AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON ________ , 2000
REGISTRATION NO. 333-10524
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WHOLESALE AUTO RECEIVABLES CORPORATION
(ORIGINATOR OF THE TRUSTS DESCRIBED HEREIN)
DELAWARE 38-3082709
(STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(302-658-7851)
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AGENT FOR SERVICE WITH A COPY TO:
JEROME B. VAN ORMAN JR., VICE PRESIDENT ROBERT L. SCHWARTZ, GENERAL COUNSEL
WHOLESALE AUTO RECEIVABLES CORPORATION WHOLESALE AUTO RECEIVABLES CORPORATION
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202 (313-556-1508) 3031 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined in
light of market conditions.
If the only securities being registered on this Form are being 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, check the following box. [x]
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CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C> <C> <C>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED PER UNIT (2) PRICE (1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------
Asset -Backed
Term Notes...........$ 4,000,000,000 100% $ 4,000,000,000 $ 1,112,000
=====================================================================================================================
(1) Estimated solely for the purpose of calculating the amount of registration fee.
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PURSUANT TO RULE 429 OF THE SECURITIES ACT OF 1933, THE PROSPECTUS WHICH IS
PART OF THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS AND INCLUDES ALL
THE INFORMATION CURRENTLY REQUIRED IN A PROSPECTUS RELATING TO THE SECURITIES
COVERED BY REGISTRATION STATEMENT NO. 33-50323 PREVIOUSLY FILED BY THE
REGISTRANT.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
APPLICABLE STATE.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED [DATE], [YEAR]
SUPERIOR WHOLESALE INVENTORY FINANCING TRUSTS
ISSUER OF THE ASSET BACKED TERM NOTES
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE ___ IN THIS
PROSPECTUS.
The notes issued by any trust do not represent obligations of or interests in,
and are not guaranteed by Wholesale Auto Receivables Corporation, General Motors
Acceptance Corporation or any of their affiliates.
This prospectus may be used to offer and sell term notes only if accompanied by
a prospectus supplement.
EACH TRUST--
o will issue one or more series of term notes, which will be
described in a prospectus supplement;
o will own a revolving pool of wholesale automotive receivables generated
by a portfolio of floor plan financing agreements with retail
automotive dealers; and
o will also issue one or more series of revolving notes and one or more
classes of certificates, but these revolving notes and certificates
will not be sold under this prospectus.
THE TERM NOTES--
o will represent indebtedness of the related trust;
o will be paid only from the assets of the trust and amounts on
deposit in the related reserve funds;
o will represent the right to payments in the amounts and at the
times described in the related prospectus supplement; and
o will benefit from one or more forms of credit enhancement.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THESE TERM NOTES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
[DATE]
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the term notes in two separate
documents:
(1) this prospectus, which provides general information and terms
of the term notes, some of which may not apply to a particular
series of term notes, including your series.
(2) the accompanying prospectus supplement, which will provide
information regarding the pool of receivables held by the
trust and will specify the terms of your series of term notes.
IF THE TERMS OF YOUR SERIES OF TERM NOTES VARY BETWEEN THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement, including the information incorporated
by reference. We have not authorized anyone to provide you with other or
different information. We are not offering the term notes in any state where the
offer is not permitted.
YOU CAN FIND DEFINITIONS OF THE CAPITALIZED TERMS USED IN THIS PROSPECTUS UNDER
THE CAPTION "GLOSSARY OF TERMS" WHICH APPEARS AT THE END OF THIS PROSPECTUS.
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SUMMARY OF TERMS
This Summary of Terms highlights selected information from this document and
does not contain all of the information that you need to consider in making your
investment decision. To understand all of the terms of an offering of the term
notes, read this entire document and the accompanying prospectus supplement
carefully.
THE PARTIES
ISSUER/TRUST
Each Superior Wholesale Inventory Financing Trust will be a Delaware business
trust formed by the seller and the owner trustee. The trust will issue the term
notes. The trust will operate under a trust sale and servicing agreement.
SELLER
Wholesale Auto Receivables Corporation, a wholly-owned subsidiary of GMAC, will
be the seller for the trust.
SERVICER
GMAC, a wholly-owned subsidiary of General Motors Corporation, will be the
servicer for the trust.
INDENTURE TRUSTEE
The prospectus supplement will specify the indenture trustee.
OWNER TRUSTEE
The prospectus supplement will specify the owner trustee.
SECURITIES ISSUED BY A TRUST
TERM NOTES
Each trust will issue one or more series of asset backed term notes. Each trust
may issue additional term notes from time to time after the initial offering of
term notes. Each series of term notes will have a stated principal amount and
will pay interest at a specified rate or rates. Each series of term notes will
have its own interest rate, which may be fixed, variable, contingent or
adjustable or any combination of these characteristics. The prospectus
supplement will specify the interest rate or the method for determining the
interest rate.
OTHER SECURITIES
Each trust will also issue revolving notes and certificates, but this prospectus
will not offer or sell those securities. We use the term NOTES to mean the term
notes and the revolving notes issued by a trust. We use the term SECURITIES to
mean the notes and the certificates issued by a trust.
SUBORDINATION
The certificates will be subordinated to the term notes and the revolving notes.
Term notes may be either senior or equal in priority to revolving notes.
Each trust may also issue subordinated term notes, which would be subordinated
to all other classes of term notes and revolving notes. The prospectus
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supplement will describe the relative priority of the term notes, the revolving
notes and certificates.
PAYMENTS ON THE SECURITIES
INTEREST
The trust will pay interest on the term notes monthly, or with any other
frequency as is specified in the prospectus supplement. The sources of funds
which the trust will use to pay interest will be specified in the prospectus
supplement. Typically, these sources will include:
o interest collections on the receivables
o swap payments that the trust receives
o servicer advances
o available credit enhancement
PRINCIPAL
Ordinarily, principal payments on term notes will occur on one or more planned
dates specified in the prospectus supplement. The prospectus supplement will
specify the sources of funds which the trust will use to pay principal.
Typically, these sources will include:
o all or a portion of the principal
collections on the receivables
o servicer advances
o interest collections remaining after
interest payments
o available credit enhancement The prospectus supplement will also
specify the manner in which the trust will apply available funds toward
principal payments on the term notes. Among the possible ways are the
following:
o a single targeted final payment date, on which the trust repays all
principal at once
o a controlled amortization period, in which the trust repays a
predetermined amount of principal on each planned payment date until
all principal has been repaid
o an index amortization period, in which the trust and investor will
refer to an index to determine the amount of principal that the trust
will repay.
However, it is possible that principal payments will begin earlier than the
planned date or dates specified in the prospectus supplement. If an early
amortization event occurs, the trust will apply all available funds to the
repayment of the outstanding principal and interest on the term notes and the
other securities issued by the trust. This type of event will likely result in
repayment of principal on the term notes earlier than the planned date or dates.
You should be aware, however, that the prospectus supplement may provide that
these funds will be set aside or accumulated for the benefit of the term notes
but not paid until a later date.
ASSETS OF THE TRUST
The primary asset of each trust will be a revolving pool of wholesale
receivables. These pools will arise under floor plan financing areements
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between GMAC and a group of retail automotive dealers franchised by General
Motors. These agreements are lines of credit which dealers use to purchase their
inventory of new and used motor vehicles manufactured by General Motors and
others. We refer to the dealers' obligations under these agreements as
RECEIVABLES.
GMAC will sell the receivables in each trust to the seller, and the seller will
then sell them to the trust. The trust will grant a security interest in the
receivables and the other trust property to the indenture trustee on behalf of
the noteholders. The trust property will also include:
o Security interests in the collateral securing the dealers' obligation
to pay the receivables, which will include vehicles and which may
include parts inventory, equipment, fixtures, service accounts, real
estate and guarantees;
o A basis swap or swaps, currency swap or swaps, interest rate swap or
swaps, or any other swap specified in the prospectus supplement;
o Amounts held on deposit in any reserve fund established for the trust
or in other trust accounts maintained for the trust;
o Any recourse GMAC has against the dealers under the floor plan
financing agreements;
o Some of the rights of the seller under its purchase agreement with
GMAC; and
o Any additional property, or exclusions of the foregoing types of
property, described in the prospectus supplement.
As new receivables arise, the seller will ordinarily transfer them to the trust
on a daily basis. At the same time, prior to the planned date on which funds
will first be set aside for payments on term notes, the trust will ordinarily
pay principal collections on receivables back to the seller. The trust could
also apply the principal collections to pay down the principal balance on the
revolving notes. The trust could also retain principal collections and invest
them in eligible investments, if sufficient new receivables were not available.
However, if an event occurs with respect to the term notes that the prospectus
supplement specifies is a cash accumulation event, the trust will retain all or
a substantial portion of principal collections, even though new receivables are
available to the trust. Rather than transfer these principal collections to the
seller or use them to repay the revolving notes or other series of term notes,
the trust will instead invest them in eligible investments in a cash
accumulation account dedicated to the term noteholders. The trust will continue
to invest these funds in eligible investments until the planned date or dates
for repayment of the term notes, or until any sooner repayment following the
occurrence of an early amortization event that requires repayment of the term
notes.
SERVICING FEES
For each series of notes, the trust will pay the servicer a set monthly fee as
compensation for servicing the receivables.
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TAX STATUS
In the opinion of Kirkland & Ellis, special tax counsel, the term notes will be
characterized as indebtedness for federal income tax purposes.
Each term noteholder, by the acceptance of a term note, will agree to treat the
term notes as indebtedness for federal, state and local income and franchise tax
purposes.
See "FEDERAL INCOME TAX CONSEQUENCES" AND "STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES" in this prospectus concerning the application of federal, state
and local tax laws.
ERISA CONSIDERATIONS
Subject to the considerations discussed under "ERISA CONSIDERATIONS," an
employee benefit plan regulated by the Employee Retirement Income Security Act
of 1974 may purchase the term notes and any subordinated term notes that a trust
may issue. An employee benefit plan should consult with its counsel before
purchasing the term notes.
RATINGS
At least one nationally recognized rating agency will rate all term notes as
investment grade securities.
The prospectus supplement will describe any further required ratings for the
term notes.
We cannot assure you that a rating agency will maintain its rating if
circumstances change. If a rating agency changes its rating, no one has an
obligation to provide additional credit enhancement. A note rating is not a
recommendation to buy the term notes. The rating considers only the likelihood
that the trust will pay interest on time and will ultimately pay principal. The
rating does not consider either the term notes' price, their suitability to a
particular investor, or the timing of principal payments.
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<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the securities.
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SOME RECEIVABLES MAY GMAC and the seller will file financing statements with respect
BECOME UNCOLLECTIBLE IF to each pool of receivables sold to each trust. These financing
OTHER PARTIES ESTABLISH statements perfect the security interests that the seller and the
LIENS ON RECEIVABLES THAT trust have in the pool of receivables. However, GMAC will
ARE SUPERIOR TO THE serve as the custodian of the receivables and will not physically
TRUST'S, WHICH COULD DELAY segregate or mark the receivables from other GMAC receivables
PAYMENT ON YOUR TERM to indicate that they have been sold to the trust. Instead the
NOTES. receivables will be held as discussed in the section in this
prospectus titled "THE TRANSFER AND
SERVICING AGREEMENTS--SALE AND ASSIGNMENT
OF RECEIVABLES AND COLLATERAL SECURITY."
</TABLE>
It is possible that another party could
acquire an interest in the receivables
superior to the trust's interest. This
would happen if the other party purchases
or takes a security interest in the
receivables:
o for value
o in the ordinary course of business
and
o without actual knowledge of the
seller's or the trust's interest.
When a previously secured vehicle is sold
or leased, and the proceed of that sale of
lease include chattel paper -- as with most
retail instalment contracts -- then a party
who buys that chattel paper may have an
interest in the receivable that is senior
to the trust's interest. This may result in
delay or reduction of payments on the term
notes. This is described further in the
section of this prospectus titled "LEGAL
ASPECTS--TRANSFER OF RECEIVABLES."
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SOME RECEIVABLES MAY A dealer who purchases financed vehicles gives GMAC a
BECOME UNCOLLECTIBLE IF security interest in those vehicles. When a financed
vehicle is DEALERS MAKE SALES OUT OF sold or leased, GMAC's security interest in
the vehicle will TRUST, WHICH COULD DELAY generally terminate. A sale out of
trust occurs when a dealer PAYMENT ON YOUR TERM sells or leases a vehicle but
fails to pay GMAC the amount owed NOTES on the receivable for that vehicle. If
this happens, GMAC will
no longer be able to look to that vehicle
as security for the receivable. This may
impair GMAC's ability to collect the
receivable, in which case you might
experience reductions or delays in payments
on your term notes.
IF GMAC FILES FOR If GMAC files for bankruptcy under the
BANKRUPTCY YOU COULD federal bankruptcy code or any state
EXPERIENCE REDUCTIONS insolvency laws, a court may:
AND DELAYS IN PAYMENTS o consolidate the assets and
ON YOUR TERM NOTES. liabilities of GMAC with those of
the seller
o decide that the sale of the
receivables to the seller was not
a "true sale"
o disallow a transfer of receivables
prior to the bankruptcy.
The result of this court ruling could be
that the receivables become part of GMAC's
bankruptcy estate. However, in the opinion
of Kirkland & Ellis, our special counsel,
in a correctly decided case, a court will
not take these actions. Nonetheless, if
that were to happen, you might experience
reductions or delays in payments on your
term notes. In addition, tax or other liens
might have priority over the trust's
interest. For a more detailed discussion of
this risk, see "LEGAL ASPECTS--MATTERS
RELATING TO BANKRUPTCY" in this prospectus.
In addition, if GMAC or General Motors
files for bankruptcy under the federal
bankruptcy code or any state insolvency
laws, the GM-franchised dealers who are
obligated to make payments on the
receivables might respond by delaying or
withholding payments on the receivables.
They might do this even though they have no
legal or contractual justification to stop
payments. The result might be that you
experience reductions or delays in payments
on your term notes.
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THE TRUST IS DEPENDENT ON GMAC makes loans to GM-franchised dealers
GMAC TO GENERATE NEW to finance their wholesale automobile
RECEIVABLES; WITHOUT NEW purchases, and these loans generate
RECEIVABLES, THE TRUST MAY receivables. GMAC has in the past provided
BE UNABLE TO MAKE financial assistance to dealers, including
PAYMENTS ON THE TERM capital contributions in the form of
NOTES. minority equity investments. GMAC must be
able to generate new receivables in order
to meet the trust's obligations to pay
interest and principal on the securities.
GMAC does not guarantee that it will
continue to generate receivables at
historical rates, and the following events
could negatively impact GMAC's ability to
generate new receivables:
o A decline in the manufacture and
sale of GM automobiles and light
trucks due to an economic
downturn, a labor disruption,
competitive pressure, or any other
factors
o A change in GM's vehicle
distribution practices
o A change in dealer inventory
management practices
o A change in the interest rates
charged by GMAC to dealers
o A change in the amounts of the
credit lines offered by GMAC to
dealers
o A change in the terms offered by
GMAC to dealers
o Defaults on dealers accounts
o Termination of dealer franchises
o Dealers filing for bankruptcy
o A change in other financial
support offered by GMAC to dealers
o Seasonal fluctuations in the sale
and leasing of vehicles
If GMAC generates new receivables at a
lower rate than it has done in the past,
you might experience reductions or delays
in payments on your term notes. The payment
reductions or delays may reflect the
decrease in receivables.
If an auto maker terminates a dealer
franchise, GM is obligated to repurchase
most new vehicles from that dealer. If GMAC
or another creditor forecloses on a
dealer's property, GM has the option, but
not the obligation, to repurchase the
dealer's new, current model, undamaged
vehicles at invoice price. If GM exercises
this option, then the proceeds of the
purchase will generally be available to pay
on the receivables.
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COLLECTIONS FROM DEALERS The trust's ability to make payments on the
IS GENERALLY THE TRUST'S term notes generally depends on collections
The ONLY SOURCE OF FUNDS TO from dealers on the receivables. The
MAKE PAYMENTS ON THE prospectus supplement will describe past
TERM NOTES patterns of dealer payments on similar
receivables. However, we do not guarantee
that dealers will pay on the receivables at
the same rate they have in the past or in
any other pattern.
No one can be certain of when dealers will
sell and lease vehicles. The timing of
sales depends on many economic and social
factors that are beyond the control of
GMAC, the seller and the trust. Sales
incentive programs and financing incentive
programs of General Motors and other
vehicle manufacturers also affect the sale
and lease of vehicles.
If the dealers' ability to pay on the
receivables declines for whatever reason,
you might experience reductions or delays
in payments on your term notes.
GMAC AND THE SELLER DO GMAC, the seller and their respective
NOT GUARANTEE PAYMENTS affiliates are generally not obligated to
ON THE RECEIVABLES OR THE to make any term note payments to you, and
TERM NOTES, BUT IN LIMITED they do not guarantee payments on the
CIRCUMSTANCES GMAC receivables and warranties about the
MAY BE REQUIRED TO characteristics of the receivables, and
REPURCHASE RECEIVABLES GMAC will then assign those representations
warranties to the trust. If GMAC branches
the receivables, the trust may require GMAC
to repurchase the applicable receivables
from the trust.
If GMAC fails to repurchase those
receivables, you might experience
reductions or delays in payments on your
term notes.
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THE TRUST HAS LIMITED The only significant assets or sources of
ASSETS: THE RECEIVABLES funds any trust will have will be its
AND ANY FORMS OF CREDIT receivables, its rights in any reserve
ENHANCEMENT fund, or other rights or credit
enhancements that the related prospectus
supplement will specify. The term notes
will only represent interests in the trust
related to those term notes. Neither GMAC,
the seller, the trustee, any of their
affiliates nor any other person nor entity
will insure or guarantee the term notes,
except as described in the related
prospectus supplement.
You must rely primarily on payments on the
related receivables and on the reserve fund
as the repayment sources of your term
notes. In addition, you may have to look to
the proceeds from the repossession and sale
of collateral which secures defaulted
receivables and the proceeds from any
recourse against dealers under the
financing agreements. If these sources are
insufficient, you might experience
reductions or delays in payments on your
term notes. For further detail please see
the section in this prospectus titled "THE
TRANSFER AND SERVICING
AGREEMENTS--LIQUIDITY AND CREDIT SUPPORT"
and "LEGAL ASPECTS."
YOU MAY FIND A LIMITED The underwriters may assist you in
MARKET FOR ANY RESALE OF reselling the term notes, but they are not
THE TERM NOTES required to do so. A secondary market for
any term notes may not develop. If a
secondary market does develop, it might not
continue or it miht not be sufficiently
liquid to allow you to resell any of your
term notes.
THE RATINGS ON THE TERM The term notes for each trust will be
NOTES ARE NOT issued only if they receive the required
RECOMMENDATIONS; THEY rating. A security rating is not a
MAY CHANGE OR BE recommendation to buy, sell or hold the
WITHDRAWN the term notes. Rating agencies may revise
the ratings or withdrawn them at any time.
Ratings on the term notes do not address
the timing of disributions on principal on
the term notes prior to the date specified
in the prospectus supplement as the rated
final maturity date. A withdrawal or lower
of rating of the term notes may impact the
value of your term notes and affect their
marketability.
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THE SERVICER
GMAC, a wholly-owned subsidiary of General Motors, was incorporated in
1919 under the New York Banking Law relating to investment companies. GMAC
relinquished this status and became a Delaware corporation on January 1, 1998.
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 are also 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 and mortgage banking and investment services.
The principal business of GMAC and its subsidiaries is to:
o finance the acquisition and resale by franchised General
Motors dealers of various new automotive and nonautomotive
products manufactured by General Motors or some of its
subsidiaries and associates, and
o acquire from these dealers, either directly or indirectly,
instalment obligations covering retail sales and leases of new
General Motors and other manufacturers' products and used
units of any make.
o In addition, GMAC also finances the acquisition of new
products of other manufacturers and leases motor vehicles and
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).
THE SELLER
Wholesale Auto Receivables Corporation, the SELLER, a wholly-owned
subsidiary of GMAC, was incorporated in the State of Delaware on November 24,
1992. The seller is organized for the limited purposes of purchasing receivables
from GMAC, transferring these 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 (Tel. No. 302-658-7581).
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 will result in consolidation of the seller's
assets and liabilities with GMAC's. These steps include creating the seller as a
separate, limited-purpose subsidiary pursuant to a certificate of incorporation
containing a number of limitations. These limitations include restrictions on
the nature of the seller's business and a restriction on the seller's ability
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to commence a voluntary case or proceeding under any insolvency law without the
unanimous affirmative vote of all of its directors. Under some circumstances,
the seller is required to have at least one director who qualifies under its
by-laws as an independent director. In addition, under each trust agreement, the
trust, the owner trustee on the trust's behalf and the related
certificateholders and certificate owners, by accepting the related certificates
or an interest therein, 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 preceding under any
insolvency law.
THE TRUSTS
GENERAL; THE TRUST ESTATE
In exchange for the securities to be issued by a trust on the INITIAL
ISSUANCE DATE for those securities, the seller will establish each trust by
selling, transferring and assigning to each trust, without recourse, the
seller's right, title and interest in, to and under:
o the Eligible Receivables existing in each dealer account in
the related pool of accounts on the date on which the trust
issues its first series of term notes and the Eligible
Receivables generated in each dealer account in the pool of
accounts from time to time thereafter during the term of the
trust,
o Collections on these receivables and
o the related Collateral Security.
GMAC will retain the Retained Property, and under each trust sale and
servicing agreement, the seller will also sell, transfer and assign to the
related trust the seller's rights and remedies under the related pooling and
servicing agreement associated with the related receivables. Unless the related
prospectus supplement states otherwise, each trust's assets will also include
one or more interest rate swaps and funds on deposit in some of the bank
accounts of the trust.
Each DEALER ACCOUNT is an individual line of credit or related lines of
credit represented by a revolving dealer floor plan financing agreement extended
or maintained by GMAC to a United States corporation or other entity or person
engaged generally in the business of purchasing vehicles from a manufacturer or
distributor thereof and holding the vehicles for sale or lease in the ordinary
course of business. The POOL OF ACCOUNTS is comprised of all dealer accounts
identified on the Schedule of Accounts as amended and supplemented from time to
time pursuant to the related pooling and servicing agreement and trust sale and
servicing agreement.
Pursuant to each trust sale and servicing agreement, the seller will
have the limited right from time to time to designate additional dealer accounts
to be included in the related pool of accounts and from time to time to
designate the dealer accounts to be removed from that pool of accounts.
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Once a dealer account is so designated for removal, or if a dealer account
ceases to be an Eligible Account, the receivables originated thereafter in that
dealer account will not be transferred to the trust. See "THE TRANSFER AND
SERVICING AGREEMENTS--ADDITION AND REMOVAL OF ACCOUNTS" in this prospectus.
With respect to each trust and to the extent specified in the related
prospectus supplement, interest rate cap or swap agreements, cash collateral
accounts and other credit, liquidity and other enhancement arrangements may be
held by the owner trustee or the indenture trustee for the benefit of holders of
any securities. These items may be included as assets of a trust or may be held
outside of a trust. Arrangements for the benefit of holders of one series or
class of securities of a trust may not be available to the holders of other
series or classes of the same trust.
The principal offices of each trust will be specified in the related
prospectus supplement.
CAPITALIZATION OF THE TRUST
Prior to each trust's initial issuance date, the trust will have no
assets or liabilities. No trust is expected to engage in any activities other
than
(1) acquiring, managing and holding
(a) the related receivables
(b) other assets contemplated in this document and in the
related prospectus supplement and
(c) the proceeds from the assets in paragraphs (a) and
(b);
(2) issuing securities; and
(3) making payments and distributions on those securities and
related activities.
No trust is expected to have any source of capital other than its
assets and any related credit, liquidity or other enhancement arrangement.
With respect to each trust, on the related initial issuance date, the
trust is expected to issue one or more series of term notes, one or more series
of revolving notes and one or more classes of certificates, all as further
described herein and in the prospectus supplement related to any term notes
offered hereby. See "THE REVOLVING NOTES" and "THE CERTIFICATES" in this
prospectus. From time to time thereafter, the trust may issue additional series
of notes and additional certificates. See "THE TRANSFER AND SERVICING
AGREEMENTS--ADDITIONAL ISSUANCES; CHANGES IN MAXIMUM REVOLVER BALANCE" in this
prospectus. The related prospectus supplement will set forth the pro forma
capitalization of a trust at the time of the issuance of any term notes. The
certificates will represent the equity in each trust. The related prospectus
supplement will set forth the portion of the certificates issued on the
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related initial issuance date. To the extent applicable, the related prospectus
supplement will also set forth the portion of the certificates issued since the
related initial issuance date. The seller or its affiliates may retain all or a
portion of the certificates by or they may be sold to third party investors that
are unaffiliated with the seller, GMAC and the trust.
THE OWNER TRUSTEE
The related prospectus supplement will specify the owner trustee for
each trust. The owner trustee's liability in connection with the issuance and
sale of the securities is limited solely to the express obligations of that
owner trustee set forth in the related trust agreement. An owner trustee may
resign at any time, in which event GMAC as servicer, or a successor servicer,
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 these 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.
USE OF PROCEEDS
Unless the related prospectus supplement states otherwise, the net
proceeds to be received by the seller from the sale of the securities will be
applied to purchase receivables from GMAC.
THE DEALER FLOOR PLAN FINANCING BUSINESS
GENERAL
The dealer accounts are individual lines of credit represented by
revolving dealer floor plan financing agreements extended or maintained by GMAC
to United States dealers. The lines of credit for all these dealers constitute
the U.S. PORTFOLIO. Dealers use funds loaned under these arrangements, which are
known generally as "wholesale" or "floor plan" financing, primarily to finance
new and used motor vehicles manufactured or distributed by General Motors and
other motor vehicle manufacturers and distributors pending sale or lease to the
ultimate customer. In general, each receivable generated in a dealer account is
secured by all vehicles owned by the related dealer and, in some instances, by
other collateral security owned by that dealer. GMAC services the U.S. portfolio
through its administrative office located in Detroit, Michigan and through a
network of branch offices located throughout the United States.
General Motors vehicles for which GMAC provides wholesale financing
include vehicles manufactured under the Buick, Cadillac, Chevrolet, Oldsmobile,
Pontiac, GMC and Saturn trademarks. GMAC also extends credit to dealers
affiliated with General Motors dealers that operate franchises for other motor
vehicle manufacturers.
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The U.S. portfolio generally includes two types of credit lines or
accounts:
o credit lines or accounts under which advances are made to
finance automobiles and trucks
o credit lines or accounts under which advances may be made to
finance vehicles intended for sale to fleet customers,
generally in lots of more than 10
For purposes of each trust, fleet accounts are not Eligible Accounts and, within
an Eligible Account, an advance must be made against a vehicle and satisfy other
criteria to be an Eligible Receivable.
GMAC categorizes the vehicles it finances as new vehicles, used
vehicles or auction vehicles. Currently, new vehicles consist of vehicles of any
model year that are untitled and generally have been driven less than 200 miles,
excluding any auction vehicles. GMAC classifies auction vehicles as those
vehicles which are purchased at a closed auction conducted by General Motors or
others. In states where demonstration cars must be titled, vehicles are
generally considered new vehicles if driven less than 200 miles. Used vehicles
consist of auction vehicles and vehicles of any model year which have been
previously titled, other than demonstration vehicles described above. The
categorization of new vehicles, used vehicles and auction vehicles may change in
the future based on the GMAC's practices and policies.
CREATION OF RECEIVABLES
GMAC makes advances to dealers in the U.S. portfolio in an amount equal
to 100% of the wholesale invoice price of new vehicles, which includes
destination and other miscellaneous charges and, with respect to vehicles
manufactured by General Motors and other motor vehicle manufacturers, a price
rebate from the manufacturer to the dealer in varying amounts as a percentage of
the invoice price. This price rebate is known as a HOLDBACK. Holdbacks on
General Motors- manufactured vehicles sold or leased by a dealer are generally
returned to the dealer by General Motors on a monthly or quarterly basis,
depending on the dealer's arrangements with General Motors. For purposes of each
trust, a receivable in respect of a new vehicle is originated by GMAC on the
date on which interest begins accruing on that receivable on or following the
estimated delivery date of the vehicle to the dealer. This date is approximately
concurrent with the receipt of the vehicle by the dealer.
The amount advanced for a used vehicle, other than an auction vehicle,
is generally up to 90% of the wholesale book value for the vehicle as set forth
in a used vehicle wholesale guide book for the region in which the dealer is
located. The amount advanced for an auction vehicle is generally 100% of the
auction purchase price, including auction fees. Used vehicle receivables are
originated by GMAC on the date on which funds are actually advanced to a dealer.
Once a dealer has commenced the floor plan financing of vehicles
through GMAC, GMAC will finance virtually all purchases of new vehicles by that
dealer from the applicable manufacturer or distributor. GMAC's credit guidelines
require that advances to finance used vehicles be approved
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on a unit by unit basis. GMAC may limit or cancel a dealer's floor plan
financing arrangements at its discretion, including under the following
circumstances:
o the dealer has exceeded the credit guidelines set by GMAC
o the dealer is experiencing financial difficulties
o the dealer is experiencing a general deterioration in its
creditworthiness
See "DEALER STATUS; REALIZATION ON COLLATERAL SECURITY" below.
CREDIT UNDERWRITING PROCESS
GMAC extends credit to dealers through established lines of credit. A
dealer requesting a new credit line must apply to a GMAC branch office.
The local branch office investigates the dealer by
o reviewing bank references and credit reports,
o if the dealer is an existing dealer, reviewing credit reports
from the dealer's current financing source,
o evaluating marketing capabilities,
o evaluating financing resources,
o evaluating credit requirements, and
o evaluating the dealer's current state of operations and its
management.
The local branch office prepares a written recommendation either
approving or disapproving the dealer's request. Depending on the size of the
requested credit line and the financial profile of the dealer, the local branch
office transmits this recommendation with the requisite documentation to the
appropriate office. In some cases, the local branch office may contact GMAC's
executive offices for final approval or disapproval. GMAC generally applies the
same underwriting standards for dealers franchised by General Motors as for
dealers franchised by other motor vehicle manufacturers.
Upon approval, a dealer executes financing agreements with GMAC and, in
the case of General Motors franchised dealers, General Motors. These agreements
evidence the debt and provide GMAC a security interest in the vehicles to be
financed and in other collateral. The vehicles are required to be insured
against comprehensive loss or damage.
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The size of a credit line offered to a dealer, which is expressed in
terms of number of vehicles or units, is based upon a number of factors,
including the dealer's sales record or expected annual sales and the dealer's
net worth. Generally, a credit line for new vehicles is intended to be an amount
sufficient to finance a 60-90 day supply and for used vehicles is generally an
amount sufficient to finance a 30-60 day supply. As described below, the credit
lines establish guidelines, not limits, which dealers may exceed from time to
time.
COLLATERAL SECURITY
GMAC takes a first priority perfected purchase money security interest
in the vehicles it finances for a dealer. Generally, the security interest in
the vehicle terminates, as a matter of law, at the time of its sale or lease by
the dealer to a retail customer and no longer secures the related receivable or
the credit line, except to the extent of the proceeds from that sale or lease.
In some instances, GMAC may take a security interest in, or a collateral
assignment of, other assets of a dealer, including parts inventory, real estate,
fixtures, tools, equipment, furniture, signs, funds held at GMAC and other
receivables, as security for that dealer's account. From time to time, GMAC also
provides some of its dealers with financing in the form of working capital
loans, real estate financing and equipment loans. In these instances, to secure
the loans, GMAC may take a security interest in assets of the dealer, including,
in some cases, vehicles. GMAC, in its sole discretion, may realize upon
Collateral Security, other than vehicles, for its own benefit in respect of its
loans or advances before this other Collateral Security can be realized upon for
the benefit of the related trust and Securityholders. Because of the subordinate
position of the trust in respect of this other Collateral Security, there is no
assurance that the trust will realize any proceeds in respect of any other
Collateral Security. See "THE TRANSFER AND SERVICING AGREEMENTS--INTERCREDITOR
ARRANGEMENTS" in this prospectus.
DEALER PAYMENT TERMS
GMAC may demand payment of interest and principal on a floor plan loan
at virtually any time. However, unless GMAC terminates the credit line or the
dealer defaults, GMAC generally requires payment of principal in full of the
related loan:
o upon the retail sale or lease of a new vehicle, and
o upon the earlier of (a) an appropriate term established for
each dealership based on risk and exposure of the account or
(b) the retail sale or lease of a used vehicle.
Interest on floor plan loans is generally payable monthly.
GMAC charges dealers interest at a floating rate equal, in most cases,
to the prime rate, as designated by GMAC, PLUS a designated spread above that
prime rate. The "prime rate" is, on any date in a semi-monthly period, the
interest rate designated by GMAC as the effective prime rate for that
semi-monthly period and is based on the prime rate of selected financial
institutions as of the day preceding that semi-monthly period. The actual spread
for each dealer is based on, among other things, competitive factors, the
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amount and status of the dealer's credit lines and various incentive programs.
In some circumstances, under a policy known as Delayed Payment
Privilege, or DPP, GMAC may agree with a dealer not to require payment of
principal promptly upon the sale or lease of the vehicle to a customer. DPP
receivables principally arise from sales to fleet customers under fleet
accounts. For purposes of the trust, fleet accounts are not Eligible Accounts,
and thus DPP receivables will not be transferred to the trust. In some cases, a
dealer will request DPP treatment for receivables originated in an account which
is not a fleet account. For purposes of the trust, if a receivable is subject to
DPP treatment at the time of its origination, that receivable will not be an
Eligible Receivable and therefore will not be transferred to the trust. If an
Eligible Receivable becomes subject to deferred payment after transfer to the
trust, GMAC will be obligated to repurchase that receivable to the extent of the
principal payment so delayed. This repurchase obligation is described in "THE
TRANSFER AND SERVICING AGREEMENTS--REPRESENTATIONS AND WARRANTIES" in this
prospectus.
From time to time, dealers maintain funds with GMAC, which are held for
these dealers for cash management, liquidity and working capital purposes. For
purposes of each trust, the principal balance of receivables with respect to any
dealer on any date is the aggregate principal balance of receivables net of any
amount so held by GMAC on that date.
BILLING AND COLLECTION PROCEDURES
A statement setting forth billing and related account information is
prepared by GMAC and distributed on a monthly basis to each dealer. Interest and
other non-principal charges are billed in arrears and are required to be paid
immediately upon receipt of the bill. Dealers remit payment directly to GMAC's
local operating offices.
DEALER MONITORING
GMAC monitors the level of borrowing under each dealer's account.
Dealers may exceed their stated credit lines from time to time. For example, a
dealer might, prior to a seasonal sales peak, purchase more vehicles than its
existing credit lines would otherwise permit. At any time that a dealer's
balance exceeds its stated credit line, GMAC, after evaluating the dealer's
financial position, may temporarily suspend the granting of additional credit,
increase the dealer's credit line or modify the dealer's credit category. See
"CREATION OF RECEIVABLES" above and "DEALER STATUS; REALIZATION ON COLLATERAL
SECURITY" in this prospectus.
Branch office personnel conduct audits of dealer vehicle inventories on
a regular basis. The timing of audits varies and no advance notice is given to
the audited dealer. Through the audit process, GMAC generally reconciles a
dealer's physical inventory with its records of financed vehicles. Among other
things, audits are intended to determine whether a dealer has sold or leased
vehicles without repaying the related loans as required.
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DEALER STATUS; REALIZATION ON COLLATERAL SECURITY
Each dealer is assigned a credit category of "satisfactory," "limited,"
"programmed" or "no credit" based on various factors, including:
o retail merchandising practices,
o retail and wholesale performance,
o financial outlook, and
o capital sufficiency and credit history with GMAC and others.
Circumstances under which GMAC will classify a dealer in "no credit" status
include a dealer's failure to remit principal or interest payments when due,
notifications of liens, levies or attachments or a general deterioration of the
dealer's financial condition. GMAC generally will not make further advances to a
dealer who has been assigned to no credit status.
GMAC frequently attempts to work with dealers to resolve the
circumstances that lead to programmed and no credit status. If, however, those
circumstances are not resolved, any of the following may occur:
o an orderly liquidation in which the dealer voluntarily
liquidates its inventory through normal sales and leases to
customers;
o a self-help or court-ordered seizure and sale of the dealer's
inventory by GMAC; or
o a voluntary surrender to GMAC and sale of the dealer's
inventory.
GMAC may sell these new vehicle inventories to the related motor
vehicle manufacturer, including under agreements entered into at the time the
credit line was established. In addition, GMAC may work with dealers and, in the
case of General Motors-franchised dealers, General Motors, to find third parties
to purchase troubled dealerships. The proceeds of this sale will be available to
the creditors of the troubled dealership, including GMAC or, if applicable, a
trust. Once liquidation has commenced, GMAC performs an analysis of its position
and writes off any amounts identified at that time as uncollectible. Actual
losses by GMAC may be more or less than the amounts initially written off as
uncollectible. See "THE TRANSFER AND SERVICING AGREEMENTS INTERCREDITOR
ARRANGEMENTS" in this prospectus.
RELATIONSHIP OF THE DEALER FLOOR PLAN FINANCING BUSINESS TO GENERAL MOTORS
General Motors has historically provided financial assistance to
General Motors-franchised dealers from time to time, but has no obligation to do
so. This assistance may take the form of guarantees and agreements to repurchase
inventory. General Motors through various initiatives may also contribute
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capital to some General Motors-franchised dealers in the form of an equity
investment in the dealership.
In addition, General Motors offers financial and sales incentives to
General Motors- franchised dealers through a number of programs. For example,
General Motors currently has a supplemental floor plan assistance program known
as the Wholesale Floor Plan Protection Program. Under this program, General
Motors provides a subsidy to General Motors-franchised dealers to assist these
dealers in making interest payments to financing sources, including GMAC. This
program encourages the purchase of an adequate supply of vehicles by the dealer
to be held in inventory.
The financial assistance and incentives provided by General Motors are
for the benefit of its dealers and do not relieve these dealers from their
obligations to GMAC. These types of assistance and incentives are provided at
the option of General Motors, which may terminate any of these programs in whole
or in part at any time. If General Motors reduced or was unable, or elected not,
to provide this assistance or incentives, the timing and amounts of payments to
GMAC in respect of the its U.S. portfolio may be adversely affected. In
addition, if a dramatic disruption in the supply of General Motors-manufactured
vehicles occurred, the rate of sales of these vehicles would decrease and it is
likely that payment rates and the loss experience of GMAC's U.S. portfolio would
also be adversely affected. A decrease in the rate of sales of General Motors
manufactured vehicles would also slow the addition of new Eligible Receivables
to the trusts. Any event of this type may result in an Early Amortization Event
with respect to one or more trusts.
Under agreements between General Motors and General Motors-franchised
dealers, General Motors has the obligation to repurchase some of the new
vehicles in a dealer's inventory at their invoice price less a specified margin
upon franchise termination. In most cases, General Motors repurchases only
current year new vehicles that are undamaged and unmodified. General Motors also
agrees to repurchase from dealers, at the time of franchise termination, parts
inventory at specified percentages of the current list price. In addition, in
the event GMAC or another creditor foreclosures upon the property of a dealer,
General Motors has the option, which it typically exercises, to purchase that
dealer's new General Motors-manufactured vehicles at invoice price.
LOSS AND AGING EXPERIENCE
Some information regarding loss and aging experience for the
receivables in GMAC's U.S. portfolio will be set forth in the related prospectus
supplement. Because the dealer accounts related to any trust will represent only
a portion of the entire U.S. portfolio, actual loss and aging experience with
respect to the dealer accounts related to any trust may be different from this
information. There can be no assurance that the loss and aging experience of the
receivables in the U.S. portfolio in the future will be similar to the
historical loss and aging experience as set forth in any prospectus supplement.
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THE ACCOUNTS
The receivables of any trust are rights to receive payments on advances
made by GMAC to the related dealers under the dealer accounts included in the
pool of accounts for that trust. The initial pool of accounts related to any
trust will be selected from all of the dealer accounts in the GMAC's U.S.
portfolio that were Eligible Accounts as of the date on which the trust issues
its first series of term notes. Eligible Accounts do not include fleet accounts.
Only Eligible Receivables will be transferred to the related trust. See "THE
TRANSFER AND SERVICING AGREEMENTS--SALE AND ASSIGNMENT OF RECEIVABLES AND
COLLATERAL SECURITY" in this prospectus. Information with respect to the dealer
accounts initially included in the pool of accounts for any trust will be set
forth in the related prospectus supplement.
For each trust, pursuant to the related trust sale and servicing
agreement, the seller will have the limited right to designate from time to time
additional dealer accounts to be included in the pool of accounts. The seller
will have the right to purchase from GMAC the Eligible Receivables then existing
and thereafter arising in those dealer accounts and to sell and assign those
receivables to the trust. See "THE TRANSFER AND SERVICING AGREEMENTS SALE AND
ASSIGNMENT OF RECEIVABLES AND COLLATERAL SECURITY" in this prospectus. In order
to be designated an additional dealer account, among other things, each
additional dealer account must be an Eligible Account. Under the circumstances
specified in the related trust sale and servicing agreement, the seller has the
right to remove dealer accounts from the pool of accounts. If a dealer account
is so designated for removal or ceases to be an Eligible Account, the
receivables originated thereafter in that dealer account will not be transferred
to the trust. See "THE TRANSFER AND SERVICING AGREEMENTS--ADDITION AND REMOVAL
OF ACCOUNTS" in this prospectus.
MATURITY AND PRINCIPAL CONSIDERATIONS
Full amortization of any term notes by the applicable Targeted Final
Payment Date, if any, and the applicable Stated Final Payment Date depends on,
among other things, payments by dealers on receivables, and may not occur if
these payments are insufficient. Because the receivables generally are not paid
prior to the ultimate sale or lease of the underlying vehicle, the timing of
these payments is uncertain. In addition, GMAC cannot assure that it will
generate additional receivables under the dealer accounts, that additional
dealer accounts will be available or added to any pool of accounts or that any
particular pattern of dealer payments will occur.
The amount of new receivables generated in any month and monthly
payment rates on the receivables may vary because of any of the following
factors:
o seasonal variations in vehicle sales and inventory levels
o retail incentive programs provided by vehicle manufacturers
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o incentive programs provided by financing sources and various
other factors affecting vehicle sales generally
Some historical information concerning the monthly payment rates for
the receivables in the U.S. portfolio will be set forth in each prospectus
supplement. There can be no assurance that the rate of principal collections on
the receivables in any trust will be comparable to prior experience.
Full amortization of any term notes by the applicable Targeted Final
Payment Date, if any, and the applicable Stated Final Payment Date may also be
affected by payment requirements for, and allocations to, other series of term
notes and the related revolving notes and certificates.
THE TERM NOTES
GENERAL
With respect to each trust, one or more series of term 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 qualified in its
entirety by reference to all of the provisions of the term notes and the
indenture. Where particular provisions or terms used in the indenture are
referred to, the actual provisions, along with definitions of terms, are
incorporated by reference as part of this summary.
Unless the related prospectus supplement specifies that the term notes
will be issued in definitive form, each series of term notes will initially be
represented by one or more term notes, which will be registered in the name of
Cede & Co., as the nominee of DTC in the United States, or Cedelbank or
Euroclear in Europe, except as set forth below. Unless the related prospectus
supplement states otherwise, term notes will be available for purchase in
denominations of $1,000 and integral multiples thereof in book-entry form only.
Unless and until definitive term notes are issued under the limited
circumstances described herein or in the related prospectus supplement, no term
noteholder will be entitled to receive a physical certificate representing a
term note. Unless otherwise indicated, all references herein to actions by Term
Noteholders refer to actions taken by DTC upon instructions from its
participating organizations, or DTC PARTICIPANTS. All distributions, notices,
reports and statements to term noteholders will be sent to DTC or Cede & Co. as
the registered holder of the term notes, as the case may be, for distribution to
beneficial owners in accordance with DTC's procedures. See "BOOK-ENTRY
REGISTRATION" and "DEFINITIVE TERM NOTES" in this prospectus.
PRINCIPAL AND INTEREST ON THE TERM NOTES
The related prospectus supplement will describe the timing and priority
of payment, seniority, Interest Rate, Targeted Final Payment Date, if any,
Stated Final Payment Date, Payment Period, if any, and the amount of, or method
for, determining payments of principal and interest on a series of term notes.
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The related prospectus supplement will describe whether interest payments on
term notes will be made monthly, quarterly, semi-annually or otherwise. With
respect to each trust, unless the related prospectus supplement states
differently and except for a series of term notes during its Payment Period, if
any, during the Revolving Period, no payments of principal will be made on the
term notes and no distributions of the certificate balance will be made with
respect to the certificates and no amounts will be set aside for that purpose.
During the Payment Period, if any, for a series of term notes, Principal
Collections and other amounts constituting Available Trust Principal, which may
include proceeds from the issuance of additional securities, will be allocated
to principal payments thereon and paid as set forth in the related prospectus
supplement. Any of these principal payments may be due in instalments, may be
limited by a Controlled Deposit Amount, or may be due in a lump sum payment.
During the Wind Down Period and any Early Amortization Period,
Principal Collections and other amounts constituting Available Trust Principal
will be allocated to principal payments on the notes and will be set aside for
that purpose as set forth in the related prospectus supplement. Unless the
related prospectus supplement states otherwise, during the Wind Down Period and
any Early Amortization Period, if and so long as there are any funds on deposit
in the related Reserve Fund, to the extent that it would result in more
principal collections being allocated to the trust than otherwise, Principal
Collections will be allocated to the trust pro rata, based on the aggregate
percentage of all the receivables in the dealer accounts that are Eligible
Receivables as of the commencement of the Wind Down Period or Early Amortization
Period. Alternatively, if an Early Amortization Period commences during the Wind
Down Period, as of the commencement of the Wind Down Period. During the Wind
Down Period, the amount so allocated may, to the extent provided in the related
prospectus supplement, be limited by any applicable Controlled Deposit Amounts.
If an Early Amortization Period commences during any Payment Period or the Wind
Down Period, amounts on deposit in the Note Distribution Account, the Revolver
Distribution Account and the Certificate Distribution Account, if any, will be
paid to holders of securities on the first Distribution Date for the Early
Amortization Period as described in the related prospectus supplement. If the
related prospectus supplement so provides, specified Early Amortization Events
may be designated as a CASH ACCUMULATION EVENT, in which case a CASH
ACCUMULATION PERIOD will commence. During any Cash Accumulation Period,
allocated Principal Collections will be invested in a cash accumulation account
dedicated to the holders of the series of term notes described in the prospectus
supplement until the planned date or dates for repayment of that series of term
notes.
With respect to each trust, unless the related prospectus supplement
states otherwise, principal and interest payments on all series of term notes
will have the same priority of payment. Payments of principal and interest on a
series of term notes may be senior or equivalent to the priority of payments on
the related revolving notes, as described in the related prospectus supplement.
However, this would not be the case in circumstances related to the occurrence
of an Event of Default. To the extent specified in the related prospectus
supplement, payments of principal and interest on the notes will be senior in
priority of payment to the distributions to be made on the related certificates
outstanding from time to time. A series of term notes may be entitled to (1)
principal payments with disproportionate, contingent, nominal or no interest
payment, or (2) interest payments with disproportionate, contingent, nominal
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or no principal payments (STRIP NOTES).
The Interest Rate for each series of term notes issued by a trust may be
o fixed,
o variable,
o contingent,
o adjustable,
o for some series of Strip Notes, an interest rate of zero, or
o any combination of Interest Rate types.
Each series of term notes may also have a different Targeted Final
Payment Date, if any, and Stated Final Payment Date.
The related prospectus supplement will specify the Interest Rate for
each series of term notes, or the initial Interest Rate and the method for
determining subsequent changes in the Interest Rate. One or more series of term
notes of a trust may be redeemable under the circumstances and in the manner
specified in the related prospectus supplement. Unless the related prospectus
supplement states differently, payments of interest on the term notes will be
made prior to payments of principal thereon.
THE INDENTURE
MODIFICATION OF INDENTURE WITHOUT NOTEHOLDER CONSENT. Each trust and
related indenture trustee, on the trust's behalf, may, without consent of the
related noteholders, enter into one or more supplemental indentures for any of
the following purposes:
(1) to correct or amplify the description of the
collateral or add additional collateral;
(2) to provide for the assumption of the notes and the
indenture obligations by a permitted successor to the trust;
(3) to add additional covenants for the benefit of the
related noteholders;
(4) to convey, transfer, assign, mortgage or pledge any
property to or with the indenture trustee;
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(5) 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 of any
supplemental indenture;
(6) to provide for the acceptance of the appointment of a
permitted 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;
(7) to modify, eliminate or add to the provisions of the
indenture in order to comply with the Trust Indenture Act;
(8) to increase the Specified Maximum Revolver Balance in
accordance with the conditions therefor in the related trust sale and
servicing agreement; and
(9) 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 the indenture; provided that any
action specified in this clause (9) does not 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:
(1) change the due date of any instalment of principal of or
interest on any note or reduce the principal amount thereof, the
applicable interest rate 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 in a way that affects the calculation of
the amount of any payment of interest or principal due on any note on
any Payment Date;
(2) impair the right to institute suit for the enforcement of
some of the provisions of the indenture regarding payment;
(3) reduce the percentage of the aggregate principal amount of
the outstanding notes the consent of the holders of which is required
for the supplemental indenture or the consent of the holders of which
is required to waive compliance with provisions of the indenture or of
defaults thereunder and their consequences as provided for in the
indenture;
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(4) modify or alter the provisions of the indenture 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;
(5) 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 trust
estate if the proceeds of the sale would be insufficient to pay the
principal amount and accrued but unpaid interest on the outstanding
notes;
(6) decrease the percentage of the aggregate outstanding
principal amount of the Notes required to amend the sections of the
indenture which specify the applicable percentage of aggregate
outstanding principal amount of the notes necessary to amend the
indenture; or
(7) 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
trust estate or, except as otherwise permitted or contemplated in the
indenture, terminate the lien of the indenture on any of the 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 the related prospectus supplement states differently, EVENTS OF
DEFAULT under the indenture will consist of:
(1) 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;
(2) any failure (a) to make any required payment of principal
on the related 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 this clause (2)(b) materially
and adversely affects the rights of related noteholders, and which
failure in either case continues for 30 days after written notice is
given of the failure (x) to the trust, the seller, or the servicer, as
applicable, by the indenture trustee or (y) to the trust, the seller,
the servicer, as applicable, and the indenture trustee by the holders
of not less than 25% of the principal amount of the related notes;
(3) failure to pay the unpaid principal balance of any
related series of notes by the respective Stated Final Payment Date for
any series; and
(4) specified events of bankruptcy, insolvency or
receivership with respect to the trust.
However, the amount of principal required to be paid to term
noteholders under the related indenture will generally be limited to amounts
available to be deposited therefor in the Note Distribution Account. Therefore,
unless the related prospectus supplement states otherwise, the failure to pay
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principal on a series of term notes will not result in the occurrence of an
Event of Default until the applicable Stated Final Payment Date.
If an Event of Default should occur and be continuing with respect to
the notes of any trust, the related indenture trustee or the holders of a
majority in principal amount of the notes then outstanding, voting together as a
single class, may declare the principal of the notes to be immediately due and
payable. That declaration will constitute an Early Amortization Event. Under
some circumstances, the holders of a majority in principal amount of the notes
then outstanding may rescind the declaration. If this happens, the Revolving
Period will recommence in some circumstances. See "THE TRANSFER AND SERVICING
AGREEMENTS--EARLY AMORTIZATION EVENTS" in this prospectus.
If the notes of any trust are declared due and payable following an
Event of Default with respect thereto, the related indenture trustee may
institute proceedings to:
(1) collect amounts due or foreclose on trust property,
(2) exercise remedies as a secured party,
(3) sell the related trust estate or
(4) elect to have the trust maintain possession of the trust
estate and continue to apply Collections as if there had been no
declaration of acceleration. The indenture trustee could make this
election even though the Early Amortization Period commenced by the
declaration will continue unless the declaration is rescinded.
The indenture trustee, however, is prohibited from selling the receivables held
by the trust following an Event of Default, unless:
(1) the holders of all the outstanding notes of the trust
consent to the sale,
(2) the proceeds of the sale are sufficient to pay in
full the principal of and the accrued interest on the outstanding
securities at the date of the sale or
(3) in some cases, the indenture trustee determines that the
trust estate would not provide sufficient funds on an ongoing basis to
make all payments on the notes as payments would have become due if the
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 principal amount of the notes.
Unless the related prospectus supplement provides otherwise, following a
declaration that the notes of a trust are immediately due and payable,
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(1) noteholders will be entitled to pro rata repayment of
principal on the basis of their respective unpaid principal balances,
and
(2) 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.
Although the indenture trustee must comply with its duties under the
related indenture, if an Event of Default occurs and is continuing with respect
to the notes of any trust, 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 the 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 that
request. As set forth 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. The
holders of a majority in aggregate principal amount of the notes then
outstanding, voting together as a single class, may, in some 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
the notes.
No holder of a note will have the right to institute any proceeding
with respect to the related indenture, unless:
(1) the holder previously has given to the indenture trustee
written notice of a continuing Event of Default,
(2) the holders of not less than 25% in aggregate principal
amount of the outstanding notes, voting together as a single class,
have made written request of the indenture trustee to institute the
proceeding in its own name as indenture trustee,
(3) the holder or holders have offered the indenture trustee
reasonable indemnity,
(4) the indenture trustee has for 60 days failed to institute
the proceeding and
(5) no direction inconsistent with the written request has
been given to the indenture trustee during the 60-day period by the
holders of a majority in aggregate principal amount of the 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 notice of
the Event of Default to each noteholder of the trust within 90 days after it
occurs. Except in the case of a failure to make any required payment of
principal or interest on any note, the indenture trustee may withhold the notice
beyond
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the 90 day period if and so long as it determines in good faith that withholding
the notice is in the interests of the noteholders.
In addition, the indenture trustee and each noteholder and note owner,
by accepting a note, or interest therein, 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 in its individual capacity 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, successors or
assigns 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 Notes
or for the agreements of the related trust contained in the indenture.
COVENANTS. Each indenture provides that the related trust may not
consolidate with or merge into any other entity, unless, among other things
(1) the entity formed by or surviving the consolidation or
merger is organized under the laws of the United States, any state or
the District of Columbia,
(2) the 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,
(3) no Event of Default shall have occurred and be continuing
immediately after the merger or consolidation,
(4) the trust has been advised that the ratings of the related
securities would not be reduced or withdrawn by the rating agencies as
a result of the merger or consolidation and
(5) the trust has received an opinion of counsel to the effect
that the consolidation or merger would have no material adverse tax
consequences to the trust or to any related holder of securities.
Each trust will not, among other things, except as expressly permitted
by the Related Documents:
(1) sell, transfer, exchange or otherwise dispose of any of
the assets of the trust,
(2) other than amounts withheld under the Code or applicable
state law, claim any credit on or make any deduction from the principal
or interest payable in respect of the related notes or assert any claim
against any present or former holder of the notes because of the
payment of taxes levied or assessed upon the trust,
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(3) dissolve or liquidate in whole or in part,
(4) 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 the
indenture except as may be expressly permitted thereby or
(5) 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 trust estate or any part thereof, or
any interest therein or the proceeds thereof.
Except as specified in the related prospectus supplement, no trust may
engage in any activity other than as described above under "THE TRUSTS." No
trust will incur, assume or guarantee any indebtedness other than indebtedness
incurred pursuant to the related notes, the related indenture, or otherwise in
accordance with the related Transfer and Servicing Agreements.
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,
(1) a brief report relating to its eligibility and
qualification to continue as indenture trustee under the related
indenture,
(2) any amounts advanced by it under the indenture,
(3) the amount, interest rate and maturity date of some types
of indebtedness owing by the trust to the indenture trustee in its
individual capacity,
(4) the property and funds physically held by the indenture
trustee, and
(5) 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 notes of any trust upon the delivery of all of
the notes to the related indenture trustee for cancellation or, with
limitations, upon deposit of funds sufficient for the payment in full of all of
the notes with the indenture trustee.
THE INDENTURE TRUSTEE
The indenture trustee for the notes of a trust 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
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trustee if the indenture trustee ceases to be eligible to continue in that
capacity under the indenture, becomes insolvent, or otherwise becomes incapable
of acting. If the indenture trustee is removed, the trust will be obligated to
appoint a successor trustee. The holders of a majority of the aggregate
principal amount of the outstanding notes will also be entitled 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.
REPORTS TO TERM NOTEHOLDERS
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 term noteholders on the Payment Date. To the extent
applicable to each series each statement will include the following information
as to the term notes with respect to the Payment Date or the period since the
previous Payment Date, as applicable:
(1) the amount, if any, of the distribution allocable to
principal on each series of term notes;
(2) the amount, if any, of the distribution allocable to
interest on each series of term notes;
(3) the aggregate outstanding principal balance for each
series of term notes, after giving effect to all payments reported
under (1) above;
(4) the aggregate principal balance of the revolving notes
and the aggregate certificate balance;
(5) if applicable, the amount of outstanding servicer
advances;
(6) the amount of the Monthly Servicing Fee paid to the
servicer with respect to the related Collection Period or Periods, as
the case may be;
(7) the interest rate applicable for the next Payment Date
for any series of term notes with variable or adjustable rates;
(8) the amount, if any, withdrawn from or credited to any
Reserve Fund;
(9) the accumulated interest shortfalls, if any, on each
series or class of securities and the change in that amounts from the
preceding Payment Date;
(10) the Trust Charge-Offs allocated to each series or class
of securities and the change in those amounts from the preceding
Payment Date; and
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(11) the balance of the Reserve Fund, if any, on the relevant
date, after giving effect to changes therein on that date.
Each amount set forth pursuant to subclauses (1), (2) and (9) with
respect to term notes will be expressed as a dollar amount per $1,000 of the
initial principal balance of the term notes.
Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during which any term notes are outstanding, the
indenture trustee will furnish or cause to be furnished to each person or entity
who at any time during the preceding calendar year was a holder of record of a
Term Note -- initially Cede, as the nominee of DTC -- and received any payment
thereon from the trust, a statement containing information for the purpose of
assisting that Noteholders in the preparation of their federal income tax
returns. As long as the holder of record of the term notes is Cede, as nominee
of DTC, beneficial owners of term notes will receive tax and other information
from DTC participants and indirect DTC participants rather than from the
indenture trustee. See "FEDERAL INCOME TAX CONSEQUENCES" in this prospectus.
BOOK-ENTRY REGISTRATION
The Depository Trust Company 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 DTC participants
through electronic book-entries, thereby eliminating the need for physical
movement of certificates. DTC participants include securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
the DTC system also is available to banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC participant,
either directly or through indirect DTC participants.
Unless the prospectus supplement provides otherwise, owners of
beneficial interest in notes (NOTE OWNERS) that are not participants or indirect
participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, term notes may do so only through DTC participants and
through indirect DTC participants. In addition, term note owners will receive
all distributions of principal and interest through DTC participants. Under a
book-entry format, term note owners may experience some delay in their receipt
of payments since payments will be forwarded by the indenture trustee to Cede,
as nominee for DTC. DTC will forward the payments to DTC participants, which
thereafter will forward them to indirect DTC participants or term note owners.
It is anticipated that the only term noteholder of record will be Cede, as
nominee of DTC. Term note owners will not be recognized by the indenture trustee
as term noteholders, as that term is used in the indenture, and term note owners
will be permitted to exercise the rights of term noteholders only indirectly
through DTC and its DTC participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers of term notes
among DTC participants on whose
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behalf it acts with respect to the term notes and to receive and transmit
payments of principal of, and interest on, the term notes. DTC participants and
indirect DTC participants with which term note owners have accounts with respect
to the term notes similarly are required to make book-entry transfers and
receive and transmit the payments on behalf of their respective term note
owners. Accordingly, although term note owners will not possess term notes, the
DTC's rules provide a mechanism by which term note owners will receive payments
and will be able to transfer their interests in term notes.
Because DTC can only act on behalf of DTC participants, who in turn act
on behalf of indirect DTC participants and banks, the ability of a holder to
pledge term notes to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to the term notes, may be limited due
to the lack of a physical certificate for the term notes.
DTC has advised the seller that it will take any action permitted to be
taken by a term noteholder under the indenture or other Related Document only at
the direction of one or more DTC participants to whose accounts with DTC the
term notes are credited. DTC may take conflicting actions with respect to other
undivided interests to the extent that the actions are taken on behalf of DTC
participants whose holdings include the undivided interests.
In addition to holding term notes through DTC participants or Indirect
DTC participants in the United States as described above, holders of term notes
may hold their term notes through Cedelbank or Euroclear in Europe if they are
participants of those systems, or indirectly through organizations which are
participants in those systems.
Cedelbank and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in Cedelbank's and
Euroclear's names on the books of their respective depositories which in turn
will hold those positions in customers' securities accounts in the depositories'
names on the books of DTC.
Transfers between Cedelbank participants, as defined below, and
Euroclear participants, as defined below, will occur in accordance with their
respective rules and operating procedures. Cross- market transfers between
persons holding directly or indirectly through DTC, on the one hand, and
directly or indirectly through Cedelbank participants or Euroclear participants,
on the other hand, will be effected in DTC in accordance with DTC rules on
behalf of the relevant European international clearing systems by its
depositary. Cross-market transactions will require delivery of instructions to
the relevant European international clearing system by the counterparty in the
clearing system in accordance with its rules and procedures and within its
established deadlines. These deadlines will be set in European time. The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedelbank
participants and Euroclear participants may not deliver instructions directly to
the depositories.
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Because of time-zone differences, credits of securities received in
Cedelbank or Euroclear as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and dated the
Business Day following the DTC settlement date. Any credits or any transactions
in securities settled during this processing will be reported to the relevant
Euroclear or Cedelbank participants on that Business Day. Cash received in
Cedelbank or Euroclear as a result of sales of securities by or through a
Cedelbank participant or a Euroclear participant to a DTC participant will be
received with value on the DTC settlement date but will be available in the
relevant Cedelbank or Euroclear cash account only as of the Business Day
following settlement in DTC. For information with respect to tax documentation
procedures, see "FEDERAL INCOME TAX CONSEQUENCES--TAX CHARACTERIZATION AND
TREATMENT OF TERM NOTES--TAX CONSEQUENCES TO FOREIGN NOTEHOLDERS" in this
prospectus.
Cedelbank is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for its Cedelbank
participants and facilitates the clearance and settlement of securities
transactions between Cedelbank participants through electronic book-entry
changes in accounts of Cedelbank participants, thereby eliminating the need for
physical movement of certificates. Transactions may be settled in Cedelbank in
any of 28 currencies, including United States dollars. Cedelbank provides to
Cedelbank participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedelbank interfaces with domestic markets
in several countries. As a professional depository, Cedelbank is regulated by
the Luxembourg Monetary Institute. Cedelbank participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations and may include the underwriters. Indirect access to Cedelbank is
also available to others entities -- i.e., banks, brokers, dealers and trust
companies -- that clear through or maintain a custodial relationship with a
Cedelbank Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for Euroclear
participants and to clear and settle transactions between Euroclear participants
through simultaneous electronic book-entry delivery against payment. This
eliminated the need for physical movement of certificates and any risk from lack
of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 34 currencies, including United States dollars. Euroclear
includes various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. Euroclear is
operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of New
York under contract with Euro-clear Clearance Systems S.C., a Belgian
cooperative corporation. All operations are conducted by Morgan Guaranty, and
all Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with Morgan Guaranty, not with Euro-clear Clearance Systems. Euro-clear
Clearance Systems establishes policy for Euroclear on behalf of Euroclear
participants. Euroclear participants include banks, central banks, securities
brokers and dealers and other professional financial intermediaries and may
include the Underwriters. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear participant, either directly or indirectly.
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Morgan Guaranty Trust Company of New York is the Belgian branch of a
New York banking corporation which is a member bank of the Federal Reserve
System. It is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with Morgan Guaranty
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and the applicable Belgian
law. These laws and procedures govern transfers of securities and cash with
Euroclear, withdrawals of securities and cash from Euroclear, and receipts of
payments with respect to securities in Euroclear. All securities in Euroclear
are held on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. Morgan Guaranty acts under these laws
and procedures only on behalf of Euroclear participants, and has no record of or
relationship with persons holding through Euroclear participants.
Distributions with respect to term notes held through Cedelbank or
Euroclear will be credited to the cash accounts of Cedelbank participants or
Euroclear participants in accordance with the relevant system's rules and
procedures, to the extent received by its depositary. The distributions must be
reported accordance with relevant United States tax laws and regulations. See
"FEDERAL INCOME TAX CONSEQUENCES-- TAX CHARACTERIZATION AND TREATMENT OF TERM
NOTES" in this prospectus. Cedelbank or Morgan Guaranty, as the case may be,
will take any other action permitted to be taken by a term noteholder under the
indenture or other Related Document on behalf of a Cedelbank participant or
Euroclear participant only in accordance with its relevant rules and procedures
and only if its depositary is able to effect that action on its behalf through
DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of term notes among participants of
DTC, Cedelbank and Euroclear, they are under no obligation to perform or
continue to perform these procedures and these procedures may be discontinued at
any time.
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, by
Cedelbank or by Euroclear in Europe, or for maintaining, supervising or
reviewing any records relating to any beneficial ownership interests.
DEFINITIVE TERM NOTES
Unless the related prospectus supplement states otherwise, term notes
will be issued in fully registered, certificated form, or DEFINITIVE TERM NOTES,
to term noteholders or their nominees, rather than to DTC or its nominee, only
if
(1) the administrator advises the indenture trustee in writing
that DTC is no longer willing or able to discharge properly its
responsibilities with respect to the term notes and the trust is unable
to locate a qualified successor,
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(2) the administrator, at its option, elects to terminate the
book-entry system through DTC, or
(3) after the occurrence of an Event of Default or a Servicing
Default, note owners representing beneficial interests aggregating at
least a majority of the outstanding principal amount of the related
term notes 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 note owners.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC will notify the note owners and the indenture trustee of that
occurrence and of the availability of definitive term notes. Upon surrender by
DTC of the definitive certificates representing the term notes and receipt of
instructions for re-registration, the indenture trustee will reissue the related
term notes as definitive term notes to holders thereof.
Payments of principal of, and interest on, the definitive term notes
will thereafter be made in accordance with the procedures set forth in the
indenture directly to holders of definitive term notes in whose names the
definitive term notes were registered at the close of business on the last day
of the preceding month. Those payments will be made by check mailed to the
address of the holder as it appears on the register maintained by the indenture
trustee. The final payment on any definitive term note, however, will be made
only upon presentation and surrender of the definitive term note at the office
or agency specified in the notice of final payment to the holders thereof.
Definitive term notes 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 term notes. 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.
THE REVOLVING NOTES
Each trust will issue one or more series of revolving notes on the
initial issuance date and may issue more series of revolving notes from time to
time thereafter. Each series of revolving notes may have a different Revolver
Interest Rate which may be fixed, variable, contingent, adjustable or any
combination of the foregoing, and a different Targeted Final Payment Date, if
any, and Stated Final Payment Date. With respect to each trust, the outstanding
principal balance of the revolving notes may fluctuate on a daily basis as
Principal Collections on the related receivables not needed for principal
payments or distributions on related term notes or certificates are, at the
discretion of the seller or as otherwise described herein:
(1) allocated to the seller in payment for receivables
purchased by the trust,
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(2) allocated to the Revolver Distribution Account as a
payment of principal on the revolving notes, or
(3) retained as the Cash Collateral Amount.
With respect to each trust, the seller, at its option, may on any day
increase the outstanding principal balance of the revolving notes to fund
purchases of receivables, provided, however, that the Net Revolver Balance may
not at any time exceed the Maximum Revolver Balance. The Specified Maximum
Revolver Balance for a trust will be set forth in the related prospectus
supplement and may be increased or decreased from time to time if a number of
conditions are satisfied. See "THE TRANSFER AND SERVICING AGREEMENTS--ADDITIONAL
ISSUANCES; CHANGES IN MAXIMUM REVOLVER BALANCE" in this prospectus.
Unless the related prospectus supplement provides otherwise, no
additional borrowings will be permitted under any revolving note during the Wind
Down Period or any Early Amortization Period for the related trust. Payments of
principal on revolving notes will be made in the amounts and priority, and at
the times, specified in the related prospectus supplement. One or more series of
revolving notes for any trust may have a Targeted Final Payment Date, if any,
and Stated Final Payment Date or otherwise require principal payments during the
related Revolving Period and may provide for extensions and renewals under some
circumstances. Each revolving note will initially be held by GMAC or the seller,
and the revolving note or an interest therein may be sold by GMAC or the seller
in a private placement to a third-party investor. Thereafter, a revolving note
or an interest therein may be transferred in whole or in part if certain
conditions are satisfied. Any additional borrowings under, and principal
payments on, the revolving notes will be allocated among all outstanding
revolving notes as determined by the seller in its sole discretion. However,
this allocation will depend on any agreements among the seller and any holders
of the revolving notes. The revolving notes are not being offered pursuant to
this prospectus or any related prospectus supplement.
THE CERTIFICATES
With respect to each trust, the certificates will be issued pursuant to
the terms of a trust agreement between the seller and the owner trustee and will
represent the ownership interest in the trust. Certificates will be issued on
the initial issuance date for a trust and may be issued from time to time
thereafter. The certificate rate for the certificates may be fixed, variable,
contingent, adjustable or any combination of the foregoing, and may vary by
class of certificate. The related prospectus supplement will set forth the
amount of, or method for determining, distributions of the certificate balance
and the timing of the distributions, including the Stated Final Payment Date.
Unless the related prospectus supplement provides differently, principal and
interest payments on the notes will be senior to distributions of the
certificate balance and interest on the related certificates. The certificates
are not being offered pursuant to this prospectus or any related prospectus
supplement.
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THE TRANSFER AND SERVICING AGREEMENTS
Except as otherwise specified in the related prospectus supplement, the
following summary describes some of the material terms of:
(1) the pooling and servicing agreement pursuant to which the
seller will purchase Eligible Receivables from GMAC, and the servicer
will agree to service all receivables in the related dealer accounts,
(2) the trust sale and servicing agreement pursuant to which
the trust will acquire those receivables from the seller and agree to
the servicing of the receivables by the servicer,
(3) the trust agreement pursuant to which the trust will be
created and certificates will be issued and
(4) the administration agreement pursuant to which GMAC, as
administrator, will undertake a number of administrative duties with
respect to the trust. Collectively, these agreements will be referred
to as 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.
Upon request of a holder of securities described therein. The seller will
provide a copy of the Transfer and Servicing Agreements. This copy will not
include exhibits. This summary does not purport to be complete and is qualified
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 are incorporated by reference
as part of this summary.
SALE AND ASSIGNMENT OF RECEIVABLES AND COLLATERAL SECURITY
GMAC will sell and assign to the seller, without recourse,
o on the initial issuance date for a trust, its entire interest
in the Eligible Receivables under the dealer accounts included
in the related pool of accounts as of the Initial Cut-Off
Date, and
o on each date on which receivables are originated in a dealer
account in the related pool of accounts, its entire interest
in, all Eligible Receivables created on that date in the
dealer accounts in the related pool of accounts. However, if
GMAC becomes subject to a bankruptcy proceeding, GMAC will not
assign receivables to the seller without approval of the
bankruptcy court.
In each case, GMAC will sell and assign to the seller the related
Collateral Security and the proceeds of all of the foregoing, pursuant to a
pooling and servicing agreement between GMAC and the seller.
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For each trust, on its initial issuance date and on each Receivables
Purchase Date, the seller will transfer and assign to the applicable trust,
without recourse, the Eligible Receivables and the other assets purchased from
GMAC on that date, pursuant to a trust sale and servicing agreement among the
seller, the servicer and the trust. The owner trustee, on behalf of the trust,
together with the indenture trustee with respect to the notes, concurrently with
the initial transfer and assignment to the trust, will execute and deliver to
the seller the related notes and the related certificates to be issued on the
initial issuance date. Unless the related prospectus supplement provides
otherwise, the seller will sell the securities and will apply the net proceeds
received from the sale of the securities to the purchase of the related
receivables from GMAC.
In each pooling and servicing agreement, in connection with the sale of
the related receivables to the seller, GMAC will agree to indicate in its
records that the Eligible Receivables and Collateral Security have been sold to
the seller, and that, upon the execution of a trust sale and servicing
agreement, the seller has sold and assigned that property to the trust. In
addition, GMAC will agree to provide a complete list to the seller showing for
each dealer account to be included in the pool of accounts, as of the Initial
Cut-Off Date, its account number and the outstanding principal balance of
receivables that GMAC represents are Eligible Receivables under that dealer
account. In the related trust sale and servicing agreement, the trust will
accept the designation of GMAC as custodian to maintain possession, as the
trust's agent, of the documents relating to the receivables. GMAC will not
deliver to the seller, the owner trustee or the indenture trustee any records or
agreements relating to the dealer accounts or the receivables. The records and
agreements relating to the dealer accounts and receivables related to any trust
will not be segregated from those relating to other accounts and receivables of
GMAC or otherwise marked to reflect the sale of the receivables therein to the
seller or the subsequent sale to the related trust. This helps to assure uniform
quality in servicing both the receivables related to any trust and the
servicer's own portfolio of receivables, as well as to facilitate servicing and
save administrative costs. However, with respect to each trust, GMAC will file
UCC financing statements with respect to the sale, transfer and assignment of
receivables to the seller and the seller will file UCC financing statements with
respect to the sale, transfer and assignment of the receivables to the trust. In
addition, each trust will file UCC financing statements with respect to the
security interest in the trust's assets granted to the indenture trustee under
the indenture to secure the trust's obligations thereunder. See "LEGAL
ASPECTS--TRANSFER OF RECEIVABLES" in this prospectus. The documents evidencing
the receivables will remain in GMAC's possession and will not be stamped or
otherwise marked to reflect the sale and assignment of the interests in the
receivables to the seller or the trust. As a result of GMAC's continued
possession, if a subsequent purchaser were able to take possession of the
receivables without knowledge of the assignment, and if the receivables are
deemed "chattel paper" under applicable law, the trust's interests in the
receivables could be defeated. See "LEGAL ASPECTS TRANSFER OF RECEIVABLES" in
this prospectus.
With respect to each trust, pursuant to the trust sale and servicing
agreement, as described in "ADDITION AND REMOVAL OF ACCOUNTS" below, the seller
has the limited right to designate from time to time additional dealer accounts
to be included in the related pool of accounts. In connection with any
designation of additional dealer accounts, the seller will purchase from GMAC
the Eligible Receivables in the additional dealer accounts and GMAC will follow
the procedures set forth in the
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preceding paragraph, except that the list will show information for the
additional dealer accounts as of the cut-off date for additional dealer
accounts. The servicer will notify the seller of this cut-off date in writing.
REPRESENTATIONS AND WARRANTIES
In each pooling and servicing agreement, GMAC will represent and
warrant to the seller, among other things, that:
(1) as of the initial issuance date, or, in the case of an
additional dealer account, as of the related cut-off date for
additional dealer accounts, each dealer account or additional dealer
account included in the pool of accounts is an Eligible Account; and
(2) as of the initial issuance date, or, in the case of an
additional dealer account, as of the related cut-off date for
additional dealer accounts, and on each Receivables Purchase Date each
receivable conveyed to the seller on that date that is identified as an
Eligible Receivable is actually an Eligible Receivable.
In the case of an additional dealer account, GMAC will make the above
representations and warranties as of the related cut-off date.
In the related trust sale and servicing agreement, the seller will
assign the representations and warranties of GMAC with respect to the dealer
accounts and the receivables to the trust, and will represent and warrant to the
trust that the seller has taken no action which would cause the representations
and warranties of GMAC to be false in any material respect as of the initial
issuance date, each cut-off date for additional dealer accounts and each
Receivables Purchase Date, as the case may be.
The seller and the servicer may discover that there has been a breach
of a representation or warranty of the seller or GMAC that materially and
adversely affects the trust's interest in a deferred payment receivable. This is
a receivable for which payment has been deferred pursuant to DPP, an instalment
sales program or a similar arrangement. Any receivable affected this way is
referred to as a WARRANTY RECEIVABLE. Unless and to the extent the breach is
cured in all material respects, GMAC or the seller will repurchase a Warranty
Receivable as follows:
(1) if the breach or deferral is a breach of a representation
or warranty of GMAC, the seller and the servicer will use reasonable
efforts to enforce the obligation of GMAC under the pooling and
servicing agreement to pay the related Warranty Payment, as defined
below, and repurchase the receivable or
(2) if the breach or deferral is a breach of a representation
or warranty of the seller, the seller will repurchase the receivable.
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Without limiting the generality of the foregoing, a receivable held by
a trust will not be an Eligible Receivable, and thus will be repurchased if and
to the extent (1) the principal amount thereof is adjusted downward because of a
rebate, refund, credit adjustment or billing error to the related dealer, or (2)
the receivable was created in respect of a vehicle that was refused or returned
by a dealer.
The WARRANTY PAYMENT, which is the price for a repurchase of a Warranty
Receivable by GMAC or the seller will be equal to the principal amount of the
receivable. In the case of a breach or deferral affecting less than the entire
principal amount of a receivable, the Warranty Payment will be to the extent of
the breach or deferral, plus all accrued and unpaid interest thereon through the
date of purchase. The principal portion of the Warranty Payment will be treated
as Trust Principal Collections and the remainder will be included in Interest
Collections. All Warranty Payments will be deposited into the related Collection
Account on the related Distribution Date. The repurchase obligations of the
seller and GMAC constitute the sole remedy available to the securityholders, the
indenture trustee or the owner trustee for any uncured breach or deferral.
In each pooling and servicing agreement, GMAC will also make
representations and warranties to the seller to the effect that, among other
things, as of the closing date for the sale of any securities:
(1) GMAC is duly incorporated and in good standing, it has the
authority to consummate the transactions contemplated by the pooling
and servicing agreement, and the related Transfer and Servicing
Agreements constitute legal, valid and binding obligations of GMAC; and
(2) the transfer of the receivables and the related Vehicle
Collateral Security, pursuant to the related pooling and servicing
agreement constitutes a valid sale, transfer and assignment to the
seller of all right, title and interest of GMAC therein, whether then
existing or thereafter created, and the proceeds thereof.
If the breach of any of the representations and warranties described in
this paragraph results in the obligation of the seller under the related trust
sale and servicing agreement to purchase the receivables and the related
Collateral Security as described below, GMAC will be obligated to repurchase the
property for an amount equal to the Reassignment Amount. In other circumstances
in which the seller is obligated under a trust sale and servicing agreement to
purchase the property, GMAC will not be obligated to repurchase the property.
In each trust sale and servicing agreement, the seller will also make
representations and warranties to the related trust to the effect that, among
other things, as of the closing date for the sale of any securities:
(1) the seller is duly incorporated and in good standing, it
has the authority to consummate the transactions contemplated by the
trust sale and servicing agreement, and the
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trust sale and servicing agreement constitutes a legal, valid and
binding agreement of the seller; and
(2) the transfer of the receivables pursuant to the trust sale
and servicing agreement constitutes a valid sale, transfer and
assignment to the trust of all right, title and the interest of the
seller in the receivables and the related Collateral Security, whether
then existing or thereafter created, and the proceeds thereof.
With respect to each trust, if the breach of any of the representations
and warranties described in this paragraph has a material adverse effect on the
interests of the securityholders, then any of the indenture trustee, the owner
trustee or the holders of the outstanding securities evidencing not less than a
majority of the outstanding principal amount of the notes and a majority of the
Voting Interests of all outstanding certificates, by written notice to the
seller, may direct the seller to accept the reassignment of all receivables and
the related Collateral Security within 60 days of the notice, or within the
longer period specified in the notice. The seller will be obligated to accept
the reassignment and pay the Reassignment Amount on a Distribution Date
occurring within the applicable period.
The reassignment will not be required to be made, however, if at or
prior to the end of the applicable period, the representations and warranties
are then true and correct in all material respects and any material adverse
effect caused by the breach has been cured. With respect to each trust, the
payment of the Reassignment Amount for all outstanding securities will be
considered as payment in full for all receivables and the related Collateral
Security. The obligation of the seller to pay the Reassignment Amount as
described above will constitute the sole remedy respecting a breach of the
representations and warranties available to the trust, the securityholders, the
owner trustee or indenture trustee. It is not expected that the seller will have
significant assets other than its rights under the pooling and servicing
agreement and the trust sale and servicing agreement with respect to each trust.
In each pooling and servicing agreement, GMAC will covenant that GMAC
will not sell, pledge, assign or transfer any interest in any Eligible
Receivables or the related Vehicle Collateral Security, unless required to by
agreements with other persons or entities. An exception to this covenant will be
made for the sale and conveyances under the pooling and servicing agreement and
the interests created under the trust sale and servicing agreement, or as
otherwise permitted by the pooling and servicing agreement.
ADDITION AND REMOVAL OF ACCOUNTS
With respect to each trust, and taking into account the conditions
described below, under the pooling and servicing agreement, GMAC may offer to
designate, and the seller may request the designation of, additional dealer
accounts to be included in the pool of accounts and, under the trust sale and
servicing agreement, the seller has the right to designate from time to time
additional dealer accounts to be included in the related pool of accounts.
Unless the related prospectus supplement
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provides otherwise, in order to add any additional dealer account to the related
pool of accounts, the following conditions, among others, must be satisfied:
(1) each additional dealer account must be an Eligible
Account;
(2) the seller must represent and warrant that the inclusion
of the additional dealer accounts in the related pool of accounts will
not, in the reasonable belief of the seller, cause an Early
Amortization Event to occur; and
(3) unless the related prospectus supplement provides
otherwise, each of the rating agencies rating the notes must have
provided written confirmation that the addition will not result in a
reduction or withdrawal of the rating of any outstanding related
securities.
On the date any additional dealer account is added to the pool of
accounts, all Eligible Receivables then in that dealer account will be sold by
GMAC to the seller and will be transferred by the seller to the trust.
With respect to each trust, even though each additional dealer account
must be an eligible account, additional dealer accounts may not be of the same
credit quality as the initial dealer accounts because, among other things, those
dealer accounts may not have been part of GMAC's U.S. portfolio on the Initial
Cut-Off Date. Additional dealer accounts may have been originated at a different
time using credit criteria different from those applied to the initial dealer
accounts.
With respect to each trust, upon the satisfaction of the conditions
specified in the trust sale and servicing agreement, the seller will have the
right to remove dealer accounts from the pool of accounts. To so remove dealer
accounts, after proper notice, the seller, or the servicer on its behalf must,
among other things:
(1) furnish to the owner trustee a list of the SELECTED DEALER
ACCOUNTS to be so removed from the pool of accounts specifying for each
selected dealer account to be removed, its account number and the
aggregate balance of Eligible Receivables in that dealer account;
(2) represent and warrant that the removal of the selected
dealer accounts will not, in the reasonable belief of the seller,
result in the occurrence of an Early Amortization Event; and
(3) represent and warrant that the seller and the servicer
have not received notice from any rating agency that the removal will
result in a reduction or withdrawal of the rating of any of the
outstanding related securities.
In addition, if a dealer account in the pool of accounts ceases to be
an eligible account, that dealer account will be deemed a selected account to be
removed on that date. In either case, receivables arising thereafter in the
selected account selected for removal will not be transferred to
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the trust. Receivables in any dealer account transferred to the trust prior to
that date and Collections thereon will continue to be assets of the trust.
Unless the related prospectus supplement states otherwise, the servicer will
allocate all Principal Collections on receivables in a Selected Account to the
oldest receivables in that dealer account. A selected account will be deemed
removed from the pool of accounts on the date on which the balance of all
receivables in that dealer account held by the trust becomes zero.
BANK ACCOUNTS
With respect to each trust, the servicer will establish and maintain
several DISTRIBUTION ACCOUNTS: the COLLECTION ACCOUNT, the NOTE DISTRIBUTION
ACCOUNT, the REVOLVER DISTRIBUTION ACCOUNT and the CERTIFICATE DISTRIBUTION
ACCOUNT. The prospectus supplement may specify also that the servicer will
establish and maintain a SWAP DISTRIBUTION ACCOUNT."
For each trust, funds in the Collection Account, the Note Distribution
Account, the Revolver Distribution Account and the Reserve Fund, if any, and
other accounts identified as these accounts in the related prospectus supplement
- - collectively, the DESIGNATED ACCOUNTS- and the Certificate Distribution
Account will be invested as provided in the trust sale and servicing agreement
in ELIGIBLE INVESTMENTS, which are specified categories of marketable
securities. Eligible investments will generally be limited to investments
acceptable to the rating agencies as being consistent with the rating of the
related securities.
Except as described below or in the related trust sale and servicing
agreement, eligible investments will be limited to obligations or securities
that mature on or before the next Distribution Date or, in the case of the Note
Distribution Account, the date of the next payment with respect to the term
notes. To the extent permitted by the rating agencies rating the notes, funds in
any Reserve Fund and other cash collateral accounts, if any, may be invested in
related term notes that will not mature prior to the date of the next payment or
distribution with respect to the term notes. Except as otherwise specified in
the related prospectus supplement, the term notes may only be sold prior to
their maturity at a price equal to or greater than the unpaid principal balance
thereof if, following the sale, the amount on deposit in any Reserve Fund would
be less than the related Reserve Fund Required Amount or other applicable
limits, if any. Thus, the amount of cash in any Reserve Fund at any time may be
less than the balance of the Reserve Fund.
If the amount required to be withdrawn from the Reserve Fund to cover
shortfalls in Collections on the receivables or other assets specified in the
related prospectus supplement exceeds the amount of cash in the Reserve Fund, a
temporary shortfall in the amounts available for distribution could result.
Except as otherwise specified in the related prospectus supplement, investment
earnings on funds deposited in the Designated Accounts and the Certificate
Distribution Account, net of losses and investment expenses, will be Investment
Proceeds and will be available for distribution as described in the related
prospectus supplement. References to amounts on deposit in any Designated
Account or the Certificate Distribution Account will not include the amount of
any Investment Proceeds.
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The Designated Accounts and the Certificate Distribution Account will
be maintained as Eligible Deposit Accounts.
Any other accounts to be established with respect to a trust will be
described in the related prospectus supplement.
COLLECTIONS
With respect to each trust, the servicer will deposit Principal
Collections and Interest Collections on the related receivables into the related
Collection Account on a daily basis. However, the servicer need not deposit
Principal Collections and Interest Collections into the Collection Account on a
daily basis but may use all of those Collections for its own benefit until the
Business Day immediately preceding the related Distribution Date if at any time
the following conditions are satisfied:
(1) GMAC is the servicer,
(2) no Servicing Default has occurred and is continuing and
(3) GMAC either
(a) maintains a short-term debt rating of at
least A-1 by Standard & Poor's and P-1 by
Moody's,
(b) arranges for and maintains a letter of
credit or other form of credit support or
enhancement in respect of the servicer's
obligations to make deposits of Collections
on the related receivables in the Collection
Account that is acceptable in form and
substance to each rating agency or
(c) otherwise obtains the written confirmation
from each rating agency that the failure by
GMAC to make daily deposits will not result
in a downgrade, suspension or withdrawal of
the rating of any of the outstanding related
securities that it is then rating.
Notwithstanding the foregoing, the Cash Collateral Amount for the last day of
any Collection Period shall be deposited into the Collection Account (to the
extent not already on deposit therein) no later than the second Business Day of
the following Collection Period. The prospectus supplement may describe
additional circumstances under which daily deposits will be required.
On any date on which Collections are deposited in the Collection
Account for a trust, the servicer will distribute directly to GMAC on account of
the Retained Property an amount equal to Principal Collections on the
receivables included in the Retained Property. Whether or not the servicer is
then making daily deposits of Collections, if, at any time, the amount on
deposit in a Collection Account exceeds the amount required to be so deposited,
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the servicer will be permitted to withdraw from the Collection Account and pay
to the seller or GMAC, as applicable, the amount of the excess.
APPLICATION OF COLLECTIONS
INTEREST COLLECTIONS. For each trust, except as set forth in the related
prospectus supplement, for each Collection Period, the trust will apply
o Trust Interest Collections,
o receipts under credit, liquidity and other enhancement arrangements,
o servicer advances,
o Investment Proceeds and
o amounts in the Reserve Fund
and will use these amounts to
o make interest payments on the related securities,
o pay related Monthly Servicing Fees,
o make payments under credit, liquidity and other enhancement
arrangements,
o reimburse servicer advances and
o cover some of the losses on defaulted receivables.
The related prospectus supplement will further set forth these applications.
Unless the related prospectus supplement states otherwise, Interest Collections
in excess of trust Interest Collections will be paid to GMAC on account of the
Retained Property.
PRINCIPAL COLLECTIONS.
REVOLVING PERIOD. During the Revolving Period for a trust and so long
as no series of related term notes is in a Payment Period, unless the related
prospectus supplement states otherwise, no amount is required to be set aside to
make principal payments on the term notes and distributions of the certificate
balance on related certificates. Accordingly, all Trust Principal Collections
and Additional Trust Principal on any date during the Revolving Period, together
with the Cash Collateral Amount from the prior date, will be available for
reinvestment in additional receivables to be purchased from the seller, and will
be paid to the seller to the extent so reinvested, so long as the servicer is
able to recover advances of principal. This will be the case provided that these
amounts will be held as the Cash Collateral Amount to the extent necessary to
ensure that the Daily Trust Invested Amount for that date equals the Daily Trust
Balance for that date. That determination will be made after giving effect to
any payments of principal, including required principal payments, on, or
additional borrowings under, the revolving notes on that date and all
collections on, and reinvestments in, receivables and all issuances of
securities by the trust on that date. Unless the related prospectus supplement
states otherwise, Principal Collections in excess of Trust Principal Collections
will be paid to GMAC on account of the Retained Property.
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PAYMENT PERIODS. The prospectus supplement for a series of term notes
will describe how, during the Payment Period for that series, Available Trust
Principal will be allocated to the series and be available to make principal
payments on the term notes. This allocation will be dependent on the servicer's
ability to recover any advances of principal it may make. Principal payments on
any series of term notes will be made in the amounts and at the times described
in the related prospectus supplement. Available Trust Principal not so allocated
to term notes will be applied as described above under "REVOLVING PERIOD." The
Payment Period, if any, for a series of term notes will commence on the first to
occur of the related Scheduled Series Payment Period Commencement Date and a
Series Early Payment Event.
EARLY AMORTIZATION AND WIND DOWN PERIODS. The prospectus supplement for
a series of term notes will also describe how, during an Early Amortization
Period or the Wind Down Period for any trust, the trust will retain Trust
Principal Collections and set them aside as required for the purpose of making
payments of principal on the related notes and distributions with respect to the
certificate balance on the related certificates. The trust will make this
retention, and not pay Trust Principal Collections to the seller, so long as the
servicer is able to recover advances of principal it may make. Unless the
related prospectus supplement states differently, during either of these
periods, no additional borrowings will be permitted under the related revolving
notes. For each Collection Period during an Early Amortization Period or the
Wind Down Period for a trust, Trust Principal Collections, together with other
amounts, if any, comprising Available Trust Principal, will be applied to make
the required deposits into the Note Distribution Account, the Revolver
Distribution Account and the Certificate Distribution Account. The relative
priorities of these deposits and the amounts required to be so deposited for any
Distribution Date will be set forth in the related prospectus supplement. Unless
the related prospectus supplement states otherwise, during the Wind Down Period
for a trust, the amount to be so applied to payments on securities will be
limited by the applicable Controlled Deposit Amount. During an Early
Amortization Period for a trust, that limit will not apply and, in general, all
Trust Principal Collections and other amounts constituting Available Trust
Principal will be available to make payments on the securities. Payments will be
made on securities during the Wind Down Period and any Early Amortization Period
to the extent, if any, described in the related prospectus supplement. Unless
the related prospectus supplement states differently, Principal Collections in
excess of Trust Principal Collections will be paid to GMAC on account of the
Retained Property.
SERVICER ADVANCES
The servicer will make a SERVICER ADVANCE to each trust to the extent
and for the purposes set forth in the related prospectus supplement. Unless the
prospectus supplement provides otherwise, the servicer will agree to make
advances to the extent that the servicer, in its sole discretion, expects to
recoup those advances from subsequent Collections and other amounts available
for that purpose as described in the related prospectus supplement.
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LIQUIDITY AND CREDIT SUPPORT
The amounts and types of credit, liquidity and other enhancement
arrangements and the provider thereof, if applicable, with respect to each trust
will be set forth in the related prospectus supplement. If and to the extent
provided in the related prospectus supplement, those arrangements may be in the
form of reserve accounts, letters of credit, credit or liquidity facilities,
repurchase obligations, third party payments or other support, cash deposits or
other arrangements as may be described in the related prospectus supplement or
any combination of two or more of the foregoing. In addition, securities may
have the benefit of interest rate swaps, caps and floors and other derivative
products, all as further described in the related prospectus supplement. These
arrangements may be for the benefit of one or more series or classes of
securities or all securities issued by a trust as described in the related
prospectus supplement.
The presence of a Reserve Fund and other forms of liquidity and credit
support, if any, are intended to increase the likelihood that the
securityholders or certificateholders, who are to benefit from those
arrangements will receive the full amount of principal or the certificate
balance, as the case may be, plus interest due. These forms of liquidity and
credit support are also intended to decrease the likelihood that the
securityholders will experience losses. Unless the related prospectus supplement
provides otherwise, these arrangements will not provide protection against all
risks of loss and will not guarantee repayment of the entire principal balance
or the certificate balance, as the case may be, and interest thereon. If losses
occur which exceed the amount covered by applicable arrangements or which are
not so covered, securityholders will bear their allocable share of deficiencies
as described herein and in the related prospectus supplement. In addition, if an
arrangement is for the benefit of more than one series or class of securities
issued by a trust, securityholders of a series or class will be faced with the
risk that the arrangement will be exhausted by the claims of securityholders of
other series or classes.
RESERVE FUND. If so provided in the related prospectus supplement, for
each trust, there will be established and maintained in the name of the
indenture trustee for the benefit of the securityholders a Reserve Fund. The
Reserve Fund will be an Eligible Deposit Account and funds in any Reserve Fund
will be invested in eligible investments. Except as otherwise provided in the
related prospectus supplement, with respect to each trust, any investment
earnings, net of losses and investment expenses, with respect to the related
Reserve Fund will be Investment Proceeds and will be available for distribution
as described in the related prospectus supplement. Amounts on deposit in any
Reserve Fund ,other than Investment Proceeds, will be available to make payments
and distributions on related securities, to cover any related Trust Defaulted
Amounts and for other purposes to the extent described in the related prospectus
supplement. The Reserve Fund Initial Deposit, if any, made by the seller will be
specified in the related prospectus supplement.
After the initial issuance date for a trust, the seller may make
additional deposits into any related Reserve Fund in connection with the
issuance of additional securities or an increase in the Specified Maximum
Revolver Balance. In addition, during the term of any trust, the seller will
have the option to make an additional deposit into any related Reserve Fund in
an amount not in excess of 1% of the Maximum Pool Balance. Available Trust
Interest will also be available for deposit into any Reserve Fund to the extent
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described in the related prospectus supplement. Unless the related prospectus
supplement states differently, with respect to each trust, amounts on deposit in
the Reserve Fund will be paid to the seller to the extent the amounts exceed the
Reserve Fund Required Amount set forth in the related prospectus supplement or
as otherwise agreed by the seller, and on the trust Termination Date any funds
remaining on deposit in the Reserve Fund will be distributed to the seller.
Following distribution to the seller of amounts from the Reserve Fund,
securityholders will not have any rights in, or claims to, those amounts.
DISTRIBUTIONS
With respect to each trust, payments of principal and interest on the
related term notes and revolving notes and distributions with respect to the
certificate balance and interest on the related certificates will be made from
amounts deposited for that purpose into the Note Distribution Account, the
Revolver Distribution Account and the Certificate Distribution Account,
respectively, as described in the related prospectus supplement. The timing,
calculation, allocation, order, source, priorities and requirements for all
payments to each series of noteholders and all distributions to
certificateholders will be set forth in the related prospectus supplement.
Payments of principal on notes and distributions in respect of the certificate
balance will be subordinate to distributions in respect of interest, and
distributions in respect of the certificates will be subordinate to payments on
the notes, all as more fully described in the related prospectus supplement.
With respect to each trust, unless the related prospectus supplement
states differently, payments of principal and interest on all series of term
notes will have the same priority of payment. This would be other than in
circumstances related to the occurrence of an Event of Default, payments of
principal and interest on term notes may be senior or equivalent to payment on
the related revolving notes, as described in the related prospectus supplement.
NET DEPOSITS AND PAYMENTS
As an administrative convenience, the servicer will be permitted to
make the deposit of Interest Collections, Principal Collections, servicer
advances and other amounts, for any trust, including amounts relating to any
credit, liquidity or other enhancement arrangement, on any date net of
distributions or payments to be made to the servicer on behalf of the trust on
that date. The servicer, however, will account to the indenture trustee, the
owner trustee and the securityholders 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 and payments or distributions on any
securities are not required to be made monthly, the servicer may retain amounts
allocable to the securities or the Distribution Accounts until the related
Payment Date or Distribution Date. Pending deposit into an account, the
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. In this situation, all
distributions, deposits or other remittances will be treated as having been
distributed, deposited or remitted on the applicable Distribution Date for
purposes of determining other amounts required to be distributed, deposited or
otherwise remitted on that Distribution Date and other Distribution Dates.
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DEFAULTS AND CHARGE-OFFS
With respect to each trust, the extent to which Trust Interest
Collections, funds in the related Reserve Fund and other amounts are available
to cover the Trust Defaulted Amount will be described in the related prospectus
supplement. Any Trust Defaulted Amount not so covered will constitute Trust
Charge-Offs. Trust Charge-Offs may be covered in subsequent periods, but only to
the extent described in the related prospectus supplement. Amounts not so
covered will reduce the principal amount of the notes or the certificate
balance, as the case may be, which will reduce the Daily Trust Invested Amount,
and will be allocated among the securities as set forth in the related
prospectus supplement.
EARLY AMORTIZATION EVENTS
Unless the related prospectus supplement provides otherwise, an EARLY
AMORTIZATION EVENT with respect to any trust refers to any of the following
events:
(1) failure on the part of the seller, GMAC or the servicer to
observe or perform in any material respect any of its covenants or
agreements set forth in the related pooling and servicing agreement or
the related trust sale and servicing agreement, as applicable, which
failure continues unremedied for a period of 60 days after written
notice; provided, however, that no Early Amortization Event will be
deemed to exist if the receivables affected by that failure are
repurchased by the seller, GMAC or the servicer, as applicable, in
accordance with the related Transfer and Servicing Agreements;
(2) any representation or warranty made by GMAC in the related
pooling and servicing agreement or by the seller in the related trust
sale and servicing agreement or any information contained on the
Schedule of Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and, as a result, the
interests of the Securityholders are materially and adversely affected;
provided, however, that no Early Amortization Event will be deemed to
occur if the receivables relating to the representation or warranty are
repurchased by GMAC or the seller, as applicable, in accordance with
the related Transfer and Servicing Agreements;
(3) failure to pay or set aside for payment all amounts
required to be paid as principal on the Notes or distributed with
respect to the certificate balance on the applicable Stated Final
Payment Date;
(4) on any Distribution Date, the average of the Monthly
Payment Rates for the three preceding Collection Periods is less than
25%;
(5) the amount on deposit in the related Reserve Fund is less
than the Reserve Fund Required Amount on three consecutive Distribution
Dates;
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(6) a notice setting forth one or more Events of Default under
the related indenture and declaring the unpaid principal amount of the
related notes immediately due and payable has been given pursuant to
the indenture; provided, however, that if no other Early Amortization
Event has occurred and is continuing and so long as the Scheduled
Revolving Period Termination Date has not occurred, if the seller so
elects, the Early Amortization Period resulting from that occurrence
will terminate and the Revolving Period will recommence if a notice
rescinding the declaration is given pursuant to the indenture;
(7) the occurrence of specified events of bankruptcy,
insolvency or receivership relating to any of (a) General Motors, (b)
the servicer, (c) GMAC, if it is not the servicer, or the (d) seller;
(8) on any Distribution Date, as of the last day of the
related Collection Period, the aggregate principal balance of
receivables owned by the trust which were advanced against used
vehicles exceeds 20% of the Daily Trust Balance, for purposes of this
clause (8), General Motors vehicles which are sold to daily rental car
operations, repurchased pursuant to General Motors repurchase
agreements and subsequently sold at auction to a General
Motors-franchised dealer will not be considered to be used vehicles;
(9) on any Distribution Date, the Reserve Fund Required Amount
for that Distribution Date exceeds the amount on deposit in the related
Reserve Fund by more than the Reserve Fund Trigger Amount as specified
in the related prospectus supplement;
(10) on any Distribution Date, the average Daily Trust Balance
is less than 75% of the sum of the average outstanding principal
balance of the related term notes and the average certificate balance
(in each case, the average being determined over the six Collection
Periods immediately preceding the Distribution Date, or, if shorter,
the period from the related initial issuance date through and including
the last day of the immediately preceding Collection Period;
(11) on any Distribution Date, as of the last day of each of
the two immediately preceding Collection Periods, the aggregate
principal balance of all related Available Receivables is less than 70%
of the aggregate principal balance of all receivables - including
receivables owned by GMAC - in the dealer accounts in the related pool
of accounts; and
(12) any other Early Amortization Event set forth in the
related prospectus supplement.
Upon the occurrence of any event described above, except as described
above or in the related prospectus supplement, an Early Amortization Event with
respect to a trust will be deemed to have occurred without any notice or other
action on the part of any other party. The Early Amortization Period will
commence as of the day on which the Early Amortization Event is deemed to occur.
During an Early Amortization Period for a trust, Trust Principal Collections and
other amounts constituting Available Trust Principal will be allocated to
principal payments on the related Notes and distributions of the certificate
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balance on the related certificates and will be paid as set forth in the related
prospectus supplement. No Controlled Deposit Amount will apply during that
period. If an Early Amortization Period commences during a Payment Period or the
Wind Down Period, amounts, if any, on deposit in the Distribution Accounts will
be paid to Securityholders on the first Distribution Date for the Early
Amortization Period as described in the related prospectus supplement. Except as
otherwise described in the related prospectus supplement, no additional
borrowings may be made on the revolving notes during an Early Amortization
Period for the related trust.
In some circumstances, so long as the related Scheduled Revolving
Period Termination Date has not occurred, the Revolving Period may recommence
following the occurrence of an Early Amortization Event as described in
subparagraph (6) above or in the related prospectus supplement.
In addition to the consequences of an Early Amortization Event
discussed above, if an insolvency event occurs with respect to the seller, the
receivables of the trust may be liquidated and the trust terminated as described
below in "INSOLVENCY EVENTS."
ADDITIONAL ISSUANCES; CHANGES IN SPECIFIED MAXIMUM REVOLVER BALANCE
After the initial issuance date for a trust, additional series of term
notes, additional series of revolving notes and additional classes of
certificates may be issued by the trust from time to time, whether or not
additional revolving notes are issued in connection therewith. The Specified
Maximum Revolver Balance may also be increased or decreased without the consent
of holders of the outstanding notes or certificates, in each case upon the
satisfaction of the conditions specified in the related trust sale and servicing
agreement. These include the conditions that
(1) the seller will have represented and warranted that the
issuance, increase or decrease will not, in the reasonable belief of
the seller, cause an Early Amortization Event to occur, and
(2) after giving effect to all issuances and all changes in
the Specified Maximum Revolver Balance, the outstanding certificate
balance of all then outstanding certificates, less amounts held in the
Certificate Distribution Account, as a percentage of the Maximum Pool
Balance equals or exceeds the trust's Specified Certificate Percentage,
in each case, as set forth in the related prospectus supplement.
Any issuance or increase in the Specified Maximum Revolver Balance is
also dependent upon each rating agency providing written confirmation that the
issuance or increase will not result in a reduction or withdrawal of the rating
of any outstanding securities. There is no limit to the number of series of term
notes that may be issued under the related trust sale and servicing agreement or
the related indenture.
The seller may offer any securities under a Disclosure Document in
transactions either registered under the Act, or exempt from registration
thereunder, directly, through one or more underwriters or placement agents,
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in fixed-price offerings or in negotiated transactions or otherwise. Any of
these securities may be issued in fully registered or book-entry form in minimum
denominations determined by the seller.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
With respect to each trust, unless the related prospectus supplement
states differently, as compensation for its servicing activities with respect to
the related receivables, on each Distribution Date, the servicer will receive a
servicing fee - the MONTHLY SERVICING FEE - for the preceding Collection Period
equal to one-twelfth of the Servicing Fee Rate multiplied by the average daily
balance of the Daily Trust Invested Amount for the Collection Period. The
Monthly Servicing Fee will be payable to the servicer solely to the extent
amounts are available for distribution therefor as described in the related
prospectus supplement.
With respect to any pool of accounts, the servicer will service the
receivables included in the Retained Property as well as the receivables sold to
the related trust. The Monthly Servicing Fee associated with each trust is
intended to compensate the servicer for performing the functions of a third
party servicer of wholesale receivables as an agent for their beneficial owner.
These duties include, without limitation,
o collecting and recording payments,
o communicating with dealers,
o investigating payment delinquencies,
o evaluating the increase of credit limits, and
o maintaining records with respect to the dealer accounts and
receivables arising thereunder. With respect to any pool of
accounts, the servicer will service the receivables included
in the Retained Property as well as the receivables sold to
the related trust.
The Monthly Servicing Fee will also compensate the servicer for
managerial and custodial services performed by the servicer on behalf of the
trust. These include:
o accounting for collections,
o furnishing monthly and annual statements to the owner trustee
and the indenture trustee with respect to payments and
distributions,
o making servicer advances, if any,
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o providing assistance in any inspections of the documents and
records relating to the dealer accounts and receivables by the
indenture trustee and the owner trustee pursuant to the
related trust sale and servicing agreement, and
o providing related data processing and reporting services for
securityholders and on behalf of the indenture trustee and
owner trustee.
The Monthly Servicing Fee will also serve to reimburse the servicer for
additional expenses the servicer incurs in connection with administering the
pool of accounts. These expenses include
o taxes, other than the trust's or the securityholders' federal,
state and local income and franchise taxes, if any,
o the owner trustee's and the indenture trustee's fees,
o accounting fees,
o outside auditor fees,
o data processing costs and other costs.
SERVICING PROCEDURES
Pursuant to each pooling and servicing agreement and related trust sale
and servicing agreement, the servicer is responsible for servicing, collecting,
enforcing and administering the receivables under the related dealer accounts.
The servicer will conduct these activities in accordance with customary and
usual procedures for servicing its own portfolio of revolving dealer floor plan
lines of credit, except where the failure to so act would not have a material
adverse effect on the interests of the Securityholders.
Pursuant to each pooling and servicing agreement and the related trust
sale and servicing agreement, the servicer may only modify the contractual terms
of the dealer accounts included in the related pool of accounts in general if:
(1) in the servicer's reasonable belief, no Early Amortization
Event will occur as a result of the change,
(2) the change is made applicable to the comparable segment of
any similar portfolio of accounts serviced by the servicer and not only
to those dealer accounts and
(3) in the case of a reduction in the rate of finance charges
on the receivables transferred to the trust, the servicer does not
reasonably expect that the reduction will, after considering amounts
due and amounts payable under any related interest rate swaps or caps
or similar agreements and Shared Investment Proceeds for the related
period, reduce the Net Receivables Rate below the sum of
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(a) the weighted average of the rates of interest payable to related
securityholders and (b) the Monthly Servicing Fee for the related
period.
The servicer is not, however, precluded from renegotiating the
contractual terms of agreements with dealers on a case-by-case basis in a manner
consistent with its servicing guidelines.
SERVICER COVENANTS
In each pooling and servicing agreement, the servicer will agree that:
(1) it will maintain in effect all qualifications required in
order to service the dealer accounts included in the related pool of
accounts and related receivables and will comply in all material
respects with all requirements of law in connection with servicing the
dealer accounts and receivables, except where the failure to maintain
that qualifications to comply with those requirements would not have a
material adverse effect on the related securityholders of any
outstanding related series;
(2) it will not permit any rescission or cancellation of
receivables held by the trust except as ordered by a court of competent
jurisdiction or other government authority;
(3) it will do nothing to impair the rights of the related
securityholders in the receivables held by the trust and it will not
reschedule, revise or defer payments due on any receivable held by the
trust, except in a manner consistent with its servicing guidelines or
as otherwise contemplated by the related trust sale and servicing
agreement; and
(4) it will not permit any receivable held by the trust to
become subject to any right of set-off or any offsetting balance.
For each trust, pursuant to the related pooling and servicing agreement
and the related trust sale and servicing agreement, the seller or the servicer
may from time to time discover or receive written notice that some of the
covenants of the servicer set forth therein have not been complied with in all
material respects with respect to any related receivable transferred to the
trust or related dealer account, and the noncompliance has a material adverse
effect on the interests of related securityholders in or under the receivable or
dealer account. If this occurs, the servicer will purchase the receivable or all
receivables transferred to the trust under the dealer account -- each, an
ADMINISTRATIVE RECEIVABLE -- as applicable. The purchase will be made no later
than two Business Days , or during any other period as may be agreed by the
applicable trustee, following the discovery by the servicer of the
noncompliance.
With respect to each administrative receivable the servicer will be
obligated to deposit into the related Collection Account on the date on which
the purchase is deemed to occur an amount -- the ADMINISTRATIVE PURCHASE PAYMENT
- -- equal to the principal amount of the receivable PLUS accrued but unpaid
interest thereon through the date of the purchase. An Administrative Purchase
Payment will be included in (i) Additional Trust Principal, to the extent of the
principal amount of
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the related receivable, and (ii) Interest Collections, as to the remainder of
the amount. A purchase by the servicer constitutes the sole remedy available to
the securityholders, the seller, the owner trustee, the indenture trustee or the
trust, if the covenant or warranty of the servicer is not satisfied.
MATTERS REGARDING THE SERVICER
Each trust sale and servicing agreement will provide that the servicer
may not resign from its obligations and duties as servicer thereunder and under
the related pooling and servicing agreement, except upon determination that the
servicer's performance of those duties is no longer permissible under applicable
law. No resignation will become effective until the related indenture trustee or
a successor servicer has assumed servicer's servicing obligations and duties
under the related Transfer and Servicing Agreements.
Each trust sale and servicing agreement will further provide that
neither the servicer nor any of its directors, officers, employees and agents
will be under any liability to the related trust, indenture trustee, owner
trustee or any related securityholders for taking any action or for refraining
from taking any action pursuant to the related Transfer and Servicing Agreements
or for errors in judgment; except that neither the servicer nor any of those
persons 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 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 related owner 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 under the applicable
Transfer and Servicing Agreements or by reason of reckless disregard of its
obligations and duties thereunder.
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 Securityholders thereunder. The legal
expenses and costs of that action and any liability resulting therefrom will be
expenses, costs and liabilities of the trust and the servicer will be entitled
to be reimbursed therefor out of the related Collection Account. Any
indemnification or reimbursement will reduce the amount otherwise available for
distribution to the Securityholders.
Under the circumstances specified in each trust sale and servicing
agreement, any entity which succeeds the servicer will be treated as the
successor of the servicer under the trust sale and servicing agreement and the
pooling and servicing agreement. This successor entity will assume the
obligations of the servicer under those agreements. A successor entity of the
servicer includes 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
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the servicer or, with respect to its obligations as servicer, any entity 50% or
more of the voting stock or interest of which is owned, directly or indirectly,
by General Motors and which is otherwise servicing wholesale receivables.
So long as GMAC acts as servicer, the servicer may at any time
subcontract any duties as servicer under the trust sale and servicing agreement
or pooling and servicing agreement to any entity more than 50% of the voting
stock or interest of which is owned, directly or indirectly, by General Motors
or to any entity that agrees to conduct the 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 delegation will relieve the servicer of its
responsibility with respect to those duties.
SERVICING DEFAULT
Except as otherwise provided in the related prospectus supplement, a
SERVICING DEFAULT under each trust sale and servicing agreement will consist of:
(1) the servicer fails at any time 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 the failure by an officer of the servicer;
(2) the servicer fails at any time to duly observe or perform
in any material respect any other covenant or agreement in the trust
sale and servicing agreement, the related pooling and servicing
agreement, the related indenture or the related trust agreement, which
failure materially and adversely affects the rights of the
securityholders and which continues unremedied for 90 days after the
giving of written notice of the failure to the servicer by the
indenture trustee or the owner trustee or to the servicer and the
indenture trustee and the owner trustee by holders of notes or Voting
Interests, as applicable, evidencing not less than 25% in principal
amount of the outstanding notes or Voting Interests or after discovery
of the failure by an officer of the servicer;
(3) any representation, warranty or certification made by the
servicer in the trust sale and servicing agreement or in any
certificate delivered pursuant thereto proves to have been incorrect
when made and the inaccuracy has a material adverse effect on the
rights of the related securityholders and the 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
(4) specified events of bankruptcy, insolvency or receivership
involving the servicer occur.
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Notwithstanding the foregoing, there will be no servicing default where
a servicing default would otherwise exist under clause (1) above for a period of
ten Business Days or under clauses (2) or (3) for a period of 60 days if the
delay or failure giving rise to the servicing default was caused by an act of
God or other similar occurrence. Upon the occurrence of any of these events, 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 with prompt notice of the failure or delay by it, together with
a description of its efforts to so perform its obligations.
RIGHTS UPON SERVICING DEFAULT
As long as a servicing 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 the
then outstanding notes may terminate all the rights and obligations of the
servicer under the trust sale and servicing agreement and the related pooling
and servicing agreement. If the notes have been paid in full and the related
indenture has been discharged with respect thereto, by the related owner trustee
or certificateholders whose certificates evidence not less than a majority of
the Voting Interests may terminate. Upon termination, the indenture trustee will
succeed to all the responsibilities, duties and liabilities of the servicer
under those 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 Servicing Default other than the appointment
has occurred, the trustee or official may have the power to prevent the
indenture trustee or the Securityholders from effecting a transfer of servicing.
In the event that the indenture trustee is unwilling or unable to so act, it may
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 who otherwise meets the
eligibility requirements set forth in the trust sale and servicing agreement.
The indenture trustee may make arrangements for compensation to be paid, which
in no event may be greater than the servicing compensation to the servicer under
the 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 Notes, voting as a single
class, may, on behalf of all the securityholders, 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.
However, a servicing default in making any required distributions, payments,
transfers or deposits in accordance with the trust sale and servicing agreement
may not be waived. No waiver of past defaults will impair the rights of the
indenture trustee, the owner trustee, or the securityholders with respect to
subsequent defaults.
STATEMENTS TO TRUSTEES AND TRUST
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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 Collection Period a
statement setting forth substantially the same information as is required to be
provided in the periodic reports to be provided to securityholders on that date
under the Transfer and Servicing Agreements.
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 no later than
the first August 15 which is at least twelve months after the trust's initial
issuance date, a statement as to compliance by the servicer during the preceding
twelve months ended June 30 with some of the standards relating to the servicing
of the receivables, the servicer's accounting records and computer files with
respect thereto and a number of other matters. The first of these statements
shall cover the period from the Initial issuance date to June 30 of that year.
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 no later than the first August 15 which is at least twelve
months after the trust's initial issuance date, a certificate signed by an
officer of the servicer stating that the servicer has fulfilled its obligations
under the trust sale and servicing agreement throughout the preceding twelve
months ended June 30, or in the case of the first certificate, the period from
the trust's initial issuance date to June 30 of that year. If there has been a
default in the fulfillment of this obligation, the certificate shall describe
each default. The servicer has agreed to give the indenture trustee and the
owner trustee notice of Servicing Defaults under the related trust sale and
servicing agreement.
Copies of these statements and certificates may be obtained by
Securityholders by request in writing addressed to the applicable indenture
trustee or owner trustee.
AMENDMENTS
Each of the Transfer and Servicing Agreements may be amended by the
parties thereto without the consent of the related securityholders
(1) to cure any ambiguity,
(2) to correct or supplement any provision therein that may be
defective or inconsistent with any other provision therein,
(3) to add or supplement any credit, liquidity or other
enhancement arrangement for the benefit of any securityholders,
provided that if any addition affects any series or class of
Securityholders differently than any other series or class of
Securityholders, then the addition will not, as evidenced by an
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opinion of counsel, adversely affect in any material respect the
interests of any series or class of securityholders,
(4) to add to the covenants, restrictions or obligations of
the seller, the servicer, the owner trustee or the indenture trustee
for the benefit of securityholders, or
(5) to add, change or eliminate any other provision of the
agreements in any manner that will not, as evidenced by an opinion of
counsel, adversely affect in any material respect the interests of the
securityholders.
Each agreement may also be amended by the parties thereto with the
consent of the holders of at least a majority in principal amount of then
outstanding notes and the holders of certificates evidencing at least a majority
of the Voting Interests for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the agreements or of
modifying in any manner the rights of the securityholders, except that no
amendment may
(1) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions or payments that are
required to be made on any security without the consent of the holder
thereof,
(2) 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 that series or class, or
(3) reduce the aforesaid percentage required to consent to
any amendment without the consent of the aforesaid percentage of
securityholders.
INSOLVENCY EVENTS
If pursuant to federal law GMAC becomes party to any involuntary
bankruptcy or similar proceeding -- other than as a claimant -- the seller will
suspend its purchase of receivables from GMAC under each pooling and servicing
agreement. If GMAC or the seller obtains an order approving the continued sale
of receivables to the seller on the same terms as, or on terms that do not have
a material adverse effect on securityholders as compared to, the terms in effect
prior to the commencement of the proceeding, GMAC may resume selling receivables
to the seller. Receivables will be considered transferred to the seller only to
the extent the purchase price therefor has been paid in cash on the same
Business Day. If the involuntary proceeding has not been dismissed within 60
days of its filing, the seller may not thereafter purchase receivables from GMAC
under any pooling and servicing agreement and thus, no additional receivables
will be transferred to any trust. See "LEGAL ASPECTS" in this prospectus.
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
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trustee by each certificateholder, including the seller, of a certificate
certifying that each certificateholder reasonably believes that the trust is
insolvent.
In each 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
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. However, this
indemnification will be limited by the proviso that neither the indenture
trustee nor owner trustee will be so indemnified if the acts or omissions or
alleged acts or omissions constitute wilful 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 and
the securityholders against losses arising out of the negligence, wilful
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 the parties against any taxes that may be asserted against the
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
A trust will terminate on its TRUST TERMINATION DATE. Upon termination
of a trust and payment, or deposit to the Distribution Accounts, of all amounts
to be paid to securityholders, the receivables and all other assets of the trust
will be conveyed and transferred to the seller. However, funds in the related
Distribution Accounts for the final distributions to the securityholders and
after distribution to GMAC from the Collection Account of amounts on account of
the Retained Property, if required, will not be conveyed and transferred to the
seller at that time.
OPTIONAL PURCHASE BY THE SERVICER
During the Wind Down Period and as otherwise set forth in the related
prospectus supplement, the servicer or any successor servicer will be permitted,
at its option, to purchase from each trust all remaining receivables and other
assets to the extent provided in the related prospectus supplement.
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INTERCREDITOR ARRANGEMENTS
The agreements governing the dealer accounts provide for a security
interest in favor of GMAC in the vehicles related to receivables thereunder.
With respect to the receivables to be conveyed to the trust, GMAC will represent
in the related pooling and servicing agreement that the security interest in the
related vehicles is a first priority perfected security interest. The security
interest in favor of GMAC in the vehicles related to each dealer account in the
related pool of accounts will be assigned by GMAC to the seller pursuant to each
pooling and servicing agreement and assigned to the applicable trust by the
seller pursuant to the related trust sale and servicing agreement. In its other
lending activities, GMAC may have made capital loans, real estate loans or other
loans to dealers that are also secured by a security interest in the vehicles.
In each pooling and servicing agreement, GMAC will agree that any security
interests in the vehicles that it may have in respect of advances or loans to
dealers other than the related receivables shall be junior and subordinate to
the security interests therein granted in connection with the related
receivables and that it will not realize on any collateral in a manner
materially adverse to the seller or any trust and the securityholders until the
seller and the related trust have been paid in full in respect of their
interests in the receivables related to the vehicles.
In addition, in connection with any other loans or advances made by
GMAC to a Dealer, GMAC may also have a security interest in property
constituting Collateral Security other than vehicles. In those cases, GMAC, in
its sole discretion, may realize on that other Collateral Security for its own
benefit in respect of those loans or advances before the indenture trustee, on
behalf of any trust, is permitted to realize upon that other Collateral Security
and the security interests of the indenture trustee therein shall be junior and
subordinate to the security interests of GMAC granted in connection with those
other loans and advances. Because of the subordinate position of any indenture
trustee in respect of the other Collateral Security, there is no assurance that
any indenture trustee will realize any proceeds in respect of any other
Collateral Security.
ADMINISTRATION AGREEMENT
GMAC, in its capacity as administrator will enter into an
administration agreement with each trust and the related indenture trustee
pursuant to which GMAC will agree, to the extent provided in the administration
agreement, to provide the notices and to perform other administrative
obligations required by the related indenture. With respect to each trust, the
related prospectus supplement states otherwise, as compensation for the
performance of its obligations under the administration agreement and as
reimbursement for its expenses related thereto, GMAC will be entitled to a
monthly administration fee in an amount equal to $1,500, which fee will be paid
by the servicer.
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LEGAL ASPECTS
TRANSFER OF RECEIVABLES
On the initial issuance date for any trust, on each date on which
dealer accounts are added to the pool of accounts and on each Receivables
Purchase Date, GMAC will sell, transfer and assign to the seller and the seller
will sell, transfer and assign the Eligible Receivables in the dealer accounts
included in the related pool of accounts to the trust. In the related pooling
and servicing agreement, GMAC will represent and warrant to the seller that the
sale, transfer and assignment of the receivables thereunder constitutes a valid
sale, transfer and assignment of all right, title and interest of GMAC in and to
the receivables to the seller. In the related trust sale and servicing
agreement, the seller will represent and warrant to the trust that the seller
has taken no action to make the representations and warranties false in any
material respect and that the sale, transfer and assignment of the receivables
thereunder constitutes a valid sale, transfer and assignment of all right, title
and interest of the seller in and to the receivables to the trust.
Each of GMAC and the seller will also covenant that it will not sell,
pledge, assign, transfer or grant any lien on the receivable other than to the
seller or to the trust, as applicable, or as otherwise contemplated by the
related Transfer and Servicing Agreements. For a discussion of the rights of
each trust arising from these representations and warranties, see "THE TRANSFER
AND SERVICING AGREEMENTS REPRESENTATIONS AND WARRANTIES" in this prospectus. To
secure its payment obligations under the notes, pursuant to the indenture, the
trust will grant a security interest in the receivables to the indenture
trustee.
GMAC will represent in each pooling and servicing agreement that the
receivables to be conveyed to the trust are either "chattel paper," "accounts"
or "general intangibles" for purposes of the UCC. If receivables are deemed to
be chattel paper or accounts and the transfer thereof by GMAC to the seller or
by the seller to a trust is deemed either to be a sale or to create a security
interest, the UCC will apply and the transferee must file an appropriate
financing statement or statements in order to perfect its interest therein. If
receivables are deemed to be general intangibles and the transfer thereof by
GMAC to the seller or by the seller to a trust is deemed to create a security
interest, the UCC will apply and the transferee must file an appropriate
financing statement or statements in order to perfect its interest therein. If
receivables are deemed to be general intangibles and the transfer thereof is
deemed to be a sale, state law other than the UCC may determine the appropriate
steps to perfect the sale. Financing statements covering the receivables to be
conveyed to the trust will be filed under the UCC by both the seller and each
related trust to perfect and/or protect their respective interests in the
receivables, to the extent the filings are required to so perfect and/or protect
those interests). Continuation statements will be filed as required to continue
the perfection of those interests. No filings will be made under any state laws
other than the UCC.
There are circumstances under the UCC and applicable federal law in
which some limited subsequent transferees of a receivable held by the trust
could have an interest in a receivable with priority over the trust's interest
in that receivable. A purchaser of chattel paper who gives new value
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and takes possession of the instruments which evidence the chattel paper in the
ordinary course of the purchaser's business may, under some circumstances, have
priority over the interest of the trust in the chattel paper. If the transfer of
receivables to the seller or a trust were recharacterized as a pledge, a tax or
other lien on property of GMAC or the seller may also have priority over the
interest of the trust in the receivable. Further, cash collections on the
receivables held by each trust may, to the extent described above, be commingled
with the funds of GMAC as servicer and amounts due to GMAC as the holder of the
Retained Property held by each trust and, in the event of the bankruptcy of
GMAC, the trust may not have a perfected interest in the collections.
GMAC will represent and warrant in the pooling and servicing agreement
that each receivable at the time of the sale to the seller is secured by a first
priority perfected security interest in the related vehicles. Generally, under
applicable state laws, a security interest in an automobile or light truck which
secures wholesale financing obligations may be perfected by the filing of UCC
financing statements. GMAC takes all actions it deems necessary under applicable
state laws to perfect GMAC's security interest in vehicles. However, at the time
a vehicle is sold or leased, GMAC's security interest in the vehicle will
generally terminate. Therefore, if a dealer fails to remit to GMAC amounts owed
with respect to any vehicle that has been sold or leased, the related receivable
will no longer be secured by the vehicle, but will be secured by the proceeds of
the retail sale or lease and, to the extent applicable, other Collateral
Security. If the proceeds of the sale or lease include chattel paper -- as is
the case with most retail instalment contracts -- some limited subsequent
transferees of that chattel paper could have an interest therein with priority
over the trust's interest therein.
MATTERS RELATING TO BANKRUPTCY
The seller's by-laws include a provision that, under some
circumstances, requires the seller to designate at least one director who
qualifies under the by-laws as "independent directors." The seller's certificate
of incorporation provides that the seller will not file a voluntary petition for
relief under the Bankruptcy Code without the unanimous affirmative vote of its
directors. Pursuant to the Transfer and Servicing Agreements, the owner trustee,
the indenture trustee and all securityholders will covenant that they will not
institute against the seller any bankruptcy, reorganization or other proceedings
under any insolvency laws until one year and one day after all securities have
been paid in full. In addition, a number of other steps will be taken to avoid
the seller's becoming a debtor in a bankruptcy case. The seller will agree not
to file a voluntary petition for relief under the insolvency laws so long as it
is solvent and does not foresee becoming insolvent, and GMAC, as the sole
stockholder of the seller, will agree that it will not cause the seller to file
such a petition.
The transfers of receivables from GMAC to the seller and from the
seller to the trust have been structured as, and will be treated by the parties
as, sales. In 1993, the U.S. Court of Appeals for the Tenth Circuit 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 to become a debtor
in a bankruptcy case, a creditor or trustee in bankruptcy of the debtor or the
debtor itself may apply this analysis or otherwise take the position that the
transfer of the receivables from the debtor to the seller or a trust, as the
case may be, should be recharacterized as a pledge of the receivables to secure
a borrowing by the debtor. If this were to occur, delays in receipt of
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Collections on the receivables to the related trust and payments on the related
securities could result or, should the court rule in favor of any creditor,
trustee in bankruptcy or debtor, reductions in the amount of the payments could
result.
In addition, in the event that GMAC or the seller were to become a
debtor in a bankruptcy case and a creditor or trustee in bankruptcy of the
debtor or the debtor itself were to request a court to order that GMAC should be
substantively consolidated with the seller, delays in payments on the securities
could result. Should the bankruptcy court rule in favor of the creditor, trustee
in bankruptcy or debtor, the amount of the payments could be reduced.
If General Motors, GMAC or the seller were to become a debtor in a
bankruptcy case, an Early Amortization Event would occur. If this happened, all
Trust Principal Collections would be applied to principal payments on related
securities and receivables arising in the related dealer accounts thereafter
would no longer be sold to the seller and transferred to the related trust. The
occurrence of specified events of bankruptcy, insolvency or receivership with
respect to the servicer will also result in a servicing default. A trustee in
bankruptcy of the servicer, including the servicer as debtor in possession, may
have the power to prevent either the indenture trustee, the owner trustee or the
securityholders from appointing a successor servicer.
In addition, if any Transfer and Servicing Agreement is deemed an
executory contract under bankruptcy laws, a trustee in bankruptcy of any party
to those agreements, including the party as debtor in possession, may have the
power to assume (i.e., reaffirm) or reject the agreement. A party deciding
whether to assume or reject an agreement would be given a reasonable period of
time to make that decision, perhaps even until the time of confirmation of the
plan of reorganization, which could result in delays in payments or
distributions on the related securities.
Transfers made in some isolated transactions contemplated by the
Transfer and Servicing Agreements (including payments made by GMAC or the seller
with respect to repurchases or reassignments of receivables and the transfers in
connection with the designation of additional dealer accounts) may be
recoverable by GMAC or the seller, as debtor in possession, or by a trustee in
bankruptcy of GMAC or the seller, as a preferential transfer from GMAC or the
seller if the transfers are made within specified periods prior to the filing of
a bankruptcy case in respect of GMAC or the seller and other conditions are met.
In addition, application of federal bankruptcy and state debtor relief
laws to any dealer could affect the interests of the related trust and the
related indenture trustee in the receivables of the dealer if the enforcement of
those laws result in any receivables conveyed to the trust being written off as
uncollectible by the servicer. Whether or not any receivables are written off as
uncollectible, delays in payments due on the receivables could result.
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FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Set forth below is a discussion of the anticipated material United
States federal income tax consequences of the purchase, ownership and
disposition of the term notes and/or certificates offered hereunder. This
discussion is based upon current provisions of the Code, existing and proposed
Treasury regulations thereunder, current administrative rulings, judicial
decisions and other applicable authorities. There are no cases or IRS rulings on
similar transactions involving both debt and equity interests issued by a trust
with terms similar to those of the term notes, the revolving 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 term noteholders.
This discussion does not purport to deal with all aspects of federal
income taxation that may be relevant to the holders of term notes in light of
their personal investment circumstances nor, except for limited discussions of
particular topics, to certain types of noteholders who have special treatment
under the federal income tax laws. These noteholders include, for example,
financial institutions, broker-dealers, life insurance companies and tax-exempt
organization. This information is directed to prospective purchasers who
purchase term notes in the initial distribution thereof, who are citizens or
residents of the United States, including domestic corporations and
partnerships, and who hold the term notes and/or certificates as "capital
assets" within the meaning of Section 1221 of the Code. 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 TERM NOTES.
With respect to each trust, one or more series of term notes will be
issued as REGISTERED TERM NOTES. Registered Term Notes may generally may be
acquired by both U.S. PERSONS and FOREIGN PERSONS. The federal income taxation
of a Registered Term Note will depend upon whether the owner of the Registered
Term Note is a U.S. Person or a Foreign Person.
TAX CHARACTERIZATION AND TREATMENT OF TERM NOTES
CHARACTERIZATION AS DEBT. Kirkland & Ellis, special tax counsel to the
seller, will deliver its opinion with respect to each series of notes, other
than Strip Notes and any series which is specifically identified as receiving
different tax treatment in the applicable prospectus supplement. This opinion
will be 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 term notes, based on the terms of the term notes and the
transactions set forth herein, the term 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 "TAX
CHARACTERIZATION OF THE TRUST-- RISKS OF ALTERNATIVE CHARACTERIZATION" below
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for a discussion of the potential federal income tax consequences to noteholders
if the IRS were successful in challenging the characterization of the term note
and certificates for federal income tax purposes.
TERM NOTES SUBJECT TO CONTINGENCIES. The federal income tax
consequences to a holder of the ownership and disposition of term notes that
provide for one or more contingent payments will vary depending on the exact
terms of the term notes and related factors. The term notes may be subject to
rules that differ from the general rules discussed below. The federal income tax
consequences to a holder of term notes that provide for contingent payments will
be summarized in the applicable prospectus supplement.
TREATMENT OF STATED INTEREST. Based on the foregoing opinion, and
assuming the term notes are not issued with original issue discount, OID, the
stated interest on a term note will be taxable as ordinary income when received
or accrued in accordance with the noteholder's method of tax accounting.
Interest received on a term note may constitute "investment income" for purposes
of limitations of the Code concerning the deductibility of investment interest
expense.
ORIGINAL ISSUE DISCOUNT. Except to the extent indicated in the related
prospectus supplement, no series of term notes will be issued with OID. In
general, OID is the excess of the "stated redemption price at maturity" of a
debt instrument over its "issue price," unless the excess falls within a
statutorily defined DE MINIMIS exception. A term note's "stated redemption price
at maturity" is the aggregate of all payments required to be made under the term
note through maturity except "qualified stated interest." "Qualified stated
interest" is generally interest that is unconditionally payable in cash or
property, other than debt instruments of the issuer, at fixed intervals of one
year or less during the entire term of the instrument at specified rates. The
"issue price" will be the first price at which a substantial amount of the term
notes are sold, excluding sales to bond holders, brokers or similar persons
acting as underwriters, placement agents or wholesalers.
If a term note were treated as being issued with OID, a noteholder
would be required to include OID in income as interest over the term of the term
note 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 term notes in advance of the receipt of cash attributable to
that income. Even if a term note has OID falling within the DE MINIMIS
exception, the noteholder must include the OID in income proportionately as
principal payments are made on the term note.
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A holder of a term note which has a fixed maturity date not more than
one year from the issue date of the term note , which we refer to in this
section as a SHORT-TERM NOTE, will generally not be required to include OID on
the term note in income as it accrues, provided the holder is not an accrual
method taxpayer, a bank, a broker or dealer that holds the term note as
inventory, a regulated investment company or common trust fund, or the
beneficial owner of a number of pass-through entities specified in the Code.
Additionally, the holder may 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 OID accrued on the term note in gross income
upon a sale or exchange of the term note or at maturity, or if the term note is
payable in installments, as principal is paid thereon. The holder of a
short-term note 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 OID accrued on the term
note. However, a holder may elect to include OID 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, OID accrues on a
short-term note on a ratable, straight- line, basis, unless the holder
irrevocably elects under Treasury Department regulations, with respect to the
obligation to apply a constant interest method, using the holder's yield to
maturity and daily compounding.
A holder who purchases a term note after the initial distribution
thereof at a discount that exceeds a statutorily defined DE MINIMIS amount will
be faced with the "market discount" rules of the Code, and a holder who
purchases a term note at a premium will be under the bond premium amortization
rules of the Code.
DISPOSITION OF TERM NOTES. If a noteholder sells a term 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 term
note. The adjusted tax basis of the term note to a particular noteholder will
equal the holder's cost for the term note, increased by any OID and market
discount previously included by the noteholder in income with respect to the
term note and decreased by any bond premium previously amortized and any
principal payments previously received by the noteholder with respect to the
term note. Any gain or loss will be a capital gain or loss if the term note was
held as a capital asset, except for gain representing accrued interest or
accrued market discount not previously included in income. Capital gain or loss
will be long-term if the term 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. The trustee will be
required to report annually to the IRS, and to each related noteholder of
record, the amount of interest paid on the term notes , as well as the amount of
interest withheld for federal income taxes, if any, for each calendar year,
except as to exempt holders. Exempt holders are 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 will be required to provide to the trustee,
under penalties of perjury, a certificate containing the holder's name, address,
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correct federal taxpayer identification number and a statement that the holder
is exempt from backup withholding. Should a nonexempt noteholder fail to provide
the required certification, the trustee will be required to withhold, from
interest otherwise payable to the holder, 31% of the interest and remit the
withheld amount to the IRS as a credit against the holder's federal income tax
liability.
The IRS has issued new regulations governing the backup withholding and
information reporting requirements. The new regulations are generally effective
for payments made after December 31, 1999. Noteholders should consult their tax
advisors with respect to the impact, if any, of the new regulations.
Because the seller will, for federal income tax purposes, treat all
term notes as indebtedness issued by a trust characterized as either a
partnership or a division of whichever entity owns all of the certificates, the
seller will not comply with the tax reporting requirements that would apply
under any alternative characterization of a trust.
TAX CONSEQUENCES TO FOREIGN NOTEHOLDERS. Based on the foregoing opinion
that the term notes will be treated as indebtedness for federal income tax
purposes, if interest paid (or accrued) and/or OID (if any) accrued to a
noteholder who is a Foreign Person is not effectively connected with the conduct
of a trade or business within the United States by the Foreign Person, the
interest and/or OID (as the case may be), the interest generally will be
considered "portfolio interest", and generally will not be liable for United
States federal income tax and withholding tax, provided that the foreign person
(1) is not actually or constructively a "10 percent shareholder" of the
applicable trust or the seller , including a holder of 10% of the outstanding
certificates of the trust, or a "controlled foreign corporation" with respect to
which the trust or the seller is a "related person" within the meaning of the
Code or a bank whose receipt of interest is described in Section 871(h)(3) of
the Code and (2) provides to the U.S. person otherwise required to withhold
federal income tax from such interest, an appropriate statement, signed under
penalties of perjury, certifying that the beneficial owner of the term note is a
foreign person and providing that foreign person's name and address. If the
information provided in this statement changes, the foreign person must so
inform the indenture trustee within 30 days of the change. If the interest were
not portfolio interest, then it would be required to pay United States federal
income and withholding tax at a rate of 30 percent, unless the tax were reduced
or eliminated pursuant to an applicable tax treaty. The IRS has amended the
transition period relating to new regulations governing withholding, backup
withholding and information reporting requirements. Withholding certificates or
statements that are valid on December 31, 1999, may be treated as valid until
the earlier of its expiration or December 31, 2000. All existing certificates or
statements will cease to be effective after December 31, 2000.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a term note by a noteholder who is a foreign person will
be exempt from United States federal income and withholding tax, provided that
(1) the gain is not effectively connected with the conduct of a trade or
business in the United States by the foreign person, and (2) in the case of a
foreign individual, the foreign person is not present in the United States for
183 days or more in the taxable year.
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If the interest, gain or income on a term note held by a foreign person
is effectively connected with the conduct of a trade or business in the United
States by the foreign person, the holder, although exempt from the withholding
tax previously discussed if an appropriate statement is furnished, generally
will be required to pay United States federal income tax on the interest, gain
or income at regular federal income tax rates. In addition, if the foreign
person is a foreign corporation, it may be required to pay a branch profits tax
equal to 30 percent of its "effectively connected earnings and profits" within
the meaning of the Code for the taxable year, as adjusted for a number of items,
unless it qualifies for a lower rate under an applicable tax treaty.
A Registered Term Note beneficially owned by an individual who at the
time of the individual's death is a Foreign Person will not be subject to
federal estate tax as a result of such individual's death, provided that such
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the seller entitled to vote
within the meaning of Section 871(h)(3) of the Code. Additionally, the holding
of such Registered Term Note must not be effectively connected with the conduct
of a trade or business within the United States.
Under current Treasury regulations, backup withholding (imposed at a
rate of 31%) will not apply to payments made in respect of a term note if the
certifications described above are received, PROVIDED in each case that the
Trust or the Paying Agent, as the case may be, does not have actual knowledge
that the payee is a U.S. Person. The IRS has issued new regulations governing
the backup withholding and information reporting requirements. The new
regulations are generally effective for payments made after December 31, 2000.
Foreign persons should consult their tax advisors with respect to the impact, if
any, of the new regulations.
Because the seller will, for federal income tax purposes, treat all
term notes as indebtedness issued by a Trust characterized as either a
partnership or a division of whichever entity owns all of the Certificates, the
seller will not comply with the tax reporting requirements that would apply
under any alternative characterization of a Trust described below.
TAX CHARACTERIZATION OF THE TRUST
Depending upon whether certificates are owned by one or more persons,
the trust will be treated as a partnership or a division of seller for federal
income tax purposes. The relevant prospectus supplement will specify the
treatment of the trust for federal income tax purposes.
If the trust issues certificates only to the seller, the equity of the
trust will be wholly-owned by the seller. In this case, under the
"check-the-box" Treasury regulations, the trust will be treated as a division of
the seller, and hence a disregarded entity for federal income tax purposes. In
other words, for federal income tax purposes, the seller will be treated as the
owner of all the assets of the trust and the obligor of all the liabilities of
the trust. Accordingly, the trust would not be liable for any federal income
taxes as it would be deemed not to exist for federal income tax purposes. Under
the "check-the-box" Treasury regulations, unless it is treated as a trust for
federal income tax purposes, an unincorporated domestic entity with more than
one equity owner is automatically classified as a partnership for federal
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income tax purposes. Because it is a business trust, the trust will not qualify
as a trust for federal income tax purposes, and accordingly, if certificates are
sold or issued in any manner which results in there being more than one
certificateholder, the trust will be treated as a partnership.
If certificates are issued to more than one person, the seller, the
servicer and the certificateholders will agree to treat each trust as a
partnership for federal, state and local income and franchise tax purposes.
Under this scenario the certificateholders would be the partners of the
partnership, and the term notes and the revolving notes would be debt of the
partnership. However, the proper characterization of this arrangement as it
involves the certificates, the seller and the servicer is not clear because
there is no authority on transactions closely comparable to that contemplated
herein.
RISK OF ALTERNATIVE CHARACTERIZATION. If a trust were an association
taxable as a corporation for federal income tax purposes, it would have to pay
corporate income tax. Any corporate income tax could materially reduce or
eliminate cash that would otherwise be distributable with respect to the
applicable notes and certificates. Certificateholders could also be liable for
any corporate income tax that is unpaid by the trust. However, upon the issuance
of each series of certificates, tax counsel will deliver its opinion that the
trust will not be classified as an association taxable as a corporation.
Under the Code and the relevant PTP REGULATIONS promulgated by the
Treasury, a partnership may be classified as a publicly traded partnership, or
PTP, if equity interests therein are traded on an "established securities
market" or are "readily tradeable" on a "secondary market" or its "substantial
equivalent." For federal income tax purposes, a PTP is taxable as a corporation.
This generally has the effect of materially reducing the PTP's net income.
However, the trust will comply with safe harbors available under the PTP
regulations to avoid PTP characterization. Furthermore, the trust, even if it
were classified as a PTP, would avoid taxation as a corporation if 90% or more
of its annual income constituted "qualifying income" not derived in the conduct
of a "financial business"; it is unclear, however, whether the trust's income
would be so classified.
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
The above discussion does not address the tax treatment of any series
of term notes or the holders thereof under any state, local or foreign 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 this
transaction. Prospective investors are urged to consult with their tax advisors
regarding the state, local and foreign tax treatment of the applicable trust as
well as any state, local or foreign tax consequences to them of purchasing,
holding and disposing of term notes.
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ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan, as well as individual retirement
accounts and some types of Keogh Plans, each a BENEFIT PLAN, from engaging in
some types of transactions with persons that are "parties in interest" under
ERISA or "disqualified persons" under the Code with respect to a 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 those persons.
Some transactions involving the trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan
that purchased term notes 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. Unless the related prospectus
supplement states otherwise, although there is little guidance on the subject,
the seller believes the term notes of each trust would be treated as
indebtedness without substantial equity features for purposes of the Plan Assets
Regulation. Other exceptions, if any, from application of the Plan Assets
Regulation available with respect to any term notes will be discussed in the
related prospectus supplement.
However, without regard to whether term notes are treated as an equity
interest for those purposes, the acquisition or holding of term notes by or on
behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the seller, the servicer, the related trust or any of their
respective affiliates is or becomes a party in interest or a disqualified person
with respect to a Benefit Plan. Some of the exemptions from the prohibited
transaction rules could be applicable to the purchase and holding of term notes
by a Benefit Plan depending on the type and circumstances of the plan fiduciary
making the decision to acquire the notes. Included among these exemptions are:
Prohibited Transaction Class Exemption, 90-1, regarding investments by insurance
company pooled separate accounts; PTCE 91-38, regarding investments by bank
collective investment funds; PTCE 84-14, regarding transactions effected by
qualified professional asset managers; PTCE 95-60, regarding transactions by
life insurance company general accounts; and PTCE 96-23, regarding transactions
affected by in-house asset managers.
Employee benefit plans that are governmental plans, as defined in
Section 3(32) of ERISA, and some church plans, as defined in Section 3(33) of
ERISA, are not governed by ERISA.
A plan fiduciary considering the purchase of term notes should consult
its tax and/or legal advisors regarding whether the assets of the related trust
would be considered plan assets, the possibility of exemptive relief from the
prohibited transaction rules and other issues and their potential consequences.
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PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement ,
with respect to each series of term notes offered thereby, the seller will agree
to sell to each of the underwriters named therein and in the related prospectus
supplement, and each of the underwriters will severally agree to purchase from
the seller, the principal amount of term notes set forth therein and in the
related prospectus supplement.
In each underwriting agreement, the underwriters will agree, based on
the terms and conditions set forth therein, to purchase all the term notes
described therein which are offered hereby and by the related prospectus
supplement if any of the term notes are purchased. In the event of a default by
any underwriter, each underwriting agreement will provide that, in some
circumstances, purchase commitments of the nondefaulting underwriters may be
increased or the underwriting agreement may be terminated.
Each prospectus supplement will either:
(1) set forth the price at which each series of term notes
being offered thereby will be offered to the public and any concessions
that may be offered to dealers participating in the offering of the
term notes or
(2) specify that the term notes are to be resold by the
underwriters in negotiated transactions at varying prices to be
determined at the time of the sale. After the initial public offering
of any term notes, the public offering price and the concessions may be
changed.
The extent, if any, to which the closing of the sale of any series of
term notes is conditioned upon the closing of any other series of securities
will be set forth in the related prospectus supplement.
Each underwriting agreement will provide that the seller will indemnify
the underwriters against a number of 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.
The place and time of delivery for the term notes in respect of which
this prospectus is delivered will be set forth in the related prospectus
supplement.
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LEGAL OPINIONS
Some legal matters relating to the term notes 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 each trust, the seller 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. Federal income tax
matters will be passed upon for each trust, the seller and the servicer by
Kirkland & Ellis.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act, we filed a registration statement
relating to the securities with the SEC. This prospectus is part of the
registration statement, but the registration statement includes additional
information.
The servicer will file with the SEC all required annual, monthly and
special SEC reports and other information about the trust.
You may read and copy any reports, statements or other information we
file at the SEC's public reference room in Washington, D.C. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
SEC. Please call the SEC at (800) SEC-0330 for further information on the
operation of the public reference rooms. Our SEC filings are also available to
the public on the SEC Internet site (http://www.sec.gov).
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. Information that we file later with
the SEC will automatically update the information in this prospectus. In all
cases, you should rely on the later information over different information
included in this prospectus or the accompanying prospectus supplement. We
incorporate by reference any future SEC reports and materials filed by or on
behalf of the trust until we terminate our offering of the certificates.
As a recipient of this prospectus, you may request a copy of any
document we incorporate by reference, except exhibits to the documents, unless
the exhibits are specifically incorporated by reference, at no cost, by writing
us at: General Motors Acceptance Corporation, 3044 West Grand Boulevard,
Detroit, Michigan 48202.
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GLOSSARY OF TERMS
THIS GLOSSARY OF TERMS DOES NOT PURPORT TO BE COMPLETE AND IS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RELATED TRANSFER AND SERVICING
AGREEMENTS, FORMS OF WHICH ARE FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT
OF WHICH THIS PROSPECTUS IS A PART. SOME OF THE CAPITALIZED TERMS USED BUT NOT
DEFINED IN THE PROSPECTUS OR THIS GLOSSARY OF TERMS ARE DEFINED IN THE RELATED
PROSPECTUS SUPPLEMENT. REFERENCES TO THE SINGULAR INCLUDE REFERENCES TO THE
PLURAL AND VICE VERSA.
"ADDITIONAL TRUST PRINCIPAL" means, for any date, the sum of amounts
applied to cover the Trust Defaulted Amount and other amounts, all as more fully
described in the related prospectus supplement.
"ADMINISTRATIVE PURCHASE PAYMENT" has the meaning set forth in "The
Transfer and Servicing Agreements--Servicer Covenants."
"AVAILABLE RECEIVABLE" means, with respect to each trust, unless the
related prospectus supplement states otherwise, a receivable that is identified
by GMAC as satisfying the criteria set forth in clauses (1) through (16) of the
definition of Eligible Receivable.
"AVAILABLE TRUST INTEREST" means, with respect to each trust, for any
Distribution Date, the sum of (1) Trust Interest Collections, (2) Shared
Investment Proceeds and (3) receipts under credit, liquidity and other
enhancement arrangements and other amounts available to make interest payments
on securities and pay other amounts, all as more fully described in the related
prospectus supplement.
"AVAILABLE TRUST PRINCIPAL" means, with respect to each trust, for any
Distribution Date, the sum of (1) Trust Principal Collections for the related
Collection Period, (2) Additional Trust Principal and (3) receipts under credit,
liquidity and other enhancement arrangements and other amounts available to make
payments of principal on the notes and distributions with respect to the
certificate balance on the certificates, all as more fully described in the
related prospectus supplement.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as amended.
"BENEFIT PLAN" has the meaning set forth in "ERISA Considerations."
"BUSINESS DAY" means, unless the related prospectus supplement states
differently, any day other than a Saturday, Sunday or any other day on which
banks in New York, New York or Detroit, Michigan may, or are required to, remain
closed.
"CASH ACCUMULATION EVENT" has the meaning set forth in "The Term
Notes--Principal and Interest on the Term Notes."
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"CASH ACCUMULATION PERIOD" has the meaning set forth in "The Term
Notes--Principal and Interest on the Term Notes."
"CASH COLLATERAL AMOUNT" means, with respect to each trust as of any
date, the amount of cash that is required to be held on behalf of the trust in
order to ensure that the Daily Trust Balance at least equals the Daily Trust
Invested Amount as described under "The Transfer and Servicing
Agreements--Application of Collections--Principal Collections."
"CERTIFICATE DISTRIBUTION ACCOUNT" means, for each trust, on or more
accounts established by the servicer at and maintained with the related owner
trustee, in the name of the owner trustee on behalf of the related
certificateholders, in which amounts to be applied for distribution to the
certificateholders will be deposited and from which all distributions to the
certificateholders will be made.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"COLLATERAL SECURITY" means, with respect to a dealer account included
in the pool of accounts and receivables arising in the dealer account, all
collateral security granted to secure the obligations of the related Dealer in
connection therewith and any proceeds therefrom, including all Vehicle
Collateral Security and, to the extent applicable, other motor vehicles, parts
inventory, equipment, fixtures, service accounts, realty and guarantees.
"COLLECTION ACCOUNT" means, with respect to each trust, one or more
bank accounts, established by the servicer at and maintained with the indenture
trustee, in the name of the indenture trustee, on behalf of the holders of the
related securities, into which the trust's share of all payments made on or with
respect to the receivables in the dealer accounts related to that trust will be
deposited.
"COLLECTION PERIOD," including "RELATED COLLECTION PERIOD," means, with
respect to any Distribution Date, the calendar month preceding the month in
which that Distribution Date occurs.
"COLLECTIONS" means Interest Collections and Principal Collections.
"CONTROLLED DEPOSIT AMOUNT" means, with respect to any trust or any
series or class of securities, on any date, the amount set forth or determined
as described in the related prospectus supplement, which amount limits the
amount of Principal Collections that may be applied to make principal payments
on the notes or distributions of the certificate balance or be set aside for
that purpose.
"DAILY PORTION" has the meaning set forth in "Federal Income Tax
Consequences--Tax Characterization and Treatment of Term Notes."
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"DAILY TRUST BALANCE" means, with respect to each trust, for any date,
the aggregate principal balance of all receivables held by the trust on that
date.
"DAILY TRUST INVESTED AMOUNT" means, with respect to each trust, for
any date during a Collection Period, an amount equal to, without duplication:
(1) the outstanding aggregate principal amount of the related
term notes on that date PLUS
(2) the outstanding certificate balance on that date PLUS
(3) the Net Revolver Balance for that date MINUS
(4) the Cash Collateral Amount for that date MINUS
(5) any amounts held on that date in a related Distribution
Account, Cash Accumulation Account or other account for payment of
principal on the notes or distribution of the certificate balance on
the certificates, MINUS,
(6) the amount of unreimbursed trust Charge-Offs as of that
date.
"DEALER OVERCONCENTRATION RECEIVABLES" means, for any date, with
respect to any dealer or group of affiliated dealers, the outstanding Available
receivables with respect to that dealer or group of affiliated dealers to the
extent, if any, of the excess of:
(1) the aggregate principal balance of all the Available
Receivables on that date over
(2) 1.0% (or a different percentage as may be set forth in the
related prospectus supplement) of the sum of (a) the Specified Maximum
Revolver Balance and (b) the aggregate principal balance of all
outstanding term notes as of that date or, if applicable, as of the
commencement of any then occurring Early Amortization Period, Wind Down
Period or Payment Period. If, on any date, there exist Dealer
Overconcentration Receivables with respect to a dealer or group of
affiliated dealers, those Receivables constituting Dealer
Overconcentration Receivables shall be identified pursuant to the
procedures set forth in the related trust sale and servicing agreement.
Dealer Overconcentration Receivables are determined in accordance with
the servicer's standard procedures for identifying and tracking
accounts of affiliated dealers.
"DEFAULTED RECEIVABLES" means, with respect to each trust, for any
Distribution Date, all receivables held by the trust that were charged-off as
uncollectible during the related Collection Period, other than any receivables
that may be repurchased by the seller or GMAC or purchased by the servicer on
that Distribution Date unless specified events of bankruptcy, insolvency or
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receivership have occurred with respect to the seller, GMAC or the servicer, as
the case may be, in which event Defaulted Receivables will include the principal
amount of the otherwise excluded receivables.
"DESIGNATED ACCOUNTS" has the meaning set forth in "The Transfer and
Servicing Agreements--Bank Accounts."
"DISCLOSURE DOCUMENT" has the meaning set forth in "prospectus
Summary--The Term Notes."
"DISTRIBUTION ACCOUNTS" means the Securities Distribution Accounts and
the Swap Distribution Account, collectively.
"DISTRIBUTION DATE" means, with respect to each trust, the fifteenth
day of each calendar month or, if that day is not a Business Day, the next
succeeding Business Day, beginning on the Initial Distribution Date specified in
the related prospectus supplement.
"DPP" has the meaning set forth in "The Dealer Floor Plan Financing
Business--Dealer Payment Terms."
"EARLY AMORTIZATION EVENT" has the meaning set forth in "The Transfer
and Servicing Agreements Early Amortization Events."
"EARLY AMORTIZATION PERIOD" means, with respect to any trust, the
period commencing on the day on which an Early Amortization Event with respect
to the trust is deemed to have occurred, and ending on the first to occur of:
(1) the payment in full of all outstanding securities issued
by the trust,
(2) the recommencement of the Revolving Period if and to the
extent described herein or in the related prospectus supplement; and
(3) the Trust Termination Date.
A Distribution Date is said to occur for an Early Amortization Period
if the last day of the related Collection Period occurred during an Early
Amortization Period.
"ELIGIBLE ACCOUNT" means, with respect to any trust, a dealer account
which, as of the date of determination thereof:
(1) is in favor of an entity or person that is not faced with
voluntary or involuntary liquidation, that is not classified in
"programmed" or "no credit" status and in which General Motors or an
affiliate does not have a more than 20% equity interest;
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(2) has been established by GMAC or General Motors;
(3) is maintained and serviced by GMAC;
(4) is not a fleet account; and
(5) satisfies the other criteria, if any, set forth in the
related prospectus supplement.
"ELIGIBLE DEPOSIT ACCOUNT" means either
(1) a segregated account with an Eligible Institution, or
(2) 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. This
corporate trust department having corporate trust powers and acting as
trustee for funds deposited in that account, so long as any of the
securities of the depository institution has a credit rating from each
rating agency then rating the securities in one of its generic rating
categories which signifies investment grade.
"ELIGIBLE INSTITUTION" means, with respect to a trust, either
(1) the corporate trust department of the related
indenture trustee or owner trustee, as applicable, or
(2) 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 (i) a long-term
unsecured debt rating acceptable to the rating
agencies rating the notes or (ii) a short-term
unsecured debt rating or certificate of deposit
rating acceptable to the Rating Agencies and (b)
whose deposits are insured by the Federal Deposit
Insurance Corporation or any successor thereto.
"ELIGIBLE RECEIVABLE" means, with respect to any date, a receivable,
except as otherwise provided in the related prospectus supplement:
(1) which was originated by GMAC in the ordinary course of
business or which was originated by General Motors in the ordinary
course of business and acquired by GMAC;
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(2) which arose under a dealer account that was an Eligible
Account, and not a Selected Account, at the time of the transfer of the
receivable from GMAC to the seller;
(3) which is payable in United States dollars;
(4) to which GMAC had good and marketable title immediately
prior to the transfer thereof by GMAC to the seller and which has been
the subject of a valid transfer and assignment from GMAC to the seller
of all of GMAC's right, title and interest therein and the related
Vehicle Collateral Security, including any proceeds thereof;
(5) which is advanced against a vehicle;
(6) which at the time of the transfer thereof by GMAC to the
seller is secured by a first priority perfected security interest in
the vehicle related thereto;
(7) with respect to which all consents, licenses and approvals
of any governmental authority in connection with the transfer thereof
to the seller and to the trust have been obtained and are in full force
and effect;
(8) which was created in compliance in all material respects
with all requirements of law applicable thereto;
(9) as to which, at all times following the transfer of the
receivable to the trust, the trust has either a first priority
perfected security interest or good and marketable title thereto, free
and clear of all liens, other than liens permitted pursuant to the
related trust sale and servicing agreement;
(10) which has been the subject of a valid transfer and
assignment from the seller to the trust of all the seller's right,
title and interest therein and the related Vehicle Collateral Security,
including any proceeds thereof;
(11) which is the legal, valid, binding and assignable payment
obligation of the dealer relating thereto, enforceable against the
dealer in accordance with its terms, except where enforceability may be
limited by the insolvency laws;
(12) which, at the time of transfer thereof by GMAC to the
seller, is not faced with any valid right of rescission, setoff or any
other defense, including defenses arising out of violations of usury
laws, of the related dealer;
(13) as to which, at the time of the transfer thereof to the
trust, GMAC and the seller have satisfied in all material respects all
their respective obligations with respect to the Receivable required to
be satisfied at that time;
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(14) as to which, at the time of the transfer thereof to the
trust, neither GMAC nor the seller has taken or failed to take any
action that would impair the rights of the trust or the securityholders
therein;
(15) which constitutes "chattel paper," an "account" or a
"general intangible" as defined in Article 9 of the UCC as in effect in
the State of Michigan;
(16) with respect to which the related dealer has not
postponed principal payment pursuant to DPP, any similar arrangement,
or any instalment payment program;
(17) which does not constitute a Dealer Overconcentration
Receivable; and
(18) which does not constitute an Excess Available Receivable.
Notwithstanding the foregoing, any other Receivable identified by GMAC
as an Eligible Receivable will also be deemed an Eligible Receivable
unless and until that receivable is thereafter determined not to
satisfy the eligibility criteria set forth above and is reassigned by
the related trust to GMAC or the seller pursuant to the related
Transfer and Servicing Agreements.
"EVENT OF DEFAULT" has the meaning set forth in "The Term Notes--The
Indenture-- Events of Default; Rights upon Events of Default."
"EXCESS AVAILABLE RECEIVABLES" means, with respect to each trust, for
any date, Available Receivables to the extent, if any, of the excess of:
(1) the aggregate principal balance of Available Receivables
less the aggregate principal balance of Dealer Overconcentration
receivables over
(2) the Maximum Pool Balance.
If, on any date, there exist Excess Available receivables, those
receivables constituting Excess Available receivables shall be identified
pursuant to the related trust sale and servicing agreement.
"FOREIGN PERSON" means a any noteholder other than a U.S. person.
"INITIAL CUT-OFF DATE" means, with respect to each trust, the date so
specified in the prospectus supplement relating to the first series of term
notes issued by the trust.
"INSOLVENCY EVENT" means, with respect to a specified entity:
(1) 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, trustee or liquidator for the
entity, in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of the entity's affairs, and the continuance of that decree
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or order unstayed and in effect for a period of 90 consecutive days,
(2) the consent by the entity to the appointment of a
conservator, receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the entity or of or relating to
substantially all of the entity's property, or
(3) the entity 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, bankruptcy or reorganization statute,
make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations.
"INTEREST COLLECTIONS" means, with respect to any trust, for any
Collection Period, collections received during the Collection Period on the
receivables existing under the dealer accounts in the related pool of accounts
that the servicer attributes to interest pursuant to its servicing guidelines,
including Administrative Purchase Payments and Warranty Payments in excess of
the principal portion thereof.
"INTEREST RATE" means for any Payment Date and for any series of term
notes, the rate or rates of interest on the series of term notes as specified in
the related prospectus supplement.
"INVESTMENT PROCEEDS" means, with respect to any trust, for any
Distribution Date, investment earnings on funds deposited in Designated Accounts
and the Certificate Distribution Account, net of losses and investment expenses,
during the related Collection Period.
"MARINE ACCOUNTS" means credit lines or accounts pursuant to which
advances are made to finance new and used boats and related items.
"MAXIMUM POOL BALANCE" means, with respect to each trust, the sum of
(1) the Maximum Revolver Balance,
(2) the aggregate outstanding principal balance of all term
notes after giving effect to any amounts on deposit in the Note
Distribution Account for payments of principal and
(3) the aggregate outstanding certificate balance of all
certificates after giving effect to any amounts on deposit in the
Certificate Distribution Account for distributions with respect to the
certificate balance.
"MAXIMUM REVOLVER BALANCE" means, with respect to each trust, at any
time, the Specified Maximum Revolver Balance set forth in the related prospectus
supplement, as that amount may be increased or decreased from time to time in
accordance with the related trust sale and servicing agreement. However, if at
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any time additional borrowings may not be made under the revolving notes,
including, if applicable, during the Wind Down Period or an Early Amortization
Period, Maximum Revolver Balance shall mean the Net Revolver Balance.
"MONTHLY PAYMENT RATE" means, for any Collection Period, the percentage
obtained by dividing Principal Collections for the Collection Period by the
average daily aggregate principal balance of all receivables included in the
Accounts in the pool of accounts during that Collection Period.
"MONTHLY SERVICING FEE" means, with respect to each trust, unless the
related prospectus supplement states differently, for any Distribution Date, the
product of (1) the average daily balance of Daily Trust Invested Amount for the
related Collection Period and (2) one-twelfth of the Servicing Fee Rate.
"NET RECEIVABLES RATE" means, with respect to each trust, unless the
related prospectus supplement states differently, with respect to any Collection
Period, a rate equal to the product of
(1) the quotient obtained by dividing (a) 360 by (b) the
actual number of days elapsed in that Collection Period and
(2) the percentage equivalent of a fraction, the numerator of
which is the amount of Trust Interest Collections for the immediately
preceding Collection Period, after subtracting therefrom the Trust
Defaulted Amount for the Distribution Date related to the immediately
preceding Collection Period, and the denominator of which is the
average Daily Trust Balance for the immediately preceding Collection
Period.
"NET REVOLVER BALANCE" means, with respect to each trust, for any date,
the aggregate outstanding principal balance under the revolving notes minus any
amounts on deposit in the related Revolver Distribution Account on the date for
the payment of principal.
"NOTE DISTRIBUTION ACCOUNT" means, with respect to each trust, one or
more accounts, established by the servicer at and maintained with the related
indenture trustee, in the name of the indenture trustee, on behalf of the
holders of the related term notes, in which amounts to be applied for payment to
the term noteholders will be deposited and from which all payments to the term
noteholders will be made.
"OID" has the meaning set forth in "Federal Income Tax
Consequences--Tax Characterization and Treatment of Term Notes."
"PAYMENT DATE" means, with respect to a series of notes, each date
specified for payment of interest or principal on the notes in the related
prospectus supplement. With respect to a series of notes providing for monthly
payment of interest or principal, Payment Date means a Distribution Date.
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"PAYMENT PERIOD" means, with respect to a series of notes, the period,
if any, described in the related prospectus supplement during which any amounts
will be set aside and/or paid as principal on the notes prior to the Wind Down
Period or an Early Amortization Period.
"PRINCIPAL COLLECTIONS" means, with respect to any trust, for any date
or any period, collections received on that date or during that period, as
applicable, on the receivables existing under the dealer accounts in the related
pool of accounts that the servicer attributes to principal pursuant to its
servicing guidelines, including the principal portion of warranty payments and
Administrative Purchase Payments.
"PTP" means, under the Code and Treasury Department regulations,
publicly traded partnership.
"REASSIGNMENT AMOUNT" means, for any Distribution Date, after giving
effect to any allocations, withdrawals and deposits otherwise to be made on that
Distribution Date, the sum of the Daily Trust Invested Amount, which, for that
purpose, will be calculated without reduction for the Cash Collateral Amount,
and accrued but unpaid interest on all outstanding securities to the extent not
previously distributed to securityholders.
"RECEIVABLES PURCHASE DATE" means, with respect to each trust, unless
the related prospectus supplement states differently, each Business Day during
the related Revolving Period on which Eligible Receivables are created in any
dealer account then included in the related pool of accounts, except as
described under "The Transfer and Servicing Agreements--Insolvency Events."
"REGISTERED TERM NOTES" means a term note issued by the trust in
registered form.
"RELATED DOCUMENTS" means the indenture, the transfer and servicing
agreement, and other related documents for the trust.
"RESERVE FUND" means, with respect to each Trust, an Eligible Deposit
Account maintained for the benefit of the Trust and the Securityholders as
described in "The Transfer and Servicing Agreements--Liquidity and Credit
Support.
"RESERVE FUND INITIAL DEPOSIT" means, with respect to each trust, the
amount, if any, specified in the related prospectus supplement.
"RESERVE FUND REQUIRED AMOUNT" means, with respect to each trust, the
amount, if any, specified in the related prospectus supplement.
"RETAINED PROPERTY" means (i) receivables in the dealer accounts
included in the related pool of accounts that GMAC does not transfer to the
seller and collections thereon and (ii) any receivables and collections thereon
repurchased by GMAC from the seller or the trust as described herein.
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"REVOLVER DISTRIBUTION ACCOUNT" means, with respect to each trust, one
or more accounts, established by the servicer at and maintained with the related
indenture trustee, in the name of the indenture trustee, on behalf of the
holders of the related revolving notes, in which amounts to be applied for
payment to the revolving noteholders will be deposited and from which all
payments to the revolving noteholders will be made.
"REVOLVER INTEREST RATE" means for any Distribution Date and for any
series of revolving notes, the rate or rates of interest on those revolving
notes.
"REVOLVING PERIOD" means, with respect to each trust, the period
commencing on the date on which the trust issues its first series of term notes
and continuing until the earlier of (1) the commencement of an Early
Amortization Period and (2) the Scheduled Revolving Period Termination Date. The
Revolving Period for a trust may recommence in limited circumstances described
herein or in the related prospectus supplement.
"SCHEDULE OF ACCOUNTS" means the list of the dealer accounts included
in the pool of accounts, which may be amended and supplemented from time to
time.
"SCHEDULED REVOLVING PERIOD TERMINATION DATE" means, with respect to
each trust, the date specified in the related prospectus supplement.
"SCHEDULED SERIES PAYMENT PERIOD COMMENCEMENT DATE" means, with respect
to any series of term notes with a Payment Period, the date so specified in the
related prospectus supplement.
"SECURITIES DISTRIBUTION ACCOUNTS" means the Note Distribution Account,
the Revolver Distribution Account, and the Certificate Distribution Account,
collectively.
"SELECTED ACCOUNTS" has the meaning set forth in the "The Transfer and
Servicing Agreements--Addition and Removal of Accounts."
"SERIES EARLY PAYMENT EVENT" means with respect to any series of term
notes with a Payment Period, an event specified in the related prospectus
supplement as commencing the related Payment Period.
"SERVICING FEE RATE" means, with respect to each trust, 1% unless any
related prospectus supplement states otherwise.
"SHORT TERM NOTE" has the meaning set forth in "Federal Income Tax
Consequences--Tax Characterization and Treatment of Term Notes."
"STATED FINAL PAYMENT DATE" means, with respect to any series of notes
or certificates, the date so set forth in the related prospectus supplement, on
which date the final payment on the notes or final distribution on the
certificates is due.
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"STRIP NOTES" has the meaning set forth in "The Term Notes--Principal
and Interest on the Term Notes."
"SWAP DISTRIBUTION ACCOUNT" means, f so specified in the prospectus
supplement, one or more established by the servicer at and maintained with the
indenture trustee, in the name of the indenture trustee on behalf of the
counterparty to an applicable currency swap, interest rate swap or other swap,
together with the holders of the term notes of the relevant series, in which
amounts to be applied for distribution to such counterparty will be deposited
and from which distributions to such counterparty will be made.
"TARGETED FINAL PAYMENT DATE" means, with respect to any series of
notes, the date, if any, specified in the related prospectus supplement on which
all principal is scheduled to be paid as principal on that series of notes, to
the extent not previously paid.
"TRANSFER AND SERVICING AGREEMENTS" means, with respect to each trust,
the pooling and servicing agreement, the trust sale and servicing agreement, the
trust agreement and the administration agreement.
"TRUST CHARGE-OFFS" means, with respect to each trust, for any
Distribution Date, the amount of the trust Defaulted Amount for that
Distribution Date that is not covered through the application of Trust Interest
Collections and funds in the Reserve Fund or otherwise. As of any date,
unreimbursed trust Charge-Offs will equal the aggregate trust Charge-Offs for
all prior Distribution Dates unless and to the extent the trust Charge-Offs have
been covered or otherwise reduced as described in the related prospectus
supplement.
"TRUST DEFAULTED AMOUNT" means, with respect to each trust, for any
Distribution Date, an amount not less than zero equal to the principal amount of
all Defaulted receivables.
"TRUST INTEREST COLLECTIONS" means, with respect to each trust,
Interest Collections for the related Collection Period attributable to the
receivables held by the trust, as more fully described herein and in the related
prospectus supplement.
"TRUST PRINCIPAL COLLECTIONS" means, with respect to each trust,
Principal Collections for the related Collection Period attributable to the
receivables held by the trust, as more fully described herein and in the related
prospectus supplement.
"TRUST TERMINATION DATE" is the date each trust will terminate and will
be on the earlier to occur of
(1) the day following the Distribution Date on which all
amounts required to be paid to the related securityholders pursuant to
the related Transfer and Servicing Agreements have been paid or have
been deposited in the related Distribution Accounts, and the aggregate
outstanding balance of the revolving notes is zero, if the seller
elects to terminate the trust at that time, and
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(2) the specified Trust Termination Date as set forth in the
related prospectus supplement.
"UCC" means the Uniform Commercial Code as in effect in Delaware,
Michigan or New York, and as may be amended from time to time.
"U.S PERSON" means (i) a citizen or resident of the United States, (ii)
a corporation or partnership created or organized in the United States or under
the laws of the United States or of any state, (iii) an estate the income of
which is subject to federal income taxation regardless of its source, or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
fiduciaries have the authority to control all substantial decisions of the
trust.
"VEHICLE COLLATERAL SECURITY" means, with respect to an Account and the
receivables arising under that dealer account, the security interest in the
vehicles of the related dealer granted to secure the obligations of that dealer
in connection therewith and any proceeds therefrom.
"VOTING INTERESTS" means, as of any date, the aggregate outstanding
certificate balance of all certificates; provided, however, that if GMAC and its
affiliates own less than 100% of the certificates, then certificates owned by
GMAC, the trust or any affiliate of GMAC or the trust, other than the seller,
shall be disregarded and deemed not to be outstanding. However, in determining
whether the owner trustee shall be protected in relying upon any 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 the certificates and that the
pledgee is not GMAC or the Trust or any affiliate of GMAC or the trust, other
than the seller.
"WARRANTY PAYMENT" has the meaning set forth in "The Transfer and
Servicing Agreements--Representations and Warranties."
"WARRANTY RECEIVABLE" has the meaning set forth in "The Transfer and
Servicing Agreements--Representations and Warranties."
"WIND DOWN PERIOD" means, with respect to each trust, the period
commencing on the day immediately after the Scheduled Revolving Period
Termination Date and continuing until the earlier of (1) the commencement of an
Early Amortization Period and (2) the date on which all of the related
securities have been paid in full. The first Distribution Date for a Wind Down
Period will be the Distribution Date following the first Collection Period
included in the Wind Down Period.
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The information in this preliminary prospectus supplement is not complete and
may be changed. This Preliminary prospectus supplement is not an offer to sell
these securities and we are not soliciting offers to buy these securities in
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED [date],
[year] Prospectus supplement to prospectus
dated [date] , [year]
Superior Wholesale Inventory Financing Trust [ ]
ISSUER OF THE [$ ] FLOATING RATE ASSET BACKED TERM NOTES, SERIES [ ]
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE ____ IN THIS
PROSPECTUS SUPPLEMENT AND PAGE __ IN THE PROSPECTUS.
The [ ] term notes represent obligations of the trust only and do not represent
obligations of or interests in, and are not guaranteed by, Wholesale Auto
Receivables Corporation, General Motors Acceptance Corporation or any of their
affiliates.
This prospectus supplement may be used to offer and sell the [ ] term notes only
if accompanied by the prospectus.
The trust will issue [ ] term notes to the public--
PRINCIPAL AMOUNT $
INTEREST RATE
TARGETED FINAL PAYMENT DATE
PRICE TO PUBLIC _____%
UNDERWRITING DISCOUNT _____%
PROCEEDS FROM SALE $__________
- --------------------------------------- ----------------------------------------
CREDIT ENHANCEMENT
o Reserve fund, with a deposit of __________.
o Cash accumulation reserve fund, with a deposit of ___________.
o A subordinated certificate class.
This prospectus supplement and the accompanying prospectus relate only to the
offering of the [ ] term notes.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
UNDERWRITER
[Date], [Year]
THE [ ] TERM NOTES REPRESENT OBLIGATIONS OF THE TRUST ONLY AND DO NOT REPRESENT
OBLIGATIONS OF OR INTERESTS IN, AND ARE NOT GUARANTEED BY, WHOLESALE AUTO
RECEIVABLES CORPORATION, GENERAL MOTORS ACCEPTANCE CORPORATION OR ANY OF THEIR
AFFILIATES
THIS PROSPECTUS SUPPLEMENT MAY BE USED TO OFFER AND SELL THE TERM NOTES ONLY IF
ACCOMPANIED BY THE PROSPECTUS.
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We provide information to you about the [ ] term notes in two separate
documents:
(a) the prospectus, which provides general information and
terms of the term notes, some of which may not apply to a particular
series of term notes, including the [ ] term notes.
(b) this prospectus supplement, which will provide information
regarding the pool of contracts held by the trust and will specify the
terms of the [ ] term notes.
IF THE TERMS OF THE [ ] TERM NOTES VARY BETWEEN THE PROSPECTUS AND THIS
PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THIS PROSPECTUS
SUPPLEMENT.
You should rely only on the information provided in the accompanying
prospectus and this prospectus supplement, including the information
incorporated by reference. We have not authorized anyone to provide you with
other or different information. We are not offering the [
] term notes in any state where the offer is not permitted.
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT
SUMMARY........................................... S-__
RISK FACTORS...................................... S-__
THE TRUST......................................... S-__
THE U.S. PORTFOLIO................................ S-__
THE POOL OF ACCOUNTS.............................. S-__
THE [ ] TERM NOTES........................ S-__
THE REVOLVING NOTES............................... S-__
THE [ ] CERTIFICATES...................... S-__
THE TRANSFER AND SERVICING AGREEMENTS S-__
ERISA CONSIDERATIONS.............................. S-__
FEDERAL INCOME TAX CONSEQUENCES................... S-__
UNDERWRITING...................................... S-__
LEGAL OPINIONS.................................... S-__
GLOSSARY.......................................... S-__
PROSPECTUS
SUMMARY OF TERMS..................................
RISK FACTORS......................................
THE SERVICER......................................
THE SELLER........................................
THE TRUSTS........................................
USE OF PROCEEDS...................................
THE DEALER FLOOR PLAN FINANCING BUSINESS
THE ACCOUNTS......................................
MATURITY AND PRINCIPAL CONSIDERATIONS
THE TERM NOTES....................................
THE REVOLVING NOTES...............................
THE CERTIFICATES..................................
THE TRANSFER AND SERVICING AGREEMENTS
LEGAL ASPECTS.....................................
FEDERAL INCOME TAX CONSEQUENCES...................
STATE AND LOCAL TAX CONSEQUENCES..................
ERISA CONSIDERATIONS..............................
PLAN OF DISTRIBUTION..............................
LEGAL OPINIONS....................................
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION BY REFERENCE........................
GLOSSARY OF TERMS.................................
<PAGE>
[GRAPHIC OMITTED]
S-1
<PAGE>
SUMMARY
This summary highlights selected information from this document and does not
contain all of the information that you need to consider in making your
investment decision. To understand the terms of this offering of the [ ] term
notes, carefully read this entire document and the accompanying prospectus.
THE PARTIES
ISSUER/TRUST
Superior Wholesale Inventory Financing Trust [ ], a Delaware business trust
formed by Wholesale Auto Receivables Corporation.
SELLER
Wholesale Auto Receivables Corporation, a wholly-owned subsidiary of GMAC.
SERVICER
GMAC, a wholly-owned subsidiary of General Motors Corporation.
INDENTURE TRUSTEE
[ ]
OWNER TRUSTEE
[ ]
CAPITALIZATION OF THE TRUST
GENERAL
On the initial closing date, [DATE], the trust will issue the following
securities:
o [$ floating rate asset backed term notes, series ], which we refer to
as the [ ] TERM NOTES The [ ] term notes will bear interest, payable
monthly, at a rate equal to [one-month U.S. dollar LIBOR] plus [ ]
basis points annually.
o floating rate asset backed revolving
note, series [ ] with a maximum
revolver balance of [$ ], which
we refer to as the [ ] REVOLVING
NOTE.
o [$ ] floating rate asset backed
certificates, class [ ], which we
refer to as the [ ] CERTIFICATES.
Only the [ ] term notes are offered hereby. The [ ] revolving note and
the [ ] certificates will initially be retained by the seller and are not
offered in this prospectus supplement. An interest in the [ ] revolving note
will be sold in a private placement.
The [ ] term notes will be registered in the name of the nominee for
the Depository Trust Company. You may hold your [ ] term notes through the
book-entry systems of DTC in the United States or Cedelbank or Euroclear in
Europe.
After the initial closing date, the trust may issue from time to time
additional series of term notes and revolving notes and additional certificates.
We use the term notes to mean the [ ] term notes, the [ ] revolving
note issued on the initial closing date and any additional series of term notes
or revolving notes. We use the term securities to mean the notes, the [ ]
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certificates and any additional certificates.
SUBORDINATION
The [ ] certificates will be subordinated to all series of notes. The [
] certificates will receive no principal until the notes are fully paid or an
allocation of principal sufficient to fully pay the notes has been made. The [ ]
revolving note and the [ ] term notes will generally have equal priority in
payments, although the timing of payments may vary.
BASIS SWAPS
On the initial closing date, the trust will enter into a basis swap for
the benefit of the [ ] term notes. The basis swap counterparty, GMAC, will pay
to the trust on each distribution date, interest at a per annum rate of U.S.
dollar [ ] month LIBOR plus _______%. The trust will pay the basis swap
counterparty interest at a per annum rate equal to the prime rate. Only the net
amount due by the trust or by the basis swap counterparty, as the case may be,
will be remitted. The trust will enter into similar basis swaps with GMAC for
the benefit of the [ ] revolving note and the [ ] certificates.
PAYMENTS ON THE [ ] TERM
NOTES
INTEREST
o The trust will pay interest on the [ ] term notes monthly, on the
[15th] day of each month or on the next business day, which we refer to
as the MONTHLY DISTRIBUTION DATE. The first monthly distribution date
is [DATE].
o The prospectus and this prospectus supplement describe how the trust
will allocate available funds to interest payments on the [ ] term
notes and other securities.
o The trust will pay interest on the [ ] term notes based on the [actual
number of days] elapsed and a [360- day year]. Interest will accrue
from and including the initial closing date, or from and including the
most recent distribution date on which the trust has paid interest to
but excluding the current monthly distribution date.
PRINCIPAL PAYMENTS
o We expect that the trust will pay the entire principal balance of the [
] term notes on their targeted final payment date, which is the monthly
distribution date in [ ] 200[ ].
o Starting approximately five months before this targeted final payment
date, the servicer will calculate the number of months in which the
trust will allocate principal collections to the repayment of the [ ]
term notes on the targeted final payment date. We refer to this period
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as the PAYMENT PERIOD. The trust will accumulate the allocated
principal collections during the payment period in a distribution
account for the [ ] term notes.
o The trust could make principal payments on the [ ] term notes sooner
than the targeted final payment date if a RAPID AMORTIZATION EVENT
occurs. The rapid amortization events for the [ ] term notes are:
o General Motors, GMAC or
the seller becomes insolvent;
o the trust does not pay the [ ]
term notes in full by their
stated final payment date;
o the trust or the seller is
required to register under the
Investment Company Act;
and
o the balance in the cash
accumulation reserve fund
declines below $____.
On each monthly distribution date after the occurrence of a rapid
amortization event, the trust will apply allocated principal collections and
other available funds to repay principal on the [ ] term notes.
o It is also possible that the trust will not repay the entire principal
balance of the [ ] term notes on or before the targeted final payment
date. If principal collections are slower than anticipated during the
payment period, then the payment of principal on the targeted final
payment date could be insufficient to repay all of the [ ] term
notes' principal balance. In that case, allocable principal collections
will be applied to the repayment of principal on the [ ] term notes
on monthly subsequent distribution dates.
o All unpaid principal on the [ ] term notes will be due on the stated
final payment date, which is the monthly distribution date in [ ]
200 [ ]. If the trust fails to pay the [ ] term notes in full on
the stated final payment date, this will trigger an event of default
and a rapid amortization event.
o The servicer may repurchase all of the remaining receivables when:
o The daily trust balance is
equal to or less than ____%
of the highest sum, at any
time since the initial closing
date, of the daily trust
balance PLUS cash held by the
trust PLUS deposits in the cash
accumulation account and the
note distribution account, and
o either no term notes are
outstanding or the wind down
period is in effect.
CREDIT ENHANCEMENT AND
LIQUIDITY
The trust will repay [ ] term notes primarily from principal and interest
collections on the receivables. In addition, there are several additional
sources from which funds will be available to pay principal and interest on the
[ ] term notes as well as other payments which the trust must make, including:
o the basis swap for the [ ] term notes;
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o excess interest, which is equal to interest collected on the
receivables, MINUS interest the trust pays on securities, MINUS the
trust's expense of entering into the basis swap;
o advances the servicer makes to the trust in some circumstances;
o subordination of payments on the certificates to payments on the notes;
o monies in the reserve fund; and
o in some circumstances, monies in the cash accumulation reserve fund.
ASSETS OF THE TRUST
The primary asset of the trust will be a revolving pool of receivables.
This pool arises under floor plan financing agreements between GMAC and a group
of retail automotive dealers franchised by General Motors. These agreements are
lines of credit which dealers use to purchase new and used motor vehicles
manufactured or distributed by General Motors and other motor vehicle
manufacturers and distributors. We refer to the dealers' obligations under these
agreements as RECEIVABLES.
The receivables will be sold by GMAC to the seller, and then by the
seller to the trust. The trust will grant a security interest in the receivables
and other trust property to the indenture trustee on behalf of the noteholders.
The trust property will also include:
o basis swaps for the [ ] term notes, the [ ] revolving note and the
[ ] certificates;
o security interests in the collateral securing the dealers' obligation
to pay the receivables, which will include vehicles and may include
parts inventory, equipment, fixtures, service accounts, real estate and
guarantees;
o amounts held on deposit in trust accounts maintained for the trust;
o any recourse GMAC has against the dealers under the floor plan
financing agreements;
o some of the rights the seller has under its purchase agreement with
GMAC; and
o all rights the trust has under its sale and servicing agreement with
the seller.
REVOLVING POOL
As new receivables arise, the seller will ordinarily transfer them to
the trust on a daily basis. At the same time, prior to the date on which funds
will first be set aside for payments on the [ ] term notes, the trust will
ordinarily use principal collections on the receivables to purchase new
receivables from the seller or to pay down the principal balance on the [ ]
revolving note. The trust could also retain principal collections and invest
them in eligible investments, if sufficient new receivables were not available.
CASH ACCUMULATION
If a CASH ACCUMULATION EVENT occurs, the trust will retain all of the
principal collections allocable to the [ ] term notes. The trust will then
invest them in eligible investments in a cash
S-5
<PAGE>
accumulation account dedicated to the [ ] term notes. The trust will continue to
invest these funds in eligible investments until the targeted final payment date
for the [ ] term notes, or until the occurrence of a rapid amortization event.
Cash accumulation events generally occur upon defaults under the underlying
transaction agreements and when the pool of receivables to satisfy various
performance tests or measurements on the pool of receivables. These tests may
include
o the payment rate on the receivables,
o the composition of the receivables pool,
o the characteristics of the receivables, and
o the amount on deposit in the reserve fund.
Each of the early amortization events identified in the prospectus
under "THE TRANSFER AND SERVICING AGREEMENTS-- EARLY AMORTIZATION EVENTS" is a
cash accumulation event, other than those which are rapid amortization events.
In addition, the termination of any basis swap identified in this
prospectus supplement is generally a cash accumulation event.
RESERVE FUNDS
o On the closing date, the seller will deposit $__________ in cash or
eligible investments into the reserve fund. If available, amounts will
be added or released on each distribution date to maintain the
balance at a specified reserve amount.
o To the extent that funds from principal and interest collections on
the receivables and net receipts on the basis swaps are not sufficient
to pay the monthly servicing fee, net amounts under the basis swaps and
to make required distributions on the notes or any other series or
class of securities, the trust will withdraw cash from the reserve fund
for that purpose.
The trust may experience shortfalls in principal and interest
collections on the receivables and net receipts on the basis swaps. The trust
will withdraw cash from the reserve fund when these shortfalls cause the trust
to have insufficient amounts to
o pay the monthly servicing fee,
o pay net amounts under the basis swaps, and
o to make required distributions on the notes.
On any monthly distribution date, after the trust pays the monthly
servicing fee and makes all deposits or payments due on the securities and any
related basis swaps, the amount in the reserve fund may exceed the specified
reserve amount. If so, the trust will pay the excess to the seller.
On the closing date, the seller will deposit $__________ in cash or
eligible investments into the cash accumulation reserve fund. This account will
supplement the funds available to pay interest on the [ ] term notes if a cash
accumulation event occurs. Amounts will be added or released on each
distribution date to maintain the balance at a specified reserve amount.
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SERVICING FEES
Each month the trust will pay the servicer a servicing fee, based on
_____% per annum, as compensation for servicing the receivables.
TAX STATUS
In the opinion of Kirkland & Ellis, special tax counsel, the [ ] term
notes will be characterized as indebtedness for federal income tax purposes.
Each term noteholder, by the acceptance of a [ ] term note, will agree
to treat the [ ] term notes as indebtedness for federal, state and local income
and franchise tax purposes.
ERISA CONSIDERATIONS
Although it must consider the factors discussed under "ERISA
CONSIDERATIONS" an employee benefit plan governed by the Employee Retirement
Income Security Act of 1974 may generally purchase the [ ] term notes. An
employee benefit plan should consult with its counsel before purchasing the [ ]
term notes.
RATINGS
o We will not issue the [ ] term notes unless they are rated in the
highest rating category for long-term obligations (I.E., "AAA") by at
least one nationally recognized rating agency.
o The rating of the [ ] term notes is partially based on the expected
performance of the receivables.
o We cannot assure you that a rating agency will maintain its rating if
circumstances change. If a rating agency changes its rating, no one has
an obligation to provide additional credit enhancement or restore the
original rating.
o A rating is not a recommendation to buy the [ ] term notes. The rating
considers only the likelihood that the trust will pay interest on time
and will ultimately pay principal. The rating does not consider either
the [ ] term notes' price, their suitability to a particular investor
or the timing of principal payments.
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RISK FACTORS
In addition to the risk factors on pages _____of the prospectus, you
should consider the following risk factor in deciding whether to purchase the [
] term notes.
THE YEAR 2000 PROBLEM MAY AFFECT
COLLECTIONS AND DISTRIBUTIONS ON THE RECEIVABLES.
We are aware of issues associated with the programming code in existing computer
systems as the year 2000 approaches. The year 2000 problem is pervasive and
complex; virtually every computer operation will be affected in some way by the
rollover of the two digit year value to 00. The central question in the year
2000 problem is whether computer systems will properly recognize date-sensitive
information when the year changes to 2000. Systems that do not properly
recognize this information could generate erroneous data or could fail.
Both the servicer and the indenture trustee to the extent applicable to its
services under the agreements to which each is a party, have advised us that
they are each committed to either
(1) implement modifications to their respective existing systems to the
extent required to cause them to be year 2000 ready or
(2) acquire computer systems that are year 2000 ready in each case prior to
January 1, 2000.
However, we have not independently investigated the computer systems of the
servicer or the indenture trustee. In the event that computer problems arise
because these efforts are not completed on time, or in the event that the
computer systems of the servicer or the indenture trustee are not fully year
2000 ready, the resulting disruptions in the collection or distribution of
receipts on the receivables could materially and adversely affect your
investment.
S-8
<PAGE>
You can find definitions of the capitalized terms used in this
prospectus supplement in the "GLOSSARY OF PRINCIPAL TERMS" on page S-____ of the
prospectus supplement or in the "GLOSSARY OF TERMS" in the prospectus.
THE TRUST
The issuer, Superior Wholesale Inventory Financing Trust [ ], is a
business trust formed under the laws of the State of Delaware. The trust will be
established and operated pursuant to a trust agreement dated on or before [DATE]
which is the date the trust initially issues securities, or the INITIAL ISSUANCE
DATE.
The trust will engage in only the following activities:
o acquire, hold and manage the receivables and other assets
of the trust;
o issue securities;
o make payments on the securities; and
o take any action necessary to fulfill the role of the
trust in connection with the [ ] term notes, the [ ]
revolving note, the [ ] certificates and any
additional securities issued by the trust.
The trust's principal offices are in Wilmington, Delaware, in care of [
], as owner trustee, at the address listed under "--THE OWNER TRUSTEE" below.
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the trust as of
the initial issuance date, as if the issuance of the [ ] term notes, [ ]
revolving note and [ ] certificates had taken place on that date and assuming
the Specified Maximum Revolver Balance was borrowed on that date under the [ ]
revolving note:
<TABLE>
<CAPTION>
<S> <C>
[ ] term notes............................................ $[ ]
[ ] revolving note........................................ [ ]
[ ] certificates..........................................
[-----------]
Total.................................................. $[ ]
==============
The [ ] certificates represent the equity of the trust and will be issued under the trust
</TABLE>
S-9
<PAGE>
agreement. The [ ] certificates will initially be held by the seller
and are not being offered hereby.
THE OWNER TRUSTEE
[ ], a [ ] corporation, is the owner trustee under the trust agreement.
Its principal offices are located at [ ].
THE TRUST ESTATE
The property of the trust - the trust estate - will include:
o the seller's right, title and interest in, to and under
o the Eligible Receivables existing in the dealer
accounts included in the pool of accounts on [DATE],
which is generally the date two days before the trust
will initially issue term notes
o the Eligible Receivables existing in any additional
dealer accounts added to the pool of dealer accounts
on the related cut-off date for additional accounts
o the Eligible Receivables generated under each of the
foregoing dealer accounts from time to time
thereafter so long as the dealer account is included
in the pool of accounts
o principal and interest collections, together
COLLECTIONS on all the Eligible Receivables
o the related collateral security for the Eligible
Receivables
o the seller's rights and remedies under the pooling and
servicing agreement associated with the receivables
transferred to the trust;
o the rights of the trust in relation to initial basis swaps;
o the reserve funds, owned by the seller and pledged to the
indenture trustee, including the Reserve Fund, the Cash
Accumulation Reserve Fund and the Certificate Reserve Fund, if
any;
o the rights of the trust in relation to following accounts,
including the amounts held therein for the benefit of the [ ]
term notes:
o the Collection Account, including the Cash Collateral
Amount
o the Cash Accumulation Account
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<PAGE>
o the distribution accounts for the term notes,
revolving notes and certificates
o any other account hereafter established for the
benefit of all holders of securities or for the
benefit of a specific series
o the rights of the trust in relation to any other Specified
Support Arrangement, or any other assets transferred to the
trust after the initial issuance date; and
o the rights of the trust in relation to each swap and account
established on or after the date the trust initially issues
securities, or the initial issuance date for the benefit of
any other series or class of securities or for the benefit of
all other series and classes of securities.
REINVESTMENT OF TRUST PRINCIPAL COLLECTIONS
Typically, the trust will use all Trust Principal Collections to
purchase new receivables, make payments that are due in respect of a series of
term notes or pay down the balance on the revolving notes. However, during some
periods, including a Payment Period or Cash Accumulation Period for the [ ] term
notes, the trust will accumulate the portion of trust Principal Collections and
other available amounts which are allocated to notes which have accumulation
provisions. Generally, the trust will invest the accumulated amounts in Eligible
Investments to provide for repayment of principal on those notes with the
accumulation provisions, including the [ ] term notes, at the Targeted Final
Payment Dates for such notes. For a description of the application of principal
collections by the trust in each of these periods, see "TRANSFER AND SERVICING
AGREEMENTS--APPLICATION OF PRINCIPAL COLLECTIONS TO THE [ ] TERM NOTES" in this
prospectus supplement.
THE U.S. PORTFOLIO
GENERAL
As of [DATE], there were approximately [ ] dealers with active credit
lines in GMAC's U.S. portfolio. The total U.S. portfolio, which includes both
owned receivables and serviced receivables, consisted of receivables with an
aggregate principal balance of approximately $ _______ billion. GMAC is the
primary source of floor plan financing for General Motors-franchised dealers in
the United States. In the [__________], GMAC provided financing for
approximately _____% of new factory sales to General Motors dealers in the
United States.
As of [DATE], receivables with respect to new vehicles represented
approximately __% of the aggregate principal amount of all receivables in the
U.S. Portfolio. receivables with respect to Used Vehicles represented
approximately [9%] of the aggregate principal amount of all receivables in the
U.S. Portfolio. Other receivables, including receivables for heavy-duty trucks,
off-highway vehicles and marine units represented approximately __% of the
aggregate principal amount of all receivables in the U.S. Portfolio. As of
[DATE], approximately __% of the used vehicles in GMAC's U.S. portfolio
S-11
<PAGE>
represented vehicles bought at closed auctions held by General Motors or others.
As of [DATE], the average Account in GMAC's U.S. portfolio provided for credit
lines for new vehicles and used vehicles of approximately _____ dealer units and
_____ units, respectively, and the average principal balance of receivables
thereunder was approximately $_____ million and $_____ million, respectively.
In 1998, GMAC streamlined the billing process on its dealer incentive
programs. Rather than charge a spread over the prime rate and separately
distribute dealer incentives, GMAC charges dealers participating in the "net
billing" program a spread that is reduced by any dealer incentives. As more
dealers participate in the net billing program, the spread over the prime rate
charged on the receivables is lower than it was in prior years. For the [ ]
months ended [DATE], the weighted average spread over the Prime Rate charged to
dealers in GMAC's U.S. portfolio was approximately __%. Some dealers elect not
to participate in the net billing program and therefore continue to be offered
rebates under incentive programs. For the [ ] months ended [DATE], the average
annual rate of dealer credits on GMAC's U.S. portfolio ranged between ____ and
____ basis points. The amount of any credit is applied to a participating
dealer's interest charges on floor plan and other loans, if any. We cannot
assure you that the spread over the prime rate in the future will be similar to
historical experience.
As of [date], the aggregate principal amount financed with respect to
dealers assigned to "no credit" status was approximately $_____ million or ____%
of the aggregate principal amount financed in the U.S. Portfolio.
LOSS EXPERIENCE
The following table sets forth GMAC's average principal balance of
receivables and loss experience for GMAC's U.S. portfolio as a whole in each of
the periods shown. GMAC's U.S. portfolio includes fleet accounts and other
accounts that are not Eligible Accounts as well as dealer accounts that meet the
eligibility criteria for inclusion in the trust but were not selected. Thus, the
dealer accounts related to the trust represent only a portion of GMAC's entire
U.S. portfolio and, accordingly, actual loss experience with respect to those
dealer accounts may be different than that of GMAC's U.S. portfolio as a whole.
There can be no assurance that the loss experience for receivables in the future
will be similar to the historical experience set forth below. The following
historical experience reflects financial assistance and incentives provided,
from time to time, by General Motors and GMAC to General Motors-franchised
dealers, including those described in the prospectus under "THE DEALER FLOOR
PLAN FINANCING BUSINESS--RELATIONSHIP OF THE DEALER FLOOR PLAN FINANCING
BUSINESS TO GENERAL MOTORS." If General Motors or GMAC reduced or was unable or
elected not to provide assistance or incentives, the loss experience of GMAC's
U.S. portfolio, including the dealer accounts, might be adversely affected. See
"SPECIAL CONSIDERATIONS--RELATIONSHIP OF EACH TRUST TO GENERAL MOTORS AND GMAC"
in the prospectus.
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<PAGE>
<TABLE>
<CAPTION>
LOSS EXPERIENCE FOR THE U.S. PORTFOLIO
YEAR ENDED DECEMBER 31
----------------------
(DOLLARS IN MILLIONS)
[Date] 1998 1997 1996 1995
Average Receivables
<S> <C> <C> <C> <C> <C>
Balance................................. $ _____ $ 16,859.6 $ 18,276.0 $ 16,991.5 $ 17,559.4
Net Losses
(Recoveries)............................ $ _____ $ 11.8 $ (10.5) $ (8.1) $ 6.2
Net Losses
(Recoveries)
Liquidations
(includes all principal reductions)..... ____% 0.014% (0.012)% (0.009)% 0.007%
Net Losses
(Recoveries)/Average
Principal
Receivables
Balance................................. ____% 0.070% (0.048)% 0.035%
(0.058)%
- ----------
</TABLE>
In the above table, AVERAGE RECEIVABLES BALANCE is the average of the
month-end principal balances of receivables, plus accrued interest, for each of
the months during that period. NET LOSSES in any period are gross losses less
recoveries for that period. Recoveries include recoveries from collateral
security in addition to vehicles.
AGING EXPERIENCE
The following table provides the age distribution of the receivables for
all dealers in GMAC's U.S. portfolio as a percentage of total principal balances
of receivables outstanding at the date indicated. The aging is based on the
receivable's interest commencement date. In addition, if a vehicle or the
related receivable is reclassified for any reason, the interest commencement
date will generally be the date of the reclassification. An example of a reason
for reclassification is a dealer's decision to designate a new vehicle for use
as a demonstration unit. The actual age distribution with respect to the
receivables related to any trust may be different because those receivables will
arise in dealer accounts representing only a portion of GMAC's entire U.S.
portfolio. There can be no assurance that the aging experience for receivables
in the future will be similar to the historical experience set forth below.
<TABLE>
<CAPTION>
AGE DISTRIBUTION FOR THE U.S. PORTFOLIO
YEAR ENDED DECEMBER 31
DAYS [DATE] 1998 1997 1996 1995
---- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
1-120.............................. ____% 90.2% 85.1% 82.2% 83.4%
121-180............................ ____ 4.9 8.0 9.0 7.0
181-270............................ ____ 2.9 3.5 5.0 5.0
Over 270........................... ____ 2.0 3.4 3.8 4.6
</TABLE>
MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest monthly payment
rates for GMAC's U.S. portfolio during any month in the periods shown and the
average of the monthly payment rates for all months during the periods shown.
The payment rates used below were calculated as set forth in the following
equation:
(principal collections during the period)
Payment Rate % = ------------------------------------
(ending principal balance of receivables for that period)
There can be no assurance that the rate of principal collections for
the dealer accounts in the pool of accounts in the future will be similar to the
historical experience set forth below. The actual monthly payment rates with
respect to those dealer accounts may be different because, among other reasons,
those dealer accounts will represent only a portion of the GMAC's entire U.S.
portfolio.
<TABLE>
<CAPTION>
MONTHLY PAYMENT RATES FOR THE U.S. PORTFOLIO
YEAR ENDED DECEMBER 31
[DATE] 1998 1997 1996 1995
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Highest Month.............. ____ 62.9% 54.2% 56.1% 51.4%
Lowest Month............... ____ 33.5 33.3 35.0 33.5
Average for the Months in the
Period................... ____ 47.3 43.3 45.1 42.1
</TABLE>
THE POOL OF ACCOUNTS
As of the close of business on [ DATE ], there were [______] dealer
accounts in the pool of accounts. As of [ DATE ], the average principal balance
of receivables in those Accounts was approximately $______ million
(approximately ___% of which were Eligible Receivables) and the weighted average
spread over the Prime Rate charged to dealers was approximately ___% for the
month of [ ] This spread over the Prime Rate does not include rebates earned by
dealers under GMAC incentive programs that entitle them to a credit based on
interest charges. These credits do not affect the spread over the Prime Rate
earned by the trust. As of [DATE], the aggregate principal balance of
receivables under those Accounts was $_______ and, of that amount, $________
would qualify as Eligible Receivables, except for the limit imposed by the
Maximum Pool Balance. In addition to the criteria specified in the definition of
"Eligible Accounts" in the "GLOSSARY OF TERMS" in the prospectus, a dealer
account will not be an Eligible Account if (1) during the preceding twelve
months, GMAC has charged off, without recovering, any amount in excess of
$25,000 or (2) the obligor on such dealer account has materially breached its
obligation to pay for a receivable upon sale of the related vehicle.
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<PAGE>
GEOGRAPHIC DISTRIBUTION
The following table provides, as of [DATE], the geographic distribution
of the dealer accounts in the pool of accounts based on the dealer addresses. As
of the [DATE], no other state accounted for more than ____% of the principal
amount of receivables outstanding in the dealer accounts.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF POOL ACCOUNTS RELATED TO THE TRUST
Percentage
of Total NUMBER OF PERCENTAGE OF TOTAL
RECEIVABLES Receivables DEALER NUMBER OF DEALER
STATE OUTSTANDING OUTSTANDING ACCOUNTS ACCOUNTS
----- ----------- ----------- -------- --------
(THOUSANDS
OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
[Illinois..........................
Texas..............................
Florida............................
Michigan...........................
New York...........................
Georgia]...........................
- ----------
</TABLE>
THE [ ] TERM NOTES
GENERAL
The [ ] term notes will be issued pursuant to the terms of an indenture
to be dated as of the initial issuance date between the trust and the indenture
trustee. As amended and supplemented from time to time, this is known as the
INDENTURE, a form of which has been filed as an exhibit to the registration
statement of which this prospectus supplement forms a part. The trust may issue
additional series of term notes after the initial issuance date. A copy of the
indenture will be filed with the SEC following the issuance of the [ ] term
notes. The following summary describes some of the terms of the [ ] term notes
and the indenture. The summary does not purport to be complete and is qualified
in its entirety by reference to all of the provisions of the [ ] term notes, the
indenture and the prospectus. Where particular provisions or terms used in the
indenture are referred to, the actual provisions are incorporated by reference
as part of the summary. The Bank of New York, a New York banking corporation,
will be the indenture trustee.
All distributions will be made on each Distribution Date to the holders
of the [ ] term notes of record as of the day preceding that Monthly
Distribution Date. If definitive term notes are issued, distributions will be
made to the holders of the [ ] term notes as of the last day of the preceding
month. All payments will be made by wire transfer while the [ ] term notes are
in global form and
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<PAGE>
will be made in accordance with the procedures of DTC, Euroclear and Cedelbank.
If definitive [ ] term notes are issued, such payments thereon will be made by
check or euro cheque and will be mailed to the address on the register kept by
the indenture trustee unless a holder gives wire transfer instructions before
the relevant record date. Final payment of any definitive [ ] term note will
only be made against presentation and surrender of the definitive [ ] term note
at the place or places specified in the notice of final payment to the holder
thereof.
PAYMENTS OF INTEREST
Interest on the outstanding principal balance of the [ ] term notes
will accrue at the [ ] Term Note Interest Rate and will be payable on each
Monthly Distribution Date commencing [date], which is the initial Monthly
Distribution Date, until the [ ] term notes are paid in full. The [ ] TERM NOTE
INTEREST RATE will equal USD One-Month LIBOR plus ___% per annum for each
Monthly Distribution Date.
Interest will accrue from and including the initial issuance date, or
from and including the most recent Monthly Distribution Date on which interest
has been paid to but excluding the current Monthly Distribution Date. Interest
on the [ ] term notes will be calculated on the basis of a year of 360 days and
the actual number of days occurring in the period for which interest is payable.
Each Monthly Distribution Date will be a Payment Date defined in the prospectus
for the [ ] term notes. Interest accrued as of any Monthly Distribution Date,
but not paid on that Monthly Distribution Date, will be due on the next Monthly
Distribution Date.
Payments of interest on the [ ] term notes will have equal priority
with interest payments on other series of term notes, the [ ] revolving note and
other series of revolving notes and will be senior to distributions of interest
on the [ ] certificates. Interest Collections will be applied to make interest
payments on the [ ] term notes as described under "THE TRANSFER AND SERVICING
AGREEMENT--APPLICATION OF INTEREST COLLECTIONS" in this prospectus supplement.
PAYMENTS OF PRINCIPAL
We expect that the trust will pay the entire principal balance of the [
] term notes on the [ ] TERM NOTE TARGETED FINAL PAYMENT DATE, which is the
Monthly Distribution Date in [ ] 200[ ]. However, the trust could make principal
payments sooner than the Targeted Final Payment Date if a Rapid Amortization
Event occurs. On each Monthly Distribution Date after the commencement of a
Rapid Amortization Period, the trust will apply the portion of Available Trust
Principal allocated to the [ ] term notes and any funds held in the Cash
Accumulation Account and Note Distribution Subaccount to repay principal on the
[ ] term notes.
It is also possible that the trust will not repay the entire principal
balance of the [ ] term notes on or before the Targeted Final Payment Date.
Starting on the [ ] 200[ ] Monthly Determination Date, the servicer will
calculate the Required Payment Period Length to determine the date on which the
trust will begin to accumulate principal collections for the purpose of repaying
principal of the [ ] term notes on their Targeted Final Payment Date. If
insufficient funds are accumulated during this period, then the payment of
principal on the Targeted Final Payment Date will be insufficient to repay all
of the [ ] term note principal balance. If the [ ] term notes are not
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<PAGE>
paid in full on the Targeted Final Payment Date, on each Monthly Distribution
Date thereafter they will receive principal payments until paid in full or until
available funds are exhausted.
All unpaid principal on the [ ] term notes will be due on the [ ] TERM
NOTE STATED FINAL PAYMENT DATE for the [ ] term notes, which is the Monthly
Distribution Date in [ ] 200[ ]. Failure to pay the [ ] term notes in full on
their Stated Final Payment Date will result in an event of default and an Early
Amortization Event for the trust and a Rapid Amortization Event for the [ ] term
notes.
If the Servicer exercises its optional right to repurchase receivables
as described in "THE TRANSFER AND SERVICING AGREEMENTS--OPTIONAL PURCHASE BY THE
SERVICER," then the proceeds of the repurchase will be treated as Trust
Principal Collections and Trust Interest Collections.
PRIORITY AMONG TERM NOTES
Payments of principal on the [ ] term notes will have at least equal
priority with payments of principal on other series of term notes that may be
issued from time to time by the trust. Some series of term notes may also have a
Payment Period prior to the commencement of the Wind Down Period and may have a
Payment Period prior to, together with, or after the Payment Period for the [ ]
term notes.
DELIVERY OF NOTES
The [ ] term notes will be issued on or about the initial issuance date
in book entry form through the facilities of DTC, Cedelbank and the Euroclear
System against payment in immediately available funds. DTC has informed its
participants and other members of the financial community that it has developed
and is implementing a program to deal with the year 2000 problem so that its
systems, as the same relate to the timely payment of distributions, including
principal and income payments, to securityholders, book-entry deliveries, and
settlement of trades with DTC, continue to function appropriately.
THE REVOLVING NOTES
The trust will issue the revolving notes under the indenture. The
following summary describes some of the terms of the revolving notes. The
summary does not purport to be complete and is qualified in its entirety by
reference to all of the provisions of the revolving notes, the indenture and the
prospectus. 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 the summary.
On the initial issuance date, the trust will issue the Floating Rate
Asset Backed Revolving Note, Series [ ]. References in this document to the [ ]
revolving note include all extensions and renewals thereof. Initially, the
seller will retain the [ ] revolving note. It is expected that the seller will
privately place an interest in the [ ] revolving note on the initial issuance
date.
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<PAGE>
PAYMENTS OF INTEREST
The trust will pay interest on the [ ] revolving note at the Revolver
Interest Rate on each Monthly Distribution Date, commencing with the first
Monthly Distribution Date after the issuance of the [ ] revolving note. Other
series of revolving notes issued after the initial issuance date will be paid
interest in accordance with their terms, which may differ from the terms of the
[ ] revolving note. On each Monthly Distribution Date, interest will be
calculated based on the average daily net revolver Balance during the related
Collection Period. Interest on the [ ] revolving note accrued as of any Monthly
Distribution Date but not paid on that Monthly Distribution Date will be due on
the next Monthly Distribution Date.
Payments of interest on the [ ] revolving note will have equal priority
to payments of interest on the term notes, including the [ ] term notes, and
will be senior in right of payment to distributions of interest on the
certificates.
PAYMENTS OF PRINCIPAL AND ADDITIONAL BORROWINGS
The trust may borrow funds under the [ ] revolving note during the
Revolving Period up to the trust's specified Maximum Revolver Balance. The
holder of the [ ] revolving note is under no obligation, however, to make
advances thereunder to the trust. The specified Maximum Revolver Balance for the
trust will initially be [$ ] and may increase or decrease from time to time
after the initial issuance date as described in the prospectus under "THE
TRANSFER AND SERVICING AGREEMENTS--ADDITIONAL ISSUANCES; CHANGES IN SPECIFIED
MAXIMUM REVOLVER BALANCE." The trust may issue additional series of revolving
notes with different Revolver Interest Rates, Targeted Final Payment Dates, if
any, and Stated Final Payment Dates, although it must stay within the specified
Maximum Revolver Balance. In connection with the issuance of any additional
series, the revolving notes outstanding on that date may be paid in full. The
trust will not borrow additional funds under the revolving notes during the Wind
Down Period or any Early Amortization Period but may borrow funds during the
Payment Period for the [ ] term notes.
The trust may pay principal on the revolving notes on a daily basis
during the Revolving Period, so long as it complies with the limitations
described herein during the Payment Period for the [ ] term notes and any other
applicable limitations during the Payment Period for any additional series of
term notes. During the Payment Period for the [ ] term notes, except for any
series of revolving notes then in a Payment Period, payments of principal on the
revolving notes may be made only after the [ ] term notes' Fully Funded Date.
During the Revolving Period, payments of principal on the revolving
notes will be required to the extent set forth in the terms of the revolving
notes. The [ ] revolving note may be extended or renewed, and the [ ] Revolving
Note Targeted Final Payment Date adjusted accordingly, at any time prior to the
last day of the month related to the Payment Date that is the third Payment Date
preceding the then applicable [ ] Revolving Note Targeted Final Payment Date by
written notice from the affected holder thereof to the indenture trustee and the
seller setting forth the new [ ] Revolving Note Targeted Final Payment Date;
PROVIDED, that the Targeted Final Payment Date may not occur during the Payment
Period for any series of term notes, or within two months thereafter, unless the
holder of the [ ] revolving note establishes the [ ] Revolving Note Targeted
Final
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<PAGE>
Payment Date by notice to the servicer delivered prior to the initial
determination of the payment period length for that series of term notes. The
new [ ] Revolving Note Targeted Final Payment Date must be a Payment Date on or
prior to the then [ ] Revolving Note Stated Final Payment Date for the [ ]
revolving note. Principal on the [ ] revolving note will be due, to the extent
of funds available for that purpose, in three equal installments on the three
consecutive Monthly Distribution Dates ending on the then-applicable Targeted
Final Payment Date. This date may be prior to the Scheduled Revolving Period
Termination Date, unless the [ ] Revolving Note Targeted Final Payment Date has
been extended to a date after the commencement of the Wind Down Period. These
installments will be based on the outstanding balance as of the last day of the
Collection Period preceding the Collection Period related to the first Monthly
Distribution Date.
During the Wind Down Period or an Early Amortization Period for the
trust, Available Trust Principal for any Collection Period and the related
Distribution Date will be allocated to each series of revolving notes in
accordance with their respective Principal Allocation Percentages up to their
respective outstanding principal balances, and will be paid on the Distribution
Date related to that Collection Period. An Early Amortization Period for the
trust and a Rapid Amortization Period for the [ ] term notes will commence if,
among other things, any revolving note is not paid in full on its Stated Final
Payment Date.
THE [ ] CERTIFICATES
GENERAL
The trust will issue the [ ] certificates under the trust agreement, a
form of which the seller has filed as an exhibit to the registration statement
of which this prospectus supplement forms a part. The following summary
describes some of the terms of the [ ] certificates and the trust agreement. The
summary does not purport to be complete and is qualified in its entirety by
reference to all of the provisions of the [ ] certificates, the trust agreement
and the prospectus. Where particular provisions or terms used in the [ ]
certificates and the trust agreement are referred to, the actual provisions,
including definitions of terms, are incorporated by reference as part of the
summary.
INTEREST
Interest with respect to the [ ] certificates will accrue at the
applicable Certificate Rate and will be payable on each Certificate Payment
Date, commencing with the first Certificate Payment Date after the issuance of
the [ ] certificates. Interest on the [ ] certificates accrued as of any
Certificate Payment Date but not distributed on a Certificate Payment Date will
be due on the next Certificate Payment Date.
Payments of interest on the notes will be senior to distributions of
interest on the [ ] certificates.
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<PAGE>
CERTIFICATE BALANCE
The CERTIFICATE BALANCE is as of any Monthly Distribution Date or a
related Certificate Payment Date, with respect to the [ ] certificates (a)
$____, PLUS (b) the principal amount of [
] certificates issued after the initial issuance date, MINUS (c) all
distributions in respect of Certificate Balance of the [ ] certificates actually
made on or prior to that date, MINUS (d) unreimbursed Trust Charge-Offs on that
Monthly Distribution Date (determined after giving effect to the application of
Available Trust Interest and other amounts available to reimburse Trust Charge-
Offs on that date as described below) allocated to the [ ] certificates, up to
the certificate balance of the [ ] certificates on that Monthly Distribution
Date calculated without regard to this clause (d). With respect to any other
class of certificates, certificate balance means the amount set forth in the
terms of that class of certificates. Any unreimbursed Trust Charge-Offs applied
to reduce the certificate balance will be applied against each class of
certificates on that Certificate Payment Date, pro rata on the basis of the
certificate balance of the certificates of that class outstanding on the
preceding Certificate Payment Date. This will be calculated without reduction
for any unreimbursed Trust Charge-Offs.
Distributions will be made with respect to the certificate balance on
the [ ] certificates after the trust has paid each series of term notes and
revolving notes, including notes issued after the initial issuance date, in full
or, with respect to each series of term notes for which principal is being
accumulated or otherwise provided, the Fully Funded Date has occurred. The
Stated Final Payment Date for the [ ] certificates will be on the Monthly
Distribution Date in [ ] 200[ ]. If the [ ] certificates have not been paid in
full on or prior to that date, an Early Amortization Period for the trust will
commence.
ADDITIONAL ISSUANCES
From time to time after the initial issuance date, so long as it
satisfies specified conditions, the trust may issue additional certificates. See
"THE TRANSFER AND SERVICING AGREEMENTS--ADDITIONAL ISSUANCES; CHANGES IN
SPECIFIED MAXIMUM REVOLVER BALANCE" in the prospectus. The Certificate Rate for
additional classes of certificates issued after the initial issuance date may be
different than the Certificate Rate for the [ ] certificates.
OPTION TO SUBORDINATE
The seller, which will be the initial holder of the [ ] certificates,
has the option to split the [ ] certificates into two or more classes and to
designate that the different classes have different priority levels in the
application of Remaining Interest Amounts.
CERTIFICATE RESERVE FUND
As of the initial issuance date, no Certificate Reserve Fund will have
been established. On repayment of the entire outstanding principal balance of
the certificates, any funds remaining on deposit in the Certificate Reserve Fund
would be paid to the seller.
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<PAGE>
THE TRANSFER AND SERVICING AGREEMENTS
The parties will enter into the Transfer and Servicing Agreements as of
the initial issuance date. The following summary describes the material terms of
the Transfer and Servicing Agreements. The seller has filed forms of the
Transfer and Servicing Agreements as exhibits to the registration statement of
which this prospectus supplement is a part. The Transfer and Servicing
Agreements will be filed with the SEC following the initial issuance date. The
summary does not purport to be complete and is qualified in its entirety by
reference to all of the provisions of the Transfer and Servicing Agreements and
the prospectus. 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 the summary.
APPLICATION OF INTEREST COLLECTIONS
For each Collection Period, the trust will apply funds to pay interest
and other amounts on the related Monthly Distribution Date in the order and in
the priority of clauses (1), (2) and (3) below:
CLAUSE (1) For each Collection Period, the trust will apply Trust
Interest Collections together with the other amounts comprising Available Trust
Interest for the related Monthly Distribution Date in the following order of
priority:
(a) an amount equal to the Monthly Servicing Fee for that
Monthly Distribution Date will be paid to the servicer; and
(b) an amount equal to the Trust Interest Allocation for each
series of notes will be made available to that series and applied in
clause (2) below.
CLAUSE (2) On each Monthly Distribution Date, the trust will apply the
amounts from clause (1)(b), together with the funds specified below, to each
series of notes as follows:
(A) FOR THE [ ] TERM NOTES:
(i) the trust will make the following funds available:
(A) the [ ] term notes' Trust Interest Allocation;
(B) the net amount, if any, received by the trust under
the [ ] term notes basis swap;
(C) all Note Distribution Subaccount Earnings in respect
of the [ ] term notes;
(D) all Cash Accumulation Account Earnings; and
(E) if the [ ] term notes are then in a Cash Accumulation
Period and if the amounts specified in the foregoing subclauses (A)
through (D) are less than the [ ] term notes Monthly Carrying
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<PAGE>
Costs for that Monthly Distribution Date, then the lesser of
(x) the shortfall,
(y) the Cash Accumulation Reserve Fund Release
Amount and
(z) the amount of funds on deposit in the Cash
Accumulation Reserve Fund will be made available.
The amounts made available pursuant to the foregoing clauses
(2)(a)(i)(A) through (E) will be the [ ] TERM NOTES MONTHLY AVAILABLE
AMOUNT.
(ii) Next, the trust will aggregate and apply the [ ] Term Notes
Monthly Available Amount on the Monthly Distribution Date as follows:
(A) first, the lesser of
(x) the [ ] Term Notes Monthly Available
Amount and
(y) the net payment, if any, due from the trust
under the [ ] term notes basis swap
will be paid in accordance with the terms of the [ ] term
notes basis swap; and
(B) second, the lesser of
(x) the [ ] Term Notes Monthly Available
Amount remaining after the application in subclause (A) and
(y) an amount equal to the [ ] term notes'
Noteholders' Interest for the related Monthly Distribution
Date will be transferred to the Note Distribution Account for
payment of interest on the [ ] term notes.
The amounts required to be paid pursuant to the foregoing clauses
(2)(a)(ii)(A)(y) and (B)(y) are the [ ] TERM NOTES MONTHLY CARRYING
COSTS. Any shortfall of the [ ] Term Notes Monthly Available Amount
below the [ ] Term Notes Monthly Carrying Costs will be treated as a
Series Shortfall for the [ ] term notes. Any excess of the [ ] Term
Notes Monthly Available Amount over the [ ] Term Notes Monthly Carrying
Costs will be treated as Remaining Interest Amounts.
(B) FOR THE [ ] REVOLVING NOTE:
(i) on each Monthly Distribution Date, the trust will make the
following funds available:
(A) the [ ] revolving note's Trust Interest Allocation;
and
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(B) the net amount, if any, received by the trust under the [
] revolving note basis swap.
The amounts made available pursuant to the foregoing clauses
(2)(b)(i)(A) and (B) will be the [ ] REVOLVING NOTE MONTHLY AVAILABLE
AMOUNT.
(ii) Next, the trust will aggregate and apply the [ ] Revolving
Note Monthly Available Amount as follows:
(A) first, the lesser of (x) the [ ] Revolving Note Monthly
Available Amount and (y) the net payment, if any, due from the trust
under the [ ] revolving note basis swap will be paid in accordance with
the terms of the [ ] revolving note basis swap; and
(B) second, the lesser of (x) the [ ] Revolving Note Monthly
Available Amount remaining after the application in subclause (A) and
(y) an amount not to exceed the [ ] revolving note's Noteholders'
Interest for the related Monthly Distribution Date will be transferred
to the Note Distribution Account for payment of interest on the [ ]
revolving note.
The amounts required to be paid pursuant to the foregoing
clauses (2)(b)(ii)(A)(y) and (B)(y) are the [ ] REVOLVING NOTE
MONTHLY CARRYING COSTS. Any shortfall of the [ ] Revolving
Note Monthly Available Amount below the [ ] Revolving Note
Monthly Carrying Costs will be treated as a Series Shortfall
for the [ ] revolving note. Any excess of the [ ] Revolving
Note Monthly Available Amount over the [ ] Revolving Note
Monthly Carrying Costs will be treated as Remaining Interest
Amounts.
(C) FOR EACH OTHER SERIES OF NOTES, in accordance with the
terms of each series, the trust will apply (x) the Trust Interest
Allocation for that series, (y) any amounts received from or owing
under Specified Support Arrangements in accordance with the terms of
the series of notes and (z) if the series is a series of term notes,
Note Distribution Subaccount Earnings, if any, for that series to pay
the monthly carrying costs for the series of term notes. Shortfalls in
these applications will be treated as a Series Shortfall for each
series and excess amounts will be treated as Remaining Interest
Amounts.
CLAUSE (3) On each Monthly Distribution Date, the trust will aggregate
the Remaining Interest Amounts from all series of notes and apply these funds in
the following order of priority:
(a) with respect to any series of notes which has a Series
Shortfall, pro rata on the basis of the respective Series Shortfalls,
an amount equal to the Series Shortfall for that series of notes for
that Monthly Distribution Date, will be transferred to the Note
Distribution Account in respect of that series or other applicable
account for the payment of amounts owing under the basis swap or in
respect of interest on those notes or payments on an interest rate swap
for any other series of notes;
(b) an amount equal to the net payment, if any, due from the
trust under the [ ] certificates basis swap and under any basis swap
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with respect to any other class of certificates will be paid in
accordance with each basis swap;
(c) an amount equal to any servicer advances not previously
reimbursed will be paid to the Servicer, except as otherwise provided
in the Transfer and Servicing Agreements;
(d) an amount equal to any Reserve Fund Deposit Amount for
that Monthly Distribution Date will be deposited into the Reserve Fund;
(e) pro rata among the following amounts specified in (A) and
(B) for that Monthly Distribution Date, (A) an amount equal to the Cash
Accumulation Reserve Fund Deposit Amount will be deposited into the
Cash Accumulation Reserve Fund and (B) an amount equal to any deposit
required under the terms of any other Specified Support Arrangements
will be deposited into the account designated by the terms of the
Specified Support Arrangement;
(f) an amount equal to the Aggregate Certificateholders'
Interest for that Monthly Distribution Date will be transferred to the
Certificate Distribution Account;
(g) an amount equal to any Trust Defaulted Amount will be
treated as Additional Trust Principal on that Monthly Distribution
Date;
(h) an amount equal to the aggregate amount of unreimbursed
Trust Charge-Offs will be treated as Additional Trust Principal on that
Monthly Distribution Date; and
(i) an amount equal to the Certificate Reserve Fund Deposit
Amount for that Monthly Distribution Date will be deposited into the
Certificate Reserve Fund, if any.
If Monthly Available Amounts are not sufficient to make all
payments required by clauses (1), (2) and (3), then the funds described
below will be applied in the following order:
FIRST, if any Monthly Carrying Costs or any amounts
specified in clauses (3)(a),(b) and (c) above remain unpaid,
then a DEFICIENCY AMOUNT will exist, and the servicer will be
obligated to make a servicer advance of this amount to the
trust, but only to the extent that the Servicer, in its sole
discretion, expects to recover the advance from Remaining
Interest Amounts applied as described above on subsequent
Distribution Dates and from releases from the Cash
Accumulation Reserve Fund as provided in "CASH ACCUMULATION
RESERVE FUND" in this prospectus supplement, and the servicer
advances will be applied to reduce the Deficiency Amount in
the order set forth in clauses (2) and (3); and
SECOND, if any Monthly Carrying Costs or any amounts
specified in clauses (3)(a), (b), (c), (g) and (h) remain
unpaid after the application described in the preceding clause
FIRST, then an UNSATISFIED DEFICIENCY AMOUNT will exist, and
funds on deposit in the Reserve Fund will be applied to reduce
the unsatisfied deficiency amount in the order set forth in
clauses (2) and (3), except that no application of
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amounts from the Reserve Fund will be made for the priorities
in clauses (3)(d), (e), (f) or (i).
Remaining Interest Amounts for a Monthly Distribution Date not applied
as described above will generally be allocated and paid to the seller as
compensation for making the initial deposit and any additional deposits into the
Reserve Fund, the Cash Accumulation Reserve Fund and the Certificate Reserve
Fund, if any.
To the extent that the full amount of the Trust Defaulted Amount has
not been treated as Additional Trust Principal pursuant to clause (3)(g) above,
the amount of the deficiency will be added to unreimbursed Trust Charge-Offs.
The following chart summarizes the way in which interest collections
are allocated to the [ ] term notes.
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APPLICATION OF PRINCIPAL COLLECTIONS BY THE TRUST
There are three mutually exclusive time periods with respect to the
trust. These time periods are the Revolving Period, the Wind Down Period and the
Early Amortization Period. The way in which each of these trust level time
periods is relevant to and impacts on each series or class of securities depends
in part upon the specific terms of that series or class. In addition, each
series or class of securities may have, by their terms, additional time periods
specific to that series or class which occur within or across the time periods
applicable to the trust as a whole. See "APPLICATION OF PRINCIPAL COLLECTIONS TO
THE [ ] TERM NOTES" below for a description of the time periods which
specifically apply to the [ ] term notes.
REVOLVING PERIOD
During the Revolving Period, the trust may, on a daily basis, use Trust
Principal Collections:
o to make payments of principal on the revolving notes;
o to purchase additional Eligible Receivables from the seller;
o to the extent required to maintain the Daily Trust Balance
equal to the Daily Trust
Invested Amount, to add to the Cash Collateral Amount; and
o to make principal payments or set asides on any series of term
notes which then requires Available Trust Principal to be
retained or set aside. No distributions of the certificate
balance will be made during the Revolving Period.
During the Revolving Period, the trust may also use the Cash Collateral
Amount for the purposes described in the first, second and fourth points above.
During the Revolving Period, the trust may issue from time to time, so
long as it satisfies the conditions described in the prospectus under "THE
TRANSFER AND SERVICING AGREEMENTS-- ADDITIONAL ISSUANCES; CHANGES IN SPECIFIED
MAXIMUM REVOLVER BALANCE," additional series of term notes and revolving notes
and additional classes of certificates.
The Revolving Period will terminate on the SCHEDULED REVOLVING PERIOD
TERMINATION DATE. The Scheduled Revolving Period Termination Date will
automatically be extended to the last day of each succeeding month unless the
seller, prior to the then Scheduled Revolving Period Termination Date, makes a
NON-EXTENSION ELECTION, causing the extension not to occur. Unless a
non-extension election is made as described below, each extension will become
effective as of the Business Day prior to the then Scheduled Revolving Period
Termination Date. The seller cannot extend the Scheduled Revolving Period
Termination Date, the FINAL REVOLVING PERIOD TERMINATION DATE.
In addition to a non-extension election, the seller may, at any time
prior to the then Scheduled Revolving Period Termination Date, affirmatively
cause an AFFIRMATIVE EXTENSION of the Scheduled Revolving Period Termination
Date to the last day of any specified month (but not beyond the Final
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Revolving Period Termination Date), subject thereafter to further automatic
extensions, non- extension elections and affirmative extensions. Any
non-extension election or affirmative extension will be made by providing
written notice of the extension to the Servicer, the owner trustee (who will be
obligated to provide notice to the certificateholders), the indenture trustee
(who will be obligated to provide notice to the noteholders) and the rating
agencies. Assuming no Early Amortization Event has occurred, the Revolving
Period will terminate and the Wind Down Period will commence on the day
immediately following a non-extension election.
If the seller makes a non-extension election, as a result of which the
Revolving Period terminates and the Wind Down Period commences prior to the
Final Revolving Period Termination Date, the seller may elect to recommence the
Revolving Period on any date prior to the date that is the earlier of (1) the
one year anniversary of the termination of the Revolving Period and (2) the
Final Revolving Period Termination Date, so long as no Early Amortization Event
has occurred and is continuing. If an Early Amortization Event described in
subparagraphs (6), (8) or (10) under "THE TRANSFER AND SERVICING
AGREEMENTS--EARLY AMORTIZATION EVENTS" in the prospectus has occurred the seller
may nonetheless elect to so recommence the Revolving Period if the conditions
specified under "--WIND DOWN PERIOD AND EARLY AMORTIZATION
PERIOD--RECOMMENCEMENT OF REVOLVING PERIOD" in this prospectus supplement are
satisfied.
WIND DOWN PERIOD AND EARLY AMORTIZATION PERIOD
The Revolving Period will be followed by either the Wind Down Period or
an Early Amortization Period. These periods commence as follows:
o The Wind Down Period for the trust will begin on the day
following the Scheduled Revolving Period Termination Date and
will continue until the earlier of (a) the commencement of an
Early Amortization Period, (b) the date on which all
outstanding securities are paid in full and (c) under the
limited circumstances described above under "THE TRANSFER AND
SERVICING AGREEMENTS--APPLICATION OF PRINCIPAL COLLECTIONS BY
THE TRUST--REVOLVING PERIOD," the recommencement of the
Revolving Period.
o The Early Amortization Period will commence upon the
occurrence of an Early Amortization Event, whether it occurs
during the Revolving Period or the Wind Down Period. The Early
Amortization Events are set out in the prospectus under "The
Transfer and Servicing Agreements--Early Amortization Events"
and below under "--EARLY AMORTIZATION EVENTS."
During the Wind Down Period and during any Early Amortization Period,
the trust will no longer reinvest Trust Principal Collections in new
receivables, nor will it make additional borrowings under any revolving notes or
issue any additional securities. Instead, on each Monthly Distribution Date,
Trust Principal Collections during the related Collection Period, together with
other amounts comprising Available Trust Principal, will be treated as follows:
FIRST, the amounts will be allocated to each series of notes in
accordance with the series' Principal Allocation Percentage, and the
Available Trust Principal will be paid or set aside
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until the Fully Funded Date for that series, and
SECOND, following the Fully Funded Date for all series of notes, any
remaining Available Trust Principal will be available for the payment
of the outstanding certificate balance on the certificates or for any
other applications permitted by holders of certificates.
Principal payments will be made on the term notes of each series,
including the [ ] term notes and the revolving notes of each series as described
in "THE [ ] TERM NOTES--PAYMENT OF PRINCIPAL" and "THE REVOLVING NOTES--PAYMENTS
OF PRINCIPAL AND ADDITIONAL BORROWINGS" above. For additional information on the
application of Available Trust Principal in respect of the [ ] term notes, see
"THE TRANSFER AND SERVICING AGREEMENTS--APPLICATION OF PRINCIPAL COLLECTIONS TO
THE [ ] TERM NOTES--CASH ACCUMULATION PERIOD" and "--RAPID AMORTIZATION PERIOD"
below.
EARLY AMORTIZATION EVENTS. In addition to the Early Amortization Events
set forth in the prospectus, an Early Amortization Event will occur if any of
the basis swaps terminate, except if the termination is for the limited reasons
set forth in "BASIS SWAPS" below. The TRIGGER AMOUNT for the Reserve Fund, which
is a component of the Early Amortization Event described in sub-paragraph (9)
under "THE TRANSFER AND SERVICING AGREEMENTS--EARLY AMORTIZATION EVENTS" in the
prospectus, will equal ___% of the Reserve Fund Required Amount.
RECOMMENCEMENT OF REVOLVING PERIOD. In limited circumstances the seller
may elect to terminate an Early Amortization Period and recommence the Revolving
Period and any Payment Period prior to the Final Revolving Period Termination
Date. If an Early Amortization Event described in sub-paragraphs (6), (8) or
(10) under "THE TRANSFER AND SERVICING AGREEMENTS--EARLY AMORTIZATION EVENTS" in
the prospectus - each of which is a Cash Accumulation Event for the [ ] term
notes - has occurred, the seller may elect to end the Cash Accumulation Period
and Early Amortization Period and recommence the Revolving Period within the
one-year anniversary of the commencement of the Early Amortization Period and
the Cash Accumulation Period if:
o none of those Early Amortization Events has existed for three
consecutive months;
o the Final Revolving Period Termination Date has not occurred;
o the long-term debt obligations of GMAC are rated at least
"Baa3" by Moody's;
o the Reserve Fund Funding Condition is satisfied; and
o after giving effect to any securities issued and any changes
in the trust's specified Maximum Revolver Balance on the date
of the recommencement, the quotient of (A) the outstanding
certificate balance of all the outstanding [ ] certificates
over (B) the Maximum Pool Balance equals or exceeds the
SPECIFIED CERTIFICATE PERCENTAGE, which is ___%.
The FUNDING CONDITION for the Reserve Fund will be satisfied on the
date of recommencement of the Revolving Period only if:
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o the amount on deposit in the Reserve Fund equals or exceeds
the Reserve Fund Required Amount as of the date of
recommencement;
o the amount on deposit in the Cash Accumulation Reserve Fund
for each series of notes equals or exceeds the related Cash
Accumulation Reserve Fund Required Amount as of the date of
recommencement; and
o the amount on deposit in the Certificate Reserve Fund equals
or exceeds the amount required to be on deposit in the
Certificate Reserve Fund, if any.
Upon any recommencement, funds in the Cash Accumulation Account may be
used to purchase additional receivables, so long as the Daily Trust Balance is
equal to the Daily Trust Invested Amount.
APPLICATION OF PRINCIPAL COLLECTIONS TO THE [ ] TERM NOTES
OVERVIEW
There are three basic and mutually exclusive time periods with respect
to the [ ] term notes which determine how Trust Principal Collections and
principal payments on the [ ] term notes are handled by the trust. These periods
are the Payment Period, the Cash Accumulation Period and the Rapid Amortization
Period. The Payment Period will begin one to four months prior to the Targeted
Final Payment Date on the [ ] term notes. The Cash Accumulation Period will
begin upon the occurrence of a Cash Accumulation Event. The Rapid Amortization
Period will begin upon the occurrence of a Rapid Amortization Event.
The time periods with respect to the [ ] term notes co-exist with the
trust time periods described above in "--APPLICATION OF PRINCIPAL COLLECTIONS BY
THE TRUST." If an Early Amortization Period occurs for the trust, then it will
give rise to either a Cash Accumulation Period or Rapid Amortization Period for
the [ ] term notes. If the Wind Down Period commences for the trust prior to the
Payment Period for the [ ] term notes, a Cash Accumulation Period for the [ ]
term notes will commence. If the trust remains in its Revolving Period, then the
[ ] term notes will not have any separate time period until the commencement of
their Payment Period . However, if a Rapid Amortization Event which is not an
Early Amortization Event occurs, the [ ] term notes will be in a Rapid
Amortization Period at the same time that the trust is in the Revolving Period.
During the Payment Period and the Cash Accumulation Period, principal
collections on the receivables allocated to the [ ] term notes are set aside in
accounts to repay principal on the [ ] term notes on the Targeted Final Payment
Date. In contrast, during a Rapid Amortization Period, the trust will pay out
principal collections allocated to the [ ] term notes on each Monthly
Distribution Date occurring after the start of the Rapid Amortization Period
instead of retaining these collections for distribution on the Targeted Final
Payment Date.
The following chart summarizes the manner in which principal
collections are allocated to the [ ] term notes.
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[GRAPHIC OMITTED]
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PAYMENT PERIOD
A Payment Period for a series of notes occurs during the Revolving
Period for the trust. If so specified with respect to a series of notes,
Available Trust Principal will be used or set aside during the Payment Period
for the purpose of repaying the outstanding principal balance of those notes. If
the series of notes is subject to a currency swap, interest rate swap or another
type of swap or derivative instrument in respect of principal, then principal
will be set aside for the purpose of making payments under the swap or
instrument. Each series of notes which is in a Payment Period will be allocated
Available Trust Principal equal to its Principal Allocation Percentage thereof.
If Trust Principal Collections will not be set aside during the Payment Period
to repay the outstanding principal balance, then alternate sources of repayment
will be specified. Available Trust Principal which is not applied for this
purpose will be used for the other purposes specified above under "--APPLICATION
OF PRINCIPAL COLLECTIONS BY THE TRUST--REVOLVING PERIOD". Upon the commencement
of a Payment Period for a series of term notes, the servicer will establish a
NOTE DISTRIBUTION SUBACCOUNT. Any Investment Proceeds or earnings in respect of
funds in the Note Distribution Subaccount, will be applied as provided in the
clause (2) under "APPLICATION OF INTEREST COLLECTIONS" above.
The Payment Period for the [ ] term notes will commence no earlier than
[ ], 200[ ] and no later than [ ], 200[ ]. On the Determination Date in [ ] 200[
] and on each Determination Date thereafter before the commencement of the
Payment Period, the Servicer will determine the appropriate date by calculating
the Required Payment Period Length, which is an estimation of the number of
Collection Periods needed to set aside funds for the repayment of the [ ] term
notes on the Targeted Final Payment Date. The Payment Period will commence with
the first day of the Collection Period which follows the first Determination
Date on which the Required Payment Period Length is equal to or greater than the
number of full Collection Periods remaining between that Determination Date and
the Targeted Final Payment Date.
On each day during the [ ] term notes' Payment Period, the [ ] term
notes will be allocated their Principal Allocation Percentage of Available Trust
Principal. These amounts will be deposited in the Note Distribution Subaccount
for the [ ] term notes until the Fully Funded Date for the [ ] term notes has
occurred and will be invested in Eligible Investments. The trust will use
amounts in the [ ] term notes' Note Distribution Subaccount, other than
Investment Proceeds thereon, only to make principal payments on the [ ] term
notes. During a Payment Period for the [ ] term notes, unless the revolving
notes are then in a Payment Period, the trust will not repay principal under the
revolving notes until the Fully Funded Date has occurred for the series of Notes
in that Payment Period, but the trust may purchase additional receivables by
borrowing under the revolving notes. On the Targeted Final Payment Date for the
[ ] term notes, the trust will pay the outstanding principal balance of the [ ]
term notes, or any lesser amount as has been set aside for that purpose, and, to
the extent not paid in full on the Targeted Final Payment Date, on each Monthly
Distribution Date thereafter until so paid in full.
The terms of any series of term notes issued after the initial issuance
date with a Payment Period occurring, in whole or in part, during the Payment
Period for the [ ] term notes may provide for the Required Payment on those term
notes to be payable during the Payment Period for
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the [ ] term notes or after the Fully Funded Date for the [ ] term notes.
If the [ ] term notes, any other series of term notes, or any revolving
notes are not paid in full on or prior to the applicable Stated Final Payment
Date, an Early Amortization Period for the trust and a Rapid Amortization Period
for the [ ] term notes will commence. If the unpaid notes are the [ ] term
notes, a Rapid Amortization Period for the [ ] term notes will also commence.
As described under "THE TRANSFER AND SERVICING AGREEMENTS--COLLECTIONS"
in the prospectus, in some circumstances the servicer is permitted to make
deposits of Principal Collections and Interest Collections into the Collection
Account on each Monthly Distribution Date rather than on a daily basis. However,
during a Payment Period, Cash Accumulation Period or Rapid Amortization Period
for the [ ] term notes, the Servicer will be required to deposit Collections
into the Collection Account on a daily basis until the Fully Funded Date has
occurred with respect to the [ ] term notes.
CASH ACCUMULATION PERIOD
On each day during a Cash Accumulation Period for the [ ] term notes,
the [ ] term notes will be allocated their Principal Allocation Percentage of
Available Trust Principal and that amount will be deposited in the Cash
Accumulation Account for the [ ] term notes until the amount on deposit therein
equals the outstanding principal balance of the [ ] term notes. The trust will
use amounts in the Cash Accumulation Account only to make principal payments on
the [ ] term notes. The trust will retain any funds in the Cash Accumulation
Account, other than Cash Accumulation Account Earnings, in excess of the total
outstanding principal balance on the [
] term notes in the Cash Accumulation Account to make principal payments on
subsequent Monthly Distribution Dates. During a Cash Accumulation Period, the
trust will not borrow additional funds under the revolving notes, nor will the
trust purchase additional receivables. On the Targeted Final Payment Date for
the [ ] term notes, the trust will pay the outstanding principal balance of the
[ ] term notes, or any lesser amount as has been set aside for this purpose,
and, to the extent not paid in full on the Targeted Final Payment Date, on each
Monthly Distribution Date thereafter until so paid in full.
RAPID AMORTIZATION PERIOD
On each day during a Rapid Amortization Period for the [ ] term notes,
the [ ] term notes will be allocated their Principal Allocation Percentage of
Available Trust Principal and that amount will be deposited in the Note
Distribution Account for the [ ] term notes. All amounts so allocated during a
Rapid Amortization Period will be paid to the holders of the [ ] term notes on
the related Monthly Distribution Date. In addition, on the first Monthly
Distribution Date during the Rapid Amortization Period, any amounts in respect
of principal held in the Cash Accumulation Account or the Note Distribution
Account for the [ ] term notes will be paid to the holders of the [ ] term
notes.
RESERVE FUND
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The Reserve Fund will be an Eligible Deposit Account established and
maintained in the name of the indenture trustee for the benefit of the holders
of notes, the holders of Certificates, and, as applicable, a swap counterparty.
On the initial issuance date, the Reserve Fund will be funded with the Reserve
Fund Initial Deposit from the seller in an amount equal to $________. The
Reserve Fund is of the type as contemplated by the prospectus. See "THE TRANSFER
AND SERVICING AGREEMENTS--LIQUIDITY AND CREDIT SUPPORT--RESERVE FUND" in the
prospectus.
Additional amounts may be deposited in the Reserve Fund - and the
formula for the Reserve Fund Required Amount adjusted, in connection with the
issuance of additional series of term notes or changes in the trusts's Specified
Maximum Revolver Balance. In addition, the seller, in its sole discretion, may
at any time make additional deposits into the Reserve Fund as described in the
prospectus under "THE TRANSFER AND SERVICING AGREEMENTS-- LIQUIDITY AND CREDIT
SUPPORT--RESERVE FUND." The seller is not obligated to make any additional
deposits into the Reserve Fund, and we cannot assurance that any additional
deposits will be made.
If the amount in the Reserve Fund is less than the Reserve Fund
Required Amount for any Monthly Distribution Date, the amount of the deficiency,
to the extent funds are available as described above under "APPLICATION OF
INTEREST COLLECTIONS," will be deposited into the Reserve Fund.
Amounts on deposit in the Reserve Fund will be available to cover the
unsatisfied deficiency amount on each Monthly Distribution Date as described
above under "APPLICATION OF INTEREST COLLECTIONS." Amounts on deposit in the
Reserve Fund will be included in Available Trust Principal and applied to make
the final principal payments on the notes and the final distributions with
respect to Certificate Balance on the certificates during the Wind Down Period
and any Early Amortization Period if and to the extent that the application of
the amount on deposit in the Reserve Fund as Available Trust Principal will
reduce the outstanding principal balance on all notes and the outstanding
Certificate Balance with respect to all certificates to zero. This would be
after giving effect to all other required applications of the Reserve Fund on
that Monthly Distribution Date and all other amounts to be applied as Available
Trust Principal on that Monthly Distribution Date and after giving effect to the
payment and distribution of all amounts otherwise on deposit, or to be
deposited, in the Distribution Accounts on that Monthly Distribution Date.
If the amount in the Reserve Fund is more than the Reserve Fund
Required Amount for any Monthly Distribution Date, the amount of the excess,
unless otherwise agreed by the seller, will be paid to the seller as
compensation for making the Reserve Fund Initial Deposit and other deposits, if
any, into the Reserve Fund. On the Trust Termination Date, any funds remaining
on deposit in the Reserve Fund will be distributed to the seller.
Any investment earnings, net of losses and investment expenses, with
respect to the Reserve Fund for a Collection Period will be Investment Proceeds
and will be included in Available Trust Interest.
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CASH ACCUMULATION RESERVE FUND
The Cash Accumulation Reserve Fund will be fully funded in the amount
of [$ ] on the initial issuance date. The [ ] term notes will not have any
rights to amounts on deposit in the cash accumulation reserve fund or interest
income thereon, except as described herein.
The seller, in its sole discretion, may at any time make additional
deposits into the Cash Accumulation Reserve Fund. The seller is not obligated to
make any additional deposits into the Cash Accumulation Reserve Fund and there
can be no assurance that any additional deposits will be made.
If the amount in the cash accumulation reserve fund on any Monthly
Distribution Date is less than the Cash Accumulation Reserve Fund Required
Amount for that Monthly Distribution Date, the amount of the deficiency, to the
extent available as described above under "Application of Interest Collections,"
will be deposited into the Cash Accumulation Reserve Fund.
On each Monthly Distribution Date, if the funds in the Cash
Accumulation Reserve Fund after giving effect to all other distributions or
allocations on that Monthly Distribution Date exceed the Cash Accumulation
Reserve Fund Required Amount, that excess will be distributed FIRST to reimburse
servicer advances and SECOND to the seller. The Cash Accumulation Reserve Fund
Required Amount will decline on each Monthly Distribution Date as the [ ] term
notes approach their Targeted Final Payment Date. On repayment of the entire
outstanding principal balance of the [ ] term notes, any funds remaining on
deposit in the Cash Accumulation Reserve Fund will be paid to the seller.
BASIS SWAPS
On the initial issuance date, the trust will enter into a BASIS SWAP
with GMAC, as the BASIS SWAP COUNTERPARTY, for each of the following:
o the [ ] term notes, the [ ] TERM NOTES BASIS SWAP
o the [ ] revolving note, the [ ] REVOLVING NOTE BASIS SWAP
o the [ ] certificates, the [ ] CERTIFICATE BASIS SWAP
Each basis swap is intended to allow the trust to receive interest at a
rate determined by reference to the index upon which the rate of interest for
the applicable series of notes or certificates or amounts payable under any
related Specified Support Arrangement is based. In each case, the trust will pay
an interest rate determined by reference to the Prime Rate, on the one hand, and
the trust will receive a rate of interest determined by reference to USD
One-Month LIBOR, as described herein.
As set forth in the table below, for each basis swap, on each Monthly
Distribution Date, the basis swap counterparty will be obligated to pay to the
trust an amount equal to interest accrued during the related Collection Period
preceding that Monthly Distribution Date, on the applicable
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Notional Amount shown in the following table, at a rate equal to LIBOR, with
respect to that Monthly Distribution Date, plus a specified percentage for each
day during the related Collection Period divided by [360]. In exchange, on each
Monthly Distribution Date, the trust will be obligated to pay to the basis swap
counterparty an amount equal to interest accrued during the related Collection
Period, on either the daily Term Notional Amount, the [ ] Revolving Notional
Amount or the [ ] Certificate Notional Amount at a per annum rate equal to the
prime rate for each day during that Collection Period divided by [360.]
<TABLE>
<CAPTION>
AMOUNT DUE FROM AMOUNT DUE
<S> <C> <C> <C> <C> <C> <C>
BASIS SWAP NOTIONAL AMOUNT SWAP COUNTERPARTY FROM THE TRUST
[ ] term notes basis swap Term Notional Amount USD One-Month Prime Rate
LIBOR + [%]
[ ] revolving note basis swap [ ] Revolving Notional USD One-Month Prime Rate
Amount LIBOR + [%]
[ ] certificate basis swap [ ] Certificate Notional USD One-Month Prime Rate
Amount LIBOR + [%]
</TABLE>
Under the basis swaps, on each Monthly Distribution Date the amount the
trust is obligated to pay will be netted against the amount the basis swap
counterparty is obligated to pay so that only the net amount will be due from
the trust or the basis swap counterparty, as the case may be. This amount will
be payable out of Available Trust Interest as described above in clauses (2) and
(3) of "APPLICATION OF INTEREST COLLECTIONS" or will be included in "Available
Trust Interest," as defined above in "APPLICATION OF INTEREST
COLLECTIONS--DEFINED TERMS."
Each basis swap will terminate if, among other things, either party
defaults in the payment of any amount due thereunder and if the basis swap
counterparty becomes insolvent. The termination of any basis swap upon these
events will be an Early Amortization Event for the trust and either a Cash
Accumulation Event or, in the case of an insolvency event, a Rapid Amortization
Event, for the [ ] term notes. The termination of a basis swap will not result
in any make-whole amount being payable by either party.
In some limited situations, the trust may, without causing an Early
Amortization Event, terminate, amend or modify the terms of any Basis Swap or
enter into other Specified Support Arrangements without the consent of holders
of the outstanding notes or certificates. These limited situations include:
(1) in connection with the issuance of additional term notes,
revolving notes or certificates;
(2) a change in the trust's specified Maximum Revolver
Balance or the specified Maximum Revolver Balance for any series of
revolving notes; or
(3) the payment in full of any series of term notes.
The trust must satisfy the conditions set forth in the trust sale and
servicing agreement for the issuance or change, including, in the case of any
issuance or increase in the trust's specified
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<PAGE>
Maximum Revolver Balance, confirmation from each rating agency that the issuance
or increase will not result in a reduction or withdrawal of the rating of any
outstanding securities. See "THE TRANSFER AND SERVICING AGREEMENTS--ADDITIONAL
ISSUANCES; CHANGES IN SPECIFIED MAXIMUM REVOLVER BALANCE" in the prospectus.
OTHER LIQUIDITY AND CREDIT SUPPORT
Distributions on the certificates will be subordinated to payments on
the notes to the extent described herein. The trust property will include the
basis swaps, and the funds on deposit in the Reserve Fund, the Cash Accumulation
Reserve Fund and the Certificate Reserve Fund. The servicer may also make
Servicer Liquidity Advances with respect to additional series of term notes
issued hereafter if the terms of the additional term notes so provide. The
servicer will also make servicer advances as described above. The Servicer will
not make Servicer Liquidity Advances for the [ ] term notes. [Initially, no
Certificate Reserve Fund will be established for the [ ] certificates.] Other
credit, liquidity and other enhancement arrangements may be established in
connection with the issuance of additional securities or increases in the
trust's specified Maximum Revolver Balance. There can be no assurance that any
of these arrangements will be for the benefit of the holders of [ ] term notes.
DEFAULTS AND CHARGE-OFFS
For any Monthly Distribution Date, Available Trust Interest will be
available to cover the trust Defaulted Amount as described in clause (3) under
"APPLICATION OF INTEREST COLLECTIONS" above. To the extent that, for any Monthly
Distribution Date, the allocated Available Trust Interest does not cover the
full amount of the trust Defaulted Amount through treatment of that Available
Trust Interest as Additional trust Principal, that deficiency will constitute an
unreimbursed Trust Charge- Off. Unreimbursed Trust Charge-Offs will be covered
on any subsequent Distribution Date out of Available Trust Interest and, to the
extent available therefor, withdrawals from the Reserve Fund and the Certificate
Reserve Fund, if any. For any date, unreimbursed Trust Charge-Offs will, unless
reduced as described below, equal the aggregate trust Charge-Offs for all prior
Monthly Distribution Dates unless and to the extent the Trust Charge-Offs have
been so covered.
The Daily Trust Invested Amount is reduced by the amount of
unreimbursed Trust Charge- Offs and will therefore be reinstated to the extent
any Trust Charge-Offs are reimbursed. Unreimbursed Trust Charge-Offs will be
applied first to reduce the outstanding Certificate Balance of the certificates
and then to reduce the outstanding principal balance of the notes. Interest
payments on securities will be reduced to the extent unreimbursed Trust
Charge-Offs are applied against these securities as of any Monthly Distribution
Date.
If unreimbursed Trust Charge-Offs exceed the certificate balance on the
Stated Final Payment Date for a series of notes, then the trust will not owe to
the holders of the [ ] term notes the portion of the excess that is allocable to
the [ ] term notes, and the amount of unreimbursed Trust Charge- Offs will be
permanently reduced by that allocation. Unreimbursed Trust Charge-Offs in excess
of the Certificate Balance will be applied to the notes on the basis of the
Trust Interest Allocation Percentage of the notes then outstanding. For purposes
of this application, the certificate balance and Trust Interest Allocation will
be calculated without reduction for Trust Charge-Offs.
S-36
<PAGE>
OPTIONAL PURCHASE BY THE SERVICER
Notwithstanding anything in the prospectus to the contrary, at any time
from and after the time that:
o the Daily Trust Balance is equal to or less than [10%] of the
highest sum, at any time since the initial issuance date, of
the Daily Trust Balance PLUS the Cash Collateral Amount PLUS
amounts on deposit in the Cash Accumulation Account and the
Note Distribution Account; and
o either no term notes are outstanding or the Wind Down Period
is in effect,
the servicer may, at its option, purchase from the trust, as of the last day of
any Collection Period, all remaining receivables and other assets then held by
the trust, at a price equal to the aggregate Administrative Purchase Payments
for those receivables plus the appraised value of the other assets which price
will not be less than the outstanding principal balance and unpaid interest on
all notes. That amount will be treated as Trust Principal Collections received
during that Collection Period to the extent of the principal portion of the
aggregate Administrative Purchase Payments so paid, with the remainder being
Trust Interest Collections.
ERISA CONSIDERATIONS
Although there is little guidance on the subject, the seller believes
that, at the time of their issuance, the [ ] term notes would be treated as
indebtedness without substantial equity features for purposes of the Plan Assets
Regulation. The debt treatment of the [ ] term notes could change, subsequent to
their issuance, if the trust incurred losses. However, without regard to whether
[ ] term notes are treated as an equity interest for those purposes, the
acquisition or holding of [ ] term notes by or on behalf of a benefit plan could
be considered to give rise to a prohibited transaction if the seller, the trust
or any of their respective affiliates is or becomes a party in interest or a
disqualified person with respect to a benefit plan. Some of the exemptions from
the prohibited transaction rules could be applicable to the purchase and holding
of [ ] term notes by a benefit plan depending on the type and circumstances of
the plan fiduciary making the decision to acquire the [
] term notes. Included among these exemptions are: Prohibited Transaction Class
Exemption 96-23, regarding transactions affected by in-house asset managers;
PTCE 95-60, regarding investments by insurance company general accounts; PTCE
90-1, regarding investments by insurance company pooled separate accounts; PTCE
91-38 regarding investments by bank collective investment funds; and PTCE 84-14,
regarding transactions effected by "qualified professional asset managers." For
additional information regarding treatment of the [ ] term notes under ERISA,
see "ERISA CONSIDERATIONS" in the prospectus.
S-37
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Kirkland & Ellis, special tax counsel to the seller,
for U.S. federal income tax purposes, the [ ] term notes will constitute
indebtedness. Each term noteholder, by the acceptance of [ ] term note, will
agree to treat the [ ] term notes as indebtedness for federal, state and local
income and franchise tax purposes.
All the [ ] certificates issued on the initial issuance date will be
issued to the seller. Accordingly, the trust will be characterized as a division
of the seller for U.S. federal income tax purposes. See "FEDERAL INCOME TAX
CONSEQUENCES--TAX CHARACTERIZATION OF THE TRUST" in the prospectus. If the
seller sells any of the [ ] certificates or if the trust issues additional
certificates, this characterization may change. See "FEDERAL INCOME TAX
CONSEQUENCES--TAX CHARACTERIZATION AND TREATMENT OF CERTIFICATES" in the
prospectus.
See "Federal Income Tax Consequences" and "STATE AND LOCAL TAX
CONSEQUENCES" in the prospectus.
UNDERWRITING
Based on the terms and conditions set forth in the underwriting
agreement, the seller has agreed to sell to each of the underwriters named
below, and each of the underwriters has severally agreed to purchase from the
seller, the principal amount of [ ] term notes set forth opposite its name
below:
AGGREGATE PRINCIPAL AMOUNT TO BE PURCHASED
UNDERWRITER [ ] TERM NOTES
----------- --------------
$
Total $
=
The seller has been advised by the underwriters that the several
underwriters propose initially to offer the [ ] term notes to the public at the
prices set forth on the cover page hereof, and to dealers at these prices less a
selling concession not in excess of the percentage set forth below for the [ ]
term notes. The Underwriters may allow, and the dealers may reallow to other
dealers, a subsequent concession not in excess of the percentage set forth below
for the [ ] term notes. After the initial public offering, the public offering
price and these concessions may be changed.
SELLING
CONCESSION REALLOWANCE
[ ] term notes [%] [%]
The underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the [ ] term notes in accordance with Regulation M under the Securities Exchange
Act of 1934. Over-allotment transactions involve
S-38
<PAGE>
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the [ ] term notes so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the [ ] term notes in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the [ ] term notes originally sold by that
syndicate member are purchased in a syndicate covering transaction. These
over-allotment transactions, stabilizing transactions, syndicate covering
transactions and penalty bids may cause the prices of the [ ] term notes to be
higher than they would otherwise be in the absence of those transactions.
Neither the seller nor any of the underwriters represent that the underwriters
will engage in these transactions or that these transactions, if commenced, will
not be discontinued without notice at any time.
We will receive proceeds of approximately [$ ] from the sale of the [ ]
term notes, representing [ %] of the principal amount of the [ ] term notes,
after paying the underwriting discount of [$ ], representing [%] of the
principal amount of the [ ] term notes. Additional offering expenses are
estimated to be [$ ].
LEGAL OPINIONS
In addition to the legal opinions described in the prospectus, some of
the legal matters relating to the [] term notes 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 a
number of its affiliates.
S-39
<PAGE>
GLOSSARY OF PRINCIPAL TERMS
The following are given the meanings shown below to help describe the
cash flow on the notes and the certificates.
ADDITIONAL TRUST PRINCIPAL means, for any Monthly Distribution Date,
the amount, if any, of Available Trust Interest and funds in the Reserve Fund
applied to cover the Trust Defaulted Amount or to cover unreimbursed Trust
Charge-Offs on that Monthly Distribution Date.
AGGREGATE CERTIFICATEHOLDERS' INTEREST means, for any Monthly
Distribution Date, an amount equal to the sum of (a) the Certificateholders'
Interest for all classes of certificates for that Distribution Date and (b) the
Certificateholders' Interest Carryover Shortfall for the preceding Monthly
Distribution Date.
AGGREGATE REVOLVER INTEREST means, for any Monthly Distribution Date,
the sum of (a) the Revolver Interest for all series of revolving notes for that
Monthly Distribution Date and (b) the Revolver Interest Carryover Shortfall for
the preceding Monthly Distribution Date.
AVAILABLE TRUST INTEREST means, for any Distribution Date, the sum of
(1) Trust Interest Collections;
(2) Shared Investment Proceeds;
(3) the net amounts, if any, paid to the trust under the
[ ] certificates basis swap; and
(4) the portion of the purchase price to be included in
Available Trust Interest if the Servicer exercises its option to
purchase the assets of the trust as described below under "OPTIONAL
PURCHASE BY THE SERVICER."
AVAILABLE TRUST PRINCIPAL means
(a) for any day during a Collection Period, Trust Principal
Collections for that day minus any amounts paid on that day to the
Servicer as reimbursement for outstanding Servicer Liquidity Advances
and
(b) on the Monthly Distribution Date related to that
Collection Period, the sum of
(1) Additional Trust Principal, if any, for that
Monthly Distribution Date,
(2) the Cash Collateral Amount on that Monthly
Distribution Date and
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<PAGE>
(3) if that Monthly Distribution Date is related to
the Wind Down Period or an Early Amortization Period for the
trust, and if the amount on deposit in the Reserve Fund on
that Distribution Date exceeds zero, the Supplemental
Principal Allocation for that current Monthly Distribution
Date.
BUSINESS DAY means any day other than a Saturday, Sunday or any other
day on which banks in New York, New York or Detroit, Michigan may, or are
required to, be closed.
CASH ACCUMULATION ACCOUNT means an Eligible Deposit Account established
and maintained by the Servicer with the indenture trustee, in the name of the
indenture trustee, on behalf of the holders of the [ ] term notes. Funds in the
Cash Accumulation Account will be invested in Eligible Investments. The Cash
Accumulation Account will constitute a Designated Account, but the Cash
Accumulation Account Earnings will not constitute Shared Investment Proceeds for
purposes of the definition of Available Trust Interest. Cash Accumulation
Account Earnings will be maintained in the Cash Accumulation Account.
CASH ACCUMULATION ACCOUNT EARNINGS for a Monthly Distribution Date
means investment earnings during the related Collection Period on funds
deposited in the Cash Accumulation Account, net of losses and investment
expenses with respect to these funds.
CASH ACCUMULATION EVENT means, for the [ ] term notes, each of the
Early Amortization Events, except for Early Amortization Events which are also
Rapid Amortization Events, and the commencement of a Wind Down Period for the
trust.
CASH ACCUMULATION RESERVE FUND means an Eligible Deposit Account
established and maintained by the trust in the name of the indenture trustee for
the benefit of the holders of the [ ]term notes. The Cash Accumulation Reserve
Fund is available for the payment of interest on the [ ] term notes to the
extent described under "THE TRANSFER AND SERVICING AGREEMENTS--APPLICATION OF
INTEREST COLLECTIONS" in this prospectus supplement.
CASH ACCUMULATION RESERVE FUND DEPOSIT AMOUNT means, for any Monthly
Distribution Date, the excess, if any, of the Cash Accumulation Reserve Fund
Required Amount over the amount on deposit in the Cash Accumulation Reserve
Fund.
CASH ACCUMULATION PERIOD means, for the [ ] term notes, a period
beginning on the occurrence of a Cash Accumulation Event and ending on the
earliest of:
(1) the date on which the [ ] term notes are paid in full,
(2 the occurrence of a Rapid Amortization Event for the
[ ] term notes,
(3) the trust Termination Date and
(4) under the limited circumstances described above under
"--APPLICATION OF PRINCIPAL COLLECTIONS BY THE TRUST--REVOLVING
PERIOD," the recommencement of the Revolving Period for the trust.
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<PAGE>
CASH ACCUMULATION RESERVE FUND RELEASE AMOUNT for a Monthly
Distribution Date can never be less than zero and is always equal to zero except
during a Cash Accumulation Period or a Rapid Amortization Period when it is
calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cash Accumulation Reserve ( (CAB) x (LIBOR Rate) x (ACTUAL DAYS) ) - (Interest Earned)
-----------
Fund Release Amount =
360
</TABLE>
where:
"CAB" is the SUM of (a) the daily average balance in the Cash
Accumulation Account and (b) the daily average balance in the
Note Distribution Subaccount in respect of the [ ] term notes
prior to any deposits or withdrawals in respect of principal
into those accounts on that Monthly Distribution Date;
provided that earnings on those accounts during the related
Collection Period will be excluded from those balances.
"LIBOR Rate" is the [ ] Term Note Interest Rate in effect
for that Monthly
Distribution Date.
"Actual Days" is the actual numbers of days elapsed from and
including the prior Monthly Distribution Date to but excluding
that Monthly Distribution Date.
"Interest Earned" is the sum of the Cash Accumulation Account
Earnings and the Note Distribution Subaccount Earnings during
the related Collection Period.
CASH ACCUMULATION RESERVE FUND REQUIRED AMOUNT means, with respect to
any Determination Date, the sum of (1) the present value, discounted at [ %] per
annum, of the Monthly Mismatch Amounts for each Monthly Distribution Date
following the Monthly Distribution Date for which the calculation is being made
to the Monthly Distribution Date preceding the Targeted Final Payment Date for
the [ ] term notes and (2) [$ ].
[ ] CERTIFICATE NOTIONAL AMOUNT for any day during a Collection Period
equals the outstanding Certificate Balance of the [ ] certificates as of the
last day of that Collection Period, including after giving effect to
unreimbursed trust Charge-Offs as of the close of business on the Monthly
Distribution Date during that Collection Period.
CERTIFICATE PAYMENT DATE for the [ ] certificates means the 15th day of
each month, or if such day is not a Business Day, the next Business Day.
CERTIFICATE RATE means for the [ ] certificates issued on the initial
issuance date a rate equal to, with respect to any Certificate Payment Date, the
product of (1) a fraction, the numerator of which is the [number of days
elapsed] from and including the prior Certificate Payment Date (or, in the case
of the first Certificate Payment Date, from and including the initial issuance
date) to but excluding that Certificate Payment Date and the denominator of
which is [360] and (2) USD One-Month LIBOR plus [ %].
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<PAGE>
CERTIFICATE RESERVE FUND means an account the trust may establish if,
after the initial issuance date, certificates are issued to a non-affiliate of
the seller. The Certificate Reserve Fund, if established, will be an Eligible
Deposit Account established and maintained in the name of the owner trustee, for
the benefit of the holders of those certificates.
CERTIFICATEHOLDERS' INTEREST means, for any Monthly Distribution Date,
for any class of certificates, the product of (a) the Certificate Balance for
that class on the prior Monthly Distribution Date (or, in the case of the first
Monthly Distribution Date following the issuance of that class of certificates,
on the related closing date) plus the initial Certificate Balance of any
certificates of that class issued since that prior Monthly Distribution Date and
(b) the certificate rate for that class for that Monthly Distribution Date.
CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL means, for any Monthly
Distribution Date, the excess of (a) the Aggregate Certificateholders' Interest
for that Monthly Distribution Date over (b) the amount that was actually
deposited in the Certificate Distribution Account on that Monthly Distribution
Date in respect of Aggregate Certificateholders' Interest.
DETERMINATION DATE means the tenth day of each calendar month, or if
the tenth day is not a Business Day, the next succeeding Business Day.
ELIGIBLE INVESTMENTS means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which, at the time made, evidence:
(a) direct obligations of and which are fully guaranteed as to
timely payment by, the United States of America;
(b) 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 U.S.
branch of a foreign bank; the depository institution or trust company
shall be supervised and examined by federal or state banking or
depository institution authorities; provided, however, that at any time
of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations, other
than those obligations the rating of which is based on the credit of a
person or entity other than that depository institution or trust
company, thereof shall have a credit rating from each of the rating
agencies then rating the obligations in the highest investment category
granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
rating agencies then rating that commercial paper in the highest
investment category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the rating agencies then rating those funds 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 an investment manager or advisor,
so long as those fund shall have that rating, PROVIDED, HOWEVER, that
no funds in the Cash Accumulation Account or the Note Distribution
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<PAGE>
Subaccount for the [ ] term notes shall be invested in Eligible
Investments described in this clause (d);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) 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 or entity with the
required deposit rating or otherwise approved by the rating agencies;
and
(g) any other investment permitted by each of the rating
agencies,
in each case, other than as permitted by the rating agencies, maturing
not later than the Business Day immediately preceding the next Monthly
Distribution Date.
The FINAL REVOLVING PERIOD TERMINATION DATE is [date].
FULLY FUNDED DATE means, with respect to a series of notes, the day on
which:
(a) for the [ ] term notes,
(1) the sum of the amounts on deposit in the Cash
Accumulation Account plus the amount on deposit in the Note
Distribution Subaccount for the [ ] term notes for the payment
of principal equals the outstanding principal balance of the [
] term notes or
(2) the [ ] term notes have been paid in full;
(b) for each other outstanding series of term notes,
(1) the outstanding principal balance of that series
has been reduced to zero,
(2) an amount equal to the principal balance has been
set aside in a segregated account for the benefit of the notes
or
(3) some other arrangement with respect to the
repayment of principal of the Notes has been made which is
satisfactory to the rating agencies; or
(c) for the revolving notes, the principal balance has been
reduced to zero and the Specified Maximum Revolver Balance has been
reduced to zero.
LIBOR BUSINESS DAY means any day other than a Saturday, Sunday or any
other day on which banks in London are required or authorized to be closed.
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<PAGE>
MONTHLY AVAILABLE AMOUNT means, for any Monthly Distribution Date, the
aggregate of the [ ] term notes Monthly Available Amount, the [ ] revolving note
Monthly Available Amount and the comparable monthly available amounts for each
other series of term notes and revolving notes, if any.
MONTHLY CARRYING COSTS means, for any Monthly Distribution Date, the
aggregate of the [ ] term notes Monthly Carrying Costs, the [ ] revolving note
Monthly Carrying Costs and the comparable monthly carrying costs for each other
series of term notes and revolving notes, if any.
The MONTHLY MISMATCH AMOUNT for a Monthly Distribution Date is
calculated as follows:
<TABLE>
<CAPTION>
(Term Note Balance) (MISMATCH RATE)
-------------
<S> <C>
Monthly Mismatch Amount = x 12
</TABLE>
where:
Term Note Balance is the outstanding principal balance on the
[ ]-A term notes on the Monthly Distribution Date on which the
Cash Accumulation Reserve Fund Required Amount is being
calculated after distribution of principal on that Monthly
Distribution Date, and
Mismatch Rate is [ %].
NOTE DISTRIBUTION SUBACCOUNT means an account in which the Servicer
will maintain all the funds deposited in the Note Distribution Account in
respect of principal for the series of term notes beginning its Payment Period.
This account may only be kept on the trust's books.
NOTEHOLDERS' INTEREST means, for any Monthly Distribution Date,
(a) with respect to the [ ] term notes, the sum of
(1) the product of
(i) the outstanding principal balance of the
[ ] term notes on the last day of the related
Collection Period , or, in the case of the Initial
Monthly Distribution Date, the outstanding principal
balance on the initial issuance date,
(ii) the [ ] Term Note Interest Rate
for that Monthly Distribution Date and
(iii) a fraction the numerator of which is
the [number of days elapsed] from and including
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<PAGE>
the prior Monthly Distribution Date, or, in the
case of the initial Monthly Distribution Date,
from and including the initial issuance date, to but
excluding that Monthly Distribution Date and the
denominator of which is [360] and
(2) the excess of the Noteholders' Interest for the [
] term notes for the preceding Monthly Distribution Date over
the amount that was actually deposited in the Note
Distribution Account on the preceding Monthly Distribution
Date for the payment of interest on the [ ] term notes,
(b) with respect to any other series of term notes, the amount
required to be paid as, or set aside for payment of, interest on that
series of term notes on the Monthly Distribution Date under its terms,
including any interest payable as a result of shortfalls from prior
Monthly Distribution Dates, and
(c) with respect to any series of revolving notes, the sum of
(1) the Revolver Interest and
(2) the Revolver Interest Carryover Shortfall, in
each case, for that series of revolving notes for that
Distribution Period.
PRINCIPAL ALLOCATION PERCENTAGE for a referent series of notes, which
requires Available Trust Principal to be retained or set aside during any period
to fund principal payments with respect to the referent series on any date, is
calculated as follows:
(1) if that date does not relate to a Wind Down Period or an
Early Amortization Period for the trust:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(Aggregate Principal Balance of Referent
Series)
Principal Allocation Percentage --------------------------------------------------
for a Referent Series = (Sum of Aggregate Principal Balance for all
Referent Series)
</TABLE>
where:
Aggregate Principal Balance of Referent Series is
(A) with respect to any referent series of
term notes, the aggregate initial principal balance
with respect to that Referent Series or
(B) with respect to any referent series of
revolving notes, the outstanding principal balance of
that referent series as of the close of business on
the day preceding the first day of the Payment Period
with respect to that series.
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<PAGE>
Sum of Aggregate Principal Balance for all referent
series is the sum of the Aggregate Principal Balance of
referent series for each series of notes which is on that date
a referent series
(2) if that date relates to a Wind Down Period or an Early
Amortization Period for the trust:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(Aggregate Principal Balance of Referent
Series)
Principal Allocation Percentage --------------------------------------------------
for a Referent Series = (Sum of Aggregate Principal Balance for each
Series of Notes)
</TABLE>
where:
Aggregate Principal Balance of Referent Series is the
aggregate outstanding principal balance of the referent series
then outstanding on the last day of the Revolving Period
Sum of Aggregate Principal Balance for each Series of
Notes is the sum of the Aggregate Principal Balance of
Referent Series for all series then outstanding on the last
day of the Revolving Period, except for any series the
principal balance of which has been fully paid or provided
for, calculated for this purpose as though each outstanding
series is a Referent Series on that date.
A RAPID AMORTIZATION EVENT for the [ ] term notes will be:
(1) specified insolvency events relating to General Motors,
the Servicer, GMAC, or the seller,
(2) failure to pay the outstanding principal balance of the
notes and any certificates by their Stated Final Payment Date,
(3) either the trust or the seller becomes required to
register as an "investment company" within the meaning of the
Investment Company Act of 1940 and
(4) on any Monthly Distribution Date, the balance in the Cash
Accumulation Reserve Fund would be less than [ ] after giving effect to
all withdrawals and additions on that Monthly Distribution Date.
Items (3) and (4) above are not Early Amortization Events for the trust.
RAPID AMORTIZATION PERIOD for the [ ] term notes means a period
commencing upon the occurrence of a Rapid Amortization Event and will end on the
earliest of (a) the date on which the [ ] term notes are paid in full and (b)
the trust Termination Date.
REFERENCE BANK RATE will be determined on the following basis.
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<PAGE>
(1) At 11:00 A.M., London time on the day that is two LIBOR
Business Days
(a) prior to the immediately preceding Monthly Distribution
Date, or
(b) prior to the first day of the related Collection Period,
(2) the applicable of
(a) the principal balance of the [ ] term notes outstanding,
(b) the Certificate Balance of the [ ] certificates then
outstanding, or
(c) the aggregate principal amount of the [ ] revolving note
then outstanding, will be computed.
(3) The offered rate on an amount approximately equal to that
determined in paragraph (2) will be determined. The offered
rate will be fixed on the basis of the rates at which deposits
in U.S. Dollars are offered by the reference banks, and the
reference banks shall be four major banks that are engaged in
transactions in the London interbank market. The indenture
trustee will select these four banks after consultation with
the seller.
(4) The indenture trustee will request the principal London office
of each of the reference banks to provide a quotation of its
offered interest rate:
(5) If at least two of the quotations in paragraph (4) are
provided, the Reference Bank Rate will be the arithmetic mean
of the quotations, rounded upwards to the nearest
one-sixteenth of one percent.
(6) However, if on that date fewer than two quotations are
provided as requested, the Reference Bank Rate will be the
arithmetic mean, rounded upwards to the nearest one-sixteenth
of one percent, of the New York offered rate.
(a) The New York offered rate will be the interest rate
quoted by
(i) one or more major banks in New York City,
selected by the indenture trustee after
consultation with the seller,
(ii) as of 11:00 a.m., New York City time, on
that date, to leading European banks for
United States dollar deposits for a period
of one month in amounts approximately equal
to that determined in paragraph (2).
(7) If, after all the steps described in paragraphs (1)-(6) have
been completed, no Eurodollar offered rate or New York offered
rate quotation can be obtained, the Reference Bank Rate will
be LIBOR for the prior Monthly Distribution Date.
REMAINING INTEREST AMOUNTS means, with respect to a series of notes,
each of the amounts designated as Remaining Interest Amounts under clause (2) of
"APPLICATION OF INTEREST COLLECTIONS" above.
S-48
<PAGE>
REQUIRED PAYMENT means, for any series of term notes other than the [ ]
term notes, the amount of principal, if any, required by the terms of the term
notes to be due and payable, or to be set aside in anticipation of a future
payment of principal, on any specified date or dates. The term Required Payment
is not used herein to describe amounts owing or required to be set aside for the
[ ] term notes.
The REQUIRED PAYMENT PERIOD LENGTH, as of a Determination Date, is
calculated as follows, with figures rounded up to the nearest whole integer:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Required Payment (Outstanding Note Principal Balance)
Period Length = (Recent Minimum Daily Trust Balance) x (Minimum Monthly Payment
Rate)
</TABLE>
where:
Outstanding Note Principal Balance is the outstanding
principal balance of all [ ] term notes and all other notes
with scheduled Payment Periods during the Payment Period for
the [ ] term notes;
Recent Minimum Daily Trust Balance is the minimum
expected Daily Trust Balance during the period between that
Determination Date and ], 200[ ] as determined by the
Servicer; and
Minimum Monthly Payment Rate is the minimum Monthly
Payment Rate during the twelve Collection Periods preceding
that Determination Date.
RESERVE FUND DEPOSIT AMOUNT means, for any Monthly Distribution Date,
the excess, if any, of the Reserve Fund Required Amount over the amount on
deposit in the Reserve Fund after taking into account any withdrawals from the
Reserve Fund on that Monthly Distribution Date.
RESERVE FUND REQUIRED AMOUNT means,
(a) for any Monthly Distribution Date during the
Revolving Period or Wind Down Period, [ %] of the Maximum Pool
Balance as of that Monthly Distribution Date, or
(i) if, as of that Monthly Distribution
Date, the long-term debt obligations of GMAC are
rated less than "BBB-" by Standard & Poor's
Ratings Services, then [ %];
(b) for any Monthly Distribution Date during any Early
Amortization Period occurring prior to the Fully Funded Date for all
series of notes, [ %] of the Maximum Pool Balance as of the last day of
the Revolving Period, or
S-49
<PAGE>
(i) if, as of the last day of the Revolving
Period the long-term debt obligations of GMAC are
rated less than "BBB--" by Standard & Poor's
Ratings Services, then [ %];
and
(c) for any Monthly Distribution Date falling on or after the
Fully Funded Date for all series of notes, zero.
REVOLVER INTEREST means, for any Monthly Distribution Date, for any
series of revolving notes, the product of (a) the average daily Series Net
Revolver Balance for the series of revolving notes during the related Collection
Period and (b) the Revolver Interest Rate for the series of revolving notes for
the Monthly Distribution Date.
REVOLVER INTEREST CARRYOVER SHORTFALL means, for any Monthly
Distribution Date, the excess of (a) the Aggregate Revolver Interest for the
Monthly Distribution Date over (b) the amount that was actually deposited in the
Revolver Distribution Account on the Monthly Distribution Date in respect of
Aggregate Revolver Interest.
REVOLVER INTEREST RATE for the [ ] revolving note issued on the initial
issuance date will be equal to, with respect to any Monthly Distribution Date,
the product of (1) a fraction, the numerator of which is the [number of days
elapsed] during the related Collection Period, or, in the case of the initial
Monthly Distribution Date, from and including the initial issuance date of the
related Collection Period, and the denominator of which is [360] and (2) USD
One-Month LIBOR plus [ %].
[ ] REVOLVING NOTE TARGETED FINAL PAYMENT DATE for the [ ] revolving
note to be issued on the initial issuance date will be the Monthly Distribution
Date in [ ]200.
[ ] REVOLVING NOTE STATED FINAL PAYMENT DATE will be the Monthly
Distribution Date in [ ] 200[ ].
[ ] REVOLVING NOTIONAL AMOUNT for any day during a Collection Period
equals the outstanding principal balance of the [ ] revolving note as of that
day, including after giving effect to unreimbursed trust Charge-Offs as of the
close of business on the Monthly Distribution Date during that Collection
Period.
SERIES NET REVOLVER BALANCE means, with respect to any series of
revolving notes, for any date, the aggregate outstanding principal balance under
the series of revolving notes minus any amounts on deposit in the Revolver
Distribution Account on that date for the payment of principal on that series of
revolving notes.
SERIES SHORTFALL means, for a series of notes, each of the amounts
designated as a Series Shortfall above in clause (2) under "APPLICATION OF
INTEREST COLLECTIONS."
SERVICER LIQUIDITY ADVANCE means, for any series of term notes the
terms of which provide for a Servicer Liquidity Advance, an advance by the
Servicer to the trust made to the
S-50
<PAGE>
extent a required principal payment for any series of Notes for any Monthly
Distribution Date cannot otherwise be made, after giving effect to all issuances
of securities and additional borrowings under the revolving notes on that
Monthly Distribution Date, as they are available. However, the Servicer can only
make Servicer Liquidity Advances to the extent that the Servicer, in its sole
discretion, expects to recover those advances from subsequent trust Principal
Collections. Servicer Liquidity Advances with respect to a series of term notes
will be reimbursed (a) if Available Trust Principal is being set aside for that
series of term notes, out of that series' share of Available Trust Principal and
(b) if Available Trust Principal is not being set aside for term notes, out of a
portion of Trust Principal Collections not to exceed a fraction, the numerator
of which is the outstanding principal balance of that series of term notes and
the denominator of which is the outstanding balance of all series of notes as of
that date. The terms of the [ ] term notes do not provide for the Servicer to
make Servicer Liquidity Advances.
SHARED INVESTMENT PROCEEDS means all Investment Proceeds other than (A)
Cash Accumulation Account Earnings, (B) Note Distribution Subaccount earnings
for the [ ] term notes, (C) Investment Proceeds from the Cash Accumulation
Reserve Fund and (D) Investment Proceeds from any other account established for
other series of term notes in which funds are accumulated to pay principal on
the notes at designated times.
SPECIFIED SUPPORT ARRANGEMENT means any letter of credit, security
bond, cash collateral account, spread account, guaranteed rate agreement,
maturity or liquidity facility, tax protection agreement, interest rate swap
agreement, interest rate cap agreement, other derivative product or other
arrangement to provide liquidity or credit support for the benefit of holders of
one or more series or classes of securities, other than the Reserve Fund,
whether or not that arrangement is an asset of the trust and is so designated.
As of the initial issuance date, the Specified Support Arrangements will consist
of the basis swaps and the Cash Accumulation Reserve Fund. Specified Support
Arrangements for the benefit of any series or classes of securities, including
those established in connection with the issuance of any securities after the
initial issuance date, may not inure to the benefit of other securities,
including the [ ] term notes, issued by the trust.
SUPPLEMENTAL PRINCIPAL ALLOCATION means, for any Monthly Distribution
Date related to the Wind Down Period or an Early Amortization Period for the
trust, an amount not less than zero and equal to the LESSER of:
(a) the excess, if any, of
(1) the product of
(A) the percentage equivalent of a fraction
which will never exceed 100%, the numerator of which
is the Daily Trust Balance and the denominator of
which is the principal balance of all receivables,
including receivables owned by GMAC, in the dealer
accounts included in the pool of accounts, in each
case, as of the termination of the Revolving Period,
and
S-51
<PAGE>
(B) the aggregate amount of Principal
Collections on all receivables, including receivables
held by GMAC, in the dealer accounts in the pool of
accounts for each day during the related Collection
Period over
(2) the aggregate amount of Trust Principal
Collections for each day during the related Collection Period
provided that no amount will be included pursuant to clause
(1)(B) or (2) for any day in that Collection Period that
occurred during the Revolving Period and
(b) an amount equal to
(1) the Daily Trust Balance as of the termination of
the Revolving Period plus
(2) the Cash Collateral Amount on the last day of the
Revolving Period minus
(3) the Available Trust Principal for each Monthly
Distribution Date from and after the final Monthly
Distribution Date for the Revolving Period through but
excluding that current Monthly Distribution Date MINUS
(4) the amount added to unreimbursed Trust
Charge-Offs on each Monthly Distribution Date from and after
the final Monthly Distribution Date for the Revolving Period
through and including that current Monthly Distribution Date
MINUS
(5) Available Trust Principal for that current
Monthly Distribution Date, assuming the Supplemental Principal
Allocation for that Monthly Distribution Date was zero.
TERM NOTIONAL AMOUNT for any day during a Collection Period equals the
Unaccumulated Principal Balance of the [ ] term notes as of that day, including
after giving effect to unreimbursed Trust Charge-Offs as of the close of
business on the Monthly Distribution Date during that Collection Period.
TRUST INTEREST ALLOCATION means, for any series of notes, for any
Monthly Distribution Date, an amount equal to the product of (1) Available Trust
Interest less the amounts paid to the Servicer under clause 1(a) under the
"APPLICATION OF INTEREST COLLECTIONS above and (2) the Trust Interest Allocation
Percentage for that series.
TRUST INTEREST ALLOCATION PERCENTAGE means, for any series of notes,
for any Monthly Distribution Date, a fraction calculated as set forth in the
following equation:
S-52
<PAGE>
(UPB OF NOTE SERIES)
Trust Interest Allocation = (UPB of all term notes) + (UPB of all
Percentage revolving notes)
where:
UPB of Note Series is
(1) for a series of term notes, the Unaccumulated
Principal Balance for that series of term notes and
(2) for a series of revolving notes, the daily
average outstanding principal balance for that series of
revolving notes during the related Collection Period;
UPB of all term notes is the Unaccumulated Principal Balances
of all series of term notes then outstanding; and
UPB of all revolving notes is the daily average of the
outstanding principal balance of all revolving notes during the related
Collection Period.
TRUST INTEREST COLLECTIONS means, for any Monthly Distribution Date, an
amount equal to the sum of (1) the product of (a) the Trust Percentage and (b)
Interest Collections for the related Collection Period and (2) recoveries during
the related Collection Period on Eligible Receivables that have previously
become Defaulted receivables. If, on any Monthly Distribution Date, the Servicer
does not make a servicer advance in the amount of the full deficiency amount,
Trust Interest Collections for the Monthly Distribution Date will be adjusted to
give effect to the actual percentage of Eligible Receivables in those dealer
accounts in the pool of accounts in which the full amount of interest due for
the related Collection Period was not collected. The adjustment will not affect
the amount of interest allocated to the trust with respect to the other dealer
accounts in the pool of accounts.
TRUST PERCENTAGE means, for any Monthly Distribution Date, the
percentage equivalent of a fraction never to exceed 100%, the numerator of which
is the average Daily Trust Balance during the related Collection Period and the
denominator of which is the average daily aggregate principal balance of all
receivables, including receivables owned by GMAC, in the dealer accounts
included in the pool of accounts during the related Collection Period.
TRUST PRINCIPAL COLLECTIONS means, for any date, the sum of (a) the
amount of Principal Collections on receivables held by the trust and (b) the
principal portion of all Warranty Payments and Administrative Purchase Payments,
if any, on that date.
UNACCUMULATED PRINCIPAL BALANCE means, with respect to any series of
term notes as of a Monthly Distribution Date,
S-53
<PAGE>
(1) the daily average of the outstanding principal balance of
the term notes during the related Collection Period MINUS
(2) with respect to the [ ] term notes, the daily average
during the related Collection Period of the sum of
(a) the amount of funds on deposit in the Cash
Accumulation Account and
(b) the amount of funds on deposit in the Note
Distribution Account in respect of the outstanding principal
balance of the [ ] term notes or, with respect to other series
of term notes, the daily average of the amount of funds on
deposit in any account during the related Collection Period
for which funds are accumulated to pay principal on that
series as specified under the terms of that series of term
notes.
USD ONE-MONTH LIBOR means, with respect to each Monthly Distribution
Date, the rate for deposits in U.S. Dollars for a period of one month which
appears on the Dow Jones Telerate Service Page 3750 as of 11:00 a.m., London
time,
(x) for the [ ] term notes and the [ ] certificates, on the
day that is two LIBOR Business Days prior to the Monthly Distribution
Date preceding that Monthly Distribution Date, or, for the Initial
Monthly Distribution Date, two LIBOR Business Days prior to the initial
issuance date, and
(y) for the [ ] revolving note, on the day that is two LIBOR
Business Days prior to the first day of the related Collection Period,
or, for the Initial Monthly Distribution Date, two LIBOR Business Days
prior to the initial issuance date.
If the rate does not appear on that page , or any other page as may
replace that page on that service, or if that service is no longer offered, that
other service for displaying LIBOR or comparable rates as may be selected by the
indenture trustee after consultation with the seller, the rate will be the
Reference Bank Rate.
S-54
<PAGE>
-----------------------------------------------------
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, THAT INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER,
THE SERVICER OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE 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 THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE ANY 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.
---------------
UNTIL [ ], [ ], ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES, 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.
-----------------------------------------------------
-----------------------------------------------------
SUPERIOR WHOLESALE
INVENTORY FINANCING TRUST [ ]
[$ ]
FLOATING RATE ASSET BACKED TERM NOTES,
SERIES [ ]
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
GENERAL MOTORS
ACCEPTANCE CORPORATION
SERVICER
----------------------------------
PROSPECTUS SUPPLEMENT
----------------------------------
UNDERWRITERS
-----------------------------------------------------
S-55
<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 term notes, other than underwriting
discounts and commissions, described in this Registration Statement:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Securities and Exchange Commission registration fee ........................... $ 1,112,000
Fees and expenses of trustee; Printing Registration
Statement, prospectus and other documents; Accountants'
fees......................................................................... 1,360,000
Rating Agencies' fees.......................................................... 2,000,000
Miscellaneous expenses......................................................... 1,028,000
---------
Total........................................................................ $ 5,500,000
= =========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Wholesale Auto Receivables Corporation 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.
Wholesale Auto Receivables Corporation's Certificate of Incorporation
provides, in effect, that, except for limited exceptions, such corporation will
indemnify its officers and directors to the extent permitted by Delaware General
Corporation Law.
Certain controlling persons of the Registrant may also be entitled to
indemnification from General Motors Acceptance Corporation, the direct parent of
the Registrant. Under Section 145, 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) The Certificate of Incorporation, as amended, of General
Motors Acceptance Corporation provides that no director shall be personally
liable to General Motors Acceptance Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to General Motors Acceptance
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174, or any successor provision thereto, of the Delaware Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
(b) Under Article VI of its By-Laws, General Motors Acceptance
Corporation shall indemnify and
II - 1
<PAGE>
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 "proceeding". A proceeding
may be a threatened, pending or completed action, suit or proceeding, whether
civil, criminal administrative or investigative, 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 General Motors Acceptance Corporation, or is or was serving at the request of
General Motors Acceptance Corporation as a director, officer, employee,
fiduciary or member of any other corporation, partnership, joint venture, trust,
organization or other enterprise. General Motors Acceptance 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
General Motors Acceptance Corporation. General Motors Acceptance Corporation
shall make an advancement of expenses, whereby it will pay the expenses of
directors and officers incurred in defending any proceeding in advance of its
final disposition ; 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 full amounts advanced if it should be ultimately determined that the
director or officer is not entitled to be indemnified under Article VI of the
By-Laws or otherwise. If a claim for indemnification or advancement of expenses
by an officer or director under Article VI of the By-Laws is not paid in full
within ninety days after a written claim therefor has been received by General
Motors Acceptance 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 the requested indemnification or advancement of expenses under applicable
law. The rights conferred on any person by Article VI of the By-Laws 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, By-Laws,
agreement, vote of stockholders or disinterested directors of General Motors
Acceptance Corporation or otherwise. The obligation, if any, of General Motors
Acceptance Corporation to indemnify any person who was or is serving at its
request as a director, officer or employee 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, join venture, trust, organization or other enterprise.
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 Delaware General Corporation 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 General Corporation Law.
Pursuant to resolutions adopted by the Board of Directors of
General Motors Corporation, General Motors Corporation, 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.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
EXHIBIT
NUMBER DESCRIPTION
*1.1 Form of underwriting agreement for the term notes 4.1Form of indenture
between the trust and the indenture trustee 5.1Opinion of Kirkland & Ellis
with respect to legality 8.1Opinion of Kirkland & Ellis with respect to
tax matters
23.1 Consent of Kirkland & Ellis (included as part of Exhibit 5.1)
99.1 Form of pooling and servicing agreement between General Motors
Acceptance Corporation and the seller 99.2 Form of trust sale and servicing
agreement among the trust, the seller and the servicer 99.3 Form of trust
agreement between the seller and the owner trustee
II - 2
<PAGE>
99.4 Form of administration agreement among the servicer, the owner trustee
and the indenture trustee 99.5 Form of custodian agreement between the
seller and the custodian
*99.6 Certificate of incorporation of the seller
*99.7 By-laws of the seller
99.8 Form of officer's issuance certificate of the seller.
* Previously filed under registration no. 33-50323 _________
- -
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement;
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, 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 these 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 an
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 this indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
the issue.
The undersigned registrant hereby undertakes:
(1) For the purpose of determining any liability under the Securities
Act of 1993, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
II - 3
<PAGE>
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of those securities
at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the indenture trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Act.
II - 4
<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 Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Detroit, State of Michigan, on the ___ day of ___,
2000.
WHOLESALE AUTO RECEIVABLES CORPORATION
/S/ WILLIAM F. MUIR
- ----------------------------------------------------------------
(William F. Muir, Chairman of the Board)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on _____, 2000 by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C> <C> <C> <C> <C> <C>
/S/ WILLIAM F. MUIR Chairman of the Board and Director
- ----------------------------------
(William F. Muir) (Principal Executive Officer)
/S/ JOHN D. FINNEGAN President and Director (Principal
- -----------------------------------
(John D. Finnegan) Operating Officer)
/S/ PAUL D. BULL Vice President and Director
- ---------------------------------
(Paul D. Bull)
/S/ JOHN E. GIBSON Vice President and Director
- ----------------------------------
(John E. Gibson)
/S/ DAVID C. WALKER Vice President and Director
- ----------------------------------
(David C. Walker)
/S/ JEROME B. VAN ORMAN JR. Vice President and Director
- --------------------------------------
(Jerome B. Van Orman Jr.)
/S/ DAVID J. BROPHY Director
- ----------------------------------
(David J. Brophy)
/S/ ROBERT D. KEMP JR. Director
- ------------------------------------
(Robert D. Kemp Jr.)
/S/ GERALD E. GROSS Comptroller
- ----------------------------------
(Gerald E. Gross) (Principal Accounting Officer)
</TABLE>
II - 5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
*1.1 Form of underwriting agreement for the term notes
4.1 Form of indenture between the trust and the indenture trustee
5.1 Opinion of Kirkland & Ellis with respect to legality
8.1 Opinion of Kirkland & Ellis with respect to tax matters
23.1 Consent of Kirkland & Ellis (included as part of Exhibit 5.1)
99.1 Form of pooling and servicing agreement between General Motors Acceptance Corporation and the seller
99.2 Form of trust sale and servicing agreement among the trust, the seller and the servicer
99.3 Form of trust agreement between the seller and the owner trustee
99.4 Form of administration agreement among the servicer, the owner trustee and the indenture trustee
99.5 Form of custodian agreement between the seller and the custodian
*99.6 Certificate of incorporation of the seller
*99.7 By-laws of the seller
99.8 Form of officer's issuance certificate of the seller.
- ----------
* Previously filed under registration no. 33-50323
</TABLE>
II - 6
<PAGE>
EXHIBIT 4.1
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
Asset-Backed Term Notes
Asset-Backed Revolving Notes
------------------------------------------
INDENTURE
Dated as of ________, ____
------------------------------------------
[ ],
a [ ] Banking Corporation,
Indenture Trustee
indt.form.01.wpd
<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) ................................. 2.1, 2.9, 4.1, 11.1(a)
(c)(2) ................................. 2.1, 2.9, 4.1, 11.1(a)
(c)(3) ................................. 2.9, 4.1, 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.
====================
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<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS..................................................... 2
-----------
1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............... 2
-------------------------------------------------
ARTICLE II
THE NOTES
2.1 ISSUANCE OF NOTES; EXECUTION, AUTHENTICATION AND DELIVERY....... 2
---------------------------------------------------------
2.2 FORM OF NOTES AND INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION 5
-------------------------------------------------------------------
2.3 TEMPORARY NOTES................................................. 5
---------------
2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE OF NOTES.... 6
------------------------------------------------------------
2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES...................... 7
------------------------------------------
2.6 PERSONS DEEMED NOTEHOLDERS...................................... 8
--------------------------
2.7 PAYMENT OF PRINCIPAL AND INTEREST............................... 8
---------------------------------
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 TERM NOTES........................................... 11
---------------------
2.13 SELLER AS NOTEHOLDER............................................ 11
--------------------
2.14 TAX TREATMENT................................................... 11
-------------
2.15 SPECIAL TERMS APPLICABLE TO SUBSEQUENT TRANSFERS OF CERTAIN NOTES 11
-----------------------------------------------------------------
ARTICLE III
COVENANTS
3.1 PAYMENT OF PRINCIPAL AND INTEREST............................... 12
---------------------------------
3.2 MAINTENANCE OF AGENCY OFFICE.................................... 13
----------------------------
3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.......................... 13
--------------------------------------
3.4 EXISTENCE....................................................... 15
---------
3.5 PROTECTION OF TRUST ESTATE; ACKNOWLEDGMENT OF PLEDGE............ 15
----------------------------------------------------
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............................... 17
---------------------------------
3.10 CONSOLIDATION, MERGER, ETC., OF ISSUER; DISPOSITION OF TRUST ASSETS 18
-------------------------------------------------------------------
3.11 SUCCESSOR OR TRANSFEREE......................................... 20
-----------------------
3.12 NO OTHER BUSINESS............................................... 20
-----------------
3.13 NO BORROWING.................................................... 20
------------
3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES............... 20
-------------------------------------------------
3.15 SERVICER'S OBLIGATIONS.......................................... 20
----------------------
3.16 CAPITAL EXPENDITURES............................................ 20
--------------------
3.17 REMOVAL OF ADMINISTRATOR........................................ 21
------------------------
indt.form.01.wpd
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<PAGE>
3.18 RESTRICTED PAYMENTS............................................. 21
-------------------
3.19 NOTICE OF EVENTS OF DEFAULT..................................... 21
---------------------------
3.20 FURTHER INSTRUMENTS AND ACTS.................................... 21
----------------------------
3.21 TRUSTEE'S ASSIGNMENT OF INTERESTS IN CERTAIN RECEIVABLES........ 21
--------------------------------------------------------
3.22 REPRESENTATIONS AND WARRANTIES BY THE ISSUER TO THE INDENTURE TRUSTEE 22
---------------------------------------------------------------------
ARTICLE IV
SATISFACTION AND DISCHARGE
4.1 SATISFACTION AND DISCHARGE OF INDENTURE......................... 22
---------------------------------------
4.2 APPLICATION OF TRUST MONEY...................................... 23
--------------------------
4.3 REPAYMENT OF MONIES HELD BY PAYING AGENT........................ 23
----------------------------------------
4.4 DURATION OF POSITION OF INDENTURE TRUSTEE....................... 24
-----------------------------------------
ARTICLE V
DEFAULT AND REMEDIES
5.1 EVENTS OF DEFAULT............................................... 24
-----------------
5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.............. 25
--------------------------------------------------
5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE
-----------------------------------------------------------------
TRUSTEE......................................................... 26
-------
5.4 REMEDIES; PRIORITIES............................................ 28
--------------------
5.5 OPTIONAL PRESERVATION OF THE TRUST ESTATE....................... 29
-----------------------------------------
5.6 LIMITATION OF SUITS............................................. 29
-------------------
5.7 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST 30
---------------------------------------------------------------------
5.8 RESTORATION OF RIGHTS AND REMEDIES.............................. 30
----------------------------------
5.9 RIGHTS AND REMEDIES CUMULATIVE.................................. 30
------------------------------
5.10 DELAY OR OMISSION NOT A WAIVER.................................. 30
------------------------------
5.11 CONTROL BY NOTEHOLDERS.......................................... 31
----------------------
5.12 WAIVER OF PAST DEFAULTS......................................... 31
-----------------------
5.13 UNDERTAKING FOR COSTS........................................... 32
---------------------
5.14 WAIVER OF STAY OR EXTENSION LAWS................................ 32
--------------------------------
5.15 ACTION ON NOTES................................................. 32
---------------
5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.............. 33
--------------------------------------------------
ARTICLE VI
THE INDENTURE TRUSTEE
6.1 DUTIES OF INDENTURE TRUSTEE..................................... 34
---------------------------
6.2 RIGHTS OF INDENTURE TRUSTEE..................................... 35
---------------------------
6.3 INDENTURE TRUSTEE MAY OWN NOTES................................. 35
-------------------------------
6.4 INDENTURE TRUSTEE'S DISCLAIMER.................................. 36
------------------------------
6.5 NOTICE OF DEFAULTS.............................................. 36
------------------
6.6 REPORTS BY INDENTURE TRUSTEE TO HOLDERS......................... 36
---------------------------------------
6.7 COMPENSATION; INDEMNITY......................................... 36
-----------------------
6.8 REPLACEMENT OF INDENTURE TRUSTEE................................ 37
--------------------------------
6.9 MERGER OR CONSOLIDATION OF INDENTURE TRUSTEE.................... 38
--------------------------------------------
6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE 38
-----------------------------------------------------------------
6.11 ELIGIBILITY; DISQUALIFICATION................................... 39
-----------------------------
6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER................ 39
------------------------------------------------
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<PAGE>
6.13 REPRESENTATIONS AND WARRANTIES OF INDENTURE TRUSTEE............. 40
---------------------------------------------------
6.14 INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES 40
----------------------------------------------------------------
6.15 SUIT FOR ENFORCEMENT............................................ 40
--------------------
6.16 RIGHTS OF NOTEHOLDERS TO DIRECT INDENTURE TRUSTEE............... 41
-------------------------------------------------
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
7.1 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
----------------------------------------------------------
NOTEHOLDERS..................................................... 41
-----------
7.2 PRESERVATION OF INFORMATION, COMMUNICATIONS TO NOTEHOLDERS...... 41
----------------------------------------------------------
7.3 REPORTS BY ISSUER............................................... 42
-----------------
7.4 REPORTS BY INDENTURE TRUSTEE.................................... 42
----------------------------
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
8.1 COLLECTION OF MONEY............................................. 43
-------------------
8.2 DESIGNATED ACCOUNTS; PAYMENTS................................... 43
-----------------------------
8.3 GENERAL PROVISIONS REGARDING DESIGNATED ACCOUNTS................ 45
------------------------------------------------
8.4 RELEASE OF TRUST ESTATE......................................... 45
-----------------------
8.5 OPINION OF COUNSEL.............................................. 46
------------------
ARTICLE IX
SUPPLEMENTAL INDENTURES
9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.......... 46
------------------------------------------------------
9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS............. 47
---------------------------------------------------
9.3 EXECUTION OF SUPPLEMENTAL INDENTURES............................ 49
------------------------------------
9.4 EFFECT OF SUPPLEMENTAL INDENTURE................................ 49
--------------------------------
9.5 CONFORMITY WITH TRUST INDENTURE ACT............................. 49
-----------------------------------
9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES................... 50
---------------------------------------------
ARTICLE X
REDEMPTION OF TERM NOTES
10.1 REDEMPTION..................................................... 50
----------
10.2 FORM OF REDEMPTION NOTICE...................................... 50
-------------------------
10.3 TERM NOTES PAYABLE ON REDEMPTION DATE.......................... 51
-------------------------------------
ARTICLE XI
MISCELLANEOUS
11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC...................... 51
------------------------------------------
11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE............... 53
------------------------------------------------
11.3 ACTS OF NOTEHOLDERS............................................ 54
-------------------
11.4 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES 54
---------------------------------------------------------------
11.5 NOTICES TO NOTEHOLDERS; WAIVER................................. 55
------------------------------
11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS........................ 55
---------------------------------------
11.7 CONFLICT WITH TRUST INDENTURE ACT.............................. 55
---------------------------------
11.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS....................... 56
----------------------------------------
11.9 SUCCESSORS AND ASSIGNS......................................... 56
----------------------
indt.form.01.wpd
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<PAGE>
11.10 SEPARABILITY................................................... 56
------------
11.11 BENEFITS OF INDENTURE.......................................... 56
---------------------
11.12 LEGAL HOLIDAYS................................................. 56
--------------
11.13 GOVERNING LAW.................................................. 56
-------------
11.14 COUNTERPARTS................................................... 57
------------
11.15 RECORDING OF INDENTURE......................................... 57
----------------------
11.16 NO RECOURSE.................................................... 57
-----------
11.17 NO PETITION.................................................... 58
-----------
11.18 INSPECTION..................................................... 58
----------
EXHIBIT A Form of Transfer Certificate
EXHIBIT B Form of Undertaking Letter
</TABLE>
indt.form.01.wpd
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<PAGE>
INDENTURE, dated as of ________, ____, between SUPERIOR WHOLESALE
INVENTORY FINANCING TRUST [ ], a Delaware business trust (the "ISSUER" or the
"TRUST"), and [ ], a [ ] banking corporation, 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, 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) all Eligible Receivables, all Collateral Security with
respect thereto, all monies due or to become due thereon and all amounts
received with respect thereto and all proceeds thereof (including "proceeds" as
defined in Section 9-306 of the UCC and Recoveries), (b) the Trust Sale and
Servicing Agreement (including the rights of Wholesale Auto Receivables
Corporation (the "SELLER") under the Pooling and Servicing Agreement assigned
to the Issuer pursuant to the Trust Sale and Servicing Agreement), (c) each
Basis Swap and any other Specified Support Arrangement, including the right to
receive payments thereunder and (d) any proceeds of any of the foregoing
(collectively with the items described in clauses (a), (b) and (c), 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 (except
as otherwise provided in any Officer's Issuance Certificate or supplement
hereto), to secure (only to the extent expressly provided herein) distributions
of Certificate Balance with respect to and interest on the Certificates, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture. This Indenture constitutes a security agreement under the UCC.
The foregoing grant includes all rights, powers and options (but
none of the obligations, if any) of the Issuer under any agreement or
instrument included in the Collateral, including the immediate and continuing
right to claim for, collect, receive and give receipt for principal and
interest payments in respect of the Receivables included in the Collateral and
all other monies payable under the Collateral, 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 Issuer or otherwise
and generally to do and receive anything that the Issuer is or may be entitled
to do or receive under or with respect to the Collateral.
The Indenture Trustee, as trustee on behalf of the Noteholders and
(only to the extent expressly provided herein) the Certificateholders,
acknowledges such grant and accepts the trusts under this Indenture in
accordance with the provisions of this Indenture.
indt.form.01.wpd
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<PAGE>
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 PART I of
APPENDIX A to the Trust Sale and Servicing Agreement dated as of ________, ____
(the "TRUST SALE AND SERVICING AGREEMENT") among the Issuer, the Seller and
General Motors Acceptance Corporation ("GMAC"). All references herein to "this
Indenture" are to this Indenture as it may be amended, supplemented or modified
from time to time, and all references herein to Articles, Sections, subsections
and exhibits are to Articles, Sections, subsections and exhibits of 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.
The rules of construction set forth in PART II of such APPENDIX A shall be
applicable to this Agreement.
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 ISSUANCE OF NOTES; EXECUTION, AUTHENTICATION AND DELIVERY.
(a) Term Notes and Revolving Notes may be issued by the Issuer upon
execution of this Indenture and from time to time thereafter, in each case, in
accordance with the terms and conditions authorized by or pursuant to an
Officer's Issuance Certificate. The Term Notes may be issued in one or more
series. The Revolving Notes may be issued in one or more series. The aggregate
principal amount of the Revolving Notes and the Term Notes of all series that
may be authenticated and delivered and outstanding under this Indenture is not
limited.
indt.form.01.wpd
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<PAGE>
(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. 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.
(c) Prior to or concurrently with the delivery of any Note to the
Indenture Trustee for authentication, the Seller shall execute and deliver to
the Indenture Trustee, or cause to be executed and delivered to the Indenture
Trustee, an Officer's Issuance Certificate and an Opinion of Counsel.
(i) The Officer's Issuance Certificate shall set forth, in
addition to all other requirements of such certificate:
(A) the designation of the particular series (which
shall distinguish such series from all other series);
(B) the aggregate principal amount of the series which
may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration and transfer of,
or in exchange for, or in lieu of, other Notes of such series
pursuant to this Indenture);
(C) the amount of or method for determining principal
payments and the timing of such payments, including the Targeted
Final Payment Date, if any, and the Stated Final Payment Date;
(D) the rate or rates at which the Notes of such series
shall bear interest, if any, or the initial interest rate and the
method for determining subsequent interest rates, the date or dates
from which such interest shall accrue, the date or dates on which
such interest shall be payable and the record date or dates for the
interest payable;
(E) the obligations or rights, if any, of the Issuer to
redeem or purchase Term Notes of such series or other redemption
provisions and the price or prices at which and the terms and
conditions upon which Term Notes of such series shall be redeemed or
purchased;
(F) if other than the principal amount thereof, the
portion of the principal amount of Notes of such series which shall
be payable upon acceleration of the maturity thereof;
(G) without limiting the generality of the foregoing,
and to the extent applicable, the extent to which payments on the
Notes are senior, subordinate or PARI PASSU in right of payment of
principal and interest to other Notes;
indt.form.01.wpd
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<PAGE>
(H) without limiting the generality of the foregoing, if
the Notes of such series are Revolving Notes, the Revolver Interest
Rate and the Specified Maximum Revolver Balance;
(I) whether such Notes will be issued as Book-Entry
Notes and whether and the extent to which SECTION 2.15 shall apply;
and
(J) any other terms or provisions of such series which
shall not be inconsistent with the provisions of this Indenture.
The terms of each series of Notes as provided for in an Officer's Issuance
Certificate are part of the terms of this Indenture.
(ii) The Opinion of Counsel shall provide, in addition to all
other requirements of such opinion:
(A) that the form and terms of such Notes have been
established by or pursuant to an Officer's Issuance Certificate in
conformity with the terms of this Indenture;
(B) that Notes in such form, when completed by
appropriate insertions and executed and delivered by the Issuer to
the Indenture Trustee for authentication in accordance with this
Indenture, authenticated and delivered by the Indenture Trustee in
accordance with this Indenture and sold in the manner specified in
such Opinion of Counsel, will be valid and legally binding
obligations of the Issuer;
(C) No approval, authorization, consent or order of any
court or governmental agency or body which has not already been
obtained or given is required in connection with the valid and
proper authorization, issuance and sale of the Notes pursuant to
this Indenture subject to certain exceptions, including but not
limited to, state securities and Blue Sky laws and routine renewals
of existing licenses and payments; and
(D) for such other matters as the Indenture Trustee may
reasonably request.
(d) Upon execution and delivery of an Officer's Issuance Certificate
and Opinion of Counsel to the Indenture Trustee, the Indenture Trustee shall
thereupon authenticate and deliver the related Notes to or upon the written
order of the Issuer, signed by any Authorized Officer.
SECTION 2.2 FORM OF NOTES AND INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
-------------------------------------------------------------------
(a) The Notes shall be in the forms provided from time to time by or
pursuant to an Officer's Issuance Certificate in accordance with the terms of
this Indenture and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
indt.form.01.wpd
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<PAGE>
printed, lithographed or engraved thereon as the Issuer may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Notes
may be listed or to conform to usage. 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. The Definitive Term 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 Authorized Officer
executing such Notes, as evidenced by such officer's execution of such Notes.
(b) The Indenture Trustee's certificate of authentication shall be
substantially in the following form:
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:
Dated: ________________________
(c) Each Note shall be dated the date of its authentication. Unless
otherwise provided in the related Officer's Issuance Certificate, (i) each Term
Note shall be issuable as a registered Note in the minimum denomination of
$1,000 and in integral multiples thereof, (ii) each Revolving Note shall be
issuable as a registered Note in the minimum denomination of $100,000 and in
any amount in excess thereof and (iii) Revolving Notes shall be issued as
Definitive Notes and SECTIONS 2.10, 2.11 AND 2.12 of this Indenture shall not
apply to the Revolving Notes.
SECTION 2.3 TEMPORARY NOTES.
(a) Pending the preparation of Definitive Term Notes, if any, to be
issued in exchange for Book-Entry Notes 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 Term Notes
in lieu of which they are issued and with such variations as are consistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall cause Definitive
Term Notes to be prepared without unreasonable delay. After the preparation of
Definitive Term Notes, the
indt.form.01.wpd
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<PAGE>
Temporary Notes shall be exchangeable for Definitive Term 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 Term 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 Term 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 series 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 shall 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 of the same series 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 series in any authorized denominations, of a like
aggregate principal amount, upon surrender of such Notes to be exchanged at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, such Notes which the Noteholder making the exchange is entitled to
receive.
(e) All Notes issued upon any registration of transfer or exchange
of other Notes shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
indt.form.01.wpd
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<PAGE>
(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, (i) of Notes that have been
selected for redemption pursuant to ARTICLE X, if applicable; (ii) of Notes
that are due for repayment within 15 days of submission to the Corporate Trust
Office or the Agency Office; or (iii) if SECTION 2.15 has not been complied
with in connection with such transfer.
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 series 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.
(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.
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(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 series of Notes shall accrue and be payable as
provided in SECTION 8.2 and the applicable Officer's Issuance Certificate.
Unless otherwise provided in the applicable Officer's Issuance Certificate, 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 or Revolver Distribution Account, as applicable, on the
applicable Payment Date 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, with
respect to Revolving Notes and with respect to Book-Entry Notes registered on
the applicable Record Date in the name of the Note Depository for which
Definitive Term Notes have not been issued pursuant to SECTION 2.12, payment
shall be made by wire transfer in immediately available funds to the account
designated by such Holder.
(b) The principal of each series of Notes shall be payable as
provided in the applicable Officer's Issuance Certificate. All principal
payments on each series of Notes shall be made pro rata to the Noteholders of
such series entitled thereto unless, with respect to any series of Revolving
Notes, otherwise provided in the related Officer's Issuance Certificate or
otherwise agreed among the Seller and the holders of such Revolving Notes.
Unless otherwise provided in the applicable Officer's Issuance Certificate, 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 in the case of the Term Notes or the Revolver Distribution
Account in the case
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of the Revolving Notes on the applicable Payment Date 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, with respect to Revolving Notes and with respect to
Book-Entry Notes registered on the Record Date in the name of the Note
Depository for which Definitive Term Notes have not been issued pursuant to
SECTION 2.12, payment shall be made by wire transfer in immediately available
funds to the account designated by such Holder, except for the final instalment
of principal on any such Note and the Redemption Price for any Term 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) With respect to any Payment Date on which the final instalment
of principal and interest on a series of Notes is to be paid, the Indenture
Trustee shall notify each Noteholder of such series of Notes as of the Record
Date for such Payment Date of the fact that the final instalment of principal
of and interest on such Note is to be paid on such Payment Date. With respect
to Book- Entry Notes for which Definitive Term Notes have not been issued, such
notice shall be sent on the Business Day prior to such Payment Date by
facsimile, and with respect to Definitive Term Notes and Revolving Notes, such
notice shall be sent not later than three Business Days after such Record Date
in accordance with SECTION 11.5(A), and, in each case, 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 Term 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 (other than for deposit in the Reserve Fund),
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 returned to it; PROVIDED, HOWEVER, that such Issuer Order is timely and the
Notes have not been previously disposed of by the Indenture Trustee. The
Indenture Trustee shall certify to the Issuer that surrendered Notes have been
duly cancelled and retained or destroyed, as the case may be.
SECTION 2.9 RELEASE OF COLLATERAL. The Indenture Trustee shall
release property from the lien of this Indenture, other than as permitted by
SECTIONS 3.21, 8.2, 8.4 AND 11.1, only upon receipt of an Issuer Request
accompanied by an Officers' Certificate, an Opinion of Counsel and (to the
extent required by the TIA) Independent Certificates in accordance with TIA
ss.ss. 314(c) and 314(d)(1).
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SECTION 2.10 BOOK-ENTRY NOTES. Unless otherwise provided in the
applicable Officer's Issuance Certificate, each series of Term 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 and such
Note or Notes shall be registered on the Note Register in the name of the Note
Depository (initially, Cede & Co.). No Note Owner shall receive a Definitive
Term Note representing such Note Owner's interest in such Note, except as
provided in SECTION 2.12. Unless and until Definitive Term Notes with respect
to such Notes have been issued to such Note Owners pursuant to SECTION 2.12,
with respect to such Notes:
(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 such 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, and unless and until Definitive Term 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 written 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. With respect to any Term
Notes issued as Book-Entry Notes, whenever a notice or other communication to
the Noteholders is required under this Indenture, unless and until Definitive
Term Notes representing such Term Notes shall have been issued to the related
Note Owners pursuant to SECTION 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to be given to the related
Noteholders to the Clearing Agency and shall have no other obligation to such
Note Owners.
SECTION 2.12 DEFINITIVE TERM NOTES. If for any Term Notes issued as
Book-Entry Notes (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 such Notes and the Issuer is unable to locate
a qualified successor; (ii) the Administrator, at its option, advises the
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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 Servicing Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of such Notes advise
the Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such 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 Term Notes to such Note Owners requesting the same. Upon surrender
to the Indenture Trustee of the typewritten Note or Notes representing such
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the related Definitive Term 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 such Definitive Term Notes, the
Indenture Trustee shall recognize the Holders of such Definitive Term 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 series 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 Issuer and the Indenture Trustee, by
entering into this Indenture, and the Noteholders and the Note Owners, by
acquiring any Note or interest therein, (i) express their intention that the
Notes qualify under applicable tax law as indebtedness secured by the
Collateral and (ii) unless otherwise required by appropriate taxing
authorities, agree to treat the Notes as indebtedness secured by the Collateral
for the purpose 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.
SECTION 2.15 SPECIAL TERMS APPLICABLE TO SUBSEQUENT TRANSFERS OF CERTAIN NOTES.
(a) The Revolving Notes have not and will not, and certain series of
Term Notes may not, be registered under the Securities Act, or the securities
laws of any other jurisdiction. Consequently, such Notes (the "UNREGISTERED
NOTES") are not transferable other than pursuant to an exemption from the
registration requirements of the Securities Act and satisfaction of certain
other provisions specified herein or in the related Officer's Issuance
Certificate. An interest in the Revolving Notes is being sold in a private
placement on the date hereof. Unless otherwise provided in the related
Officer's Issuance Certificate, no sale, pledge or other transfer of any
Unregistered Note (or interest therein) after the date thereof may be made by
any Person unless either (i) such sale, pledge or other transfer is made to a
"qualified institutional buyer" (as defined under Rule 144A under the
Securities Act) or to an institutional investor that is an "accredited
investor" (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) and, if so requested by the Seller or the Indenture Trustee, such proposed
transferee executes and delivers a certificate, substantially in the form
attached hereto as EXHIBIT A or otherwise in form and substance satisfactory to
the Indenture Trustee and the Seller, or (ii) such sale, pledge or other
transfer is otherwise made in a transaction exempt from the registration
requirements of the Securities Act, in which case (A) the Indenture Trustee
shall require that both the prospective transferor and the prospective
transferee certify to the Indenture Trustee and the Seller in writing the facts
surrounding such transfer, which certification
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shall be in form and substance satisfactory to the Indenture Trustee and the
Seller, and (B) the Indenture Trustee shall require a written opinion of
counsel (which shall not be at the expense of the Seller, the Servicer or the
Indenture Trustee) satisfactory to the Seller and the Indenture Trustee to the
effect that such transfer will not violate the Securities Act. Unless otherwise
provided in the related Officer's Issuance Certificate, no sale, pledge or
other transfer of any Revolving Note that is an Unregistered Note (or interest
therein) may be made by any Person unless the Seller shall have consented in
writing to such transfer. Neither the Seller nor the Indenture Trustee shall be
obligated to register any Unregistered Notes under the Securities Act, qualify
any Unregistered Notes under the securities laws of any state or provide
registration rights to any purchaser or holder thereof.
(b) Unless otherwise provided in the related Officer's Issuance
Certificate, the Unregistered Notes may not be acquired by or for the account
of a Benefit Plan and, by accepting and holding an Unregistered Note, the
Holder thereof shall be deemed to have represented and warranted that it is not
a Benefit Plan and, if requested to do so by the Seller or the Indenture
Trustee, the Holder of an Unregistered Note shall execute and deliver to the
Indenture Trustee an Undertaking Letter in the form set forth in EXHIBIT B.
(c) Unless otherwise provided in the related Officer's Issuance
Certificate, Unregistered Notes shall be issued in the form of Definitive
Notes, shall be in fully registered form and SECTIONS 2.10, 2.11 AND 2.12 of
this Indenture shall not apply thereto.
(d) Each Unregistered Note shall bear legends to the effect set
forth in subsections (a) and (b) (if subsection (b) is applicable) above.
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 date on which any
payments are to be made, the Issuer shall cause amounts on deposit in the Note
Distribution Account and Revolver Distribution Account to be paid to the Term
Noteholders and Revolving Noteholders, respectively, in accordance with the
terms of the Notes and this Indenture, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or
principal. Any amounts so withheld shall be considered as having been paid by
the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 MAINTENANCE OF AGENCY OFFICE. As long as any of the
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "AGENCY OFFICE"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer shall give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may
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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, 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 or Revolver 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 or Revolver Distribution Account for payments of Term
Notes or Revolving Notes, respectively, shall be paid over to the Issuer except
as provided in this SECTION 3.3.
(b) On or before each date on which payments are to be made or the
Redemption Date (if applicable), the Issuer shall deposit or cause to be
deposited in the Note Distribution Account and Revolver Distribution Account
(including pursuant to SECTION 4.5 of the Trust Sale and Servicing Agreement)
aggregate sums sufficient to pay the amounts then becoming due with respect to
the Term Notes and Revolving Notes, respectively, such sums to be held in trust
for the benefit of the Persons entitled thereto.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this SECTION 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met by
a Paying Agent in effect at the time of determination; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
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(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 by the Indenture Trustee to the Issuer; 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; ACKNOWLEDGMENT OF PLEDGE.
The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements, amendments
thereto, continuation statements, assignments, certificates, instruments of
further assurance and other instruments, and shall take such other action
necessary or advisable to:
(a) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof, including by making the necessary filings of financing statements or
amendments thereto within sixty days after the
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occurrence of any of the following: (A) any change in the Issuer's name, (B)
any change in the location of the Issuer's principal place of business, (C) any
merger or consolidation or other change in the Issuer's identity or
organizational structure and by promptly notifying the Indenture Trustee of any
such filings and (D) any other change or occurrence that would make any
financing statement or amendment seriously misleading within the meaning of
Section 9-402(7) of the UCC;
(b) perfect, publish notice of or protect the validity of any
grant of a security interest made or to be made by this Indenture;
(c) enforce the rights of the Indenture Trustee and the Noteholders
in any of the Collateral; or
(d) 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 pursuant to this SECTION 3.5.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Initial 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.
(b) On or before ______ 15 in each calendar year, beginning ______
15, 20__, 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 ______ 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
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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 herein or 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 Uniform Commercial Code
financing statements and continuation statements required to be filed under 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
Servicing 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 Servicing 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 in the Accounts in the Pool
of Accounts, 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.
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 Defaulted
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,
marshaling 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
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liquidation of its affairs or any other event specified in SECTION 5.1(F); or
(d) either (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to
be released from any covenants or obligations with respect to the Notes under
this Indenture except as may be expressly permitted hereby, (ii) permit any
lien, charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law or as otherwise
contemplated by the Basic Documents) 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 ______ 15 of each year,
beginning ______ 15, 20__, an Officer's Certificate signed by an Authorized
Officer, dated as of ______ 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 in all material respects 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 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 for each then outstanding
series of Notes;
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(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 Issuer 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 material portion of the properties and assets 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 (and so long as any Specified Support
Arrangement is in effect, such Specified Support Arrangements
and all related documents) 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)
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required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
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 for each then outstanding
series of Notes;
(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 Issuer 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 the Issuer 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 Collateral
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, including entering into and making
payments under any Specified Support Arrangements.
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SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or 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 3.05
of the Pooling and Servicing Agreement and SECTIONS 4.1, 4.2 AND 4.8 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 on the Initial
Closing Date and from time to time thereafter 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 for each series of Notes then outstanding shall
have been satisfied in connection with such removal.
SECTION 3.18 RESTRICTED PAYMENTS. Except for payments of principal
or interest on or redemption of the Notes, so long as any Notes are
Outstanding, the Issuer shall not, directly or indirectly:
(a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise, in each case with respect to any ownership or equity
interest or similar security in or of the Issuer or to the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
PROVIDED, HOWEVER, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Seller, the Indenture Trustee, 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, the Trust Agreement
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or the other Basic Documents. The Issuer shall not, directly or indirectly,
make payments to or distributions from the Collection Account or any other
Designated Account except in accordance with the Basic Documents.
SECTION 3.19 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give
the Indenture Trustee and the Rating Agencies written notice of each Event of
Default hereunder, each Servicing Default, any Insolvency Event with respect to
the Seller, each default on the part of the Seller or the Servicer of its
respective obligations under the Trust Sale and Servicing Agreement and each
default on the part of GMAC or the Servicer of its respective obligations under
the Pooling and Servicing Agreement, in each case promptly after the discovery
thereof by the Issuer.
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 INTERESTS IN CERTAIN
RECEIVABLES. The Indenture Trustee shall assign, without recourse,
representation or warranty, to the Servicer, GMAC or the Seller, as the case
may be, all of the Indenture Trustee's right, title and interest in and to any
Receivable assigned by the Issuer to the Servicer, GMAC or the Seller, as
applicable, pursuant to the Pooling and Servicing Agreement or the Trust Sale
and Servicing Agreement (including, without limitation, SECTION 9.3 thereof)
(in each case, to the extent so assigned and upon the receipt of any related
payment, if applicable), such assignment being an assignment outright and not
for security; and the Servicer, GMAC or the Seller, as applicable, shall
thereupon own the interest purchased in such Receivable, 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 such 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 interest in any Receivable conveyed to the Issuer
has been sold, transferred, assigned or pledged by the Issuer to any Person
other than the Indenture Trustee; immediately prior to the conveyance of such
Receivables pursuant to this Indenture, the Issuer had good and marketable
title thereto, free of any Lien; and, upon execution and delivery of this
Indenture by the Issuer, the Indenture Trustee shall have all of the right,
title and interest of the Issuer in, to and under such Receivables, free of any
Lien; and
(b) ALL FILINGS MADE. All filings (including, without limitation,
Uniform Commercial Code filings) necessary in any jurisdiction to give the
Indenture Trustee, upon the acquisition by the Issuer of any Eligible
Receivable, a first priority perfected security interest in such Eligible
Receivable have been made.
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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:
(i) 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
(ii) 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 Stated
Final 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)(II) 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;
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
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(c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate of the Issuer, 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 and the applicable provisions of the Trust Sale and Servicing
Agreement, including without limitation SECTION 4.5 thereof, 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 by applicable law.
SECTION 4.3 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to each
series of Notes, all monies then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to all
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 all Noteholders under the terms of the Notes of each series and the
cancellation of such 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 6.1(A), 8.2 AND 8.3 of the Trust Sale and Servicing Agreement, as
appropriate, until such time as all distributions in respect of Certificate
Balance and interest due to the Certificateholders have been paid in full.
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. For the purposes of this Indenture,
"EVENT OF DEFAULT" wherever used herein, means any one of the following events:
(a) failure to pay any interest on any Note as and when the same
becomes due and payable, and such default shall continue unremedied 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, a written notice specifying such default and demanding
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that it be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(c) failure to pay in full the Outstanding Amount attributable to
any series of Notes on or prior to the Stated Final Payment Date for such
series; 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
specifically dealt with elsewhere 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 an 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 the Bankruptcy Code, and such order shall
have continued undischarged or unstayed for a period of 90 days; or the filing
of a decree or order by a court having jurisdiction in the premises approving
as properly filed a petition seeking reorganization, arrangement, adjustment or
composition of the Issuer under any other Insolvency Law, and such decree or
order shall have continued undischarged or unstayed for a period of 90 days; or
the filing of a decree or order of a court having jurisdiction in the premises
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 have continued undischarged and unstayed for a
period of 90 consecutive days; or
(f) the commencement by the Issuer of a voluntary case under the
Bankruptcy Code; or the filing of a petition or answer or consent by the Issuer
seeking reorganization, arrangement, adjustment or composition under any other
Insolvency Law, or consent to the filing of any such petition, answer or
consent; 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 an assignment for the benefit of creditors, or
the admission in writing of its inability to pay its debts generally as such
debts become due; or
(g) any other event designated as such in an Officer's Issuance
Certificate.
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.
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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
rescind and annul such declaration and its consequences; PROVIDED, HOWEVER,
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 to their respective 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 commenced.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if there shall occur an Event of
Default under SECTIONS 5.1(A), (B) OR (C) that has not been waived pursuant to
SECTION 5.12, then the Issuer shall, upon demand of the Indenture Trustee, pay
to the Indenture Trustee, for the ratable benefit of the parties to receive
such amounts pursuant to the terms of this Indenture, the entire amount then
due and payable on the Notes for principal and interest, with interest upon the
overdue principal for each series of Notes, at the rate borne by such 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, with all such amounts applied as described in clause SECOND of
SECTION 5.4(B).
(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.
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(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
applicable 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 any Insolvency 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:
(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
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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 Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the Indenture Trustee, each
predecessor trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.4 REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under SECTION 5.2(A), the Indenture Trustee
may (but shall not be required to) 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 or elect to have the Issuer
maintain possession of the Trust Estate, including the Receivables
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included therein, and continue to apply Collections on such Receivables as
if there had been no declaration of acceleration;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default and acceleration of
the Notes, unless (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 Securityholders are sufficient to discharge in full the
principal of and the accrued interest on the Notes and the Certificate Balance
of and accrued interest on the Certificates, in each case as of the date of
such sale or liquidation or (C) (i) there has been an Event of Default under
SECTION 5.1(A), (B) OR (C) or otherwise arising from a failure to make a
required payment of principal on any Notes, (ii) 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
(iii) the Indenture Trustee obtains the consent of Holders of a majority of the
aggregate Outstanding Amount of the Notes. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this ARTICLE V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under SECTION
6.7; and
SECOND: to the Collection Account for distribution pursuant to
SECTION 4.5 of the Trust Sale and Servicing Agreement, with such amounts
being deemed to be Available Trust Principal and Available Trust Interest
in the same proportion as the outstanding principal balance of the Notes
bears to the accrued and unpaid interest on the Notes (and, if any series
of Notes has Specified Support Arrangements, the amount unpaid under such
Specified Support Arrangement).
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.
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SECTION 5.6 LIMITATION OF SUITS. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) 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;
(c) 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;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(e) 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
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Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and to their respective former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this ARTICLE V or by law
to the Indenture Trustee or to the Noteholders 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:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) 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;
(c) 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
(d) 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 (y)
with respect to which the Indenture Trustee shall have reasonable grounds to
believe that adequate indemnity against such liability is not assured to it and
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(z) which might materially adversely affect the rights of any
Noteholders not consenting to such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS.
(a) Prior to the declaration of the acceleration of the maturity of
the Notes as provided in SECTION 5.2, the Holders of not less than a majority
of the Outstanding Amount of the Notes may waive any past Default or Event of
Default and its consequences except a Default (i) in the payment of principal
of or interest on any of the Notes or (ii) in respect of a covenant or
provision hereof that cannot be modified or amended without the consent of the
Holder of each such 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 and expenses, 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
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to the Indenture Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15 ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with SECTION 5.4(B) hereof.
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 and the Servicer of each of their 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
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administrative actions or proceedings to compel or secure performance by GMAC
and the Servicer of each of their obligations under the Pooling and Servicing
Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Seller against GMAC and
the Servicer 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 and the Servicer of each of their 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
the Trust Sale and Servicing Agreement and no implied covenants or
obligations shall be read into this Indenture or the Trust Sale and
Servicing Agreement 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 (but need not
confirm or investigate the accuracy of any mathematical calculations or
other facts stated therein).
(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);
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(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to SECTION 5.11.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(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.
(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 conclusively 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 from the Issuer or an Opinion of Counsel
that such action or omission is required or permitted hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such 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.
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(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.
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 by the terms of the Trust Sale and Servicing
Agreement to be provided to Holders by the Indenture Trustee 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 3.03 of
the Pooling and Servicing Agreement to pay to the Indenture Trustee from time
to time such compensation for its services as shall be agreed upon in writing.
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 3.03 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 pursuant to the Trust Sale and Servicing Agreement to indemnify the
Indenture Trustee in accordance with SECTION 7.1 of the Trust Sale and
Servicing Agreement.
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(b) The Issuer's obligation to cause the Servicer to honor the
Issuer's obligations to the Indenture Trustee specified in SECTION 6.7(A) shall
survive the discharge of this Indenture. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in SECTION 5.1(E) OR (F)
with respect to the Issuer, if the Survivor has failed to honor such obligation
the expenses are intended to constitute expenses of administration under any
Insolvency Law.
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may at any time give notice of its intent
to resign by so notifying the Issuer; PROVIDED, HOWEVER, that no such
resignation shall become effective and the Owner Trustee shall not resign prior
to the time set forth in SECTION 6.8(C). 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 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 gives notice of its intent to resign 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 and designate a
successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment and designation 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 gives notice of its intent to resign
or is removed, the retiring Indenture 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 and designation of a successor
Indenture Trustee.
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(e) If the Indenture Trustee fails to comply with SECTION 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee
pursuant to this SECTION 6.8, the Issuer's obligations under SECTION 6.7 and
the Servicer's corresponding obligations under the Trust Sale and Servicing
Agreement shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 MERGER OR CONSOLIDATION OF INDENTURE TRUSTEE.
(a) Any corporation into which the Indenture Trustee may be merged
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to all or substantially all of 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 Issuer or any Dealer 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 approved by the Indenture Trustee to
act as a co-trustee or co-trustees, jointly with the Indenture Trustee, or
separate trustee or separate trustees, of all or any part of the Issuer, 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 Issuer, 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.
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(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Issuer 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 appoint the
Indenture 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 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 ss. 310(a) and SECTION 26(A)
of the Investment Company Act. The Indenture Trustee shall have a combined
capital and surplus, and an aggregate capital, surplus and undivided profits,
of at least $50,000,000 as set forth in its most recent published annual report
of condition and (unless waived by Moody's) it shall have a long term unsecured
debt rating of Baa3 or better by Moody's. The Indenture Trustee shall comply
with TIA ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 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 ss. 310(b)(1) are met.
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SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A trustee who has resigned or been
removed shall be subject to TIA ss. 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 New York banking corporation and the
eligibility requirements set forth in SECTION 6.11 are satisfied with respect
to the Indenture Trustee;
(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 Estate 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.
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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 a 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 necessary 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 in writing 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 date
on which payments are to be made, 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, COMMUNICATIONS TO
NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in SECTION 7.1 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
SECTION 7.1 upon receipt of a new list so furnished.
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(b) Noteholders may communicate pursuant to TIA ss. 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 ss. 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 or any applicable
state agencies, 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 or any applicable
state agencies pursuant to comparable regulation;
(ii) file with the Indenture Trustee and the Commission or any
applicable state agencies in accordance with rules and regulations
prescribed from time to time by the Commission or any applicable state
agencies 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 ss.
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 or any applicable state agencies.
(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 INDENTURE TRUSTEE.
(a) If required by TIA ss. 313(a), within 60 days after each ______
1, beginning with ______ 1, 20__, the Indenture Trustee shall mail to each
Noteholder as required by TIA ss. 313(c) a brief report dated as of such date
that complies with TIA ss. 313(a). The Indenture Trustee also shall comply with
TIA ss. 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 Payment Date, the Indenture Trustee shall include with
each payment to each Noteholder a copy of the statement for the Collection
Period or Periods applicable to such Payment Date as required pursuant to
SECTION 4.8 of the Trust Sale and Servicing Agreement.
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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, the Pooling and Servicing Agreement and the Trust Sale and Servicing
Agreement. 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 an 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, for
the benefit of the Noteholders and the Certificateholders, the Designated
Accounts as provided in ARTICLES IV AND VI of the Trust Sale and Servicing
Agreement (or with respect to any Designated Account for any series of Notes
issued after the Closing Date, on or prior to the closing date with respect to
such series of Notes).
(b) On each date during the Revolving Period that amounts are
transferred from the Collection Account to the Revolver Distribution Account
for payment of principal on Revolving Notes as provided in SECTION 4.5(D)(I) of
the Trust Sale and Servicing Agreement, the Indenture Trustee shall distribute
such funds as principal to the Holders of each series of Revolving Notes,
unless otherwise provided in any related Officer's Issuance Certificate, pro
rata on the basis of the Outstanding Amount attributable to each such series.
Distributions shall be made to the Holders of each such series of Revolving
Notes on each such date, pro rata on the basis of the respective Outstanding
Amounts attributable to the Revolving Notes of each such Holder, (i) unless
otherwise provided in any Officer's Issuance Certificate or (ii) if and as
otherwise directed by the Issuer, in the respective amounts directed by the
Issuer (up to, in any such case, the Outstanding Amount of the Revolving Note
held by each such Holder). If and as requested by the Holders of any series of
Revolving Notes, distributions may be made directly to the account(s) directed
by such Holders and such account(s) shall be the Revolver Distribution Account
for all purposes of this Indenture and the Trust Sale and Servicing Agreement.
(c) On or before each Distribution Date (i) amounts shall be
deposited in the Collection Account as provided in SECTION 4.5 of the Trust
Sale and Servicing Agreement, (ii) the Aggregate Noteholders' Interest and the
Aggregate Revolver Interest shall be transferred from the Collection Account to
the Note Distribution Account or as otherwise provided in the Officer's
Certificate with respect to any series of Notes and to the Revolver
Distribution Account, respectively, if and to the extent provided in SECTION
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4.5(C)of the Trust Sale and Servicing Agreement, (iii) if such Distribution Date
is related to an Early Amortization Period or the Wind Down Period, the
Aggregate Noteholders' Principal and the Required Revolver Payment shall be
transferred from the Collection Account or the Accumulation Accounts to the Note
Distribution Account and the Revolver Distribution Account, respectively, as
provided in SECTION 4.5(D) of the Trust Sale and Servicing Agreement and (iv)
with respect to the Revolving Period, if such Distribution Date is related to a
Payment Period for a series of Notes or if a principal payment is required to be
made on (or set aside for) any series of Notes on such Distribution Date, the
amount required to be deposited or paid in the Note Distribution Account, the
Revolver Distribution Account or as otherwise provided in the Officer's Issuance
Certificate with respect to any series of Notes, as applicable, on such date
pursuant to the related Officer's Issuance Certificate and the Trust Sale and
Servicing Agreement shall be transferred from the Collection Account or the
Accumulation Accounts or any other applicable account. Notwithstanding the
preceding sentence, to the extent permitted and as provided by SECTION 4.7 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 a series of Notes or the Note Distribution Account or the Revolver
Distribution Account, as applicable, which are otherwise required to be made on
an Exempt Deposit Date for such series may be made on the next succeeding
Payment Date for such series, on which Payment Date the cumulative amount of all
such distributions, deposits and other remittances with respect to such series
for such Payment Date and the immediately preceding Exempt Deposit Date or Dates
shall be made.
(d) On each Distribution Date, the Indenture Trustee shall (unless
otherwise provided in any Officer's Issuance Certificate) allocate the amount
deposited into the Note Distribution Account or as otherwise provided in the
Officer's Certificate with respect to any series of Notes pursuant to SECTION
4.5(C) of the Trust Sale and Servicing Agreement for the payment of interest on
each outstanding series of Term Notes to such Term Notes and, to the extent of
the funds available for such purpose, make the payments required under any
Specified Support Arrangements to the extent and at the times as provided in
the related Officer's Issuance Certificate. On the related Payment Date (which
may be such Distribution Date) for each series of Term Notes, the Indenture
Trustee shall pay amounts to the Holders of such series to the extent and at
the times provided in the related Officer's Issuance Certificate.
(e) On each Distribution Date, the Indenture Trustee shall allocate
the amount deposited into the Revolver Distribution Account as Aggregate
Revolver Interest pursuant to SECTION 4.5(C) of the Trust Sale and Servicing
Agreement among all outstanding series of Revolving Notes pro rata on the basis
of the accrued and unpaid interest on such Revolving Notes. On the related
Payment Date (which may be such Distribution Date) for each series of Revolving
Notes, the Indenture Trustee shall pay to the Holders of such series all
amounts in the Revolver Distribution Account so allocated to such series.
(f) On each Distribution Date described in subsection (c) above, the
Indenture Trustee shall allocate amounts deposited in the Note Distribution
Account and the Revolver Distribution Account for payments of principal among
all series of Term Notes and Revolving Notes, respectively, and pay amounts to
the Holders thereof, to the extent and at the times provided in the related
Officer's Issuance Certificates.
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(g) On the first Distribution Date related to an Early Amortization
Period that commences during the Wind Down Period or a Payment Period or during
the Revolving Period (if amounts are then being set aside for payments of
principal on any Revolving Notes), the Indenture Trustee shall, unless
otherwise provided in any Officer's Issuance Certificate, pay to the Holders of
each series of Term Notes and Revolving Notes all amounts deposited in the Note
Distribution Account, the Revolver Distribution Account or as otherwise
provided in the Officer's Issuance Certificate with respect to any series of
Notes, as appropriate, on prior Distribution Dates allocated to the payment of
principal on such Notes and not theretofore paid to the Holders of such Notes
and, to the extent described in the related Officer's Issuance Certificate,
such other amounts allocated to the payment of principal on such Notes on such
Distribution Date with respect to the period prior to the commencement of such
Early Amortization Period.
(h) Notwithstanding anything to the contrary herein, all investment
earnings on funds on deposit in the Note Distribution Account and the Revolver
Distribution Account, net of losses and investment expenses, shall constitute
Investment Proceeds and be applied as described in the Trust Sale and Servicing
Agreement.
SECTION 8.3 GENERAL PROVISIONS REGARDING DESIGNATED ACCOUNTS.
(a) 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.
(b) If (i) the Servicer 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 Servicer and the Indenture Trustee) on any Business Day or (ii) an 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.
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(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, notify the Issuer thereof in writing and upon receipt of an
Issuer Request, 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 Note
Distribution Account and the Revolver Distribution Account. The Indenture
Trustee shall (i) release any remaining portion of the Trust Estate that
secured the Certificates from the lien of this Indenture and (ii) release to
the Issuer or any other Person entitled thereto any funds then on deposit in
the Reserve Fund or the Collection Account only at such time as (x) there are
no Notes Outstanding, (y) all payments in respect of Certificate Balance and
interest due to the Certificateholders have been paid in full and (z) all sums
due to the Indenture Trustee pursuant to SECTION 6.7 have been paid.
SECTION 8.5 OPINION OF COUNSEL. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to SECTION 8.4(A), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action shall not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; PROVIDED,
HOWEVER, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee pursuant to the provisions of this Indenture 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
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;
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(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 or 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
the Indenture 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;
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as
may be expressly required by the TIA, and the Indenture Trustee is hereby
authorized to join in the execution of any such supplemental indenture and
to make any further appropriate agreements and stipulations that may be
therein contained; or
(viii)to increase or decrease the Specified Maximum Revolver
Balance with respect to the Revolving Notes, subject to the satisfaction
of the Rating Agency Condition, in the case of an increase, and the other
conditions set forth in the Trust Sale and Servicing Agreement.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to the Rating Agencies, at any time and from time to time enter
into one or more indentures supplemental hereto for the purpose of adding any
provisions to, changing in any manner, or eliminating any of the provisions of,
this Indenture or modifying in any manner the rights of the Noteholders under
this Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, changing in any manner, or eliminating any
of the provisions of, this Indenture or 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:
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(i) change the due date of any instalment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate applicable thereto, or the Redemption Price with respect thereto,
change any place of payment where, or the coin or currency in which, any
Note or any interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in ARTICLE V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences as provided for in this
Indenture;
(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;
(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 Payment Date (including the
calculation of any of the individual components of such calculation) (it
being understood that the issuance of any Notes and the specification of
the terms and provisions thereof pursuant to an Officer's Issuance
Certificate shall not be deemed to have such effect for purposes hereof),
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
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conclusive and binding upon the Holders of all Notes, whether authenticated and
delivered thereunder before or after the date upon which such supplemental
indenture becomes 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 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 and that all conditions precedent to
the execution of any such amendment have been satisfied. 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 and be deemed to 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 series.
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ARTICLE X
REDEMPTION OF TERM NOTES
SECTION 10.1 REDEMPTION. A series of Term Notes shall be subject to
redemption if and to the extent provided in the related Officer's Issuance
Certificate. The purchase price for any Term Notes shall be equal to the
applicable Redemption Price set forth in the related Officer's Issuance
Certificate, provided the Issuer has available funds sufficient to pay such
amount. The Issuer shall furnish the Rating Agencies notice of any such
redemption. If any Term Notes are to be redeemed pursuant to this SECTION 10.1,
the Issuer shall furnish notice thereof to the Indenture Trustee not later than
25 days prior to the applicable Redemption Date and the Issuer shall deposit
into the Note Distribution Account, on or before the applicable Redemption
Date, the aggregate Redemption Price of the Term Notes to be redeemed,
whereupon all such Term Notes shall be due and payable on the Redemption Date.
SECTION 10.2 FORM OF REDEMPTION NOTICE.
(a) Notice of redemption of any Term Notes under SECTION 10.1 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 Term
Noteholder of record of the Term Notes to be redeemed at such Term Noteholder's
address appearing in the Note Register.
(b) All notices of redemption shall state:
(i) the applicable Redemption Date;
(ii) the applicable Redemption Price;
(iii) the place where the Term 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);
(iv) the CUSIP number, if applicable; and
(v) the principal amount of Notes to be redeemed.
(c) Notice of redemption of the Term 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 Term Note
shall not impair or affect the validity of the redemption of any other Term
Note.
SECTION 10.3 TERM NOTES PAYABLE ON REDEMPTION DATE.
With respect to any Term Notes, such Term Notes shall, following
notice of redemption as required by SECTION 10.2 (in the case of redemption
pursuant to SECTION 10.1), on the
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applicable Redemption Date cease to be Outstanding for purposes of this
Indenture and shall thereafter represent only the right to receive the
applicable Redemption Price and (unless the Issuer shall default in the payment
of such Redemption Price) no interest shall accrue on such Redemption Price for
any period after the date to which accrued interest is calculated for purposes
of calculating such Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this SECTION 11.1, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(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
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90 days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (b)(i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuer, as set forth
in the certificates delivered pursuant to clause (i) above and this clause
(b)(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Warranty
Receivables, Administrative Receivables or Defaulted 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 or Defaulted 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 and related Collateral Security and proceeds of
both as and to the extent permitted or required by the Basic Documents,
(B) make cash payments out of the Designated Accounts and the Certificate
Distribution Account as and to the extent permitted or required by the
Basic Documents and (C) take any other action not inconsistent with the
TIA.
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SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or 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 series 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
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any purpose of this Indenture and (subject to SECTION 6.1) conclusive in favor
of the Indenture Trustee and the Issuer, if made in the manner provided in this
SECTION 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes (or any one or more
Predecessor 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 each at the address specified in APPENDIX B to the Trust Sale
and Servicing Agreement.
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 Issuer.
(c) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be delivered as
specified in APPENDIX B to the Trust Sale and Servicing Agreement.
SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of any
condition or 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
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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.
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 ss.ss. 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.
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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 and the Note Owners and (only to the extent
expressly provided herein) the Certificateholders and the Certificate Owners
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.
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.
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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.
(a) Each Noteholder will agree by acceptance of a Note (or interest
therein) 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 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 or employee 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.
(b) 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, owners, beneficiaries, agents,
officers, directors, employees or successors or assigns, shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in the Notes or this
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. Each Noteholder or Note Owner by the
acceptance of a Note (or beneficial interest therein) will agree that, except
as expressly provided in the Basic Documents, in the case of an Event of
Default under this 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
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against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in this Indenture or in the Notes.
SECTION 11.17 NO PETITION.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Note Owner, by accepting a Note (or interest therein) 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 the Trust Agreement,
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
Insolvency 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.
* * * * *
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
SUPERIOR WHOLESALE INVENTORY
FINANCING TRUST [ ]
By: [ ], not in its
individual capacity but solely as
Owner Trustee
By:
Name:
Title:
[ ], as Indenture Trustee
By:
Name:
Title:
indt.form.01.wpd
<PAGE>
EXHIBIT A
TRANSFER CERTIFICATE
Wholesale Auto Receivables Corporation
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
[ Indenture Trustee]
Attn:Corporate Trust Trustee Administration
as Indenture Trustee for Superior
Wholesale Inventory Financing Trust [ ]
Ladies and Gentlemen:
In connection with the purchase of a Note subject to Section 2.15 of
the Indenture dated as of ________, ____ (the "UNREGISTERED NOTE") of the
Superior Wholesale Inventory Financing Trust [ ], the undersigned buyer
("BUYER") hereby acknowledges, represents and agrees that:
(a) The Buyer has received the [describe offering document] relating
to the offering of the Unregistered Note (including exhibits thereto).
(b) The Buyer understands that the Unregistered Note has not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and may not be sold except as permitted in the following sentence. The Buyer
agrees, on its own behalf and on behalf of any accounts for which it is acting
as hereinafter stated, that such Unregistered Note may be resold, pledged or
transferred only (i) to an institutional investor that is an "Accredited
Investor" as defined in Rule 501(a)(1),(2),(3) or (7) (an "INSTITUTIONAL
ACCREDITED INVESTOR") under the Securities Act acting for its own account (and
not for the account of others) or as a fiduciary or agent for others (which
others also are Institutional Accredited Investors unless the holder is a bank
acting in its fiduciary capacity) that, if so requested by the Seller or the
Indenture Trustee, executes a certificate in the form hereof, (ii) so long as
such Unregistered Note is eligible for resale pursuant to Rule 144A under the
Securities Act ("RULE 144A"), to a person whom the Buyer reasonably believes
after due inquiry to be a "qualified institutional buyer" (as defined in Rule
144A) acting for its own account (and not for the account of others) or as a
fiduciary or agent for others (which others also are "qualified institutional
buyers") that, if so requested by the Seller or the Indenture Trustee, executes
a certificate in the form hereof or (iii) in a sale, pledge or other transfer
made in a transaction otherwise exempt from the registration requirements of
the Securities Act, in which case (A) the Indenture Trustee shall require that
both the prospective transferor and the prospective transferee certify to the
Indenture Trustee and the Seller in writing the facts surrounding such
transfer, which
indt.form.01.wpd
<PAGE>
certification shall be in form and substance satisfactory to the Indenture
Trustee and the Seller, and (B) the Indenture Trustee shall require a written
opinion of counsel (which will not be at the expense of the Seller, the
Servicer or the Indenture Trustee) satisfactory to the Seller and the Indenture
Trustee to the effect that such transfer will not violate the Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States. The Buyer will notify any purchaser of the Unregistered Note
from it of the above resale restrictions, if then applicable. The Buyer further
understands that in connection with any transfer of the Unregistered Note by it
that the Seller and the Indenture Trustee may request, and if so requested the
Buyer will furnish, such certificates and other information as they may
reasonably require to confirm that any such transfer complies with the
foregoing restrictions.
(c)
[CHECK ONE]
o (1) The Buyer is an institutional investor and an
"accredited investor" (as defined in Rule 501(a)(1),(2),(3)
or (7) of Regulation D under the Securities Act) acting for
its own account (and not for the account of others) or as a
fiduciary or agent for others (which others also are
Institutional Accredited Investors unless the Buyer is bank
acting in its fiduciary capacity). The Buyer has such
knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its
investment in the Unregistered Note, and the Buyer and any
accounts for which it is acting are able to bear the
economic risk of investment in the Unregistered Note for an
indefinite period of time. The Buyer is acquiring the
Unregistered Note for investment and not with a view to, or
for offer and sale in connection with, a public
distribution.
o (2) The Buyer is a "qualified institutional buyer" as
defined under Rule 144A under the Securities Act and is
acquiring the Unregistered Note for its own account (and not
for the account of others) or as a fiduciary or agent for
others (which others also are "qualified institutional
buyers"). The Buyer is are familiar with Rule 144A under the
Securities Act and is aware that the seller of the
Unregistered Note and other parties intend to rely on the
statements made herein and the exemption from the
registration requirements of the Securities Act provided by
Rule 144A.
indt.form.01.wpd
<PAGE>
(d) You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Print Name of Buyer
By:
Name:
Title:
Date:
indt.form.01.wpd
<PAGE>
EXHIBIT B
UNDERTAKING LETTER
Wholesale Auto Receivables Corporation
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
[ Indenture Trustee] ,
Attn: Corporate Trust Trustee Administration
as Indenture Trustee for Superior
Wholesale Inventory Financing Trust [ ]
Ladies and Gentlemen:
In connection with our purchase of record or beneficial ownership of
a Note subject to the provisions of Section 2.15 of the Indenture dated as of
________, ____ (the "UNREGISTERED NOTE") of the Superior Wholesale Inventory
Financing 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 Unregistered Note 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 such entity; and
(2) acknowledges that you and others will rely on our
acknowledgments, representations and warranties, and agrees to notify you
promptly in writing if any of our acknowledgments, representations or
warranties herein cease to be accurate and complete.
Name of Note Owner
By:
Name:
Title:
Date:
indt.form.01.wpd
<PAGE>
[EXHIBIT 5.1]
March __, 2000
Wholesale Auto Receivables Corporation
3031 West Grand Boulevard
Detroit, Michigan 48202
Re: Wholesale Auto Receivables Corporation
Registration Statement No. 333-10524
We have acted as special counsel to Wholesale Auto Receivables
Corporation, a Delaware corporation (the "Company"), in connection with the
above-mentioned Registration Statement on Form S-3 filed with the Securities and
Exchange Commission (together with the exhibits and amendments thereto, the
"Registration Statement") in connection with the registration by the Company of
asset backed term notes (the "Registered Notes") to be sold from time to time in
one or more series in amounts to be determined at the time of sale and to be set
forth in one or more supplements (each, a "prospectus supplement") to the
prospectus (the "prospectus") included in the Registration Statement.
As described in the Registration Statement, the Registered Notes of
each series will be issued by an owner trust to be formed with respect to such
series (an "Owner Trust"). Each Owner Trust will be a Delaware business trust to
be formed by the Company pursuant to a trust agreement (a "Trust Agreement")
between the Company and an Owner Trustee. For each Owner Trust, the Registered
Notes will be issued pursuant to an Indenture (each, an "Indenture") between the
Owner Trust and an Indenture Trustee.
In arriving at the opinions expressed below, among other things, we
have examined and, to the extent we deem proper, relied on (i) the Registration
Statement, (ii) the form of Indenture, (iii) the form of 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 "Trust Certificate"), (iv)
the form of Pooling and Servicing Agreement between General Motors Acceptance
Corporation and the Company, (v) the form of trust sale and servicing agreement
(the "Trust Sale and Servicing Agreement") by and among the Company, General
Motors Acceptance Corporation, as Servicer, and an Owner Trust, (vi) the form of
Officer's Issuance Certificate of the Company (the Registration Statement, the
Indenture, the Trust Agreement, the Pooling and Servicing Agreement, the Trust
Sale and Servicing Agreement and the Officers Issuance Certificate,
collectively, the "Operative Documents") and (vii) the form of Underwriting
Agreement to be executed by the Company and the representatives of the several
underwriters (the "Underwriters") to be parties thereto (the "Underwriting
Agreement"), in each case, as filed with or incorporated by reference into the
Registration Statement.
<PAGE>
Subject to the assumptions, qualifications, and limitations
identified in this letter, and assuming the aforementioned documents are duly
executed and delivered in substantially the form we have examined, we hereby
advise you that in our opinion, after the Requisite Preliminary Actions
identified below have been taken with respect to a series of Registered Notes,
the Registered Notes will have been legally issued, will be entitled to the
benefits of the Indenture and will be binding obligations of the applicable
Owner Trust.
The term "Requisite Preliminary Actions" means: (i) the Registration
Statement becomes effective pursuant to the provisions of the Securities Act of
1933, as amended, (ii) the amount, price, interest rate or pass through rate and
other principal terms with respect to each series of Registered Notes, the
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) with respect to
each series of Registered Notes, the Trust Certificate for the related Owner
Trust has been duly executed by the Owner Trustee and timely filed with the
Secretary of State of the State of Delaware, (v) with respect to each series of
Registered Notes, the related Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and (vi) with respect to each series of
Registered Notes, such Registered Notes have been duly issued by the Trust and
authenticated by the Owner Trustee or the Indenture Trustee, as applicable, all
in accordance with the terms and conditions of the related Operative Documents
and sold by the Company in the manner described in the Registration Statement.
The opinion in this letter that the Registered Notes will be binding
obligations of the applicable Owner Trust (the "enforceability opinion") is
subject to: (i) the effect of bankruptcy, insolvency, fraudulent conveyance and
other similar laws and judicially developed doctrines in this area such as
substantive consolidation and equitable subordination; (ii) the effect of
general principles of equity; and (iii) other commonly recognized statutory and
judicial constraints on enforceability including statutes of limitations.
"General principles of equity" include but are not limited to: principles
limiting the availability of specific performance and injunctive relief;
principles which limit the availability of a remedy under certain circumstances
where another remedy has been elected; principles requiring reasonableness, good
faith and fair dealing in the performance and enforcement of an agreement by the
party seeking enforcement; principles which may permit a party to cure a
material failure to perform its obligations; and principles affording equitable
defenses such as waiver, laches and estoppel. It is possible that terms in a
particular contract covered by our enforceability opinion may not prove
enforceable for reasons other than those explicitly cited in this letter should
an actual enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations contained in this letter) such
unenforceability would not in our opinion prevent the party entitled to enforce
that contract from realizing the principal benefits purported to be provided to
that party by the terms in that contract which are covered by our enforceability
opinion.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal laws of the States of New York and Illinois. We
advise you that issues addressed by this letter may be governed in whole or in
part by other laws, but we express no opinion as to whether any relevant
difference exists between the laws upon which our opinions are based and any
other laws which may actually govern. For purposes of our opinions we have
assumed without
<PAGE>
independent investigation that factual information supplied to us for purposes
of our opinions is complete and accurate.
We consent to the filing of both this letter and the letter filed as
Exhibit 8.1 of the Registration Statement as exhibits to the Registration
Statement and to the reference to this firm under the captions titled "Summary
of Terms--Tax Status," "Risk Factors," "Federal Income Tax Consequences--Tax
Characterization and Treatment of Term Notes" and "Legal Opinions" in the
prospectus and "Summary--Tax Status" and "Federal Income Tax Consequences" in
the prospectus supplement. In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
KIRKLAND & ELLIS
<PAGE>
[Exhibit 8.1]
March __, 2000
Wholesale Auto Receivables Corporation
3031 West Grand Boulevard
Detroit, Michigan 48202
Re: Wholesale Auto Receivables Corporation
Registration Statement No. 333-10524
We have acted as special counsel to Wholesale Auto Receivables
Corporation, a Delaware corporation (the "Company"), in connection with the
above-referenced Registration Statement on Form S-3 filed with the Securities
and Exchange Commission (together with the exhibits and any amendments thereto,
the "Registration Statement") in connection with the registration by the Company
of asset-backed term notes (the "Registered Notes") to be sold from time to time
in one or more series in amounts to be determined at the time of sale and to be
set forth in one or more supplements (each, a "prospectus supplement") to the
prospectus (the "prospectus") included in the Registration Statement.
As described in the Registration Statement, the Notes of each series
will be issued by an owner trust (an "Owner Trust"). Each Owner Trust will be a
Delaware business trust to be formed by the Company pursuant to a Trust
Agreement (an "Trust Agreement") between the Company and an Owner Trustee. For
each Owner Trust, the Registered Notes will be issued pursuant to an Indenture
(each, an "Indenture") between the Owner Trust and an Indenture Trustee.
In arriving at the opinions expressed below, among other things, we
have examined and, to the extent we deem proper, relied on (i) the Registration
Statement, (ii) the form of Indenture, (iii) the form of 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 "Trust Certificate"), (iv)
the form of Pooling and Servicing Agreement between General Motors Acceptance
Corporation and the Company, (v) the form of trust sale and servicing agreement
(the "Trust Sale and Servicing Agreement") by and among the Company, General
Motors Acceptance Corporation, as Servicer, and an Owner Trust, and (vi) the
form of Officer's Issuance Certificate of the Company (the Registration
Statement, the Indenture, the Trust Agreement, the Pooling and Servicing
Agreement, the Trust Sale and Servicing Agreement and the Officers Issuance
Certificate, collectively, the "Operative Documents"), in each case, as filed
with or incorporated by reference into the Registration Statement. 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>
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.
Subject to the assumptions, qualifications, and limitations identified
in this letter, and assuming the aforementioned documents are duly executed and
delivered in substantially the form we have examined, we hereby advise you that
in our opinion the discussions presented in the Registration Statement under the
captions "Summary of Terms--Tax Status," "Risk Factors," "Federal Income Tax
Consequences--Tax Characterization and Treatment of Term Notes" and "Legal
Opinions" in the prospectus and "Summary--Tax Status" and "Federal Income Tax
Consequences" in the prospectus supplement, to the extent they constitute
matters of law or legal conclusions with respect thereto relating to federal
income tax matters, are a fair and accurate discussion of material federal
income tax consequences, and we hereby confirm and adopt the opinions set forth
therein. 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,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS
<PAGE>
EXHIBIT 99.1
POOLING AND SERVICING AGREEMENT
BETWEEN
GENERAL MOTORS ACCEPTANCE CORPORATION
SELLER AND SERVICER
AND
WHOLESALE AUTO RECEIVABLES CORPORATION
PURCHASER
DATED AS OF ________, ____
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
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<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
ARTICLE I
<S> <C> <C>
DEFINITIONS............................................................ 1
SECTION 1.01.DEFINITIONS............................................... 1
-----------
ARTICLE II
PURCHASE AND SALE OF ELIGIBLE RECEIVABLES.............................. 2
SECTION 2.01.PURCHASE AND SALE OF ELIGIBLE RECEIVABLES................. 2
-----------------------------------------
SECTION 2.02.PURCHASE PRICE............................................ 2
--------------
SECTION 2.03.ADDITION OF ACCOUNTS...................................... 3
--------------------
SECTION 2.04.OPTIONAL REMOVAL OF ACCOUNTS.............................. 4
----------------------------
SECTION 2.05.REMOVAL OF INELIGIBLE ACCOUNTS............................ 4
------------------------------
SECTION 2.06.CUSTODY OF DOCUMENTATION.................................. 5
------------------------
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES............................ 5
SECTION 3.01.APPOINTMENT OF SERVICER AND ACCEPTANCE OF APPOINTMENT5....
-----------------------------------------------------
SECTION 3.02.RIGHTS AND DUTIES OF THE SERVICER......................... 5
---------------------------------
SECTION 3.03.SERVICING COMPENSATION; PAYMENT OF CERTAIN EXPENSES BY THE SERVICER 7
-------------------------------------------------------------------
SECTION 3.04.REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER 8
---------------------------------------------------------
SECTION 3.05.SERVICER'S ACCOUNTING AND REPORTS.................. 12
---------------------------------
SECTION 3.06.PRE-CLOSING COLLECTIONS............................ 12
-----------------------
SECTION 3.07.COLLECTIONS RECEIVED BY GMAC....................... 12
----------------------------
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS............................. 12
SECTION 4.01.REPRESENTATIONS AND WARRANTIES OF GMAC RELATING TO THE
------------------------------------------------------
ACCOUNTS AND THE RECEIVABLES............................. 13
----------------------------
SECTION 4.02.REPRESENTATIONS AND WARRANTIES OF GMAC RELATING TO GMAC
-------------------------------------------------------
AND THE AGREEMENT........................................ 15
-----------------
SECTION 4.03.REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.......... 17
-----------------------------------------------
SECTION 4.04.COVENANTS OF GMAC........................................ 18
-----------------
ARTICLE V
CERTAIN MATTERS RELATING TO GMAC...................................... 19
SECTION 5.01.MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
------------------------------------------------------------
OF, GMAC................................................. 19
--------
SECTION 5.02.GMAC INDEMNIFICATION OF THE PURCHASER.................... 19
-------------------------------------
SECTION 5.03.GMAC ACKNOWLEDGMENT OF TRANSFERS TO THE ISSUER........... 19
----------------------------------------------
ARTICLE VI
ADDITIONAL AGREEMENTS................................................. 20
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<PAGE>
SECTION 6.01.ADDITIONAL OBLIGATIONS OF GMAC AND THE PURCHASER......... 20
------------------------------------------------
SECTION 6.02.EFFECT OF INVOLUNTARY CASE INVOLVING GMAC................ 20
-----------------------------------------
SECTION 6.03.INTERCREDITOR AGREEMENTS................................. 21
------------------------
ARTICLE VII
MISCELLANEOUS PROVISIONS.............................................. 23
SECTION 7.01.AMENDMENT................................................ 23
---------
SECTION 7.02.PROTECTION OF RIGHT, TITLE AND INTEREST IN AND TO RECEIVABLES 23
-------------------------------------------------------------
SECTION 7.03.COSTS AND EXPENSES....................................... 24
------------------
SECTION 7.04.GOVERNING LAW............................................ 24
-------------
SECTION 7.05.NOTICES.................................................. 25
-------
SECTION 7.06.SEVERABILITY OF PROVISIONS............................... 25
--------------------------
SECTION 7.07.ASSIGNMENT............................................... 25
----------
SECTION 7.08.FURTHER ASSURANCES....................................... 25
------------------
SECTION 7.09.NO WAIVER; CUMULATIVE REMEDIES........................... 25
------------------------------
SECTION 7.10.COUNTERPARTS............................................. 25
------------
SECTION 7.11.THIRD-PARTY BENEFICIARIES................................ 25
-------------------------
SECTION 7.12.MERGER AND INTEGRATION................................... 25
----------------------
SECTION 7.13.CONFIDENTIAL INFORMATION................................. 26
------------------------
SECTION 7.14.HEADINGS................................................. 26
--------
SECTION 7.15.TERMINATION.............................................. 26
-----------
EXHIBIT A List of Locations of the Schedule of Accounts
EXHIBIT B Form of Assignment for the Initial Closing Date
EXHIBIT C Form of Assignment for Each Addition Date
EXHIBIT D Form of Opinion of Counsel With Respect to Addition of Accounts
APPENDIX A Definitions and Rules of Construction
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<PAGE>
THIS POOLING AND SERVICING AGREEMENT is made as of ________, ____,
between GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware corporation (referred
to herein as "GMAC" in its capacity as seller of the Receivables specified
herein and as the "SERVICER" in its capacity as servicer of the Receivables),
and WHOLESALE AUTO RECEIVABLES CORPORATION, a Delaware corporation (the
"PURCHASER").
WHEREAS, GMAC, in the ordinary course of its business, generates
certain payment obligations by financing the floor plan inventory of motor
vehicle dealers;
WHEREAS, GMAC desires to sell and assign to the Purchaser, and the
Purchaser desires to purchase from GMAC, certain of such existing and future
payment obligations arising or acquired from time to time;
WHEREAS, the Purchaser desires to transfer and assign its interest
in such payment obligations to Superior Wholesale Inventory Financing Trust [ ]
(the "ISSUER") pursuant to the Trust Sale and Servicing Agreement;
WHEREAS, the Issuer desires to issue the Initial Securities to
fund its acquisition of such payment obligations;
WHEREAS, the Purchaser, the Issuer and GMAC (as the holder of such
payment obligations not sold to the Purchaser hereunder) desire that the
Servicer shall service such payment obligations; and
WHEREAS, the Servicer is willing to service such payment obligations
and related payment obligations in accordance with the terms hereof and of the
Trust Sale and Servicing Agreement for the benefit of the Purchaser, GMAC, the
Issuer and each other party identified or described herein or in the Trust Sale
and Servicing Agreement as having an interest therein as owner, trustee, secured
party or holder of the Securities (all such parties being collectively referred
to herein as "INTERESTED PARTIES").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
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 Part I of APPENDIX A to this Agreement. All references
herein to "the Agreement" or "this Agreement" are to this Pooling 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. The rules
of construction set forth in Part II of such Appendix A shall be applicable to
this Agreement.
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<PAGE>
ARTICLE II
PURCHASE AND SALE OF ELIGIBLE RECEIVABLES
SECTION 2.01PURCHASE AND SALE OF ELIGIBLE RECEIVABLES.
(a) By execution of this Agreement, on the Initial Closing Date,
GMAC does hereby sell, transfer, assign and otherwise convey to the Purchaser,
without recourse, all of its right, title and interest in, to and under all of
the Eligible Receivables existing in the Accounts listed on the Schedule of
Accounts (which is kept at locations listed in EXHIBIT A) as of the close of
business on the Initial Cut-Off Date and all monies due or to become due thereon
after the Initial Cut-Off Date, all Collateral Security with respect thereto and
all amounts received with respect thereto (including all Interest Collections
received in the calendar month in which the Initial Cut-Off Date occurs, whether
or not received prior to the Initial Cut-Off Date) and all proceeds thereof
(including "proceeds" as defined in SECTION 9-306 of the UCC and Recoveries).
(b) Subject to SECTION 6.02, as of each Receivables Purchase Date,
GMAC does hereby sell, transfer, assign and otherwise convey to the Purchaser,
without recourse, all of its right, title and interest in, to and under all
Eligible Receivables created or deemed created in the Accounts in the Pool of
Accounts on such date and all monies due or to become due thereon after such
date, all Collateral Security with respect thereto and all amounts received with
respect thereto and all proceeds thereof (including "proceeds" as defined in
SECTION 9-306 of the UCC and Recoveries).
(c) It is the intention of GMAC and the Purchaser that the transfers
and assignments contemplated by this Agreement shall constitute sales of the
property described in SECTIONS 2.01(A) AND (B) from GMAC to the Purchaser and
that the beneficial interest in and title to such property shall not be part of
GMAC's estate in the event of the filing of a bankruptcy petition by or against
GMAC under any Insolvency Law. The foregoing sales, transfers, assignments and
conveyances and any subsequent sales, transfers, assignments and conveyances
contemplated hereby do not constitute, and are not intended to result in, the
creation or an assumption by the Purchaser of any obligation of the Servicer,
GMAC (if GMAC is not the Servicer), General Motors or any other Person in
connection with the Receivables described above or under any agreement or
instrument relating thereto, including any obligation to any Dealers.
(d) Subject to SECTION 2.06 and Article III hereof, GMAC shall
retain all right, title and interest in, to and under the Receivables in the
Accounts in the Pool of Accounts that GMAC has not transferred to the Purchaser
hereunder. Such Receivables, together with any Receivables repurchased by GMAC
or (so long as GMAC is the Servicer) the Servicer from the Purchaser or the
Trust pursuant to this Agreement or the Trust Sale and Servicing Agreement, all
monies due or to become due on such Receivables, all amounts received with
respect thereto and all proceeds thereof (including "proceeds" as defined in
SECTION 9-306 of the UCC and Recoveries) are collectively referred to herein as
the "RETAINED PROPERTY".
SECTION 2.02 PURCHASE PRICE. On the Initial Closing Date, in consideration
for the sale of the property described in SECTION 2.01(A) to the Purchaser, the
Purchaser shall pay to GMAC [$ ] (representing the aggregate principal balance
of the Receivables as of the close of business on the Initial Cut-Off Date so
sold on the Initial Closing Date) in immediately available
p&s.form.01.wpd - 2 -
<PAGE>
funds, and GMAC shall deliver to the Purchaser an executed assignment
substantially in the form of EXHIBIT B hereto. The Purchaser shall pay, subject
to SECTION 6.02, for property described in SECTION 2.03 sold by GMAC to the
Purchaser on each Addition Date and property described in SECTION 2.01(B) sold
by GMAC to the Purchaser on each Receivables Purchase Date, a price equal to the
principal balance of the Eligible Receivables to be purchased on each such date.
Such purchase price shall be payable by the Purchaser on each such date in
immediately available funds.
SECTION 2.03 ADDITION OF ACCOUNTS.
--------------------
(a) OFFERS TO DESIGNATE ADDITIONAL ACCOUNTS. From time to time, GMAC
may, at its option, offer to designate and the Purchaser may, at its option,
request the designation of, one or more Accounts (each, an "ADDITIONAL ACCOUNT")
to be included as Accounts in the Pool of Accounts, subject to the conditions
specified in SECTION 2.03(B) below. If the Purchaser, at its option, elects to
accept any such offer by GMAC or if GMAC, at its option, agrees to any such
request of the Purchaser, GMAC shall sell and assign to the Purchaser, and the
Purchaser shall purchase from GMAC, all of GMAC's right, title and interest in,
to and under all of the Eligible Receivables in each such Additional Account as
of the related Additional Cut-Off Date and all monies due or to become due
thereon after such date, all Collateral Security with respect thereto, all
amounts received with respect thereto and all proceeds thereof (including
"proceeds" as defined in SECTION 9-306 of the UCC and Recoveries), effective as
of the Addition Date specified in a written notice provided by the Servicer, on
behalf of GMAC, to the Purchaser (the "GMAC ADDITION NOTICE"). Effective as of
each such Addition Date, such Additional Account shall be included in the Pool
of Accounts and Eligible Receivables arising therein from and after the
Additional Cut-Off Date shall be subject to purchase under SECTION 2.01(B)
above. Each GMAC Addition Notice shall specify the related Additional Cut- Off
Date and shall be given (with a copy to the Rating Agencies) on or before the
fifth Business Day but not more than 30 days prior to the related Addition Date.
(b) CONDITIONS. GMAC shall be permitted to designate, and the
Purchaser shall be permitted to accept the designation of, Additional Accounts,
in accordance with SECTION 2.03(A) only upon satisfaction of each of the
following conditions on or prior to the related Addition Date:
(i) GMAC shall represent that as of the related Additional
Cut-Off Date each such Additional Account is an Eligible Account and that
each Receivable arising thereunder identified as an Eligible Receivable
and conveyed to the Purchaser on such Addition Date is an Eligible
Receivable;
(ii) GMAC shall have delivered to the Purchaser a duly
executed written assignment in substantially the form of EXHIBIT C and the
list required to be delivered pursuant to SECTION 7.02(D);
(iii) GMAC shall have agreed to deliver to the Purchaser, for
deposit in the Collection Account, to the extent required by the Trust
Sale and Servicing Agreement, all Collections with respect to the Eligible
Receivables arising in such Additional Accounts since the Additional
Cut-Off Date within two Business Days after such Addition Date;
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(iv) as of the Addition Date, neither GMAC nor the Purchaser
is insolvent nor shall any of them have been made insolvent by such
transfer nor is either of them aware of any pending insolvency;
(v) the Schedule of Accounts shall have been amended to
reflect such Additional Accounts and the Schedule of Accounts as so
amended shall be true and correct as of the Addition Date;
(vi) GMAC shall have delivered to the Purchaser a certificate
of an Authorized Officer of GMAC confirming the items set forth in clauses
(i) through (v) above;
(vii) the conditions set forth in SECTION 2.7(B) of the Trust Sale and
--------------
Servicing Agreement shall have been satisfied; and
(viii)GMAC shall have delivered to the Purchaser an Opinion of
Counsel of GMAC substantially in the form of EXHIBIT D.
SECTION 2.04 OPTIONAL REMOVAL OF ACCOUNTS. From time to time, GMAC
may, at its option, request from the Purchaser, and the Purchaser may, at its
option, offer to GMAC, the right to designate an Account for removal from the
Pool of Accounts. Subject to the satisfaction by the Purchaser of the conditions
set forth in SECTION 2.8 of the Trust Sale and Servicing Agreement, GMAC, at its
option, may accept offers to designate an Account for removal or request from
the Purchaser the right to designate an Account for removal by furnishing a
written notice (the "GMAC REMOVAL NOTICE") to the Purchaser not less than five
Business Days but not more than 30 days prior to the Removal Commencement Date.
On and after the Removal Commencement Date with respect to a Selected Account,
GMAC shall not transfer Receivables with respect to such Selected Account to the
Purchaser. The Schedule of Accounts shall be amended to reflect such designation
as of the Removal Commencement Date and to reflect such Account becoming a
Removed Account as of the Removal Date. At any time after the Removal Date, at
the written request of GMAC, the Purchaser shall assign to GMAC, without
recourse, representation or warranty, effective as of the Removal Date, all of
the Purchaser's right, title and interest in, to and under the Receivables
arising in such Account and related Collateral Security.
SECTION 2.05 REMOVAL OF INELIGIBLE ACCOUNTS. If at any time an Account
shall be deemed a Selected Account as described in SECTION 2.9 of the Trust Sale
and Servicing Agreement, the Purchaser shall give notice thereof to GMAC at the
time it gives notice to the parties identified in such SECTION 2.9. From and
after the Removal Commencement Date with respect to a Selected Account pursuant
to such SECTION 2.9, GMAC shall not transfer Receivables with respect to such
Selected Account to the Purchaser. The Schedule of Accounts shall be amended to
reflect such designation as of the Removal Commencement Date and to reflect such
Account becoming a Removed Account as of the Removal Date. At any time after
such removal, at the written request of GMAC, the Purchaser shall assign to
GMAC, without recourse, representation or warranty, effective as of the Removal
Date, all of the Purchaser's right, title and interest in, to and under the
Receivables in such Account and related Collateral Security.
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SECTION 2.06 CUSTODY OF DOCUMENTATION. In connection with the sale,
transfer, assignment and conveyance of the Receivables and related Collateral
Security in the Accounts in the Pool of Accounts to the Purchaser hereunder, the
Purchaser is executing simultaneously herewith the Custodian Agreement with the
Custodian, pursuant to which the Purchaser shall revocably appoint the Custodian
to act as agent of the Purchaser to maintain custody of the documents and
instruments (as more fully described in the Custodian Agreement) associated with
such Receivables, which shall be constructively delivered to the Purchaser.
GMAC, as the holder of the Retained Property, hereby consents to the appointment
of the Custodian to act as agent of GMAC to maintain custody of the documents
and contracts (as more fully described in the Custodian Agreement) associated
with the Receivables included therein and is simultaneously herewith executing
the Custodian Agreement. The Custodian has accepted such appointment by the
Purchaser and GMAC under the Custodian Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01 APPOINTMENT OF SERVICER AND ACCEPTANCE OF APPOINTMENT. The
Purchaser and GMAC hereby appoint the Servicer to act as Servicer with respect
to the Eligible Receivables and the Receivables included in the Retained
Property, existing in or arising under the Accounts included in the Pool of
Accounts from time to time and authorize the Servicer to perform the duties of
Servicer under this Agreement and under the Trust Sale and Servicing Agreement.
The Servicer by execution of this Agreement and by execution of the Trust Sale
and Servicing Agreement hereby accepts such appointment and the terms hereof and
thereof.
SECTION 3.02RIGHTS AND DUTIES OF THE SERVICER.
(a) The Servicer shall manage, service and administer the
Receivables described in SECTION 3.01, including, without limitation, collecting
payments due under the Receivables and providing for charge-offs of
uncollectible Receivables, with reasonable care and all in accordance with the
Servicer's customary and usual servicing procedures for servicing wholesale
receivables comparable to the Receivables which the Servicer services for its
own account, including the Floor Plan Financing Guidelines, except insofar as
any failure to do so would not have a material adverse effect on the interests
of Securityholders. The Servicer shall have full power and authority, acting
alone or through any party properly designated by it hereunder or under the
Trust Sale and Servicing Agreement, to do any and all things in connection with
such servicing and administration which it may deem necessary or desirable,
including monitoring the insurance maintained by Dealers. The Servicer is hereby
authorized to commence, in its own name or in the name of any Interested Party,
a Proceeding to enforce any Receivable subject hereto, to enforce all
obligations of GMAC and the Purchaser under this Agreement and under the Trust
Sale and Servicing Agreement or to commence or participate in a Proceeding
(including without limitation a bankruptcy proceeding) relating to or involving
any such Receivable. If in any Proceeding it is held that the Servicer may not
enforce a Receivable arising under an Account in the Pool of Accounts on the
ground that it is not a real party in interest or a holder entitled to enforce
such Receivable, the Purchaser, GMAC and each other Interested Party shall, at
the Servicer's expense, take such steps as the Servicer reasonably deems
necessary or appropriate to enforce the Receivable, including bringing suit in
the name of such
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Person. If the Servicer commences or participates in such a Proceeding in its
own name, each Interested Party shall thereupon be deemed to have automatically
assigned such Receivable to the Servicer for purposes of commencing or
participating in any such Proceeding as a party or claimant, and the Servicer is
hereby authorized and empowered 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. Each Interested
Party shall furnish the Servicer with any powers of attorney and other documents
and take any other steps which the Servicer may reasonably deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement and the Trust Sale and Servicing Agreement. Except
to the extent required by the preceding two sentences, the authority and rights
granted to the Servicer in this SECTION 3.02 shall be nonexclusive and shall not
be construed to be in derogation of the retention by any Interested Party (to
the extent of its rights in a Receivable) of equivalent authority and rights.
Without limiting the generality of the foregoing and subject to any Servicing
Default, the Servicer is hereby authorized and empowered, unless such power and
authority is revoked by any Interested Party on account of the occurrence of
such a Servicing Default, to:
(i) instruct the Issuer to make allocations, withdrawals and
payments to or from the Collection Account, the Distribution Accounts, the
Reserve Fund, the Cash Accumulation Reserve Fund and any other related
bank accounts or funds as set forth in the Trust Sale and Servicing
Agreement;
(ii) instruct the Issuer or any Interested Party to take
any action required or permitted under any Specified Support Arrangement;
(iii) execute and deliver, on behalf of the Issuer for the
benefit of any related Securityholders, 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,
after the delinquency of any Receivable and to the extent permitted under
and in compliance with applicable requirements of law, to commence
enforcement proceedings with respect to any such Receivable; and
(iv) make any filings, reports, notices, applications,
registrations with, and seek any consents or authorizations from, the
Securities and Exchange Commission and any State securities authority on
behalf of the Issuer as may be necessary or advisable to comply with any
federal or State securities law or reporting requirement.
(b) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables in the
Accounts in the Pool of Accounts from the procedures, offices, employees and
accounts used by the Servicer in connection with servicing other receivables.
The Servicer shall, at its own expense, on or prior to the Initial Closing Date,
in the case of the Initial Accounts, and on or prior to the applicable Addition
Date, in the case of Additional Accounts, indicate in its computer files that
the Eligible Receivables in the Accounts in the Pool of Accounts have been sold
and transferred by GMAC to the Purchaser hereunder and by the Purchaser to the
Trust under the Trust Sale and Servicing Agreement.
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(c) Except as otherwise required to comply with all Requirements of
Law, the Servicer may change the terms and provisions of the Floor Plan
Financing Agreements or the Floor Plan Financing Guidelines in any respect
(including the calculation of the amount or the timing of charge-offs and the
rate of the finance charge assessed thereon), only if:
(i) in the reasonable belief of the Servicer, no Early
Amortization Event shall occur as a result of such change;
(ii) such change is made applicable to the comparable segment
of any similar portfolio of accounts serviced by the Servicer and not only
to the Accounts in the Pool of Accounts; and
(iii) in the case of a reduction in the rate of such finance
charges, the Servicer (and, if GMAC is not then the Servicer, GMAC) does
not reasonably expect any such reduction, after considering amounts due
and amounts payable under any Specified Support Agreements and Investment
Proceeds for the related period, to result in the Net Receivables Rate for
any Collection Period being less than the sum of (A) the weighted average
of the rates of interest payable to all holders of Securities and (B) the
Monthly Servicing Fee for the related period;
PROVIDED, HOWEVER, that nothing herein shall prevent the Servicer from modifying
the terms of the Floor Plan Financing Agreement with any dealer on a
case-by-case basis in a manner consistent with the Floor Plan Financing
Guidelines.
SECTION 3.03 SERVICING COMPENSATION; PAYMENT OF CERTAIN EXPENSES BY THE
SERVICER. The Servicer is entitled to receive the Monthly Servicing Fee as
described in the Trust Sale and Servicing Agreement. The Monthly Servicing Fee
shall be payable to the Servicer solely to the extent amounts are available for
payment in accordance with the terms of the Trust Sale and Servicing Agreement.
Subject to any limitations on the Servicer's liability under the Trust Sale and
Servicing Agreement, the Servicer shall be required to pay all expenses incurred
by it in connection with its activities under this Agreement and the Trust Sale
and Servicing Agreement (including disbursements of the Issuer, fees and
disbursements of any trustees, accountants and outside auditors, taxes imposed
on the Servicer, expenses incurred in connection with distributions and reports
to Securityholders and all other fees and expenses not expressly stated under
this Agreement or the Trust Sale and Servicing Agreement to be for the account
of the Securityholders, but in no event including federal, state and local
income and franchise taxes, if any, of the Issuer or any holder of the
Securities).
SECTION 3.04REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER.
(a) The Servicer hereby makes, and any successor Servicer by its
appointment under this Agreement and under the Trust Sale and Servicing
Agreement shall make, on each Closing Date (and on the date of any such
appointment) the following representations, warranties
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and covenants on which the Purchaser relies in accepting and holding the
Receivables and the related Collateral Security hereunder and the Issuer shall
rely in acquiring and holding such Receivables and the related Collateral
Security under the Trust Sale and Servicing Agreement and in issuing the
Securities:
(i) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware (or, in the case of a Servicer other
than GMAC, other applicable law of its jurisdiction of incorporation),
with power and authority to own its properties and to conduct its
businesses as such properties are presently owned and such businesses are
presently conducted.
(ii) DUE QUALIFICATION. The Servicer is duly qualified to do
business and, where necessary, is in good standing as a foreign
corporation (or is exempt from such requirement) and has obtained all
necessary licenses and approvals in each jurisdiction in which the conduct
of its businesses requires such qualification, except where the failure to
so qualify or obtain licenses or approvals would not have material adverse
effect on its ability to perform its obligations under this Agreement.
(iii) POWER AND AUTHORITY. The Servicer has the power and
authority to execute and deliver this Agreement and the Trust Sale and
Servicing Agreement, to carry out the terms of each such agreement and to
service the Accounts in the Pool of Accounts and the Receivables arising
therein as provided herein and in the Trust Sale and Servicing Agreement,
and the execution, delivery and performance of this Agreement and the
Trust Sale and Servicing Agreement have been duly authorized by the
Servicer by all necessary corporate action on the part of the Servicer.
(iv) BINDING OBLIGATION. This Agreement constitutes, and the
Trust Sale and Servicing Agreement, when duly executed and delivered by
the Servicer, shall constitute, the legal, valid and binding obligation of
the Servicer enforceable in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect, 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 execution of this Agreement and the
consummation of the transactions contemplated by this Agreement and the
Trust Sale and Servicing Agreement by the Servicer and the fulfillment of
the terms of this Agreement and the Trust Sale and Servicing Agreement by
the Servicer, 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 pursuant to the
Basic Documents), or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer
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of any Governmental Authority having jurisdiction over the Servicer or any
of its properties, except where any such conflict or violation would not
have a material adverse effect on its ability to perform its obligations
under this Agreement or the Trust Sale and Servicing Agreement.
(vi) NO PROCEEDINGS. To the Servicer's knowledge, there are no
Proceedings or investigations pending, or threatened, against the Servicer
before any Governmental Authority having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or the Trust
Sale and Servicing Agreement or any Securities issued thereunder, (B)
seeking to prevent the issuance of the such Securities, the execution of
this Agreement or the consummation of any of the transactions contemplated
by this Agreement or the Trust Sale and Servicing 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 and
enforceability of, this Agreement or the Trust Sale and Servicing
Agreement.
(vii) COMPLIANCE WITH REQUIREMENTS OF LAW. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the Accounts to be serviced under this
Agreement and the Trust Sale and Servicing Agreement, shall maintain in
effect all qualifications required under Requirements of Law in order to
service properly such Receivables and such Accounts and shall comply in
all material respects with all Requirements of Law in connection with
servicing such Receivables and such Accounts, except, in each case, where
a failure to do so would not have a material adverse effect on the
interests of the Securityholders.
(viii)NO RESCISSION OR CANCELLATION. Except pursuant to the
Floor Plan Financing Guidelines, the Servicer shall not permit any
rescission or cancellation of any Receivable sold and assigned to the
Purchaser hereunder that the Servicer services under this Agreement and
the Trust Sale and Servicing Agreement, except as ordered by a court of
competent jurisdiction or other Governmental Authority.
(ix) PROTECTION OF INTERESTED PARTY RIGHTS. The Servicer shall
take no action, nor omit to take any action, which would impair the rights
or interests of Interested Parties in the Receivables sold and assigned to
the Purchaser hereunder that the Servicer services under this Agreement
and the Trust Sale and Servicing Agreement or in the related Vehicle
Collateral Security nor shall it reschedule, revise or defer payments due
on any such Receivable except, in each case, in a manner consistent with
the Floor Plan Financing Guidelines or as otherwise contemplated herein or
in the Trust Sale and Servicing Agreement. The Servicer shall not permit
any such Receivable to become subject to any right of set-off or any
offsetting balance.
(x) NEGATIVE PLEDGE. Except for the conveyances hereunder to
the Issuer pursuant to the Trust Sale and Servicing Agreement and the
pledge of the Trust Estate to the Indenture Trustee pursuant to the
Indenture, and as provided in SECTION 6.03, the Servicer shall not sell,
pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist, any Lien on any Receivable sold and assigned to
the Purchaser hereunder
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(and any related Collateral Security), whether now existing or hereafter
created, or any interest therein, and the Servicer shall defend the right,
title and interest of the Purchaser, the Issuer and any Interested Party
in, to and under such property, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Purchaser or the Servicer. The Servicer shall notify the Purchaser
promptly after becoming aware of any Lien on such property other than the
conveyances hereunder or under the Trust Sale and Servicing Agreement or
the Indenture.
(b) NOTICE OF BREACH. Upon discovery by the Purchaser or the
Servicer of a breach of any of the representations, warranties and covenants set
forth in this SECTION 3.04, the party discovering such breach shall give prompt
written notice to the other party.
(c) PURCHASE OF RECEIVABLES. If any covenants of the Servicer under
SECTION 3.04(A)(VIII), (IX) OR (X) has not been complied with in all material
respects with respect to any Eligible Receivable or Account in the Pool of
Accounts and such noncompliance has a material adverse effect on the interests
of Securityholders or any other Interested Parties in such Receivable or such
Account, the Servicer shall purchase such Receivable (or, in the case of a
breach affecting less than the entire principal amount of a Receivable, to the
extent of the breach) or all Eligible Receivables under such Account (each, an
"ADMINISTRATIVE RECEIVABLE") from the Issuer, on the terms and conditions set
forth in this SECTION 3.04.
(d) PAYMENT OF PURCHASE PRICE. The Servicer shall purchase each
Administrative Receivable no later than two Business Days (or such other period
as may be agreed by the Applicable Trustee) following discovery by the Servicer
(including through the receipt of notice thereof) of the event giving rise to
such Administrative Receivable by depositing in the Collection Account, on the
date on which such purchase is deemed to occur, an amount (in immediately
available funds) equal to the principal amount of such Receivable plus accrued
and unpaid interest thereon through the date of purchase. The amount so
deposited with respect to a Receivable (an "ADMINISTRATIVE PURCHASE PAYMENT")
shall be included in Trust Principal Collections (to the extent of the principal
amount of such Receivable) and Interest Collections (as to the remainder of such
amount) on such date and shall be applied in accordance with the terms of this
Agreement and the Trust Sale and Servicing Agreement.
(e) SOLE REMEDY. The obligation of the Servicer to purchase
Receivables as described in this SECTION 3.04, and to make the deposits required
to be made to the Collection Account as provided in the preceding paragraph,
shall constitute the sole remedy respecting the event giving rise to such
obligation available to any Securityholders, the Purchaser, the Owner Trustee,
the Indenture Trustee or the Issuer.
SECTION 3.05 SERVICER'S ACCOUNTING AND REPORTS.
(a) On or before each Determination Date, the Servicer shall deliver
to the Purchaser, the Owner Trustee, the Indenture Trustee and the Rating
Agencies a Servicer's Accounting with respect to the immediately preceding
Collection Period executed by an Authorized Officer of the Servicer containing
all information necessary for making the allocations, deposits and distributions
required by the Trust Sale and Servicing Agreement, the Trust Agreement and the
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Indenture on the related Distribution Date, and all information necessary to
each such party for sending any statements required to be sent to
Securityholders with respect to such Distribution Date under the Trust Sale and
Servicing Agreement.
(b) On each Business Day, the Servicer shall deliver to the
Indenture Trustee a Servicer's Accounting executed by an Authorized Officer of
the Servicer containing the Daily Trust Balance, the Daily Trust Invested Amount
and all related amounts to the extent necessary to determine the Cash Collateral
Amount for such date as described in SECTION 4.5(D) of the Trust Sale and
Servicing Agreement.
(c) At any time that GMAC does not have a long-term rating of at
least BBB- from Standard & Poor's and at least Baa3 from Moody's, the Servicer
shall identify on a daily basis all Eligible Receivables and, on or before each
Determination Date, the Servicer shall deliver to the Owner Trustee a list
identifying all Eligible Receivables as of the last day of the related
Collection Period.
SECTION 3.06 PRE-CLOSING COLLECTIONS. Within two Business Days after the
Initial Closing Date, GMAC shall deliver to the Purchaser all collections on the
Receivables in the Accounts in the Pool of Accounts held by GMAC on the Initial
Closing Date to the extent such collections would be required to be on deposit
on such date if this Agreement and the Trust Sale and Servicing Agreement had
been in effect from and after the Initial Cut-Off Date and the Revolving Period
had commenced on such date. The Purchaser hereby directs GMAC to deposit such
amount on its behalf into the Collection Account.
SECTION 3.07COLLECTIONS RECEIVED BY GMAC. GMAC hereby agrees to
deliver all Collections on the Receivables in the Accounts in the Pool of
Accounts received by GMAC from or on behalf of Dealers to the Servicer and
consents to the application, allocation and distribution thereof in accordance
with the terms and provisions of this Agreement and the Trust Sale and Servicing
Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF GMAC RELATING TO THE
ACCOUNTS AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. As of the dates set forth below,
GMAC makes the following representations and warranties to the Purchaser as to
the Accounts in the Pool of Accounts and the Receivables sold to the Purchaser
hereunder, on which the Purchaser relies in accepting such Receivables:
(i) as of the Initial Cut-Off Date, each Account included in the
Pool of Accounts is an Eligible Account;
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(ii) as of the Initial Cut-Off Date, each Receivable that is
identified as an Eligible Receivable and conveyed to the Purchaser on the
Initial Closing Date is an Eligible Receivable;
(iii) as of each Additional Cut-Off Date, each related
Additional Account is an Eligible Account and each Receivable arising
thereunder that is identified as an Eligible Receivable and conveyed to
the Purchaser on the related Addition Date is an Eligible Receivable; and
(iv) as of each date that Receivables are sold and transferred
hereunder pursuant to SECTION 2.01(B), each Receivable that is identified
as an Eligible Receivable and so conveyed to the Purchaser on such date is
an Eligible Receivable.
(b) SURVIVAL; NOTICE OF BREACH. The representations and warranties
set forth in this SECTION 4.01 shall survive the transfer and assignment of the
Eligible Receivables in the Accounts in the Pool of Accounts and related items
to the Purchaser from time to time and the subsequent assignment and transfer of
its interests therein to the Issuer pursuant to the Trust Sale and Servicing
Agreement. Upon discovery by GMAC or the Purchaser of a breach of any of the
representations and warranties set forth in this SECTION 4.01, the party
discovering such breach shall give prompt written notice to the other party.
(c) REPURCHASE. GMAC acknowledges that the Purchaser shall assign
its rights and remedies hereunder with respect to the Eligible Receivables
arising in the Accounts in the Pool of Accounts to the Issuer under the Trust
Sale and Servicing Agreement. GMAC hereby covenants and agrees with the
Purchaser that (i) in the event of a breach of any of GMAC's representations and
warranties contained in SECTION 4.01(A) with respect to any Receivable or with
respect to any Account that materially and adversely affects the interests of
the Purchaser or the Trust in any Receivable or (ii) in the event that the
payment of all or a portion of the principal amount of any Receivable held by
the Purchaser or the Trust is deferred pursuant to DPP or any other instalment
sales program or similar arrangement, unless and to the extent such breach or
deferral shall have been cured in all material respects, GMAC shall repurchase
the interest of the Issuer in such Receivable (to the extent of such breach or
deferral) on the date and for the amount specified in SECTION 2.5 of the Trust
Sale and Servicing Agreement, without further notice from the Purchaser
hereunder and without any representation, warranty or recourse from the
Purchaser or the Issuer. Without limiting the generality of the foregoing, a
Receivable shall not be an Eligible Receivable, and thus shall be subject to
repurchase, if and to the extent that, (A) the Servicer adjusts downward the
principal amount of such Receivable because of a rebate, refund, credit
adjustment or billing error to the related Dealer or (B) such Receivable was
created in respect of a Vehicle which was refused or returned by the related
Dealer.
(d) SOLE REMEDY. The obligation of GMAC to repurchase any Receivable
shall constitute the sole remedy respecting the event giving rise to such
obligation available to the Purchaser and to any Interested Party.
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SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF GMAC RELATING TO GMAC AND
THE AGREEMENT.
(a) REPRESENTATIONS AND WARRANTIES. GMAC, in its capacity as seller,
hereby makes as of each Closing Date the following representations and
warranties on which the Purchaser relies. The following representations and
warranties shall survive the sale, transfer and assignment of the Receivables
hereunder:
(i) ORGANIZATION AND GOOD STANDING. GMAC 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 businesses as such properties are presently
owned and such businesses are presently conducted;
(ii) DUE QUALIFICATION. GMAC is duly qualified to do business
and, where necessary, is in good standing as a foreign corporation (or is
exempt from such requirement) and has obtained all necessary licenses and
approvals in each jurisdiction in which the conduct of its businesses
requires such qualification, except where the failure to so qualify or
obtain licenses or approvals would not have a material adverse effect on
its ability to perform its obligations under this Agreement;
(iii) POWER AND AUTHORITY. GMAC has the power and authority to
execute and deliver this Agreement, to carry out its terms, and to
consummate the transactions contemplated herein, and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by GMAC by all
necessary corporate action on the part of GMAC;
(iv) NO VIOLATION. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms of this Agreement by GMAC 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
pursuant to the Basic Documents) or violate any law or, to the best of
GMAC's knowledge, any order, rule or regulation applicable to GMAC of any
Governmental Authority having jurisdiction over GMAC or any of its
properties, except where any such conflict or violation would not have a
material adverse effect on its ability to perform its obligations with
respect to the Purchaser or any Interested Party under this Agreement or
the Trust Sale and Servicing Agreement;
(v) NO PROCEEDINGS. To GMAC's knowledge, there are no
Proceedings or investigations pending, or threatened, against GMAC before
any Governmental Authority having jurisdiction over GMAC or its properties
(A) asserting the invalidity of this Agreement, the Trust Sale and
Servicing Agreement, the Custodian Agreement or the Administration
Agreement, (B) seeking to prevent the execution of this Agreement or the
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<PAGE>
consummation of any of the transactions contemplated by this Agreement,
the Trust Sale and Servicing Agreement, the Custodian Agreement or the
Administration 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,
the Trust Sale and Servicing Agreement, the Custodian Agreement or the
Administration Agreement;
(vi) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of GMAC, enforceable against GMAC in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect 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;
(vii) RECORD OF ACCOUNTS. The Schedule of Accounts is an
accurate and complete listing in all material respects of all of the
Accounts in the Pool of Accounts as of the Initial Cut-Off Date or the
applicable Additional Cut-Off Date, as the case may be, and the
information contained therein with respect to the identity of such
Accounts is true and correct in all material respects; and
(viii)VALID SALE. With respect to the Initial Accounts, this
Agreement and the related assignment to be delivered on the Initial
Closing Date or, in the case of Additional Accounts, the related
assignment as described in SECTION 2.03(B), when duly executed and
delivered, shall constitute a valid sale, transfer and assignment to the
Purchaser of all right, title and interest of GMAC in, to and under the
Eligible Receivables thereunder and the related Vehicle Collateral
Security, whether then existing or thereafter created, and the proceeds
thereof, enforceable against creditors of and purchasers from GMAC. To the
extent such filings are required therefor, upon the filing of the
financing statements described in SECTION 7.02(A) (and, in the case of
Eligible Receivables hereafter created in the Accounts in the Pool of
Accounts and the proceeds thereof, upon the creation thereof) the
Purchaser shall have a first priority perfected ownership interest in such
property, except for Liens permitted under SECTION 4.04(A). Except as
otherwise provided in the Trust Sale and Servicing Agreement or this
Agreement, neither General Motors, GMAC nor any Person claiming through or
under General Motors or GMAC has any claim to or interest in the Trust
Estate.
(b) SURVIVAL; NOTICE OF BREACH. The representations and warranties
set forth in this SECTION 4.02 shall survive the transfer and assignment of the
Receivables and related items to the Purchaser hereunder and the subsequent
assignment and transfer of its interests therein to the Issuer pursuant to the
Trust Sale and Servicing Agreement. Upon discovery by GMAC or the Purchaser of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other party.
(c) REPURCHASE. If (i) the Purchaser is required to purchase
Receivables and related Collateral Security pursuant to SECTION 3.1(C) of the
Trust Sale and Servicing Agreement and (ii) the condition giving rise to such
purchase obligation shall also constitute a breach of a
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representation or warranty pursuant to SECTION 4.02(A), GMAC shall repurchase
such Receivables and such Collateral Security and shall pay to the Purchaser,
prior to the time the Purchaser is required to pay such amount pursuant to the
Trust Sale and Servicing Agreement, an amount equal to the Reassignment Amount.
(d) SOLE REMEDY. The obligation of GMAC to purchase such Receivables
and such Collateral Security pursuant to this SECTION 4.02 shall constitute the
sole remedy available to the Purchaser and to any Interested Party against GMAC
respecting the event giving rise to such obligation.
SECTION 4.03 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to GMAC as of each Closing Date that:
(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 Eligible Receivables
arising in the Accounts in the Pool of Accounts and the Collateral Security
related thereto;
(b) DUE QUALIFICATION. The Purchaser is duly qualified to do
business and, where necessary, is in good standing as a foreign corporation (or
is exempt from such requirement) 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, except where the
failure to so qualify or obtain licenses or approvals would not have a material
adverse effect on its ability to perform its obligations under this Agreement;
(c) POWER AND AUTHORITY. The Purchaser has the power and authority
to execute and deliver this Agreement, to carry out its terms and to consummate
the transactions contemplated herein, and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by the Purchaser by all necessary
corporate action on the part of the Purchaser;
(d) NO VIOLATION. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement by the Purchaser
and the fulfillment of the terms of this Agreement by the Purchaser 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, mortgage, deed of trust or other instrument (other than pursuant to
the Basic Documents), or violate any law or, to the best of the Purchaser's
knowledge, any order, rule or regulation applicable to the Purchaser of any
Governmental Authority having jurisdiction over the Purchaser or any of its
properties, except where any such conflict or violation would not have a
material adverse effect on its ability to perform its obligations with respect
to GMAC or any Interested Party under this Agreement or the Trust Sale and
Servicing Agreement;
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(e) NO PROCEEDINGS. To the Purchaser's knowledge, there are no
Proceedings or investigations pending, or threatened, against the Purchaser
before any Governmental Authority having jurisdiction over the Purchaser or its
properties (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the execution of this Agreement or the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any 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; and
(f) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors' rights
in general and by general principles or equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
SECTION 4.04 COVENANTS OF GMAC. GMAC hereby covenants that:
-----------------
(a) NEGATIVE PLEDGE. Except for the conveyances hereunder and under
the Trust Sale and Servicing Agreement and the pledge of the Trust Estate to the
Indenture Trustee under the Indenture and as provided in SECTION 6.03, GMAC
shall not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist, any Lien on any Eligible Receivable in
any Account in the Pool of Accounts (and any related Vehicle Collateral
Security), whether now existing or hereafter created, or any interest therein,
and GMAC shall defend the right, title and interest of the Purchaser and any
Interested Party in, to and under such property, whether now existing or
hereafter created, against all claims of third parties claiming through or under
GMAC. GMAC shall notify the Purchaser and the Issuer promptly after becoming
aware of any Lien on any such property other than the conveyances hereunder or
under the Trust Sale and Servicing Agreement or the Indenture. Nothing herein
shall prohibit GMAC from granting, creating, incurring or suffering to exist any
Lien on all or any portion of the Retained Property.
(b) DELIVERY OF COLLECTIONS. All payments received by GMAC from or
on behalf of a Dealer in respect of Receivables in any Accounts in the Pool of
Accounts or any Collateral Security (except as contemplated in SECTION 6.03 with
respect to any property constituting Common Collateral that is not Vehicle
Collateral Security in connection with any Other Indebtedness) shall be received
by GMAC in its capacity as Servicer, unless GMAC is no longer the Servicer, in
which case GMAC shall deliver all such payments to the Servicer as soon as
practicable after receipt thereof, but in no event later than two Business Days
after receipt thereof.
(c) COMPLIANCE WITH REQUIREMENTS OF LAW. GMAC shall comply in all
material respects with all Requirements of Law applicable to GMAC, except where
any such failure to comply would not have a material adverse effect on its
ability to perform its obligations under this Agreement.
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(d) NO PETITION. Neither the Servicer nor GMAC shall at any time
institute against the Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law.
ARTICLE V
CERTAIN MATTERS RELATING TO GMAC
SECTION 5.01 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, GMAC.
(a) Notwithstanding anything to the contrary in this Agreement, any
Person (i) into which GMAC may be merged or consolidated, (ii) resulting from
any merger, conversion or consolidation to which GMAC shall be a party, (iii)
succeeding to the business of GMAC or (iv) more than 50% of the voting interests
of which is owned, directly or indirectly, by General Motors and which is
otherwise originating receivables, which Person in any of the foregoing cases
(other than GMAC as the surviving entity of such merger or consolidation)
executes an agreement of assumption to perform every obligation of GMAC, as
seller, under this Agreement and the Trust Sale and Servicing Agreement, shall
be the successor to GMAC under this Agreement, as seller, without the execution
or filing of any document or any further act on the part of any of the parties
to this Agreement or the Trust Sale and Servicing Agreement, anything in this
Agreement to the contrary notwithstanding.
(b) GMAC shall provide notice of any merger, consolidation or
succession pursuant to this SECTION 5.01 to the Rating Agencies.
SECTION 5.02 GMAC INDEMNIFICATION OF THE PURCHASER. GMAC shall
indemnify the Purchaser for any liability as a result of the failure of an
Eligible Receivable sold hereunder 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 5.03 GMAC ACKNOWLEDGMENT OF TRANSFERS TO THE ISSUER. By its
execution of the Trust Sale and Servicing Agreement, GMAC acknowledges that the
Purchaser shall, pursuant to the Trust Sale and Servicing Agreement, transfer
the Receivables purchased hereunder and related Collateral Security to the
Issuer and assign its rights associated therewith under this Agreement to the
Issuer, subject to the terms and conditions of the Trust Sale and Servicing
Agreement, and that the Issuer shall in turn further pledge, assign or transfer
its rights in such property and this Agreement to the Indenture Trustee under
the Indenture. GMAC further acknowledges that the Purchaser shall assign its
rights under the Custodian Agreement to the Issuer.
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<PAGE>
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 ADDITIONAL OBLIGATIONS OF GMAC AND THE PURCHASER.
(a) SUPPLEMENTAL PRINCIPAL ALLOCATIONS. On or before the Business
Day prior to each Distribution Date for the Wind Down Period or an Early
Amortization Period, GMAC shall deposit into the Collection Account, on behalf
of the Purchaser, an amount equal to the Supplemental Principal Allocation for
such Distribution Date. Such amount shall be recorded as an advance under the
Intercompany Advance Agreement and shall bear interest and be payable as
provided therein.
(b) REMOVED ACCOUNTS. With respect to each Removed Account, if and
to the extent that any related Receivable held by the Trust on the related
Removal Commencement Date (determined without giving effect to the special
allocation of Principal Collections pursuant to SECTION 2.8(C) OR SECTION
2.9(B), as applicable, of the Trust Sale and Servicing Agreement) is charged-off
as uncollectible at any time following the related Removal Date, the Purchaser
shall pay the amount so charged-off to GMAC.
SECTION 6.02 EFFECT OF INVOLUNTARY CASE INVOLVING GMAC.
(a) SUSPENSION OF PURCHASES. The Purchaser shall suspend the
purchase (and GMAC shall suspend the sale) of Receivables hereunder if either
party shall receive notice at its principal corporate office that GMAC has
become an involuntary party to (or has been made the subject of) any proceeding
provided for by any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to GMAC or relating to all or
substantially all of its property (an "INVOLUNTARY CASE").
(b) RESUMPTION OF PURCHASES. Notwithstanding any cessation or
suspension of purchases pursuant to SECTION 6.02(A), if GMAC or the Purchaser
has obtained an order from the court having jurisdiction over an Involuntary
Case approving the continuation of the sale of Receivables by GMAC to the
Purchaser and/or approving the sale of Receivables originating in the Accounts
in the Pool of Accounts since the date of the suspension of such sales on the
same terms (including SECTION 6.03 hereof) as, or on terms that do not have a
material adverse effect on Securityholders as compared to, the terms in effect
prior to the commencement of such Involuntary Case, and further providing that
the Purchaser and any of its transferees (including the Issuer) may rely on such
order for the validity and nonavoidance of such transfer (the "ORDER"), the
Purchaser may resume the purchase (and GMAC may resume the sale) of Receivables
pursuant to the terms hereof; PROVIDED, HOWEVER, that so long as such
Involuntary Case shall continue, notwithstanding anything in this Agreement to
the contrary, the purchase price of such Receivables (which shall not be less
than reasonably equivalent value therefor or greater than the principal balance
thereof) shall be paid by the Purchaser to GMAC in cash not later than the same
Business Day of any such sale, and such Receivables shall be considered
transferred to the Purchaser only to the extent that the purchase price therefor
has been paid in cash on the same Business Day.
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(c) CESSATION OF PURCHASES. If an Order is obtained but subsequently
is reversed or rescinded or expires, the Purchaser shall immediately cease to
purchase (and GMAC shall immediately cease to sell) Receivables hereunder.
Notwithstanding anything contained in SECTION 6.02(B), if an Involuntary Case
has not been dismissed by the first Business Day following the 60 day period
beginning on the day on which notice of an Involuntary Case was received by
either party, whether or not an Order was obtained, the Purchaser shall not
thereafter purchase Receivables from GMAC hereunder and GMAC shall not
thereafter designate Additional Accounts for transfer to the Purchaser or sell
Receivables hereunder.
SECTION 6.03 INTERCREDITOR AGREEMENTS.
------------------------
(a) COMMON COLLATERAL. In connection with loans or advances made or
to be made by GMAC to a Dealer from time to time other than pursuant to an
Account (collectively, "OTHER INDEBTEDNESS"), GMAC may have a security interest
in property constituting Collateral Security (the "COMMON COLLATERAL").
(b) AGREEMENTS OF GMAC WITH RESPECT TO COMMON COLLATERAL. GMAC
agrees that with respect to the Receivables of each Dealer:
(i) GMAC's security interest in any Common Collateral that is
Vehicle Collateral Security (and the proceeds thereof) in connection with
any Other Indebtedness is subordinate to the security interest therein in
connection with such Receivables and assigned to the Purchaser hereunder;
(ii) GMAC shall not apply the proceeds of any such Common
Collateral that is Vehicle Collateral Security in connection with any
Other Indebtedness in any manner that is materially adverse to the
Purchaser or the Issuer and the Securityholders until all required
payments in respect of such Receivable have been made; and
(iii) in realizing upon any such Common Collateral that is
Vehicle Collateral Security in connection with any such Receivables,
neither the Purchaser nor the Issuer (nor the Servicer on behalf of
either) shall be obligated to protect or preserve the rights of GMAC in
such Common Collateral.
(c) AGREEMENTS OF THE PURCHASER WITH RESPECT TO COMMON COLLATERAL.
The Purchaser agrees that with respect to the Receivables of each Dealer:
(i) the Purchaser's security interest in any Common Collateral
that is not Vehicle Collateral Security (and the proceeds thereof) in
connection with such Receivables assigned to the Purchaser hereunder is
subordinate to the security interest therein in connection with any Other
Indebtedness;
(ii) the Purchaser (or the Servicer on its behalf) shall not
apply the proceeds of any such Common Collateral that is not Vehicle
Collateral Security in connection with any such Receivables in any manner
that is materially adverse to GMAC until all required payments in respect
of such Other Indebtedness have been made; and
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(iii) in realizing upon any such Common Collateral that is not
Vehicle Collateral Security in connection with such Other Indebtedness,
GMAC shall not be obligated to protect or preserve the rights of the
Purchaser or the Issuer in such Collateral Security.
(d) OBLIGATIONS OF ISSUER. The Trust Sale and Servicing Agreement
shall provide that the Issuer is subject to this SECTION 6.03.
(e) OBLIGATIONS OF ASSIGNEES AND TRANSFEREES. If, other than
pursuant hereto, GMAC in any manner assigns or transfers any right or obligation
with respect to any Other Indebtedness or any property constituting Common
Collateral, GMAC shall make such assignment or transfer subject to the
provisions of this SECTION 6.03 and shall require such assignee or transferee to
acknowledge that it takes such assignment or transfer subject to the provisions
of this SECTION 6.03 and to agree that it shall require the same acknowledgment
from any subsequent assignee or transferee.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 AMENDMENT. This Agreement may be amended from time to
time (subject to SECTION 10.1(G) of the Trust Sale and Servicing Agreement) by a
written amendment duly executed and delivered by GMAC and the Purchaser.
SECTION 7.02 PROTECTION OF RIGHT, TITLE AND INTEREST IN AND TO
RECEIVABLES.
(a) GMAC or the Purchaser or both shall execute and file such
financing statements and cause to be executed and filed such continuation
statements or other statements, all in such manner and in such places as may be
required by law fully to evidence, preserve, maintain and protect the interest
of the Purchaser hereunder in the Eligible Receivables arising in the Accounts
in the Pool of Accounts and the related Collateral Security and in the proceeds
thereof (including, without limitation, UCC-1 financing statements on or prior
to the Initial Closing Date). 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) Within 60 days after GMAC makes any change in its name, identity
or corporate structure that would make any financing statement or continuation
statement filed in accordance with SECTION 7.02(A) seriously misleading within
the meaning of SECTION 9-402(7) of the UCC, GMAC shall give the Purchaser notice
of any such change.
(c) 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 its principal
executive office within the United States of America.
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(d) In connection with the sale and transfer hereunder of the
Receivables in the Accounts in the Pool of Accounts and the related Collateral
Security from GMAC to the Purchaser, GMAC shall, at its own expense, on or prior
to the Initial Closing Date, in the case of the Initial Accounts, and on or
prior to the applicable Addition Date, in the case of Additional Accounts, (i)
indicate in its computer files that the Eligible Receivables in the Accounts in
the Pool of Accounts have been sold and transferred, and the Collateral Security
assigned, to the Purchaser pursuant to this Agreement and that such property has
been sold and transferred to the Issuer pursuant to the Trust Sale and Servicing
Agreement and (ii) deliver to the Purchaser a true and complete list of all such
Accounts specifying for each such Account, as of the Initial Cut-Off Date, in
the case of the Initial Accounts, and as of the applicable Additional Cut-Off
Date, in the case of Additional Accounts, its account number and the outstanding
principal balance of Eligible Receivables in such Account. Such list, as
supplemented from time to time to reflect Additional Accounts, Selected Accounts
and Removed Accounts (including Accounts removed as described in SECTION 2.05),
shall be the Schedule of Accounts and is hereby incorporated into and made a
part of this Agreement.
(e) The Servicer shall furnish to the Purchaser at any time upon
request a list of all Accounts then included in the Pool of Accounts, together
with a reconciliation of such list to the Schedule of Accounts as initially
furnished pursuant to the Trust Sale and Servicing Agreement and to each notice
furnished before such request indicating removal from or addition to the
Accounts in the Pool of Accounts.
SECTION 7.03 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, to and under the Receivables sold
hereunder and the enforcement of any obligation of GMAC hereunder.
SECTION 7.04 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF OR OF ANY OTHER JURISDICTION, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 7.05 NOTICES. All demands, notices and communications upon
or to GMAC, the Purchaser, or any other Person identified in SECTION 10.3 of the
Trust Sale and Servicing Agreement under this Agreement shall be delivered as
specified in APPENDIX B to the Trust Sale and Servicing Agreement.
SECTION 7.06 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be 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 covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or
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enforceability of the other provisions of this Agreement or of any Securities or
rights of any Interested Parties.
SECTION 7.07 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by GMAC without the prior
written consent of the Purchaser and the Issuer. The Purchaser may assign all or
a portion of its rights, remedies, powers and privileges under this Agreement to
the Issuer pursuant to the Trust Sale and Servicing Agreement.
SECTION 7.08 FURTHER ASSURANCES. GMAC and the Purchaser agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other party to more
fully effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables 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 or the Servicer.
SECTION 7.09 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on
the part of the Purchaser 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, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
SECTION 7.10 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.
SECTION 7.11 THIRD-PARTY BENEFICIARIES.This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Interested Parties
and their respective successors and permitted assigns. Except as otherwise
expressly provided in this Agreement, no other Person shall have any right or
obligation hereunder.
SECTION 7.12 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 7.13 CONFIDENTIAL INFORMATION. The Purchaser agrees that it
shall neither use nor disclose to any Person the names and addresses of Dealers,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Trust Sale and Servicing Agreement, under the Receivables or as
required by law.
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SECTION 7.14 HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.15 TERMINATION. This Agreement (except for SECTION 5.02)
shall terminate immediately after the termination of the Trust Sale and
Servicing Agreement; PROVIDED, that if at the time of the termination of the
Trust Sale and Servicing Agreement, the Purchaser has not made all payments to
GMAC required to be made under SECTION 6.01, this Agreement (except for SECTION
5.02) shall not terminate until immediately after all such payments have been
made.
SECTION 7.16. NO PETITION COVENANTS. Notwithstanding any prior
termination of this Agreement, GMAC shall not, prior to the date which is one
year and one day after the final distribution with respect to the Securities to
the Note Distribution Account, the Revolver Distribution Account or the
Certificate Distribution Account, as applicable, acquiesce, petition or
otherwise invoke or cause the Purchaser to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Purchaser 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 Purchaser or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of the
Purchaser.
* * * *
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IN WITNESS WHEREOF, the parties hereby have caused this Pooling and
Servicing Agreement to be executed by their respective officers thereunto duly
authorized as of the date and year first above written.
GENERAL MOTORS ACCEPTANCE CORPORATION,
Seller and Servicer
By:
Name:
Title:
WHOLESALE AUTO RECEIVABLES CORPORATION,
Purchaser
By:
Name:
Title:
<PAGE>
EXHIBIT A
LIST OF LOCATIONS OF THE
SCHEDULE OF ACCOUNTS
The Schedule of Accounts is
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. General Motors Acceptance Corporation
4. Wholesale Auto Receivables Corporation
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT FOR INITIAL CLOSING DATE
For value received, in accordance with the Pooling and Servicing
Agreement, dated as of ________, ____ (the "POOLING AND SERVICING AGREEMENT"),
between General Motors Acceptance Corporation, a Delaware corporation ("GMAC"),
and Wholesale Auto Receivables Corporation, a Delaware corporation (the
"PURCHASER"), GMAC does hereby sell, assign, transfer and otherwise convey unto
the Purchaser, without recourse, all of its right, title and interest in, to and
under all of the Eligible Receivables existing in the Accounts listed in the
Schedule of Accounts as of the close of business on the Initial Cut-Off Date
and, so long as each such Account is included in the Pool of Accounts, all
Eligible Receivables created or deemed created thereunder on each Receivables
Purchase Date and all monies due or to become due thereon after the Initial
Cut-Off Date or such Receivables Purchase Date, as appropriate, all Collateral
Security with respect thereto and all amounts received with respect thereto and
all proceeds thereof (including "proceeds" as defined in SECTION 9-306 of the
UCC and Recoveries).
The foregoing sale, transfer, assignment and conveyance and any
sales, transfers, assignments and conveyances subsequent to the date hereof do
not constitute, and are not intended to result in, the creation or an assumption
by the Purchaser of any obligation of the Servicer, GMAC (if GMAC is not the
Servicer), General Motors or any other Person in connection with the Accounts,
the Receivables or under any agreement or instrument relating thereto, including
any obligation to any Dealers.
It is the intention of GMAC and the Purchaser that the transfers and
assignments contemplated by this Assignment, including transfers and assignments
subsequent to the date hereof, shall constitute a sale of the property described
herein and in the Pooling and Servicing Agreement from GMAC to the Purchaser and
the beneficial interest in and title to such property 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
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of ________, ____.
GENERAL MOTORS ACCEPTANCE CORPORATION
By:
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT FOR EACH ADDITION DATE
For value received, in accordance with the Pooling and Servicing
Agreement, dated as of ________, ____ (the "POOLING AND SERVICING AGREEMENT"),
between General Motors Acceptance Corporation, a Delaware corporation ("GMAC"),
and Wholesale Auto Receivables Corporation, a Delaware corporation (the
"PURCHASER"), GMAC does hereby sell, assign, transfer and otherwise convey unto
the Purchaser, without recourse, with respect to the Additional Accounts to
which this Assignment relates, all of its right, title and interest in, to and
under all of the Eligible Receivables as of the close of business on the related
Additional Cut-Off Date in such Additional Accounts and, so long as each such
Account is included in the Pool of Accounts, all Eligible Receivables created or
deemed created thereunder on each Receivables Purchase Date and all monies due
or to become due thereon after such Additional Cut-Off Date or such Receivables
Purchase Date, as appropriate, all Collateral Security with respect thereto and
all amounts received with respect thereto and all proceeds thereof (including
"proceeds" as defined in SECTION 9-306 of the UCC and Recoveries).
The foregoing sale, transfer, assignment and conveyance and any
sales, transfers, assignments and conveyances subsequent to the date hereof do
not constitute, and are not intended to result in, the creation or an assumption
by the Purchaser of any obligation of the Servicer, GMAC (if GMAC is not the
Servicer), General Motors or any other Person in connection with the Accounts,
the Receivables or under any agreement or instrument relating thereto, including
any obligation to any Dealers.
It is the intention of GMAC and the Purchaser that the transfers and
assignments contemplated by this Assignment, including transfers and assignments
subsequent to the date hereof, shall constitute a sale of the property described
herein and in the Pooling and Servicing Agreement from GMAC to the Purchaser and
the beneficial interest in and title to such property 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
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of ________, ___.
GENERAL MOTORS ACCEPTANCE CORPORATION
By:
Name:
Title:
<PAGE>
EXHIBIT D
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ADDITION OF ACCOUNTS
PROVISION TO BE INCLUDED IN OPINION OF COUNSEL
DELIVERED PURSUANT TO SECTION 2.03(B)(VIII)
OF THE POOLING AND SERVICING AGREEMENT
The opinion set forth below may be subject to standard
qualifications, assumptions, limitations and exceptions.
The Assignment delivered on the Addition Date has been duly
authorized, executed and delivered by GMAC, and constitutes the valid and
legally binding obligation of GMAC, enforceable against GMAC in accordance
with its terms.
<PAGE>
APPENDIX A
PART I
For ease of reference, capitalized terms defined herein have been
consolidated with and are contained in Appendix A to the Trust Sale and
Servicing Agreement of even date herewith among GMAC, Wholesale Auto Receivables
Corporation and Superior Wholesale Inventory Financing Trust [ ].
PART II
For ease of reference, the rules of construction have been
consolidated with and are contained in Part II of Appendix A to the Trust Sale
and Servicing Agreement of even date herewith among GMAC, Wholesale Auto
Receivables Corporation and Superior Wholesale Inventory Financing Trust [ ].
PART III
For ease of reference, the notice address and procedures have been
consolidated with and are contained in Part II of Appendix B to the Trust Sale
and Servicing Agreement of even date herewith among GMAC, Wholesale Auto
Receivables Corporation and Superior Wholesale Inventory Financing Trust [ ].
<PAGE>
</TABLE>
EXHIBIT 99.2
TRUST SALE AND SERVICING AGREEMENT
AMONG
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
AND
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
ISSUER
DATED AS OF ________, ____
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 DEFINITIONS................................................................. 1
ARTICLE II
CONVEYANCE OF ELIGIBLE RECEIVABLES;
ISSUANCE OF INITIAL SECURITIES
SECTION 2.1 CONVEYANCE OF ELIGIBLE RECEIVABLES.................................. 2
----------------------------------
SECTION 2.2 CUSTODY OF DOCUMENTATION............................................ 3
------------------------
SECTION 2.3 ACCEPTANCE BY THE ISSUER............................................ 3
------------------------
SECTION 2.4 REPRESENTATIONS AND WARRANTIES UNDER THE POOLING AND
----------------------------------------------------
SERVICING AGREEMENT................................................. 3
-------------------
SECTION 2.5 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY;
--------------------------------------------------
ADMINISTRATIVE RECEIVABLES.......................................... 4
--------------------------
SECTION 2.6 COVENANTS.................................................................... 5
---------
SECTION 2.7 ADDITION OF ACCOUNTS......................................................... 6
--------------------
SECTION 2.8 OPTIONAL REMOVAL OF ACCOUNTS................................................. 7
----------------------------
SECTION 2.9 REMOVAL OF INELIGIBLE ACCOUNTS............................................... 8
------------------------------
ARTICLE III
THE SELLER
SECTION 3.1 REPRESENTATIONS OF THE SELLER....................................... 9
-----------------------------
SECTION 3.2 LIABILITY OF SELLER.......................................................... 11
-------------------
SECTION 3.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
------------------------------------------------------------
OF, SELLER; AMENDMENT OF CERTIFICATE OF INCORPORATION............... 11
-----------------------------------------------------
SECTION 3.4 LIMITATION ON LIABILITY OF SELLER AND OTHERS................................. 13
--------------------------------------------
SECTION 3.5 SELLER MAY OWN NOTES OR CERTIFICATES................................ 13
------------------------------------
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE FUNDS;
STATEMENTS TO SECURITYHOLDERS
SECTION 4.1 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF SERVICING
------------------------------------------------------
DEFAULT............................................................. 13
-------
SECTION 4.2 ANNUAL INDEPENDENT ACCOUNTANTS' REPORT....................................... 14
--------------------------------------
SECTION 4.3 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
ACCOUNTS AND RECEIVABLES..................................................... 14
------------------------
SECTION 4.4 ENFORCEMENT OF RECEIVABLES.......................................... 15
--------------------------
SECTION 4.5 ALLOCATIONS; DISTRIBUTIONS.......................................... 15
--------------------------
SECTION 4.6 SWIFT V RESERVE FUNDS AND THE RESERVE FUND.......................... 24
------------------------------------------
SECTION 4.7 NET DEPOSITS................................................................. 26
------------
SECTION 4.8 STATEMENTS TO SECURITYHOLDERS................................................ 26
-----------------------------
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<PAGE>
SECTION 4.9 NEW ISSUANCES; CHANGES IN SPECIFIED MAXIMUM REVOLVER B
-------------------------------------------------------
BALANCE............................................................. 28
-------
ARTICLE V
SERVICING FEE
SECTION 5.1 SERVICING COMPENSATION....................................................... 29
----------------------
ARTICLE VI
SECURITYHOLDER ACCOUNTS; COLLECTIONS,
DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 6.1 ESTABLISHMENT OF ACCOUNTS........................................... 30
-------------------------
SECTION 6.2 COLLECTIONS.................................................................. 34
-----------
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.1 LIABILITY OF SERVICER; INDEMNITIES........................................... 35
----------------------------------
SECTION 7.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
------------------------------------------------------------
OF, THE SERVICER............................................................. 37
----------------
SECTION 7.3 LIMITATION ON LIABILITY OF SERVICER AND OTHERS...................... 37
----------------------------------------------
SECTION 7.4 DELEGATION OF DUTIES......................................................... 38
--------------------
SECTION 7.5 SERVICER NOT TO RESIGN....................................................... 38
----------------------
ARTICLE VIII
DEFAULT
SECTION 8.1 SERVICING DEFAULTS........................................................... 38
------------------
SECTION 8.2 CONSEQUENCES OF A SERVICING DEFAULT.......................................... 39
-----------------------------------
SECTION 8.3 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR........................... 40
---------------------------------------- ---------
SECTION 8.4 NOTIFICATION TO SECURITYHOLDERS.............................................. 41
-------------------------------
SECTION 8.5 WAIVER OF PAST DEFAULTS...................................................... 41
-----------------------
SECTION 8.6 REPAYMENT OF ADVANCES........................................................ 42
---------------------
ARTICLE IX
EARLY AMORTIZATION EVENTS; TERMINATION
SECTION 9.1 EARLY AMORTIZATION EVENTS.................................................... 42
-------------------------
SECTION 9.2 INSOLVENCY EVENTS............................................................ 44
-----------------
SECTION 9.3 OPTIONAL PURCHASE BY THE SERVICER............................................ 44
---------------------------------
SECTION 9.4 TERMINATION.................................................................. 45
-----------
SECTION 9.5 RECOMMENCEMENT OF REVOLVING PERIOD........................................... 45
----------------------------------
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 AMENDMENT.................................................................... 47
---------
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<PAGE>
SECTION 10.2 PROTECTION OF TITLE TO THE OWNER TRUST ESTATE................................ 49
---------------------------------------------
SECTION 10.3 NOTICES .................................................................... 51
-------
SECTION 10.4 GOVERNING LAW................................................................ 51
-------------
SECTION 10.5 SEVERABILITY OF PROVISIONS................................................... 51
--------------------------
SECTION 10.6 ASSIGNMENT................................................................... 51
----------
SECTION 10.7 THIRD-PARTY BENEFICIARIES.................................................... 51
-------------------------
SECTION 10.8 COUNTERPARTS................................................................. 52
------------
SECTION 10.9 HEADINGS .................................................................... 52
--------
SECTION 10.10 ASSIGNMENT TO INDENTURE TRUSTEE..................................... 52
-------------------------------
SECTION 10.11 NO PETITION COVENANTS............................................... 52
---------------------
SECTION 10.12 FURTHER ASSURANCES.................................................. 52
------------------
SECTION 10.13 NO WAIVER; CUMULATIVE REMEDIES...................................... 52
------------------------------
SECTION 10.14 MERGER AND INTEGRATION.............................................. 52
----------------------
SECTION 10.15 LIMITATION OF LIABILITY OF INDENTURE TRUSTEE AND
------------------------------------------------
OWNER TRUSTEE....................................................... 53
-------------
EXHIBIT A Form of Assignment for the Initial Closing Date
EXHIBIT B Locations of Schedule of Accounts
EXHIBIT C Form of Assignment for Each Addition Date
EXHIBIT D Form of Opinion of Counsel With Respect to Addition of Accounts
APPENDIX A Definitions and Rules of Construction
APPENDIX B Notices and Addresses
</TABLE>
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<PAGE>
THIS TRUST SALE AND SERVICING AGREEMENT is made as of
________, ____, by and among GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware
corporation ("GMAC") and in its capacity as Servicer under the Pooling and
Servicing Agreement and hereunder (the "SERVICER"), WHOLESALE AUTO RECEIVABLES
CORPORATION, a Delaware corporation (the "SELLER"), and SUPERIOR WHOLESALE
INVENTORY FINANCING TRUST [ ], a Delaware business trust (the "ISSUER" or the
"TRUST").
WHEREAS, on the Initial Closing Date, GMAC has sold the
Eligible Receivables in the Accounts in the Pool of Accounts to the Seller and,
as Servicer, has agreed to service all Receivables in such Accounts pursuant to
the Pooling and Servicing Agreement;
WHEREAS, the Seller desires to sell the Eligible Receivables
in the Accounts in the Pool of Accounts to the Issuer on the Initial Closing
Date in exchange for the Initial Securities pursuant to the terms of this
Agreement and to sell to the Issuer any Eligible Receivables thereafter arising
in such Accounts, and the Issuer desires to purchase all such Eligible
Receivables;
WHEREAS, 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 Eligible Receivables in the Accounts in the Pool of
Accounts and all related Collateral Security are to be sold by the Seller to the
Issuer on the Initial Closing Date and thereafter and all Receivables in such
Accounts serviced by the Servicer.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 DEFINITIONS. Certain capitalized terms used in the
above recitals and in this Agreement are defined in and shall have the
respective meanings assigned to them in PART I of 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, the exhibits hereto and the capitalized terms used herein which
are defined in Appendix A, and all references herein to Articles, Sections and
subsections are to Articles, Sections or subsections of this Agreement unless
otherwise specified. The rules of construction set forth in Part II of Appendix
A shall be applicable to this Agreement.
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<PAGE>
ARTICLE II
CONVEYANCE OF ELIGIBLE RECEIVABLES;
ISSUANCE OF INITIAL SECURITIES
SECTION 2.1 CONVEYANCE OF ELIGIBLE RECEIVABLES.
(a) In consideration of the Issuer's delivery on the Initial
Closing Date of the [ ] Term Notes, the [ ] Revolving Note and the [ ]
Certificates with an initial Certificate Balance of [$ ] 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 does hereby sell, transfer, assign
and otherwise convey to the Issuer, without recourse (except as expressly
provided herein), pursuant to an assignment in the form of EXHIBIT A hereto, on
the Initial Closing Date, (i) all of its right, title and interest in, to and
under all of the Eligible Receivables existing in the Accounts listed on the
Schedule of Accounts (which is on file at the locations set forth in EXHIBIT B
hereto) as of the close of business on the Initial Cut-Off Date and all monies
due or to become due thereon after the Initial Cut-Off Date, all Collateral
Security with respect thereto and all amounts received with respect thereto
(including all Interest Collections received in the calendar month in which the
Initial Cut-Off Date occurs, whether or not received prior to the Initial
Cut-Off Date), (ii) all of its right, title and interest in, to and under
ARTICLE IV and SECTIONS 3.04(C) AND 6.03 of the Pooling and Servicing Agreement
with respect to such Receivables, including the right of the Seller to cause
GMAC or the Servicer to repurchase Receivables under certain circumstances,
(iii) all of its right, title and interest in, to and under the Custodian
Agreement with respect to such Receivables and (iv) all of its right, title and
interest in all proceeds of the foregoing (including "proceeds" as defined in
Section 9-306 of the UCC and Recoveries).
(b) As of each Receivables Purchase Date, the Seller does
hereby sell, transfer, assign and otherwise convey to the Trust, without
recourse (except as expressly provided herein), (i) all of its right, title and
interest in, to and under all Eligible Receivables created or deemed created in
the Accounts in the Pool of Accounts on such date and all monies due or to
become due thereon after such Receivables Purchase Date, all Collateral Security
with respect thereto and all amounts received with respect thereto, (ii) all of
its right, title and interest in, to and under ARTICLE IV and SECTIONS 3.04(C)
AND 6.03 of the Pooling and Servicing Agreement, including the right of the
Seller to cause GMAC or the Servicer to repurchase Receivables under certain
circumstances, (iii) all of its right, title and interest in, to and under the
Custodian Agreement with respect to such Receivables and (iv) all of its right,
title and interest in all proceeds of the foregoing (including "proceeds" as
defined in Section 9-306 of the UCC and Recoveries). The Trust shall pay for the
property purchased on any Receivables Purchase Date as set forth in SECTION
4.5(D)(I), with the purchase price equal to the principal balance of the
Receivables so purchased on such date.
(c) It is the intention of the Seller and the Issuer that the
transfers and assignments contemplated by this Agreement shall constitute sales
of the property described in SECTIONS 2.1(A) AND (B) from the Seller to the
Issuer and that 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 Insolvency Law. Notwithstanding the
foregoing, in the event a court of competent jurisdiction determines that such
transfers and assignments did not constitute such sales or that such
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<PAGE>
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 the 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 sales, transfers, assignments and conveyances and any subsequent
sales, transfers, assignments and conveyances do not constitute, and are not
intended to result in, the creation or an assumption by the Issuer of any
obligation of the Seller or any other Person in connection with the Receivables
described above or under any agreement or instrument relating thereto, including
any obligation to any Dealers.
(d) Within two Business Days after the Initial Closing Date
(or such later date as may be permitted pursuant to SECTION 6.2), GMAC, as
directed by the Seller in SECTION 3.06 of the Pooling and Servicing Agreement,
shall cause to be deposited into the Collection Account the collections with
respect to the Receivables described in SECTION 3.06 of the Pooling and
Servicing Agreement.
SECTION 2.2 CUSTODY OF DOCUMENTATION. In connection with the
sale, transfer, assignment and conveyance of the Receivables in the Accounts in
the Pool of Accounts and related Collateral Security to the Issuer hereunder,
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 documents and instruments (as more fully described
in the Custodian Agreement) associated with the Receivables related to the
Accounts in the Pool of Accounts.
SECTION 2.3 ACCEPTANCE BY THE ISSUER; OTHER ACKNOWLEDGMENTS.
(a) The Issuer hereby acknowledges its acceptance of all
right, title and interest previously held by the Seller to the property, now
existing and hereafter created, conveyed by the Seller pursuant to SECTION 2.1,
and declares that it shall hold such consideration upon the trust set forth in
the Trust Agreement for the benefit of the Securityholders, subject to the terms
and conditions of the Indenture, the Trust Agreement and this Agreement. The
Issuer hereby agrees and accepts the appointment and authorization of GMAC as
Servicer hereunder and under the Pooling and Servicing Agreement. The Issuer
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, the Seller delivered to the Owner Trustee the
Schedule of Accounts. The parties agree that the rights, duties and obligations
of GMAC as Servicer under the Pooling and Servicing Agreement are subject to the
provisions hereof, including SECTIONS 7.2, 7.4, 7.5 AND 10.2 and ARTICLE VIII.
The Trust and the Indenture Trustee hereby confirm the authorization and
empowerment of the Servicer under SECTION 3.02 of the Pooling and Servicing
Agreement.
(b) The Issuer acknowledges and agrees to the provisions of
SECTION 6.03 of the Pooling and Servicing Agreement relating to Common
Collateral and accepts the interests and rights in Collateral Security sold and
assigned to it hereunder subject to the terms and conditions set forth in such
SECTION 6.03.
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<PAGE>
SECTION 2.4 REPRESENTATIONS AND WARRANTIES UNDER THE POOLING
AND SERVICING AGREEMENT. The Seller hereby represents and warrants to the Issuer
that the Seller has taken no action which would cause the representations and
warranties of GMAC in SECTION 4.01(A) of the Pooling and Servicing Agreement to
be false in any material respect. The foregoing representation and warranty
speaks as of the Initial Cut-Off Date (as to SECTIONS 4.01(A)(I) AND (II)), as
of the related Additional Cut-Off Date with respect to each Additional Account
(as to SECTION 4.01(A)(III)) and as of the related Receivables Purchase Date
with respect to Receivables purchased and sold after the Initial Closing Date
(as to SECTION 4.01(A)(IV)), and shall survive the sales, transfers and
assignments under SECTION 2.1 to the Issuer and the pledge of the Issuer's
assets to the Indenture Trustee pursuant to the Indenture. 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 hereunder and delivering the Securities.
The Servicer acknowledges that the Issuer is relying on the representations,
warranties and covenants of the Servicer in SECTION 3.04 of the Pooling and
Servicing Agreement in acquiring and holding Receivables and the related
Collateral Security hereunder and in issuing the Securities.
SECTION 2.5 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY;
ADMINISTRATIVE RECEIVABLES.
(a) Upon discovery by the Seller, the Servicer, the Owner
Trustee or the Indenture Trustee (i) of a breach of any of the representations
and warranties in SECTION 4.01(A) of the Pooling and Servicing Agreement or in
SECTION 2.4 or SECTION 3.1 of this Agreement that materially and adversely
affects the interests of the Trust in any Receivable or (ii) that the payment of
all or any portion of the principal amount of any Receivable held by the Trust
is deferred pursuant to DPP or any other instalment sales program or similar
arrangement, the party discovering such breach shall give prompt written notice
thereof to the others. No later than the second Business Day following discovery
or receipt of notice of breach or deferral by the Seller and the Servicer,
unless and to the extent, in the case of breach, 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 2.4 or SECTION 3.1(B), the Seller
shall repurchase such Receivable, or in the event of a breach of a
representation and warranty under SECTION 4.01(A) of the Pooling and Servicing
Agreement or a deferral, the Seller and the Servicer shall use reasonable
efforts to enforce the obligation of GMAC under SECTION 4.01(A) of the Pooling
and Servicing Agreement to repurchase such Receivable from the Issuer on such
date; PROVIDED, HOWEVER, that with respect to any breach of a representation or
warranty or a deferral that affects less than the entire principal amount of any
Receivable, although the Warranty Payment shall be paid promptly as described
below, no repurchase and assignment shall be required until the remaining
principal amount of such Receivable is collected in full or written off as
uncollectible. The purchase price to be paid by the Seller or GMAC shall be an
amount equal to the principal amount of such Receivable (in the case of a breach
or a deferral affecting less than the entire principal amount of a Receivable,
to the extent of the breach or deferral) plus all accrued and unpaid interest
thereon through the date of purchase (the "WARRANTY PAYMENT") to the extent of
such breach of a representation or warranty or deferral (a "WARRANTY
RECEIVABLE"), and shall be deposited into the Collection Account on such date of
purchase. Without limiting the generality of the foregoing, a Receivable shall
not be an Eligible Receivable, and thus shall be a Warranty Receivable and
subject to repurchase, if and to the extent that (A) the Servicer adjusts
downward the principal amount of
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<PAGE>
such Receivable because of a rebate, refund, credit adjustment or billing error
to the related Dealer or (B) such Receivable was credited in respect of a
Vehicle which was refunded or returned by the related Dealer. It is understood
and agreed that the obligation of GMAC or the Seller, as applicable, to
repurchase any Receivable as to which a breach of a representation or warranty
made in SECTION 2.4 or SECTION 3.1 hereof or SECTION 4.01(A) of the Pooling and
Servicing Agreement has occurred and is continuing or as to which any such
deferral occurs, and the obligation of the Seller and the Servicer to enforce
GMAC's obligation to repurchase such Receivable pursuant to the Pooling and
Servicing Agreement shall constitute the sole remedy against the Seller, the
Servicer or GMAC for such breach or deferral available to the Issuer, the
Securityholders, the Owner Trustee or the Indenture Trustee.
(b) The Servicer also acknowledges its obligations to
repurchase from the Issuer Administrative Receivables pursuant to SECTION
3.04(C) of the Pooling and Servicing Agreement. Upon discovery by the Indenture
Trustee or the Owner Trustee of a breach of any of the covenants of the Servicer
in SECTIONS 3.04(A)(VIII), (IX) OR (X) of the Pooling and Servicing Agreement,
such party shall give prompt written notice to the other, the Servicer and the
Seller.
(c) Upon each payment of the Administrative Purchase Payment
or the Warranty Payment with respect to a Receivable, except as provided in
SECTION 2.5(A), the Trust shall automatically and without further action be
deemed to have sold, transferred, assigned and otherwise conveyed to the Seller
or Servicer, as appropriate, without recourse, representation or warranty, as of
the date of such payment, all right, title and interest of the Trust in, to and
under such Receivable, all monies due or to become due with respect thereto on
and after such payment date and all proceeds thereof and, if such repurchase is
made in connection with the repurchase hereunder of all other Receivables in the
related Account held by the Trust, the related Collateral Security. The Owner
Trustee and the Indenture Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by the Seller or the Servicer, as the case may be, to evidence such
conveyance.
SECTION 2.6 COVENANTS. The Seller hereby covenants that:
(a) NEGATIVE PLEDGE. Except for the conveyances hereunder and
the pledge of the Trust Estate to the Indenture Trustee pursuant to the
Indenture, and as provided in SECTION 6.03 of the Pooling and Servicing
Agreement, the Seller shall not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist, any Lien on any
Eligible Receivable in any Account in the Pool of Accounts (and any related
Vehicle Collateral Security), whether now existing or hereafter created, or any
interest therein, or the Seller's rights, remedies, powers or privileges under
the Pooling and Servicing Agreement conveyed to the Trust hereunder and the
Seller shall defend the right, title and interest of the Trust and any
Interested Party in, to and under such property, whether now existing or
hereafter created against all claims of third parties claiming through or under
the Seller. The Seller shall notify the Issuer promptly after becoming aware of
any Lien on such property other than the conveyances contemplated hereunder.
(b) DELIVERY OF COLLECTIONS. If the Seller or GMAC receives
payments by or on behalf of a Dealer in respect of Receivables in any Account in
the Pool of Accounts or any Collateral
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Security (except as contemplated in SECTION 6.03 of the Pooling and Servicing
Agreement with respect to any property constituting Common Collateral that is
not Vehicle Collateral Security in connection with Other Indebtedness), the
Seller and GMAC shall deliver such payments to the Servicer as soon as
practicable after receipt thereof, but in no event later than two Business Days
after the receipt thereof.
(c) POOLING AND SERVICING AGREEMENT MATTERS. If GMAC breaches
any of its covenants in SECTIONS 3.01, 3.02, 3.03, 3.05, 5.01, 6.01(A), 7.01 OR
7.03 of the Pooling and Servicing Agreement and such breach has a material
adverse effect on the interests of the Securityholders, the Seller shall enforce
its rights under the Pooling and Servicing Agreement arising from such breach.
SECTION 2.7 ADDITION OF ACCOUNTS.
(a) VOLUNTARY ADDITION. The Seller may from time to time, in
its sole discretion, subject to the conditions specified in SECTION 2.7(B)
below, designate one or more Accounts as Additional Accounts to be included in
the Pool of Accounts by giving (or causing the Servicer to give on its behalf) a
written notice to the Indenture Trustee, the Owner Trustee and the Rating
Agencies specifying the Additional Cut-Off Date and the Addition Date (the
"ADDITION NOTICE"). An Addition Notice shall be provided on or before the fifth
Business Day but not more than the thirtieth day prior to the related Addition
Date. If Additional Accounts are to be included in the Pool of Accounts,
effective as of the related Addition Date, the Seller shall sell and assign to
the Trust, and the Trust shall purchase from the Seller, all of the Seller's
right, title and interest in, to and under the Eligible Receivables in the
Additional Accounts and the related Collateral Security, as more fully described
in the assignment referred to in SUBSECTION (B)(II) below.
(b) CONDITIONS. The Seller may convey to the Trust all
Eligible Receivables and the related Collateral Security in any Additional
Accounts in accordance with SECTION 2.7(A) only upon satisfaction of each of the
following conditions on or prior to the related Addition Date:
(i) the Seller shall represent and warrant that as of
the related Additional Cut-Off Date each such Additional Account is an
Eligible Account and that each Receivable arising thereunder identified
as an Eligible Receivable and conveyed to the Trust on such Addition
Date is an Eligible Receivable;
(ii) the Seller shall have delivered to the Owner
Trustee a duly executed written assignment in substantially the form of
EXHIBIT C hereto and the list required to be delivered pursuant to
SECTION 10.2(E);
(iii) the Seller shall have agreed to deposit in the
Collection Account all Collections with respect to Eligible Receivables
arising in such Additional Accounts since the Additional Cut-Off Date
within two Business Days after such Addition Date (or such later date
as may be permitted pursuant to SECTION 6.2(B);
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(iv) as of the Addition Date, neither GMAC nor the
Seller is insolvent nor shall any of them have been made insolvent by
such transfer nor is either of them aware of any pending insolvency;
(v) the Rating Agency Condition shall have been
satisfied with respect to such addition for each series or class of
Securities then outstanding;
(vi) the Seller shall represent and warrant that the
designation of such Additional Accounts, the inclusion of such
Additional Accounts in the Pool of Accounts and the purchase of the
related Receivables shall not, in the reasonable belief of the Seller,
result in the occurrence of an Early Amortization Event;
(vii) the Schedule of Accounts shall have been
amended to reflect such Additional Accounts and the Schedule of
Accounts as so amended shall be true and correct as of the Addition
Date;
(viii) the Seller shall have delivered to the
Indenture Trustee and the Owner Trustee a certificate of an Authorized
Officer of the Seller confirming the items set forth in clauses (i)
through (vii) above; and
(ix) the Seller shall have delivered to the Owner
Trustee an Opinion of Counsel substantially in the form of EXHIBIT D
hereto.
SECTION 2.8 OPTIONAL REMOVAL OF ACCOUNTS.
----------------------------
(a) The Seller shall have the right from time to time as
described in this SECTION 2.8 to require the removal of Accounts from the Pool
of Accounts. To so remove Accounts, the Seller (or the Servicer on its behalf)
shall take the following actions and make the following determinations:
(i) not less than five Business Days but not more
than 30 days prior to the Removal Commencement Date, furnish to the
Indenture Trustee, the Owner Trustee and the Rating Agencies a written
notice (the "REMOVAL NOTICE") specifying the date (the "REMOVAL
COMMENCEMENT DATE") on which removal of one or more Accounts will
commence (the "SELECTED ACCOUNTS"); and
(ii) determine on the Removal Commencement Date with
respect to such Selected Accounts the aggregate principal balance of
Eligible Receivables in respect of each such Selected Account (the
"REMOVAL BALANCE") and amend the Schedule of Accounts by delivering to
the Owner Trustee a true and complete list of the Selected Accounts,
specifying for each Selected Account as of the Removal Commencement
Date its account number and the Removal Balance.
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(b) The removal of any of such Accounts shall be subject to
the following conditions:
(i) the Seller shall represent and warrant that such
removal shall not, in the reasonable belief of the Seller, result in
the occurrence of an Early Amortization Event;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such removal for each series or class of
outstanding Securities; and
(iii) on or before the related Removal Commencement
Date, the Seller shall have delivered to the Owner Trustee a
certificate of an Authorized Officer confirming the items set forth in
clauses (i) and (ii) above.
(c) Subject to the satisfaction of the conditions set forth in
SECTION 2.8(B), from and after the Removal Commencement Date with respect to a
Selected Account, (i) the Seller shall not transfer Receivables with respect to
such Selected Account to the Trust, and (ii) until the Removal Balance has been
reduced to zero all Principal Collections with respect to such Selected Account
shall be allocated to the oldest outstanding principal balance of Receivables
arising under such Selected Accounts and amounts so allocated to Receivables
owned by the Trust shall constitute Trust Principal Collections and shall reduce
the Removal Balance. The Removal Balance shall also be reduced to the extent
Receivables in the Selected Accounts held by the Trust on the Removal
Commencement Date become Defaulted Receivables.
(d) After the Removal Balance with respect to any such
Selected Account is reduced to zero, Collections thereon shall cease to be
allocated in accordance with SECTION 2.8(C) and such Selected Account shall be
deemed removed from the Pool of Accounts for all purposes (a "REMOVED ACCOUNT")
and the Servicer shall amend the Schedule of Accounts accordingly. At any time
after the date (the "REMOVAL DATE") on which the Removal Balance is reduced to
zero with respect to a Removed Account, the Owner Trustee shall assign to the
Seller, without recourse, representation or warranty, effective as of the
Removal Date all of the Trust's right, title and interest in, to and under the
Receivables arising in such Account and related Collateral Security.
SECTION 2.9 REMOVAL OF INELIGIBLE ACCOUNTS.
(a) On or before the fifth Business Day after the date on
which an Account becomes an Ineligible Account (which Business Day shall be
deemed to be the Removal Commencement Date with respect to such Account) such
Account shall be deemed a Selected Account. Within five Business Days after the
Removal Commencement Date with respect to any Account that became a Selected
Account pursuant to this SECTION 2.9, the Seller shall furnish a Removal Notice
to the Owner Trustee stating that the Removal Commencement Date for such
Ineligible Account has occurred and specifying for each such Selected Account as
of the Removal Commencement Date its account number and the Removal Balance. The
Schedule of Accounts shall be amended to reflect such designation as of the
Removal Commencement Date.
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(b) From and after the Removal Commencement Date with respect
to a Selected Account subject to this SECTION 2.9, the Seller shall not transfer
Receivables with respect to such Selected Account to the Trust and, until the
Removal Balance has been reduced to zero, all Principal Collections with respect
to such Selected Account shall be allocated to the oldest outstanding principal
balance of Receivables arising under such Selected Account and amounts so
allocated to Receivables owned by the Trust shall constitute Trust Principal
Collections. After the Removal Balance with respect to any such Selected Account
has been reduced to zero, Collections thereon shall cease to be allocated in
accordance with the preceding sentence and such Selected Account shall be a
Removed Account and the Servicer shall amend the Schedule of Accounts
accordingly. At any time after the Removal Date with respect to such Removed
Account, the Owner Trustee shall assign to the Seller, without recourse,
representation or warranty, effective as of the Removal Date, all of the Trust's
right, title and interest in, to and under the Receivables arising in such
Account and related Collateral Security.
ARTICLE III
THE SELLER
SECTION 3.1 REPRESENTATIONS OF THE SELLER. The Seller hereby
makes, and any successor to the Seller under this Agreement or under the Pooling
and Servicing Agreement shall make, as of each Closing Date (and as of the date
of such succession) the following representations and warranties on which the
Issuer relies in acquiring and holding the Receivables hereunder and the related
Collateral Security and issuing the Securities. The following representations
and warranties shall survive the sale, transfer and assignment of the Eligible
Receivables in the Accounts in the Pool of Accounts to the Issuer and the pledge
thereof to the Indenture Trustee.
(a) REPRESENTATIONS AND WARRANTIES AS TO THE SELLER.
(i) ORGANIZATION AND GOOD STANDING. The Seller has
been duly incorporated 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 Eligible Receivables in the
Accounts in the Pool of Accounts and the Collateral Security related
thereto.
(ii) DUE QUALIFICATION. The Seller is duly qualified
to do business and, where necessary, is in good standing as a foreign
corporation (or is exempt from such requirement) 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, except where the failure to so qualify or obtain
licenses or approvals would not have a material adverse effect on its
ability to perform its obligations under this Agreement.
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(iii) POWER AND AUTHORITY. The Seller has the power
and authority to execute and deliver this Agreement, to carry out its
terms and to consummate the transactions contemplated herein, and the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein have been duly
authorized by the Seller by all necessary corporate action on the part
of the Seller.
(iv) VALID SALE; BINDING OBLIGATIONS. With respect to
the Initial Accounts and the related assignment to be delivered on the
Initial Closing Date, this Agreement constitutes or, in the case of
Additional Accounts, the related assignment as described in SECTION
2.7(B), when duly executed and delivered, shall constitute a valid
sale, transfer and assignment to the Issuer of all right, title and
interest of the Seller in, to and under the related Eligible
Receivables and the related Collateral Security, whether then existing
or thereafter created, and the proceeds thereof, 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 against the Seller in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium 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, and,
upon the filing of the financing statements described in SECTION
10.2(A) (and, in the case of Eligible Receivables hereafter created in
the Accounts in the Pool of Accounts and the proceeds thereof, upon the
creation thereof) the Trust shall have a first priority perfected
ownership interest in such property, except for Liens permitted under
SECTION 2.6(A). Except as otherwise provided in this Agreement or the
Pooling and Servicing Agreement, neither the Seller nor any Person
claiming through or under the Seller has any claim to or interest in
the Trust Estate.
(v) NO VIOLATION. The execution of this Agreement and
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, mortgage, deed of trust 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,
mortgage, deed of trust 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 Governmental Authority having jurisdiction over the Seller or any
of its properties, except where any such conflict or violation would
not have a material adverse effect on its ability to perform its
obligations with respect to the Issuer or any Interested Party under
this Agreement or the Pooling and Servicing Agreement.
(vi) NO PROCEEDINGS. To the Seller's knowledge, there
are no Proceedings or investigations pending, or threatened, against
the Seller before any Governmental Authority having jurisdiction over
the Seller or its properties (A) asserting the invalidity of this
Agreement, the Securities, the Indenture, the Trust Agreement, the
Custodian Agreement or the Administration Agreement, (B) seeking to
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prevent the issuance of the Securities, the execution of this
Agreement or the consummation of any of the transactions contemplated
by this Agreement, the Indenture, the Trust Agreement, the Custodian
Agreement or the Administration 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 Notes, the Certificates, the
Indenture, the Trust Agreement, the Custodian Agreement or the
Administration Agreement or (D) seeking to adversely affect the
federal income tax attributes of the Notes or the Certificates.
(b) REPRESENTATIONS AND WARRANTIES AS TO THE ELIGIBLE
RECEIVABLES.
(i) GOOD TITLE. No Eligible Receivables included in
the Accounts in the Pool of Accounts have been sold, transferred,
assigned or pledged by the Seller to any Person other than the Issuer;
immediately prior to the conveyance of the Eligible Receivables in the
Accounts included in the Pool of Accounts pursuant to this Agreement
the Seller had good and marketable title to such Receivables, 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 Eligible Receivables in the Accounts
included in the Pool of Accounts, free of any Lien.
(ii) ALL FILINGS MADE. All filings (including,
without limitation, UCC filings) necessary in any jurisdiction to give
the Issuer a first priority perfected ownership interest in the
Eligible Receivables in the Accounts in the Pool of Accounts shall have
been made.
(c) REASSIGNMENT OF ALL RECEIVABLES.
(i) If any representation or warranty under SECTION
3.1(A) OR (B) is not true and correct as of the date specified therein
and such breach has a material adverse effect on the interests of the
Securityholders, then any of the Indenture Trustee, the Owner Trustee
and the holders of outstanding Securities evidencing not less than a
majority of the Outstanding Amount and a majority of the Voting
Interests of all outstanding Certificates, by written notice to the
Seller with a copy to the Servicer, the Indenture Trustee and the Owner
Trustee, may direct the Seller to accept the reassignment of all
Receivables held by the Trust and the related Collateral Security
pursuant to this SECTION 3.1(C) within 60 days of such notice, or
within such longer period specified in such notice and pay the
Reassignment Amount on any Distribution Date within such period;
PROVIDED, HOWEVER, that no such reassignment shall be made if, prior to
the time such reassignment is to occur, the breached representation or
warranty shall then be true and correct in all material respects and
any material adverse effect caused thereby shall have been cured.
(ii) Upon the reassignment of all Receivables held by
the Trust and the related Collateral Security, subject to the payment
to the Trust of the Reassignment Amount, the Trust shall automatically
and without further action be deemed to sell, transfer, assign and
otherwise convey to the Seller, without recourse, representation or
warranty, all the right,
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title and interest of the Trust in and to such Receivables and such
related Collateral Security. Each of the Indenture Trustee and the
Owner Trustee shall execute such documents and instruments of transfer
or assignment and take such other actions as they shall reasonably be
requested by the Seller to effect the conveyance pursuant to this
SECTION 3.1(C).
(iii) It is understood and agreed that the obligation
of the Seller to repurchase the Receivables (and the related Collateral
Security) in the event of a breach of a representation or warranty made
in SECTION 3.1(A) OR (B) has occurred and is continuing and the
obligation of the Seller to pay the Reassignment Amount therefor shall,
if such obligations are fulfilled, constitute the sole remedy against
the Seller for such breach available to the Issuer, the
Securityholders, the Owner Trustee or the Indenture Trustee.
SECTION 3.2 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 3.3 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 interests 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, anything in this Agreement to the contrary
notwithstanding. The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this SECTION 3.3 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 as contemplated by the Basic
Documents or pursuant to the Intercompany Advance Agreement (without giving
effect to any amendment to the Intercompany Advance Agreement after the date
hereof, unless the Rating Agency Condition for each series or class of
Securities then outstanding was satisfied in connection therewith) if such
action would result in a downgrading of the then current rating of any
outstanding series or class of Securities by a Rating Agency for such series or
class.
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SECTION 3.4 LIMITATION ON LIABILITY OF SELLER AND OTHERS.
--------------------------------------------
(a) 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
Securityholders 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 for errors in judgment; PROVIDED, HOWEVER,
that this provision shall not protect the Seller or any such Person against any
liability that would otherwise be imposed by reason of 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 arising under the Basic Documents.
(b) The Seller and any director, officer or employee of the
Seller shall be reimbursed by 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 under such agreement or the Trust Agreement or by reason of
reckless disregard of its obligations and duties under such agreements. 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 and related Collateral Security under this Agreement and that in its
opinion may involve it in any expense or liability.
SECTION 3.5 SELLER MAY OWN NOTES OR CERTIFICATES. Each of the
Seller and any Affiliate of the Seller may in its individual or any other
capacity become the owner or pledgee of Notes or Certificates with the same
rights (except as otherwise specifically provided in the Basic Documents) as it
would have if it were not the Seller or an Affiliate thereof. Except as
otherwise specifically provided in the Basic Documents, 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 FUNDS;
STATEMENTS TO SECURITYHOLDERS
SECTION 4.1 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF
SERVICING DEFAULT.
(a) The Servicer shall deliver to the Indenture Trustee and
the Owner Trustee, on or before ______ 15 of each year, beginning ______ 15,
20__, an officer's certificate signed by the President or any Vice President of
the Servicer, dated as of ______ 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 Initial Closing Date to the date of
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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 Securityholder by a
request in writing to the Issuer addressed to the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, as applicable.
(b) The Servicer shall deliver to the Indenture Trustee, the
Owner Trustee and 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 Servicing Default under SECTION 8.1.
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 Servicing Default under CLAUSE (B) of
SECTION 8.1.
SECTION 4.2 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
Owner Trustee, the Indenture Trustee and the Rating Agencies on or before ______
15 of each year, beginning ______ 15, 20__ with respect to the twelve months
ended on the immediately preceding ______ 30 (or, with respect to the first such
report, such period as shall have elapsed from the Initial 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 wholesale receivables (including financing arrangements with
automobile dealers to finance their automobile and light-duty truck inventory)
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
wholesale receivables (including financing arrangements with automobile dealers
to finance their automobile and light-duty truck inventory) 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
Securityholder by a request in writing to the Issuer addressed to the Corporate
Trust Office of the Indenture Trustee or the Owner Trustee.
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SECTION 4.3 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING ACCOUNTS AND RECEIVABLES. The Servicer shall provide to the Indenture
Trustee and the Owner Trustee reasonable access to the documentation regarding
the Accounts in the Pool of Accounts and the Receivables arising thereunder. The
Servicer shall provide such access to any Securityholder only in such cases
where a Securityholder 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 4.3
shall derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding any Dealer, and the failure of
the Servicer to provide access as provided in this SECTION 4.3 as a result of
such obligation shall not constitute a breach of this SECTION 4.3.
SECTION 4.4 ENFORCEMENT OF RECEIVABLES. If in any Proceeding
it is held that the Servicer may not enforce a Receivable that has been
transferred to the Trust on the ground that it is not a real party in interest
or a holder entitled to enforce such 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 such Receivable, including bringing
suit in the name of such Person or the names of the Securityholders. The
Indenture Trustee and the Owner Trustee agree to the provisions of SECTION 3.02
of the Pooling and Servicing Agreement as such provisions apply to Interested
Parties (as used therein).
SECTION 4.5 ALLOCATIONS; DISTRIBUTIONS.
(a) The Trust, as the holder of the Receivables transferred
hereunder, shall be entitled to Principal Collections and Interest Collections
to the extent of Trust Principal Collections and Trust Interest Collections and
GMAC, as the holder of the Retained Property, shall be entitled to such
Principal Collections and Interest Collections in excess thereof. Any Principal
Collections or Interest Collections on deposit in the Collection Account which
do not represent Trust Principal Collections or Trust Interest Collections shall
be paid to GMAC as holder of the Retained Property.
(b) The Servicer shall calculate, in a manner consistent with
the Indenture (including all Officer's Issuance Certificates) and the Trust
Agreement, (i) no later than each Determination Date, Available Trust Interest,
the Monthly Servicing Fee, Aggregate Noteholders' Interest, Aggregate Revolver
Interest, Aggregate Certificateholders' Interest, any payment due under any
Specified Support Arrangement and, for each of the four (4) Determination Dates
immediately preceding the Determination Date preceding the Targeted Final
Payment Date for the Term Notes, the Required Payment Period Length and, (ii) no
later than each Determination Date for the Wind Down Period, an Early
Amortization Period, the Payment Period for any series of Notes or, if principal
payments are then required to be made (or set aside) under any series of Notes,
the Revolving Period, Available Trust Principal, Aggregate Noteholders'
Principal, Aggregate Revolver Principal, Aggregate Certificateholders'
Principal, the Required Revolver Payment, unreimbursed Trust Charge-Offs, the
Trust Defaulted Amount and the Principal Allocation Percentage for each series
of Notes, and in each case, all other amounts required to determine the amounts
to be deposited in or paid from each of the Collection Account, the Accumulation
Accounts, the Note Distribution Account, the Revolver Distribution Account, the
Certificate Distribution Account, the
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SWIFT [ ] Reserve Funds and any other Designated Account on the next succeeding
Distribution Date and (iii) on each Business Day that any series of Notes
requires Available Trust Principal to be retained or set aside with respect to
such series of Notes, the Principal Allocation Percentage and the maximum amount
required to be set aside for such series of Notes. The Servicer shall calculate
on a daily basis the Daily Trust Balance, the Daily Trust Invested Amount and
all related amounts to the extent necessary to determine the Cash Collateral
Amount for such date as described in SECTION 4.5(D).
(c) (i) With respect to each Distribution Date and the related
Collection Period, the Indenture Trustee (based on the information contained in
the Servicer's Accounting delivered on the related Determination Date pursuant
to SECTION 3.05 of the Pooling and Servicing Agreement) shall apply Available
Trust Interest in the following amounts and in the priority of clauses (1), (2)
and (3) below:
CLAUSE (1) For each Collection Period, the Indenture Trustee will apply
Trust Interest Collections together with the other amounts comprising Available
Trust Interest for the related Distribution Date in the following order of
priority:
(a) an amount equal to the Monthly Servicing Fee for such
Distribution Date will be paid to the Servicer; and
(b) an amount equal to the Trust Interest Allocation for each
series of Notes will be made available to that series and applied in
clause (2) below.
CLAUSE (2) On each Distribution Date, the Indenture Trustee will apply
the amounts from clause (1)(b), together with the funds specified below, to each
series of Notes as follows:
(A) FOR THE [ ] TERM NOTES:
(i) the Indenture Trustee will identify and make
available the amounts identified in the following clauses (A)
through (E) below:
(A) the Trust Interest Allocation for the
[ ] Term Notes;
(B) the net amount, if any, received by the
Trust under the [ ] Term Notes Basis Swap;
(C) all Note Distribution Subaccount
Earnings in respect of the [ ] Term Notes;
(D) all Cash Accumulation Account Earnings;
and
(E) if the [ ] Term Notes are then in a
Cash Accumulation Period and if the amounts specified
in the foregoing subclauses (A) through (D) are less
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than the [ ] Term Notes Monthly Carrying Costs for
such Distribution Date, then the lesser of
(x) such shortfall,
(y) the Cash Accumulation Reserve
Fund Release Amount and
(z) the amount of funds on deposit
in the Cash Accumulation Reserve Fund.
The amounts identified and made available pursuant to
the foregoing clauses (2)(a)(i)(A) through (E) will be the "[
] TERM NOTES MONTHLY AVAILABLE AMOUNT" for such Distribution
Date.
(ii) Next, the Indenture Trustee will aggregate and
apply the [ ] Term Notes Monthly Available Amount as follows:
(A) first, the lesser of
(x) the [ ] Term Notes Monthly
Available Amount and
(y) the net payment, if any, due
from under the Trust under the [ ] Term
Notes Basis Swap
will be paid in accordance with the terms of the
[ ] Term Notes Basis Swap; and
(B) second, the lesser of
(x) the [ ] Term Notes Monthly
Available Amount remaining after the
application in subclause (A) and
(y) an amount equal to the [ ]
Term Notes' Noteholders' Interest for the
related Distribution Date
will be transferred to the Note Distribution Account
for payment of interest on the [ ] Term Notes.
Any shortfall of the [ ] Term Notes Monthly Available
Amount below the [ ] Term Notes Monthly Carrying Costs will be
treated as a Series Shortfall for the [ ] Term Notes. Any
excess of the [ ] Term Notes Monthly Available Amount over the
[ ] Term Notes Monthly Carrying Costs will be treated as
Remaining Interest Amounts.
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(B) FOR THE [ ] REVOLVING NOTE:
(i) the Indenture Trustee will identify and make
available the amounts identified in the following clauses (A)
and (B):
(A) the Trust Interest Allocation for the
[ ] Revolving Note; and
(B) the net amount, if any, received by the
Trust under the [ ] Revolving Note Basis Swap.
The amounts made available pursuant to the foregoing
clauses (2)(b)(i)(A) and (B) will be the "[ ] REVOLVING NOTE
MONTHLY AVAILABLE AMOUNT."
(ii) Next, the Indenture Trustee will aggregate and
apply the [ ] Revolving Note Monthly Available Amount as
follows:
(A) first, the lesser of
(x) the [ ] Revolving Note
Monthly Available Amount and
(y) the net payment, if any, due
from the Trust under the [ ] Basis Swap
will be paid in accordance with the terms of the [ ]
Basis Swap; and
(B) second, the lesser of
(x) the [ ] Revolving Note
Monthly Available Amount remaining after the
application in subclause (A) and
(y) an amount not to exceed the
[ ] Revolving Note's Noteholders'
Interest for the related Distribution Date
will be transferred to the Revolver Distribution
Account for payment of interest on the [ ] Revolving Note.
Any shortfall of the [ ] Revolving Note Monthly Available
Amount below the [ ] Revolving Note Monthly Carrying Costs will be
treated as a Series Shortfall for the [ ] Revolving Note. Any excess of
the [ ] Revolving Note Monthly Available Amount over the [ ] Revolving
Note Monthly Carrying Costs will be treated as Remaining Interest
Amounts.
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<PAGE>
(C) FOR EACH OTHER SERIES OF NOTES, in accordance with the
terms of such series, the Indenture Trustee will apply (x) the Trust
Interest Allocation for such series, (y) any amounts received from or
owing under Specified Support Arrangements in accordance with the terms
of such series of Notes and (z) if such series is a series of Term
Notes, Note Distribution Subaccount Earnings, if any, for such series
to pay the monthly carrying costs for such series of Term Notes.
Shortfalls in such applications will be treated as a Series Shortfall
for such series and excess amounts will be treated as Remaining
Interest Amounts.
CLAUSE (3) On each Distribution Date, the Indenture Trustee will
aggregate the Remaining Interest Amounts from all series of Notes and apply such
amounts in the following order of priority:
(a) with respect to any series of Notes which has a Series
Shortfall, pro rata on the basis of the respective Series Shortfalls,
an amount equal to the Series Shortfall for that series of Notes for
that Distribution Date will be transferred to the Note Distribution
Account in respect of such series or other applicable account for the
payment of amounts owing under the Basis Swap or in respect of interest
on such Notes;
(b) an amount equal to the net payment, if any, due from the
Trust under the [ ] Certificates Basis Swap and under any Basis Swap
with respect to any other class of Certificates will be paid in
accordance with each such Basis Swap;
(c) an amount equal to any Servicer Advances not previously
reimbursed will be paid to the Servicer, except as otherwise provided
in the Trust Sale and Servicing Agreement and the Pooling and Servicing
Agreement;
(d) an amount equal to any Reserve Fund Deposit Amount
for such Distribution Date will be deposited into the Reserve Fund;
(e) pro rata among the following amounts specified in (A)
and (B) for such Distribution Date,
(i) an amount equal to the Cash Accumulation Reserve
Fund Deposit Amount will be deposited into the Cash
Accumulation Reserve Fund and
(ii) an amount equal to any deposit required under
the terms of any other Specified Support Arrangements will be
deposited into the account designated by the terms of such
Specified Support Arrangement;
(f) an amount equal to the Aggregate Certificateholders'
Interest for such Distribution Date will be transferred to the
Certificate Distribution Account;
(g) an amount equal to any Trust Defaulted Amount will be
treated as Additional Trust Principal on such Distribution Date;
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<PAGE>
(h) an amount equal to the aggregate amount of unreimbursed
Trust Charge-Offs will be treated as Additional Trust Principal on such
Distribution Date; and
(i) an amount equal to the Certificate Reserve Fund Deposit
Amount for such Distribution Date will be deposited into the
Certificate Reserve Fund, if any.
(ii) To the extent the Monthly Available Amount is
not sufficient to make all payments required by clauses (1), (2) and
(3) of SECTION 4.5(C)(I), then the funds described below will be
applied in the following order:
FIRST, if any Monthly Carrying Costs or any
amounts specified in Section 4.5(C)(I)(3)(A), (B) AND
(C) remain unpaid, then a "Deficiency Amount" will
exist for such Distribution Date, and the Servicer
shall make a Servicer Advance equal to such
Deficiency Amount to complete the applications
pursuant to such Section (but only to the extent that
the Servicer, in its sole discretion, expects to
recover such Servicer Advance from Remaining Interest
Amounts, applied as described above on subsequent
Distribution Dates, and from amounts applied to
reimburse Servicer Advances pursuant to the terms of
any Officer's Issuance Certificate (including Section
I(E) of the Officer's Issuance Certificate for the [
] Term Notes), and such Servicer Advances will be
applied to reduce such Deficiency Amount in the
priorities set forth above in SECTION 4.5(C)(I)
CLAUSES (2) AND (3); and
SECOND, if any Monthly Carrying Costs or any
amounts specified in Section 4.5(c) clauses (3)(a),
(b), (c), (g) and (h) for such Distribution Date
(calculated after the adjustment, if any, to Trust
Interest Collections described in SUBSECTION (V)
below) remain unpaid after the application described
in the preceding clause FIRST, then an Unsatisfied
Deficiency Amount will exist for such Distribution
Date, and the Servicer shall instruct the Indenture
Trustee to withdraw funds from the Reserve Fund and
apply such funds to reduce such Unsatisfied
Deficiency Amount in the priorities set forth in
SECTIONS 4.5(C)(I) CLAUSES (1), (2) AND (3); PROVIDED
that no amount shall be withdrawn from the Reserve
Fund and paid to the Servicer pursuant to SECTION
4.5(C)(I) CLAUSE (3)(C) in order to reimburse the
Servicer for Servicer Advances with respect to
Receivables that are not Eligible Receivables (as
determined by the Servicer in accordance with its
servicing procedures) and no amount shall be applied
to CLAUSES (3)(D), (E), (F) OR (I) of SECTION
4.5(C)(I).
To the extent that, after application of the funds in
the Reserve Fund, the full amount of the Trust Defaulted
Amount has not been treated as Additional Trust Principal
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<PAGE>
pursuant to SECTION 4.5(C)(I) CLAUSE (3)(G), the amount of
such deficiency shall be added to unreimbursed Trust
Charge-Offs.
(iii) To the extent any Available Trust Interest
(calculated after the adjustment, if any, to Trust Interest Collections
described in SUBSECTION (V) below) is available on any Distribution
Date after making the applications described in SECTION 4.5(C)(I), such
amount shall be allocated and paid to the Seller as compensation for
making the initial and any other deposits into the SWIFT [ ] Reserve
Funds.
(iv) On each Distribution Date, the Servicer shall
pay to GMAC, as the holder of the Retained Property, any Interest
Collections for the related Collection Period that do not constitute
Trust Interest Collections (calculated after the adjustment, if any,
described in SUBSECTION (V) below) to the extent not previously so paid
to GMAC.
(v) If the Servicer does not make a Servicer Advance
in the amount of the full Deficiency Amount for a Distribution Date,
the Servicer shall calculate for each Account in the Pool of Accounts
in which the full amount of interest due for the related Collection
Period was not collected, the product of (i) the amount of interest
collected with respect to such Collection Period and (ii) the
difference between (A) the percentage equivalent (which shall never
exceed 100%) of a fraction, the numerator of which is the average daily
aggregate principal balance of the Eligible Receivables in such Account
during the related Collection Period and the denominator of which is
the average daily aggregate principal balance of all Receivables
(including Receivables included in the Retained Property) in such
Account during the related Collection Period and (B) the Trust
Percentage for such Distribution Date. With respect to each such
Account, the absolute value of such amount so calculated shall be (1)
added to Trust Interest Collections for such Distribution Date to the
extent such amount is greater than zero or (2) subtracted from Trust
Interest Collections for such Distribution Date to the extent such
amount is less than zero. No adjustment to Trust Interest Collections
shall be made with respect to the other Accounts in the Pool of
Accounts.
(d) The Indenture Trustee (based on the information contained
in the Servicer's Accounting delivered on any such date or the related
Determination Date pursuant to SECTION 3.05 of the Pooling and Servicing
Agreement, as applicable) shall apply Trust Principal Collections and Available
Trust Principal in the following manner:
(i) On each Business Day during the Revolving Period,
all Trust Principal Collections and Additional Trust Principal shall be
applied as follows:
(A) if no series of Notes is then in a
Payment Period or a Rapid Amortization Period which
is not an Early Amortization Period during which
Available Trust Principal is required to be retained
or set aside or paid to fund principal payments, then
(1) if any Servicer Liquidity
Advance for any series of Term Notes is
outstanding, an amount not to exceed
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<PAGE>
the product of Trust Principal Collections
and a fraction, the numerator of which is
the outstanding principal balance of such
series of Term Notes and the denominator of
which is the outstanding principal balance
of all Notes as of such Business Day, shall
be paid to the Servicer in reimbursement of
such Servicer Liquidity Advance and
(2) all remaining Trust Principal
Collections shall be applied as provided in
Section 4.5(d)(iii);
(B) if one or more series of Notes is then
in a Payment Period or a Rapid Amortization Period
which is not an Early Amortization Period during
which Available Trust Principal is required to be
retained or set aside or paid to fund principal
payments, then
(1) if any Servicer Liquidity
Advance is outstanding for any series of
Term Notes that does not then require
Available Trust Principal to be retained or
set aside to fund principal payments with
respect thereto, an amount not to exceed the
product of Trust Principal Collections and a
fraction, the numerator of which is the
outstanding principal balance of such series
of Term Notes, and the denominator of which
is the outstanding principal balance of all
Notes as of such Business Day, shall be paid
to the Servicer in reimbursement of such
Servicer Liquidity Advance, and
(2) each such series that requires
Available Trust Principal to be retained or
set aside shall be allocated its Principal
Allocation Percentage of the Available Trust
Principal (prior to giving effect to any
reimbursement of Servicer Liquidity Advances
with respect to such series for such
Business Day) and such amounts shall,
FIRST, be applied to
reimburse the Servicer for any
outstanding Servicer Liquidity
Advances, if any, related to such
series and,
SECOND, (and to the extent
specified in the Officer's Issuance
Certificate with respect to such
series), be retained or set aside in
the account specified in the
Officer's Issuance Certificate with
respect to such series, and
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<PAGE>
(3) any amounts in excess of the amount
required to be reimbursed, retained or set aside in
the foregoing clauses (1) and (2) shall be applied as
provided in Section 4.5(d)(iii);
(ii) On each Business Day during the Revolving
Period, proceeds from the issuance of Securities and additional
borrowings under any Revolving Notes shall be applied
(A) first, if so directed by the Seller,
to the payment of principal of any series of Notes
then in a Payment Period,
(B) second, if so directed by the Seller,
to the reimbursement of Servicer Liquidity Advances
and
(C) thereafter, as provided in SECTION
4.5(D)(III);
(iii) On each Business Day during the Revolving
Period, after making the applications specified in SECTIONS 4.5(D)(I)
and 4.5(D)(II), the Indenture Trustee shall apply the amounts in the
Collection Account in respect of Trust Principal Collections for such
Business Day, the Cash Collateral Amount from the prior Business Day,
proceeds from the issuance of Securities and additional borrowings
under the Revolving Notes, and (if such Business Day is a Distribution
Date) Additional Trust Principal as follows:
(A) the Indenture Trustee shall set aside in
the Collection Account as the Cash Collateral Amount
such amount of funds as is necessary to maintain
Trust Equilibrium, and
(B) the Indenture Trustee shall apply any
remaining such funds, if so directed by the Seller in
its sole discretion, to Trust Receivables Purchases
or to make payments of principal on any series of
Revolving Notes (to the extent permitted under the
Officer's Issuance Certificate with respect to such
Revolving Notes);
(iv) On each Business Day during the Wind Down
Period or an Early Amortization Period, the Indenture Trustee shall
(A) with respect to each series of Notes,
(1) allocate to such series its
Principal Allocation Percentage of Available
Trust Principal for such Business Day,
(2) unless otherwise set forth in
the Officer's Issuance Certificate with
respect to such series, after the
reimbursement of any Servicer Liquidity
Advance with
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<PAGE>
respect to such series, set aside in the
account specified in the Officer's Issuance
Certificate for such series its Principal
Allocation Percentage of Available Trust
Principal, and
(3) on each related Distribution
Date pay the amounts set aside along with
the Principal Allocation Percentage for such
series of Available Trust Principal for such
Distribution Date as provided in the
Officer's Issuance Certificate with respect
to such series of Notes;
(B) to the extent of any Available Trust
Principal remaining after the applications described
in the preceding clause (A), allocate such amounts to
Priority Payment Amounts and distribute them as
specified in the applicable Officer's Issuance
Certificate or Certificate Issuance Order;
(C) to the extent of any Available Trust
Principal remaining after the applications described
in the preceding clauses (A) and (B), allocate to the
Certificates any remaining amounts up to the
Aggregate Certificate Principal for the related
Distribution Date and pay to the Certificateholders
the amounts set aside along with any unallocated
Available Trust Principal for such Distribution Date;
and
(D) to the extent of any Available Trust
Principal remaining after the applications described
in the preceding clauses (A) through (C), pay such
amounts to the Seller.
(v) The Indenture Trustee shall not make payments of
principal with respect to the Certificate Balance on any Certificates
until all Term Notes and all Revolving Notes are paid in full (or
otherwise fully provided for) and any Priority Payment Amount, if any,
has been paid in full.
(e) Unless otherwise set forth in the Officer's Issuance
Certificate with respect to a series of Term Notes, if the terms of any series
of Term Notes provide for a Servicer Liquidity Advance in the event a Required
Payment on such series cannot be made from other available funds, then to the
extent that a Required Payment for any Distribution Date during a Payment Period
for such series cannot be made as provided by the terms of such series (after
giving effect to all issuances of securities and additional borrowings under the
Revolving Notes on such Distribution Date), the Servicer shall make a Servicer
Liquidity Advance in an amount sufficient to complete such series' Required
Payment, to the extent that the Servicer, in its sole discretion, expects to
recover such Servicer Liquidity Advance from subsequent Trust Principal
Collections allocated as provided in SUBSECTION 4.5(D)(I), and such Servicer
Liquidity Advance shall be used to make such Required Payment.
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<PAGE>
(f) On each Distribution Date for the Wind Down Period or an
Early Amortization Period, the Seller shall (or shall use reasonable efforts to
cause GMAC on its behalf to) deposit in the Collection Account an amount equal
to the Supplemental Principal Allocation for such Distribution Date. The Seller
shall be entitled to reimbursement of the aggregate amount of Supplemental
Principal Allocations for all Distribution Dates following the payment in full
of all Securities. The Trust's obligation to so reimburse the Seller shall be
limited to collections on Receivables (as and when such amounts are received)
and amounts on deposit in the Reserve Fund.
(g) To the extent unreimbursed Trust Charge-Offs for any
Distribution Date exceed the Certificate Balance (calculated without reduction
for Trust Charge-Offs), such excess shall be applied to reduce the Outstanding
Amount attributable to each series of Notes, pro rata on the basis of the
Outstanding Amount attributable to each such series (calculated without
reduction for Trust Charge-Offs after giving effect to any amounts to be paid on
such Distribution Date).
SECTION 4.6 SWIFT [ ] RESERVE FUNDS AND THE RESERVE FUND.
(a) Each of the SWIFT [ ] Reserve Funds shall include the
money and other property deposited and held therein pursuant to this SECTION 4.6
and SECTION 4.5. The Seller shall make such deposits into any of the SWIFT [ ]
Reserve Funds on the Initial Closing Date and from time to time thereafter in
connection with the issuance of Additional Securities or an increase in the
Specified Maximum Revolver Balance (at which time the formula for the Reserve
Fund Required Amount or the required amount for any other SWIFT [ ] Reserve Fund
may be adjusted) as are specified herein or in any Officer's Issuance
Certificate or Certificate Issuance Order. None of the SWIFT [ ] Reserve Funds
shall under any circumstances be deemed to be part of or otherwise included in
the Trust.
(b) On the Initial Closing Date, the Seller shall deposit the
Reserve Fund Initial Deposit into the Reserve Fund. In addition, the Seller, in
its sole discretion, may at any time make an additional deposit into the Reserve
Fund in an amount up to 1% of the Maximum Pool Balance as of the date such
additional deposit is to be made. If the amount on deposit in the Reserve Fund
on any Distribution Date (after giving effect to all deposits therein or
withdrawals therefrom on such Distribution Date) exceeds the Reserve Fund
Required Amount for such Distribution Date, the Servicer shall instruct the
Indenture Trustee to distribute an amount equal to any such excess to the
Seller, unless otherwise agreed to by the Seller.
(c) In order to provide for timely payments in accordance with
SECTION 4.5 and the terms of any Securities, to assure availability of the
amounts maintained in the Reserve Fund for the benefit of the Noteholders 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 Fund and all
proceeds of the foregoing, including, without limitation, all other amounts and
investments held from time to time in the Reserve Fund (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise) and (ii) the Reserve Fund Initial Deposit and all
proceeds thereon ((i) and (ii), collectively, the "RESERVE FUND PROPERTY"), to
have and to hold all the aforesaid property, rights and privileges unto the
Indenture Trustee, its
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<PAGE>
successors and assigns, in trust for the uses and purposes, and subject to the
terms and provisions, set forth in this SECTION 4.6. The Indenture Trustee
hereby acknowledges such transfer and accepts the trust hereunder and shall hold
and distribute the Reserve Fund Property in accordance with the terms and
provisions of this Agreement. By its authentication of any series of Notes
issued pursuant to an Officer's Issuance Certificate, the Indenture Trustee
shall acknowledge and accept such trusts as are specified therein with respect
to any SWIFT [ ] Reserve Fund established thereunder.
(d) Each of the Seller and the Servicer agrees 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 4.6 and any Officers' Issuance Certificate in any SWIFT [ ] Reserve
Fund and otherwise fully to effectuate the purposes, terms and conditions of
this SECTION 4.6 and any Officer's Issuance Certificate. 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) 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.
SECTION 4.7 NET DEPOSITS.
(a) 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) Notwithstanding anything in this Agreement or the
Indenture (including all Officer's Issuance Certificates) to the contrary, for
so long as the conditions specified in the first sentence of SECTION 6.2(B) are
satisfied, the Servicer, the Seller, the Indenture Trustee and the Owner Trustee
shall not be required to make any distributions, deposits or other remittances
in respect of any Notes or to the related Distribution Account pursuant to this
ARTICLE IV (including deposits by the Servicer into the Collection Account)
which are to be made on an Exempt Deposit Date with respect to such Notes.
Distributions, deposits and other remittances on Exempt Deposit Dates which are
not required to be made by virtue of the preceding sentence shall nonetheless be
accounted for as having been distributed, deposited or remitted for purposes of
determining other amounts required to be distributed, deposited or otherwise
remitted on such Exempt Deposit Date or the next
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<PAGE>
succeeding 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 in respect of such Notes and
the related Distribution Account.
SECTION 4.8 STATEMENTS TO SECURITYHOLDERS.
(a) On or before each Distribution Date, the Owner Trustee
shall (except as otherwise provided in the Trust Agreement) deliver to each
Certificateholder to be made on such date and the Indenture Trustee shall
include with each distribution to each Term Noteholder and each Revolving
Noteholder to be made on such date, a statement (which statement shall also be
provided to the Rating Agencies) prepared by the Servicer based on information
in the Servicer's Accounting furnished pursuant to SECTION 3.05 of the Pooling
and Servicing Agreement. Except as otherwise set forth in the Officer's Issuance
Certificate with respect to any series of Notes, each such statement to be
delivered to Securityholders shall set forth the following information
concerning the Term Notes, the Revolving Notes or the Certificates, as
appropriate, with respect to such Distribution Date or the preceding Collection
Period:
(i) the amount, if any, of the distribution
allocable to principal on each series of Term Notes and Revolving Notes
and to the Certificate Balance;
(ii) the amount, if any, of the distribution
allocable to interest on or with respect to each series or class of
Securities;
(iii) the aggregate Outstanding Amount for each
series of Term Notes, the Outstanding Amount of the Revolving Notes and
the Certificate Balance, each as of such date and after giving effect
to all payments reported under clause (i) above (or, in the case of any
Revolving Notes during the Revolving Period, unless principal payments
thereon are required on such Distribution Date, as of the last day of
such Collection Period);
(iv) the amount of outstanding Servicer Advances on
such date;
(v) the amount of the Monthly Servicing Fee paid to
the Servicer with respect to the related Collection Period or Periods,
as the case may be;
(vi) the per annum interest rate for the next
Distribution Date or Payment Date, as the case may be, for any series
or class of Securities with a variable or adjustable interest rate;
(vii) the amount, if any, withdrawn from or credited
to each of the SWIFT [ ] Reserve Funds;
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<PAGE>
(viii) the accumulated interest and principal
shortfalls, if any, on each series or class of Securities and the
change in each of such amounts from the preceding Payment Date or
Distribution Date, as the case may be;
(ix) the Trust Charge-Offs allocated to each series
or class of Securities and the change in such amounts from the
preceding Payment Date or Distribution Date, as the case may be; and
(x) the balance of each of the SWIFT [ ] Reserve
Funds, if any, on such date after giving effect to changes therein or
any distributions therefrom on such date.
Each amount set forth pursuant to clauses (i), (ii) and (viii) above with
respect to the Term Notes or the Certificates shall be expressed as a dollar
amount per $1,000 of initial principal amount of the Term 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 furnish (or cause to be
furnished), to each Person who at any time during such calendar year shall have
been a holder of record of Notes or Certificates, respectively, and received any
payment 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.
(c) A copy of each statement provided pursuant to SECTION
4.8(A) shall be made available for inspection at the Corporate Trust Office.
SECTION 4.9 NEW ISSUANCES; CHANGES IN SPECIFIED MAXIMUM REVOLVER BALANCE.
------------------------------------------------------------
(a) The Seller may from time to time after the Initial Closing
Date direct the Indenture Trustee or the Owner Trustee, as applicable, on behalf
of the Trust, to issue one or more series of Term Notes or Revolving Notes, or
Revolving Notes of any series outstanding pursuant to the Indenture or increase
or decrease the Specified Maximum Revolver Balance or issue additional
Certificates (including Certificates of a different class) pursuant to the Trust
Agreement. Except as otherwise provided in any supplement hereto or any
Officer's Issuance Certificate or Certificate Issuance Order, the Term Notes of
all outstanding series, the Revolving Notes of all outstanding series and the
Certificates of all outstanding classes shall be equally and ratably entitled as
and to the extent provided herein to the benefits of this Agreement, the
Indenture and the Pooling and Servicing Agreement without preference, priority
or distinction.
(b) The obligation of the Indenture Trustee or the Owner
Trustee, as applicable, to issue Term Notes or Revolving Notes of a new series,
to increase or decrease the Specified Maximum Revolver Balance (including any
Series Specified Maximum Revolver Balance) or to issue any additional
Certificates and to execute and deliver any related documents, including a
supplement hereto or to the Indenture, is subject to the following conditions:
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(i) on or before the fifth Business Day immediately
preceding the related Closing Date, the Seller shall have given the
Indenture Trustee, the Owner Trustee, the Servicer and each Rating
Agency notice of such issuance or of such increase or decrease in the
Specified Maximum Revolver Balance and the Closing Date;
(ii) with respect to the issuance of a new series of
Term Notes or Revolving Notes, the Seller shall have delivered to the
Indenture Trustee and the Owner Trustee the related supplement and/or
Officer's Issuance Certificate, in form reasonably satisfactory to such
Trustees;
(iii) with respect to the issuance of Certificates,
the Seller shall have delivered to the Owner Trustee the related
Certificate Issuance Order, in form reasonably satisfactory to the
Owner Trustee;
(iv) the Seller shall have delivered to the Indenture
Trustee or the Owner Trustee, as applicable, any related Specified
Support Arrangement executed by each of the parties thereto, other than
such Trustee;
(v) the Rating Agency Condition shall have been
satisfied with respect to such issuance or increase in the Specified
Maximum Revolver Balance; PROVIDED that any decrease in the Specified
Maximum Revolver Balance shall not be subject to such condition;
(vi) the Seller shall have delivered to the Indenture
Trustee and the Owner Trustee a certificate of a Vice President or more
senior officer, dated the Closing Date, to the effect that the Seller
reasonably believes that such issuance or increase or decrease shall
not result in the occurrence of an Early Amortization Event;
(vii) after giving effect to all issuances of
Securities and all changes in the Specified Maximum Revolver Balance on
the Closing Date, the quotient of (A) the outstanding Certificate
Balance of all then outstanding Certificates over (B) the Maximum Pool
Balance shall equal or exceed the Specified Certificate Percentage; and
(viii) with respect to the issuance of additional
Certificates (unless otherwise agreed by the holders of all outstanding
Certificates or unless the Rating Agency Condition is satisfied) the
initial Certificate Balance of the Certificates to be issued on the
Closing Date shall be less than or equal to the lowest Certificate
Balance outstanding at all times during the twelve-month period
preceding such issuance.
Upon satisfaction of the above conditions with respect to the issuance of
additional Term Notes or Revolving Notes, the Indenture Trustee shall, to the
extent necessary, execute a supplement to the Indenture and execute and
authenticate such Term Notes or Revolving Notes pursuant to the Indenture. Upon
satisfaction of the above conditions with respect to the increase or decrease of
the Specified Maximum Revolver Balance, the Indenture Trustee shall, to the
extent necessary, amend the Revolving Notes or the Indenture. Upon satisfaction
of the above conditions with respect to the issuance of additional Certificates,
the Owner Trustee shall execute and authenticate such additional
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Certificates pursuant to the Trust Agreement. In any such case, upon
satisfaction of the above conditions, and upon payment in full of any series of
Term Notes, the Owner Trustee shall, to the extent necessary, terminate, amend
or modify the terms of any Specified Support Arrangements (including the Basis
Swaps) and enter into additional Specified Support Arrangements.
ARTICLE V
SERVICING FEE
SECTION 5.1 SERVICING COMPENSATION. The Monthly Servicing Fee
shall be payable to the Servicer, in arrears, on each Distribution Date through
and including the Distribution Date on which the final distribution on the
Securities is made, in an amount equal to the product of (a) one-twelfth of the
Servicing Fee Rate and (b) the average daily balance of the Daily Trust Invested
Amount for the related Collection Period; PROVIDED, HOWEVER, that with respect
to the first Distribution Date, the Monthly Servicing Fee shall be equal to the
product of (a) [ ]/360 of the Servicing Fee Rate and (b) the average daily
balance of the Daily Trust Invested Amount during the period from and including
the Initial Cut-Off Date through and including the last day of the Collection
Period in which the Initial Cut-Off Date occurs.
ARTICLE VI
SECURITYHOLDER ACCOUNTS; COLLECTIONS,
DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 6.1 ESTABLISHMENT OF ACCOUNTS; DEPOSITS; INVESTMENTS.
(a) (i) The Servicer, for the benefit of the Securityholders,
shall establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account known as the Superior Wholesale Inventory Financing Trust [ ]
Collection Account (the "COLLECTION ACCOUNT"), bearing an additional designation
clearly indicating that the funds deposited therein are held for the benefit of
the Securityholders.
(ii) The Servicer, for the benefit of the Term
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account known as the Superior Wholesale
Inventory Financing Trust [ ] Note Distribution Account (the "NOTE
DISTRIBUTION ACCOUNT"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of
the Term Noteholders. Upon the commencement of a Payment Period for a
series of Term Notes, the Servicer, for the benefit of the Term
Noteholders, shall establish a subaccount of the Note Distribution
Account (a "NOTE DISTRIBUTION SUBACCOUNT") (which account may be kept
only on the books of the Trust) in which to maintain all the funds
deposited in the Note Distribution Account in respect of principal for
the series of Term Notes beginning its Payment Period.
(iii) The Servicer, for the benefit of the Revolving
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account known as the Superior Wholesale
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Inventory Financing Trust [ ] Revolver Distribution Account (the
"REVOLVER DISTRIBUTION ACCOUNT"), bearing an additional designation
clearly indicating that the funds deposited therein are held for the
benefit of the Revolving Noteholders.
(iv) Pursuant to the Trust Agreement, the Servicer,
for the benefit of the Certificateholders, shall establish and maintain
at [ ] in the name of the Issuer an Eligible Deposit Account known as
the Superior Wholesale Inventory Financing Trust [ ] Certificate
Distribution Account (the "CERTIFICATE DISTRIBUTION ACCOUNT") bearing
an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(v) The Servicer, for the benefit of the
Securityholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account known as the Superior
Wholesale Inventory Financing Trust [ ] Reserve Fund (the "RESERVE
FUND") bearing an additional designation clearly indicating that the
funds deposited therein are held for the benefit of the
Securityholders.
(vi) The Servicer, for the benefit of the respective
Noteholders, shall establish and maintain in the name of the Indenture
Trustee any Eligible Deposit Accounts and subaccounts as set forth in
the Officer's Issuance Certificates with respect to such series of
Notes (each, an "ACCUMULATION ACCOUNT", and together with the Cash
Accumulation Account, the "ACCUMULATION ACCOUNTS"), each bearing an
additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders of such series of
Notes.
(vii) If Certificates are issued to a non-Affiliate
of the Seller, the Servicer, for the benefit of such
Certificateholders, may establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account known as the Superior
Wholesale Inventory Financing Trust [ ] Certificate Reserve Fund (the
"CERTIFICATE RESERVE FUND") bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of
such Certificateholders. As of the Initial Closing Date, there is no
Certificate Reserve Fund.
(b) (i) Each of the Designated Accounts 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 the
Designated Accounts (other than the Cash Accumulation Account and any other
Designated Account with respect to a series of Notes specified otherwise in the
Officer's Issuance Certificate with respect to such Series of Notes) (including
amounts, if any, which the Servicer is required to remit daily to the Collection
Account pursuant to SECTION 6.2) shall, to the extent permitted by applicable
laws, rules and regulations, be invested, at the written direction of the
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Servicer (provided, however, with respect to a series of Term Notes, the
Officer's Issuance Certificate with respect to such series of Term Notes may
provide that under specified conditions a person other than the Servicer shall
direct the investment of funds in deposit in the Designated Accounts with
respect to such series of Term Notes on the terms set forth in such Officer's
Issuance Certificate), by such bank or trust company in Eligible Investments (in
the name of the Indenture Trustee or its nominee). Such written direction shall
constitute certification by the Servicer (or such other Person) that any such
investment is authorized by this SECTION 6.1. Funds deposited in each of the
Reserve Funds shall be invested in Eligible Investments and except, and then
only to the extent, as shall be otherwise permitted by the Rating Agencies, such
investments shall not be sold or disposed of prior to their maturity. Should the
short-term unsecured debt obligations of the Indenture Trustee (or any other
bank or trust company with which the Designated Accounts 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 (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) so long as 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, to be
moved to the corporate trust department of the Indenture Trustee. On each
Distribution Date, Shared Investment Proceeds shall be included in Available
Trust Interest and applied as set forth in SECTION 4.5(C). The Indenture Trustee
or the other Person holding the Designated Accounts as provided in this Section
6.1(b)(i) shall be the "Securities Intermediary." If the Securities Intermediary
shall be a Person other than the Indenture Trustee, the Servicer shall obtain
the express agreement of such Person to the obligations of the Securities
Intermediary set forth in this Section 6.1 and an Opinion of Counsel that such
Person can perform such Obligations.
(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. The Designated Accounts are accounts to
which Financial Assets will be credited.
(B) All securities or other property
underlying any Financial Assets credited to the Designated
Accounts shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in
blank or credited to another securities account maintained in
the name of the Securities Intermediary and in no case will
any Financial Asset credited to any of the Designated Accounts
be registered in the name of the Issuer, the Servicer or the
Seller, payable to the order of the Issuer, the Servicer or
the Seller or specially indorsed to the Issuer, the Servicer
or the Seller except to the extent the foregoing have been
specially indorsed to the Securities Intermediary or in blank.
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(C) All property delivered to the Securities
Intermediary pursuant to this Agreement will be credited upon
receipt of such property to the appropriate Designated
Account.
(D) Each item of property (whether
investments, investment property, Financial Asset, security,
instrument or cash) credited to a Designated Account shall be
treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the New York UCC.
(E) If at any time the Securities
Intermediary shall receive any order from the Indenture
Trustee directing transfer or redemption of any Financial
Asset relating to the Designated Accounts, the Securities
Intermediary shall comply with such order without further
consent by the Trust, the Servicer, the Seller or any other
Person.
(F) The Designated Accounts shall be
governed by the laws of the State of New York, regardless of
any provision in any other agreement. For purposes of the UCC,
New York shall be deemed to be the Securities Intermediary's
jurisdiction and the Designated Accounts (as well as the
Security Entitlements related thereto) shall be governed by
the laws of the State of New York.
(G) The Securities Intermediary has not
entered into, and until the termination of this Agreement will
not enter into, any agreement with any other Person relating
to the Designated Accounts and/or any Financial Assets or
other property credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the New York UCC) of such other Person
and the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into,
any agreement with the Issuer, the Seller, the Servicer or the
Indenture Trustee purporting to limit or condition the
obligation of the Securities Intermediary to comply with
entitlement orders as set forth in SECTION 6.1(B)(II)(E)
hereof.
(H) Except for the claims and interest of
the Indenture Trustee in the Designated Accounts, the
Securities Intermediary has no knowledge of claims to, or
interests in, the Designated Accounts or in any Financial
Asset credited thereto. If any other Person asserts any Lien,
encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process)
against the Designated Accounts or in any Financial Asset
carried therein, the Securities Intermediary will promptly
notify the Indenture Trustee, the Servicer and the Issuer
thereof.
(I) The Securities Intermediary will
promptly send copies of all statements, confirmations and
other correspondence concerning the Designated Accounts
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and/or any Designated Account Property simultaneously to
each of the Servicer and the Indenture Trustee, at the
addresses set forth in APPENDIX B to this Agreement.
(J) 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.
(K) The Servicer or other Person directing
the investment of funds in the Designated Accounts shall not
direct the Indenture Trustee to:
(1) invest in any Physical Property,
any Uncertificated Security that is not a
Federal Book-Entry Security or any
Certificated Security unless the Indenture
Trustee takes Delivery of such item; or
(2) invest in any Security
Entitlement or Federal Book-Entry Security
unless the Indenture Trustee obtains Control
over such investment.
(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.
(iv) The Indenture Trustee shall possess all right,
title and interest in and to all funds on deposit from time to time in
the Designated Accounts and in all proceeds thereof (except Investment
Proceeds). Except as otherwise provided herein or in the Indenture, the
Designated Accounts shall be under the exclusive dominion and control
of the Indenture Trustee for the benefit of the Securityholders and the
Indenture Trustee shall have sole signature power and authority with
respect thereto.
(v) The Servicer 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 Servicer shall deliver to the
Indenture Trustee an Opinion of Counsel, acceptable to the Indenture
Trustee, to such effect.
(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 Proceeds). Except as otherwise provided
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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. All amounts in the Certificate Distribution Account shall,
to the extent permitted by applicable laws, rules and regulations, be invested,
at the written direction of the Servicer, by the bank or trust company at which
the Certificate Distribution Account is maintained in Eligible Investments. Such
written direction shall constitute certification by the Servicer that any such
investment is authorized by this SECTION 6.1(C). Investments in Eligible
Investments shall be made in the name of the Owner Trustee or its nominee. If,
at any time, the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Servicer 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 cause the Owner Trustee to transfer any cash and/or any
investments in the old Certificate Distribution Account to such new Certificate
Distribution Account.
(d) The Indenture Trustee, the Owner Trustee, the Securities
Intermediary and each other Eligible Deposit Institution with whom a Designated
Account or the Certificate Distribution Account is maintained waives any right
of set-off, counterclaim, security interest or bankers' lien to which it might
otherwise be entitled.
SECTION 6.2 COLLECTIONS.
(a) Except as otherwise provided in SECTION 6.2(B), the
Servicer shall deposit Collections into the Collection Account as promptly as
possible after the date such Collections are processed by the Servicer, but in
no event later than the second Business Day after such processing date.
(b) Notwithstanding anything in this Agreement to the
contrary, for so long as
(i) GMAC is the Servicer,
(ii) no Servicing Default has occurred and is
continuing,
(iii) (A) GMAC maintains a short-term rating of at
least A-1 by Standard & Poor's and P-1 by Moody's,
(B) GMAC arranges for and maintains a letter
of credit or other form of Specified Support Arrangement in
respect of the Servicer's obligations to make deposits of
Collections in the Collection Account that is acceptable in
form and substance to each Rating Agency or
(C) GMAC otherwise obtains the written
confirmation from each Rating Agency that the failure by GMAC
to make daily deposits shall not result in a downgrade,
suspension or withdrawal of the rating of any outstanding
series or class of Securities with respect to which it is a
Rating Agency, and
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(iv) no Daily Remittance Period specified in the
Officer's Issuance Certificate of any series of Notes is in effect
(each of clause (i), (ii), (iii) and (iv), a "MONTHLY REMITTANCE CONDITION"),
then, subject to any limitations in the confirmations described in (C) above, if
then applicable, the Servicer need not deposit Trust Principal Collections and
Trust Interest Collections into the Collection Account on a daily basis during a
Collection Period or make the deposits on any dates during such Collection
Period otherwise specified in SECTIONS 2.1(D), 2.6(B) and 2.7(B)(III), but may
make a single deposit into the Collection Account in same-day or next-day funds
not later than 12:00 noon, New York City time, on the Business Day immediately
preceding the related Distribution Date (or, with the consent of the Indenture
Trustee, in same-day funds not later than 10:00 a.m., New York City time, on a
Distribution Date) in a net amount equal to the amount which would have been on
deposit in the Collection Account on such Distribution Date; PROVIDED that the
amount of the Cash Collateral Amount for the last day of any Collection Period
shall be deposited into the Collection Account (to the extent not already on
deposit therein) no later than the second Business Day of the following
Collection Period. If and so long as a Monthly Remittance Condition ceases to be
satisfied, the Servicer shall commence, if not already doing so, making deposits
in accordance with SECTION 6.2(A) no later than the first day of the first
Collection Period that begins at least two Business Days after the day on which
such Monthly Remittance Condition ceases to be satisfied.
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.1 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 in its
capacity as Servicer. Such obligations shall include the following:
(i) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee, the Issuer and the
Securityholders 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 any Eligible Receivables
to the Issuer hereunder or the issuance and original sale of any
Securities, or asserted with respect to ownership or sale of any
Eligible Receivables in the Accounts in the Pool of Accounts or the
Securities, or federal or other income taxes arising out of
distributions or receipt of payment on the Securities, or any fees or
other compensation payable to any such Person) and costs and expenses
in defending against the same;
(ii) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee, the Issuer and the
Securityholders from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense,
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loss, claim, damage or liability arose out of, or was imposed upon the
Indenture Trustee, the Owner Trustee, the Issuer or the Securityholders
through the negligence, wilful 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
(iii) 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 Owner Trust
Estate, and the Trust Agreement (in case of the Owner Trustee),
including the administration of the Trust Estate, except in each case
to the extent that such cost, expense, loss, claim, damage or
liability: (A) is due to the wilful misfeasance, bad faith or
negligence (except for errors in judgment) of the Person seeking to be
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 7.1 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 7.1 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 7.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, THE SERVICER. Any Person (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 interests of which is owned,
directly or indirectly, by General Motors and which is otherwise servicing
dealer receivables, which Person in any of the foregoing cases (other than the
Servicer as the surviving entity of any such merger or consolidation) executes
an agreement of assumption to perform every obligation of the Servicer under
this Agreement and the Pooling and Servicing Agreement, shall be the successor
to the Servicer under this Agreement and the Pooling and Servicing Agreement
without the execution or filing of any document 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
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shall provide notice of any merger, consolidation or succession pursuant to this
SECTION 7.2 to the Rating Agencies.
SECTION 7.3 LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
(a) Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer in its capacity as such shall be under any
liability to the Issuer, the Indenture Trustee, the Owner Trustee, the
Securityholders or any other Person, 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 the Basic Documents 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 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 Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on the advice
of counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under the Basic
Documents.
(b) The Servicer and any director, officer or employee of the
Servicer shall be reimbursed by the Owner Trustee for any contractual damages,
liability or expense (including, without limitation, any obligation of the
Servicer to the Indenture Trustee pursuant to SUBSECTION 7.1(A)(III)(Y) OR (Z))
incurred by reason of the Owner Trustee's wilful misfeasance, bad faith or
negligence (except errors in judgment) in the performance of such trustee's
duties under this Agreement or the Trust Agreement or by reason of reckless
disregard of its obligations and duties under such agreements.
(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 arising under the Accounts in the Pool of Accounts in
accordance with this Agreement and the Pooling and Servicing Agreement and that
in its opinion may cause it to incur any expense or liability; PROVIDED,
HOWEVER, that the Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of the Basic Documents and the rights and
duties of the parties to the Basic Documents and the interests of the
Securityholders under the Basic Documents. In such event, the legal expenses and
costs for such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor.
(d) The Applicable Trustee shall distribute out of the
Collection Account on a Distribution Date any amounts permitted for
reimbursement pursuant to SUBSECTION 7.3(C) not therefor reimbursed; PROVIDED,
HOWEVER, that the Applicable Trustee shall not distribute such amounts if the
amount on deposit in the Reserve Fund (after giving effect to all withdrawals
pursuant to SECTION 4.5, on such Distribution Date) is less than the Reserve
Fund Required Amount.
SECTION 7.4 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
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Pooling and Servicing Agreement to any Person more than 50% of the voting
interests 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 dealer floor plan
automotive or similar receivables; PROVIDED, HOWEVER, that no such delegation
shall relieve the Servicer of its responsibility with respect to such duties.
SECTION 7.5 SERVICER NOT TO RESIGN. Subject to the provisions
of SECTION 7.2, 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
under the Basic Documents in accordance with SECTION 7.2.
ARTICLE VIII
DEFAULT
SECTION 8.1 SERVICING DEFAULTS. Each of the following shall
constitute a "Servicing 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 or the Owner Trustee to make any required
distribution 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) any failure on the part of the Servicer duly to observe or
perform in any material respect any other covenant or agreement 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 Securityholders 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, the Indenture Trustee and 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 or after discovery
of such failure by an officer of the Servicer;
(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 Securityholders
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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 Indenture Trustee or the Owner 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 Servicer, in any insolvency,
readjustment of debt, marshaling 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 Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling 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 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, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of all or
substantially all 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) OR (C) 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,
floods or similar causes. The preceding sentence shall not relieve the Servicer
from using its best efforts to perform its obligations in a timely manner in
accordance with the terms of this Agreement and the Pooling and Servicing
Agreement and the Servicer shall provide the Indenture Trustee, the Owner
Trustee, the Seller and the Securityholders with prompt notice of such failure
or delay by it, together with a description of its efforts so to perform its
obligations. The Servicer shall immediately notify the Indenture Trustee and the
Owner Trustee in writing of any Servicing Default.
SECTION 8.2 CONSEQUENCES OF A SERVICING DEFAULT. If a
Servicing 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 attributable to such 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 with respect thereto, 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, but not
less than all, of the rights and obligations (other than its obligations that
have accrued up to the time of such termination) 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, the Accounts in the Pool of Accounts,
the related Receivables (including those held by the Trust and those retained by
GMAC) or otherwise, shall pass to and be vested in the Indenture
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Trustee pursuant to and under this SECTION 8.2. The Indenture Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) 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 arising under the Accounts in the Pool of Accounts 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
Collections 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 Revolver Distribution Account, the Certificate
Distribution Account or any other Designated Account or thereafter received with
respect to the Receivables in the Accounts in the Pool of Accounts 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, as described in SECTION 8.6,
reimbursements for any outstanding Servicer Advances made during the period
prior to the notice pursuant to this SECTION 8.2 which terminates the obligation
and rights of the Servicer under this Agreement. To the extent that compliance
with this SECTION 8.2 shall require the Servicer to disclose to the successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest.
SECTION 8.3 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to SECTION 8.2, 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. Notwithstanding the above, the Indenture Trustee may, if it is unwilling
to so act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction for the appointment of, a successor (i) having a
net worth of not less than $100,000,000, (ii) a long-term unsecured debt rating
from Moody's of at least Baa3 (unless such requirement is expressly waived by
Moody's) and (iii) whose regular business includes the servicing of dealer floor
plan 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 (except that such
successor shall not be liable for any liabilities incurred by any predecessor
Servicer). Any successor to the Servicer shall automatically agree to be bound
by the terms and provisions of any Specified Support Arrangement. In connection
with such appointment and assumption, the Indenture Trustee may make such
arrangements for the
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compensation of such successor out of Collections as it and such successor shall
agree; PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement and the Pooling and Servicing
Agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement and the Pooling and Servicing Agreement, as shall
be necessary to effectuate any such succession.
(b) All authority and power granted to any successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to SECTION 7.1 of the Trust Agreement, and shall pass to and
be vested in the Seller and, without limitation, the Seller is hereby authorized
and empowered to execute and deliver, on behalf of the successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The successor Servicer agrees to
cooperate with the Seller in effecting the termination of the responsibilities
and rights of the successor Servicer under this Agreement and the Pooling and
Servicing Agreement. The successor Servicer shall transfer to the Seller its
electronic records relating to the Accounts and the Receivables serviced
hereunder in such electronic form as the Seller may reasonably request and shall
transfer to the Seller all other records, correspondence and documents in the
manner and at such times as the Seller shall reasonably request. To the extent
that compliance with this SECTION 8.3 shall require the successor Servicer to
disclose to the Seller information of any kind which the successor Servicer
deems to be confidential, the Seller shall be required to enter into such
customary licensing and confidentiality agreements as the successor Servicer
shall deem necessary to protect its interests.
SECTION 8.4 NOTIFICATION TO SECURITYHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VIII, the Indenture Trustee shall give prompt written notice thereof to
the Term Noteholders, the Revolving Noteholders, the Rating Agencies and the
Owner Trustee shall give prompt written notice thereof to the
Certificateholders.
SECTION 8.5 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,
Certificateholders whose Certificates evidence not less than a majority of the
Voting Interests as of the close of the preceding Distribution Date) voting as a
single class, may, on behalf of all Securityholders, waive any default by the
Servicer in the performance of its obligations hereunder and under the Pooling
and Servicing Agreement and its consequences, except a Servicing Default under
SECTION 8.1(A) of this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicing 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 8.6 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 Servicer Advances in the manner
specified in SECTION 4.5, with respect to all previously unreimbursed Servicer
Advances made by such predecessor Servicer prior to the reimbursement of any
Servicer Advances made by the successor Servicer.
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ARTICLE IX
EARLY AMORTIZATION EVENTS; TERMINATION
SECTION 9.1 EARLY AMORTIZATION EVENTS. If any one of the
following events shall occur:
(a) an Insolvency Event with respect to the Seller or the
Servicer (or GMAC, if it is not the Servicer);
(b) General Motors shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws; or General
Motors shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition, answer or
consent; or General Motors shall appoint, or consent to the appointment of, a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial part of
its property; or General Motors shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due;
(c) any order for relief against General Motors shall have
been entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws, and such order shall have continued undischarged or
unstayed for a period of 60 days; or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of
General Motors under any other similar applicable Federal law, and such decree
or order shall have continued undischarged or unstayed for period of 120 days;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of General
Motors or of any substantial part of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and such decree or order
shall have remained in force undischarged or unstayed for a period of 120 days;
(d) failure on the part of the Seller, the Servicer or GMAC,
as applicable, (i) to pay (or set aside for payment) pursuant to SECTION
4.5(D)(II), (III) AND (IV) all amounts required to be paid as principal on any
Notes or distributed as Certificate Balance on any Certificates on the
applicable Stated Final Payment Date;
(e) failure on the part of the Seller, the Servicer or GMAC,
as applicable, to duly observe or perform in any material respect any other
covenants or agreements of the Seller, the Servicer or GMAC, as the case may be,
set forth in this Agreement or the Pooling and Servicing Agreement, which
failure continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given by the Indenture Trustee or the Owner Trustee to the Seller,
PROVIDED, HOWEVER, that no Early Amortization Event shall be deemed to occur if
the Receivables affected by such failure are repurchased by the Seller or the
Servicer or GMAC (if GMAC is not the Servicer), as applicable, in accordance
with the Basic Documents;
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(f) any representation or warranty made by GMAC in the Pooling
and Servicing Agreement or the Seller in this Agreement or any information
contained on the Schedule of Accounts, (i) shall prove to have been incorrect in
any material respect when made or when delivered, and shall continue to be
incorrect in any material respect for a period of 60 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 Indenture Trustee or the Owner Trustee and
(ii) as a result of such incorrectness the interests of the Securityholders are
materially and adversely affected, PROVIDED, HOWEVER, that no Early Amortization
Event shall be deemed to occur if the Receivables relating to such
representation or warranty are repurchased by GMAC or the Seller, as applicable,
in accordance with the Basic Documents;
(g) on any Distribution Date, the average of the Monthly
Payment Rates for the three preceding Collection Periods is less than 25%;
(h) on any three consecutive Distribution Dates, the amount on
deposit in the Reserve Fund is less than the Reserve Fund Required Amount;
(i) on any Distribution Date, as of the last day of the
related Collection Period, the aggregate principal balance of Receivables owned
by the Trust which were advanced against Used Vehicles exceeded 20% of the Daily
Trust Balance (for purposes of this clause (i), General Motors vehicles that are
sold to daily rental car operations, repurchased pursuant to General Motors
repurchase agreements and subsequently sold at auction to a General
Motors-franchised dealer shall not be considered to be Used Vehicles);
(j) a notice setting forth one or more Events of Default under
the Indenture and declaring the unpaid principal amount of Outstanding Notes
(together with accrued and unpaid interest thereon) immediately due and payable
has been given pursuant to SECTION 5.2(A) of the Indenture; PROVIDED, HOWEVER,
that if no other Early Amortization Event has occurred and is continuing and so
long as the Scheduled Revolving Period Termination Date has not occurred, if the
Seller so elects, the Early Amortization Period resulting from such occurrence
shall terminate and the Revolving Period (and, if the Seller so elects, any then
occurring Payment Periods if and to the extent set forth in the related
Officer's Issuance Certificate) shall recommence if a notice rescinding and
annulling such declaration has been given pursuant to the Indenture;
(k) on any Distribution Date, the Reserve Fund Required Amount
for such Distribution Date exceeds the amount on deposit in the Reserve Fund by
more than the Reserve Fund Trigger Amount;
(l) on any Distribution Date, the average Daily Trust Balance
is less than 75% of the sum of the average Outstanding Amount of the Term Notes
and the average Certificate Balance (in each case, such average being determined
over the six Collection Periods immediately preceding such Distribution Date
(or, if shorter, the period from the Initial Closing Date through and including
the last day of the immediately preceding Collection Period));
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(m) except for a termination, amendment or modification of the
terms of any Basis Swap or entry into any other Specified Support Arrangement in
connection with the issuance of additional Securities, the payment in full of
any series of Term Notes or a change in the Specified Maximum Revolver Balance
or any Series Specified Maximum Revolver Balance so long as the conditions set
forth in SECTION 4.9 for such issuance or change are satisfied, any Basis Swap
or Specified Support Arrangement related to any Securities is terminated,
revoked, withdrawn, rescinded or found by a court of competent jurisdiction to
be unenforceable or an Insolvency Event with respect to a Basis Swap
Counterparty;
(n) on any Distribution Date, as of the last day of each of
the two immediately preceding Collection Periods, the aggregate principal
balance of all Available Receivables is less than 70% of the aggregate principal
balance of all Receivables (including Receivables included in the Retained
Property) in the Accounts in the Pool of Accounts; or
(o) any other Early Amortization Event set forth in the
Officer's Issuance Certificate related to any series of Notes;
then, subject to applicable law, and after the applicable grace period, if any,
an amortization event (an "EARLY AMORTIZATION EVENT") shall occur without any
notice or other action on the part of any party immediately upon the occurrence
of such event.
SECTION 9.2 INSOLVENCY EVENTS.
(a) Upon any sale, disposition or other liquidation of the
assets of the Trust pursuant to ARTICLE V of the Indenture, the Servicer shall
instruct the Indenture Trustee to deposit into the Collection Account the
amounts specified in SECTION 5.4(B) of the Indenture (the "INSOLVENCY
PROCEEDS"). The Servicer shall determine conclusively the amount of the
Insolvency Proceeds which are deemed to be Trust Interest Collections and Trust
Principal Collections. The Insolvency Proceeds shall be allocated and
distributed to the Securityholders in accordance with ARTICLE IV on the next
Distribution Date and the Trust (if not already so terminated) and the Trust
Agreement shall terminate as provided in SECTION 7.1 of the Trust Agreement.
(b) Subject to SECTION 6.1(B), any investments on deposit in
any of the Reserve Funds 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.
SECTION 9.3 OPTIONAL PURCHASE BY THE SERVICER. At any time
from and after the time that,
(a) the Daily Trust Balance is less than or equal to 10% of an
amount equal to the highest sum, on any date since the Initial Closing Date, of
the Daily Trust Balance PLUS the Cash Collateral Amount PLUS amounts on deposit
in the Cash Accumulation Account and Note Distribution Account (all such amounts
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being calculated as of the close of business on such day), and
(b) either
(i) there are no Term Notes then outstanding or
(ii) the Wind Down Period is then in effect,
the Servicer shall have the option to purchase, as of the last day of any
Collection Period, the assets of the Trust other than the Designated Accounts
and the Certificate Distribution Account. To exercise such option, with respect
to any Collection Period, the Servicer shall deposit in the Collection Account
an amount equal to the aggregate Administrative Purchase Payments for the
Receivables (including Defaulted Receivables) held by the Trust on the last day
of such Collection Period, plus the appraised value of any such other property
held by the Trust, such value to be determined by an appraiser mutually agreed
upon by the Servicer, the Owner Trustee and the Indenture Trustee (such amount
will not be less than the outstanding principal balance and unpaid interest on
all Notes). Thereupon, the Servicer shall succeed to all interests in and to the
assets of the Trust (other than the Designated Accounts and the Certificate
Distribution Account) and the Trust shall assign all such interest to the
Servicer. The amount so paid to the Trust shall be treated as Trust Principal
Collections received during such Collection Period to the extent of the
principal portion of the aggregate Administrative Purchase Payment so paid, with
the remainder being treated as Trust Interest Collections received during such
Collection Period.
SECTION 9.4 TERMINATION. Notice of any termination of the
Trust and the Trust Agreement 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. Following the satisfaction and discharge of the
Indenture and the payment in full of principal and interest on the Term Notes
and the Revolving Notes, the Certificateholders shall succeed to the rights of
the Term Noteholders and the Revolving Noteholders hereunder and the Owner
Trustee shall succeed to the rights of, and assume the obligations of, the
Indenture Trustee pursuant to this Agreement (subject to the continuing
obligations of the Indenture Trustee set forth in SECTION 4.4 of the Indenture).
After payment to the Indenture Trustee, the Owner Trustee, the Securityholders
(including any deposit into the Distribution Accounts for the benefit of the
Securityholders) and the Servicer of all amounts required to be paid (or so
deposited) under this Agreement, the Indenture and the Trust Agreement, any
amounts on deposit in each of the Reserve Funds and the Collection Account
(after all other distributions required to be made from each of the Reserve
Funds have been made and all distributions to GMAC on account of the Retained
Property have been made) and any other assets of the Trust, including any
Receivables held by the Trust, shall be paid and delivered to the Seller and
this Agreement (except for SECTION 7.1) shall be terminated.
SECTION 9.5 RECOMMENCEMENT OF REVOLVING PERIOD.
(a) If an Early Amortization Event described in SECTION
9.1(I), (J) OR (L) has occurred with the result that the Revolving Period has
terminated and the Early Amortization Period has commenced, the Seller may
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nonetheless elect to terminate the Early Amortization Period and recommence the
Revolving Period, but only if
(i) such recommencement begins no later than the
first anniversary of the termination of the Revolving Period;
(ii) as of the date of recommencement, if the event
giving rise to such Early Amortization Event was SECTION 9.1(I) OR (L),
such event was not reoccurring on each of the three Distribution Dates
immediately preceding the date of recommencement or, if the event
giving rise to such Early Amortization Event was SECTION 9.1(J), the
provisions of the proviso thereof have been satisfied;
(iii) the Final Revolving Period Termination Date has
not occurred;
(iv) the long term debt obligations of GMAC are
rated at least "Baa3" by Moody's;
(v) the Reserve Fund Funding Condition is
satisfied; and
(vi) after giving effect to all issuances of
securities and all changes in the Specified Maximum Revolver Balance on
the date of the recommencement, the quotient of
(A) the outstanding Certificate Balance of
all outstanding Certificates over
(B) the Maximum Pool Balance shall equal or
exceed the Specified Certificate Percentage.
Written notice of such election to recommence the Revolving Period must be given
to the Servicer, the Owner Trustee, the Indenture Trustee and the Rating
Agencies at least ten Business Days prior to the proposed date of
recommencement.
(b) If the Revolving Period has terminated and the Wind Down
Period has commenced prior to the Final Revolving Period Termination Date, the
Seller may nonetheless elect to terminate the Wind Down Period and recommence
the Revolving Period, but only if
(i) such recommencement begins no later than the
first anniversary of the termination of the Revolving Period;
(ii) if an Early Amortization Event has occurred,
the Revolving Period was or on or before the recommencement date will
be recommenced in accordance with SECTION 9.5(A);
(iii) the Final Revolving Period Termination Date
has not occurred;
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(iv) the Reserve Fund Funding Condition is
satisfied; and
(v) after giving effect to all issuances of
securities and all changes in the Specified Maximum Revolver Balance on
the date of the recommencement, the quotient of
(A) the outstanding Certificate Balance of
all outstanding [ ] Certificates over
(B) the Maximum Pool Balance shall equal or
exceed the Specified Certificate Percentage.
Written notice of such election to recommence the Revolving Period must be given
to the Servicer, the Owner Trustee, the Indenture Trustee and the Rating
Agencies at least ten Business Days prior to the proposed date of
recommencement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 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 Securityholders,
(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 or any other Basic Documents,
(iii) to add or supplement any Specified Support
Arrangement for the benefit of any Securityholders (provided that if
any such addition shall affect any series or class of Securityholders
differently than any other series or class of Securityholders, then
such addition shall not, as evidenced by an Opinion of Counsel,
materially and adversely affect in any material respect the interests
of any series or class of Securityholders),
(iv) to add to the covenants, restrictions or
obligations of the Seller, the Servicer, the Owner Trustee or the
Indenture Trustee for the benefit of the Securityholders or
(v) to add, change or eliminate any other provision
of this Agreement in any manner that shall not, as evidenced by an
Opinion of Counsel, materially and adversely affect the interests of
the Securityholders.
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(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 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 10.1 or pursuant to any other provision of this Agreement, shall be
conclusive and binding on such Person and on all future holders of such Security
and of any Security issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
Security) 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 Securityholders; PROVIDED, HOWEVER, that no such
amendment shall
(i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, distributions or payments that
shall be required to be made on any Security without the consent of the
holder thereof (it being understood that the issuance of any Securities
after the Initial Closing Date as contemplated by this Agreement, the
Indenture and the Trust Agreement and the specification of the terms
and provisions thereof pursuant to an Officer's Issuance Certificate
(with respect to any Notes) or a Certificate Issuance Order (with
respect to any Certificates) shall not be deemed to have such effect
for purposes hereof),
(ii) adversely affect the rating of any series or
class of Securities by any Rating Agency without the consent of the
holders of two-thirds of the Outstanding Amount of such series of Notes
or the Voting Interests of such class of Certificates, as appropriate,
or
(iii) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of such aforesaid
percentage of Securityholders.
(c) Prior to the execution of any such amendment, supplement
or consent, the Servicer 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,
supplement or consent, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Securityholder.
(e) It shall not be necessary for the consent of
Securityholders pursuant to SUBSECTION 10.1(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 Securityholders provided for in this Agreement or in any
other Basic Document) and of evidencing the authorization of the execution
thereof by Securityholders shall be subject to such reasonable requirements as
the Indenture Trustee or the Owner Trustee may prescribe, including the
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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 10.2(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 10.1
as if this SECTION 10.1 were contained in the Pooling and Servicing Agreement.
SECTION 10.2 PROTECTION OF TITLE TO THE OWNER TRUST ESTATE.
(a) The Seller or the Servicer or both shall execute and file
such financing statements and cause to be executed and filed such continuation
statements or 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
Securityholders, the Indenture Trustee and the Owner Trustee hereunder in the
Receivables in the Accounts in the Pool of Accounts and the related Collateral
Security and in the proceeds thereof (including, without limitation, the filing
of UCC-1 financing statements on or prior to the Initial Closing Date). 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. The Seller agrees to use reasonable efforts to cause GMAC
to comply with its obligations under SECTION 7.02 of the Pooling and Servicing
Agreement.
(b) Within 60 days after the Seller or the Servicer make any
change in its name, identity or corporate structure that would 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, the Seller or the Servicer as applicable shall give the Indenture Trustee
and the Owner Trustee notice of any such change.
(c) Each of the Seller and the Servicer shall give the
Indenture Trustee and the Owner Trustee at least 60 days prior written notice of
any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement. The Servicer shall at all times maintain each office
from which it services Receivables arising under the Accounts in the Pool of
Accounts and its principal executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Eligible Receivable arising under an Account in the Pool of Accounts
accurately and in sufficient detail to
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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 such Receivable and the amounts from time to time deposited in the
Collection Account, Note Distribution Account, Revolver Distribution Account and
Certificate Distribution Account.
(e) In connection with the sale and transfer hereunder of the
Receivables in the Accounts in the Pool of Accounts and the related Collateral
Security from the Seller to the Trust, the Seller shall, at its own expense, on
or prior to the Initial Closing Date, in the case of the Initial Accounts, and
on or prior to the applicable Addition Date, in the case of Additional Accounts,
(i) indicate in its computer files and cause GMAC to indicate in its computer
files as required by the Pooling and Servicing Agreement, that the Eligible
Receivables in the Accounts in the Pool of Accounts have been sold and
transferred, and the Collateral Security assigned, to the Seller pursuant to the
Pooling and Servicing Agreement and that such property has been sold and
transferred to the Trust pursuant to this Agreement for the benefit of the
Securityholders and (ii) deliver (or cause GMAC to deliver) a true and complete
list of all such Accounts to the Owner Trustee specifying for each such Account,
as of the Initial Cut-Off Date, in the case of the Initial Accounts, and as of
the applicable Additional Cut-Off Date, in the case of Additional Accounts, its
account number and the outstanding principal balance of Eligible Receivables in
such Account. Such list, as supplemented from time to time to reflect Additional
Accounts, Selected Accounts and Removed Accounts (including Accounts removed as
described in SECTION 2.9), shall be the Schedule of Accounts to this Agreement
and is hereby incorporated into and made a part of this Agreement. The Owner
Trustee shall be under no obligation whatsoever to verify the accuracy or
completeness of the information contained in the Schedule of Accounts from time
to time.
(f) If at any time the Seller or the Servicer proposes to
sell, grant a security interest in, or otherwise transfer any interest in dealer
floor plan 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
Eligible Receivable arising under an Account in the Pool of Accounts indicate
clearly that an interest in such Receivable has been sold and is owned by the
Issuer.
(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 Receivable
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 Accounts then included
in the Pool of Accounts, together with a reconciliation of such list to the
Schedule of Accounts as initially furnished hereunder and to each notice
furnished before such request indicating removal from or addition to the
Accounts in the Pool of Accounts. 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 Accounts and a copy
of the Pooling and Servicing Agreement, the Trust Sale and Servicing Agreement
and the Indenture for examination by interested parties during normal business
hours at
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their respective Corporate Trust Offices or, in the case of the Seller, at its
office, located at the addresses set forth in SECTION 10.3.
(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 or supplement hereto, an Opinion of Counsel either (a)
stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Indenture Trustee and the Owner Trustee
in the Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (b) stating that,
in the opinion of such counsel, no such action is necessary to preserve and
protect such interest.
(j) To the extent required by law, the Seller shall cause the
Term Notes (other than any Unregistered Notes) to be registered with the
Securities and Exchange Commission pursuant to Section 12(b) or Section 12(g) of
the Exchange Act within the time periods specified in such sections.
SECTION 10.3 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 delivered as specified in
APPENDIX B hereto.
SECTION 10.4 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 THE PRINCIPLES OF CONFLICTS OF LAW THEREOF OR OF ANY OTHER
JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.5 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 enforceable to the fullest extent permitted, and if not
so permitted, 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 any
of the Securities or rights of any Interested Parties.
SECTION 10.6 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, 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 10.7 THIRD-PARTY BENEFICIARIES. This Agreement shall
inure to the benefit of and be binding upon the parties hereto, the
Securityholders and their respective successors and permitted assigns. Except
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as otherwise provided in SECTION 7.1 or in this ARTICLE X, no other person shall
have any right or obligation hereunder.
SECTION 10.8 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.
SECTION 10.9 HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 10.10 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 herein and 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 10.11 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 Securities to the Note Distribution Account, the Revolver 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 governmental 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 10.12 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 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 UCC
of any applicable jurisdiction and to evidence the repurchase of any interest in
any Receivable by GMAC, the Seller or the Servicer.
SECTION 10.13 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, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, power and privileges provided by law.
SECTION 10.14 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter
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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 10.15 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. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder, the Indenture Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
ARTICLE VI of the Indenture.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been executed by [ ] not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall [ ]
in its individual capacity or, except as expressly provided in the Trust
Agreement, as Owner Trustee of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of ARTICLE VI of the Trust
Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Sale and Servicing Agreement to be duly executed by their respective officers
hereunto duly authorized as of the day and year first above written.
SUPERIOR WHOLESALE INVENTORY FINANCING
TRUST [ ], Issuer
By: [ ], not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By:
Name:
Title:
WHOLESALE AUTO RECEIVABLES CORPORATION,
Seller
By:
Name:
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION,
Servicer
By:
Name:
Title:
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Acknowledged and Accepted:
[ ], not in its
individual capacity but solely
as Indenture Trustee,
By:
Name:
Title:
[ ],
not in its individual capacity
but solely as Owner Trustee,
By:
Name:
Title:
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EXHIBIT A
FORM OF ASSIGNMENT FOR THE INITIAL CLOSING DATE
For value received, in accordance with the Trust Sale and
Servicing Agreement, dated as of ________, ____ (the "TRUST SALE AND SERVICING
AGREEMENT"), between General Motors Acceptance Corporation, a Delaware
corporation, as Servicer ("GMAC"), Wholesale Auto Receivables Corporation, a
Delaware corporation (the "SELLER"), and Superior Wholesale Inventory Financing
Trust [ ] (the "TRUST"), the Seller does hereby sell, assign, transfer and
otherwise convey unto the Trust, without recourse, all of its right, title and
interest in, to and under (i) all of the Eligible Receivables existing in the
Accounts listed in the Schedule of Accounts as of the close of business on the
Initial Cut-Off Date and, so long as each such Account is included in the Pool
of Accounts, all Eligible Receivables created or deemed created thereunder on
each Receivables Purchase Date, all monies due or to become due thereon after
the Initial Cut-Off Date or such Receivables Purchase Date, as appropriate, all
Collateral Security with respect thereto and all amounts received with respect
thereto, (ii) Article IV and SECTIONS 3.04(C) AND 6.03 of the Pooling and
Servicing Agreement, dated as of ________, ____, between GMAC and the Seller,
with respect to such Receivables, (iii) the Custodian Agreement with respect to
such Receivables and (iv) all proceeds of the foregoing (including "proceeds" as
defined in SECTION 9-306 of the UCC and Recoveries), in each case, as more fully
described in the Trust Sale and Servicing Agreement.
The foregoing sale, transfer, assignment and conveyance and
any sales, transfers, assignments and conveyances subsequent to the date hereof
do not constitute, and are not intended to result in, the creation or an
assumption by the Trust of any obligation of the Seller, GMAC, General Motors or
any other Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto, including any obligation to any
Dealers.
It is the intention of Seller and the Trust that the transfers
and assignments contemplated by this Assignment, including transfers and
assignments subsequent to the date hereof, shall constitute a sale of the
property described herein and in the Pooling and Servicing Agreement from the
Seller to the Trust 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.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Trust Sale and Servicing Agreement and is to be governed by the
Trust Sale and Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Trust Sale and Servicing Agreement.
* * * * *
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IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of ________, ____.
WHOLESALE AUTO RECEIVABLES CORPORATION
By:
Name:
Title:
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EXHIBIT B
LOCATIONS OF SCHEDULE OF ACCOUNTS
The Schedule of Accounts is on file
at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. General Motors Acceptance Corporation
4. Wholesale Auto Receivables Corporation
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EXHIBIT C
FORM OF ASSIGNMENT FOR EACH ADDITION DATE
For value received, in accordance with the Trust Sale and
Servicing Agreement, dated as of ________, ____ (the "TRUST SALE AND SERVICING
AGREEMENT"), between General Motors Acceptance Corporation, a Delaware
corporation, as Servicer ("GMAC"), Wholesale Auto Receivables Corporation, a
Delaware corporation (the "SELLER") and Superior Wholesale Inventory Financing
Trust [ ] (the "TRUST"), the Seller does hereby sell, assign, transfer and
otherwise convey unto the Trust, without recourse, with respect to the
Additional Accounts to which this Assignment relates, all of its right, title
and interest in, to and under (i) all of the Eligible Receivables as of the
close of business on the related Additional Cut-Off Date in such Additional
Accounts and, so long as each such Account is included in the Pool of Accounts,
all Eligible Receivables created or deemed created thereunder on each
Receivables Purchase Date, all monies due or to become due thereon after such
Additional Cut-Off Date or such Receivables Purchase Date, as appropriate, all
Collateral Security with respect thereto and all amounts received with respect
thereto, (ii) ARTICLE IV and SECTIONS 3.04(C) AND 6.03 of the Pooling and
Servicing Agreement, dated as of ________, ____, between GMAC and the Seller,
with respect to such Receivables, including the right of the Seller to cause
GMAC to repurchase Receivables under certain circumstances, (iii) the Custodian
Agreement with respect to such Receivables and (iv) all proceeds of the
foregoing (including "proceeds" as defined in SECTION 9-306 of the UCC and
Recoveries), in each case as more fully described in the Trust Sale and
Servicing Agreement.
The foregoing sale, transfer, assignment and conveyance and
any sales, transfers, assignments and conveyances subsequent to the date hereof
do not constitute, and are not intended to result in, the creation or an
assumption by the Trust of any obligation of the Seller, GMAC, General Motors or
any other Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto, including any obligation to any
Dealers.
It is the intention of the Seller and the Trust that the
transfers and assignments contemplated by this Assignment, including transfers
and assignments subsequent to the date hereof, shall constitute a sale of the
property described herein and the Pooling and Servicing Agreement from the
Seller to the Trust 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.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Trust Sale and Servicing Agreement and is to be governed by the
Trust Sale and Servicing Agreement.
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Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Trust Sale and Servicing Agreement.
* * * * *
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IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of , .
WHOLESALE AUTO RECEIVABLES CORPORATION
By:
Name:
Title:
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EXHIBIT D
FORM OF OPINION OF COUNSEL WITH RESPECT TO
ADDITION OF ACCOUNTS
PROVISION TO BE INCLUDED IN OPINION OF COUNSEL
DELIVERED PURSUANT TO SECTION 2.7(B)(IX)
OF THE TRUST SALE AND SERVICING AGREEMENT
The opinion set forth below is subject to standard
qualifications, assumptions, limitations and exceptions. Capitalized terms used
but not defined herein are used as defined in the Trust Sale and Servicing
Agreement dated as of ________, ____ among General Motors Acceptance
Corporation, as servicer, Wholesale Auto Receivables Corporation, as Seller (the
"Seller"), and Superior Wholesale Inventory Financing Trust [ ].
The Assignment delivered on the Addition Date has been duly
authorized, executed and delivered by the Seller, and constitutes the
valid and legally binding obligation of the Seller, enforceable against the
Seller in accordance with its terms.
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EXHIBIT 99.3
TRUST AGREEMENT
BETWEEN
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
AND
[ ]
OWNER TRUSTEE
DATED AS OF ________, ____
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
1.1 Definitions.................................................................................1
ARTICLE II
ORGANIZATION
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 Certificate Owners.........................................................3
2.8 Title to Trust Property.....................................................................3
2.9 Situs of Trust..............................................................................3
2.10 Representations and Warranties of the Seller................................................3
2.11 Tax Treatment...............................................................................4
ARTICLE III
THE CERTIFICATES
3.1 [Intentionally Omitted].....................................................................4
3.2 Form of the Certificates....................................................................4
3.3 Execution, Authentication and Delivery......................................................5
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.......................................................8
3.9 Appointment of Paying Agent.................................................................9
3.10 [Reserved]..................................................................................9
3.11 Book-Entry Certificates.....................................................................9
3.12 Notices to Clearing Agency.................................................................10
3.13 Termination of Book-Entry Registration.....................................................10
3.14 Seller as Certificateholder................................................................11
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
4.1 Prior Notice to Certificateholders with Respect to Certain Matters.........................11
4.2 Action by Certificateholders with Respect to Certain Matters...............................12
4.3 Action by Certificateholders with Respect to Bankruptcy....................................12
4.4 Restrictions on Certificateholders' Power..................................................12
4.5 Majority Control...........................................................................12
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
5.1 Establishment of Certificate Distribution Account..........................................13
5.2 Application of Trust Funds.................................................................13
5.3 Method of Payment..........................................................................14
5.4 Accounting and Reports to the Certificateholders, the Internal Revenue
Service and Others....................................................................14
5.5 Signature on Returns; Tax Matters Partner..................................................15
ARTICLE VI
THE OWNER TRUSTEE
6.1 Duties of Owner Trustee....................................................................15
6.2 Rights of Owner Trustee....................................................................16
6.3 Acceptance of Trusts and Duties............................................................16
6.4 Action upon Instruction by Certificateholders..............................................18
6.5 Furnishing of Documents....................................................................18
6.6 Representations and Warranties of Owner Trustee............................................19
6.7 Reliance; Advice of Counsel................................................................19
6.8 Owner Trustee May Own Certificates and Notes...............................................20
6.9 Compensation and Indemnity.................................................................20
6.10 Replacement of Owner Trustee...............................................................20
6.11 Merger or Consolidation of Owner Trustee...................................................21
6.12 Appointment of Co-Trustee or Separate Trustee..............................................22
6.13 Eligibility Requirements for Owner Trustee.................................................23
ARTICLE VII
TERMINATION OF TRUST AGREEMENT
7.1 Termination of Trust Agreement.............................................................23
7.2 [Reserved].................................................................................25
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ARTICLE VIII
AMENDMENTS
8.1 Amendments Without Consent of Securityholders..............................................25
8.2 Amendments With Consent of Certificateholders and Noteholders..............................25
8.3 Form of Amendments.........................................................................26
ARTICLE IX
MISCELLANEOUS
9.1 No Legal Title to Owner Trust Estate.......................................................27
9.2 Limitations on Rights of Others............................................................27
9.3 Derivative Actions.........................................................................27
9.4 Notices....................................................................................27
9.5 Severability of Provisions.................................................................27
9.6 Counterparts...............................................................................28
9.7 Successors and Assigns.....................................................................28
9.8 No Petition Covenants......................................................................28
9.9 No Recourse................................................................................28
9.10 Headings...................................................................................28
9.11 Governing Law..............................................................................29
9.12 Certificate Transfer Restrictions..........................................................29
9.13 Indemnification by and Reimbursement of the Servicer.......................................30
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Undertaking Letter
Exhibit D Form of Investor Letter
</TABLE>
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THIS TRUST AGREEMENT, dated as of ________, ____, between
WHOLESALE AUTO RECEIVABLES CORPORATION, a Delaware corporation, as Seller, and
[ ], a [ ] banking corporation, as Owner Trustee.
In consideration of the premises and the mutual covenants
herein contained, the parties hereto 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 Part I of 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 the Trust
Agreement as it may be amended and supplemented from time to time, and all
references herein to Articles, Sections and subsections are to Articles,
Sections and subsections of this Agreement unless otherwise specified. The rules
of construction set forth in Part II of such Appendix shall be applicable to
this Agreement.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as "Superior
Wholesale Inventory Financing Trust [ ]" 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, and the
Trust shall have the power and authority, to engage in the following activities:
(i) to acquire, manage and hold the Receivables to be transferred
to the Trust from time to time pursuant to the Trust Sale and
Servicing Agreement;
(ii) to issue and sell the Notes pursuant to the Indenture or to
another indenture, note purchase agreement or similar agreement and
the Certificates pursuant to this Agreement, and to sell, transfer or
exchange the Notes and the Certificates;
(iii) to acquire property and assets from the Seller pursuant to
the Trust Sale and Servicing Agreement, to make payments or
distributions on the Securities, to make
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withdrawals from the Reserve Fund and other accounts established
pursuant to the Basic Documents and to pay the organizational,
start-up and transactional expenses of the Trust;
(iv) to establish, acquire, hold and terminate liquidity, credit
and other enhancement arrangements, including each Basis Swap and
other Specified Support Arrangement from time to time, and perform its
obligations thereunder;
(v) 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;
(vi) to enter into and perform its obligations and exercise its
rights under the Basic Documents to which it is to be a party;
(vii) 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
(viii) 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 Securityholders.
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
and obligations set forth herein and in the Trust Sale and Servicing Agreement
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,
that this Agreement constitute the governing instrument of such business trust
and that the Certificates represent the equity interests therein. The rights of
the Certificateholders shall be determined as set
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forth herein and in the Business Trust Statute and the relationship between the
parties created by this Agreement shall not constitute indebtedness. The parties
hereto agree that, unless otherwise required by appropriate taxing 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
partnership for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth in this Agreement,
the Trust Sale and Servicing Agreement and the Business Trust Statute with
respect to accomplishing the purposes of the Trust. The Owner Trustee agrees to
file the certificate required under ss3810 et seq. of the Business Trust Statute
in connection with the formation of the Trust as a business trust under the
Business Trust Statute.
SECTION 2.7 Liability of the Certificate Owners. Certificateholders and
holders of beneficial interests therein shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the Delaware General Corporation Law.
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 and distributions shall 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 contemplated to be
transferred to the Trust pursuant to the Trust Sale and Servicing
Agreement.
(b) The Seller is duly qualified to do business and, where necessary
is in good standing (or is exempt from such requirement), 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, except where the failure to so qualify or obtain licenses
or approvals would not have a material adverse effect on its ability to
perform its obligations under the Basic Documents to which it is a party.
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(c) The Seller has the power and authority to execute and deliver this
Agreement, to carry out its terms and to consummate the transactions
contemplated herein; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by the Seller by all necessary corporate action.
(d) The execution of this Agreement and the consummation of the
transactions contemplated herein 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,
mortgage, deed of trust 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, mortgage, deed of trust 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 Governmental Authority having jurisdiction over the Seller or
any of its properties.
SECTION 2.11 Tax Treatment. As long as the Seller is the sole owner of the
Certificates, the Seller and Owner Trustee, by entering into this Agreement, (i)
express their intention that the Trust will be disregarded for federal income
tax purposes and will be treated as a division of the Seller and (ii) agree that
paragraph 5.5 of this Agreement will not be applicable. If the Seller is not the
sole owner of the Certificates, through sale of Certificates, issuance by the
Trust of additional Certificates to a person other than the Seller, or
otherwise, the Seller and Owner Trustee, by entering into this Agreement, and
the Certificateholders and the Certificate Owners, by acquiring any Certificate
or interest in the Trust, (i) express their intention that the Certificates
shall qualify under applicable tax law as partnership interests in a
partnership, with the assets of the partnership held by the Trust, (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the
Certificates as partnership interests for purposes of federal, 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, and (iii) agree
that immediately upon there being more than one owner of Certificates, paragraph
5.5 of this Agreement will become applicable.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 [Intentionally 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 denominations of [ $ ] or greater (or such
other amount as the Seller may determine in orer to prevent the Trust from being
treated as a "publicly traded partnership" under Section 7704 of the Code, but
in no event less than $250,000). The Certificates shall represent the entire
beneficial interest in the Trust. The Certificates shall be executed on behalf
of the Trust by
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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.
(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 Certificates shall be issued in fully-registered form. The terms of
the Certificates as set forth in Exhibit A shall form part of this Agreement.
SECTION 3.3 Execution, Authentication and Delivery.
(a) On the Initial Closing Date, concurrently with the initial sale,
transfer and assignment of Receivables to the Trust pursuant to the Trust Sale
and Servicing Agreement, the Owner Trustee shall cause Certificates with an
aggregate initial Certificate Balance equal to [ $ ] 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. Such Certificates shall be designated as Floating Rate
Asset-Backed Certificates, Class [ ], and the Certificate Rate for such
Certificates shall equal, with respect to any Distribution Date, the product of
(i 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 Initial
Distribution Date, from and including the Initial Closing Date) to but excluding
such Distribution Date and the denominator of which is 360 and (ii) LIBOR plus [
%].
(b) From time to time after the Initial Closing Date, at the direction of
the Seller (a "Certificate Issuance Order"), and upon satisfaction of the
conditions set forth in Section 4.9 of the Trust Sale and Servicing Agreement,
the Owner Trustee shall cause additional Certificates of any class theretofore
issued, or Certificates of a new class, with an aggregate initial Certificate
Balance specified by the Seller, 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. All such
Certificates shall have the same terms, provisions and rights as those
Certificates issued on the Initial Closing Date; provided, however, that any
class of Certificates may have a different Certificate Rate than the
Certificates of any other class and may be issued in book-entry form pursuant to
Section 3.11 hereof. The Certificate Rate for any such Certificates issued after
the Initial Closing Date shall be set forth in the related Certificate Issuance
Order. The terms of any Certificates as provided in a Certificate Issuance Order
shall be considered terms of this Agreement. Any Certificate Issuance Order
issued pursuant to this Section shall be considered a part of this Agreement.
(c) 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
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in Exhibit A, executed by the Owner Trustee or 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. [ ] is hereby appointed as the Owner Trustee's authenticating
agent.
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 in a manner such that
the resulting Certificate if it had been sold in the original offering would
have had an initial offering price of less than [ $ ] (or such other amount as
the Seller may determine in order to prevent the Trust from being treated as a
"publicly traded partnership" under Section 7704 of the Code, but in no event
less than $250,000) and any attempted transfer of a Certificate in contravention
of this restriction shall be void ab initio and the purported transferor shall
continue to be treated as the owner of such Certificate for all purposes. [ ]
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) Certificateholders may at any time, without consent of the Noteholders,
sell, transfer, convey or assign in any manner whatsoever their rights to and
interests in the Certificates, provided that the following conditions are
satisfied: (i) the transferee provides written verification from the applicable
Rating Agencies that such sale, transfer, conveyance or assignment will not
result in a reduction or withdrawal of the rating of any class of Notes then
outstanding, (ii the transferee provides to the Owner Trustee and the Indenture
Trustee an opinion of independent counsel that such action will not cause the
Trust to be treated as an association (or publicly traded partnership) taxable
as a corporation for Federal income tax purposes, (iii) such transferee or
assignee agrees in writing to take positions for tax purposes consistent with
the tax positions agreed to be taken by the initial Certificateholders herein,
(iv) the transferee provides the Owner Trustee (and the Certificate Registrar if
not the Owner Trustee) with an opinion of counsel satisfactory to the Owner
Trustee stating that such transfer (x) is exempt from registration under
applicable state and federal securities laws, (y) will not cause the Trust to be
an "investment company" or under the "control" of an "investment company" within
the meaning of the Investment Company Act and (z) otherwise complies with the
restrictions on transfer contained in this Agreement, and (v the transferee
certifies to the Owner Trustee that it is not a Benefit Plan. The Owner Trustee
shall have no obligation to determine whether a transferee of a Trust
Certificate is or is not a Benefit Plan.
(c) Subject to Section 3.4(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 of the same class in authorized denominations of a like
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aggregate amount dated the date of authentication by the Owner Trustee or any
authenticating agent.
(d) At the option of a Holder, Certificates may be exchanged for other
Certificates of the same class in authorized denominations of a like 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.
(e) 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 and such other documents
and instruments as may be required by Section 3.4(b). Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently destroyed by the Owner Trustee or Certificate Registrar in
accordance with its customary practice. The Owner Trustee shall certify to the
Seller that surrendered Certificates have been duly canceled and retained or
destroyed, as the case may be.
(f) 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 protected purchaser, the Owner Trustee shall
execute on behalf of the Trust and the Owner Trustee shall authenticate and
deliver (or shall cause[ ], 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 the same class in authorized
denominations of a like 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 distributions to such
destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or distribution in
respect of a destroyed, lost or stolen Certificate pursuant to subsection
3.5(a), a protected 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 (and any distributions or payments made with respect thereto) from
the Person to whom it was delivered or any Person taking such replacement
Certificate from such Person to whom such
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replacement Certificate was delivered or any assignee of such Person, except a
protected 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 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 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 the offices of[ ], 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.
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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; provided that no such reports shall be
required so long as the Seller is the sole Certificateholder. 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[ ]. [ ] shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Owner Trustee. If[ ]
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
distribution to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Sections 6.3, 6.6, 6.7 and 6.9 shall apply to the Owner Trustee also in its role
as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 3.10 [Reserved]
SECTION 3.11 Book-Entry Certificates. The Certificates to be issued on the
Initial Closing Date shall be issued in definitive form. If, and to the extent,
so provided in the related Certificate Issuance Order, Certificates to be issued
after the Initial Closing Date (other than those described in Section 3.10) may
be issued in the form of a typewritten certificate or certificates representing
Book-Entry Certificates. Any such Book-Entry Certificate shall be delivered to
the Clearing Agency by or on behalf of the Trust and shall be registered on the
Certificate Register in the name of the Clearing Agency (or its nominee) and no
Certificate Owner shall receive a Definitive Certificate. If and to the extent
Book-Entry Certificates have been issued pursuant to this Section 3.11 with
respect to any Certificates:
(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 distribution of Certificate Balance and interest on such
Certificates and the giving of instructions or directions hereunder) as the
sole Holder of such Certificates, and shall have no obligation to the
Certificate Owners;
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(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 and, unless and until Definitive
Certificates are issued pursuant to Section 3.13, the initial Clearing
Agency shall make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of Certificate Balance
and interest on such 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 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 written 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.
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. With respect to any Certificates
issued as Book-Entry Certificates, whenever a notice or other communication to
the Certificateholders is required under this Agreement, unless and until
Definitive Certificates representing such Certificates shall have been issued to
the related Certificate Owners pursuant to Section 3.13, the Owner Trustee shall
give all such notices and communications specified herein to be given to the
related Certificateholders to the Clearing Agency and shall have no further
obligation to such Certificate Owners.
SECTION 3.13 Termination of Book-Entry Registration. With respect to any
Certificates issued as 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 Servicing 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 Book-Entry Certificates by
the Clearing Agency, accompanied by registration instructions, the Owner Trustee
shall execute and authenticate the related 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
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conclusively rely on, and shall be protected in relying on, such instructions.
Additionally, Definitive Certificates shall be issued to a Certificate Owner (or
its nominee) at any time (subject to the rules and procedures of the Clearing
Agency) upon the request of such Certificate Owner that its interest be
exchanged for a Definitive Certificate or Certificates. Upon the issuance of
such Definitive Certificates, the Owner Trustee shall recognize the Holders of
such Definitive Certificates as Certificateholders.
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 (other than an
action to collect on a Receivable or an action by the Indenture Trustee
pursuant to the Indenture) and the compromise of any action, claim or
lawsuit brought by or against the Trust (other than an action to collect on
a Receivable or an action by the Indenture Trustee pursuant to the
Indenture);
(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 interest of the
Certificateholders (it being understood that the issuance of additional
Certificates as contemplated by Section 3.3 shall not be deemed to
materially adversely affect 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
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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.
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 8.2 thereof or
(d) except as expressly provided in the Basic Documents, sell the Receivables
transferred to the Trust pursuant to the Trust Sale and Servicing Agreement 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 the
affirmative vote of, or a written consent signed by, the holders of a majority
of the Voting Interests upon at least 30 days prior notice thereof.
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. By its
acceptance of any Certificate issued to it on the Closing Date, the Seller
agrees that it, at any time that it is the holder thereof, shall not approve or
be deemed to have approved the commencement of a voluntary proceeding in
bankruptcy relating to the Trust for purposes of this Section 4.3 unless such
commencement is approved by the affirmative vote of all of the members of the
Seller's board of directors.
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 shall be effective if such action is
taken or such consent is 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.
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(a) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Owner Trustee an Eligible Deposit
Account known as the Superior Wholesale Inventory Financing Trust [ ]
Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. The Certificate
Distribution Account shall initially be established with[ ].
(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 Investment Proceeds therefrom as set forth
in the Trust Sale and Servicing Agreement) for the benefit of the
Certificateholders. 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 the amounts deposited in the Certificate Distribution Account
pursuant to Section 4.5 of the Trust Sale and Servicing Agreement with respect
to such Distribution Date (i) to the extent of the amount deposited with respect
to Aggregate Certificateholders' Interest, pro rata based upon the amount of
interest due with respect to each Certificate and (ii) to the extent of any
amount deposited with respect to Aggregate Certificateholder's Principal, on a
pro rata basis. Notwithstanding the foregoing or anything else to the contrary
in this Agreement or the other Basic Documents, so long as Certificates
representing in the aggregate a 100% beneficial interest in the Trust are held
by the Seller, (i) no Certificate Distribution Account shall be required to be
established or maintained and (ii) all distributions and payments on the
Certificates (including the final distribution as contemplated by Section 7.1(c)
hereof) required hereunder or under the Trust Sale and Servicing Agreement shall
be made directly to the Seller by the Indenture Trustee (whether or not the
Trust Sale and Servicing Agreement otherwise contemplates deposit into the
Certificate Distribution Account) and the Owner Trustee shall have no duty or
liability to see to such distribution.
(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 4.8 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
Fund (and amounts, if any, distributed from the Reserve Fund), and the Monthly
Servicing Fee with respect to the Distribution Date or the related Collection
Period, as applicable, each since the last statement so
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provided to Certificateholders; provided that no such statement shall be
required to be sent by the Owner Trustee so long as the Seller is the sole
Certificateholder.
(c) If any withholding tax is imposed on the Trust's distribution (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; provided that the Owner Trustee shall not have an obligation to withhold
any such amount so long as the Seller is the sole Certificateholder. 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 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 Section 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 Section 7.1(c) and subject to the
right of the Owner Trustee and the Clearing Agency to agree otherwise in the
case of Book-Entry Certificates, distributions required to be made to
Certificateholders on any Distribution Date shall be made to each
Certificateholder 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 shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Record Date, 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 partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or
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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.
In preparing and filing tax returns for the Trust, the Owner Trustee shall
allocate taxable income of the Trust for each Collection Period in the following
manner: (A) to the Certificateholders, an amount equal to the sum of
(1) interest distributable on the Certificates on the Distribution Date related
to such Collection Period and (2) any Trust income attributable to discount on
the Receivables that corresponds to any excess of the Certificate Balance of the
Certificates over their initial issue price; and (B) to the Seller, if and to
the extent that the taxable income of the Trust for such Collection Period
exceeds the amount computed under (A) above. Unless otherwise permitted or
required by any applicable law or regulation, the Owner Trustee shall allocate
amounts of taxable income of the Trust for a particular Collection Period among
the Certificateholders in proportion to the Certificate Balance owned by them as
of the Record Date for the related Distribution Date.
SECTION 5.5 Signature on Returns; Tax Matters Partner. Subject to Section
2.11, 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. The
Seller shall be the "tax matters partner" of the Trust pursuant to the Code.
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:
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(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.
(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.
(g) 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 wilful 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):
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(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 held by the Trust, or the perfection and priority of any
security interest created by any such Receivable in any 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
distributions and payments to be made to Certificateholders under this
Agreement or to Noteholders under the Indenture, including, without
limitation: the existence and contents of any such Receivable on any
computer or other record thereof; the validity of the assignment of any
such Receivable to the Trust or of any intervening assignment; the
completeness of any such Receivable; the performance or enforcement of any
such 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 held by the Trust 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 wilful 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.
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 the Noteholders and the Certificateholders,
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.
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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. The eligibility
requirements set forth in Section 6.13 are satisfied with respect to it.
(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 regulating the banking and
corporate trust activities of banks or trust companies in the jurisdiction in
which the Trust was formed.
(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
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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 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.
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 7.1 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 at any time give notice of its intent to resign
and be discharged from the trusts hereby created by giving written notice
thereof to the Administrator; provided that no such resignation shall become
effective, and the Owner Trustee shall not resign, prior to the time set forth
in Section 6.10(c). 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, the resigning Owner Trustee giving such notice may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee. The
Administrator shall remove the Owner Trustee if:
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(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.
(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, and no such resignation shall be deemed to have
occurred, 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 Person 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 Person
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 Person shall be eligible pursuant to Section 6.13, and without the
execution or filing of any instrument or any
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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.
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 of the Dealers 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
(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
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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 satisfy the requirements of Section 26(a)(1) of the
Investment Company Act. 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 an
aggregate capital, surplus and undivided profits 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 and at least Baa3 by Moody's. 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 aggregate capital, surplus and
undivided profits of such corporation shall be deemed to be its aggregate
capital, surplus and undivided profits 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.
ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
(a) The Trust shall terminate in accordance with Section 3808 of the
Business Trust Statute on the date (the "Trust Termination Date") on which the
first of the following occurs: (i) if the Seller so elects, the day following
the Distribution Date on which all amounts required to be paid to the
Securityholders pursuant to the Basic Documents have been paid (or deposited in
the Note Distribution Account, the Certificate Distribution Account or the
Revolver Distribution Account) and the aggregate Outstanding Amount of the
Revolving Notes is zero and (ii)the Specified Trust Termination Date. This
Agreement and the obligations of the parties hereunder (other than Section 6.9
hereof and as otherwise expressly provided herein) shall terminate and be of no
further force or effect (i) if the Trust Termination Date is determined pursuant
to clause (i) above, on the Trust Termination Date and (ii) if the Trust
Termination Date is determined pursuant to clause (ii) above, on the date
following the Distribution Date on which the final payments to be made to the
Securityholders pursuant to the Basic Documents have been paid (or deposited in
the appropriate Distribution Accounts).
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(b) The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder 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. Except as provided in Section 7.1(a), neither the Seller nor any
Certificateholder shall be entitled to revoke or terminate the Trust or this
Agreement.
(c) Notice of any termination of the Trust specifying the Distribution Date
upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for distribution 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 Section 9.4 of the Trust Sale and Servicing Agreement, stating:
(i) the Distribution Date upon or with respect to which the final distribution
of the Certificate Balance 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 distribution of the Certificate
Balance; and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions 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) Notice of any termination of the Trust specifying the Distribution Date
upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for distribution 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 Section 9.4 of the Trust Sale and Servicing Agreement, stating:
(i) the Distribution Date upon or with respect to which the final distribution
of the Certificate Balance 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 distribution of the Certificate
Balance; and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions 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. The Seller shall have the beneficial interest in any assets
remaining in the Trust following final payment of the Certificates.
(e) If all of the Certificateholders shall not surrender their Certificates
for cancellation within six months after the date specified in the written
notice specified 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 with respect
thereto.
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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.
(f) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be canceled 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 [Reserved].
ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Securityholders. This Agreement
may be amended by the Seller and the Owner Trustee without the consent of any of
the Securityholders (but with prior notice to 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 liquidity, credit or other enhancement arrangement
for the benefit of any Securityholders (provided that if any such addition shall
affect any series of Securityholders differently than any other series of
Securityholders, then such addition shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any series of
Securityholders), (iv) add to the covenants, restrictions or obligations of the
Seller or the Owner Trustee for the benefit of the Securityholders, (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, (vi) restrict transfers of Certificates
(or interests therein) or as otherwise required to prevent the Trust from being
treated as a "publicly traded partnership" under Section 7704 of the Code or
(vii) add, change or eliminate any other provision of this Agreement in any
manner that shall not, as evidenced by an Opinion of Counsel, materially and
adversely affect the interests of the Securityholders.
SECTION 8.2 Amendments With Consent of Certificateholders 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 business on
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 business on 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
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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, distributions that shall be required to be made on any Security
without the consent of the Holder thereof (it being understood that the issuance
of any Securities after the Initial Closing Date as contemplated by this
Agreement, the Trust Sale and Servicing Agreement and the Indenture and the
specification of the terms and provisions thereof pursuant to a Certificate
Issuance Order (with respect to any Certificates) or an Officer's Issuance
Certificate (with respect to any Notes) shall not be deemed to have such effect
for purposes hereof), (b) adversely effect the rating of any series of
Securities without the consent of the Holders of two- thirds of the Outstanding
Amount of such series of Notes or the Voting Interests with respect to such
Certificates, as appropriate or (c) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all of the
Notes and all of the Voting Interests with respect to Certificates then
outstanding. Prior to the execution of any such amendment, supplement or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment, supplement or consent to the Rating Agencies.
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 Securityholders 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 Securityholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
Securityholders 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.
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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,
Section 7.1(c) and Section 9.13, 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.
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 delivered as specified in Appendix
B to the Trust Sale and Servicing Agreement.
(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 enforceable to the fullest extent permitted, and if not so
permitted, shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
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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 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.
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 Covenants. The Owner Trustee by entering this Trust
Agreement and each Certificateholder, by accepting a Certificate (or interest
therein) issued hereunder, hereby covenants and agrees that they shall not,
prior to the day that is one year and one day after the termination of the
Trust, acquiesce, petition or otherwise invoke or cause the Seller or the Trust
to invoke in any court or government authority for the purpose of commencing or
sustaining a case against the Seller or the Trust 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 Trust or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Seller or the Trust.
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 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 Certificate Balance with respect to
or interest on, 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 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.
SECTION 9.10 Headings. The headings herein are for purposes of reference
only and shall not affect the meaning or interpretation of any provision hereof.
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SECTION 9.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF OR OF ANY OTHER
JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.12 Certificate Transfer Restrictions.
(a) The Certificates may not be acquired by or for the account of a Benefit
Plan unless the Benefit Plan acquiring a Certificate has available to it an
exemption from the prohibited transaction rules under Section 406(a) of ERISA
and Section 4975 of the Code and such exemption is applicable to the purchase
and holding of the Certificates. Unless the Seller determines that such an
exemption is available, 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
pursuant to Section 3.4(b), the Certificateholder and the Certificate Owner
shall execute and deliver to the Owner Trustee an Undertaking Letter in the form
set forth in Exhibit C. The Certificates are also subject to the minimum
denomination specified in Section 3.4(a).
(b) The Certificates will not be registered under the Securities Act or the
securities laws of any other jurisdiction. Consequently, the Certificates are
not transferable other than pursuant to an exemption from the registration
requirements of the Securities Act and satisfaction of certain other provisions
specified herein. No sale, pledge or other transfer of the Certificates (or
interest therein) may be made by any Person unless either (i) such sale, pledge
or other transfer is made to the Seller, (ii) such sale, pledge or other
transfer is made to an Institutional Accredited Investor that executes a
certificate, substantially in the form attached hereto as Exhibit D, to the
effect that it is an Institutional Accredited Investor acting for its own
account (and not for the account of others) or as a fiduciary or agent for
others (which others also are Institutional Accredited Investors unless the
holder is a bank acting in its fiduciary capacity), (iii) so long as the
Certificates are eligible for resale pursuant to Rule 144A under the Securities
Act, such sale, pledge or other transfer is made to a person whom the seller
reasonably believes after due inquiry is a "qualified institutional buyers"
within the meaning of Rule 144A under the Securities Act (a "Qualified
Institutional Buyer") acting for its own account (and not for the account of
others) or as a fiduciary or agent for others (which others also are Qualified
Institutional Buyers) to whom notice is given that the sale, pledge or transfer
is being made in reliance on Rule 144A under the Securities Act, or (iv) such
sale, pledge or other transfer is otherwise made in a transaction exempt from
the registration requirements of the Securities Act, in which case (A) the Owner
Trustee shall require that both the prospective transferor and the prospective
transferee certify to the Owner Trustee and the Seller in writing the facts
surrounding such transfer, which certification shall be in form and substance
satisfactory to the Owner Trustee and the Seller, and (B) the Owner Trustee
shall require a written opinion of counsel (which will not be at the expense of
the Seller or the Owner Trustee) satisfactory to the Seller and the Owner
Trustee to the effect that such transfer will not violate the Securities Act. No
sale, pledge or other transfer may be made to any one person for Certificates
with a face amount of less than [ $ ] (or such other amount as the Seller may
determine in order to prevent the Trust from being treated as a "publicly traded
partnership" under Section 7704 of the
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Code, but in no event less than $250,000) and, in the case of any Person acting
on behalf of one or more third parties (other than a bank (as defined in Section
3(a)(2) of the Securities Act) acting in its fiduciary capacity), for
Certificates with a face amount of less than such amount for each such third
party. Any attempted transfer in contravention of the immediately preceding
restriction will be void ab initio and the purported transferor will continue to
be treated as the owner of the Certificates for all purposes. Neither the Seller
nor the Owner Trustee shall be obligated to register the Certificates under the
Securities Act, qualify the Certificates under the securities laws of any state
or provide registration rights to any purchaser or holder thereof.
(c) Each Certificate shall bear a legend to the effect set forth in
subsections (a) and (b) above.
(d) The Seller shall be responsible for determining compliance with the
restrictions set forth in this Section 9.12.
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 7.3(b) of
the Trust Sale and Servicing Agreement and (ii) the Seller and its directors,
officers, employees and agents in accordance with Section 3.4 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
7.1(a) of the Trust Sale and Servicing Agreement.
* * * * *
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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:
WHOLESALE AUTO RECEIVABLES
CORPORATION, Seller
By:
Name:
Title:
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EXHIBIT A
[FORM OF CERTIFICATE]
NUMBER [ $ ]
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 DISTRIBUTION, 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 DISTRIBUTION 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.1
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE IN THE UNITED
STATES OR ANY FOREIGN SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS
CERTIFICATE THE HOLDER OF THIS CERTIFICATE (A) IS DEEMED TO REPRESENT
TO THE SELLER AND THE OWNER TRUSTEE (i) THAT IT IS AN INSTITUTIONAL
INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") AND THAT IT IS
ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS
ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A
BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR INVESTMENT AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, THE PUBLIC
DISTRIBUTION HEREOF OR (ii) THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS -------- 1 Applicable only to Book-Entry Certificates.
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DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING SUCH
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR
AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED
INSTITUTIONAL BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
BY ANY PERSON UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS
MADE TO THE SELLER, (ii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT EXECUTES A CERTIFICATE,
SUBSTANTIALLY IN THE FORM SPECIFIED IN THE TRUST AGREEMENT, TO THE
EFFECT THAT IT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACTING FOR ITS
OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED
INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY
CAPACITY), (iii) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR
OTHER TRANSFER IS MADE TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
AFTER DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE,
PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR
(iv) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN WHICH CASE (A) THE OWNER TRUSTEE SHALL REQUIRE THAT
BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY
TO THE OWNER TRUSTEE AND THE SELLER IN WRITING THE FACTS SURROUNDING
SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE OWNER TRUSTEE AND THE SELLER, AND (B) THE OWNER
TRUSTEE SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH WILL NOT BE
AT THE EXPENSE OF THE SELLER OR THE OWNER TRUSTEE) SATISFACTORY TO THE
SELLER AND THE OWNER TRUSTEE TO THE EFFECT THAT SUCH TRANSFER WILL NOT
VIOLATE THE SECURITIES ACT. NO SALE, PLEDGE OR OTHER TRANSFER MAY BE
MADE TO ANY ONE PERSON FOR CERTIFICATES WITH A FACE AMOUNT OF LESS
THAN [ $ ] (OR SUCH OTHER AMOUNT AS THE SELLER MAY DETERMINE IN ORDER
TO PREVENT THE TRUST FROM BEING TREATED AS A "PUBLICLY TRADED
PARTNERSHIP" UNDER SECTION 7704 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), BUT IN NO EVENT LESS THAN $250,000) AND, IN
THE CASE OF ANY PERSON ACTING ON BEHALF OF ONE OR MORE THIRD PARTIES
(OTHER THAN A BANK (AS DEFINED IN SECTION 3(a)(2)
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OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR OFFERED
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN SUCH AMOUNT FOR EACH SUCH
THIRD PARTY. ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING RESTRICTION WILL BE VOID AB INITIO AND THE
PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE
OFFERED CERTIFICATES FOR ALL PURPOSES.
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 CODE, OR (iii) ANY
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY, UNLESS THE SELLER DETERMINES THAT THE
BENEFIT PLAN ACQUIRING THIS CERTIFICATE HAS AVAILABLE TO IT AN
EXEMPTION FROM THE PROHIBITED TRANSACTION RULES UNDER SECTION 406(a)
OF ERISA AND SECTION 4975 OF THE CODE AND SUCH EXEMPTION IS APPLICABLE
TO THE PURCHASE AND HOLDING OF THIS CERTIFICATE. UNLESS SUCH AN
EXEMPTION IS AVAILABLE, 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 AN EMPLOYEE BENEFIT PLAN.
IN THE EVENT WHOLESALE AUTO RECEIVABLES CORPORATION OR ITS
ASSIGNEE OR SUCCESSOR ('SELLER') IS NOT THE SOLE OWNER OF THE
CERTIFICATES, THEN THE SELLER AND EACH CERTIFICATEHOLDER OR
CERTIFICATE OWNER, BY ACCEPTING THIS CERTIFICATE (OR INTEREST
THEREIN), (i) EXPRESSES ITS INTENTION THAT THE CERTIFICATES WILL
QUALIFY UNDER APPLICABLE TAX LAW AS PARTNERSHIP INTERESTS IN A
PARTNERSHIP, WITH THE ASSETS OF THE PARTNERSHIP BEING THE ASSETS HELD
BY THE TRUST, AND (ii) UNLESS OTHERWISE REQUIRED BY APPROPRIATE TAXING
AUTHORITIES, AGREES TO TREAT THE CERTIFICATES AS INTERESTS IN SUCH A
PARTNERSHIP 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.
EACH CERTIFICATEHOLDER OR CERTIFICATE OWNER, BY ITS ACCEPTANCE OF
THIS CERTIFICATE (OR INTEREST THEREIN), 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
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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.
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
FLOATING RATE ASSET-BACKED CERTIFICATE, CLASS [ ]
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of wholesale receivables
generated from time to time in a portfolio of revolving financing
arrangements with dealers to finance automobile and other vehicle
inventories and collections thereon and certain other property.
(This Certificate does not represent an interest in or obligation of
Wholesale Auto Receivables Corporation, General Motors Acceptance
Corporation, General Motors Corporation, the Owner Trustee or any of
their respective affiliates, except to the extent described in the
Basic Documents.)
THIS CERTIFIES THAT __________ is the registered owner of a nonassessable,
fully-paid, fractional undivided interest in Superior Wholesale Inventory
Financing Trust [ ] (the "Trust") formed by Wholesale Auto Receivables
Corporation, a Delaware corporation.
The Trust was created pursuant to a Trust Agreement, dated as of ________,
____ (as amended and supplemented from time to time, the 'Trust Agreement'),
between the Seller and [ ], 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
"Floating Rate Asset-Backed Certificates, Class [ ]" (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 calendar month or, if such 15th day is not a Business Day, the next
succeeding Business Day, commencing on ______ 15, 20__ (each, a "Distribution
Date"), to the person in whose name this Certificate is registered on the
related Record Date (as defined below), interest accrued hereon to the extent of
funds available therefor and such Certificateholder's fractional undivided
interest in the amount of
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<PAGE>
distributions in respect of Certificate Balance to be distributed to
Certificateholders on such Distribution Date. Interest shall accrue on this
Certificate at the applicable Certificate Rate (as set forth on the reverse
hereof) and interest accrued hereon as of any Distribution Date but not
distributed on such Distribution Date shall be due on the next Distribution
Date. No distributions of Certificate Balance shall be made on any Certificate
until all Notes have been paid (or provided for) in full. The entire unpaid
Certificate Balance on this Certificate shall be due and payable on the
Distribution Date in ______, 20__ (the "Stated Final Payment Date"). However,
the actual distribution in full of the Certificate could occur sooner or later
than such date. The "Record Date," with respect to any Distribution Date, means
the last day of the preceding Collection 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 distribution is legal tender for payment of public and private
debts. All distributions 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.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate (or interest therein), 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. By its acceptance of this Certificate,
the Seller agrees that it shall not be deemed to have approved the commencement
of a voluntary proceeding in bankruptcy relating to the Trust for purposes of
Section 4.3 of the Trust Agreement unless such commencement was approved by the
affirmative vote of all of the members of the Seller's board of directors.
Distributions on this Certificate shall be made as provided in the Trust
Agreement without the presentation or surrender of this Certificate or the
making of any notation hereon, 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, or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register. 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 City of New York.
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<PAGE>
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 GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF OR OF ANY OTHER JURISDICTION, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
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<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.
Dated: ________, ____
SUPERIOR WHOLESALE INVENTORY
FINANCING TRUST [ ]
By: [ ], not in its individual
capacity but solely as Owner Trustee
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
capacity but solely as Owner Trustee
By:
Name:
Title:
OR
[ ], not in its individual
capacity but solely as Owner Trustee by[
], as Authenticating Agent
By:
Name:
Title:
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<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 held by the Trust (and certain other
amounts), all as more specifically set forth herein, 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.
The term "Certificate Rate" as used in this Certificate means, with respect
to any Distribution Date, the product of (i) 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 Initial Distribution Date, from and including the
Initial Closing Date) to but excluding such Distribution Date and the
denominator of which is 360 and (ii) LIBOR plus [ %].
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, (ii) any certificate and/or Opinion of
Counsel required by Section 9.12(b) of the Trust Agreement, and (iii) if
requested by the Seller, the Undertaking Letter required by Section 9.12(a) of
the Trust Agreement, and thereupon one or more new Certificates of the same
class of authorized denominations evidencing the same aggregate interest in the
Trust shall be issued to the designated transferee.
The initial Certificate Registrar appointed under the Trust Agreement is[
].
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<PAGE>
The Certificates are issuable only as registered Certificates without
coupons in denominations of [ $ ] or greater (or such other amount as the Seller
may determine in order to prevent the Trust from being treated as a "publicly
traded partnership" under Section 7704 of the Code, but in no event less than
$250,000). As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same class of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same; provided,
however, that no Certificate may be subdivided upon transfer or exchange in a
manner such that the resulting Certificate if it had been sold in the original
offering would have had an initial offering price of less than [ $ ] (or such
other amount as the Seller may determine in order to prevent the Trust from
being treated as a "publicly traded partnership" under Section 7704 of the Code,
but in no event less than $250,000). 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 distribution 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.
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<PAGE>
CERTIFICATE OF TRANSFER
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.
In connection with any sale, pledge or transfer of this Certificate the
undersigned hereby represents to the Owner Trustee and the Seller that such
sale, pledge or transfer is being made:
[CHECK ONE]
o (a) to an institutional investor that is an "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act of 1933, as amended) acting for its own account (and not for
the account of others) or as a fiduciary or agent for others (which others
also are such institutional investors unless it is a bank acting in its
fiduciary capacity);
or
o (b) to a person whom the undersigned reasonably believes after due inquiry
is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act of 1933, as amended) acting for its own account (and not for
the account of others) or as a fiduciary or agent for others (which others
also are qualified institutional buyers) to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A.
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<PAGE>
If such sale, pledge or other transfer is being made pursuant to (a) above, the
undersigned acknowledges that such institutional investor must execute a
certificate substantially in the form specified in the Trust Agreement.
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.
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<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
THIS Certificate of Trust of Superior Wholesale Inventory Financing Trust [
] (the "Trust"), dated as of ________, ____, is being duly executed and filed by
[ ], a [ ] banking corporation, as trustee, to form a business trust under the
Delaware Business Trust Act (12 Del. C. ss3801 et seq.).
1. Name. The name of the business trust formed hereby is Superior Wholesale
Inventory Financing Trust [ ].
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 ________, ____.
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 ________, ____.
By:
Name:
Title:
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<PAGE>
EXHIBIT C
UNDERTAKING LETTER
Wholesale Auto Receivables Corporation
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
[ Indenture Trustee] ]
Ladies and Gentlemen:
In connection with our purchase or record or beneficial ownership of the
Floating Rate Asset-Backed Certificate, Class [ ] (the "Certificate") of
Superior Wholesale Inventory Financing 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 such
entity; and
(2) acknowledges that you and others will rely on our acknowledgments,
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:
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<PAGE>
EXHIBIT D
INVESTOR LETTER
Wholesale Auto Receivables Corporation
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
[ Indenture Trustee]
Ladies and Gentlemen:
In connection with our proposed purchase of a Floating Rate Asset-Backed
Certificate, Class [ ] (the "Certificate"), representing a fractional undivided
interest in the Superior Wholesale Inventory Financing Trust [ ], issued under a
trust agreement, dated as of ________, ____ (the "Trust Agreement"), between
Wholesale Auto Receivables Corporation, a Delaware corporation (the "Seller")
and [ ], as owner trustee, acting thereunder not in its individual capacity but
solely as owner trustee of the Trust (the "Owner Trustee"), we confirm that:
1. We understand that the Certificate has not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may
not be sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that such Certificate may be resold,
pledged or transferred only (i) to the Seller, (ii) to an
institutional investor that is an "accredited investor" as defined in
Rule 501(a)(1), (2), (3) or (7) (an "Institutional Accredited
Investor") under the Securities Act (as indicated by the box checked
by the transferor on the Certificate of Transfer on the reverse of the
certificate for the Certificate) acting for its own account (and not
for the account of others) or as a fiduciary or agent for others
(which others also are Institutional Accredited Investors unless the
holder is a bank acting in its fiduciary capacity) that executes a
certificate substantially in the form hereof, (iii) so long as such
Certificate is eligible for resale pursuant to Rule 144A under the
Securities Act ("Rule 144A"), to a person whom we reasonably believe
after due inquiry to be a "qualified institutional buyer" as defined
in Rule 144A acting for its own account (and not for the account of
others) or as a fiduciary or agent for others (which others also are
"qualified institutional buyers") to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or
(iv) in a sale, pledge or other transfer made in a transaction
otherwise exempt from the registration requirements of the Securities
Act, in which case (A) the Owner Trustee shall require that both the
prospective transferor and the prospective transferee certify to the
Owner Trustee and the Seller in writing the facts surrounding such
transfer, which
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<PAGE>
certification shall be in form and substance satisfactory to the Owner
Trustee and the Seller, and (B) the Owner Trustee shall require a
written opinion of counsel (which will not be at the expense of the
Seller or the Owner Trustee) satisfactory to the Seller and the Owner
Trustee to the effect that such transfer will not violate the
Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States. We will notify any
purchaser of the Certificate from us of the above resale restrictions,
if then applicable. We further understand that in connection with any
transfer of the Certificate by us that the Seller and the Owner
Trustee may request, and if so requested we will furnish, such
certificates and other information as they may reasonably require to
confirm that any such transfer complies with the foregoing
restrictions. We understand that no sale, pledge or other transfer may
be made to any one person for Certificates with a face amount of less
than [ $ ] (or such other amount as the Seller may determine in order
to prevent the Trust from being treated as a "publicly traded
partnership" under Section 7704 of the Code, but in no event less than
$250,000) and, in the case of any person acting on behalf of one or
more third parties (other than a bank (as defined in Section 3(a)(2)
of the Securities Act) acting in its fiduciary capacity), for
Certificates with a face amount of less than such amount for each such
third party. Any attempted transfer will be void ab initio and the
purported transferor will continue to be treated as the owner of the
offered Certificates for all purposes.
2.
[CHECK ONE]
o (a) We are an institutional investor and an "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) acting for our own account (and not for
the account of others) or as a fiduciary or agent for others
(which others also are Institutional Accredited Investors unless
we are bank acting in its fiduciary capacity). We have such
knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment
in the Certificate, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its
investment for an indefinite period of time. We are acquiring the
Certificate for investment and not with a view to, or for offer
and sale in connection with, a public distribution.
o (b) We are a "qualified institutional buyer" as defined under
Rule 144A under the Securities Act and are acquiring the
Certificate for our own account (and not for the account of
others) or as a fiduciary or agent for
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<PAGE>
others (which others also are "qualified institutional buyers").
We are familiar with Rule 144A under the Securities Act and are
aware that the seller of the Certificate and other parties intend
to rely on the statements made herein and the exemption from the
registration requirements of the Securities Act provided by Rule
144A.
3. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
(Name of Purchaser)
By:
Date:
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<PAGE>
EXHIBIT 99.4
- ------------------------------------------------------------------------------
ADMINISTRATION AGREEMENT
AMONG
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST [ ]
ISSUER
AND
GENERAL MOTORS ACCEPTANCE CORPORATION
ADMINISTRATOR
AND
[ ]
INDENTURE TRUSTEE
DATED AS OF ________, ____
- ------------------------------------------------------------------------------
admin-v5.fin
<PAGE>
THIS ADMINISTRATION AGREEMENT is made as of ________, ____, among SUPERIOR
WHOLESALE INVENTORY FINANCING TRUST [ ], a Delaware business trust (the
"ISSUER"), GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware corporation, as
administrator (the "ADMINISTRATOR"), and [ ], a [ ] banking corporation, not in
its individual capacity but solely as Indenture Trustee (the "INDENTURE
TRUSTEE"). -----------------
WITNESSETH:
WHEREAS, the Issuer is issuing the [ ] Term Notes and the [ ]
Revolving Note on the date hereof and may in the future issue additional Notes,
in each case pursuant to the Indenture between the Issuer and the Indenture
Trustee;
WHEREAS, the Issuer is issuing on the date hereof the [ ]
Certificates, and may in the future issue additional Certificates, in each case
pursuant to the Trust Agreement;
WHEREAS, the Issuer has entered into (or assumed) certain agreements
in connection with the issuance of the Notes and the Certificates, including (i)
the Trust Sale and Servicing Agreement, (ii) the Depository Agreement and (iii)
the Indenture;
WHEREAS, pursuant to the Basic Documents, the Issuer and [ ], as
Owner Trustee, are required to perform certain duties in connection with (i) the
Notes, (ii) the Collateral and (iii) the Certificates;
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner Trustee
referred to in the preceding clause, and to provide such additional services
consistent with the terms of this Agreement and the Basic Documents as the
Issuer and the Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. CERTAIN DEFINITIONS. Certain capitalized terms used in this
Agreement are defined in and shall have the respective meanings assigned to them
in PART I of APPENDIX A to the Trust Sale and Servicing Agreement dated as of
________, ____ among the Issuer, the Seller and General Motors Acceptance
Corporation, as Servicer (the "TRUST SALE AND SERVICING AGREEMENT"). All
references herein to "the Agreement" or "this Agreement" are to this
Administration Agreement, as it may be amended, supplemented or modified from
time to time, and all references herein to Sections are to Sections of this
Agreement unless otherwise specified. The rules of construction set forth in
PART II of such APPENDIX A shall be applicable to this Agreement.
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2. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE DEPOSITORY AGREEMENT AND THE INDENTURE.
i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer under the Indenture and the
Depository Agreement. In addition, the Administrator shall consult with
the Owner Trustee regarding the duties of the Issuer under the Indenture
and the Depository Agreement. The Administrator shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action
is necessary to comply with the Issuer's duties under the Indenture and
the Depository Agreement. The Administrator shall prepare for execution by
the Issuer or shall cause the preparation by other appropriate persons of
all such documents, reports, filings, instruments, certificates, notices
and opinions as it shall be the duty of the Issuer to prepare, file or
deliver pursuant to the Indenture and the Depository Agreement. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Indenture
including, without limitation, such of the foregoing as are required with
respect to the following matters under the Indenture (references are to
sections of the Indenture):
(A) the preparation of (or obtaining of) the documents and
instruments required for issuance of the Notes (if not prepared or
obtained by the Issuer), including the Officer's Issuance
Certificate and Opinion of Counsel to be delivered in connection
with the issuance of each series of Notes, the coordination with the
holders of the Revolving Notes of all borrowings under the Revolving
Notes and all matters relating to such borrowings, and the
preparation of (or obtaining of) the documents and instruments
required for authentication of the Notes and delivery of the same to
the Indenture Trustee (SECTION 2.1);
(B) the duty to cause the Note Register to be kept and to give
the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (SECTION 2.4);
(C) the notification of the Noteholders of each series of the
final principal payment on their Notes (SECTION 2.7(C));
(D) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the
release of Collateral (SECTION 2.9);
(E) the preparation of Definitive Term Notes and arranging the
delivery thereof (SECTION 2.12);
(F) the maintenance of an office in the Borough of Manhattan,
the City of New York, for registration of transfer or exchange of
Notes (SECTION 3.2);
(G) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (SECTION 3.3);
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(H) the direction to the Indenture Trustee to deposit monies
with Paying Agents, if any, other than the Indenture Trustee
(SECTION 3.3);
(I) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Trust Estate (SECTION
3.4);
(J) the preparation of all supplements, amendments, financing
statements, continuation statements, assignments, certificates,
instruments of further assurance and other instruments, in
accordance with SECTION 3.5 of the Indenture, necessary to protect
the Trust Estate (SECTION 3.5);
(K) the delivery of the Opinion of Counsel on the Initial
Closing Date, in accordance with SECTION 3.6 of the Indenture, as to
the Trust Estate, and the annual delivery of the Officers'
Certificate, in accordance with SECTION 3.9 of the Indenture, as to
compliance with the Indenture (SECTIONS 3.6 AND 3.9);
(L) the identification to the Indenture Trustee in an
Officers' Certificate of a Person with whom the Issuer has
contracted to perform its duties under the Indenture (SECTION
3.7(B));
(M) the notification of the Indenture Trustee and the Rating
Agencies of a Servicing Default under the Trust Sale and Servicing
Agreement and, if such Servicing Default arises from the failure of
the Servicer to perform any of its duties under the Trust Sale and
Servicing Agreement or the Pooling and Servicing Agreement, the
taking of all reasonable steps available to remedy such failure
(SECTION 3.7(D));
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under
the Indenture (SECTION 3.11(B));
(O) the delivery of notice to the Indenture Trustee and the
Rating Agencies of each Event of Default under the Indenture, each
Servicing Default, any Insolvency Event with respect to the Seller,
each default on the part of the Seller or the Servicer of their
respective obligations under the Trust Sale and Servicing Agreement
and each default on the part of GMAC or the Servicer of their
respective obligations under the Pooling and Servicing Agreement
(SECTION 3.19);
(P) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture, the preparation of an
Officers' Certificate, the obtaining of the Opinion of Counsel and,
if necessary, an Independent Certificate relating thereto (SECTION
4.1);
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(Q) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Trust Estate in a
commercially reasonable manner if an Event of Default shall have
occurred and be continuing (SECTION 5.4(A));
(R) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate
trustee and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee
(SECTIONS 6.8 AND 6.10);
(S) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture
Trustee is not the Note Registrar (SECTION 7.1);
(T) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable state agencies and the
Indenture Trustee of documents required to be filed on a periodic
basis with, and summaries thereof as may be required by rules and
regulations prescribed by, the Commission and any applicable state
agencies and the transmission of such summaries, as necessary, to
the Noteholders (SECTION 7.3);
(U) the notification of the Indenture Trustee of the listing
or delisting of the Notes of any series on any stock exchange, if
and when such Notes are so listed or delisted (SECTION 7.4(A));
(V) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders, Officer's Certificates and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Designated Accounts
(SECTIONS 8.2 AND 8.3);
(W) the preparation of an Issuer Request and Officer's
Certificate and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the Trust
Estate (SECTIONS 8.4 AND 8.5);
(X) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with
respect to such supplemental indentures (SECTIONS 9.1, 9.2 AND 9.3);
(Y) the preparation and execution of new Notes conforming to
any supplemental indenture (SECTION 9.6);
(Z) the notification of Noteholders and the Rating Agencies of
the redemption of any Notes subject to redemption or the duty to
cause the Indenture Trustee to provide such notification (SECTIONS
10.1 AND 10.2);
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(AA) the preparation of all Officer's Certificates, Opinions
of Counsel and Independent Certificates, if necessary, with respect
to any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (SECTION 11.1(A));
(BB) the preparation and delivery of Officers' Certificates
and the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (SECTION
11.1(B));
(CC) the notification of the Rating Agencies, upon the failure
of the Indenture Trustee to give such notification, of the
information required pursuant to SECTION 11.4 (SECTION 11.4);
(DD) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (SECTION 11.6); and
(EE) the recording of the Indenture, if applicable, and the
obtaining of an Opinion of Counsel as required pursuant to SECTION
11.15 (SECTION 11.15).
(ii) The Administrator will perform those payment and indemnity
obligations of the Servicer under SECTION 3.02 of the Pooling and
Servicing Agreement and SECTION 7.1 of the Trust Sale and Servicing
Agreement in the event that the Servicer fails to perform such
obligations.
(b) ADDITIONAL DUTIES.
(i) In addition to the duties of the Administrator set forth above,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Owner Trustee or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates, notices and opinions as it shall be
the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents, and at the request of the Owner Trustee
shall take all appropriate action that it is the duty of the Issuer or the
Owner Trustee to take pursuant to the Basic Documents. Subject to SECTION
7 of this Agreement, and in accordance with the directions of the Owner
Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) The Administrator shall perform the duties of the Administrator
specified in SECTION 6.10 of the Trust Agreement required to be performed
in connection with the resignation or removal of the Owner Trustee, and
any other duties expressly required to be performed by the Administrator
under the Trust Agreement.
(iii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any
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of its Affiliates; PROVIDED, HOWEVER, that the terms of any such
transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Administrator's opinion, no
less favorable to the Issuer than would be available from Persons that are
not Affiliates of the Administrator.
(c) NON-MINISTERIAL MATTERS.
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any
action unless, within a reasonable time before the taking of such action,
the Administrator shall have notified the Owner Trustee of the proposed
action and the Owner Trustee shall not have withheld consent or provided
an alternative direction. For the purpose of the preceding sentence, "non-
ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture (other
than pursuant to or in connection with an Officer's Issuance
Certificate);
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer;
(C) the amendment, change or modification of any of the Basic
Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or
successor Servicers, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee of its obligations
under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any
payments to the Noteholders under the Basic Documents, (y) except as
provided in SECTION 2(A)(I)(Q) hereof, sell the Trust Estate pursuant to
SECTION 5.4 of the Indenture or (z) take any other action that the Issuer
directs the Administrator not to take on its behalf.
3. SUCCESSOR SERVICER AND ADMINISTRATOR. The Issuer shall undertake,
as promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to SECTION 8.2 of the
Trust Sale and Servicing Agreement, to enforce the provisions of SECTIONS 8.2,
8.3 AND 8.4 of the Trust Sale and Servicing Agreement with respect to the
appointment of a successor Servicer. Such successor Servicer shall, upon
compliance with SECTIONS 10(E)(II) AND (III), become the successor Administrator
hereunder.
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4. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer and the
Seller at any time during normal business hours.
5. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Servicer shall pay the Administrator a monthly fee
in the amount of $1,500.
6. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
7. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
8. NO JOINT VENTURE. Nothing contained in this Agreement (a) shall
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) shall be construed to
impose any liability as such on any of them or (c) shall be deemed to confer on
any of them any express, implied or apparent authority to incur any obligation
or liability on behalf of the others.
9. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person or entity even though such Person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
10. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR.
(a) This Agreement shall continue in force until the dissolution of
the Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to SECTION 10(E), the Administrator may resign its
duties hereunder by providing the Issuer with at least 60 days' prior written
notice.
(c) Subject to SECTION 10(E), the Issuer may remove the
Administrator without cause by providing the Administrator with at least 60
days' prior written notice.
(d) Subject to SECTION 10(E), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
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(i) the Administrator shall default in the performance of any of its
duties under this Agreement and, after notice from the Issuer of such
default, shall not cure such default within ten days (or, if such default
cannot be cured in such time, shall not give within ten days such
assurance of cure as shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within 60 days, in respect of the Administrator in any involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Administrator
or any substantial part of its property or order the winding-up or
liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment
of a receiver, liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial part of its
property, shall consent to the taking of possession by any such official
of any substantial part of its property, shall make any general assignment
for the benefit of creditors or shall fail generally to pay its debts as
they become due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this SECTION 10(D) shall occur, it shall give written
notice thereof to the Issuer and the Indenture Trustee within seven days after
the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
SECTION 10 shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer, (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same manner
as the Administrator is bound hereunder, and (iii) the Rating Agency Condition
has been satisfied with respect to such proposed appointment.
11. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon
the effective date of termination of this Agreement pursuant to SECTION 10(A) or
the resignation or removal of the Administrator pursuant to SECTION 10(B) OR
(C), respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the effective date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to SECTION 10(A) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to SECTION
10(B) OR (C), respectively, the Administrator shall cooperate with the Issuer
and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
12. NOTICES. All demands, notices and communications upon or to the
Issuer, the Owner Trustee, the Administrator or the Indenture Trustee shall be
delivered as specified in APPENDIX B of the Trust Sale and Servicing Agreement.
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13. AMENDMENTS.
(a) This Agreement may be amended from time to time with prior
notice to the Rating Agencies by a written amendment duly executed and delivered
by the Issuer, the Administrator and the Indenture Trustee, with the written
consent of the Owner Trustee, without the consent of the Noteholders or the
Certificateholders, for any of the following purposes:
(i) to add provisions hereof for the benefit of the Noteholders and
Certificateholders or to surrender any right or power herein conferred
upon the Administrator;
(ii) to cure any ambiguity or to correct or supplement any provision
herein which may be inconsistent with any other provision herein;
(iii) to evidence and provide for the appointment of a successor
Administrator hereunder and to add to or change any of the provisions of
this Agreement as shall be necessary to facilitate such succession; and
(iv) to add any provisions to or change in any manner or eliminate
any of the provisions of this Agreement or modify in any manner the rights
of the Noteholders or Certificateholders; PROVIDED, HOWEVER, that such
amendment under this SECTION 13(A)(IV) shall not, as evidenced by an
Opinion of Counsel, materially and adversely affect in any material
respect the interest of any Noteholder or Certificateholder.
(b) This Agreement may also be amended by the Issuer, the
Administrator and the Indenture Trustee with prior notice to the Rating Agencies
and with the written consent of the Owner Trustee, the Holders of Notes
evidencing at least a majority in the Outstanding Amount of the Notes as of the
close of the immediately preceding Distribution Date, the Holders of
Certificates evidencing at least a majority of the Voting Interests as of the
close of the preceding Distribution Date for the purpose of adding any
provisions to, changing in any manner or eliminating any of the provisions of
this Agreement or modifying in any manner the rights of Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that no such amendment may (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
Collections on the Receivables held by the Trust or payments or distributions
that are required to be made for the benefit of the Noteholders or
Certificateholders (it being understood that the issuance of any Securities and
the specification of the terms and provisions thereof pursuant to an Officer's
Issuance Certificate (in the case of Notes) or a Certificate Issuance Order (in
the case of Certificates) shall not be deemed to have such effect for purposes
hereof), (ii) reduce the percentage of the Holders of Notes and Certificates
which are required to consent to any amendment of this Agreement or (iii) modify
or alter any provision of this SECTION 13, except to provide that certain
additional provisions of this Agreement and the Basic Documents cannot be
modified or waived without the consent of each Noteholder and Certificateholder
affected thereby, without, in any such case, the consent of the Holders of all
the outstanding Notes and Certificates.
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(c) Notwithstanding SECTIONS 13(A) AND (B), the Administrator may
not amend this Agreement without the permission of the Seller, which permission
shall not be unreasonably withheld.
14. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in writing
by the Issuer and the Owner Trustee and subject to the satisfaction of the
Rating Agency Condition for each then outstanding series of Notes in respect
thereof. An assignment with such consent and satisfaction, if accepted by the
assignee, shall bind the assignee hereunder in the same manner as the
Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement
may be assigned by the Administrator without the consent of the Issuer or the
Owner Trustee to a corporation or other organization that is a successor (by
merger, consolidation or purchase of assets) to the Administrator, PROVIDED that
such successor organization executes and delivers to the Issuer, the Owner
Trustee and the Indenture Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of such assignment
in the same manner as the Administrator is bound hereunder. Subject to the
foregoing, this Agreement shall bind any successors or assigns of the parties
hereto.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
16. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
17. SEPARATE COUNTERPARTS, This Agreement may be executed by the
parties 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.
18. SEVERABILITY OF PROVISIONS. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be 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.
19. NOT APPLICABLE TO GENERAL MOTORS ACCEPTANCE CORPORATION IN OTHER
CAPACITIES. Nothing in this Agreement shall affect any obligation General Motors
Acceptance Corporation may have in any other capacity.
20. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE.
--------------------------------------------------------------
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been executed by [ ], not in its individual
capacity but solely as Owner Trustee
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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. For
all purposes of this Agreement, 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.
(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 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.
21. THIRD-PARTY BENEFICIARY. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
* * * * *
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IN WITNESS WHEREOF, the parties have caused this Administration
Agreement to be duly executed by their respective officers as of the day and
year first above written.
SUPERIOR WHOLESALE INVENTORY FINANCING
TRUST [ ]
By: [ ], not in its individual
capacity, but solely as Owner Trustee on behalf of
the Issuer
By:
Name:
Title:
[ ], as Indenture Trustee
By: [ ], not in its individual
capacity, but solely as Indenture Trustee
By:
Name:
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION,
as Administrator
By:
Name:
Title:
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EXHIBIT 99.5
CUSTODIAN AGREEMENT
BETWEEN
GENERAL MOTORS ACCEPTANCE CORPORATION
CUSTODIAN
AND
WHOLESALE AUTO RECEIVABLES CORPORATION
SELLER
DATED AS OF ________, ____
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THIS CUSTODIAN AGREEMENT, dated as of ________, ____, is made
between General Motors Acceptance Corporation, a Delaware corporation (referred
to herein as "GMAC" in its capacity as seller of the Receivables specified
herein and as "CUSTODIAN" in its capacity as Custodian of such Receivables), and
Wholesale Auto Receivables Corporation, a Delaware corporation (the "SELLER").
WHEREAS, simultaneously herewith, GMAC and the Seller are
entering into a Pooling and Servicing Agreement, dated as of the date hereof
(the "POOLING AND SERVICING AGREEMENT," the capitalized terms defined therein
being used herein with the same meanings), pursuant to which GMAC shall sell,
transfer and assign to the Seller without recourse all of its right, title and
interest in, to and under the Eligible Receivables existing or arising in the
Accounts in the Pool of Accounts;
WHEREAS, in connection with such sale, transfer and assignment,
the Pooling and Servicing Agreement provides that the Seller shall
simultaneously enter into a custodian agreement pursuant to which the Seller
shall revocably appoint the Custodian as custodian of the Floor Plan Financing
Agreements between GMAC and each Dealer and any other documents and instruments
pertaining to such Eligible Receivables (the "ELIGIBLE RECEIVABLES FILES");
WHEREAS, the Pooling and Servicing Agreement contemplates that
the Seller will enter into the Trust Sale and Servicing Agreement with Superior
Wholesale Inventory Financing Trust [ ], a Delaware business trust (the
"ISSUER"), pursuant to which the Seller shall sell, transfer and assign to the
Issuer without recourse all of the Seller's right, title and interest in and to
such Eligible Receivables and under the aforementioned custodian agreement;
WHEREAS, in connection with such sale, transfer and assignment,
the Seller desires for the Custodian to act as custodian of such Eligible
Receivables for the benefit of the Issuer; and
WHEREAS, GMAC will retain the Receivables in the Accounts in the
Pool of Accounts not so sold, transferred and assigned to the Seller (the
"RETAINED RECEIVABLES") and, in connection therewith, the Seller desires for
(and GMAC is willing to agree and accept) the Custodian to act as custodian of
the Wholesale Security Agreements between GMAC and each Dealer and any other
documents and instruments pertaining to the Receivables retained by GMAC (the
"RETAINED RECEIVABLES FILES," and together with the Eligible Receivables Files,
the "RECEIVABLES FILES");
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 Seller hereby appoints the Custodian,
and the Custodian hereby accepts such appointment, to act as agent of the Seller
as Custodian to maintain custody of the Eligible Receivables Files pertaining to
the Eligible Receivables conveyed to the Seller from time to time under the
Pooling and Servicing Agreement. The Custodian hereby acknowledges that the
Seller
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desires to sell, transfer and assign all of its right, title and interest in, to
and under such Eligible Receivables and this Custodian Agreement to the Issuer
pursuant to the Trust Sale and Servicing Agreement. The Custodian hereby agrees,
in connection with such sale, transfer and assignment, to act as Custodian for
the benefit of the Issuer with respect to such Receivables. Subject to the terms
and conditions hereof and at the request of the Seller, GMAC hereby appoints the
Custodian, and the Custodian hereby accepts such appointment, to act as agent of
GMAC as Custodian to maintain custody of the Retained Receivables Files
pertaining to the Retained Receivables. 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 receivable files relating
to comparable wholesale receivables that the Custodian services and holds for
itself or others. The Custodian hereby acknowledges receipt of the Receivables
Files for (i) each Eligible Receivable conveyed to the Seller and (ii) each
Retained Receivable on the date hereof.
2. MAINTENANCE AT OFFICE. The Custodian agrees to maintain each
Receivables 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 Issuer upon 30 days'
prior written notice.
3. DUTIES OF CUSTODIAN.
(a) SAFEKEEPING. The Custodian shall hold each Receivables File
described herein on behalf of the Seller, the Issuer or GMAC, as the case may
be, for the use and benefit of the Seller, the Issuer, GMAC and the Interested
Parties, as applicable, and maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivables File described
herein as shall enable GMAC, the Seller and the Issuer to comply with their
respective obligations under the Pooling and Servicing Agreement and the Trust
Sale and Servicing Agreement. Each Receivable subject hereto shall be identified
as such on the books and records of the Custodian to the extent the Custodian
reasonably determines to be necessary to comply with the terms and conditions of
the Pooling and Servicing Agreement and the Trust Sale and Servicing Agreement.
The Custodian shall conduct, or cause to be conducted, periodic physical
inspections of the Receivables 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 Issuer, GMAC and the Custodian to verify the accuracy of the
Custodian's inventory and record keeping. The Custodian shall promptly report to
the Issuer or GMAC, as applicable, any failure on its part to hold the related
Receivables File as described herein 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 Issuer, GMAC or their
respective duly authorized representatives, attorneys or auditors to inspect the
related Receivables Files described herein and the related accounts, records and
computer systems maintained by the Custodian pursuant hereto at such times as
the Issuer or GMAC may reasonably request.
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(c) RELEASE OF DOCUMENTS. The Custodian shall release any
Receivable (and its related Receivables File) to GMAC, the Seller, the Servicer
or the Issuer, as appropriate, under the circumstances provided in the Pooling
and Servicing Agreement and the Trust Sale and Servicing Agreement or, in the
case of the Retained Receivables, as otherwise requested by GMAC (so long as
such request is not inconsistent with the terms of the Pooling and Servicing
Agreement and the Trust Sale and Servicing Agreement).
(d) ADMINISTRATION; REPORTS. In general, the Custodian shall
attend to all non-discretionary details in connection with maintaining custody
of the Receivables Files as described herein. In addition, the Custodian shall
assist the Issuer or GMAC, as applicable, generally in the preparation of
routine reports to the Securityholders, if any, or to regulatory bodies, to the
extent necessitated by the Custodian's custody of the Receivables Files
described herein.
(e) SERVICING. The Custodian is familiar with the duties of the
Servicer, the servicing procedures and the allocation and distribution
provisions (including those related to principal collections, losses and
recoveries on Receivables) set forth in the Pooling and Servicing Agreement, the
Trust Sale and Servicing Agreement and the Indenture and hereby agrees to
maintain the Receivables Files in a manner consistent therewith. The Custodian
further agrees to cooperate with the Servicer in the Servicer's performance of
its duties under the Pooling and Servicing Agreement and the Trust Sale and
Servicing Agreement.
4. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be deemed
to have received proper instructions from the Issuer or GMAC, as the case may
be, with respect to the Receivables Files described herein upon its receipt of
written instructions signed by an Authorized Officer. A certified copy of a
by-law or of a resolution of the appropriate governing body of the Issuer or
GMAC, as the case may be (or, as appropriate, a trustee on behalf of the
Issuer), 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. Such instructions
may be general or specific in terms.
5. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to
indemnify the Issuer, GMAC and each trustee with respect to any Securities 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 Issuer, GMAC or any such trustee as the result of any act or
omission in any way relating to the maintenance and custody by the Custodian of
the Receivables Files described herein; PROVIDED, HOWEVER, that the Custodian
shall not be liable to the Issuer, GMAC or any such trustee, respectively, for
any portion of any such amount resulting from the wilful misfeasance, bad faith
or gross negligence of the Issuer, GMAC or any such trustee, respectively.
6. ADVICE OF COUNSEL. The Custodian, GMAC, the Seller and, upon
execution of the Trust Sale and Servicing Agreement, the Issuer 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
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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, and may be amended at any time by mutual agreement of the
parties hereto. This Custodian Agreement may be terminated by either party by
written notice to the other party, such termination to take effect no sooner
than 60 days after the date of such notice. Notwithstanding the foregoing, if
GMAC resigns as Servicer under the Trust Sale and Servicing Agreement or if all
of the rights and obligations of the Servicer have been terminated under the
Trust Sale and Servicing Agreement, this Custodian Agreement may be terminated
by the Issuer or GMAC or by any Persons to whom the Issuer or GMAC has assigned
its rights hereunder. As soon as practicable after the termination of this
Custodian Agreement, the Custodian shall deliver the Receivables Files described
herein to the Issuer, the Issuer's agent or GMAC at such place or places as the
Issuer or GMAC may reasonably designate.
8. GOVERNING LAW. THIS CUSTODIAN AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE DOMESTIC 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.
9. NOTICES. All demands, notices and communications upon or to
the Custodian, the Seller and GMAC under this Agreement shall be delivered as
specified in APPENDIX B of the Trust Sale and Servicing Agreement.
10. BINDING EFFECT. This Custodian Agreement shall be binding
upon and shall inure to the benefit of the Seller, GMAC, the Issuer, the
Custodian and their respective successors and assigns, including the Issuer.
11. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Custodian 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 Custodian Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Custodian
Agreement.
12. ASSIGNMENT. Notwithstanding anything to the contrary
contained in this Custodian Agreement, this Custodian Agreement may not be
assigned by the Custodian without the prior written consent of the Seller or
GMAC or any Persons to whom the Seller or GMAC has assigned its rights
hereunder, as applicable.
13. HEADINGS. The headings of the various Sections herein are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
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14. COUNTERPARTS. This Custodian Agreement may be executed by
the parties 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.
* * * * *
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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.
WHOLESALE AUTO RECEIVABLES CORPORATION
By:
Name:
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION,
as owner of the Retained Receivables
By:
Name:
Title:
GENERAL MOTORS ACCEPTANCE CORPORATION,
as Custodian
By:
Name:
Title:
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<PAGE>
EXHIBIT 99.8
OFFICER'S ISSUANCE CERTIFICATE
FLOATING RATE ASSET-BACKED TERM NOTES, SERIES [ ]
-------------------------------------------------
The undersigned hereby certifies, pursuant to the Indenture
dated as of_______, ____ (the "INDENTURE"), between Superior Wholesale Inventory
Financing Trust [ ] (the "ISSUER" or the "TRUST") and The Bank of New York, a
New York banking corporation, that:
I. There has been established pursuant to and in conformity with
resolutions duly adopted by the Board of Directors of Wholesale Auto
Receivables Corporation, a Delaware corporation, a series of Notes to
be issued under and in conformity with the Indenture, which series of
Notes shall have the following terms:
A. The designation of the series of Notes is Floating Rate
Asset-Backed Term Notes, Series [ ] (the "[ ] TERM NOTES"). The [
] Term Notes shall be in the form set ----------------- forth in
EXHIBIT A hereto. ---------
B. The aggregate principal amount of the [ ] Term Notes which may be
authenticated and delivered under the Indenture (except for [ ]
Term Notes authenticated and delivered upon registration and
transfer of, or in exchange for, or in lieu of, other [ ] Term
Notes pursuant to the Indenture) is [$ ].
C. The following terms used in the Indenture, the Trust Sale and
Servicing Agreement and the other Basic Documents shall have the
indicated meanings with respect to the [ ] Term Notes:
1. Each Distribution Date shall be a Payment Date for the [ ]
Term Notes.
2. The Stated Final Payment Date for the [ ] Term Notes shall
be the Distribution Date in ______ 20__, on which date the
final payment of principal on the [ ] Term Notes shall be
due and payable.
3. The Targeted Final Payment Date for the [ ] Term Notes shall
be the Distribution Date in ______ 20__.
4. The "[ ] TERM NOTE INTEREST RATE" shall mean the interest
rate specified in -------------------------------- Part I.D.
of this Officer's Issuance Certificate.
5. The "CASH ACCUMULATION RESERVE FUND" shall be the account
established as ------------------------------ provided in
Part I.I.1. of this Officer's Issuance Certificate.
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6. The "Cash Accumulation Account" shall be the account
established as provided in Part I.I.2. of this Officer's
Issuance Certificate.
7. The "Note Distribution Subaccount" for the [ ] Term Notes
shall be established as provided in Part I.I.3. of this
Officer's Issuance Certificate.
8. A "Daily Remittance Period" shall be in effect at any time
that a Rapid Amortization Period, Cash Accumulation Period
or Payment Period is in effect for the [ ] Term Notes, until
such time as the Fully Funded Date has occurred.
D. The [ ] Term Notes shall bear interest, with respect to any
Distribution Date, at an interest rate equal to LIBOR plus 0.125%
per annum, calculated on the basis of a 360-day year and the
actual number of days elapsed from and including the prior
Distribution Date (or, in the case of the Initial Distribution
Date, from and including the Initial Closing Date) to but
excluding such Distribution Date. Interest on the [ ] Term Notes
accrued as of any Distribution Date but not paid on such
Distribution Date shall be due on the next Distribution Date.
E. On each Distribution Date, amounts deposited in the Note
Distribution Account which have been allocated to the [ ] Term
Notes pursuant to CLAUSE (2)(A) of SECTION 4.5(C)(I) of the Trust
Sale and Servicing Agreement and any amounts allocated to
interest on the [ ] Term Notes pursuant to the other provisions
of SECTION 4.5(C) of the Trust Sale and Servicing Agreement shall
be paid to the holders of the [ ] Term Notes, in an amount not to
exceed the [ ] Term Notes' Noteholders Interest for such
Distribution Date.
F. Principal shall be due and payable on the [ ] Term Notes as
follows:
1. During the Revolving Period, until the commencement of
either the Payment Period for the [ ] Term Notes or a Rapid
Amortization Period for the [ ] Term Notes which is not an
Early Amortization Period for the Trust, no payments of
principal on the [ ] Term Notes shall be required or made
and Available Trust Principal shall not be set aside for
such purpose.
2. Unless a Cash Accumulation Period or a Rapid Amortization
Period for the [ ] Term Notes has commenced and is
continuing, the Payment Period for the [ ] Term Notes will
commence upon a date that is no earlier than ______, 20__
and no later than _____, 20__ (the "LATEST COMMENCEMENT
------------------- DATE"). On the Determination Date in
______, 20__ and on each ---- Determination Date thereafter
before the commencement of the Payment Period, the Servicer
will determine the date, if any, on which the Payment Period
shall commence prior to the Latest Commencement Date, by
calculating the Required Payment Period Length. The Payment
Period will commence with the first day of the Collection
Period which follows the first Determination Date on which
the Required Payment Period Length is equal
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to or greater than the number of full Collection Periods
remaining between such Determination Date and the Targeted
Final Payment Date, subject to earlier commencement on the
Latest Commencement Date. The Payment Period for the [ ]
Term Notes will terminate upon the earlier of the occurrence
of a Cash Accumulation Event and a Rapid Amortization Event.
3. If the Payment Period for the [ ] Term Notes shall be
terminated upon the occurrence of an Early Amortization
Event described in CLAUSES (I), (J) OR (L)
----------------------- of SECTION 9.1 of the Trust Sale and
Servicing Agreement and no other Early -----------
Amortization Event has occurred, such Payment Period may be
recommenced if the Seller elects to recommence the Revolving
Period as described in SECTION 9.5(A) of the Trust Sale and
Servicing Agreement. If the Payment -------------- Period
for the [ ] Term Notes shall be terminated upon the
commencement of the Wind Down Period prior to the Final
Revolving Period Termination Date, such Payment Period may
be recommenced, if the Seller elects to recommence the
Revolving Period as described in SECTION 9.5(B) of the Trust
-------------- Sale and Servicing Agreement.
4. During any Collection Period occurring during the Payment
Period or a Rapid Amortization Period for the [ ] Term Notes
which is not an Early Amortization Period for the Trust, all
principal and other funds allocated to the [ ] Term Notes in
respect of the payment of principal shall be set aside in
the Note Distribution Subaccount for the [ ] Term Notes.
5. On the Targeted Final Payment Date for the [ ] Term Notes,
the Trust will pay to the holders of the [ ] Term Notes the
outstanding principal balance of the [ ] Term Notes (or such
lesser amount as has been set aside for such purpose) and,
to the extent not paid in full on the Targeted Final Payment
Date, on each Distribution Date thereafter until so paid in
full, from funds on deposit in the Cash Accumulation
Account, the Note Distribution Subaccount established for
the [ ] Term Notes and any other accounts in which funds
have been set aside for the payment of principal on the [ ]
Term Notes.
6. During a Cash Accumulation Period, the [ ] Term Notes'
Principal Allocation Percentage of Available Trust Principal
for any day during a Collection Period will be allocated and
set aside in the Cash Accumulation Account. During a Cash
Accumulation Period occurring prior to the Targeted Final
Payment Date, amounts allocated to the [ ] Term Notes on
such Distribution Date and the related Collection Period
shall be retained in the Cash Accumulation Account and shall
not be paid as principal on the [ ] Term Notes until the
Targeted Final Payment Date. On the Targeted Final Payment
Date for the [ ] Term Notes, the Trust will pay to the
holders of the [ ] Term Notes the outstanding principal
balance of the [ ] Notes (or such lesser amount as has been
set aside for such purpose) and, to the extent not paid in
full on the Targeted Final Payment Date, on each
Distribution
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Date thereafter until so paid in full, from funds on deposit
in the Cash Accumulation Account.
7. On each Distribution Date during a Rapid Amortization
Period, beginning with the Distribution Date related to the
Collection Period in which such Rapid Amortization Period
commenced, all amounts in respect of principal held in the
Cash Accumulation Account and the Note Distribution Account,
together with all Available Trust Principal allocated to the
[ ] Term Notes for such Distribution Date, shall be paid to
the holders of the [ ] Term Notes as principal on the [ ]
Term Note on such Distribution Date.
8. During any period in which funds are being set aside or paid
out in respect of the outstanding principal balance of the [
] Term Notes, no amount shall be set aside or paid to the
extent that it would cause the total amount so set aside or
paid to exceed the outstanding principal balance of the [ ]
Term Notes.
A "CASH ACCUMULATION PERIOD" for the [ ] Term Notes will
commence upon a Cash Accumulation Event for the [ ] Term
Notes and will terminate on the earliest of :
(a) the date on which the [ ] Term Notes are paid in full,
(b) the occurrence of a Rapid Amortization Event for [ ]
Term Notes,
(c) the Trust Termination Date, and
(d) under limited circumstances described in the Trust Sale
and Servicing Agreement, the remediation of the Cash
Accumulation Event and the recommencement of the
Revolving Period.
If a Cash Accumulation Period commences as a result
of the occurrence of an Early Amortization Event
described in CLAUSES (I), (J) OR (L) of SECTION 9.1
of the Trust Sale and Servicing Agreement and no
other Early Amortization Event has occurred, such
Cash Accumulation Period may be terminated, and the
Revolving Period may be recommenced, if the Seller
elects to recommence the Revolving Period as
described in SECTION 9.5(A) of the Trust Sale and
Servicing Agreement.
A "CASH ACCUMULATION EVENT" for the [ ] Term Notes
means:
(A) any of the Early Amortization Events other than Early
Amortization Events which are also Rapid Amortization
Events and
(B) the commencement of the Wind Down Period.
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A "RAPID AMORTIZATION PERIOD" for the [ ] Term Notes
will commence upon the occurrence of a Rapid
Amortization Event and will end upon the earliest of
(a) the date on which the [ ] Term Notes are paid in
full and (b) the Trust Termination Date.
A "RAPID AMORTIZATION EVENT" for the [ ] Term Notes
means:
(1) the occurrence of any of the Early Amortization
Events set out in SECTIONS 9.1(A), (B), (C) AND (D)
of the Trust Sale and Servicing Agreement,
(2) either the Trust or the Seller becoming required to
register as an "investment company" within the
meaning of the Investment Company Act of 1940 and
(3) on any Distribution Date, the balance in the Cash
Accumulation Reserve Fund would be less than [$ ]
(after giving effect to all withdrawals and
additions on such Distribution Date).
G. The [ ] Term Notes are not subject to optional or mandatory
purchase or redemption by the Issuer.
H. The [ ] Term Notes shall initially be issued in book-entry form
pursuant to SECTION 2.10 of the Indenture and subject to the
terms of the Note Depository Agreement attached hereto as EXHIBIT
B. The [ ] Term Notes will not be Unregistered Notes under
SECTION 2.15 of the Indenture.
I. CASH ACCUMULATION RESERVE FUND, CASH ACCUMULATION ACCOUNT AND
NOTE DISTRIBUTION SUBACCOUNT.
1. The Servicer, for the benefit of the holders of the [ ] Term
Notes, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account known as the
Superior Wholesale Inventory Financing Trust [ ] Cash
Accumulation Reserve Fund bearing an additional designation
clearly indicating that the funds deposited therein are held
for the benefit of the holders of the [ ] Term Notes.
2. The Servicer, for the benefit of the holders of the [ ] Term
Notes, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account known as the
Superior Wholesale Inventory Financing Trust [ ] Cash
Accumulation Account bearing an additional designation
clearly indicating that the funds deposited therein are held
for the benefit of the holders of the [ ] Term Notes.
3. The Servicer shall instruct the Indenture Trustee to
maintain a subaccount within the Note Distribution Account
for the benefit of the holders of the [ ] Term Notes,
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which subaccount shall be referred to in this Officer's
Issuance Certificate as the Note Distribution Subaccount
for the [ ] Term Notes.
4. On the Initial Closing Date, the Seller shall deposit the
Cash Accumulation Reserve Fund Initial Deposit into the Cash
Accumulation Reserve Fund. The Seller, in its sole
discretion, may at any time make additional deposits into
the Cash Accumulation Reserve Fund. If the amounts on
deposit in the Cash Accumulation Reserve Fund on any
Distribution Date (after giving effect to all deposits
therein or withdrawals therefrom on such Distribution Date)
exceeds the Cash Accumulation Reserve Fund Required Amount,
the Servicer shall instruct the Indenture Trustee to
distribute an amount equal to any such excess to the Seller,
unless otherwise agreed by the Seller.
5. Cash Accumulation Account Earnings and Investment Proceeds
of the Cash Accumulation Reserve Fund shall not constitute
Shared Investment Proceeds.
6. In order to provide for timely payments in accordance with
SECTION 4.5 of the Trust Sale and Servicing Agreement and
the terms of the [ ] Term Notes, to assure the availability
for the benefit of the Noteholders and the Servicer of the
amounts maintained in the Cash Accumulation Reserve Fund,
the Cash Accumulation Account and the Note Distribution
Subaccount for the [ ] Term Notes, 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 Cash Accumulation Reserve Fund and all proceeds
of the foregoing, including, without limitation, all other
amounts and investments held from time to time in the Cash
Accumulation Reserve Fund (whether in the form of deposit
accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise),
(ii) the Cash Accumulation Reserve Fund Initial Deposit
and all proceeds thereof,
(iii) the Cash Accumulation Account and all proceeds of
the foregoing, including, without limitation, all other
amounts and investments held from time to time in the Cash
Accumulation Account (whether in the form of deposit
accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise),
(iv) the Note Distribution Subaccount for the [ ] Term
Notes and all proceeds of the foregoing, including, without
limitation, all other amounts and investments held from time
to time in the Cash
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Accumulation Account (whether in the form of deposit
accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise)
(collectively, the "[ ] 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 Officer's Issuance Certificate
and in SECTION 4.6 of the Trust Sale and Servicing
Agreement. The Indenture Trustee shall hold and distribute
the [ ] Account Property in accordance with the terms and
provisions of the Trust Sale and Servicing Agreement. By its
authentication of the [ ] Term Notes, the Indenture Trustee
acknowledges and accepts such trusts as are specified herein
with respect to the [ ] Account Property.
II. The undersigned has read or has caused to be read the Indenture, including
the provisions of SECTION 2.1 and the definitions relating thereto, and the
resolutions adopted by the Board of ----------- Directors referred to
above. Based on such examination, the undersigned has, in the undersigned's
opinion, made such examination or investigation as is necessary to enable
the undersigned to express an informed opinion as to whether all conditions
precedent set forth in the Indenture and the other Basic Documents relating
to the establishment of the form and terms of a series of Notes under the
Indenture have been complied with. In the opinion of the undersigned, all
such conditions precedent have been complied with in respect of the [ ]
Term Notes.
III. Capitalized terms used herein and not defined shall have the meanings
assigned to such terms in the Indenture and in Appendix A to the Trust Sale
and Servicing Agreement dated as of ________, ____ among General Motors
Acceptance Corporation, as Servicer, Wholesale Auto Receivables
Corporation, as Seller, and Superior Wholesale Inventory Financing Trust [
], as Issuer.
* * * *
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IN WITNESS WHEREOF, the undersigned has hereunto executed this
Officer's Issuance Certificate as of the____ day of ______, 20__.
WHOLESALE AUTO RECEIVABLES
CORPORATION
By:
Name:
Title:
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EXHIBIT A
[FORM OF NOTE]
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EXHIBIT B
[NOTE DEPOSITORY AGREEMENT]
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