EXECUTION COPY
EXHIBIT 99.1
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TRUST SALE AND SERVICING AGREEMENT
AMONG
GENERAL MOTORS ACCEPTANCE CORPORATION
SERVICER
CAPITAL AUTO RECEIVABLES, INC.
SELLER
AND
CAPITAL AUTO RECEIVABLES ASSET TRUST 2006-1
ISSUER
DATED AS OF FEBRUARY 16, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I CERTAIN DEFINITIONS.....................................................................................1
Section 1.01 Definitions..................................................................................1
ARTICLE II CONVEYANCE OF RECEIVABLES; ISSUANCE OF SECURITIES......................................................1
Section 2.01 Conveyance of Receivables....................................................................1
Section 2.02 Custody of Receivable Files..................................................................3
Section 2.03 Acceptance by Issuer.........................................................................3
Section 2.04 Representations and Warranties as to the Receivables.........................................3
Section 2.05 Repurchase of Receivables Upon Breach of Warranty............................................3
Section 2.06 Realization Upon Liquidating Receivables.....................................................4
ARTICLE III THE SELLER............................................................................................4
Section 3.01 Representations of Seller....................................................................4
Section 3.02 Liability of Seller..........................................................................6
Section 3.03 Merger or Consolidation of, or Assumption of the Obligations of Seller; Amendment of
Certificate of Incorporation...................................................................................6
Section 3.04 Limitation on Liability of Seller and Others.................................................7
Section 3.05 Seller May Own Notes or Certificates.........................................................7
ARTICLE IV SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS.7
Section 4.01 Annual Statement as to Compliance; Notice of Servicer Default................................7
Section 4.02 Annual Report of Assessment of Compliance with Servicing Criteria............................8
Section 4.03 Access to Certain Documentation and Information Regarding the Receivables....................8
Section 4.04 Amendments to Schedule of Receivables........................................................9
Section 4.05 Assignment of Administrative Receivables and Warranty Receivables............................9
Section 4.06 Distributions................................................................................9
Section 4.07 Reserve Account.............................................................................12
Section 4.08 Net Deposits................................................................................13
Section 4.09 Statements to Securityholders...............................................................14
ARTICLE V CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS;
ADVANCES.........................................................................................................15
Section 5.01 Establishment of Accounts...................................................................15
Section 5.02 Collections.................................................................................19
Section 5.03 Investment Earnings and Supplemental Servicing Fees.........................................20
Section 5.04 Monthly Advances............................................................................20
Section 5.05 Additional Deposits.........................................................................21
ARTICLE VI LIABILITIES OF SERVICER AND OTHERS....................................................................21
Section 6.01 Liability of Servicer; Indemnities..........................................................21
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of the Servicer................22
Section 6.03 Limitation on Liability of Servicer and Others..............................................22
Section 6.04 Delegation of Duties........................................................................24
Section 6.05 Servicer Not to Resign......................................................................24
ARTICLE VII DEFAULT..............................................................................................24
Section 7.01 Servicer Defaults...........................................................................24
Section 7.02 Consequences of a Servicer Default..........................................................25
Section 7.03 Indenture Trustee to Act; Appointment of Successor..........................................26
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Section 7.04 Notification to Noteholders and Certificateholders..........................................26
Section 7.05 Waiver of Past Defaults....................................................................26
Section 7.06 Repayment of Advances.......................................................................27
ARTICLE VIII TERMINATION.........................................................................................27
Section 8.01 Optional Purchase of All Receivables; Insolvency of Seller; Termination of Trust............27
ARTICLE IX MISCELLANEOUS PROVISIONS..............................................................................29
Section 9.01 Amendment...................................................................................29
Section 9.02 Protection of Title to Trust................................................................31
Section 9.03 Notices.....................................................................................32
Section 9.04 GOVERNING LAW...............................................................................33
Section 9.05 Severability of Provisions..................................................................33
Section 9.06 Assignment..................................................................................33
Section 9.07 Third-Party Beneficiaries...................................................................33
Section 9.08 Separate Counterparts.......................................................................33
Section 9.09 Headings and Cross-References...............................................................33
Section 9.10 Assignment to Indenture Trustee.............................................................33
Section 9.11 No Petition Covenants.......................................................................34
Section 9.12 Limitation of Liability of Indenture Trustee and Owner Trustee..............................34
Section 9.13 Tax Treatment...............................................................................34
Section 9.14 Furnishing Documents........................................................................34
Section 9.15 Information to Be Provided by the Indenture Trustee.........................................34
EXHIBIT A Schedule of Receivables
EXHIBIT B Form of Second Step Receivables Assignment
EXHIBIT C Additional Representations and Warranties
APPENDIX A Definitions and Rules of Construction
APPENDIX B Notices Addresses and Procedures
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THIS TRUST SALE AND SERVICING AGREEMENT is made as of February 16,
2006, by and among General Motors Acceptance Corporation, a Delaware corporation
and in its capacity as Servicer under the Pooling and Servicing Agreement
described below (the "Servicer"), Capital Auto Receivables, Inc., a Delaware
corporation (the "Seller"), and Capital Auto Receivables Asset Trust 2006-1, a
Delaware statutory trust (the "Issuer").
WHEREAS, on the Closing Date GMAC has sold the Receivables to the
Seller;
WHEREAS, GMAC, as Servicer, has agreed to service the Receivables
pursuant to the Pooling and Servicing Agreement;
WHEREAS, the Seller desires to sell the Receivables to the Issuer on
the Closing Date in exchange for the Notes and Certificates pursuant to the
terms of this Agreement;
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, Seller and the Issuer wish to set forth the terms pursuant to
which the Receivables are to be sold by the Seller to the Issuer and serviced by
the Servicer.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.01 Definitions. Certain capitalized terms used in the above recitals
and in this Agreement are defined in and shall have the respective meanings
assigned 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 such 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 such
Appendix A shall be applicable to this Agreement.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ISSUANCE OF SECURITIES
Section 2.01 Conveyance of Receivables.
(a) Receivables. In consideration of the Issuer's delivery of
the Notes and the Certificates to, or upon the order of, the Seller, the Seller
does hereby enter into this Agreement and the related Second Step Receivables
Assignment in the form attached as Exhibit B to this Agreement (the "Second Step
Receivables Assignment") and agrees to fulfill all of its obligations hereunder
and thereunder and to sell, transfer, assign and otherwise convey to the Issuer,
without recourse:
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(i) all right, title and interest of the Seller in,
to and under the Receivables listed on the Schedule of Receivables and (a) in
the case of Receivables that are Scheduled Interest Receivables, all monies due
thereunder on and after the Cutoff Date and (b) in the case of Receivables that
are Simple Interest Receivables, all monies received thereon on and after the
Cutoff Date, in each case exclusive of any amounts allocable to the premium for
physical damage insurance force-placed by the Servicer covering any related
Financed Vehicle;
(ii) the interest of the Seller in the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and, to the extent permitted by law, any accessions thereto;
(iii) the interest of the Seller in any proceeds from
claims on any physical damage, credit life, credit disability or other insurance
policies covering related Financed Vehicles or Obligors;
(iv) the interest of the Seller in any proceeds from
recourse against Dealers on the Receivables;
(v) all right, title and interest of the Seller in,
to and under the Pooling and Servicing Agreement, the First Step Receivables
Assignment and the Custodian Agreement, including the right of the Seller to
cause GMAC to repurchase Receivables under certain circumstances; and
(vi) all present and future claims, demands, causes
and choses in action in respect of any or all of the foregoing described above
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion of any or all of the foregoing, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, investment property, payment intangibles, general intangibles,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which may any time
constitute all or part or are included in the proceeds of any of the foregoing.
(b) It is the intention of the Seller and the Issuer that the
transfers and assignments contemplated by this Agreement and the related Second
Step Receivables Assignment shall constitute sales of the Receivables from the
Seller to the Issuer for the purpose of applicable bankruptcy, insolvency,
reorganization and other similar laws, so that the beneficial interest in and
title to the Receivables shall not be part of the Seller's estate in the event
of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law.
(c) The foregoing sales do not constitute and are not intended
to result in any assumption by the Issuer of any obligation of the Seller to the
Obligors, Dealers, insurers or any other Person in connection with the
Receivables, any Dealer Agreements, any insurance policies or any agreement or
instrument relating to any of them.
(d) Within two (2) Business Days after the Closing Date, GMAC
shall cause to be deposited into the Collection Account the collections on the
Receivables described in Section 5.07 of the Pooling and Servicing Agreement;
provided, however, that so long as the Monthly
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Remittance Conditions are satisfied, such collections need not be deposited
until the Distribution Date immediately following the Closing Date.
Section 2.02 Custody of Receivable Files. In connection with the sale,
transfer and assignment of the Receivables to the Issuer pursuant to this
Agreement and the related Second Step Receivables Assignment, GMAC, as Custodian
under the Custodian Agreement, agrees to act as Custodian thereunder for the
benefit of the Issuer. The Issuer hereby accepts and agrees to the terms and
provisions of the Custodian Agreement and designates GMAC as custodian with
respect to the Receivables Files.
Section 2.03 Acceptance by Issuer.The Issuer does hereby accept all
consideration conveyed by the Seller pursuant to Section 2.01(a), and declares
that the Issuer shall hold such consideration upon the trust set forth in the
Trust Agreement for the benefit of Certificateholders, subject to the terms and
conditions of the Indenture, this Agreement and the related Second Step
Receivables Assignment and the rights of the Noteholders with respect thereto.
The Issuer hereby agrees to and accepts the appointment and authorization of
GMAC as Servicer under Section 3.01 of the Pooling and Servicing Agreement. The
parties agree that this Agreement, the Second Step Receivables Assignment, the
Indenture, the Trust Agreement, the Notes and the Certificates constitute the
Further Transfer and Servicing Agreements for purposes of the Pooling and
Servicing Agreement and that the rights, duties and obligations of GMAC as
Servicer under the Pooling and Servicing Agreement are subject to the provisions
of Sections 6.02, 6.04, 6.05, 9.01 and Article VII hereof.
Section 2.04 Representations and Warranties as to the
Receivables.Pursuant to Section 2.01(a)(v), the Seller assigns to the Issuer all
of its right, title and interest in, to and under the Pooling and Servicing
Agreement. Such assigned right, title and interest includes the benefit of
representations and warranties of GMAC made to the Seller pursuant to Section
4.01 of the Pooling and Servicing Agreement. The Seller hereby represents and
warrants to the Issuer that the Seller has taken no action which would cause
such representations and warranties of GMAC to be false in any material respect
as of the Closing Date. The Seller further acknowledges that the Issuer and its
permitted assignees rely on the representations and warranties of the Seller
under this Agreement and of GMAC under the Pooling and Servicing Agreement in
accepting the Receivables in trust and executing and delivering the Notes and
the Certificates. The foregoing representation and warranty speaks as of the
Closing Date, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
Section 2.05 Repurchase of Receivables Upon Breach of Warranty.Upon
discovery by the Seller, the Servicer, the Owner Trustee or the Indenture
Trustee of a breach of any of the representations and warranties in Section 4.01
of the Pooling and Servicing Agreement or in Section 2.04 or Section 3.01 of
this Agreement that materially and adversely affects the interests of the
Noteholders or the Certificateholders in any Receivable, the party discovering
such breach shall give prompt written notice thereof to the others. As of the
last day of the second Monthly Period following its discovery or its receipt of
notice of breach (or, at the Seller's election, the last day of the first
Monthly Period following such discovery), unless such breach shall have been
cured in all material respects, in the event of a breach of the representations
and warranties made by the Seller in Section 2.04 or Section 3.01, the Seller
shall repurchase, or in the event of
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a breach of a representation and warranty under Section 4.01 of the Pooling and
Servicing Agreement, the Seller and the Servicer shall use reasonable efforts to
enforce the obligation of GMAC under Section 5.04 of the Pooling and Servicing
Agreement to repurchase such Receivable from the Issuer on the related
Distribution Date. The repurchase price to be paid by the breaching party (the
"Warranty Purchaser") shall be an amount equal to the Warranty Payment
calculated as of the last day of the related Monthly Period. Upon repurchase and
payment of such Warranty Payment, the Warranty Purchaser shall be entitled to
receive the Released Warranty Amount, if any. It is understood and agreed that
the obligation of the Warranty Purchaser to repurchase any Receivable as to
which a breach has occurred and is continuing, and the obligation of the Seller
and the Servicer to enforce GMAC's obligation to repurchase such Receivables
pursuant to the Pooling and Servicing Agreement shall, if such obligations are
fulfilled, constitute the sole remedy against the Seller, the Servicer or GMAC
for such breach available to the Issuer, the Financial Parties, the Owner
Trustee or the Indenture Trustee. The Servicer also acknowledges its obligations
to repurchase Administrative Receivables from the Issuer pursuant to Section
3.08 of the Pooling and Servicing Agreement.
Section 2.06 Realization Upon Liquidating Receivables.The Servicer
shall use all reasonable efforts, consistent with its customary servicing
procedures, to repossess or take other similar action with respect to any
Financed Vehicle that it has reasonably determined should be repossessed or
otherwise converted following a default under the Receivable secured by the
Financed Vehicle. The Servicer is authorized to follow such practices, policies
and procedures as it customarily follows with respect to comparable automotive
receivables that it services for itself or others, which practices, policies and
procedures may include reasonable efforts to realize upon any recourse to
Dealers, selling the related Financed Vehicle at public or private sale and the
taking of other actions by the Servicer in order to realize upon such a
Receivable. The Servicer is hereby authorized to exercise its discretion
consistent with its customary servicing procedures and the terms of the Basic
Documents, in servicing Liquidating Receivables so as to maximize the net
collection of those Liquidating Receivables. The Servicer shall not be liable
for any such exercise of its discretion made in good faith and in accordance
with such servicing procedures. The foregoing is subject to the provision that,
in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall determine in its
discretion and in accordance with such servicing procedures that such repair
and/or repossession shall increase the proceeds of liquidation of the related
Receivable by an amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each
Liquidating Receivable at such time as the Receivable becomes a Liquidating
Receivable
ARTICLE III
THE SELLER
Section 3.01 Representations of Seller.The Seller makes the following
representations on which the Issuer is relying in acquiring the Receivables and
issuing the Notes and the Certificates. The following representations in clause
(a) speak as of the Closing Date. The representations in clause (b) speak as of
the Closing Date, with respect to the Receivables, and shall survive the sale,
transfer and assignment of the Receivables to the Issuer.
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(a) Representations and Warranties as to the Seller.
(i) Organization and Good Standing. The Seller has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire and own the Receivables;
(ii) Due Qualification. The Seller is duly qualified
to do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualification;
(iii) Power and Authority. The Seller has the power
and authority to execute and deliver the Basic Documents to which it is a party
and to carry out their terms, the Seller has full power and authority to sell
and assign the property to be sold and assigned to and deposited with the Issuer
as part of the Trust and has duly authorized such sale and assignment to the
Issuer by all necessary corporate action; and the execution, delivery and
performance of the Basic Documents to which it is a party have been duly
authorized by the Seller by all necessary corporate action;
(iv) Valid Sale; Binding Obligations. This Agreement
and the Second Step Receivables Assignment, when duly executed and delivered,
shall constitute a valid sale, transfer and assignment of the Receivables,
enforceable against creditors of and purchasers from the Seller; and the Basic
Documents to which the Seller is a party, when duly executed and delivered,
shall constitute legal, valid and binding obligations of the Seller enforceable
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law;
(v) No Violation; Consents. The consummation of the
transactions contemplated by the Basic Documents to which the Seller is a party
and the fulfillment of the terms of the Basic Documents to which the Seller is a
party shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or by
which it is bound, or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument, other than this Agreement and the Second Step Receivables
Assignment, or violate any law or, to the best of the Seller's knowledge, any
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its properties;
and
(vi) No Proceedings. To the Seller's knowledge, there
are no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over
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the Seller or its properties (i) asserting the invalidity of any Basic Document,
(ii) seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by any Basic Document,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the validity
or enforceability of, any Basic Document, or (iv) seeking to adversely affect
the federal income tax attributes of the Notes or the Certificates.
(b) Representations and Warranties as to the Receivables.
(i) Good Title. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than the
Issuer; immediately prior to the conveyance of the Receivables pursuant to this
Agreement and the Second Step Receivables Assignment, the Seller had good and
marketable title thereto, free of any Lien; and, upon execution and delivery of
this Agreement and the Second Step Receivables Assignment by the Seller, the
Issuer shall have all of the right, title and interest of the Seller in, to and
under the Receivables, the unpaid indebtedness evidenced thereby and the
collateral security therefor, free of any Lien.
(ii) All Filings Made. All filings (including,
without limitation, UCC filings) necessary in any jurisdiction to give the
Issuer a first priority perfected ownership interest in the Receivables shall
have been made.
(iii) Additional Representations and Warranties. The
representations and warranties regarding creation, perfection and priority of
security interests in the Receivables, which are attached to this Agreement as
Exhibit C, are true and correct to the extent they are applicable.
Section 3.02 Liability of Seller.The Seller shall be liable in
accordance with this Agreement and the Second Step Receivables Assignment only
to the extent of the obligations in this Agreement and the Second Step
Receivables Assignment specifically undertaken by the Seller.
Section 3.03 Merger or Consolidation of, or Assumption of the
Obligations of Seller; Amendment of Certificate of Incorporation.
(a) Any corporation or other entity (i) into which the Seller
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Seller shall be a party, (iii) succeeding to the business of the
Seller, or (iv) more than 50% of the voting stock (or, if not a corporation,
other voting interests) of which is owned directly or indirectly by General
Motors, which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement and
the other Basic Documents to which it is a party, shall be the successor to the
Seller under this Agreement without the execution or filing of any document or
any further act on the part of any of the parties to this Agreement. The Seller
shall provide ten (10) days prior notice of any merger, consolidation or
succession pursuant to this Section 3.03 to the Rating Agencies.
(b) The Seller hereby agrees that during the term of this
Agreement it shall not (i) take any action prohibited by Article Fourth of its
certificate of incorporation, (ii) without the prior written consent of the
Indenture Trustee and the Owner Trustee and without giving prior
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written notice to the Rating Agencies, amend Article Third or Fourth of its
certificate of incorporation or (iii) incur any indebtedness, or assume or
guaranty indebtedness of any other entity, other than pursuant to the Revolving
Note and the Intercompany Advance Agreement (without giving effect to any
amendment to such Note or Agreement after the date hereof, unless the Rating
Agency Condition was satisfied in connection therewith), if such action would
result in a downgrading of the then current rating of any class of the Notes.
Section 3.04 Limitation on Liability of Seller and Others.The Seller
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement and the Second Step Receivables Assignment. The Seller and
any director or officer or employee or agent of the Seller shall be reimbursed
by the Indenture Trustee or Owner Trustee, as applicable, for any contractual
damages, liability or expense incurred by reason of such trustee's willful
misfeasance, bad faith or negligence (except errors in judgment) in the
performance of its duties under this Agreement, the Second Step Receivables
Assignment, the Indenture or the Trust Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement, the Second Step
Receivables Assignment, the Indenture or the Trust Agreement. In no event,
however, shall the Indenture Trustee or the Owner Trustee be liable to the
Seller for any damages in the nature of special, indirect or consequential
damages, however styled, including lost profits. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations as Seller of the Receivables under this Agreement
and the Second Step Receivables Assignment and that in its opinion may involve
it in any expense or liability.
Section 3.05 Seller May Own Notes or Certificates.Each of the Seller
and any Person controlling, controlled by or under common control with the
Seller may in its individual or any other capacity become the owner or pledgee
of Notes or Certificates with the same rights as it would have if it were not
the Seller or an affiliate thereof, except as otherwise specifically provided
herein. Except as otherwise provided herein, Notes or Certificates so owned by
or pledged to the Seller or such controlling or commonly controlled Person shall
have an equal and proportionate benefit under the provisions of this Agreement,
without preference, priority or distinction as among all of such Notes or
Certificates, respectively.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
Section 4.01 Annual Statement as to Compliance; Notice of Servicer
Default.
(a) The Servicer shall deliver to the Indenture Trustee and
the Owner Trustee, on or before March 15 of each year, beginning March 15, 2007,
an officer's certificate signed by the President or any Vice President of the
Servicer, dated as of December 31 of the immediately preceding year, in each
instance stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or, with respect to the first such certificate, such
period as shall have elapsed from the Closing Date to the date of such
certificate) and of its performance under this Agreement and under the Pooling
and Servicing Agreement has been made under such officer's supervision and (ii)
to such officer's knowledge, based on such review, the Servicer has
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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, once delivered, may be obtained by any
Noteholder or Certificateholder by a request in writing to the Issuer addressed
to the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as
applicable.
(b) The Servicer shall deliver to the Issuer, on or before
March 15 of each year, beginning on March 15, 2007, a report regarding the
Servicer's assessment of compliance within the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB.
(c) The Servicer shall deliver to the Indenture Trustee, the
Owner Trustee and to the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an officer's certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
7.01. The Seller shall deliver to the Indenture Trustee, the Owner Trustee, the
Servicer and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an officer's certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under clause (b) of
Section 7.01.
(d) The Administrator shall prepare, and cause the Servicer to
execute and deliver all certificates or other documents required to be delivered
by the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and
regulations promulgated pursuant thereto.
Section 4.02 Annual Report of Assessment of Compliance with Servicing
Criteria.
(a) The Servicer shall cause a firm of independent certified
public accountants, who may also render other services to the Servicer or the
Seller, to deliver to the Issuer, the Indenture Trustee and the Owner Trustee on
or before March 15 of each year, beginning March 15, 2007, a report (the "Report
of Assessment of Compliance with Servicing Criteria") delivered to the Board of
Directors of the Servicer and to the Indenture Trustee and the Owner Trustee,
that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange
Act and Item 1122 of Regulation AB, as applicable, on the assessment of
compliance with Servicing Criteria with respect to the prior calendar year.
(b) A copy of the Report of Assessment of Compliance with
Servicing Criteria received pursuant to Section 4.02(a) shall be delivered by
the Servicer to the Indenture Trustee and the Owner Trustee on or before March
15 of each year beginning March 15, 2007.
(c) A copy of the Report of Assessment of Compliance with
Servicing Criteria may be obtained by any Noteholder or Certificateholder by a
request in writing to the Issuer addressed to the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee.
Section 4.03 Access to Certain Documentation and Information Regarding
the Receivables.The Servicer shall provide to the Indenture Trustee and the
Owner Trustee reasonable access to the documentation regarding the Receivables.
The Servicer shall provide such access to any Noteholder or Certificateholder
only in such cases where a Noteholder or a
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Certificateholder is required by applicable statutes or regulations to review
such documentation. In each case, such access shall be afforded without charge
but only upon reasonable request and during normal business hours at offices of
the Servicer designated by the Servicer. Nothing in this Section 4.03 shall
derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding Obligors, and the failure of the
Servicer to provide access as provided in this Section 4.03 as a result of such
obligation shall not constitute a breach of this Section 4.03.
Section 4.04 Amendments to Schedule of Receivables.If the Servicer,
during a Monthly Period, assigns to a Receivable an account number that differs
from the account number previously identifying such Receivable on the Schedule
of Receivables, the Servicer shall deliver to the Seller, the Indenture Trustee
and the Owner Trustee on or before the Distribution Date related to such Monthly
Period an amendment to the Schedule of Receivables to report the newly assigned
account number. Each such amendment shall list all new account numbers assigned
to the Receivables during such Monthly Period and shall show by cross reference
the prior account numbers identifying such Receivables on the Schedule of
Receivables.
Section 4.05 Assignment of Administrative Receivables and Warranty
Receivables.Upon receipt of the Administrative Purchase Payment or the Warranty
Payment with respect to an Administrative Receivable or a Warranty Receivable,
respectively, each of the Indenture Trustee and the Owner Trustee shall assign,
without recourse, representation or warranty, to the Servicer or the Warranty
Purchaser, as applicable, all of such Person's right, title and interest in, to
and under such Administrative Receivable or Warranty Receivable, all monies due
thereon, the security interests in the related Financed Vehicle, proceeds from
any Insurance Policies, proceeds from recourse against a Dealer on such
Receivable and the interests of such Person or the Trust, as applicable, in
rebates of premiums and other amounts relating to the Insurance Policies and any
document relating thereto, such assignment being an assignment outright and not
for security; and the Servicer or the Warranty Purchaser, as applicable, shall
thereupon own such Receivable, and all such security and documents, free of any
further obligations to the Indenture Trustee, the Owner Trustee, the Noteholders
or the Certificateholders with respect thereto. If in any Proceeding it is held
that the Servicer may not enforce a Receivable on the ground that it is not a
real party in interest or a holder entitled to enforce the Receivable, the
Indenture Trustee or the Owner Trustee, as applicable, shall, at the Servicer's
expense, take such steps as the Servicer deems necessary to enforce the
Receivable, including bringing suit in the name of such Person or the names of
the Noteholders or the Certificateholders.
Section 4.06 Distributions.
(a) On or before each Determination Date, the Servicer shall
calculate the Total Available Amount, the Available Interest, the Available
Principal, if any, the Basic Servicing Fee, the Aggregate Noteholders' Interest
Distributable Amount (including the Aggregate Class A Interest Distributable
Amount, the Aggregate Class B Interest Distributable Amount, the Aggregate Class
C Interest Distributable Amount, and the Aggregate Class D Interest
Distributable Amount), the Noteholders' Regular Principal Distributable Amount,
the Aggregate Noteholders' Principal Distributable Amount, the Specified Reserve
Account Balance, the net amount, if any, payable by the Trust under any Interest
Rate Swaps, the amount, if any, of any
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payments due in respect of an Early Termination Date payable by the Trust under
any Interest Rate Swaps, and all other amounts required to determine the
amounts, if any, to be deposited in or paid from each of the Collection Account,
the Note Distribution Account, the Reserve Account, the Payment Ahead Servicing
Account, if applicable, on or before the related Distribution Date (or, in the
case of payments due under any Interest Rate Swaps, if any, on the Business Day
preceding the Distribution Date).
(b) Based in each case, on the information contained in the
Servicer's Accounting delivered on the related Determination Date pursuant to
Section 3.10 of the Pooling and Servicing Agreement:
(i) On or before each Distribution Date, the
Indenture Trustee shall cause collections made during the related Monthly Period
which constitute Payments Ahead to be transferred from the Collection Account to
the Servicer, or to the Payment Ahead Servicing Account, if required pursuant to
Section 5.01(e).
(ii) On or before each Distribution Date (or, with
respect to funds necessary to make payments due, if any, under any Interest Rate
Swaps for the related Monthly Period, on the Business Day preceding the
Distribution Date), the Indenture Trustee shall transfer from the Payment Ahead
Servicing Account (or, if the Servicer is not required to make deposits to the
Payment Ahead Servicing Account on a daily basis pursuant to Section 5.01(e),
the Servicer shall deposit) to the Collection Account the aggregate Applied
Payments Ahead and, as applicable, Applied Payments Ahead necessary to make
payments under any Interest Rate Swaps pursuant to Section 4.06(c)(ii) and
(c)(iii).
(iii) On or before each Distribution Date, the
Indenture Trustee shall transfer from the Collection Account to the Servicer, in
immediately available funds, reimbursement of Outstanding Monthly Advances
pursuant to Section 5.04, payment of Excess Simple Interest Collections, if any,
pursuant to Section 3.11(b) of the Pooling and Servicing Agreement, and payments
of Liquidation Expenses (and any unpaid Liquidation Expenses from prior periods)
with respect to Receivables which became Liquidating Receivables during the
related Monthly Period pursuant to Section 3.04 of the Pooling and Servicing
Agreement.
(iv) On or before each Distribution Date (or, with
respect to funds necessary to make payments due, if any, under any Interest Rate
Swaps for the related payment period thereunder, the amount, if any, of any
payments due in respect of any Early Termination Date payable by the Trust under
any Interest Rate Swaps), the Indenture Trustee shall withdraw from the Reserve
Account and deposit in the Collection Account the amount of cash or other
immediately available funds on deposit therein.
(c) Except as otherwise provided in Section 4.06(d), on each
Distribution Date (or in the case of payments to the Swap Counterparty pursuant
to clause (ii) below, if any, on the Business Day preceding the Distribution
Date) the Indenture Trustee (based on the information contained in the
Servicer's Accounting delivered on the related Determination Date pursuant to
Section 3.10 of the Pooling and Servicing Agreement) shall make the following
distributions from the Collection Account (after the withdrawals, deposits and
transfers specified in Section 4.06(b) have been made) in the following order of
priority:
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(i) first, to the Servicer, to the extent of the
Total Available Amount, the Basic Servicing Fee;
(ii) second, to the Swap Counterparty, to the extent
of the Total Available Amount (as such amount has been reduced by the
distributions described in clause (i) above), the net amount, if any, due under
all Interest Rate Swaps (exclusive of payments due in respect of an Early
Termination Date of any Interest Rate Swaps);
(iii) third, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) and (ii) above) (a) to the Note Distribution Account for the payment
of interest on the Class A Notes, the Aggregate Class A Interest Distributable
Amount, and (b) to the Swap Counterparty, the amount of any payments due to the
Swap Counterparty in connection with an Early Termination Date of any Interest
Rate Swaps related to the Class A-2b Notes, allocated between the Note
Distribution Account and the Swap Counterparty in proportion to the amount of
the Aggregate Class A Interest Distributable Amount and the amount owing to the
Swap Counterparty in connection with such Early Termination Date;
(iv) fourth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (iii) above), to the Note Distribution Account for the
payment of principal on the Notes in the priority specified in the Indenture,
the First Priority Principal Distributable Amount;
(v) fifth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (iv) above), to the Note Distribution Account for the
payment of interest on the Class B Notes, the Aggregate Class B Interest
Distributable Amount;
(vi) sixth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (v) above), to the Note Distribution Account for the payment
of principal on the Notes in the priority specified in the Indenture, the Second
Priority Principal Distributable Amount;
(vii) seventh, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (vi) above), to the Note Distribution Account for the
payment of interest on the Class C Notes, the Aggregate Class C Interest
Distributable Amount;
(viii) eighth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (vii) above), to the Note Distribution Account for the
payment of principal on the Notes in the priority specified in the Indenture,
the Third Priority Principal Distributable Amount;
(ix) ninth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (viii) above), to the Note Distribution Account for the
payment of interest on the Class D Notes, the Aggregate Class D Interest
Distributable Amount;
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(x) tenth, to the extent of the Total Available
Amount (as such amount has been reduced by the distributions described in
clauses (i) through (ix) above), to the Note Distribution Account for the
payment of principal on the Notes in the priority specified in the Indenture,
the Fourth Priority Principal Distributable Amount;
(xi) eleventh, to the Reserve Account, to the extent
of the Total Available Amount (as such amount has been reduced by the
distributions described in clauses (i) through (x) above), the amount required
to bring the amount on deposit therein up to the Specified Reserve Account
Balance;
(xii) twelfth, to the Note Distribution Account for
payment to the Noteholders, to the extent of the Total Available Amount (as such
amount has been reduced by the distributions described in clauses (i) through
(xi) above), an amount equal to the Noteholders' Regular Principal Distributable
Amount; and
(xiii) thirteenth, to the Certificateholders (if the
Certificate Distribution Account has been established pursuant to Section 5.1 of
the Trust Agreement, then to such Certificate Distribution Account for
distribution to the Certificateholders), any portion of the Total Available
Amount remaining after the distributions described in clauses (i) through (xii)
above.
(d) Notwithstanding the foregoing, at any time that the Notes
have not been paid in full and the principal balance of the Notes has been
declared immediately due and payable following the occurrence of an Event of
Default under Sections 5.1(a), 5.1(b), 5.1(c), 5.1(e), or 5.1(f) of the
Indenture, then until such time as the Notes have been paid in full and the
Indenture has been discharged or the foregoing Events of Default have been cured
or waived as provided in Section 5.2(b) of the Indenture, the order in which
payments to Noteholders shall be made or on amounts deposited into the Note
Distribution Account shall be as specified in Section 2.7(c) of the Indenture.
Section 4.07 Reserve Account.
(a) There shall be established in the name of and maintained
with the Indenture Trustee for the benefit of the Noteholders an Eligible
Deposit Account known as the Capital Auto Receivables Asset Trust 2006-1 Reserve
Account (the "Reserve Account") to include the money and other property
deposited and held therein pursuant to this Section 4.07(a), Section 4.07(e) and
Section 4.06(c). On the Closing Date, the Seller shall deposit the Reserve
Account Initial Deposit in immediately available funds into the Reserve Account.
The Reserve Account shall constitute property of the Trust.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits therein or withdrawals
therefrom on such Distribution Date) exceeds the Specified Reserve Account
Balance for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute an amount equal to any such excess to the
Certificateholder; it being understood that no such distribution from the
Reserve Account shall be made to the Certificateholder unless the amount so on
deposit in the Reserve Account exceeds such Specified Reserve Account Balance.
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(c) [Intentionally Omitted].
(d) Each of the Seller and Servicer agree to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
authorized and executed, as applicable, delivered and filed such further
documents and instruments (including, without limitation, any UCC financing
statements or this Agreement) as may be determined to be necessary, in an
Opinion of Counsel to the Seller delivered to the Indenture Trustee, in order to
perfect the interests created by this Section 4.07 and otherwise fully to
effectuate the purposes, terms and conditions of this Section 4.07. The Seller
shall:
(i) promptly authorize and execute, as applicable,
deliver and file any financing statements, amendments, continuation statements,
assignments, certificates and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect or to
maintain the perfection of the Indenture Trustee's security interest; and
(ii) make the necessary filings of financing
statements or amendments thereto within thirty (30) 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 or any change in their respective
jurisdictions of organization, (C) any merger or consolidation or other change
in their respective identities or corporate structures and (D) any other change
or occurrence that would make any financing statement or amendment thereto
seriously misleading within the meaning of the UCC; and shall promptly notify
the Indenture Trustee of any such filings.
(e) If the Servicer pursuant to Section 5.04 determines on any
Determination Date that it is required to make a Monthly Advance and does not do
so from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.04 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Monthly Advances, and the Servicer shall
within two (2) Business Days replace any funds in the Reserve Account so used.
The Servicer shall not be entitled to reimbursement for any such deemed Monthly
Advances unless and until the Servicer shall have replaced such funds in the
Reserve Account.
Section 4.08 Net Deposits. At any time that (i) GMAC shall be the
Servicer, (ii) the Servicer shall be permitted by Section 5.02 to remit
collections on a basis other than a daily basis, and (iii) the Servicer shall be
permitted by Section 5.01(e) to remit Payments Ahead on a basis other than on a
daily basis, the Servicer, the Seller, the Indenture Trustee and the Owner
Trustee may make any remittances pursuant to this Article IV net of amounts to
be distributed by the applicable recipient to such remitting party. Nonetheless,
each such party shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred separately.
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Section 4.09 Statements to Securityholders.
(a) On each Distribution Date, the Owner Trustee shall (except
as otherwise provided in the Trust Agreement) deliver to each Certificateholder,
and the Indenture Trustee shall include with each distribution to each
Noteholder, a statement (which statement shall also be provided to the Rating
Agencies) prepared by the Servicer based on information in the Servicer's
Accounting furnished pursuant to Section 3.10 of the Pooling and Servicing
Agreement. Each such statement to be delivered to Certificateholders and
Noteholders, respectively, shall set forth the following information concerning
the Certificates or the Notes, as appropriate, with respect to such Distribution
Date or the preceding Monthly Period:
(i) the amount of such distribution allocable to
principal of each class of the Notes;
(ii) the amount of the distribution, if any,
allocable to interest on or with respect to each class of securities;
(iii) the net amount, if any, of any payments due
under all Interest Rate Swaps (specifying, if applicable, any amounts owing as a
result of an Early Termination Date under the Notes);
(iv) the Aggregate Receivables Principal Balance as
of the close of business on the last day of such Monthly Period, the Aggregate
Receivables Principal Balance as of the close of business on the last day of the
second monthly period preceding such Distribution Date (or, for the first
Distribution Date, the Initial Aggregate Receivables Principal Balance) and the
Principal Distributable Amount for such Distribution Date;
(v) the Note Principal Balance for each class of
Notes and the Aggregate Note Principal Balance, and the Note Pool Factor for
each class of Notes, each as of such Distribution Date after giving effect to
all payments described under clause (i) above;
(vi) the amount of the Class A Notes Interest
Carryover Shortfall, the Class B Notes Interest Carryover Shortfall, the Class C
Notes Interest Carryover Shortfall, and the Class D Notes Interest Carryover
Shortfall, if any, and the change in each of such amounts from the preceding
Distribution Date;
(vii) the aggregate amount in the Payment Ahead
Servicing Account or on deposit with the Servicer as Payments Ahead and the
change in such amount from the previous Distribution Date;
(viii) the amount of Outstanding Monthly Advances on
such Distribution Date;
(ix) the amount of the Basic Servicing Fee paid to
the Servicer with respect to the related Monthly Period;
(x) the amount, if any, and purpose of any other fees
or expenses accrued or paid,
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(xi) the amount, if any, distributed to Noteholders
from amounts on deposit in the Reserve Account;
(xii) the amount, if any, of excess cash distributed
from the Reserve Account to the Seller,
(xiii) the balance of the Reserve Account on such
Distribution Date (after giving effect to changes therein on such Distribution
Date);
(xiv) LIBOR for such Distribution Date and the
interest rate on each class of Floating Rate Notes.
(xv) cash flows received during the related
Collection Period and their sources,
(xvi) the number and dollar amount of Receivables at
the beginning and end of the applicable Collection Period, and updated pool
composition information as of the end of the Collection Period, such as weighted
average coupon, weighted average life, weighted average remaining term, and
prepayment amounts,
(xvii) delinquency and loss information for the
period and any material changes in determining or defining delinquencies,
charge-offs and uncollectible accounts,
(xviii) the amount of receivables with respect to
which material breaches of pool asset representations or warranties or
transaction covenants have occurred, and
(xix) any material modifications, extensions or
waivers relating to the terms of or fees, penalties or payments on, pool assets
during the distribution period or that, cumulatively, have become material over
time.
Each amount set forth pursuant to clauses (i) through (xix) above shall be
expressed as a dollar amount per $1,000 of initial principal amount of the
Notes.
(b) Within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of this Agreement,
the Indenture Trustee and the Owner Trustee shall mail, to each Person who at
any time during such calendar year shall have been a holder of Notes or
Certificates, respectively, and received any payments thereon, a statement
containing such information as may be required by the Code and applicable
Treasury Regulations to enable such securityholder to prepare its federal income
tax returns.
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
Section 5.01 Establishment of Accounts.
(a) (i) The Servicer, for the benefit of the Financial
Parties, shall establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account known as the
15
Capital Auto Receivables Asset Trust 2006-1 Collection Account (the "Collection
Account"), bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Financial Parties.
(ii) The Servicer, for the benefit of the
Noteholders, shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account known as the Capital Auto Receivables Asset Trust
2006-1 Note Distribution Account (the "Note Distribution Account"), bearing an
additional designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders.
(iii) [Intentionally Omitted].
(iv) The Servicer, for the benefit of the Obligors,
shall establish and maintain in the name of the Indenture Trustee an account
known as the Capital Auto Receivables Asset Trust 2006-1 Payment Ahead Servicing
Account (the "Payment Ahead Servicing Account"). The Payment Ahead Servicing
Account shall not be property of the Issuer.
(b) (i) Each of the Designated Accounts and the Payment Ahead
Servicing Account shall be initially established with the Indenture Trustee. At
any time after the Closing Date, the Servicer, upon thirty (30) days written
notice to the Indenture Trustee or other Account Holder, shall have the right to
instruct an Account Holder to transfer any or all of the Designated Accounts or
the Payment Ahead Servicing Account to another Eligible Institution designated
by the Servicer in such notice. No Designated Account nor the Payment Ahead
Servicing Account shall be maintained with an Account Holder if the short-term
debt obligations of such Account Holder cease to have the Required Deposit
Rating (except that any Designated Account, but not the Payment Ahead Servicing
Account, may be maintained with an Account Holder even if the short-term debt
obligations of such Account Holder do not have the Required Deposit Rating, if
such Account Holder maintains such Designated Account in its corporate trust
department). Should the short-term unsecured debt obligations of an Account
Holder no longer have the Required Deposit Rating, then the Servicer shall,
within ten (10) Business Days (or such longer period, not to exceed thirty (30)
calendar days, as to which each Rating Agency shall consent), with the Indenture
Trustee's assistance as necessary, cause each affected Designated Account or
Payment Ahead Servicing Account (A) to be moved to an Account Holder that is an
Eligible Institution or (B) with respect to the Designated Accounts only, to be
moved to the corporate trust department of the Account Holder. All amounts held
in Designated Accounts and the Payment Ahead Servicing Account (including
amounts, if any, which the Servicer is required to remit daily to the Collection
Account pursuant to Section 5.02) shall, to the extent permitted by applicable
laws, rules and regulations, be invested, at the written direction of the
Servicer, by such Account Holder in Eligible Investments. Such written direction
shall constitute certification by the Servicer that any such investment is
authorized by this Section 5.01. Funds deposited in the Reserve Account shall be
invested in Eligible Investments which mature (i) prior to the next Distribution
Date or (ii) at such later date as shall be otherwise permitted by the Rating
Agencies. Investments in Eligible Investments shall be made in the name of the
Indenture Trustee or its nominee, and such investments shall not be sold or
disposed of prior to their maturity; provided, however, that Notes held in the
Reserve Account may be sold or disposed of prior to their maturity so long as
(x) the Servicer directs the Indenture Trustee to make such sale or disposition,
(y) the Indenture Trustee gives reasonable prior notice of such
16
disposition to the Administrator and (z) such Notes are sold at a price equal to
or greater than the unpaid principal balance thereof if, following such sale,
the amount on deposit in the Reserve Account would be less than the Specified
Reserve Account Balance. Investment Earnings on funds deposited in the
Designated Accounts and the Payment Ahead Servicing Account shall be payable to
the Servicer. Each Account Holder holding a Designated Account as provided in
this Section 5.01(b)(i), shall be a "Securities Intermediary." If a 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 5.01 and an Opinion of Counsel
that such Person can perform such obligations.
(ii) With respect to the Designated Account Property,
the Account Holder 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.
(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
17
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, the Account Holder 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 5.01(b)(ii)(E) hereof.
(H) Except for the claims and interest of
the Indenture Trustee in the Designated Accounts, the Securities Intermediary
has no actual 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 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 Account Holder shall maintain each
item of Designated Account Property in the particular Designated Account to
which such item originated and shall not commingle items from different
Designated Accounts.
(iii) The Servicer shall have the power, revocable by
the Indenture Trustee (or by the Owner Trustee with the consent of the Indenture
Trustee) to instruct the Indenture Trustee to make withdrawals and payments from
the Designated Accounts for the purpose of permitting the Servicer or the Owner
Trustee to carry out its respective duties hereunder or permitting the Indenture
Trustee to carry out its duties under the Indenture.
(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 Earnings).
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 Account Holder
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 Account Holder 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) [Intentionally Omitted].
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(d) The Indenture Trustee, the Owner Trustee, the Securities
Intermediary, the Account Holder and each other Eligible Deposit Institution
with whom a Designated Account is maintained waives any right of set-off,
counterclaim, security interest or bankers' lien to which it might otherwise be
entitled.
(e) At any time that each Monthly Remittance Condition is
satisfied, then (x) Payments Ahead need not be remitted to and deposited in the
Payment Ahead Servicing Account but instead may be remitted to and held by the
Servicer and (y) the Servicer shall not be required to segregate or otherwise
hold separate any Payments Ahead, but the Servicer shall be required to remit
Applied Payments Ahead to the Collection Account in accordance with Section
4.06(b)(ii). The Servicer shall promptly notify the Indenture Trustee if any
Monthly Remittance Condition ceases to be satisfied such that the Payments Ahead
will not be remitted in accordance with the prior sentence. Commencing with the
first day of the first Monthly Period that begins at least two (2) Business Days
after the day on which any Monthly Remittance Condition ceases to be satisfied,
the Servicer shall deposit in the Payment Ahead Servicing Account the amount of
any Payments Ahead then held by it, and thereafter, for so long as a Monthly
Remittance Condition continues to be unsatisfied, the Servicer shall deposit any
additional Payments Ahead in the Payments Ahead Servicing Account within two (2)
Business Days after receipt thereof. Notwithstanding the foregoing, if a Monthly
Remittance Condition is unsatisfied the Servicer may utilize, with respect to
the Payments Ahead, an alternative remittance schedule (which may include a
remittance schedule utilized by the Servicer at a time when the Monthly
Remittance Conditions were satisfied), if the Servicer provides to the Indenture
Trustee written confirmation from the Rating Agencies that such alternative
remittance schedule will not result in the downgrading or withdrawal by the
Rating Agencies of the ratings then assigned to either the Notes or the
Certificates. Neither the Indenture Trustee nor the Owner Trustee shall be
deemed to have knowledge of any Servicer Default unless such trustee has
received notice of such event or circumstance from the other trustee, the Seller
or the Servicer in an officer's certificate or from Certificateholders whose
Certificates evidence not less than 25% of the Voting Interests as of the close
of the preceding Distribution Date or from Noteholders whose Notes evidence not
less than 25% of the Outstanding Amount of the Notes as of the close of the
preceding Distribution Date or unless a Responsible Officer in the Corporate
Trust Office of the Indenture Trustee with knowledge hereof and familiarity
herewith has actual knowledge of such event or circumstance.
Section 5.02 Collections.If a Monthly Remittance Condition is not
satisfied, commencing with the first day of the first Monthly Period that begins
at least two (2) Business Days after the day on which any Monthly Remittance
Condition ceases to be satisfied, the Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors (including Payments Ahead
in accordance with Section 5.01(e)) on the Receivables and all Liquidation
Proceeds within two (2) Business Days after receipt thereof. Notwithstanding the
foregoing, if a Monthly Remittance Condition is unsatisfied, the Servicer may
utilize an alternative remittance schedule (which may include a remittance
schedule utilized by the Servicer at a time when the Monthly Remittance
Conditions were satisfied), if the Servicer provides to the Indenture Trustee
written confirmation from the Rating Agencies that such alternative remittance
schedule will not result in the downgrading or withdrawal by the Rating Agencies
of the ratings then assigned to the Notes or the Certificates. At all times when
all Monthly Remittance Conditions are satisfied, the Servicer (i) shall not be
required to segregate or otherwise hold separate any Payments Ahead remitted to
the Servicer and (ii) shall remit
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collections received during a Monthly Period to the Collection Account in
immediately available funds on or before the related Distribution Date (or in
the case of amounts payable to the Swap Counterparty pursuant to Section
4.06(c)(ii), if any, on or before the Business Day preceding the Distribution
Date).
Section 5.03 Investment Earnings and Supplemental Servicing Fees. The
Servicer shall be entitled to receive all Investment Earnings and Supplemental
Servicing Fees when and as paid without any obligation to the Owner Trustee, the
Indenture Trustee or the Seller in respect thereof. The Servicer will have no
obligation to deposit any such amount in any account established hereunder. To
the extent that any such amount shall be held in any account held by the
Indenture Trustee or the Owner Trustee, or otherwise established hereunder, such
amount will be withdrawn therefrom and paid to the Servicer upon presentation of
a certificate signed by a Responsible Officer of the Servicer setting forth, in
reasonable detail, the amount of such Investment Earnings or Supplemental
Servicing Fees.
Section 5.04 Monthly Advances.
(a) Subject to the following sentence, as of the last day of
each Monthly Period, with respect to each Scheduled Interest Receivable (other
than an Administrative Receivable or a Warranty Receivable), if there is a
shortfall in the Scheduled Payment remaining after application of the Deferred
Prepayment pursuant to the last sentence of Section 3.11(a) of the Pooling and
Servicing Agreement, the Servicer shall advance an amount equal to such
shortfall (such amount, a "Scheduled Interest Advance"). The Servicer shall be
obligated to make a Scheduled Interest Advance in respect of a Scheduled
Interest Receivable only to the extent that the Servicer, in its sole
discretion, shall determine that such advance shall be recoverable from
subsequent collections or recoveries on any Receivable. The Servicer shall be
reimbursed for Outstanding Scheduled Interest Advances with respect to a
Receivable from the following sources with respect to such Receivable, in each
case as set forth in the Pooling and Servicing Agreement: (i) subsequent
payments by or on behalf of the Obligor, (ii) collections of Liquidation
Proceeds, and (iii) the Warranty Payment. At such time as the Servicer shall
determine that any Outstanding Scheduled Interest Advances with respect to any
Scheduled Interest Receivable shall not be recoverable from payments with
respect to such Receivable, the Servicer shall be reimbursed from any
collections made on other Receivables held by the Issuer.
(b) As of the last day of each Monthly Period, the Servicer
shall advance an amount equal to the excess, if any, of (i) the amount of
interest that would be due during such Monthly Period on all Simple Interest
Receivables held by the Issuer (assuming that the payment on each such
Receivable was received on its respective due date) over (ii) all payments
received during such Monthly Period on all Simple Interest Receivables held by
the Issuer to the extent allocable to interest (such excess, a "Simple Interest
Advance"). In addition, Liquidation Proceeds with respect to a Simple Interest
Receivable allocable to accrued and unpaid interest thereon (but not including
interest for the then current Monthly Period) shall be paid to the Servicer but
only to the extent of any Outstanding Simple Interest Advances. The Servicer
shall not make any advance with respect to principal of any Simple Interest
Receivable. Excess Simple Interest Collections shall be paid to the Servicer as
provided in Section 3.11(b) of the Pooling and Servicing Agreement.
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Section 5.05 Additional Deposits.The Servicer shall deposit in
the Collection Account the aggregate Monthly Advances pursuant to Sections
5.04(a) and (b) and the aggregate amounts to be paid to the Issuer pursuant to
Section 3.03 of the Pooling and Servicing Agreement. The Servicer and the Seller
shall deposit in the Collection Account the aggregate Administrative Purchase
Payments and Warranty Payments with respect to Administrative Receivables and
Warranty Receivables, respectively. All such deposits with respect to a Monthly
Period shall be made in immediately available funds on or before the
Distribution Date related to such Monthly Period (or, to the extent such funds
are necessary to make payments due, if any, under any Interest Rate Swaps for
the related Monthly Period, on or before the Business Day preceding the
Distribution Date)..
ARTICLE VI
LIABILITIES OF SERVICER AND OTHERS
Section 6.01 Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance with this
Agreement and the Second Step Receivables Assignment only to the extent of the
obligations in this Agreement and the Pooling and Servicing Agreement
specifically undertaken by the Servicer. Such obligations shall include the
following:
(i) The Servicer shall defend, indemnify and hold
harmless the Indenture Trustee, the Owner Trustee, the Issuer, the Noteholders
and the Certificateholders from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any affiliate thereof of any Financed
Vehicle;
(ii) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee and the Issuer from and
against any taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated in this Agreement, including, without
limitation, any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the Issuer or
the issuance and original sale of the Notes and the Certificates, or asserted
with respect to ownership of the Receivables, or federal or other income taxes
arising out of distributions on the Notes or the Certificates, or any fees or
other compensation payable to any such Person) and costs and expenses in
defending against the same;
(iii) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee, the Issuer, the Noteholders
and the Certificateholders from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such cost, expense, loss,
claim, damage, or liability arose out of, or was imposed upon the Indenture
Trustee, the Owner Trustee, the Issuer, the Noteholders or the
Certificateholders through the negligence, willful misfeasance or bad faith of
the Servicer in the performance of its duties under this Agreement, the Pooling
and Servicing Agreement, the Indenture or the Trust Agreement or any other Basic
Document or by reason of reckless disregard of its obligations and
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duties under this Agreement, the Pooling and Servicing Agreement, the Indenture,
the Trust Agreement or any other Basic Document; and
(iv) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee and the Owner Trustee, and their respective
agents and servants, from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with (x) in the
case of the Owner Trustee, the Indenture Trustee's performance of its duties
under the Indenture or any other Basic Document, (y) in the case of the
Indenture Trustee, the Owner Trustee's performance of its duties under the Trust
Agreement or (z) the acceptance, administration or performance by, or action or
inaction of, the Indenture Trustee or the Owner Trustee, as applicable, of the
trusts and duties contained in this Agreement, the Basic Documents, the
Indenture (in the case of the Indenture Trustee), including the administration
of the Trust Estate, and the Trust Agreement (in case of the Owner Trustee),
including the administration of the Owner Trust Estate, except in each case to
the extent that such cost, expense, loss, claim, damage or liability: (A) is due
to the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Person indemnified, (B) to the extent otherwise payable to the
Indenture Trustee, arises from the Indenture Trustee's breach of any of its
representations or warranties in Section 6.13 of the Indenture, (C) to the
extent otherwise payable to the Owner Trustee, arises from the Owner Trustee's
breach of any of its representations or warranties set forth in Section 6.6 of
the Trust Agreement, or (D) shall arise out of or be incurred in connection with
the performance by the Indenture Trustee of the duties of successor Servicer
hereunder.
(b) Indemnification under this Section 6.01 shall include,
without limitation, reasonable fees and expenses of external counsel and
expenses of litigation. If the Servicer has made any indemnity payments pursuant
to this Section 6.01 and the recipient thereafter collects any of such amounts
from others, the recipient shall promptly repay such amounts collected to the
Servicer, without interest.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of the Servicer. Any corporation or other entity (a) into which the
Servicer may be merged or consolidated, (b) resulting from any merger,
conversion or consolidation to which the Servicer shall be a party, (c)
succeeding to the business of the Servicer, or (d) more than 50% of the voting
stock (or, if not a corporation, other voting interests) of which is owned
directly or indirectly by General Motors and which is otherwise servicing the
Seller's receivables, which corporation in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Servicer under
this Agreement and the Pooling and Servicing Agreement, shall be the successor
to the Servicer under this Agreement and the Pooling and Servicing Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, anything in this Agreement or in the
Pooling and Servicing Agreement to the contrary notwithstanding. The Servicer
shall provide notice of any merger, consolidation or succession pursuant to
this Section 6.02 to the Rating Agencies.
Section 6.03 Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors or officers
or employees or agents of the Servicer shall be under any liability to the
Issuer, the Noteholders or the
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Certificateholders, except as specifically provided in this Agreement and in the
Pooling and Servicing Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement, the Pooling and Servicing
Agreement, the Indenture or the Trust Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement, the Pooling and Servicing Agreement, the Indenture,
the Trust Agreement or any other Basic Document. The Servicer and any director,
officer or employee or agent of the Servicer may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement
or the Pooling and Servicing Agreement.
(b) The Servicer and any director or officer or employee or
agent of the Servicer shall be reimbursed by the Indenture Trustee or the Owner
Trustee, as applicable, for any contractual damages, liability or expense
(including any obligation of the Servicer to the Indenture Trustee or the Owner
Trustee, as applicable, pursuant to Section 6.01(a)(iv)(x) or (y)) incurred by
reason of such trustee's willful misfeasance, bad faith or negligence (except
errors in judgment) in the performance of such trustee's duties under this
Agreement, the Indenture or the Trust Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement. In no event,
however, shall the Indenture Trustee or the Owner Trustee be liable to the
Servicer for any damages in the nature of special, indirect or consequential
damages, however styled, including lost profits.
(c) Except as provided in this Agreement or in the Pooling and
Servicing Agreement, the Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
service the Receivables in accordance with this Agreement and the Pooling and
Servicing Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement or
the Pooling and Servicing Agreement and the rights and duties of the parties to
this Agreement or the Pooling and Servicing Agreement and the interests of the
Noteholders and the Certificateholders under this Agreement and the Pooling and
Servicing Agreement, the interests of the Noteholders under the Indenture and
the interests of the Certificateholders under the Trust Agreement. In such
event, the legal expenses and costs for such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust and the Servicer
shall be entitled to be reimbursed therefor.
(d) The Applicable Trustee shall distribute out of the
Collection Account on a Distribution Date any amounts permitted for
reimbursement pursuant to Section 6.03(c) not therefor reimbursed; provided,
however, that the Applicable Trustee shall not distribute such amounts if the
amount on deposit in the Reserve Account (after giving effect to all deposits
and withdrawals pursuant to Sections 4.06(b) and (c) and Section 4.07(e), on
such Distribution Date) is greater than zero but less than the Specified Reserve
Account Balance for such Distribution Date.
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Section 6.04 Delegation of Duties.So long as GMAC acts as Servicer, the
Servicer may, at any time without notice or consent, delegate any duties under
this Agreement or under the Pooling and Servicing Agreement to any corporation
or other Person more than 50% of the voting stock (or, if not a corporation,
other 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 automotive receivables;
provided, however, that no such delegation or sub-contracting shall relieve the
Servicer of its responsibility with respect to such duties.
Section 6.05 Servicer Not to Resign.Subject to the provisions of
Section 7.02, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement and the Pooling and Servicing Agreement as
Servicer except upon determination that the performance of its duties under this
Agreement or under the Pooling and Servicing Agreement, as the case may be, is
no longer permissible under applicable law. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Indenture Trustee and the Owner Trustee. If, at the
time of resignation, a successor Servicer has not accepted appointment as
Servicer, the Indenture Trustee shall assume the responsibilities and
obligations of the Servicer in accordance with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Defaults.Each of the following shall constitute a
"Servicer Default":
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Designated Accounts any required payment or to
direct the Indenture Trustee to make any required distributions therefrom, which
failure continues unremedied for a period of five (5) Business Days after
written notice is received by the Servicer from the Indenture Trustee or the
Owner Trustee or after discovery of such failure by an officer of the Servicer;
(b) failure on the part of the Seller or the Servicer to duly
observe or perform in any material respect any other covenants or agreements of
the Seller or the Servicer set forth in this Agreement, the Pooling and
Servicing Agreement, the Indenture or the Trust Agreement which failure (i)
materially and adversely affects the rights of Noteholders or
Certificateholders, and (ii) continues unremedied for a period of ninety (90)
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller or the Servicer, as
applicable, by the Indenture Trustee or the Owner Trustee, or to the Seller or
the Servicer, as applicable, and to the Indenture Trustee or the Owner Trustee
by Noteholders whose Notes evidence not less than 25% of the Outstanding Amount
of the Controlling Class as of the close of the preceding Distribution Date or
by Certificateholders whose Certificates evidence not less than 25% of the
Voting Interests as of the close of the preceding Distribution Date;
(c) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator, receiver or liquidator for the Seller or the Servicer, in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of their respective
affairs,
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and the continuance of any such decree or order unstayed and in effect for a
period of ninety (90) consecutive days; or
(d) the consent by the Seller or the Servicer to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to the Seller or the Servicer or of or relating to
substantially all of their respective property; or the Seller or the Servicer
shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations.
Notwithstanding the foregoing, there shall be no Servicer
Default where a Servicer Default would otherwise exist under clause (a) above
for a period of ten (10) Business Days or under clause (b) for a period of sixty
(60) days if the delay or failure giving rise to the Servicer Default was caused
by an act of God or other similar occurrence. Upon the occurrence of any of
these events, the Servicer shall 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 this Agreement, and the Servicer shall
provide the Indenture Trustee, the Owner Trustee, the Seller and the
Securityholders prompt notice of the failure or delay by it, together with a
description of its efforts to so perform its obligations.
Section 7.02 Consequences of a Servicer Default.If a Servicer Default
shall occur and be continuing, either the Indenture Trustee or the Noteholders
whose Notes evidence not less than a majority of the Outstanding Amount of the
Controlling Class as of the close of the preceding Distribution Date (or, if the
Notes have been paid in full and the Indenture has been discharged in accordance
with its terms, by the Owner Trustee or Certificateholders whose Certificates
evidence not less than a majority of the Voting Interests as of the close of the
preceding Distribution Date) by notice then given in writing to the Servicer and
the Owner Trustee (and to the Indenture Trustee if given by the Noteholders or
the Certificateholders) may terminate all of the rights and obligations of the
Servicer under this Agreement and the Pooling and Servicing Agreement. On or
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement and the Pooling and Servicing
Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall pass to and be vested in the Indenture Trustee
pursuant to and under this Section 7.02. The Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The Servicer
agrees to cooperate with the Indenture Trustee and the Owner Trustee in
effecting the termination of the responsibilities and rights of the Servicer
under this Agreement and the Pooling and Servicing Agreement, including, without
limitation, the transfer to the Indenture Trustee or the Owner Trustee for
administration by it of all cash amounts that shall at the time be held by the
Servicer for deposit, or that shall have been deposited by the Servicer in the
Collection Account, the Note Distribution Account or the Payment Ahead Servicing
Account or thereafter received with respect to the Receivables and all Payments
Ahead that shall at that time be held by the Servicer. In addition to any other
amounts that are then payable to the Servicer under this Agreement, the Servicer
shall be entitled to
25
receive from the successor Servicer reimbursements for any Outstanding Monthly
Advances made during the period prior to the notice pursuant to this Section
7.02 which terminates the obligation and rights of the Servicer under this
Agreement.
Section 7.03 Indenture Trustee to Act; Appointment of Successor.On and
after the time the Servicer receives a notice of termination pursuant to Section
7.02, the Indenture Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the Pooling and
Servicing Agreement and the transactions set forth or provided for in this
Agreement and the Pooling and Servicing Agreement, and shall be subject to all
the responsibilities, restrictions, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions of this Agreement and the
Pooling and Servicing Agreement. As compensation therefore, the Indenture
Trustee shall be entitled to such compensation (whether payable out of the
Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such notice of termination had been given including
the Basic Servicing Fee, Investment Earnings and Supplemental Servicing Fees.
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction to appoint, a successor (i) having a net worth
of not less than $100,000,000, (ii) a long-term unsecured debt rating from
Moody's Investors Service, Inc. of at least Baa3 (unless such requirement is
expressly waived by Moody's Investors Service, Inc.) and (iii) whose regular
business includes the servicing of automotive receivables, as the successor to
the Servicer under this Agreement and the Pooling and Servicing Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer under this Agreement and the Pooling and Servicing Agreement. In
connection with such appointment and assumption, the Indenture Trustee may make
such arrangements for the compensation of such successor out of payments on
Receivables as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the Servicer under this
Agreement and the Pooling and Servicing Agreement. The Indenture Trustee and
such successor shall take such action, consistent with this Agreement and the
Pooling and Servicing Agreement, as shall be necessary to effectuate any such
succession. Costs associated with the resignation of the Servicer and the
appointment of a successor Servicer will be borne by the Issuer.
Section 7.04 Notification to Noteholders and Certificateholders.Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VII, the Indenture Trustee shall give prompt written notice thereof
to the Noteholders and the Rating Agencies and the Owner Trustee shall give
prompt written notice thereof to the Certificateholders.
Section 7.05 Waiver of Past Defaults.Noteholders whose Notes evidence
not less than a majority of the Outstanding Amount of the Controlling Class 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) may,
on behalf of all Noteholders and Certificateholders, waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from any of the
accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
26
Agreement and the Pooling and Servicing Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
Section 7.06 Repayment of Advances.If the identity of the Servicer
shall change, the predecessor Servicer shall be entitled to receive, to the
extent of available funds, reimbursement for Outstanding Monthly Advances
pursuant to Section 5.04 in the manner specified in Section 4.06 with respect to
all Monthly Advances made by such predecessor Servicer.
ARTICLE VIII
TERMINATION
Section 8.01 Optional Purchase of All Receivables; Insolvency of
Seller; Termination of Trust.
(a) (i) The Servicer shall have the option to purchase the
assets of the Trust (other than the Designated Accounts) as of any date (the
"Optional Purchase Date") which is the last day of any Monthly Period as of
which the Aggregate Receivables Principal Balance is the Optional Purchase
Percentage or less of the Initial Aggregate Receivables Principal Balance. To
exercise such option, the Servicer shall (A) furnish to the Issuer and the
Indenture Trustee notice of its intention to exercise such option and of the
Optional Purchase Date (such notice to be furnished not later than twenty-five
(25) days prior to the Distribution Date related to such Optional Purchase Date)
and (B) deposit in the Collection Account when required pursuant to (ii) below
an amount equal to the greater of (a) the remaining unpaid Principal Balance of
the Notes, plus accrued and unpaid interest, and any amounts payable to the Swap
Counterparty under any Interest Rate Swaps and any accrued and unpaid Basic
Servicing Fee payments and (b) the lesser of (i) the unpaid Aggregate
Receivables Balance plus accrued and unpaid interest and (ii) the fair market
value of the Receivables. Such fair market value shall be determined by an
appraiser mutually satisfactory to the Seller, the Servicer, the Owner Trustee
and the Indenture Trustee.
(i) The Servicer shall make such deposit set forth in
(i)(B) above in immediately available funds on the Distribution Date related to
the Optional Purchase Date, except that if any Monthly Remittance Condition is
not satisfied on the Optional Purchase Date, such deposit shall instead be made
on the Optional Purchase Date. Upon the making of such deposit, the Servicer
shall succeed to all interests in and to the Trust (other than the Designated
Accounts and the rights of the Trust under the Interest Rate Swaps).
(b) Upon any sale or other disposition of the assets of the
Trust pursuant to Article V of the Indenture (an "Event of Default Sale"), the
Servicer shall instruct the Applicable Trustee to deposit into the Collection
Account from the proceeds of such disposition the amount specified in clause
SECOND of Section 5.4(b) of the Indenture (the "Event of Default Proceeds"). On
the Distribution Date on which the Event of Default Proceeds are deposited in
the Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such deposit),
the Servicer shall instruct the Applicable Trustee to make the following
deposits (after the application on such Distribution Date of the Available
Principal and the Available Interest and funds on deposit in the Reserve Account
pursuant to Sections 4.06 and 4.07) from the Event of Default Proceeds and any
funds remaining
27
on deposit in the Reserve Account (including the proceeds of any sale of
investments therein as described in the following sentence) in the following
priority:
(i) first, to the Swap Counterparty, the net amount,
if any, then due to the Swap Counterparty under any Interest Rate Swaps
(exclusive of payments due to the Swap Counterparty in respect of an Early
Termination Date under any Interest Rate Swaps);
(ii) second, to (a) the Note Distribution Account,
for payment of interest pro rata on the Class A Notes, the Aggregate Class A
Interest Distributable Amount and (b) to the Swap Counterparty in respect of any
payments due to the Swap Counterparty in connection with any Early Termination
Date of any Interest Rate Swaps related to the Class A-2b Notes, allocated
between the Note Distribution Account and the Swap Counterparty in proportion to
the amounts owing in respect of the Aggregate Class A Interest Distributable
Amount and the amounts owing to the Swap Counterparty in connection with such
Early Termination Date;
(iii) third, to the Note Distribution Account, an
amount equal to the Note Principal Balance of the Class A Notes (after giving
effect to the reduction in the Note Principal Balance to result from the
deposits made in the Note Distribution Account on such Distribution Date and on
each prior Distribution Date) for payment of principal pro rata on the Class A
Notes;
(iv) fourth, to the Note Distribution Account, an
amount equal to the Aggregate Class B Interest Distributable Amount for payment
of interest on the Class B Notes;
(v) fifth, to the Note Distribution Account, an
amount equal to the Note Principal Balance of the Class B Notes (after giving
effect to the reduction in the Note Principal Balance to result from the
deposits made in the Note Distribution Account on such Distribution Date and on
each prior Distribution Date) for payment of principal on the Class B Notes;
(vi) sixth, to the Note Distribution Account, an
amount equal to the Aggregate Class C Interest Distributable Amount for payment
of interest on the Class C Notes;
(vii) seventh, to the Note Distribution Account, an
amount equal to the Note Principal Balance of the Class C Notes (after giving
effect to the reduction in the Note Principal Balance to result from the
deposits made in the Note Distribution Account on such Distribution Date and on
each prior Distribution Date) for payment of principal on the Class C Notes;
(viii) eighth, to the Note Distribution Account, an
amount equal to the Aggregate Class D Interest Distributable Amount for payment
of interest on the Class D Notes; and
(ix) ninth, to the Note Distribution Account, an
amount equal to the Note Principal Balance of the Class D Notes (after giving
effect to the reduction in the Note Principal Balance to result from the
deposits made in the Note Distribution Account on such
28
Distribution Date and on each prior Distribution Date) for payment of principal
on the Class D Notes.
Subject to Section 5.01(b), any investments on deposit in the Reserve Account
which shall not mature on or before such Distribution Date shall be sold by the
Indenture Trustee at such time as shall result in the Indenture Trustee
receiving the proceeds from such sale not later than such Distribution Date and
applied as set forth above. Any Event of Default Proceeds remaining after all
the deposits and other payments described above have been paid in full shall be
paid to the Seller.
(c) Notice of any termination of the Trust shall be given by
the Servicer to the Owner Trustee and the Indenture Trustee as soon as
practicable after the Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture
with respect to the Notes, and the payment in full of the principal and interest
on the Notes, the Certificateholders shall succeed to the rights of the
Noteholders hereunder and the Owner Trustee shall succeed to the rights of, and
assume the obligations (other than those under Section 7.03 which shall remain
obligations of the Indenture Trustee) 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).
(e) After indefeasible payment in full to the Indenture
Trustee, the Owner Trustee, the Swap Counterparty, the Noteholders, the
Certificateholders and the Servicer of all amounts required to be paid under
this Agreement, the Indenture, any Interest Rate Swaps and the Trust Agreement
(including as contemplated by this Section 8.01), (i) any amounts on deposit in
the Reserve Account, the Payment Ahead Servicing Account and the Collection
Account (after all other distributions required to be made from such accounts
have been made and provision for the payment of all liabilities of the Trust as
required by Section 3808 of the Statutory Trust Statute) shall be paid to the
Seller and (ii) any other assets remaining in the Trust shall be distributed to
the Seller.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01 Amendment.
(a) This Agreement may be amended by the Seller, the Servicer
and the Owner Trustee with the consent of the Indenture Trustee, but without the
consent of any of the Financial Parties, (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 credit enhancement for the benefit of
the Noteholders of any class or the Certificateholders ( provided that if any
such addition shall affect any class of Noteholders or Certificateholders
differently than any other class of Noteholders or Certificateholders, then such
addition shall not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any class of Noteholders or the
Certificateholders), (iv) add to the covenants, restrictions or obligations of
the Seller, the
29
Servicer, the Owner Trustee or the Indenture Trustee or (v) add, change or
eliminate any other provision of this Agreement in any manner that shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of the Financial Parties.
(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 Controlling Class as of the close of
the preceding Distribution Date, the consent of Certificateholders whose
Certificates evidence not less than a majority of the Voting Interests as of the
close of the preceding Distribution Date, (which consent, whether given pursuant
to this Section 9.01 or pursuant to any other provision of this Agreement, shall
be conclusive and binding on such Person and on all future holders of such Note
or Certificate and of any Note or Certificate issued upon the transfer thereof
or in exchange thereof or in lieu thereof whether or not notation of such
consent is made upon the Note or Certificate) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made on any Note or Certificate, the Interest Rate for any class
of Notes or the Specified Reserve Account Balance, (ii) adversely affect the
rating of any Securities by any of the Rating Agencies without the consent of
two-thirds of the holders of each affected Security, the Outstanding Amount of
the affected class of Notes or the Voting Interests of the Certificates, as
appropriate, as of the close of the preceding Distribution Date or (iii) reduce
the aforesaid percentage required to consent to any such amendment, without the
consent of the holders of all Notes and Certificates then outstanding.
(c) Prior to the execution of any such amendment or consent,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or consent to the Rating Agencies.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Financial Party.
(e) It shall not be necessary for the consent of Noteholders
or Certificateholders pursuant to Section 9.01(b) to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents (and
any other consents of Noteholders or Certificateholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Noteholders and Certificateholders shall be subject to such reasonable
requirements as the Indenture Trustee or the Owner Trustee may prescribe,
including the establishment of record dates pursuant to paragraph number 2 of
the Note Depository Agreement.
(f) Prior to the execution of any amendment to this Agreement,
the Indenture Trustee and the Owner Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 9.02(j). The Indenture Trustee and
30
the Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects such trustee's own rights, duties or immunities under
this Agreement or otherwise.
(g) Each of GMAC and the Seller agrees that such Person shall
not amend or agree to any amendment of the Pooling and Servicing Agreement
unless such amendment would be permissible under the terms of this Section 9.01
as if this Section 9.01 were contained in the Pooling and Servicing Agreement.
Section 9.02 Protection of Title to Trust.
(a) The Seller or the Servicer or both shall authorize and/or
execute, as applicable, and file such financing statements and cause to be
authorized and/or executed, as applicable, and filed such continuation and other
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Noteholders, the
Certificateholders, the Indenture Trustee and the Owner Trustee under this
Agreement and the Second Step Receivables Assignment in the Receivables and in
the proceeds thereof. The Seller or the Servicer or both shall deliver (or cause
to be delivered) to the Indenture Trustee and the Owner Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
(b) Neither the Seller nor the Servicer shall change its state
of organization or its name, identity or corporate structure in any manner that
would, could or might make any financing statement or continuation statement
filed in accordance with paragraph (a) above seriously misleading within the
meaning of the UCC, unless it shall have given the Indenture Trustee and the
Owner Trustee at least sixty (60) days prior written notice thereof.
(c) Each of the Seller and the Servicer shall give the
Indenture Trustee and the Owner Trustee at least sixty (60) days prior written
notice of any relocation of its principal executive office or change of its
jurisdiction of incorporation if, as a result of such relocation or change of
jurisdiction, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement or of
any new financing statement. The Servicer shall at all times maintain each
office from which it services Receivables and its principal executive office
within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each), and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, Note Distribution Account, and Payment Ahead Servicing Account and any
Payments Ahead held by the Servicer in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement and the Second Step
Receivables Assignment of the Receivables, the Servicer's master computer
records (including any back-up archives) that refer to any Receivable indicate
clearly that the Receivable is owned by the Issuer. Indication of the Issuer's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer
31
systems when, and only when, the Receivable has been paid in full or repurchased
by the Seller or purchased by the Servicer in accordance with the terms of the
Basic Documents.
(f) In the event that GMAC shall change the jurisdiction in
which it is incorporated or otherwise enter into any transaction which would
result in a "new debtor" (as defined in the UCC) succeeding to the obligations
of GMAC hereunder, GMAC shall comply fully with the obligations of Section
9.02(a).
(g) If at any time the Seller or the Servicer proposes to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender or other transferee,
the Servicer and the Seller shall give to such prospective purchaser, lender or
other transferee computer tapes, records or print-outs (including any restored
from back-up archives) that, if they refer in any manner whatsoever to any
Receivable, indicate clearly that such Receivable has been sold and is owned by
the Issuer unless such Receivable has been paid in full or repurchased by the
Seller or purchased by the Servicer.
(h) The Servicer shall permit the Indenture Trustee and the
Owner Trustee and their respective agents at any time to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Receivables
then or previously included in the Owner Trust Estate.
(i) The Servicer shall furnish to the Indenture Trustee and
the Owner Trustee at any time upon request a list of all Receivables then held
as part of the Trust, together with a reconciliation of such list to the
Schedule of Receivables and to each of the Servicer's Accountings furnished
before such request indicating removal of Receivables from the Trust. Upon
request, the Servicer shall furnish a copy of any such list to the Seller. The
Indenture Trustee, the Owner Trustee and the Seller shall hold any such list and
the Schedule of Receivables for examination by interested parties during normal
business hours at their respective offices located at the addresses specified in
Section 9.03.
(j) The Servicer shall deliver to the Indenture Trustee and
the Owner Trustee promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (a) stating that, in
the opinion of such counsel, all financing statements and continuation
statements have been authorized and filed as necessary to fully 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.
(k) To the extent required by law, the Seller shall cause the
Notes and the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934 within the time periods specified in such sections.
Section 9.03 Notices.All demands, notices and communications upon or to
the Seller, the Servicer, the Indenture Trustee, the Owner Trustee or the Rating
Agencies under this Agreement shall be delivered as specified in Appendix B
hereto.
32
Section 9.04 GOVERNING LAW.THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OR OF ANY OTHER
JURISDICTION OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.05 Severability of Provisions.If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 9.06 Assignment.Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may not be assigned by the Seller
without the prior written consent of Noteholders whose Notes evidence not less
than 66% of the Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and of Certificateholders whose Certificates evidence not less
than 66% of the Voting Interests as of the close of the preceding Distribution
Date. The Seller shall provide notice of any such assignment to the Rating
Agencies.
Section 9.07 Third-Party Beneficiaries.This Agreement and the Second
Step Receivables Assignment shall inure to the benefit of and be binding upon
the parties hereto and, to the extent expressly provided herein, the
Noteholders, the Certificateholders, the Indenture Trustee, the Owner Trustee,
the Swap Counterparty and their respective successors and permitted assigns. The
Swap Counterparty shall be a third-party beneficiary to this Agreement only to
the extent that it has any rights specified herein or rights with respect to
this Trust Sale and Servicing Agreement specified under the Swap Counterparty
Rights Agreement. Except as otherwise provided in Section 6.01, the Swap
Counterparty Rights Agreement, or in this Article IX, no other person shall have
any right or obligation hereunder.
Section 9.08 Separate Counterparts.This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 9.09 Headings and Cross-References.The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement.
Section 9.10 Assignment to Indenture Trustee.The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer pursuant to the Indenture for the benefit of the
Noteholders and (only to the extent expressly provided in the Indenture) the
Certificateholders of all right, title and interest of the Issuer in, to and
under the Receivables and/or the assignment of any or all of the Issuer's rights
and obligations hereunder to the Indenture Trustee.
33
Section 9.11 No Petition Covenants.Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the final distribution with respect
to the Notes to the Note Distribution Account, acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
Section 9.12 Limitation of Liability of Indenture Trustee and Owner
Trustee.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been acknowledged and accepted by JPMorgan Chase Bank, N.A.,
not in its individual capacity but solely as Indenture Trustee and in no event
shall JPMorgan Chase Bank, N.A. 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 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 Deutsche Bank Trust Company Delaware not in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Deutsche Bank Trust Company Delaware 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.
Section 9.13 Tax Treatment.The Servicer covenants that for all tax
purposes the Servicer shall regard and treat the Notes and the Certificates in a
manner consistent with the agreements (i) among the Seller, the Owner Trustee
and the Certificateholders in Section 2.11 of the Trust Agreement and (ii) among
the Seller, the Indenture Trustee and the Noteholders in Section 2.14 of the
Indenture.
Section 9.14 Furnishing Documents.The Indenture Trustee shall furnish
to Noteholders, promptly upon receipt of a written request therefor, copies of
the Pooling and Servicing Agreement, the Administration Agreement, the Custodian
Agreement, the Trust Agreement, the Indenture and this Agreement.
Section 9.15 Information to Be Provided by the Indenture Trustee.
34
(a) The Indenture Trustee agrees to cooperate in good faith
with any reasonable request by the Seller for information regarding the
Indenture Trustee which is required in order to enable the Seller to comply with
the provisions of Items 1117, 1119 and 1122 of Regulation AB as it relates to
the Indenture Trustee or to the Indenture Trustee's obligations under this
Agreement and the Indenture.
(b) Except to the extent disclosed by the Indenture Trustee in
subsection (c) or (d) below, the Indenture Trustee shall be deemed to have
represented to the Seller on the first day of each Monthly Period with respect
to the prior Monthly Period that to the best of its knowledge there were no
legal or governmental proceedings pending (or known to be contemplated) against
JPMorgan Chase Bank, N.A. or any property of JPMorgan Chase Bank, N.A. that
would be material to any Noteholder or, to the extent that the Certificates are
registered under the Securities Act for public sale, any holder of such
Certificates.
(c) The Indenture Trustee shall, as promptly as practicable
following notice to or discovery by the Indenture Trustee of any changes to any
information regarding the Indenture Trustee as is required for the purpose of
compliance with Item 1117 of Regulation AB, provide to the Seller, in writing,
such updated information.
(d) The Indenture Trustee shall deliver to the Seller on or
before March 15 of each year, beginning with March 15, 2007, a report of a
representative of the Indenture Trustee with respect to the immediately
preceding calendar year certifying, on behalf of the Indenture Trustee, that
except to the extent otherwise disclosed in writing to Seller, to the best of
his or her knowledge there were no legal or governmental proceedings pending (or
known to be contemplated) against JPMorgan Chase Bank, N.A. or any property of
JPMorgan Chase Bank, N.A. that would be material to any Noteholder or, to the
extent that the Certificates are registered under the Securities Act for public
sale, any holder of such Certificates.
(e) The Indenture Trustee shall deliver to the Seller on or
before March 15 of each year, beginning with March 15, 2007, a report of a
representative of the Indenture Trustee with respect to the immediately
preceding calendar year providing to the Seller such information regarding the
Indenture Trustee as is required for the purpose of compliance with Item 1119 of
Regulation AB. Such information shall include, at a minimum a description of any
affiliation between the Indenture Trustee and any of the following parties to
this securitization transaction, as such parties are identified to the Indenture
Trustee by the Seller in writing in advance of this securitization transaction:
(i) the Seller;
(ii) GMAC;
(iii) the Issuer;
(iv) the Servicer;
(v) the Owner Trustee;
(vi) the Swap Counterparty; and
35
(vii) any other material transaction party
In connection with the parties listed in clauses (i) and (vii) above, the
Indenture Trustee shall include a description of whether there is, and if so,
the general character of, any business relationship, agreement, arrangement,
transaction or understanding that is entered into outside the ordinary course of
business or is on terms other than would be obtained in an arm's length
transaction with an unrelated third party, apart from this securitization
transaction, that currently exists or that existed during the past two years and
that is material to an investor's understanding of the asset backed securities
issued in this securitization transaction..
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
CAPITAL AUTO RECEIVABLES
ASSET TRUST 2006-1
By: DEUTSCHE BANK TRUST COMPANY
DELAWARE, not in its individual
capacity but solely as Owner
Trustee on behalf of the Trust
By: /s/ Jenna Kaufman
---------------------------------
Name: Jenna Kaufman
Title: Attorney-In-Fact
CAPITAL AUTO RECEIVABLES, INC.,
Seller
By: /s/ Nancy L. Bugg
-----------------------------------
Name: Nancy L. Bugg
Title: Vice President
GENERAL MOTORS ACCEPTANCE CORPORATION
By: /s/ Carl J. Vannatter
-----------------------------------
Name: Carl J. Vannatter
Title: Director - Global Securitization
Acknowledged, Accepted, and, with respect to Section 9.15, Agreed to by:
JPMORGAN CHASE BANK, N.A., not in its individual
capacity but solely as Indenture Trustee
By: /s/ Keith R. Richardson
------------------------------------
Name: Keith R. Richardson
Title: Attorney-in-Fact
EXHIBIT A
SCHEDULE OF RECEIVABLES
The Schedule of Receivables is
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. General Motors Acceptance Corporation
4. Capital Auto Receivables, Inc.
EXHIBIT B
SECOND STEP RECEIVABLES ASSIGNMENT
PURSUANT TO TRUST SALE AND SERVICING AGREEMENT
For value received in accordance with and subject to the Trust Sale and
Servicing Agreement, dated as of February 16, 2006, (the "Trust Sale and
Servicing Agreement"), by and among General Motors Acceptance Corporation, a
Delaware corporation and in its capacity as Servicer under the Pooling and
Servicing Agreement described below (the "Servicer"), Capital Auto Receivables,
Inc., a Delaware corporation (the "Seller"), and Capital Auto Receivables Asset
Trust 2006-1, a Delaware statutory trust (the "Issuer"), the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) all right, title and interest of the Seller in, to and
under the Receivables listed on the Schedule of Receivables, attached as Exhibit
A hereto, and (a) in the case of Receivables that are Scheduled Interest
Receivables, all monies due thereunder on and after the Cutoff Date and (b) in
the case of Receivables that are Simple Interest Receivables, all monies
received thereon on and after the Cutoff Date, in each case exclusive of any
amounts allocable to the premium for physical damage insurance force-placed by
the Servicer covering any related Financed Vehicle;
(ii) the interest of the Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and, to
the extent permitted by law, any accessions thereto;
(iii) the interest of the Seller in any proceeds from claims
on any physical damage, credit life, credit disability or other insurance
policies covering Financed Vehicles or Obligors;
(iv) the interest of the Seller in any proceeds from recourse
against Dealers on Receivables;
(v) all right, title and interest of the Seller in, to and
under the Pooling and Servicing Agreement, the First Step Receivables
Assignment, and the Custodian Agreement, including the right of the Seller to
cause GMAC to repurchase Receivables under certain circumstances; and
(vi) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing described above and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion
of any or all of the foregoing, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, investment property, payment intangibles, general intangibles,
condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which ay any time constitute all or part or are included in the
proceeds of any of the foregoing.
The Seller hereby represents that as of the Cutoff Date, the
Aggregate Receivables Principal Balance was $3,151,304,872.54 and acknowledges
that in consideration of such Receivables, the Trust has paid to the Seller an
amount equal to $3,151,304,872.54.
THIS SECOND STEP RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OR OF ANY OTHER
JURISDICTION OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
This Second Step Receivables Assignment is made pursuant to and upon
the representations, warranties and agreements on the part of the Seller
contained in the Trust Sale and Servicing Agreement (including the Officer's
Certificate of the Seller accompanying this Second Step Receivables Assignment)
and is to be governed in all respects by the Trust Sale and Servicing Agreement.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the Trust Sale and Servicing Agreement.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
CAPITAL AUTO RECEIVABLES, INC.,
as Seller
By:
--------------------------------
Name: Nancy L. Bugg
Title: Vice President
EXHIBIT C
Additional Representations and Warranties
1. This Agreement and the Indenture create a valid and continuing security
interest (as defined in the applicable UCC) in the Purchased Property
in favor of the Issuer and the Indenture Trustee, as applicable, which
security interest is prior to all other Liens, and is enforceable as
such as against creditors of and purchasers from CARI and the Issuer,
respectively.
2. All steps necessary to perfect CARI's security interest against each
Obligor in the property securing the Purchased Property have been
taken.
3. Prior to the sale of the Purchased Property to the Issuer under this
Agreement, the Receivables constitute "tangible chattel paper" within
the meaning of the applicable UCC.
4. CARI owns and has good and marketable title to the Purchased Property
free and clear of any Lien, claim or encumbrance of any Person.
5. CARI has caused or will have caused, within ten (10) days, the filing
of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Purchased Property granted to the Issuer
hereunder and the Indenture Trustee under the Indenture.
6. Other than the security interest granted to CARI pursuant to the Basic
Documents, the Issuer under the Trust Sale and Servicing Agreement and
the Indenture Trustee under the Indenture, none of GMAC, CARI or the
Issuer has pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Purchased Property. None of GMAC, CARI or
the Issuer has authorized the filing of, nor is CARI aware of, any
financing statements against GMAC, CARI or the Issuer that include a
description of collateral covering the Purchased Property other than
the financing statements relating to the security interests granted to
CARI, the Issuer and the Indenture Trustee under the Basic Documents or
any financing statement that has been terminated. CARI is not aware of
any judgment or tax lien filings against GMAC, CARI or the Issuer.
7. GMAC, as Servicer, has in its possession all original copies of the
Receivables Files and other documents that constitute or evidence the
Receivables and the Purchased Property. The Receivables Files and other
documents that constitute or evidence the Purchased Property do not
have any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than CARI.
EXECUTION COPY
APPENDIX A
PART I - DEFINITIONS
All terms defined in this Appendix shall have the defined meanings when
used in the Basic Documents, unless otherwise defined therein.
Account Holder: A bank or trust company, whose short-term unsecured
debt obligations have the Required Deposit Rating, that holds one or more of the
Designated Accounts or the Payment Ahead Servicing Account.
Act: An Act as specified in Section 11.3(a) of the Indenture.
Actual Payment: With respect to a Distribution Date and to a Scheduled
Interest Receivable, all payments received by the Servicer from or for the
account of the Obligor during the related Monthly Period (and, in the case of
the first Monthly Period, all payments received by the Servicer from or for the
account of the Obligor on or after the Cutoff Date) except for any Overdue
Payments or Supplemental Servicing Fees. Actual Payments do not include Applied
Payments Ahead.
Administration Agreement: That certain Administration Agreement, dated
as of the Closing Date, among GMAC, as Administrator, the Trust and the
Indenture Trustee, as amended and supplemented from time to time.
Administrative Purchase Payment: With respect to a Distribution Date
and to an Administrative Receivable purchased as of the last day of the related
Monthly Period:
(i) in the case of a Scheduled Interest Receivable, a release of
all claims for reimbursement of Scheduled Interest Advances
made on such Receivable plus a payment equal to the sum of:
(A) the Scheduled Payments on such Receivable due after
the last day of the related Monthly Period minus the
Rebate as of the last day of such Monthly Period;
(B) any reimbursement made on or prior to the last day of
such Monthly Period pursuant to the last sentence of
Section 5.04(a) of the Trust Sale and Servicing
Agreement with respect to such Receivable; and
(C) all past due Scheduled Payments with respect to which
a Scheduled Interest Advance has not been made on or
prior to the last day of such Monthly Period; or
(ii) in the case of a Simple Interest Receivable, a payment equal
to the Amount Financed minus that portion of all payments made
by or on behalf of the related
Obligor on or prior to the last day of the related Monthly
Period allocable to principal.
Administrative Receivable: A Receivable that the Servicer is required
to purchase pursuant to Section 3.08 of the Pooling and Servicing Agreement or
which the Servicer has elected to repurchase pursuant to Section 8.01(a) of the
Trust Sale and Servicing Agreement.
Administrator: GMAC or any successor Administrator under the
Administration Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Office: The office of the Issuer maintained pursuant Section 3.2
of the Indenture.
Aggregate Amount Financed: The aggregate of the Amount Financed for
each Receivable as of the Cutoff Date. As of the Cutoff Date, the Aggregate
Amount Financed was $3,448,419,727.08.
Aggregate Class A Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) the aggregate of the Note Class Interest
Distributable Amount for each class of the Class A Notes as of such Distribution
Date and (ii) the Class A Interest Carryover Shortfall as of the close of the
preceding Distribution Date.
Aggregate Class B Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) the Note Class Interest Distributable Amount
for the Class B Notes as of such Distribution Date and (ii) the Class B Interest
Carryover Shortfall as of the close of the preceding Distribution Date.
Aggregate Class C Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) the Note Class Interest Distributable Amount
for the Class C Notes as of such Distribution Date and (ii) the Class C Interest
Carryover Shortfall as of the close of the preceding Distribution Date.
Aggregate Class D Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) the Note Class Interest Distributable Amount
for the Class D Notes as of such Distribution Date and (ii) the Class D Interest
Carryover Shortfall as of the close of the preceding Distribution Date.
Aggregate Note Principal Balance: With respect to the close of a
Distribution Date, the sum of the Note Principal Balances for all classes of
Notes.
Aggregate Noteholders' Interest Distributable Amount: With respect to
any Distribution Date, the sum of (i) the Aggregate Class A Interest
Distributable Amount as of such Distribution
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Date, (ii) the Aggregate Class B Interest Distributable Amount as of such
Distribution Date, (iii) the Aggregate Class C Interest Distributable Amount as
of such Distribution Date, and (iv) the Aggregate Class D Interest Distributable
Amount as of such Distribution Date.
Aggregate Noteholders' Principal Distributable Amount: With respect to
any Distribution Date, the sum of (i) the Noteholders' Regular Principal
Distributable Amount as of such Distribution Date and (ii) the Aggregate
Noteholders' Priority Principal Distributable Amount as of such Distribution
Date.
Aggregate Noteholders' Priority Principal Distributable Amount: With
respect to any Distribution Date, the sum of (i) the First Priority Principal
Distributable Amount, (ii) the Second Priority Principal Distributable Amount,
(iii) the Third Priority Principal Distributable Amount, and (iv) the Fourth
Priority Principal Distributable Amount, each as of such Distribution Date.
Aggregate Principal Balance of Non-Subvented Receivables: As of any
date, the present value as of such date of all scheduled monthly payments on all
of the Non-Subvented Receivables (other than Liquidating Receivables) held by
the Trust on such date which have not been applied on or prior to such date
(determined after taking into account any Prepayments, Warranty Payments and
Administrative Purchase Payments in respect of such Receivables), discounted
from the last day of the calendar month in which payments are to become due to
such date at the Discount Rate.
Aggregate Principal Balance of Subvented Receivables: As of any date,
the present value as of such date of all scheduled monthly payments on all of
the Subvented Receivables (other than Liquidating Receivables) held by the Trust
on such date which have not been applied on or prior to such date (determined
after taking into account any Prepayments, Warranty Payments and Administrative
Purchase Payments in respect of such Receivables), discounted from the last day
of the calendar month in which payments are to become due to such date at the
Discount Rate.
Aggregate Receivables Face Amount: As of any date, the sum of the
Principal Balances of all outstanding Receivables (other than Liquidating
Receivables) held by the Trust on such date.
Aggregate Receivables Principal Balance: As of any date, the sum of (i)
the Aggregate Principal Balance of Subvented Receivables and (ii) the Aggregate
Principal Balance of Non-Subvented Receivables, each as of such date.
Amount Financed: With respect to a Receivable, the aggregate amount
advanced under such Receivable toward the purchase price of the Financed
Vehicle, including accessories, insurance premiums, service and warranty
contracts and other items customarily financed as part of retail automobile
instalment sale contracts and direct purchase money loans and related costs,
less:
(i) (A) in the case of a Scheduled Interest Receivable, payments
due from the related Obligor prior to the Cutoff Date
allocable to principal and (B) in the case of a Simple
Interest Receivable, payments received from the related
Obligor prior to the Cutoff Date allocable to principal and
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(ii) any amount allocable to the premium for physical damage
insurance covering the Financed Vehicle force-placed by the
Servicer.
Annual Percentage Rate: With respect to a Receivable, the annual rate
of finance charges stated in such Receivable.
Annual Statement of Compliance: The Officer's Certificate required to
be delivered by the Issuer, pursuant to Section 3.9 of the Indenture or the
Officer's Certificate required to be delivered by the Servicer pursuant to
Section 4.01(a) of the Trust Sale and Servicing Agreement, as applicable.
Applicable Trustee: So long as the Aggregate Note Principal Balance is
greater than zero and the Indenture has not been discharged in accordance with
its terms, the Indenture Trustee, and thereafter, the Owner Trustee.
Applied Payment Ahead: With respect to a Distribution Date and to a
Scheduled Interest Receivable on which the Actual Payment is less than the
Scheduled Payment, the Deferred Prepayment to the extent the Scheduled Payment
exceeds the Actual Payment.
Authorized Officer: With respect to the Issuer, any officer or agent
acting under power of attorney of the Owner Trustee who is authorized to act for
the Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) or the power of attorney and, so long as the
Administration Agreement is in effect, any officer of the Administrator who is
authorized to act for the Administrator in matters relating to the Issuer and to
be acted upon by the Administrator pursuant to the Administration Agreement and
who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Available Interest: With respect to any Distribution Date, the sum of
the following amounts with respect to the prior Monthly Period:
(i) that portion of all collections on the Receivables held by the
Trust (other than Liquidating Receivables) allocable to
interest or Prepayment Surplus (including, in the case of
Scheduled Interest Receivables, the interest portion of
Applied Payments Ahead but excluding Excess Payments made
during such Monthly Period that are treated as Payments
Ahead);
(ii) Liquidation Proceeds to the extent allocable to interest;
(iii) all Simple Interest Advances;
(iv) all Scheduled Interest Advances to the extent allocable to
interest;
(v) the net amount, if any, paid by the Swap Counterparty to the
Trust pursuant to any Interest Rate Swaps; and
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(vi) the Warranty Payment or the Administrative Purchase Payment
for each Receivable that the Seller repurchased or the
Servicer purchased during such Monthly Period to the extent
allocable to accrued interest or Prepayment Surplus;
except that any of the foregoing amounts, to the extent they constitute
any of the following, shall be excluded from "Available Interest":
(A) all amounts received on any Scheduled Interest
Receivable (other than a Liquidating Receivable) to
the extent of the Outstanding Scheduled Interest
Advances allocable to interest with respect to such
Receivable;
(B) all Liquidation Proceeds with respect to Scheduled
Interest Receivables to the extent of the Outstanding
Scheduled Interest Advances thereon allocable to
interest;
(C) any Excess Simple Interest Collections;
(D) all Liquidation Proceeds with respect to Simple
Interest Receivables paid to the Servicer to
reimburse Outstanding Simple Interest Advances
pursuant to Section 5.04 of the Trust Sale and
Servicing Agreement; and
(E) amounts representing Liquidation Expenses pursuant to
Section 3.04 of the Pooling and Servicing Agreement.
For purposes of this definition, references to the prior Monthly Period
shall mean with respect to the initial Distribution Date, the period from and
including the Cutoff Date to the end of the calendar month preceding the initial
Distribution Date. All of the preceding allocations called for herein shall be
made in accordance with the Servicer's customary servicing procedures.
Available Principal: With respect to any Distribution Date, the sum of
the following amounts with respect to the prior Monthly Period:
(i) that portion of all collections on Receivables held by the
Trust (other than Liquidating Receivables) allocable to
principal (including, in the case of Scheduled Interest
Receivables, the principal portion of Prepayments and Applied
Payments Ahead but excluding Excess Payments made during such
Monthly Period that are treated as Payments Ahead);
(ii) Liquidation Proceeds to the extent allocable to principal;
(iii) all Scheduled Interest Advances to the extent allocable to
principal;
(iv) to the extent allocable to principal, the Warranty Payment or
the Administrative Purchase Payment for each Receivable that
the Seller repurchased or the Servicer purchased during such
Monthly Period; and
(v) all Prepayments to the extent allocable to principal;
5
except that any of the foregoing amounts, to the extent they constitute
any of the following shall be excluded from "Available Principal":
(A) any Excess Simple Interest Collections;
(B) all amounts received on any Scheduled Interest Receivable
(other than a Liquidating Receivable) to the extent of the
Outstanding Scheduled Interest Advances allocable to principal
with respect to such Receivable;
(C) all Liquidation Proceeds with respect to Simple Interest
Receivables paid to the Servicer to reimburse Outstanding
Simple Interest Advances pursuant to Section 5.04 of the Trust
Sale and Servicing Agreement;
(D) all Liquidation Proceeds with respect to Scheduled Interest
Receivables to the extent of the Outstanding Scheduled
Interest Advances allocable to principal; and
(E) amounts representing reimbursement for Liquidation Expenses
pursuant to Section 3.04 of the Pooling and Servicing
Agreement.
For purposes of this definition, references to the prior Monthly Period
shall mean with respect to the initial Distribution Date, the period from and
including the Cutoff Date to the end of the calendar month preceding the initial
Distribution Date. All of the preceding allocations called for herein shall be
made in accordance with the Servicer's customary servicing procedures.
Basic Documents: The Certificate of Trust, the Trust Agreement, the
Pooling and Servicing Agreement (including the First Step Receivables
Assignment), the Trust Sale and Servicing Agreement (including the Second Step
Receivables Assignment), the Triparty Agreement, the Custodian Agreement, the
Administration Agreement, the Indenture, any Interest Rate Swaps, the Swap
Counterparty Rights Agreement, the Note Depository Agreement, the Notes, the
Certificates and the other documents and certificates delivered in connection
therewith.
Basic Servicing Fee: With respect to a Distribution Date, the basic fee
payable to the Servicer for services rendered during the related Monthly Period,
which shall be equal to the sum of (a) one-twelfth (1/12th) of the Basic
Servicing Fee Rate multiplied by the Aggregate Receivables Face Amount of all
Receivables held by the Trust as of the first day of such Monthly Period (or,
for the first Distribution Date, the Basic Servicing Fee Rate multiplied by a
fraction, the numerator of which is 13 and the denominator of which is 360,
multiplied by the Aggregate Receivables Face Amount as of the Closing Date) and
(b) any unpaid Basic Servicing Fees from any prior Distribution Date.
Basic Servicing Fee Rate: 1.00% per annum.
Benefit Plan: Any of (i) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975 (e)(1) of the Code or (iii) any entity
whose underlying assets include plan assets by reason of investment by an
employee benefit plan or plan in such entity.
6
Book-Entry Notes: A beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
Business Day: Any day other than a Saturday, a Sunday or any other day
on which banks in New York, New York; Detroit, Michigan; or Chicago, Illinois
may, or are required to, remain closed.
CARI: Capital Auto Receivables, Inc., a Delaware corporation.
Certificate: The Certificates executed by the Owner Trustee and
authenticated by the Owner Trustee in substantially the form set forth in
Exhibit A to the Trust Agreement.
Certificate Distribution Account: The account, if applicable,
designated as such, established and maintained pursuant to Section 5.1(a) of the
Trust Agreement.
Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Act.
Certificate Register: The register of Certificates specified in Section
3.4 of the Trust Agreement.
Certificate Registrar: The registrar at any time of the Certificate
Register, appointed pursuant to Section 3.4(a) of the Trust Agreement.
Certificateholder: A Person in whose name a Certificate is registered
pursuant to the terms of the Trust Agreement.
Class A Interest Carryover Shortfall: With respect to any Distribution
Date, as of the close of business on such Distribution Date, the excess of (i)
the Aggregate Class A Interest Distributable Amount for such Distribution Date
over (ii) the amount that was actually deposited in the Note Distribution
Account on such Distribution Date in respect of interest for the Class A Notes.
Class A Notes: Collectively, the Class A-1 Notes, the Class A-2a Notes,
the Class A-2b Notes, the Class A-3 Notes, and the Class A-4 Notes.
Class A-1 Notes: The 4.642% Asset Backed Notes, Class A-1 in the
initial aggregate principal balance of $510,000,000 issued pursuant to the
Indenture.
Class A-2 Notes: Collectively, the Class A-2a Notes and the Class A-2b
Notes.
Class A-2a Notes: The 5.03% Asset Backed Notes, Class A-2a in the
initial aggregate principal balance of $450,000,000 issued pursuant to the
Indenture.
Class A-2b Notes: The Floating Rate Asset Backed Notes, Class A-2b in
the aggregate principal balance of $1,060,000,000 issued pursuant to the
Indenture.
7
Class A-3 Notes: The 5.03% Asset Backed Notes, Class A-3 in the initial
aggregate principal balance of $650,000,000 issued pursuant to the Indenture.
Class A-4 Notes: The 5.04% Asset Backed Notes, Class A-4 in the
aggregate principal balance of $252,835,000 issued pursuant to the Indenture.
Class B Interest Carryover Shortfall: With respect to any Distribution
Date, as of the close of business on such Distribution Date, the excess of (i)
the Aggregate Class B Interest Distributable Amount for such Distribution Date
over (ii) the amount that was actually deposited in the Note Distribution
Account on such current Distribution Date in respect of interest for the Class B
Notes.
Class B Notes: The 5.26% Asset Backed Notes, Class B in the initial
aggregate principal balance of $126,052,000 issued pursuant to the Indenture.
Class C Interest Carryover Shortfall: With respect to any Distribution
Date, as of the close of business on such Distribution Date, the excess of (i)
the Aggregate Class C Interest Distributable Amount for such Distribution Date
over (ii) the amount that was actually deposited in the Note Distribution
Account on such current Distribution Date in respect of interest for the Class C
Notes.
Class C Notes: The 5.55% Asset Backed Notes, Class C in the initial
aggregate principal balance of $47,270,000 issued pursuant to the Indenture.
Class D Interest Carryover Shortfall: With respect to any Distribution
Date, as of the close of business on such Distribution Date, the excess of (i)
the Aggregate Class D Interest Distributable Amount for such Distribution Date
over (ii) the amount that was actually deposited in the Note Distribution
Account on such current Distribution Date in respect of interest for the Class D
Notes.
Class D Notes: The 7.16% Asset Backed Notes, Class D in the initial
aggregate principal balance of $31,513,000 issued pursuant to the Indenture.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The initial Clearing Agency shall
be The Depository Trust Company.
Clearing Agency Participant: A securities broker, dealer, bank, trust
company, clearing corporation or other financial institution or other Person for
whom from time to time a Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
Closing Date: February 16, 2006.
Code: The Internal Revenue Code of 1986, as amended from time to time,
and the Treasury Regulations promulgated thereunder.
Collateral: The collateral specified in the Granting Clause of the
Indenture.
8
Collection Account: The account designated as such, established and
maintained pursuant to Section 5.01(a)(i) of the Trust Sale and Servicing
Agreement.
Commission: The Securities and Exchange Commission
Contingent Interest Rate Swap: Each interest rate swap agreement,
including the schedule and confirmation related thereto, between GMAC and the
Trust, as executed and delivered on the Closing Date, as the same may become
effective as provided in the Triparty Agreement or be amended, supplemented,
renewed, extended or replaced from time to time.
Controlling Class: (a) So long as the Class A Notes are outstanding,
the Class A Notes, (b) if the Class A Notes are no longer outstanding but the
Class B Notes are outstanding, the Class B Notes, (c) if the Class A Notes and
the Class B Notes are no longer outstanding but the Class C Notes are
outstanding, the Class C Notes, and (d) if the Class A Notes, Class B Notes and
the Class C Notes are no longer outstanding, the Class D Notes.
Corporate Trust Office: With respect to the Indenture Trustee or the
Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 227 West Monroe Street, 26th
Floor, Chicago, Illinois 60606, Attn: Worldwide Securities Services - CARAT
2006-1 and, with respect to registration, exchange and transfer of a Security,
at 4 New York Plaza, New York, Sixth Floor, New York, New York 10004, Attn:
Worldwide Securities Service/Structured Finance Services, CARAT 2006-1, and in
the case of the Owner Trustee, at Montgomery Building, 1011 Centre Road, Suite
200, Wilmington, Delaware 19805, Attn: Corporate Trust Department.
Custodian: GMAC, as Servicer, or another custodian named from time to
time in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of the Closing
Date, between the Custodian and CARI, as amended or supplemented from time to
time.
Cutoff Date: January 1, 2006.
Dealer: The seller of automobiles or light trucks that originated one
or more of the Receivables and assigned the respective Receivable, directly or
indirectly, to GMAC under an existing agreement between such seller and GMAC or
between such seller and General Motors, as applicable.
Dealer Agreement: An existing agreement between GMAC and a Dealer with
respect to a Receivable.
Default: Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
Deferred Prepayment: With respect to the opening of business on a
Distribution Date and to a Scheduled Interest Receivable, the amount, if any,
held by the Servicer pursuant to Section
9
5.01(e) of the Trust Sale and Servicing Agreement or in the Payment Ahead
Servicing Account with respect to such Receivable as of the opening of business
on such Distribution Date.
Definitive Certificates: As defined in Section 3.13 of the Trust
Agreement.
Definitive Notes: The Notes issued in the form of definitive notes
pursuant to Section 2.12 or Section 2.15 of the Indenture.
Designated Account Property: The Designated Accounts, all cash,
investments, Financial Assets, securities and investment property held from time
to time in any Designated Account (whether in the form of deposit accounts,
Physical Property, book-entry securities, Uncertificated Securities or
otherwise), including the Reserve Account Initial Deposit, and all proceeds of
the foregoing but excluding all Investment Earnings thereon.
Designated Accounts: The Collection Account, the Note Distribution
Account and the Reserve Account, collectively.
Determination Date: The tenth day of each calendar month, or if such
tenth day is not a Business Day, the next succeeding Business Day.
Discount Rate: 8.85% per annum.
Distribution Date: With respect to a Monthly Period, the 15th day of
the next succeeding calendar month or, if such 15th day is not a Business Day,
the next succeeding Business Day, commencing March 15, 2006.
Early Termination Date: As defined in each Interest Rate Swap.
Eligible Deposit Account: Either (i) a segregated account with an
Eligible Institution or (ii) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade.
Eligible Institution: Either (i) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (ii) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), (A) which has either (1) a long-term unsecured debt rating acceptable to
the Rating Agencies or (2) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies and (B) whose deposits are
insured by the FDIC.
Eligible Investments: Book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form which
evidence:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States
of America;
10
(ii) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under
the laws of the United States of America or any state thereof
(or any domestic branch of a foreign bank) and subject to
supervision and examination by Federal or State banking or
depository institution authorities; provided, however, that at
the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured
debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such
depository institution or trust company) thereof shall have a
credit rating from each of the Rating Agencies in the highest
investment category for short-term unsecured debt obligations
or certificates of deposit granted thereby;
(iii) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each
of the Rating Agencies in the highest investment category for
short-term unsecured debt obligations or certificates of
deposit granted thereby;
(iv) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest
investment category for short-term unsecured debt obligations
or certificates of deposit granted thereby (including funds
for which the Indenture Trustee or the Owner Trustee or any of
their respective affiliates is investment manager or advisor,
so long as such fund shall have such rating);
(v) bankers' acceptances issued by any depository institution or
trust company referred to in clause (ii) above;
(vi) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit
of the United States of America, in either case entered into
with (A) a depository institution or trust company (acting as
principal) described in clause (ii) or (B) a depository
institution or trust company (x) the deposits of which are
insured by FDIC or (y) the counterparty for which has a rating
from each of the Rating Agencies in the highest investment
category for short-term unsecured debt obligations, the
collateral for which is held by a custodial bank for the
benefit of the Trust or the Indenture Trustee, is marked to
market daily and is maintained in an amount that exceeds the
amount of such repurchase obligation, and which is required to
be liquidated immediately upon the amount of such collateral
being less than the amount of such repurchase obligation
(unless the counterparty immediately satisfies the repurchase
obligation upon being notified of such shortfall);
(vii) commercial paper master notes having, at the time of the
investment or contractual commitment to invest therein, a
rating from each of the Rating Agencies in the highest
investment category for short-term unsecured debt obligations;
11
(viii) (solely in the case of the Reserve Account) the Notes; and
(ix) any other investment permitted by each of the Rating Agencies,
in each case, unless otherwise permitted by the Rating Agencies, maturing (A)
not later than the Business Day immediately preceding the next Distribution Date
or (B) on such next Distribution Date if either (x) such investment is issued by
the institution with which the Note Distribution Account is then maintained or
(y) the Indenture Trustee (so long as the short-term unsecured debt obligations
of the Indenture Trustee are rated at least P-1 by Moody's Investors Service,
Inc. and A-1+ by Standard & Poor's Ratings Services on the date such investment
is made) shall advance funds on such Distribution Date to the Note Distribution
Account in the amount payable on such investment on such Distribution Date
pending receipt thereof to the extent necessary to make distributions on the
Notes on such Distribution Date. The provisions in clauses (ii), (iii), (iv),
(vi) and (vii) above requiring that certain investments be rated in the highest
investment category granted by each Rating Agency require such rating from
Fitch, Inc. only if Fitch, Inc. is then rating such investment. For purposes of
the foregoing, unless the Indenture Trustee objects at the time an investment is
made, the Indenture Trustee shall be deemed to have agreed to make such advance
with respect to such investment.
Entitlement Holder: Has the meaning given such term in Section
8-102(a)(7) of the New York UCC.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event described in Section 5.1 of the Indenture.
Event of Default Proceeds: As defined in Section 8.01(b) of the Trust
Sale and Servicing Agreement.
Event of Default Sale: As defined in Section 8.01(b) of the Trust Sale
and Servicing Agreement.
Excess Payment: With respect to a Distribution Date and a Scheduled
Interest Receivable, the portion of an Actual Payment on such Receivable in
excess of the Scheduled Payment thereon.
Excess Simple Interest Collections: With respect to a Distribution
Date, the excess, if any, of (i) all payments received during the related
Monthly Period on all Simple Interest Receivables to the extent allocable to
interest over (ii) the amount of interest that would be due during the related
Monthly Period on all Simple Interest Receivables assuming that the payment on
each such Receivable was received on its respective due date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Executive Officer: With respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, Executive
Vice President, any Vice President, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
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Expenses: The expenses described in Section 6.9 of the Trust Agreement.
FDIC: Federal Deposit Insurance Corporation or any successor agency.
Final Scheduled Distribution Date: With respect to a class of Notes,
the Distribution Date in the month and year set forth below opposite such Notes:
Class A-1 Notes: February 15, 2007;
Class A-2 Notes: September 15, 2008;
Class A-3 Notes: October 15, 2009;
Class A-4 Notes: May 17, 2010;
Class B Notes: October 15, 2010;
Class C Notes: January 18, 2011; and
Class D Notes: January 15, 2013.
Financed Vehicle: A new or used car or light truck, together with all
accessories thereto, securing an Obligor's indebtedness under a Receivable.
Financial Asset: Has the meaning given such term in Article 8 of the
New York UCC. As used herein, the Financial Asset "related to" a Security
Entitlement is the Financial Asset in which the entitlement holder (as defined
in Article 8 of the New York UCC) holding such Security Entitlement has the
rights and property interest specified in Article 8 of the New York UCC.
Financial Parties: The Noteholders, the Certificateholders and, so long
as any Interest Rate Swap is in effect, the Swap Counterparty.
First Priority Principal Distributable Amount: With respect to any
Distribution Date , an amount equal to the excess, if any, of (i) the aggregate
outstanding principal balance of the Class A Notes as of the preceding
Distribution Date (after giving effect to any principal payments made on the
Class A Notes on such preceding Distribution Date) over (ii) the Aggregate
Receivables Principal Balance as of the close of business on the last day of the
immediately preceding Monthly Period.
First Step Receivables Assignment: As defined in Section 2.02(a) of the
Pooling and Servicing Agreement.
Fixed Rate Notes: Together, the Class A-1 Notes, the Class A-2a Notes,
the Class B Notes, the Class C Notes and the Class D Notes.
Floating Rate Notes: The Class A-2b Notes.
Fourth Priority Principal Distributable Amount: With respect to any
Distribution Date , an amount, not less than zero, equal to the difference
between (i) the excess, if any, of (a) the aggregate outstanding principal
balance of all the Notes as of the preceding Distribution Date (after giving
effect to any principal payments made on the Notes on such preceding
Distribution Date) over (b) the Aggregate Receivables Principal Balance as of
the close of business on the last
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day of the immediately preceding Monthly Period, and (ii) the sum of (a) the
First Priority Principal Distributable Amount, if any, with respect to such
Distribution Date, (b) the Second Priority Principal Distributable Amount, if
any, with respect to such Distribution Date, and (c) the Third Priority
Principal Distributable Amount, if any, with respect to such Distribution Date.
Fractional Undivided Interest: The percentage interest in the Trust
shown on a Certificateholders' Certificate.
Further Transfer and Servicing Agreements: As defined in the recitals
to the Pooling and Servicing Agreement.
General Motors: General Motors Corporation, a Delaware corporation.
GMAC: General Motors Acceptance Corporation, a Delaware corporation.
GMAC Interest Rate Swap: Each interest rate swap agreement, including
the schedule and confirmation related thereto, between GMAC and the Swap
Counterparty in effect on the Closing Date, as the same may be amended,
supplemented, renewed, extended or replaced from time to time.
GMACNA: General Motors Acceptance Corporation, North America, a
Delaware corporation.
GMACNA Sale Agreement: The GMACNA Sale Agreement, dated as of June 23,
2004, by and between GMACNA and GMAC.
Grant: To mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon, a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Holder: The Person in whose name a Note or Certificate is registered on
the Note Register or the Certificate Register, as applicable.
Indemnified Parties: The Persons specified in Section 6.9 of the Trust
Agreement.
Indenture: The Indenture, dated as of the Closing Date, between the
Issuer and the Indenture Trustee, as amended and supplemented from time to time.
Indenture Trustee: JPMorgan Chase Bank, N.A., not in its individual
capacity but solely as trustee under the Indenture, or any successor trustee
under the Indenture.
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Independent: When used with respect to any specified Person, that the
Person (i) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (ii) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
stating that the signer has read the definition of "Independent" in the
Indenture and that the signer is Independent within the meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company
or other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Initial Aggregate Receivables Principal Balance: As of the Cutoff Date,
the sum of (i) the Aggregate Principal Balance of Subvented Receivables and (ii)
the Aggregate Principal Balance of Non-Subvented Receivables, equal to
$3,151,304,872.54.
Insurance Policy: With respect to a Receivable, an insurance policy
covering physical damage, credit life, credit disability, theft, mechanical
breakdown or similar event with respect to the related Financed Vehicle.
Intercompany Advance Agreement: The Amended and Restated Intercompany
Advance Agreement dated as of February 22, 1996 between CARI and GMAC, as
amended and supplemented from time to time.
Interest Rate: With respect to each class of Notes, the per annum rate
set forth below:
Class A-1 Notes: 4.642%;
Class A-2a Notes: 5.03%;
Class A-2b Notes: LIBOR + 0.030%;
Class A-3 Notes: 5.03%;
Class A-4 Notes: 5.04%;
Class B Notes: 5.26%;
Class C Notes: 5.55%; and
Class D Notes: 7.16%.
Interest Rate Swap: Each interest rate swap agreement, including all
schedules and confirmations related thereto, between the Trust and the Swap
Counterparty, in effect on the Closing Date, as the same may be amended,
supplemented, renewed, extended or replaced from time to time. From and after
the date, if any, on which any Contingent Interest Rate Swaps become effective
as provided in the Triparty Agreement, each shall constitute an "Interest Rate
Swap" for all purposes under the Basic Documents.
15
Interested Parties: As defined in the recitals to the Pooling and
Servicing Agreement.
Investment Company Act: The Investment Company Act of 1940, as the same
may be amended from time to time.
Investment Earnings: Investment earnings on funds deposited in the
Designated Accounts and the Payment Ahead Servicing Account, net of losses and
investment expenses.
Issuer: The party named as such in the Trust Sale and Servicing
Agreement and in the Indenture until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained herein and
required by the TIA, each other obligor on the Notes.
Issuer Order: A written order signed in the name of the Issuer by any
one of its Authorized Officers and delivered to the Indenture Trustee.
Issuer Request: A written request signed in the name of the Issuer by
any one of its Authorized Officers and delivered to the Indenture Trustee.
LIBOR: With respect to the initial Distribution Date, 4.57%; with
respect to each Distribution Date other than the initial Distribution Date, the
rate for deposits in U.S. Dollars for a period of one month which appears on
Telerate Service Page 3750 as of 11:00 a.m., London time, on the day that is two
LIBOR Business Days prior to the preceding Distribution Date (and, in the case
of the initial Distribution Date, two LIBOR Business Days prior to the Initial
Closing Date). If such rate does not appear on that date on Telerate Service
Page 3750 (or any other page as may replace that page on that service, or if
that service is no longer offered, any other service for displaying LIBOR or
comparable rates as may be selected by the Indenture Trustee after consultation
with the Seller), then LIBOR will be the Reference Bank Rate.
LIBOR Business Day: Any day other than a Saturday, Sunday or any other
day on which banks in London are required or authorized to be closed.
Lien: Any security interest, lien, charge, pledge, equity, encumbrance
or adverse claim of any kind other than tax liens, mechanics' liens and any
liens that attach by operation of law.
Liquidating Receivable: A Receivable as to which the Servicer (i) has
reasonably determined, in accordance with its customary servicing procedures,
that eventual payment of amounts owing on such Receivable is unlikely, or (ii)
has repossessed and disposed of the Financed Vehicle.
Liquidation Expenses: With respect to (i) a Liquidating Receivable
without recourse to a Dealer, $300.00 (or such greater amount as the Servicer
determines necessary in accordance with its customary procedures to refurbish
and dispense of a repurchased Financed Vehicle) as an allowance for amounts
charged to the account of the Obligor, in keeping with the Servicer's customary
procedures, for refurbishing and disposition of the Financed Vehicle and other
out-of-pocket costs related to the liquidation; and (ii) a Liquidating
Receivable with recourse to a Dealer, $0.
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Liquidation Proceeds: With respect to a Liquidating Receivable, all
amounts realized with respect to such Receivable net of amounts that are
required to be refunded to the Obligor on such Receivable.
Materiality Opinion: A written opinion of Kirkland & Ellis LLP, Mayer
Brown Rowe & Maw LLP or another nationally recognized law firm experienced in
securitization matters reasonably acceptable to the Swap Counterparty, addressed
to the Swap Counterparty and in form and substance reasonably satisfactory to
the Swap Counterparty.
Monthly Advance: As of a Distribution Date, either a Scheduled Interest
Advance or a Simple Interest Advance, or both, as applicable, in respect of the
related Monthly Period.
Monthly Period: With respect to a Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs; provided, however,
that with respect to the first Distribution Date, the Monthly Period will be the
period from and including the Cutoff Date to the end of the calendar month
preceding such Distribution Date.
Monthly Remittance Condition: Each of the following conditions:
(i) GMAC is the Servicer;
(ii) the rating of GMAC's short-term unsecured debt is at
least A-1 by Standard & Poor's Ratings Services and
P-1 by Moody's Investors Service, Inc.; and
(iii) a Servicer Default shall not have occurred and be
continuing.
New York UCC: The UCC as in effect on the Closing Date in the State of
New York, and as may be amended from time to time.
Non-Subvented Receivable: A Receivable that was or will be acquired or
originated by GMAC or its subsidiaries that is not a Subvented Receivable.
Note Class Interest Distributable Amount: With respect to any class or
tranche of Notes and any Distribution Date, the product of (i) the outstanding
principal balance of such class or tranche of Notes as of the close of the
preceding Distribution Date (or, in the case of the first Distribution Date, the
outstanding principal balance of such class or tranche of Notes on the Closing
Date) and (ii) in the case of (a) the Fixed Rate Notes, one-twelfth of the
Interest Rate for such class or tranche (or, in the case of the first
Distribution Date, the Interest Rate for such class multiplied by a fraction,
the numerator of which is 29 and the denominator of which is 360) and (b) the
Floating Rate Notes, the product of the Interest Rate for such class or tranche
of Notes for such Distribution Date and a fraction, the numerator of which is
the number of days elapsed from and including the prior Distribution Date (or,
in the case of the first Distribution Date, from and including the Closing
Date), to but excluding that Distribution Date and the denominator of which is
360.
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Note Depository: The depository from time to time selected by the
Indenture Trustee on behalf of the Trust in whose name the Notes are registered
prior to the issue of Definitive Notes. The first Note Depository shall be Cede
& Co., the nominee of the initial Clearing Agency.
Note Depository Agreement: The agreement, dated as of the Closing Date,
between the Issuer and The Depository Trust Company, as the initial Clearing
Agency relating to the Notes, substantially in the form of Exhibit B to the
Indenture, as the same may be amended and supplemented from time to time.
Note Distribution Account: The account designated as such, established
and maintained pursuant to Section 5.01(a)(ii) of the Trust Sale and Servicing
Agreement.
Note Owner: With respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an Indirect
Participant, in each case in accordance with the rules of such Clearing Agency).
Note Pool Factor: With respect to any class of Notes and any
Distribution Date, an amount expressed to the seventh decimal place and computed
by the Servicer which is equal to the Note Principal Balance for such class as
of the close of such Distribution Date divided by the initial Note Principal
Balance for such class.
Note Principal Balance: With respect to a class of Notes and any
Distribution Date, the aggregate principal balance of such class of Notes,
reduced by all previous payments to the Noteholders of such class in respect of
principal of such Notes.
Note Register: With respect to any class of Notes, the register of such
Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note Register,
appointed pursuant to Section 2.4 of the Indenture.
Notes: The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes.
Noteholders: Holders of record of the Notes pursuant to the Indenture
and, with respect to any class of Notes, holders of record of such class of
Notes pursuant to the Indenture.
Noteholders' Regular Principal Distributable Amount: With respect to
the Notes, for any Distribution Date, the lesser of:
(A) the Aggregate Note Principal Balance as of the close
of the immediately preceding Distribution Date; and
(B) the remainder, if any, of:
(1) the Principal Distributable Amount
minus
18
(2) the Aggregate Noteholders' Priority
Principal Distributable Amount, if
any, with respect to such
Distribution Date.
Notwithstanding the foregoing, on the Final Scheduled Distribution Date
for any class of the Notes, the Noteholders' Regular Principal Distributable
Amount shall equal the greater of (i) the amount specified above and (ii) the
outstanding principal balance of such class of Notes as of the preceding
Distribution Date.
Obligor: The purchaser or the co-purchasers of the Financed Vehicle or
other person who owes payments under a Receivable.
Offered Notes: Together, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes and the Class C Notes.
Officer's Certificate: A certificate signed by any Authorized Officer
of the Issuer, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, and
delivered to the Indenture Trustee. Unless otherwise specified in the Indenture,
any reference in the Indenture to an officer's certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel, who may, except as
otherwise expressly provided, be an employee of the Seller or the Servicer. In
addition, for purposes of the Indenture: (i) such counsel shall be satisfactory
to the Indenture Trustee; (ii) the opinion shall be addressed to the Indenture
Trustee as Trustee and (iii) the opinion shall comply with any applicable
requirements of Section 11.1 of the Indenture and shall be in form and substance
satisfactory to the Indenture Trustee.
Optional Purchase Date: As defined in Section 8.01(a) of the Trust Sale
and Servicing Agreement.
Optional Purchase Percentage: 5.00%.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore authenticated and delivered under the
Indenture except:
(i) Notes theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders
of such Notes; provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given
pursuant to the Indenture or provision therefor, satisfactory
to the Indenture Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide
purchaser;
19
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes both legally and beneficially owned by the Issuer, any other obligor upon
the Notes, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee knows to be so owned shall be so disregarded. Notes
so owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgor's right so to act with respect to such Notes and that the pledgee is not
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons.
Outstanding Amount: As of any date, the aggregate principal amount of
all Notes, or a class of Notes, as applicable, Outstanding at such date.
Outstanding Monthly Advances: Outstanding Scheduled Interest Advances
and Outstanding Simple Interest Advances, collectively.
Outstanding Scheduled Interest Advances: As of the last day of a
Monthly Period and with respect to a Scheduled Interest Receivable, the sum of
all Scheduled Interest Advances made on or prior to such date minus all payments
made or collections received on or prior to such date which are specified in
Section 5.04(a) of the Trust Sale and Servicing Agreement as reducing
Outstanding Scheduled Interest Advances with respect to such Receivable.
Outstanding Simple Interest Advances: As of the last day of a Monthly
Period, the sum of all Simple Interest Advances made on or prior to such date
minus the sum of (i) all payments to the Servicer made on or prior to such date
pursuant to Section 5.04(b) of the Trust Sale and Servicing Agreement and (ii)
all Excess Simple Interest Collections paid to the Servicer made on or prior to
such date; provided, however, that Outstanding Simple Interest Advances shall
never be deemed to be less than zero.
Overcollateralization Target Amount: The product of 0.75% multiplied by
the Initial Aggregate Receivables Principal Balance.
Overdue Payment: With respect to a Distribution Date and to a Scheduled
Interest Receivable, all payments received by the Servicer from or for the
account of the related Obligor during the related Monthly Period in excess of
any Supplemental Servicing Fees (excluding any Investment Earnings during the
related Monthly Period), to the extent of the Outstanding Scheduled Interest
Advances relating to such Receivable.
Owner: As defined in Section 1.02 of the Pooling and Servicing
Agreement.
Owner Trust Estate: All right, title and interest of the Trust in and
to the property and rights assigned to the Trust pursuant to Article II of the
Trust Sale and Servicing Agreement, all funds on deposit from time to time in
the Collection Account and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Trust
Sale and Servicing Agreement and the Administration Agreement.
20
Owner Trustee: Deutsche Bank Trust Company Delaware, a Delaware banking
corporation, not in its individual capacity but solely as trustee, or any
successor trustee under the Trust Agreement.
Paying Agent: With respect to the Indenture, the Indenture Trustee or
any other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer. With respect to the Trust Agreement, any paying agent
or co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement that
meets the eligibility standards for the Owner Trustee specified in Section 6.13
of the Trust Agreement. The initial Paying Agent under the Trust Agreement shall
be Deutsche Bank Trust Company Americas.
Payment Ahead: With respect to a Distribution Date and to a Scheduled
Interest Receivable, any Excess Payment (not representing prepayment in full of
such Receivable) that is of an amount such that the sum of such Excess Payment
and the Deferred Prepayment is equal to or less than three times the Scheduled
Payment.
Payment Ahead Servicing Account: The account designated as such,
established and maintained pursuant to Section 5.01(a)(iv) of the Trust Sale and
Servicing Agreement.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, limited liability company, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
Physical Property: (i) Bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-102(47) of the New York UCC and
are susceptible of physical delivery and (ii) Security Certificates.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement,
dated as of the Closing Date, between GMAC and the Seller, as amended and
supplemented from time to time.
Predecessor Note: With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
Prepayment: Any Excess Payment other than a Payment Ahead.
Prepayment Surplus: With respect to any Distribution Date on which a
Prepayment is to be applied with respect to a Scheduled Interest Receivable,
that portion of such Prepayment, net of any Rebate.
Principal Balance: With respect to any Scheduled Interest Receivable,
as of any date, the Amount Financed minus the sum of the following amounts:
21
(i) that portion of all Scheduled Payments due on or after the
Cutoff Date and on or prior to such date allocable to
principal;
(ii) any Warranty Payment or Administrative Purchase Payment to the
extent allocable to principal; and
(iii) any Prepayments applied by the Servicer to reduce the
Principal Balance of such Scheduled Interest Receivable.
With respect to any Simple Interest Receivable, as of any date, the Amount
Financed minus the sum of the following amounts:
(i) that portion of all payments received from the related Obligor
on or prior to such date allocable to principal; and
(ii) any Warranty Payment or Administrative Purchase Payment to the
extent allocable to principal.
Principal Distributable Amount: With respect to any Distribution Date,
the excess of (i) the Aggregate Note Principal Balance as of the close of the
preceding Distribution Date over (ii) the result of the Aggregate Receivables
Principal Balance as of the close of business on the last day of the immediately
preceding Monthly Period minus the Overcollateralization Target Amount.
Private Notes: The Class A-1 Notes and the Class D Notes.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Purchased Property: As defined in Section 2.01(a) of the Pooling and
Servicing Agreement.
Rating Agencies: As of any date, the nationally recognized statistical
rating organizations requested by the Seller to provide ratings on the Notes
which are rating the Notes on such date.
Rating Agency Condition: With respect to any action, the condition that
each Rating Agency shall have been given at least ten (10) days prior notice
thereof and that each of the Rating Agencies shall have notified the Seller, the
Servicer, the Issuer and the Indenture Trustee in writing that such action shall
not result in a downgrade or withdrawal of the then current rating of the Notes.
Rebate: With respect to a given date and a Scheduled Interest
Receivable, the rebate under such Receivable that is or would be payable to the
Obligor for unearned finance charges or any other charges rebatable to the
Obligor upon the payment on such date of all remaining Scheduled Payments.
22
Receivable: A retail instalment sale contract or direct purchase money
loan for a Financed Vehicle that is included in the Schedule of Receivables and
all rights and obligations thereunder.
Receivable File: The documents listed in Section 2.04 of the Pooling
and Servicing Agreement pertaining to a particular Receivable.
Receivable Principal Balance: (i) with respect to a Subvented
Receivable, an amount equal to the present value as of the close of business on
the Cutoff Date of all remaining payments on the Subvented Receivable which have
not been applied prior to the Cutoff Date, discounted at the Discount Rate from
the last day of the calendar month in which each scheduled payment is to become
due to that Distribution Date and (ii) with respect to a Non-Subvented
Receivable, an amount equal to the outstanding principal balance of the
Non-Subvented Receivable on the Cutoff Date.
Receivables Purchase Price: The amount described in Section 2.02 of the
Pooling and Servicing Agreement.
Record Date: (i) with respect to the Notes and with respect to any
Distribution Date, the close of business on the day immediately preceding such
Distribution Date, or if Definitive Notes are issued for any class of Notes,
with respect to such class of Notes the last day of the preceding Monthly Period
and (ii) with respect to the Certificates and with respect to any Distribution
Date, the close of business on the date immediately preceding such Distribution
Date, or if Definitive Certificates are issued, the last day of the preceding
Monthly Period.
Redemption Date: As defined in Section 10.1 of the Indenture.
Redemption Price: With respect to the Notes, the unpaid principal
amount of such Notes, plus accrued and unpaid interest thereon.
Regulation AB: Subpart 229.1100 -- Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518. 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Reference Bank Rate: For any Distribution Date, a rate determined on
the basis of the rates at which deposits in United States dollars are offered by
reference banks as of 11:00 a.m., London time, on the day that is two LIBOR
Business Days prior to the immediately preceding Distribution Date (or, in the
case of the initial Distribution Date, the day that is two LIBOR Business Days
prior to the Closing Date) to prime banks in the London interbank market for a
period of one month, in amounts approximately equal to the then Outstanding
Amount of the applicable class or tranche of the then outstanding Floating Rate
Notes. The reference banks shall be four major banks that are engaged in
transactions in the London interbank market, selected by the Indenture Trustee
after consultation with the Seller. The Indenture Trustee will request the
principal London office of each of the reference banks to provide a quotation of
its rate. If at least two quotations are provided, the rate will be the
arithmetic mean of the
23
quotations, rounded upwards to the nearest one-sixteenth of one percent. If on
that date fewer than two quotations are provided as requested, the rate will be
the arithmetic mean, rounded upwards to the nearest one-sixteenth of one
percent, of the rates quoted by one or more major banks in New York City,
selected by the Indenture Trustee after consultation with the Seller, 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 the then Outstanding Amount of the applicable class or tranche of the
then outstanding Floating Rate Notes. If no quotation can be obtained, then
LIBOR will be the rate from the prior Distribution Date.
Registered Holder: The Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
Released Administrative Amount: With respect to a Distribution Date and
a purchased Administrative Receivable, the Deferred Prepayment on such
Receivable.
Released Warranty Amount: With respect to a Distribution Date and a
repurchased Warranty Receivable, the Deferred Prepayment on such Receivable.
Report of Assessment of Compliance with Servicing Criteria: As defined
in Section 4.02(a) of the Trust Sale and Servicing Agreement.
Required Deposit Rating: A rating on short-term unsecured debt
obligations of P-1 by Moody's Investors Service, Inc.; A-1+ by Standard & Poor's
Ratings Services; and, if rated by Fitch, Inc., F-1+ by Fitch, Inc. Any
requirement that short-term unsecured debt obligations have the "Required
Deposit Rating" shall mean that such short-term unsecured debt obligations have
the foregoing required ratings from each of such rating agencies.
Reserve Account: The account designated as such, established and
maintained pursuant to Section 4.07(a) of the Trust Sale and Servicing
Agreement.
Reserve Account Initial Deposit: Cash or Eligible Investments having a
value of at least $15,756,524.36.
Reserve Account Property: (i) The Reserve Account and all proceeds
thereof (other than the Investment Earnings thereon) including all cash,
investments, investment property and other amounts held from time to time in the
Reserve Account (whether in the form of deposit accounts, Physical Property,
book-entry securities, Uncertificated Securities, Financial Assets or otherwise)
and (ii) the Reserve Account Deposit and all proceeds thereof (other than the
Investment Earnings thereon).
Responsible Officer: With respect to the Indenture Trustee or the Owner
Trustee, any officer within the Corporate Trust Office of such trustee or with
respect to the Owner Trustee, any agent of the Owner Trustee acting under a
power of attorney, and, with respect to the Servicer, the President, any Vice
President, Assistant Vice President, Secretary, Assistant Secretary or any other
officer or assistant officer of such Person customarily performing functions
similar to those performed by any of the above designated officers and also,
with
24
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Retained Certificates: The Certificates retained by the Seller pursuant
to the Trust Agreement.
Revolving Note: The Revolving Notes issued by CARI to GMAC under the
Intercompany Advance Agreement.
Schedule of Receivables: The schedule of Receivables attached to the
First Step Receivables Assignment delivered on the Closing Date and originally
held as part of the Trust, and on file at the locations listed on Exhibit A of
the Trust Sale and Servicing Agreement, as it may be amended from time to time.
Scheduled Interest Advance: With respect to a Scheduled Interest
Receivable, the amount, as of the last day of the related Monthly Period, which
the Servicer is required to advance pursuant to Section 5.04(a) of the Trust
Sale and Servicing Agreement.
Scheduled Interest Receivable: Any Receivable pursuant to which the
payments due from the Obligors during any month are allocated between finance
charges and principal on a scheduled basis, without regard to the period of time
which has elapsed since the preceding payment was made, using the actuarial
method.
Scheduled Payment: With respect to a Distribution Date and a Scheduled
Interest Receivable, the payment in respect of such Scheduled Interest
Receivable due from the Obligor in the related Monthly Period.
Second Priority Principal Distributable Amount: With respect to any
Distribution Date, an amount, not less than zero, equal to the difference
between (i) the excess, if any, of (a) the aggregate outstanding principal
balance of the Class A Notes and the Class B Notes as of the preceding
Distribution Date (after giving effect to any principal payments made on the
Class A Notes and the Class B Notes on such preceding Distribution Date) over
(b) the Aggregate Receivables Principal Balance as of the close of business on
the last day of the immediately preceding Monthly Period, and (ii) the First
Priority Principal Distributable Amount, if any, with respect to such
Distribution Date.
Second Step Receivables Assignment: As defined in Section 2.01(a) of
the Trust Sale and Servicing Agreement.
Secretary of State: The Secretary of State of the State of Delaware.
Secured Obligations: Obligations consisting of the principal of and
interest on, and any other amounts owing in respect of, the Notes and amounts
allocable pursuant to the Indenture with respect to the Certificates.
Secured Parties: Each Noteholder.
Securities: The Notes and the Certificates.
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Securities Act: The Securities Act of 1933, as amended.
Securities Intermediary: As defined in Section 5.01(b)(i) of the Trust
Sale and Servicing Agreement.
Security Certificate: Has the meaning given such term in Section
8-102(a)(16) of the New York UCC.
Security Entitlement: Has the meaning given such term in Section
8-102(a)(17) of the New York UCC.
Securityholder: A Holder of a Note or a Certificate.
Seller: The Person executing the Trust Sale and Servicing Agreement as
the Seller, or its successor in interest pursuant to Section 3.03 of the Trust
Sale and Servicing Agreement.
Servicer: The Person executing the Trust Sale and Servicing Agreement
as the Servicer, or its successor in interest pursuant to Section 6.02 of the
Trust Sale and Servicing Agreement.
Servicer Default: An event described in Section 7.01 of the Trust Sale
and Servicing Agreement.
Servicer's Accounting: A certificate, completed by and executed on
behalf of the Servicer, in accordance with Section 3.10 of the Pooling and
Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Simple Interest Advance: The amount, as of the last day of the related
Monthly Period, which the Servicer is required to advance pursuant to Section
5.04(b) of the Trust Sale and Servicing Agreement.
Simple Interest Method: The method of allocating each monthly payment
on a Simple Interest Receivable to principal and interest pursuant to which the
portion of such payment that is allocated to interest is equal to the product of
the outstanding principal balance thereon multiplied by the fixed rate of
interest applicable to such Receivable multiplied by the period of time elapsed
(expressed as a fraction of a calendar year) since the preceding payment of
interest with respect to such principal balance was made.
Simple Interest Receivable: Any Receivable under which the portion of
each monthly payment allocable to earned interest and the portion allocable to
the Amount Financed is determined in accordance with the Simple Interest Method.
For purposes hereof, all payments with respect to a Simple Interest Receivable
shall be allocated to principal and interest in accordance with the Simple
Interest Method.
Specified Reserve Account Balance: For any Distribution Date, the
lesser of:
(i) 0.50% of the Initial Aggregate Receivables Principal Balance;
and
26
(ii) the outstanding principal balance of the Notes as of the close
of business on such Distribution Date (after giving effect to
all payments and distributions to be made on such Distribution
Date).
State: Any one of the 50 states of the United States of America or the
District of Columbia.
Statutory Trust Act: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as the same may be amended from time to time.
Subvented Receivable: A Receivable that was or will be acquired or
originated by GMAC or its subsidiaries under special incentive rate financing
programs.
Supplemental Servicing Fees: With respect to a Distribution Date, all
late fees, prepayment charges and other administrative fees and expenses or
similar charges allowed by applicable law with respect to Receivables, collected
(from whatever source) on the Receivables held by the Trust during the related
Monthly Period.
Swap Counterparty: Citibank, N.A. will serve as swap counterparty under
each Interest Rate Swap, or any successor or replacement Swap Counterparty from
time to time under each Interest Rate Swap.
Swap Counterparty Rights Agreement: The Swap Counterparty Rights
Agreement, dated as of the Closing Date, among the Swap Counterparty, the
Issuer, GMAC, as Servicer, Custodian, and Administrator, the Seller, the
Indenture Trustee, and the Owner Trustee, as amended and supplemented from time
to time.
Temporary Notes: The Notes specified in Section 2.3 of the Indenture.
Third Party Instrument: Each Interest Rate Swap, each Contingent
Interest Rate Swap and the Triparty Agreement.
Third Priority Principal Distributable Amount: With respect to any
Distribution Date, an amount, not less than zero, equal to the difference
between (i) the excess, if any, of (a) the aggregate outstanding principal
balance of the Class A Notes, the Class B Notes, and the Class C Notes as of the
preceding Distribution Date (after giving effect to any principal payments made
on the Class A Notes, the Class B Notes, and the Class C Notes on such preceding
Distribution Date) over (b) the Aggregate Receivables Principal Balance as of
the close of business on the last day of the immediately preceding Monthly
Period, and (ii) the sum of (a) the First Priority Principal Distributable
Amount, if any, with respect to such Distribution Date and (b) the Second
Priority Principal Distributable Amount, if any, with respect to such
Distribution Date.
Total Available Amount: With respect to any Distribution Date, the sum
of the Available Interest and the Available Principal for such Distribution Date
and the amount of all cash or other immediately available funds on deposit in
the Reserve Account immediately prior to such Distribution Date.
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Treasury Regulations: The regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Triparty Agreement: The Triparty Contingent Assignment Agreement, dated
as of the Closing Date, including all schedules, and confirmations thereto,
among the Trust, the Swap Counterparty and GMAC, as the same may be amended,
supplemented, renewed, extended or replaced from time to time.
Trust: Capital Auto Receivables Asset Trust 2006-1, a Delaware
statutory trust created by the Certificate of Trust and described in the Trust
Agreement.
Trust Agreement: The Trust Agreement, dated as of the Closing Date,
between the Seller and the Owner Trustee, as amended and supplemented from time
to time.
Trust Estate: All money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Secured Parties (including, without limitation,
all property and interests Granted to the Indenture Trustee), including all
proceeds thereof, and the Reserve Account and the Reserve Account Property
pledged to the Indenture Trustee pursuant to the Trust Sale and Servicing
Agreement.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939 as in force
on the date hereof, unless otherwise specifically provided.
Trust Sale and Servicing Agreement: The Trust Sale and Servicing
Agreement, dated as of the Closing Date, between the Seller, the Servicer and
the Trust, as amended and supplemented from time to time.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction from time to time.
Unaffiliated Certificateholder: Any Certificateholder other than the
Seller or an Affiliate of the Seller.
Uncertificated Security: Has the meaning given to such term in Section
8-102(a)(18) of the New York UCC.
Undertaking Letter: The letter in substantially the form set forth in
Exhibit C of the Trust Agreement.
Voting Interests: The voting interests in the Certificates, the
aggregate strength of which shall be based on the percentage interests in the
Trust represented thereby.
Warranty Payment: With respect to a Distribution Date and to a Warranty
Receivable to be repurchased as of the last day of the related Monthly Period:
(i) in the case of a Scheduled Interest Receivable, a payment
equal to the sum of:
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(A) the sum of all remaining Scheduled Payments on such
Scheduled Interest Receivable minus the Rebate as of
the last day of such Monthly Period;
(B) all past due Scheduled Payments with respect to which
a Scheduled Interest Advance has not been made on or
prior to the last day of such Monthly Period;
(C) any reimbursement made on or prior to the last day of
such Monthly Period pursuant to the last sentence of
subsection 5.04(a) of the Trust Sale and Servicing
Agreement with respect to such Receivable; and
(D) all Outstanding Scheduled Interest Advances made on
or prior to the last day of such Monthly Period with
respect to such Receivable, minus any Liquidation
Proceeds (to the extent applied to reduce the
Principal Balance of such Receivable) previously
received on or prior to the last day of such Monthly
Period with respect to such Receivable; or
(ii) in the case of a Simple Interest Receivable, a payment equal
to the Amount Financed minus that portion of all payments
received from the related Obligor on or prior to the last day
of the related Monthly Period allocable to principal and minus
any Liquidation Proceeds (to the extent applied to reduce the
Principal Balance of such Simple Interest Receivable)
previously received with respect to such Simple Interest
Receivable.
Warranty Purchaser: The Person described in Section 2.05 of the Trust
Sale and Servicing Agreement.
Warranty Receivable: A Receivable that the Warranty Purchaser has
become obligated to repurchase pursuant to Section 2.05 of the Trust Sale and
Servicing Agreement.
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PART II - RULES OF CONSTRUCTION
(a) Accounting Terms. As used in this Appendix or the Basic
Documents, accounting terms which are not defined, and
accounting terms partly defined, herein or therein shall have
the respective meanings given to them under generally accepted
accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are
inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in
this Appendix or the Basic Documents will control.
(b) "Hereof," etc. The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Appendix or any
Basic Document will refer to this Appendix or such Basic
Document as a whole and not to any particular provision of
this Appendix or such Basic Document; and Section, Schedule
and Exhibit references contained in this Appendix or any Basic
Document are references to Sections, Schedules and Exhibits in
or to this Appendix or such Basic Document unless otherwise
specified. The word "or" is not exclusive.
(c) Reference to Distribution Dates. With respect to any
Distribution Date, the "related Monthly Period," and the
"related Record Date," will mean the Monthly Period and Record
Date, respectively, immediately preceding such Distribution
Date, and the relationships among Monthly Periods and Record
Dates will be correlative to the foregoing relationships.
(d) Number and Gender. Each defined term used in this Appendix or
the Basic Documents has a comparable meaning when used in its
plural or singular form. Each gender-specific term used in
this Appendix or the Basic Documents has a comparable meaning
whether used in a masculine, feminine or gender-neutral form.
(e) Including. Whenever the term "including" (whether or not that
term is followed by the phrase "but not limited to" or
"without limitation" or words of similar effect) is used in
this Appendix or the Basic Documents in connection with a
listing of items within a particular classification, that
listing will be interpreted to be illustrative only and will
not be interpreted as a limitation on, or exclusive listing
of, the items within that classification.
(f) Reference to a Class of Notes. Unless otherwise specified,
references to a Class of Notes includes all the tranches
included in such class of Notes.
APPENDIX B
Notice Addresses and Procedures
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon, given or furnished to or filed with the Seller, the Servicer,
the Administrator, the Indenture Trustee, the Issuer, the Owner Trustee, the
Custodian or the Rating Agencies shall be in writing, personally delivered, sent
by facsimile with a copy to follow via first class mail or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt:
(a) in the case of the Seller, at the following address:
Capital Auto Receivables, Inc.
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801,
with a copy to:
Manager - Securitization,
General Motors Acceptance Corporation
200 Renaissance Center
12th Floor, MC: 482-B12-C24
Detroit, MI 48265,
(b) in the case of the Servicer, the Administrator or the
Custodian, at the following address:
Director - Global Securitization
General Motors Acceptance Corporation
200 Renaissance Center
12th Floor, MC: 482-B12-C24
Detroit, MI 48265,
(c) in the case of the Indenture Trustee, at its Corporate
Trust Office, and
(d) in the case of the Issuer or the Owner Trustee, to the
Owner Trustee at its Corporate Trust Office,
with a copy to:
Deutsche Bank Trust Company Americas
60 Wall Street, 26th Floor
Mail Stop: NYC60-2606
New York, NY 10005
Phone: 212-250-2946
Fax: 212-797-8606/8607,
and with a copy to:
Capital Auto Receivables, Inc.,
Attention: Manager - Securitization
200 Renaissance Center
12th Floor, MC: 482-B12-C24
Detroit, MI 48265
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:
(e) in the case of Moody's Investors Service, Inc., to
Moody's Investors Service, Inc.
ABS Monitoring Department,
99 Church Street,
New York, NY 10007,
(f) in the case of Standard & Poor's Ratings Services, to
Standard & Poor's Ratings Services,
55 Water Street
40th Floor
New York, NY 10041
Attention: Asset Backed Surveillance Department,
(g) in the case of Dominion Bond Rating Service, Inc., to
Dominion Band Rating Service, Inc.,
55 Broadway,
New York, NY 10006,
Attention: Asset-Backed Surveillance, and
(h) in the case of Fitch Ratings, Inc., to
Fitch Ratings, Inc. ,
One State Street Plaza,
New York, NY 10004
Attention: Asset Backed Securities Group-Auto ABS
(i) in the case of Swap Counterparty, to
Citibank, N.A.
250 West Street
10th Floor
New York, New York 10013
Attention: Director Derivatives Operations
2
or at such other address as shall be designated by such Person in a written
notice to the other parties to this Agreement.
Where any Basic Document provides for notice to Noteholders or
Certificateholders 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 or Certificateholder
affected by such condition or event, at such Person's address as it appears on
the Note Register or Certificate Register, as applicable, not later than the
latest date, and not earlier than the earliest date, prescribed in such Basic
Document for the giving of such notice. If notice to Noteholders or
Certificateholders is given by mail, neither the failure to mail such notice nor
any defect in any notice so mailed to any particular Noteholders or
Certificateholders shall affect the sufficiency of such notice with respect to
other Noteholders or Certificateholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.
3