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8-K - Ally Financial Inc. | v185824_8-k.htm |
COMPLETE
TEXT OF ALLY DEMAND NOTES PROGRAM
(as
amended May 21, 2010)
The Ally
Demand Notes Program (the “Program”) has been established by Ally Financial Inc.
(formerly GMAC Inc.) (the “Company”) to provide investors with a convenient
means of investing funds directly with the Company. Information concerning the
Program may be obtained by calling toll free 1-800-684-8823 or by visiting the
Ally Demand Notes website at www.demandnotes.com.
ARTICLE
ONE
ADMINISTRATION
SECTION
1.01. Ally Demand
Notes Committee. (a) The Company’s Chief Financial Officer or Treasurer
shall designate an Ally Demand Notes Committee (the “Demand Notes Committee”) to
administer the Program. The Demand Notes Committee shall consist of at least
three members. Members of the Demand Notes Committee shall not receive any
compensation for their service on the Demand Notes Committee, but they may be
officers, directors or employees of the Company or any of its subsidiaries. The
Demand Notes Committee members shall serve at the pleasure of the Company’s
Chief Financial Officer or Treasurer until their resignation or removal. The
Demand Notes Committee shall act by a majority of its members, with or without a
meeting. In the event the Demand Notes Committee is unable to resolve a matter
before it by reason of an equally-divided vote, the matter shall be referred to
the Company’s Chief Financial Officer or Treasurer for resolution.
(b)
Subject to Section 5.01 of Article Five, the Demand Notes Committee shall have
the full power and authority to amend the provisions of the Program at any time
as it may deem necessary or appropriate, to interpret the provisions of the
Program, to adopt rules and regulations in connection therewith, to make
determinations thereunder provided for it to make and to set and adjust the rate
of interest to be paid on the Demand Notes.
(c) Any
interpretation of the provisions of the Program by the Demand Notes Committee
shall be final and conclusive.
SECTION
1.02. Processing
Agent. (a) The Company shall appoint a bank or corporation to act as its
agent under the Program (the “Processing Agent”) for the Ally Demand Notes (the
“Demand Notes”). The Company may, at any time, remove the Processing Agent and
appoint a successor Processing Agent. Services performed by the Processing Agent
shall include investment and redemption processing and accounting; preparation
of Demand Note statements and other correspondence; investor servicing; advice
on the principal amount of Demand Notes, accrual of interest income and payment
and reinvestment of interest accrued; required tax reporting and filings with
the Federal government; and other services required pursuant to the provisions
of the Program. All costs incurred in connection with the appointment of the
Processing Agent and with the Processing Agent’s provision of services shall be
paid by the Company, except as provided in Section 1.04.
(b) Any
determination rendered by the Demand Notes Committee in connection with the
services performed by the Processing Agent shall be final and
conclusive.
SECTION
1.03. Records
Conclusive. The records of the Company, the Demand Notes Committee and
the Processing Agent shall be conclusive with respect to all matters involved in
the administration of the Program.
SECTION
1.04. Company to Bear
Costs of Administration. The Company shall bear all costs associated with
the administration of the Program. There shall be no charges, expenses, costs,
fees or penalties to investors or deductions from Demand Notes for making
investments in, or redeeming, Demand Notes; provided that (i) the Company shall
not be responsible for any charges an investor may have to pay to such
investor’s bank in connection with making investments by wire transfer pursuant
to Section 3.05 of Article Three or in connection with redemptions by wire
transfer pursuant to Section 4.03 of Article Four, (ii) the Company shall not be
responsible for any costs an investor may incur in connection with obtaining
signature guarantees required pursuant to Section 2.04(b) of Article Two and
Section 4.03(e), 4.03(f) and 4.03(g) of Article Four and (iii) the Company shall
pass through to investors any service charges the Processing Agent may assess
pursuant to Section 4.02(d) and 4.06(c) of Article Four; the Company may
institute other fees as it deems necessary.
ARTICLE TWO
DEMAND
NOTES
SECTION
2.01. Issuance of the
Demand Notes. (a) The Company shall issue Demand Notes which shall
constitute unsecured and unsubordinated debt obligations of the Company. The
Demand Notes shall have no stated maturity and shall be redeemable in whole, or
in part, at the option of investors pursuant to the terms of Article Four
hereof.
(b) The
Company shall appoint one or more corporations to act as trustee (the “Trustee”)
for Demand Notes issued pursuant to the Program and shall enter into an
Indenture (the “Indenture”) with the Trustee which meets the requirements of the
Trust Indenture Act of 1939. Subject to the terms and conditions of the
Indenture, the Company and the Trustee may amend or supplement the Indenture
from time to time. The terms and conditions of the Demand Notes shall be
governed by the provisions of the Indenture and of the Program.
SECTION
2.02. Interest Rate on
the Demand Notes. (a) The Demand Notes shall bear interest at a floating
rate determined by the Demand Notes Committee. The interest rate on the Demand
Notes shall be subject to change on Friday of each week, such change to be
effective the following Monday. Such rate shall reflect both the level of
interest rates generally and the changes in interest rates which occur from time
to time.
(b)
Interest on Demand Notes shall accrue in accordance with the provisions of
Article Three.
(c)
Interest on Demand Notes shall be compounded daily, at the rate in effect each
day, based on a 365-day year. During a leap year the interest on Demand Notes is
compounded daily, at the rate in effect each day, based on a 366 day
year.
(d) On
the last day of each month, interest accrued during the month on the principal
amount of a Demand Notes shall be paid by the Company and reinvested in such
Demand Notes, thereby increasing the principal amount of such Demand
Notes.
SECTION
2.03. Information
Concerning Current Interest Rate on Demand Notes. Information concerning
the rate of interest currently payable on the Demand Notes shall be available to
an investor at any time by such investor’s calling toll free 1-800-426-8323 or
by the investor visiting the Ally Demand Notes website at
www.demandnotes.com.
SECTION
2.04. Eligibility,
Restrictions on Transfer. (a) The Demand Notes shall be offered only to
persons whose registered addresses are in the United States. The Demand Notes
Committee shall have the power to determine eligibility for participation in the
Program.
(b) In
order to transfer a Demand Notes, an investor must provide written instructions
to the Processing Agent. Such instructions must include the investor’s tax
identification or Social Security number, the Demand Note number assigned by the
Processing Agent and the signatures of all registered owners (including joint
owners) of the Demand Note and must be signed exactly as they appear on the
Demand Notes investment form. The signature of each registered owner and the
transferee also must be guaranteed by an authorized signatory of a commercial
bank, trust company (not a savings bank) or member firm of a national or
regional stock exchange in the United States. The instructions also must include
the name, tax identification or Social Security number, address and date of
birth of the eligible transferee. In addition, investors may be required to
provide certain other information as required by relevant law. The instructions
must be mailed in accordance with the applicable instructions.
SECTION
2.05. Business
Day. For purposes of the Program, “Business Day” shall mean only a day on
which the Processing Agent and the Federal Reserve Bank are fully open for
business.
ARTICLE
THREE
INVESTMENTS
IN DEMAND NOTES
SECTION
3.01. Investment
Form-Initial Investment. An investor may invest in a Demand Note by
completing a Demand Notes investment form requiring such information as the
Demand Notes Committee may deem appropriate and by making an initial investment
(minimum $1,000) in accordance with the provisions of this Article
Three.
SECTION
3.02. Demand Notes
Register—Confirmations Statements. (a) All funds invested in Demand
Notes, together with interest accrued thereon, and redemptions, if any, shall be
recorded on a register (the “Demand Notes Register”) established and maintained
by the Processing Agent. An investor will be able to obtain the current balance
of such investor’s Demand Note at any time by calling toll free 1-800-684-8823.
An investor can also access his or her account online through
www.demandnotes.com. No certificate or other instrument evidencing the Company’s
indebtedness to an investor shall be issued to investors. The Demand Notes
Register also shall include, but not be limited to, the name(s), address(es),
tax identification or Social Security Number(s), and date of birth of the
registered owner(s) of the Demand Note. In addition, investors may be required
to provide certain other information required by relevant law.
(b) The
Processing Agent shall provide an investor with periodic statements concerning
such investor’s Demand Notes. Periodic statements shall include, but not be
limited to, a summary of any investments and redemptions, accrued and reinvested
interest, and the principal amount of the Demand Notes at the beginning and at
the end of the period.
SECTION
3.03. Holding of
Demand Notes. Subject to applicable statutes and regulations, the
interpretation of which shall be solely within the authority of the Processing
Agent, a Demand Notes may be held individually, jointly, in a trust or custodial
capacity or in the name of a corporation, partnership or association. In the
event of the death of an investor, redemption proceeds shall be paid to the
survivor in the case of a Demand Notes jointly held, to the successor custodian
in the case of a Demand Notes held in a custodial capacity, to the trust in the
case of a Demand Notes held in a trust capacity or to the investor’s
estate.
SECTION
3.04. Investments by
Check. (a) To make an initial investment by check, an investor must
complete a Demand Notes investment form. The investment form, together with a
personal check (minimum of $1,000) made payable to “Ally Demand Notes” must be
mailed as provided in the applicable program documents. Investments
by check made subsequent to the initial investment (minimum of $50) also must be
made payable to “Ally Demand Notes,” must include the investor’s tax
identification or Social Security number and the 14-digit Demand Notes number
assigned by the Processing Agent, and must be mailed as provided in the
applicable program documents. An investor shall also be required to enclose an
investment slip which is provided as a detachable stub on the bottom of all
monthly statements and in the investor’s checkbook. Neither the Processing Agent
nor the Company shall be responsible for delays in the receipt of checks mailed
to Mellon Bank, N.A.
(b)
Initial and subsequent investments by check that are received and processed by
the Processing Agent before 10 a.m. EST are invested in an investor’s Demand
Notes on the same Business Day as the investor’s check is received. Initial and
subsequent investments by check that are received and processed by the
Processing Agent after 10 a.m. EST are invested in the investor’s Demand Notes
on the next Business Day after the date of the check’s receipt. Interest will
begin to accrue on the day it is invested. Investments made by check shall be
available for redemption on the sixth Business Day after the Processing Agent
invests the investor’s check.
(c)
Checks must be drawn in United States dollars on a financial institution
incorporated in the United States.
(d) The
Company may in its discretion waive the initial $1,000 minimum investment
requirement as to any investor.
(e) The
Company will not accept cash as an initial or subsequent investment. If cash is
received by the Processing Agent for investment in a Demand Notes, a cashier’s
check will be purchased by the Processing Agent and the service fee will be
deducted directly from the cash investment.
SECTION
3.05. Investments by
Wire Transfer. (a) Initial investments in a Demand Note may not be made
by transferring funds via bank wire. Once a Demand Note has been opened,
subsequent investments (minimum of $50) may be made via bank wire. To do so, an
investor must comply with instructions provided in the applicable program
documents. The bank wire must include the designation “Ally Demand Notes,” the
name and address of the investor and the investor’s tax identification or Social
Security number, and the investor’s 14-digit Demand Note number.
(b)
Investments by wire transfer of funds to the Processing Agent shall be invested
in an investor’s Demand Note on the Business Day the funds are received by the
Processing Agent in proper form and shall begin accruing interest on such day
provided the funds are received by the Processing Agent by 2:00 p.m. Eastern
Time. Funds received after 2:00 p.m. Eastern Time shall be invested and shall
begin to accrue interest on the next succeeding Business Day.
(c)
Neither the Company nor the Processing Agent shall be responsible for delays in
the transfer and wiring of funds.
SECTION
3.06. Investments by
Automatic Monthly or Periodic Electronic Transfer from a Bank Account.
(a) An investor may elect to authorize the Processing Agent to make monthly
charges of $50 or more to such investor’s personal banking account(s) for
purposes of investing in Demand Notes. Upon receipt of proper written
authorization, the Processing Agent shall prepare an electronic transfer using
up to two transfer dates each month drawn against an investor’s banking
account(s) for the prescribed amount. The proceeds from the check shall be
invested in an investor’s Demand Note and shall accrue interest on the same day
as the electronic transfer is received by the Processing Agent.
(b) To
invest in the manner described in subsection (a) of this Section 3.06, an
investor must elect this option on the investment form or obtain the necessary
authorization form directly from the Processing Agent.
(c) An
investor may change the amount of the monthly investment (subject to the $50
monthly minimum) or terminate such investment entirely by providing notice in
writing to the Processing Agent. Such notice shall be effective as soon as
practicable after receipt thereof by the Processing Agent.
SECTION
3.07. Investments by
Direct Investment. (a) An investor may elect to invest in Demand Notes by
authorizing the Processing Agent to receive such investor’s net paycheck (gross
pay less deductions) from an investor’s place of employment, or to receive such
investor’s Social Security, annuity or pension checks or other regularly
recurring checks. Investments by direct investment may be made by electronic
transfer or by check. Direct investments by electronic transfer of funds to the
Processing Agent shall be invested in an investor’s Demand Note and accrue
interest in accordance with the provisions of Sections 3.05(b) and 3.05(c).
Direct investments by checks mailed to the Processing Agent shall be invested in
an investor’s Demand Note and accrue interest in accordance with the provisions
of Sections 3.04(b) and 3.04(c).
(b) To
invest in the manner described in subsection (a) of this Section 3.07, the forms
necessary to authorize direct investment of Social Security checks may be
obtained from most Social Security offices. Investors who wish to have such
investor’s net paycheck invested directly into such investor’s Demand Notes
should contact the employer’s payroll location. Eligible retirees
should contact their former employer in order to obtain the proper forms
permitting direct investment.
(c) An
investor may terminate the Processing Agent’s authority to receive such
investor’s net paychecks, Social Security, annuity or pension checks or other
regularly recurring checks by providing notice in writing to the issuer of such
checks and to the Processing Agent. If, upon termination of the Processing
Agent’s authority to receive an investor’s net paychecks, Social Security,
annuity or pension checks or other regularly recurring checks, an investment is
made incorrectly to an investor’s Demand Notes, such investor must promptly
notify the Company of such error and return any and all amounts incorrectly
invested.
SECTION
3.08. Investments by
Payroll Deduction. (a) This option is available only to employees of
companies participating in Ally Demand Note payroll deductions.
(b)
Investments by payroll deduction must be specified as a fixed dollar amount. The
minimum investment by payroll deduction must be at least $50 per month; provided
that the minimum investment for an employee paid weekly shall be $11.50 per
week, or such other amount as the Demand Notes Committee from time to time may
authorize.
(c) Each
payroll deduction investment by an employee shall be invested in such employee’s
Demand Note as of the payday on which it was withheld and begins accruing
interest as of such date.
(d)
Unless otherwise permitted by the Demand Notes Committee, an employee may make
investments by payroll deduction in only one Demand Note.
SECTION
3.09. Investments by
Pension Deduction. (a) This option shall be available only to a retiree
or a surviving spouse of such retiree (collectively referred to as the
“retiree”) who is receiving retirement benefits from participating
subsidiaries and affiliates of Ally, if any.
(b)
Investments by pension deduction must be specified as a fixed dollar amount. The
minimum investment by pension deduction must be at least $50 per month. Each
pension deduction investment by a retiree shall be invested in such retiree’s
Demand Note as of the first Business Day of each month the retiree is eligible
to receive retirement benefits and shall begin to accrue interest as of such
date. Unless otherwise permitted by the Demand Notes Committee, a retiree may
make investments by pension deduction in only one Demand Note.
(c)
Investments by pension deduction shall commence as soon as practicable after
receipt by the Company and the Processing Agent of the applicable authorization
form upon which a retiree shall have elected a pension deduction.
(d) The
pension deduction amount authorized by a retiree may be increased or decreased
by such retiree’s delivering to the Company a notice in writing or through the
automated phone system at 1-800-684-8823 of such increase or decrease. Such
increase or decrease shall be effective as soon as practicable after receipt by
the Company of such notice. Pension deductions authorized by a retiree may be
terminated at any time, in which event such pension deduction authorization
shall terminate as soon as practicable following receipt by the Company of
written instructions or through the automated phone system at 1-800-684-8823
from such retiree to terminate investments by pension deduction.
(e) The
Company shall refund any pension deduction(s) made subsequent to the retiree’s
death to the Trustee for the applicable pension plan and redeem an amount equal
to such refund from the retiree’s Demand Note. If the amount of the redemption
exceeds the principal amount in the retiree’s Demand Note, the retiree’s estate
shall be liable to the Company for the difference between the amount of the
redemption and the amount of the pension deduction(s) to be refunded to the
retiree’s pension plan.
SECTION
3.10. Modification,
Suspension or Termination of Methods of Investment. The Company reserves
the right at any time to modify, suspend or terminate any of the methods of
investment contained in this Article Three.
ARTICLE
FOUR
REDEMPTIONS
OF DEMAND NOTES
SECTION
4.01. Redemption at
Option of Investor. Subject to the provisions of this Article Four, an
investor may redeem all or any part of a Demand Note.
SECTION
4.02. Redemption by
Check. (a) Each investor will be provided with a free supply of checks.
You may redeem your Demand Notes in part by writing a check, payable to the
order of anyone, in an amount of $250 or more. Only the signature of one
registered owner of the Demand Note is required on the check.
(b) The
amount to be redeemed by a check shall continue to accrue interest until the
date on which such check is presented to the Processing Agent for
payment.
(c) When
a check is presented to the Processing Agent for payment, the Processing Agent
shall cause the Company to redeem a part of the investor’s Demand Note
sufficient to cover the amount of such check.
(d) If
the amount of a check is greater than the principal amount of an investor’s
Demand Note, or if the signatures required by subsection (a) of this Section
4.02 do not appear on the check, or the amount of the check is less than $250,
the Processing Agent shall not cause the redemption to be effected and shall
return the check to the depositary bank. The Processing Agent shall assess a
service charge for each check returned to a depositary bank. The Processing
Agent also shall assess a service charge in the event an investor requests
stopping payment of a check.
(e) Check
Redemption shall not create a checking, bank account or depositor relationship
between the investor and the Company or the Processing Agent.
SECTION
4.03. Wire
Redemption. (a) An investor who selects the Wire Redemption Option on the
Demand Notes investment form may redeem such investor’s Demand Notes in part
during regular business hours of the Processing Agent by having redemption
proceeds of $1,000 or more wired to a predesignated bank account or Demand
Notes. By selecting this option, an investor shall authorize the Processing
Agent to act on telephone or written redemption instructions from any person or
persons representing themselves to be the registered owners of the Demand Notes.
The Processing Agent’s record of such instructions shall be
binding.
(b) To
select the Wire Redemption Option the investor must designate on the Demand
Notes investment form either a bank account at a commercial bank in the United
States or a Demand Notes to receive the redemption proceeds. If the redemption
proceeds are to be wired to a bank account, the investor also must provide the
Processing Agent with a voided specimen check or deposit slip from such bank. If
the redemption proceeds are to be wired to a Demand Notes, the investor must
provide the number of such Demand Notes.
(c) Once
established, an investor may utilize the Wire Redemption Option by calling the
Processing Agent during the Processing Agent’s regular business hours toll free
at 1-800-684-8823.
(d) Upon
receipt of the wire redemption instructions given pursuant to subsection (c) of
this Section 4.03, the Processing Agent shall cause the Company to redeem a part
of the investor’s Demand Note sufficient to cover the amount specified in the
wire redemption instructions. If the redemption instructions are received by
2:00 p.m. Eastern Time on any Business Day, the Processing Agent shall wire the
redemption proceeds to the predesignated bank account or Demand Note on the
Business Day on which the instructions are received and interest on the
redemption proceeds shall accrue to, but not include, such day. If the
redemption instructions are received after 2:00 p.m. Eastern Time on any
Business Day, the Processing Agent shall wire the redemption proceeds to the
predesignated bank account or Demand Note on the Business Day following receipt
of the redemption instructions and interest on the redemption proceeds shall
accrue to, but not include, such day.
(e) An
investor may change the predesignated bank and account number thereat or Demand
Note for purposes of the Wire Redemption Option only upon written request to the
Processing Agent with the signature of each registered owner (including joint
owners) of the Demand Note guaranteed by an authorized signatory of a commercial
bank, trust company (not a savings bank) or member firm of a national or
regional stock exchange in the United States.
(f)
Neither the Processing Agent nor the Company shall be responsible for delays in
the wiring of funds through the banking system or for the authenticity of
telephone redemption instructions.
(g) An
investor may request the Wire Redemption Option subsequent to submitting the
investment form by providing the Processing Agent with a written request to add
the Wire Redemption Option to the investor’s Demand Note, with such request
bearing the signatures of all registered owners (including joint owners) of the
Demand Note exactly as they appear on the Demand Notes investment form. A
signature guarantee stamp for each owner is also required. The request should be
mailed in accordance with instructions provided in the applicable program
documents.
SECTION
4.04. Automatic
Monthly or Quarterly ACH Redemption or Monthly Interest ACH Redemption.
(a) An investor may redeem a specified part of a Demand Notes (minimum of $100)
on either a monthly or quarterly basis by selecting this option on the Demand
Notes investment form. Redemption on a monthly basis may consist of a specified
part of a Demand Notes (minimum of $100) or the monthly interest accrued on such
investor’s Demand Notes. This automatic monthly or quarterly redemption option
shall be available only to investors who hold Demand Notes with a principal
amount of $5,000 or more and if there are designated bank account instructions
for redemption by ACH on file.
(b) For
purposes of the Automatic Monthly or Quarterly Redemption Option, the Processing
Agent shall select a specific date for redemption in each month or quarter, as
the case may be. On the predetermined date, the Processing Agent shall cause the
Company to redeem a part of the investor’s Demand Notes equal to the redemption
amount specified by the investor. Interest on the redemption proceeds shall
accrue to, but not include, such predetermined day. The Processing Agent will
send, via ACH transfer, the funds to your designated bank account. The funds
will settle on the second business day following the day of
request.
(c) If on
the date selected for any monthly or quarterly redemption pursuant to subsection
(b) of this Section 4.05 an investor’s Demand Note shall not have a principal
amount of $5,000 or more, the Processing Agent shall not cause the Company to
effect a redemption pursuant to subsection (b) of this Section 4.05 nor shall
the Processing Agent cause any such redemption to be effected, if after such
redemption, the principal amount of an investor’s Demand Note would not be in
excess of $5,000. If the Processing Agent does not cause a redemption to be
effected for the reasons described in this subsection (d), the Processing Agent
shall notify the investor in writing that the redemption has not been effected
and shall provide the reason therefor.
(d) An
investor may terminate the Automatic Monthly or Quarterly Redemption Option by
providing notice in writing to the Processing Agent. Such notice shall be
effective as soon as practicable after receipt thereof by the Processing
Agent.
(e) An
investor may request the Automatic Monthly or Quarterly Redemption Option
subsequent to submitting the investment form by providing the Processing Agent
with a written request to add the desired automatic redemption option to the
Demand Note, with such request bearing the signatures of all registered owners
(including joint owners) of the Demand Note exactly as they appear on the Demand
Notes investment form and each signature must have a signature guarantee from a
banking or financial institution. The request should be mailed in accordance
with instructions provided in the applicable program documents.
SECTION
4.05. Ad Hoc ACH
Redemption (a) If an investor selects this option, the investor
authorizes, either through the automated phone system or through a customer
service representative, the Processing Agent to redeem the investor’s Demand
Notes (minimum $250) by an amount specific by the investor on that day. If the
ACH redemption request is received by 8:30 a.m. Eastern Time on any Business
Day, then the funds will settle on the second business day following such
request. If the request is received by the Processing Agent after 8:30 a.m.
Eastern Time on any Business Day, then the funds will settle on the third
Business Day following the date of such request.
(b) By
use of this option, the investor shall authorize the Processing Agent to act on
telephone or written redemption instructions from any person or persons
representing themselves to be the registered owners of the Demand Notes. The
Processing Agent’s record of the investor’s instructions is
binding.
(c) An
investor may request the Ad Hoc ACH Redemption Option subsequent to submitting
the investment form by providing the Processing Agent with a written request to
add the desired automatic redemption option to the Demand Notes, with such
request bearing the signatures of all registered owners (including joint owners)
of the Demand Note exactly as they appear on the Demand Notes investment form
and each signature must have a signature guarantee from a banking or financial
institution. The request should be mailed in accordance with instructions
provided in the applicable program documents.
SECTION
4.06. Full Redemption
of a Demand Note. (a) An investor may redeem a Demand Note in full by
providing telephone or written instructions to the Processing Agent. Such
instructions must state the investor’s intention to redeem in full such
investor’s Demand Note and must be mailed in accordance with instructions
provided in the applicable program documents.
(b) Upon
receipt of instructions required by subsection (a) of this Section 4.06, the
Processing Agent shall cause the Company to redeem in full the investor’s Demand
Note, including accrued and unpaid interest to the date of
redemption.
(c) The
Processing Agent will send via ACH the redemption proceeds on the Business Day
following receipt of the instructions using the designated bank instructions for
redemption on file for the Demand Notes. If there are no bank instructions on
file, a bank check will be mailed to the registered address and a service fee
will be charged.
SECTION
4.07. Limitation on
Redemption of Investments by Check. If an investor instructs the
Processing Agent to redeem part of a Demand Note which is represented by, or
includes, an investment made by check pursuant to Sections 3.04(a), 3.06(a) or
3.07(a) of Article Three, the Processing Agent shall not act on the instructions
if such instructions are received within a period of five Business Days from the
day of receipt of such investment check by the Processing Agent.
SECTION
4.08. Redemption
Instructions Ineffective. Redemption instructions given by an investor to
the Processing Agent pursuant to Sections 4.03, 4.04 or 4.05 shall be
ineffective if the instructions specify an amount to be redeemed, or the method
of redemption requires an amount to be redeemed, which exceeds the principal
amount of the investor’s Demand Note. In the event the Processing Agent receives
such ineffective instructions from an investor, the Processing Agent shall
notify the investor in writing that the redemption instructions are ineffective
and shall provide the reason therefor, provided that the Processing Agent shall
not be required to provide written notification to investors who give
ineffective redemption instructions to the Processing Agent by telephone
pursuant to Section 4.03.
SECTION
4.09. No Redemptions
in Cash. No redemption proceeds shall be paid in cash.
SECTION
4.10. Optional
Redemption by the Company. (a) The Company may redeem, at any time in its
discretion, any particular Demand Note in which the principal amount remains
below $1,000 for a period of two consecutive months immediately following the
month in which the average principal amount falls below $1,000. The Company
shall notify an investor of its intention to redeem such Demand Note. Following
such notification, an investor shall have 60 calendar days from the date of the
notice to restore a Demand Note to the required minimum principal amount of
$1,000. If an investor does not restore a Demand Note to such required principal
amount, the Company shall redeem the Demand Note in full.
(b) The
Company may redeem, at any time in its discretion, any particular Demand Notes
in which the principal amount of all Demand Notes having the same social
security or tax identification number exceeds $15,000,000. The Company shall
mail a check (less a service fee) to the address of record or send an ACH (using
the designated bank instructions on file) for such amount exceeding $15,000,000
as it shall determine in its sole discretion.
(c) The
Company shall have the right to redeem any Demand Note of an investor who the
Company believes, in its sole judgment and discretion, is abusing or misusing
the redemption provisions in a manner or with an effect that is not in the best
interests of the Company (i.e., the writing of checks by an investor where the
amounts of the checks are greater than the principal amount of such investor’s
Demand Note). The Company shall notify an investor of its intention to redeem
such Demand Note on the third Business Day following the date of the notice. The
Company shall redeem the Demand Note in full on such redemption date. A check
shall be sent to the investor in an amount equal to the principal amount of the
Demand Note, including accrued and unpaid interest to the date of redemption. In
the event that a Demand Note with a principal amount below $0 is redeemed, the
investor shall be liable to the Company for the amount required to restore the
principal amount to $0 as of the date the Demand Note is redeemed.
SECTION
4.11. Modification,
Suspension or Termination of Methods of Redemption. The Company reserves
the right at any time to modify, suspend or terminate any of the redemption
options contained in ARTICLE FOUR.
ARTICLE
FIVE
MODIFICATION,
SUSPENSION OR TERMINATION
SECTION
5.01. Modification. (a) The
Company or the Demand Notes Committee may amend or modify the Program at any
time as it may deem necessary or appropriate.
(b) The
Company or the Demand Notes Committee shall provide to investors written notice
of any material amendment or modification of the Program at least fifteen days
prior to the effective date of such amendment or modification.
(c) No
amendment or modification of the Program shall reduce the principal amount of
any Demand Note, or accrued and unpaid interest thereon, as of the effective
date of such amendment or modification and no such amendment or modification
shall have a retroactive effect that would prejudice the rights of
investors.
SECTION
5.02. Suspension or
Termination. (a) The Company may terminate the Program in its entirety
for any reason. The Company may, in its discretion, temporarily or permanently
suspend the acceptance of investments in the Demand Notes without such a
suspension amounting to a suspension or termination of the Program.
(b) The
Company shall provide written notice to investors of any suspension or
termination of the Program at least thirty days prior to the effective date of
such suspension or termination.
(c) The
Company may omit, restrict, suspend or terminate the Program in any jurisdiction
in which the Company, in its discretion, deems such action advisable in view of
local law and regulations.
ARTICLE
SIX
MISCELLANEOUS
SECTION
6.01. Demand Notes Not
Insured. Funds invested in the Demand Notes are not subject to the
protection of the Federal Deposit Insurance Corporation or any other
insurance.
SECTION
6.02. Investments
Voluntary. Eligible investors to whom Demand Notes shall be offered for
investment shall not be required to invest in the Demand Notes and any decision
to invest shall be solely that of such investor.
SECTION
6.03. Company Has No
Right of Set-off. The Company shall have no right of set-off against a
Demand Note for indebtedness not related to such Demand Note.
SECTION
6.04. Company and
Processing Agent Have No Obligation to Contest Legal Proceeding Against a Demand
Note. Neither the Company nor the Processing Agent shall have any
obligation to contest any legal proceeding brought against a Demand Note by any
third party nor shall the Company or the Processing Agent be liable for any
payment of redemption proceeds from a Demand Note to anyone other than the
registered owner as a result of a legal proceeding or governmental
action.
SECTION
6.05. Deduction of
Amounts Invested in Error in a Demand Note. The Company shall have the
right to deduct from the principal amount of a Demand Note amounts invested in
error in such Demand Note.
SECTION
6.06. Notices,
Statements and Other Communications. Unless otherwise specified, all
notices, statements and communications provided to investors by the Company or
the Processing Agent pursuant to the provisions of the Program shall be deemed
to have been duly given when mailed by first-class mail, postage prepaid to the
registered address of the registered owner.
SECTION
6.07. Notice of Change
of Address. An investor must promptly provide the Processing Agent with
notice of any change in address. Such notice must be in writing and must include
the investor’s tax identification or Social Security number, the Demand Note
number assigned by the Processing Agent and the signatures of all registered
owners (including joint owners) of the Demand Note and must be signed exactly as
they appear on the Demand Notes investment form. The notice must be mailed in
accordance with instructions provided in the applicable program documents. The
notice shall be effective as soon as practicable after receipt thereof by the
Processing Agent.
SECTION
6.08. Notices,
Communications to Company. Unless otherwise specified, all notices or
communications from investors to the Company must include the name and address
of the investor, the investor’s tax identification or Social Security number and
the Demand Note number assigned by the Processing Agent and must be signed by
all registered owners (including joint owners) of the Demand Note and must be
signed exactly as they appear on the Demand Notes investment form. Such notices
or communications must be sent to Ally Demand Notes, Ally Financial Inc., 200
Renaissance Center, Detroit, Michigan 48265; Attention: General
Counsel.
SECTION
6.09. Notices,
Communications to Processing Agent. Unless otherwise specified, all
notices or communications from an investor to the Processing Agent must include
the name and address of the investor, the investor’s tax identification or
Social Security number and the Demand Note number assigned by the Processing
Agent and must be signed by all registered owners (including joint owners) of
the Demand Note and must be signed exactly as they appear on the Demand Notes
investment form. Such notices or communications must be sent to the address of
the Processing Agent as indicated in the applicable program
documents.
SECTION
6.10. Investor
Acceptance of Program Provisions. By investing in a Demand Note, the
investor shall be deemed to accept and agree to all provisions of the
Program.
SECTION
6.11. Facsimile
Signatures. No facsimile signatures shall be accepted on any check,
investment form, account change request or any other document that affects a
change to a Demand Notes account.
SECTION
6.12. Right to Reject
Investments. The Company has the sole right to accept offers to purchase
Demand Notes and may reject any proposed purchase of Demand Notes in whole or in
part.
SECTION
6.13. Limited
Liability. Neither the Company nor the Processing Agent shall be liable
for any loss or expense to an investor caused directly or indirectly by
government restrictions (including the suspension of banking), war, terrorism,
strikes, blackouts, or any other condition beyond the Company’s or the
Processing Agent’s control.
SECTION
6.14. Interpretation. The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
SECTION
6.15. Governing
Law. The terms and conditions of the Program and its operation shall be
governed by the laws of the State of New York.
SECTION
6.16. Dispute
Resolution. All disputes or controversies between an investor and the
Company shall be subject to, and shall be exclusively submitted to, binding
obligation under the Commercial Arbitration Rules of the American Arbitration
Association. Such arbitration shall be final and binding on all
parties.