AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE __, 1996
REGISTRATION NO. ___-________
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. 38-3082892
-------------------------
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(302-658-7851)
AGENT FOR SERVICE
J. B. VAN ORMAN, JR., 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 . . . . $749,458,257.75 100% $749,458,257.75 $258,433.88
-------------------------------------------------------------------------------
(1) $9,250,541,742.25 aggregate principal amount of Asset Backed Securities
registered by the Registrant under Registration Statement No. 33-52597
referred to below and by GMAC Auto Receivables Corporation under
Registration Statement No. 33-49197 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. 33-52597 and Registration Statement No. 33-49197. The total amount
registered under this Registration Statement as so consolidated as of the
date of this filing is $10,000,000,000.00.
(2) Estimated solely for the purpose of calculating the registration fee.
-------------------------
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. 33-58597 AND REGISTRATION STATEMENT NO.
33-49197 PREVIOUSLY FILED BY THE REGISTRANT AND GMAC AUTO RECEIVABLES
CORPORATION, RESPECTIVELY. THIS REGISTRATION STATEMENT, WHICH RELATES TO
$10,000,000,000 AGGREGATE PRINCIPAL AMOUNT OF ASSET BACKED SECURITIES,
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO.
33-52597 AND POST EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO.
33-49197.
<PAGE>
PROSPECTUS Version 1
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.
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 June __, 1996.
<PAGE>
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 Citicorp 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 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Seller with respect to the
Trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Securities shall be deemed to be incorporated by reference into
this Prospectus and to be part hereof. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
superseded such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Seller will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written request of any such person, a copy
of any or all of the documents incorporated herein by reference, except the
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents). Written requests for such copies should be
directed to the Seller, in care of GMAC, as Servicer, 3044 West Grand
Boulevard, Detroit, Michigan 48202.
<PAGE>
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 fixed,
variable or adjustable, 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, 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 or other Trust
Property. 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 fixed, variable or
adjustable, 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.
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
pool of retail instalment sale contracts
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 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. Certain
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.
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 Considerations......... 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; and (4) such Certificates,
if identified as Trust Certificates,
should constitute interests in a grantor
trust. See "Certain Federal Income Tax
Considerations" and "State and Local Tax
Considerations" 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.
RATINGS...................... At the time of issuance, the Notes will be
rated as investment grade securities by
at least one Rating Agency. Any other
required ratings for Term Notes will be
set forth in the related Prospectus
Supplement.
<PAGE>
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.
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
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 in the ordinary course of business, which evaluate the
prospective purchaser's ability to pay and creditworthiness, as well as the
asset value of the vehicle to be financed. GMAC's standards generally 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.
"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. Any reinvestment risk resulting from prepayment of Receivables
will be borne entirely by the holders of Securities. 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, 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.
GMAC Auto Receivables Corporation, a wholly-owned subsidiary of GMAC
incorporated in the State of Delaware on November 16, 1990, was merged with and
into the Seller on February 22, 1996.
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.
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."
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;
(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 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 in principal amount of the
outstanding Notes affected thereby, 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 or modify any of
the provisions of the Indenture is 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; (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 principal 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 principal amount of the Notes the
consent of the holders of which is required to direct the Indenture Trustee to
sell or liquidate the assets of the Trust 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 (vii) permit the creation of any lien
ranking prior to or on a parity with the lien of the Indenture with respect to
any part of the assets of the Trust 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 (x) to
the Trust, to the Seller or the Servicer, as applicable, by the Indenture
Trustee or (y) 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 bankruptcy insolvency or receivership
with respect to 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 therefor 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.
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 declared due and payable following an
Event of Default with respect thereto, the related Indenture Trustee may
institute proceedings to (a) collect amounts due or foreclose on Trust
property, (b) exercise remedies as a secured party, (c) sell the assets of the
Trust or (d) elect to have the Trust maintain possession of the assets of the
Trust 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. Unless otherwise specified in the
related Prospectus Supplement following a declaration upon an Event of Default
that the Notes are immediately due and payable, (x) Noteholders will be
entitled to ratable repayment of principal on the basis of their respective
unpaid principal balances and (y) repayment in full of the accrued interest on
and unpaid principal balances of the Notes will be made prior to any further
distribution 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 aggregate principal
amount of the outstanding Notes of a Trust, voting together as a single class
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 aggregate principal amount of such Notes then outstanding voting
together as a single class, 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 aggregate principal
amount of the outstanding Notes of a Trust voting together as a single class
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
aggregate principal amount of such outstanding Notes.
If an Event of Default occurs and is continuing with respect to any Trust
and if it is known to the Indenture Trustee, the Indenture Trustee will mail to
each Noteholder of such Trust notice of the Event of Default within 90 days
after it occurs. Except in the case of a failure to make any required payment
of principal of or interest on any Note, the Indenture Trustee may withhold the
notice beyond such 90-day period if and so long as it determines in good faith
that withholding the notice is in the interests of Noteholders.
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 termination of the related Trust Agreement,
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 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 on
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 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, except as expressly permitted by
the Indenture, the Transfer and Servicing Agreements or certain related
documents for such Trust (collectively, the "RELATED DOCUMENTS"), (i) 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.
Except as specified in the related Prospectus Supplement, 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.
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 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 the aggregate
principal amount of the outstanding 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.
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 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 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 payments 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 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.
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
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
(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 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."
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, will 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 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 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 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 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 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 no later than the business day immediately preceding
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 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
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. Unless otherwise
provided in the Prospectus Supplement, the Total Servicing Fee for each Monthly
Period (together with any portion of the Total Servicing Fee that remains
unpaid from prior Distribution Dates) may be paid at the beginning of such
Monthly Period out of collections for such Monthly Period. 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 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 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 Rating Services 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.
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
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. At such time as the Servicer shall determine that Scheduled
Interest Advances shall not be recoverable from payments with respect to such
Receivable, 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 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.
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.
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 during such Monthly Periods as the
Servicer is permitted to hold payments on Receivables until the related
Distribution Date, the Servicer will also 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.
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.
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 and the Pooling 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, except
as specifically provided otherwise, 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 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.
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
under the Trust Sale and Servicing Agreement and the Pooling and Servicing
Agreement, will be the successor of the Servicer under such Trust Sale and
Servicing Agreement and the Pooling and Servicing Agreement. So long as GMAC
acts as Servicer 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 or to any entity
that agrees to conduct such duties in accordance with the Servicer's servicing
guidelines and the Trust Sale and Servicing Agreement. The Servicer may at any
time perform specific duties as Servicer through subcontractors who are in the
business of servicing receivables similar to the Receivables, provided that no
such delegation will relieve the Servicer of its responsibility with respect to
such duties.
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 make any required distribution, payment,
transfer or deposit or to direct the related Indenture Trustee to make any
required distribution, 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 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 to the Servicer by the Indenture Trustee or the Owner Trustee or
to the Servicer , 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 or after
discovery of such failure by an officer of the Servicer; (iii) any
representation, warranty or certification made by the Servicer in such Trust
Sale and Servicing Agreement or in any certificate delivered pursuant thereto
proves to have been incorrect when made and which has a material adverse effect
on the rights of the related Securityholders and which effect continues
unremedied for a period of 60 days after the giving of written notice thereof
to the Servicer by the Indenture Trustee or the Owner Trustee; or (iv) certain
events of bankruptcy insolvency or receivership, with respect to the Servicer
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) or (iii) 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.
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,
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 if all
of the Notes have been paid in full, holders of the related Certificates whose
Certificates evidence not less than a majority of the outstanding Certificate
Balance) 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, liquidity or other
enhancement arrangement 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, distributions of payments that are required to be made on any Note
or Certificate without the consent of the holder thereof, any Interest Rate,
any Pass Through Rate or the Specified Reserve Account Balance (ii) adversely
affect the rating of any series by any Rating Agency without the consent of
two-thirds of the principal amount of the outstanding Notes or the Voting
Interests of the outstanding Certificates, as appropriate, of such series or
(iii) 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.
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 received written
instructions from (i) each of the Certificateholders (other than the Seller and
its affiliates) and (ii) each of the Noteholders to the effect that each such
party disapproves of the such 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 or liquidation of the
related assets. If no such instructions are received within such 90-day period,
the Owner Trustee shall direct the Indenture Trustee promptly to sell,
liquidate or otherwise dispose of 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 (which may include
continuing to hold the Receivable and receiving collections thereon). The
proceeds from any such sale, disposition or liquidation will be treated as
collections on the related 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 and Certificates 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; INDEMNIFICATION
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.
Each Trust Sale and Servicing Agreement provides that the Servicer will
indemnify the Indenture Trustee and the Owner Trustee from and against any
loss, liability, expense, damage or cost arising out of or incurred in
connection with the acceptance or performance of its duties pursuant to the
Transfer and Servicing Agreements, including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that neither the Indenture Trustee nor Owner Trustee will be
so indemnified if such acts or omissions or alleged acts or omissions
constitute willful misfeasance bad faith or negligence by the Indenture Trustee
or the Owner Trustee, as applicable. In addition, the Servicer will indemnify
the Trust, the Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders against losses arising out of the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties under
the Transfer and Servicing Agreements and the Indenture or by reason of its
reckless disregard of its obligations and duties thereunder. The Servicer will
also indemnify such parties against any taxes that may be asserted against such
parties with respect to the transactions contemplated in the Trust Sale and
Servicing Agreement, other than taxes with respect to the sale of Receivables
or Securities, the ownership of Receivables or the receipt of payments on
Securities or other compensation.
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 redeemed concurrently therewith and the subsequent distribution to
related Certificateholders of all amounts required to be distributed to them
pursuant 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, unless otherwise specified in the
Prospectus Supplement 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, no certificate of title will be amended
to identify the Trust as the new secured party 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 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 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 in
all material respects. See "The Transfer and Servicing Agreements-Sale and
Assignment of Receivables."
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.
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 may create
an obligation to repurchase the Receivable unless the breach is cured in all
material respects. 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 CONSIDERATIONS
GENERAL
Set forth below is a discussion of the anticipated material United States
federal income tax considerations relevant to 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
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 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. Because the Seller will
treat each Tax Trust as a grantor trust and each Tax Partnership as a
Partnership 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. For purposes of this
discussion, reference to a "Noteholder" are to the beneficial owner of a Note,
and 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 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 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.
INFORMATION REPORTING AND BACKUP WITHHOLDING. Each Tax Trust and 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 (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.
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 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.
GRANTOR TRUST TREATMENT. As a grantor trust, a Tax Trust will not be
subject to federal income tax. Subject to the discussions below under
"Treatment of Fees or Payment", 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 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 is
$117,950 in the case of a married couple filing jointly for a taxable year
beginning in 1996). 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.
TREATMENT OF FEES OR PAYMENTS. It is expected that income will be
reported 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 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
purchasing Certificates in the initial distribution thereof 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 an amount which is less than a statutorily
defined de minimis amount, such Receivable would not be treated as having OID.
In general, 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 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.
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. 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 any OID previously included in income,
and decreased by any deductions previously allowed for accrued premium and by
the amount of principal payments previously received on the Receivables held by
the related Tax Trust.
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.
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 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 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 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, under current Treasury
regulations, 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. Proposed Treasury regulations would modify this treatment. 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 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.
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.
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.
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 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 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.
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 Robert L. Schwartz, Esq.,
General Counsel of the Seller and Assistant General Counsel of GMAC, and by
Kirkland & Ellis, special counsel to the Seller, each Trust and GMAC. Mr.
Schwartz owns shares of each of the classes of General Motors common stock and
has options to purchase shares of General Motors common stock, $1-2/3 par
value. Certain federal income tax matters will be passed upon for GMAC, each
Trust and the Seller by Kirkland & Ellis.
<PAGE>
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.
Additional Servicing....................................
Administration Agreement................................
Administrative Purchase Payment.........................
Administrative Receivable...............................
Administrator...........................................
Aggregate Amount Financed...............................
Aggregate Principal Balance.............................
Amount Financed.........................................
APR.....................................................
Basic Servicing Fee.....................................
Benefit Plan............................................
Cede....................................................
Certificate Distribution Account........................
Certificate Pool Factor.................................
Certificateholder.......................................
Certificates............................................
Closing Date............................................
Code....................................................
Collection Account......................................
Commission..............................................
Cutoff Date.............................................
Definitive Certificates.................................
Definitive Notes........................................
Definitive Securities...................................
Depository..............................................
Designated Accounts.....................................
Distribution Date.......................................
DTC.....................................................
Eligible Deposit Account................................
Eligible Institution....................................
Eligible Investment.....................................
ERISA...................................................
Event of Default........................................
Excess Payment..........................................
Excess Simple Interest Collections......................
Exchange Act............................................
Financed Vehicles.......................................
FTC Repossession Consent Order..........................
FTC Rule................................................
General Motors..........................................
GMAC....................................................
Indenture...............................................
Indenture Trustee.......................................
Indirect Participants...................................
Insolvency Event........................................
Insolvency Laws.........................................
Interest Rate...........................................
Investment Earnings.....................................
IRS.....................................................
Liquidation Expenses....................................
Monthly Advance.........................................
Monthly Period..........................................
Note Distribution Account...............................
Note Pool Factor........................................
Noteholders.............................................
Notes...................................................
OID.....................................................
Owner Trustee...........................................
Participants............................................
Partnership Certificates................................
Pass Through Rate.......................................
Payment Ahead...........................................
Payment Ahead Servicing Account.........................
Payment Date............................................
Plan Assets Regulation..................................
Pooling and Servicing Agreement.........................
Prepayment..............................................
Principal Balance.......................................
Prospectus Supplement...................................
Rating Agency...........................................
Receivables.............................................
Receivables Pool........................................
Registration Statement..................................
Related Documents.......................................
Reserve Account.........................................
Rules...................................................
Schedule of Receivables.................................
Scheduled Interest Advance..............................
Scheduled Interest Receivables..........................
Scheduled Payments......................................
Securities..............................................
Securities Act..........................................
Seller..................................................
Servicer................................................
Servicer Default........................................
Short-Term Note.........................................
Simple Interest Advance.................................
Simple Interest Receivables.............................
Strip Certificates......................................
Strip Notes.............................................
Supplemental Servicing Fee..............................
Tax Counsel.............................................
Tax Partnership.........................................
Tax Trust...............................................
Total Servicing Fee.....................................
Transfer and Servicing Agreements.......................
Trust...................................................
Trust Agreement.........................................
Trust Indenture Act.....................................
Trust Sale and Servicing Agreement......................
UCC.....................................................
UCCC....................................................
Underwriting Agreement..................................
Warranty Payment........................................
Warranty Receivable.....................................
<PAGE>
PROSPECTUS VERSION 2
GMAC GRANTOR TRUSTS
ASSET BACKED CERTIFICATES, CLASS A
----------------------------
CAPITAL AUTO RECEIVABLES, INC.
SELLER
-----------------------------
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
------------------------
The Asset Backed Certificates (the "CERTIFICATES") 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 Certificates will consist
of two classes of Certificates, the Class A Certificates and the Class B
Certificates.
The Class A Certificates of any series will evidence in the aggregate an
undivided ownership interest of the Class A Percentage (as defined in the
related Prospectus Supplement) in the grantor trust to be formed with respect to
such series (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 Pooling and Servicing Agreement (an "AGREEMENT") to be
entered into among Capital Auto Receivables, Inc., as Seller (the "SELLER"),
General Motors Acceptance Corporation, as Servicer (the "SERVICER"), and The
First National Bank of Chicago, as Trustee (the "TRUSTEE").
Principal and interest, to the extent of the Pass Through Rate set forth
in the related Prospectus Supplement, with respect to the Receivables held by
the related Trust will be distributed on the 15th day of each month (or the next
following business day) beginning on the date set forth in the related
Prospectus Supplement (each, a "DISTRIBUTION DATE"). The rights of Class B
Certificateholders to receive distributions will be subordinated to the rights
of the related Class A Certificateholders to the extent described herein.
THE ONLY OBLIGATIONS OF THE SELLER OR OF GENERAL MOTORS ACCEPTANCE
CORPORATION AS ORIGINATOR OF RECEIVABLES WITH RESPECT TO A SERIES OF
CERTIFICATES WILL BE PURSUANT TO CERTAIN REPRESENTATIONS AND WARRANTIES MADE BY
SUCH PARTY. GENERAL MOTORS ACCEPTANCE CORPORATION WILL BE 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 PAYMENTS ON RECEIVABLES THAT ARE NOT TIMELY).
There will be no secondary market for the Certificates prior to the
offering thereof. There can be no assurance that a secondary market for the
Certificates will develop or, if it does develop, that it will continue. The
Certificates will not be listed on any securities exchange.
Unless otherwise provided in the related Prospectus Supplement, the
Class A Certificates initially will be represented by Certificates registered
in the name of Cede & Co., the nominee of The Depository Trust Company
("DTC"). The interests of beneficial owners of the Class A Certificates will
be represented by book entries on the records of DTC and participating
members thereof. Definitive Certificates will be available only under limited
circumstances.
---------
PROCEEDS OF THE ASSETS OF EACH TRUST AND CERTAIN LIMITED AMOUNTS ON DEPOSIT
IN A SUBORDINATION SPREAD ACCOUNT ARE THE SOLE SOURCES OF PAYMENTS ON THE
RELATED CERTIFICATES. THE CERTIFICATES DO NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF, AND ARE NOT INSURED OR GUARANTEED BY, GENERAL MOTORS
ACCEPTANCE CORPORATION, CAPITAL AUTO RECEIVABLES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES.
---------
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 June __, 1996.
----------
<PAGE>
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 Class A Certificates offered
pursuant to this Prospectus. This Prospectus, which forms part of the
Registration Statement, does not contain all of the information in the
Registration Statement and is qualified by reference to the Registration
Statement. The Registration Statement is available for inspection without charge
at the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the regional offices of the Commission at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such information
can be obtained from the Public Reference Section of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Seller will provide, without charge, to each person to whom this Prospectus is
delivered, upon the written 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.
REPORTS TO CLASS A CERTIFICATEHOLDERS BY THE TRUSTEE
Unless otherwise provided in the related Prospectus Supplement, the
Trustee for the Class A Certificateholders and Class B Certificateholders
(collectively, the "CERTIFICATEHOLDERS") will provide to such Class A
Certificateholders (which, unless otherwise provided in the related Prospectus
Supplement, will be Cede & Co. as nominee of DTC unless Definitive Certificates
are issued under the limited circumstances described herein) unaudited monthly
and annual reports concerning the Receivables. See "The Certificates --
Statements to Class A Certificateholders." 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, and the
rules and regulations of the Commission thereunder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Seller with respect to the
Trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Securities shall be deemed to be incorporated by reference into
this Prospectus and to be part hereof. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Seller will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written request of any such person, a copy
of any or all of the documents incorporated herein by reference, except the
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents.) Written requests for such copies should be
directed to the Seller in care of GMAC, as Servicer, 3044 West Grand Boulevard,
Detroit, Michigan 48202.
<PAGE>
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 Certificates contained in the related
Prospectus Supplement to be prepared and delivered in connection with the
offering of such series. Certain capitalized terms used in this Prospectus
Summary are defined elsewhere in this Prospectus. 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 Certificates, a
grantor trust (a "TRUST") will be formed by
Capital Auto Receivables, Inc. (the "SELLER")
pursuant to a Pooling and Servicing Agreement
between the Seller, General Motors Acceptance
Corporation, as Servicer (the "SERVICER") and The
First National Bank of Chicago, as Trustee (the
"TRUSTEE"), which incorporates the GMAC Grantor
Trust Standard Terms and Conditions of Agreement
identified therein (together, an "AGREEMENT"), to
be dated the Closing Date (as defined in the
related Prospectus Supplement).
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.
Securities Offered........ Each series of Certificates will
consist of two classes, the Asset Backed
Certificates, Class A (the "CLASS A CERTIFICATES")
and the Asset Backed Certificates, Class B (the
"CLASS B Certificates"), in each case as designated
in the related Prospectus Supplement. Each
Certificate will represent an undivided ownership
interest in the related Trust. The property of each
Trust will include a pool (a "RECEIVABLES POOL") of
retail instalment sale contracts for automobiles and
light trucks (the "RECEIVABLES"), certain monies due
or received thereunder on and after the Cutoff Date
(as defined in the related Prospectus Supplement),
security interests in the vehicles financed thereby
(the "FINANCED VEHICLES"), certain bank accounts and
the proceeds thereof, any proceeds from claims on
certain insurance policies and certain rights under
the related Purchase Agreement. See "The Trust."
Unless otherwise provided in the related Prospectus
Supplement, the Class A Certificates will be issued
in fully registered form in minimum denominations of
$1,000 and integral multiples thereof.
For any series, the Class A Certificates will
evidence in the aggregate an undivided ownership
interest of the Class A Percentage (as defined in the
related Prospectus Supplement) of the related Trust
and the Class B Certificates will evidence in the
aggregate an undivided ownership interest of the
Class B Percentage (as defined in the related
Prospectus Supplement) of such Trust. The Class B
Certificates will be subordinated to the Class A
Certificates of the related series to the extent
described herein.
Interest.................. With respect to each series of Certificates, on
each Distribution Date, interest will be passed
through to the holders of record of Class A
Certificates (the "CLASS A CERTIFICATEHOLDERS") as
of the day immediately preceding such Distribution
Date (or, if Definitive Certificates are issued,
the last day of the preceding Monthly Period)(the
"RECORD DATE") at the Pass Through Rate (as
defined in the related Prospectus Supplement) on
the Class A Certificate Balance. Interest on the
Class A Certificates will accrue from the most
recent Distribution Date on which interest has
been paid to but excluding the current
Distribution Date, to the extent of funds
available from (i) the Class A Percentage of the
Available Interest, (ii) the Subordination Spread
Account and (iii) the Class B Distributable
Amount. The "CLASS A CERTIFICATE BALANCE" will
equal, initially, the applicable Class A
Percentage of the Aggregate Amount Financed and
thereafter, except as provided in the related
Agreement, will equal the initial Class A
Certificate Balance reduced by all principal
distributions on the Class A Certificates. A
"MONTHLY PERIOD" with respect to a Distribution
Date will be the calendar month preceding the
month in which such Distribution Date occurs. See
"The Certificates" and "Federal Income Tax
Consequences."
Principal................. With respect to each series of Certificates, on
each Distribution Date, the Trustee will pass
through and distribute pro rata to Class A
Certificateholders as of the Record Date, with
respect to Scheduled Interest Receivables, all
Scheduled Payments of principal, the principal
portion of all prepayments in full and certain
partial prepayments received during the related
Monthly Period and, with respect to Simple
Interest Receivables, all payments allocable to
principal that are received by the Trustee during
the related Monthly Period, in each case to the
extent of funds available from (i) the Class A
Percentage of the Available Principal, (ii) the
Subordination Spread Account and (iii) the
remainder of the Total Available Amount. See "The
Certificates" and "The Receivables Pool."
Receivables............... The aggregate Amount Financed under the
Receivables held by each Trust (the "AGGREGATE
AMOUNT FINANCED") will be the amount specified in
the related Prospectus Supplement. Each
Receivable will be either a Scheduled Interest
Receivable or a Simple Interest Receivable. All
of the Receivables will be prepayable at any time
without penalty to the obligor. See "The
Receivables." Information with respect to each
Receivables Pool, including the weighted average
annual percentage rate and the weighted average
remaining maturity, will be set forth in the
related Prospectus Supplement.
Subordination............ The rights of the holders of Class B Certificates
(the "CLASS B CERTIFICATEHOLDERS") to receive
distributions to which they would otherwise be
entitled with respect to the Receivables held by
the related Trust will be subordinated to the
rights of the related Class A Certificateholders,
as described herein.
Subordination Spread
Account................... A Subordination Spread Account for each series will
be created with an initial deposit by the Seller of
cash or certain investments maturing on or prior to
the related initial Distribution Date and having a
value equal to the Subordination Initial Deposit (as
defined in the related Prospectus Supplement). The
funds in each Subordination Spread Account will
thereafter be supplemented by the deposit of amounts
otherwise distributable to the related Class B
Certificateholders until the amount of funds in such
Subordination Spread Account reaches an amount equal
to the applicable Specified Subordination Spread
Account Balance. Thereafter, amounts otherwise
distributable to the Class B Certificateholders will
be deposited in the Subordination Spread Account to
the extent necessary to maintain the amount of funds
in such Subordination Spread Account at an amount
equal to the Specified Subordination Spread Account
Balance. Amounts in each Subordination Spread Account
on any Distribution Date (after giving effect to all
distributions made on such Distribution Date) in
excess of the Specified Subordination Spread Account
Balance for such Distribution Date generally will be
released to the Class B Certificateholders of the
related Trust. The "SPECIFIED SUBORDINATION SPREAD
ACCOUNT BALANCE" with respect to any Distribution
Date will be equal to the Minimum Subordination
Spread Amount (as defined in the related Prospectus
Supplement), subject to adjustment in the manner
described herein. See "The Certificates --
Subordination of the Class B Certificates;
Subordination Spread Account." In no event will the
Specified Subordination Spread Account Balance be
more than the Maximum Subordination Spread Amount (as
defined in the related Prospectus Supplement) or less
than the Minimum Subordination Spread Amount. As of
any Distribution Date, the amount of funds actually
on deposit in the Subordination Spread Account may,
in certain circumstances, be less than the Specified
Subordination Spread Account Balance.
Each Subordination Spread Account will be maintained
with the Trustee as a segregated trust account, but
will not be part of the related Trust.
Monthly Advances.......... With respect to any series of
Certificates, the Servicer each month will advance to
the related Trust, with respect to each Scheduled
Interest Receivable, that portion of Scheduled
Payments that was not timely made (a "SCHEDULED
INTEREST ADVANCE"). The Servicer will be entitled to
reimbursement of a Scheduled Interest Advance 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 advance each month the
aggregate interest shortfall, if any, resulting from
payments being received other than on their
respective due dates (a "SIMPLE INTEREST ADVANCE" and
together with a Scheduled Interest Advance, a
"MONTHLY ADVANCE"). Any monthly surplus resulting
from payments on Simple Interest Receivables being
received other than on their due dates ("EXCESS
SIMPLE INTEREST COLLECTIONS") will be paid to the
Servicer. See "The Certificates--Monthly Advances."
Total Servicing Fee...... With respect to each series of
Certificates, the Servicer will receive each month a
fee for servicing the related Receivables equal to
the sum of (i) the product of one-twelfth of the
Basic Servicing Fee Rate (as defined in the related
Prospectus Supplement) and the aggregate Principal
Balance as of the last day of the preceding Monthly
Period, (ii) any interest earned on the amounts
deposited in the Collection Account and the Payment
Ahead Servicing Account and (iii) to the extent
payable as provided herein, Additional Servicing. In
addition, the Servicer will be entitled to any late
fees, prepayment charges and other administrative
fees and expenses or similar charges collected during
such Monthly Period. See "The Certificates--Servicing
Compensation and Payment of Expenses."
Optional Purchase......... With respect to each series of
Certificates, the Servicer may purchase all of the
property of the related Trust as of the last day of
the related Monthly Period on or after which the
aggregate Principal Balance declines below 10% of the
Aggregate Amount Financed. In each such case, the
purchase price will be equal to the aggregate of the
Administrative Purchase Payment plus the appraised
value of any other property held as part of such
Trust (less related Liquidation Expenses). See "The
Certificates--Termination."
Trustee................... The First National Bank of Chicago.
Tax Status................ In the opinion of Kirkland & Ellis, special
counsel for the Seller, each Trust will constitute
a grantor trust for federal income tax purposes
and will not be subject to federal income tax.
Class A Certificate Owners must report their
respective allocable shares of all income earned
on the related Trust assets (except to the extent,
that "stripped coupon" or other amounts are
treated for tax purposes as retained by the
Seller), and, subject to certain limitations on
individuals, estates and trusts, may deduct their
respective allocable shares of reasonable
servicing and other fees. Individuals should
consult their tax advisors to determine the
federal, state, local and other tax consequences
of the purchase, ownership and disposition of the
Class A Certificates. Prospective investors should
note that no rulings have been or will be sought
from the Internal Revenue Service (the "SERVICE")
with respect to any of the federal income tax
consequences discussed herein, and no assurance
can be given that the Service will not take
contrary positions. See "Federal Income Tax
Considerations."
ERISA Considerations...... As described herein and in the
Prospectus Supplement, the Class A Certificates may
be purchased by employee benefit plans that are
subject to the Employee Retirement Income Security
Act of 1974, as amended. Any benefit plan fiduciary
considering the purchase of Class A Certificates
should, among other things, consult with its counsel
in determining whether all required conditions have
been satisfied. See "ERISA Considerations."
Rating ................... As a condition of issuance, the Class A
Certificates of each series will be rated in the
highest rating category by at least one nationally
recognized rating agency. There is no assurance
that a rating will not be lowered or withdrawn by
a rating agency if circumstances so warrant. In
the event that the rating initially assigned to
any Class A Certificates is subsequently lowered
for any reason, no person or entity is obligated
to provide any additional credit enhancement.
The rating of any series does not constitute a
recommendation to buy the Certificates, and such
rating does not address the price of such
Certificates or the suitability of such Certificates
to the investor. The rating addresses the likelihood
of ultimate payment of principal and interest on the
Certificates, but does not address the timing of such
payments.
------------------------
<PAGE>
THE TRUSTS
With respect to each series of Certificates, the Seller will establish a
Trust by selling and assigning the Trust property to the Trust in exchange for
the related Certificates. The 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 or 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 Agreement and the
proceeds of such accounts, (iii) security interests in 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
Purchase Agreement. The Subordination Spread Account for a series of
Certificates will not be included in the property of the related Trust but will
be a segregated trust account held by the Trustee for the benefit of the holders
of such Certificates.
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
Certificates and making payments and distributions thereon and (iii) engaging in
other activities that are related or incidental to the foregoing and necessary,
convenient or advisable to accomplish the foregoing.
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "The Certificates--Servicing
Compensation and Payment of Expenses." To facilitate the servicing of the
Receivables, the Trustee will authorize General Motors Acceptance Corporation,
as custodian to retain physical possession of the Receivables held by each Trust
and other documents relating thereto as custodian for the 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 Trustee. In the absence of such an
amendment, the Trustee may not have a perfected security interest in the
Financed Vehicles in all states. The Trustee will not be responsible for the
legality, validity or enforceability of any security interest in any Financed
Vehicle. See "Certain Legal Aspects of the Receivables," "The Certificates--Sale
and Assignment of Receivables and Warranties Thereon" and "The
Certificates--Duties of the Trustee."
If the protection provided to the Class A Certificateholders by the
subordination of the related Class B Certificates and by the related
Subordination Spread Account is insufficient, the Class A Certificateholders
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
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
Certificateholders. See "The Certificates--Subordination of the Class B
Certificates; Subordination Spread Account" and "Certain Legal Aspects of the
Receivables."
The principal offices of each Trust will be specified in the related
Prospectus Supplement.
THE RECEIVABLES
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 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 in the ordinary course of business, which evaluate the prospective
purchaser's ability to pay and creditworthiness, as well as the asset value of
the vehicle to be financed. GMAC's standards generally also require physical
damage insurance to be maintained on each Financed Vehicle.
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 such
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 related obligor
prior to the related Cutoff Date allocable to principal.
"SCHEDULED INTEREST RECEIVABLES" are Receivables pursuant to which the
payments due from 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
monthly 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 Class A 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.
"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 any 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.
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 CERTIFICATES
The weighted average life of 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
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. Any reinvestment risk
resulting from prepayments of Receivables will be borne entirely by the
Certificateholders. See also "Certain Legal Aspects of the Receivables --
Transfers of Vehicles."
CLASS A POOL FACTOR AND TRADING INFORMATION
The "Class A Pool Factor" for any series 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 Class A Certificate
Balance as of the close of such date as a fraction of the initial Class A
Certificate Balance of such series. The Class A Pool Factor for each series will
initially be 1.0000000; thereafter, the Class A Pool Factor will decline to
reflect reductions in the related Class A Certificate Balance. The amount of a
Class A Certificateholder's pro rata share of the related Class A Certificate
Balance can be determined by multiplying the original denomination of the
holder's Certificate by the then current Class A Pool Factor.
Unless otherwise provided in the related Prospectus Supplement, with
respect to the Trust, the Certificateholders will receive reports on or about
each Distribution Date concerning payments received on the Receivables, the
Aggregate Principal Balance, each Class A 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 "The Certificates -- Statements to Class A
Certificateholders."
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 Certificates will be
applied to the purchase of the related 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.
GMAC Auto Receivables Corporation, a wholly-owned subsidiary of GMAC,
incorporated in the State of Delaware on November 16, 1990 was merged with and
into the Seller on February 22, 1996.
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 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 CERTIFICATES
The Certificates will be issued in series. Each series of Certificates
will be issued pursuant to an Agreement to be entered into between the Seller,
the Servicer and the Trustee, a form of which has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. Citations to the
relevant sections of the form of Agreement as filed appear below in parentheses.
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
Certificate and the related Agreement. Where particular provisions or terms used
in an Agreement are referred to, the actual provisions (including definitions of
terms) are incorporated by reference as part of this summary.
GENERAL
The Class A Certificates will be offered for purchase in fully registered
form in minimum denominations of $1,000 and integral multiples thereof. Unless
otherwise provided in the related Prospectus Supplement, the Certificates will
initially be represented by physical certificates registered in the name of the
nominee of The Depository Trust Company ("DTC" and, together with any successor
depository selected by the Servicer, the "DEPOSITORY"), except as provided
below. The Seller has been informed by DTC that DTC's nominee will be Cede & Co.
("CEDE"). Accordingly, Cede is expected to be the holder of record of the Class
A Certificates. Unless and until Definitive Certificates are issued under the
limited circumstances described herein or in the related Prospectus Supplement,
no person acquiring an interest in Class A Certificates (a "CLASS A CERTIFICATE
OWNER" or "CERTIFICATE OWNER") will be entitled to receive a certificate
representing such person's interest in such Class A Certificates. All references
herein to actions by Class A Certificateholders refer to actions taken by DTC
upon instructions from the participating organization ("PARTICIPANTS"), and all
references herein to distributions, notices, reports and statements to Class A
Certificateholders refer to distributions, notices, reports and statements to
DTC or Cede, as the registered holder of such Class A Certificates, as the case
may be, for distribution to Certificate Owners in accordance with DTC
procedures. (Sections 5.01 and 5.08). See "Book-Entry Registration."
The Certificates will evidence interests in the Trust created pursuant to
the related Agreement. The Class A Certificates will evidence in the aggregate
an undivided ownership interest of the Class A Percentage of the related Trust
and the Class B Certificates will evidence in the aggregate an undivided
ownership interest of the Class B Percentage of the related Trust.
(Section 5.03).
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 Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended. 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,
Certificate Owners that are not Participants or Indirect Participants but desire
to purchase, sell or otherwise transfer ownership of, or other interests in,
Class A Certificates may do so only through Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions of
principal of and interest on the Class A Certificates from the Trustee through
DTC and its Participants. Under a book-entry format, Certificate Owners may
experience some delay in their receipt of payments, since such payments will be
forwarded by the Trustee to Cede, as nominee for DTC. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Certificate Owners. Certificate Owners will not be recognized by
the Trustee as Class A Certificateholders, as such term is used in each related
Agreement, and Certificate Owners will be permitted to exercise the rights of
Class A 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
Class A Certificates among Participants on whose behalf it acts with respect to
the Class A Certificates and to receive and transmit payments of principal of,
and interest on, the Class A Certificates. Participants and Indirect
Participants with which Certificate Owners have accounts with respect to the
Class A Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective Certificate
Owners. Accordingly, although Class A Certificate Owners will not possess Class
A Certificates, the Rules provide a mechanism by which Certificate Owners will
receive payments and will be able to transfer their 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 Certificate
Owner to pledge Class A Certificates to persons or entities that do not
participate in the DTC system, or otherwise act with respect to Class A
Certificates, may be limited due to the lack of physical certificates for such
Class A Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Class A Certificateholder under the related Agreement only at the
direction of one or more Participants to whose accounts with DTC the Class A
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 Seller nor the Trustee will have
any liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Class A 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 CERTIFICATES
Unless otherwise provided in the related Prospectus Supplement, the Class
A Certificates will be issued in fully registered, certificated form
("DEFINITIVE CERTIFICATES") to Certificate Owners or their nominees, rather than
to DTC or its nominee, only if (i) the Seller advises the Trustee in writing
that DTC is no longer willing or able to discharge properly its responsibilities
as Depository with respect to the Class A Certificates and the Seller is unable
to locate a qualified successor, (ii) the Seller, at its option, advises the
Trustee in writing that it elects to terminate the book-entry system through DTC
or (iii) after the occurrence of an Event of Default for any series, Certificate
Owners representing at least a majority of the voting interests of the Class A
Certificates of such series advise the 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 interests of the Certificate Owners. The "voting interests"
of the Class A Certificates will be allocated among the Class A Certificate
Owners in accordance with the Class A Certificate Balance represented thereby;
except that in certain circumstances any Class A Certificates held by the
Seller, the Servicer or any of their respective affiliates shall be excluded
from such determination.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee is required to notify DTC of the availability
of Definitive Certificates. DTC shall notify all Class A Certificateholders of
availability of Definitive Certificates. Upon surrender by DTC of the Class A
Certificates and receipt of instructions for re-registration, the Trustee will
reissue the Class A Certificates as Definitive Certificates, and thereafter the
Trustee will recognize the holders of such Definitive Certificates as Class A
Certificateholders under the related Agreement (the "HOLDERS"). (Section 5.10).
Distribution of principal of and interest on the Class A Certificates will
be made by the Trustee directly to Holders of Definitive Certificates in
accordance with the procedures set forth herein and in the related Agreement.
Distributions of principal of and interest on each Distribution Date will be
made to Holders in whose names such Definitive Certificates were registered at
the close of business on the last day of the related Monthly Period. The final
payment on any Class A Certificate (whether a Definitive Certificate or a Class
A Certificate registered in the name of Cede) will be made only upon
presentation and surrender of such Class A Certificate at the office or agency
specified in the related notice of final distribution to Certificateholders.
(Sections 5.10 and 10.01).
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee or of a registrar named in a notice delivered to holder
of Definitive Certificates. No service charge will be imposed for any
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. (Section 5.03).
SALE AND ASSIGNMENT OF RECEIVABLES AND WARRANTIES THEREON
On or prior to a Closing Date, pursuant to the related Purchase Agreement
(a "PURCHASE AGREEMENT"), GMAC will sell and assign to the Seller, without
recourse, its entire interest in the related Receivables, including the security
interests in the Financed Vehicles, the proceeds from certain insurance policies
and the proceeds from recourse against dealers with respect to such Receivables.
On the Closing Date, the Seller will sell and assign to the Trustee, without
recourse, the Seller's entire interest in the related Receivables, including the
security interests in the Financed Vehicles, the proceeds from certain insurance
policies and the proceeds from recourse against dealers with respect to such
Receivables. (Section 2.01). 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 Purchase Agreement and the related Agreement (the
"SCHEDULE OF Receivables"). The Trustee will, concurrently with such sale and
assignment, authenticate and deliver the Certificates to the Seller in exchange
for such Receivables. (Section 5.02). The Seller will sell the Class A
Certificates to the underwriters specified in the related Prospectus Supplement.
See "Underwriting."
In each Purchase Agreement, GMAC will represent and warrant to the Seller,
among other things, that (i) the information set forth in the related Schedule
of Receivables is correct in all material respects, (ii) the obligor on each
related Receivable is required to maintain physical damage insurance covering
the Financed Vehicle in accordance with GMAC's normal requirements, (iii) as of
the related 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 related Closing
Date, each of the related Receivables 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 on the related Closing
Date complies, in all material respects with applicable state and federal laws,
including, without limitation, consumer credit, truth-in-lending, equal credit
opportunity and disclosure laws. In each related Pooling and Servicing
Agreement, the Seller will assign the representations and warranties of the
Servicer, 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 the Servicer to be false in any material
respect as of the Closing Date.
As of the last day of the second (or, if the Seller so elects, the first)
month following the discovery by the Seller, the Servicer or the Trustee of a
breach of any representation or warranty of the Seller or the Servicer that
materially and adversely affects the interests of the Certificateholders of any
series in any Receivable held by the related Trust, the Seller, unless the
breach is cured in all material respects, will repurchase (or will enforce the
obligation of GMAC under the related Purchase Agreement to repurchase) such
Receivable (a "WARRANTY RECEIVABLES") from the Trust at a price equal to: (a) in
the case 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 Schedule 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 previously received (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. This repurchase obligation constitutes the sole remedy available to
Certificateholders or the Trustee for any such uncured breach. (Sections 2.04
and 2.05).
In each 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 Trustee or the
Certificateholders in the related Receivables and (iii) the Servicer will not
amend or otherwise modify any 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 or the Trustee
of a breach of any covenant that materially and adversely affects any Receivable
held by the related Trust 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 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 Certificateholders or the Trustee for
any such uncured breach. (Sections 3.07 and 3.08).
Pursuant to each Agreement, the Trustee will agree to GMAC acting as
custodian to maintain possession, as the Trust's agent, of the retail instalment
sale contracts and any other documents relating to the Receivables (Section
2.02). To assure uniform quality in servicing both the Receivables and 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 financing statements reflecting
the sale and assignment of such Receivables to the Trust will be filed, and
GMAC's accounting records and computer files will reflect such sale and
assignment. Because such Receivables will remain in possession of GMAC as
custodian, and will not be stamped or otherwise marked to reflect such
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
interest in such Receivables could be defeated. See "Certain Legal Aspects of
the Receivables--Security Interest in Vehicles."
COLLECTIONS
With respect to each series of Certificates, the Servicer will establish
two accounts in the name of the Trustee on behalf of the Certificateholders, the
first into which certain payments made on or with respect to the related
Receivables will be deposited (the "COLLECTION Account"), and the second from
which all distributions with respect to the related Receivables and the
Certificates will be made (the "CERTIFICATE ACCOUNT"). The Servicer will also
establish with respect to each series of Certificates an additional account (the
"PAYMENT AHEAD SERVICING ACCOUNT") in the name of the Trustee, into which, to
the extent required by the related Agreement, early payments by or on behalf of
obligors on a Scheduled Interest Receivable which do not constitute either
Scheduled Payments or Prepayments will be deposited until such time as payment
falls due. The Payment Ahead Servicing Account will not be property of the
related Trust. Each Collection Account and each Payment Ahead Servicing Account
will be maintained with the Trustee so long as (i) the Trustee's short-term
unsecured debt obligations have a rating of P-l by Moody's Investors Service,
Inc., a rating of A-l+ by Standard & Poor's Ratings Services and, if rated by
Fitch Investors Service, L.P., a rating of F-1+ by Fitch Investors Service, L.P.
(the "REQUIRED DEPOSIT RATING") or (ii) such Accounts are maintained in the
trust department of the Trustee. If the short-term unsecured debt obligations of
the Trustee do not have the Required Deposit Rating, the Servicer will, with the
Trustee's assistance as necessary, cause any Collection Account and any Payment
Ahead Servicing Account to be moved to a bank whose short-term unsecured debt
obligations have the Required Deposit Rating or moved to the trust department of
the Trustee. Unless otherwise provided in the related Prospectus Supplement,
each Collection Account, Payment Ahead Servicing Account and Certificate Account
will initially be maintained in the trust department of the Trustee. (Section
4.01).
The Servicer will deposit all payments on Receivables held by any Trust
received from obligors and all proceeds of such Receivables collected during
each 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 Event of Default and (iii) either (A) the short-term
unsecured debt of the Servicer is rated at least A-1 by Standard & Poor's
Ratings Services and P-1 by Moody's Investors Service, Inc. or (B) certain
arrangements are made which are acceptable to the relevant rating agency or
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. (Section 4.02).
Collections on a Scheduled Interest Receivable held by any Trust 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 (i), (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"). (Section
4.03(a)).
Collections made during a Monthly Period with respect to Simple Interest
Receivables held by any Trust (other than Administrative Receivables or 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
held by the related Trust. (Section 4.03(b)). 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 related 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 such 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. (Section 4.03(c)).
MONTHLY ADVANCES
Unless otherwise provided in the related Prospectus Supplement, if the
full Scheduled Payment due on a Scheduled Interest Receivable held by any Trust
is not received by the end of the month in which it is due, whether as the
result of any 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
make 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 Scheduled Interest
Receivable. The Servicer will be reimbursed for any such Scheduled Interest
Advances from subsequent payments or collections relating to such Scheduled
Interest Receivable. Upon the determination that reimbursement from the
preceding sources is unlikely, the Servicer will be entitled to recoup its
Scheduled Interest Advance from collections from other Receivables. (Section
4.04(a)).
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 make a Simple Interest 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 related 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 related Trust to the extent allocable to interest. In addition, the Servicer
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. (Section 4.04(b)).
DISTRIBUTIONS
With respect to each Trust, on or before each Distribution Date, the
Servicer or the Trustee, as the case may be, will transfer collections on the
Receivables held by the related Trust for the related Monthly Period and all
Prepayments to the related Certificate Account. On each Distribution Date, the
Trustee will cause collections made during such Monthly Period which constitute
Payments Ahead to be transferred from such Certificate Account to the Servicer
or to the related Payment Ahead Servicing Account, if required.
(Sections 4.01 and 4.06).
The Trustee will make distributions to the Certificateholders out of the
amounts on deposit in the related Certificate Account. The amount to be
distributed to the Certificateholders will be determined in the manner described
below.
DETERMINATION OF AVAILABLE AMOUNTS. The "TOTAL AVAILABLE AMOUNT" for a
Distribution Date will be the sum of the Available Interest and the Available
Principal.
The "AVAILABLE INTEREST" with respect to each series of Certificates for a
Distribution Date will be the sum, with respect to the related Monthly Period,
of: (i) that portion of all collections on the Receivables held by the related
Trust (other than Liquidating Receivables) allocable to interest or Prepayment
Surplus (including, in the case of Scheduled Interest Receivables, the interest
portion of existing Payments Ahead being applied in such Monthly Period but
excluding Excess Payments made during such Monthly Period that are treated as
Payments Ahead), (ii) proceeds ("LIQUIDATION PROCEEDS") of the liquidation of
defaulted Receivables ("LIQUIDATING RECEIVABLES"), 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 of each Receivable that the Seller repurchased or the Servicer
purchased during such related Monthly Period, to the extent allocable to accrued
interest or Prepayment Surplus thereon.
With respect to each series of Certificates, the "Available Principal" for
a Distribution Date will be the sum, with respect to the related Monthly Period,
of: (i) that portion of all collections on the Receivables held by the related
Trust (other than Liquidating Receivables) allocable to principal (including, in
the case of Scheduled Interest Receivables, the principal portion of Prepayments
and existing Payments Ahead being applied in such Monthly Period 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 and (iv) to the
extent allocable to principal, the Warranty Payment or the Administrative
Purchase Payment received with respect to each Receivable that the Seller
repurchased or the Servicer purchased during such related Monthly Period.
The Available Interest and the Available Principal with respect to any
series of Certificates on any Distribution Date will exclude: (i) amounts
received on any Scheduled Interest Receivable (other than a Liquidating
Receivable) to the extent that the Servicer has previously made an unreimbursed
Scheduled Interest Advance, (ii) Liquidation Proceeds with respect to Scheduled
Interest Receivables to the extent of any unreimbursed Scheduled Interest
Advances, (iii) any Excess Simple Interest Collections, (iv) Liquidation
Proceeds with respect to Simple Interest Receivables paid to the Servicer as
described above under "Monthly Advances" and (v) amounts representing
reimbursement for certain Liquidation Expenses.
CALCULATION OF DISTRIBUTABLE AMOUNTS. With respect to any series of
Certificates, the "CLASS A DISTRIBUTABLE AMOUNT" with respect to a Distribution
Date will equal the sum of (i) the "Class A Principal Distributable Amount,"
consisting of the Class A Percentage of the following items: (a) the principal
portion of all Scheduled Payments with respect to the related Monthly Period on
Scheduled Interest Receivables held by the related Trust (other than Liquidating
Receivables) and the principal portion of all payments received by the Trustee
during the related Monthly Period on Simple Interest Receivables held by the
related Trust (other than Liquidating Receivables), (b) the principal portion of
all Prepayments received during the related Monthly Period (except to the extent
included in (a) above) and (c) 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 (a) or (b) above) and (ii) the "CLASS A
INTEREST DISTRIBUTABLE AMOUNT," consisting of one month's interest at the Pass
Through Rate on the Class A Certificate Balance as of the last day of the
related Monthly Period.
The "Class A Certificate Balance" with respect to any series of
Certificates will equal, initially, the Class A Percentage of the Aggregate
Amount Financed and, thereafter, will equal such initial Class A Certificate
Balance, reduced by all distributions of Class A Principal Distributable Amounts
actually made to Class A Certificateholders.
With respect to any series of Certificates, the "CLASS B DISTRIBUTABLE
AMOUNT" with respect to a Distribution Date will be an amount equal to the sum
of (i) the "CLASS B PRINCIPAL DISTRIBUTABLE AMOUNT," consisting of the Class B
Percentage of the amounts set forth under (i)(a) through (i)(c) above with
respect to the Class A Principal Distributable Amount and (ii) the "Class B
Interest Distributable Amount," consisting of (a) one month's interest at the
Pass Through Rate on the Class B Certificate Balance as of the last day of the
related Monthly Period, (b) an amount equal to (1) all Surplus Interest with
respect to Receivables held by the related Trust less (2) Additional Servicing
payable on such Distribution Date and (c) all Prepayment Surplus with respect to
Scheduled Interest Receivables held by the related Trust to which a Prepayment
is to be applied, net of one month's interest at the applicable Pass Through
Rate on the aggregate Principal Balance of such Scheduled Interest Receivables
as of the first day of the related Monthly Period.
With respect to any series of Certificates, the "CLASS B CERTIFICATE
BALANCE" will equal, initially, the Class B Percentage of the Aggregate Amount
Financed and, thereafter, will equal the initial Class B Certificate Balance,
reduced by (i) all distributions of Class B Principal Distributable Amounts
actually made on or prior to such date to Class B Certificateholders (or
deposited on or prior to such date in the Subordination Spread Account, not
including the Subordination Initial Deposit), (ii) the Class A Principal
Carryover Shortfall as of the preceding Distribution Date and (iii) any
shortfalls from prior Distribution Dates in principal distributions to the Class
B Certificateholders.
With respect to each series of Certificates, the "PREPAYMENT SURPLUS" with
respect to any Distribution Date on which a Prepayment is to be applied with
respect to a Scheduled Interest Receivable, will equal that portion of such
Prepayment, net of any rebate to the obligor of the portion of the Scheduled
Payments attributable to unearned finance charges, which is not allocable to
principal.
With respect to each series of Certificates, the "SURPLUS INTEREST" with
respect to any Distribution Date will equal the product of (i) in the case of a
Scheduled Interest Receivable, the interest portion of the Scheduled Payment on
such Receivable or, in the case of a Simple Interest Receivable, the amount of
interest that would be due during such Monthly Period on such Receivable
assuming that such payment was received on its due date and (ii) the remainder
of (a) one minus (b) a fraction, the numerator of which equals the sum of the
applicable Pass Through Rate and the Basic Servicing Fee Rate and the
denominator of which equals the APR on such Receivable.
CALCULATION OF AMOUNTS TO BE DISTRIBUTED. Prior to each Distribution
Date, the Servicer will calculate the amount to be distributed to
Certificateholders.
The holders of the Class A Certificates will receive on each Distribution
Date, to the extent of available funds, an amount equal to the sum of the
related Class A Distributable Amount and any outstanding Class A Interest
Carryover Shortfall and Class A Principal Carryover Shortfall (each as defined
below). On each Distribution Date on which the sum of the Class A Interest
Distributable Amount and any outstanding Class A Interest Carryover Shortfall
from the preceding Distribution Date exceeds the related Class A Percentage of
the Available Interest (after payment of the Total Servicing Fee including any
unpaid Total Servicing Fees with respect to prior Monthly Periods), the Class A
Certificateholders will be entitled to receive such excess: first, from the
related Class B Percentage of such Available Interest, second, if such amounts
are insufficient, from amounts on deposit in the related Subordination Spread
Account, and third, if such amounts are insufficient, from the related Class B
Percentage of the Available Principal. (Section 4.06). With respect to any
series of Certificates, the "CLASS A INTEREST CARRYOVER SHORTFALL" as of the
close of any Distribution Date means the excess of the Class A Interest
Distributable Amount for such Distribution Date plus any outstanding Class A
Interest Carryover Shortfall from the preceding Distribution Date, to the extent
permitted by law, at the applicable Pass Through Rate from such preceding
Distribution Date through the current Distribution Date, over the amount of
interest that the holders of the Class A Certificates actually received on such
current Distribution Date.
With respect to any series of Certificates, on each Distribution Date on
which the sum of the Class A Principal Distributable Amount and any outstanding
Class A Principal Carryover Shortfall from the preceding Distribution Date
exceeds the Class A Percentage of the Available Principal on such Distribution
Date, the Class A Certificateholders will be entitled to receive such excess,
first, from the related Class B Percentage of the Available Principal, second,
if such amounts are insufficient, from amounts on deposit in the related
Subordination Spread Account, and third, if such amounts are insufficient, from
any remaining related Available Interest. (Section 4.06). With respect to any
series of Certificates, the "Class A Principal Carryover Shortfall" as of the
close of any Distribution Date means the excess of the Class A Principal
Distributable Amount plus any outstanding Class A Principal Carryover Shortfall
from the preceding Distribution Date over the amount of principal that the
holders of the Class A Certificates actually received on such current
Distribution Date.
The holders of the Class B Certificates will be entitled to receive on any
Distribution Date an amount equal to the sum of the related Class B Interest
Distributable Amount and the Class B Principal Distributable Amount (and any
shortfalls from prior Distribution Dates in payments to the Class B
Certificateholders), after giving effect to (i) amounts required to pay the
related Total Servicing Fee payable to the Servicer on such Distribution Date,
and (ii) any amounts required to be distributed to the holders of Class A
Certificates pursuant to the subordination of the rights of the holders of such
Class B Certificates. (Section 4.06).
SUBORDINATION OF THE CLASS B CERTIFICATES; SUBORDINATION SPREAD ACCOUNT
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables held by the related Trust will be subordinated to the
rights of the Class A Certificateholders of the related series in the event of
defaults and delinquencies on such Receivables as provided in the related
Agreement. The protection afforded to the Class A Certificateholders will be
effected both by the preferential right of the Class A Certificateholders to
receive current distributions with respect to the Receivables held by the
related Trust and by the establishment of a Subordination Spread Account. Each
Subordination Spread Account will be created with an initial deposit by the
Seller of the applicable Subordination Initial Deposit and will thereafter be
increased by deposit therein of amounts otherwise distributable to the related
Class B Certificateholders until the amount in such Subordination Spread Account
reaches an amount equal to the applicable Specified Subordination Spread Account
Balance. Thereafter, amounts otherwise distributable to the Class B
Certificateholders will be deposited in such Subordination Spread Account to the
extent necessary to maintain the amount in such Subordination Spread Account at
the applicable Specified Subordination Spread Account Balance. (Section 4.07).
With respect to any series of Certificates, the "Specified Subordination
Spread Account Balance" with respect to any Distribution Date, will be the
Minimum Subordination Spread Amount, except that, unless otherwise provided in
the related Prospectus Supplement, if on any Distribution Date (i) the average
of the Charge-off Rates for the preceding three months exceeds 2.0% or (ii) the
average of the Delinquency Percentages for the preceding three months exceeds
1.5%, then such Specified Subordination Spread Account Balance for such
Distribution Date will be an amount equal to a specified percentage of the
aggregate Principal Balance. Such specified percentage shall be determined by
deducting from the Specified Subordination Percentage (as defined in the related
Prospectus Supplement) the following fraction, expressed as a percentage: (x) 1
minus (y) a fraction, the numerator of which is the related Class A Certificate
Balance and the denominator of which is the aggregate Principal Balance.
Notwithstanding the foregoing, in no event (except as described below) will any
Specified Subordination Spread Account Balance be more than the Maximum
Subordination Spread Amount or less than the Minimum Subordination Spread
Amount. As of any Distribution Date, the amount of funds actually on deposit in
any Subordination Spread Account may, in certain circumstances, be less than the
applicable Specified Subordination Spread Account Balance. Finally, on any
Distribution Date on which the related Class A Certificate Balance is equal to
or less than the Subordination Spread Trigger (as defined in the related
Prospectus Supplement) after giving effect to distributions on such Distribution
Date, the Specified Subordination Spread Account Balance will be the greater of
the applicable balance determined as described above or the Trigger
Subordination Spread Amount (as defined in the related Prospectus Supplement).
With respect to any series of Certificates, the "CHARGE-OFF RATE" with
respect to a Monthly Period will equal the Aggregate Net Losses with respect to
the Receivables held by the related Trust expressed, on an annualized basis, as
a percentage of the average of (x) the aggregate Principal Balance on the last
day of the Monthly Period preceding such Monthly Period and (y) the aggregate
Principal Balance on the last day of such Monthly Period; the "AGGREGATE NET
LOSSES" with respect to a Monthly Period will equal 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; and the "Delinquency
Percentage" with respect to a Monthly Period will equal the ratio of all
outstanding Receivables which are 61 days or more delinquent as of the last day
of such 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.
A Subordination Spread Account will not be a part of or otherwise
includable in the related Trust and will be a segregated trust account held by
the Trustee. With respect to any series of Certificates, on each Distribution
Date, (i) if the amounts on deposit in the related Subordination Spread Account
are less than the Specified Subordination Spread Account Balance for such
Distribution Date, the Trustee will, after payment of any amounts required to be
distributed to holders of the Class A Certificates and the payment of the Total
Servicing Fee due with respect to the related Monthly Period, withdraw from the
related Certificate Account and deposit in the related Subordination Spread
Account the amount remaining in the Certificate Account that would otherwise be
distributed to the holders of the Class B Certificates, or such lesser portion
thereof as is sufficient to bring the amount in such Subordination Spread
Account up to such Specified Subordination Spread Account Balance and (ii) if
the amount on deposit in the related Subordination Spread Account on such
Distribution Date (after giving effect to all deposits or withdrawals therefrom
on such Distribution Date) is greater than the applicable Specified
Subordination Spread Account Balance for such Distribution Date, the Trustee
will release and distribute any such excess to the holders of the Class B
Certificates. Upon any such distribution to the Class B Certificateholders, the
Class A Certificateholders of such series will have no further rights in, or
claims to, such amounts. (Section 4.07).
Amounts held from time to time in each Subordination Spread Account will
continue to be held for the benefit of holders of the Certificates. Funds in
each Subordination Spread Account will be invested as provided in the related
Agreement. The holders of the Class B Certificates will be entitled to receive
all investment earnings on amounts in the related Subordination Spread Account.
Investment income on amounts in any Subordination Spread Account will not be
available for distribution to the holders of the related Class A Certificates or
otherwise subject to any claims or rights of the holders of the related Class A
Certificates.
(Section 4.07).
If on any Distribution Date the holders of the Class A Certificates do not
receive the sum of the related Class A Distributable Amount, Class A Interest
Carryover Shortfall and Class A Principal Carryover Shortfall for such
Distribution Date (after giving effect to any amounts applied to such deficiency
which were withdrawn from the related Subordination Spread Account or withheld
from the related Class B Distributable Amount), the holders of the Class B
Certificates of such series will not receive any portion of the Total Available
Amount.
The subordination of the Class B Certificates and the related
Subordination Spread Account is intended to enhance the likelihood of receipt by
the Class A Certificateholders of the full amount of principal and interest on
the Receivables held by the related Trust due them and to decrease the
likelihood that the Class A Certificateholders will experience losses. However,
in certain circumstances, the related Subordination Spread Account could be
depleted and shortfalls could result.
So long as certain conditions are satisfied, the Servicer is permitted for
administrative convenience to deposit in each Certificate Account only the net
amount distributable to Certificateholders on the Distribution Date. (Section
4.08). Similarly, the Seller is entitled to net its payment obligations to the
Trustee against any amounts distributable on the related Class B Certificates on
any Distribution Date. The amounts available for distribution to
Certificateholders as described above could be reduced if certain
indemnification or reimbursement payments were required to be made from the
related Certificate Account as described under "Monthly Advances," "Certain
Matters Regarding the Servicer" and "The Trustee."
<PAGE>
The following chart sets forth an example of the application of the
foregoing provisions to a hypothetical monthly distribution:
September 1-
September 30........... Monthly Period. The Servicer receives payments
and other proceeds in respect of the Receivables.
October 10.............. The tenth calendar day of the month. On or
before this date the Servicer notifies the
Trustee of, among other things, the amounts to
be distributed on the Distribution Date.
October 14.............. Record Date. Distributions on the Distribution
Date are made to Certificateholders of record at
the close of business on this date (or, if
Definitive Certificates are issued, the Record Date
will be September 30).
October 15.............. Distribution Date. On or before this date, the
Seller and the Servicer (or the Trustee) make
the required remittances and transfers to the
Collection Account and the Certificate Account
in immediately available funds, and the Trustee
pays the Total Servicing Fee, distributes to
holders of the Class A and Class B Certificates
amounts payable in respect of the Certificates
and remits amounts to the Subordination Spread
Account (if required).
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
With respect to each Trust, unless otherwise provided in the related
Prospectus Supplement, the Servicer will receive a servicing fee (the "BASIC
SERVICING FEE") for each 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
last day of the preceding Monthly Period. Unless otherwise provided in the
related Prospectus Supplement with respect to each series of Certificates, the
Servicer will also receive for each Monthly Period an additional amount (the
"ADDITIONAL SERVICING") equal to the lesser of (i) the amount by which (A) 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 (A) the sum of Available Interest and Available
Principal for the related Distribution Date exceeds (B) the sum, without
duplication, of (x) all amounts required to be distributed with respect to the
Class A Certificates and the Class B Certificates on such Distribution Date, (y)
the Basic Servicing Fee paid on such Distribution Date and any unpaid Basic
Servicing Fees from all prior Distribution Dates and (z) the amount, if any,
deposited into the Subordinated Spread Account on such Distribution Date. 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. Unless otherwise provided in the Prospectus Supplement, the
Total Servicing Fee for each Monthly Period (together with any portion of the
Total Servicing Fee that remains unpaid from prior Distribution Dates) may be
paid at the beginning of such Monthly Period out of collections for such Monthly
Period. In addition, with respect to each series of Certificates, the Servicer
will be entitled to any late fees, prepayment charges or certain similar fees
and charges collected during the Monthly Period, plus any interest earned during
the Monthly Period on deposits in the related Collection Account and Payment
Ahead Servicing Account (the "SUPPLEMENTAL SERVICING FEE"). The "PRINCIPAL
BALANCE," as of any day, 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.
The Total Servicing Fee and the Supplemental Servicing Fee with respect to
each series of Certificates is 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 Trustee with respect to
distributions and generating federal income tax information for the related
Trust. Such amounts also will reimburse the Servicer for certain taxes, the
Trustee's fees, accounting fees, outside auditor fees, data processing costs and
other costs incurred in connection with administering the related Receivables
Pool. (Section 3.09).
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 Agreement, follow such collection procedures as it follows with respect
to comparable automotive receivables that it services for itself or others.
(Section 3.02). See "Certain Legal Aspects of the Receivables." The Servicer is
authorized to grant certain rebates, adjustments or extensions with respect to a
Receivable subject to certain restrictions on amending or modifying Receivables,
as described under "The Certificates -- Sale and Assignment of Receivables and
Warranties Thereon." (Sections 3.02 and 3.07).
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 such Receivable, including the repossession and disposition of the
Financed Vehicle securing such Receivable at a public or private sale, or the
taking of any other action permitted by applicable law. (Section 3.04). The
Servicer will be entitled to receive an amount specified in the related
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"). (Section 3.04).
REPORTS TO CLASS A CERTIFICATEHOLDERS
With respect to each series of Certificates, on each Distribution Date,
the Trustee will include with each distribution to each Class A
Certificateholder (which will be Cede as the nominee for DTC unless Definitive
Certificates are issued under the limited circumstances described herein) a
statement setting forth the following information with respect to the related
Monthly Period, to the extent applicable (Section 4.09(a)):
(i) the amount of the distribution allocable to principal;
(ii) the amount of the distribution allocable to interest;
(iii) the aggregate Principal Balance as of the close of business on
the last day of such Monthly Period;
(iv) the amount of the Total Servicing Fee paid to the Servicer with
respect to the related Monthly Period and the Certificateholder's Class
A Percentage of the Total Servicing Fee;
(v) the amount of the Class A Interest Carryover Shortfall and Class A
Principal Carryover Shortfall, if any, on such Distribution Date and the
change in such amounts from those of the prior Distribution Date;
(vi) the Class A Pool Factor on such Distribution Date (after giving
effect to payments allocated to principal reported under (i) above);
(vii) the amount otherwise distributable to the Class B
Certificateholders that is distributed to Class A Certificateholders on
such Distribution Date;
(viii) the balance of the Subordination Spread Account on such
Distribution Date, after giving effect to distributions made on such
Distribution Date, and the change in such balance from that of the prior
Distribution Date;
(ix) 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 Distribution Date; and
(x) the amount of Monthly Advances on such Distribution Date.
Each amount set forth pursuant to subclauses (i), (ii), (iv) and (v) above
will be expressed as a dollar amount per $1,000 of original principal balance of
a Class A Certificate.
Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of each related Agreement, the
Trustee will mail to each person who at any time during such calendar year
will have been a Class A Certificateholder, a statement containing the sum of
the amounts described in (i), (ii), (iv) and (v) above for the purposes of
such Class A Certificateholder's preparation of federal income tax returns.
(Section 4.09(b)). See "Federal Income Tax Consequences."
EVIDENCE AS TO COMPLIANCE
Each Agreement will provide that a firm of independent accountants will
furnish to the 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 with certain standards relating to the servicing of the related
Receivables, the Servicer's accounting records and computer files with respect
thereto and certain other matters. (Section 3.12).
Each Agreement will also provide for delivery to the Trustee, on or before
August 15 of such 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
related Agreement throughout the preceding twelve months ended June 30 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 Agreement. (Section 3.11).
Copies of such statements and certificates may be obtained by
Certificateholders by a request in writing to the Trustee addressed to the
Corporate Trust Office. (Section 3.11(a)).
In each Agreement, the Seller will agree to give the Trustee notice of any
event which with the giving of notice or the lapse of time, or both, would
become an Event of Default as defined in Section 8.01 therein. In addition, the
Seller will agree to give the Trustee and the Trust notice of certain covenant
breaches which with the giving of notice or lapse of time, or both, would become
an Event of Default. (Section 3.11(b)).
CERTAIN MATTERS REGARDING THE SERVICER
Each Agreement will provide that GMAC may not resign from its obligations
and duties as the Servicer thereunder, 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 Trustee or a successor servicer
has assumed GMAC's servicing obligations and duties under the related Agreement.
(Section 7.05).
Each 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 Certificateholders for taking any action or for refraining
from taking any action pursuant to such Agreement 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 Agreement will further provide that the
Servicer and its directors, officers, employees and agents will be reimbursed by
the Trustee for any contractual damages, liability or expense incurred by reason
of the Trustee's wilful misfeasance, bad faith or negligence (except errors in
judgment) in the performance of the Trustee's duties thereunder or by reason of
reckless disregard of its obligations and duties thereunder. In addition, each
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 such Agreement 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 such
Agreement and the rights and duties of the parties thereto and the interests of
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 Certificate Account. Any such
indemnification or reimbursement will reduce the amount otherwise available for
distribution to Certificateholders. (Section 7.03).
Under the circumstances specified in each Agreement, any entity into which
the Servicer or the Seller, as the case may be, may be merged or consolidated,
or any entity resulting from any merger, conversion or consolidation to which
the Servicer or the Seller, as the case may be, is a party, or any entity
succeeding to the business of the Servicer or the Seller, as the case may be 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 or the Seller, as the case may be, will be the successor of the
Servicer or the Seller, as the case may be, under each Agreement. (Sections 6.02
and 7.02). The Servicer may at any time subcontract any duties as Servicer under
any Agreement to any entity more than 50% of the voting interests of which are
owned, directly or indirectly, by General Motors. The Servicer may at any time
perform specific duties as Servicer through subcontractors who are in the
business of servicing receivables similar to the Receivables, provided that no
such delegation will relieve the Servicer of its responsibility with respect to
such duties. (Section 7.04).
EVENTS OF DEFAULT
With respect to any series of Certificates, "EVENTS OF DEFAULT" under the
related Agreement will consist of (i) any failure by the Servicer to make any
required distribution, payment, transfer or deposit or to direct the Trustee to
make any required distribution, which failure continues unremedied for five
business days after receipt by the Servicer of notice thereof from the Trustee
or discovery of such failure by an officer of the Servicer; (ii) any failure by
the Seller or the Servicer to observe or perform in any material respect any
other of its covenants or agreements in the related Agreement which failure
materially and adversely affects the rights of Certificateholders and which
continues unremedied for 90 days after the giving of written notice of such
failure to the Seller, by the Trustee or to the Seller and the Trustee by the
holders of Class A Certificates evidencing not less than 25% of the voting
interests thereof; (iii) any representation, warranty or certification made by
the Servicer in such Pooling and Servicing Agreement or in any certificate
delivered pursuant thereto proves to have been incorrect when made and which has
a material adverse effect on the rights of the related Securityholders and which
effect continues unremedied for a period of 60 days after the giving of written
notice thereof to the Servicer by the Trustee; or (iv) certain events of
bankruptcy insolvency or receivership with respect to the Servicer. (Section
8.01).
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 reasonable efforts to perform its obligations in
a timely manner in accordance with the terms of the Pooling and Servicing
Agreement and the Servicer will provide the Trustee, the Seller and the
Certificateholders prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
RIGHTS UPON EVENT OF DEFAULT
As long as an Event of Default under an Agreement remains unremedied, the
Trustee or holders of Class A Certificates evidencing at least a majority of the
voting interests thereof may terminate all of the rights and obligations of the
Servicer under such Agreement, whereupon such Trustee will succeed to all the
responsibilities, duties and liabilities of the Servicer under such Agreement
and will be entitled to similar compensation arrangements. If, however, a
bankruptcy trustee or similar official has been appointed for the Servicer, and
no Event of Default other than such appointment has occurred, such trustee or
official may have the power to prevent the Trustee or the Certificateholders
from effecting a transfer of servicing. If the Trustee is unwilling to act, then
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 having a net worth of
at least $100,000,000 and whose regular business includes the servicing of
automobile receivables and which satisfies the other criteria set forth in the
Agreement. The Trustee and such successor may agree upon the servicing
compensation to be paid, which in no event may be greater than the servicing
compensation to the Servicer under the related Agreement. (Sections 8.02 and
8.03).
WAIVER OF PAST DEFAULTS
With respect to each Trust, the holders of Class A Certificates evidencing
at least a majority of the voting interests thereof may waive any default by the
Servicer in the performance of its obligations under the related Agreement and
its consequences, except a default in making any required deposits to or
payments from the related Collection Account or Certificate Account in
accordance with the Agreement. No such waiver will impair the rights of the
Trustee or the Certificateholders with respect to subsequent defaults. (Section
8.05).
AMENDMENT
Each Agreement may be amended by the Seller, the Servicer and the Trustee
without the consent of the Class A 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, liquidity or other enhancement arrangement for the benefit of
Certificateholders, (iv) to add to the covenants, restrictions or obligations of
the Seller, the Servicer or the Trustee for the benefit of Certificateholders 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 Certificateholders. Each such
Agreement may also be amended by parties thereto with the consent of the holders
of Certificates evidencing at least a majority of the voting interests of each
class of Certificates 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 Certificateholders; except that no such
amendment may (a) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, distributions of payments that are required to be made
on any related Certificate, the applicable Pass Through Rate or the applicable
Specified Subordination Spread Account Balance, (b) adversely affect the rating
by any Rating Agency of the Certificates without the consent of holders of
Certificates evidencing at least two-thirds of the voting interests of the
outstanding Certificates or (c) reduce the aforesaid percentage required of
Certificateholders to consent to any such amendment without the consent of all
Certificateholders. (Section 11.01).
TERMINATION
With respect to each Trust, the respective obligations of the Seller, the
Servicer and the Trustee created by each Agreement will terminate upon the
distribution to the related Certificateholders of all amounts required to be
distributed to them pursuant to such Agreement. In order to avoid excessive
administrative expense, the Servicer, or its successor, is permitted at its
option to purchase from the related Trust, as of the last day of any Monthly
Period as of which the aggregate Principal Balance of all Receivables held by
the related Trust is equal to or less than 10% of the Aggregate Amount Financed,
the corpus of such Trust at a price equal to the aggregate Administrative
Purchase Payments for the related Receivables plus the appraised value of any
other property held as part of such Trust less Liquidation Expenses. Exercise of
such right and the subsequent distribution to Certificateholders of all amounts
required to be distributed to them pursuant to the related Agreement will effect
early retirement of such Certificates. In such case, the Trustee will give
written notice of termination to each Certificateholder of record. The final
distribution to any Certificateholder will be made only upon surrender and
cancellation of such Certificateholder's Certificate at an office or agency of
the Trustee specified in the notice of termination. (Sections 10.01 and 10.02).
DUTIES OF THE TRUSTEE
The Trustee will make no representations as to the validity or sufficiency
of any Agreement, the Certificates or any Receivables or related documents, and
will not be accountable for the use or application by the Seller or the Servicer
of any funds paid to the Seller or the Servicer in respect of the Certificates
or the Receivables, or the investment of any monies by the Servicer before such
monies are deposited into the related Certificate Account. The Trustee will not
independently verify any Receivables. If no Event of Default has occurred, the
Trustee will be required to perform only those duties specifically required of
it under the related Agreement. Generally, those duties will be limited to the
receipt of the various certificates, reports or other instruments required to be
furnished to the Trustee, in which case it will only be required to examine them
to determine whether they conform to the requirements of the related Agreement.
(Sections 9.01 and 9.05).
THE TRUSTEE
The First National Bank of Chicago will be the Trustee. The Trustee and
any of its affiliates may hold Certificates in their own names. In addition, for
the purpose of meeting the legal requirements of certain local jurisdictions,
the Trustee, with the consent of the Servicer, will have the power to appoint
co-trustees or separate trustees of all or any part of each Trust. In the event
of such appointment, all rights, powers, duties and obligations conferred or
imposed upon the Trustee by an Agreement will be conferred or imposed upon the
Trustee and such separate trustee or co-trustee jointly, or, in any jurisdiction
in which the Trustee will be incompetent or unqualified to perform certain acts,
singly upon such separate trustee or co-trustee who will exercise and perform
such rights, powers, duties and obligations solely at the direction of the
Trustee. (Section 9.12).
The Trustee will be under no obligation to exercise any of the trusts or
powers vested in it by an Agreement or to make any investigation of matters
arising thereunder or to institute, conduct or defend any litigation thereunder
or in relation thereto at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby. (Section 9.04). No Certificateholder
will have any right under an Agreement to institute any proceeding with respect
to such Agreement, unless such holder previously has given to the Trustee
written notice of default and unless the holders of Class A Certificates
evidencing not less than 25% of the voting interests of such series have made
written request upon the Trustee to institute such proceeding in its own name as
Trustee thereunder and have offered to the Trustee reasonable indemnity and the
Trustee for 30 days has neglected or refused to institute any such proceedings.
(Section 11.03).
The Trustee may give notice of its intent to resign at any time, in which
event the Servicer will be obligated to appoint a successor trustee. The
Servicer may also remove the Trustee if the Trustee ceases to be eligible to
continue as such under the related Agreement or if the Trustee becomes insolvent
or unable to act. In such circumstances, the Servicer will be obligated to
appoint a successor trustee. Any resignation or removal of the Trustee and
appointment of a successor trustee will not become effective until acceptance of
the appointment by the successor trustee. (Section 9.09).
Each Agreement will provide that the Servicer will pay the Trustee's fees.
(Section 9.07). Each Agreement will further provide that the Trustee will be
entitled to indemnification by the Servicer for, and will be held harmless
against, any loss, liability or expense incurred by the Trustee in the
acceptance or performance of its duties under such Agreement (other than through
its own wilful misfeasance, bad faith or negligence (other than errors in
judgment) or by reason of a breach of any of its representations or warranties
set forth in such Agreement). (Sections 6.01, 7.01 and 9.07). Any such
indemnification by a Trust will reduce the amount otherwise available for
distribution to Certificateholders.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In all states in which the Receivables are 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 will constitute
personal property security agreements and include grants of security interests
in the vehicles under the Uniform Commercial Code. 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 are 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 related Purchase Agreement,
GMAC will assign its security interest in the Financed Vehicles securing the
related Receivables to the Seller and pursuant to each Agreement, the Seller
will assign its security interest in the Financed Vehicles securing the
Receivables to the Trust. However, because of the administrative burden and
expense, no certificate of title will be amended to identify the related Trust
as the new secured party relating to a Financed Vehicle. Also, the Servicer will
continue to hold any certificates of title relating to the vehicles in its
possession as custodian for the Seller and the Trustee pursuant to the related
Custodian Agreement. See "The Certificates--Sale and Assignment of Receivables
and Warranties Thereon."
In most states, an assignment such as that under both the related Purchase
Agreement and the related 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
the Servicer'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 GMAC's warranties under the related Purchase Agreement
and, if the interests of the Certificateholders in the related Receivable are
materially and adversely affected, would create an obligation of GMAC to
repurchase such Receivable unless the breach is cured. See "The
Certificates--Sale and Assignment of Receivables and Warranties Thereon."
Similarly, the security interest of the related Trust in the vehicle could be
defeated through fraud or negligence and, because such Trust is not identified
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 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 obligor 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 Receivable before release of the lien. Under each
Agreement, the Servicer will be 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 Internal Revenue Code of 1986, as amended,
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. With respect to
each series of Certificates, GMAC will have represented to the Seller that, as
of the date of issuance of the Certificates of such series, each security
interest in a Financed Vehicle is or will be prior to all other present liens
(other than tax liens and other liens that arise by operation of law) upon and
security interests in such Financed Vehicle. The Seller will have assigned such
representation, among others, to the related Trust pursuant to the related
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 Trustee or Certificateholders 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
Uniform Commercial Code, except where specifically limited by other state laws.
Among Uniform Commercial Code 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 taking 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, this 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 Uniform Commercial Code 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 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 Practices 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
adaptations 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 related 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 UCCC,
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 an 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 held by any Trust will be subject to the
requirements of the FTC Rule. Accordingly, the Trustee, as holder of the related
Receivables, will be subject to any claims or defenses that the purchaser of the
related 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 the GMAC's
warranties under the related Agreement and may create an obligation of the GMAC
to repurchase the Receivables unless the breach is cured in all material
respects. See "The Certificates--Sale and Assignment of the Receivables and
Warranties Thereon."
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.
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 does not involve sufficient state action to afford constitutional
protection to consumers.
Under each Purchase Agreement GMAC will represent to the Seller that each
related Receivable complies with all requirements of law in all material
respects. The Seller will assign 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 may constitute a breach and
would create an obligation of GMAC to repurchase such Receivable unless the
breach is cured in all material respects. See "The Certificates--Sale and
Assignment of the Receivables and Warranties Thereon."
OTHER LIMITATIONS
In addition to 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.
TRANSFERS OF VEHICLES
The Receivables prohibit the sale or transfer of a Financed Vehicle
without the Servicer's consent and will 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 the 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.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the material federal income tax
considerations relevant to the purchase, ownership and disposition of Class A
Certificates which are purchased in the initial distribution thereof. This
summary is based upon laws, regulations, rulings and decisions currently in
effect, all of which are subject to change. The discussion does not purport to
deal with all federal tax considerations applicable to all categories of
investors, some of which may be subject to special rules. In addition, this
summary is generally directed to prospective purchasers who purchase the Class A
Certificates in the initial distribution thereof, who are citizens or residents
of the United States, including domestic corporations and partnerships, and who
will hold the Class A Certificates as "capital assets" (generally, property held
for investment) within the meaning of Section 1221 of the Internal Revenue Code
of 1986, as amended (the "Code"). Investors should consult their tax advisors to
determine the federal, state, local and other tax consequences of the purchase,
ownership and disposition of the Class A Certificates. Prospective investors
should note that no rulings have been or will be sought from the Internal
Revenue Service (the "SERVICE") with respect to any of the federal income tax
consequences discussed below, and no assurance can be given that the Service
will not take contrary positions.
TAX STATUS OF THE TRUST
In the opinion of Kirkland & Ellis, special counsel to the Seller ("TAX
COUNSEL"), each Trust will be classified as a grantor trust and not as an
association taxable as a corporation for federal income tax purposes. Subject to
the discussion below under "Treatment of Fees or Payments," each Class A
Certificate Owner will be treated as the owner of a pro rata undivided interest
in the applicable Class A Percentage of the ordinary income and corpus portions
of the related Trust.
INCOME OF CERTIFICATEHOLDERS
Subject to the discussion below under "Treatment of Fees or Payments," in
the opinion of Tax Counsel, each Class A Certificate Owner will be required to
report on its federal income tax return, in a manner consistent with its method
of accounting, its pro rata share of the applicable Class A Percentage of the
entire income of the related Trust, including interest or finance charges earned
on the Receivables held by such Trust and any gain or loss upon collection or
disposition of such Receivables. The portion of each monthly payment to a Class
A Certificate Owner that is allocable to principal will represent a recovery of
capital, which will reduce the tax basis of such Class A Certificate Owner's
undivided interest in the Receivables held by the related Trust. In computing
its federal income tax liability, a Class A Certificate Owner generally will be
entitled to deduct, consistent with its method of accounting, its pro rata share
of reasonable servicing fees and other fees paid or incurred by the related
Trust as provided in Section 162 or 212 of the Code. However, if a Class A
Certificate Owner is an individual, estate or trust, the deduction for its pro
rata share of such fees will be subject to certain limitations. In particular,
the deduction (taken together with all of such person's other miscellaneous
itemized deductions) will be allowed, for regular tax purposes, only to the
extent that all of such person's miscellaneous itemized deductions, including
such person's share of such fees, exceed 2% of such person's adjusted gross
income (including any income from the Certificates) and (in the case of an
individual) only to the extent that all of such person's itemized deductions (as
defined in Section 68(c) of the Code) exceed an amount equal to the lesser of
(i) 3% of such person's adjusted gross income in excess of certain
statutorily-defined thresholds which are adjusted annually for inflation (for
1996, $117,950 for married individuals filing jointly) or (ii) 80% of such
itemized deductions. The deduction will not be allowed for alternative minimum
tax purposes. Because the Trustee will not report to Class A Certificate Owners
the amount of income or deductions attributable to the related Surplus Interest,
Supplemental Servicing Fee or Prepayment Surplus, any such Class A Certificate
Owner who is an individual, estate or trust may effectively underreport its net
taxable income. See "Treatment of Fees and Payments" below for a discussion of
other possible consequences if amounts paid to the Servicer exceed reasonable
compensation for services rendered.
TREATMENT OF FEES OR PAYMENTS. It is expected that income will be reported
to Class A Certificate Owners on the assumption that the Class A Certificate
Owners own a 100% interest in the applicable Class A Percentage 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 of the related Trust allocable to Class A Certificate Owner 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 Trust's
deductions would be limited to reasonable servicing fees and other fees. In
addition, a Class A Certificate Owner purchasing Certificates in the initial
distribution thereof 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 original issue discount ("OID") rules of the Code.
However, if the price at which a Class A Certificate Owner were deemed to have
acquired a stripped Receivable is less than the remaining principal balance of
such Receivable by an amount which is less than a statutorily defined DE MINIMIS
amount, such Receivable would not be treated as having OID. In general, 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 Class A
Certificate Owner 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 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 Class A
Certificate Owner at a significant discount, such prepayment assumption could
accelerate the accrual of income by a Class A Certificate Owner. No
representation is made, nor is Tax Counsel able to give an opinion, that
Receivables will prepay at any particular rate.
It is also possible that any fees deemed to be excessive could be
recharacterized as deferred purchase price payable to the Seller by Class A
Certificate Owners in exchange for the related Receivables. The likely effect of
such recharacterization would be to increase current taxable income to a Class A
Certificate Owner.
DISCOUNT AND PREMIUM. If the price at which a Class A Certificate Owner
were deemed to have acquired a Receivable is less than the remaining principal
balance of such Receivable by an amount which is less than a statutorily defined
DE MINIMIS amount, such Receivable would not be treated as having OID. In
general, under 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 Service 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 is 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 Class A
Certificate Owner would be required to include any such OID in income as it
accrues, regardless of when cash payments are received, using a method
reflecting a constant yield on the Receivables. Moreover, the Service could
assert that a prepayment assumption should be used in computing the yield to
maturity of a Receivable. If a Receivable is deemed to be acquired by a Class A
Certificate Owner at a significant discount, such prepayment assumption could
accelerate the accrual of income by a Class A Certificate Owner. No
representation is made, nor is Tax Counsel able to give an opinion, that the
Receivable will prepay at any particular rate.
In the opinion of Tax Counsel, in the event that a Receivable held by any
Trust is treated as purchased at a premium (i.e., the purchase price exceeds the
sum of principal payments to be made thereon), such premium will be amortizable
by a Class A Certificate Owner as an offset to interest income (with a
corresponding reduction in the Class A Certificate Owner's basis) under a
constant yield method over the term of such Receivable if an election under
Section 171 of the Code is made (or was previously in effect in accordance with
the provisions of the Tax Reform Act of 1986).
SALE OF A CLASS A CERTIFICATE. In the opinion of Tax Counsel, if a Class A
Certificate is sold, gain or loss will be recognized equal to the difference
between the amount realized on the sale and the Class A Certificate Owner's
adjusted basis in such Class A Certificate. A Class A Certificate Owner's
adjusted basis will equal the cost of the Class A Certificate, increased by any
discount previously included in income and decreased by any deduction previously
allowed for accrued premium and by the amount of principal payments previously
received on the Receivables held by the related Trust.
BACKUP WITHHOLDING
Payments made on Class A Certificates and proceeds from the sale of Class
A Certificates will not be subject to a "backup" withholding tax of 31% unless,
in general, the Class A Certificate Owner fails to comply with certain reporting
procedures and is not an exempt recipient under applicable provisions of the
Code.
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 from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under ERISA
or "disqualified persons" under the Code with respect to the plan. ERISA also
imposes certain duties and certain prohibitions on persons who are fiduciaries
of plans subject to ERISA. Under ERISA, generally, any person who exercises any
authority or control with respect to the management or disposition of the assets
of a plan is considered to be a fiduciary of such plan. A violation of these
"prohibited transaction" rules may generate excise tax and other liabilities
under ERISA and the Code for such persons.
Pursuant to a final regulation (the "FINAL REGULATION") issued by the
Department of Labor ("DOL") concerning the definition of what constitutes the
"plan assets" of an employee benefit plan subject to ERISA or the Code or an
individual retirement account (collectively referred to as "BENEFIT PLANS"), the
assets and properties of certain entities in which a Benefit Plan makes an
equity investment could be deemed to be assets of the Benefit Plan in certain
circumstances. Accordingly, if Benefit Plans purchase Class A Certificates, the
related Trust could be deemed to hold plan assets.
Unless otherwise provided in the related Prospectus Supplement, the DOL
has granted an administrative exemption (an "EXEMPTION") to the underwriter
specified in the related Prospectus Supplement from certain of the prohibited
transaction and conflict of interest rules of ERISA with respect to the initial
purchase, the holding and the subsequent resale by Benefit Plans of certificates
in pass-through trusts with respect to which such underwriter is the sole
underwriter or the manager or co-manager of the underwriting syndicate and that
consist of certain receivables, loans and other obligations that meet the
conditions and requirements of such Exemption. The receivables covered by an
Exemption include motor vehicle instalment obligations such as the Receivables.
An Exemption will apply only if specific conditions (certain of which are
described below) are met. The Seller believes that an Exemption will apply to
the acquisition and holding of each series of Class A Certificates by Benefit
Plans and that all conditions of such Exemption other than those within the
control of the investors have been or will be met.
Among the conditions which must be satisfied for an Exemption to apply to
the acquisition by a Benefit Plan of Class A Certificates are the following:
(1) The acquisition of the Class A Certificates by a Benefit Plan is
on terms (including the price for the Certificates) that are at least as
favorable to the Benefit Plan as they would be in an arm's-length
transaction with an unrelated party;
(2) The rights and interests evidenced by the Class A Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by other certificates of the related Trust;
(3) The Class A Certificates acquired by the Benefit Plan have
received a rating at the time of such acquisition that is in one of the
three highest generic rating categories from Standard & Poor's Ratings
Services, Moody's Investors Service, Inc., Duff & Phelps Credit Rating
Co. or Fitch Investors Service, L.P.;
(4) The sum of all payments made to the related underwriters in
connection with the distribution of such Class A Certificates represents
not more than reasonable compensation for underwriting such Class A
Certificates. The sum of all payments made to and retained by the Seller
pursuant to the sale of the Receivables to the related Trust represents
not more than the fair market value of such Receivables. The sum of all
payments made to and retained by the Servicer represents not more than
reasonable compensation for the Servicer's services as servicer under the
related Agreement and reimbursement of the Servicer's reasonable expenses
in connection therewith;
(5) The Trustee is not an "affiliate" (as defined in the
Exemption) of any other member of the Restricted Group (as defined
below);
(6) The Benefit Plan investing in the Class A Certificates is an
"accredited investor" as defined in Rule 501(a)(1) of Regulation D of the
Commission under the Securities Act of 1933 as amended; and
(7) The related Trust satisfies the following requirements:
(a) the corpus of such Trust consists solely of assets of the
type which have been included in other investment pools,
(b) certificates in such other investment pools have been rated in
one of the three highest generic rating categories of Standard &
Poor's Ratings Services, Moody's Investors Service, Inc., Duff &
Phelps Credit Rating Co. or Fitch Investors Service, L.P. for at
least one year prior to the Benefit Plan's acquisition of Class A
Certificates, and
(c) certificates evidencing interests in such other investment pools
have been purchased by investors other than Benefit Plans for at
least one year prior to any Benefit Plan's acquisition of Class A
Certificates.
Certain transactions are not covered by an applicable exemption. An
Exemption does not exempt the acquisition and holding of Class A Certificates by
Benefit Plans sponsored by the Seller, the underwriters, the Trustee, the
Servicer, or any "obligor" (as defined in the Exemption) with respect to
Receivables included in the related Trust constituting more than 5% of the
aggregate unamortized principal balance of the assets in such Trust or any
affiliate of such parties (the "RESTRICTED GROUP"). Unless otherwise provided in
the related Prospectus Supplement, as of the date thereof, no obligor with
respect to Receivables included in any Trust will constitute more than five
percent of the aggregate unamortized principal balance of such Trust. Moreover,
the exemptive relief from the self-dealing/conflict of interest prohibited
transaction rules of ERISA is available, only if, among other requirements (i)
the person who has discretionary authority or renders investment advice with
respect to the investment of a Benefit Plan's assets in the Class A Certificates
(or such person's affiliate) is an obligor with respect to five percent or less
of the fair market value of the assets contained in the related Trust, (ii) a
Benefit Plan's investment in such Class A Certificates does not exceed 25% of
all of the Class A Certificates of such series outstanding at the time of the
acquisition, (iii) immediately after the acquisition, no more than 25% of the
assets of a Benefit Plan with respect to which the person who has discretionary
authority or renders investment advice are invested in certificates representing
an interest in a trust containing assets sold or serviced by the same entity and
(iv) in the case of the acquisition of Class A Certificates in connection with
their initial issuance, at least 50% of such Class A Certificates are acquired
by persons independent of the Restricted Group and at least 50% of the aggregate
interest in the related Trust is acquired by persons independent of the
Restricted Group.
An applicable Exemption will also apply to transactions in connection with
the servicing, management and operation of the related Trust, provided that, in
addition to the general requirements described above, (a) such transactions are
carried out in accordance with the terms of a binding pooling and servicing
agreement and (b) the pooling and servicing agreement is provided to, or
described in all material respects in the prospectus or private placement
memorandum provided to investing Benefit Plans before the Plans purchase Class A
Certificates issued by the related Trust. Each Agreement is a pooling and
servicing agreement as defined in the related Exemption. All transactions
relating to the servicing, management and operations of each Trust will be
carried out in accordance with the related Agreement, which Agreement is
described in all material respects in "The Certificates" and in the related
Prospectus Supplement.
Any Benefit Plan fiduciary considering the purchase of Class A
Certificates should consult with its counsel with respect to the applicability
of the related Exemption and other issues and determine on its own whether all
conditions have been satisfied and whether the Certificates are an appropriate
investment for a Benefit Plan under ERISA and the Code.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement (an
"UNDERWRITING AGREEMENT") with respect to each series of Certificates, 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 Class A Certificates
set forth therein and in the related Prospectus Supplement.
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the Class
A Certificates described therein which are offered hereby and by the related
Prospectus Supplement if any of such Class A Certificates are purchased. In the
event of a default by any 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
the Class A Certificates 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 Certificates or (ii) specify that the Class A Certificates are
to be resold by such Underwriter in negotiated transactions at varying prices to
be determined at the time of such sale. After the initial public offering of any
Certificates, the public offering price and such concessions may be changed.
Each Underwriting Agreement will provide that the Seller will indemnify
the related underwriters against certain liabilities, including liabilities
under the Securities Act.
The place and time of delivery for the Certificates in respect of which
this Prospectus is delivered will be set forth in the accompanying Prospectus
Supplement. The Trustee may, from time to time, invest the funds in the
Designated Accounts in Eligible Investments acquired from the Underwriters.
LEGAL OPINIONS
Certain legal matters relating to the Certificates will be passed upon for
the Seller and the Servicer by Robert L. Schwartz, Esq., General Counsel of the
Seller and Assistant General Counsel of GMAC, and by Kirkland & Ellis, special
counsel to the Seller and the Servicer. Mr. Schwartz owns shares of each of the
classes of General Motors common stocks and has options to purchase shares of
General Motors common stock, $1-2/3 par value. Certain federal income tax
matters will be passed upon for the Seller by Kirkland & Ellis.
---------------
<PAGE>
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.................................
Administrative Purchase Payment......................
Administrative Receivable............................
Aggregate Amount Financed............................
Aggregate Net Losses ................................
Agreement ...........................................
Amount Financed......................................
APR..................................................
Available Interest ..................................
Available Principal..................................
Basic Servicing Fee..................................
Basic Servicing Fee Rate.............................
Benefit Plans........................................
Cede.................................................
Certificate Account..................................
Certificate Owner....................................
Certificateholders...................................
Certificates.........................................
Charge-off Rate......................................
Class A Certificateholder............................
Class A Certificates.................................
Class A Certificate Balance..........................
Class A Certificate Owner............................
Class A Distributable Amount.........................
Class A Interest Carryover Shortfall.................
Class A Interest Distributable Amount................
Class A Percentage...................................
Class A Pool Factor..................................
Class A Principal Carryover Shortfall................
Class A Principal Distributable Amount...............
Class B Certificateholder............................
Class B Certificates.................................
Class B Certificate Balance..........................
Class B Distributable Amount.........................
Class B Interest Distributable Amount................
Class B Percentage ..................................
Class B Principal Distributable Amount...............
Closing Date.........................................
Code ................................................
Collection Account...................................
Commission...........................................
Cutoff Date..........................................
Definitive Certificates..............................
Delinquency Percentage...............................
Depository...........................................
Distribution Date....................................
DOL..................................................
DTC..................................................
ERISA................................................
<PAGE>
Page
----
Events of Default....................................
Excess Payment.......................................
Excess Simple Interest Collections...................
Exemption............................................
Financed Vehicles....................................
FTC Repossession Consent Order.......................
FTC Rule.............................................
Holders..............................................
Indirect Participants ...............................
Initial Class A Certificate Balance .................
Initial Class B Certificate Balance .................
Insolvency Laws .....................................
Liquidating Receivables .............................
Liquidation Expenses ................................
Liquidation Proceeds ................................
Maximum Subordination Spread Amount..................
Minimum Subordination Spread Amount..................
Monthly Advance .....................................
Monthly Period ......................................
Participants ........................................
Pass Through Rate ...................................
Payment Ahead .......................................
Payment Ahead Servicing Account .....................
Prepayment ..........................................
Prepayment Surplus ..................................
Principal Balance ...................................
Prospectus Supplement ...............................
Purchase Agreement ..................................
Receivables .........................................
Receivables Pool ....................................
Record Date .........................................
Registration Statement...............................
Required Deposit Rating .............................
Restricted Group ....................................
Rules ...............................................
Schedule of Receivables .............................
Scheduled Interest Advance ..........................
Scheduled Interest Receivable .......................
Scheduled Payments ..................................
Securities Act.......................................
Seller ..............................................
Service .............................................
Servicer ............................................
Simple Interest Advance .............................
Simple Interest Receivable ..........................
Specified Subordination Percentage ..................
Specified Subordination Spread Account Balance ......
Subordination Initial Deposit .......................
Subordination Spread Trigger ........................
Supplemental Servicing Fee ..........................
Surplus Interest ....................................
Tax Counsel .........................................
Total Available Amount ..............................
Total Servicing Fee .................................
Page
----
Trigger Subordination Spread Amount..................
Trust ...............................................
Trustee .............................................
UCCC ...............................................
Underwriters ........................................
Underwriting Agreement ..............................
United States person ................................
Warranty Payment ....................................
Warranty Receivable .................................
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER,
THE SERVICER OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS DO
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY TO ANYONE IN ANY JURISDICTION IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SINCE THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS.
TABLE OF CONTENTS
Page
----
Prospectus Supplement
The Certificates.....................................
The Receivables Pool.................................
ERISA Considerations.................................
Underwriting.........................................
Legal Matters........................................
Prospectus
Available Information ...............................
Reports to Class A Certificateholders
By The Trustee.....................................
Prospectus Summary...................................
The Trusts...........................................
The Receivables .....................................
Class A Pool Factor and Trading Information .........
Use of Proceeds .....................................
The Seller ..........................................
The Servicer ........................................
The Certificates ....................................
Certain Legal Aspects of the Receivables ............
Federal Income Tax Consequences .....................
ERISA Considerations ................................
Plan of Distribution ................................
Legal Opinions ......................................
Index of Terms ......................................
-----------------
<PAGE>
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.............................. $258,433.88
Printing Expenses............................... 10,000.00*
Legal Fees and Expenses......................... 25,000.00*
Blue Sky Filing and Counsel Fees................ 5,000.00*
Accountants' Fees............................... 60,000.00*
Trustee Fees and Expenses....................... 8,000.00*
Rating Agencies' Fees........................... 225,000.00*
Miscellaneous................................... 8,566.12*
--------------
Total..................................... $600,000.00
==============
*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 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 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>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
1.1 Form of Underwriting Agreement
1.2 Form of Underwriting Agreement for the Grantor Trust Certificates
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
4.3*** Form of Pooling and Servicing Agreement between GMAC and the
Seller - Version 1
4.4 Form of Pooling and Servicing Agreement between GMAC and the Seller
- Version 2
4.5 GMAC Grantor Trusts Standard Terms and Conditions of
Agreement Effective June 1, 1996
5.1 Opinion of Kirkland & Ellis with respect to legality
8.1 Opinion of Kirkland & Ellis with respect to tax matters
10.1 Form of Purchase Agreement between GMAC and the Seller
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
99.3** 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 - Version 1
99.5 Form of Prospectus Supplement - Version 2
------------------------------------------
* Incorporated by reference to registrant's Registration Statement No.
33-49169
** Incorporated by reference to registrant's Registration Statement No.
33-49307 dated January 29, 1993
*** Incorporated by reference to registrant's Registration Statement No.
33-52597 dated March 21, 1994
ITEM 17. UNDERTAKINGS.
The Undersigned registrant hereby undertakes:
(a) (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.
PROVIDED HOWEVER, that paragraphs (a)(1)(i) an (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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.
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in this Registration Statement 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors and officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act 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, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person 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 Act 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.
<PAGE>
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 14TH DAY OF
JUNE, 1996.
CAPITAL AUTO RECEIVABLES, INC.
By: s/ ERIC A. FELDSTEIN*
-----------------------------
Eric A. Feldstein, Chairman of the Board
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON JUNE 14, 1996 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE TITLE
--------- -----
s/ ERIC A. FELDSTEIN*
----------------------------- Chairman of the Board and Director
Eric A. Feldstein
s/ JOHN R. RINES*
----------------------------- President and Director
John R. Rines
s/ PAUL D. BULL*
----------------------------- Vice President and Director
Paul D. Bull
s/ JOHN E. GIBSON*
----------------------------- Vice President and Director
John E. Gibson
s/ LAWRENCE B. LACOMBE, JR.*
----------------------------- Vice President and Director
Lawrence B. LaCombe, Jr.
s/ JEROME B. VAN ORMAN, JR.*
----------------------------- Vice President and Director
Jerome B. Van Orman, Jr.
s/ JOHN RAKOLTA, JR.*
----------------------------- Director
John Rakolta, Jr.
s/ RICHARD E. DAMMAN*
----------------------------- Director
Richard E. Damman
s/ GERALD E. GROSS
----------------------------- Comptroller
Gerald E. Gross
*By: s/ GERALD E. GROSS
-----------------------------
Gerald E. Gross
Attorney-in-Fact
EXHIBIT 1.1
CAPITAL AUTO RECEIVABLES ASSET TRUST 199_ - _
[INSERT TITLE AND RATE OF EACH CLASS OF SECURITIES INCLUDED]
CAPITAL AUTO RECEIVABLES, INC.
(SELLER)
GENERAL MOTORS ACCEPTANCE CORPORATION
(SERVICER)
FORM OF UNDERWRITING AGREEMENT
____________ __, 199__
As Representative of the several Underwriters
Dear Sirs:
1. Introductory. Capital Auto Receivables, Inc., a Delaware corporation
(the "Seller"), proposes to sell $________________ principal amount of [insert
dollar amount, title and rate of one class of Securities included] (the
"_____________________") of the Capital Auto Receivables Asset Trust 199_-_ (the
"Trust"), [Insert dollar amount title, and rate for other classes of Securities
included] (the "______________," and together with the [insert other classes],
the "Securities") of the Trust. The assets of the Trust will include among other
things, a pool of retail instalment sale contracts for new and used automobiles
and light trucks (the "Receivables") and certain monies due or received
thereunder on and after _________ __, 199_ (the "Cutoff Date"), such Receivables
to be transferred to the Trust by the Seller and serviced by General Motors
Acceptance Corporation (the "Servicer"). [The [Securities] will be issued in an
aggregate principal amount of $______________ and $_______________ aggregate
principal amount of [Securities] will initially be retained by the Seller.] The
aggregate amount financed under the Receivables, exclusive of accrued interest,
as of the Cutoff Date will be $________________. The Securities will be issued
pursuant to [an indenture, dated as of __________ __, 199_ (as amended and
supplemented from time to time, the "Indenture") between the Trust and
____________________, as trustee (the "Indenture Trustee")] [a trust agreement,
dated as of _______________ __, 199_ (as amended and supplemented from time to
time, the "Trust Agreement") between the Seller and
_____________________________, as trustee, acting thereunder not in its
individual capacity but solely as trustee of the Trust (the "Owner Trustee").
The Trust will be formed pursuant to the Trust Agreement.]
Simultaneously with the issuance and sale of the Securities as contemplated
herein, the Trust will issue its [Insert dollar amount, title and rate for
classes of Securities not included] (the "Other Securities") pursuant to [as
indenture, dated as of ________________ __, 199_ (as amended and supplemented
from time to time, the "Indenture") between the Trust and ___________________,
as trustee (the "Indenture Trustee"), a trust agreement, dated as of
______________ __, 199_ (as amended and supplemented from time to time, the
"Trust Agreement") between the Seller and _________________, as trustee, acting
thereunder not in its individual capacity but solely as trustee of the Trust
(the "Owner Trustee"). The Trust will be formed pursuant to the Trust Agreement.
[$_______________ aggregate principal amount of [Insert title and rate] [Other
Securities] will initially be retained by the Seller (the "Retained
Certificates". The [Other Securities] will represent a fractional undivided
interest in the Trust and $_________________ aggregate principal amount of]
[The] Other Securities will be sold by the Seller pursuant to one or more
underwriting agreements dated the date hereof (the "Other Underwriting
Agreements") between the Seller and the underwriters named in Schedule I to each
of such agreements. General Motors Acceptance Corporation will serve as the
initial custodian of the Receivable Files (as defined in a trust sale and
servicing agreement, dated as of ______________ __, 199_, between the Seller,
the Servicer and the Trust (the "Trust Sale and Servicing Agreement")) pursuant
to the Trust Sale and Servicing Agreement.
2. Representations and Warranties of the Seller. The Seller represents and
warrants to, and agrees with, the several underwriters named in Schedule I
hereto (the "Underwriters") that:
(a) The Seller has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 333-_______), including a
prospectus, on Form S-3 for the registration under the Securities Act of
1933, as amended (the "Act"), of the Securities and the Other Securities
(which are issuable in series and classes thereof), which registration
statement has become effective, and a copy of which, as amended to the
date hereof, has heretofore been delivered to the Underwriter. The Seller
proposes to file with the Commission pursuant to Rule 424(b)(5) under the
rules and regulations of the Commission under the Act (the "Rules and
Regulations") a supplement dated _______________ __, 199_ (the "Prospectus
Supplement"), to the prospectus dated ______________ __, 199____ (the
"Basic Prospectus"), relating to the Securities and the Other Securities
and the method of distribution thereof. Such registration statement (No.
333-_______), including exhibits thereto is hereinafter called the
"Registration Statement"; and the Basic Prospectus and the Prospectus
Supplement, together with an amendment thereof or supplement thereto
authorized by the Seller prior to the Closing Date (as defined below) for
use in connection with the offering of the Securities and the Other
Securities, are hereinafter called the "Prospectus".
(b) The Registration Statement has become effective, and the
Registration Statement as of its effective date (the "Effective Date"),
and the Prospectus, as of the date of the Prospectus Supplement, complied
in all material respects with the applicable requirements of the Act and
the Rules and Regulations; and the Registration Statement, as of the
Effective Date, did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and the
Prospectus, as of the date of the Prospectus Supplement, did not, and as
of the Closing Date will not, contain an untrue statement of a material
fact and did not and will not omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading except that this representation
and warranty does not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance on and in
conformity with written information furnished to the Seller by or on
behalf of the Underwriters expressly for use in connection with the
preparation of the Registration Statement or the Prospectus. As of the
Closing Date, the representations and warranties of the Seller in the
Trust Sale and Servicing Agreement and the Trust Agreement will be true
and correct.
(c) This Agreement has been duly authorized, executed and
delivered by the Seller.
3. Purchase, Sale and Delivery of the Securities. The Underwriter executing
this Agreement on its own behalf and as Representative of the several
Underwriters (the "Representative") hereby represents and warrants to the Seller
that it has been authorized by the other Underwriters to execute this Agreement
on their behalf. On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Seller agrees to sell to the Underwriters, and the Underwriters agree severally
and not jointly, to purchase from the Seller, the respective principal amount of
the each class of Securities set forth opposite the names of the Underwriters in
Schedule I hereto. The [Insert title of a class] are to be purchased at the
purchase price of ____% of the principal amount thereof, plus accrued interest
at the [rate] of ____ % per annum] [Pass Through Rate (as defined in the
Prospectus)] from (and including) ___________ __, 199_ to (but excluding) the
Closing Date.
The Seller will deliver the Securities to the Representative for the
account of the Underwriters against payment of the purchase price in immediately
available funds, at the office of on ______________ __, 199_ at 10:00 a.m. (New
York time) or at such other time not later than seven full business days
thereafter as the Representative and the Seller determine, such time being
herein referred to as the "Closing Date". The Securities so to be delivered will
be initially represented by Securities registered in the name of Cede & Co., the
nominee of The Depository Trust Company ("DTC"). The interests of beneficial
owners of the Securities will be represented by book entries on the records of
DTC and participating members thereof. Definitive Securities will be available
only under limited circumstances.
4. Offering by Underwriters. It is understood that the Underwriters propose
to offer the Securities for sale to the public (which may include selected
dealers) as set forth in the Prospectus. The Underwriters agree that all such
offers and sales by the Underwriters will be made in compliance with all
applicable laws and regulations.
5. Covenants of the Seller. The Seller covenants and agrees with the
Underwriters:
(a) To furnish the Representative, without charge, a copy of the
Registration Statement including exhibits and during the period mentioned
in paragraph (d) below, as many copies of the preliminary prospectus and
the Prospectus and any supplements and amendments thereto as the
Representative may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Securities the Other Securities, to
furnish the Representative a copy of each such proposed amendment or
supplement thereto.
(c) The Seller will cause the Prospectus to be transmitted to the
Commission for filing pursuant to Rule 424(b)(5) under the Act by means
reasonably calculated to result in filing with the Commission pursuant to
said rule.
<PAGE>
(d) If, during such period after the first date of the public
offering of the Notes as in the opinion of counsel for the Representative
the Prospectus is required by law to be delivered, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the
Representative, either amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law.
(e) To take such action for the qualification or exemption of the
Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representative shall reasonably request and to
pay all reasonable expenses (including reasonable fees and disbursements
of counsel) in connection with such qualification or exemption and in
connection with the determination of the eligibility of the Securities for
investment under the laws of such jurisdictions as the Representative may
designate. Thereafter, until all of the Securities have been retired, the
Seller will arrange for the filing and making of, and will pay all fees
applicable to, such statements and reports and renewals of registration
necessary in order to continue to qualify or exempt the Securities for
secondary market transactions in the various jurisdictions in which the
Securities were originally registered or exempted for sale.
(f) For a period from the date of this Agreement until the
retirement of the Securities, or until such time as one Underwriter shall
cease to maintain a secondary market in the Securities, whichever first
occurs, to deliver to the Representative the annual statement of
compliance delivered to the Indenture Trustee and the Owner Trustee
pursuant to [the Trust Sale and Servicing Agreement] and the annual
independent auditor's servicing report furnished to the Indenture Trustee
and the Owner Trustee pursuant to [the Trust Sale and Servicing
Agreement,] as soon as such statements are furnished to the Indenture
Trustee and the Owner Trustee.
(g) So long as any of the Securities are outstanding, to furnish to
the Representative (i) as soon as available, a copy of each report of the
Seller filed with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act") or mailed to Securityholders, and
(ii) from time to time, such other information concerning the Seller as
the Representative may reasonably request.
(h) If the transactions contemplated by this Agreement are
consummated or this Agreement is terminated pursuant to Section 9 below,
the Seller will pay or cause to be paid all expenses incident to the
performance of the Seller's obligations under this Agreement, and will pay
or cause to be paid or will reimburse the Underwriters for any reasonable
expenses (including reasonable fees and disbursements of counsel) incurred
by them in connection with qualification or exemption of the Securities
for offer and sale and determination of their eligibility for investment
under the laws of such jurisdictions as the Representative has reasonably
requested pursuant to paragraph (e) above and the printing of memoranda
relating thereto, for any fees charged by investment rating agencies for
the rating of the Securities and for expenses incurred in printing and
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
(i) To the extent, if any, that, on or prior to the Closing Date, a
rating that is necessary to satisfy the condition set forth in Section
6(j) of this Agreement is conditional upon the furnishing of documents or
the taking of other actions by the Seller, the Seller shall furnish such
documents and take such other actions.
(j) If, during the period after the Closing Date in which a
prospectus relating to the Securities is required to be delivered under
the Act, the Seller receives notice that a stop order suspending the
effectiveness of the Registration Statement or preventing the offer and
sale of the Securities is in effect, the Seller will advise the
Representative of the issuance of such stop order.
6. Conditions of the Obligations of the Underwriters. The obligations of
the Underwriters hereunder are subject to the following conditions:
(a) The Representative shall have received a letter dated as of the
date hereof, of Deloitte & Touche LLP in a form and substance satisfactory
to the Representative.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission and there shall have been
no material adverse change (not in the ordinary course of business) in the
condition of the Seller and its subsidiaries, taken as a whole, from that
set forth in the Registration Statement and the Prospectus; and the
Representative shall have received, on the Closing Date, a certificate,
dated the Closing Date and signed by an executive officer of the Seller,
to the foregoing effect. The officer making such certificate may rely upon
the best of his knowledge as to proceedings pending or threatened.
(c)
The Representative shall have received on the Closing Date an opinion of
General Counsel of the Seller, dated the Closing Date, substantially to
the effect set forth in Exhibit A.
(d) The Representative shall have received on the Closing Date an opinion
of Kirkland & Ellis, special counsel of the Seller, dated the Closing
Date, substantially to the effect set forth in Exhibit B.
(e) The Representative shall have received on the Closing Date an opinion
of _________________ , counsel for the Underwriters, dated the Closing
Date, substantially to the effect set forth in Exhibit C.
(f) The Representative shall have received a certificate signed by
an executive officer or officers of the Seller, dated the Closing Date, in
which such officer or officers, to the best of his or their knowledge
after reasonable investigation, shall state that the representations and
warranties of the Seller in this Agreement, the Trust Agreement and the
Trust Sale and Servicing Agreement are true and correct and that the
Seller has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder or thereunder at or before
the Closing Date.
(g) On or prior to the Closing Date, the Seller shall not offer,
sell, contract to sell or otherwise dispose of any additional similar
asset-backed securities in a grantor trust or other special purpose
vehicle without the Representative's prior written consent.
(h) The Representative shall have received on the Closing Date an
opinion of Kirkland & Ellis, special counsel to the Seller, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, (i) with respect to the characterization of the transfer
of the Receivables by the Servicer to the Seller as a sale and (ii)
concluding that neither the issue and delivery of the Securities, nor the
consummation of the transactions contemplated by the Trust Sale and
Servicing Agreement, the Pooling and Servicing Agreement, dated as of
_______ __, 199_, between the Servicer and the Seller, the Trust Agreement
or the Administration Agreement, dated as of ___________ __, 199_, between
the Servicer, the Owner Trustee and the Indenture Trustee, nor the
fulfillment of the terms thereof, conflicts with, or results in any breach
of any terms and provisions of, or constitutes (with or without notice or
lapse of time) a default under, or results in the creation of any lien,
charge or encumbrance upon any of the property or assets of the Seller or
the Servicer pursuant to the terms of, any indenture, agreement, mortgage,
deed of trust or other instrument to which the Seller or the Servicer is
subject.
(i) Each class of securities shall have been given a rating by
Standard & Poor's Ratings Services ("S&P") and/or Moody's Investors
Service, Inc. ("Moody's") that is at least or better than the rating
required for such class of Securities as set forth in the Prospectus
Supplement.
(j) On the Closing Date, all of the Other Securities [(other than
the Retained Certificates)]] shall have been issued and sold.
The Seller will furnish the Representative with conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests.
7. Indemnification.
The Seller agrees to indemnify and hold harmless the Underwriters and each
person, if any, who controls an Underwriter within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (if used within the
period set forth in paragraph (d) of Section 5 hereof and as amended or
supplemented if the Seller shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission in reliance upon and in conformity with information furnished in
writing to the Seller by the Representative or any Underwriter expressly for use
therein.
Each Underwriter agrees to indemnify and hold harmless the Seller, its
directors, its officers who sign the Registration Statement and any person
controlling the Seller to the same extent as the foregoing indemnity from the
Seller to such Underwriter, but only with reference to information relating to
such Underwriter or such Underwriter's offer or sale of the Securities pursuant
to this Agreement furnished in writing by such Underwriter directly expressly
for use in the Registration Statement, any preliminary Prospectus or the
Prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
Party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by the Underwriter in the case of parties indemnified pursuant to the
second preceding paragraph and by the Seller in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under the second or third preceding paragraphs hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits but
also the relative fault of the Seller on the one hand and of the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Seller on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Seller or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
<PAGE>
The Seller and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriters shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities were offered to the public exceeds the amount of
any damages which the Underwriters have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 7 to indemnify and contribute are several in proportion to their
respective underwriting obligations and not joint.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Seller in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by any Underwriter or on behalf of the
Underwriters or any person controlling the Underwriters or by or on behalf of
the Seller, its directors or officers or any person controlling the Seller, and
(iii) acceptance of and payment for any of the Securities.
8. Default by an Underwriter. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Trust or the Seller. In the event of a default by any Underwriter as set forth
in this Section 8, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Seller and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
<PAGE>
9. Termination. If this Agreement shall be terminated by the Representative
because of any failure or refusal on the part of the Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Seller shall be unable to perform its obligations under this
Agreement, the Seller will reimburse the Underwriters for all reasonable out-of
pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by the Underwriters in connection with the offering
of the Securities.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters or the Seller or any of their officers or directors or any
controlling persons, and will survive delivery of and payment for the
Securities.
11. Notices. All communications hereunder will be in writing, and, if sent
to the Representative of the Underwriters will be mailed, delivered or sent by
facsimile transmission and confirmed to the Representative at
_____________________ facsimile ( ) ___ - _____________, or if sent to the
Seller will be mailed, delivered or telegraphed and confirmed to it at 3044 West
Grand Boulevard, Detroit, Michigan 48202; Attention: Vice President, facsimile
(313) 974-1244.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Seller and you in accordance with its
terms.
Very truly yours,
CAPITAL AUTO RECEIVABLES, INC.
By: _______________________________
The foregoing Securities Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
By: ___________________________________
Acting on its own behalf and as Representative of
the several Underwriters
<PAGE>
SCHEDULE I
PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF [TITLE OR CLASS] OF [TITLE OF CLASS] OF [TITLE OF CLASS
UNDERWRITERS TO BE PURCHASED TO BE PURCHASED TO BE PURCHASED
$ $ $
----------------- ---------------- ----------------
Total
$----------------- $ ---------------- $ ----------------
Exhibit 1.2
GMAC 199_-_ GRANTOR TRUST
____% ASSET BACKED CERTIFICATES, CLASS A
CAPITAL AUTO RECEIVABLES, INC.
(SELLER)
GENERAL MOTORS ACCEPTANCE CORPORATION
(SERVICER)
UNDERWRITING AGREEMENT
___________, 199_
[UNDERWRITER]
As Representative of the several Underwriters
Dear Sirs:
1. Introductory. Capital Auto Receivables, Inc., a Delaware corporation
(the "Seller"), proposes to sell ____% Asset Backed Certificates, Class A (the
"Certificates") of the GMAC 199_-_ Grantor Trust (the "Trust"). Each Certificate
will represent a fractional undivided interest in the Trust. The assets of the
Trust will include, among other things, a pool of retail instalment sale
contracts for new and used automobiles and light trucks (the "Receivables") and
certain monies due or received thereunder on and after ____________, 199_ (the
"Cutoff Date"), such Receivables to be sold to the Trust by the Seller and
serviced by General Motors Acceptance Corporation (the "Servicer"). The
Certificates will be issued in an aggregate principal amount of
$__________________, and the aggregate amount financed under the Receivables,
exclusive of accrued interest, as of the Cutoff Date will be $________________.
Simultaneously with the issuance and sale of the Certificates as contemplated
herein, the Trust will issue ____% Asset Backed Certificates, Class B (the
"Class B Certificates"). The Class B Certificates will be issued in an aggregate
principal amount of $________________ and will initially be retained by the
Seller. The Trust will be formed and the Certificates and the Class B
Certificates will be issued pursuant to a pooling and servicing agreement, which
incorporates the GMAC Grantor Trusts Standard Terms and Conditions of Agreement
identified therein (together, the "Pooling and Servicing Agreement") to be dated
as of ____________, 199_ among the Seller, the Servicer and The First National
Bank of Chicago, as trustee (the "Trustee"). The Servicer will serve as the
initial custodian of the Receivable Files (as defined in the Pooling and
Servicing Agreement) pursuant to the Custodian Agreement (the "Custodian
Agreement"), to be dated as of ____________, 199_ between the Servicer, as
custodian, and the Trustee. The Class B Certificates will be subordinate to the
Certificates to the extent provided in the Pooling and Servicing Agreement.
2. Representations and Warranties of the Seller. The Seller represents and
warrants to, and agrees with, the several underwriters named in Schedule I
hereto (the "Underwriters") that:
(a) The Seller has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (No. 333-_____), including a
prospectus, on Form S-3 for the registration under the Securities Act of
1933, as amended (the "Act"), of the Certificates (issuable in series),
which registration statement has become effective, and a copy of which, as
amended to the date hereof, has heretofore been delivered to the
Underwriters. The Seller proposes to file with the Commission pursuant to
Rule 424(b)(5) under the rules and regulations of the Commission under the
Act (the "Rules and Regulations") a supplement dated ___________, 199_ (the
"Prospectus Supplement"), to the prospectus dated ________, 199_ (the "Basic
Prospectus"), relating to the Certificates and the method of distribution
thereof. Such registration statement (No. 333-_____), including exhibits
thereto, is hereinafter called the "Registration Statement"; and the Basic
Prospectus and the Prospectus Supplement, together with any amendment
thereof or supplement thereto authorized by the Seller prior to the Closing
Date (as defined below) for use in connection with the offering of the
Certificates, are hereinafter called the "Prospectus".
(b) The Registration Statement has become effective, and the Registration
Statement as of its effective date (the "Effective Date"), and the
Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the Act and the Rules
and Regulations; and the Registration Statement, as of the Effective Date,
did not contain any untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading and the Prospectus, as of the date of
the Prospectus Supplement, did not, and as of the Closing Date will not,
contain an untrue statement of a material fact and did not and will not omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus
made in reliance on and in conformity with written information furnished to
the Seller by or on behalf of the Underwriters expressly for use in
connection with the preparation of the Registration Statement or the
Prospectus. As of the Closing Date, the representations and warranties of
the Seller in the Pooling and Servicing Agreement will be true and correct.
(c) This Agreement has been duly authorized, executed and
delivered by the Seller.
3. Purchase, Sale and Delivery of Certificates. The Underwriter executing
this Agreement on its own behalf and as Representative of the several
Underwriters (the "Representative") hereby represents and warrants to the Seller
that it has been authorized by the other Underwriters to execute this Agreement
on their behalf. On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Seller agrees to sell to the Underwriters, and the Underwriters agree, severally
and not jointly, to purchase from the Seller, the entire aggregate principal
amounts of Certificates set forth opposite the names of the Underwriters in
Schedule I hereto. The Certificates are to be purchased at the purchase price of
______% of the initial Class A Certificate Balance (as defined in the Pooling
and Servicing Agreement), plus accrued interest at the Pass Through Rate (as
defined in the Prospectus) from (and including) ____________, 199_ to (but
excluding) the Closing Date. The Seller will deliver the Certificates to the
Representative for the account of the Underwriters against payment of the
purchase price in immediately available funds, at the office of General Motors
Acceptance Corporation, 3031 West Grand Boulevard, New Center One, Detroit,
Michigan on ____________, 199_, at 10:00 a.m. (New York time), or at such other
time not later than seven full business days thereafter as the Representative
and the Seller determine, such time being herein referred to as the "Closing
Date". The Certificates so to be delivered will be initially represented by
Certificates registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive Certificates will be available only under limited
circumstances.
4. Offering by Underwriters. It is understood that the Underwriters propose
to offer the Certificates for sale to the public (which may include selected
dealers) as set forth in the Prospectus and the Underwriters agree that all such
offers and sales by the Underwriters shall be made in compliance with all
applicable laws and regulations.
5. Covenants of the Seller. The Seller covenants and agrees
with the Underwriters:
(a) To furnish the Representative, without charge, a copy of the
Registration Statement including exhibits and, during the period mentioned
in paragraph (d) below, as many copies of the preliminary prospectus (if
any) and the Prospectus and any supplements and amendments thereto as the
Representative may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Certificates, to furnish the Representative a
copy of each such proposed amendment or supplement thereto.
(c) The Seller will cause the Prospectus to be transmitted to the
Commission for filing pursuant to Rule 424(b)(5) under the Act by means
reasonably calculated to result in filing with the Commission pursuant to
said rule.
(d) If, during such period after the first date of the public offering of
the Certificates as in the opinion of counsel for the Representative the
Prospectus is required by law to be delivered, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the Representative,
either amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading
or so that the Prospectus will comply with law.
(e) To take such action for the qualification or exemption of the
Certificates for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representative shall reasonably request and to pay
all reasonable expenses (including reasonable fees and disbursements of
counsel) in connection with such qualification or exemption and in
connection with the determination of the eligibility of the Certificates for
investment under the laws of such jurisdictions as the Representative may
designate. Thereafter, until all of the Certificates have been retired, the
Seller will arrange for the filing and making of, and will pay all fees
applicable to, such statements and reports and renewals of registration
necessary in order to continue to qualify or exempt the Certificates for
secondary market transactions in the various jurisdictions in which the
Certificates were originally registered or exempted for sale.
(f) For a period from the date of this Agreement until the retirement of
the Certificates, or until such time as one Underwriter shall cease to
maintain a secondary market in the Certificates, whichever first occurs, to
deliver to the Representative the annual statement of compliance delivered
to the Trustee pursuant to Article III of the Pooling and Servicing
Agreement and the annual independent auditor's servicing report furnished to
the Trustee pursuant to Article III of the Pooling and Servicing Agreement,
as soon as such statements are furnished to the Trustee.
(g) So long as any of the Certificates are outstanding, to furnish to the
Representative (i) as soon as available, a copy of each report of the Seller
filed with the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or mailed to Certificateholders, and (ii) from
time to time, such other information concerning the Seller as the
Representative may reasonably request.
(h) If the transactions contemplated by this Agreement are consummated or
this Agreement is terminated pursuant to Section 9 below, the Seller will
pay or cause to be paid all expenses incident to the performance of the
Seller's obligations under this Agreement, and will pay or cause to be paid
or will reimburse the Underwriters for any reasonable expenses (including
reasonable fees and disbursements of counsel) incurred by them in connection
with qualification of the Certificates for sale and determination of their
eligibility for investment under the laws of such jurisdictions as the
Representative has reasonably requested pursuant to paragraph (e) above and
the printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Certificates, and for
expenses incurred in printing and distributing preliminary prospectuses (if
any) and the Prospectus (including any amendments and supplements thereto)
to the Underwriters.
(i) To the extent, if any, that, any rating necessary to satisfy the
condition set forth in Section 6(i) of this Agreement is conditioned upon
the furnishing of documents or the taking of other actions by the Seller on
or after Closing Date, the Seller shall furnish such documents and take such
other actions.
(j) If, during the period after the Closing Date in which a prospectus
relating to the Certificates is required to be delivered under the Act, the
Seller receives notice that a stop order suspending the effectiveness of the
Registration Statement or preventing the offer and sale of the Certificates
is in effect, the Seller will advise the Representative of the issuance of
such stop order.
6. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters hereunder are subject to the
following conditions:
(a) The Representative shall have received a letter, dated as of the date
hereof, of Deloitte & Touche in a form and substance satisfactory to the
Representative.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission and there shall have been no
material adverse change (not in the ordinary course of business) in the
condition of the Seller and its subsidiaries, taken as a whole, from that
set forth in the Registration Statement and the Prospectus; and the
Representative shall have received, on the Closing Date, a certificate,
dated the Closing Date and signed by an executive officer of the Seller, to
the foregoing effect. The officer making such certificate may rely upon the
best of his knowledge as to proceedings pending or threatened.
(c) The Representative shall have received on the Closing Date an opinion
of counsel of the Seller, dated the Closing Date, in a form and substance
satisfactory to the Representative.
(d) The Representative shall have received on the Closing Date an opinion
of Kirkland & Ellis, special counsel of the Seller, dated the Closing Date,
in a form and substance satisfactory to the Representative.
(e) The Representative shall have received on the Closing Date an opinion
of Mayer, Brown & Platt, counsel for the Underwriters, dated the Closing
Date, in a form and substance satisfactory to the Representative.
(f) The Representative shall have received a certificate signed by an
executive officer or officers of the Seller, dated the Closing Date, in
which such officer or officers, to the best of his or their knowledge after
reasonable investigation, shall state that the representations and
warranties of the Seller in this Agreement and the Pooling and Servicing
Agreement are true and correct and that the Seller has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder or thereunder at or before the Closing Date.
(g) On or prior to the Closing Date, the Seller shall not offer, sell,
contract to sell or otherwise dispose of any additional similar asset-backed
securities in a grantor trust or other special purpose vehicle without the
Representative's prior written consent.
(h) The Representative shall have received on the Closing Date an opinion
of Kirkland & Ellis, special counsel to the Seller, dated the Closing Date,
in form and substance reasonably satisfactory to the Representative, (i)
with respect to the characterization of the transfer of the Receivables by
the Servicer to the Seller as a sale and (ii) concluding that neither the
issue and delivery of the Certificates, nor the consummation of the
transactions contemplated by the Pooling and Servicing Agreement, the
Purchase Agreement or the Custodian Agreement, nor the fulfillment of the
terms thereof, conflicts with, or results in any breach of any terms and
provisions of, or constitutes (with or without notice or lapse of time) a
default under, or results in the creation of any lien, charge or encumbrance
upon any of the property or assets of the Seller or the Servicer pursuant to
the terms of, any indenture, agreement, mortgage, deed of trust or other
instrument to which the Seller or the Servicer is subject.
(i) The Certificates shall have been rated "AAA" by Standard & Poor's
Ratings Services or "Aaa" by Moody's Investors Service, Inc.
The Seller will furnish the Representative with conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests.
7. Indemnification.
The Seller agrees to indemnify and hold harmless the Underwriters and each
person, if any, who controls an Underwriter within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (if used within the
period set forth in paragraph (d) of Section 5 hereof and as amended or
supplemented if the Seller shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission in reliance upon and in conformity with information furnished in
writing to the Seller by the Representative or any Underwriter expressly for use
therein.
Each Underwriter agrees to indemnify and hold harmless the Seller, its
directors, its officers who sign the Registration Statement and any person
controlling the Seller to the same extent as the foregoing indemnity from the
Seller to such Underwriter, but only with reference to information relating to
such Underwriter or such Underwriter's offer or sale of the Certificates
pursuant to this Agreement furnished in writing by such Underwriter directly
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by the Underwriter in the case of parties indemnified pursuant to the
second preceding paragraph and by the Seller in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under the second or third preceding paragraphs hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits but
also the relative fault of the Seller on the one hand and of the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Seller on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Seller or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Seller and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriters shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Certificates were offered to the public exceeds the amount of
any damages which the Underwriters have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 7 to indemnify and contribute are several in proportion to their
respective underwriting obligations and not joint.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Seller in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by any Underwriter or on behalf of the
Underwriters or any person controlling the Underwriters or by or on behalf of
the Seller, its directors or officers or any person controlling the Seller, and
(iii) acceptance of and payment for any of the Certificates.
8. Default by an Underwriter. If any one or more Underwriters shall fail to
purchase and pay for any of the Certificates agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Certificates set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Certificates set forth opposite the names of all the remaining Underwriters) the
Certificates which the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the aggregate amount of
Certificates which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate amount of Certificates set forth
in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Certificates, and if such nondefaulting Underwriters do not purchase all the
Certificates, this Agreement will terminate without liability to any
nondefaulting Underwriter, the Trust or the Seller. In the event of a default by
any Underwriter as set forth in this Section 8, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Underwriters shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Seller and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
9. Termination. If this Agreement shall be terminated by the Representative
because of any failure or refusal on the part of the Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Seller shall be unable to perform its obligations under this
Agreement, the Seller will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by the Underwriters in connection with the offering
of the Certificates.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters or the Seller or any of their officers or directors or any
controlling persons, and will survive delivery of and payment for the
Certificates.
11. Notices. All communications hereunder will be in writing, and, if sent
to the Representative of the Underwriters will be mailed, delivered or sent by
facsimile transmission and confirmed to the Representative at
_____________________________________________; Attention: _______________,
facsimile (___) ___-____, or if sent to the Seller will be mailed, delivered or
telegraphed and confirmed to it at 3031 West Grand Boulevard, Detroit, Michigan
48202; Attention: Vice President, facsimile (313) 974-1244.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original,
which taken together shall constitute one and the same instrument.
------------------------
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Seller and you in accordance with its
terms.
Very truly yours,
CAPITAL AUTO RECEIVABLES, INC.
By:______________________________
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
[UNDERWRITER]
By:______________________________
Acting on its own behalf and
as Representative of the
several Underwriters
Exhibit 3.2
AMENDED AND RESTATED
BY-LAWS
OF
CAPITAL AUTO RECEIVABLES, INC.
A Delaware Corporation
(February 20, 1996)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Delaware shall be located at Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware, County of New Castle. The name
of the corporation's registered agent at such address shall be The Corporation
Trust Company. The registered office and/or registered agent of the corporation
may be changed from time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at
such other places, both within and without the State of Delaware, as the board
of directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year for the purpose of electing directors and
conducting such other proper business as may come before the meeting. The date,
time and place of the annual meeting shall be determined by the chairman of the
board or the president of the corporation; provided that if the chairman of the
board or the president does not act, the board of directors shall determine the
date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the chairman of the board, the president, the stockholders, or by resolution of
the board of directors.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate
any place, either within or without the State of Delaware, as the place of
meeting for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted
to take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding
shares of capital stock, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. If a quorum is not
present, the holders of a majority of the shares present in person or
represented by proxy at the meeting, and entitled to vote at the meeting, may
adjourn the meeting to another time and/or place. When a quorum is once present
to commence a meeting of stockholders, it is not broken by the subsequent
withdrawal of any stockholders or their proxies.
Section 7. Adjourned Meetings. When a meeting is adjourned to
another time and place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
<PAGE>
Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. All elections for directors shall be decided by a
plurality of the vote.
Section 9. Voting Rights. Except as otherwise provided by the
General Corporation Law of the State of Delaware or by the certificate of
incorporation of the corporation or any amendments thereto and subject to
Section 3 of Article VI hereof, every stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
common stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. At each meeting of the
stockholders, and before any voting commences, all proxies filed at or before
the meeting shall be submitted to and examined by the secretary or a person
designated by the secretary, and no shares may be represented or voted trader a
proxy that has been found to be invalid or Irregular.
Section 11. Action by Written Consent. Unless otherwise provided in
the certificate of incorporation, any action required to be taken at any annual
or special meeting of stockholders of the corporation, or any action which may
be taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing the dates of
signature of the stockholders who signed the consent or consents, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the State of Delaware, or the corporation's principal place of business, or an
officer or agent of the corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested, provided, however, that no consent or consents
delivered by certified or registered mail shall be deemed delivered until
received at the registered office. All consents properly delivered in accordance
with this section shall be deemed to be recorded when so delivered. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the earliest dated consent delivered to the
corporation as required by this section, written consents signed by the holders
of a sufficient number of shares to take such corporate action are so recorded.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. Any action taken pursuant to such written consent or
consents of the stockholders shall have the same force and effect as if taken by
the stockholders at a meeting thereof.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business and affairs of the
corporation shall be managed by or under the direction of the board of
directors.
Section 2. Number, Election and Term of Office. The total number of
directors shall be established from time to time by resolution of the board,
provided that such number shall not be less than three. The directors shall be
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote in the election of
directors. The directors shall be elected in this manner at the annual meeting
of the stockholders, except as provided in Section 4 of this Article III. Each
director elected shall hold office until a successor is duly elected and
qualified or until his or her earlier resignation or removal as hereinafter
provided.
Section 3. Removal and Resignation. Any director or the entire board
of directors may be removed at any time, with or without cause, by the holders
of a majority of the shares then entitled to vote at an election of directors.
Any director may resign at any time upon written notice to the corporation. Such
written resignation shall take effect at the time specified therein, and if no
time be specified, at the time of its receipt by the president or secretary. The
acceptance of a resignation shall not be necessary to make it effective.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier resignation
or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this By-laws
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than
the annual meeting, of the board of directors may be held within or without the
State of Delaware and without notice at such time and at such place as shall
from time to time be determined by resolution of the board. Special meetings of
the board of directors may be called by or at the request of the chairman of the
board, the president or any director on at least 24 hours notice to each
director, either personally, by telephone, by mail or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these By-laws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and report the same to the board of
directors when required.
Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of
directors or any committee thereof may participate in and act at any meeting of
such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
section shall constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member
of the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted
by the certificate of incorporation, any action required or permitted to be
taken at any meeting of the board of directors, or of any committee thereof, may
be taken without a meeting if all members of the board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the board or committee.
<PAGE>
Section 13. Compensation. Unless otherwise restricted by the
certificate of incorporation, the board of directors shall have the authority to
fix the compensation of directors by written resolution. Nothing herein shall be
construed to preclude any director from serving the corporation in any other
capacity as an officer, agent or otherwise, and receiving compensation therefor.
Section 14. Independent Director. At all times after February 15,
1993 during which a Rating Condition (as defined in Section 15) shall be in
existence, the board of directors shall include at least two individuals who are
Independent Directors (as defined in Section 15). This Section 14 shall not be
amended, altered or repealed without the written consent of each rating agency
which has been requested by the corporation to rate one or more classes of
securities issued by the corporation or by a trust in which the corporation
holds a beneficial interest and which is then rating such class or classes of
securities (each a "Rating Agency").
Section 15. Definitions of Certain Terms Used in Section 14.
For purposes of Section 14 the following terms shall have the meaning set
forth in this Section 15:
(i) A "Rating Condition" shall be deemed to exist at any time that
either (A) General Motors Acceptance Corporation's short-term unsecured debt is
rated at or below (1) A-2 by Standard & Poor's Corporation or (2) P-2 by Moody's
Investors Service, Inc. or (B) General Motors Acceptance Corporation's long-term
debt is rated below (1) A- by Standard & Poor's Corporation or (2) A2 by Moody's
Investors Service, Inc.
(ii) An "Independent Director" shall be an individual who: (A) is not
and has not been employed by General Motors Acceptance Corporation or any of its
subsidiaries or affiliates as a director, officer or employee within the five
years immediately prior to such individual's appointment as an Independent
Director; (B) is not (and is not affiliated with a company or a firm that is) a
significant advisor or consultant to General Motors Acceptance Corporation or
any of its subsidiaries and affiliates; (C) is not affiliated with a significant
customer of supplier of General Motors Acceptance Corporation or any of its
subsidiaries or affiliates; (D) is not affiliated with a company of which
General Motors Acceptance Corporation or any of its subsidiaries and affiliates
is a significant customer or supplier; (E) does not have significant personal
services contract(s) with General Motors Acceptance Corporation or any of its
subsidiaries or affiliates; (F) is not affiliated with a tax-exempt entity that
receives significant contributions from General Motors Acceptance Corporation or
any of its subsidiaries or affiliates; (G) is not the beneficial owner at the
time of such individual's appointment as an Independent Director, or at any time
thereafter while serving as an Independent Director, of such number of shares of
any classes of common stock of General Motors Corporation the value of which
constitutes more than 5% of such individual's net worth; and (H) is not a
spouse, parent, sibling or child of any person described by (A) through (H), any
Independent Director may serve or have served as an independent director of one
or more additional limited purpose corporations organized for the purpose of
acquiring, financing or otherwise investing, directly or indirectly, in
automotive assets or receivables originated, owned or serviced by General Motors
Acceptance Corporation or any of its affiliates.
<PAGE>
(iii) An "affiliate" of a person, or a person "affiliated with," a
specified person, shall mean a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the specified person.
(iv) The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise; provided, however, that a person shall
not be deemed to control another person solely because he or she is a director
of such other person.
(v) The term "person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person pursuant to Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, as in effect on
December 1, 1992.
(vi) A "subsidiary" of General Motors Acceptance Corporation shall
mean any corporation a majority of the voting stock of which is owned, directly
or indirectly through one or more other subsidiaries, by General Motors
Acceptance Corporation.
(vii) A person shall be deemed to be, or to be affiliated with a
company or firm that is a "significant advisor or consultant to General Motors
Acceptance Corporation or any of its subsidiaries or affiliates" if he, she or
it, as the case may be, received or would receive fees or similar compensation
from General Motors Acceptance Corporation or any of its subsidiaries or
affiliates in excess of the lesser of (A) 3% of the consolidated gross revenues
which General Motors Acceptance Corporation and its subsidiaries received for
the sale of their products and services during the last fiscal year of General
Motors Acceptance Corporation, (B) 5% of the gross revenues of the person during
the last calendar year, if such person is a self-employed individual and (C) 5%
of the consolidated gross revenues received by such company or firm for the sale
of its products and services during its last fiscal year, if the person is a
company or firm; provided, however, that director's fees and expense
reimbursements shall not be included in the gross revenues of an individual for
purposes of this determination.
(viii) A "significant customer of General Motors Acceptance corporation
of any of its subsidiaries or affiliates" shall mean a customer from which
General Motors Acceptance Corporation and any of its subsidiaries or affiliates
collectively in the last fiscal year of General Motors Acceptance Corporation
received payments in consideration for the products and services of General
Motors Acceptance Corporation and its subsidiaries or affiliates which are in
excess of 3% of the consolidated gross revenues of General Motors Acceptance
Corporation and its subsidiaries during such fiscal year.
(ix) A "significant supplier of General Motors Acceptance corporation
or any of its subsidiaries or affiliates" shall mean a supplier to which General
Motors Acceptance Corporation and any of its subsidiaries or affiliates
collectively in the last fiscal year of General Motors Acceptance Corporation
made payments in consideration for the supplier's products and services in
excess of 3% of the consolidated gross revenues of General Motors Acceptance
Corporation and its subsidiaries during such fiscal year.
<PAGE>
(x) General Motors Acceptance Corporation or any of its subsidiaries
and affiliates shall be deemed a "significant customer" of a company if General
Motors Acceptance Corporation and any of its subsidiaries and affiliates
collectively were the direct source during such company's last fiscal year of in
excess of 5% of the gross revenues which such company received for the sale of
its products and services during such fiscal year.
(xi) General Motors Acceptance Corporation or any of its subsidiaries
and affiliates shall be deemed a "significant supplier" of a company if General
Motors Acceptance Corporation and any of its subsidiaries and affiliates
collectively received in such company's last fiscal year payments from such
company in excess of 5% of the gross revenues which such company received during
such fiscal year for the sale of its products and services.
(xii) A person shall be deemed to have "significant personal services
contract(s) with General Motors Acceptance Corporation of any of its
subsidiaries or affiliates" if the fees and other compensation received by the
person pursuant to personal services contract(s) with General Motors Acceptance
Corporation and any of its subsidiaries or affiliates exceeded or would exceed
5% of his or her gross revenues during the last calendar year.
(xiii) A tax-exempt entity shall be deemed to receive "significant
contributions from General Motors Acceptance Corporation or any of its
subsidiaries or affiliates" if such tax-exempt entity received during its last
fiscal year, or expects to receive during its current fiscal year, contributions
from General Motors Acceptance Corporation or its subsidiaries or affiliates in
excess of the lesser of (A) 3% of the consolidated gross revenues of General
Motors Acceptance Corporation and its subsidiaries during such fiscal year and
(B) 5% of the contributions received by the tax-exempt entity during such fiscal
year.
This section 15 shall not be amended, altered or repealed without
the written consent of each Rating Agency.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be elected
by the board of directors and shall consist of a chairman of the board, a
president, one or more vice presidents, a secretary, a treasurer, a controller,
and such other officers and assistant officers as may be deemed necessary or
desirable by the board of directors. Any number of offices may be held by the
same person. In its discretion, the board of directors may choose not to fill
any office for any period as it may deem advisable, except that the offices of
president and secretary shall be filled as expeditiously as possible.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the board of directors at its first
meeting held after each annual meeting of stockholders or as soon thereafter as
conveniently may be. Vacancies may be filled or new offices created and filled
at any meeting of the board of directors. Each officer shall hold office until a
successor is duly elected and qualified or until his or her earlier resignation
or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be
fixed by the board of directors, and no officer shall be prevented from
receiving such compensation by virtue of his or her also being a director of
the corporation.
Section 6. The Chairman of the Board. The chairman of the board
shall be the chief executive officer of the corporation, and shall have the
powers and perform the duties incident to that position. Subject to the powers
of the board of directors, he or she shall be in the general and active charge
of the entire business and affairs of the corporation, and shall be its chief
policy making officer. He or she shall preside at all meetings of the board of
directors and stockholders and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or provided by these
By-laws. Whenever the president is unable to serve, by reason of sickness,
absence or otherwise, the chairman of the board shall perform all the duties and
responsibilities and exercise all the powers of the president.
Section 7. The President. The president shall be subject to the
powers of the board of directors and the chairman of the board; shall have
general charge of the business, affairs and property of the corporation, and
control over its officers, agents and employees; and shall see that all orders
and resolutions of the board of directors are carried into effect. The president
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the board of directors to some other officer or
agent of the corporation. The president shall have such other powers and perform
such other duties as may be prescribed by the board of directors and the
chairman of the board or as may be provided in these By-laws.
Section 8. Vice Presidents. The vice president, or if there shall be
more than one, the vice presidents in the order determined by the board of
directors shall, in the absence or disability of the president, act with all of
the powers and be subject to all the restrictions of the president. The vice
presidents shall also perform such other duties and have such other powers as
the board of directors, the chairman of the board, the president or these
By-laws may, from time to time, prescribe.
<PAGE>
Section 9. The Controller. The controller shall have general charge,
control, and supervision over the accounting and auditing affairs of the
corporation. The controller or such persons as the controller shall designate
shall have responsibility for the custody and safekeeping of all permanent
records and papers of the corporation. The controller shall have responsibility
for the preparation and maintenance of the books of account and of the
accounting records and papers of the corporation; shall supervise the
preparation of all financial statements and reports on the operation and
condition of the business; shall have responsibility for the establishment of
financial procedures, records, and forms used by the corporation; shall have
responsibility for the filing of all financial reports and returns, except tax
returns, required by law; shall render to the chairman of the board, the
president or the board of directors, whenever they may require, an account of
the controller's transactions; and in general shall have such other powers and
perform such other duties as are incident to the office of controller and as
from time to time may be prescribed by the board of directors, the chairman of
the board, the president, or these By-laws may prescribe.
Section 10. The Secretary and Assistant Secretaries. The secretary
shall attend all meetings of the board of directors, all meetings of the
committees thereof and all meetings of the stockholders and record all the
proceedings of the meetings in a book or books to be kept for that purpose.
Under the president's supervision, the secretary shall give, or cause to be
given, all notices required to be given by these By-laws or by law; shall have
such powers and perform such duties as the board of directors, the chairman of
the board, the president or these By-laws may, from time to time, prescribe; and
shall have custody of the corporate seal of the corporation. The secretary, or
an assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature. The
assistant secretary, or if there be more than one, the assistant secretaries in
the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors, the chairman of the board, the president, or secretary may,
from time to time, prescribe.
Section 11. The Treasurer and Assistant Treasurer. The treasurer
shall have the custody of the corporate funds and securities; shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the chairman of the board, the president and the board of
directors, at its regular meeting or when the board of directors so requires, an
account of the treasurer's actions; shall have such powers and perform such
duties as the board of directors, the chairman of the board, the president or
these By-laws may, from time to time, prescribe. If required by the board of
directors, the treasurer shall give the corporation a bond (which shall be
rendered every six years) in such sums and with such surety or sureties as shall
be satisfactory to the board of directors for the faithful performance of the
duties of the office of treasurer and for the restoration to the corporation, in
case of death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in the possession
or under the control of the treasurer belonging to the corporation. The
assistant treasurer, or if there shall be more than one, the assistant
treasurers in the order determined by the board of directors, shall in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. The assistant treasurers shall perform such other
duties and have such other powers as the board of directors, the chairman of the
board, the president or treasurer may, from time to time, prescribe.
Section 12. Other Officers, Assistant officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these By-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 13. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
INDEMNIFICATION
Section 1. Right to Indemnification of Directors and Officers.
Subject to the other provisions of this article, the corporation shall indemnify
and advance expenses to every director and officer (and to such person's heirs,
executors, administrators or other legal representatives) in the manner and to
the full extent permitted by applicable law as it presently exists, or may
hereafter be amended, against any and all amounts (including judgments, fines,
payments in settlement, attorneys' fees and other expenses) reasonably incurred
by or on behalf of such person in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative ("a proceeding"), in which such director or officer was or is made
or is threatened to be made a party or is otherwise involved by reason of the
fact that such person is or was a director or officer of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employs, fiduciary or member of any other corporation, partnership, joint
venture, trust, organization or other enterprise. The corporation shall not be
required to indemnify a person in connection with a proceeding initiated by such
person if the proceeding was not authorized by the board of directors of the
corporation.
Section 2. Advancement of Expenses of Directors and Officers. The
corporation shall pay the expenses of directors and officers incurred in
defending any proceeding in advance of its final disposition ("advancement of
expenses"); provided, however, that the payment of expenses incurred by a
director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the director or officer to repay
all amounts advanced if it should be ultimately determined that the director or
officer is not entitled to be indemnified under this article or otherwise.
Section 3. Claims by Officers or Directors. If a claim for
indemnification or advancement of expenses by an officer or director under this
Article V is not paid in full within ninety days after a written claim therefor
has been received by the corporation, the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification or advancement of expenses under
applicable law.
Section 4. Indemnification of Employees. Subject to the other
provisions of this Article V, the corporation may indemnify and advance expenses
to every employs who is not a director or officer (and to such person's heirs,
executors, administrators or other legal representatives) in the manner and to
the full extent permitted by applicable law as it presently exists, or may
hereafter be amended against any and all amounts (including judgments, fines,
payments in settlement, attorneys' fees and other expenses) reasonably incurred
by or on behalf of such person in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative ("a proceeding"), in which such employe was or is made or is
threatened to be made a party or is otherwise involved by reason of the fact
that such person is or was an employe of the corporation, or is or was serving
at the request of the corporation as a director, officer, employs, fiduciary or
member of any other corporation, partnership, joint venture, trust, organization
or other enterprise. The ultimate determination of entitlement to
indemnification of employees who are not officers and directors shall be made by
the board of directors or by a committee of the board of directors in such
manner as the board or such committee shall determine. The corporation shall not
be required to indemnify a person in connection with a proceeding initiated by
such person if the proceeding was not authorized by the board of directors of
the corporation.
Section 5. Advancement of Expenses of Employees. The advancement of
expenses of an employs who is not an officer or director shall be made by or in
the manner provided by resolution of the board of directors or by a committee of
the board of directors or of the corporation.
Section 6. Non-Exclusivity of Rights. The rights conferred on any
person by this Article V shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 7. Other Indemnification. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer or employe of another corporation, partnership, joint venture, trust,
organization or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture, trust, organization or other enterprise.
Section 8. Insurance. The board of directors may, to the full extent
permitted by applicable law as it presently exists, or may hereafter be amended
from time to time, authorize an appropriate officer or officers to purchase and
maintain at the corporation's expense insurance: (a) to indemnify the
corporation for any obligation which it incurs as a result of the
indemnification of directors, officers and employees under the provisions of
this Article V; and (b) to indemnify or insure directors, officers and employees
against liability in instances in which they may not otherwise be indemnified by
the corporation under the provisions of this Article V.
Section 9. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article V shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice president and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by such holder in the
corporation. If such a certificate is countersigned (1) by a transfer agent or
an assistant transfer agent other than the corporation or its employs or (2) by
a registrar, other than the corporation or its employs, the signature of any
such chairman of the board, president, vice president, secretary, or assistant
secretary may be facsimiles. In case any officer or officers who have signed, or
whose facsimile signature or signatures have been used on, any such certificate
or certificates shall cease to be such officer or officers of the corporation
whether because of death, resignation or otherwise before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile signature
or signatures have been used thereon had not ceased to be such officer or
officers of the corporation. All certificates for shares shall be consecutively
numbered or otherwise identified. The name of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the books of the corporation. Shares of stock of the
corporation shall only be transferred on the books of the corporation by the
holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the corporation of the certificate or certificates
for such shares endorsed by the appropriate person or persons, with such
evidence of the authenticity of such endorsement, transfer, authorization, and
other matters as the corporation may reasonably require, and accompanied by all
necessary stock transfer stamps. In that event, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under the
laws of the United States or any state thereof to act as its transfer agent or
registrar, or both in connection with the transfer of any class or series of
securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnity the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order
that the corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board of
directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be the close of business on the next
day preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In
order that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that
the corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment or any rights or the
stockholders entitled to exercise 'any rights in respect of any change,
conversion or exchange of stock, or for the purposes of any other lawful action,
the board of directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
<PAGE>
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such instalments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any instalment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any
officer or officers, or any agent or agents, of the corporation to enter into
any contract or to execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
<PAGE>
Section 4. Loans. The corporation may lend money to, or guarantee
any obligation of, or otherwise assist any officer or other employs of the
corporation or of any subsidiary, including any officer or employe who is a
director of the corporation or any subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation
shall be the year ending December 31.
Section 6. Corporate Seal. The board of directors may provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities
in any other corporation held by the corporation shall be voted by the
president, unless the board of directors specifically confers authority to vote
with respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of
record, in person or by attorney or other agent, shall, upon written demand
under oath stating the purpose thereof, have the right during the usual hours
for business to inspect for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean any purpose reasonably related
to such person's interest as a stockholder. In every instance where an attorney
or other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these By-laws
are for convenience of reference only and shall not be given any substantive
effect in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these By-laws is or becomes inconsistent with any provision of the
certificate of incorporation, the General Corporation Law of the State of
Delaware or any other applicable law, the provision of these By-laws shall not
be given any effect to the extent of such inconsistency but shall otherwise be
given full force and effect.
ARTICLE VIII
AMENDMENTS
These By-laws may be amended, altered, or repealed and new By-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter or repeal the By-laws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.
Exhibit 4.1
- -------------------------------------------------------------------------------
CAPITAL AUTO RECEIVABLES ASSET TRUST _______
[CLASS A-_ _.__% ASSET BACKED NOTES
CLASS A-_ _.__% ASSET BACKED NOTES
CLASS A-_ _.__% ASSET BACKED NOTES
CLASS A-_ _.__% ASSET BACKED NOTES
CLASS A-_ _.__% ASSET BACKED NOTES
CLASS A-_ _.__% ASSET BACKED NOTES]
-------------------------------------------
INDENTURE
DATED AS OF ____________, 199_
-------------------------------------------
----------------------------------,
A ____________________________,
INDENTURE TRUSTEE
- -------------------------------------------------------------------------------
<PAGE>
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>
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
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<PAGE>
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 Trust Estate.................... 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>
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>
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>
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 thereunder on
and after the Cutoff Date and (ii) in the case of Simple Interest Receivables,
all monies received thereunder on and after the Cutoff Date, in each case
exclusive of any amounts allocable to the premium for physical damage insurance
and covering any related Financed Vehicle force-placed by the Servicer; (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").
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.
<PAGE>
The Indenture Trustee, as trustee on behalf of the Noteholders,
acknowledges such Grant, and 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 __________, 199_ 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.
ARTICLE II
THE NOTES
SECTION 2.1 FORM.
(a) [Each of the 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.
<PAGE>
(b) The Definitive Notes 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 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;
(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 delivered to or upon
the order of the Issuer, the Notes for original issue in 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
<PAGE>
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.
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 Registrar 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 exchanged 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
<PAGE>
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.
(f) Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory 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.
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(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 A-__ Notes and the Class
A-__ Notes will be payable on each Distribution Date and interest on the Class
A-__ Notes, the Class A-__ Notes, the Class A-__ 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
<PAGE>
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- _ Notes) shall be payable in full on the Class A-_
Notes on each] Distribution Date through and including the ____________, 199_
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-_ 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.
(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.
<PAGE>
(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.
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
<PAGE>
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 control;
(d) the rights of the Note Owners shall be exercised 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.
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
<PAGE>
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 Definitive 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.
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
<PAGE>
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.
(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
<PAGE>
(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.
(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.
<PAGE>
(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:
(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, continuation 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.
<PAGE>
(b) On or before August 15 in each calendar year, beginning August
15, 199_, 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.
(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
<PAGE>
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 the Trust's interest in
Receivables (including Warranty Receivables, Administrative Receivables
and Liquidating Receivables), (ii) make cash payments out of the
Designated Accounts and the Certificate Distribution Account and(iii) take
other actions, in each case as contemplated by the Basic Documents;
(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
<PAGE>
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.
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;
<PAGE>
(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:
(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;
<PAGE>
(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:
(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.
<PAGE>
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 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, (i)
distributions to the Servicer, the Seller, 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 and (ii) payments to the Indenture Trustee pursuant to Section
2(a)(ii) of the Administration Agreement. The Issuer shall not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with the Basic Documents.
<PAGE>
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 Trust to any Person other than the Indenture Trustee;
immediately prior to the conveyance of the Receivables pursuant to this
Indenture, the Trust had good and marketable title thereto, free of any Lien;
and, upon execution and delivery of this Indenture by the Trust, the Indenture
Trustee shall have all of the right, title and interest of the Trust in, to and
under the Receivables, the unpaid indebtedness evidenced thereby and the
collateral security therefor, free of any Lien; and
(b) ALL FILINGS MADE. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Indenture Trustee a first
priority perfected security interest in the Receivables shall have been made.
<PAGE>
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, 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
<PAGE>
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.
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:
<PAGE>
(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 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
(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.
<PAGE>
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.
(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
<PAGE>
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) 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; 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:
<PAGE>
(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 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
<PAGE>
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 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.
<PAGE>
(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 TRUST ESTATE. 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.
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;
<PAGE>
(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.
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
<PAGE>
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;
(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
<PAGE>
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 discretion 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:
(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,
<PAGE>
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 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.
<PAGE>
(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.
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 including without limitation, continuing to hold the
Trust Estate and receive collections on the Receivables included therein and
provided in the Trust Sale and Servicing Agreement.
(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
<PAGE>
(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.
(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 Opinion 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.
<PAGE>
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.
(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
<PAGE>
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.
(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.
<PAGE>
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.
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
<PAGE>
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 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
<PAGE>
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;
(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.
<PAGE>
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.
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
<PAGE>
provided in such Section 7.1 upon receipt of a new list so furnished.
(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 February 1, 199_, 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.
(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
<PAGE>
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.]
(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:
<PAGE>
(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-_
Notes, the Class A-_ Notes, the Class A-_ Notes and the Class A-_ 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-_ Notes, the lesser of
$_____________ and the Outstanding Amount attributable to such
class;]
[(B) Second, to the Class A-_ 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-_ Notes, such amount shall be
held in the Note Distribution Account as an Undistributed Amount;]
[(C) Third, on each Distribution Date that is on or
after _______ __, 199_, to the Class A-_ 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-_ Notes, such amount shall be
held in the Note Distribution Account as an Undistributed Amount;]
[(D) Fourth, to the Class A-_ 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;]
<PAGE>
[(E) Fifth, to the Class A-_ Notes, until the
Outstanding Amount attributable to such class is reduced to zero;]
[(F) Sixth, to the Class A-_ 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-_ Notes, until the
Outstanding Amount attributable to such class is reduced to zero;
and]
[(H) Eighth, to the Class A-_ 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.]
(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.
<PAGE>
(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.
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
<PAGE>
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.
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;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement 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
<PAGE>
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.
(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 in principal amount of the
outstanding Notes affected thereby, 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 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
Payment Date, 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 aggregate outstanding
principal 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;
<PAGE>
(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.
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
<PAGE>
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.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 REDEMPTION.
(a) The Class A-_ 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-_
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 A-_ 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 A-_
Notes to be redeemed,
<PAGE>
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 A-_ 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 A-_ 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 A-_ 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).
(c) Notice of redemption of the Class A-_ 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 A-_
Note shall not impair or affect the validity of the redemption of any other
Class A-_ 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 A-_ 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.
<PAGE>
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;
(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
<PAGE>
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.
(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
<PAGE>
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 representations 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.
(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
<PAGE>
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.
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., 3031 West Grand
Boulevard, Detroit, Michigan 48202, Attention: L. B. LaCombe, Jr., 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 Agencies 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 Services, at the following address: Standard & Poor's Ratings
Services, 26 Broadway (20th Floor), New York, New York 10004, Attn: Asset Backed
Surveillance Department; (iii) in the case of Fitch Investors Service, L. P. at
the following address: Fitch Investors Service, L. P., One State Street Plaza,
New York, N.Y.
<PAGE>
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.
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.
<PAGE>
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.
SECTION 11.13 GOVERNING LAW.
<PAGE>
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
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.
<PAGE>
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.
* * * * *
<PAGE>
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.
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:
<PAGE>
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:
- ----------------------------
STATE OF ________, )
<PAGE>
) 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 ______________________________, a national banking association, 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:
- ----------------------------
<PAGE>
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>
EXHIBIT B
FORM OF NOTE DEPOSITORY AGREEMENT
<PAGE>
EXHIBIT C
FORM OF ASSET BACKED NOTES
REGISTERED $____________1
No. R-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________2
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
Issuer or its agent for registration of transfer, exchange or payment, and
any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CAPITAL AUTO RECEIVABLES ASSET TRUST ______
CLASS A-__% ASSET BACKED NOTES
CAPITAL AUTO RECEIVABLES ASSET TRUST ______, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to
_______________, or registered assigns, the principal sum of _______________
DOLLARS ($_________) 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 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,
- --------
1Denominations of $1,000 and integral multiples thereof
2If applicable.
<PAGE>
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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date:
CAPITAL AUTO RECEIVABLES ASSET
TRUST 199_-_,
By: _________________________,
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:
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-_ Asset Backed Notes (herein called the "Class A-_
Notes"), all issued under an Indenture, dated as of __________, 199- (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 A-_ 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 A-_ 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.
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
<PAGE>
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.
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 obligations, 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
<PAGE>
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.
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:__________________ __________________________________3
Signature Guaranteed:
- ------------------------- ----------------------------------
- --------
3NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
EXHIBIT 4.2
TRUST AGREEMENT
BETWEEN
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
------------------------
OWNER TRUSTEE
DATED AS OF _______ __, 199_
<PAGE>
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 (Intentially Omitted).........................................
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 Termination of Book-Entry 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>
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 of Provisions................................... 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>
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>
TRUST AGREEMENT, dated as of _______ __, 199_, 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 to be transferred to
the Trust pursuant to the Trust Sale and Servicing Agreement;
(ii) to issue and sell 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 and
distributions 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>
(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>
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>
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
4
<PAGE>
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 (INTENTIALLY OMITTED)
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.
5
<PAGE>
(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 evidenced 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.
______________________ 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
_____________________ 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
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Owner Trustee in 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 _____________________ 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 Certificate- holders 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 TERMINATION OF BOOK-ENTRY 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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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,
_________________________ 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 Certificateholders 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 Ratings Services 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 Certificate- holders 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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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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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: L. B. LaCombe, Jr., Vice
President, 3031 West Grand Boulevard, Detroit, Michigan 48202, (b) in the case
of the Servicer and the Administrator, at the following address: J. B. Van
Orman, Jr., 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 Services, to
Standard & Poor's Ratings Services, 26 Broadway (15th Floor), New York, New York
10004, Attention: Asset Backed Surveillance Department, (g) in the case of Fitch
Investors Service, L.P., to Fitch Investors Service, L.P., One State Street
Plaza, New York, New York 10004, Attention: Asset Backed Surveillance Department
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.
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(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 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 9.6 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 and Certificate
Owner, by accepting a Certificate (or interest therein), shall agree that such
Person's Certificates (or interest therein) 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 Indenture Trustee or any
Affiliate thereof and no recourse, either directly or indirectly, 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. Except
as expressly provided in the Basic Documents, neither the Seller, the Servicer
nor the
<PAGE>
Owner Trustee in their respective individual capacities, 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 distribution of Certificates Balance with respect to or
interest on the certificates, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in the Certificates or
this Agreement, it being expressly understood that said covenants, obligations
and indemnifications of the Owner Trustee have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. Each Certificateholder
or Certificate Owner by the acceptance of a Certificate (or beneficial interest
therein) shall agree that, except as expressly provided in the Basic Documents,
in the case of nonpayment of any amounts with respect to the Certificates, it
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom.
31
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>
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>
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 Corporation or any of their respective affiliates, except
to the extent described in the Basic Documents.)
<PAGE>
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
____________, 199_ (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 ___________, 199_ (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 A-___ Notes, the Class A-___ Notes and the
Class A-___ Notes and any required monthly payment of principal of Class A-___
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>
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>
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: ___________, 199_ By: _________________________
Name:
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
- ------------------------, ------------------------,
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>
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 _________________, New York, New York.
5
<PAGE>
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
denomination, 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>
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>
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 ________ __, 199_, is being duly executed and
filed by ________________________, 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
__________, 199_.
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 __________, 199_
By: _______________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
<PAGE>
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_-_
[Address]
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: ________________________
<PAGE>
Exhibit 4.4
Version 2
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
AND
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
---------------
POOLING AND SERVICING AGREEMENT
DATED AS OF ________ __, 199_
---------------
$----------------
GMAC 199____ GRANTOR TRUST
____% ASSET BACKED CERTIFICATES
<PAGE>
TABLE OF CONTENTS
Page
-------
PART I............................................................... 1
CREATION OF TRUST ............................................. 1
PART II.............................................................. 1
CONVEYANCE OF RECEIVABLES...................................... 1
PART III............................................................. 1
ACCEPTANCE BY TRUSTEE.......................................... 2
PART IV.............................................................. 2
STANDARD TERMS AND CONDITIONS OF AGREEMENT...................... 2
PART V............................................................... 2
SPECIAL DEFINITIONS AND TERMS.................................. 2
PART VI.............................................................. 5
NOTICES........................................................ 5
LOCATION OF SCHEDULE OF RECEIVABLES.................................. 7
- i -
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of ________ __, 199_, is
made with respect to the formation of the GMAC 199_-_ Grantor Trust (the
"Trust"), among Capital Auto Receivables, Inc., a Delaware corporation, as
Seller (the "Seller"), General Motors Acceptance Corporation, a corporation
incorporated under the New York Banking Law relating to investment companies, as
Servicer (the "Servicer"), and The First National Bank of Chicago, a national
banking association, as Trustee (the "Trustee"). This Agreement sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "GMAC Grantor Trusts Standard Terms and Conditions of
Agreement" identified therein (herein called the "Standard Terms and Conditions
of Agreement") and such provisions as are set forth in full herein and such
provisions as are incorporated herein by reference constitute a single
instrument. All references herein to Articles and Sections are to Articles and
Sections of the Standard Terms and Conditions of Agreement.
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
PART I
CREATION OF TRUST
1.01. Creation of Trust. There is hereby formed a trust to be known
as the GMAC 199_-___ Grantor Trust.
PART II
CONVEYANCE OF RECEIVABLES
2.01. Conveyance of Receivables. In consideration of the Trustee's
delivery to, or upon the order of, the Seller of Certificates ("Certificates")
in an aggregate amount equal to the Aggregate Amount Financed, the Seller does
hereby irrevocably sell, transfer, assign and otherwise convey to the Trustee,
in trust for the benefit of the Certificateholders, without recourse (subject to
the obligations herein):
(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 Schedule 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 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
Purchase Agreement (other than Section 5.05 thereof), including the right of the
Seller to cause General Motors Acceptance Corporation 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 Trust that the transfer and
assignment contemplated by this Agreement shall constitute a sale from the
Seller to the Trust of the Receivables and other property described above and
the beneficial interest in and title to such property 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. Notwithstanding the foregoing, in
the event a court of competent jurisdiction determines that such transfer and
assignment did not constitute a sale or that such beneficial interest is a part
of the Seller's estate, then the Seller shall be deemed to have granted to the
Trustee a first priority perfected security interest in all of Seller's right,
title and interest in, to and under such property and the Seller hereby grants
such security interest. For purposes of such grant, this Agreement shall
constitute a security agreement under the UCC.
The foregoing sale, transfer and assignment does not constitute and is not
intended to result in any assumption by the Trustee of any obligation of the
Seller to the Obligors, Dealers, insurers or any other person in connection with
the Receivables, the Dealer Agreements, any insurance policies or any other
agreement or instrument relating to any of them.
2.02 Assignment of Representations and Warranties as to the Receivables.
Pursuant to Section 2.01(e), the Seller assigns to the Trustee, in trust for the
benefit of the Certificateholders, all of its right, title and interest in, to
and under the Purchase Agreement (other than Section 5.05 thereof). Such
assigned right, title and interest includes representations and warranties of
General Motors Acceptance Corporation made to the Seller pursuant to Section
3.02(a) of the Purchase Agreement. The Seller hereby represents and warrants to
the Trustee that the Seller has taken no action which would cause such
representations and warranties of General Motors Acceptance Corporation to be
false in any material respect as of the Closing Date, and acknowledges that the
Trustee relies on the representations and warranties of the Seller under this
Agreement and of General Motors Acceptance Corporation under the Purchase
Agreement in accepting the Receivables in trust and executing and delivering 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 Trustee.
PART III
ACCEPTANCE BY TRUSTEE
3.01. Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Seller pursuant to Paragraph 2.01, and declares
that the Trustee shall hold such consideration upon the trusts herein set forth
for the benefit of all present and future Certificateholders, subject to the
terms and provisions of this Pooling and Servicing Agreement.
PART IV
STANDARD TERMS AND CONDITIONS OF AGREEMENT
4.01. Incorporation of Standard Terms and Conditions of Agreement. This
Pooling and Servicing Agreement does hereby incorporate by reference the
Standard Terms and Conditions of Agreement in their entirety, in the form
attached hereto.
PART V
SPECIAL DEFINITIONS AND TERMS
5.01. Special Definitions and Terms. Whenever used in the Standard Terms
and Conditions of Agreement and as used in this Pooling and Servicing Agreement,
the following words and phrases shall have the following meanings:
Aggregate Amount Financed: $________________
Basic Servicing Fee Rate: ___% per annum.
Class A Percentage: ____%
Class B Percentage: ____%
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of this instrument is located at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126, Attn: Corporate Trust Administration.
Cutoff Date: ________ _, 199_.
Depository: The Trustee or any successor depository bank or trust company
appointed pursuant to Section 4.01 of the Standard Terms and Conditions of
Agreement.
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 ________ __, 199_.
Final Scheduled Distribution Date: ________ 15, 199_.
Liquidation Expenses: With respect to a Liquidating Receivable 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.
Optional Purchase Percentage: 10%.
Pass Through Rate: ____% per annum.
Purchase Agreement: The agreement, dated as of ________ __, 199_ between
General Motors Acceptance Corporation and the Seller, pursuant to which the
Seller purchased the Receivables.
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
Services and, if rated by Fitch Investors Service, L.P., a rating of F-1+ by
Fitch Investors Service, L.P. 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.
Specified Subordination Spread Account Balance: With respect to any
Distribution Date, an amount equal to ________________, except that, in the
event that on any Distribution Date (i) the average of the Charge-off Rates for
the preceding three months exceeds 2.0% or (ii) the average of the Delinquency
Percentages for the preceding three months exceeds 1.5%, then the Specified
Subordination Spread Account Balance for such Distribution Date will be an
amount equal to a specified percentage of the aggregate Principal Balance as of
the close of business on the related Accounting Date. Such specified percentage
shall be determined by deducting from ______ the following fraction, expressed
as a percentage: (x) 1 minus (y) a fraction, the numerator of which is the Class
A Certificate Balance and the denominator of which is the aggregate Principal
Balances of all Receivables held by the Trust, both as of the close of business
on such Record Date preceding such Distribution Date. Notwithstanding the
foregoing for any Distribution Date, in no event (except as described below)
shall the Specified Subordination Spread Account Balance be more than
____________ or less than ________________. On any Distribution Date on which
the Class A Certificate Balance is equal to or less than _____________________
after giving effect to distributions on such Distribution Date, the Specified
Subordination Spread Account Balance will be the greater of the applicable
balance determined as described above or _____________. For purposes of
calculating the average Charge-off Rate or Delinquency Rate for the three-month
periods ending on _____ __, 199_ and ______ __, 199_, the Servicer shall
calculate the applicable Rate 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 Rate.
Subordination Initial Deposit: $_____________
Trust Formation Date: __________ __, 199_
<PAGE>
PART VI
NOTICES
7.01. 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 the Seller, at the following address: Capital Auto
Receivables, Inc., Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801, with a copy to: L. B. LaCombe, Jr., Vice President, 3031 West
Grand Boulevard, Detroit, Michigan 48202, (b) in the case of the Servicer, at
the following address: J. B. Van Orman, Jr., Vice President, General Motors
Acceptance Corporation, 3044 West Grand Boulevard, Detroit, Michigan 48202, and
(c) in the case of the Trustee, at the Corporate Trust Office, or at such other
address as shall be designated by such party in a written notice to the other
party. Any notice required or permitted to be mailed 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.
7.02. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have caused
this Pooling and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
CAPITAL AUTO RECEIVABLES, INC.
SELLER
By: ________________________________
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
By: ________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
By: ________________________________
Title:
<PAGE>
Exhibit A
LOCATIONS OF SCHEDULE OF RECEIVABLES
The Schedule of Receivables is
on file at the offices of:
1. The First National Bank of Chicago
2. General Motors Acceptance Corporation
3. Capital Auto Receivables, Inc.
Exhibit 4.5
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
__________________
GMAC GRANTOR TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
EFFECTIVE JUNE 1, 1996
__________________
FOR GMAC GRANTOR TRUSTS
FORMED ON OR SUBSEQUENT TO
THE EFFECTIVE DATE SPECIFIED ABOVE
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions ............................ 1
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Receivables .............. 14
SECTION 2.02. Custody of Receivable Files ............ 14
SECTION 2.03. Acceptance by Trustee .................. 15
SECTION 2.04. Representations and Warranties of Seller 15
SECTION 2.05. Repurchase of Receivables Upon Breach
of Warranty ............................ 17
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer ................. 17
SECTION 3.02. Collection of Receivable Payments ...... 18
SECTION 3.03. Rebates on Full Prepayments ............ 18
SECTION 3.04. Realization Upon Liquidating Receivables 19
SECTION 3.05. Maintenance of Insurance Policies ...... 19
SECTION 3.06. Maintenance of Security Interests in
Vehicles ............................... 19
SECTION 3.07. Covenants, Representations, and
Warranties of Servicer ................. 19
SECTION 3.08. Purchase of Receivables Upon Breach
of Covenant ............................ 21
SECTION 3.09. Total Servicing Fee; Payment of Certain
Expenses by Servicer ................... 21
SECTION 3.10. Servicer's Certificate ................. 21
SECTION 3.11. Annual Statement as to Compliance;
Notice of Event of Default ............. 22
SECTION 3.12. Annual Independent Accountants' Report . 22
SECTION 3.13. Access to Certain Documentation and
Information Regarding Receivables ...... 23
SECTION 3.14. Amendments to Schedule of Receivables .. 23
- i -
<PAGE>
ARTICLE IV
DISTRIBUTIONS; SUBORDINATION SPREAD ACCOUNT;
STATEMENT TO CERTIFICATEHOLDERS
SECTION 4.01. Accounts ............................... 23
SECTION 4.02. Collections ............................ 25
SECTION 4.03. Application of Collections ............. 25
SECTION 4.04. Monthly Advances ....................... 26
SECTION 4.05. Additional Deposits .................... 26
SECTION 4.06. Distributions .......................... 27
SECTION 4.07. Subordination; Subordination Spread
Account; Priority of Distributions ..... 29
SECTION 4.08. Net Deposits ........................... 33
SECTION 4.09. Statements to Certificateholders ....... 33
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates ....................... 34
SECTION 5.02. Authentication of Certificates ......... 35
SECTION 5.03. Registration of Transfer and Exchange of
Certificates ........................... 35
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates ........................... 36
SECTION 5.05. Persons Deemed Owners .................. 36
SECTION 5.06. Access to List of Certificateholders'
Names and Addresses .................... 37
SECTION 5.07. Maintenance of Office or Agency ........ 37
SECTION 5.08. Book-Entry Certificates ................ 37
SECTION 5.09. Notices to Clearing Agency ............. 38
SECTION 5.10. Definitive Certificates ................ 38
ARTICLE VI
THE SELLER
SECTION 6.01. Liability of Seller .................... 39
SECTION 6.02. Merger or Consolidation of, or
Assumption of the Obligations of,
Seller; Amendment of Certificate of
Incorporation .......................... 39
SECTION 6.03. Limitation on Liability of Seller and
Others ................................. 39
SECTION 6.04. Seller May Own Certificates ............ 40
ARTICLE VII
THE SERVICER
SECTION 7.01. Liability of Servicer; Indemnities ..... 40
SECTION 7.02. Merger or Consolidation of, or
Assumption of the Obligations of, the
Servicer ............................... 41
SECTION 7.03. Limitation on Liability of Servicer
and Others ............................. 41
SECTION 7.04. Delegation of Duties ................... 42
SECTION 7.05. Servicer Not to Resign ................. 42
- ii -
<PAGE>
ARTICLE VIII
DEFAULT
SECTION 8.01. Events of Default ...................... 43
SECTION 8.02. Consequences of an Event of Default .... 43
SECTION 8.03. Trustee to Act; Appointment of Successor 44
SECTION 8.04. Notification to Certificateholders ..... 44
SECTION 8.05. Waiver of Past Defaults ................ 45
SECTION 8.06. Repayment of Advances .................. 45
ARTICLE IX
THE TRUSTEE
SECTION 9.01. Duties of Trustee ...................... 45
SECTION 9.02. Trustee's Certificate .................. 47
SECTION 9.03. Trustee's Assignment of Administrative
Receivables and Warranty Receivables ... 47
SECTION 9.04. Certain Matters Affecting the Trustee .. 47
SECTION 9.05. Trustee Not Liable for Certificates
or Receivables ......................... 49
SECTION 9.06. Trustee May Own Certificates ........... 49
SECTION 9.07. Trustee's Fees and Expenses ............ 50
SECTION 9.08. Eligibility Requirements for Trustee ... 50
SECTION 9.09. Resignation or Removal of Trustee ...... 50
SECTION 9.10. Successor Trustee ...................... 51
SECTION 9.11. Merger or Consolidation of Trustee ..... 51
SECTION 9.12. Appointment of Co-Trustee or Separate
Trustee ................................ 52
SECTION 9.13. Representations and Warranties of
Trustee ................................ 53
SECTION 9.14. Tax Returns ............................ 54
SECTION 9.15. Trustee May Enforce Claims Without
Possession of Certificates ............. 54
SECTION 9.16. Suit for Enforcement ................... 54
SECTION 9.17. Rights of Certificateholders to Direct
Trustee ................................ 54
ARTICLE X
TERMINATION
SECTION 10.01. Termination of the Trust .............. 55
SECTION 10.02. Optional Purchase of All Receivables .. 56
- iii -
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment ............................. 56
SECTION 11.02. Protection of Title to Trust .......... 57
SECTION 11.03. Limitation on Rights of
Certificateholders .................... 59
SECTION 11.04. Governing Law ......................... 60
SECTION 11.05. Severability of Provisions ............ 60
SECTION 11.06. Assignment ............................ 60
SECTION 11.07. Certificates Nonassessable and Fully
Paid .................................. 60
SECTION 11.08. Third-Party Beneficiaries ............. 60
EXHIBITS
Exhibit A -- Form of Class A Certificate
Exhibit B -- Form of Class B Certificate
Exhibit C -- Form of Custodian Agreement
Exhibit D -- Form of Depository Agreement
_________________
- iv -
<PAGE>
GMAC GRANTOR TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
EFFECTIVE [DATE]____________
For GMAC Grantor Trusts formed
on or subsequent to the Effective Date
specified above
INTRODUCTION
These Standard Terms and Conditions of Agreement Effective June 1,
1996 (the "Standard Terms and Conditions of Agreement"), shall be
applicable to GMAC Grantor Trusts formed on or after the effective date
hereof. For each GMAC Grantor Trust to which the Standard Terms and
Conditions of Agreement are to be applicable, a Pooling and Servicing
Agreement shall be executed which incorporates by reference the
Standard Terms and Conditions of Agreement and designates any
exclusion from or exception to such incorporation by reference or
variation of the terms hereof for the purposes of that GMAC Grantor
Trust.
ARTICLE I DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires,
pertain to the Trust created by a particular Pooling and Servicing
Agreement and shall have the following meanings with reference to such
Trust:
Accounting Date: With respect to a Distribution Date, the last day
of the related Monthly Period, or, with respect to any initial
Distribution Date that occurs in the same calendar month as the Trust
Formation Date, at the close of business on the Trust Formation Date.
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 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 Monthly Period and
related Distribution Date, an amount equal to the lesser of (i) the
amount by which (A) 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
(A) the sum of Available Interest and Available Principal exceeds (B)
the sum of (1) the Class A Distributable Amount, (2) the Class
B Distributable Amount (exclusive of Surplus Interest), (3) the
Class A Interest Carryover Shortfall, the Class A Principal
Carryover Shortfall, the Class B Interest Carryover Shortfall and
the Class B Principal Carryover Shortfall as of the close of business
on the preceding Distribution Date, (4) the Basic Servicing Fee and all
unpaid Basic Servicing Fees from prior Monthly Periods and (5) the
amount, if any, deposited into the Subordinated Spread Account on such
Distribution Date to restore the amount in the Subordination Spread
Account to the Specified Subordination Spread Account Balance.
Administrative Purchase Payment: With respect to a Distribution
Date and to an Administrative Receivable purchased as of an Accounting
Date, (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 sum of
the Scheduled Payments on such Receivable due after the Accounting
Date minus the Rebate, (B) any reimbursement made pursuant to the
last sentence of subsection 4.04(a) 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 Accounting Date allocable to
principal. Administrative Receivable: A Receivable which the Servicer
is required to purchase as of an Accounting Date pursuant to Section
3.08 or which the Servicer has elected to repurchase as of an
Accounting Date pursuant to Section 10.02.
Aggregate Amount Financed: The dollar amount equal to the
aggregate of the Amount Financed under all the Receivables, as set
forth in the Pooling and Servicing Agreement.
Aggregate Net Losses: With respect to a Monthly Period, the
aggregate amount allocable to principal 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.
Agreement: With respect to a Trust, the Pooling and Servicing
Agreement executed by the Seller, the Servicer and the Trustee
as of the Trust Formation Date, into which these Standard Terms and
Conditions of Agreement shall be incorporated by reference, and
all amendments and supplements thereto.
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 of physical damage insurance force-placed by the
Servicer covering the Financed Vehicle.
Annual Percentage Rate: With respect to a Receivable, the annual
rate of finance charges stated in such Receivable.
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
of the Scheduled Payment minus the Actual Payment.
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 Payments Ahead), (ii)
Liquidation Proceeds to the extent allocable to interest due thereon
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, (v) all Warranty Payments and all
Administrative Purchase Payments to the extent allocable to accrued
interest or Prepayment Surplus; less an amount equal to (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 a particular
Scheduled Interest Receivable to the extent of the Outstanding
Scheduled Interest Advances allocable to interest thereon, (C) any
Excess Simple Interest Collections, and (D) all Liquidation Proceeds
with respect to a particular Simple Interest Receivable 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 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) all Warranty Payments to the extent allocable to principal, (v)
all Administrative Purchase Payments to the extent allocable to
principal, and (vi) all Prepayments to the extent allocable to
principal; less an amount equal to (A) all amounts received on any
Scheduled Interest Receivable (other than a Liquidating Receivable)
to the extent of the Outstanding Scheduled Interest Advances of
principal with respect to such Receivable, (B) all Liquidation
Proceeds with respect to a particular Scheduled Interest Receivable
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) (iv).
Basic Servicing Fee: With respect to a Monthly Period, the fee
payable to the Servicer for services rendered during such 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 Accounting Date related to the preceding
Monthly Period.
Basic Servicing Fee Rate: The percentage set forth in the
Pooling and Servicing Agreement.
Book-Entry Certificates: A beneficial interest in the
Class A Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section
5.08.
Business Day: Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York or Detroit,
Michigan are authorized or obligated by law, executive order or
governmental decree to be closed.
Certificate: Any one of the Class A Certificates and the
Class B Certificates.
Certificate Account: The account designated as such,
established and maintained pursuant to Section 4.01.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the 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 or as
an indirect participant, in accordance with the rules of such
Clearing Agency) and shall mean, with respect to a Definitive
Certificate, the Certificateholder.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 5.03.
Charge-off Rate: With respect to a Distribution Date, the
Aggregate Net Losses with respect to the Receivables expressed, on an
annualized basis, as a percentage of the average (x) the aggregate
Principal Balance on the last day of the Monthly Period preceding the
related Monthly Period and (y) the aggregate Principal Balance on the
related Accounting Date.
Class A Certificate: Any one of the Certificates executed
by the Trustee and authenticated by the Trustee in substantially the
form set forth in Exhibit A hereto.
Class A Certificate Balance: A dollar amount which shall
equal, initially, the Class A Percentage of the Aggregate Amount
Financed and, thereafter, shall equal such initial Class A
Certificate Balance reduced by all amounts distributed to Class A
Certificateholders in respect of the Class A Principal Distributable
Amount.
Class A Distributable Amount: With respect to any Distribution
Date, the sum of the Class A Principal Distributable Amount and
the Class A Interest Distributable Amount.
Class A Interest Carryover Shortfall: With respect to the
close of business on any Distribution Date, the excess, if any, of
(i) the Class A Interest Distributable Amount for such
Distribution Date plus any outstanding Class A Interest
Carryover Shortfall from the preceding Distribution Date over (ii)
the amount of interest that the holders of the Class A Certificates
actually received on such current Distribution Date.
Class A Interest Distributable Amount: With respect to any
Distribution Date, one month's interest at the Pass Through
Rate on the Class A Certificate Balance as of the related Accounting
Date.
Class A Percentage: The percentage specified as such in the
Pooling and Servicing Agreement.
Class A Pool Factor: With respect to any Distribution
Date, a seven-digit decimal figure computed by the Servicer equal to
the Class A Certificate Balance as of such Distribution Date (after
giving effect to distributions on such date) divided by the Class A
Certificate Balance as of the date of the initial issuance of the
Certificates.
Class A Principal Carryover Shortfall: With respect to the close
of business on any Distribution Date, the excess, if any, of (i) the
Class A Principal Distributable Amount and any outstanding Class
A Principal Carryover Shortfall from the preceding Distribution
Date over (ii) the amount of principal that the holders of the
Class A Certificates actually received on such current Distribution
Date.
Class A Principal Distributable Amount: With respect to
any Distribution Date, the sum of the Class A Percentage of the
following amounts: (i) the principal portion of all Scheduled Payments
with respect to the related Monthly Period on Scheduled Interest
Receivables held by the Trust (other than Liquidating Receivables),
(ii) the principal portion of all payments received by the Trustee
during the related Monthly Period on Simple Interest Receivables
held by the Trust (other than Liquidating Receivables), (iii) the
principal portion of all Prepayments received during the related
Monthly Period (without duplication of amounts included in clause
(i) above), and (iv) the Principal Balance of each Receivable that
became an Administrative Receivable, a Warranty Receivable or a
Liquidating Receivable during the related Monthly Period (without
duplication of amounts referred to in clause (i), (ii) or (iii)
above). In addition, on the Final Scheduled Distribution Date, the
principal required to be distributed to the Class A Certificateholders
will include the lesser of (i) the aggregate of (A) the Class A
Percentage of any Scheduled Payments of principal due and remaining
unpaid on each Scheduled Interest Receivable held by the Trust as of
the related Accounting Date and (B) the Class A Percentage of
any principal due and remaining unpaid on each Simple Interest
Receivable held by the Trust as of the related Accounting Date and
(ii) the portion of the amount required to be distributed under the
preceding clause (i) above that is necessary (after giving effect to
the other amounts described above to be distributed to the Class A
Certificateholders on such Distribution Date and allocable to
principal) to reduce the Class A Certificate Balance to zero.
Class B Certificate: Any one of the Certificates executed
by the Trustee and authenticated by the Trustee in substantially the
form set forth in Exhibit B hereto.
Class B Certificate Balance: A dollar amount which shall
equal, initially, the Class B Percentage of the Aggregate Amount
Financed and, on any Accounting Date thereafter, shall equal such
initial Class B Certificate Balance, reduced by (i) all amounts
distributed on or prior to such date to Class B Certificateholders
(or deposited on or prior to such date in the Subordination Spread
Account, not including the Subordination Initial Deposit) with
respect to the Class B Principal Distributable Amount, (ii) the Class
A Principal Carryover Shortfall as of the preceding Distribution Date
and (iii) the Class B Principal Carryover Shortfall as of the preceding
Distribution Date.
Class B Distributable Amount: With respect to any Distribution
Date, the sum of the Class B Principal Distributable Amount and
the Class B Interest Distributable Amount.
Class B Interest Carryover Shortfall: With respect to the
close of business on any Distribution Date, the excess, if any, of
(i) the Class B Interest Distributable Amount plus any
outstanding Class B Interest Carryover Shortfall on the preceding
Distribution Date over (ii) the amount of interest the Holders of the
Class B Certificates actually received on such current Distribution
Date.
Class B Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) one month's interest at the Pass
Through Rate on the Class B Certificate Balance as of the related
Accounting Date, (ii) an amount equal to the excess of (a) all
Surplus Interest with respect to Receivables held by the Trust (b)
Additional Servicing over and (iii) an amount equal to the excess
of (a) all Prepayment Surplus with respect to Scheduled Interest
Receivables held by the Trust to which a Prepayment is to be applied
over (b) one month's interest at the Pass Through Rate on the
aggregate Principal Balance of such Receivables as of the first day
of the related Monthly Period.
Class B Percentage: The percentage specified as such in the
Pooling and Servicing Agreement.
Class B Principal Carryover Shortfall: With respect to the
close of business on any Distribution Date, the excess, if any, of
(i) the Class B Principal Distributable Amount and any
outstanding Class B Principal Carryover Shortfall on the preceding
Distribution Date over (ii) the amount of principal that the Holders
of the Class B Certificates actually received on such current
Distribution Date.
Class B Principal Distributable Amount: With respect to any
Distribution Date, the sum of the Class B Percentage of the following
amounts: (i) the principal portion of all Scheduled Payments due
during the related Monthly Period on Scheduled Interest Receivables
held by the Trust (other than Liquidating Receivables), (ii) the
principal portion of all payments received by the Trustee during the
related Monthly Period on Simple Interest Receivables held by the Trust
(other than Liquidating Receivables), (iii) the principal portion of
all Prepayments received during the related Monthly Period (without
duplication of amounts included in clause (i) above), and (iv) the
Principal Balance of each Receivable that became an Administrative
Receivable, a Warranty Receivable or a Liquidating Receivable during
the related Monthly Period (without duplication of amounts referred to
in clauses (i), (ii) or (iii) above).
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934,
as amended.
Clearing Agency Participant: A broker, dealer, bank, 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.
Collection Account: The account designated as such,
established and maintained pursuant to Section 4.01.
Corporate Trust Office: The principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the Trust Formation Date is specified
in the Pooling and Servicing Agreement.
Custodian: General Motors Acceptance Corporation, as Servicer, or
another custodian named from time to time in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement from time to
time in effect between the Custodian named therein and the Trustee,
substantially in the form of Exhibit C hereto, as the same may be
amended or modified from time to time in accordance with the terms
thereof.
Cutoff Date: The date specified as such in the Pooling and
Servicing Agreement.
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 General Motors
Acceptance Corporation under an existing agreement between such
seller and General Motors Acceptance Corporation or between such
seller and General Motors Corporation, as applicable.
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 4.01(b)
or in the Payment Ahead Servicing Account with respect to such
Receivable.
Definitive Certificates: The Certificates specified in Section
5.08.
Delinquency Percentage: With respect to a Distribution Date, the
ratio of (i) the number of all outstanding Receivables which are 61
days or more delinquent as of the related Accounting Date, determined
in accordance with the Servicer's normal practices, divided by (ii) the
number of outstanding Receivables on the related Accounting Date.
Delivery: When used with respect to Subordination Spread
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 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 Trustee or its
nominee;
(ii) with respect to any such Subordination Spread
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 Property to an appropriate book-entry account maintained
with a Federal Reserve Bank by the Trustee or by a custodian and
issuance to the 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 Trustee and
indicating that such custodian holds such Subordination Spread
Account Property solely as agent for the Trustee, and the making
by the Trustee of entries in its books and records establishing
that it holds such Subordination Spread Account Property solely
as Trustee under the terms of Section 4.07, and (C) such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such
Subordination Spread Account Property to the Trustee, consistent
with changes in applicable law or regulations or the
interpretation thereof; and
(iii) with respect to any such Subordination Spread
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
Subordination Spread Account Property by, the Trustee or
its nominee by the issuer of such Subordination Spread
Account Property.
Depository: The Trustee or any successor depository bank or trust
company appointed pursuant to Section 4.01 of the Standard Terms and
Conditions of Agreement.
Depository Agreement: The agreement among the Seller, the
Trustee and the initial Clearing Agency, dated as of the date of
this Agreement, substantially in the form attached hereto as Exhibit
D.
Determination Date: The 10th day of each calendar month, or if
such 10th day is not a Business Day, on the next succeeding Business
Day.
Distribution Date: With respect to a Monthly Period, the monthly
date, as specified in the Pooling and Servicing Agreement, on which
distributions are made to Certificateholders.
Eligible Investments: Is an investment property under the
Illinois UCC and which (at the time made) (i) are rated A-1+ by
Standard & Poor's Ratings Services and P-1 by Moody's Investors
Service, Inc., and, if rated by Fitch Investors Service, L.P., rated
F-1 by Fitch Investors Service, L.P., (ii) are in time deposits in,
or bankers acceptances issued by, any U.S., Canadian or European
depository institution or trust company with the Required Deposit
Rating, (iii) are in a money market fund with the highest available
rating from each Rating Agency then rating such fund (including The
First National Bank of Chicago Corporate Trust Short Term Investment
Fund, so long as such fund shall have such rating) or (iv) are
otherwise permitted by the Rating Agencies, in each case maturing on
or before the Distribution Date next succeeding the date of
investment.
Event of Default: An event described in Section 8.01.
Excess Payment: With respect to a Distribution Date and a
Scheduled Interest Receivable, the portion of an Actual Payment in
excess of the Scheduled Payment.
Excess Simple Interest Collections: With respect to a Monthly
Period, 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.
Final Scheduled Distribution Date: As defined in the
Pooling and Servicing Agreement.
Financed Vehicle: An automobile or light truck, together with
all accessories thereto, securing an Obligor's indebtedness under a
receivable.
Fractional Undivided Interest: The fractional undivided interest
in the Trust that is evidenced by a Certificate.
Insurance Policy: With respect to a Receivable, an insurance
policy covering physical damage, credit life, credit disability,
theft, mechanical breakdown or similar event to the Financed Vehicle.
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 Receivable
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.
Liquidation Proceeds: With respect to a Liquidating
Receivable, all amounts realized with respect to such Receivables net
of amounts that are required to be refunded to the Obligor on such
Receivable.
Monthly Advance: As of an Accounting Date, either a Scheduled
Interest Advance or a Simple Interest Advance, or both, as applicable.
Monthly Period: With respect to a Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs. With
respect to an Accounting Date, the calendar month in which such
Accounting Date occurs.
Monthly Remittance Condition: Any of the conditions
specified in subsection 4.01(b) hereof.
Obligor: The purchaser or the co-purchasers of the Financed
Vehicle or other person who owes payments under a Receivable.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Seller or the Servicer.
Optional Purchase Percentage: 10%.
Outstanding Monthly Advances: Outstanding Scheduled Interest
Advances and Outstanding Simple Interest Advances, collectively.
Outstanding Scheduled Interest Advances: As of an Accounting
Date and with respect to a Scheduled Interest Receivable, the sum of
all Scheduled Interest Advances made as of or prior to such
Accounting Date minus all payments or collections as of or prior to
such Accounting Date which are specified in subsection 4.04(a) as
reducing Outstanding Scheduled Interest Advances with respect to such
Receivable.
Outstanding Simple Interest Advances: As of an Accounting Date,
the sum of all Simple Interest Advances made as of or prior to such
Accounting Date minus the sum of (i) all payments to the Servicer as
of or prior to such Accounting Date pursuant to subsection 4.04(b)
and (ii) all Excess Simple Interest Collections paid to the Servicer
as of or prior to such Accounting 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 during the
related Monthly Period in excess of any Supplemental Servicing Fees
(excluding any interest earned on amounts on deposit in the
Collection Account or the Payment Ahead Servicing Account with
respect to such Receivable during the related Monthly Period), to
the extent of the Outstanding Scheduled Interest Advances relating
to such Receivable.
Pass Through Rate: The interest rate per annum payable to
Certificateholders, as specified in the Pooling and Servicing
Agreement, computed on the basis of a 360-day year of twelve 30-day
months.
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.
Payment Ahead Servicing Account: The account or accounts created
and maintained pursuant to Section 4.01.
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.
Pooling and Servicing Agreement: With respect to a Trust, the
Pooling and Servicing Agreement executed and delivered by the Seller,
the Servicer and the Trustee that incorporates by reference these
Standard Terms and Conditions of Agreement.
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, which is not allocable to principal.
Principal Balance: With respect to any Scheduled Interest
Receivable, as of an Accounting Date, the Amount Financed minus the sum
of the following amounts: (i) that portion of all Scheduled Payments
due on or prior to the Accounting Date allocable to principal,
(ii) any Warranty Payment or Administrative Purchase Payment to
the extent allocable to principal, and (iii) any Prepayments
applied to reduce the Principal Balance of such Receivable. With
respect to any Simple Interest Receivable, as of an Accounting
Date, the Amount Financed minus the sum of the following amounts: (A)
that portion of all payments received from the related Obligor on or
after the Cutoff Date and on or prior to the Accounting Date
allocable to principal and (B) any Warranty Payment or Administrative
Purchase Payment to the extent allocable to principal.
Purchase Agreement: As defined in the Pooling and Servicing
Agreement.
Rating Agencies: As of any date, all of the rating agencies
requested by the Seller to provide a rating on the Class A
Certificates which are rating the Class A Certificates on such date.
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 rebateable to the Obligor upon the payment 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 2.02 pertaining
to a particular Receivable.
Record Date: With respect to a Distribution Date, the day
immediately preceding such Distribution Date, or, if Definitive
Certificates are issued pursuant to Section 5.10, the related
Accounting Date, or, with respect to any initial Distribution Date
that occurs in the same calendar month as the Trust Formation Date,
at the close of business on the Trust Formation 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: The rating specified in the Pooling
and Servicing Agreement.
Residual Certificates: The Certificates specified in Section 5.01.
Responsible Officer: When used with respect to the Trustee, any
officer of the Trustee assigned by the Trustee to administer its
corporate trust affairs.
Scheduled Interest Advance: With respect to a Scheduled
Interest Receivable, the amount, as of an Accounting Date, which
the Servicer is required to advance pursuant to subsection 4.04(a).
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 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 to the Pooling and Servicing Agreement, as it may
be amended from time to time.
Seller: The Person executing this Agreement as the Seller, or its
successor in interest pursuant to Section 6.02.
Servicer: The Person executing this Agreement as the Servicer, or
its successor in interest pursuant to Section 7.02.
Servicer's Certificate: A certificate, completed by and executed
on behalf of the Servicer, in accordance with Section 3.10.
Simple Interest Advance: The amount, as of an Accounting Date,
which the Servicer is required to advance pursuant to subsection
4.04(b).
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 Subordination Spread Account Balance: As defined in
the Pooling and Servicing Agreement.
Subordination Initial Deposit: The amount, if any, deposited
into the Subordination Spread Account on the date of initial
issuance of the Certificates pursuant to Section 4.07 and
specified in the Pooling and Servicing Agreement.
Subordination Spread Account: The account established and
maintained pursuant to Section 4.07.
Subordination Spread Account Property: The property designated as
such pursuant to subsection 4.07(a)(ii). The Subordination
Spread Account Property shall not, under any circumstances, be
deemed to be a part of or otherwise includable in the Trust.
Supplemental Servicing Fee: Any interest earned on the
amounts deposited in the Collection Account and the Payment Ahead
Servicing Account during the applicable Monthly Period plus 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 such Monthly Period.
Surplus Interest: With respect to a Distribution Date and for
any Receivable having finance charges equivalent to an Annual
Percentage Rate which exceeds the sum of the Pass Through Rate and
the Basic Servicing Fee Rate, (i) in the case of a Scheduled Interest
Receivable, that portion of the Scheduled Payment thereon allocable
to interest, or (ii) in the case of a Simple Interest Receivable,
the amount of interest that would be due during such Monthly
Period on such Receivable (assuming that such payment was received on
its due date), in either case multiplied by the remainder of (a) one
minus (b) a fraction, the numerator of which equals the sum of the
Pass Through Rate and the Basic Servicing Fee Rate and the
denominator of which equals such Annual Percentage Rate.
Total Servicing Fee: With respect to a Monthly Period the sum
of the Basic Servicing Fee, the Supplemental Servicing Fee and the
Additional Servicing Fee.
Trust: Each trust created by a Pooling and Servicing Agreement.
Trustee: The Person executing this Agreement as Trustee, or
its successor in interest, and any successor trustee appointed as
provided in this Agreement.
Trustee's Certificate: A certificate completed and executed by
the Trustee in accordance with Section 9.02.
Trust Formation Date: The date, as specified in the Pooling
and Servicing Agreement, on which the Trust is formed.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
Voting Interests: The aggregate voting strength evidenced by
the Class A Certificates and the Class B Certificates which shall be
proportionate to the Class A Percentage and the Class B Percentage,
respectively; provided, however, that where the Voting Interests are
relevant in determining whether the requisite percentage of Class A
Certificateholders necessary to effect any consent, waiver, request or
demand shall have been obtained, the Voting Interests shall be deemed
to be reduced by the amount equal to the Voting Interests (without
giving effect to this provision) represented by the interests evidenced
by any Class A Certificate registered in the name of the Seller, the
Servicer or any Person controlling, controlled by or under common
control with the Seller or the Servicer.
Warranty Payment: With respect to a Distribution Date and to a
Warranty Receivable repurchased as of an Accounting Date, (i) in
the case of a Scheduled Interest Receivable, a payment equal to the
sum of (A) the sum of the Scheduled Payments on such Receivable due
after the Accounting Date 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 4.04(a) 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 Accounting Date 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 Receivable: A Receivable which the Seller has become
obligated to repurchase pursuant to Section 2.05.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Receivables. The Seller,
pursuant to the mutually agreed upon terms contained in the
Pooling and Servicing Agreement, shall sell, transfer, assign, and
otherwise convey to the Trustee, without recourse (but without
limitation of its obligations in this Agreement), all the right, title
and interest of the Seller in and to the Receivables and any
proceeds related thereto, including any right of recourse to
Dealers and such other items as shall be specified in the Pooling
and Servicing Agreement. It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement shall
constitute a sale of the Receivables from the Seller to the Trust
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.
SECTION 2.02. Custody of Receivable Files. In connection
with the sale, transfer and assignment of the Receivables to the
Trustee pursuant to the Pooling and Servicing Agreement, the Trustee,
simultaneously with the execution and delivery of the Pooling and
Servicing Agreement, shall enter into the Custodian Agreement with
the Custodian, dated as of the Trust Formation Date, pursuant to
which the Trustee shall revocably appoint the Custodian, and the
Custodian shall accept such appointment, to act as the agent of the
Trustee as Custodian of the following documents or instruments which
shall be constructively delivered to the Trustee with respect to each
Receivable:
(a) the fully executed original of the Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor,
fully executed by each such Obligor on General Motors Acceptance
Corporation's customary form, or on a form approved by General
Motors Acceptance Corporation, for such application;
(d) where permitted by law, the original certificate of
title (when received) and otherwise such documents, if any, that
General Motors Acceptance Corporation 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 General Motors
Acceptance Corporation as first lienholder or secured party; and
(e) any and all other documents that General Motors
Acceptance Corporation keeps on file in accordance with its
customary procedures relating to the individual Receivable, Obligor or
Financed Vehicle.
SECTION 2.03. Acceptance by Trustee. The Trustee
shall acknowledge its acceptance, pursuant to the Pooling and Servicing
Agreement, of all right, title and interest in and to the Receivables
conveyed by the Seller pursuant to the Pooling and Servicing
Agreement and shall declare that the Trustee holds and shall hold
such right, title and interest, upon the trust set forth in the
Pooling and Servicing Agreement.
SECTION 2.04. Representations and Warranties of Seller.
The Seller hereby makes the following representations and warranties
on which the Trustee relies in accepting the Receivables in trust and
authenticating the Certificates. Such representations and warranties
speak as of the Trust Formation Date, but shall survive the sale,
transfer, and assignment of the Receivables to the Trustee.
(a) As to the Receivable:
(i) Good Title. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other
than the Trustee; immediately prior to the conveyance of the
Receivables pursuant to the Pooling and Servicing Agreement, the
Seller had good and marketable title thereto, free of any Lien
and, upon execution and delivery of the Pooling and Servicing
Agreement by the Seller, the Trustee shall have all of the
right, title and interest of the Seller in and to the
Receivables, the unpaid indebtedness evidenced thereby,
and the collateral security therefor, free of any Lien; and
(ii) All Filings Made. All filings (including,
without limitation, UCC filings) necessary in any jurisdiction
to give the Trustee a first priority perfected ownership
interest in the Receivables shall have been made.
(b) 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 assigned to and
deposited with the Trustee as part of the Trust and has duly
authorized such sale and assignment to the Trustee 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 the Pooling and Servicing Agreement has been 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 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 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 instrumentality 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 (A) asserting the invalidity
of this Agreement, the Certificates or the Custodian
Agreement, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Custodian Agreement, (C)
seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
Agreement, the Certificates or the Custodian Agreement, or (D)
seeking to adversely affect the federal income tax attributes of
the Certificates.
SECTION 2.05. Repurchase of Receivables Upon Breach of
Warranty. Upon discovery by either the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties in
Section 2.02 of the Pooling and Servicing Agreement, Section
3.02(a) of the Purchase Agreement or Section 2.04 of this
Agreement that materially and adversely affects the interests of the
Certificateholders in any Receivable, the party discovering such
breach shall give prompt written notice to the others. As of the
second Accounting Date following its discovery or its receipt of
notice of breach (or, at the Seller's election, the first
Accounting Date so following), 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
2.02 of the Pooling and Servicing Agreement or Section 2.04 of this
Agreement, the Seller shall repurchase, or in the event of a breach
of a representation and warranty under Section 3.02(a) of the
Purchase Agreement, the Seller and the Servicer shall use
reasonable efforts to enforce the obligation of General Motors
Acceptance Corporation under the Purchase Agreement to repurchase,
such Receivable from the Trustee 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
General Motors Acceptance Corporation's obligation to the
Seller to repurchase such Receivables pursuant to the Purchase
Agreement shall, if such obligation is fulfilled, constitute the sole
remedy against the Seller, the Servicer or General Motors
Acceptance Corporation for such breach available to Certificateholders
or the Trustee on behalf of Certificateholders.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of Servicer. The Servicer is
hereby authorized to act as agent for the Trustee 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 all comparable
automotive receivables that it services for itself or others.
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 Trustee
with respect to distributions, generating federal income tax
information and performing the other duties specified herein. 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
Trustee, pursuant to this Section 3.01, to execute and
deliver, on behalf of the Certificateholders and the Trustee 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 with respect to the
Financed Vehicles. The Servicer is hereby authorized to commence, in
its own name or in the name of the Trustee, a legal proceeding to
enforce a Liquidating Receivable pursuant to Section 3.04 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 Trustee
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 authorized and empowered by the Trustee 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. The Trustee 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.
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
procedures as it follows with respect to all 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 Trustee. 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. In the event that 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 Trust.
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 and
procedures as it shall deem necessary or advisable and as shall be
customary and usual in its servicing of automotive receivables,
which practices 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, in
accordance with subsection 4.06(a).
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 Trustee
hereby authorizes the Servicer to re-perfect such security interest
on behalf of the Trust, as necessary because of the relocation of
a Financed Vehicle or for any other reason.
SECTION 3.07. Covenants, Representations and
Warranties of Servicer. As of the Trust Formation Date, the
Servicer hereby makes the following representations, warranties and
covenants on which the Trustee relies in accepting the
Receivables in trust and authenticating the Certificates.
(a) The Servicer covenants that from and after the Trust
Formation Date :
(i) Liens in Force. Except as contemplated in
this Agreement, 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 the Trustee or the Certificateholders in 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 or 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, on the last scheduled due
date, in the case of a Simple Interest Receivable, occurs
after the Final Scheduled Distribution Date.
(b) The Servicer represents and warrants:
(i) Organization and Good Standing. The Servicer 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, and had at all relevant times, and now has,
power, authority and legal right to service the Receivables;
(ii) Due Qualification. The Servicer is duly qualified
to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or
the conduct of its business (including the servicing of
the Receivables as required by this Agreement) requires or
shall require such qualification;
(iii) Power and Authority. The Servicer has the
power and authority to execute and deliver this Agreement and to
carry out its terms; and the execution, delivery and
performance of this Agreement have been duly authorized by the
Servicer by all necessary corporate action;
(iv) Binding Obligation. This Agreement, when the
Pooling and Servicing Agreement has been duly executed and
delivered, shall constitute a legal, valid and binding
obligation of the Servicer 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, 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 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 this Agreement, 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;
(vi) 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
this Agreement or the Certificates, (B) seeking to prevent the
issuance of the Certificates or 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 the Servicer of its obligations under, or the
validity or enforceability of, this Agreement; and
(vii) Reasonable Liquidation Expenses. The amount defined as
"Liquidation Expenses" is 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 either the Servicer or the Trustee of a
breach of any of the covenants set forth in subsection 3.07(a), the
party discovering such breach shall give prompt written notice to
the other. As of the second Accounting Date following its
discovering or receiving notice of such breach or its making of such
amendment (or, at the Servicer's election, the first Accounting Date
so following), the Servicer shall, unless it shall have cured such
breach in all material respects, purchase from the Trustee any
Receivable materially and adversely affected by such breach as
determined by the Trustee 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 Certificateholders or the Trustee on behalf of
Certificateholders.
SECTION 3.09. Total Servicing Fee; Payment of Certain
Expenses by Servicer. The Servicer is entitled to receive out of
the Certificate Account the Total Servicing Fee. Unless otherwise
provided in the Pooling and Servicing Agreement, the Basic Servicing
Fee for each Monthly Period (together with any portion of the Total
Servicing Fee that remains unpaid from prior Distribution Dates) may be
paid at the beginning of such Monthly Period out of collections for
such Monthly Period. Subject to Section 7.03, the Servicer shall be
required to pay all expenses incurred by it in connection with its
activities under this Agreement (including fees and disbursements of
the Trustee and independent accountants, taxes imposed on the Servicer,
expenses incurred in connection with distributions and reports to
Certificateholders and all other fees and expenses not expressly stated
under this Agreement to be for the account of the Certificateholders).
SECTION 3.10. Servicer's Certificate. On each
Determination Date, the Servicer shall deliver to the Trustee and
the Rating Agencies a Servicer's Certificate executed by the
President or any Vice President of the Servicer containing all
information necessary to the Trustee for making the distributions
required by Section 4.06, and all information necessary to the
Trustee for sending statements to Certificateholders pursuant to
subsection 4.09(a). Receivables to be purchased by the Servicer or
to be repurchased by the Seller as of any Accounting Date shall be
identified by Receivable number (as set forth in the Schedule of
Receivables).
SECTION 3.11. Annual Statement as to Compliance; Notice of
Event of Default.
(a) The Servicer shall deliver to the Trustee, on or before
August 15 of each year, beginning on the first August 15 next
following the first anniversary of the Trust Formation Date, 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 such other period as shall have elapsed from the
Trust Formation Date to the date of such certificate) and of its
performance under this 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 this
Agreement 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. Such
certificate may be provided as a single certificate making the required
statements as to more than one Agreement. A copy of such certificate
may be obtained by any Certificateholder by a request in writing to
the Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to the
Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than 5 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 an Event of Default
under Section 8.01. The Seller shall deliver to the Trustee, the
Servicer and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than 5 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 an Event of Default under clause (b) of Section 8.01.
SECTION 3.12. Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of independent
accountants, who may also render other services to the Servicer or
to the Seller, to deliver to the Trustee and the Rating Agencies, on
or before August 15 of each year, beginning on the first August 15
after the first anniversary of the Trust Formation Date, with
respect to the twelve months ended the immediately preceding June
30 (or such other period as shall have elapsed from the Trust
Formation Date to the date of such certificate), a report (the
"Accountants' Report") addressed to the Board of Directors of the
Servicer and to the 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 (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.
(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 Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
SECTION 3.13. Access to Certain Documentation and
Information Regarding Receivables. The Servicer shall provide to the
Trustee reasonable access to the documentation regarding the
Receivables. The Servicer shall provide such access to any
Certificateholder only in such cases where 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 3.13 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 as a result of such obligation shall not
constitute a breach of this Section 3.13.
SECTION 3.14. 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 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.
ARTICLE IV
DISTRIBUTIONS; SUBORDINATION SPREAD ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Accounts.
(a) The Servicer shall establish the Collection Account
and the Certificate Account in the name of the Trustee for the
benefit of the Certificateholders and shall establish the Payment
Ahead Servicing Account in the name of the Trustee on behalf of
the Obligors. The Collection Account and the Payment Ahead
Servicing Account shall be segregated trust accounts initially
established with the Trustee and maintained with the Trustee so
long as (i) the deposits of the Trustee have the Required Deposit
Rating, or (ii) the Collection Account and the Payment Ahead
Servicing Account are maintained in the Corporate Trust Department
of the Trustee; provided, however, that for so long as the bank
or trust company then maintaining the accounts has the Required
Deposit Rating, all amounts held in the Collection Account and the
Payment Ahead Servicing Account 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; and provided, further, that if the Servicer is
required to remit collections daily to the Collection Account
pursuant to Section 4.02 then such remittances shall be invested
at the written direction of the Servicer (as to specific
investments) in Eligible Investments. Such written direction shall
certify that any such investment is authorized by this Section
4.01. Investments in Eligible Investments shall be made in the
name of the Trustee or its nominee, and such investments shall
not be sold or disposed of prior to their maturity. The Certificate
Account shall be a segregated trust account established and
maintained with the Trustee, and the amounts in such account shall
not be invested. Should the short-term unsecured debt obligations of
the Trustee no longer have the Required Deposit Rating, then the
Servicer shall, with the Trustee's assistance as necessary, cause the
Collection Account and the Payment Ahead Servicing Account (i) to be
moved to a bank or trust company, the short-term unsecured debt
obligations of which shall have the Required Deposit Rating, or (ii)
to be moved to the corporate trust department of the Trustee. Earnings
on investment of funds in the Collection Account and the Payment Ahead
Servicing Account shall be paid to the Servicer.
(b) At any time that (i) General Motors Acceptance
Corporation is the Servicer, (ii) the rating of General Motors
Acceptance Corporation's short-term unsecured debt is at least P-1 by
Moody's Investors Service, Inc. and is at least A-1 by Standard &
Poor's Ratings Services, and (iii) an Event of 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 Certificate Account in accordance with subsection
4.06(a)(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 the
remittance schedule utilized by the Servicer before the Monthly
Remittance Condition became unsatisfied), if the Servicer provides
to the 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
Class A Certificates. The Trustee shall not be deemed to have
knowledge of any event or circumstance under clause (iii) of the
first sentence of this subsection 4.01(b) unless the Trustee has
received notice of such event or circumstance from the Seller or the
Servicer in an officer's certificate or from the Holders of Class A
Certificates evidencing not less the 25% of the Voting Interests
thereof or unless a Responsible Officer in the Corporate Trust
Office with knowledge hereof and familiarity herewith has actual
knowledge of such event or circumstance.
SECTION 4.02. 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 daily to the Collection Account
all payments by or on behalf of the Obligors (including Payments
Ahead in accordance with Section 4.01) 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 the remittance schedule utilized
by the Servicer before the occurrence of the Monthly Remittance
Condition), if the Servicer provides to the 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 Class A
Certificates. At all times when the 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 4.03. Application of Collections. For the
purposes of this Agreement, as of each Accounting Date, all
collections for the related Monthly Period shall be applied by the
Servicer as follows:
(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 Scheduled Advances
made with respect to such Receivable. Next, the amount of any
such payments in excess of Supplemental Servicing Fees and
Outstanding Scheduled Interest 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.
(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 the Seller, as applicable. In the case of a
Scheduled Interest Receivable, a Warranty Payment shall be applied
to reduce Outstanding Scheduled Interest Advances 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.
SECTION 4.04. Monthly Advances.
(a) As of each Accounting Date, if the payments during the
related Monthly Period by or on behalf of the Obligor on a
Scheduled Interest Receivable (other than an Administrative
Receivable or a Warranty Receivable) after application under
subsection 4.03(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. Next,
subject to the following sentence, the Servicer shall advance any
remaining 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 Scheduled Interest 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: (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 Trust.
(b) As of each Accounting Date, 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 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 (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.
SECTION 4.05. Additional Deposits. The Servicer shall
deposit in the Collection Account the aggregate Monthly
Advances pursuant to subsections 4.04(a) and (b) and the
aggregate amounts paid pursuant to Section 3.03. 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.
SECTION 4.06. Distributions.
(a) On each Distribution Date, the Trustee shall cause to be
made the following transfers and distributions in the amounts set
forth in the Servicer's Certificate for such Distribution Date:
(i) from the Collection Account to the Certificate
Account, in immediately available funds, the entire amount then
on deposit in the Collection Account; provided, however, that
if the Servicer is required to make deposits to the Collection
Account on a daily basis pursuant to Section 4.02, the amount of
the funds transferred from the Collection Account to the
Certificate Account shall include only those funds that were
deposited in the Collection Account for the Monthly Period
related to such Distribution Date;
(ii) from the Payment Ahead Servicing Account, or
from the Servicer if the Servicer is not required to make
deposits to the Payment Ahead Servicing Account on a daily basis
pursuant to subsection 4.01(b), to the Certificate Account, in
immediately available funds, the aggregate Applied Payments
Ahead;
(iii) from the Certificate Account to the Payment
Ahead Servicing Account, or to the Servicer if the Servicer is
not required to make deposits to the Payment Ahead Servicing
Account on a daily basis pursuant to subsection 4.01(b), in
immediately available funds, the aggregate Payments Ahead for
the Monthly Period related to such Distribution Date; and
(iv) from the Certificate Account to the
Servicer, in immediately available funds, reimbursement of
Outstanding Monthly Advances pursuant to subsections 4.04(a)
and (b), payment of Excess Simple Interest Collections, if any,
pursuant to subsection 4.03(b) 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.
(b) On each Determination Date, the Servicer shall
calculate the Available Interest, the Available Principal, the
Class A Distributable Amount, the Class B Distributable Amount, the
amount to be distributed to Certificateholders of each Class and all
other distributions to be made on the next succeeding Distribution Date.
(c) On each Distribution Date, the Trustee (based
on the information contained in the Servicer's Certificate delivered
on the related Determination Date pursuant to Section 3.10) shall,
subject to subsection (d) hereof, make the following distributions
in the following order of priority:
(i) first, to the Servicer, from the Available
Interest, the Total Servicing Fee (that has not been previously
distributed as provided in Section 3.09) and all unpaid Total
Servicing Fees from prior Monthly Periods;
(ii) second, to the Class A Certificateholders:
(A) from the Class A Percentage of the
Available Interest (as such Available Interest has been
reduced by payments of Total Servicing Fees), an amount
equal to the sum of the Class A Interest Distributable
Amount and any outstanding Class A Interest Carryover
Shortfall as of the close of business on the preceding
Distribution Date; and
(B) from the Class A Percentage of the
Available Principal, an amount equal to the sum of the
Class A Principal Distributable Amount and any
outstanding Class A Principal Carryover Shortfall as of
the close of business on the preceding Distribution Date;
(iii) third, to the Class B Certificateholders:
(A) from the Available Interest (as such
Available Interest has been reduced by payments of Total
Servicing Fees), an amount equal to the sum of the Class
B Interest Distributable Amount and any outstanding Class B
Interest Carryover Shortfall as of the close of business on
the preceding Distribution Date; and
(B) from the Class B Percentage of the
Available Principal, an amount equal to the sum of the
Class B Principal Distributable Amount and any
outstanding Class B Principal Carryover Shortfall as of the
close of business on the preceding Distribution Date;
provided, however, that the amounts otherwise
distributable to the Class B Certificateholders shall
instead be deposited by the Trustee in the Subordination
Spread Account to the extent provided in subsection
4.07(b) hereof to cover any Subordination Spread Account
deficiency resulting from payments on such Distribution
Date from the Subordination Spread Account pursuant to
subsection 4.06(d) or otherwise.
(d) The rights of the Class B Certificateholders to
receive distributions in respect of the Class B Certificates shall be
and hereby are subordinated to the rights of the Class A
Certificateholders to receive distributions in respect of the Class A
Certificates and the rights of the Servicer to receive the Total
Servicing Fee (and any accrued and unpaid Total Servicing Fees
from prior Monthly Periods) and reimbursement of Outstanding
Scheduled Interest Advances in the event of delinquency or
defaults on the Receivables. Such subordination shall be
effected as follows, and all payments shall be effected pursuant to
clause (i) below prior to any payments pursuant to clause (ii):
(i) if the Class A Percentage of the Available
Interest (as such Available Interest has been reduced by payments
of Total Servicing Fees) is less than the sum of the Class A
Interest Distributable Amount and any Class A Interest
Carryover Shortfall from the preceding Distribution Date, the
Class A Certificateholders shall be entitled to receive
distributions in respect of such deficiency first, from the
Class B Percentage of the Available Interest (as such
Available Interest has been reduced payments of Total Servicing
Fee); second, if such amounts are insufficient, from amounts
on deposit in the Subordination Spread Account; and third, if
such amounts are insufficient, from the Class B Percentage of
the Available Principal;
and
(ii) if the Class A Percentage of the Available
Principal is less than the sum of the Class A Principal
Distributable Amount and any Class A Principal Carryover
Shortfall from the preceding Distribution Date, the Class A
Certificateholders shall be entitled to receive distributions
in respect of such deficiency first, from the Class B
Percentage of the Available Principal; second, if such
amounts are insufficient, from amounts on deposit in the
Subordination Spread Account; and third, if such amounts
are insufficient, from any remaining Available Interest.
(e) Subject to Section 10.01 respecting the final payment
upon retirement of each Certificate, the Servicer shall on each
Distribution Date instruct the Trustee to distribute to each
Certificateholder of any Class of record on the related 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 is the Seller or a
Clearing Agency and shall have provided to the Servicer
appropriate instructions prior to such Distribution Date, or, if
not, by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register, the amounts to be
distributed to such Certificateholder with respect to such Holder's
Certificates.
SECTION 4.07. Subordination; Subordination Spread
Account; Priority of Distributions.
(a) (i) In order to effectuate the subordination
provided for herein, there shall be established and maintained
with the Trustee a separate trust account (the "Subordination Spread
Account") to include the money and other property deposited and
held therein pursuant to this subsection 4.07(a) and subsection 4.07
(b). On the date of issuance of the Certificates, the Seller shall
deposit the Subordination Initial Deposit, if any, into the
Subordination Spread Account. The Subordination Spread Account
shall not be part of the Trust.
(ii) In order to provide for the prompt payment to the
Class A Certificateholders and the Servicer in accordance with
subsections 4.06(c) and 4.06(d), to give effect to the
subordination provided for herein, and to assure availability of
the amounts maintained in the Subordination Spread Account:
(A) the Seller as initial holder of the
Class B Certificates on behalf of itself and its
successors and assigns, hereby pledges to the Trustee and
its successors and assigns, all its right, title and
interest in and to the Subordination Spread Account,
subject, however, to the limitations set forth below, and all
proceeds of the foregoing, including, without limitation,
all other amounts and investments held from time to
time in the Subordination Spread Account (whether in
the form of deposit accounts, Physical Property, book-entry
securities, uncertificated securities or otherwise) subject,
however, to the limitations set forth below, and solely for
the purpose of providing for payment of the Class A
Distributable Amount provided for in Section 4.06 and this
Section; and
(B) the Seller hereby pledges to the Trustee
and its successors and assigns, the Subordination Initial
Deposit and all proceeds thereof, subject, however, to the
limitations set forth below, and solely for the purpose of
providing for payment of the Class A Distributable Amount
provided for in Section 4.06 and this Section, (all of the
foregoing, subject to the limitations set forth below, the
"Subordination Spread Account Property"), to have and to hold
all the aforesaid property, rights and privileges unto the
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 Trustee hereby acknowledges
such transfer and accepts the trust hereunder and shall hold
and distribute the Subordination Spread Account Property in
accordance with the terms and provisions of this Section 4.07.
(iii) The Subordination Spread Account Property shall
not under any circumstances be deemed to be part of or otherwise
includable in the Trust.
(b) On each Distribution Date, if the amount of the
Subordination Spread Account (after giving effect to all payments to be
made from such Account pursuant to subsection 4.06(d) on such
Distribution Date) is less than the Specified Subordination Spread
Account Balance for such Distribution Date, the Servicer shall instruct
the Trustee, after payment of any amounts required to be distributed to
Class A Certificateholders and the Servicer, to withhold from amounts
otherwise distributable to the Class B Certificateholders and not
otherwise distributed to Class A Certificateholders or the Servicer and
deposit in the Subordination Spread Account all such amounts, or such
lesser amounts as are sufficient to restore the amount in the
Subordination Spread Account to the Specified Subordination Spread
Account Balance. For purposes of calculating the Class B Certificate
Balance, any amounts so deposited shall be deemed to have been paid to
the Class B Certificateholders. Subject to subsection 4.07(d), if the
amount of the Subordination Spread Account (after taking into account
any withdrawals therefrom pursuant to subsection 4.06(d)) is greater
than the Specified Subordination Spread Account Balance for such
Distribution Date, the Trustee shall release and, at the instruction of
the Servicer, shall distribute the amount of the excess to the Class B
Certificateholders on a pro rata basis in accordance with their
ownership of the Class B Certificates. Amounts properly distributed to
the Class B Certificateholders pursuant to this subsection 4.07(b),
either directly from the Certificate Account without deposit in the
Subordination Spread Account or from the Subordination Spread Account,
shall be deemed released from the Subordination Spread Account and
Class B Certificateholders shall in no event thereafter be required to
refund any such distributed amounts.
(c) (i) Amounts held in the Subordination Spread Account
shall be invested in Eligible Investments, in accordance with
written instructions from the holders of Class B Certificates
evidencing not less than 51% of the Voting Interests evidenced by
all of the Class B Certificates or their designee and all income
and gain realized thereon shall be solely for the benefit of the
Class B Certificateholders and shall be payable by the Trustee to
the Class B Certificateholders on each Distribution Date.
(ii) With respect to the Subordination Spread
Account Property, the Seller and the Trustee agree that:
(A) any Subordination Spread Account Property
that is held in deposit accounts shall be held solely in
the name of the Trustee at one or more depository
institutions having the Required Deposit Rating; each such
deposit account shall be subject to the exclusive custody
and control of the Trustee, and the Trustee shall have
sole signature authority with respect thereto;
(B) any Subordination Spread Account Property
that constitutes Physical Property shall be delivered to the
Trustee in accordance with paragraph (i) of the definition
of "Delivery" and shall be held, pending maturity or
disposition, solely by the Trustee or a financial
intermediary (as such term is defined in Section 8-313(4)
of the UCC) acting solely for the Trustee;
(C) any Subordination Spread Account Property that
is a book-entry security held through the Federal Reserve
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
Trustee, pending maturity or disposition, through
continued book-entry registration of such Subordination
Spread Account Property as described in such paragraph; and
(D) any Subordination Spread Account Property that
is an "uncertificated security" under Article VIII of the
UCC and that is not governed by clause (C) above shall be
delivered to the Trustee in accordance with paragraph
(iii) of the definition of "Delivery" and shall be
maintained by the Trustee, pending maturity or
disposition, through continued registration of the
Trustee's (or its nominee's) ownership of such
security. Effective upon Delivery of any Subordination
Spread Account Property in the form of Physical Property,
book-entry securities or uncertificated securities, the
Trustee shall be deemed to have represented that it has
purchased such Subordination Spread Account Property for
value, in good faith and without notice of any adverse
claim thereto.
(iii) Each of the Seller (and any successor to the
Seller as Class B Certificateholder) 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 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 (and any successor to the Seller
as Class B Certificateholder) shall:
(A) 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 Trustee's security interest; and
(B) make the necessary filings of financing
statements or amendments thereto within five days after the
occurrence of any of the following: (1) any change in
their respective corporate names or any trade names, (2)
any change in the location of their respective chief
executive offices or principal places of business and (3)
any merger or consolidation or other change in their
respective identities or corporate structures; and shall
promptly notify the Trustee of any such filings.
(iv) Investment earnings attributable to the
Subordination Spread Account Property and proceeds therefrom
shall be held by the Trustee for the benefit of the Class B
Certificateholders. Investment earnings attributable to the
Subordination Spread Account Property shall not be available to
satisfy the subordination provisions of this Agreement and shall
not otherwise be subject to any claims or rights of the Class A
Certificateholders or the Servicer. The Trustee shall cause
all investment earnings attributable to the Subordination Spread
Account to be distributed on each Distribution Date to the
Class B Certificateholders on a pro rata basis in
accordance with their ownership of the Class B Certificates.
Notwithstanding the foregoing, the Subordination Spread Account
may contain at any time uninvested cash in an amount not to
exceed the maximum amount insured by the Federal Deposit
Insurance Corporation or any successor thereto without giving
rise to any obligation to withdraw such cash from the
Subordination Spread Account. Realized losses, if any, on
investment of the Subordination Spread Account Property shall
be charged first against undistributed investment earnings
attributable to the Subordination Spread Account Property
and then against the Subordination Spread Account Property.
(d) If the Servicer, pursuant to Section 4.04, 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 Trustee to withdraw funds from the Subordination Spread
Account and deposit them in the Certificate Account to cover any
shortfall. Such payment shall be deemed to have been made by the
Servicer pursuant to Section 4.04 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 to the Trustee, and the Servicer shall within two
Business Days replace any funds in the Subordination Spread 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 Subordination Spread Account.
(e) Upon termination of this Agreement in accordance with
Section 10.02, any amounts on deposit in the Subordination Spread
Account shall be paid to the Holders of the Class B Certificates.
SECTION 4.08. Net Deposits. For so long as (i) General
Motors Acceptance Corporation shall be the Servicer, (ii) the
Servicer shall be entitled pursuant to Section 4.02 to remit
collections on a monthly rather than daily basis, and (iii) the
Servicer shall be entitled pursuant to subsection 4.01(b) to remit
Payments Ahead on a monthly basis, the Servicer, the Seller and the
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.
SECTION 4.09. Statements to Certificateholders. (a) On each
Distribution Date, the Trustee shall include with each distribution to
each Certificateholder, a statement (which statement shall also be
provided to the Rating Agencies) based on information in the
Servicer's Certificate furnished pursuant to Section 3.10, setting
forth for the Monthly Period relating to such Distribution Date
the following information:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the aggregate Principal Balance as of the Accounting
Date;
(iv) the amount of the Basic Servicing Fee paid to the
Servicer with respect to the related Monthly Period and the
Class A Certificateholder's Class A Percentage of the Basic
Servicing Fee;
(v) the amount of the Class A Principal and Interest
Carryover Shortfalls, if any, on such Distribution Date and the
change in the Class A Principal and Interest Carryover
Shortfalls from the preceding Distribution Date;
(vi) the Class A Pool Factor as of such Distribution Date,
after giving effect to payments allocated to principal reported
under (i) above;
(vii) the amount otherwise distributable to the Class B
Certificateholders that is distributed to the Class
A Certificateholders on such Distribution Date;
(viii) the balance of the Subordination Spread Account on
such Distribution Date, after giving effect to distributions
made on such Distribution Date and the change in such
balance from the preceding Distribution Date;
(ix) the Payments Ahead Servicing Account Balance and the
change in such Balance from the preceding Distribution Date; and
(x) the amount of Outstanding Monthly Advances on such
Distribution Date.
Each amount set forth pursuant to subclauses (i), (ii), (iv) or (v)
above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Class A Certificate.
(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 Trustee shall mail, to each Person who
at any time during such calendar year shall have been a holder of a
Class A Certificate, a statement containing the sum of the amounts
set forth in each of clauses (i), (ii), (iv) and (v), for such
calendar year or, in the event such Person shall have been a holder of
a Class A Certificate during a portion of such calendar year, for the
applicable portion of such year, for the purposes of such
Certificateholder's preparation of federal income tax returns.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates. The Class A Certificates
shall be issued in minimum denominations of $1,000 and integral
multiples thereof; the Class B Certificates shall be issued in
denominations of $100,000 or in any amount in excess thereof in fully
registered form; provided, however, that one Class A Certificate and
one Class B Certificate may be issued in a denomination that
includes any residual amount (each a "Residual Certificate").
The Certificates shall be executed on behalf of the Trustee by manual
or facsimile signature of the President or any Vice President of the
Trustee under the Trustee's seal imprinted thereon and attested on
behalf of the Trustee by the manual or facsimile signature of any
other officer of the Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee
shall be valid and binding obligations of the Trust, notwithstanding
that such individuals or any of them 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 such Certificates. All
Certificates shall be dated the date of their authentication.
SECTION 5.02. Authentication of Certificates. The Trustee
shall cause to be authenticated and delivered to or upon the order of
the Seller, in exchange for the Receivables and the other components of
the Trust, simultaneously with the sale, assignment and transfer to the
Trustee of the Receivables, and the constructive delivery to the
Trustee of the Receivable Files and the other components of the Trust,
Certificates duly authenticated by the Trustee, in authorized
denominations equaling in the aggregate the Aggregate Amount Financed
and evidencing the entire ownership of the Trust. No Certificate shall
be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A or
Exhibit B hereto, executed by the Trustee by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered under this Agreement.
SECTION 5.03. Registration of Transfer and
Exchange of Certificates.
(a) The Certificate Registrar shall maintain in accordance
with the provisions of Section 5.07 a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of
Certificates and transfers and exchanges of Certificates as
provided in this Agreement. The Trustee is hereby initially appointed
Certificate Registrar.
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates in authorized
denominations of a like aggregate Fractional Undivided Interest.
(c) At the option of a Certificateholder, Certificates
may be exchanged for other Certificates of authorized
denominations of a like aggregate Fractional Undivided Interest, upon
surrender of the Certificates to be exchanged at any such office or
agency. Whenever any Certificates are so surrendered for exchange
the Trustee on behalf of the Trust shall execute, and the Trustee
shall authenticate and deliver, the Certificates that the
Certificateholder making the exchange is entitled to receive. 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 Trustee and the Certificate Registrar duly
executed by the holder thereof or his attorney duly authorized in
writing.
(d) No service charge shall be made for any
registration of transfer or exchange of Certificates, but the Trustee
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.
(e) All Certificates surrendered for registration of
transfer and exchange shall be cancelled and subsequently destroyed by
the Trustee.
(f) (i) The Class B Certificates shall initially be retained
by the Seller. No transfer of a Class B Certificate shall be made
unless the Class B Certificateholder desiring to effect such transfer
shall have given the Seller, the Trustee and the Rating Agencies, prior
written notice of such proposed transfer, and the Rating Agencies shall
have notified such Class B Certificateholder, the Seller and the
Trustee that such proposed transfer shall not result in the
qualification, downgrading or withdrawal of the rating then assigned to
the Class A Certificates by the Rating Agencies.
(ii) In addition to the restrictions on transfer of Class B
Certificates set forth in paragraph (i) above, no transfer of a Class B
Certificate shall be made unless prior to such transfer the Holder of
such Class B Certificate delivers to the Seller and the Trustee (A)
either a ruling of the Internal Revenue Service or (B) an Opinion of
Counsel, which shall be independent outside counsel, satisfactory to
the Trustee and the Rating Agencies, in either case to the effect that
the proposed transfer (1) shall not result in the arrangement
contemplated by this Agreement being treated as an association taxable
as a corporation under either (I) the Internal Revenue Code of 1986, as
from time to time in force or (II) the tax laws of the State of New
York and (2) shall not have any adverse effect on the federal income
taxation of the Trust or the Class A Certificateholders. In no event
shall the Class B Certificate be transferred separately from the right
to receive all amounts in the Subordination Spread Account.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) 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 (b) there is delivered to the
Certificate Registrar and the Trustee such security or indemnity
as may be required by them to save each of them harmless, then, in
the absence of notice to the Certificate Registrar or the Trustee that
such Certificate has been acquired by a bona fide purchaser, the
Trustee on behalf of the Trust shall execute and the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and Fractional Undivided Interest. In connection with
the issuance of any new Certificate under this Section 5.04, the
Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee
and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 5.04 shall constitute
complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 5.05. Persons Deemed Owners. Prior to due
presentation of a Certificate for registration of transfer, the
Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.06 and for
all other purposes whatsoever, and neither the Trustee, the
Certificate Registrar nor any agent of the Trustee or the
Certificate Registrar shall be affected by any notice to the contrary.
SECTION 5.06. Access to List of Certificateholders'
Names and Addresses. The Trustee shall furnish or cause to be
furnished to the Servicer, within 15 days after receipt by the
Trustee of a written request therefor from the Servicer, a list,
in such form as the Servicer may reasonably require, of the names
and addresses of the Certificateholders as of the most recent
Record Date for payment of distributions to Certificateholders.
If three or more Certificateholders, or one or more Holders of
Class A Certificates evidencing not less than 25% of the Voting
Interests thereof (hereinafter referred to as "Applicants"),
apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication that
such Applicants propose to transmit, then the Trustee shall, within
five Business Days after the receipt of such application, afford
such Applicants access, during normal business hours, to the current
list of Certificateholders. Every Certificateholder, by receiving
and holding a Certificate, agrees with the Servicer and the Trustee
that neither the Servicer nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names
and addresses of the Certificateholders under this Agreement,
regardless of the source from which such information was derived.
SECTION 5.07. Maintenance of Office or Agency. The 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 Trustee in respect of the
Certificates and this Agreement may be served. The Trustee initially
designates its office at 14 Wall Street, 8th Floor, New York, New
York 10005, Attention: Corporate Trust Administration, for such
purposes. The Trustee shall give prompt written notice to the
Servicer and to Certificateholders of any change in the location of
the Certificate Register or any such office or agency.
SECTION 5.08. Book-Entry Certificates. The Class A
Certificates, upon original issuance (except for the Residual
Certificate), shall be issued in the form of typewritten Class A
Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Seller. The Class A Certificates
delivered to The Depository Trust Company 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 the Certificates, except as provided
in Section 5.10. Unless and until definitive, fully registered Class
A Certificates (the "Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 5.10:
(a) the provisions of this Section 5.08 shall be in full
force and effect;
(b) the Seller, the Servicer, the Certificate Registrar
and the Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Class A
Certificates) as the authorized representative of the Certificate
Owners;
(c) to the extent that the provisions of this Section
5.08 conflict with any other provisions of this Agreement, the
provisions of this Section 5.08 shall control;
(d) the rights of 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;
and pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.10, the initial
Clearing Agency shall make book-entry transfers among the
Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Class A Certificates to
such Clearing Agency Participants; and
(e) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of Holders
of Class A Certificates evidencing a specified percentage of the
Voting Interests of the Class A Certificates, 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 the Voting Interests of the
Class A Certificates and has delivered such instructions to the
Trustee. The Seller, the Servicer or the Trustee may set a record date
for the purpose of determining the identity of Holders of Class A
Certificates entitled to vote or to consent to any action by vote as
provided in this Agreement.
SECTION 5.09. Notices to Clearing Agency. Whenever
notice or other communication to the Class A Certificateholders is
required under this Agreement, other than to the Holder of the
Residual Certificate of such Class, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to
Section 5.10, the Trustee and the Servicer shall give all such notices
and communications specified herein to be given to Holders of the
Class A Certificates to the Clearing Agency.
SECTION 5.10. Definitive Certificates. If (i) the Seller
advises the Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities under the
Depository Agreement and the Trustee or the Seller is unable to
locate a qualified successor, (ii) the Seller, at its option,
advises the 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, Certificate Owners representing
at least a majority of the Voting Interests of the Class A
Certificates advise the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the
best interests of the Certificate Owners, then the Trustee shall
notify the Clearing Agency and request that the Clearing Agency
notify all Certificate Owners of the occurrence of any such
event and of the availability of Definitive Certificates to
Certificate Owners requesting the same. Upon surrender to the
Trustee of the Class A Certificates by the Clearing Agency, accompanied
by re-registration instructions from the Clearing Agency for
re-registration, the Trustee shall issue the Definitive Certificates
and deliver such Definitive Certificates in accordance with the
instructions of the Clearing Agency Neither the Seller, the
Certificate Registrar nor the Trustee shall be liable for any
delay in the 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 Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder. The Trustee shall
not be liable if the Trustee or the Seller is unable to locate a
qualified successor Clearing Agency.
ARTICLE VI
THE SELLER
SECTION 6.01. 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 6.02. Merger or Consolidation of, or Assumption
of the Obligations of, Seller; Amendment of Certificate of
Incorporation.
(a) Any entity (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 interest of which
is owned directly or indirectly by General Motors Corporation,
which entity 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 notice of any merger, consolidation or succession pursuant
to this Section 6.02 to the Rating Agencies.
(b) The Seller hereby agrees that for so long as it is the
holder of Class B Certificates it shall not (i) take any action
prohibited by Article Fourth of its certificate of incorporation or
(ii), without the prior written consent of the Trustee and without
giving prior written notice to the Rating Agencies, amend Article
Third or Fourth of its certificate of incorporation.
SECTION 6.03. 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 Trustee for any contractual damages,
liability or expense incurred by reason of the Trustee's willful
misfeasance, bad faith or negligence (except errors in judgment) in
the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this
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 6.04. Seller May Own 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 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
set forth in Section 1.01 in the definition of Voting Interests,
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 the
Certificates.
ARTICLE VII
THE SERVICER
SECTION 7.01. 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 specifically undertaken by the Servicer. Such obligations
shall include the following:
(i) The Servicer shall defend, indemnify and hold
harmless the Trustee, the Trust and the Certificateholders from
and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses
of counsel and expenses of litigation, 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 Trustee and the Trust from and against any taxes
that may at any time be asserted against the Trustee or the
Trust with respect to the transactions contemplated in this
Agreement, including, 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 Trustee or the issuance and original sale of
the Certificates, or asserted with respect to ownership of the
Receivables, or federal or other income taxes arising out of
distributions on the Certificates) and costs and expenses in
defending against the same;
(iii) The Servicer shall indemnify, defend and hold
harmless the Trustee, the Trust, 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 Trustee, the Trust, or the Certificateholders through
the negligence, willful misfeasance, or bad faith of the
Servicer in the performance of its duties under this Agreement
or by reason of reckless disregard of its obligations and
duties under this Agreement; and
(iv) The Servicer shall indemnify, defend, and hold
harmless the Trustee and Depository from and against all
costs, expenses, losses, claims, damages and liabilities arising
out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in this
Agreement, except 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) arises from the
Trustee's breach of any of its representations or warranties set
forth in Section 9.13, or (C) shall arise out of or be incurred
in connection with the performance by the Trustee of the duties of
successor Servicer hereunder.
(b) Indemnification under this Article 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 Article 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 7.02. Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer. Any 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 interest of which is owned directly or indirectly by
General Motors Corporation and which is otherwise servicing the
Seller's receivables, which entity in any of the foregoing cases
executes an agreement of assumption to perform every obligation of
the Servicer under this Agreement, shall be the successor to the
Servicer under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties
to this Agreement, anything in this Agreement to the contrary
notwithstanding. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 7.02 to the
Rating Agencies.
SECTION 7.03. 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 Trust or the Certificateholders, except as provided in this
Agreement, for any action taken or for refraining from the taking
of any action pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect
the Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or
negligence (except errors in judgment) in the performance of duties
or by reason of reckless disregard of obligations and duties under
this 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.
(b) The Servicer and any director or officer or employee or
agent of the Servicer shall be reimbursed by the Trustee for any
contractual damages, liability or expense incurred by reason of the
Trustee's willful misfeasance, bad faith or negligence (except
errors in judgment) in the performance of the Trustee's duties
under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
(c) Except as provided in this 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 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 and the rights and duties of
the parties to this Agreement and the interests of the
Certificateholders under this 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 Trustee shall distribute out of the Certificate
Account on a Distribution Date any amounts permitted for
reimbursement pursuant to subsection 7.03(c) not therefor
reimbursed; provided, however, that the Trustee shall not distribute
such amounts if the amount of the Subordination Spread Account (after
giving effect to all deposits and withdrawals pursuant to subsection
4.07(b) on such Distribution Date) is greater than zero but less
than the Specified Subordination Spread Account Balance for such
Distribution Date.
SECTION 7.04. Delegation of Duties. So long as General
Motors Acceptance Corporation acts as Servicer, the Servicer may,
at any time without notice or consent, delegate any duties under this
Agreement to any entity more than 50% of the voting stock of which is
owned, directly or indirectly, by General Motors Corporation. 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.
SECTION 7.05. 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 as Servicer
except upon determination that the performance of its duties under
this Agreement 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 Trustee. No such resignation shall become effective until the
Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with
Section 7.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Events of Default. For purposes of this
Agreement, each of the following shall constitute an "Event of Default":
(a) any failure by the Servicer to deliver to the
Trustee for distribution to Certificateholders any proceeds or payment
required to be so delivered under the terms of the Certificates
and this Agreement that continues unremedied for a period of five
Business Days after written notice is received by the Servicer from
the 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
observe or perform in any material respect any other covenants or
agreements of the Seller or the Servicer set forth in the
Certificates or in this Agreement, which failure (i) materially and
adversely affects the rights of 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 by the Trustee, or to the Seller and to
the Trustee by the Holders of Class A Certificates evidencing not
less than 25% of the Voting Interests thereof;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement proves to have been incorrect when made and such
inaccuracy has a material adverse effect on the rights of the
Certificateholders and such material adverse effect continues for a
period of 60 days after the date on which written notice thereof,
requiring the same to be remedied, shall have been given to the
Servicer by the Trustee; or
(d) 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
(e) 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 8.02. Consequences of an Event of Default. If an
Event of Default shall occur and be continuing, either the Trustee or
the Holders of Class A Certificates evidencing at least a majority of
the Voting Interests thereof, by notice then given in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may
terminate all of the rights and obligations of the Servicer under
this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Certificates or the
Receivables or otherwise, shall pass to and be vested in the
Trustee pursuant to and under this Section 8.02. The Trustee is
authorized and empowered by this Agreement 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 Trustee in effecting the
termination of the responsibilities and rights of the Servicer
under this Agreement, including, without limitation, the transfer to
the Trustee for administration by it of all cash amounts that shall
at the time be held by the Servicer for deposit, or have been
deposited by the Servicer, in the Collection Account, Certificate
Account or 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 8.02 which terminates the
obligation and rights of the Servicer under this Agreement.
SECTION 8.03. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 8.02, the Trustee shall be the successor in all
respects to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for in
this 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. As
compensation therefor, the Trustee shall be entitled to such
compensation (whether payable out of the Certificate Account or
otherwise) as the Servicer would have been entitled to under this
Agreement if no such notice of termination had been given.
Notwithstanding the above, the 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
having a net worth of not less than $100,000,000 and whose regular
business includes the servicing of automotive receivables, as the
successor to the Servicer under this Agreement in the assumption of all
or any part of the responsibilities, duties or liabilities of the
Servicer under this Agreement. In connection with such appointment
and assumption, the 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. The Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
SECTION 8.04. Notification to Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Trustee shall give prompt written
notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
SECTION 8.05. Waiver of Past Defaults. The Holders of
Class A Certificates evidencing at least a majority of the Voting
Interests thereof may, on behalf of all Holders of Class A
Certificates, 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 the
Collection Account or the Certificate Account in accordance with
this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 8.06. 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 Sections
4.03 and 4.04, in the manner specified in Section 4.06, with
respect to all Monthly Advances made by such predecessor Servicer.
ARTICLE IX
THE TRUSTEE
SECTION 9.01. Duties of Trustee. (a) The Trustee, both
prior to and after the occurrence of an Event of Default, undertakes
to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default has occurred and has
not been cured or waived, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs; provided, however, that if the Trustee assumes the duties of
the Servicer pursuant to Section 8.03, the Trustee in performing
such duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to automotive receivables
that it services for itself or others.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee that are specifically
required to be furnished pursuant to any provision of this Agreement,
shall examine them to determine whether they conform to the
requirements of this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act (other than errors in judgment) or
its own bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement,
the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the absence
of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer of
the Trustee, unless it shall be proved that the Trustee was
negligent (except with respect to errors in judgment) in
performing its duties in accordance with the terms of this
Agreement;
(iii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement; and
(iv) the Trustee shall not be charged with knowledge
of any failure by the Servicer to comply with the obligations of
the Servicer referred to in clauses (a)(i) and (a)(ii) of
Section 7.01 unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure (it being understood
that knowledge of the Servicer or the Servicer as custodian, in
its capacity as agent for the Trustee, is not attributable to the
Trustee) or the Trustee receives written notice of such failure
from the Servicer or the Holders of Class A Certificates
evidencing not less than 25% of the Voting Interests thereof.
(d) The Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the
performance of any of its duties under this Agreement, or in the
exercise of any of its rights or powers, if there is reasonable
ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations
of the Servicer under this Agreement except during such time, if
any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
SECTION 9.02. Trustee's Certificate. Prior to each
Distribution Date as of which the Servicer shall purchase
Administrative Receivables or the Seller shall repurchase Warranty
Receivables, the Trustee shall submit to the Servicer and the
Seller, as applicable, a Trustee's Certificate identifying the
Receivables so purchased, executed by the Trustee and completed
as to its date and the date of the Pooling and Servicing
Agreement, and accompanied by a copy of the Servicer's Certificate
for the related Monthly Period.
SECTION 9.03. Trustee's Assignment of Administrative
Receivables and Warranty Receivables. With respect to all
Administrative Receivables and all Warranty Receivables, the Trustee
shall assign, without recourse, representation or warranty, to the
Seller or the Servicer as applicable, all the Trustee's right,
title and interest in and to such repurchased Receivable, all
monies due thereon, the security interests in the related Financed
Vehicles, proceeds from any Insurance Policies, proceeds from
recourse against Dealers on such Receivables and the interests of the
Trust 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
Seller or the Servicer, as applicable, shall thereupon own such
Receivable, and all such security and documents, free of any
further obligation to the Trustee 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 Trustee shall, at the
Servicer's expense, take such steps as the Trustee deems necessary to
enforce the Receivable, including bringing suit in the Trustee's
name or the names of the Certificateholders.
SECTION 9.04. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 9.01:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(b) the Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by
it under this Agreement in good faith and in accordance with such
Opinion of Counsel;
(c) the 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 in
relation to this Agreement, at the request, order or direction
of any of the Certificateholders, pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby;
nothing contained in this Agreement shall, however, relieve the
Trustee of the obligations, upon the occurrence of an Event of Default
(that has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care
and skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(d) prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing
to do so by Holders of Class A Certificates evidencing not less than
25% of the Voting Interests thereof; provided, however, that if the
payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the
Seller or, if paid by the Trustee, shall be reimbursed by the
Seller upon demand; nothing in this subsection 9.04(d) shall
derogate from the obligation of the Seller to observe any
applicable law prohibiting disclosure of information regarding the
Obligors; and
(e) The Trustee may execute any of the trusts or powers under
this Agreement or perform any duties under this Agreement either
directly or by or through agents or attorneys or a custodian.
SECTION 9.05. Trustee Not Liable for Certificates or
Receivables. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other
than the certificate of authentication on the Certificates) or
of any Receivable or related document. The Trustee shall at no time
have any responsibility or liability for or with respect to the
legality, validity and enforceability of any security interest in
any Financed Vehicle or any Receivable, or the perfection and
priority of such a security interest or the maintenance of any such
perfection and priority, or for or with respect to the efficacy of
the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including
without limitation: the existence, condition, location and ownership
of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable or
any computer or other record thereof (it being understood that the
Trustee has not reviewed and does not intend to review such matters,
the sole responsibility for such review being vested in the Seller,
the Servicer and the Custodian); the completeness of any Receivable;
the receipt by the Servicer of any Receivable; the performance
or enforcement of any Receivable; the compliance by the Seller, the
Servicer and the Custodian with any covenant or the breach by the
Seller, the Servicer and the Custodian of any warranty or
representation made under this Agreement or in any related document and
the accuracy of any such warranty or representation prior to the
Trustee's receipt of notice or other discovery of any
noncompliance therewith or any breach thereof; any investment of
monies by the Servicer or any loss resulting therefrom (it being
understood that the Trustee shall remain responsible for any Trust
property that it may hold); the acts or omissions of the
Seller, the Servicer, the Custodian or any Obligor; any action of the
Servicer taken in the name of the Trustee; or any action by the
Trustee taken at the instruction of the Servicer; provided, however,
that the foregoing shall not relieve the Trustee of its obligation
to perform its duties under this Agreement. Except with respect
to a claim based on the failure of the Trustee to perform its
duties under this Agreement or based on the Trustee's negligence or
willful misconduct: no recourse shall be had for any claim based on
any provision of this Agreement, the Certificate, or any Receivable or
assignment thereof against the institution serving as Trustee in
its individual capacity, such institution shall not have any
personal obligation, liability or duty whatsoever to any Holder of a
Certificate or any other Person with respect to any such claim, and any
such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided in this
Agreement. The Trustee shall not be accountable for the use
or application by the Seller of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of
any funds paid to the Servicer in respect of the Receivables.
SECTION 9.06. Trustee May Own Certificates. The Trustee
in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it
were not Trustee, subject to the definition of the term
"Certificateholder" in Section 1.01, and may deal with the Seller and
the Servicer in banking transactions with the same rights as it would
have if it were not Trustee.
SECTION 9.07. Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts created by this Agreement
and in the exercise and performance of any of the powers and duties
under this Agreement of the Trustee, and the Servicer shall pay
or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances (including the reasonable
compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) incurred or made by the
Trustee in defense of any action brought against it in connection with
this Agreement except any such expense, disbursement or advance as
may arise from its negligence (other than errors in judgment) or
bad faith or that is the responsibility of Certificateholders under
this Agreement. Additionally, the Servicer, in Section 7.01 has
agreed to indemnify the Trustee with respect to certain matters; and
Certificateholders, under subsection 9.04(c) or (d), may agree to
indemnify the Trustee under certain circumstances.
SECTION 9.08. Eligibility Requirements for Trustee. The
Trustee under this Agreement shall at all times be a corporation duly
organized and validly existing under the laws of its state of
incorporation and the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority. If such corporation
publishes 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 9.08, 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. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of
this Section 9.08, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.09.
SECTION 9.09. Resignation or Removal of Trustee. (a) The
Trustee may at any time resign and be discharged from the trusts
created by this Agreement by giving written notice thereof to the
Servicer. Upon receiving such notice of resignation, the Servicer
shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 9.08 and
shall fail to resign after written request therefor by the
Servicer, or if at any time the Trustee shall be legally unable to
act, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Servicer may remove the
Trustee. If it removes the Trustee under the authority of the
immediately preceding sentence, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to any of the provisions of this
Section 9.09 shall not become effective until acceptance of
appointment by the successor Trustee as provided in Section 9.10.
SECTION 9.10. Successor Trustee. Any successor Trustee
appointed as provided in Section 9.09 shall execute, acknowledge and
deliver to the Servicer and to its predecessor Trustee an
instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, 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 Trustee. The predecessor Trustee shall deliver to the
successor Trustee all documents and statements held by it under
this Agreement; and the predecessor Trustee and the Custodian shall
amend the Custodian Agreement to make the successor Trustee the
successor to the predecessor Trustee thereunder; and the Servicer
and the predecessor 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
Trustee all such rights, powers, duties and obligations. No
successor Trustee shall accept appointment as provided in this Section
9.10 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 9.08. Upon
acceptance of appointment by a successor Trustee as provided in this
Section 9.10, the Servicer shall mail notice of the successor of such
Trustee under this Agreement to the Rating Agencies and all Holders of
Certificates at their addresses as shown in the Certificate Register.
If the Servicer fails to mail such notice within 10 days after
acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the
Servicer.
SECTION 9.11. Merger or Consolidation of Trustee.
Any corporation into which the 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 Trustee
shall be a party, or any corporation succeeding to the business
of the Trustee, shall be the successor of the Trustee under this
Agreement, provided such corporation shall be eligible under the
provisions of Section 9.08, without the execution or filing of any
instrument or any further act on the part of any of the parties to
this Agreement, anything in this Agreement to the contrary
notwithstanding.
SECTION 9.12. 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 requirements of any
jurisdiction in which any part of the Trust or any Financed Vehicle
may at the time be located, the Trustee, with the consent of the
Servicer, shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee or co-trustees, jointly with the Trustee, 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 Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section
9.12, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the
Servicer shall not have consented to such appointment within 15 days
after the receipt by it of a request so to do, or if an Event of
Default shall have occurred and be continuing, the 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 under Section 9.10 and no
notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 9.10. 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 Trustee shall be conferred or
imposed upon and exercised or performed by the 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 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 (whether as
Trustee under this Agreement or as successor to the Servicer
under this Agreement), the 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
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
(iii) The Servicer and the Trustee acting jointly may
at any time accept the resignation of or remove any separate
trustee or co-trustee.
(b) Any notice, request or other writing given to the
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 IX.
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
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 Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.
(c) Any separate trustee or co-trustee may at any time
constitute the 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 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 Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
SECTION 9.13. Representations and Warranties of Trustee.
The Trustee represents and warrants as of the date of the Pooling and
Servicing Agreement that:
(a) the Trustee is either (i) a banking corporation
duly organized, validly existing and in good standing under the laws of
the state of its incorporation or (ii) a national banking association
duly organized, validly existing and in good standing under the laws of
the United States of America;
(b) the Trustee 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 the Trustee of
this Agreement (i) shall not violate any provision of any law or
regulation governing the banking and trust powers of the Trustee or
any order, writ, judgment, or decree of any court, arbitrator, or
governmental authority applicable to the Trustee or any of its
assets, (ii) shall not violate any provision of the corporate
charter or by-laws of the 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
Trustee's performance or ability to perform its duties under this
Agreement or on the transactions contemplated in this Agreement;
(d) the execution, delivery and performance by the 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; and
(e) this Agreement has been duly executed and delivered
by the Trustee and constitutes the legal, valid and binding
agreement of the Trustee, enforceable in accordance with its terms.
SECTION 9.14. Tax Returns. In the event the Trust
shall be required to file tax returns, the Servicer shall prepare or
shall cause to be prepared any tax returns required to be filed by
the Trust and shall remit such returns to the Trustee for signature
at least five days before such returns are due to be filed. The
Trustee, upon request, shall furnish the Servicer with all such
information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust, and
shall, upon request, execute such returns.
SECTION 9.15. Trustee May Enforce Claims Without
Possession of Certificates. All rights of action and claims under
this Agreement or the Certificates may be prosecuted and enforced
by the Trustee without the possession of any of the Certificates
or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in
its own name as trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in
respect of which such judgment has been obtained.
SECTION 9.16. Suit for Enforcement. If an Event of Default
shall occur and be continuing, the Trustee, in its discretion may,
subject to the provisions of Section 9.01, proceed to protect and
enforce its rights and the rights of the Certificateholders under this
Agreement by a suit, action or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any
other legal, equitable or other remedy as the Trustee, being advised
by counsel, shall deem most effectual to protect and enforce any of
the rights of the Trustee or the Certificateholders.
SECTION 9.17. Rights of Certificateholders to Direct
Trustee. Holders of Class A Certificates evidencing not less than 51%
of the Voting Interests thereof shall have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided, however, that subject to Section 9.01, the
Trustee shall have the right to decline to follow any such direction if
the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the 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 Certificateholders not parties to
such direction; and provided further that nothing in this Agreement
shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction by
the Certificateholders.
ARTICLE X
TERMINATION
SECTION 10.01. Termination of the Trust.
(a) The respective obligations and responsibilities of the
Seller, the Servicer and the Trustee created by this Agreement and the
Trust created by this Agreement shall terminate upon (i) the purchase
as of any Accounting Date by the Servicer at its option of the corpus
of the trust as described in Section 10.02 and the subsequent
distribution to Certificateholders pursuant to Section 4.06 of the
amount required to be deposited pursuant to Section 10.02, or (ii)
the payment to Certificateholders of all amounts required to be paid
to them pursuant to this Agreement and the disposition of all
property held as part of the Trust; provided, however, that in no
event shall the trust created by this Agreement continue
beyond the expiration of 21 years from the death of the last
survivor of the descendants of Rose Kennedy of the Commonwealth of
Massachusetts living on the date of this Agreement. The Servicer shall
promptly notify the Trustee of any prospective termination pursuant to
this Section 10.01.
(b) Notice of any termination, specifying the Distribution
Date upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final
distribution and retirement of the Certificates, shall be given
promptly by the Trustee by letter to Certificateholders mailed
not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment of
the Certificates shall be made upon presentation and surrender of
Certificates at the office of the Trustee therein specified, (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 Trustee therein specified.
The Trustee shall give such notice to the Certificate Registrar
at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer or the Trustee, as the
case may be shall make deposits into the Certificate Account in
accordance with Section 4.02, or, in the case of an optional purchase
of Receivables pursuant to Section 10.02, shall deposit the amount
specified in Section 10.02. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date
pursuant to Section 4.06.
(c) In the event that all of the Certificateholders subject
to such repurchase shall not surrender their Certificates for
retirement within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to
surrender their Certificates for retirement and receive the final
distribution with respect thereto. If within one year after the
second notice all the Certificates shall not have been surrendered for
retirement, the 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 remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies shall be
distributed by the Trustee to The United Way.
SECTION 10.02. Optional Purchase of All Receivables. On
each Accounting Date as of which the aggregate Principal
Balance of all Receivables held by the Trust was less than the
Optional Purchase Percentage of the Aggregate Amount Financed, the
Servicer shall have the option to purchase the corpus of the Trust.
To exercise such option, the Servicer shall pay the aggregate
Administrative Purchase Payments for the Receivables, plus the
appraised value of any other property (including the right to receive
any future recoveries) held as part of the Trust (less the
Liquidation Expenses to be incurred in connection with the
recovery thereof), such appraisal to be conducted by an appraiser
mutually agreed upon by the Servicer and the Trustee, and shall
succeed to all interests in and to the Trust.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment. (a) This Agreement may be
amended by the Seller, the Servicer and the Trustee, without the
consent of any of the Class A Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions in this
Agreement, (iii) to add or supplement any credit, liquidity or other
enhancement arrangement for the benefit of Certificateholders, (iv) to
add to the covenants, restrictions or obligations of the Seller, the
Servicer or the Trustee for the benefit of Certificateholders or (v) to
add, change or eliminate any other provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect
the interests of the Class A Certificateholders.
(b) This Agreement may also be amended from time to time
by the Seller, the Servicer and the Trustee with the consent of
the Holders of Certificates (which consent of any Holder of a
Certificate given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Certificate and of any
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 Certificate) evidencing at least a majority of the Voting
Interests of each Class of 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 Holders of Certificates; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, distributions of payments
that shall be required to be made on any Certificate or the Pass
Through Rate or the Specified Subordination Spread Account Balance or
(b) adversely affect the rating by any Rating Agency of the
Certificates without the consent of Holders of Certificates evidencing
at least two-thirds of the Voting Interests of the outstanding
Certificates or (c) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of the Holders of all
Certificates then outstanding.
(c) Prior to the execution of any such amendment or
consent, the 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 Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder.
(e) It shall not be necessary for the
consent of Certificateholders pursuant to subsection 11.01(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 Certificateholders provided for in this Agreement)
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements
as the Trustee may prescribe, including the establishment of
record dates pursuant to paragraph number 2 of the Depository
Agreement.
(f) Prior to the execution of any amendment to this
Agreement, the 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 11.02(i). The Trustee may, but
shall not be obligated to, enter into any such amendment which affects
the Trustee's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 11.02. 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 Certificateholders and the 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 Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available
following such filing.
(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 by the Seller 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 Trustee at least 60 days prior
written notice thereof.
(c) Each of the Seller and the Servicer shall give the
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,
Certificate 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 to the Trustee, 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 Trustee.
Indication of the Trustee'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 Trustee unless such Receivable has been paid in full or
repurchased by the Seller or purchased by the Servicer.
(g) The Servicer shall permit the Trustee and its 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 Trust.
(h) The Servicer shall furnish to the Trustee at any time
upon request a list of all Receivables then held as part of the
Trust, together with a reconciliation of such list to the Schedule
of Receivables and to each of the Servicer's Certificates furnished
before such request indicating removal of Receivables from the
Trust. Upon request, the Servicer shall furnish a copy of any list
to the Seller. The Trustee shall hold any such list and Schedule A to
the Purchase Agreement for examination by interested parties during
normal business hours at the Corporate Trust Office.
(i) The Servicer shall deliver to the Trustee promptly
after the execution and delivery of the Pooling and Servicing
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 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 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.
(k) For the purpose of facilitating their execution and for
other purposes, the Pooling and Servicing Agreement may be executed
simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder
shall not operate to terminate this Agreement or the Trust,
nor entitle such Certificateholder's legal representatives or heirs
to claim an accounting or to take any action or commence any
proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the
parties to this Agreement or any of them.
(b) No Certificateholder shall have any right to vote
(except as provided in Sections 11.03 or 8.05) or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties to this Agreement, nor shall anything set
forth in this Agreement, or contained in the terms of the
Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision of this Agreement.
(c) No Certificateholder shall have any right by virtue
or by availing itself of any provisions of this Agreement to
institute any suit, action, or proceeding in equity or at law upon or
under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as provided in this
Agreement and unless also the Holders of Class A Certificates
evidencing not less than 25% of the Voting Interests thereof shall
have made written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee under this Agreement and
shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 30 days after
its receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such action, suit, or
proceeding and during such 30-day period, no request or waiver
inconsistent with such written request has been given to the Trustee
pursuant to this Section or Section 8.05; it being understood and
intended, and being expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or
more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb, or prejudice the
rights of the Holders of any other of the Certificates, or to obtain
or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and
common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 11.04. Governing Law. This Agreement shall be
governed by and 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.
SECTION 11.05. 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 11.06. Assignment. Notwithstanding anything
to the contrary contained in this Agreement, except as provided in
Section 6.02, this Agreement may not be assigned by the Seller
without the prior written consent of Holders of Certificates
evidencing not less than 66% of the Voting Interests of each class.
SECTION 11.07. Certificates Nonassessable and Fully
Paid. Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests
represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and
Certificates upon authentication thereof by the Trustee pursuant to
Section 5.02 are and shall be deemed fully paid.
SECTION 11.08. Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties
hereto, the Certificateholders, and their respective successors and
permitted assigns. Except as otherwise provided in this Article XI, no
other person shall have any right or obligation hereunder.
__________________
<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SEE REVERSE FOR
CERTAIN DEFINITIONS
(the following legend to be inserted if this Certificate is issued to
CEDE & Co.):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
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.
GMAC ______ GRANTOR TRUST
____% ASSET BACKED CERTIFICATE, CLASS A
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 obligation
of, or an interest in, Capital Auto Receivables,
Inc, General Motors Acceptance Corporation or any
affiliate of either of them.)
NUMBER
CUSIP _______________
$____________________
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the GMAC
______ Grantor Trust (the "Trust") formed by Capital Auto
Receivables, Inc., a Delaware corporation, as Seller (the
"Seller"). The Trust was created pursuant to a Pooling and
Servicing Agreement, dated as of ________ __, 19__ (the "Agreement"),
between the Seller, General Motors Acceptance Corporation, a
corporation incorporated under the New York Banking Law
relating to investment companies, as Servicer (the "Servicer"), and
________________________________
_______________,______________________________, as Trustee (the
"Trustee"). A summary of certain of the pertinent provisions of the
Agreement is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned
to them in the Agreement. This Certificate is one of the duly
authorized Certificates issued under the Agreement and designated
as "____% Asset Backed Certificates, Class A" (the "Class A
Certificates"). Also issued under the Agreement are Certificates
designated
A-1
<PAGE>
as "____% Asset Backed Certificates, Class B" (the "Class B
Certificates"). The Class A Certificates and the Class B
Certificates are hereinafter collectively called the
"Certificates." The aggregate undivided interest in the Trust
evidenced by all Class A Certificates is __%. This Class A
Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the
holder of this Class A Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of
the Trust includes (as more fully described in the Agreement) a pool
of retail instalment sale contracts for new and used automobiles
and light trucks (the "Receivables"), certain monies due thereunder
on and after the Cutoff Date, security interests in the Financed
Vehicles, certain bank accounts, property (including the right to
receive Liquidation Proceeds) securing the Receivables and held
by the Trustee, proceeds from certain insurance policies, certain
other items financed by the obligors and certain interests of the
Seller in proceeds from recourse against Dealers with respect to the
Receivables and proceeds of all of the foregoing.
Under the Agreement, there will be distributed on the 15th
day of each month or, if such 15th day is not a Business Day, the
next Business Day (the "Distribution Date"), commencing on
___________, 19__, to the person in whose name this Class A
Certificate is registered at the close of business as of the day
immediately preceding such Distribution Date (or, if Definitive
Certificates are issued, the last date of the preceding Monthly
Period) (the "Record Date"), such Class A Certificateholder's
fractional undivided interest in the lesser of (a) the sum of
(i) the Class A Distributable Amount, (ii) any outstanding
Class A Interest Carryover Shortfall (plus interest on such Class A
Interest Carryover Shortfall at the Pass Through Rate from such
preceding Distribution Date through the current Distribution Date, to
the extent permitted by law) and (iii) any outstanding Class A
Principal Carryover Shortfall and (b) the sum of (i) the Available
Interest, (ii) the Available Principal and (iii) amounts on deposit
in the Subordination Spread Account.
Distributions on this Class A Certificate will be made
by the Trustee by check or money order mailed to the Class A
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A Certificate or the making of
any notation hereon except that with respect to Class A Certificates
registered in the name of CEDE & Co., the nominee for the Clearing
Agency, distributions will be made in the form of immediately
available funds. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Class
A Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and
surrender of this Class A Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan,
the City of New York. The Record Date otherwise applicable to such
distributions shall not be applicable.
Reference is hereby made to the further provisions of this
Class A 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 Trustee, by
manual signature, this Class A Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any
purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and
not in its individual capacity has caused this Class A
Certificate to be duly executed.
GMAC ______ GRANTOR TRUST
______________________________,as Trustee
By: ___________________________
DATED:
(SEAL)
ATTEST:
_______________________________
This is one of the Class A Certificates referred
to in the Agreement.
_____________________________, as Trustee
By: _________________________
Authorized Officer
A-3
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliate
of any of them. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Receivables and
property in the Subordination Spread Account, all as more specifically
set forth in the Agreement. A copy of the Agreement may, upon
request, be examined by any Certificateholder during normal
business hours at the principal office of the Seller, and at such other
places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights
and obligations of the parties thereto and the rights of the
Certificateholders under the Agreement at any time by the Seller, the
Servicer and the Trustee. In certain limited circumstances, the
Agreement may only be amended with the consent of the Holders of
Certificates evidencing at least a majority of the Voting Interests
of each Class of Certificates. 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate
is registrable in the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the Corporate Trust
Office of the Trustee in its capacity as Certificate Registrar, or
by any successor Certificate Registrar, in the Borough of
Manhattan, the City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations of a like
aggregate fractional undivided interest will be issued to the
designated transferee.
The Class A Certificates are issuable only as
registered Certificates without coupons in denominations of $1,000 and
integral multiples thereof; however, one Class A Certificate may be
issued in a denomination that includes the residual amount. As
provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of
authorized denominations of a like aggregate fractional undivided
interest, as requested by the holder surrendering the same. No
service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the
Trustee or the Certificate Registrar may treat the person in whose
name this Class A Certificate is registered as the owner hereof for
the purpose of receiving distributions and for all other
purposes, and neither the Trustee, the Certificate Registrar nor
any such agent shall be affected by any notice to the contrary.
A-4
<PAGE>
The obligations and responsibilities created by the
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 Agreement and the disposition of all property
held as part of the Trust. The Servicer of the Receivables may at its
option purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property
of the Trust will effect early retirement of the Certificates;
provided, however, such right of purchase is exercisable only as of a
Record Date as of which the aggregate Principal Balance is less than
10% of the Aggregate Amount Financed.
The recitals contained herein (other than the
certificate of authentication herein) shall be taken as the statements
of the Seller or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee
makes no representations as to the validity or sufficiency of this
Certificate (other than the certificate of authentication herein), or
of any Receivable or related document.
__________________
A-5
<PAGE>
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 typewrite 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, Inc. or a commercial bank or trust
company.
A-6
<PAGE>
EXHIBIT B
FORM OF CLASS B CERTIFICATE
SEE REVERSE FOR
CERTAIN DEFINITIONS
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED UNLESS PURSUANT TO A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER
SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED AND THE SATISFACTION
OF CERTAIN OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT.
GMAC _______ GRANTOR TRUST
____% ASSET BACKED CERTIFICATE, CLASS B
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 obligation
of, or an interest in, Capital Auto Receivables,
Inc., General Motors Acceptance Corporation or any
affiliate of either of them.)
NUMBER
CUSIP_____________
$_________________
THIS CERTIFIES THAT _______________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the GMAC
______ Grantor Trust (the "Trust") formed by Capital Auto
Receivables, Inc., a Delaware corporation, as Seller (the
"Seller"). The Trust was created pursuant to a Pooling and
Servicing Agreement, dated as of ________ __, 19__ (the "Agreement"),
between the Seller, General Motors Acceptance Corporation, a
corporation incorporated under the New York Banking Law
relating to investment companies, as Servicer (the "Servicer"), and
___________________, a__________________, as Trustee (the "Trustee").
A summary of certain of the pertinent provisions of the Agreement is
set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in
the Agreement. This Certificate is one of the duly
B-1
<PAGE>
authorized Certificates issued under the Agreement and designated
as "___% Asset Backed Certificates, Class B" (the "Class B
Certificates"). Also issued under the Agreement are Certificates
designated as "___% Asset Backed Certificates, Class A" (the "Class
A Certificates"). The Class A Certificates and the Class B
Certificates are hereinafter collectively called the
"Certificates." The aggregate undivided interest in the Trust evidenced
by all Class B Certificates is __%. This Class B Certificate is
issued under and is subject to the terms, provisions and conditions
of the Agreement, to which Agreement the holder of this Class B
Certificate by virtue of the acceptance hereof assents and by which
such holder is bound. The property of the Trust includes (as more
fully described in the Agreement) a pool of retail instalment
sale contracts for new and used automobiles and light trucks (the
"Receivables"), certain monies due thereunder on and after the Cutoff
Date, security interests in the Financed Vehicles, certain bank
accounts, property (including the right to receive Liquidation
Proceeds) securing the Receivables and held by the Trustee, proceeds
from certain insurance policies, certain other items financed by the
obligors and certain interests of the Seller in proceeds from
recourse against Dealers with respect to the Receivables and
proceeds of all of the foregoing.
Under the Agreement, there will be distributed on the 15th
day of each month or, if such 15th day is not a Business Day, the
next Business Day (the "Distribution Date"), commencing on _______
__, 199_, to the person in whose name this Class B Certificate is
registered as of the day immediately preceding such Distribution Date
(or, if Definitive Certificates are issued, the last date of the
preceding Monthly Period) (the "Record Date"), such Class B
Certificateholder's fractional undivided interest in the lesser of (a)
the sum of (i) the Class B Distributable Amount, (ii) any outstanding
Class B Interest Carryover Shortfall and (iii) any outstanding
Class B Principal Carryover Shortfall and (b) the sum of (i) the
Available Interest, (ii) the Available Principal and (iii) amounts on
deposit in the Subordination Spread Account in excess of the
Specified Subordination Spread Account Balance for the next succeeding
Distribution Date, in each case after giving effect to (A) the amount
required to be distributed to the Class A Certificateholders
pursuant to the subordination of the rights of the Class B
Certificateholders, and (B) the amounts required to be deposited
in the Subordination Spread Account and to pay the Total
Servicing Fee (including any unpaid Total Servicing Fees with
respect to prior Monthly Periods) payable to the Servicer on the
Distribution Date.
Distributions on this Class B Certificate will be made
by the Trustee by check or money order mailed to the Class B
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making
of any notation hereon. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution on
this Class B Certificate will be made after due notice by the Trustee
of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan,
the City of New York. The Record Date otherwise applicable to such
distributions shall not be applicable.
B-2
<PAGE>
Reference is hereby made to the further provisions of this
Class B 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 Trustee, by
manual signature, this Class B Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and
not in its individual capacity has caused this Class B Certificate
to be duly executed.
GMAC _______ GRANTOR TRUST
________________________, as Trustee
By: ________________________________
DATED:
(SEAL)
ATTEST:
_______________________________
This is one of the Class B Certificates referred
to in the Agreement.
________________________, as Trustee
By: _______________________________
Authorized Officer
B-3
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliate
of any of them. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Receivables and
property in the Subordination Spread Account, all as more specifically
set forth in the Agreement. A copy of the Agreement may, upon
request, be examined by any Certificateholder during normal
business hours at the principal office of the Seller, and at such other
places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights
and obligations of the parties thereto and the rights of the
Certificateholders under the Agreement at any time by the Seller, the
Servicer and the Trustee. In certain limited circumstances, the
Agreement may only be amended with the consent of the Holders of
Certificates evidencing at least a majority of the Voting Interests
of each Class of Certificates. 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate
is registrable in the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the Corporate Trust
Office of the Trustee in its capacity as Certificate Registrar, or
by any successor Certificate Registrar, in the Borough of
Manhattan, the City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations of a like
aggregate fractional undivided interest will be issued to the
designated transferee.
The Class B Certificates are issuable only as
registered Certificates without coupons in denominations of $100,000
and integral multiples thereof; however, one Class B Certificate may be
issued in a denomination that includes the residual amount. As
provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of
authorized denominations of a like aggregate fractional undivided
interest, as requested by the holder surrendering the same. No
service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the
Trustee or the Certificate Registrar may treat the person in whose
name this Class B Certificate is registered as the owner hereof for
the purpose of receiving distributions and for all other
purposes, and neither the Trustee, the Certificate Registrar nor
any such agent shall be affected by any notice to the contrary.
B-4
<PAGE>
The obligations and responsibilities created by the
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 Agreement and the disposition of all
property held as part of the Trust. The Servicer of the Receivables
may at its option purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and
other property of the Trust will effect early retirement of
the Certificates; provided, however, such right of purchase is
exercisable only as of a Record Date as of which the aggregate
Principal Balance is less than 10% of the Aggregate Amount Financed.
The recitals contained herein (other than the
certificate of authentication herein) shall be taken as the statements
of the Seller or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee
makes no representations as to the validity or sufficiency of this
Certificate (other than the certificate of authentication herein), or
of any Receivable or related document.
________________
B-5
<PAGE>
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 typewrite 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, Inc. or a commercial bank or trust
company.
B-6
<PAGE>
EXHIBIT C
FORM OF CUSTODIAN AGREEMENT
GENERAL MOTORS ACCEPTANCE CORPORATION
CUSTODIAN
AND
TRUSTEE
________________
CUSTODIAN AGREEMENT
DATED AS OF ___________, 19__
GMAC ______ GRANTOR TRUST
____% ASSET BACKED CERTIFICATES
<PAGE>
This Custodian Agreement, dated as of ___________, 19__,
is made with respect to the formation of the GMAC ______ Grantor
Trust, between General Motors Acceptance Corporation, a corporation
organized under the New York Banking Law relating to investment
companies, as Custodian (the "Custodian") and
______________________________________, a ____________________________,
as Trustee (the "Trustee").
WHEREAS, simultaneously herewith the Trustee, General
Motors Acceptance Corporation, as Servicer (the "Servicer") and Capital
Auto Receivables, Inc., a Delaware corporation (the "Seller") are
entering into a Pooling and Servicing Agreement, dated as of the
date hereof (the "Agreement", the capitalized terms defined therein
being used herein with the same meanings), pursuant to which the
Seller shall sell, transfer and assign to the Trustee without
recourse all of the Seller's right, title and interest in and to the
Receivables; and
WHEREAS, in connection with such sale, transfer and
assignment, the Agreement provides that the Trustee shall hold the
Receivable Files directly or through a Custodian acting as agent
of the Trustee under a Custodian Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and of other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. APPOINTMENT OF CUSTODIAN; ACKNOWLEDGMENT OF RECEIPT.
Subject to the terms and conditions hereof, the Trustee hereby
revocably appoints the Custodian, and the Custodian hereby accepts
such appointment, to act as agent of the Trustee as Custodian to
maintain custody of the Receivable Files relating to the
Receivables from time to time held as part of the Trust. In
performing its duties hereunder, the Custodian agrees to act with
reasonable care, using that degree of skill and attention that the
Custodian exercises with respect to the receivable files relating to
all comparable automotive receivables that the Custodian services and
holds for itself or others. The Custodian hereby acknowledges
receipt of the Receivable File for each Receivable listed on
Exhibit A of the Agreement.
2. MAINTENANCE AT OFFICE. The Custodian agrees to
maintain each Receivable File at one of its branch offices as
identified in the List of Branch Offices attached hereto as Exhibit
A, or at such other office of the Custodian as shall from time to
time be identified to the Trustee upon 30 days' prior written
notice.
C-1
<PAGE>
3. DUTIES OF CUSTODIAN.
(a) SAFEKEEPING. The Custodian shall hold the Receivable
Files on behalf of the Trustee for the use and benefit of all
present and future Certificateholders, maintain such accurate and
complete accounts, records and computer systems pertaining to each
Receivable File as will enable the Trustee to comply with the terms
and conditions of the Agreement. Each Receivable shall be identified
as such on the books and records of the Custodian as the Custodian
reasonably determines to be necessary to comply with the terms and
conditions of the Agreement. The Custodian shall conduct, or
cause to be conducted, periodic physical inspections of the
Receivable Files held by it under this Custodian Agreement, and of
the related accounts, records and computer systems, in such a
manner as shall enable the Trustee and the Custodian to verify
the accuracy of the Custodian's inventory and record keeping. The
Custodian shall promptly report to the Trustee any failure on its
part to hold the Receivable Files and maintain its accounts, records
and computer systems as herein provided and promptly take
appropriate action to remedy any such failure.
(b) ACCESS TO RECORDS. Subject only to the Custodian's
security requirements applicable to its own employees having access
to similar records held by the Custodian, the Custodian shall permit
the Trustee or its duly authorized representatives, attorneys or
auditors to inspect the Receivable Files and the related accounts,
records and computer systems maintained by the Custodian pursuant
hereto at such times as the Trustee may reasonably request.
(c) RELEASE OF DOCUMENTS. The Custodian shall
release any Receivable in the Receivable Files to the Seller, the
Servicer or the Trustee, as appropriate, under the circumstances
provided in the Agreement.
(d) ADMINISTRATION; REPORTS. In general, the Custodian shall
attend to all non-discretionary details in connection with maintaining
custody of the Receivable Files on behalf of the Trustee. In
addition, the Custodian shall assist the Trustee generally in the
preparation of routine reports to Certificateholders or to regulatory
bodies, to the extent necessitated by the Custodian's custody of the
Receivable Files.
4. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be
deemed to have received proper instructions with respect to the
Receivable Files upon its receipt of written instructions signed by
a Responsible Officer of the Trustee. A certified copy of a by-law
or of a resolution of the Board of Directors of the Trustee may be
received and accepted by the Custodian as conclusive evidence of the
authority of any such officer to act and may be considered as in
full force and effect until receipt of written notice to the contrary
by the Trustee. Such instructions may be general or specific in
terms.
5. INDEMNIFICATION BY THE CUSTODIAN. The Custodian
agrees to indemnify the Trustee for any and all liabilities,
obligations, losses, damage, payments, costs or expenses of any kind
whatsoever that may be imposed on, incurred or asserted against the
Trustee as the result of any act or omission in any way relating to
the maintenance and custody by the Custodian of the Receivable Files;
provided, however, that the Custodian shall not be liable for any
portion of any such amount resulting from the willful
misfeasance, bad faith or gross negligence of the Trustee.
C-2
<PAGE>
6. ADVICE OF COUNSEL. The Custodian and the Trustee further
agree
that the Custodian shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder and shall be
without liability for any action reasonably taken pursuant to such
advice, provided that such action is not in violation of applicable
Federal or state law.
7. EFFECTIVE PERIOD, TERMINATION, AND AMENDMENT; INTERPRETIVE
AND
ADDITIONAL PROVISIONS. This Custodian Agreement shall become
effective as of the date hereof, shall continue in full force and
effect until terminated as hereinafter provided, may be amended at
any time by mutual agreement of the parties hereto and may be
terminated by either party by written notice to the other party, such
termination to take effect no sooner than sixty (60) days after the
date of such notice. Notwithstanding the foregoing, if General
Motors Acceptance Corporation resigns as Servicer under Section 7.05
of the GMAC Grantor Trusts Standard Terms and Conditions of
Agreement Effective June 1, 1996 (the "Standard Terms") or all of the
rights and obligations of the Servicer have been terminated under
Section 8.02 of the Standard Terms, this Custodian Agreement may be
terminated by the Trustee, or by the Holders of Class A Certificates
evidencing at least a majority of the Voting Interests thereof, in the
same manner as the Trustee or such Holders may terminate the rights
and obligations of the Servicer under such Section 8.02. As soon as
practicable after the termination of this Custodian Agreement, the
Custodian shall deliver the Receivable Files to the Trustee or the
Trustee's agent at such place or places as the Trustee may reasonably
designate.
8. GOVERNING LAW. This Custodian Agreement shall be
governed by, and construed in accordance with, the laws of the State of
New York.
9. NOTICES. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by
certified mail, return receipt requested and shall be deemed to have
been duly given upon receipt (a) in the case of the Custodian, at
the following address: J. B. Van Orman, Jr., Vice President,
General Motors Acceptance Corporation, 3044 West Grand Boulevard,
Detroit, Michigan 48202, and (b) in the case of the Trustee, at the
following address:
_______________________________________________________________________________
or at such other address as shall be designated by such party in a
written notice to the other party.
10. BINDING EFFECT. This Custodian Agreement shall be
binding upon and shall inure to the Trustee, the Custodian and their
respective successors and assigns. Concurrently with the
appointment of a successor trustee as provided in Section 9.11 of
the Standard Terms, the Trustee and the Custodian shall amend this
Custodian Agreement to make said successor trustee the successor
to the Trustee hereunder.
C-3
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has
caused this Custodian Agreement to be in its name and on its behalf
by a duly authorized officer as of the day and year first above
written.
__________________________________
By:________________________________
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION,
as Custodian
By:________________________________
Title:
C-4
<PAGE>
EXHIBIT D
LETTER OF REPRESENTATIONS
Capital Auto Receivables, Inc., AS SELLER
AND
_________________________________, AS TRUSTEE
_____________, 199
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street
New York, New York 10041-0099
Re: GMAC ______ Grantor Trust
____% Asset Backed Certificates
-------------------------------
Ladies and Gentlemen:
This letter is in reference to the issuance by GMAC
_______Grantor
Trust ("Issuer") of $_______________ in aggregate principal amount
of its____% Asset Backed Certificates, Class A (the "Class A
Certificates") and its____% Asset Backed Certificates, Class B (the
"Class B Certificates" and together with the Class A
Certificates, the "Certificates"). The First National Bank of
Chicago, a national banking association is acting as Trustee
("Trustee") with respect to the Certificates pursuant to a
Pooling and Servicing Agreement, dated as of _________________,
including the Standard Terms and Conditions of Agreement Effective
_______________ (the "Pooling and Servicing Agreement"), among Capital
Auto Receivables, Inc., as Seller ("Seller"), General Motors
Acceptance Corporation, as Servicer ("Servicer") and Trustee.
Pursuant to an Underwriting Agreement dated __________________,
(the "Underwriting Agreement") by and among Seller, Servicer and
( ), on its own behalf and as representative of the
several underwriters named therein ("Underwriter"), Underwriter has
agreed to purchase, and Seller has agreed to cause the Issuer to
issue, the Class A Certificates. All references herein to the
"Securities" shall be considered references to the "Class A
Certificates" and all references herein to the "Issuer" shall be
considered references to the "Seller".
To induce The Depository Trust Company ("DTC") to accept the
Securities, and to act in accordance with its Rules with respect to
the Securities, Issuer and Trustee make the following representations
to DTC:
D-1
<PAGE>
1. Prior to closing on the Securities on _____________________,
199__, there shall be deposited with DTC one Security certificate
registered in the name of DTC's nominee, Cede & Co., for each stated
maturity of the Securities in the face amounts set forth on Schedule
A hereto, the total of which represents 100% of the principal
amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $150 million, one certificate will be
issued with respect to each $150 million of principal amount and an
additional certificate will be issued with respect to any remaining
principal amount. Each $150 million certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company , a New York
corporation ("DTC"), to 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.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record
date for such purposes (with no provision for revocation of consents
or votes by subsequent holders) and shall, to the extent possible, send
notice of such record date to DTC not less than 15 calendar days in
advance of such record date.
3. In the event of a full or partial redemption or advance
refunding of outstanding Securities, Issuer or Trustee shall send
notice of such events to DTC not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance
refunding, the date the proceeds are deposited in escrow.
4. There will be no case in which an invitation to tender the
Securities will occur.
5. All notices and payment advices sent to DTC shall contain
the CUSIP number of the Securities.
6. Notices to DTC pursuant to Paragraph 2 by telecopy shall be
sent to DTC's Reorganization Department at (212) 709-1093 or (212)
709-1094, and receipt of such notices shall be confirmed by telephoning
(212) 709-6884. Notices to DTC pursuant to Paragraph 2 by mail or by
any other means shall be sent to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
D-2
<PAGE>
7. Notices to DTC pursuant to Paragraph 3 by telecopy shall be
sent to DTC's Call Notification Department at (516) 227-4039 or (516)
227-4190, and receipt of such notices shall be confirmed by
telephoning (516) 227-4070. Notices to DTC pursuant to Paragraph 3 by
mail or by any other means shall be sent to:
Manager, Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
8. Trustee shall send DTC written notice with respect to the
dollar amount per $1,000 original face value (or other minimum
authorized denomination if less than $1,000 face value) payable on
each payment date allocated as to the interest and principal portion
thereof preferably 5, but not less than 2, business days prior to such
payment date. Such notices, which shall also contain Trustee contact's
name and telephone number, shall be sent by telecopy to DTC's Dividend
Department at (212) 709-1723, or by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
9. Interest payments and payments of principal that are part of
periodic principal-and-interest payments shall be received by Cede &
Co., as nominee of DTC, or its registered assigns in same-day funds on
each payment date (or the equivalent in accordance with existing
arrangements between Issuer or Trustee and DTC). Such payments shall be
made payable to the order of Cede & Co. Absent any other existing
arrangements such payments shall be addressed as follows:
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square; 24th Floor
New York, NY 10004-2695
10. Securities Eligible for DTC's Same-Day Funds
Settlement System ("SDFS")
Other payments of principal (redemption payments) shall be made in
same-day funds by Trustee in the manner set forth in the SDFS Paying
Agent Operating Procedures, a copy of which previously has been
furnished to Trustee.
11. DTC may direct Issuer or Trustee to use any other telephone
number or address as the number or address to which notices or
payments of interest or principal may be sent.
D-3
<PAGE>
12. In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response
to Issuer's or Trustee's invitation) necessitating a reduction in
the aggregate principal amount of Securities outstanding or an
advance refunding of part of the Securities outstanding, DTC, in its
discretion: (a) may request Issuer or Agent to issue and authenticate
a new Security certificate, or (b) may make an appropriate
notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final
maturity, in which case the certificate will be presented to Issuer or
Agent prior to payment, if required.
13. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, the
Trustee shall notify DTC of the availability of certificates. In
such event, the Trustee shall issue, transfer, and exchange
certificates in appropriate amounts. DTC will return to Seller all
book-entry Class A Certificates for which Definitive Certificates are
issued.
14. DTC may discontinue its services as securities
depository with respect to the Securities at any time by giving 60
days' prior written notice to Issuer or Trustee (at which time DTC will
confirm with Issuer or Trustee the aggregate principal amount of
Securities outstanding). Under such circumstances, at DTC's request
Issuer and Trustee shall cooperate fully with DTC by taking appropriate
action to make available one or more separate certificates evidencing
Securities to any DTC Participant having Securities credited to its DTC
accounts. DTC will return to Seller all book-entry Class A
Certificates for which Definitive Certificates are issued.
15. Nothing herein shall be deemed to require Trustee to advance
funds on behalf of Issuer. Nothing herein shall restrict the powers of
the Securities and Exchange Commission.
NOTES:
A. If there is a Trustee (as defined in this Letter of
Representations), Trustee as well as Issuer must sign this Letter. If
there is no Trustee, in signing this Letter Issuer itself undertakes
to perform all of the obligations set forth herein.
B. Schedule B contains statements that DTC believes accurately
describe DTC, the method of effecting book-entry transfers of
securities distributed through DTC, and certain related matters.
D-4
<PAGE>
Very truly yours,
CAPITAL AUTO RECEIVABLES, INC.
__________________________________
(Seller)
By:_________________________________
(Authorized Officer's Signature)
THE FIRST NATIONAL BANK OF CHICAGO
____________________________________
(Trustee)
By:_________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ___________________________________
(Authorized Officer)
D-5
To Call Writer Direct:
312 861-2000
EXHIBIT 5.1
June 13, 1996
Capital Auto Receivables, Inc.
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
RE: CAPITAL AUTO RECEIVABLES, INC.
REGISTRATION STATEMENT ON FORM S-3 (NO. _________)
We have acted as special counsel to Capital Auto Receivables,
Inc., a Delaware corporation (the "Company"), in connection with the
above-referenced Registration Statement (together with the exhibits and any
amendments hereto and the prospectus supplements described therein, the
"Registration Statement"), filed by the Company with the Securities and Exchange
Commission in connection with the registration by the Company of Asset Backed
Securities (the "Securities") with an aggregate principal amount of
$749,458,257.75. Pursuant to Rule 429 under the Securities Act of 1933,
Securities in the aggregate principal amount of $9,250,541,742.25 registered by
the Company under Registration No. 33-52597 and by GMAC Auto Receivables
Corporation (which was merged into the Company) under Registration No. 33-49197
and not previously sold have been consolidated under this Registration
Statement. The Registration Statement also constitutes Post- Effective Amendment
No. 1 to Registration Statement No. 33-52597.
Two different base prospectuses are contained in the
Registration Statement. One such prospectus (the "CARAT Prospectus") pertains to
offerings by the Company of Securities issued by CARAT Trusts (as defined
below), and the other such prospectus (the "Grantor Trust Prospectus") pertains
to offerings by the Company of Securities issued by Grantor Trusts (as defined
below).
As described in the CARAT Prospectus, the Securities issued
pursuant to the CARAT Prospectus and related prospectus supplements (each, a
"CARAT Prospectus Supplement") will be Asset Backed Notes ("CARAT Notes") and
Asset Backed Certificates ("CARAT Certificates") that will be issued in series.
Each series of CARAT Notes and CARAT Certificates will be issued by a Delaware
business
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 2
trust (each, a "CARAT Trust") to be formed by the Company pursuant to a Trust
Agreement (each, a "CARAT Trust Agreement") between the Company and an Owner
Trustee to be specified in the related CARAT Prospectus Supplement. Each series
issued by a CARAT Trust may include one or more classes of CARAT Notes and one
or more classes of CARAT Certificates. The CARAT Notes of any CARAT Trust will
be issued pursuant to an Indenture (each, a "CARAT Indenture") by and between
such CARAT Trust and an Indenture Trustee to be specified in the related CARAT
Prospectus Supplement and a Trust Sale and Servicing Agreement by and among such
CARAT Trust, the Company and General Motors Acceptance Corporation, as servicer
(each, a "CARAT Trust Sale and Servicing Agreement"). The CARAT Certificates of
any CARAT Trust will be issued pursuant to a CARAT Trust Agreement.
As described in the Grantor Trust Prospectus, the Securities
issued pursuant to the Grantor Trust Prospectus and related prospectus
supplements will be Asset Backed Certificates, Class A ("Grantor Trust
Certificates") to be issued in series, each series to be issued by a grantor
trust to be formed by the Company (each, a "Grantor Trust"). Each series will be
issued pursuant to a Pooling and Servicing Agreement among the Company, as
Seller, General Motors Acceptance Corporation, as Servicer, and The First
National Bank of Chicago, as Trustee (the "Trustee") (each, a "Grantor Trust
Pooling and Servicing Agreement").
We are generally familiar with the proceedings required to be taken in
connection with the proposed authorization, issuance and sale of the CARAT
Notes, CARAT Certificates and Grantor Trust Certificates, and in order to
express the opinion hereinafter stated, we have examined copies of the
Registration Statement and, in each case as filed as an exhibit to or
incorporated by reference in the Registration Statement, (i) the form of CARAT
Indenture, (ii) the form of CARAT Trust Agreement (including the form of
Certificate of Trust to be filed pursuant to the Delaware Business Trust Act
included as an exhibit thereto (a "CARAT Trust Certificate")), (iii) the form of
CARAT Trust Sale and Servicing Agreement, (iv) the form of CARAT Pooling and
Servicing Agreement between General Motors Acceptance Corporation and the
Company and (v) the form of Administration Agreement among the related CARAT
Trust, the related Indenture Trustee and General Motors Acceptance Corporation,
as administrator (collectively, the "CARAT Operative Documents"). We also have
examined (i) the form of Grantor Trust Pooling and Servicing Agreement, (ii) the
form of the Grantor Trust Certificate and (iii) the form of Purchase Agreement
between General Motors Acceptance Corporation and the Company (each, a "Purchase
Agreement"), in each case as filed as an exhibit to the Registration Statement.
We have examined such other documents and such matters
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 3
of law, and we have satisfied ourselves as to such matters of fact, as we have
considered relevant for purposes of this opinion.
On the basis of the foregoing and on the basis of our
examination of the Company's Amended and Restated Certificate of Incorporation
and Amended and Restated By-laws and a review of a Certificate of the Secretary
of State of the State of Delaware as to the good standing of the Company, it is
our opinion that:
(a) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware;
(b) With respect to the CARAT Notes and CARAT Certificates of
any series issued by any CARAT Trust, when, as and if (i) the
Registration Statement becomes effective pursuant to the provisions of
the Securities Act of 1933, as amended, (ii) the principal amount or
certificate balance, price, interest rate and other principal terms of
such CARAT Notes and CARAT Certificates and the forms of such CARAT
Notes and CARAT Certificates have been duly established and approved by
the Company's Board of Directors, (iii) the CARAT Operative Documents
relating thereto have each been duly completed, executed and delivered
by the parties thereto substantially in the form we have examined, duly
reflecting the terms established as described above, (iv) the CARAT
Trust Certificate for the related CARAT Trust has been duly executed by
the Owner Trustee and timely filed with the Secretary of State of the
State of Delaware, (v) the related CARAT Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended, and (vi)
such CARAT Notes and CARAT Certificates have been duly executed and
issued by such CARAT Trust and authenticated by the Indenture Trustee
or the Owner Trustee, as appropriate, and sold by the Company, all in
accordance with the terms and conditions of the related CARAT Operative
Documents and in the manner described in the Registration Statement,
such CARAT Notes and CARAT Certificates will have been duly authorized
by all necessary action of such CARAT Trust and will have been legally
issued and will be enforceable in accordance with their terms and
entitled to the benefits of the related CARAT Operative Documents,
except as the same may be limited by Title 11 of the United States Code
or other bankruptcy, insolvency, reorganization, moratorium, or other
laws relating to or affecting the enforcement of creditors' rights or
the relief of debtors, as may be in
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 4
effect from time to time, or by general principles of
equity; and
(c) With respect to the Grantor Trust Certificates of any
series, when, as and if (i) the Registration Statement becomes
effective pursuant to the provisions of the Securities Act of 1933, as
amended, (ii) the principal balance, price, interest rate and other
principal terms of such Grantor Trust Certificates have been duly
approved by the Board of Directors of the Company, (iii) the Grantor
Trust Pooling and Servicing Agreement, the Purchase Agreement and other
documents relating thereto have been duly completed, executed and
delivered by the parties thereto substantially in the form we have
examined, duly reflecting the terms established as described above, and
(iv) such Grantor Trust Certificates have been duly executed by the
Company, authenticated by the Trustee and sold by the Company, all in
accordance with the terms and conditions of the related Grantor Trust
Pooling and Servicing Agreement and in the manner described in the
Registration Statement, such Grantor Trust Certificates will have been
duly authorized by all necessary corporate action of the Company and
will have been legally issued and will be enforceable in accordance
with their terms and entitled to the benefits of the related Grantor
Trust Pooling and Servicing Agreement, except as the same may be
limited by Title 11 of the United States Code or other bankruptcy,
insolvency, reorganization, moratorium, or other laws relating to or
affecting the enforcement of creditors' rights or the relief of
debtors, as may be in effect from time to time, or by general
principles of equity.
We do not find it necessary for the purposes of this opinion,
and accordingly we do not purport to cover herein, the application of securities
or "Blue Sky" laws of the various states to the offer or sale of the CARAT
Notes, CARAT Certificates and Grantor Trust Certificates.
We wish to advise you that we are members of the bar of the
State of New York and the opinions expressed herein are limited to the laws of
the State of New York, the federal laws of the United States, the General
Corporation Law of the State of Delaware and the Delaware Business Trust Act.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement, the filing of our opinion of even date herewith
with respect to certain tax matters as Exhibit 8.1 to
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 5
the Registration Statement, to the reference to our firm in the CARAT Prospectus
included in the Registration Statement under the captions "PROSPECTUS
SUMMARY--Certain Federal Income Tax Consequences," "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES" and "LEGAL OPINIONS" and to the reference to our firm in the
Grantor Trust Prospectus included in the Registration Statement under the
captions "PROSPECTUS SUMMARY--Tax Status," "FEDERAL INCOME TAX CONSEQUENCES--
TAX STATUS OF THE TRUST" and "LEGAL OPINIONS."
Sincerely,
----------------------------------
KIRKLAND & ELLIS
To Call Writer Direct:
312 861-2000
EXHIBIT 8.1
June 13, 1996
Capital Auto Receivables, Inc.
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
RE: CAPITAL AUTO RECEIVABLES, INC.
REGISTRATION STATEMENT ON FORM S-3 (NO. _________)
We have acted as special counsel to Capital Auto Receivables,
Inc., a Delaware corporation (the "Company"), in connection with the
above-referenced Registration Statement (together with the exhibits and any
amendments hereto and the prospectus supplements described therein, the
"Registration Statement"), filed by the Company with the Securities and Exchange
Commission in connection with the registration by the Company of Asset Backed
Securities (the "Securities") with an aggregate principal amount of
$749,458,257.75. Pursuant to Rule 429 under the Securities Act of 1933,
Securities in the aggregate principal amount of $9,250,541,742.25 registered by
the Company under Registration No. 33-52597 and by GMAC Auto Receivables
Corporation (which was merged into the Company) under Registration No. 33-49197
and not previously sold have been consolidated under this Registration
Statement. The Registration Statement also constitutes Post- Effective Amendment
No. 1 to Registration Statement No. 33-52597.
Two different base prospectuses are contained in the
Registration Statement. One such prospectus (the "CARAT Prospectus") pertains to
offerings by the Company of Securities issued by CARAT Trusts (as defined
below), and the other such prospectus (the "Grantor Trust Prospectus") pertains
to offerings by the Company of Securities issued by Grantor Trusts (as defined
below).
As described in the CARAT Prospectus, the Securities issued
pursuant to the CARAT Prospectus and related prospectus supplements (each, a
"CARAT Prospectus Supplement") will be Asset Backed Notes ("CARAT Notes") and
Asset Backed Certificates ("CARAT Certificates") that will be issued in series.
Each series of CARAT Notes and CARAT Certificates will be issued by a Delaware
business trust (each, a "CARAT Trust") to be formed by the Company pursuant to a
Trust Agreement (each, a "CARAT Trust Agreement") between the Company and an
Owner Trustee to be specified in the related CARAT
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 2
Prospectus Supplement. Each series issued by a CARAT Trust may include one or
more classes of CARAT Notes and one or more classes of CARAT Certificates. The
CARAT Notes of any CARAT Trust will be issued pursuant to an Indenture (each, a
"CARAT Indenture") by and between such CARAT Trust and an Indenture Trustee to
be specified in the related CARAT Prospectus Supplement and a Trust Sale and
Servicing Agreement by and among such CARAT Trust, the Company and General
Motors Acceptance Corporation, as servicer (each, a "CARAT Trust Sale and
Servicing Agreement"). The CARAT Certificates of any CARAT Trust will be issued
pursuant to a CARAT Trust Agreement.
As described in the Grantor Trust Prospectus, the Securities
issued pursuant to the Grantor Trust Prospectus and related prospectus
supplements will be Asset Backed Certificates, Class A (the "Grantor Trust
Certificates") to be issued in series, each series to be issued by a grantor
trust to be formed by the Company (each, a "Grantor Trust"). Each series will be
issued pursuant to a Pooling and Servicing Agreement among the Company, as
Seller, General Motors Acceptance Corporation, as Servicer, and The First
National Bank of Chicago, as Trustee (the "Trustee") (each, a "Grantor Trust
Pooling and Servicing Agreement").
We are generally familiar with the proceedings required to be
taken in connection with the proposed authorization, issuance and sale of the
CARAT Notes, CARAT Certificates and Grantor Trust Certificates, and in order to
express the opinion hereinafter stated, we have examined copies of the
Registration Statement and, in each case as filed as an exhibit to or
incorporated by reference in the Registration Statement, (i) the form of CARAT
Indenture, (ii) the form of CARAT Trust Agreement (including the form of
Certificate of Trust to be filed pursuant to the Delaware Business Trust Act
included as an exhibit thereto (a "CARAT Trust Certificate")), (iii) the form of
CARAT Trust Sale and Servicing Agreement, (iv) the form of CARAT Pooling and
Servicing Agreement between General Motors Acceptance Corporation and the
Company and (v) the form of Administration Agreement among the related CARAT
Trust, the related Indenture Trustee and General Motors Acceptance Corporation,
as administrator (collectively, the "CARAT Operative Documents"). We also have
examined (i) the form of Grantor Trust Pooling and Servicing Agreement, (ii) the
form of the Grantor Trust Certificate and (iii) the form of Purchase Agreement
between General Motors Acceptance Corporation and the Company (each, a "Purchase
Agreement"), in each case as filed as an exhibit to the Registration Statement
(collectively, the "Grantor Trust Operative Documents"). We have examined such
other documents and such matters of law, and we have satisfied ourselves as to
such matters of fact, as we have considered relevant for purposes of this
opinion.
<PAGE>
Capital Auto Receivables, Inc.
June 13, 1996
Page 3
The opinion set forth in this letter is based upon the
applicable provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated and proposed thereunder, current positions of the
Internal Revenue Service (the "IRS") contained in published Revenue Rulings and
Revenue Procedures, current administrative positions of the IRS and existing
judicial decisions. No tax rulings will be sought from the IRS with respect to
any of the matters discussed herein.
Based on the foregoing and assuming that the CARAT Operative
Documents with respect to each series of CARAT Notes and CARAT Certificates and
the Grantor Trust Operative Documents with respect to each series of Grantor
Trust Certificates are duly authorized, executed and delivered in substantially
the form we have examined and that the transactions contemplated to occur under
the CARAT Operative Documents and Grantor Trust Operative Documents in fact
occur in accordance with the terms thereof, we are of the opinion that the
discussions presented in (i) the CARAT Prospectus forming part of the
Registration Statement under the captions "PROSPECTUS SUMMARY--Certain Federal
Income Tax Consequences" and "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and (ii)
the Grantor Trust Prospectus forming part of the Registration Statement under
the captions "PROSPECTUS SUMMARY--Tax Status" and "FEDERAL INCOME TAX
CONSEQUENCES--TAX STATUS OF THE TRUST" are based upon reasonable interpretations
of existing U.S. federal tax law. There can be no assurance, however, that the
conclusions of U.S. federal tax law presented therein will not be successfully
challenged by the IRS or significantly altered by new legislation, changes in
IRS positions or judicial decisions, any of which challenges or alterations may
be applied retroactively with respect to completed transactions.
Sincerely,
------------------------------
KIRKLAND & ELLIS
Exhibit 10.1
GENERAL MOTORS ACCEPTANCE CORPORATION
AND
CAPITAL AUTO RECEIVABLES, INC.
-------------------------------------
PURCHASE AGREEMENT
DATED AS OF ____ __, 199_
-------------------------------------
GMAC 199___-_ GRANTOR TRUST
<PAGE>
THIS PURCHASE AGREEMENT is made as of _____ __, 199_, by and 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 (the "Purchaser").
WHEREAS, in the regular course of its business, GMAC purchases
retail instalment sale contracts for automobiles and light trucks through a
nationwide branch system from automobile and truck dealers (each, a "Dealer")
pursuant to existing agreements between GMAC and such Dealers (each, a "Dealer
Agreement").
WHEREAS, GMAC and the Purchaser wish to set forth the terms pursuant
to which the Receivables are to be sold by GMAC to the Purchaser.
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
As used in this Agreement, the following terms shall, unless the
context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms of the terms defined):
AGGREGATE AMOUNT FINANCED: shall have the meaning assigned to that
term in the Pooling and Servicing Agreement.
AMOUNT FINANCED: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
ANNUAL PERCENTAGE RATE: shall have the meaning assigned to that term
in the Pooling and Servicing Agreement.
ASSIGNMENT: shall mean the document of assignment substantially in the
form attached to this Agreement as EXHIBIT A.
CERTIFICATE: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
CERTIFICATEHOLDER: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
CERTIFICATE REGISTER: shall mean the register maintained pursuant to
Section 5.03 of the Pooling and Servicing Agreement.
- 1 -
<PAGE>
CLASS A PERCENTAGE: shall have the meaning assigned to that term in
the Pooling and Servicing Agreement.
COLLECTIONS: shall mean all amounts collected by GMAC as Servicer
(from whatever source) on or with respect to the Receivables.
CUTOFF DATE: shall mean the date specified in the Pooling and
Servicing Agreement.
DEALER: shall have the meaning assigned to that term in the second
paragraph of this Agreement.
DEALER AGREEMENT: shall have the meaning assigned to that term in the
second paragraph of this Agreement.
DISTRIBUTION DATE: shall mean, with respect to a Monthly Period, the
monthly date, as specified in the Pooling and Servicing Agreement, on which
distributions are made to Certificateholders.
FINANCED VEHICLE: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
GMAC: shall have the meaning assigned to that term in the first
paragraph of this Agreement.
LIEN: shall have the meaning assigned to that term in the Pooling and
Servicing Agreement.
MONTHLY PERIOD: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
OBLIGOR: shall have the meaning assigned to that term in the Pooling
and Servicing Agreement.
PERSON: shall mean 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.
POOLING AND SERVICING AGREEMENT: shall mean the Pooling and Servicing
Agreement by and between GMAC, as Servicer, the Purchaser, as Seller, and the
Trustee named therein, dated as of the date hereof, that incorporates the
Standard Terms and Conditions of Agreement referred to therein.
PURCHASER: shall have the meaning assigned to that term in the first
paragraph of this Agreement.
- 2 -
<PAGE>
RECEIVABLE: shall mean a retail instalment sale contract for a
Financed Vehicle that is included in the Schedule of Receivables which is on
file at the locations listed on EXHIBIT B attached hereto and all rights and
obligations thereunder.
RECEIVABLES PURCHASE PRICE: shall mean the Aggregate Amount Financed
plus accrued interest thereon.
RECORD DATE: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
RELEASED WARRANTY AMOUNT: shall have the meaning assigned to that term
in the Pooling and Servicing Agreement.
REPURCHASE EVENT: shall have the meaning assigned to that term in
Section 5.04.
SCHEDULED INTEREST RECEIVABLE: shall have the meaning assigned to that
term in the Pooling and Servicing Agreement.
SCHEDULED PAYMENT: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
SERVICER: shall mean General Motors Acceptance Corporation, in its
capacity as such under the Pooling and Servicing Agreement.
SIMPLE INTEREST RECEIVABLE: shall have the meaning assigned to that
term in the Pooling and Servicing Agreement.
TRUST FORMATION DATE: shall have the meaning assigned to that term in
the Pooling and Servicing Agreement.
TRUST PROPERTY: shall have the meaning assigned to that term in
Section 2.01.
TRUSTEE: shall mean the Person named as Trustee in the Pooling and
Servicing Agreement, or its successor in interest or any successor in interest
or any successor trustee appointed as provided in the Pooling and Servicing
Agreement.
UCC: shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
VOTING INTERESTS: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
WARRANTY PAYMENT: shall have the meaning assigned to that term in the
Pooling and Servicing Agreement.
- 3 -
<PAGE>
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.01 PURCHASE AND SALE OF RECEIVABLES. Immediately prior to
the Trust Formation Date transactions pursuant to the Pooling and Servicing
Agreement, GMAC shall sell, transfer, assign and otherwise convey to the
Purchaser, without recourse:
(a) all right, title and interest of GMAC in, to and under the
Receivables listed on the Schedule of Receivables which is on file at the
locations listed on EXHIBIT B 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 thereunder on and
after the Cutoff Date, in each case, exclusive of any amounts allocable to the
premium for physical damage insurance covering any related Financed Vehicle
force-placed by GMAC;
(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
(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)
collectively, the "Trust Property").
It is the intention of GMAC and the Purchaser that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables from
GMAC to the Purchaser 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 the
Purchaser 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
Receivables and other properties described in Section 2.01, the Purchaser shall,
on the Trust Formation Date, pay to GMAC the Receivables Purchase Price. An
amount equal to approximately the Class A Percentage of the Receivables Purchase
Price 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 the
Purchaser.
- 4 -
<PAGE>
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, on the Trust Formation Date, simultaneously with the closing of
the transactions contemplated by the Pooling and Servicing Agreement and the
Certificate Purchase Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby represents and warrants to GMAC as of the date hereof and as of
the Trust Formation Date:
(a) ORGANIZATION AND GOOD STANDING. The Purchaser 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. The Purchaser 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. The Purchaser has the power and authority
to execute and deliver this Agreement and to carry out its terms and the
execution, delivery and performance of this Agreement have been duly authorized
by the Purchaser 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 the Purchaser, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the Purchaser 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 the Pooling and
Servicing Agreement or violate any law or, to the best of the Purchaser's
knowledge, any order, rule or regulation applicable to the Purchaser of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or any of
its properties; and
(e) NO PROCEEDINGS. To the Purchaser'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 Purchaser or its properties (i)
asserting the invalidity of this Agreement, or (ii) seeking any
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determination or ruling that might materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
Section 3.02 REPRESENTATIONS AND WARRANTIES OF GMAC.
(a) GMAC makes the following representations and warranties as to
the Receivables on which the Purchaser relies in accepting the Receivables. Such
representations and warranties speak as of the date hereof and as of the Trust
Formation Date, but shall survive the sale, transfer and assignment of the
Receivables to the Purchaser and the subsequent assignment and transfer pursuant
to the Pooling and Servicing Agreement:
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) 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, (B) 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 the Purchaser, (C) 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 (D) provides for level monthly payments (provided that the
payment in the first Monthly Period and the final Monthly Period of the life of
the Receivable may be minimally different from the level payment) that shall
amortize the Amount Financed by maturity and shall yield interest at the Annual
Percentage Rate;
(ii) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables is true and correct in all material respects as of the
close of business on the Trust Formation Date, and no selection procedures
believed to be adverse to the Certifi- cateholders were utilized in selecting
the Receivables from those receivables of GMAC which meet the selection criteria
under the Pooling and Servicing Agreement;
(iii) 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;
(iv) 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'
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rights in general and by equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(v) 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 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
security interest in the Financed Vehicle in favor of GMAC as secured party;
(vi) 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;
(vii) NO WAIVER. Since the Cutoff Date, no provision of a Receivable
has been waived, altered or modified in any respect;
(viii) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable;
(ix) 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;
(x) 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;
(xi) GOOD TITLE. No Receivable has been sold, transferred, assigned
or pledged by GMAC to any Person other than the Purchaser; 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, the Purchaser 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;
(xii) 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;
(xiii) ALL FILINGS MADE. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Purchaser a first
perfected ownership interest in the Receivables shall have been made;
(xiv) ONE ORIGINAL. There is only one original executed copy of each
Receivable;
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(xv) 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);
(xvi) MATURITY OF RECEIVABLES. Each Receivable has an original
maturity of not less than _ months and not greater than __ months;
(xvii) LOWEST ANNUAL PERCENTAGE RATE. The lowest Annual Percentage
Rate of any Receivable is ___%.
(xviii) SCHEDULED PAYMENT; DELINQUENCY. Each Receivable has a first
scheduled payment that is due on or after _______ __, 199_ and a final scheduled
payment that is due no later than ______ __, ____, and no Receivable has a
payment that is more than 29 days overdue as of the Cutoff Date nor shall any
Receivable have been charged-off by the Servicer;
(xix) VEHICLES. Each Financed Vehicle is a new or used automobile or
light truck;
(xx) ORIGIN. Each Receivable has been originated in the United
States; and
(xxi) NO AMENDMENT. No Receivable has been amended or otherwise
modified such that the Amount Financed, the APR or the total number of Scheduled
Payments (in the case of a Scheduled Interest Receivable) or the number of
original 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.
(b) GMAC hereby represents and warrants to the Purchaser as of the
date hereof and as of the Trust Formation Date:
(i) 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;
(ii) 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 requires or shall require such
qualification;
(iii) 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
the Purchaser, has duly authorized such sale and assignment to the Purchaser by
all necessary corporate action; and the
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execution, delivery and performance of this Agreement have been duly authorized
by GMAC by all necessary corporate action;
(iv) VALID SALE; BINDING OBLIGATION. This Agreement 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;
(v) 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 the Pooling and Servicing 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
(vi) 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.
ARTICLE IV
CONDITIONS
Section 4.01 CONDITIONS TO OBLIGATION OF THE PURCHASER. The
obligation of the Purchaser to purchase the Receivables 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 on the Trust Formation
Date 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 Trust Formation
Date.
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(b) NO REPURCHASE EVENT. No Repurchase Event shall have occurred
on or prior to the Trust Formation Date.
(c) COMPUTER FILES MARKED. GMAC shall, at its own expense, on or
prior to the Trust Formation Date, indicate in its computer files created in
connection with the Receivables that the Receivables have been sold to the
Purchaser pursuant to this Agreement and deliver to the Purchaser 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 the Assignment.
(ii) EVIDENCE OF UCC FILING. On or prior to the Trust
Formation Date, 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 the Purchaser as purchaser or
secured party, naming the Receivables and the other Trust 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 the Purchaser. GMAC shall deliver a
file-stamped copy, or other evidence satisfactory to the Purchaser of such
filing, to the Purchaser on or prior to the Trust Formation Date.
(iii) OTHER DOCUMENTS. At the Closing, GMAC shall provide such
other documents as the Purchaser may reasonably request.
(e) OTHER TRANSACTIONS. The transactions contemplated by the Pooling
and Servicing Agreement shall be consummated on the Trust Formation Date.
Section 4.02 CONDITIONS TO OBLIGATION OF GMAC. The obligation of
GMAC to sell the Receivables to the Purchaser is subject to the satisfaction of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Purchaser hereunder shall be true and correct on the Trust
Formation Date 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
Trust Formation Date.
(b) RECEIVABLES PURCHASE PRICE. At the Trust Formation Date, the
Purchaser shall pay to GMAC the Receivables Purchase Price as provided in
Section 2.02.
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ARTICLE V
ADDITIONAL AGREEMENTS
GMAC agrees with the Purchaser as follows:
Section 5.01 CONFLICTS WITH POOLING AND SERVICING AGREEMENT. To the
extent that any provision of Sections 5.02 through 5.04 of this Agreement
conflicts with any provision of the Pooling and Servicing Agreement, the Pooling
and Servicing Agreement shall govern.
Section 5.02 PROTECTION OF TITLE TO TRUST.
(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 the Purchaser under this Agreement in the
Receivables and the other Trust Property and in the proceeds thereof. GMAC shall
deliver (or cause to be delivered) to the Purchaser 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 paragraph
(a) above seriously misleading within the meaning of Section 9-402(7) of the
UCC, unless it shall have given the Purchaser at least 60 days prior written
notice thereof.
(c) EXECUTIVE OFFICE; MAINTENANCE OF OFFICES. GMAC shall give the
Purchaser 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.
Section 5.03 OTHER LIENS OR INTERESTS. Except for the conveyances
hereunder and pursuant to this Agreement and the Pooling and Servicing
Agreement, 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 the
Purchaser in, to and under such Receivables against all claims of third parties
claiming through or under GMAC.
Section 5.04 REPURCHASE EVENTS. GMAC acknowledges that the Purchaser
has assigned all of its right, title and interest in, to and under this
Agreement (other than Section 5.05 hereof), including the Purchaser's right to
cause GMAC to repurchase Receivables from the Purchaser under certain
circumstances, to the Trustee pursuant to Section 2.01 of the Pooling and
Servicing Agreement. GMAC hereby covenants and agrees with the Purchaser for the
benefit of the Purchaser, the Trustee and the Certificateholders that the
occurrence of a breach of any
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of GMAC's representations and warranties contained in Section 3.02(a) hereof
shall constitute events obligating GMAC, to the extent specified in Section 2.05
of the Pooling and Servicing Agreement, and without further notice from the
Purchaser hereunder, to repurchase a Receivable from the Trustee. 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
Certificateholders or the Trustee on behalf of the Certificateholders.
Section 5.05 INDEMNIFICATION. GMAC shall indemnify the Purchaser 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 TRUST. GMAC acknowledges that the Purchaser may,
pursuant to the Pooling and Servicing Agreement, sell the Receivables to the
Trust and assign its rights hereunder to the Trustee for the benefit of the
Certificateholders.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 AMENDMENT. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by GMAC and the
Purchaser; provided, however, that any such amendment that materially affects
the rights of the Certifi- cateholders under the Pooling and Servicing Agreement
must be consented to by the Certificateholders evidencing 51% of the Voting
Interests of each class of Certificate.
Section 6.02 WAIVERS. No failure or delay on the part of the
Purchaser 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 6.03 COSTS AND EXPENSES. GMAC agrees to pay all reasonable
out-of-pocket costs and expenses of the Purchaser, including fees and expenses
of counsel, in connection with the perfection as against third parties of the
Purchaser's right, title and interest in and to the Receivables and the
enforcement of any obligation of GMAC hereunder.
Section 6.04 SURVIVAL. The representations, warranties and covenants
of GMAC set forth in Section 3.02 and Article V of this Agreement shall remain
in full force and effect and shall survive the closing under Section 2.03
hereof.
Section 6.05 CONFIDENTIAL INFORMATION. The Purchaser 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 the Purchaser's rights
hereunder, under the Receivables, under the Pooling and Servicing Agreement or
as required by law.
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Section 6.06 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. References in this
Agreement to Section names or numbers are to such Sections of this Agreement
unless otherwise specified.
Section 6.07 GOVERNING LAW. This Agreement and the Assignment 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 6.08 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 the Purchaser, 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., 3031 West Grand
Boulevard, Detroit, Michigan 48202.
Section 6.09 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.
-----------------------
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:____________________________________________
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EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated
as of _______________, 19__ (the "Purchase 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 (the "Purchaser"), GMAC does hereby sell, assign,
transfer and otherwise convey unto the Purchaser, without recourse, (i) all
right, title and interest of GMAC in, to and under the Receivables listed on the
Schedule of 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, all monies received thereunder on and after the
Cutoff Date, in each case, exclusive of any amounts allocable to the premium for
physical damage insurance covering any related Financed Vehicle force-placed by
GMAC; (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.
The foregoing sale does not constitute and is not intended to result
in any assumption by the Purchaser 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.
It is the intention of GMAC and the Purchaser that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the
Receivables from GMAC to the Purchaser 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.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Purchase Agreement.
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IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of ______________, 199__.
GENERAL MOTORS ACCEPTANCE CORPORATION
By:__________________________________
Name:________________________________
Its: Vice President
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EXHIBIT B
LOCATIONS OF SCHEDULE OF RECEIVABLES
The Schedule of Receivables is on file at the offices
of:
1. The Trustee
2. General Motors Acceptance Corporation
3. Capital Auto Receivables, Inc.
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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, Lawrence B.
LaCombe, Jr. and Robert L. Schwartz, 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 MAY 1, 1996.
- ----------------------------------- --------------------------------
Paul D. Bull Lawrence B. LaCombe, Jr.
- ----------------------------------- --------------------------------
Richard E. Dammon John Rakolta, Jr.
- ----------------------------------- --------------------------------
Eric A. Feldstein John R. Rines
- ----------------------------------- --------------------------------
John E. GIbson Jerome B. Van Orman, Jr.
- -----------------------------------
Gerald E. Gross
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>
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>
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>
THIS TRUST SALE AND SERVICING AGREEMENT is made as of __________, 199_, 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
the Seller and, General Motors Acceptance Corporation as Servicer, has agreed to
service the Receivables pursuant to the Pooling and Servicing Agreement;
WHEREAS, the Seller desires to sell the Receivables to the 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; and
WHEREAS, the 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 as it may be amended, supplemented or modified from time to time, 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:
(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 there under on and
after the Cutoff Date, in each case exclusive of any
<PAGE>
amounts allocable to the premium for physical damage insurance covering any
related Financed Vehicle force-placed by the Servicer;
(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 (other than Section 5.05 thereof) 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. Notwithstanding the foregoing, in the event a court of competent
jurisdiction determines that such transfer and assignment did not constitute a
sale or that such beneficial interest is a part of the Seller's estate, then the
Seller shall be deemed to have granted to the Issuer a first priority perfected
security interest in all of Seller's right, title and interest in, to and under
such property and the Seller hereby grants such security interest. For purposes
of such grant, this Agreement shall constitute a security agreement under the
UCC.
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 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.
<PAGE>
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 (other
than Section 5.05 thereof). 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 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
<PAGE>
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 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
<PAGE>
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 instrumentality 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 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, transferred, 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.
<PAGE>
(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 Person (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 Person in any of the foregoing cases (other than the Seller as the
surviving entity of such merger or consolidation) 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 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. Neither the
Seller nor any of the directors, officers, employees or agents of the Seller in
its capacity as such shall be under any liability to the Issuer, the Indenture
Trustee, the Owner Trustee, the Holders or any other Person, except as
specifically provided in this Agreement, for any action taken or for refraining
from the taking of any action pursuant to the Basic Documents or from errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such Person against any liability that would otherwise be imposed by reason
of wilful 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 the Basic Documents. 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
<PAGE>
arising under the Basic Documents. 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
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 Affiliates of 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 Affiliate 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 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. Such certificate may be provided as a single certificate making the
required statements as to more than one Trust Sale and Servicing Agreement.
(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
<PAGE>
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, 199_, 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.
(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
<PAGE>
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 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.
<PAGE>
(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 transferred 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.
(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;
<PAGE>
(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
(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 199_-_ 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
<PAGE>
the Reserve Account exceeds such Specified Reserve Account Balance.
(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:
(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 sixty days after the occurrence of any of the
following: (A) any change in their respective corporate names or any trade
names, (B)
<PAGE>
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.
(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
Services 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
<PAGE>
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 or before 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):]
(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
<PAGE>
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;
<PAGE>
(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 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 199_-_ 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 199_-_ 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 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.
<PAGE>
(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 and any securities of the Indenture Trustee
have a credit rating from each Rating Agency then rating such Securities in one
of its generic rating categories that signifies investment grade. All amounts
held in such accounts (including amounts, if any, which the Servicer is required
to remit daily to the Collection Account pursuant to 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
<PAGE>
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;
(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) Pursuant to the Trust Agreement 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
<PAGE>
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.
(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 Services
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 Rating Agencies
<PAGE>
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.
(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
<PAGE>
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,
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,
<PAGE>
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.
(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 Person 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
<PAGE>
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.
(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
<PAGE>
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.
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 Servicer to duly observe or perform in any
material respect any other covenants or agreements of 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
<PAGE>
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 Servicer, by the Indenture
Trustee or the Owner Trustee, or to 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 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
(d) the consent by 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 Servicer or
of or relating to substantially all of its respective property; 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.
Notwithstanding the foregoing, there shall be no Servicing Default where a
Servicing Default would otherwise exist due to a delay in or failure of
performance under Section 8.1(a) for a period of 10 Business Days, or under
Section 8.1(b) for a period of 60 days, if the delay or failure giving rise to
such Servicing Default was caused by an act of God or the public enemy, acts of
declared or undeclared war, public disorder, rebellion or sabotage, epidemics,
landslides, lightning, fire, hurricanes, earthquakes.
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
<PAGE>
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.
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
<PAGE>
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
full and the Indenture has been discharged in accordance with its terms,
Certificate- holders 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).
<PAGE>
(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 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
<PAGE>
obligations of the Indenture Trustee set forth in Section 4.4 of
the Indenture).
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.
(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.
<PAGE>
(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.
(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
<PAGE>
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.
(h) The Servicer shall furnish to the Indenture Trustee and the Owner
Trustee at any time upon request a list of all Receivables then held as part of
the Trust, together with a reconciliation 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
<PAGE>
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: L. B. LaCombe, Jr., Vice President, 3031 West
Grand Boulevard, Detroit, Michigan 48202, (b) in the case of the Servicer, at
the following address: J. B. Van Orman, Jr., 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, (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
Service, to Standard & Poor's Ratings Service, 26 Broadway (20th Floor), New
York, New York 10004, Attention: Asset Backed Surveillance Department,(g) in the
case of Fitch Investors Service, L. P., to Fitch Investors Service, L. P., One
State Street Plaza, New York, New York 10004, Attention: Asset Backed
Surveillance Department 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 enforceable to the fullest extent permitted and if not so
permitted, shall be deemed severable from the remaining
<PAGE>
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 respective 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.
SECTION 9.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders 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 FURTHER ASSURANCES. The Seller, the Owner Trustee and the
Indenture Trustee agree to do and perform from time to time, any and all acts
and to execute any and all further
<PAGE>
instruments required or reasonably requested by the other more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Accounts for filing under
the provisions of the Uniform Commercial Code of any applicable jurisdiction and
to evidence the repurchase of any interest in any Receivable by GMAC, the Seller
or the Servicer.
SECTION 9.13 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of the Owner Trustee or the Indenture Trustee in exercising any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, power and privileges herein provided are cumulative and not exhaustive
of any rights, remedies, power and privileges provided by law.
SECTION 9.14 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 9.15. 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.
<PAGE>
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 199_-_
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:
<PAGE>
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
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 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 Agreement, 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.
<PAGE>
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 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 Distribution 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.
<PAGE>
CERTIFICATEHOLDERS' PERCENTAGE: With respect to any Distri- bution Date,
100% minus the Noteholders' Percentage for such Distribution Date.
CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: With respect 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 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
<PAGE>
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).
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- NOTES: The Class A-_ _.__% Asset Backed Notes in the aggregate
principal amount of $___________ issued pursuant to the Indenture.]
[CLASS A- NOTES: The Class A-_ _.__% Asset Backed Notes in the aggregate
principal amount of $__________ issued pursuant to the Indenture.]
[CLASS A- NOTES: The Class A-_ _.__% Asset Backed Notes in the aggregate
principal amount of $__________ issued pursuant to the Indenture.]
[CLASS A- NOTES: The Class A-_ _.__% Asset Backed Notes in the aggregate
principal amount of $___________ issued pursuant to the Indenture.]
[CLASS A- NOTES: The Class A-_ _.__% Asset Backed Notes in the aggregate
principal amount of $___________ issued pursuant
<PAGE>
to the Indenture.]
[CLASS A- NOTES: The Class A-_ _.__% 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.
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: __________, 199_.
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: _________, 199_.
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
<PAGE>
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.
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
(iii) with respect to any such Designated Account
<PAGE>
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 ___________, 199_.
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:
(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
<PAGE>
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 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 Services 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
<PAGE>
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, L. P. only if Fitch Investors Service, L. P. 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.
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-_ Notes: _________ __ 199_]
[Class A-_ Notes: _________ __ 199_]
[Class A-_ Notes: _________ __ 199_]
[Class A-_ Notes: _________ __ 199_]
[Class A-_ Notes: _________ __ 199_]
[Class A-_ Notes: _________ __ 199_]
FINANCED VEHICLE: An automobile or light truck, together
<PAGE>
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.
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
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reason-
<PAGE>
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.
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 Amended and Restated Intercompany
Advance Agreement dated as of February 22, 1996, 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-_ Notes: _.__%]
[Class A-_ Notes: _.__%]
[Class A-_ Notes: _.__%]
[Class A-_ Notes: _.__%]
[Class A-_ Notes: _.__%]
[Class A-_ 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.
<PAGE>
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 Receivable 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.
LIQUIDATION PROCEEDS: With respect to a Liquidating Receivable, 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-_ Notes, the Class A-_ Notes, the Class A-_ Notes and the Class A-_
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-_ Notes and the
Class A-_
<PAGE>
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: ___% (i) with respect to any Distribution Date,
until the amount of principal required to be paid on the Class A-_ Notes on such
Distribution Date, if any, has been paid in full and (ii) until the principal
balance of the Class A-_ Notes, the Class A-_ Notes and the Class A-_ Notes has
been paid (or provided for) in full; and _____% 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 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-_ Notes and the Class A-_ Notes have been paid (or provided for) in full
(after giving effect to any amount paid on the Class A-_ Notes and the Class A-_
Notes on such Distribution Date) and the outstanding principal balance of the
Class A-_ Notes (after giving effect to principal payments on such Distribution
Date) exceeds zero, the Noteholders' Principal Distributable Amount for the
Class A-_ 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-_ 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-_ Notes, the Class A-_ Notes, the Class A-_ Notes, the
Class A-_ Notes, the Class A-_ Notes and the Class A-_ Notes.]
NOTE DEPOSITORY: The depository from time to time selected
<PAGE>
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.
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-_ Notes and the Class A-_ Notes) or any Payment
Date (in the case of the Class A- _ Notes, the Class A-_ Notes, the Class A-_
Notes and the Class A-_ 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
<PAGE>
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.
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.
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
<PAGE>
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.
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
<PAGE>
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.
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
<PAGE>
(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.
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-_ 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-_ 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
<PAGE>
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
Services; if rated by Fitch Investors Service, L.P., F-1+ by Fitch Investors
Service, L.P.; 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.
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
<PAGE>
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.
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
<PAGE>
average Delinquency Percentage for the three month periods ending on __________,
199_ and ___________, 199_, 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.
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.
<PAGE>
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.
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.
Exhibit 99.5
Version 2
FORM OF PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 199 )
$----------------
GMAC 199_-__ GRANTOR TRUST
% ASSET BACKED CERTIFICATES, CLASS A
CAPITAL AUTO RECEIVABLES, INC.
SELLER
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
The % Asset Backed Certificates (the "Certificates") will consist of two
classes of Certificates, the Class A Certificates and the Class B Certificates.
Only the Class A Certificates are being offered hereby. The Class A Certificates
will evidence in the aggregate an undivided ownership interest of % in the GMAC
199___ Grantor Trust (the "Trust") to be formed pursuant to a Pooling and
Servicing Agreement to be entered into among Capital Auto Receivables, Inc., as
Seller (the "Seller"), General Motors Acceptance Corporation, as Servicer (the
"Servicer") and The First National Bank of Chicago, as Trustee (the "Trustee").
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables are subordinated to the rights of the Class A
Certificateholders, to the extent described herein.
Principal, and interest to the extent of the Pass Through Rate of _.__%
per annum, will be distributed on the 15th day of each month (or the next
following business day) beginning _________ ,199_ (each a "Distribution Date").
The Trust property 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 ,199_ , security interests in the vehicles
financed thereby and certain other property. The aggregate amount financed under
the Receivables is $________________. The final scheduled Distribution Date on
the Certificates will be _____________, ____.
There is currently no secondary market for the Certificates. The
Underwriters expect to make a market in the Class A Certificates, but are not
obligated to do so. There can be no assurance that a secondary market for the
Class A Certificates will develop or, if it does develop, that it will continue.
The Class A Certificates will not be listed on any securities exchange.
The Class A Certificates initially will be represented by Certificates
registered in the name of Cede & Co., the nominee of DTC. The interests of
beneficial owners of the Class A Certificates will be represented by book
entries on the records of DTC and participating members thereof. Definitive
Certificates will be available only under limited circumstances.
PROCEEDS OF THE ASSETS OF THE TRUST AND CERTAIN LIMITED AMOUNTS ON DEPOSIT IN
THE SUBORDINATION SPREAD ACCOUNT ARE THE SOLE SOURCES OF PAYMENTS ON THE CLASS A
CERTIFICATES. THE CERTIFICATES DO NOT REPRESENT AN INTEREST IN OR OBLIGATION OF,
AND ARE NOT INSURED OR GUARANTEED BY, GENERAL MOTORS ACCEPTANCE CORPORATION,
CAPITAL AUTO RECEIVABLES, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES.
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.
- -------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT SELLER(1)(2)
- -------------------------------------------------------------------------
Per Class A Certificate . % . % . %
Total $ $ $
- -------------------------------------------------------------------------
(1) Plus accrued interest at the Pass Through Rate from 15,
199_.
(2) Before deducting expenses payable by the Seller estimated to be
$----------.
The Class A Certificates are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Class A Certificates will be made in
book-entry form through the facilities of DTC, on or about __________, 199_
against payment therefor in immediately available funds.
The date of this Prospectus Supplement is __________, 199_ .
THE CERTIFICATES OFFERED BY THIS PROSPECTUS SUPPLEMENT CONSTITUTE PART OF A
SEPARATE SERIES OF CERTIFICATES BEING OFFERED BY THE SELLER PURSUANT TO ITS
PROSPECTUS DATED _______, 199_, OF WHICH THIS PROSPECTUS SUPPLEMENT IS A PART
AND WHICH ACCOMPANIES THIS PROSPECTUS SUPPLEMENT. THE PROSPECTUS CONTAINS
IMPORTANT INFORMATION REGARDING THIS OFFERING WHICH IS NOT CONTAINED HEREIN, AND
PROSPECTIVE INVESTORS ARE URGED TO READ THE PROSPECTUS AND THIS PROSPECTUS
SUPPLEMENT IN FULL. SALES OF THE CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
UNTIL,__________, 199_ ALL DEALERS EFFECTING TRANSACTIONS IN THE OFFERED
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES. THIS
DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>
THE CERTIFICATES
The Certificates are a series of Certificates described in the attached
Prospectus. The Series of Certificates consists of two classes, entitled % Asset
Backed Certificates, Class A (the "Class A Certificates") and % Asset Backed
Certificates, Class B (the " Class B Certificates"). Only the Class A
Certificates are being offered hereby. The Class B Certificates are not being
offered hereby and initially will be held by the Seller. The Certificates will
be issued by the GMAC ____ Grantor Trust (the "Trust") to be formed by Capital
Auto Receivables, Inc. (the "Seller") pursuant to a Pooling and Servicing
Agreement between the Seller, General Motors Acceptance Corporation (the
"Servicer") and The First National Bank of Chicago, as Trustee (the "Trustee"),
which incorporates the GMAC Grantor Trusts Standard Terms and Conditions of
Agreement Effective , 199_ (together, the "Agreement") to be dated as of , 199_
(the "Closing Date"). In addition to the terms and conditions set forth below,
reference is made to the Prospectus for the terms and conditions of the
Certificates.
Aggregate Amount Financed. . . . . . . . . . . . . . $______________
Class A Percentage . . . . . . . . . . . . . . . . . _____ %
Initial Class A Certificate Balance. . . . . . . . . $______________
Class B Percentage . . . . . . . . . . . . . . . . . _____%
Initial Class B Certificate Balance. . . . . . . . . $______________
Pass Through Rate . . . . . . . . . . . . . . . . . _____ %
Cutoff Date . . . . . . . . . . . . . . . . . . . . ______________
Subordination Initial Deposit. . . . . . . . . . . . $ ______________
Minimum Subordination Spread Amount. . . . . . . . . $ ______________
Maximum Subordination Spread Amount. . . . . . . . . $ ______________
Specified Subordination Percentage . . . . . . . . . _____ %
Trigger Subordination Spread Amount. . . . . . . . . $ ______________
Basic Servicing Fee Rate . . . . . . . . . . . . . . _____%
The final Distribution Date, assuming all payments are made on Simple Interest
Receivables on their respective due dates and the Servicer does not exercise its
option to purchase the Receivables as described under the caption "Termination"
in the Prospectus, is expected to be ,199_.
<PAGE>
THE RECEIVABLES POOL
The Receivables to be included in the Receivables Pool related to this Series of
Certificates were selected from the Servicer's portfolio based on several
criteria, including that each such Receivable (i) has a first payment due date
on or after ___________, (ii) has an original term of ___ to _ months, (iii)
provides for finance charges at an annual percentage rate between ___% and ___%,
(iv) as of the Cutoff Date, was not more than __ days past due and (v) satisfies
the other criteria set forth in the Prospectus under the caption "The
Receivables." As of the Cutoff Dates, Scheduled Interest Receivables represented
approximately ___% of the Receivables Pool by aggregate principal balance, with
the remainder being Simple Interest receivables.
The Aggregate Amount Financed under the Receivables is $_____________. The
Receivables Pool has an average annual percentage rate of ____% and a weighted
average remaining maturity of ___months. he composition and distribution by
annual percentage rate of the
Receivables Pool are as set forth in the following tables:*
COMPOSITION OF THE RECEIVABLES POOL
Weighted
Average
Annual Weighted
Percentage Weighted Average
Rate of Aggregate Number of Average Average Remaining
Receivables Amount Contracts Amount Original Maturity
(Range) Financed in Pool Financed Maturity (Range)
- ----------- ---------- ---------- -------- -------- ---------
. % $ $ months months
( % to %) ( to months)
Scheduled
Weighted
Average
Life (1)
---------
months
- ----------
(1) Based on Scheduled Payments due on and after the Cutoff Date and assuming
that no prepayments on the Receivables are made and that all payments on
Simple Interest Receivables are received on their respective due dates.
<PAGE>
Distribution by Annual Percentage Rate of the Receivables Pool
Percentage of
Annual Percentage Number of Amount Aggregate Amount
Rate Range Contracts Financed Financed
- ------------------- ---------- -------- -----------------
---------- --------- -----------------
Total $ %
========== ========= =================
The Receivables Pool includes Receivables originated in __ states and the
District of Columbia. The following table sets forth the percentage of the
Aggregate Amount Financed in the states with the largest concentration of
Receivables. No other state accounts for more than % of the Aggregate Amount
Financed.
Percentage of Aggregate
State(1) Amount Financed
%
- ---------
(1) Based on billing address of the obligors on the Receivables.
Approximately % of the aggregate principal balance of the Receivables,
constituting % of the number of Receivables, as of the Cutoff Date, represent
Receivables secured by new vehicles. The remainder are secured by used vehicles.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is 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
General Motors Acceptance Corporation continues to service). There can be no
assurance that the delinquency, repossession and net loss experience on the
Receivables Pool will be comparable to that set forth below.
<PAGE>
YEARS ENDED DECEMBER 31
--------------------------------------------
1995 1994 1993 1992 1991
--------------------------------------------
NEW AND USED VEHICLE
CONTRACTS
Total Retail Contracts
Outstanding at End of the
Period (in thousands) 3,518 3,892 4,589 5,217 5,777
Average Daily Delinquency
31-60 Days........... 2.75% 2.32% 2.35% 2.43% 2.54%
61-90 Days .......... 0.19 0.12 0.11 0.12 0.14
91 Days or More ..... 0.02 0.02 0.02 0.02 0.02
Percent of Portfolio with
Recourse to Dealers at
End of the Period ... 2.4% 3.6% 4.1% 6.0% 7.0%
Repossessions as a Percent
of Average Number of
Contracts Outstanding 3.07 2.31 2.17 2.41 2.80
Net Losses as a Percent of
Liquidations (2) .... 1.57 0.96 1.03 1.46 1.86
Net Losses as a Percent of
Average Receivables (2) 0.95 0.57 0.64 0.89 1.08
- -----------
(1) Annualized Rate.
(2) Percentages based on gross accounts receivable including unearned
income.
The net loss figures above reflect the fact that General Motors Acceptance
Corporation had recourse to dealers on a portion of its retail instalment sale
contracts. The percentage of aggregate Amount Financed with recourse to dealers
in the Receivables Pool is ___%. General Motors Acceptance Corporation applies
the same underwriting standards to the purchase of contracts without regard to
whether dealer recourse is provided. Based on its experience, General Motors
Acceptance Corporation believes that there is no material difference between the
rates of delinquency and repossession on contracts with recourse against dealers
as compared to contracts without recourse against dealers. However, the net loss
experience of contracts without recourse against dealers is higher than that of
contracts with recourse against dealers because, under its recourse obligation,
the dealer is responsible to General Motors Acceptance Corporation for payment
of the unpaid balance of the contract, provided General Motors Acceptance
Corporation retakes the car from the obligor and returns it to the dealer within
a specified time.
<PAGE>
ERISA CONSIDERATIONS
The Exemption described in the Prospectus under the caption "ERISA
Considerations" refers to the exemption granted to (Prohibited Transaction
Exemption ).
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Seller has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom ________ ,
_________ ,_____________ , are acting as representatives (the
"Representatives"), has severally agreed to purchase from the Seller, the
principal amount of Class A Certificates set forth opposite its name below:
AGGREGATE PRINCIPAL
AMOUNT OF CLASS A
CERTIFICATES
UNDERWRITERS TO BE PURCHASED
------------ -------------------
--------------------
TOTAL..................................... $
====================
The Seller has been advised by the Representatives that the several Underwriters
propose initially to offer the Class A Certificates to the public at the price
set forth on the cover page hereof, and to certain dealers at such price less a
concession not in excess of % of the Class A Certificate denominations. The
Underwriters may allow and such dealers may reallow a concession not in excess
of % of the Class A Certificate denominations to certain other dealers. After
the initial public offering, the public offering price and such concessions may
be changed.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain legal
matters relating to the Certificates will be passed upon for the Underwriters by
Mayer, Brown & Platt. Mayer, Brown & Platt has from time to time represented,
and is currently representing, General Motors Corporation and certain of its
writers and with respect to their unsold allotments or subscriptions.
__________________
Until ________________, all dealers effecting transactions in the Class
A Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus Supplement and the Prospectus to which it
relates. This delivery requirement is in addition to the obligation of
dealers to deliver a Prospectus Supplement and Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
$______________
GMAC GRANTOR TRUSTS
_____% ASSET BACKED
CERTIFICATES, CLASS A
CAPITAL AUTO RECEIVABLES, INC.
SELLER
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
[UNDERWRITERS]
PROSPECTUS SUPPLEMENT
Dated _____________________
affiliates.
--------------------
