation
of the affairs of the Seller or the Issuer.
SECTION 11.18 INSPECTION.
The Issuer agrees that, on reasonable prior notice, it
shall permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to
make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by
law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Indenture
Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.
SECTION 11.19 INDEMNIFICATION BY AND REIMBURSEMENT OF
THE SERVICER.
The Indenture Trustee acknowledges and agrees to
reimburse (i) the Servicer and its directors, officers,
employees and agents in accordance with Section 6.03(b) of the
Trust Sale and Servicing Agreement and (ii) the Seller and its
directors, officers, employees and agents in accordance with
Section 3.04 of the Trust Sale and Servicing Agreement. The
Indenture Trustee further acknowledges and accepts the
conditions and limitations with respect to the Servicer's
obligation to indemnify, defend and hold the Indenture Trustee
harmless as set forth in Section 6.01(a)(iv) of the Trust Sale
and Servicing Agreement.
* * * * *
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IN WITNESS WHEREOF, the Issuer and the Indenture
Trustee have caused this Indenture to be duly executed by their
respective officers, thereunto duly authorized, all as of the
day and year first above written.
<PAGE>
CAPITAL AUTO RECEIVABLES
ASSET TRUST 199_-_
By: _______________________,
not in its individual
capacity but solely as
Owner Trustee,
By: ________________________
Name:
Title:
____________________________,
______, as Indenture Trustee,
By: ________________________
Name:
Title:
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STATE OF ________, )
) ss.:
COUNTY OF ________, )
BEFORE ME, the undersigned authority, a Notary Public
in and for said county and state, on this day personally
appeared _____________________________, known to me to be the
person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of
the said Capital Auto Receivables Asset Trust 199_-_, a Delaware
business trust, and that he executed the same as the act of said
business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____
day of _______, ____.
___________________________________
Notary Public in and for the
State of ________.
My commission expires:
____________________________
68
<PAGE>75
STATE OF ________, )
) ss.:
COUNTY OF _______, )
BEFORE ME, the undersigned authority, a Notary Public
in and for said county and state, on this day personally
appeared ____________________, known to me to be the person and
officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said The
______________________________,_______________________________,
and that he executed the same as the act of said national
banking association for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____
day of _______, ____.
___________________________________
Notary Public in and for the
State of ________.
My commission expires:
____________________________
69
<PAGE>76
EXHIBIT A
LOCATION OF
SCHEDULE OF RECEIVABLES
The Schedule of Receivables is on file at the offices
of:
1. The Indenture Trustee
2. The Owner Trustee
3. General Motors Acceptance Corporation
4. Capital Auto Receivables, Inc.
<PAGE>
<PAGE>77
EXHIBIT B
FORM OF NOTE DEPOSITORY AGREEMENT
<PAGE>
<PAGE>78
EXHIBIT C
FORM OF ASSET BACKED NOTES
REGISTERED $____________
No. R-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
Unless this Note is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name
of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an
interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
CAPITAL AUTO RECEIVABLES ASSET TRUST ______
CLASS A-__% ASSET BACKED NOTES
CAPITAL AUTO RECEIVABLES ASSET TRUST ______, a
business trust organized and existing under the laws of the
State of Delaware (herein referred to as the "Issuer"), for
value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _______________ DOLLARS
($_________) payable in accordance with the Indenture (as
defined on the reverse side of this Note), prior to the
occurrence of an Event of Default and a declaration that the
Notes are due and
<PAGE>79
payable, on each Distribution Date/Payment Date in an amount
equal to the result obtained by multiplying (i) a fraction, the
numerator of which is the initial principal amount hereof and
the denominator of which is [AGGREGATE PRINCIPAL AMOUNT FOR
CLASS] by (ii) the aggregate amount, if any, payable on such
Distribution Date/Payment Date from the Note Distribution
Account in respect of principal on the Class ___ Notes pursuant
to Sections 2.7, 3.1 and 8.2(c) of the Indenture; PROVIDED,
HOWEVER, that the entire unpaid principal amount of this Note
shall be due and payable on [THE EARLIER OF] ______________ (the
"Final Scheduled Payment Date") [AND THE REDEMPTION DATE, IF
ANY, PURSUANT TO SECTION 10.1(A) OF THE INDENTURE]. The Issuer
shall pay interest on this Note at the rate per annum shown
above on each Distribution Date/Payment Date until the principal
of this Note is paid or made available for payment in the manner
set forth in Section 2.7(a) of the Indenture.
The principal of and interest on this Note are payable
in such coin or currency of the United States of America which,
at the time of payment, is legal tender for payment of public
and private debts. All payments made by the Issuer with respect
to this Note shall be applied first to interest due and payable
on this Note as provided above and then to the unpaid principal
of this Note.
Reference is made to the further provisions of this
Note set forth on the reverse hereof, which shall have the same
effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has
been executed by the Indenture Trustee whose name appears below
by manual signature, this Note shall not be entitled to any
benefit under the Indenture referred to on the reverse hereof or
be valid or obligatory for any purpose.
2
<PAGE>80
IN WITNESS WHEREOF, the Issuer has caused this
instrument to be signed, manually or in facsimile, by its
Authorized Officer.
<PAGE>
<PAGE>
Date:
CAPITAL AUTO RECEIVABLES ASSET
TRUST 199_-_,
By: BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement
By: ______________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred
to in the within-mentioned Indenture.
___________________________
_______, not in its
individual capacity but
solely as Indenture Trustee
By:___________________________
Name:
Title:
- 3 -
<PAGE>81
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes
of the Issuer, designated as its Class ___ Asset Backed Notes
(herein called the "Class ___ Notes"), all issued under an
Indenture, dated as of __________, 1994 (such Indenture, as
supplemented or amended, is herein called the "Indenture"),
between the Issuer and __________________________________, a
____________________________, as trustee (the "Indenture
Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Class ___ Notes are
one of six duly authorized classes of Notes of the Issuer issued
pursuant to the Indenture (collectively, as to all Notes of all
such classes, the "Notes"). The Notes are governed by and
subject to all terms of the Indenture (which terms are
incorporated herein and made a part hereof), to which Indenture
the Holder of this Note by virtue of acceptance hereof assents
and by which such Holder is bound. All capitalized terms used
and not otherwise defined in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings
assigned to them in or pursuant to the Indenture.
The Class ___ Notes and all other Notes issued
pursuant to the Indenture are and will be equally and ratably
secured by the Collateral pledged as security therefor as
provided in the Indenture.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee or the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities,
(ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee in
their individual capacities, any holder of a beneficial interest
in the Issuer, the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner
Trustee in their individual capacities, except as any such
Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any
instalment or call owing to such entity.
4
<PAGE>82
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note, covenants and agrees that by accepting the benefits of the
Indenture such Noteholder will not, prior to the date which is
one year and one day after the termination of this Indenture
with respect to the Issuer, acquiesce, petition or otherwise
invoke or cause the Seller or the Issuer to invoke the process
of any court or government authority for the purpose of
commencing or sustaining a case against the Seller or 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 Seller
or the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, unless
otherwise required by appropriate taxing authorities, agrees to
treat the Notes as indebtedness secured by the Receivables for
the purpose of federal income taxes, state and local income and
franchise taxes, Michigan single business tax, and any other
taxes imposed upon, measured by or based upon gross or net
income.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Issuer and the rights of the
Noteholders under the Indenture at any time by the Issuer with
the consent of the Holders of Notes representing a majority of
the Outstanding Amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Note (or any one of
more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the
consent of the Noteholders.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under
certain circumstances, to merge or consolidate, subject to the
rights of the Indenture Trustee and the Holders of Notes under
the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
5
<PAGE>83
This Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obliga-
tions, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
Anything herein to the contrary notwithstanding,
except as expressly provided in the Basic Documents, neither the
Seller, the Servicer, the Indenture Trustee nor the Owner
Trustee in their respective individual capacities, any owner of
a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees
or successors or assigns, shall be personally liable for, nor
shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee solely as the Owner Trustee
in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that, except as expressly provided in
the Basic Documents, in the case of an Event of Default under
the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; PROVIDED,
HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
6
<PAGE>84
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _____________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints __________________________,
as attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the
premises.
Dated:__________________ __________________________________
Signature Guaranteed:
_________________________ __________________________________
7
EXHIBIT 4.2
TRUST AGREEMENT
BETWEEN
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
________________________
OWNER TRUSTEE
DATED AS OF _______ __, 1994
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION . . . . . . . . . . . . . . 1
2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Purposes and Powers. . . . . . . . . . . . . . . . . . . . . . 1
2.4 Appointment of Owner Trustee . . . . . . . . . . . . . . . . . 2
2.5 Initial Capital Contribution of Owner Trust Estate . . . . . . 2
2.6 Declaration of Trust . . . . . . . . . . . . . . . . . . . . . 2
2.7 Liability of the Seller and the Certificate Owners . . . . . . 3
2.8 Title to Trust Property. . . . . . . . . . . . . . . . . . . . 4
2.9 Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 Representations and Warranties of the Seller . . . . . . . . . 4
2.11 Tax Treatment. . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
THE CERTIFICATES . . . . . . . . . . . . . 5
3.1 Initial Certificate Ownership. . . . . . . . . . . . . . . . . 5
3.2 Form of the Certificates . . . . . . . . . . . . . . . . . . . 5
3.3 Execution, Authentication and Delivery . . . . . . . . . . . . 6
3.4 Registration; Registration of Transfer and Exchange
of Certificates. . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Mutilated, Destroyed, Lost or Stolen Certificates. . . . . . . 7
3.6 Persons Deemed Certificateholders. . . . . . . . . . . . . . . 8
3.7 Access to List of Certificateholders' Names and
Addresses. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Maintenance of Corporate Trust Office. . . . . . . . . . . . . 9
3.9 Appointment of Paying Agent. . . . . . . . . . . . . . . . . . 9
3.10 Disposition by Seller. . . . . . . . . . . . . . . . . . . . . 10
3.11 Book-Entry Certificates. . . . . . . . . . . . . . . . . . . . 10
3.12 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . 11
3.13 Definitive Certificates. . . . . . . . . . . . . . . . . . . . 11
3.14 Seller as Certificateholder. . . . . . . . . . . . . . . . . . 12
ARTICLE IV
ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . 12
4.1 Prior Notice to Certificateholders with Respect to
Certain Matters. . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Action by Certificateholders with Respect to Certain
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Action by Certificateholders with Respect to
Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4 Restrictions on Certificateholders' Power. . . . . . . . . . . 13
4.5 Majority Control . . . . . . . . . . . . . . . . . . . . . . . 13
i
<PAGE>3
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES. . . . . . . 13
5.1 Establishment of Certificate Distribution Account. . . . . . . 13
5.2 Application of Trust Funds . . . . . . . . . . . . . . . . . . 14
5.3 Method of Payment. . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Accounting and Reports to the Certificateholders, the
Internal Revenue Service and Others. . . . . . . . . . . . . . 15
5.5 Signature on Returns; Tax Matters Partner. . . . . . . . . . . 15
ARTICLE VI
THE OWNER TRUSTEE. . . . . . . . . . . . . 16
6.1 Duties of Owner Trustee. . . . . . . . . . . . . . . . . . . . 16
6.2 Rights of Owner Trustee. . . . . . . . . . . . . . . . . . . . 17
6.3 Acceptance of Trusts and Duties. . . . . . . . . . . . . . . . 17
6.4 Action upon Instruction by Certificateholders. . . . . . . . . 19
6.5 Furnishing of Documents. . . . . . . . . . . . . . . . . . . . 20
6.6 Representations and Warranties of Owner Trustee. . . . . . . . 20
6.7 Reliance; Advice of Counsel. . . . . . . . . . . . . . . . . . 21
6.8 Owner Trustee May Own Certificates and Notes . . . . . . . . . 22
6.9 Compensation and Indemnity . . . . . . . . . . . . . . . . . . 22
6.10 Replacement of Owner Trustee . . . . . . . . . . . . . . . . . 22
6.11 Merger or Consolidation of Owner Trustee . . . . . . . . . . . 23
6.12 Appointment of Co-Trustee or Separate Trustee. . . . . . . . . 24
6.13 Eligibility Requirements for Owner Trustee . . . . . . . . . . 25
ARTICLE VII
TERMINATION OF TRUST AGREEMENT. . . . . . . . . . 26
7.1 Termination of Trust Agreement . . . . . . . . . . . . . . . . 26
7.2 Dissolution upon Bankruptcy of the Seller. . . . . . . . . . . 27
ARTICLE VIII
AMENDMENTS. . . . . . . . . . . . . . . 28
8.1 Amendments Without Consent of Certificateholders or
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Amendments With Consent of Certificateholders and
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Form of Amendments . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IX
MISCELLANEOUS. . . . . . . . . . . . . . 29
9.1 No Legal Title to Owner Trust Estate. . . . . . . . . . . . . 29
9.2 Limitations on Rights of Others. . . . . . . . . . . . . . . . 29
9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 31
9.8 No Petition Covenant . . . . . . . . . . . . . . . . . . . . . 31
9.9 No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.11 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 32
9.12 Certificate Transfer Restrictions. . . . . . . . . . . . . . . 32
9.13 Indemnification by and Reimbursement of the
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ii
<PAGE>4
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
Exhibit D Form of Undertaking Letter
iii
<PAGE>5
TRUST AGREEMENT, dated as of _______ __, 1994, between
CAPITAL AUTO RECEIVABLES, INC., a Delaware corporation, as
Seller, and ________________________, __________________
___________, as Owner Trustee.
The Seller and the Owner Trustee hereby agree as
follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS. Certain capitalized terms
used in this Agreement shall have the respective meanings
assigned to them in Appendix A to the Trust Sale and Servicing
Agreement of even date herewith, among the Seller, the Servicer
and the Trust (the "Trust Sale and Servicing Agreement"). All
references herein to "the Agreement" or "this Agreement" are to
this Trust Agreement, and all references herein to Articles,
Sections and subsections are to Articles, Sections and
subsections of this Agreement unless otherwise specified.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME. The Trust created hereby shall
be known as "Capital Auto Receivables Asset Trust 199_-_" in
which name the Owner Trustee may conduct the business of the
Trust, make and execute contracts and other instruments on behalf
of the Trust and sue and be sued on behalf of the Trust.
SECTION 2.2 OFFICE. The office of the Trust shall
be in care of the Owner Trustee at the Corporate Trust Office or
at such other address in Delaware as the Owner Trustee may
designate by written notice to the Certificate Owners and the
Seller.
SECTION 2.3 PURPOSES AND POWERS. (a) The purpose
of the Trust is to engage in the following activities:
(i) to acquire, manage and hold the Receivables;
(ii) to issue the Notes pursuant to the Indenture and
the Certificates pursuant to this Agreement, and to sell,
transfer or exchange the Notes and the Certificates;
(iii) to acquire certain property and assets from the
Seller pursuant to the Trust Sale and Servicing Agreement,
to make payments to the Noteholders and the
Certificateholders, to make deposits into and withdrawals
from the Reserve Account and to pay the organizational,
start-up and transactional expenses of the Trust;
<PAGE>6
(iv) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the terms of the
Indenture and to hold, manage and distribute to the
Certificate Owners pursuant to the terms of this Agreement
and the Trust Sale and Servicing Agreement any portion of
the Trust Estate released from the lien of, and remitted to
the Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations and
exercise its rights under the Basic Documents to which it
is to be a party;
(vi) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or
connected therewith; and
(vii) subject to compliance with the Basic Documents,
to engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and
the making of distributions to the Certificateholders and
the Noteholders.
The Trust shall not engage in any activity other than in
connection with the foregoing or other than as required or
authorized by the terms of this Agreement or the Basic Documents.
SECTION 2.4 APPOINTMENT OF OWNER TRUSTEE. The
Seller hereby appoints the Owner Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers
and duties set forth herein.
SECTION 2.5 INITIAL CAPITAL CONTRIBUTION OF OWNER
TRUST ESTATE. The Seller hereby sells, assigns, transfers,
conveys and sets over to the Owner Trustee, as of the date
hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner
Trust Estate and shall be deposited in the Certificate
Distribution Account. The Seller shall pay organizational
expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6 DECLARATION OF TRUST. The Owner Trustee
hereby declares that it shall hold the Owner Trust Estate in
trust upon and subject to the conditions set forth herein for the
use and benefit of the Certificate Owners, subject to the
obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business
trust. It is the intention of the parties hereto that, solely
for purposes of federal income taxes, state and local income and
franchise taxes, Michigan single business tax, and any other
2
<PAGE>7
taxes imposed upon, measured by, or based upon gross or net
income, the Trust shall be treated as a grantor trust. The
parties agree that, unless otherwise required by appropriate tax
authorities, the Trust shall file or cause to be filed annual or
other necessary returns, reports and other forms consistent with
the characterization of the Trust as a grantor trust for such tax
purposes. Effective as of the date hereof, the Owner Trustee
shall have all rights, powers and duties set forth herein and in
the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
SECTION 2.7 LIABILITY OF THE SELLER AND THE
CERTIFICATE OWNERS.
(a) The Seller shall be liable directly to and shall
indemnify the injured party for all losses, claims, damages,
liabilities and expenses of the Trust (including Expenses, to the
extent not paid out of the Owner Trust Estate) to the extent that
the Seller would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the
Seller were a general partner; PROVIDED, HOWEVER, that the Seller
shall not be liable for (i) any losses incurred by a
Certificateholder or a Certificate Owner in its capacity as an
investor in the Certificates or by a Noteholder in its capacity
as an investor in the Notes or (ii) any losses, claims, damages,
liabilities and expenses arising out of the imposition by any
taxing authority of any federal, state or local income or
franchise taxes, Michigan single business tax, or any other taxes
imposed on or measured by gross or net income, gross or net
receipts, capital, net worth and similar items (including any
interest, penalties or additions with respect thereto) upon the
Certificateholders, the Certificate Owners, the Noteholders, the
Owner Trustee or the Indenture Trustee (including any
liabilities, costs or expenses with respect thereto) with respect
to the Receivables not specifically indemnified or represented to
hereunder. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the
preceding sentence for which the Seller shall not be liable)
shall be deemed third party beneficiaries of this subsection
2.7(a). The obligations of the Seller under this subsection
2.7(a) shall be evidenced by the Certificates issued pursuant to
Section 3.10, which for purposes of the Business Trust Statute
shall be deemed to be a separate class of Certificates from all
other Certificates issued by the Trust; PROVIDED, HOWEVER, that
the rights and obligations evidenced by all Certificates,
regardless of class, shall, except as provided in this subsection
2.7(a) and as provided with respect to Voting Interests, be
identical.
(b) No Certificate Owner, other than to the extent set
forth in subsection 2.7(a) with respect to the Seller, shall have
any personal liability for any liability or obligation of the
Trust.
3
<PAGE>8
SECTION 2.8 TITLE TO TRUST PROPERTY. Legal title
to all the Owner Trust Estate shall be vested at all times in the
Trust as a separate legal entity except where applicable law in
any jurisdiction requires title to any part of the Owner Trust
Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.9 SITUS OF TRUST. The Trust shall be
located and administered in the State of Delaware. All bank
accounts maintained by the Owner Trustee on behalf of the Trust
shall be located in the State of Delaware or the State of New
York. The Trust shall not have any employees in any state other
than Delaware; PROVIDED, HOWEVER, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees
within or without the State of Delaware. Payments shall be
received by the Trust only in Delaware or New York, and payments
will be made by the Trust only from Delaware or New York. The
only office of the Trust shall be the Corporate Trust Office in
Delaware.
SECTION 2.10 REPRESENTATIONS AND WARRANTIES OF THE
SELLER. The Seller hereby represents and warrants to the Owner
Trustee that:
(a) 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 power and authority to own
its properties and to conduct its business as such
properties are presently owned and such business is
presently conducted and had at all relevant times, and now
has, power, authority and legal right to acquire and own the
Receivables.
(b) 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 requires such qualifications.
(c) The Seller has the 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 with the
Issuer as part of the Trust and the Seller has duly
authorized such sale and assignment to the Issuer by all
necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by
the Seller by all necessary corporate action.
(d) The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms of this
Agreement do not conflict with, result in any breach of any
of the terms and provisions of or constitute (with or
without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Seller, or
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any indenture, agreement or other instrument to which the
Seller is a party or by which it is bound, or 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 pursuant to the
Basic Documents), or 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 any
of its properties.
SECTION 2.11 TAX TREATMENT. The Seller and the Owner
Trustee, by entering into this Agreement, and the
Certificateholders, by acquiring any Certificate or interest
therein, (i) express their intention that the Certificates will
qualify under applicable tax law as equity interests in a grantor
trust which holds the Receivables and related property for their
benefit and (ii) unless otherwise required by appropriate taxing
authorities, agree to treat the Certificates as equity interests
in such a grantor trust for the purposes of federal income taxes,
state and local income and franchise taxes, Michigan single
business tax and any other taxes imposed upon, measured by or
based upon gross or net income.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 INITIAL CERTIFICATE OWNERSHIP. Upon the
formation of the Trust by the contribution by the Seller pursuant
to Section 2.5 and until the issuance of the Certificates, the
Seller shall be the sole Certificateholder.
SECTION 3.2 FORM OF THE CERTIFICATES.
(a) The Certificates shall be substantially in the
form set forth in EXHIBIT A and shall be issued in minimum
denominations of $20,000 and in integral multiples of $1,000 in
excess thereof; provided, however, that one Certificate may be
issued in a denomination that includes any residual amount. The
Certificates shall be executed on behalf of the Trust by manual
or facsimile signature of a Responsible Officer of the Owner
Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall
have been affixed, authorized to sign on behalf of the Trust,
shall be duly issued, fully paid and non-assessable beneficial
interests in the Trust, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold
such offices at the date of authentication and delivery of such
Certificates.
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(b) The Definitive Certificates shall be typewritten,
printed, lithographed or engraved or produced by any combination
of these methods (with or without steel engraved borders) all as
determined by the officers executing such Certificates, as evi-
denced by their execution of such Certificates.
(c) The terms of the Certificates set forth in
Exhibit A shall form part of this Agreement.
SECTION 3.3 EXECUTION, AUTHENTICATION AND DELIVERy.
Concurrently with the sale of the Receivables to the Trust
pursuant to the Trust Sale and Servicing Agreement, the Owner
Trustee shall cause the Certificates in an aggregate principal
amount equal to the initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the
written order of the Seller, signed by its chairman of the board,
its president or any vice president, without further corporate
action by the Seller, in authorized denominations. No
Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall
appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or Bankers Trust Company, as the Owner Trustee's
authenticating agent, by manual signature. Such authentication
shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 3.4 REGISTRATION; REGISTRATION OF TRANSFER
AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall keep or cause to
be kept, at the office or agency maintained pursuant to Section
3.8, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Owner Trustee shall provide
for the registration of Certificates and of transfers and
exchanges of Certificates as provided herein; PROVIDED, HOWEVER,
that no Certificate may be subdivided upon transfer or exchange
such that the denomination of any resulting Certificate is less
than $20,000. Bankers Trust Company shall be the initial
Certificate Registrar. Upon any resignation of a Certificate
Registrar, the Owner Trustee shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the
duties of Certificate Registrar.
(b) Upon surrender for registration of transfer of any
Certificate at the office or agency maintained pursuant to
Section 3.8, the Owner Trustee shall execute on behalf of the
Trust, authenticate and deliver (or shall cause Bankers Trust
Company as its authenticating agent to authenticate and deliver),
in the name of the designated transferee or transferees, one or
more new Certificates in authorized denominations of a like
aggregate amount dated the date of authentication by the Owner
Trustee or any authenticating agent. Notwithstanding the
foregoing, if the Seller shall have advised the Owner Trustee in
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writing that an Undertaking Letter shall be required with respect
to any transfer, such transfer shall not be effective unless the
requirements of Section 9.11, with respect to the delivery of an
Undertaking Letter, shall have been complied with.
(c) At the option of a Holder, Certificates may be
exchanged for other Certificates of authorized denominations of
a like aggregate principal amount upon surrender of the
Certificates to be exchanged at the Corporate Trust Office
maintained pursuant to Section 3.8. Whenever any Certificates
are so surrendered for exchange, the Owner Trustee shall execute
on behalf of the Trust, authenticate and deliver (or shall cause
Bankers Trust Company as its authenticating agent to authenticate
and deliver) one or more Certificates dated the date of
authentication by the Owner Trustee or any authenticating agent.
Such Certificates shall be delivered to the Holder making the
exchange.
(d) Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Owner
Trustee and the Certificate Registrar duly executed by the Holder
or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer or exchange shall be
cancelled and subsequently destroyed by the Owner Trustee or
Certificate Registrar in accordance with its customary practice.
(e) No service charge shall be made for any
registration of transfer or exchange of Certificates, but the
Owner Trustee or the Certificate Registrar may require payment of
a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of
Certificates.
SECTION 3.5 MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
(a) If (i) any mutilated Certificate is surrendered
to the Certificate Registrar, or the Certificate Registrar
receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (ii) there is delivered to the
Certificate Registrar, the Owner Trustee and the Trust such
security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Certificate
Registrar or the Owner Trustee that such Certificate has been
acquired by a bona fide purchaser, the Owner Trustee shall
execute on behalf of the Trust and the Owner Trustee shall
authenticate and deliver (or shall cause Bankers Trust Company as
its authenticating agent to authenticate and deliver), in
exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a replacement Certificate of a like aggregate
principal amount; PROVIDED, HOWEVER, that if any such destroyed,
lost or stolen Certificate, but not a mutilated Certificate,
shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Certificate the Owner
Trustee may pay such destroyed, lost or stolen Certificate when
so due or payable.
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(b) If, after the delivery of a replacement
Certificate or payment in respect of a destroyed, lost or stolen
Certificate pursuant to subsection 3.5(a), a bona fide purchaser
of the original Certificate in lieu of which such replacement
Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such
replacement Certificate (or such payment) from the Person to whom
it was delivered or any Person taking such replacement
Certificate from such Person to whom such replacement Certificate
was delivered or any assignee of such Person, except a bona fide
purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Owner Trustee in connection
therewith.
(c) In connection with the issuance of any replacement
Certificate under this Section 3.5, the Owner Trustee may require
the payment by the Holder of such Certificate of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including
the fees and expenses of the Owner Trustee and the Certificate
Registrar) connected therewith.
(d) Any duplicate Certificate issued pursuant to this
Section 3.5 in replacement of any mutilated, destroyed, lost or
stolen Certificate shall constitute an original additional
beneficial interest in the Trust, whether or not the mutilated,
destroyed, lost or stolen Certificate shall be found at any time
or be enforced by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any
and all other Certificates duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive
and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
SECTION 3.6 PERSONS DEEMED CERTIFICATEHOLDERS.
Prior to due presentation of a Certificate for registration of
transfer, the Owner Trustee or the Certificate Registrar may
treat the Person in whose name any Certificate shall be
registered in the Certificate Register as the Certificateholder
of such Certificate for the purpose of receiving distributions
pursuant to Article V and for all other purposes whatsoever, and
neither the Owner Trustee nor the Certificate Registrar shall be
affected by any notice to the contrary.
SECTION 3.7 ACCESS TO LIST OF CERTIFICATEHOLDERS'
NAMES AND ADDRESSES. The Owner Trustee shall furnish or cause to
be furnished to the Servicer and the Seller, within 15 days after
receipt by the Owner Trustee of a request therefor from the
Servicer or the Seller in writing, a list, in such form as the
Servicer or the Seller may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record
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Date. Each Holder, by receiving and holding a Certificate, shall
be deemed to have agreed not to hold any of the Servicer, the
Seller or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.8 MAINTENANCE OF CORPORATE TRUST OFFICE.
The Owner Trustee shall maintain in the Borough of Manhattan, the
City of New York, an office or offices or agency or agencies
where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the
Owner Trustee in respect of the Certificates and the Basic
Documents may be served. The Owner Trustee initially designates
____________________________________, _______________________
____________________, as its principal office for such purposes.
The Owner Trustee shall give prompt written notice to the Seller
and to the Certificateholders of any change in the location of
the Certificate Register or any such office or agency.
SECTION 3.9 APPOINTMENT OF PAYING AGENT. The Paying
Agent shall make distributions to Certificateholders from the
Certificate Distribution Account pursuant to Section 5.2 and
shall report the amounts of such distributions to the Owner
Trustee and the Servicer. Any Paying Agent shall have the
revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its
sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be _____________
_______, and any co-paying agent chosen by _____________ _______,
and acceptable to the Owner Trustee. Bankers Trust Company shall
be permitted to resign as Paying Agent upon 30 days' written
notice to the Owner Trustee. If Bankers Trust Company shall no
longer be the Paying Agent, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust
company). The Owner Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument
in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that as Paying Agent, such
successor Paying Agent or additional Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner
Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Owner
Trustee. The provisions of Sections 6.3, 6.6, 6.7 and 6.9 shall
apply to the Owner Trustee also in its role as Paying Agent, for
so long as the Owner Trustee shall act as Paying Agent and, to
the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires
otherwise.
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SECTION 3.10 DISPOSITION BY SELLER. On and after the
Closing Date, the Seller shall retain beneficial and record
ownership of Certificates representing at least 1% of the
Certificate Balance. Any attempted transfer of any Certificate
that would reduce such interest of the Seller below 1% of the
Certificate Balance shall be void. The Owner Trustee shall cause
any Certificate issued to the Seller to contain a legend to such
effect.
SECTION 3.11 BOOK-ENTRY CERTIFICATES. Except for the
Certificates issued to the Seller, the Certificates, upon
original issuance, shall be issued in the form of a typewritten
Certificate or Certificates representing Book-Entry Certificates,
to be delivered to The Depository Trust Company, the initial
Clearing Agency by or on behalf of the Trust. Such Certificate
or Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the initial
Clearing Agency and no Certificate Owner shall receive a
definitive Certificate representing such Certificate Owner's
interest in such Certificate, except as provided in Section 3.13.
Unless and until definitive fully registered Certificates (the
"Definitive Certificates") shall have been issued to Certificate
Owners pursuant to Section 3.13:
(a) the provisions of this Section 3.11 shall be in
full force and effect;
(b) the Certificate Registrar and the Owner Trustee
shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of
principal of and interest on the Certificates and the giving
of instructions or directions hereunder) as the sole Holder
of the Certificate, and shall have no obligation to the
Certificate Owners;
(c) to the extent that the provisions of this Section
3.11 conflict with any other provisions of this Agreement,
the provisions of this Section 3.11 shall control;
(d) the rights of the Certificate Owners shall be
exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Certificate
Depository Agreement in the form attached as EXHIBIT C,
unless and until Definitive Certificates are issued pursuant
to Section 3.13, the initial Clearing Agency will make book-
entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest
on the Certificates to such Clearing Agency Participants;
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(e) whenever this Agreement requires or permits
actions to be taken based upon instructions or directions
of Holders of Certificates evidencing a specified percentage
of the Voting Interests, the Clearing Agency shall be deemed
to represent such percentage only to the extent that it has
received instructions to such effect from Certificate Owners
and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of Voting Interests
and has delivered such instructions to the Owner Trustee;
PROVIDED, HOWEVER, that the provisions of this Section 3.11 shall
not be applicable in respect of Certificates issued to the
Seller. The Seller or the Owner Trustee may set a record date
for the purpose of determining the identity of Holders of
Certificates entitled to vote or to consent to any action by vote
as provided in this Agreement.
SECTION 3.12 NOTICES TO CLEARING AGENCY. Whenever
a notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive
Certificates shall have been issued to Certificate Owners
pursuant to Section 3.13, the Owner Trustee shall give all such
notices and communications specified herein to be given to
Certificateholders to the Clearing Agency and shall have no
further obligation to the Certificate Owners.
SECTION 3.13 DEFINITIVE CERTIFICATES. If (i) the
Administrator advises the Owner Trustee in writing that the
Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Certificates,
and the Administrator is unable to locate a qualified successor,
(ii) the Administrator at its option advises the Owner Trustee in
writing that it elects to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of
Default or a Servicer Default, Certificate Owners representing
beneficial interests aggregating at least a majority of the
Voting Interests advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency
is no longer in the best interest of the Certificate Owners, then
the Clearing Agency shall notify all Certificate Owners and the
Owner Trustee of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Owner Trustee of the
typewritten Certificate or Certificates representing the Book-
Entry Certificates by the Clearing Agency, accompanied by
registration instructions, the Owner Trustee shall execute and
authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Certificate
Registrar nor the Owner Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, the Owner Trustee shall
recognize the Holders of the Definitive Certificates as
Certificateholders.
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SECTION 3.14 SELLER AS CERTIFICATEHOLDER. The Seller
in its individual or any other capacity may become the owner or
pledgee of Certificates and may otherwise deal with the Owner
Trustee or its Affiliates as if it were not the Seller.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 PRIOR NOTICE TO CERTIFICATEHOLDERS WITH
RESPECT TO CERTAIN MATTERS. The Owner Trustee shall not take
action with respect to the following matters, unless (i) the
Owner Trustee shall have notified the Certificateholders in
writing of the proposed action at least 30 days before the taking
of such action and (ii) the Certificateholders shall not have
notified the Owner Trustee in writing prior to the 30th day after
such notice is given that such Certificateholders have withheld
consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the
Trust and the compromise of any action, claim or lawsuit
brought by or against the Trust;
(b) the election by the Trust to file an amendment to
the Certificate of Trust, a conformed copy of which is
attached hereto as EXHIBIT B;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is not required and such amendment materially
adversely affects the interests of the Certificateholders;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or
to amend or supplement any provision in a manner that would
not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Paying Agent or Indenture Trustee
or pursuant to this Agreement of a successor Certificate
Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee or Certificate
Registrar of its obligations under the Indenture or this
Agreement, as applicable.
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SECTION 4.2 ACTION BY CERTIFICATEHOLDERS WITH
RESPECT TO CERTAIN MATTERS. The Owner Trustee shall not have the
power, except upon the written direction of the
Certificateholders, to (a) remove the Administrator under the
Administration Agreement pursuant to Section 10 thereof, (b)
appoint a successor Administrator pursuant to Section 10 of the
Administration Agreement, (c) remove the Servicer under the Trust
Sale and Servicing Agreement pursuant to Section 7.02 thereof or
(d) except as expressly provided in the Basic Documents, sell the
Receivables or any interest therein after the termination of the
Indenture. The Owner Trustee shall take the actions referred to
in the preceding sentence only upon written instructions signed
by the Certificateholders.
SECTION 4.3 ACTION BY CERTIFICATEHOLDERS WITH
RESPECT TO BANKRUPTCY. The Owner Trustee shall not have the
power to commence a voluntary proceeding in bankruptcy relating
to the Trust without the unanimous prior approval of all holders
of Certificates (including the Seller) and the delivery to the
Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that
the Trust is insolvent.
SECTION 4.4 RESTRICTIONS ON CERTIFICATEHOLDERS'
POWER. The Certificateholders shall not direct the Owner Trustee
to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents
or would be contrary to Section 2.3, nor shall the Owner Trustee
be obligated to follow any such direction, if given.
SECTION 4.5 MAJORITY CONTROL. Except as expressly
provided herein, any action that may be taken or consent that may
be given or withheld by the Certificateholders under this
Agreement may be taken, given or withheld by the Holders of
Certificates evidencing not less than a majority of the Voting
Interests thereof. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to
this Agreement shall be effective if signed by Holders of
Certificates evidencing not less than a majority of the Voting
Interests at the time of the delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 ESTABLISHMENT OF CERTIFICATE
DISTRIBUTION ACCOUNT.
(a) The Servicer, for the benefit of the Certificate-
holders, shall establish and maintain in the name of the Owner
Trustee an Eligible Deposit Account known as the Capital Auto
Receivables Asset Trust 199_-_ Certificate Distribution Account
(the "Certificate Distribution Account"), bearing an additional
designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders.
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(b) The Owner Trustee shall possess all right, title
and interest in and to all funds on deposit from time to time in
the Certificate Distribution Account and in all proceeds thereof.
Except as otherwise provided herein or in the Trust Sale and
Servicing Agreement, the Certificate Distribution Account shall
be under the sole dominion and control of the Owner Trustee for
the benefit of the Certificateholders. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Servicer on behalf of the
Owner Trustee, if the Certificate Distribution Account is not
then held by the Owner Trustee or an Affiliate thereof) shall
within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent)
establish a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
SECTION 5.2 APPLICATION OF TRUST FUNDS.
(a) On each Distribution Date, the Owner Trustee shall
distribute to the Certificateholders, on a pro rata basis,
amounts equal to the amounts deposited in the Certificate
Distribution Account pursuant to Sections 4.06 and 4.07 of the
Trust Sale and Servicing Agreement on or prior to such
Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall
send to each Certificateholder the statement provided to the
Owner Trustee by the Servicer pursuant to Section 4.09(a) of the
Trust Sale and Servicing Agreement on such Distribution Date
setting forth, among other things, the amount of the distribution
allocable to Certificate Balance and to interest, the Certificate
Balance after giving effect to such distribution, the balance of
the Reserve Account (and amounts, if any, distributed from the
Reserve Account) and the Total Servicing Fee with respect to such
Distribution Date or Monthly Period, as applicable.
(c) If any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such
tax shall reduce the amount otherwise distributable to the
Certificateholder in accordance with this Section 5.2. The Owner
Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Certificateholders sufficient
funds for the payment of any tax that is legally owed by the
Trust (but such authorization shall not prevent the Owner Trustee
from contesting any such tax in appropriate proceedings and
withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as
cash distributed to such Certificateholder at the time it is
withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is
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<PAGE>19
payable with respect to a distribution (such as a distribution to
a non-U.S. Certificateholder), the Owner Trustee may in its sole
discretion withhold such amounts in accordance with this
subsection 5.2(c). If a Certificateholder wishes to apply for a
refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such
claim so long as such Certificateholder agrees to reimburse the
Owner Trustee for any out-of-pocket expenses incurred.
(d) If the Indenture Trustee holds escheated funds for
payment to the Trust pursuant to Section 3.3(e) of the Indenture,
the Owner Trustee shall, upon notice from the Indenture Trustee
that such funds exist, submit on behalf of the Trust an Issuer
Order to the Indenture Trustee pursuant to Section 3.3(e) of the
Indenture instructing the Indenture Trustee to pay such funds to
or at the order of the Seller.
SECTION 5.3 METHOD OF PAYMENT. Subject to
subsection 7.1(c), distributions required to be made to
Certificateholders on any Distribution Date shall be made to each
Certificateholder of record on the immediately preceding Record
Date either by wire transfer, in immediately available funds, to
the account of such Holder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall
have provided to the Certificate Registrar appropriate written
instructions at least five Business Days prior to such Record
Date and such Holder's Certificates in the aggregate evidence a
denomination of not less than $1,000,000, or, if not, by check
mailed to such Certificateholder at the address of such holder
appearing in the Certificate Register.
SECTION 5.4 ACCOUNTING AND REPORTS TO THE
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The
Owner Trustee shall (a) maintain (or cause to be maintained) the
books of the Trust on a calendar year basis on the accrual method
of accounting, (b) deliver to each Certificateholder, as may be
required by the Code and applicable Treasury Regulations or
otherwise, such information as may be required to enable each
Certificateholder to prepare its federal income tax return, (c)
file such tax returns relating to the Trust and make such
elections as may from time to time be required or appropriate
under any applicable state or federal statute or rule or
regulation thereunder so as to maintain the Trust's
characterization as a grantor trust for federal income tax
purposes, (d) cause such tax returns to be signed in the manner
required by law and (e) collect or cause to be collected any
withholding tax as described in and in accordance with subsection
5.2(c) with respect to income or distributions to
Certificateholders.
SECTION 5.5 SIGNATURE ON RETURNS; OTHER TAX MATTERS.
The Owner Trustee shall sign on behalf of the Trust any and all
tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such
documents shall be signed by the Seller. To the extent one may
be required, the Seller shall be the "tax matters partner" of the
Trust pursuant to the Code.
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ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 DUTIES OF OWNER TRUSTEE.
(a) The Owner Trustee undertakes to perform such
duties, and only such duties, as are specifically set forth in
this Agreement and the other Basic Documents, including the
administration of the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Agreement. No implied
covenants or obligations shall be read into this Agreement.
(b) Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the
extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the
Owner Trustee hereunder or under any Basic Document, and the
Owner Trustee shall not be liable for the default or failure of
the Administrator to carry out its obligations under the
Administration Agreement.
(c) In the absence of bad faith on its part, the Owner
Trustee may conclusively rely upon certificates or opinions
furnished to the Owner Trustee and conforming to the requirements
of this Agreement in determining the truth of the statements and
the correctness of the opinions contained therein; PROVIDED,
HOWEVER, that the Owner Trustee shall have examined such
certificates or opinions so as to determine compliance of the
same with the requirements of this Agreement.
(d) The Owner Trustee may not be relieved from
liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) this subsection 6.1(d) shall not limit the effect
of subsection 6.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer unless it is proved that the Owner Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Owner Trustee shall not be liable with
respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant
to Section 4.1, 4.2 or 6.4.
(e) Subject to Sections 5.1 and 5.2, monies received
by the Owner Trustee hereunder need not be segregated in any
manner except to the extent required by law or the Trust Sale and
Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee
shall not be liable for any interest thereon.
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(f) The Owner Trustee shall not take any action that
(i) is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (ii) would, to the actual knowledge of a
Responsible Officer of the Owner Trustee, result in the Trust's
becoming taxable as a corporation for federal income tax
purposes. The Certificateholders shall not direct the Owner
Trustee to take action that would violate the provisions of this
Section 6.1.
SECTION 6.2 RIGHTS OF OWNER TRUSTEE. The Owner
Trustee is authorized and directed to execute and deliver the
Basic Documents and each certificate or other document attached
as an exhibit to or contemplated by the Basic Documents to which
the Trust is to be a party, in such form as the Seller shall
approve as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all
actions required of the Trust pursuant to the Basic Documents.
The Owner Trustee is further authorized from time to time to take
such action as the Administrator recommends with respect to the
Basic Documents.
SECTION 6.3 ACCEPTANCE OF TRUSTS AND DUTIES. Except
as otherwise provided in this Article VI, in accepting the trusts
hereby created, Bankers Trust (Delaware) acts solely as Owner
Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof. The Owner Trustee accepts the trusts
hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Owner Trust Estate upon
the terms of the Basic Documents and this Agreement. The Owner
Trustee shall not be liable or accountable hereunder or under any
Basic Document under any circumstances, except (i) for its own
negligent action, its own negligent failure to act or its own
willful misconduct or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.6 and expressly
made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall at no time have any
responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable, or
the perfection and priority of any security interest created
by any Receivable in any Financed Vehicle or the maintenance
of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificate-
holders under this Agreement or to Noteholders under the
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Indenture, including, without limitation: the existence,
condition and ownership of any Financed Vehicle; the
existence and enforceability of any insurance thereon; the
existence and contents of any Receivable on any computer or
other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment;
the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Seller
or the Servicer with any warranty or representation made
under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any
action of the Administrator, the Trustee or the Servicer or
any subservicer taken in the name of the Owner Trustee.
(b) the Owner Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
accordance with the instructions of the Administrator or any
Certificateholder;
(c) no provision of this Agreement or any Basic
Document shall require the Owner Trustee to expend or risk
funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or
under any Basic Document, if the Owner Trustee shall have
reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability
is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any
of the Basic Documents, including the principal of and
interest on the Notes or the Certificate Balance of and
interest on the Certificates;
(e) the Owner Trustee shall not be responsible for or
in respect of and makes no representation as to the validity
or sufficiency of any provision of this Agreement or for the
due execution hereof by the Seller or for the form,
character, genuineness, sufficiency, value or validity of
any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, the Notes,
the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivables
or any related documents, and the Owner Trustee shall in no
event assume or incur any liability, duty or obligation to
any Noteholder or to any Certificateholder, other than as
expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the
default or misconduct of the Administrator, the Indenture
Trustee, the Seller or the Servicer under any of the Basic
Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the
Trust under this Agreement or the Basic Documents that are
required to be performed by the Administrator under the
Administration Agreement, the Indenture Trustee under the
Indenture or the Servicer under the Pooling and Servicing
Agreement or the Trust Sale and Servicing Agreement; and
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(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for
other than its negligence or willful misconduct in the
performance of any such act.
SECTION 6.4 ACTION UPON INSTRUCTION BY
CERTIFICATEHOLDERS.
(a) Subject to Section 4.4, the Certificateholders may
by written instruction direct the Owner Trustee in the management
of the Trust. Such direction may be exercised at any time by
written instruction of the Certificateholders pursuant to Section
4.5.
(b) Notwithstanding the foregoing, the Owner Trustee
shall not be required to take any action hereunder or under any
Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by
the terms of this Agreement or any Basic Document, or is unsure
as to the application, intent, interpretation or meaning of any
provision of this Agreement or the Basic Documents, the Owner
Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted,
and, to the extent the Owner Trustee acts in good faith in
accordance with any such instruction received, the Owner Trustee
shall not be liable on account of such action to any Person. If
the Owner Trustee shall not have received appropriate
instructions within ten days of such notice (or within such
shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but
shall be under no duty to, take or refrain from taking such
action which is consistent, in its view, with this Agreement or
the Basic Documents, and as it shall deem to be in the best
interests of the Certificateholders, and the Owner Trustee shall
have no liability to any Person for any such action or inaction.
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SECTION 6.5 FURNISHING OF DOCUMENTS. The Owner
Trustee shall furnish (a) to the Certificateholders, promptly
upon receipt of a written request therefor, duplicates or copies
of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents and (b) to Noteholders,
promptly upon receipt of a written request therefor, copies of
the Pooling and Servicing Agreement, the Trust Sale and Servicing
Agreement, the Administration Agreement, the Custodian Agreement
and this Agreement.
SECTION 6.6 REPRESENTATIONS AND WARRANTIES OF OWNER
TRUSTEE. The Owner Trustee hereby represents and warrants to the
Seller, for the benefit of the Certificateholders, that:
(a) It is a banking corporation duly organized,
validly existing and in good standing under the laws of the
state of its incorporation.
(b) It has full power, authority and legal right to
execute, deliver and perform this Agreement, and has taken
all necessary action to authorize the execution, delivery
and performance by it of this Agreement.
(c) The execution, delivery and performance by it of
this Agreement (i) shall not violate any provision of any
law or regulation governing the banking and trust powers of
the Owner Trustee or any order, writ, judgment or decree of
any court, arbitrator or governmental authority applicable
to the Owner Trustee or any of its assets, (ii) shall not
violate any provision of the corporate charter or by-laws
of the Owner Trustee or (iii) shall not violate any
provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or
imposition of any lien on any properties included in the
Trust pursuant to the provisions of any mortgage, indenture,
contract, agreement or other undertaking to which it is a
party, which violation, default or lien could reasonably be
expected to have a materially adverse effect on the Owner
Trustee's performance or ability to perform its duties as
Owner Trustee under this Agreement or on the transactions
contemplated in this Agreement.
(d) The execution, delivery and performance by the
Owner Trustee of this Agreement shall not require the
authorization, consent or approval of, the giving of notice
to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or
agency regulating the banking and corporate trust activities
of banks or trust companies in the jurisdiction in which the
Trust was formed.
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(e) This Agreement has been duly executed and
delivered by the Owner Trustee and constitutes the legal,
valid and binding agreement of the Owner Trustee,
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or
at law.
SECTION 6.7 RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be
genuine and believed by it to be signed by the proper party or
parties and need not investigate any fact or matter in any such
document. The Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of
any corporate party as conclusive evidence that such resolution
has been duly adopted by such body and that the same is in full
force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate,
signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations
under this Agreement or the Basic Documents, the Owner Trustee:
(i) may act directly or through its agents, attorneys, custodians
or nominees (including the granting of a power of attorney to
officers of Bankers Trust Company to execute and deliver any
Basic Documents, Certificate, Note or other documents related
thereto on behalf of the Owner Trustee) pursuant to agreements
entered into with any of them, and the Owner Trustee shall not be
liable for the conduct or misconduct of such agents, attorneys,
custodians or nominees if such agents, attorneys, custodians or
nominees shall have been selected by the Owner Trustee with
reasonable care; and (ii) may consult with counsel, accountants
and other skilled professionals to be selected with reasonable
care and employed by it. The Owner Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in
accordance with the opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this
Agreement or any Basic Document.
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SECTION 6.8 OWNER TRUSTEE MAY OWN CERTIFICATES AND
NOTES. The Owner Trustee in its individual or any other capacity
may become the owner or pledgee of Certificates or Notes and may
deal with the Seller, the Administrator, the Indenture Trustee
and the Servicer in transactions in the same manner as it would
have if it were not the Owner Trustee.
SECTION 6.9 COMPENSATION AND INDEMNITY. The Owner
Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date
hereof between the Seller and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by the Servicer for
its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents,
custodians, nominees, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and
performance of its rights and its duties hereunder. The Servicer
shall indemnify the Owner Trustee and its successors, assigns,
agents and servants in accordance with the provisions of Section
6.01 of the Trust Sale and Servicing Agreement. The indemnities
contained in this Section 6.9 shall survive the resignation or
termination of the Owner Trustee or the termination of this
Agreement. Any amounts paid to the Owner Trustee pursuant to
this Article VI shall be deemed not to be a part of the Owner
Trust Estate immediately after such payment.
SECTION 6.10 REPLACEMENT OF OWNER TRUSTEE.
(a) The Owner Trustee may resign at any time and be
discharged from the trusts hereby created by giving 30 days'
prior written notice thereof to the Administrator. The
Administrator may appoint a successor Owner Trustee by delivering
written instrument, in duplicate, to the resigning Owner Trustee
and the successor Owner Trustee. If no successor Owner Trustee
shall have been appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
The Administrator shall remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 6.13 and shall
fail to resign after written request therefor by the
Administrator;
(ii) the Owner Trustee shall be adjudged bankrupt or
insolvent;
(iii) a receiver or other public officer shall be
appointed or take charge or control of the Owner Trustee or
of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable
of acting.
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(b) If the Owner Trustee resigns or is removed or if
a vacancy exists in the office of Owner Trustee for any reason
the Administrator shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate (one copy of which
instrument shall be delivered to the outgoing Owner Trustee so
removed and one copy to the successor Owner Trustee) and shall
pay all fees owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee
and appointment of a successor Owner Trustee pursuant to any of
the provisions of this Section 6.10 shall not become effective
until a written acceptance of appointment is delivered by the
successor Owner Trustee to the outgoing Owner Trustee and the
Administrator and all fees and expenses due to the outgoing Owner
Trustee are paid. Any successor Owner Trustee appointed pursuant
to this Section 6.10 shall be eligible to act in such capacity in
accordance with Section 6.13 and, following compliance with the
preceding sentence, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner
Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating
Agencies.
(d) The predecessor Owner Trustee shall upon payment
of its fees and expenses deliver to the successor Owner Trustee
all documents and statements and monies held by it under this
Agreement. The Administrator and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such
rights, powers, duties and obligations.
(e) Upon acceptance of appointment by a successor
Owner Trustee pursuant to this Section 6.10, the Administrator
shall mail notice of the successor of such Owner Trustee to all
Certificateholders, the Indenture Trustee, the Noteholders and
the Rating Agencies.
SECTION 6.11 MERGER OR CONSOLIDATION OF OWNER
TRUSTEE. Any corporation into which the Owner Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Owner Trustee, shall be the
successor of the Owner Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 6.13, and
without the execution or filing of any instrument or any further
act on the part of any of the parties hereto; PROVIDED, HOWEVER,
that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
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SECTION 6.12 APPOINTMENT OF CO-TRUSTEE OR SEPARATE
TRUSTEE.
(a) Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Owner
Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or as separate
trustee or trustees, of all or any part of the Owner Trust
Estate, and to vest in such Person, in such capacity, such title
to the Trust, or any part thereof, and, subject to the other
provisions of this Section 6.12, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner
Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Owner
Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee
pursuant to Section 6.13 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to
Section 6.10.
(b) Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be
conferred upon and exercised or performed by the Owner
Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be
personally liable by reason of any act or omission of any
other trustee under this Agreement; and
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(iii) the Administrator and the Owner Trustee acting
jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Owner Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate
trustee or co-trustee shall refer to this Agreement and the
conditions of this Article. Each separate trustee and co-
trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument
of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee.
Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time
appoint the Owner Trustee as its agent or attorney-in-fact with
full power and authority, to the extent not prohibited by law, to
do any lawful act under or in respect of this Agreement on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor
trustee.
SECTION 6.13 ELIGIBILITY REQUIREMENTS FOR OWNER
TRUSTEE. The Owner Trustee shall at all times: (a) be a
corporation satisfying the provisions of Section 3807(a) of the
Business Trust Statute; (b) be authorized to exercise corporate
trust powers; (c) have a combined capital and surplus of at least
$50,000,000 and be subject to supervision or examination by
federal or state authorities; and (d) have (or have a parent
which has) a long-term unsecured debt rating of at least BBB- by
Standard Poor's Corporation and at least Baa3 by Moody's
Investors Service, Inc. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 6.13, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Owner
Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.13, the Owner Trustee shall resign
immediately in the manner and with the effect specified in
Section 6.10.
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ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 TERMINATION OF TRUST AGREEMENT.
(a) This Agreement (other than Section 6.9) and the
Trust shall terminate and be of no further force or effect on the
earlier of: (i) the final distribution by the Owner Trustee of
all monies or other property or proceeds of the Owner Trust
Estate in accordance with the terms of the Indenture, the Trust
Sale and Servicing Agreement (including the exercise by the
Servicer of its option to purchase the Receivables pursuant to
Section 8.01(a) of the Trust Sale and Servicing Agreement) and
Article V or (ii) at the time provided in Section 7.2. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder, other than the Seller as described in Section
7.2, shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up
of all or any part of the Trust or the Owner Trust Estate nor
(z) otherwise affect the rights, obligations and liabilities of
the parties hereto.
(b) Except as provided in Section 7.1(a), neither the
Seller nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying
the Distribution Date upon which the Certificateholders shall
surrender their Certificates to the Paying Agent for payment of
the final distribution and cancellation, shall be given by the
Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the
Servicer given pursuant to subsection 8.01(c) of the Trust Sale
and Servicing Agreement, stating: (i) the Distribution Date upon
or with respect to which final payment of the Certificates shall
be made upon presentation and surrender of the Certificates at
the office of the Paying Agent therein designated; (ii) the
amount of any such final payment; and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the
Certificates at the office of the Paying Agent therein
specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the
Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.2.
(d) If all of the Certificateholders shall not
surrender their Certificates for cancellation within six months
after the date specified in the written notice referred to in
subsection 7.1(c), the Owner Trustee shall give a second written
notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution
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with respect thereto. If within one year after the second notice
all the Certificates shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds
and other assets that shall remain subject to this Agreement.
Subject to applicable laws with respect to escheat of funds, any
funds remaining in the Trust after exhaustion of such remedies in
the preceding sentence shall be deemed property of the Seller and
distributed by the Owner Trustee to the Seller, and the Owner
Trustee shall have no further liability to the Certificateholders
with respect thereto.
(e) Upon the winding up of the Trust and its
termination, the Owner Trustee shall cause the Certificate of
Trust to be cancelled by filing a certificate of cancellation
with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute.
SECTION 7.2 DISSOLUTION UPON BANKRUPTCY OF THE
SELLER. Upon the occurrence of an Insolvency Event with respect
to the Seller, this Agreement and the Trust shall be terminated
in accordance with Section 7.1 unless, within 90 days after such
occurrence, the Owner Trustee shall have received written
instructions from (a) each of the Certificateholders (other than
the Seller) and (b) each of the Noteholders, to the effect that
each such party disapproves of the liquidation of the Receivables
and termination of the Trust. Promptly after the occurrence of
any Insolvency Event with respect to the Seller: (i) the Seller
shall give the Indenture Trustee and the Owner Trustee written
notice of such Insolvency Event; (ii) the Owner Trustee shall,
upon the receipt of such written notice from the Seller, give
prompt written notice to the Certificateholders and the Indenture
Trustee of the occurrence of such event; and (iii) the Indenture
Trustee shall, upon receipt of written notice of such Insolvency
Event from the Owner Trustee or the Seller, give prompt written
notice to the Noteholders of the occurrence of such event;
PROVIDED, HOWEVER, that any failure to give a notice required by
this sentence shall not prevent or delay in any manner a
termination of the Trust pursuant to the first sentence of this
Section 7.2. If no such instructions are received within such
90-day period, the Owner Trustee shall direct the Indenture
Trustee promptly to sell the assets of the Trust (other than the
Designated Accounts and the Certificate Distribution Account) in
a commercially reasonable manner and on commercially reasonable
terms. The proceeds of any such sale, disposition or liquidation
of the assets of the Trust shall be treated as collections on the
Receivables and deposited in the Collection Account pursuant to
Section 8.01(b) of the Trust Sale and Servicing Agreement.
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ARTICLE VIII
AMENDMENTS
SECTION 8.1 AMENDMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS OR NOTEHOLDERS. This Agreement may be amended
by the Seller and the Owner Trustee without the consent of any of
the Noteholders or the Certificateholders (but with prior notice
to each of the Rating Agencies), to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Agreement that
may be defective or inconsistent with any other provision in this
Agreement, (iii) add or supplement any credit enhancement for the
benefit of the Noteholders or the Certificateholders (provided
that if any such addition shall affect any class of Noteholders
or Certificateholders differently than any other class of
Noteholders or Certificateholders, then such addition shall not,
as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any class of the Noteholders or
the Certificateholders), (iv) add to the covenants, restrictions
or obligations of the Seller or the Owner Trustee, (v) evidence
and provide for the acceptance of the appointment of a successor
trustee with respect to the Owner Trust Estate and add to or
change any provisions as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee
pursuant to Article VI, and (vi) add, change or eliminate any
other provision of this Agreement in any manner that shall not,
as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Noteholders or the
Certificateholders.
SECTION 8.2 AMENDMENTS WITH CONSENT OF CERTIFICATE-
HOLDERS AND NOTEHOLDERS. This Agreement may be amended from time
to time by the Seller and the Owner Trustee with the consent of
Noteholders whose Notes evidence not less than a majority of the
Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and the consent of Certificateholders whose
Certificates evidence not less than a majority of the Voting
Interests as of the close of the preceding Distribution Date
(which consent, whether given pursuant to this Section 8.2 or
pursuant to any other provision of this Agreement, shall be
conclusive and binding on such Person and on all future holders
of such Notes or Certificates and of any Notes or Certificates
issued upon the transfer thereof or in exchange thereof or in
lieu thereof whether or not notation of such consent is made upon
the Notes or Certificates) 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 the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (a) increase or reduce in
any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that
shall be required to be made on any Note or Certificate, the Pass
Through Rate or the Specified Reserve Account Balance or
(b) reduce the aforesaid percentage required to consent to any
such amendment, without the consent of the holders of all Notes
and all of the Voting Interests with respect to Certificates then
outstanding. The Owner Trustee shall furnish notice to each of
the Rating Agencies prior to obtaining consent to any proposed
amendment under this Section 8.2.
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<PAGE>33
SECTION 8.3 FORM OF AMENDMENTS.
(a) Promptly after the execution of any amendment,
supplement or consent pursuant to Section 8.1 or 8.2, the Owner
Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder and the
Indenture Trustee.
(b) It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee
pursuant to Section 8.2 to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
(c) Promptly after the execution of any amendment to
the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.
(d) Prior to the execution of any amendment to this
Agreement or the Certificate of Trust, the Owner 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. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the
Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NO LEGAL TITLE TO OWNER TRUST ESTATE.
The Certificateholders shall not have legal title to any part of
the Owner Trust Estate. The Certificateholders shall be entitled
to receive distributions with respect to their undivided
ownership interest therein only in accordance with Articles V and
VII. No transfer, by operation of law or otherwise, of any
right, title, and interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate
to terminate this Agreement or the trusts hereunder or entitle
any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
SECTION 9.2 LIMITATIONS ON RIGHTS OF OTHERS. Except
for Section 2.7 and Section 9.12, the provisions of this
Agreement are solely for the benefit of the Owner Trustee, the
Seller, the Certificateholders, the Administrator and to the
extent expressly provided herein, 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.
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<PAGE>34
SECTION 9.3 DERIVATIVE ACTIONS. Any provision
contained herein to the contrary notwithstanding, the right of
any Certificate Owner to bring a derivative action in the right
of the Trust is hereby made expressly subject to the following
limitations and requirements:
(a) such Certificate Owner must meet all requirements
set forth in the Business Trust Statute; and
(b) no Certificate Owner may bring a derivative action
in the right of the Trust without the prior written consent of
Certificate Owners owning, in the aggregate, a beneficial
interest in Certificates representing 50% of the then outstanding
Certificate Balance.
SECTION 9.4 NOTICES.
(a) All demands, notices and communications upon or
to the Seller, the Servicer, the Administrator, the Indenture
Trustee, the Owner Trustee or the Rating Agencies under this
Agreement shall be in writing, personally delivered, sent by
electronic facsimile (with hard copy to follow via first class
mail) 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, at the following address: Capital Auto
Receivables, Inc., Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801, with a copy to: J. B. Van Orman,
Vice President, 3044 West Grand Boulevard, Detroit, Michigan
48202, (b) in the case of the Servicer and the Administrator, at
the following address: F. A. Henderson, Group Vice President,
General Motors Acceptance Corporation, 3044 West Grand Boulevard,
Detroit, Michigan 48202, (c) in the case of the Indenture
Trustee, at its Corporate Trust Office, (d) in the case of the
Trust or the Owner Trustee, to the Owner Trustee at its Corporate
Trust Office, with a copy to _____________________, ___________
________________________________, Attention: Corporate Trust and
Agency Group, (e) in the case of Moody's Investors Service, Inc.,
to Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007, (f) in the case of
Standard & Poor's Ratings Group, to Standard & Poor's Ratings
Group, 26 Broadway (15th Floor), New York, New York 10004,
Attention: Asset Backed Surveillance Department, (g) in the case
of Fitch Investors Service, Inc., to Fitch Investors Service,
Inc., One State Street Plaza, New York, New York 10004,
Attention: Structured Finance Surveillance and (h) in the case of
Duff & Phelps Credit Rating Co., to Duff & Phelps Credit Rating
Co., 55 E. Monroe Street, Chicago, Illinois 60603, Attention:
Structured Finance Research & Monitoring, or at such other
address as shall be designated by such Person in a written notice
to the other parties to this Agreement.
30
<PAGE>35
(b) Any notice required or permitted to be given to
a Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder
receives such notice.
SECTION 9.5 SEVERABILITY. If any one or more of the
covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the holders thereof.
SECTION 9.6 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 one and the same
instrument.
SECTION 9.7 SUCCESSORS AND ASSIGNS. All covenants
and agreements contained herein shall be binding upon, and inure
to the benefit of, the Seller, the Owner Trustee and each
Certificateholder and their respective successors and permitted
assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 9.8 NO PETITION COVENANT. Notwithstanding
any prior termination of this Agreement, the Trust (or the Owner
Trustee on behalf of the Trust), each Certificateholder or
Certificate Owner, the Indenture Trustee and each Noteholder or
Note Owner shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the
Seller, acquiesce, petition or otherwise invoke or cause the
Seller to invoke the process of any court or governmental
authority for the purpose of commencing or sustaining a case
against the Seller 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 Seller or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 9.9 NO RECOURSE. Each Certificateholder by
accepting a Certificate acknowledges that such
Certificateholder's Certificates represent beneficial interests
in the Trust only and do not represent interests in or
obligations of the Seller, the Servicer, the Administrator, the
Owner Trustee, the
31
<PAGE>36
Indenture Trustee or any Affiliate thereof and no recourse may be
had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the
Certificates or the Basic Documents.
SECTION 9.10 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 9.11 GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.12 CERTIFICATE TRANSFER RESTRICTIONS. The
Certificates may not be acquired by or for the account of a
Benefit Plan. By accepting and holding a Certificate, the Holder
thereof and the Certificate Owner shall each be deemed to have
represented and warranted that it is not a Benefit Plan and, if
requested to do so by the Seller, the Certificateholder and the
Certificate Owner shall execute and deliver to the Owner Trustee
an Undertaking Letter in the form set forth in Exhibit D. The
Certificates are also subject to the minimum denomination
specified in Section 3.4(a).
SECTION 9.13 INDEMNIFICATION BY AND REIMBURSEMENT OF
THE SERVICER. The Owner Trustee acknowledges and agrees to
reimburse (i) the Servicer and its directors, officers,
employees and agents in accordance with Section 6.03(b) of the
Trust Sale and Servicing Agreement and (ii) the Seller and its
directors, officers, employees and agents in accordance with
Section 3.04 of the Trust Sale and Servicing Agreement. The
Owner Trustee further acknowledges and accepts the conditions and
limitations with respect to the Servicer's obligation to
indemnify, defend and hold the Owner Trustee harmless as set
forth in Section 6.01(a)(iv) of the Trust Sale and Servicing
Agreement.
32
<PAGE>37
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above
written.
________________________,
as Owner Trustee
By: __________________________
Name:
Title:
CAPITAL AUTO RECEIVABLES, INC.
By: __________________________
Name: _______________
Title: ______________
33
<PAGE>38
EXHIBIT A
NUMBER $ __________
R- CUSIP NO. __________
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR
THE ACCOUNT OF (i) AN "EMPLOYEE BENEFIT PLAN" (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA"))
THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(ii) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED OR (iii) ANY
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY. BY
ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER
HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE DEEMED
TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A
BENEFIT PLAN.
PURSUANT TO THE TRUST AGREEMENT, CAPITAL AUTO
RECEIVABLES, INC. ("CARI") SHALL RETAIN BENEFICIAL AND
RECORD OWNERSHIP OF CERTIFICATES REPRESENTING AT LEAST
1% OF THE CERTIFICATE BALANCE, AND ANY ATTEMPTED
TRANSFER OF THIS CERTIFICATE THAT REDUCES THE
BENEFICIAL AND RECORD INTEREST OF CARI TO BELOW 1% OF
THE CERTIFICATE BALANCE SHALL BE VOID.
CAPITAL AUTO RECEIVABLES ASSET TRUST 199_-_
_.__% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the
Trust, as defined below, the property of which includes
a pool of retail instalment sale contracts secured by
new and used automobiles and light trucks and sold to
the Trust by Capital Auto Receivables, Inc.
(This Certificate does not represent an interest in or
obligation of Capital Auto Receivables, Inc., General
Motors Acceptance Corporation or General Motors Corpo-
ration or any of their respective affiliates, except
to the extent described in the Basic Documents.)
<PAGE>39
THIS CERTIFIES THAT _________________________ is the
registered owner of a nonassessable, fully-paid, fractional
undivided interest in Capital Auto Receivables Asset Trust 199_-_
(the "Trust") formed by Capital Auto Receivables, Inc., a
Delaware corporation.
The Trust was created pursuant to a Trust Agreement,
dated as of ____________, 1994 (as amended and supplemented from
time to time, the "Trust Agreement"), between the Seller and
Bankers Trust (Delaware), as owner trustee (the "Owner Trustee"),
a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them
in the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as "_.__% Asset Backed Certificates" (the
"Certificates"). This Certificate is issued under and is subject
to the terms, provisions and conditions of the Trust Agreement,
the terms of which are incorporated herein by reference and made
a part hereof, to which Trust Agreement the holder of this
Certificate by virtue of the acceptance hereof assents and by
which such holder is bound.
Under the Trust Agreement, there shall be distributed
on the 15th day of each month or, if such 15th day is not a
Business Day, the next Business Day, commencing on ___________,
1994 (each, a "Distribution Date"), to the person in whose name
this Certificate is registered on the related Record Date (as
defined below), such Certificateholder's fractional undivided
interest in the amount of interest on and distributions in
respect of Certificate Balance to be distributed to
Certificateholders on such Distribution Date; PROVIDED, HOWEVER,
Certificateholders shall not receive payments in respect of the
Certificate Balance until the Class ___ Notes, the Class ___
Notes and the Class ____Notes and any required monthly payment of
principal of Class ___ Notes have been paid (or provided for) in
full. The "Record Date," with respect to any Distribution Date,
means the close of business on the day immediately preceding such
Distribution Date, or if Definitive Certificates are issued, the
last day of the preceding Monthly Period.
The distributions in respect of Certificate Balance and
interest on this Certificate are payable in such coin or currency
of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All
payments made by the Trust with respect to this Certificate shall
be applied first to interest due and payable on this Certificate
as provided above and then to the unpaid distributions in respect
of Certificate Balance of this Certificate.
The holder of this Certificate acknowledges and agrees
that its rights to receive distributions in respect of this
Certificate are subordinated to the rights of the Noteholders as
and to the extent described in the Trust Sale and Servicing
Agreement and the Indenture.
2
<PAGE>40
It is the intent of the Seller, the Servicer and the
Certificateholders that, for purposes of federal income, state
and local income and franchise taxes, Michigan single business
tax and any other taxes imposed upon, measured by or based upon
gross or net income, the Trust shall be treated as a grantor
trust. Except as otherwise required by appropriate taxing
authorities, the Seller and the other Certificateholders by
acceptance of a Certificate, agree to treat, and to take no
action inconsistent with the treatment of, the Certificates for
such tax purposes as interests in such grantor trust.
Each Certificateholder or Certificate Owner, by its
acceptance of a Certificate or, in the case of a Certificate
Owner, a beneficial interest in a Certificate, covenants and
agrees that such Certificateholder or Certificate Owner, as the
case may be, shall not, prior to the date which is one year and
one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Seller to invoke the
process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Seller under any
federal or state bankruptcy, insolvency, reorganization or
similar law or 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.
Distributions on this Certificate shall be made as
provided in the Trust Agreement by the Owner Trustee by wire
transfer or check mailed to the Certificateholder of record in
the Certificate Register without the presentation or surrender of
this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date
in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments shall be made by wire
transfer in immediately available funds to the account designated
by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution
on this Certificate shall be made after due notice by the Owner
Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office
maintained for such purpose by the Owner Trustee in the Borough
of Manhattan, the City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon shall
have been executed by an authorized officer of the Owner Trustee
by manual signature, this Certificate shall not entitle the
holder hereof to any benefit under the Trust Agreement or the
Trust Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
3
<PAGE>41
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Trust and not in its individual capacity, has caused this
Certificate to be duly executed.
CAPITAL AUTO RECEIVABLES ASSET
TRUST ____-_
________________________,
not in its individual capacity
but solely as Owner Trustee
Dated: ___________, 1994 By: _________________________
Name:
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
<PAGE>
________________________, ________________________,
not in its individual not in its individual
capacity but solely OR capacity but solely
as Owner Trustee as Owner Trustee
By________________________,
as Authenticating Agent
By:_________________________
Name: By:_______________________
Title: Name:
Title:
4
<PAGE>42
REVERSE OF CERTIFICATE
The Certificates do not represent an obligation of, or
an interest in, the Seller, the Servicer, General Motors
Corporation, the Indenture Trustee, the Owner Trustee or any
affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or
contemplated herein or in the Trust Agreement or the Basic
Documents. In addition, this Certificate is not guaranteed by
any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with
respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Trust Agreement and
the Trust Sale and Servicing Agreement. A copy of each of the
Trust Sale and Servicing Agreement and the Trust Agreement may be
examined during normal business hours at the principal office of
the Seller, and at such other places, if any, designated by the
Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of
the rights and obligations of the Seller and the rights of the
Certificateholders under the Trust Agreement at any time by the
Seller and the Owner Trustee with the consent of the Holders of
the Notes evidencing not less than a majority of the Outstanding
Amount of the Notes as of the close of the preceding Distribution
Date and the consent of Certificateholders whose Certificates
evidence not less than a majority of the Voting Interests as of
the close of the preceding Distribution Date. Any such consent
by the Holder of this Certificate shall be conclusive and binding
on such holder and on all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain circumstances, without the
consent of the Holders of any of the Certificates or the Notes.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registerable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the City of New York, accompanied by (i) a
written instrument of transfer in form satisfactory to the Owner
Trustee and the Certificate Registrar duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing and
(ii) if requested by the Seller, the Undertaking Letter required
by Section 9.12 of the Trust Agreement, and thereupon one or more
new Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Bankers Trust Company, New York, New York.
5
<PAGE>43
The Certificates are issuable only as registered
Certificates without coupons in denominations of $20,000 or
integral multiples of $1,000 in excess thereof. As provided in
the Trust Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomina-
tion, as requested by the Holder surrendering the same; provided,
however, that no Certificate may be subdivided such that the
denomination of any resulting Certificate is less than $20,000.
No service charge shall be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any
agent of the Owner Trustee or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Owner Trustee, the
Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the
Trust Agreement and the Trust created thereby shall terminate
upon the payment to Certificateholders of all amounts required to
be paid to them pursuant to the Trust Agreement and the Trust
Sale and Servicing Agreement and the disposition of all property
held as part of the Trust. The Servicer of the Receivables may
at its option purchase the assets of the Trust other than the
Designated Accounts and the Certificate Distribution Account at
a price specified in the Trust Sale and Servicing Agreement, and
such purchase of the Receivables and other property of the Trust
shall effect early retirement of the Certificates; PROVIDED,
HOWEVER, that such right of purchase is exercisable only as of
the last day of any Monthly Period as of which the Aggregate
Principal Balance is 10% or less of the Aggregate Amount
Financed.
6
<PAGE>44
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
______________________________________________________________
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________________Attorney
to transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
_____________________________*
Signature Guaranteed:
_____________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Certificate in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank or trust
company.
7
<PAGE>45
EXHIBIT B
CERTIFICATE OF TRUST OF
CAPITAL AUTO RECEIVABLES ASSET TRUST 199 -
THIS Certificate of Trust of Capital Auto Receivables
Asset Trust 199_-_ (the "Trust"), dated as of ________ __, 1994,
is being duly executed and filed by Bankers Trust (Delaware), a
Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 DEL. C. 3801 et
seq.).
1. NAME. The name of the business trust formed
hereby is Capital Auto Receivables Asset Trust 199_-_.
2. DELAWARE TRUSTEE. The name and business address
of the trustee of the Trust in the State of Delaware is _________
_________________, _____________________, __________,
______________.
3. This Certificate of Trust shall be effective on
__________, 1994.
IN WITNESS WHEREOF, the undersigned, being the sole
trustee of the Trust, has executed this Certificate of Trust as
of the date first-above written.
________________________, not in its
individual capacity but solely as Owner
Trustee under a Trust Agreement dated
as of October 20, 1993
By: _______________________________
Name:
Title:
<PAGE>46
EXHIBIT C
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
<PAGE>47
EXHIBIT D
UNDERTAKING LETTER
Capital Auto Receivables, Inc.
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
________________________,
as Owner Trustee of Capital Auto Receivables Asset Trust 199_-_
1001 Jefferson Street
Wilmington, DE 19807
Ladies and Gentlemen:
In connection with our purchase or record or beneficial
ownership of the _.__% Asset Backed Certificate (the
"Certificate") of the Capital Auto Receivables Asset Trust
____-_, the undersigned purchaser, record owner or beneficial
owner hereby acknowledges, represents and warrants that such
purchaser, record owner or beneficial owner:
(1) is not, and has not acquired the Certificate by
or for the benefit of, (i) an employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is subject to the provisions of
Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended or (iii) any entity
whose underlying assets include plan assets by reason of a plan's
investment in the entity whose underlying assets include plan
assets by reason of a plan's investment in the entity; and
(2) acknowledges that you and others will rely on our
acknowledgements, representations and warranties, and agrees to
notify you promptly in writing if any of our representations or
warranties herein cease to be accurate and complete.
______________________________
Name of Certificate Owner
By:___________________________
Name:
Title:
Date: ________________________
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned, being a director or officer or both of Capital Auto
Receivables, Inc., hereby constitutes and appoints Gerald E. Gross,
Christopher J. Rutkowski, Robert L. Schwartz and Darwin L. Wayne, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities (including his capacity as director and/or officer of
Capital Auto Receivables, Inc.), to sign a Registration Statement on Form S-3
covering Asset Backed Securities to be sold by Capital Auto Receivables, Inc.
and any or all amendments (including post-effective amendments) to such
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS POWER
OF ATTORNEY HAS BEEN EXECUTED BY THE UNDERSIGNED ON , 199 .
___________________________________ ________________________________
John D. Finnegan John Rakolta, Jr.
___________________________________ ________________________________
John E. Gibson Raymond R. Reilly
___________________________________ ________________________________
Gerald E. Gross John R. Rines
___________________________________ ________________________________
Frederick A. Henderson Christopher J. Rutkowski
___________________________________ ________________________________
Robert T. O'Connell Jerome B. Van Orman, Jr.
EXHIBIT 99.1
TRUST SALE AND SERVICING AGREEMENT
AMONG
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
CAPITAL AUTO RECEIVABLES ASSET TRUST ______
ISSUER
DATED AS OF __________, 1994
<PAGE>
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF SECURITIES
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . . 1
SECTION 2.02. Custody of Receivable Files . . . . . . . . . . . . . . 2
SECTION 2.03. Acceptance by Issuer. . . . . . . . . . . . . . . . . . 3
SECTION 2.04. Representations and Warranties as to
the Receivables . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.05. Repurchase of Receivables Upon Breach
of Warranty . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
THE SELLER
SECTION 3.01. Representations of Seller . . . . . . . . . . . . . . . 4
SECTION 3.02. Liability of Seller . . . . . . . . . . . . . . . . . . 6
SECTION 3.03. Merger or Consolidation of, or
Assumption of the Obligations of,
Seller; Amendment of Certificate of
Incorporation . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.04. Limitation on Liability of Seller and
Others. . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.05. Seller May Own Notes or Certificates. . . . . . . . . . 7
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance;
Notice of Servicer Default. . . . . . . . . . . . . . . 7
SECTION 4.02. Annual Independent Accountants'
Report. . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.03. Access to Certain Documentation and
Information Regarding Receivables . . . . . . . . . . . 9
SECTION 4.04. Amendments to Schedule of Receivables . . . . . . . . . 9
SECTION 4.05. Assignment of Administrative
Receivables and Warranty Receivables. . . . . . . . . . 9
SECTION 4.06. Distributions . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.07. Reserve Account . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.08. Net Deposits. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.09. Statements to Securityholders . . . . . . . . . . . . . 15
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts . . . . . . . . . . . . . . . 16
SECTION 5.02. Collections . . . . . . . . . . . . . . . . . . . . . . 20
i
<PAGE>3
SECTION 5.03. Investment Earnings and Supplemental
Servicing Fees. . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.04. Monthly Advances. . . . . . . . . . . . . . . . . . . . 21
SECTION 5.05. Additional Deposits . . . . . . . . . . . . . . . . . . 21
ARTICLE VI
LIABILITIES OF SERVICER AND OTHERS
SECTION 6.01. Liability of Servicer; Indemnities. . . . . . . . . . . 22
SECTION 6.02. Merger or Consolidation of, or
Assumption of the Obligations of, the
Servicer. . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.03. Limitation on Liability of Servicer
and Others. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.04. Delegation of Duties. . . . . . . . . . . . . . . . . . 25
SECTION 6.05. Servicer Not to Resign. . . . . . . . . . . . . . . . . 25
ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Defaults . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02. Consequences of a Servicer Default. . . . . . . . . . . 26
SECTION 7.03. Indenture Trustee to Act; Appointment
of Successor. . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.04. Notification to Noteholders and
Certificateholders. . . . . . . . . . . . . . . . . . . 28
SECTION 7.05. Waiver of Past Defaults. . . . . . . . . . . . . . . . 28
SECTION 7.06. Repayment of Advances . . . . . . . . . . . . . . . . . 28
ARTICLE VIII
TERMINATION
SECTION 8.01. Optional Purchase of All Receivables;
Insolvency of Seller; Termination of
Trust . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.02. Protection of Title to Trust. . . . . . . . . . . . . . 32
SECTION 9.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.04. Governing Law . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.05. Severability of Provisions. . . . . . . . . . . . . . . 34
SECTION 9.06. Assignment. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.07. Third-Party Beneficiaries . . . . . . . . . . . . . . . 35
SECTION 9.08. Separate Counterparts . . . . . . . . . . . . . . . . . 35
SECTION 9.09. Headings and Cross-References . . . . . . . . . . . . . 35
SECTION 9.10. Assignment to Indenture Trustee . . . . . . . . . . . . 35
SECTION 9.11. No Petition Covenants . . . . . . . . . . . . . . . . . 35
SECTION 9.12. Limitation of Liability of Indenture
Trustee and Owner Trustee . . . . . . . . . . . . . . . 36
Exhibit A - Locations of Schedule of Receivables
ii
<PAGE>4
THIS TRUST SALE AND SERVICING AGREEMENT is made as of
__________, 1994, by and among General Motors Acceptance
Corporation, a corporation incorporated under the New York
Banking Law relating to investment companies and in its capacity
as Servicer under the Pooling and Servicing Agreement described
below (the "Servicer"), Capital Auto Receivables, Inc., a
Delaware corporation (the "Seller") and Capital Auto Receivables
Asset Trust ______, a Delaware business trust (the "Issuer").
WHEREAS, General Motors Acceptance Corporation has sold the
Receivables to Seller and, as Servicer, has agreed to service the
Receivables pursuant to the Pooling and Servicing Agreement.
WHEREAS, Seller desires to sell the Receivables to Issuer
in exchange for the Notes and Certificates pursuant to the terms
of this Agreement, and the Servicer desires to perform the
servicing obligations set forth herein for and in consideration
of the fees and other benefits set forth in this Agreement and in
the Pooling and Servicing Agreement.
WHEREAS, Seller and the Issuer wish to set forth the terms
pursuant to which the Receivables are to be sold by the Seller to
the Issuer and serviced by the Servicer.
NOW, THEREFORE, in consideration of the foregoing, the other
good and valuable consideration and the mutual terms and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. DEFINITIONS. Certain capitalized terms used
in the above recitals and in this Agreement are defined in and
shall have the respective meanings assigned them in APPENDIX A to
this Agreement. All references herein to "the Agreement" or
"this Agreement" are to this Trust Sale and Servicing Agreement,
and all references herein to Articles, Sections and subsections
are to Articles, Sections or subsections of this Agreement unless
otherwise specified.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF SECURITIES
SECTION 2.01. CONVEYANCE OF RECEIVABLES. In consideration
of the Issuer's delivery of the Notes and the Certificates to, or
upon the order of, the Seller, the Seller does hereby enter into
this Agreement and agree to fulfill all of its obligations
hereunder and to sell, transfer, assign and otherwise convey to
the Issuer, without recourse:
<PAGE>5
(a) all right, title and interest of the Seller in, to and
under the Receivables listed on the Schedule of Receivables which
is on file at the locations listed on EXHIBIT A hereto and (i) in
the case of Scheduled Interest Receivables, all monies due
thereunder on and after the Cutoff Date and (ii) in the case of
Simple Interest Receivables, all monies received thereon on and
after the Cutoff Date, in each case exclusive of any amounts
allocable to the premium for physical damage insurance
force-placed by the Servicer covering any related Financed
Vehicle;
(b) the interest of the Seller in the security interests
in the Financed Vehicles granted by Obligors pursuant to the
Receivables and, to the extent permitted by law, any accessions
thereto;
(c) except for those Receivables originated in Wisconsin,
the interest of the Seller in any proceeds from claims on any
physical damage, credit life, credit disability or other
insurance policies covering Financed Vehicles or Obligors;
(d) the interest of the Seller in any proceeds from
recourse against Dealers on Receivables;
(e) all right, title and interest of the Seller in, to and
under the Pooling and Servicing Agreement and the Custodian
Agreement, including the right of the Seller to cause GMAC to
repurchase Receivables under certain circumstances; and
(f) the interest of the Seller in any proceeds of the
property described in clauses (a), (b) and (e) above.
It is the intention of the Seller and the Issuer 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 foregoing sale does not constitute
and is not intended to result in any assumption by the Issuer of
any obligation of the Seller to the Obligors, Dealers, insurers
or any other Person in connection with the Receivables, any
Dealer Agreements, any insurance policies or any agreement or
instrument relating to any of them. Within two Business Days
after the Closing Date, GMAC shall cause to be deposited into the
Collection Account the collections on the Receivables described
in Section 5.07 of the Pooling and Servicing Agreement.
SECTION 2.02. CUSTODY OF RECEIVABLE FILES. In connection
with the sale, transfer and assignment of the Receivables to the
Issuer pursuant to this Agreement, GMAC, as Custodian under the
Custodian Agreement, agrees to act as Custodian thereunder for
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<PAGE>6
the benefit of the Issuer. The Issuer hereby accepts and agrees
to the terms and provisions of the Custodian Agreement and
designates GMAC as custodian with respect to the Receivables
Files.
SECTION 2.03. ACCEPTANCE BY ISSUER. The Issuer does hereby
accept all consideration conveyed by the Seller pursuant to
Section 2.01, and declares that the Issuer shall hold such
consideration upon the trust set forth in the Trust Agreement for
the benefit of Certificateholders, subject to the terms and
conditions of the Indenture and this Agreement. The Issuer
hereby agrees and accepts the appointment and authorization of
General Motors Acceptance Corporation as Servicer under Section
3.01 of the Pooling and Servicing Agreement. The parties agree
that this Agreement, the Indenture and the Trust Agreement
constitute the Further Transfer and Servicing Agreements for
purposes of the Pooling and Servicing Agreement and that the
rights, duties and obligations of GMAC as Servicer under the
Pooling and Servicing Agreement are subject to the provisions of
Sections 6.02, 6.04, 6.05, 9.01 and Article VII hereof.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES AS TO THE
RECEIVABLES. Pursuant to Section 2.01(e), the Seller assigns to
the Issuer all of its right, title and interest in, to and under
the Pooling and Servicing Agreement. Such assigned right, title
and interest includes the representations and warranties of GMAC
made to the Seller pursuant to Section 4.01 of the Pooling and
Servicing Agreement. The Seller hereby represents and warrants
to the Issuer that the Seller has taken no action which would
cause such representations and warranties of GMAC to be false in
any material respect as of the Closing Date. The Seller further
acknowledges that the Issuer relies on the representations and
warranties of the Seller under this Agreement and of GMAC under
the Pooling and Servicing Agreement in accepting the Receivables
in trust and executing and delivering the Notes and the
Certificates. The foregoing representation and warranty speaks
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.
SECTION 2.05. REPURCHASE OF RECEIVABLES UPON BREACH OF
WARRANTY. Upon discovery by the Seller, the Servicer, the Owner
Trustee or the Indenture Trustee of a breach of any of the
representations and warranties in Section 4.01 of the Pooling and
Servicing Agreement or in Section 2.04 or Section 3.01 of this
Agreement that materially and adversely affects the interests of
the Noteholders or the Certificateholders in any Receivable, the
party discovering such breach shall give prompt written notice
thereof to the others. As of the last day of the second Monthly
Period following its discovery or its receipt of notice of breach
(or, at the Seller's election, the last day of the first Monthly
Period following such discovery), unless such breach shall have
been cured in all material respects, in the event of a breach of
the representations and warranties made by the Seller in Section
2.04 or Section 3.01, the Seller shall
3
<PAGE>7
repurchase, or in the event of a breach of a representation and
warranty under Section 4.01 of the Pooling and Servicing
Agreement the Seller and the Servicer shall use reasonable
efforts to enforce the obligation of GMAC under Section 5.04 of
the Pooling and Servicing Agreement to repurchase, such
Receivable from the Issuer on the related Distribution Date. The
repurchase price to be paid by the breaching party (the "Warranty
Purchaser") shall be an amount equal to the Warranty Payment.
Upon repurchase, the Warranty Purchaser shall be entitled to
receive the Released Warranty Amount, if any. It is understood
and agreed that the obligation of the Warranty Purchaser to
repurchase any Receivable as to which a breach has occurred and
is continuing, and the obligation of the Seller and the Servicer
to enforce GMAC's obligation to repurchase such Receivables
pursuant to the Pooling and Servicing Agreement shall, if such
obligations are fulfilled, constitute the sole remedy against the
Seller, the Servicer or GMAC for such breach available to the
Issuer, Noteholders, Certificateholders, the Owner Trustee or the
Indenture Trustee. The Servicer also acknowledges its
obligations to repurchase Administrative Receivables from the
Issuer pursuant to Section 3.08 of the Pooling and Servicing
Agreement.
ARTICLE III
THE SELLER
SECTION 3.01. REPRESENTATIONS OF SELLER. The Seller makes
the following representations on which the Issuer is relying in
acquiring the Receivables and issuing the Notes and the
Certificates. The following representations speak as of the
Closing Date but shall survive the sale, transfer and assignment
of the Receivables to the Issuer.
(a) REPRESENTATIONS AND WARRANTIES AS TO THE SELLER.
(i) 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 power and authority to own its properties and to
conduct its business as such properties are presently owned
and such business is presently conducted, and had at all
relevant times, and now has, power, authority and legal
right to acquire and own the Receivables;
(ii) 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 requires such
qualification;
(iii) POWER AND AUTHORITY. The Seller has the 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
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<PAGE>8
assigned to and deposited with the Issuer as part of the
Trust and has duly authorized such sale and assignment to
the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement have
been duly authorized by the Seller by all necessary
corporate action;
(iv) VALID SALE; BINDING OBLIGATIONS. This Agreement,
when duly executed and delivered, shall constitute a valid
sale, transfer and assignment of the Receivables,
enforceable against creditors of and purchasers from the
Seller; and this Agreement when duly executed and delivered,
shall constitute a legal, valid and binding obligation of
the Seller enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or
at law;
(v) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement by the Seller
and the fulfillment of the terms of this Agreement by the
Seller shall not conflict with, result in any breach of any
of the terms and provisions of or 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 is bound, or 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 this Agreement,
or 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 instrumen-
tality having jurisdiction over the Seller or any of its
properties; and
(vi) NO PROCEEDINGS. To the Seller's knowledge, there
are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having
jurisdiction over the Seller or its properties (i) asserting
the invalidity of this Agreement, the Notes, the
Certificates, the Indenture, the Trust Agreement, the
Custodian Agreement or the Administration Agreement, (ii)
seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Pooling and Servicing
Agreement, the Indenture, the Trust Agreement, the Custodian
Agreement or the Administration Agreement, (iii) seeking
any determination or ruling that might materially and
adversely affect the performance by the Seller of its
obligations under, or the validity or
5
<PAGE>9
enforceability of, this Agreement, the Pooling and Servicing
Agreement, the Notes, the Certificates, the Indenture, the
Trust Agreement, the Custodian Agreement or the
Administration Agreement or (iv) seeking to adversely affect
the federal income tax attributes of the Notes or the
Certificates.
(b) REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES.
(i) GOOD TITLE. No Receivable has been sold, trans-
ferred, assigned or pledged by the Seller to any Person
other than the Issuer; immediately prior to the conveyance
of the Receivables pursuant to this Agreement the Seller had
good and marketable title thereto, free of any Lien; and,
upon execution and delivery of this Agreement by the Seller,
the Issuer shall have all of the right, title and interest
of the Seller in, to and under the Receivables, the unpaid
indebtedness evidenced thereby and the collateral security
therefor, free of any Lien.
(ii) ALL FILINGS MADE. All filings (including,
without limitation, UCC filings) necessary in any
jurisdiction to give the Issuer a first priority perfected
ownership interest in the Receivables shall have been made.
SECTION 3.02. LIABILITY OF SELLER. The Seller shall be
liable in accordance with this Agreement only to the extent of
the obligations in this Agreement specifically undertaken by the
Seller.
SECTION 3.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE OBLIGATIONS OF, SELLER; AMENDMENT OF CERTIFICATE OF
INCORPORATION.
(a) Any corporation (i) into which the Seller may be merged
or consolidated, (ii) resulting from any merger or consolidation
to which the Seller shall be a party, (iii) succeeding to the
business of the Seller or (iv) more than 50% of the voting stock
of which is owned directly or indirectly by General Motors, which
corporation in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Seller under
this Agreement, shall 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.
The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this Section 3.03 to the
Rating Agencies.
(b) The Seller hereby agrees that during the term of this
Agreement it shall not (i) take any action prohibited by Article
Fourth of its certificate of incorporation, (ii) without the
prior written consent of the Indenture Trustee and the Owner
Trustee and without giving prior written notice to the Rating
Agencies, amend Article Third or Fourth of its certificate of
6
<PAGE>10
incorporation or (iii) incur any indebtedness, or assume or
guaranty indebtedness of any other entity, other than pursuant to
the Revolving Note and the Intercompany Advance Agreement
(without giving effect to any amendment to such Note or Agreement
after the date hereof, unless the Rating Agency Condition was
satisfied in connection therewith), if such action would result
in a downgrading of the then current rating of any class of the
Notes.
SECTION 3.04. LIMITATION ON LIABILITY OF SELLER AND OTHERS.
The Seller and any director or officer or 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. The Seller and any director or officer or employee or
agent of the Seller shall be reimbursed by the Indenture Trustee
or Owner Trustee, as applicable, for any contractual damages,
liability or expense incurred by reason of such trustee's willful
misfeasance, bad faith or gross negligence (except errors in
judgment) in the performance of its duties under this Agreement,
the Indenture or the Trust Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement, the
Indenture or the Trust Agreement. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action
that is not incidental to its obligations as Seller of the
Receivables under this Agreement and that in its opinion may
involve it in any expense or liability.
SECTION 3.05. SELLER MAY OWN NOTES OR CERTIFICATES. Each
of the Seller and any Person controlling, controlled by or under
common control with the Seller may in its individual or any other
capacity become the owner or pledgee of Notes or Certificates
with the same rights as it would have if it were not the Seller
or an affiliate thereof except as otherwise specifically provided
herein. Except as otherwise provided herein, Notes or
Certificates 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 such
Notes or Certificates, respectively.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF
SERVICER DEFAULT.
(a) The Servicer shall deliver to the Indenture Trustee and
the Owner Trustee, on or before August 15 of each year, beginning
_______________, an officer's certificate signed by the President
or any Vice President of the Servicer, dated as of June 30 of
such year, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or, with respect
to the first such certificate, such period as
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<PAGE>11
shall have elapsed from the Closing Date to the date of such
certificate) and of its performance under this Agreement and
under the Pooling and Servicing Agreement has been made under
such officer's supervision and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its
obligations under such agreements throughout such period, or, if
there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer
and the nature and status thereof. A copy of such certificate may
be obtained by any Noteholder or Certificateholder by a request
in writing to the Issuer addressed to the Corporate Trust Office
of the Indenture Trustee or the Owner Trustee, as applicable.
(b) The Servicer shall deliver to the Indenture Trustee,
the Owner Trustee and to the Rating Agencies, 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 which with the giving of notice or lapse
of time, or both, would become a Servicer Default under Section
7.01. The Seller shall deliver to the Indenture Trustee, the
Owner Trustee, the Servicer and the Rating Agencies, 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 which with the giving of
notice or lapse of time, or both, would become a Servicer Default
under clause (b) of Section 7.01.
SECTION 4.02. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.
(a) The Servicer shall cause a firm of independent
accountants, who may also render other services to the Servicer
or the Seller, to deliver to the Issuer and the Rating Agencies,
on or before August 15 of each year, beginning August 15, _____,
with respect to the twelve months ended on the immediately
preceding June 30 (or, with respect to the first such report,
such period as shall have elapsed from the Closing Date to the
date of such certificate), a report (the "Accountants' Report")
addressed to the Board of Directors of the Servicer and to the
Indenture Trustee and the Owner Trustee, to the effect that such
firm has audited the financial statements of the Servicer and
issued its report thereon and that such audit (i) was made in
accordance with generally accepted auditing standards, (ii)
included tests relating to automotive loans serviced for others
in accordance with the requirements of the Uniform Single Audit
Program for Mortgage Bankers (the "Program"), to the extent the
procedures in the Program are applicable to the servicing
obligations set forth in this Agreement and the Pooling and
Servicing Agreement, and (iii) except as described in the report,
disclosed no exceptions or errors in the records relating to
automobile and light truck loans serviced for others that, in the
firm's opinion, paragraph four of the Program requires such firm
to report.
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<PAGE>12
(b) The Accountants' Report shall also indicate that the
firm is independent of the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by
any Noteholder or Certificateholder by a request in writing to
the Issuer addressed to the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee.
SECTION 4.03. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES. The Servicer shall provide to
the Indenture Trustee and the Owner Trustee reasonable access to
the documentation regarding the Receivables. The Servicer shall
provide such access to any Noteholder or Certificateholder only
in such cases where a Noteholder or a Certificateholder is
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 normal
business hours at offices of the Servicer designated by the
Servicer. Nothing in this Section 4.03 shall derogate from the
obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding Obligors, and the
failure of the Servicer to provide access as provided in this
Section 4.03 as a result of such obligation shall not constitute
a breach of this Section 4.03.
SECTION 4.04. AMENDMENTS TO SCHEDULE OF RECEIVABLES. If
the Servicer, during a Monthly Period, assigns to a Receivable an
account number that differs from the account number previously
identifying such Receivable on the Schedule of Receivables, the
Servicer shall deliver to the Seller, the Indenture Trustee and
the Owner Trustee on or before the Distribution Date related to
such Monthly Period an amendment to the Schedule of Receivables
to report the newly assigned account number. Each such amendment
shall list all new account numbers assigned to Receivables during
such Monthly Period and shall show by cross reference the prior
account numbers identifying such Receivables on the Schedule of
Receivables.
SECTION 4.05. ASSIGNMENT OF ADMINISTRATIVE RECEIVABLES AND
WARRANTY RECEIVABLES. Upon receipt of the Administrative
Purchase Payment or the Warranty Payment with respect to an
Administrative Receivable or a Warranty Receivable, respectively,
each of the Indenture Trustee and the Owner Trustee shall assign,
without recourse, representation or warranty, to the Servicer or
the Warranty Purchaser, as applicable, all of such Person's
right, title and interest in, to and under such Administrative
Receivable or Warranty Receivable, all monies due thereon, the
security interests in the related Financed Vehicle, proceeds from
any Insurance Policies, proceeds from recourse against a Dealer
on such Receivable and the interests of such Person or the Trust,
as applicable, in certain rebates of premiums and other amounts
relating to the Insurance Policies and any document relating
thereto, such assignment being an assignment outright and not
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for security; and the Servicer or the Warranty Purchaser, as
applicable, shall thereupon own such Receivable, and all such
security and documents, free of any further obligations to the
Indenture Trustee, the Owner Trustee, the Noteholders or the
Certificateholders with respect thereto. If in any Proceeding it
is held that the Servicer may not enforce a Receivable on the
ground that it is not a real party in interest or a holder
entitled to enforce the Receivable, the Indenture Trustee or the
Owner Trustee, as applicable, shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the
Receivable, including bringing suit in the name of such Person or
the names of the Noteholders or the Certificateholders.
SECTION 4.06. DISTRIBUTIONS.
(a) On or before each Determination Date, the Servicer
shall calculate the Total Available Amount, the Available
Interest, the Available Principal, the Total Servicing Fee, the
Aggregate Noteholders' Interest Distributable Amount, the
Aggregate Noteholders' Principal Distributable Amount, the
Certificateholders' Interest Distributable Amount, the
Certificateholders' Principal Distributable Amount, the aggregate
Undistributed Amount and all other amounts required to determine
the amounts to be deposited in or paid from each of the
Collection Account, the Note Distribution Account, the
Certificate Distribution Account, the Reserve Account and, if
applicable, the Payment Ahead Servicing Account on the next
succeeding Distribution Date.
(b) (i) On or before each Distribution Date, the Indenture
Trustee shall cause collections made during the related
Monthly Period which constitute Payments Ahead to be trans-
ferred from the Collection Account to the Servicer, or to
the Payment Ahead Servicing Account, if required pursuant
to Section 5.01(d).
(ii) On or before each Distribution Date, the
Indenture Trustee shall transfer from the Payment Ahead
Servicing Account (or, if the Servicer is not required to
make deposits to the Payment Ahead Servicing Account on a
daily basis pursuant to Section 5.01(d), the Servicer shall
deposit) to the Collection Account the aggregate Applied
Payments Ahead.
(iii) On or before each Distribution Date, the
Indenture Trustee shall transfer from the Collection Account
to the Servicer, in immediately available funds,
reimbursement of Outstanding Monthly Advances pursuant to
Section 5.04, payment of Excess Simple Interest Collections,
if any, pursuant to subsection 3.11(b) of the Pooling and
Servicing Agreement, and payments of Liquidation Expenses
(and any unpaid Liquidation Expenses from prior periods)
with respect to Receivables which became Liquidating
Receivables during the related Monthly Period pursuant to
Section 3.04 of the Pooling and Servicing Agreement.
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(iv) On or before each Distribution Date, the
Indenture Trustee shall withdraw from the Reserve Account
and deposit in the Collection Account the lesser of (A) the
amount of cash or other immediately available funds
deposited therein and (B) the amount, if any, by which (x)
the sum of the Total Servicing Fee, the Aggregate
Noteholders' Interest Distributable Amount, the
Certificateholders' Interest Distributable Amount, the
Aggregate Noteholders' Principal Distributable Amount and
the Certificateholders' Principal Distributable Amount for
such Distribution Date exceeds (y) the sum of Available
Interest and Available Principal for such Distribution Date
and the aggregate Undistributed Amount with respect to the
immediately preceding Distribution Date.
(c) Except as otherwise provided in Section 4.06(d), on
each Distribution Date the Indenture Trustee (based on the
information contained in the Servicer's Accounting delivered on
the related Determination Date pursuant to Section 3.10 of the
Pooling and Servicing Agreement) shall make the following
distributions from the Collection Account (after the withdrawals,
deposits and transfers specified in Section 4.06(b) have been
made) in the following order of priority:
(i) first, to the Servicer, to the extent of the Total
Available Amount, the Total Servicing Fee;
(ii) second, to the Note Distribution Account, to the
extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clause (i)
above), the Aggregate Noteholders' Interest Distributable
Amount;
(iii) third, to the Certificate Distribution Account,
to the extent of the Total Available Amount (as such amount
has been reduced by the distributions described in clauses
(i) and (ii) above), the Certificateholders' Interest
Distributable Amount;
(iv) fourth, to the Note Distribution Account, to the
extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clauses (i),
(ii) and (iii) above), the Aggregate Noteholders' Principal
Distributable Amount in excess of the aggregate
Undistributed Amount with respect to the immediately
preceding Distribution Date;
(v) fifth, to the Certificate Distribution Account,
to the extent of the Total Available Amount (as such amount
has been reduced by the distributions described in clauses
(i) through (iv) above), exclusive of the Undistributed
Amount for the immediately preceding Distribution Date, the
Certificateholders' Principal Distributable Amount; and
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(vi) sixth, to the Reserve Account, any portion of the
Total Available Amount remaining after the distributions
described in clauses (i) through (v) above, exclusive of the
Undistributed Amount for the immediately preceding
Distribution Date.
(d) Notwithstanding the foregoing, at any time that the
Notes have not been paid in full and the principal balance of the
Notes has been declared immediately due and payable following the
occurrence of an Event of Default pursuant to Section 5.2 of the
Indenture, then until such time as the Notes have been paid in
full and the Indenture has been discharged or all Events of
Default have been cured or waived as provided in Section 5.2(b)
of the Indenture, no amounts shall be deposited in or distributed
to the Certificate Distribution Account. Any such amounts
otherwise distributable to the Certificate Distribution Account
shall be deposited instead into the Note Distribution Account as
payments of principal on the Notes.
SECTION 4.07. RESERVE ACCOUNT.
(a) There shall be established in the name of and
maintained with the Indenture Trustee an Eligible Deposit Account
known as the Capital Auto Receivables Asset Trust ______ Reserve
Account (the "Reserve Account") to include the money and other
property deposited and held therein pursuant to this Section
4.07(a), Section 4.07(e) and Section 4.06(c). On the Closing
Date, the Seller shall deposit the Reserve Account Initial
Deposit into the Reserve Account. The Reserve Account shall not
under any circumstances be deemed to be part of or otherwise
included in the Trust.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits therein or
withdrawals therefrom on such Distribution Date) exceeds the
Specified Reserve Account Balance for such Distribution Date, the
Servicer shall instruct the Indenture Trustee to distribute an
amount equal to any such excess to the Seller; it being
understood that no such distribution from the Reserve Account
shall be made to the Seller unless the amount so on deposit in
the Reserve Account exceeds such Specified Reserve Account
Balance. Notwithstanding the foregoing, no such distribution
shall be made on any of the Distribution Dates set forth below if
the Aggregate Principal Balance on the last day of the related
Monthly Period is less than the specified Principal Balance for
such Distribution Date set forth below:
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[DISTRIBUTION DATE SPECIFIED PRINCIPAL BALANCE
January 199_ $
February 199_
March 199_
April 199_
May 199_
June 199_
July 199_
August 199_
September 199_
October 199_ ]
(c) In order to provide for the timely payment to the
Noteholders, the Certificateholders and the Servicer in
accordance with Sections 4.06(c) and 4.06(d), to assure
availability of the amounts maintained in the Reserve Account for
the benefit of the Noteholders, the Certificateholders and the
Servicer, and as security for the performance by the Seller of
its obligations hereunder, the Seller on behalf of itself and its
successors and assigns, hereby pledges to the Indenture Trustee
and its successors and assigns, all its right, title and interest
in and to:
(i) the Reserve Account, and all proceeds of the
foregoing (other than the Investment Earnings thereon),
including, without limitation, all other amounts and
investments held from time to time in the Reserve Account
(whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or
otherwise); and
(ii) the Reserve Account Initial Deposit and all
proceeds thereof (other than the Investment Earnings
thereon),
((i) and (ii), collectively, the "Reserve Account Property"), to
have and to hold all the aforesaid property, rights and
privileges unto the Indenture Trustee, its successors and
assigns, in trust for the uses and purposes, and subject to the
terms and provisions, set forth in this Section 4.07. The
Indenture Trustee hereby acknowledges such transfer and accepts
the trust hereunder and shall hold and distribute the Reserve
Account Property in accordance with the terms and provisions of
this Agreement.
(d) Each of the Seller and the Servicer agree to take or
cause to be taken such further actions, to execute, deliver and
file or cause to be executed, delivered and filed such further
documents and instruments (including, without limitation, any UCC
financing statements or this Agreement) as may be determined to
be necessary, in an Opinion of Counsel to the Seller delivered to
the Indenture Trustee, in order to perfect the interests created
by this Section 4.07 and otherwise fully to effectuate the
purposes, terms and conditions of this Section 4.07. The Seller
shall:
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(i) promptly execute, deliver and file any financing
statements, amendments, continuation statements,
assignments, certificates and other documents with respect
to such interests and perform all such other acts as may be
necessary in order to perfect or to maintain the perfection
of the Indenture Trustee's security interest; and
(ii) make the necessary filings of financing
statements or amendments thereto within thirty days after
the occurrence of any of the following: (A) any change in
their respective corporate names or any trade names, (B) any
change in the location of their respective chief executive
offices or principal places of business and (C) any merger
or consolidation or other change in their respective
identities or corporate structures; and shall promptly
notify the Indenture Trustee of any such filings.
(e) If the Servicer pursuant to Section 5.04 determines on
any Determination Date that it is required to make a Monthly
Advance and does not do so from its own funds, the Servicer shall
instruct the Indenture Trustee to withdraw funds from the Reserve
Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the
Servicer pursuant to Section 5.04 for purposes of making
distributions pursuant to this Agreement, but shall not otherwise
satisfy the Servicer's obligation to deliver the amount of the
Monthly Advances, and the Servicer shall within two Business Days
replace any funds in the Reserve Account so used. The Servicer
shall not be entitled to reimbursement for any such deemed
Monthly Advances unless and until the Servicer shall have
replaced such funds in the Reserve Account.
(f) After payment to the Indenture Trustee, the Owner
Trustee, the Noteholders, the Certificateholders and the Servicer
of all amounts required to be paid under this Agreement, the
Indenture and the Trust Agreement, any amounts on deposit in the
Reserve Account, the Payment Ahead Servicing Account and the
Collection Account (after all other distributions required to be
made from such accounts have been made) shall be paid to the
Seller and any other assets remaining in the Trust shall be
distributed to the Seller.
SECTION 4.08. NET DEPOSITS.
(a) At any time that (i) GMAC shall be the Servicer, (ii)
the Servicer shall be permitted by Section 5.02 to remit
collections on a basis other than a daily basis and (iii) the
Servicer shall be permitted by subsection 5.01(d) to remit
Payments Ahead on a basis other than on a daily basis, the
Servicer, the Seller, the Indenture Trustee and the Owner
Trustee may make any remittances pursuant to this Article IV net
of amounts to be distributed by the applicable recipient to such
remitting party. Nonetheless, each such party shall account for
all of the above described remittances and distributions as if
the amounts were deposited and/or transferred separately.
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(b) At any time that (i) GMAC shall be the Servicer, (ii)
the rating of GMAC's short-term unsecured debt is at least A-1+
by Standard & Poor's Ratings Group and P-1 by Moody's Investors
Service, Inc. and (iii) a Servicer Default shall not have
occurred and be continuing, the Servicer, the Seller, the
Indenture Trustee and the Owner Trustee shall not be required to
make any distributions, deposits or other remittances pursuant to
this Article IV (including deposits by the Servicer into the
Collection Account and deposits from the Collection Account to
the Note Distribution Account) on or in respect of the [Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes or the Class A-6
Notes] which are to be made on an Exempt Deposit Date.
Distributions, deposits or other remittances on Exempt Deposit
Dates which are not required to be made by virtue of the
preceding sentence shall nonetheless be accounted for as having
been distributed, deposited or remitted for purposes of
determining other amounts required to be distributed, deposited
or otherwise remitted on such Exempt Deposit Date or the next
succeeding Distribution Date or Payment Date. On the Payment
Date next succeeding any Exempt Deposit Date on which any of the
Servicer, the Seller, the Indenture Trustee or the Owner Trustee
did not make distributions, deposits and other remittances in
reliance upon the second preceding sentence, each such Person
shall be required to distribute, deposit or otherwise remit the
cumulative amount of all such distributions, deposits and other
remittances for such Payment Date and the immediately preceding
Exempt Deposit Date or Dates on or in respect of the [Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-6
Notes.]
SECTION 4.09. STATEMENTS TO SECURITYHOLDERS.
(a) On each Distribution Date and each Payment Date, the
Owner Trustee shall include with each distribution to each
Certificateholder, and the Indenture Trustee shall include with
each distribution to each Noteholder, a statement (which
statement shall also be provided to the Rating Agencies) based on
information in the Servicer's Accounting furnished pursuant to
Section 3.10 of the Pooling and Servicing Agreement. Each such
statement to be delivered to Certificateholders and Noteholders,
respectively, shall set forth the following information
concerning the Certificates or the Notes, as appropriate, with
respect to such Distribution Date or the preceding Monthly Period
(in the case of statements to holders of the [Class A-1 Notes,
the Class A-5 Notes] and the Certificates) or such Payment Date
or the three preceding Monthly Periods (or, if monthly payments
are required, with respect to such Payment Date or the preceding
Monthly Period) (in the case of statements to holders of the
[Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and
the Class A-6 Notes):]
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(i) the amount of such distribution allocable to
principal of each class of the Notes and to the Certificate
Balance;
(ii) the amount of the distribution, if any, allocable
to interest on or with respect to each class of securities;
(iii) the Aggregate Principal Balance as of the close
of business on the last day of the preceding Monthly Period;
(iv) the Note Principal Balance for each class of
Notes, the Aggregate Note Principal Balance, the Certificate
Balance, the Note Pool Factor for each class of Notes and
the Certificate Pool Factor, each as of such Payment Date
or Distribution Date, as the case may be, after giving
effect to all payments described under clause (i) above;
(v) the amount of the Noteholders' Interest Carryover
Shortfall, the Noteholders' Principal Carryover Shortfall,
the Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall, if any,
and the change in each of such amounts from the preceding
Payment Date or Distribution Date, as applicable;
(vi) the aggregate amount in the Payment Ahead
Servicing Account or on deposit with the Servicer as
Payments Ahead and the change in such amount from the
previous Payment Date or Distribution Date, as the case may
be;
(vii) the amount of Outstanding Monthly Advances on
such Payment Date or Distribution Date, as the case may be;
(viii) the amount of the Total Servicing Fee paid to
the Servicer with respect to the related Monthly Period or
Periods, as the case may be;
(ix) the amount, if any, distributed to Noteholders
and Certificateholders from amounts on deposit in the
Reserve Account; and
(x) the balance of the Reserve Account on such Payment
Date or Distribution Date, as the case may be (after giving
effect to changes therein on such Payment Date or
Distribution Date, as the case may be).
Each amount set forth pursuant to clauses (i), (ii), (v), (viii)
and (ix) above shall be expressed as a dollar amount per $1,000
of initial principal amount of the Notes or of Certificate
Balance, as applicable.
(b) Within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of
this Agreement, the Indenture Trustee and the Owner Trustee
16<PAGE>
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shall mail, to each Person who at any time during such calendar
year shall have been a holder of Notes or Certificates,
respectively, and received any payments thereon, a statement
containing such information as may be required by the Code and
applicable Treasury Regulations to enable such securityholder to
prepare its federal income tax returns.
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. ESTABLISHMENT OF ACCOUNTS.
(a) (i) The Servicer, for the benefit of the Noteholders
and the Certificateholders, shall establish and maintain in the
name of the Indenture Trustee an Eligible Deposit Account known
as the Capital Auto Receivables Asset Trust ______ Collection
Account (the "Collection Account"), bearing an additional
designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders and the
Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account known as the Capital Auto Receivables
Asset Trust ______ Note Distribution Account (the "Note
Distribution Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders.
(iii) Pursuant to the Trust Agreement, the Servicer,
for the benefit of the Certificateholders, shall establish and
maintain at Bankers Trust Company in the name of the Owner
Trustee an Eligible Deposit Account known as the Capital Auto
Receivables Asset Trust ______ Certificate Distribution Account
(the "Certificate Distribution Account") bearing an additional
designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders.
(iv) The Servicer, for the benefit of the Obligors,
shall establish and maintain in the name of the Indenture Trustee
an account known as the Capital Auto Receivables Asset Trust
199_-_ Payment Ahead Servicing Account (the "Payment Ahead
Servicing Account"). The Payment Ahead Servicing Account shall
not be property of the Issuer.
(b) (i) Each of the Designated Accounts and the Payment
Ahead Servicing Account shall be initially established with the
Indenture Trustee and shall be maintained with the Indenture
Trustee so long as (A) the short-term unsecured debt obligations
of the Indenture Trustee have the Required Deposit Rating or (B)
each of the Designated Accounts are maintained in the corporate
trust department of the Indenture Trustee. All amounts held in
such accounts (including amounts, if any, which the Servicer is
required to remit daily to the Collection Account pursuant to
17<PAGE>
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Section 5.02) shall, to the extent permitted by applicable laws,
rules and regulations, be invested, at the written direction of
the Servicer, by such bank or trust company in Eligible
Investments. Such written direction shall constitute
certification by the Servicer that any such investment is
authorized by this Section 5.01. Funds deposited in the Reserve
Account shall be invested in Eligible Investments which mature
prior to the next Distribution Date except, and then only to the
extent, as shall be otherwise permitted by the Rating Agencies.
Investments in Eligible Investments shall be made in the name of
the Indenture Trustee or its nominee, and such investments shall
not be sold or disposed of prior to their maturity; PROVIDED,
HOWEVER, that Notes held in the Reserve Account may be sold or
disposed of prior to their maturity so long as (x) the Servicer
directs the Indenture Trustee to make such sale or disposition,
(y) the Indenture Trustee gives reasonable prior notice of such
disposition to the Administrator and (z) such Notes are sold at
a price equal to or greater than the unpaid principal balance
thereof if, following such sale, the amount on deposit in the
Reserve Account would be less than the Specified Reserve Account
Balance. Should the short-term unsecured debt obligations of the
Indenture Trustee (or any other bank or trust company with which
the Designated Accounts or Payment Ahead Servicing Account are
maintained) no longer have the Required Deposit Rating, then the
Servicer shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency
shall consent), with the Indenture Trustee's assistance as
necessary, cause the Designated Accounts and the Payment Ahead
Servicing Account (A) to be moved to a bank or trust company, the
short-term unsecured debt obligations of which shall have the
Required Deposit Rating or (B) with respect to the Designated
Accounts, to be moved to the corporate trust department of the
Indenture Trustee. Investment Earnings on funds deposited in the
Designated Accounts and the Payment Ahead Servicing Account shall
be payable to the Servicer.
(ii) With respect to the Designated Account Property,
the Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Designated Account Property that is held
in deposit accounts shall be held solely in Eligible
Deposit Accounts; and each such Eligible Deposit
Account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with
respect thereto;
(B) any Designated Account Property that
constitutes Physical Property shall be delivered to the
Indenture Trustee in accordance with paragraph (i) of
the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture
Trustee or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely
for the Indenture Trustee;
18<PAGE>
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(C) any Designated Account Property that is a
book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations shall
be delivered in accordance with paragraph (ii) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition,
through continued book-entry registration of such
Designated Account Property as described in such
paragraph;
(D) any Designated Account Property that is an
"uncertificated security" under Article 8 of the UCC
and that is not governed by clause (C) above shall be
delivered to the Indenture Trustee in accordance with
paragraph (iii) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued registration
of the Indenture Trustee's (or its nominee's) ownership
of such security; and
(E) the Indenture Trustee shall maintain each
item of Designated Account Property in the particular
Designated Account to which such item originated and
shall not commingle items from different Designated
Accounts.
(iii) 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 Designated Accounts for
the purpose of permitting the Servicer or the Owner Trustee to
carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
(c) The Owner Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in the
Certificate Distribution Account and in all proceeds thereof
(except Investment Earnings). Except as otherwise provided herein
or in the Trust Agreement, the Certificate Distribution Account
shall be under the sole dominion and control of the Owner Trustee
for the benefit of the Certificateholders. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Seller on behalf of the Owner
Trustee, if the Certificate Distribution Account is not then held
by the Owner Trustee or an Affiliate thereof) shall within 10
Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a
new Certificate Distribution Account as an Eligible Deposit
Account and shall transfer any cash and/or any investments to
such new Certificate Distribution Account.
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(d) At any time that (i) GMAC is the Servicer, (ii) the
rating of GMAC's short-term unsecured debt is at least A-1 by
Standard & Poor's Ratings Group and P-1 by Moody's Investors
Service, Inc. and (iii) a Servicer Default shall not have
occurred and be continuing (each a "Monthly Remittance
Condition"), then (x) Payments Ahead need not be remitted to and
deposited in the Payment Ahead Servicing Account but instead may
be remitted to and held by the Servicer and (y) the Servicer
shall not be required to segregate or otherwise hold separate any
Payments Ahead, but the Servicer shall be required to remit
Applied Payments Ahead to the Collection Account in accordance
with Section 4.06(b)(ii). Commencing with the first day of the
first Monthly Period that begins at least two Business Days after
the day on which any Monthly Remittance Condition ceases to be
satisfied, the Servicer shall deposit in the Payment Ahead
Servicing Account the amount of any Payments Ahead then held by
it, and thereafter, for so long as a Monthly Remittance Condition
continues to be unsatisfied, the Servicer shall deposit any
additional Payments Ahead in the Payments Ahead Servicing Account
within two Business Days after receipt thereof. Notwithstanding
the foregoing, if a Monthly Remittance Condition is unsatisfied
the Servicer may utilize, with respect to the Payments Ahead, an
alternative remittance schedule (which may include a remittance
schedule utilized by the Servicer at a time when the Monthly
Remittance Conditions were satisfied), if the Servicer provides
to the Indenture Trustee written confirmation from the Rating
Agencies that such alternative remittance schedule will not
result in the downgrading or withdrawal by the Rating Agencies of
the ratings then assigned to the Notes and the Certificates.
Neither the Indenture Trustee nor the Owner Trustee shall be
deemed to have knowledge of any Servicer Default unless such
trustee has received notice of such event or circumstance from
the other trustee, the Seller or the Servicer in an officer's
certificate or from Certificateholders whose Certificates
evidence not less than 25% of the Voting Interests as of the
close of the preceding Distribution Date or from Noteholders
whose Notes evidence not less than 25% of the Outstanding Amount
of the Notes as of the close of the preceding Distribution Date
or unless a Responsible Officer in the Corporate Trust Office of
the Indenture Trustee with knowledge hereof and familiarity
herewith has actual knowledge of such event or circumstance.
SECTION 5.02. COLLECTIONS. If a Monthly Remittance
Condition is not satisfied, commencing with the first day of the
first Monthly Period that begins at least two Business Days after
the day on which any Monthly Remittance Condition ceases to be
satisfied, the Servicer shall remit to the Collection Account all
payments by or on behalf of the Obligors (including Payments
Ahead in accordance with Section 5.01(d)) on the Receivables and
all Liquidation Proceeds within two Business Days after receipt
thereof. Notwithstanding the foregoing, if a Monthly Remittance
Condition is unsatisfied, the Servicer may utilize an alternative
remittance schedule (which may include a remittance schedule
utilized by the Servicer at a time when the Monthly Remittance
Conditions were satisfied), if the Servicer provides to the
Indenture Trustee written confirmation from the
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Rating Agencies that such alternative remittance schedule will
not result in the downgrading or withdrawal by the Rating
Agencies of the ratings then assigned to the Notes or the
Certificates. At all times when all Monthly Remittance
Conditions are satisfied, the Servicer (i) shall not be required
to segregate or otherwise hold separate any Payments Ahead
remitted to the Servicer and (ii) shall remit collections
received during a Monthly Period to the Collection Account in
immediately available funds on the related Distribution Date.
SECTION 5.03. INVESTMENT EARNINGS AND SUPPLEMENTAL
SERVICING FEES. The Servicer shall be entitled to receive all
Investment Earnings and Supplemental Servicing Fees when and as
paid without any obligation to the Owner Trustee, the Indenture
Trustee or the Seller in respect thereof. The Servicer will have
no obligation to deposit any such amount in any account
established hereunder. To the extent that any such amount shall
be held in any account held by the Indenture Trustee or the Owner
Trustee, or otherwise established hereunder, such amount will be
withdrawn therefrom and paid to the Servicer upon presentation of
a certificate signed by a Responsible Officer of the Servicer
setting forth, in reasonable detail, the amount of such
Investment Earnings or Supplemental Servicing Fees.
SECTION 5.04. MONTHLY ADVANCES.
(a) Subject to the following sentence, as of the last day
of each Monthly Period, with respect to each Scheduled Interest
Receivable (other than an Administrative Receivable or a Warranty
Receivable), if there is a shortfall in the Scheduled Payment
remaining after application of the Deferred Prepayment pursuant
to the last sentence of subsection 3.11(a) of the Pooling and
Servicing Agreement, the Servicer shall advance an amount equal
to such shortfall (such amount, a "Scheduled Interest Advance").
The Servicer shall be obligated to make a Scheduled Interest
Advance in respect of a Scheduled Interest Receivable only to the
extent that the Servicer, in its sole discretion, shall determine
that such advance shall be recoverable from subsequent
collections or recoveries on any Receivable. The Servicer shall
be reimbursed for Outstanding Scheduled Interest Advances with
respect to a Receivable from the following sources with respect
to such Receivable, in each case as set forth in the Pooling and
Servicing Agreement: (i) subsequent payments by or on behalf of
the Obligor, (ii) collections of Liquidation Proceeds and (iii)
the Warranty Payment. At such time as the Servicer shall
determine that any Outstanding Scheduled Interest Advances with
respect to any Scheduled Interest Receivable shall not be
recoverable from payments with respect to such Receivable, the
Servicer shall be reimbursed from any collections made on other
Receivables held by the Issuer.
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(b) As of the last day of each Monthly Period, the Servicer
shall advance an amount equal to the excess, if any, of (i) the
amount of interest that would be due during such Monthly Period
on all Simple Interest Receivables held by the Issuer (assuming
that the payment on each such Receivable was received on its
respective due date) over (ii) all payments received during such
Monthly Period on all Simple Interest Receivables held by the
Issuer to the extent allocable to interest (such excess, a
"Simple Interest Advance"). In addition, Liquidation Proceeds
with respect to a Simple Interest Receivable allocable to accrued
and unpaid interest thereon (but not including interest for the
then current Monthly Period) shall be paid to the Servicer but
only to the extent of any Outstanding Simple Interest Advances.
The Servicer shall not make any advance with respect to principal
of any Simple Interest Receivable. Excess Simple Interest
Collections shall be paid to the Servicer as provided in Section
3.11(b) of the Pooling and Servicing Agreement.
SECTION 5.05. ADDITIONAL DEPOSITS. The Servicer shall
deposit in the Collection Account the aggregate Monthly Advances
pursuant to Sections 5.04(a) and (b) and the aggregate amounts to
be paid to the Issuer pursuant to Section 3.03 of the Pooling and
Servicing Agreement. The Servicer and the Seller shall deposit
in the Collection Account the aggregate Administrative Purchase
Payments and Warranty Payments with respect to Administrative
Receivables and Warranty Receivables, respectively. All such
deposits with respect to a Monthly Period shall be made in
immediately available funds on the Distribution Date related to
such Monthly Period.
ARTICLE VI
LIABILITIES OF SERVICER AND OTHERS
SECTION 6.01. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer shall be liable in accordance with this
Agreement only to the extent of the obligations in this Agreement
and the Pooling and Servicing Agreement specifically undertaken
by the Servicer. Such obligations shall include the following:
(i) The Servicer shall defend, indemnify and hold
harmless the Indenture Trustee, the Owner Trustee, the
Issuer, the Noteholders and the Certificateholders from and
against any and all costs, expenses, losses, damages, claims
and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any affiliate
thereof of any Financed Vehicle;
(ii) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee and the
Issuer from and against any taxes that may at any time be
asserted against any such Person with respect to the
transactions contemplated in this Agreement, including,
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without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege or
license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale
of the Notes and the Certificates, or asserted with respect
to ownership of the Receivables, or federal or other income
taxes arising out of distributions on the Notes or the
Certificates, or any fees or other compensation payable to
any such Person) and costs and expenses in defending against
the same;
(iii) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee, the
Issuer, the Noteholders and the Certificateholders from and
against any and all costs, expenses, losses, claims, damages
and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon
the Indenture Trustee, the Owner Trustee, the Issuer, the
Noteholders or the Certificateholders through the
negligence, willful misfeasance or bad faith of the Servicer
in the performance of its duties under this Agreement, the
Pooling and Servicing Agreement, the Indenture or the Trust
Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement, the Pooling and
Servicing Agreement, the Indenture or the Trust Agreement;
and
(iv) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee and the Owner Trustee, and
their respective agents and servants, from and against all
costs, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with (x) in the
case of the Owner Trustee, the Indenture Trustee's
performance of its duties under the Indenture, (y) in the
case of the Indenture Trustee, the Owner Trustee's
performance of its duties under the Trust Agreement or (z)
the acceptance, administration or performance by, or action
or inaction of, the Indenture Trustee or the Owner Trustee,
as applicable, of the trusts and duties contained in this
Agreement, the Basic Documents, the Indenture (in the case
of the Indenture Trustee), including the administration of
the Trust Estate, and the Trust Agreement (in case of the
Owner Trustee), including the administration of the Owner
Trust Estate, except in each case to the extent that such
cost, expense, loss, claim, damage or liability: (A) is due
to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Person indemnified, (B) to
the extent otherwise payable to the Indenture Trustee,
arises from the Indenture Trustee's breach of any of its
representations or warranties in Section 6.13 of the
Indenture, (C) to the extent otherwise payable to the Owner
Trustee, arises from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 6.6
of the Trust Agreement or (D) shall arise out of or be
incurred in connection with the performance by the Indenture
Trustee of the duties of successor Servicer hereunder.
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(b) Indemnification under this Section 6.01 shall include,
without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer has made any indemnity
payments pursuant to this Section 6.01 and the recipient
thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts collected to the
Servicer, without interest.
SECTION 6.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE OBLIGATIONS OF, THE SERVICER. Any corporation or other
entity (a) into which the Servicer may be merged or consolidated,
(b) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, (c) succeeding to the
business of the Servicer, or (d) more than 50% of the voting
stock of which is owned directly or indirectly by General Motors
and which is otherwise servicing the Seller's receivables, which
corporation in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Servicer under
this Agreement and the Pooling and Servicing Agreement, shall be
the successor to the Servicer under this Agreement and the
Pooling and Servicing Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
to this Agreement, anything in this Agreement or in the Pooling
and Servicing Agreement to the contrary notwithstanding. The
Servicer shall provide notice of any merger, consolidation or
succession pursuant to this Section 6.02 to the Rating Agencies.
SECTION 6.03. LIMITATION ON LIABILITY OF SERVICER AND
OTHERS.
(a) Neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer shall be under
any liability to the Issuer, the Noteholders or the
Certificateholders, except as specifically provided in this
Agreement and in the Pooling and Servicing Agreement, for any
action taken or for refraining from the taking of any action
pursuant to this Agreement, the Pooling and Servicing Agreement,
the Indenture or the Trust 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 (except errors in judgment) in the performance of
duties or by reason of reckless disregard of obligations and
duties under this Agreement, the Pooling and Servicing Agreement,
the Indenture or the Trust Agreement. The Servicer and any
director, officer or 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 or the
Pooling and Servicing Agreement.
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(b) The Servicer and any director or officer or employee
or agent of the Servicer shall be reimbursed by the Indenture
Trustee or the Owner Trustee, as applicable, for any contractual
damages, liability or expense (including, without limitation, any
obligation of the Servicer to the Indenture Trustee or the Owner
Trustee, as applicable, pursuant to subsection 6.01(a)(iv)(x) or
(y)) incurred by reason of such trustee's willful misfeasance,
bad faith or gross negligence (except errors in judgment) in the
performance of such trustee's duties under this Agreement, the
Indenture or the Trust Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
(c) Except as provided in this Agreement or in the Pooling
and Servicing Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties to service the Receivables
in accordance with this Agreement and the Pooling and Servicing
Agreement and that in its opinion may involve it in 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 or the Pooling and Servicing Agreement
and the rights and duties of the parties to this Agreement or the
Pooling and Servicing Agreement and the interests of the
Noteholders and the Certificateholders under this Agreement and
the Pooling and Servicing Agreement, the interests of the
Noteholders under the Indenture and the interests of the
Certificateholders under the Trust Agreement. In such event, the
legal expenses and costs for such action and any liability
resulting therefrom shall be expenses, costs and liabilities of
the Trust and the Servicer shall be entitled to be reimbursed
therefor.
(d) The Applicable Trustee shall distribute out of the
Collection Account on a Distribution Date any amounts permitted
for reimbursement pursuant to subsection 6.03(c) not therefor
reimbursed; PROVIDED, HOWEVER, that the Applicable Trustee shall
not distribute such amounts if the amount on deposit in the
Reserve Account (after giving effect to all deposits and
withdrawals pursuant to Sections 4.06(b) and (c) and Section
4.07(e), on such Distribution Date) is greater than zero but less
than the Specified Reserve Account Balance for such Distribution
Date.
SECTION 6.04. DELEGATION OF DUTIES. So long as GMAC acts
as Servicer, the Servicer may, at any time without notice or
consent, delegate any duties under this Agreement or under the
Pooling and Servicing Agreement to any corporation more than 50%
of the voting stock of which is owned, directly or indirectly, by
General Motors. The Servicer may at any time perform specific
duties as Servicer through sub-contractors who are in the
business of servicing automotive receivables; PROVIDED, HOWEVER,
that no such delegation shall relieve the Servicer of its
responsibility with respect to such duties.
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SECTION 6.05. SERVICER NOT TO RESIGN. Subject to the
provisions of Section 7.02, the Servicer shall not resign from
the obligations and duties imposed on it by this Agreement and
the Pooling and Servicing Agreement as Servicer except upon
determination that the performance of its duties under this
Agreement or under the Pooling and Servicing Agreement, as the
case may be, is no longer permissible under applicable law. Any
such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Owner Trustee. No
such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance
with Section 7.02.
ARTICLE VII
DEFAULT
SECTION 7.01. SERVICER DEFAULTS. Each of the following
shall constitute a "Servicer Default":
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Designated Accounts or to the
Owner Trustee for deposit in the Certificate Distribution Account
any required payment or to direct the Indenture Trustee to make
any required distributions therefrom, which failure continues
unremedied for a period of five Business Days after written
notice is received by the Servicer from the Indenture Trustee or
the Owner Trustee or after discovery of such failure by an
officer of the Servicer;
(b) failure on the part of the Seller or the Servicer to
duly observe or perform in any material respect any other
covenants or agreements of the Seller or the Servicer set forth
in this Agreement, the Pooling and Servicing Agreement, the
Indenture or the Trust Agreement which failure (i) materially and
adversely affects the rights of Noteholders or Certificateholders
and (ii) continues unremedied for a period of 90 days after the
date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller or the
Servicer, as applicable, by the Indenture Trustee or the Owner
Trustee, or to the Seller or the Servicer, as applicable, and to
the Indenture Trustee or the Owner Trustee by Noteholders whose
Notes evidence not less than 25% of the Outstanding Amount of the
Notes as of the close of the preceding Distribution Date or by
Certificateholders whose Certificates evidence not less than 25%
of the Voting Interests as of the close of the preceding
Distribution Date;
(c) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the
Seller or the Servicer, in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of their respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 90 consecutive days; or
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(d) the consent by the Seller or the Servicer to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of or relating to the Seller
or the Servicer or of or relating to substantially all of their
respective property; or the Seller or the Servicer shall admit in
writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations.
SECTION 7.02. CONSEQUENCES OF A SERVICER DEFAULT. If a
Servicer Default shall occur and be continuing, either the
Indenture Trustee or the Noteholders whose Notes evidence not
less than a majority of the Outstanding Amount of the Notes as of
the close of the preceding Distribution Date (or, if the Notes
have been paid in full and the Indenture has been discharged in
accordance with its terms, by the Owner Trustee or
Certificateholders whose Certificates evidence not less than a
majority of the Voting Interests as of the close of the preceding
Distribution Date) by notice then given in writing to the
Servicer and the Owner Trustee (and to the Indenture Trustee if
given by the Noteholders or the Certificateholders) may terminate
all of the rights and obligations of the Servicer under this
Agreement and the Pooling and Servicing Agreement. On or after
the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement and the Pooling
and Servicing Agreement, whether with respect to the Notes, the
Certificates or the Receivables or otherwise, shall pass to and
be vested in the Indenture Trustee pursuant to and under this
Section 7.02. The Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the 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
Servicer agrees to cooperate with the Indenture Trustee and the
Owner Trustee in effecting the termination of the
responsibilities and rights of the Servicer under this Agreement
and the Pooling and Servicing Agreement, including, without
limitation, the transfer to the Indenture Trustee or the Owner
Trustee for administration by it of all cash amounts that shall
at the time be held by the Servicer for deposit, or that shall
have been deposited by the Servicer in the Collection Account,
the Note Distribution Account, the Certificate Distribution
Account or the Payment Ahead Servicing Account or thereafter
received with respect to the Receivables and all Payments Ahead
that shall at that time be held by the Servicer. In addition to
any other amounts that are then payable to the Servicer under
this Agreement, the Servicer shall be entitled to receive from
the successor Servicer reimbursements for any Outstanding Monthly
Advances made during the period prior to the notice pursuant to
this Section 7.02 which terminates the obligation and rights of
the Servicer under this Agreement.
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SECTION 7.03. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF
SUCCESSOR. On and after the time the Servicer receives a notice
of termination pursuant to Section 7.02, the Indenture Trustee
shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the Pooling and
Servicing Agreement and the transactions set forth or provided
for in this Agreement and the Pooling and Servicing Agreement,
and shall be subject to all the responsibilities, restrictions,
duties and liabilities relating thereto placed on the Servicer by
the terms and provisions of this Agreement and the Pooling and
Servicing Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to such compensation (whether payable
out of the Collection Account or otherwise) as the Servicer would
have been entitled to under this Agreement if no such notice of
termination had been given including, but not limited to, the
Total Servicing Fee, Investment Earnings and Supplemental
Servicing Fees. Notwithstanding the above, the Indenture Trustee
may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of
competent jurisdiction to appoint, a successor (i) having a net
worth of not less than $100,000,000, (ii) a long-term unsecured
debt rating from Moody's Investors Service, Inc. of at least Baa3
(unless such requirement is expressly waived by Moody's Investors
Service, Inc.) and (iii) whose regular business includes the
servicing of automotive receivables, as the successor to the
Servicer under this Agreement and the Pooling and Servicing
Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under
this Agreement and the Pooling and Servicing Agreement. In
connection with such appointment and assumption, the Indenture
Trustee may make such arrangements for the compensation of such
successor out of payments on Receivables as it and such successor
shall agree; PROVIDED, HOWEVER, that no such compensation shall
be in excess of that permitted the Servicer under this Agreement
and the Pooling and Servicing Agreement. The Indenture Trustee
and such successor shall take such action, consistent with this
Agreement and the Pooling and Servicing Agreement, as shall be
necessary to effectuate any such succession.
SECTION 7.04. NOTIFICATION TO NOTEHOLDERS AND
CERTIFICATEHOLDERS. Upon any termination of, or appointment of
a successor to, the Servicer pursuant to this Article VII, the
Indenture Trustee shall give prompt written notice thereof to the
Noteholders and the Rating Agencies and the Owner Trustee shall
give prompt written notice thereof to the Certificateholders.
SECTION 7.05. WAIVER OF PAST DEFAULTS. Noteholders whose
Notes evidence not less than a majority of the Outstanding Amount
of the Notes as of the close of the preceding Distribution Date
(or, if all of the Notes have been paid in
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full and the Indenture has been discharged in accordance with its
terms, Certificateholders whose Certificates evidence not less
than a majority of the Voting Interests as of the close of the
preceding Distribution Date) may, on behalf of all Noteholders
and Certificateholders, waive 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 any of the accounts 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 and the
Pooling and Servicing Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent
thereon.
SECTION 7.06. REPAYMENT OF ADVANCES. If the identity of
the Servicer shall change, the predecessor Servicer shall be
entitled to receive, to the extent of available funds,
reimbursement for Outstanding Monthly Advances pursuant to
Section 5.04 in the manner specified in Section 4.06, with
respect to all Monthly Advances made by such predecessor
Servicer.
ARTICLE VIII
TERMINATION
SECTION 8.01. OPTIONAL PURCHASE OF ALL RECEIVABLES;
INSOLVENCY OF SELLER; TERMINATION OF TRUST.
(a) On the last day of any Monthly Period as of which the
Aggregate Principal Balance is 10% or less of the Aggregate
Amount Financed, the Servicer shall have the option to purchase
the assets of the Trust other than the Designated Accounts and
the Certificate Distribution Account. To exercise such option,
the Servicer shall deposit in the Collection Account an amount
equal to the aggregate Administrative Purchase Payments for the
Receivables (including defaulted Receivables), plus the appraised
value of any such other property held by the Trust (less the
Liquidation Expenses to be incurred in connection with the
recovery thereof), such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee. Thereupon, the Servicer shall succeed to all
interests in and to the Trust (other than the Designated Accounts
and the Certificate Distribution Account).
(b) Upon any sale of the assets of the Trust pursuant to
Section 7.2 of the Trust Agreement, the Servicer shall instruct
the Applicable Trustee to deposit the proceeds from such sale
after all payments and reserves therefrom have been made (the
"Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited
in the Collection Account (or, if such proceeds are not so
deposited on a Distribution Date, on the Distribution Date
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immediately following such deposit), the Servicer shall instruct
the Applicable Trustee to make the following deposits (after the
application on such Distribution Date of the Total Available
Amount and funds on deposit in the Reserve Account pursuant to
Sections 4.06 and 4.07) from the Insolvency Proceeds and any
funds remaining on deposit in the Reserve Account (including the
proceeds of any sale of investments therein as described in the
following sentence) in the following priority:
(i) to the Note Distribution Account, any portion of
the Aggregate Noteholders' Interest Distributable Amount not
otherwise deposited into the Note Distribution Account on
such Distribution Date;
(ii) to the Note Distribution Account, the Aggregate
Note Principal Balance (after giving effect to the reduction
in the Aggregate Note Principal Balance to result from the
deposits made in the Note Distribution Account on such
Distribution Date and on prior Distribution Dates);
(iii) to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable
Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance and the Certificateholders' Principal
Carryover Shortfall (after giving effect to the reduction
in the Certificate Balance and the Certificateholders'
Principal Carryover Shortfall to result from the deposits
made in the Certificate Distribution Account on such
Distribution Date).
Subject to Section 5.01(b), any investments on deposit in the
Reserve Account which shall not mature on or before such
Distribution Date shall be sold by the Indenture Trustee at such
time as shall result in the Indenture Trustee receiving the
proceeds from such sale not later than the day immediately
preceding such Distribution Date. Any Insolvency Proceeds
remaining after the deposits described above shall be paid to the
Seller.
(c) Notice of any termination of the Trust shall be given
by the Servicer to the Owner Trustee and the Indenture Trustee as
soon as practicable after the Servicer has received notice
thereof.
(d) Following the satisfaction and discharge of the
Indenture and the payment in full of the principal and interest
on the Notes, the Certificateholders shall succeed to the rights
of the Noteholders hereunder and the Owner Trustee shall succeed
to the rights of, and assume the obligations of, the Indenture
Trustee pursuant to this Agreement (subject to the continuing
obligations of the Indenture Trustee set forth in Section 4.4 of
the Indenture).
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01. AMENDMENT.
(a) This Agreement may be amended by the Seller, the
Servicer and the Owner Trustee with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or
supplement any provision in this Agreement that may be defective
or inconsistent with any other provision in this Agreement, (iii)
to add or supplement any credit enhancement for the benefit of
the Noteholders of any class or the Certificateholders (provided
that if any such addition shall affect any class of Noteholders
or Certificateholders differently than any other class of
Noteholders or Certificateholders, then such addition shall not,
as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any class of Noteholders or the
Certificateholders), (iv) add to the covenants, restrictions or
obligations of the Seller, the Servicer, the Owner Trustee or the
Indenture Trustee or (v) add, change or eliminate any other
provision of this Agreement in any manner that shall not, as
evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Noteholders or the
Certificateholders.
(b) This Agreement may also be amended from time to time
by the Seller, the Servicer and the Owner Trustee with the
consent of the Indenture Trustee, the consent of Noteholders
whose Notes evidence not less than a majority of the Outstanding
Amount of the Notes as of the close of the preceding Distribution
Date, the consent of Certificateholders whose Certificates
evidence not less than a majority of the Voting Interests as of
the close of the preceding Distribution Date (which consent,
whether given pursuant to this Section 9.01 or pursuant to any
other provision of this Agreement, shall be conclusive and
binding on such Person and on all future holders of such Note or
Certificate and of any Note or Certificate issued upon the
transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note or
Certificate) 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 the
Noteholders or the Certificateholders; PROVIDED, HOWEVER, that no
such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required
to be made on any Note or Certificate, the Interest Rate for any
class of Notes, the Pass Through Rate or the Specified Reserve
Account Balance or (ii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of the
holders of all Notes and Certificates then outstanding.
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(c) Prior to the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification
of the substance of such amendment or consent to the Rating
Agencies.
(d) 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 Noteholder and
Certificateholder.
(e) It shall not be necessary for the consent of
Noteholders or Certificateholders pursuant to subsection 9.01(b)
to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents
(and any other consents of Noteholders or Certificateholders
provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders and
Certificateholders shall be subject to such reasonable
requirements as the Indenture Trustee or the Owner Trustee may
prescribe, including the establishment of record dates pursuant
to paragraph number 2 of the Depository Agreements.
(f) Prior to the execution of any amendment to this
Agreement, the Indenture Trustee and the Owner 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
subsection 9.02(i). The Indenture Trustee and the Owner Trustee
may, but shall not be obligated to, enter into any such amendment
which affects such trustee's own rights, duties or immunities
under this Agreement or otherwise.
(g) Each of GMAC and the Seller agrees that such Person
shall not amend or agree to any amendment of the Pooling and
Servicing Agreement unless such amendment would be permissible
under the terms of this Section 9.01 as if this Section 9.01 were
contained in the Pooling and Servicing Agreement.
SECTION 9.02. PROTECTION OF TITLE TO TRUST.
(a) The Seller or the Servicer or both shall execute and
file such financing statements and cause to be executed and filed
such continuation and other 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 Noteholders, the
Certificateholders and the Indenture Trustee and the Owner
Trustee under this Agreement in the Receivables and in the
proceeds thereof. The Seller or the Servicer or both shall
deliver (or cause to be delivered) to the Indenture Trustee and
the Owner Trustee file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available
following such filing.
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(b) Neither the Seller nor the Servicer shall change 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 9-402(7) of the UCC,
unless it shall have given the Indenture Trustee and the Owner
Trustee at least 60 days prior written notice thereof.
(c) Each of the Seller and the Servicer shall give the
Indenture Trustee and the Owner Trustee at least 60 days prior
written notice of any relocation of its principal executive
office 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. The Servicer shall at all times
maintain each office from which it services 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, Note Distribution Account, Certificate Distribution
Account and Payment Ahead Servicing Account and any Payments
Ahead held by the Servicer 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, the Servicer's master computer records (including
any back-up archives) that refer to any Receivable indicate
clearly that the Receivable is owned 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 or repurchased by the
Seller or purchased by the Servicer.
(f) If at any time the Seller or the Servicer proposes 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 print-outs (including any restored from back-up
archives) that, if they refer in any manner whatsoever to any
Receivable, indicate clearly that such Receivable has been sold
and is owned by the Issuer unless such Receivable has been paid
in full or repurchased by the Seller or purchased by the
Servicer.
(g) The Servicer shall permit the Indenture Trustee and the
Owner Trustee and their respective agents at any time to inspect,
audit and make copies of and abstracts from the Servicer's
records regarding any Receivables then or previously included in
the Owner Trust Estate.
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(h) The Servicer shall furnish to the Indenture Trustee and
the Owner Trustee at any time upon request a list of all Receiv-
ables then held as part of the Trust, together with a reconcilia-
tion of such list to the Schedule of Receivables and to each of
the Servicer's Accountings furnished before such request
indicating removal of Receivables from the Trust. Upon request,
the Servicer shall furnish a copy of any such list to the Seller.
The Indenture Trustee, the Owner Trustee and the Seller shall
hold any such list and the Schedule of Receivables for
examination by interested parties during normal business hours at
their respective offices located at the addresses set forth in
Section 9.03.
(i) The Servicer shall deliver to the Indenture Trustee and
the Owner Trustee promptly after the execution and delivery of
this Agreement and of each amendment thereto, an Opinion of
Counsel either (a) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Indenture Trustee and the Owner
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) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such
interest.
(j) To the extent required by law, the Seller shall cause
the Notes and the Certificates to be registered with the
Securities and Exchange Commission pursuant to Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934 within the
time periods specified in such sections.
SECTION 9.03. NOTICES. All demands, notices and
communications upon or to the Seller, the Servicer, the Indenture
Trustee, the Owner Trustee or the Rating Agencies under this
Agreement shall be in writing, personally delivered, sent by
facsimile with a copy to follow via first class mail 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,
at the following address: Capital Auto Receivables, Inc.,
Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801, with a copy to: J. B. Van Orman, Vice President,
3044 West Grand Boulevard, Detroit, Michigan 48202, (b) in the
case of the Servicer, at the following address: F. A. Henderson,
Group Vice President, General Motors Acceptance Corporation, 3044
West Grand Boulevard, Detroit, Michigan 48202, (c) in the case of
the Trust or the Indenture Trustee, at its Corporate Trust
Office, (d) in the case of the Trust or the Owner Trustee, to the
Owner Trustee at its Corporate Trust Office, with a copy to:
_________________, _______________________________________,
Attention: Corporate Trust and Agency Group, (e) in the case of
Moody's Investors Service, Inc., to Moody's Investors Service,
Inc., ABS Monitoring Department, 99 Church Street, New York, New
York 10007, (f) in the case of Standard &
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Poor's Ratings Group, to Standard & Poor's Ratings Group, 26
Broadway (20th Floor), New York, New York 10004, Attention: Asset
Backed Surveillance Department,(g) in the case of Fitch Investors
Service, Inc., to Fitch Investors Service, Inc., One State Street
Plaza, New York, New York 10004, Attention: Structured Finance
Surveillance and (h) in the case of Duff & Phelps Credit Rating
Co., to Duff & Phelps Credit Rating Co., 55 East Monroe Street,
Chicago, Illinois 60603, Attention: Structured Finance Research &
Monitoring, or at such other address as shall be designated by
such party in a written notice to the other parties.
SECTION 9.04. GOVERNING LAW. THIS 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 LAWS
PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 9.05. SEVERABILITY OF PROVISIONS. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the holders thereof.
SECTION 9.06. ASSIGNMENT. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may not be
assigned by the Seller without the prior written consent of
Noteholders whose Notes evidence not less than 66% of the
Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and of Certificateholders whose Certificates
evidence not less than 66% of the Voting Interests as of the
close of the preceding Distribution Date. The Seller shall
provide notice of any such assignment to the Rating Agencies.
SECTION 9.07. THIRD-PARTY BENEFICIARIES. This Agreement
shall inure to the benefit of and be binding upon the parties
hereto, the Noteholders, the Certificateholders and their respec-
tive successors and permitted assigns. Except as otherwise
provided in Section 6.01 or in this Article IX, no other person
shall have any right or obligation hereunder.
SECTION 9.08. 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 9.09. HEADINGS AND CROSS-REFERENCES. The various
headings in this Agreement are included for convenience only and
shall not affect the meaning or interpretation of any provision
of this Agreement.
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SECTION 9.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Seller
hereby acknowledges and consents to any mortgage, pledge, assign-
ment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders and (only to the extent expressly provided in the
Indenture) the Certificateholders of all right, title and
interest of the Issuer in, to and under the Receivables and/or
the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 9.11. NO PETITION COVENANTS. 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 final distribution with respect to the Notes and the
Certificates to the Note Distribution Account or the Certificate
Distribution Account, as applicable, 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.
SECTION 9.12. LIMITATION OF LIABILITY OF INDENTURE TRUSTEE
AND OWNER TRUSTEE.
(a) Notwithstanding anything contained herein to the
contrary, this Agreement has been acknowledged and accepted by
__________________________________ not in its individual capacity
but solely as Indenture Trustee and in no event shall
__________________________________ 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 pursuant hereto, as
to all of which recourse shall be had solely to the assets of the
Issuer.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been executed by
________________________ not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no
event shall ________________________ in its individual capacity
or, except as expressly provided in the Trust Agreement, as Owner
Trustee of the Issuer 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 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 Article VI of the Trust Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.
CAPITAL AUTO RECEIVABLES
ASSET TRUST ______
By: ________________________, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
By:______________________________
Name:
Title:
CAPITAL AUTO RECEIVABLES, INC.,
Seller
By:___________________________________
Name:
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION
By:___________________________________
Name:
Title:
Acknowledged and Accepted:
__________________________________,
not in its individual capacity
but solely as Indenture Trustee,
By: ______________________________
Name:
Title:
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EXHIBIT A
LOCATIONS OF SCHEDULE OF RECEIVABLES
The Schedule of Receivables is
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. General Motors Acceptance Corporation
4. Capital Auto Receivables, Inc.
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DOCUMENT 11(A)
APPENDIX A
All terms defined in this Appendix shall have the defined
meanings when used in the Basic Documents, unless otherwise
defined therein.
As used in this Appendix and in the Basic Documents,
accounting terms not defined in this Appendix or in the Basic
Documents, and accounting terms partly defined in this Appendix
or in the Basic Documents, shall have the respective meanings
given to them under generally accepted accounting principles. To
the extent the definitions of accounting terms in this Appendix
or in the Basic Documents are inconsistent with the meanings of
such terms under generally accepted accounting principles, the
definitions contained in this Appendix or in the Basic Documents
shall control.
The word "or" is not exclusive. Definitions contained in
this Appendix are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
ACCOUNTANTS' REPORT: The report described in Section 4.02
of the Trust Sale and Servicing Agreement.
ACT: An Act as specified in Section 11.3(a) of the
Indenture.
ACTUAL PAYMENT: With respect to a Distribution Date and to
a Scheduled Interest Receivable, all payments received by the
Servicer from or for the account of the Obligor during the
related Monthly Period (and, in the case of the first Monthly
Period, all payments received by the Servicer from or for the
account of the Obligor on or after the Cutoff Date) except for
any Overdue Payments or Supplemental Servicing Fees. Actual
Payments do not include Applied Payments Ahead.
ADDITIONAL SERVICING: With respect to any Distribution
Date, an amount equal to the lesser of (i) the amount by which
(A) the amount equal to the aggregate amount of the Basic
Servicing Fee for such Distribution Date and all prior
Distribution Dates exceeds (B) the aggregate amount of Additional
Servicing paid to the Servicer on all prior Distribution Dates
and (ii) the amount, if any, by which the amount on deposit in
the Reserve Account on such Distribution Date (after giving
effect to all deposits, withdrawals and payments affecting the
Reserve Account other than Additional Servicing and payments to
the Seller) exceeds the Specified Reserve Account Balance. For
purposes of this definition, it is understood that Additional
Servicing equals zero on any Distribution Date unless all
payments described in Sections 4.06(c)(ii) through (vi) of the
Trust Sale and Servicing Agreement have been paid.
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ADMINISTRATION AGREEMENT: That certain Administration
Agreement, dated as of the Closing Date, among GMAC, as
Administrator, the Trust and the Indenture Trustee, as amended
and supplemented from time to time.
ADMINISTRATIVE PURCHASE PAYMENT: With respect to a
Distribution Date and to an Administrative Receivable purchased
as of the last day of a Monthly Period, (i) in the case of a
Scheduled Interest Receivable, a release of all claims for
reimbursement of Scheduled Interest Advances made on such
Receivable plus a payment equal to the sum of: (A) the Scheduled
Payments on such Receivable due after the last day of the related
Monthly Period minus the Rebate, (B) any reimbursement made
pursuant to the last sentence of subsection 5.04(a) of the Trust
Sale and Servicing Agreement with respect to such Receivable and
(C) all past due Scheduled Payments with respect to which a
Scheduled Interest Advance has not been made or (ii) in the case
of a Simple Interest Receivable, a payment equal to the Amount
Financed minus that portion of all payments made by or on behalf
of the related Obligor on or prior to the last day of the related
Monthly Period allocable to principal.
ADMINISTRATIVE RECEIVABLE: A Receivable which the Servicer
is required to purchase as of the last day of the related Monthly
Period pursuant to Section 3.08 of the Pooling and Servicing
Agreement or which the Servicer has elected to repurchase as of
the last day of the related Monthly Period pursuant to Section
8.01(a) of the Trust Sale and Servicing Agreement.
ADMINISTRATOR: GMAC or any successor Administrator under
the Administration Agreement.
AFFILIATE: With respect to any specified Person, any other
Person controlling, 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 terms "controlling"
and "controlled" have meanings correlative to the foregoing.
AGENCY OFFICE: The office of the Issuer maintained pursuant
Section 3.2 of the Indenture.
AGGREGATE AMOUNT FINANCED: $____________________, which
represents the aggregate of the Amount Financed under all of the
Receivables.
AGGREGATE NET LOSSES: With respect to a Monthly Period, the
aggregate Principal Balance of all Receivables newly designated
during such Monthly Period as Liquidating Receivables minus
Liquidation Proceeds collected during such Monthly Period with
respect to all Liquidating Receivables.
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AGGREGATE NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With
respect to a Distribution Date, the sum of the Noteholders'
Interest Distributable Amounts for all classes of Notes and the
Noteholders' Interest Carryover Shortfall as of the preceding
Distribution Date.
AGGREGATE NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to a Distribution Date, the sum of the Noteholders'
Principal Distributable Amounts for all classes of Notes and the
Noteholders' Principal Carryover Shortfall as of the preceding
Distribution Date.
AGGREGATE NOTE PRINCIPAL BALANCE: With respect to the close
of a Distribution Date, the sum of the Note Principal Balances
for all classes of Notes.
AGGREGATE PRINCIPAL BALANCE: As of any date, the sum of the
Principal Balances of all outstanding Receivables (other than
Liquidating Receivables) held by the Trust on such date.
AMOUNT FINANCED: With respect to a Receivable, the
aggregate amount advanced under such Receivable toward the
purchase price of the Financed Vehicle, including accessories,
insurance premiums, service and warranty contracts and other
items customarily financed as part of retail automobile
instalment sale contracts and related costs, less (i) (A) in the
case of a Scheduled Interest Receivable, payments due from the
related Obligor prior to the Cutoff Date allocable to principal
and (B) in the case of a Simple Interest Receivable, payments
received from the related Obligor prior to the Cutoff Date
allocable to principal and (ii) any amount allocable to the
premium for physical damage insurance covering the Financed
Vehicle force-placed by the Servicer.
ANNUAL PERCENTAGE RATE: With respect to a Receivable, the
annual rate of finance charges stated in such Receivable.
APPLICABLE TRUSTEE: So long as the Aggregate Note Principal
Balance is greater than zero and the Indenture has not been
discharged in accordance with its terms, the Indenture Trustee,
and thereafter, the Owner Trustee.
APPLIED PAYMENT AHEAD: With respect to a Distribution Date
and to a Scheduled Interest Receivable on which the Actual
Payment is less than the Scheduled Payment, the Deferred
Prepayment to the extent the Scheduled Payment exceeds the Actual
Payment.
AUTHORIZED OFFICER: With respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner
Trustee in matters relating to the Issuer and who is identified
on the list of Authorized Officers delivered by the Owner Trustee
to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice
President or more senior officer of the Administrator who is
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authorized to act for the Administrator in matters relating to
the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement and who is identified on the list of
Authorized Officers delivered by the Administrator to the
Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
AVAILABLE INTEREST: With respect to any Distribution Date,
the sum of the following amounts with respect to the related
Monthly Period: (i) that portion of all collections on
Receivables held by the Trust (other than Liquidating
Receivables) allocable to interest or Prepayment Surplus
(including, in the case of Scheduled Interest Receivables, the
interest portion of Applied Payments Ahead but excluding Excess
Payments made during such Monthly Period that are treated as
Payments Ahead), (ii) Liquidation Proceeds to the extent
allocable to interest in accordance with the Servicer's customary
servicing procedures, (iii) all Simple Interest Advances, (iv)
all Scheduled Interest Advances to the extent allocable to
interest and (v) the Warranty Payment or the Administrative
Purchase Payment for each Receivable that the Seller repurchased
or the Servicer purchased during such Monthly Period to the
extent allocable to accrued interest or Prepayment Surplus; LESS
an amount equal to the sum of (A) all amounts received on any
Scheduled Interest Receivable (other than a Liquidating
Receivable) to the extent of the Outstanding Scheduled Interest
Advances allocable to interest with respect to such Receivable,
(B) all Liquidation Proceeds with respect to Scheduled Interest
Receivables to the extent of the Outstanding Scheduled Interest
Advances thereon allocable to interest, (C) any Excess Simple
Interest Collections and (D) Liquidation Proceeds with respect to
Simple Interest Receivables allocable to accrued and unpaid
interest thereon (but not including interest for the then current
Monthly Period), but only to the extent of any Outstanding Simple
Interest Advances.
AVAILABLE PRINCIPAL: With respect to any Distribution Date,
the sum of the following amounts with respect to the related
Monthly Period: (i) that portion of all collections on
Receivables held by the Trust (other than Liquidating
Receivables) allocable to principal (including, in the case of
Scheduled Interest Receivables, the principal portion of Applied
Payments Ahead but excluding Excess Payments made during such
Monthly Period that are treated as Payments Ahead), (ii)
Liquidation Proceeds to the extent allocable to principal in
accordance with the Servicer's customary servicing procedures,
(iii) all Scheduled Interest Advances to the extent allocable to
principal, (iv) to the extent allocable to principal, the
Warranty Payment or the Administrative Purchase Payment for each
Receivable that the Seller repurchased or the Servicer purchased
during such Monthly Period and (vi) all Prepayments to the extent
allocable to principal; LESS an amount equal to the sum of (A)
all amounts received on any Scheduled Interest Receivable (other
than a Liquidating Receivable) to the extent of the Outstanding
Scheduled Interest Advances allocable to principal with respect
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to such Receivable, (B) all Liquidation Proceeds with respect to
Scheduled Interest Receivables to the extent of the Outstanding
Scheduled Interest Advances allocable to principal and (C)
amounts representing reimbursement for Liquidation Expenses
pursuant to subsection 4.06(a)(iii) of the Trust Sale and
Servicing Agreement.
BASIC DOCUMENTS: The Certificate of Trust, the Trust Agree-
ment, the Pooling and Servicing Agreement, the Trust Sale and
Servicing Agreement, the Custodian Agreement, the Administration
Agreement, the Indenture, the Note Depository Agreement, the
Certificate Depository Agreement and the other documents and
certificates delivered in connection therewith.
BASIC SERVICING FEE: With respect to a Distribution Date,
the fee payable to the Servicer for services rendered during the
related Monthly Period, which shall be equal to one-twelfth of
the Basic Servicing Fee Rate multiplied by the Aggregate
Principal Balance of all Receivables held by the Trust as of the
first day of such Monthly Period.
BASIC SERVICING FEE RATE: ___% per annum.
BENEFIT PLAN: Any of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section
4975 (e)(1) of the Code or (iii) any entity whose underlying
assets include plan assets by reason of a plan's investment in
such entity.
BOOK-ENTRY CERTIFICATES: A beneficial interest in the
Certificates, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section
3.11 of the Trust Agreement.
BOOK-ENTRY NOTES: A beneficial interest in the Notes,
ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.10 of the
Indenture.
BUSINESS DAY: Any day other than a Saturday, a Sunday or
any other day on which banks in New York, New York; Detroit,
Michigan or Chicago, Illinois may, or are required to, remain
closed.
BUSINESS TRUST STATUTE: Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code 3801 et seq., as the same may be
amended from time to time.
CARI: Capital Auto Receivables, Inc., a Delaware
corporation.
CERTIFICATEHOLDER: A Person in whose name a Certificate is
registered pursuant to the terms of the Trust Agreement.
CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL: With
respect to the close of any Distribution Date, the excess of
(i) the Certificateholders' Interest Distributable Amount for
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such Distribution Date over (ii) the amount that was actually
deposited in the Certificate Distribution Account on such current
Distribution Date in respect of interest on the Certificates.
CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the sum of (i) the Certificate-
holders' Monthly Interest Distributable Amount for such Distribu-
tion Date, (ii) the Certificateholders' Interest Carryover
Shortfall as of the close of the preceding Distribution Date and
(iii) one month's interest at the Pass Through Rate on the sum of
(a) any outstanding Noteholders' Principal Carryover Shortfall
and (b) any outstanding Certificateholders' Principal Carryover
Shortfall, each as of the close of the preceding Distribution
Date.
CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT:
With respect to any Distribution Date, interest equal to one-
twelfth of the Pass Through Rate multiplied by the Certificate
Balance as of the last day of the related Monthly Period (or, in
the case of the first Distribution Date, as of the Closing Date).
CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT:
With respect to any Distribution Date, the lesser of (i) the
Certificateholders' Percentage of the Principal Distributable
Amount for such Distribution Date and (ii) the Certificate
Balance as of the close of the preceding Distribution Date.
CERTIFICATEHOLDERS' PERCENTAGE: With respect to any Distri-
bution Date, 100% minus the Noteholders' Percentage for such
Distribution Date.
CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: With re-
spect to the close of any Distribution Date, the excess of
(i) the Certificateholders' Principal Distributable Amount for
such Distribution Date over (ii) the amount that was actually
deposited in the Certificate Distribution Account on such current
Distribution Date in respect of Certificate Balance.
CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the sum of (a) the lesser of
(i) the Certificateholders' Percentage of the Principal
Distributable Amount for such Distribution Date and (ii) the
Certificate Balance plus (b) any outstanding Certificateholders'
Principal Carryover Shortfall as of the close of the preceding
Distribution Date. In addition, on the Final Scheduled
Distribution Date, the amount required to be distributed to
Certificateholders in respect of the Certificate Balance and
Certificateholders' Principal Carryover Shortfall shall include
the lesser of (i) the sum of (a) the principal portion of any
Scheduled Payments of principal due and remaining unpaid on each
Scheduled Interest Receivable and (b) any principal due and
remaining unpaid on each Simple Interest Receivable, in each case
in the Trust as of the last day of the related Monthly Period and
(ii) the amount that is necessary (after giving
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effect to the other amounts to be deposited in the Certificate
Distribution Account on such Distribution Date and allocable to
payments in respect of the Certificate Balance and
Certificateholders' Principal Carryover Shortfall) to reduce the
Certificate Balance and Certificateholders' Principal Carryover
Shortfall to zero, in either case after giving effect to any
required distribution of the Aggregate Noteholders' Principal
Distributable Amount to the Note Distribution Account. In
addition, on any Distribution Date on which, after giving effect
to all distributions to the Servicer (other than Additional
Servicing), the Noteholders and the Certificateholders on such
Distribution Date, (i) the outstanding principal balance of the
Notes is zero and (ii) the amount on deposit in the Reserve
Account is equal to or greater than the Certificate Balance and
Certificateholders' Principal Carryover Shortfall,
Certificateholders' Principal Distributable Amount shall include
an amount equal to such Certificate Balance and
Certificateholders' Principal Carryover Shortfall.
CERTIFICATE: Any one of the ____% Asset Backed Certificates
executed by the Owner Trustee and authenticated by the Owner
Trustee in substantially the form set forth in Exhibit A to the
Trust Agreement.
CERTIFICATE BALANCE: Initially, as of the Closing Date,
$_____________ and, on any Distribution Date thereafter, the
initial Certificate Balance reduced by (i) all distributions in
respect of the Certificateholders' Principal Distributable Amount
actually made on or prior to such date to Certificateholders,
(ii) the Noteholders' Principal Carryover Shortfall as of the
close of the preceding Distribution Date and (iii) the
Certificateholders' Principal Carryover Shortfall as of the
preceding Distribution Date.
CERTIFICATE DEPOSITORY AGREEMENT: The Agreement, dated as
of the Closing Date, among the Trust, the Administrator and The
Depository Trust Company (as the initial Clearing Agency),
relating to the Certificates and substantially in the form set
forth in EXHIBIT C to the Trust Agreement, as the same may be
amended and supplemented from time to time.
CERTIFICATE DISTRIBUTION ACCOUNT: The account designated
as such, established and maintained pursuant to Section 5.1(a) of
the Trust Agreement.
CERTIFICATE OF TRUST: The certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust
Agreement to be filed for the Trust pursuant to Section 3810(a)
of the Business Trust Statute.
CERTIFICATE OWNER: With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-
Entry Certificate, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant
or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
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CERTIFICATE POOL FACTOR: With respect to any Distribution
Date, a seven-digit decimal figure computed by the Servicer equal
to the remaining Certificate Balance as of the close of such
Distribution Date divided by the initial Certificate Balance.
CERTIFICATE REGISTER: The register of Certificates
specified in Section 3.4 of the Trust Agreement.
CERTIFICATE REGISTRAR: The registrar at any time of the
Certificate Register, appointed pursuant to Section 3.4(a) of the
Trust Agreement.
CHARGE-OFF RATE: With respect to a Distribution Date, the
Aggregate Net Losses with respect to the Receivables for the
related Monthly Period expressed, on an annualized basis, as a
percentage of the average of (i) the Aggregate Principal Balance
on the last day of the Monthly Period preceding the related
Monthly Period and (ii) the Aggregate Principal Balance on the
last day of the related Monthly Period.
[CLASS A-1 NOTES: The Class A-1 _.__% Asset Backed Notes
in the aggregate principal amount of $___________ issued pursuant
to the Indenture.]
[CLASS A-2 NOTES: The Class A-2 _.__% Asset Backed Notes
in the aggregate principal amount of $__________ issued pursuant
to the Indenture.]
[CLASS A-3 NOTES: The Class A-3 _.__% Asset Backed Notes
in the aggregate principal amount of $__________ issued pursuant
to the Indenture.]
[CLASS A-4 NOTES: The Class A-4 _.__% Asset Backed Notes
in the aggregate principal amount of $___________ issued pursuant
to the Indenture.]
[CLASS A-5 NOTES: The Class A-5 _.__% Asset Backed Notes
in the aggregate principal amount of $___________ issued pursuant
to the Indenture.]
[CLASS A-6 NOTES: The Class A-6 _.__% Asset Backed Notes
in the aggregate principal amount of $________________ issued
pursuant to the Indenture.]
CLEARING AGENCY: An organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
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CLEARING AGENCY PARTICIPANT: A securities broker, dealer,
bank, trust company, clearing corporation or other financial
institution or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
CLOSING DATE: __________, 1994.
CODE: The Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated
thereunder.
COLLATERAL: The collateral specified in the Granting Clause
of the Indenture.
COLLECTION ACCOUNT: The account designated as such,
established and maintained pursuant to Section 5.01(a)(i) of the
Trust Sale and Servicing Agreement.
CORPORATE TRUST OFFICE: With respect to the Indenture
Trustee or the Owner Trustee, the principal office at which at
any particular time the corporate trust business of the Indenture
Trustee or Owner Trustee, respectively, shall be administered,
which offices at the Closing Date are located, in the case of the
Indenture Trustee, at ________________________,
______________________________________, Attn: Corporate Trust
Division, and in the case of the Owner Trustee, at ____
________________, _______________________ Attn: Corporate Trust
and Agency Group.
CUSTODIAN: GMAC, as Servicer, or another custodian named
from time to time in the Custodian Agreement.
CUSTODIAN AGREEMENT: The Custodian Agreement, dated as of
the Closing Date, between the Custodian and CARI, as amended or
supplemented from time to time.
CUTOFF DATE: _________, 1994.
DEALER: The seller of automobiles or light trucks that
originated one or more of the Receivables and assigned the
respective Receivable, directly or indirectly, to GMAC under an
existing agreement between such seller and GMAC or between such
seller and General Motors, as applicable.
DEALER AGREEMENT: An existing agreement between GMAC and
a Dealer with respect to a Receivable.
DEFAULT: Any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
DEFERRED PREPAYMENT: With respect to the opening of
business on a Distribution Date and to a Scheduled Interest
Receivable, the amount, if any, held by the Servicer pursuant to
subsection 5.01(d) of the Trust Sale and Servicing Agreement or
in the Payment Ahead Servicing Account with respect to such
Receivable.
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DEFINITIVE NOTES: The Notes issued in the form of
definitive notes pursuant to Section 2.12 or Section 2.15 of the
Indenture.
DELINQUENCY PERCENTAGE: With respect to a Distribution
Date, the ratio of all outstanding Receivables which are 61 days
or more delinquent as of the last day of the related Monthly
Period, determined in accordance with the Servicer's normal
practices, divided by the number of outstanding Receivables on
the last day of such Monthly Period.
DELIVERY: When used with respect to Designated Account
Property, "Delivery" means:
(i) with respect to certificated securities, bankers'
acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery (collectively, the
"Physical Property"), transfer thereof to the Indenture
Trustee in accordance with Section 8-313(1)(a), Section
8-313(1)(d)(i) or Section 8-313(1)(g) of the UCC, and that
any such Physical Property that is in registered form has
been registered in the name of the Indenture Trustee or its
nominee;
(ii) with respect to any such Designated Account
Property that is a book-entry security held through the
Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance
with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: (A) book-entry
registration of such Designated Account Property to an
appropriate book-entry account maintained with a Federal
Reserve Bank by the Indenture Trustee or by a custodian and
issuance to the Indenture Trustee or to such custodian, as
the case may be, of a deposit advice or other written
confirmation of such book-entry registration, (B) the making
by any such custodian of entries in its books and records
identifying such book-entry security held through the
Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Indenture Trustee and
indicating that such custodian holds such Designated Account
Property solely as agent for the Indenture Trustee, and the
making by the Indenture Trustee of entries in its books and
records establishing that it holds such Designated Account
Property solely as Indenture Trustee under the terms of
Section 5.01 of the Trust Sale and Servicing Agreement and
(C) such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of
ownership of any such Designated Account Property to the
Indenture Trustee, consistent with changes in applicable law
or regulations or the interpretation thereof; and
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<PAGE>52
(iii) with respect to any such Designated Account
Property that is an uncertificated security under Article
8 of the UCC and that is not governed by clause (ii) above,
registration of the transfer to, and ownership of such
Designated Account Property by, the Indenture Trustee or its
nominee by the issuer of such Designated Account Property.
DEPOSITORY AGREEMENTS: The Note Depository Agreement and
the Certificate Depository Agreement, collectively.
DESIGNATED ACCOUNT PROPERTY: The Designated Accounts, all
amounts and investments held from time to time in any Designated
Account (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or
otherwise), including the Reserve Account Initial Deposit, and
all proceeds of the foregoing.
DESIGNATED ACCOUNTS: The Collection Account, the Note
Distribution Account and the Reserve Account, collectively.
DETERMINATION DATE: The tenth day of each calendar month,
or if such tenth day is not a Business Day, the next succeeding
Business Day.
DISTRIBUTION DATE: With respect to a Monthly Period, the
15th day of the next succeeding calendar month or, if such 15th
day is not a Business Day, the next succeeding Business Day,
commencing ___________, 1994.
ELIGIBLE DEPOSIT ACCOUNT: Either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account
with the corporate trust department of a depository institution
organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution have
a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade.
ELIGIBLE INSTITUTION: Either (i) the corporate trust
department of the Indenture Trustee or the Owner Trustee or
(ii) a depository institution organized under the laws of the
United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank),
(A) which has either (1) a long-term unsecured debt rating
acceptable to the Rating Agencies or (2) a short-term unsecured
debt rating or certificate of deposit rating acceptable to the
Rating Agencies and (B) whose deposits are insured by the FDIC.
ELIGIBLE INVESTMENTS: Book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which (at the time made) evidence:
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(i) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of
America;
(ii) demand deposits, time deposits or certificates
of deposit of any depository institution or trust company
incorporated under the laws of the United States of America
or any state thereof (or any domestic branch of a foreign
bank) and subject to supervision and examination by Federal
or State banking or depository institution authorities;
provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other
than such obligations the rating of which is based on the
credit of a Person other than such depository institution
or trust company) thereof shall have a credit rating from
each of the Rating Agencies in the highest investment
category granted thereby;
(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 or common trust funds
having a rating from each of the Rating Agencies in the
highest investment category granted thereby for money market
funds (including funds for which the Indenture Trustee or
the Owner Trustee or any of their respective affiliates is
investment manager or advisor, including The First National
Bank of Chicago Corporate Trust Short Term Investment Fund,
so long as such fund shall have such rating);
(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 Person with the
Required Deposit Rating or otherwise approved by the Rating
Agencies;
(vii) (solely in the case of the Reserve Account) the
Notes; and
(viii) any other investment permitted by each of the
Rating Agencies;
in each case, other than as permitted by the Rating Agencies,
maturing (A) not later than the Business Day immediately
preceding the next Distribution Date or (B) on such next
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Distribution Date if either (x) such investment is in the
institution with which the Note Distribution Account or the
Certificate Distribution Account, as the case may be, is then
maintained or (y) the Indenture Trustee (so long as the short-
term unsecured debt obligations of the Indenture Trustee are
rated at least P-1 by Moody's Investors Service, Inc. and A-1 by
Standard & Poor's Ratings Group on the date such investment is
made) shall advance funds on such Distribution Date to the Note
Distribution Account or the Certificate Distribution Account, as
the case may be, in the amount payable on such investment on such
Distribution Date pending receipt thereof to the extent necessary
to make distributions on the Notes or the Certificates, as the
case may be, on such Distribution Date; provided, however, that
subject to the conditions and limitations set forth in subsection
5.01(b)(i) of the Trust Sale and Servicing Agreement, funds in
the Reserve Account may be invested in securities that will not
mature prior to each Distribution Date. The provisions in
clauses (ii), (iii) and (iv) above requiring that certain
investments be rated in the highest investment category granted
by each Rating Agency require (a) such rating from Fitch
Investors Service Inc. only if Fitch Investors Service Inc. is
then rating such investment and (b) such rating from Duff &
Phelps Credit Rating Co. only if Duff & Phelps Credit Rating Co.
is then rating such investment. For purposes of the foregoing,
unless the Indenture Trustee objects at the time an investment is
made, the Indenture Trustee shall be deemed to have agreed to
make such advance with respect to such investment.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
EVENT OF DEFAULT: An event described in Section 5.1 of the
Indenture.
EXCESS PAYMENT: With respect to a Distribution Date and a
Scheduled Interest Receivable, the portion of an Actual Payment
on such Receivable in excess of the Scheduled Payment thereon.
EXCESS SIMPLE INTEREST COLLECTIONS: With respect to a
Distribution Date, the excess, if any, of (i) all payments
received during the related Monthly Period on all Simple Interest
Receivables to the extent allocable to interest over (ii) the
amount of interest that would be due during the related Monthly
Period on all Simple Interest Receivables assuming that the
payment on each such Receivable was received on its respective
due date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended.
EXECUTIVE OFFICER: With respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President,
the Secretary or the Treasurer of such corporation; and with
respect to any partnership, any general partner thereof.
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EXEMPT DEPOSIT DATE: A Distribution Date which is not a
Payment Date.
EXPENSES: The expenses described in Section 6.9 of the
Trust Agreement.
FINAL SCHEDULED DISTRIBUTION DATE: __________, ____.
FINAL SCHEDULED PAYMENT DATE: With respect to a class of
Notes, the date set forth below opposite such Notes:
[Class A-1 Notes: November 15, 199_]
[Class A-2 Notes: January 18, 199_]
[Class A-3 Notes: April 15, 199_]
[Class A-4 Notes: October 17, 199_]
[Class A-5 Notes: October 16, 199_]
[Class A-6 Notes: October 15, 199_]
FINANCED VEHICLE: An automobile or light truck, together
with all accessories thereto, securing an Obligor's indebtedness
under a Receivable.
GENERAL MOTORS: General Motors Corporation, a Delaware
corporation.
GMAC: General Motors Acceptance Corporation, a corporation
incorporated under the New York Banking Law relating to
investment companies.
GRANT: To mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create and
grant a lien upon, a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture.
A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of,
the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or
other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is
or may be entitled to do or receive thereunder or with respect
thereto.
HOLDER: The Person in whose name a Note or Certificate is
registered on the Note Register or the Certificate Register, as
applicable.
INDEMNIFIED PARTIES: The Persons specified in Section 6.9
of the Trust Agreement.
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INDENTURE: The Indenture, dated as of the Closing Date,
between the Issuer and the Indenture Trustee, as amended and
supplemented from time to time.
INDENTURE Trustee: __________________________________, a
_____________________________ not in its individual capacity but
solely as trustee under the Indenture, or any successor trustee
under the Indenture.
INDEPENDENT: When used with respect to any specified
Person, that the Person (i) is in fact independent of the Issuer,
any other obligor upon the Notes, the Seller and any Affiliate of
any of the foregoing Persons, (ii) does not have any direct
financial interest or any material indirect financial interest in
the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons and (iii) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or person
performing similar functions.
INDEPENDENT CERTIFICATE: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, made by an Inde-
pendent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reason-
able care, and such opinion or certificate shall state that the
signer has read the definition of "Independent" in the Indenture
and that the signer is Independent within the meaning thereof.
INDIRECT PARTICIPANT: A securities broker, dealer, bank,
trust company or other Person that clears through or maintains a
custodial relationship with a Clearing Agency Participant, either
directly or indirectly.
INSOLVENCY EVENT: With respect to a specified Person,
(i) the entry of a decree or order by a court, agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for such
Person, in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of such Person's affairs, and the
continuance of any such decree or order unstayed and in effect
for a period of 90 consecutive days; (ii) the consent by such
Person to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating
to such Person or of or relating to substantially all of such
Person's property or (iii) such Person shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations.
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INSURANCE POLICY: With respect to a Receivable, an
insurance policy covering physical damage, credit life, credit
disability, theft, mechanical breakdown or similar event with
respect to the related Financed Vehicle.
INTERCOMPANY ADVANCE AGREEMENT: The Intercompany Advance
Agreement dated as of December 1, 1992, between CARI and GMAC, as
amended and supplemented from time to time.
INTEREST RATE: With respect to each class of Notes, the per
annum rate set forth below:
[Class A-1 Notes: _.__%]
[Class A-2 Notes: _.__%]
[Class A-3 Notes: _.__%]
[Class A-4 Notes: _.__%]
[Class A-5 Notes: _.__%]
[Class A-6 Notes: _.__%]
INVESTMENT EARNINGS: Investment earnings on funds deposited
in the Designated Accounts and the Payment Ahead Servicing
Account, net of losses and investment expenses.
ISSUER: The party named as such in the Trust Sale and
Servicing Agreement and in the Indenture until a successor
replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the
TIA, each other obligor on the Notes.
ISSUER ORDER and ISSUER REQUEST: A written order or request
signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
LIEN: Any security interest, lien, charge, pledge, equity
or encumbrance of any kind other than tax liens, mechanics' liens
and any liens that attach by operation of law.
LIQUIDATING RECEIVABLE: A Receivable as to which the
Servicer (i) has reasonably determined, in accordance with its
customary servicing procedures, that eventual payment of amounts
owing on such Receivable is unlikely or (ii) has repossessed and
disposed of the Financed Vehicle.
LIQUIDATION EXPENSES: With respect to a Liquidating Receiv-
able without recourse to a Dealer, $300.00 as an allowance for
amounts charged to the account of the Obligor, in keeping with
the Servicer's customary procedures, for refurbishing and
disposition of the Financed Vehicle and other out-of-pocket costs
related to the liquidation; with respect to a Liquidating
Receivable with recourse to a Dealer, $0.
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LIQUIDATION PROCEEDS: With respect to a Liquidating Receiv-
able, all amounts realized with respect to such Receivable net of
amounts that are required to be refunded to the Obligor on such
Receivable.
MONTHLY ADVANCE: As of a Distribution Date, either a
Scheduled Interest Advance or a Simple Interest Advance, or both,
as applicable, in respect of the related Monthly Period.
MONTHLY PERIOD: With respect to a Distribution Date, the
calendar month preceding the month in which such Distribution
Date occurs.
MONTHLY REMITTANCE CONDITION: Any of the conditions
specified in subsection 5.01(d) of the Trust Sale and Servicing
Agreement.
NOTEHOLDERS: Holders of record of the Notes pursuant to the
Indenture and, with respect to any class of Notes, holders of
record of such class of Notes pursuant to the Indenture.
NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL: As of the close
of any Distribution Date, the excess of the Aggregate
Noteholders' Interest Distributable Amount for such Distribution
Date over the amount that was actually deposited in the Note
Distribution Account on such current Distribution Date in respect
of interest.
NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect
to any class of Notes and any Distribution Date, the product of
(i) the outstanding principal balance of such class of Notes on
the preceding Distribution Date after giving effect to all
payments of principal in respect of such class of Notes on such
preceding Distribution Date (or, in the case of the first
Distribution Date, the outstanding principal balance on the
Closing Date) and (ii)(A) in the case of Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the
product of the Interest Rate for such class and a fraction, the
numerator of which is the number of days elapsed from and
including the prior Distribution Date (or, in the case of the
first Distribution Date, from and including the Closing Date) to
but excluding such Distribution Date and the denominator of which
is 360, (B) in the case of the Class A-5 Notes and the Class A-6
Notes, one-twelfth of the Interest Rate for such class (or, in
the case of the first Distribution Date, the Interest Rate for
such class multiplied by a fraction, the numerator of which is 24
and the denominator of which is 360).
NOTEHOLDERS' PERCENTAGE: 100% (i) with respect to any
Distribution Date, until the amount of principal required to be
paid on the Class A-1 Notes on such Distribution Date, if any,
has been paid in full and (ii) until the principal balance of the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes has
been paid (or provided for) in full; and 96.75% thereafter until
the principal balance of all of the Notes is paid (or provided
for) in full; and zero thereafter; provided, however,
that if the amount on deposit in the Reserve Account is less
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than 0.75% of the Aggregate Amount Financed on any Distribution
Date, then the Noteholders' Percentage shall mean 100% until all
of the Notes are paid (or provided for) in full or the amount on
deposit in the Reserve Account exceeds the Specified Reserve
Account Balance.
NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the close
of any Distribution Date, the excess of Aggregate Noteholders'
Principal Distributable Amount for such Distribution Date over
the amount that was actually deposited in the Note Distribution
Account on such current Distribution Date in respect of
principal.
NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: On any
Distribution Date, (i) with respect to the Class ___ Notes, the
lesser of (A) $_____________ and (B) the Note Principal Balance
with respect to such class of Notes and (ii) with respect to all
other classes of Notes, the lesser of (A) the remainder of
(I) the Undistributed Amount for the prior Distribution Date plus
the Noteholders' Percentage of the Principal Distributable Amount
minus (II) the Noteholders' Principal Distributable Amount for
each class of Notes then having priority of payment (as described
in Section 8.2(c) of the Indenture) and (B) the Note Principal
Balance with respect to such class of Notes; [provided, that if
the Class A-6 Notes and the Class A-3 Notes have been paid (or
provided for) in full (after giving effect to any amount paid on
the Class A-6 Notes and the Class A-3 Notes on such Distribution
Date) and the outstanding principal balance of the Class A-1
Notes (after giving effect to principal payments on such
Distribution Date) exceeds zero, the Noteholders' Principal
Distributable Amount for the Class A-1 Notes shall also include
an amount (up to such outstanding principal balance) equal to the
excess of (x) the Undistributed Amount for the prior Distribution
Date plus the Noteholders' Percentage of the Principal Distribut-
able Amount over (y) the sum of the Noteholders' Principal
Distributable Amount for all other classes of Notes plus the
amount for the Class A-1 Notes determined pursuant to clause
(i).] In addition, on the Final Scheduled Payment Date for any
class of Notes, the Noteholders' Principal Distributable Amount
for such Notes shall include the amount necessary to reduce the
Note Principal Balance for such class of Notes to zero.
NOTES: [The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes, the Class A-5 Notes and the Class
A-6 Notes.]
NOTE DEPOSITORY: The depository from time to time selected
by the Indenture Trustee on behalf of the Trust in whose name the
Notes are registered prior to the issue of Definitive Notes. The
first Note Depository shall be Cede & Co., the nominee of the
initial Clearing Agency.
NOTE DEPOSITORY AGREEMENT: The agreement, dated as of the
Closing Date, among the Issuer, the Indenture Trustee and The
Depository Trust Company, as the initial Clearing Agency relating
to the Notes, substantially in the form of Exhibit B to the
Indenture, as the same may be amended and supplemented from time
to time.
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NOTE DISTRIBUTION ACCOUNT: The account designated as such,
established and maintained pursuant to Section 5.01(a)(ii) of the
Trust Sale and Servicing Agreement.
NOTE OWNER: With respect to a Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected
on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an Indirect Participant, in
each case in accordance with the rules of such Clearing Agency).
NOTE POOL FACTOR: [With respect to any class of Notes and
any Distribution Date (in the case of the Class A-1 Notes and the
Class A-5 Notes) or any Payment Date (in the case of the Class A-
2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class
A-6 Notes), a seven-digit decimal figure computed by the Servicer
which is equal to the Note Principal Balance for such class as of
the close of such Distribution Date or Payment Date, as
applicable, divided by the initial Note Principal Balance for
such class.]
NOTE PRINCIPAL BALANCE: With respect to any class of Notes
and any Distribution Date, the initial aggregate principal
balance of such class of Notes, reduced by all previous payments
to the Noteholders of such class in respect of principal of such
Notes.
NOTE REGISTER: With respect to any class of Notes, the
register of such Notes specified in Section 2.4 of the Indenture.
NOTE REGISTRAR: The registrar at any time of the Note
Register, appointed pursuant to Section 2.4 of the Indenture.
OBLIGOR: The purchaser or the co-purchasers of the Financed
Vehicle or other person who owes payments under a Receivable.
OFFICER'S CERTIFICATE: A certificate signed by any
Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference
in the Indenture to an officer's certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
OPINION OF COUNSEL: A written opinion of counsel, who may,
except as otherwise expressly provided, be an employee of the
Seller or the Servicer. In addition, for purposes of the
Indenture: (i) such counsel shall be satisfactory to the
Indenture Trustee; (ii) the opinion shall be addressed to the
Indenture Trustee as Trustee and (iii) the opinion shall comply
with any applicable requirements of Section 11.1 of the Indenture
and shall be in form and substance satisfactory to the Indenture
Trustee.
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<PAGE>61
OPTIONAL PURCHASE PERCENTAGE: __%.
OUTSTANDING: With respect to the Notes, as of the date of
determination, all Notes theretofore authenticated and delivered
under the Indenture except:
(i) Notes theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for
cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent in trust for
the Holders of such Notes (it being understood that
Undistributed Amounts shall not be deemed held in trust for
purposes of the foregoing); provided, however, that if such
Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to the Indenture Trustee
is presented that any such Notes are held by a bona fide
purchaser;
PROVIDED, HOWEVER, that in determining whether the Holders of the
requisite Outstanding Amount of the Notes have given any request,
demand, authorization, direction, notice, consent or waiver
hereunder or under any Basic Document, Notes owned by the Issuer,
any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that
the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgor's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon
the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
OUTSTANDING AMOUNT: As of any date, the aggregate principal
amount of all Notes, or a class of Notes, as applicable, Outstanding
at such date.
OUTSTANDING MONTHLY ADVANCES: Outstanding Scheduled Interest
Advances and Outstanding Simple Interest Advances, collectively.
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OUTSTANDING SCHEDULED INTEREST ADVANCES: As of the last day
of a Monthly Period and with respect to a Scheduled Interest
Receivable, the sum of all Scheduled Interest Advances made as of
or prior to such date minus all payments or collections as of or
prior to such date which are specified in subsection 5.04(a) of the
Trust Sale and Servicing Agreement as reducing Outstanding Scheduled
Interest Advances with respect to such Receivable.
OUTSTANDING SIMPLE INTEREST ADVANCES: As of the last day of
a Monthly Period, the sum of all Simple Interest Advances made as
of or prior to such date minus the sum of (i) all payments to the
Servicer as of or prior to such date pursuant to subsection 5.04(b)
of the Trust Sale and Servicing Agreement and (ii) all Excess Simple
Interest Collections paid to the Servicer as of or prior to such
date; provided, however, that Outstanding Simple Interest Advances
shall never be deemed to be less than zero.
OVERDUE PAYMENT: With respect to a Distribution Date and to
a Scheduled Interest Receivable, all payments received by the
Servicer from or for the account of the related Obligor during the
related Monthly Period in excess of any Supplemental Servicing Fees
(excluding any Investment Earnings during the related Monthly
Period), to the extent of the Outstanding Scheduled Interest
Advances relating to such Receivable.
OWNER TRUST ESTATE: All right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to
Article II of the Trust Sale and Servicing Agreement, all funds on
deposit from time to time in the Collection Account and the
Certificate Distribution Account and all other property of the Trust
from time to time, including any rights of the Owner Trustee and the
Trust pursuant to the Trust Sale and Servicing Agreement and the
Administration Agreement.
OWNER TRUSTEE: ________________________, __________________,
or any successor trustee under the Trust Agreement.
PASS THROUGH RATE: ____% per annum.
PAYING AGENT: With respect to the Indenture, the Indenture
Trustee or any other Person that meets the eligibility standards for
the Indenture Trustee specified in Section 6.11 of the Indenture and
is authorized by the Issuer to make the payments to and
distributions from the Collection Account and the Note Distribution
Account, including payment of principal of or interest on the Notes
on behalf of the Issuer. With respect to the Trust Agreement, any
paying agent or co-paying agent appointed pursuant to Section 3.9
of the Trust Agreement that meets the eligibility standards for the
Owner Trustee specified in Section 6.13 of the Trust Agreement, and
initially Bankers Trust Company.
PAYMENT AHEAD: With respect to a Distribution Date and to a
Scheduled Interest Receivable, any Excess Payment (not representing
prepayment in full of such Receivable) that is of an amount such
that the sum of such Excess Payment and the Deferred Prepayment is
equal to or less than three times the Scheduled Payment.
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<PAGE>63
PAYMENT AHEAD SERVICING ACCOUNT: The account designated as
such, established and maintained pursuant to Section 5.01(a)(iv) of
the Trust Sale and Servicing Agreement.
PAYMENT DATE: The 15th day of each _________________________
or, if any such 15th day is not a Business Day, the next succeeding
Business Day, commencing _______________; provided, however, that
if on any two consecutive Distribution Dates any amount is withdrawn
from the Reserve Account pursuant to subsection 4.06(b) of the Trust
Sale and Servicing Agreement, then each subsequent Distribution Date
shall constitute a Payment Date, until the quarterly Payment Date
following the first Distribution Date on which (i) no amount is
withdrawn from the Reserve Account pursuant to subsection 4.06(b)
of the Trust Sale and Servicing Agreement and (ii) the amount on
deposit in the Reserve Account is equal to the Specified Reserve
Account Balance.
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
PHYSICAL PROPERTY: The property described as such in the
definition of "Delivery."
POOLING AND SERVICING AGREEMENT: The Pooling and Servicing
Agreement, dated as of the Closing Date, between GMAC and the
Seller, as amended and supplemented from time to time.
PREDECESSOR NOTE: With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this
definition, any Note authenticated and delivered under Section 2.5
of the Indenture in lieu of a mutilated, lost, destroyed or stolen
Note shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Note.
PREPAYMENT: Any Excess Payment other than a Payment Ahead.
PREPAYMENT SURPLUS: With respect to any Distribution Date on
which a Prepayment is to be applied with respect to a Scheduled
Interest Receivable, that portion of such Prepayment, net of any
Rebate.
PRINCIPAL BALANCE: With respect to any Scheduled Interest
Receivable, as of any date, the Amount Financed minus the sum of the
following amounts: (i) that portion of all Scheduled Payments due
on or after the Cutoff Date and on or prior to such date allocable
to principal, (ii) any Warranty Payment or Administrative Purchase
Payment to the extent allocable to principal and (iii) any
Prepayments applied by the Servicer to reduce the Principal Balance
of such Receivable. With respect to any Simple Interest Receivable,
as of any date, the Amount Financed minus the sum of the following
amounts: (i) that portion of all payments received from the related
Obligor on or prior to such date allocable to principal and (ii) any
Warranty Payment or Administrative Purchase Payment to the extent
allocable to principal.
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PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of: (i) the principal portion of all
Scheduled Payments due with respect to the related Monthly Period
on Scheduled Interest Receivables held by the Trust (other than
Liquidating Receivables) and the principal portion of all payments
received by the Trust during the related Monthly Period on Simple
Interest Receivables held by the Trust (other than Liquidating
Receivables), (ii) the principal portion of all Prepayments received
during the related Monthly Period (except to the extent included in
(i) above) and (iii) the Principal Balance of each Receivable that
the Servicer became obligated to purchase, the Seller became
obligated to repurchase or that became a Liquidating Receivable
during the related Monthly Period (except to the extent included in
(i) or (ii) above).
PROCEEDING: Any suit in equity, action at law or other
judicial or administrative proceeding.
PURCHASED PROPERTY: The property described in Section 2.01 of
the Pooling and Servicing Agreement.
RATING AGENCIES: As of any date, the nationally recognized
statistical rating organizations requested by the Seller to provide
ratings on the Notes and the Certificates which are rating the Notes
and the Certificates on such date.
RATING AGENCY CONDITION: With respect to any action, the
condition that each Rating Agency shall have been given at least 10
days prior notice thereof and that each of the Rating Agencies shall
have notified the Seller, the Servicer and the Issuer in writing
that such action shall not result in a downgrade or withdrawal of
the then current rating of the Notes or the Certificates.
REBATE: With respect to a given date and to a Scheduled
Interest Receivable, the rebate under such Receivable that is or
would be payable to the Obligor for unearned finance charges or any
other charges rebatable to the Obligor upon the payment on such date
of all remaining Scheduled Payments.
RECEIVABLE: A retail instalment sale contract for a Financed
Vehicle that is included in the Schedule of Receivables and all
rights and obligations thereunder.
RECEIVABLE FILE: The documents listed in Section 2.04 of the
Pooling and Servicing Agreement pertaining to a particular
Receivable.
RECEIVABLES PURCHASE PRICE: The amount described in Section
2.02 of the Pooling and Servicing Agreement.
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RECORD DATE: (i) with respect to the Notes and with respect
to any Distribution Date, the close of business on the day
immediately preceding such Distribution Date, or if Definitive Notes
are issued for any class of Notes, with respect to such class of
Notes the last day of the preceding Monthly Period and (ii) with
respect to the Certificates and with respect to any Distribution
Date, the close of business on the day immediately preceding such
Distribution Date, or if Definitive Certificates are issued, the
last day of the preceding Monthly Period.
REDEEMABLE NOTES: [The Class A-6 Notes.]
REDEMPTION DATE: The Distribution Date specified by the
Servicer or the Issuer pursuant to Section 10.1(a) or (b) of the
Indenture, as applicable.
REDEMPTION PRICE: With respect to the [Class A-6 Notes], the
unpaid principal amount of such Notes, plus accrued and unpaid
interest thereon.
REGISTERED HOLDER: The Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
RELEASED ADMINISTRATIVE AMOUNT: With respect to a Distribution
Date and to a purchased Administrative Receivable, the Deferred
Prepayment on such Receivable.
RELEASED WARRANTY AMOUNT: With respect to a Distribution Date
and to a repurchased Warranty Receivable, the Deferred Prepayment
on such Receivable.
REQUIRED DEPOSIT RATING: A rating on short-term unsecured debt
obligations of P-1 by Moody's Investors Service, Inc.; A-1+ by
Standard & Poor's Ratings Group; if rated by Fitch Investors
Service, Inc., F-1+ by Fitch Investors Service, Inc.; and, if rated
by Duff & Phelps Credit Rating Co., D-1+ by Duff & Phelps Credit
Rating Co. Any requirement that short-term unsecured debt
obligations have the "Required Deposit Rating" shall mean that such
short-term unsecured debt obligations have the foregoing required
ratings from each of such rating agencies.
RESERVE ACCOUNT: The account designated as such, established
and maintained pursuant to Section 4.07(a) of the Trust Sale and
Servicing Agreement.
RESERVE ACCOUNT INITIAL DEPOSIT: Cash or Eligible Investments
having a value of at least $_____________.
RESERVE ACCOUNT PROPERTY: As defined in Section 4.07(c) of the
Trust Sale and Servicing Agreement.
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RESPONSIBLE OFFICER: With respect to the Indenture Trustee or
the Owner Trustee, any officer within the Corporate Trust Office of
such trustee, and, with respect to the Servicer, the President, any
Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer or assistant officer of such Person
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.
RETAINED CERTIFICATES: The Certificates retained by the Seller
pursuant to Section 3.10 of the Trust Agreement, with an initial
Certificate Balance of $__________.
REVOLVING NOTE: The Revolving Note issued by CARI to GMAC
under the Intercompany Advance Agreement.
SCHEDULED INTEREST ADVANCE: With respect to a Scheduled
Interest Receivable, the amount, as of the last day of the related
Monthly Period, which the Servicer is required to advance pursuant
to subsection 5.04(a) of the Trust Sale and Servicing Agreement.
SCHEDULED INTEREST RECEIVABLE: Any Receivable that is not a
Simple Interest Receivable. For purposes hereof, all payments with
respect to a Scheduled Interest Receivable shall be allocated to
principal and interest in accordance with the actuarial method.
SCHEDULED PAYMENT: With respect to a Distribution Date and to
a Scheduled Interest Receivable, the payment set forth in such
Receivable due from the Obligor in the related Monthly Period.
SCHEDULE OF RECEIVABLES: The schedule of all Receivables
originally held as part of the Trust and on file at the locations
listed on Exhibit A of the Trust Sale and Servicing Agreement, as
it may be amended from time to time.
SECRETARY OF STATE: The Secretary of State of the State of
Delaware.
SELLER: The Person executing the Trust Sale and Servicing
Agreement as the Seller, or its successor in interest pursuant to
Section 3.03 of the Trust Sale and Servicing Agreement.
SERVICER: The Person executing the Trust Sale and Servicing
Agreement as the Servicer, or its successor in interest pursuant to
Section 6.02 of the Trust Sale and Servicing Agreement.
SERVICER DEFAULT: An event described in Section 7.01 of the
Trust Sale and Servicing Agreement.
SERVICER'S ACCOUNTING: A certificate, completed by and
executed on behalf of the Servicer, in accordance with Section 3.10
of the Pooling and Servicing Agreement.
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SIMPLE INTEREST ADVANCE: The amount, as of the last day of the
related Monthly Period, which the Servicer is required to advance
pursuant to subsection 5.04(b) of the Trust Sale and Servicing
Agreement.
SIMPLE INTEREST METHOD: The method of allocating each monthly
payment on a Simple Interest Receivable to principal and interest
pursuant to which the portion of such payment that is allocated to
interest is equal to the product of the outstanding principal
balance thereon multiplied by the fixed rate of interest applicable
to such Receivable multiplied by the period of time elapsed
(expressed as a fraction of a calendar year) since the preceding
payment of interest with respect to such principal balance was made.
SIMPLE INTEREST RECEIVABLE: Any Receivable under which the
portion of each monthly payment allocable to earned interest and the
portion allocable to the Amount Financed is determined in accordance
with the Simple Interest Method. For purposes hereof, all payments
with respect to a Simple Interest Receivable shall be allocated to
principal and interest in accordance with the Simple Interest
Method.
SPECIFIED RESERVE ACCOUNT BALANCE: With respect to any
Distribution Date, the greater of:
(i) the sum of ____% of the Aggregate Principal Balance
as of the close of business on the last day of the related
Monthly Period plus ____% of the Aggregate Amount Financed;
PROVIDED, HOWEVER, that if on any Distribution Date (x) the
average of the Charge-Off Rates for the preceding three
Monthly Periods exceeds ___% or (y) the average of the
Delinquency Percentages for the preceding three Monthly
Periods exceeds ___%, then the amount specified in this clause
(i) shall be an amount equal to ___% of the Aggregate
Principal Balance as of the close of business on the last day
of the related Monthly Period; and
(ii) ___% of the Aggregate Amount Financed.
For purposes of calculating the average Charge-Off Rate and the
average Delinquency Percentage for the three month periods ending
on __________, 1994 and ___________, 1994, the Servicer shall
calculate the applicable amount for the Receivables during the two
calendar months and one calendar month, respectively, prior to the
Cutoff Date, and shall use such calculations in determining the
three-month average for such amount.
STATE: Any one of the 50 States of the United States of
America or the District of Columbia.
SUPPLEMENTAL SERVICING FEES: With respect to a Distribution
Date, all late fees, prepayment charges and other administrative
fees and expenses or similar charges allowed by applicable law with
respect to Receivables, collected (from whatever source) on the
Receivables held by the Trust during the related Monthly Period.
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TEMPORARY NOTES: The Notes specified in Section 2.3 of the
Indenture.
TOTAL AVAILABLE AMOUNT: With respect to a Distribution Date,
the sum of the Available Interest and the Available Principal for
such Distribution Date, the aggregate Undistributed Amount at the
close of the immediately preceding Distribution Date and the amount
of all cash or other immediately available funds on deposit in the
Reserve Account immediately prior to the Distribution Date.
TOTAL SERVICING FEE: With respect to a Distribution Date, the
sum of the Basic Servicing Fee for such Distribution Date, any
unpaid Basic Servicing Fee for all prior Distribution Dates and
Additional Servicing for such Distribution Date.
TREASURY REGULATIONS: The regulations, including proposed or
temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations
shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.
TRUST: Capital Auto Receivables Asset Trust 199_-_, a Delaware
business trust created by the Trust Agreement.
TRUST AGREEMENT: The Trust Agreement, dated as of the Closing
Date, between the Seller and the Owner Trustee, as amended and
supplemented from time to time.
TRUST ESTATE: 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), including all proceeds
thereof, and the Reserve Account and the Reserve Account Property
pledged to the Indenture Trustee pursuant to the Trust Sale and
Servicing Agreement.
TRUST INDENTURE ACT or TIA: The Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically
provided.
TRUST SALE AND SERVICING AGREEMENT: The Trust Sale and
Servicing Agreement, dated as of the Closing Date, between the
Seller, the Servicer and the Trust, as amended and supplemented
from time to time.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
UNDERTAKING LETTER: The Letter referred to in Sections 3.4 and
9.12 of the Trust Agreement.
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UNDISTRIBUTED AMOUNT: With respect to any Distribution Date,
that portion, if any, of the sum of (i) the Undistributed Amount for
the prior Distribution Date plus (ii) the Noteholders' Percentage
of the Principal Distributable Amount that is held in the Note
Distribution Account and not distributed on such Distribution Date
to Noteholders.
VOTING INTERESTS: As of any date, the aggregate Certificate
Balance of all Certificates outstanding; PROVIDED, HOWEVER, that
Certificates owned by the Issuer, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Owner Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Certificates that the Owner Trustee knows to be so owned shall be
so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Owner Trustee the pledgor's right so to
act with respect to such Certificates and that the pledgee is not
the Issuer, the Seller or any Affiliate of any of the foregoing
Persons.
WARRANTY PAYMENT: With respect to a Distribution Date and to
a Warranty Receivable repurchased as of the last day of a Monthly
Period, (i) in the case of a Scheduled Interest Receivable, a
payment equal to the sum of (A) the sum of all remaining Scheduled
Payments on such Receivable minus the Rebate, (B) all past due
Scheduled Payments with respect to which a Scheduled Interest
Advance has not been made, (C) any reimbursement made pursuant to
the last sentence of subsection 5.04(a) of the Trust Sale and
Servicing Agreement with respect to such Receivable and (D) all
Outstanding Scheduled Interest Advances with respect to such
Receivable, minus any Liquidation Proceeds (to the extent applied
to reduce the Principal Balance of such Receivable) previously
received with respect to such Receivable or (ii) in the case of a
Simple Interest Receivable, a payment equal to the Amount Financed
minus that portion of all payments received from the related Obligor
on or prior to the last day of the related Monthly Period allocable
to principal and minus any Liquidation Proceeds (to the extent
applied to reduce the Principal Balance of such Receivable)
previously received with respect to such Receivable.
WARRANTY PURCHASER: The Person described in Section 2.05 of
the Trust Sale and Servicing Agreement.
WARRANTY RECEIVABLE: A Receivable which the Warranty Purchaser
has become obligated to repurchase pursuant to Section 2.05 of the
Trust Sale and Servicing Agreement.
66
Exhibit 99.2
POOLING AND SERVICING AGREEMENT
BETWEEN
CAPITAL AUTO RECEIVABLES, INC.
AND
GENERAL MOTORS ACCEPTANCE CORPORATION
DATED AS OF ___________, 1994
<PAGE>
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Owner of a Receivable. . . . . . . . . . . . . . . . 3
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.01. Purchase and Sale of Receivables . . . . . . . . . . 3
SECTION 2.02. Receivables Purchase Price . . . . . . . . . . . . . 3
SECTION 2.03. The Closing. . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.04. Custody of Receivable Files. . . . . . . . . . . . . 3
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES. . . . . . . . . . . . . . . 4
SECTION 3.01. Duties of the Servicer . . . . . . . . . . . . . . . 4
SECTION 3.02. Collection of Receivable Payments. . . . . . . . . . 5
SECTION 3.03. Rebates on Full Prepayments on
Scheduled Interest Receivables . . . . . . . . . . . 5
SECTION 3.04. Realization Upon Liquidating
Receivables. . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.05. Maintenance of Insurance Policies. . . . . . . . . . 6
SECTION 3.06. Maintenance of Security Interests
in Vehicles. . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.07. Covenants, Representations and
Warranties of the Servicer . . . . . . . . . . . . . 6
SECTION 3.08. Purchase of Receivables Upon Breach
of Covenant. . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.09. Total Servicing Fee; Payment of
Certain Expenses by Servicer . . . . . . . . . . . . 8
SECTION 3.10. Servicer's Accounting. . . . . . . . . . . . . . . . 9
SECTION 3.11. Application of Collections . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.01. Representations and Warranties as
to the Receivables . . . . . . . . . . . . . . . . . 10
SECTION 4.02. Additional Representations and
Warranties of GMAC . . . . . . . . . . . . . . . . . 13
SECTION 4.03. Representations and Warranties of CARI . . 14
i
<PAGE>3
ARTICLE V
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.01. Conflicts With Further Transfer and
Servicing Agreements . . . . . . . . . . . . . . . . 15
SECTION 5.02. Protection of Title. . . . . . . . . . . . . . . . . 15
SECTION 5.03. Other Liens or Interests . . . . . . . . . . . . . . 16
SECTION 5.04. Repurchase Events. . . . . . . . . . . . . . . . . . 16
SECTION 5.05. Indemnification. . . . . . . . . . . . . . . . . . . 16
SECTION 5.06. Further Assignments. . . . . . . . . . . . . . . . . 16
SECTION 5.07. Pre-Closing Collections. . . . . . . . . . . . . . . 16
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.01. Conditions to Obligation of CARI . . . . . . . . . . 17
SECTION 6.02. Conditions To Obligation of GMAC . . . . . . . . . . 18
ARTICLE VII
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.01. Amendment. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.02. Survival . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.03. Notices. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.04. Governing Law. . . . . . . . . . . . . . . . . . . . 18
SECTION 7.05. Waivers. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.06. Costs and Expenses . . . . . . . . . . . . . . . . . 19
SECTION 7.07. Confidential Information . . . . . . . . . . . . . . 19
SECTION 7.08. Headings . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.09. Counterparts . . . . . . . . . . . . . . . . . . . . 19
EXHIBIT A - Form of Assignment
APPENDIX A - Definitions
ii<PAGE>
<PAGE>4
POOLING AND SERVICING AGREEMENT, dated as of ___________,
1994, between CAPITAL AUTO RECEIVABLES, INC., a Delaware
corporation ("CARI"), and GENERAL MOTORS ACCEPTANCE CORPORATION,
a corporation incorporated under the New York Banking Law
relating to investment companies (herein referred to as "GMAC" in
its capacity as seller of the Receivables and as the "Servicer"
in its capacity as servicer of the Receivables).
WHEREAS, CARI desires to purchase a portfolio of automobile
and light truck retail instalment sale contracts and related
rights owned by GMAC;
WHEREAS, GMAC is willing to sell such contracts and related
rights to CARI;
WHEREAS, CARI may wish to sell or otherwise transfer such
contracts and related rights, or interests therein, to a trust,
corporation, partnership or other entity (any such entity being
the "Issuer");
WHEREAS, the Issuer may issue debentures, notes,
participations, certificates of beneficial interest, partnership
interests or other interests or securities (collectively, any
such issued interests or securities being "Securities") to fund
its acquisition of such contracts and related rights;
WHEREAS, the Issuer may wish to provide in the agreements
pursuant to which it acquires its interest in such contracts and
related rights and issues the Securities (all such agreements
being collectively the "Further Transfer and Servicing
Agreements") that GMAC shall service such contracts;
WHEREAS, the Servicer is willing to service such contracts
in accordance with the terms hereof for the benefit of CARI and,
by its execution of the Further Transfer and Servicing
Agreements, will be willing to service such contracts in
accordance with the terms of such Further Transfer and Servicing
Agreements for the benefit of the Issuer and each other party
identified or described herein or in the Further Transfer and
Servicing Agreements as having an interest as owner, trustee,
secured party or holder of Securities (the Issuer and all such
parties under the Further Transfer and Servicing Agreements being
"Interested Parties") with respect to such contracts, and the
proceeds thereof, as the interests of such parties may appear
from time to time.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as
follows:
<PAGE>5
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Certain capitalized terms used
in this Agreement are defined in and shall have the respective
meanings assigned them in APPENDIX A to this Agreement. All
references herein to "the Agreement" or "this Agreement" are to
this Pooling and Servicing Agreement, and all references herein
to Articles, Sections and subsections are to Articles, Sections
or subsections of this Agreement unless otherwise specified.
SECTION 1.02. OWNER OF A RECEIVABLE. For purposes of this
Agreement, the "Owner" of a Receivable shall mean CARI until the
execution and delivery of the Further Transfer and Servicing
Agreements and thereafter shall mean the Issuer; provided, that
GMAC or CARI, as applicable, shall be the "Owner" of any
Receivable from and after the time that such Person shall acquire
such Receivable, whether pursuant to Sections 3.08 or 5.04 of
this Agreement, any provision of the Further Transfer and
Servicing Agreements or otherwise.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. PURCHASE AND SALE OF RECEIVABLES. On such
date as is acceptable to CARI and GMAC by which the conditions
specified in Article VI have been satisfied (and in any event
immediately prior to consummation of the transactions
contemplated by the Further Transfer and Servicing Agreements, if
any), GMAC shall sell, transfer, assign and otherwise convey to
CARI, without recourse:
(a) all right, title and interest of GMAC in, to and under
the Receivables listed on the Schedule of Receivables and (i) in
the case of Scheduled Interest Receivables, all monies due
thereunder on and after the Cutoff Date and (ii) in the case of
Simple Interest Receivables, all monies received thereon on and
after the Cutoff Date, in each case exclusive of any amounts
allocable to the premium for physical damage insurance
force-placed by GMAC covering any related Financed Vehicle;
(b) the interest of GMAC in the security interests in the
Financed Vehicles granted by Obligors pursuant to the Receivables
and, to the extent permitted by law, any accessions thereto;
(c) except for those Receivables originated in Wisconsin,
the interest of GMAC in any proceeds from claims on any physical
damage, credit life, credit disability or other insurance
policies covering Financed Vehicles or Obligors;
(d) the interest of GMAC in any proceeds from recourse
against Dealers on Receivables; and
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(e) the interest of GMAC in any proceeds of the property
described in clauses (a) and (b) above.
The property described in clauses (a) through (e) is
referred to herein collectively as the "Purchased Property."
It is the intention of GMAC and CARI that the transfer and
assignment contemplated by this Agreement shall constitute a sale
of the Receivables from GMAC to CARI and the beneficial interest
in and title to the Receivables shall not be part of GMAC's
estate in the event of the filing of a bankruptcy petition by or
against GMAC under any bankruptcy law.
The foregoing sale does not constitute and is not intended
to result in any assumption by CARI of any obligation of GMAC to
the Obligors, Dealers, insurers or any other Person in connection
with the Receivables, any Dealer Agreements, any insurance
policies or any agreement or instrument relating to any of them.
SECTION 2.02. RECEIVABLES PURCHASE PRICE. In consideration
for the Purchased Property, CARI shall, at the closing hereunder,
pay to GMAC an amount equal to the Aggregate Amount Financed in
respect of the Receivables (the "Receivables Purchase Price") and
GMAC shall execute and deliver to CARI an assignment in the form
attached hereto as Exhibit A. A portion of the Receivables
Purchase Price equal to approximately $________________ shall be
paid to GMAC in immediately available funds, and the balance of
the Receivables Purchase Price shall be recorded as an advance
from GMAC to CARI pursuant to the Intercompany Advance Agreement.
SECTION 2.03. THE CLOSING. The sale and purchase of the
Receivables shall take place at the offices of GMAC, 3031 West
Grand Boulevard, Detroit, Michigan 48202, at a date and time
mutually agreeable to GMAC and CARI, and may occur simultaneously
with the closing of transactions contemplated by the Further
Transfer and Servicing Agreements.
SECTION 2.04. CUSTODY OF RECEIVABLE FILES. In connection
with the sale, transfer and assignment of the Receivables to CARI
pursuant to this Agreement, CARI, simultaneously with the
execution and delivery of this Agreement, shall enter into the
Custodian Agreement with the Custodian, pursuant to which CARI
shall revocably appoint the Custodian, and the Custodian shall
accept such appointment, to act as the agent of CARI as Custodian
of the following documents or instruments which shall be
constructively delivered to CARI with respect to each Receivable:
(a) the fully executed original of the instalment sale
contract for such Receivable;
(b) documents evidencing or related to any Insurance
Policy;
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(c) the original credit application of each Obligor, fully
executed by each such Obligor on GMAC's customary form, or on a
form approved by GMAC, for such application;
(d) where permitted by law, the original certificate of
title (when received) and otherwise such documents, if any, that
GMAC keeps on file in accordance with its customary procedures
indicating that the Financed Vehicle is owned by the Obligor and
subject to the interest of GMAC as first lienholder or secured
party; and
(e) any and all other documents that GMAC keeps on file in
accordance with its customary procedures relating to the
individual Receivable, Obligor or Financed Vehicle.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. DUTIES OF THE SERVICER. The Servicer is
hereby appointed and authorized to act as agent for the Owner of
the Receivables and in such capacity 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 comparable automotive
receivables that it services for itself or others. The Servicer
hereby accepts such appointment and authorization and agrees to
perform the duties of Servicer with respect to the Receivables
set forth herein and in the Further Transfer and Servicing
Agreements. The Servicer's duties shall include collection and
posting of all payments, responding to inquiries of Obligors,
investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, policing the collateral,
accounting for collections and furnishing monthly and annual
statements to the Owner of any Receivables with respect to
distributions, generating federal income tax information and
performing the other duties specified herein. Subject to the
provisions of Section 3.02, the Servicer shall follow its
customary standards, policies and procedures and shall have full
power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and
collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer is hereby
authorized and empowered by the Owner of the Receivables,
pursuant to this Section 3.01, to execute and deliver, on behalf
of all Interested Parties, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments,
with respect to the Receivables and the Financed Vehicles. The
Servicer is hereby authorized to commence, in its own name or in
the name of the Owner of such Receivable a legal proceeding to
enforce a Liquidating Receivable as contemplated by Section 3.04,
to enforce all obligations of GMAC and CARI under this Agreement
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and under the Further Transfer and Servicing Agreements or to
commence or participate in a legal proceeding (including without
limitation a bankruptcy proceeding) relating to or involving a
Receivable or a Liquidating Receivable. If the Servicer
commences or participates in such a legal proceeding in its own
name, the Owner of such Receivable shall thereupon be deemed to
have automatically assigned such Receivable to the Servicer for
purposes of commencing or participating in any such proceeding as
a party or claimant, and the Servicer is hereby authorized and
empowered by the Owner of a Receivable to execute and deliver in
the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in
connection with any such proceeding. Any Owner of Receivables
shall furnish the Servicer with any powers of attorney and other
documents and take any other steps which the Servicer may deem
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement and the
Further Transfer and Servicing Agreements. Except to the extent
required by the preceding two sentences, the authority and rights
granted to the Servicer in this Section 3.01 shall be
nonexclusive and shall not be construed to be in derogation of
the retention by the Owner of a Receivable of equivalent
authority and rights.
SECTION 3.02. 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 practices, policies and procedures as it follows with
respect to comparable automotive receivables that it services for
itself or others. Except as provided in subsection 3.07(a)(iii),
the Servicer is hereby authorized to grant extensions, rebates or
adjustments on a Receivable without the prior consent of the
Owner of such Receivable. The Servicer is authorized in its
discretion to waive any prepayment charge, late payment charge or
any other fees that may be collected in the ordinary course of
servicing such Receivable.
SECTION 3.03. REBATES ON FULL PREPAYMENTS ON SCHEDULED
INTEREST RECEIVABLES. If the amount of a full Prepayment by an
Obligor under a Scheduled Interest Receivable, after adjustment
for the Rebate, is less than the amount that would be payable
under the actuarial method if a full Prepayment were made at the
end of the billing month under such Scheduled Interest
Receivable, either because the Rebate calculated under the terms
of such Receivable is greater than the amount calculable under
the actuarial method or because the Servicer's customary
servicing procedure is to credit a greater Rebate, the Servicer,
as part of its servicing duties, shall remit such difference to
the Owner of such Receivable.
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SECTION 3.04. REALIZATION UPON LIQUIDATING RECEIVABLES.
The Servicer shall use reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise
comparably convert the ownership of any Financed Vehicle that it
has reasonably determined should be repossessed or otherwise
converted following a default under the Receivable secured by the
Financed Vehicle. The Servicer is authorized to follow such
practices, policies and procedures as it follows with respect to
comparable automotive receivables that it services for itself or
others, which practices, policies and procedures may include
reasonable efforts to realize upon any recourse to Dealers,
selling the related Financed Vehicle at public or private sale
and other actions by the Servicer in order to realize upon such a
Receivable. The foregoing is 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
any repair or towards the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair
and/or repossession shall increase the proceeds of liquidation of
the related Receivable by an amount greater than the amount of
such expenses. The Servicer shall be entitled to receive
Liquidation Expenses with respect to each Liquidating Receivable
at such time as the Receivable becomes a Liquidating Receivable
(or as may otherwise be provided in the Further Transfer and
Servicing Agreements).
SECTION 3.05. MAINTENANCE OF INSURANCE POLICIES. The
Servicer shall, in accordance with its customary servicing
procedures, require that each Obligor shall have obtained
physical damage insurance covering the Financed Vehicle as of the
execution of the related Receivable. The Servicer shall, in
accordance with its customary servicing procedures, monitor such
physical damage insurance with respect to each Receivable.
SECTION 3.06. MAINTENANCE OF SECURITY INTERESTS IN
VEHICLES. The Servicer shall, in accordance with its customary
servicing procedures and at its own expense, take such steps as
are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle. The
Owner of each Receivable hereby authorizes the Servicer to
re-perfect such security interest on behalf of such Owner, as
necessary because of the relocation of a Financed Vehicle, or for
any other reason.
SECTION 3.07. COVENANTS, REPRESENTATIONS AND WARRANTIES OF
THE SERVICER. As of the closing hereunder, the Servicer hereby
makes the following representations, warranties and covenants on
which CARI relies in accepting the Receivables hereunder and on
which the Issuer shall rely in accepting the Receivables and
executing and delivering the Securities under the Further
Transfer and Servicing Agreements.
(a) The Servicer covenants that from and after the closing
hereunder:
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(i) LIENS IN FORCE. Except as contemplated in this
Agreement or the Further Transfer and Servicing Agreements,
the Servicer shall not release in whole or in part any
Financed Vehicle from the security interest securing the
related Receivable;
(ii) NO IMPAIRMENT. The Servicer shall do nothing to
impair the rights of CARI or any Interested Party in and to
the Receivables; and
(iii) NO MODIFICATIONS. The Servicer shall not
amend or otherwise modify any Receivable such that the
Amount Financed, the Annual Percentage Rate, the total
number of Scheduled Payments (in the case of a Scheduled
Interest Receivable) or the number of originally scheduled
due dates (in the case of a Simple Interest Receivable), is
altered or such that the last Scheduled Payment (in the case
of a Scheduled Interest Receivable) or the last scheduled
due date (in the case of a Simple Interest Receivable)
occurs after the final scheduled payment date that is
specified in Section 4.01(r).
(b) Upon the execution of the Further Transfer and
Servicing Agreements, the Servicer represents and warrants to the
Issuer and CARI that in addition to the representations and
warranties in Sections 4.01 and 4.02 being true as of the date of
the closing thereunder that as of such closing:
(i) ORGANIZATION AND GOOD STANDING. The Servicer had
at all relevant times, and now has, power, authority and
legal right to service the Receivables as provided herein
and in the Further Transfer and Servicing Agreements;
(ii) POWER AND AUTHORITY. The Servicer has the power
and authority to execute and deliver the Further Transfer
and Servicing Agreements and to carry out the terms of such
agreements; and the Servicer's execution, delivery and
performance of the Further Transfer and Servicing Agreements
have been duly authorized by the Servicer by all necessary
corporate action;
(iii) BINDING OBLIGATION. The Further Transfer and
Servicing Agreements, when duly executed and delivered,
shall constitute the legal, valid and binding obligations of
the Servicer enforceable in accordance with their respective
terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general
and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity
or at law;
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(iv) NO VIOLATION. The consummation by the Servicer of
the transactions contemplated by the Further Transfer and
Servicing Agreements, and the fulfillment by the Servicer of
the terms of the Further Transfer and Servicing Agreements,
shall not conflict with, result in any breach of any of the
terms and provisions of, or 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, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument,
other than the Further Transfer and Servicing Agreements, or
violate any law or, to the best of the Servicer's knowledge,
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 any of its
properties;
(v) NO PROCEEDINGS. To the Servicer's knowledge,
there are no proceedings or investigations pending, or
threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of the Further
Transfer and Servicing Agreements or any Securities issued
thereunder, (B) seeking to prevent the issuance of such
Securities or the consummation of any of the transactions
contemplated by the Further Transfer and Servicing
Agreements or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or
enforceability of, the Further Transfer and Servicing
Agreements; and
(vi) REASONABLE LIQUIDATION EXPENSES. The amounts
defined as "Liquidation Expenses" are a reasonable estimate
of such expenses, reasonably related to the Servicer's
experience for such expenses in servicing comparable
automotive receivables.
SECTION 3.08. PURCHASE OF RECEIVABLES UPON BREACH OF
COVENANT. Upon discovery by any of the Servicer, CARI or any
party under the Further Transfer and Servicing Agreements of a
breach of any of the covenants set forth in Sections 3.06 and
3.07(a), the party discovering such breach shall give prompt
written notice thereof to the others. As of the last day of the
second Monthly Period following its discovering or receiving
notice of such breach (or, at the Servicer's election, the last
day of the first Monthly Period so following), the Servicer
shall, unless it shall have cured such breach in all material
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respects, purchase from the Owner thereof any Receivable
materially and adversely affected by such breach as determined by
such Owner and, on the related Distribution Date, the Servicer
shall pay the Administrative Purchase Payment, and shall be
entitled to receive the Released Administrative Amount, if any.
It is understood and agreed that the obligation of the Servicer
to purchase any Receivable with respect to which such a breach
has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against the Servicer for
such breach available to CARI or any Interested Party.
SECTION 3.09. TOTAL SERVICING FEE; PAYMENT OF CERTAIN
EXPENSES BY SERVICER. The Servicer is entitled to receive the
Total Servicing Fee and Supplemental Servicing Fees out of
collections in respect of the Receivables. The Servicer shall
also be entitled to Investment Earnings as set forth in the
Further Transfer and Servicing Agreements. Subject to any
limitations on the Servicer's liability under the Further
Transfer and Servicing Agreements, the Servicer shall be required
to pay all expenses incurred by it in connection with its
activities under this Agreement and under the Further Transfer
and Servicing Agreements (including fees and disbursements of the
Issuer, any trustees and independent accountants, taxes imposed
on the Servicer, expenses incurred in connection with
distributions and reports to holders of Securities and all other
fees and expenses not expressly stated under this Agreement or
the Further Transfer and Servicing Agreements to be for the
account of the holders of Securities).
SECTION 3.10. SERVICER'S ACCOUNTING. On each Determination
Date under a Further Transfer and Servicing Agreement, the
Servicer shall deliver to each of the trustees and other
applicable parties under the Further Transfer and Servicing
Agreements and to CARI and the Rating Agencies a Servicer's
Accounting with respect to the immediately preceding Monthly
Period executed by the President or any Vice President of the
Servicer containing all information necessary to each such party
for making any distributions required by the Further Transfer and
Servicing Agreements, and all information necessary to each such
party for sending any statements required under the Further
Transfer and Servicing Agreements. Receivables to be purchased
by the Servicer under Sections 3.08 or 5.04 or to be repurchased
by CARI or GMAC under the Further Transfer and Servicing
Agreements as of the last day of any Monthly Period shall be
identified by Receivable number (as set forth in the Schedule of
Receivables). With respect to any Receivables for which CARI is
the Owner, the Servicer shall deliver to CARI such accountings
relating to such Receivables and the actions of the Servicer with
respect thereto as CARI may reasonably request.
SECTION 3.11. APPLICATION OF COLLECTIONS. For the purposes
of this Agreement and the Further Transfer and Servicing
Agreements, as of the last day of each Monthly Period, all
collections for the related Monthly Period shall be applied by
the Servicer as follows:
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(a) With respect to each Scheduled Interest Receivable
(other than an Administrative Receivable or a Warranty
Receivable), payments by or on behalf of the Obligor which are
not Supplemental Servicing Fees shall be applied first to reduce
outstanding advances of shortfalls in collections, if any, made
pursuant to the Further Transfer and Servicing Agreements with
respect to such Receivable. Next, the amount of any such payments
in excess of Supplemental Servicing Fees and any such advances
with respect to such Receivable shall be applied to the Scheduled
Payment with respect to such Receivable. Any amount of such
payments remaining after the applications described in the
preceding two sentences constitutes an Excess Payment with
respect to such Receivable, and such Excess Payment (to the
extent it does not constitute a Payment Ahead) shall be applied
to prepay such Receivable. If the amounts applied under the
first two sentences of this subsection 3.11(a) shall be less than
the Scheduled Payment, whether as a result of any extension
granted to the Obligor or otherwise, then the Deferred
Prepayment, if any, with respect to such Receivable shall be
applied by the Servicer to the extent of the shortfall, and such
Deferred Prepayment shall be reduced accordingly.
(b) With respect to all Simple Interest Receivables (other
than Administrative Receivables and Warranty Receivables),
payments by or on behalf of the Obligors which are not
Supplemental Servicing Fees shall be applied first to the payment
to the Servicer of Excess Simple Interest Collections, if any,
and next to principal and interest on all such Simple Interest
Receivables.
(c) With respect to each Administrative Receivable and
Warranty Receivable, payments by or on behalf of the Obligor
shall be applied in the same manner, except that any Released
Administrative Amount or Released Warranty Amount shall be
remitted to the Servicer or CARI, as applicable. In the case of
a Scheduled Interest Receivable, a Warranty Payment shall be
applied to reduce any advances described in Section 3.11(a) and
such Warranty Payment or an Administrative Purchase Payment, as
applicable, shall be applied to the Scheduled Payment, in each
case to the extent that the payments by or on behalf of the
Obligor shall be insufficient, and then to prepay such Receivable
in full. In the case of a Simple Interest Receivable, a Warranty
Payment or an Administrative Payment, as applicable, shall be
applied to principal and interest on such Receivable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES AS TO THE
RECEIVABLES. GMAC makes the following representations and
warranties as to the Receivables on which CARI relies in
accepting the Receivables. Such representations and warranties
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speak as of the date hereof, as of the closing hereunder and as
of the closing under the Further Transfer and Servicing
Agreements, and shall survive the sale, transfer and assignment
of the Receivables to CARI and the subsequent assignment and
transfer pursuant to the Further Transfer and Servicing
Agreements:
(a) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i)
was originated by a Dealer for the retail sale of a Financed
Vehicle in the ordinary course of such Dealer's business, was
fully and properly executed by the parties thereto, was purchased
by GMAC from such Dealer under an existing Dealer Agreement, and
was validly assigned by such Dealer to GMAC in accordance with
its terms, (ii) has created or shall create a valid, binding and
enforceable first priority security interest in favor of GMAC in
the Financed Vehicle, which security interest is assignable by
GMAC to CARI, (iii) contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral of the benefits
of the security and (iv) provides for level monthly payments
(provided that the payment in the first month and the final month
of the life of the Receivable may be different from the level
payment) that shall amortize the Amount Financed by maturity and
shall yield interest at the Annual Percentage Rate;
(b) SCHEDULE OF RECEIVABLES. The information set forth in
the Schedule of Receivables is true and correct in all material
respects, and no selection procedures believed to be adverse to
CARI or to holders of the Securities issued under the Further
Transfer and Servicing Agreements were utilized in selecting the
Receivables from those receivables of GMAC which meet the
selection criteria under this Agreement;
(c) COMPLIANCE WITH LAW. All requirements of applicable
federal, state and local laws, and regulations thereunder,
including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940, the Texas Consumer Credit Code and state adaptations
of the National Consumer Act and of the Uniform Consumer Credit
Code and other consumer credit laws and equal credit opportunity
and disclosure laws, in respect of any of the Receivables, have
been complied with in all material respects, and each Receivable
and the sale of the Financed Vehicle evidenced thereby complied
at the time it was originated or made and now complies in all
material respects with all legal requirements of the jurisdiction
in which it was originated or made;
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(d) BINDING OBLIGATION. Each Receivable represents the
genuine, legal, valid and binding payment obligation in writing
of the Obligor thereon, enforceable by the holder thereof in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights in general and by
equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law;
(e) SECURITY INTEREST IN FINANCED VEHICLE. Immediately
prior to the sale, transfer and assignment thereof pursuant
hereto, each Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle in favor of
GMAC as secured party or all necessary and appropriate action had
been commenced that would result in the valid perfection of a
first priority security interest in the Financed Vehicle in favor
of GMAC as secured party;
(f) RECEIVABLES IN FORCE. No Receivable has been
satisfied, subordinated or rescinded, and the Financed Vehicle
securing each such Receivable has not been released from the lien
of the related Receivable in whole or in part;
(g) NO WAIVER. Since the Cutoff Date, no provision of a
Receivable has been waived, altered or modified in any respect;
(h) NO DEFENSES. No right of rescission, setoff,
counterclaim or defense has been asserted or threatened with
respect to any Receivable;
(i) NO LIENS. There are, to the best of GMAC's knowledge,
no liens or claims that have been filed for work, labor or
materials affecting any Financed Vehicle securing any Receivable
that are or may be liens prior to, or equal or coordinate with,
the security interest in the Financed Vehicle granted by the
Receivable;
(j) INSURANCE. Each Obligor is required to maintain a
physical damage insurance policy of the type that GMAC requires
in accordance with its customary underwriting standards for the
purchase of automotive receivables;
(k) GOOD TITLE. No Receivable has been sold, transferred,
assigned or pledged by GMAC to any Person other than CARI;
immediately prior to the conveyance of the Receivables pursuant
to this Agreement GMAC had good and marketable title thereto,
free of any Lien; and, upon execution and delivery of this
Agreement by GMAC, CARI shall have all of the right, title and
interest of GMAC in and to the Receivables, the unpaid
indebtedness evidenced thereby and the collateral security
therefor, free of any Lien;
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(l) LAWFUL ASSIGNMENT. No Receivable was originated in, or
is subject to the laws of, any jurisdiction the laws of which
would make unlawful the sale, transfer and assignment of such
Receivable under this Agreement;
(m) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give
CARI a first priority perfected ownership interest in the
Receivables shall have been made;
(n) ONE ORIGINAL. There is only one original executed copy
of each Receivable;
(o) NO DOCUMENTS OR INSTRUMENTS. No Receivable, or
constituent part thereof, constitutes a "negotiable instrument"
or "negotiable document of title" (as such terms are used in the
UCC);
(p) MATURITY OF RECEIVABLES. Each Receivable has an
original maturity of not less than __ months and not greater than
__ months;
(q) LOWEST ANNUAL PERCENTAGE RATE. The lowest Annual
Percentage Rate of any Receivable is ___%;
(r) SCHEDULED PAYMENTS; DELINQUENCY. Each Receivable has
a first scheduled payment that is due on or after _________,
____, and a final scheduled payment that is due no later than
____________, ____, and no Receivable shall have a payment that
is more than __ days overdue as of the Cutoff Date nor shall any
Receivable have been charged-off by GMAC;
(s) VEHICLES. Each Financed Vehicle shall be a new or used
automobile or light truck;
(t) ORIGIN. Each Receivable shall have been originated in
the United States; and
(u) NO AMENDMENT. No Receivable has been amended or
otherwise modified such that the total number of the Obligor's
Scheduled Payments (in the case of a Scheduled Interest
Receivable) or the number of originally scheduled due dates (in
the case of a Simple Interest Receivable) is increased or such
that the Amount Financed is increased.
SECTION 4.02. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF
GMAC. GMAC hereby represents and warrants to CARI as of the date
hereof, as of the closing hereunder and as of the closing under
the Further Transfer and Servicing Agreements, both in its
capacity as the seller of the Receivables hereunder and in its
capacity as Servicer, that:
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(a) ORGANIZATION AND GOOD STANDING. GMAC has been duly
organized and is validly existing as a corporation in good
standing under the New York Banking Law relating to investment
companies, with power and authority to own its properties and to
conduct its business as such properties are presently owned and
such business is presently conducted;
(b) DUE QUALIFICATION. GMAC 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 (including the servicing of the
Receivables) requires or shall require such qualification;
(c) POWER AND AUTHORITY. GMAC has the power and authority
to execute and deliver this Agreement and to carry out its terms;
GMAC has full power and authority to sell and assign the property
to be sold and assigned to CARI and to service the Receivables as
provided herein and in the Further Transfer and Servicing
Agreements, has duly authorized such sale and assignment to CARI
by all necessary corporate action; and the execution, delivery
and performance of this Agreement have been duly authorized by
GMAC by all necessary corporate action;
(d) VALID SALE; BINDING OBLIGATION. This Agreement, when
duly executed and delivered, shall constitute a valid sale,
transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from GMAC; and this Agreement, when
duly executed and delivered, shall constitute a legal, valid and
binding obligation of GMAC enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law;
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
of this Agreement shall not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
incorporation or By-laws of GMAC, or any indenture, agreement,
mortgage, deed of trust or other instrument to which GMAC is a
party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement or violate any law
or, to the best of GMAC's knowledge, any order, rule or
regulation applicable to GMAC of any court or of any federal or
state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over GMAC or any
of its properties; and
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(f) NO PROCEEDINGS. To GMAC's knowledge, there are no
proceedings or investigations pending, or threatened, before
any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction
over GMAC or its properties (A) asserting the invalidity of this
Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) seeking any
determination or ruling that might materially and adversely
affect the performance by GMAC of its obligations under, or the
validity or enforceability of, this Agreement.
SECTION 4.03. REPRESENTATIONS AND WARRANTIES OF CARI. CARI
hereby represents and warrants to GMAC as of the date hereof and
as of the closing hereunder:
(a) ORGANIZATION AND GOOD STANDING. CARI has been duly
organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as
such properties are presently owned and such business is
presently conducted, and had at all relevant times, and now has,
power, authority and legal right to acquire and own the
Receivables;
(b) DUE QUALIFICATION. CARI 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 requires such qualification;
(c) POWER AND AUTHORITY. CARI 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 CARI by all necessary corporate
action;
(d) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
of this Agreement shall not conflict with, result in any breach
of any of the terms and provisions of or constitute (with or
without notice or lapse of time) a default under, the certificate
of incorporation or By-laws of CARI, or any indenture, agreement,
mortgage, deed of trust or other instrument to which CARI is a
party or by which it is bound, or 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 any Further Transfer and Servicing Agreement or violate any
law or, to the best of CARI's knowledge, any order, rule or
regulation applicable to CARI of any court or of any federal or
state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over CARI or any
of its properties; and
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(e) NO PROCEEDINGS. To CARI's knowledge, there are no
proceedings or investigations pending, or threatened, before any
court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over CARI or
its properties (i) asserting the invalidity of this Agreement or
(ii) seeking any determination or ruling that might materially
and adversely affect the performance by CARI of its obligations
under, or the validity or enforceability of, this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
The Servicer agrees with CARI as follows:
SECTION 5.01. CONFLICTS WITH FURTHER TRANSFER AND SERVICING
AGREEMENTS. To the extent that any provision of Sections 5.02
through 5.04 of this Agreement conflicts with any provision of
the Further Transfer and Servicing Agreements, the Further
Transfer and Servicing Agreements shall govern.
SECTION 5.02. PROTECTION OF TITLE.
(a) FILINGS. GMAC shall execute and file such financing
statements and cause to be executed and filed such continuation
and other statements, all in such manner and in such places as
may be required by law fully to preserve, maintain and protect
the interest of CARI under this Agreement in the Receivables and
the other Purchased Property and in the proceeds thereof. GMAC
shall deliver (or cause to be delivered) to CARI file-stamped
copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) NAME CHANGE. GMAC shall not change its name, identity
or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed by
GMAC in accordance with Section 5.02(a) seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it
shall have given CARI at least 60 days prior written notice
thereof.
(c) EXECUTIVE OFFICE; MAINTENANCE OF OFFICES. GMAC shall
give CARI at least 60 days prior written notice of any relocation
of its principal executive office 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. GMAC
shall at all times maintain each office from which it services
Receivables and its principal executive office within the United
States of America.
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SECTION 5.03. OTHER LIENS OR INTERESTS. Except for the
conveyances hereunder and as contemplated by the Further Transfer
and Servicing Agreements, GMAC shall not sell, pledge, assign or
transfer the Receivables to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any interest
therein, and GMAC shall defend the right, title and interest of
CARI in, to and under such Receivables against all claims of
third parties claiming through or under GMAC.
SECTION 5.04. REPURCHASE EVENTS. By its execution of the
Further Transfer and Servicing Agreements to which it is a party,
GMAC shall acknowledge the assignment by CARI of such of its
right, title and interest in, to and under this Agreement to the
Issuer as shall be provided in the Further Transfer and Servicing
Agreements. GMAC hereby covenants and agrees with CARI for the
benefit of CARI and the Interested Parties that in the event of a
breach of any of GMAC's representations and warranties contained
in Section 4.01 hereof with respect to any Receivable (a
"Repurchase Event"), GMAC will repurchase such Receivable from
the Issuer (if the Issuer is then the Owner of such Receivable)
on the date and for the amount specified in the Further Transfer
and Servicing Agreements, without further notice from CARI
hereunder. Upon the occurrence of a Repurchase Event with
respect to a Receivable for which CARI is the Owner, GMAC agrees
to repurchase such Receivable from CARI for an amount and upon
the same terms as GMAC would be obligated to repurchase such
Receivable from the Issuer if the Issuer was then the Owner
thereof, and upon payment of such amount, GMAC shall have such
rights with respect to such Receivable as if GMAC had purchased
such Receivable from the Issuer as the Owner thereof. It is
understood and agreed that the obligation of GMAC to repurchase
any Receivable as to which a breach has occurred and is
continuing shall, if such obligation is fulfilled, constitute the
sole remedy against GMAC for such breach available to CARI or any
Interested Party.
SECTION 5.05. INDEMNIFICATION. GMAC shall indemnify CARI
for any liability as a result of the failure of a Receivable to
be originated in compliance with all requirements of law. This
indemnity obligation shall be in addition to any obligation that
GMAC may otherwise have.
SECTION 5.06. FURTHER ASSIGNMENTS. GMAC acknowledges that
CARI may, pursuant to the Further Transfer and Servicing
Agreements, sell the Receivables to the Issuer and assign its
rights hereunder to the Issuer, subject to the terms and
conditions of the Further Transfer and Servicing Agreements, and
that the Issuer may in turn further pledge, assign or transfer
its rights in the Receivables and this Agreement. GMAC further
acknowledges that CARI may assign its rights under the Custodian
Agreement to the Issuer.
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SECTION 5.07. PRE-CLOSING COLLECTIONS. Within two Business
Days after the closing hereunder, GMAC shall transfer to the
account or accounts designated by CARI (or by the Issuer under
the Further Transfer and Servicing Agreements) all collections on
the Receivables held by GMAC at the time of such closing and
conveyed to CARI pursuant to Section 2.01(a).
ARTICLE VI
CONDITIONS
SECTION 6.01. CONDITIONS TO OBLIGATION OF CARI. The
obligation of CARI to purchase the Receivables hereunder is
subject to the satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of GMAC hereunder shall be true
and correct at the time of the closing hereunder with the same
effect as if then made, and GMAC shall have performed all
obligations to be performed by it hereunder on or prior to the
closing hereunder.
(b) NO REPURCHASE EVENT. No Repurchase Event shall have
occurred on or prior to the closing hereunder.
(c) COMPUTER FILES MARKED. GMAC shall, at its own expense,
on or prior to the closing hereunder, indicate in its computer
files created in connection with the Receivables that the
Receivables have been sold to CARI pursuant to this Agreement and
deliver to CARI the Schedule of Receivables certified by an
officer of GMAC to be true, correct and complete.
(d) DOCUMENTS TO BE DELIVERED BY GMAC AT THE CLOSING.
(i) THE ASSIGNMENT. At the Closing, GMAC shall
execute and deliver an assignment in the form attached
hereto as Exhibit A.
(ii) EVIDENCE OF UCC FILING. On or prior to the
closing hereunder, GMAC shall record and file, at its own
expense, a UCC-1 financing statement in each jurisdiction in
which required by applicable law, executed by GMAC as seller
or debtor, naming CARI as purchaser or secured party, naming
the Receivables and the other Purchased Property as
collateral, meeting the requirements of the laws of each
such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of
such Receivables to CARI. GMAC shall deliver a file-stamped
copy, or other evidence satisfactory to CARI of such filing,
to CARI on or prior to the closing hereunder.
(iii) OTHER DOCUMENTS. At the closing hereunder,
GMAC shall provide such other documents as CARI may
reasonably request.
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(e) OTHER TRANSACTIONS. The transactions contemplated by
the Further Transfer and Servicing Agreements shall be
consummated to the extent that such transactions are intended to
be substantially contemporaneous with the transactions hereunder.
SECTION 6.02. CONDITIONS TO OBLIGATION OF GMAC. The
obligation of GMAC to sell the Receivables to CARI hereunder is
subject to the satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of CARI hereunder shall be true
and correct at the time of the closing hereunder with the same
effect as if then made, and CARI shall have performed all
obligations to be performed by it hereunder on or prior to the
closing hereunder.
(b) RECEIVABLES PURCHASE PRICE. At the closing hereunder,
CARI shall pay to GMAC the Receivables Purchase Price as provided
in Section 2.02.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. AMENDMENT. This Agreement may be amended
from time to time (subject to any expressly applicable amendment
provision of the Further Transfer and Servicing Agreements) by a
written amendment duly executed and delivered by GMAC and CARI.
SECTION 7.02. SURVIVAL. The representations and warranties
of GMAC set forth in Articles IV and V of this Agreement and of
Servicer set forth in Section 3.07 of this Agreement shall remain
in full force and effect and shall survive the closing under
Section 2.03 hereof and the closing under the Further Transfer
and Servicing Agreements.
SECTION 7.03. NOTICES. All demands, notices and
communications 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 GMAC, at the following address:
General Motors Acceptance Corporation (to the attention of the
individual executing this Agreement on the signature page), 3044
West Grand Boulevard, Detroit, Michigan 48202 and (b) in the case
of CARI, at the following address: Capital Auto Receivables,
Inc., Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801, with a copy to the individual executing this
Agreement on the signature page, Capital Auto Receivables, Inc.,
3044 West Grand Boulevard, Detroit, Michigan 48202.
SECTION 7.04. GOVERNING LAW. THIS AGREEMENT AND THE
ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE DOMESTIC
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF OR OF ANY OTHER JURISDICTION, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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SECTION 7.05. WAIVERS. No failure or delay on the part of
CARI in exercising any power, right or remedy under this
Agreement or the Assignment shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right
or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy.
SECTION 7.06. COSTS AND EXPENSES. GMAC agrees to pay all
reasonable out-of-pocket costs and expenses of CARI, including
fees and expenses of counsel, in connection with the perfection
as against third parties of CARI's right, title and interest in,
to and under the Receivables and the enforcement of any
obligation of GMAC hereunder.
SECTION 7.07. CONFIDENTIAL INFORMATION. CARI agrees that
it shall neither use nor disclose to any person the names and
addresses of the Obligors, except in connection with the
enforcement of CARI's rights hereunder, under the Receivables,
under the Further Transfer and Servicing Agreements or as
required by law.
SECTION 7.08. 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 7.09. COUNTERPARTS. This Agreement may be executed
in two or more counterparts and by different parties on separate
counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
* * * * *
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IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the date and year first above written.
GENERAL MOTORS ACCEPTANCE CORPORATION
By: __________________________________
CAPITAL AUTO RECEIVABLES, INC.
By: _________________________________
<PAGE>25
EXHIBIT A
FORM OF ASSIGNMENT
For value received, in accordance with the Pooling and
Servicing Agreement, dated as of __________, 1994 (the "Pooling
and Servicing Agreement"), between General Motors Acceptance
Corporation, a corporation incorporated under the New York
Banking Law relating to investment companies ("GMAC"), and
Capital Auto Receivables, Inc., a Delaware corporation ("CARI"),
GMAC does hereby sell, assign, transfer and otherwise convey unto
CARI, without recourse, (i) all right, title and interest of GMAC
in, to and under the Receivables and (a) in the case of Scheduled
Interest Receivables, all monies due thereunder on and after the
Cutoff Date and (b) in the case of Simple Interest Receivables,
and all monies received thereon on and after the Cutoff Date, in
each case exclusive of any amounts allocable to the premium for
physical damage insurance force-placed by GMAC covering any
related Financed Vehicle; (ii) the interest of GMAC in the
security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and, to the extent permitted by law,
any accessions thereto; (iii) except for those Receivables
originated in Wisconsin, the interest of GMAC in any proceeds
from claims on any physical damage, credit life, credit
disability or other insurance policies covering Financed Vehicles
or Obligors; (iv) the interest of GMAC in any proceeds from
recourse against Dealers on Receivables; and (v) the interest of
GMAC in any proceeds of the property described in clauses (i) and
(ii) above.
It is the intention of GMAC and CARI that the transfer and
assignment contemplated by this Agreement shall constitute a sale
of the Receivables from GMAC to CARI and the beneficial interest
in and title to the Receivables shall not be part of GMAC's
estate in the event of the filing of a bankruptcy petition by or
against GMAC under any bankruptcy law.
The foregoing sale does not constitute and is not intended
to result in any assumption by CARI of any obligation of the
undersigned to the Obligors, Dealers, insurers or any other
Person in connection with the Receivables, the Dealer Agreements,
any insurance policies or any agreement or instrument relating to
any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Pooling and Servicing Agreement and
is to be governed by the Pooling and Servicing Agreement.
Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Pooling and
Servicing Agreement.
* * * * *
<PAGE>26
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of ___________, 1994.
GENERAL MOTORS ACCEPTANCE CORPORATION
By: _________________________________
Name:
Title:
<PAGE>27
APPENDIX A
For ease of reference, capitalized terms defined herein
have been consolidated with and are contained in Appendix A to
the Trust Sale and Servicing Agreement of even date herewith
among GMAC, CARI and Capital Auto Receivables Asset Trust 199_-_.
