SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 21, 1997
AmeriCredit Automobile Receivables Trust 1997-B
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(Exact name of registrant as specified in its charter)
United States 333-17981 88-0359494
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
c/o AmeriCredit Financial 76107
Services, Inc. ------------------------------
Attention: Chris A. Choate (Zip Code)
200 Bailey Avenue
Fort Worth, Texas
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(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (817) 882-7000
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Description of the Securities and the Auto Loans
AmeriCredit Financial Services, Inc., as Sponsor, has registered
an issuance of $1,000,000,000 in principal amount of Securities (the
"Securities") on Form S-3. Pursuant to the Registration Statement, AmeriCredit
Automobile Receivables Trust 1997-B (the "Trust") issued $68,000,000 Class A-1
5.79% Asset Backed Notes, $96,250,000 Class A-2 6.36% Asset Backed Notes and
$85,750,000 Class A-3 6.67% Asset Backed Notes (collectively, the "Notes") on
May 21, 1997. This Current Report on Form 8-K is being filed to satisfy an
undertaking to file copies of certain agreements executed in connection with the
issuance of the Notes, the forms of which were filed as Exhibits to the
Registration Statement.
The Notes were issued pursuant to an Indenture attached hereto as
Exhibit 4.1, dated as of May 1, 1997, between the Trust and LaSalle National
Bank, as Trustee and Trust Collateral Agent (the "Trustee" and the "Trust
Collateral Agent").
The Notes will evidence fractional undivided ownership interests
in the Trust, the assets of which consist primarily of retail installment sales
contracts and installment loans (the "Receivables") secured by new and used
automobiles and light duty trucks financed thereby.
As of the Closing Date, the Receivables had the characteristics
described in the Prospectus dated May 15, 1997 filed pursuant to Rule 424(b)(2)
of the Act with the Commission.
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement, dated May 15, 1997, among AmeriCredit
Financial Services, Inc., as Servicer, AFS Funding Corp., as Seller, and Bear,
Stearns & Co. Inc., as Representative of the Underwriters.
4.1 Indenture, dated as of May 1, 1997, between AmeriCredit
Automobile Receivables Trust 1997-B and LaSalle National Bank, as Trustee and
Trust Collateral Agent.
4.2 Trust Agreement, dated as of May 1, 1997, between AFS Funding
Corp., as Depositor, and Bankers Trust (Delaware), as Owner Trustee.
4.3 Sale and Servicing Agreement, dated as of May 1, 1997, among
AmeriCredit Automobile Receivables Trust 1997-B, AmeriCredit Financial Services,
Inc., as Servicer, AFS Funding Corp., as Seller, and LaSalle National Bank, as
Backup Servicer and Trust Collateral Agent.
4.4 Note Guaranty Surety Bond, dated May 21, 1997 and delivered
by Financial Security Assurance Inc.
10.1 Purchase Agreement, dated as of May 1, 1997, among
AmeriCredit Financial Services, Inc., as Seller, and AFS Funding Corp., as
Purchaser.
10.2 Indemnification Agreement, dated May 1, 1997, among
Financial Security Assurance Inc., as Insurer, AFS Funding Corp., as Seller, and
Bear, Stearns & Co. Inc., as Representative of the Underwriters.
23.1 Consent of Coopers & Lybrand L.L.P. regarding financial
statements of the Insurer and their report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST
1997-B
By: AmeriCredit Financial Services, Inc., as
Servicer
By:/s/ Preston Miller
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Name: Preston Miller
Title: Senior Vice President and
Treasurer
Dated: May 30, 1997
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EXHIBIT INDEX
Exhibit No. Description
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1.1 Underwriting Agreement, dated May 15, 1997, among
AmeriCredit Financial Services, Inc., as Servicer, AFS
Funding Corp., as Seller, and Bear, Stearns & Co. Inc., as
Representative of the Underwriters.
4.1 Indenture, dated as of May 1, 1997, between AmeriCredit
Automobile Receivables Trust 1997-B and LaSalle National
Bank, as Trustee and Trust
Collateral Agent.
4.2 Trust Agreement, dated as of May 1, 1997, between
AFS Funding Corp., as Depositor, and Bankers Trust
(Delaware), as Owner Trustee.
4.3 Sale and Servicing Agreement, dated as of May 1, 1997,
among AmeriCredit Automobile Receivables Trust 1997-B,
AmeriCredit Financial Services, Inc., as Servicer, AFS
Funding Corp., as Seller, and LaSalle National Bank, as
Backup Servicer and Trust Collateral Agent.
4.4 Note Guaranty Surety Bond, dated May 21, 1997 and
delivered by Financial Security Assurance Inc.
10.1 Purchase Agreement, dated as of May 1, 1997, among
AmeriCredit Financial Services, Inc., as Seller, and AFS
Funding Corp., as Purchaser.
10.2 Indemnification Agreement, dated May 1, 1997,
among Financial Security Assurance Inc., as
Insurer, AFS Funding Corp., as Seller, and Bear,
Stearns & Co. Inc., as Representative of the
Underwriters.
23.1 Consent of Coopers & Lybrand L.L.P. regarding
financial statements of the Insurer and their
report.
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AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1997-B
Class A-1 5.79% Asset Backed Notes
Class A-2 6.36% Asset Backed Notes
Class A-3 6.67% Asset Backed Notes
UNDERWRITING AGREEMENT
BEAR, STEARNS & CO. INC.
As Representative of the
Underwriters
245 Park Avenue
New York, New York 10167 May 15, 1997
Dear Sirs:
AmeriCredit Financial Services, Inc., a corporation organized and
existing under the laws of Delaware (the "Sponsor"), and AFS Funding Corp., a
corporation organized and existing under the laws of Nevada (the "Seller") (the
Sponsor and the Seller, collectively, the "Companies"), agree with you as
follows:
Section 1. Issuance and Sale of Notes. The Sponsor has authorized
the issuance and sale of $68,000,000 Class A-1 5.79% Asset Backed Notes,
$96,250,000 Class A-2 6.36% Asset Backed Notes and $85,750,000 Class A-3 6.67%
Asset Backed Notes (collectively, the "Notes"). The Notes are to be issued by
AmeriCredit Automobile Receivables Trust 1997-B (the "Trust") pursuant to an
Indenture, to be dated as of May 1, 1997 (the "Indenture"), between the Trust
and LaSalle National Bank, a national banking association, as indenture trustee
(the "Trustee") and as trust collateral agent. In addition to the Notes, the
Trust will also issue an Asset Backed Certificate (the "Certificate") (the Notes
and the Certificate, collectively, the "Securities") pursuant to a Trust
Agreement, to be dated as of May 1, 1997, between the Seller and Bankers Trust
(Delaware), as owner trustee (the "Owner Trustee"). The assets of the Trust will
initially include a pool of retail installment sale contracts secured by new or
used automobiles, light duty trucks and vans (the "Initial Receivables") and
certain monies due thereunder on or after May 1, 1997 (the "Initial Cutoff
Date"). Additional retail installment sale contracts secured by new or used
automobiles, light duty trucks and vans (the "Subsequent Receivables") and
certain monies due thereunder on or after the applicable Subsequent Cutoff Date
are intended to be purchased by the Trust from the Seller from time to time on
or before the end of the Funding
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Period, from funds available under the Pre-Funded Amount. The Initial
Receivables and the Subsequent Receivables are hereinafter referred to as the
"Receivables."
The Notes will have the benefit of a note insurance policy (the
"Note Insurance Policy"), issued by Financial Security Assurance Inc., a
monoline insurance corporation organized under the laws of New York (the "Note
Insurer").
In connection with the issuance of the Note Insurance Policy (i) the
Companies, the Trust and the Note Insurer will execute and deliver an Insurance
Agreement dated as of May 1, 1997 (the "Insurance Agreement") and (ii) the
Seller, the Underwriters and the Note Insurer will execute and deliver an
Indemnification Agreement dated as of May 1, 1997 (the "Indemnification
Agreement").
As used herein, the term "Sponsor Agreements" means the Sale and
Servicing Agreement dated as of May 1, 1997 among the Trust, the Sponsor, as
servicer, the Seller and LaSalle National Bank, a national banking association,
as trust collateral agent (the "Sale and Servicing Agreement"), the Purchase
Agreement between the Sponsor and the Seller dated as of May 1, 1997 (the
"Purchase Agreement"), the Insurance Agreement, the Indemnification Agreement
and this Agreement; the term "Seller Agreements" means the Sale and Servicing
Agreement, the Purchase Agreement, the Trust Agreement, the Insurance Agreement,
the Indemnification Agreement and this Agreement.
The Notes are being purchased by the Underwriters named in Schedule
1 hereto, and the Underwriters are purchasing, severally, only the Notes set
forth opposite their names in Schedule 1, except that the amounts purchased by
the Underwriters may change in accordance with Section 10 of this Agreement.
Bear, Stearns & Co. Inc. is acting as representative of the Underwriters and in
such capacity, is hereinafter referred to as the "Representative."
The offering of the Notes will be made by the Underwriters and the
Companies understand that the Underwriters propose to make a public offering of
the Notes for settlement on May 21, 1997, as the Underwriters deem advisable.
The Certificate will be retained by the Seller.
Defined terms used herein shall have their respective meanings as
set forth in the Sale and Servicing Agreement.
Section 2. Representations and Warranties. A. The Sponsor represents, warrants
and agrees with the Underwriters, that:
(i) A Registration Statement on Form S-3 (No. 333-17981) has (a)
been prepared by the Sponsor on such Form in conformity
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with the requirements of the Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission") thereunder, (b)
been filed with the Commission and (c) been declared effective by the
Commission, and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been initiated
or threatened, by the Commission. Copies of such Registration Statement have
been delivered by the Sponsor to the Underwriters. There are no contracts or
documents of the Sponsor which are required to be filed as exhibits to the
Registration Statement pursuant to the Securities Act or the Rules and
Regulations which have not been so filed or incorporated by reference therein on
or prior to the Effective Date of the Registration Statement. The conditions for
use of Form S-3, as set forth in the General Instructions thereto, have been
satisfied.
As used herein, the term "Effective Date" means the date on and time
at which the Registration Statement became effective, or the date on and the
time at which the most recent post-effective amendment to such Registration
Statement, if any, was declared effective by the Commission. The term
"Registration Statement" means (i) the registration statement referred to in the
preceding paragraph, including the exhibits thereto, (ii) all documents
incorporated by reference therein pursuant to Item 12 of Form S-3 and (iii) any
post-effective amendment filed and declared effective prior to the date of
issuance of the Notes. The term "Base Prospectus" means the prospectus included
in the Registration Statement. The term "Prospectus Supplement " means the
prospectus supplement dated the date hereof, specifically relating to the Notes,
as filed with the Commission pursuant to Rule 424 of the Rules and Regulations
(the "Prospectus Supplement"). The term "Sponsor Offering Materials" means,
collectively, the Registration Statement, the Base Prospectus and the Prospectus
Supplement except for (x) the information set forth under the caption "The
Insurer" and (y) the Underwriter Information. The term "Seller Offering
Materials" means the Prospectus Supplement except for (x) the information set
forth under the caption "The Insurer" and (y) the Underwriter Information. The
term "Underwriter Information" means the information set forth under the caption
"Underwriting" in the Prospectus Supplement and any information in the
Prospectus Supplement relating to any potential market-making, over-allotment or
price stabilization activities of the Underwriters. The term "Prospectus" means,
together, the Base Prospectus and the Prospectus Supplement.
To the extent that either Underwriter (i) has provided to the
Sponsor Collateral term sheets (as hereinafter defined) that such Underwriter
has provided to a prospective investor, the Sponsor has filed such Collateral
term sheets as an exhibit to a report on Form 8-K within two business days of
its receipt thereof, or (ii) has provided to the Sponsor Structural term sheets
or Computational Materials (each as defined below) that such
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Underwriter has provided to a prospective investor, the Sponsor will file or
cause to be filed with the Commission a report on Form 8-K containing such
Structural term sheet and Computational Materials, as soon as reasonably
practicable after the date of this Agreement, but in any event, not later than
the date on which the Prospectus is made available to the Underwriter in final
form.
(ii) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations. The Sponsor Offering Materials do not and
will not, as of the Effective Date or filing date thereof and of any amendment
thereto, as appropriate, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) The documents incorporated by reference in the Sponsor
Offering Materials, when they were filed with the Commission conformed in all
material respects to the requirements of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as applicable, and the
Rules and Regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; any further documents so filed and incorporated by reference in
the Sponsor Offering Materials, when such documents are filed with the
Commission will conform in all material respects to the requirements of the
Exchange Act and the Rules and Regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(iv) Since the respective dates as of which information is given in
the Sponsor Offering Materials, or the Sponsor Offering Materials as amended and
supplemented, (x) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, business, management, financial condition, stockholders'
equity, results of operations, regulatory situation or business prospects of the
Sponsor and (y) the Sponsor has not entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Sponsor
that, in either case, would reasonably be expected to materially adversely
affect the interests of the holders of the Notes, otherwise than as set forth or
contemplated in the Sponsor Offering Materials, as so amended or supplemented.
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(v) The Sponsor is not aware of (x) any request by the Commission
for any further amendment of the Registration Statement or the Prospectus or for
any additional information, (y) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose or (z) any notification with
respect to the suspension of the qualification of the Notes for the sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(vi) The Sponsor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the business or financial condition of the Sponsor and has all power and
authority necessary to own or hold its properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under each
Sponsor Agreement and to cause the Securities to be issued.
(vii) There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other tribunal to
which the Sponsor is a party or of which any of its properties is the subject
(i) which if determined adversely to it is likely to have a material adverse
effect individually, or in the aggregate, on the business or financial condition
of the Sponsor, (ii) asserting the invalidity of any Sponsor Agreement, in whole
or in part or the Securities, (iii) seeking to prevent the issuance of the
Securities or the consummation by the Companies of any of the transactions
contemplated by any Sponsor Agreement, in whole or in part, or (iv) which if
determined adversely it is likely to materially and adversely affect the
performance by the Sponsor of its obligations under, or the validity or
enforceability of, any Sponsor Agreement, in whole or in part or the Securities.
(viii) Each Sponsor Agreement has been, or, when executed and
delivered will have been, duly authorized, validly executed and delivered by the
Sponsor and each Sponsor Agreement constitutes, a valid and binding agreement of
the Sponsor, enforceable against the Sponsor in accordance with its respective
terms, except to the extent that the enforceability hereof may be subject (x) to
insolvency, reorganization, moratorium, receivership, conservatorship, or other
similar laws, regulations or procedures of general applicability now or
hereafter in effect relating to or affecting creditors' rights generally, (y) to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and (z) with respect to rights of indemnity
under this Agreement, to limitations of public policy under applicable
securities laws.
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(ix) The issuance and delivery of the Securities, and the execution,
delivery and performance of each Sponsor Agreement and the consummation of the
transactions contemplated hereby and thereby, do not and will not conflict with
or result in a breach of or violate any term or provision of or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, or other
agreement or instrument to which the Sponsor is a party, by which the Sponsor
may be bound or to which any of the property or assets of the Sponsor or any of
its subsidiaries may be subject, nor will such actions result in any violation
of the provisions of the articles of incorporation or by-laws of the Sponsor or
any law, statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Sponsor or any of its respective
properties or assets.
(x) Coopers & Lybrand L.L.P. is an independent public accountant
with respect to the Sponsor as required by the Securities Act and the Rules and
Regulations.
(xi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance and sale of the Notes, or the consummation
by the Sponsor of the other transactions contemplated by this Agreement, except
the registration under the Securities Act of the Securities and such consents,
approvals, authorizations, registrations or qualifications as may have been
obtained or effected or as may be required under securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Underwriters.
(xii) The Sponsor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, Federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Sponsor Offering Materials (or is exempt therefrom)
and the Sponsor has not received notice of any proceedings relating to the
revocation or modification of such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, is likely to materially and adversely affect the conduct of
its business, operations, financial condition or income.
(xiii) The Sponsor will not conduct its operations while any of the
Securities are outstanding in a manner that would require the Sponsor or the
Trust to be registered as an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act"), as in effect on the date hereof.
(xiv) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of any Sponsor Agreement, the Note
Insurance Policy and the Securities that are required to be paid by the Sponsor
at or prior to the Closing Date have been paid or will be paid at or prior to
the Closing Date.
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(xv) At the Closing Date, each of the representations and warranties
of the Sponsor set forth in any Sponsor Agreement will be true and correct in
all material respects.
Any certificate signed by an officer of the Sponsor and delivered to
the Representative or the Representative's counsel in connection with an
offering of the Notes shall be deemed, and shall state that it is, a
representation and warranty as to the matters covered thereby to each person to
whom the representations and warranties in this Section 2A are made.
B. The Seller represents, warrants and agrees with the Underwriters,
that:
(i) The Seller Offering Materials do not and will not, as of the
applicable filing date therefor and any amendment or supplement thereto, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading.
(ii) The documents incorporated by reference in the Seller Offering
Materials, when they were filed with the Commission conformed in all material
respects to the requirements of the Securities Act or the Exchange Act and the
Rules and Regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; any further documents so filed and incorporated by reference in
the Seller Offering Materials, when such documents are filed with the Commission
will conform in all material respects to the requirements of the Exchange Act
and the Rules and Regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
(iii) Since the respective dates as of which information is given in
the Seller Offering Materials, or the Seller Offering Materials as amended and
supplemented, (x) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, business, management, financial condition, stockholders'
equity, results of operations, regulatory situation or business prospects of the
Seller and (y) the Seller has not entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Seller that,
in either case, would reasonably be expected to materially adversely affect the
interests of the holders of the Securities, otherwise than as set forth or
contemplated in the Seller Offering Materials, as so amended or supplemented.
(iv) The Seller is not aware of (x) any request by the Commission
for any further amendment of the Registration Statement
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or the Prospectus or for any additional information, (y) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
or (z) any notification with respect to the suspension of the qualification of
the Notes for the sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(v) The Seller has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the business or financial condition of the Seller and has all power and
authority necessary to own or hold its properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under each
Seller Agreement.
(vi) There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other tribunal to
which the Seller is a party or of which any of its properties is the subject (i)
which if determined adversely to it is likely to have a material adverse effect
individually, or in the aggregate, on the business or financial condition of the
Seller, (ii) asserting the invalidity of any Seller Agreement in whole or in
part, (iii) seeking to prevent the issuance of the Securities or the
consummation by the Seller of any of the transactions contemplated by any Seller
Agreement in whole or in part, or (iv) which if determined adversely it is
likely to materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, any Seller Agreement in
whole or in part or the Securities.
(vii) Each Seller Agreement has been, or, when executed and
delivered will have been, duly authorized, validly executed and delivered by the
Seller and each Seller Agreement constitutes, a valid and binding agreement of
the Seller, enforceable against the Seller in accordance with their respective
terms, except to the extent that the enforceability hereof may be subject (x) to
insolvency, reorganization, moratorium, receivership, conservatorship, or other
similar laws, regulations or procedures of general applicability now or
hereafter in effect relating to or affecting creditors' rights generally, (y) to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and (z) with respect to rights of indemnity
under this Agreement, to limitations of public policy under applicable
securities laws.
(viii) The execution, delivery and performance of each Seller
Agreement by the Seller and the consummation of the transactions contemplated
hereby and thereby, do not and will not
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conflict with or result in a breach of or violate any term or provision of or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, or other agreement or instrument to which the Seller is a party, by
which the Seller may be bound or to which any of the property or assets of the
Seller or any of its subsidiaries may be subject, nor will such actions result
in any violation of the provisions of the articles of incorporation or by-laws
of the Seller or any law, statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Seller or any of
their respective properties or assets.
(ix) Coopers & Lybrand, L.L.P. is an independent public accountant
with respect to the Seller as required by the Securities Act and the Rules and
Regulations.
(x) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance and sale of the Notes, or the consummation
by the Seller of the transactions contemplated by each Seller Agreement except
the registration under the Securities Act of the Securities and such consents,
approvals, authorizations, registrations or qualifications as may have been
obtained or effected or as may be required under securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Underwriters.
(xi) The Seller possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, Federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Seller Offering Materials (or each is exempt
therefrom) and the Seller has not received notice of any proceedings relating to
the revocation or modification of such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, is likely to materially and adversely affect the conduct of
its business, operations, financial condition or income.
(xii) (a) Following the conveyance of the Receivables to the Trust
pursuant to the Sale and Servicing Agreement, the Trust will own the Receivables
free and clear of any lien, mortgage, pledge, charge, encumbrance, adverse claim
or other security interest (collectively, "Liens") other than Liens created by
the Sale and Servicing Agreement, and (b) the Seller will have the power and
authority to sell such Receivables to the Trust.
(xiii) As of the Cut-off Date, each of the Receivables will meet the
eligibility criteria described in the Prospectus.
(xiv) Neither the Seller nor the Trust created by the Trust
Agreement will conduct their operations while any of the Securities are
outstanding in a manner that would require the
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Seller or the Trust to be registered as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act"), as in effect on the
date hereof.
(xv) Each of the Securities, the Sale and Servicing Agreement, the
Purchase Agreement, the Trust Agreement, the Indemnification Agreement and the
Note Insurance Policy conforms in all material respects to the descriptions
thereof contained in the Prospectus.
(xvi) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of any Seller Agreement, the Note
Insurance Policy and the Securities that are required to be paid by either the
Seller at or prior to the Closing Date have been paid or will be paid at or
prior to the Closing Date.
(xvii) At the Closing Date, each of the representations and
warranties of the Seller set forth in any Seller Agreement will be true and
correct in all material respects.
(xviii) The direction by the Seller to the Owner Trustee to execute,
authenticate, issue and deliver the Certificate will be duly authorized by the
Seller and, assuming the Owner Trustee has been duly authorized to do so, when
executed, authenticated, issued and delivered by the Owner Trustee in accordance
with the Trust Agreement, the Certificate will be validly issued and outstanding
and will be entitled to the benefits of the Trust Agreement.
Any certificate signed by an officer of the Seller and delivered to
the Representative or the Representative's counsel in connection with an
offering of the Notes shall be deemed, and shall state that it is, a
representation and warranty as to the matters covered thereby to each person to
whom the representations and warranties in this Section 2B are made.
Section 3. Purchase and Sale. The Underwriters's commitment to
purchase the Notes pursuant to this Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Sponsor and of the
Seller herein contained and shall be subject to the terms and conditions herein
set forth. The Sponsor agrees to instruct the Trust to issue the Notes to the
Underwriters, and the Underwriters agree to purchase on the date of issuance
thereof. The purchase prices for the Notes shall be as set forth on Schedule 1
hereto.
Section 4. Delivery and Payment. Payment of the purchase price for,
and delivery of, any Notes to be purchased by the Underwriters shall be made at
the office of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York,
or at such other place as shall be agreed upon by the Representative and the
Companies, at 10:00 a.m. New York City time on May 21, 1997 (the "Closing
Date"), or at such other time or date as shall be agreed
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upon in writing by the Representative and the Companies. Payment shall be made
by wire transfer of same day funds payable to the account designated by the
Sponsor. Each of the Notes so to be delivered shall be represented by one or
more global certificates registered in the name of Cede & Co., as nominee for
The Depository Trust Company.
The Companies agree to have the Notes available for inspection,
checking and packaging by the Representative in New York, New York, not later
than 12:00 P.M. New York City time on the business day prior to the Closing
Date.
Section 5. Offering by Underwriters. It is understood that the
Underwriters propose to offer the Notes for sale to the public as set forth in
the Prospectus.
Section 6. Covenants of the Seller. Each of the Sponsor and the
Seller covenants with the Underwriters as follows:
A. To cause to be prepared a Prospectus in a form approved by the
Underwriters, to file such Prospectus pursuant to Rule 424(b) under the
Securities Act within the time period prescribed by Rule 424(b) and to provide
the Underwriters with evidence satisfactory to the Underwriters of such timely
filing; to cause to be made no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the 91st day following the
Closing Date except as permitted herein; to advise the Underwriters, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective prior to the 91st day
following the Closing Date or any supplement to the Prospectus or any amended
Prospectus has been filed prior to the 91st day following the Closing Date and
to furnish the Underwriters with copies thereof; to file promptly all reports
and any global proxy or information statements required to be filed by the
Sponsor with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, until the 91st day
following the Closing Date; to promptly advise the Underwriters of its receipt
of notice of the issuance by the Commission of any stop order or of: (i) any
order preventing or suspending the use of the Prospectus; (ii) the suspension of
the qualification of the Notes for offering or sale in any jurisdiction; (iii)
the initiation of or threat of any proceeding for any such purpose; (iv) any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information. In the event of the
issuance of any stop order or of any order preventing or suspending the use of
the Prospectus or suspending any such qualification, the Sponsor promptly shall
use its best efforts to obtain the withdrawal of such order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration
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Statement as originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case including exhibits); (ii) the Prospectus
and any amended or supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto). If the delivery of
a prospectus is required at any time in connection with the offering or sale of
the Notes and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Sponsor shall notify the Underwriters
and, upon the Underwriters's request based upon the advice of counsel, shall
file such document and prepare and furnish without charge to the Underwriters
and to any dealer in securities as many copies as the Underwriters may from time
to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which corrects such statement or omission or effects such compliance.
D. To cause to be filed promptly with the Commission any amendment
to the Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Seller or the Underwriters, be
required by the Securities Act or requested by the Commission. Neither the
Underwriters' consent to nor their delivery of any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 7
hereof.
E. To cause to be furnished to the Underwriters and counsel for the
Underwriters, prior to filing with the Commission, and to obtain the consent of
the Underwriters, which consent will not unreasonably be withheld, for the
filing of the following documents relating to the Notes: (i) any amendment to
the Registration Statement or supplement to the Prospectus, or document
incorporated by reference in the Prospectus, or (ii) Prospectus pursuant to Rule
424 of the Rules and Regulations.
F. To use its best efforts, in cooperating with the Sponsor and the
Underwriters, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Underwriters may designate, and maintain or cause to be maintained such
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qualifications in effect for as long as may be required for the distribution of
the Notes. The Seller will cause the filing of such statements and reports as
may be required by the laws of each jurisdiction in which the Notes have been so
qualified.
G. The Seller will not, without the prior written consent of the
Representative, contract to sell any automobile receivables-backed certificates,
automobile receivables-backed notes or other similar securities either directly
or indirectly (as through the Sponsor) for a period of five (5) business days
after the later of the termination of the syndicate or the Closing Date.
H. So long as the Notes shall be outstanding, the Seller shall
deliver to the Underwriters as soon as such statements are furnished to the
Trustee: (i) the annual statement as to compliance of the Servicer delivered to
the Trustee pursuant to Section 4.10(a) of the Sale and Servicing Agreement;
(ii) the annual statement of a firm of independent public accountants furnished
to the Trustee pursuant to Section 4.11(a) of the Sale and Servicing Agreement
with respect to the Servicer; and (iii) the monthly reports furnished to the
Noteholders pursuant to Section 5.9 of the Sale and Servicing Agreement.
I. So long as any of the Notes are outstanding, the Seller will
furnish to the Underwriters (i) as soon as practicable after the end of the
fiscal year of the Trust all documents required to be distributed to Noteholders
and other filings with the Commission pursuant to the Exchange Act, or any order
of the Commission thereunder with respect to any securities issued by the
Sponsor or the Seller that are (A) non-structured equity or debt offering of the
Sponsor or the Seller or (B) the Notes and (ii) from time to time, any other
information concerning the Sponsor or the Seller filed with any government or
regulatory authority which is otherwise publicly available, as the Underwriters
shall reasonably request in writing.
J. To apply the net proceeds from the sale of the Notes in the
manner set forth in the Prospectus.
K. If, between the date hereof or, if earlier, the dates as of which
information is given in the Prospectus and the Closing Date, to the knowledge of
the Seller, there shall have been any material change, or any development
involving a prospective material change in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Sponsor or the Seller, the Seller will give prompt written notice thereof to
the Underwriters.
L. To the extent, if any, that the ratings provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes are
conditional upon the furnishing of documents or the taking of any other actions
by the Sponsor or the
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Seller, the Seller shall use its best efforts to furnish or cause to be
furnished such documents and take any such other actions.
Section 7. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Notes pursuant to this Agreement
are subject to (i) the accuracy on and as of the Closing Date of the
representations and warranties on the part of the Companies herein contained,
(ii) the accuracy of the statements of officers of the Companies made pursuant
hereto, (iii) the performance by the Companies of all of their respective
obligations hereunder, and the performance by the Companies of all of their
respective obligations under the Sponsor Agreements and the Seller Agreements
and (iv) the following conditions as of the Closing Date:
A. No stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request of the Commission
for inclusion of additional information in the Registration Statement or the
Prospectus shall have been complied with.
B. The Underwriters shall have received the Sale and Servicing
Agreement, the Purchase Agreement, the Indenture, the Trust Agreement, the
Indemnification Agreement and the Notes in form and substance satisfactory to
the Underwriters and duly executed by the signatories required pursuant to the
respective terms thereof.
C. The Underwriters shall have received from Dewey Ballantine,
counsel for the Sponsor and the Seller, a favorable opinion, dated the Closing
Date and satisfactory in form and substance to the Underwriters and counsel for
the Underwriters to the effect that:
(i) The issuance and sale of the Notes have been duly authorized
and, when executed, authenticated, countersigned and delivered by the
Trustee in accordance with the Indenture and delivered and paid for
pursuant to this Agreement, will be validly issued and outstanding and
will be entitled to the benefits of the Trust Agreement and the Indenture,
respectively.
(ii) No authorization, approval, consent or order of, or filing
with, any court or governmental agency or authority is necessary under the
federal law of the United States or the laws of the State of New York in
connection with the execution, delivery and performance by the Sponsor of
the Sponsor Agreements and by the Seller of the Seller Agreements, except
such as may be required under the Act or the Rules and Regulations and
blue sky or other state securities laws, filings with respect to the
transfer of the Receivables to the
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Trust pursuant to the Sale and Servicing Agreement and such other
approvals or consents as have been obtained.
(iii) Each Sponsor Agreement and each Seller Agreement constitutes
the legal, valid and binding obligation of the Sponsor or the Seller, as
appropriate, enforceable against each of the Sponsor or the Seller, as
appropriate, in accordance with their respective terms, except that as to
enforceability such enforcement may (A) be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally, (B) be limited by general
principles of equity (whether considered in a proceeding at law or in
equity) and (C) the enforceability as to rights to indemnification may be
subject to limitations of public policy under applicable laws.
(iv) None of the Sponsor, the Seller nor the Trust is required to be
registered as an "investment company" under the Investment Company Act of
1940, as amended.
(v) The direction by the Seller to the Owner Trustee to execute,
issue, countersign and deliver the Certificate has been duly authorized
and, when the Certificate is executed and authenticated by the Trustee in
accordance with the Trust Agreement and delivered and paid for, they will
be validly issued and outstanding and entitled to the benefits provided by
the Trust Agreement.
(vi) The Seller has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trustee as part
of the Trust Estate and has duly authorized such sale and assignment to
the Trustee by all necessary corporate action.
(vii) The Securities, the Sale and Servicing Agreement, the Purchase
Agreement and this Agreement each conform in all material respects with
the respective descriptions thereof contained in the Registration
Statement and the Prospectus.
(viii) The statements in the Base Prospectus under the captions
"Summary of Terms - Tax Considerations", "Summary of Terms - ERISA
Considerations", "ERISA Considerations" and "Certain Tax Considerations"
and the statements in the Prospectus Supplement under the captions
"Summary of Terms Tax Status", "Summary of Terms - ERISA Considerations",
"Certain Federal Income Tax Consequences" and "ERISA Considerations", to
the extent that they constitute matters of law or legal conclusions with
respect thereto, have been reviewed by such counsel and represent a fair
and accurate summary of the matters addressed therein, under existing law
and the assumptions stated therein.
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(ix) The statements in the Base Prospectus under the caption
"Certain Legal Aspects of the Receivables" to the extent they constitute
matters of law or legal conclusions, are correct in all material respects.
(x) The Registration Statement is effective under the Act and no
stop order suspending the effectiveness of the Registration Statement has
been issued, and to the best of such counsel's knowledge no proceeding for
that purpose has been instituted or threatened by the Commission under the
Act.
(xi) The conditions to the use by the Sponsor of a registration
statement on Form S-3 under the Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts or
documents which are required to be filed as exhibits to the Registration
Statement pursuant to the Act or the Rules and Regulations thereunder
which have not been so filed.
(xii) The Registration Statement at the time it became effective, and
any amendments thereto at the time such amendment becomes effective (other
than the information set forth in the financial statements and other
financial and statistical information contained therein, as to which such
counsel need express no opinion), complied as to form in all material
respects with the applicable requirements of the Act and the Rules and
Regulations thereunder.
(xiii) The execution, delivery and performance of each Sponsor
Agreement by the Sponsor will not conflict with or violate any federal
statute, rule, regulation or order of any federal governmental agency or
body, or any federal court having jurisdiction over the Sponsor or its
properties or assets.
(xiv) The execution, delivery and performance of each Seller
Agreement by the Seller will not conflict with or violate any federal
statute, rule, regulation or order of any federal governmental agency or
body, or any federal court having jurisdiction over the Seller or its
properties or assets.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of each of
the Seller, the Sponsor, the Servicer, the Note Insurer, the Trustee and the
Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and on the basis of the foregoing,
no facts have come to such counsel's attention that have led such counsel to
believe the Registration Statement, at the time it became effective and as of
the date of such counsel's opinion contained or contains an untrue statement of
a material fact or
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omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus,
as of its date and as of the date of such counsel's opinion, contained or
contains an untrue statement of material fact or omitted or omits to state a
material fact necessary to make the statements therein not misleading; it being
understood that such counsel need express no belief with respect to the
financial statements, schedules and other financial and statistical data
included in the Registration Statement or the Prospectus.
D. The Sponsor shall have delivered to the Underwriters a
certificate, dated the Closing Date, of an authorized officer of the Sponsor to
the effect that the signer of such certificate has carefully examined this
Agreement and the Prospectus and that: (i) the representations and warranties of
the Sponsor in each Sponsor Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on the
Closing Date, (ii) the Sponsor has complied in all material respects with all
the agreements and satisfied in all material respects all the conditions on its
part to be performed or satisfied at or prior to the Closing Date, (iii) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or, to such officer's
knowledge, threatened, (iv) there has been no material adverse change in the
condition (financial or other), earnings, business, properties or prospects of
the Sponsor, whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus and (v) nothing
has come to such officer's attention that would lead such officer to believe
that the Sponsor Offering Materials contain any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Sponsor shall attach to such certificate a true and correct copy
of its certificate of incorporation, as appropriate, and bylaws which are in
full force and effect on the date of such certificate and a certified true copy
of the resolutions of its Board of Directors with respect to the transactions
contemplated herein.
E. The Underwriters shall have received from the Seller a
certificate dated the Closing Date, of an authorized officer of the Seller to
the effect that the signer of such certificate has carefully examined this
Agreement and the Prospectus and that: (i) the representations and warranties of
the Seller in each Seller Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on the
Closing Date, (ii) the Seller has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied in all material respects at or prior to
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the Closing Date, (iii) there has been no material adverse change in the
condition (financial or other), earnings, business, properties or prospects of
the Seller whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus, and (iv)
nothing has come to such officers' attention that would lead such officer to
believe that the Seller Offering Materials contain any untrue statement of a
material fact or omits to state any material facts required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Seller shall attach to such certificate a true and correct copy
of its certificate of incorporation, as appropriate, and bylaws which are in
full force and effect on the date of such certificate and a certified true copy
of the resolutions of its Board of Directors with respect to the transactions
contemplated herein.
F. The Underwriters shall have received from Chris Choate, Esq.,
in-house counsel of the Sponsor and the Seller, a favorable opinion, dated the
Closing Date and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters to the effect that:
(i) The Sponsor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
The Seller has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada. Each
of the Sponsor and the Seller has full corporate power to own its property
or assets and to conduct its business as presently conducted by it and as
described in the Prospectus, and is in good standing in each jurisdiction
in which the conduct of its business or the ownership of its property or
assets requires such qualification or where the failure to be so qualified
would have a material adverse effect on its condition (financial or
otherwise).
(ii) Each Sponsor Agreement and each Seller Agreement has been duly
authorized, executed and delivered by authorized officers or signers of
the Sponsor or the Seller, as appropriate.
(iii) The direction by the Seller to the Trustee to execute, issue,
countersign and deliver the Notes has been duly authorized by the Seller.
(iv) The execution, delivery and performance of each Sponsor
Agreement by the Sponsor will not conflict with or result in a material
breach of any of the terms or provisions of, or constitute a material
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon
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any of the property or assets of the Sponsor pursuant to the terms of the
certificate of incorporation or the by-laws of the Sponsor or any statute,
rule, regulation or order of any governmental agency or body of the State
of Delaware, or any Delaware state court having jurisdiction over the
Sponsor or its property or assets or any material agreement or instrument
known to such counsel to which the Sponsor is a party or by which the
Sponsor or any of its property or assets is bound.
(v) The execution, delivery and performance of each Seller
Agreement by the Seller will not conflict with or result in a material
breach of any of the terms or provisions of, or constitute a material
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of the Seller pursuant
to the terms of the certificate of incorporation or the by-laws of the
Seller or any statute, rule, regulation or order of any governmental
agency or body of the State of Nevada, or any Nevada state court having
jurisdiction over the Seller or its property or assets or any material
agreement or instrument known to such counsel, to which the Seller is a
party or by which the Seller or any of its property or assets is bound.
(vi) No authorization, approval, consent or order of, or filing
with, any court or governmental agency or authority of the State of
Delaware is necessary in connection with the execution, delivery and
performance by the Sponsor of any Sponsor Agreement except such as may be
required under the Act or the Rules and Regulations and blue sky or other
state securities laws filings with respect to the transfer of the
Receivables to the Trust pursuant to the Sale and Servicing Agreement and
such other approvals or consents as have been obtained.
(vii) No authorization, approval, consent or order of, or filing
with, any court or governmental agency or authority of the State of Nevada
is necessary in connection with the execution, delivery and performance by
the Seller of any Seller Agreement, except such as may be required under
the Act or the Rules and Regulations and blue sky or other state
securities laws, filings with respect to the transfer of the Receivables
to the Trust pursuant to the Sale and Servicing Agreement and such other
approvals or consents as have been obtained.
(viii) There are no legal or governmental proceedings pending to which
the Sponsor or the Seller is a party or of which any property or assets of
the Sponsor or the Seller is the subject, and no such proceedings are to
the best of such counsel's knowledge threatened or contemplated by
governmental authorities against the Sponsor, the Seller or the Trust,
that, (A) are required to be disclosed in the Registration Statement or
(B) (i) assert the invalidity against the Sponsor
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of all or any part of any Sponsor Agreement or against the Seller of all
or any part of any Seller Agreement, (ii) seek to prevent the issuance of
the Securities, (iii) could materially adversely affect the Sponsor's or
the Seller's obligations under any Sponsor Agreement or any Seller
Agreement, as appropriate, or (iv) seek to affect adversely the Federal or
state income tax attributes of the Securities.
G. The Underwriters shall have received from special counsel to the
Note Insurer, reasonably acceptable to the Underwriters, a favorable opinion
dated the Closing Date and satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, to the effect that:
(i) The Note Insurer is a stock insurance company licensed and
authorized to transact insurance business and to issue, deliver and
perform its obligations under its surety bonds under the laws of the State
of New York. The Note Insurer (a) is a stock insurance company validly
existing and in good standing under the laws of the State of New York, (b)
has the corporate power and authority to own its assets and to carry on
the business in which it is currently engaged, and (c) is duly qualified
and in good standing as a foreign corporation under the laws of each
jurisdiction where failure so to qualify or to be in good standing would
have a material and adverse effect on its business or operations.
(ii) No litigation or administrative proceedings of or before any
court, tribunal or governmental body are currently pending or, to the best
of such counsel's knowledge, threatened against the Note Insurer, which,
if adversely determined, would have a material and adverse effect on the
ability of the Note Insurer to perform its obligations under the Note
Insurance Policy.
(iii) The Note Insurance Policy and the Indemnification Agreement
constitute the irrevocable, valid, legal and binding obligations of the
Note Insurer in accordance with their respective terms to the extent
provided therein, enforceable against the Note Insurer in accordance with
their respective terms, except as the enforceability thereof and the
availability of particular remedies to enforce the respective terms
thereof against the Note Insurer may be limited by applicable laws
affecting the rights of creditors of the Note Insurer and by the
application of general principles of equity.
(iv) The Note Insurer, as an insurance company, is not eligible for
relief under the United States Bankruptcy Code. Any proceedings for the
liquidation, conservation or rehabilitation of the Note Insurer would be
governed by the provisions of the Insurance Law of the State of New York.
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(v) The statements set forth in the Prospectus Supplement under the
captions "The Insurer" and "The Policy" are true and correct, except that
no opinion is expressed as to financial statements or other financial
information included in the Prospectus relating to the Note Insurer and,
insofar as such statements constitute a summary of the Note Insurance
Policy, accurately and fairly summarize the terms of the Note Insurance
Policy.
(vi) The Note Insurance Policy constitutes an insurance policy
within the meaning of Section 3(a)(8) of the Act.
(vii) Neither the execution or delivery by the Note Insurer of the
Note Insurance Policy or the Indemnification Agreement, nor the
performance by the Note Insurer of its obligations thereunder, will
conflict with any provision of the certificate of incorporation or the
amended by-laws of the Note Insurer nor, to the best of such counsel's
knowledge, result in a breach of, or constitute a default under, any
agreement or other instrument to which the Note Insurer is a party or by
which any of its property is bound nor, to the best of such counsel's
knowledge, violate any judgment, order or decree applicable to the Note
Insurer of any governmental regulatory body, administrative agency, court
or arbitrator located in any jurisdiction in which the Note Insurer is
licensed or authorized to do business.
H. The Underwriters shall have received from Dewey Ballantine,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the validity of the Securities and such other related matters as
the Underwriters may require.
I. The Underwriters shall have received from counsel to the Trustee
and the Back-Up Servicer, a favorable opinion dated the Closing Date and
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, to the effect that:
(i) Each of the Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
United States of America.
(ii) The Trustee and the Back-Up Servicer has full corporate trust
power and authority to enter into and perform its obligations under the
Indenture, as the case may be, including, but not limited to, its
obligation to serve in the capacity of Trustee and to execute, issue,
countersign and deliver the Notes.
(iii) The Indenture has been duly authorized, executed and delivered
by the Trustee and constitutes a legal, valid and binding obligation of
the Trustee enforceable against the Trustee, in accordance with its terms,
except that as to
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enforceability such enforcement may (A) be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and (B) be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(iv) The Notes have been duly authorized, executed and authenticated
by the Trustee on the date hereof on behalf of the Trust in accordance
with the Indenture.
(v) The execution, delivery and performance of the Indenture and
the Notes by the Trustee will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Trustee pursuant to the terms of
the articles of association or the by-laws of the Trustee or any statute,
rule, regulation or order of any governmental agency or body, or any court
having jurisdiction over the Trustee or its property or assets or any
agreement or instrument known to such counsel, to which the Trustee is a
party or by which the Trustee or any of its respective property or assets
is bound.
(vi) No authorization, approval, consent or order of, or filing
with, any state or federal court or governmental agency or authority is
necessary in connection with the execution, delivery and performance by
the Trustee or the Back-Up Servicer of the Indenture and the Notes, as
applicable.
J. The Underwriters shall have received from counsel to the Owner
Trustee a favorable opinion dated the Closing Date and satisfactory in form and
substance to the Underwriters and counsel for the Underwriters, to the effect
that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
United States of America.
(ii) The Owner Trustee has full corporate trust power and authority
to enter into and perform its obligations under the Trust Agreement, as
the case may be, including, but not limited to, its obligation to serve in
the capacity of Owner Trustee and to execute, issue, countersign and
deliver the Certificate.
(iii) The Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee and constitutes a legal, valid and binding
obligation of the Owner Trustee enforceable against the Owner Trustee, in
accordance with its terms, except that as to enforceability such
enforcement may (A) be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and (B) be limited by general
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principles of equity (whether considered in a proceeding at law or in
equity).
(iv) The Certificate has been duly authorized, executed and
authenticated by the Owner Trustee on the date hereof on behalf of the
Trust in accordance with the Trust Agreement.
(v) The execution, delivery and performance of the Trust Agreement
and the Certificate by the Owner Trustee will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Owner Trustee
pursuant to the terms of the articles of association or the by-laws of the
Owner Trustee or any statute, rule, regulation or order of any
governmental agency or body, or any court having jurisdiction over the
Owner Trustee or its property or assets or any agreement or instrument
known to such counsel, to which the Owner Trustee is a party or by which
the Owner Trustee or any of its respective property or assets is bound.
(vi) No authorization, approval, consent or order of, or filing
with, any state or federal court or governmental agency or authority is
necessary in connection with the execution, delivery and performance by
the Owner Trustee of the Trust Agreement and the Certificate, as
applicable.
K. LaSalle National Bank ("LaSalle") shall have furnished to the
Underwriters a certificate of LaSalle, signed by one or more duly authorized
officers of LaSalle, dated the Closing Date, as to the due authorization,
execution and delivery of the Indenture and the Sale and Servicing Agreement by
LaSalle and the acceptance by the Trustee of the trusts created thereby and the
due execution and delivery of the Notes by the Trustee thereunder and such other
matters as the Underwriters shall reasonably request.
L. Bankers Trust (Delaware) ("Bankers") shall have furnished to
the Underwriters a certificate of Bankers, signed by one or more duly authorized
officers of Bankers, dated the Closing Date, as to the due authorization,
execution and delivery of the Trust Agreement by Bankers and the acceptance by
the Owner Trustee of the trusts created thereby and the due execution and
delivery of the Certificate by the Owner Trustee thereunder and such other
matters as the Underwriters shall reasonably request.
M. The Indemnification Agreement shall have been executed and
delivered, in which the Note Insurer shall represent, among other
representations, that (i) the information under the captions, "The Policy" in
the section entitled "Summary of Terms", "The Policy" and "The Insurer" in the
Prospectus Supplement was approved by the Note Insurer and does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the
23
<PAGE>
circumstances under which they were made, not misleading and (ii) there has been
no change in the financial condition of the Note Insurer since June 30, 1996,
which would have a material adverse effect on the Note Insurer's ability to meet
its obligations under the Note Insurance Policy.
N. The Note Insurance Policy shall have been issued by the Note
Insurer and shall have been duly countersigned by an authorized agent of the
Note Insurer, if so required under applicable state law or regulation.
O. The Class A-1 Notes shall have been rated "A-1+" by Standard &
Poor's Ratings Services ("S&P") and "P-1" by Moody's Investors Service, Inc.
("Moody's") and the Class A-2 Notes and the Class A-3 Notes shall have been
rated AAA by S&P and Aaa by Moody's.
P. The Underwriters shall have received copies of letters dated as
of the Closing Date, from S&P and Moody's stating the current ratings of the
Notes as set forth in Section O above.
Q. The Underwriters shall have received from Dewey Ballantine,
counsel to the Sponsor and the Seller, a favorable opinion, dated the Closing
Date and satisfactory in form and substance to the Underwriters and counsel for
the Underwriters, as to true sale matters relating to the transaction, and the
Underwriters shall be addressees of any opinions of counsel supplied to the
rating organizations relating to the Notes.
R. All proceedings in connection with the transactions
contemplated by this Agreement, and all documents incident hereto, shall be
reasonably satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, and the Underwriters and counsel for the Underwriters
shall have received such other information, opinions, certificates and documents
as they may reasonably request in writing.
S. The Prospectus and any supplements thereto shall have been
filed (if required) with the Commission in accordance with the rules and
regulations under the Act and Section 2 hereof, and prior to the Closing Date,
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or shall be contemplated by the Commission or by any authority administering any
state securities or blue sky law.
T. On the Closing Date the Underwriters shall have received from
Coopers & Lybrand L.L.P. a letter dated as of the Closing Date, in the form
heretofore agreed to.
If any condition specified in this Section 7 shall not have been
fulfilled when and as required to be fulfilled, (i) this Agreement may be
terminated by the Representative by notice to both
24
<PAGE>
of the Companies at any time at or prior to the Closing Date, and such
termination shall be without liability of any party to any other party except as
provided in Section 8 and (ii) the provisions of Section 8, the indemnity set
forth in Section 9, the contribution provisions set forth in Section 9 and the
provisions of Sections 12 and 15 shall remain in effect.
Section 8. Payment of Expenses. The Seller agrees to pay the
following expenses incident to the performance of the Companies' obligations
under this Agreement, (i) the filing of the Registration Statement and all
amendments thereto, (ii) the duplication and delivery to the Underwriters, in
such quantities as the Underwriters may reasonably request, of copies of this
Agreement, (iii) the preparation, issuance and delivery of the Notes, (iv) the
fees and disbursements of Dewey Ballantine, counsel for the Underwriters and
special counsel to the Seller, (v) the fees and disbursements of Coopers &
Lybrand, L.L.P., accountants of the Companies, (vi) the qualification of the
Notes under securities and Blue Sky laws and the determination of the
eligibility of the Notes for investment in accordance with the provisions
hereof, including filing fees and the fees and disbursements of Dewey
Ballantine, counsel to the Underwriters, in connection therewith and in
connection with the preparation of any Blue Sky survey, (vii) the printing and
delivery to the Underwriters in such quantities as the Underwriters may
reasonably request, of copies of the Registration Statement and Prospectus and
all amendments and supplements thereto, and of any Blue Sky survey, (viii) the
duplication and delivery to the Underwriters, in such quantities as the
Underwriters may reasonably request, of copies of the Sale and Servicing
Agreement, the Indenture, the Trust Agreement and the other transaction
documents, (ix) the fees charged by nationally recognized statistical rating
agencies for rating the Notes, (x) the fees and expenses of the Trustee and its
counsel, the fees and expenses of the Owner Trustee and its counsel and (xi) the
fees and expenses of the Note Insurer and its counsel.
If this Agreement is terminated by the Representative in accordance
with the provisions of Section 7, the Companies shall reimburse the
Representative for all reasonable third-party out-of-pocket expenses, including
the reasonable fees and disbursements of Dewey Ballantine, the Representative's
counsel.
Section 9. Indemnification. A. (x) The Sponsor agrees to indemnify
and hold harmless the Underwriters and each person, if any, who controls the
Underwriters within the meaning of the Securities Act or the Exchange Act, from
and against any and all loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the Notes), to
which the Underwriters or any such controlling person may become subject, under
the Securities Act or the Exchange Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or
25
<PAGE>
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Sponsor Offering Materials (other
than the Registration Statement) or (iv) the omission or alleged omission to
state therein a material fact required to be stated or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and shall reimburse the Underwriters and each such
controlling person promptly upon demand for any documented legal or documented
other expenses reasonably incurred by the Underwriters or such controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the foregoing indemnity with respect to any
untrue statement contained in or omission from the Prospectus shall not inure to
the benefit of the Underwriters if the Sponsor shall sustain the burden of
proving that the person asserting against the Underwriters the loss, liability,
claim, damage or expense purchased any of the Notes which are the subject
thereof and was not sent or given a copy of the appropriate Prospectus (or the
appropriate Prospectus as amended or supplemented) (the term Prospectus as used
in this clause shall not include documents incorporated by reference thereto),
if required by law, at or prior to the written confirmation of the sale of such
Notes to such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the appropriate Prospectus (or the
appropriate Prospectus as amended or supplemented).
(y) The Seller agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls the Underwriters within the
meaning of the Securities Act or the Exchange Act, from and against any and all
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of the Notes), to which the Underwriters
or any such controlling person may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Seller Offering Materials
or (ii) the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading and shall
reimburse the Underwriters and each such controlling person promptly upon demand
for any documented legal or documented other expenses reasonably incurred by the
Underwriters or such controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the foregoing
indemnity with respect to any
26
<PAGE>
untrue statement contained in or omission from a prospectus shall not inure to
the benefit of the Underwriters if the Seller shall sustain the burden of
proving that the person asserting against the Underwriters the loss, liability,
claim, damage or expense purchased any of the Notes which are the subject
thereof and was not sent or given a copy of the appropriate Prospectus (or the
appropriate Prospectus as amended or supplemented) (the term Prospectus as used
in this clause shall not include documents incorporated by reference thereto),
if required by law, at or prior to the written confirmation of the sale of such
Notes to such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the appropriate Prospectus (or the
appropriate Prospectus as amended or supplemented).
The foregoing indemnity agreement is in addition to any liability
which the Sponsor or the Seller may otherwise have to the Underwriters or any
controlling person of any of the Underwriters.
B. Each of the Underwriters agrees to severally and not jointly
indemnify and hold harmless the Sponsor and the Seller, the directors and the
officers of the Sponsor who signed the Registration Statement, and each person,
if any, who controls the Sponsor or the Seller within the meaning of the
Securities Act or the Exchange Act against any and all loss, claim, damage or
liability, or any action in respect thereof, to which the Sponsor, the Seller or
any such director, officer or controlling person may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact relating to such
Underwriter contained in the Underwriter Information or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and shall reimburse the Sponsor or
the Seller, as the case may be, promptly on demand, and any such director,
officer or controlling person for any documented legal or other documented
expenses reasonably incurred by the Sponsor or the Seller, or any director,
officer or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability
which the Underwriters may otherwise have to the Sponsor or the Seller or any
such director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section 9 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 9, promptly notify the indemnifying party
in writing of the claim or the commencement of that action; provided, however,
that
27
<PAGE>
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure; and provided, further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party, unless such indemnified party reasonably objects to such assumption on
the ground that there may be legal defenses available to it which are different
from or in addition to those available to such indemnifying party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, except to the extent provided in the next
following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 9 for any fees and expenses of counsel
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Representative, if the indemnified
parties under this Section 9 consist of the Underwriters or any of their
controlling persons, or by the Companies, if the indemnified parties under this
Section 9 consist
28
<PAGE>
of either of the Companies or any of the Companies' directors, officers or
controlling persons, but in either case reasonably satisfactory to the
indemnified party.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9A and B, shall use its best efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which such indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
Notwithstanding the foregoing, if (x) the indemnified party has
made a proper request to the indemnifying party for the payment of the
indemnified party's legal fees and expenses, as permitted hereby, and (y) such
request for payment has not been honored within thirty days, then, for so long
as such request thereafter remains unhonored, the indemnifying party shall be
liable for any settlement entered into by the indemnified party whether or not
the indemnifying party consents thereto.
D. Each Underwriter agrees to deliver to the Companies no later
than the date prior to the date on which the Form 8-K is required to be filed
pursuant to Section 2(ii) hereof with a copy of its Derived Information (defined
below) for filing with the Commission on Form 8-K.
E. Each Underwriter agrees, assuming all Company-Provided
Information (defined below) is accurate and complete in all material respects,
to severally and not jointly indemnify and hold harmless the Sponsor and the
Seller, each of the Sponsor's and the Seller's officers and directors and each
person who controls the Sponsor or the Seller within the meaning of Section 15
of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement of a material fact contained in the Derived Information
provided by such Underwriter, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the
29
<PAGE>
light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The obligations of each of the
Underwriters under this Section 9E shall be in addition to any liability which
such Underwriter may otherwise have.
The procedures set forth in Section 9C shall be equally applicable
to this Section 9E.
F. For purposes of this Section 9, the term "Derived Information"
means such portion, if any, of the information delivered to the Sponsor or the
Seller pursuant to Section 9D for filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral term
sheets, Structural term sheets or Computational Materials
(as such terms are interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to
the Underwriters by the Sponsor or the Seller concerning the Receivables
comprising the Trust.
The terms "Collateral term sheet" and "Structural term sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of Cleary, Gottlieb, Steen & Hamilton on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral term sheet" as used
herein includes any subsequent Collateral term sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Kidder letter" and
together with the PSA Letter, the "No-Action Letters") of Brown & Wood on behalf
of Kidder, Peabody & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994).
G. If the indemnification provided for in this Section 9 shall for
any reason be unavailable to hold harmless an indemnified party under Section 9A
or B in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid
30
<PAGE>
or payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Sponsor or the
Seller on the one hand and the Underwriters on the other from the offering of
the Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Sponsor or the Seller on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations.
The relative benefits of the Underwriters and the Sponsor or the
Seller shall be deemed to be in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the public
offering price appearing on the cover page of the Prospectus.
The relative fault of the Underwriters and the Sponsor or the
Seller shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Sponsor or the Seller or by one of
the Underwriters, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission
and other equitable considerations.
The Sponsor, the Seller and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 9G were to
be determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 9G shall be deemed to include, for purposes of this Section 9G, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Each person, if any, who controls each Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as each of the Underwriters and each director of the Sponsor and/or
the Seller, each officer of the Sponsor who signed the Registration Statement,
and each person, if any, who controls the Sponsor and/or the Seller within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Sponsor.
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<PAGE>
In no case shall any Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Notes purchased by such
Underwriter hereunder. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
H. The Underwriters severally confirm that the information set
forth (i) in the Prospectus Supplement relating to market making and (ii) under
the caption "Underwriting" in the Prospectus Supplement, together with the
Derived Information, is correct and constitutes the only information furnished
in writing to the Sponsor or the Seller by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
Section 10. Default by One or More of the Underwriters. If one or
more of the Underwriters participating in the public offering of the Notes shall
fail at the Closing Date to purchase the Notes which it is obligated to purchase
hereunder (the "Defaulted Securities"), then the non-defaulting Underwriter
shall have the right, within 24 hours thereafter, to make arrangements to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth. If, however, the
Underwriter have not completed such arrangements within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of the Notes to be purchased
pursuant to this Agreement, the non-defaulting Underwriter shall be obligated to
purchase the full amount thereof, or
(ii) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of the Notes to be purchased
pursuant to this Agreement, this Agreement shall terminate, without any
liability on the party of the non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve the
defaulting Underwriter from the liability with respect to any default of such
Underwriter under this Agreement.
In the event of a default by either Underwriter as set forth in
this Section, each of the Underwriters and the Seller shall have the right to
postpone the Closing Date for a period not exceeding five Business Days in order
that any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
Section 11. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Sponsor and the Seller prior
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<PAGE>
to delivery of and payment for the Notes if prior to such time (i) any change,
or any development involving a prospective change, in or affecting particularly
the business or properties of the Trust, the Sponsor or the Seller which, in the
reasonable judgment of the Representative, materially impairs the investment
quality of the Notes or makes it impractical or inadvisable to market the Notes;
(ii) the Notes have been placed on credit watch by S&P or Moody's with negative
implications; (iii) trading in securities generally on the New York Stock
Exchange or the National Association of Securities Dealers National Market
System shall have been suspended or limited, or minimum prices shall have been
established on such exchange or market system; (iv) a banking moratorium shall
have been declared by either Federal or New York State authorities; or (v) there
shall have occurred any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which makes it, in the reasonable judgment of
the Representative, impractical or inadvisable to proceed with the completion of
the sale and payment for the Notes. Upon such notice being given, the parties to
this Agreement shall (except for any liability arising before or in relation to
such termination) be released and discharged from their respective obligations
under this Agreement.
Section 12. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Companies submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Representative or controlling
person of the Representative, or by or on behalf of the Companies or any
officers, directors or controlling persons and shall survive delivery of any
Notes to the Representative or any controlling person.
Section 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication to:
The Underwriters: Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention:
Fax: (212) 272-7294
The Sponsor: AmeriCredit Financial Services, Inc.
200 Bailey Avenue
Fort Worth, TX 76107
Attention: Chief Financial Officer
Fax: (817) 336-9519
The Seller: AFS Funding Corp.
33
<PAGE>
1325 Airmotive Way
Reno, Nevada 89502
Attention: Chief Financial Officer
Fax: (702) 322-8808
Section 14. Parties. This Agreement shall inure to the benefit of
and be binding upon the Representative and the Companies, and their respective
successors or assigns. Nothing expressed or mentioned in this Agreement is
intended nor shall it be construed to give any person, firm or corporation,
other than the parties hereto or thereto and their respective successors and the
controlling persons and officers and directors referred to in Section 9 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties and their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives (to the extent of their rights as specified herein and
therein) and except as provided above for the benefit of no other person, firm
or corporation. No purchaser of Notes from the Representative shall be deemed to
be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but together they
shall constitute but one instrument.
Section 17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of or affect the
meaning or interpretation of, this Agreement.
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<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, please sign and return to us a counterpart
hereof, whereupon this instrument along with all counterparts will become a
binding agreement between the Representative, the Sponsor and the Seller in
accordance with its terms.
Very truly yours,
AMERICREDIT FINANCIAL SERVICES, INC.
By:
--------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
AFS FUNDING CORP.
By:
--------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
CONFIRMED AND ACCEPTED, as of
the date first above written:
BEAR, STEARNS & CO. INC.
Acting on its own behalf and
as Representative of the
Underwriters referred to in
the foregoing Agreement
By:
---------------------------
Name:
Title: Authorized Signatory
[Underwriting Agreement]
<PAGE>
Schedule 1
Underwriting
Purchase Price (excluding accrued interest)
------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3
------------------ ------------------ ------------------
Bear, Stearns & 99.73500% 99.69407% 99.57852%
Co. Inc.
Credit Suisse 99.73500%
First Boston 99.69407% 99.57852%
Corporation
Notional Principal Amount
------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3
------------------ ------------------ ------------------
$34,000,000.00 $48,125,000.00 $42,875,000.00
Bear, Stearns &
Co. Inc.
Credit Suisse
First Boston $34,000,000.00 $48,125,000.00 $42,875,000.00
Corporation
------------------ ------------------ ------------------
$68,000,000.00 $96,250,000.00 $85,750,000.00
TOTAL
Proceeds (excluding accrued interest)
------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3
------------------ ------------------ ------------------
Bear, Stearns &
Co. Inc. $33,909,900.00 $47,977,771.19 $42,694,290.45
Credit Suisse
First Boston $33,909,900.00 $47,977,771.19 $42,694,290.45
Corporation
------------------ ------------------ ------------------
$67,819,800.00 $95,955,542.38 $85,388,580.90
TOTAL
================================================================================
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1997-B
Class A-1 5.79% Asset Backed Notes
Class A-2 6.36% Asset Backed Notes
Class A-3 6.67% Asset Backed Notes
---------------------------------
INDENTURE
Dated as of May 1, 1997
-----------------------------------
LASALLE NATIONAL BANK
Trustee and Trust Collateral Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Incorporation by
Reference.................................... 3
SECTION 1.1 Definitions.................................. 3
SECTION 1.2 Incorporation by Reference of Trust
Indenture Act................................ 12
SECTION 1.3 Rules of Construction........................ 13
ARTICLE II The Notes.................................... 14
SECTION 2.1 Form......................................... 14
SECTION 2.2 Execution, Authentication and
Delivery..................................... 14
SECTION 2.3 Temporary Notes.............................. 15
SECTION 2.4 Registration; Registration of
Transfer and Exchange........................ 15
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen
Notes........................................ 17
SECTION 2.6 Persons Deemed Owner......................... 18
SECTION 2.7 Payment of Principal and Interest;
Defaulted Interest........................... 18
SECTION 2.8 Cancellation................................. 20
SECTION 2.9 Release of Collateral........................ 20
SECTION 2.10 Book-Entry Notes............................. 20
SECTION 2.11 Notices to Clearing Agency................... 21
SECTION 2.12 Definitive Notes............................. 21
ARTICLE III Covenants.................................... 22
SECTION 3.1 Payment of Principal and Interest............ 22
SECTION 3.2 Maintenance of Office or Agency.............. 22
SECTION 3.3 Money for Payments to be Held in
Trust........................................ 23
SECTION 3.4 Existence.................................... 25
SECTION 3.5 Protection of Trust Estate................... 25
SECTION 3.6 Opinions as to Trust Estate.................. 26
SECTION 3.7 Performance of Obligations;
Servicing of Receivables..................... 26
SECTION 3.8 Negative Covenants........................... 28
SECTION 3.9 Annual Statement as to Compliance............ 28
SECTION 3.10 Issuer May Consolidate, Etc. Only on
Certain Terms................................ 29
SECTION 3.11 Successor or Transferee...................... 31
SECTION 3.12 No Other Business............................ 32
SECTION 3.13 No Borrowing................................. 32
SECTION 3.14 Servicer's Obligations....................... 32
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SECTION 3.15 Guarantees, Loans, Advances and
Other Liabilities............................ 32
SECTION 3.16 Capital Expenditures......................... 32
SECTION 3.17 Compliance with Laws......................... 32
SECTION 3.18 Restricted Payments.......................... 33
SECTION 3.19 Notice of Events of Default.................. 33
SECTION 3.20 Further Instruments and Acts................. 33
SECTION 3.21 Amendments of Sale and Servicing
Agreement and Trust Agreement................ 33
SECTION 3.22 Income Tax Characterization.................. 33
ARTICLE IV Satisfaction and Discharge................... 33
SECTION 4.1 Satisfaction and Discharge of
Indenture.................................... 34
SECTION 4.2 Application of Trust Money................... 35
SECTION 4.3 Repayment of Moneys Held by Paying
Agent........................................ 35
ARTICLE V Remedies..................................... 36
SECTION 5.1 Events of Default............................ 36
SECTION 5.2 Rights Upon Event of Default................. 38
SECTION 5.3 Collection of Indebtedness and Suits
for Enforcement by Trustee................... 39
SECTION 5.4 Remedies..................................... 42
SECTION 5.5 Optional Preservation of the
Receivables.................................. 44
SECTION 5.6 Priorities................................... 44
SECTION 5.7 Limitation of Suits.......................... 45
SECTION 5.8 Unconditional Rights of Noteholders
To Receive Principal and Interest............ 46
SECTION 5.9 Restoration of Rights and Remedies........... 46
SECTION 5.10 Rights and Remedies Cumulative............... 46
SECTION 5.11 Delay or Omission Not a Waiver............... 47
SECTION 5.12 Control by Noteholders....................... 47
Section 5.13 Waiver of Past Defaults...................... 48
SECTION 5.14 Undertaking for Costs........................ 48
SECTION 5.15 Waiver of Stay or Extension Laws............. 48
SECTION 5.16 Action on Notes.............................. 49
SECTION 5.17 Performance and Enforcement of
Certain Obligations.......................... 49
ARTICLE VI The Trustee and the Trust Collateral
Agent........................................ 50
SECTION 6.1 Duties of Trustee............................ 50
SECTION 6.2 Rights of Trustee............................ 52
SECTION 6.3 Individual Rights of Trustee................. 53
SECTION 6.4 Trustee's Disclaimer......................... 53
SECTION 6.5 Notice of Defaults........................... 53
SECTION 6.6 Reports by Trustee to Holders................ 54
SECTION 6.7 Compensation and Indemnity................... 54
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SECTION 6.8 Replacement of Trustee....................... 55
SECTION 6.9 Successor Trustee by Merger.................. 57
SECTION 6.10 Appointment of Co-Trustee or
Separate Trustee............................. 57
SECTION 6.11 Eligibility: Disqualification................ 58
SECTION 6.12 Preferential Collection of Claims
Against Issuer............................... 59
SECTION 6.13 Appointment and Powers....................... 59
SECTION 6.14 Performance of Duties........................ 59
SECTION 6.15 Limitation on Liability...................... 60
SECTION 6.16 Reliance Upon Documents...................... 61
SECTION 6.17 Successor Trust Collateral Agent............. 61
SECTION 6.18 Compensation................................. 62
SECTION 6.19 Representations and Warranties of
the Trust Collateral Agent................... 63
SECTION 6.20 Waiver of Setoffs............................ 63
SECTION 6.21 Control by the Controlling Party............. 63
ARTICLE VII Noteholders' Lists and Reports............... 64
SECTION 7.1 Issuer To Furnish To Trustee Names
and Addresses of Noteholders................. 64
SECTION 7.2 Preservation of Information;
Communications to Noteholders................ 64
SECTION 7.3 Reports by Issuer............................ 64
SECTION 7.4 Reports by Trustee........................... 65
ARTICLE VIII Accounts, Disbursements and Releases......... 65
SECTION 8.1 Collection of Money.......................... 65
SECTION 8.2 Release of Trust Estate...................... 66
SECTION 8.3 Opinion of Counsel........................... 66
ARTICLE IX Supplemental Indentures...................... 67
SECTION 9.1 Supplemental Indentures Without
Consent of Noteholders....................... 67
SECTION 9.2 Supplemental Indentures with Consent
of Noteholders............................... 68
SECTION 9.3 Execution of Supplemental
Indentures................................... 70
SECTION 9.4 Effect of Supplemental Indenture............. 70
SECTION 9.5 Conformity With Trust Indenture
Act.......................................... 71
SECTION 9.6 Reference in Notes to Supplemental
Indentures................................... 71
ARTICLE X Redemption of Notes.......................... 71
SECTION 10.1 Redemption................................... 71
SECTION 10.2 Form of Redemption Notice.................... 72
SECTION 10.3 Notes Payable on Redemption Date............. 72
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ARTICLE XI Miscellaneous................................ 73
SECTION 11.1 Compliance Certificates and
Opinions, etc................................ 73
SECTION 11.2 Form of Documents Delivered to
Trustee...................................... 75
SECTION 11.3 Acts of Noteholders.......................... 76
SECTION 11.4 Notices. etc. to Trustee, Issuer and
Rating Agencies.............................. 76
SECTION 11.5 Notices to Noteholders; Waiver............... 78
SECTION 11.6 Alternate Payment and Notice
Provisions................................... 78
SECTION 11.7 Conflict with Trust Indenture Act............ 79
SECTION 11.8 Effect of Headings and Table of
Contents..................................... 79
SECTION 11.9 Successors and Assigns....................... 79
SECTION 11.10 Separability................................. 79
SECTION 11.11 Benefits of Indenture........................ 79
SECTION 11.12 Legal Holidays............................... 80
SECTION 11.13 GOVERNING LAW................................ 80
SECTION 11.14 Counterparts................................. 80
SECTION 11.15 Recording of Indenture....................... 80
SECTION 11.16 Trust Obligation............................. 80
SECTION 11.17 No Petition.................................. 81
SECTION 11.18 Inspection................................... 81
iv
<PAGE>
INDENTURE dated as of May 1, 1997, between AMERICREDIT AUTOMOBILE
RECEIVABLES TRUST 1997-B, a Delaware business trust (the "Issuer"), and LASALLE
NATIONAL BANK, a national banking association, as trustee (the "Trustee") and
Trust Collateral Agent (as defined below)
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Class A-1 5.79%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 6.36% Asset Backed Notes
(the "Class A-2 Notes") and Class A-3 6.67% Asset Backed Notes (the "Class A-3
Notes," and together with the Class A-1 Notes and the Class A-2 Notes, the
"Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Indenture Collateral (as defined below) as collateral to the Trust
Collateral Agent for the benefit of the Trustee on behalf of the Noteholders.
Financial Security Assurance Inc. (the "Security Insurer") has
issued and delivered a financial guaranty insurance policy, dated the Closing
Date (with endorsements, the "Note Policy"), pursuant to which the Security
Insurer guarantees Scheduled Payments, as defined in the Note Policy.
As an inducement to the Security Insurer to issue and deliver the
Note Policy, the Issuer and the Security Insurer have executed and delivered the
Insurance and Indemnity Agreement, dated as of May 1, 1997 (as amended from time
to time, the "Insurance Agreement"), among the Security Insurer, the Issuer,
AmeriCredit Financial Services, Inc., AmeriCredit Corp. and AFS Funding Corp.
As an additional inducement to the Security Insurer to issue the
Note Policy, and as security for the performance by the Issuer of the Insurer
Issuer Secured Obligations and as security for the performance by the Issuer of
the Trustee Issuer Secured Obligations, the Issuer has agreed to assign the
Collateral (as defined below) as collateral to the Trust Collateral Agent for
the benefit of the Issuer Secured Parties, as their respective interests may
appear.
<PAGE>
GRANTING CLAUSE
The Issuer hereby Grants to the Trust Collateral Agent at the
Closing Date, for the benefit of the Issuer Secured Parties, all of the Issuer's
right, title and interest in and to (a) the Initial Receivables; (b) an
assignment of the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any Subsequent Receivables and
any other interest of the Issuer in the Financed Vehicles; (c) any proceeds with
respect to the Initial Receivables and the Subsequent Receivables repurchased by
a Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement; (d) all rights under
any Service Contracts on the related Financed Vehicles; (e) any proceeds with
respect to the Initial Receivables and the Subsequent Receivables from claims on
any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors; (f) the Trust Accounts and all funds on deposit
from time to time in the Trust Accounts, and in all investments and proceeds
thereof and all rights of the Issuer therein (including all income thereon); (g)
the Issuer's rights and benefits, but none of its obligations or burdens, under
the Purchase Agreement and each Subsequent Purchase Agreement, including the
delivery requirements, representations and warranties and the cure and
repurchase obligations of AmeriCredit under the Purchase Agreement; (h) all
items contained in the Receivable Files and any and all other documents that
AmeriCredit keeps on file in accordance with its customary procedures relating
to the Receivables, the Obligors or the Financed Vehicles, (i) the Issuer's
rights and benefits, but none of its obligations or burdens, under the Sale and
Servicing Agreement (including all rights of the Seller under the Purchase
Agreement, any Subsequent Purchase Agreement and any Subsequent Transfer
Agreement assigned to the Issuer pursuant to the Sale and Servicing Agreement);
and (j) all present and future claims, demands, causes and choses of action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to the Trust Collateral Agent,
for the benefit of the Trustee on behalf of the Holders of the Notes and for the
benefit of the Security
2
<PAGE>
Insurer. The Trust Collateral Agent hereby acknowledges such Grant, accepts the
trusts under this Indenture in accordance with the provisions of this Indenture
and agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of such parties, recognizing the
priorities of their respective interests may be adequately and effectively
protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture.
"Act" has the meaning specified in Section 11.3(a).
"Affiliate" means, with respect to any specified Person, any other
Person controlling or 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. A Person shall not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.
"Authorized Officer" means, with respect to the Issuer and the
Servicer, any officer or agent acting pursuant to a power of attorney of the
Owner Trustee or the Servicer, as applicable, who is authorized to act for the
Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by each of
the Owner Trustee and the Servicer to the Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).
"Basic Documents" means this Indenture, the Certificate of Trust,
the Trust Agreement, the Sale and Servicing Agreement, the Spread Account
Agreement, the Spread Account Agreement Supplement, the Insurance Agreement and
other documents and certificates delivered in connection therewith.
"Book Entry Notes" means a beneficial interest in the Notes,
ownership and transfers of which shall be made
3
<PAGE>
through book entries by a Clearing Agency as described in Section 2.10.
"Business Day" means (i) with respect to the Note Policy, any day
other than a Saturday, Sunday, legal holiday or other day on which commercial
banking institutions in Wilmington, Delaware, the City of New York, Chicago,
Illinois or Fort Worth, Texas or any other location of any successor Servicer,
successor Owner Trustee or successor Trust Collateral Agent are authorized or
obligated by law, executive order or governmental decree to be closed and (ii)
otherwise, a day other than a Saturday, a Sunday or other day on which
commercial banks located in the states of Delaware, Texas, New York or Illinois
are authorized or obligated to be closed.
"Certificate" means a trust certificate evidencing the beneficial
interest of a Certificateholder in the Trust.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Interest Rate" means 5.79% per annum (computed on the
basis of the actual number of days elapsed in a 360-day year).
"Class A-1 Notes" means the Class A-1 5.79% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-1 Prepayment Amount" means, as of the Distribution Date on
or immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to the
Class A-1 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes) of the Pre-Funded Amount
as of such Distribution Date.
"Class A-2 Interest Rate" means 6.36% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-2 Notes" means the Class A-1 6.36% Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-2 Prepayment Amount" means, as of the Distribution Date on
or immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to the
Class A-2 Noteholders' pro rata share (based on the respective
4
<PAGE>
current outstanding principal balance of each class of Notes) of the Pre-Funded
Amount as of such Distribution Date.
"Class A-3 Interest Rate" means 6.67% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 6.67% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-3 Prepayment Amount" means, as of the Distribution Date on
or immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to the
Class A-3 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes) of the Pre-Funded Amount
as of such Distribution Date.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means May 21, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of
this Indenture.
"Controlling Party" means the Security Insurer, so long as no
Insurer Default shall have occurred and be continuing, and the Trustee, for so
long as an Insurer Default shall have occurred and be continuing.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered which office at date of the execution of this Agreement is located
at 135 South LaSalle Street, Suite 1740, Chicago, Illinois Attention: Asset
Backed Securities Trust Administration - Americredit 1997-B or at such other
address as the Trustee may designate from time to time by notice to the
Noteholders, the Security Insurer, the Servicer and the Issuer, or the principal
corporate trust office of any successor Trustee (the address of which the
5
<PAGE>
successor Trustee will notify the Noteholders and the Issuer).
"Default" means any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
"Distribution Date" has the meaning specified in the Notes.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, 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.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this 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" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted
6
<PAGE>
accounting principles, recorded as capital leases; (c) current liabilities of
such Person in respect of unfunded vested benefits under plans covered by Title
IV of ERISA; (d) obligations issued for or liabilities incurred on the account
of such Person; (e) obligations or liabilities of such Person arising under
acceptance facilities; (f) obligations of such Person under any guarantees,
endorsements (other than for collection or deposit in the ordinary course of
business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or otherwise to assure a
creditor against loss; (g) obligations of such Person secured by any lien on
property or assets of such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person under any interest
rate or currency exchange agreement.
"Indenture" means this Indenture as amended and supplemented from
time to time.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of the Issuer, any other obliger upon
the Notes, the Seller and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obliger, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obliger, 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" means a certificate or opinion to be
delivered to the Trust Collateral Agent under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1,
prepared by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Trust Collateral Agent in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Insurance Agreement Indenture Cross Default" has the meaning
specified therefor in the Insurance Agreement.
"Insurer Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the Security
Insurer under this Indenture, the Insurance Agreement or any other Basic
Document.
"Interest Rate" means, with respect to the (i) Class A-1 Notes, the
Class A-1 Interest Rate, (ii) Class A-2 Notes,
7
<PAGE>
the Class A-2 Interest Rate, and (iii) Class A-3 Notes, the Class A-3 Interest
Rate.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"Issuer Secured Obligations" means the Insurer Issuer Secured
Obligations and the Trustee Issuer Secured Obligations.
"Issuer Secured Parties" means each of the Trustee in respect of the
Trustee Issuer Secured Obligations and the Security Insurer in respect of the
Insurer Issuer Secured Obligations.
"Note" means a Class A-1 Note, a Class A-2 Note and a Class A-3
Note.
"Note Owner" means, with respect to a Book-Entry Note, the person
who is the 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 Paying Agent" means the Trustee or any other Person that meets
the eligibility standards for the Trustee specified in Section 6.11 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.
"Note Policy" means the insurance policy issued by the Security
Insurer with respect to the Notes, including any endorsements thereto.
"Note Policy Claim Amount" has the meaning specified in the Sale and
Serving Agreement.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.4.
"Notice of Claim" has the meaning specified in the Sale and
Servicing Agreement.
8
<PAGE>
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and TIA
ss. 314, and delivered to the Trustee. Unless otherwise specified, any reference
in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be employees
of or counsel to the Issuer and who shall be satisfactory to the Trustee and, if
addressed to the Security Insurer, satisfactory to the Security Insurer, and
which shall comply with any applicable requirements of Section 11.1, and shall
be in form and substance satisfactory to the Trustee, and if addressed to the
Security Insurer, satisfactory to the Security Insurer.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the 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 this Indenture or provision therefor, satisfactory
to the Trustee); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
bona fide purchaser;
provided, however, that Notes which have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Security Insurer has been paid as subrogee hereunder or reimbursed pursuant
to the Insurance Agreement as evidenced by a written notice from the Security
Insurer delivered to the Trustee, and the Security Insurer shall be deemed to be
the Holder thereof to the extent of any payments thereon made by the Security
Insurer; provided, further, 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
9
<PAGE>
owned by the Issuer, any other obliger 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 Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the Trustee
either actually knows to be so owned or has received written notice thereof
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
Trustee the pledgees right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obliger upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Predecessor Note" means, 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 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.
"Preference Claim" has the meaning specified in the Sale and
Servicing Agreement.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency" means each of Moody's and Standard & Poor's, so long
as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization selected by the Seller and
(so long as an Insurer Default shall not have occurred and be continuing)
acceptable to the Security Insurer.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each of
the Rating Agencies shall have notified the Seller, the Servicer, the Security
Insurer, the Trustee, the Owner Trustee and the Issuer in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes.
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"Record Date" means, with respect to a Distribution Date or
Redemption Date, the close of business on the Business Day immediately preceding
such Distribution Date or Redemption Date.
"Redemption Date" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) or a payment to Noteholders pursuant to Section
10.1(b), the Distribution Date specified by the Servicer or the Issuer pursuant
to Section 10.1(a) or (b) as applicable.
"Redemption Price" means (a) in the case of a redemption of the
Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal
amount of the then outstanding principal amount of each class of Notes being
redeemed plus accrued and unpaid interest thereon to but excluding the
Redemption Date, or (b) in the case of a payment made to Noteholders pursuant to
Section 10.1(b), the amount on deposit in the Note Distribution Account, but not
in excess of the amount specified in clause (a) above.
"Reference Banks" means the following banks: Union Bank of
Switzerland, Barclays Bank, Deutsche Bank, Canadian Imperial Bank of Commerce.
"Responsible Officer" means, with respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary,
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of May 1, 1997, among the Issuer, the Seller, the Servicer
and the Trustee as Backup Servicer and Trust Collateral Agent, as the same may
be amended or supplemented from time to time.
"Scheduled Payments" has the meaning specified in the Note Policy.
"State" means any one of the 50 states of the United States of
America or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.7(e).
"Termination Date" means the latest of (i) the expiration of the
Note Policy and the return of the Note
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Policy to the Security Insurer for cancellation, (ii) the date on which the
Security Insurer shall have received payment and performance of all Insurer
Issuer Secured obligations and (iii) the date on which the Trustee shall have
received payment and performance of all Trustee Issuer Secured Obligations.
"Trust Collateral Agent" means, initially, LaSalle National Bank, in
its capacity as collateral agent on behalf of the Issuer Secured Parties,
including its successors in interest, until and unless a successor Person shall
have become the Trust Collateral Agent pursuant to Section 6.17 hereof, and
thereafter "Trust Collateral Agent" shall mean such successor Person.
"Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including all
property and interests Granted to the Trust Collateral Agent), including all
proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended and as in force on the date hereof, unless otherwise
specifically provided.
"Trustee" means LaSalle National Bank, a national banking
association, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.
"Trustee Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the Trustee
for the benefit of the Noteholders under this Indenture or the Notes.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Sale and Servicing Agreement or
the Trust Agreement.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
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"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
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ARTICLE II
The Notes
SECTION 2.1 Form. The Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, in each case together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A-1, A-2
and A-3, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibits A-1, A-2 and A-3 are part of the terms of
this Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall upon receipt of the Note Policy and Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $68,000,000, Class A-2 Notes for original issue in the
aggregate principal amount of $96,250,000 and Class A-3 Notes for original issue
in the aggregate principal amount of $85,750,000. The Class A-1 Notes, Class A-2
Notes and Class A-3 Notes outstanding at any time may not exceed such amounts
except as provided in Section 2.5.
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Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.3 Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
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If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.
Subject to Sections 2.10 and 2.12 hereof, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in Section 3.2, if the requirements of Section 8-401(1)
of the UCC are met the Issuer shall execute and upon its request the Trustee
shall authenticate and the Noteholder shall obtain from the Trustee, in the name
of the designated transferee or transferees, one or more new Notes, in any
authorized denominations, of the same class and a like aggregate principal
amount.
At the option of the Holder, Notes may be exchanged for other Notes
in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, subject to Sections
2.10 and 2.12 hereof, if the requirements of Section 8-401(1) of the UCC are met
the Issuer shall execute and upon its request the Trustee shall authenticate and
the Noteholder shall obtain from the Trustee, the Notes which the Noteholder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached to Exhibits A-1, A-2 and A-3 duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange
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Act, and (ii) accompanied by such other documents as the Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar shall not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and the Security Insurer (unless an Insurer
Default shall have occurred and be continuing) such security or indemnity as may
be required by it to hold the Issuer, the Trustee and the Security Insurer
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the requirements of Section 8-405 of the UCC are met, the Issuer
shall execute and upon its request the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; provided, however, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or within seven days
shall be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may direct the Trustee, in writing, to
pay such destroyed, lost or stolen Note when so due or payable or upon the
Redemption Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer, the Trustee and the Security Insurer shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
Issuer, the Trustee, the Security Insurer may treat the Person in whose name any
Note is registered (as of the Record Date) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Security Insurer, the Trustee nor any agent of the
Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note, the Class A-2 Note and the Class A-3 Note and the Class A-4 Note set forth
in Exhibits A-1, A-2 and A-3, respectively, and such interest shall be payable
on each Distribution Date as specified therein. Any installment of interest or
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Distribution Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the Record Date, by check mailed first-class, postage prepaid, to such
Person's address as it appears on the Note Register on such Record Date, except
that, unless Definitive Notes have been issued pursuant to Section 2.12, with
respect to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final installment of principal payable with
respect to such Note on
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a Distribution Date or on the Final Scheduled Distribution Date (and except for
the Redemption Price for any Note called for redemption pursuant to Section
10.1(a)) which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the forms of the Class A-1 Note, the Class
A-2 Note and the Class A-3 Note set forth in Exhibits A-1, A-2 and A-3,
respectively. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable, if not previously paid, on the date on
which an Event of Default shall have occurred and be continuing, if the Trustee
or the Holders of the Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on
each class of Notes shall be made pro rata to the Noteholders of such class
entitled thereto. Upon written notice from the Issuer, the Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes,
the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Interest Rate in any lawful
manner. The Issuer may pay such defaulted interest to the Persons who are
Noteholders on a subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Issuer shall fix or cause to
be fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
and the Trustee a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been surrendered
to the Trustee, the Trustee shall, if the Security Insurer has paid any amount
in respect of the Notes under the Note Policy or otherwise which
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has not been reimbursed to it, deliver such surrendered Notes to the Security
Insurer.
SECTION 2.8 Cancellation. Subject to Section 2.7(d), all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to Section 2.7(d), the
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.7(d), all canceled Notes may
be held or disposed of by the Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Trustee.
SECTION 2.9 Release of Collateral. The Trust Collateral Agent shall,
on or after the Termination Date, release any remaining portion of the Trust
Estate from the lien created by this Indenture and deposit in the Collection
Account any funds then on deposit in any other Trust Account. The Trust
Collateral Agent shall release property from the lien created by this Indenture
pursuant to this Section 2.9 only upon receipt of an Issuer Request accompanied
by an Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA ss.ss. 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
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(ii) the Note Registrar and the Trustee shall be entitled to deal
with the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Notes to such Clearing Agency
Participants;
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of reproduction
and postage expenses associated with the distribution of such reports,
from the Trustee at the Corporate Trust Office.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.12 Definitive Notes. If (i) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its
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responsibilities with respect to the Notes, and the Servicer is unable to locate
a qualified successor, (ii) the Servicer at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of an Event of Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Trustee through the Clearing Agency
in writing that the continuation of a book entry system through the Clearing
Agency is no longer in the best interests of the Note Owners, then the Clearing
Agency shall notify all Note Owners and the Trustee of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners requesting
the same. Upon surrender to the Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
ARTICLE III
Covenants
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on a Distribution Date deposited therein pursuant to the
Sale and Servicing Agreement (i) for the benefit of the Class A-l Notes, to
Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to Class A-2
Noteholders and (iii) for the benefit of the Class A-3 Notes, to Class A-3
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will
maintain in the Chicago, Illinois, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Trustee to serve as its agent
for the foregoing purposes. The Issuer
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will give prompt written notice to the Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments to be Held in Trust. On or before
each Distribution Date and Redemption Date, the Issuer shall deposit or cause to
be deposited in the Note Distribution Account from the Collection Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Trustee) shall promptly notify the Trustee of
its action or failure so to act.
The Issuer will cause each Note Paying Agent other than the Trustee
to execute and deliver to the Trustee and the Security Insurer an instrument in
which such Note Paying Agent shall agree with the Trustee (and if the Trustee
acts as Note Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Note Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Trustee notice of any default by the Issuer (or any
other obliger upon the Notes) of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed
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thereon and with respect to any applicable reporting requirements in
connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such a
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request with the consent of the Security Insurer
(unless an Insurer Default shall have occurred and be continuing) and shall be
deposited by the Trustee in the Collection Account; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that if such money or any
portion thereof had been previously deposited by the Security Insurer or the
Trust Collateral Agent with the Trustee for the payment of principal or interest
on the Notes, to the extent any amounts are owing to the Security Insurer, such
amounts shall be paid promptly to the Security Insurer upon receipt of a written
request by the Security Insurer to such effect, and provided, further, that the
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Trustee shall also
adopt and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or of
any Paying Agent, at the last address of record for each such Holder).
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SECTION 3.4 Existence. Except as otherwise permitted by the
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Issuer
Secured Parties to be prior to all other liens in respect of the Trust Estate,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Trust Collateral Agent, for the benefit of the Issuer Secured Parties, a
first lien on and a first priority, perfected security interest in the Trust
Estate. The Issuer will from time to time prepare (or shall cause to be
prepared), execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trust Collateral Agent for the benefit
of the Issuer Secured Parties created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights of
the Trust Collateral Agent in such Trust Estate against the claims of all
persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
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The Issuer hereby designates the Trust Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Trust Collateral Agent pursuant to this
Section.
SECTION 3.6 Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Trustee, the Trust Collateral Agent and the
Security Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the first priority lien and security interest in favor of the
Trust Collateral Agent, for the benefit of the Issuer Secured Parties, created
by this Indenture and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after the
Closing Date, the Issuer shall furnish to the Trustee, Trust Collateral Agent
and the Security Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
are necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until January 30 in the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
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ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing) to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Trustee and the
Security Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including but
not limited to preparing (or causing to prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Trustee, the Security Insurer or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d) If a responsible officer of the Owner Trustee shall have actual
knowledge of the occurrence of a Servicer Termination Event under the Sale and
Servicing Agreement, the Issuer shall promptly notify the Trustee, the Security
Insurer and the Rating Agencies thereof in accordance with Section 11.4, and
shall specify in such notice the action, if any, the Issuer is taking in respect
of such default. If a Servicer Termination Event shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents (x) without the prior consent of the Security Insurer (unless an
Insurer Default shall have occurred and be controlling) or (y) if the effect
thereof would adversely affect the Holders of the Notes.
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SECTION 3.8 Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the Trust
Estate, unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien in favor of the Trust Collateral Agent
created by this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on a
Financed Vehicle and arising solely as a result of an action or omission
of the related Obligor), (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) security interest in the Trust Estate or
(D) amend, modify or fail to comply with the provisions of the Basic
Documents without the prior written consent of the Controlling Party.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will
deliver to the Trustee and the Security Insurer, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 1997), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture
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has been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee and the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing)) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, the Security Insurer, any Noteholder or the
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for
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relating to such transaction have been complied with (including any filing
required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Security Insurer written
notice of such conveyance or transfer at least 20 Business Days prior to
the consummation of such action and shall have received the prior written
approval of the Security Insurer of such conveyance or transfer and the
Issuer or the Person (if other than the Issuer) formed by or surviving
such conveyance or transfer has a net worth, immediately after such
conveyance or transfer, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to
such conveyance or transfer.
(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate, to
any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, and the Security Insurer (so long as no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each of the Basic
Documents on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agree by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes,
(D) unless otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Issuer against and from
any loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agree by means of such supplemental
indenture that such Person (or if a group of persons, then one specified
Person) shall prepare (or cause to be prepared) and make all filings with
the Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
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(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing)) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, the Security Insurer, any Noteholder or the
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Security Insurer written
notice of such conveyance or transfer at least 20 Business Days prior to
the consummation of such action and shall have received the prior written
approval of the Security Insurer of such consolidation or merger and the
Issuer or the Person (if other than the Issuer) formed by or surviving
such consolidation or merger has a net worth, immediately after such
consolidation or merger, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to
such consolidation or merger.
SECTION 3.11 Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10 (b), AmeriCredit Automobile Receivables
Trust 1997-B will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with respect to
the Notes immediately upon the delivery of written
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notice to the Trustee stating that AmeriCredit Automobile Receivables Trust
1997-B is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto. After the Funding Period, the Issuer shall
not fund the purchase of any additional Receivables.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Security Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Basic Documents. The proceeds of
the Notes shall be used exclusively to fund the Issuer's purchase of the
Receivables and the other assets specified in the Sale and Servicing Agreement,
to fund the Pre-Funding Account, the Capitalized Interest Account and the Spread
Account and to pay the Issuer's organizational, transactional and start-up
expenses.
SECTION 3.14 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.10 of the Sale and
Servicing Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17 Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.
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SECTION 3.18 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Trustee and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement or Trust Agreement. The Issuer will not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with this Indenture and the Basic Documents.
SECTION 3.19 Notice of Events of Default. Upon a responsible officer
of the Owner Trustee having actual knowledge thereof, the Issuer agrees to give
the Trustee, the Security Insurer and the Rating Agencies prompt written notice
of each Event of Default hereunder and each default on the part of the Servicer
or the Seller of its obligations under the Sale and Servicing Agreement.
SECTION 3.20 Further Instruments and Acts. Upon request of the
Trustee or the Security Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to any amendment to Section 12.1 of the
Sale and Servicing Agreement or Section 13.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.
SECTION 3.22 Income Tax Characterization. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness and hereby instructs the Trustee to
treat the Notes as indebtedness for all applicable tax reporting purposes.
ARTICLE IV
Satisfaction and Discharge
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SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Section 6.7 and the obligations of the Trustee under Section 4.2) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.5 and (ii) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section
3.3) have been delivered to the Trustee for cancellation and the
Note Policy has expired and been returned to the Security Insurer
for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective
Final Scheduled Distribution Dates within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Trust Collateral Agent cash or direct obligations of or obligations
guaranteed by the United States of America (which
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will mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation when due to the Final Scheduled
Distribution Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.1(a)), as the case may
be;
(B) the Issuer has paid or caused to be paid all Insurer Issuer
Secured Obligations and all Trustee Issuer Secured Obligations; and
(C) the Issuer has delivered to the Trustee, the Trust Collateral
Agent and the Security Insurer an Officer's Certificate, an Opinion of
Counsel and if required by the TIA, the Trustee, the Trust Collateral
Agent or the Security Insurer (so long as an Insurer Default shall not
have occurred and be continuing) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with
the Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
3.3 and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
ARTICLE V
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Remedies
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days (solely for purposes of this clause, a payment on the Notes
funded by the Security Insurer or the Collateral Agent pursuant to the
Spread Account Agreement shall be deemed to be a payment made by the
Issuer); or
(ii) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable (solely
for purposes of this clause, a payment on the Notes funded by the Security
Insurer or the Collateral Agent pursuant to the Spread Account Agreement,
shall be deemed to be a payment made by the Issuer); or
(iii) so long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Indenture Cross Default shall have
occurred; provided, however, that the occurrence of an Insurance Agreement
Cross Default may not form the basis of an Event of Default unless the
Security Insurer shall, upon prior written notice to the Rating Agencies,
have delivered to the Issuer and the Trustee and not rescinded a written
notice specifying that such Insurance Agreement Indenture Cross Default
constitutes an Event of Default under the Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any representation
or warranty of the Issuer made in this Indenture or in any certificate or
other writing delivered pursuant hereto or in connection herewith proving
to have been incorrect in any material respect as of the time when the
same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of
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30 days (or for such longer period, not in excess of 90 days, as may be
reasonably necessary to remedy such default; provided that such default is
capable of remedy within 90 days or less and the Servicer on behalf of the
Owner Trustee delivers an Officer's Certificate to the Trustee to the
effect that the Issuer has commenced, or will promptly commence and
diligently pursue, all reasonable efforts to remedy such default) after
there shall have been given, by registered or certified mail, to the
Issuer by the Trustee or to the Issuer and the Trustee by the Holders of
at least 25% of the Outstanding Amount of the Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(v) so long as an Insurer Default shall have occurred and be
continuing, the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(vi) so long as an Insurer Default shall have occurred and be
continuing, the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.
The Issuer shall deliver to the Trustee and the Security Insurer,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
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SECTION 5.2 Rights Upon Event of Default. (a) If an Insurer Default
shall not have occurred and be continuing and an Event of Default shall have
occurred and be continuing, the Notes shall become immediately due and payable
at par, together with accrued interest thereon. If an Event of Default shall
have occurred and be continuing, the Controlling Party may exercise any of the
remedies specified in Section 5.4(a). In the event of any acceleration of any
Notes by operation of this Section 5.2, the Trustee shall continue to be
entitled to make claims under the Note Policy pursuant to the Sale and Servicing
Agreement for Scheduled Payments on the Notes. Payments under the Note Policy
following acceleration of any Notes shall be applied by the Trustee:
FIRST: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for interest; and
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal.
(b) In the event any Notes are accelerated due to an Event of
Default, the Security Insurer shall have the right (in addition to its
obligation to pay Scheduled Payments on the Notes in accordance with the Note
Policy), but not the obligation, to make payments under the Note Policy or
otherwise of interest and principal due on such Notes, in whole or in part, on
any date or dates following such acceleration as the Security Insurer, in its
sole discretion, shall elect.
(c) If an Insurer Default shall have occurred and be continuing and
an Event of Default shall have occurred and be continuing, the Trustee in its
discretion may, or if so requested in writing by Holders holding Notes
representing not less than a majority of the Outstanding Amount of the Notes,
declare by written notice to the Issuer that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon.
(d) If an Insurer Default shall have occurred and be continuing,
then at any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the Holders
of Notes representing a majority of the Outstanding Amount of the Notes, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
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(i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. (a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer will, upon demand of the Trustee, pay to it,
for the benefit of the Holders of the Notes, the whole amount then due and
payable on such Notes for principal and interest, with interest upon the overdue
principal, and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest, at the applicable Interest
Rate and in addition thereto such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Controlling Party, with full power of substitution, to execute, acknowledge and
deliver any notice, document, certificate, paper, pleading or instrument and to
do in the name of the Controlling Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the name of such Issuer Secured Party under this Indenture (including
specifically under Section 5.4) and under the Basic Documents which such Issuer
Secured
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Party could or might do or which may be necessary, desirable or convenient in
such Controlling Party's sole discretion to effect the purposes contemplated
hereunder and under the Basic Documents and, without limitation, following the
occurrence of an Event of Default, exercise full right, power and authority to
take, or defer from taking, any and all acts with respect to the administration,
maintenance or disposition of the Trust Estate.
(c) If an Event of Default occurs and is continuing, the Trustee may
in its discretion but with the consent of the Controlling Party and shall, at
the direction of the Controlling Party (except as provided in Section 5.3(d)
below), proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee or the Controlling
Party shall deem most effective to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Trustee by this
Indenture or by law.
(d) Notwithstanding anything to the contrary contained in this
Indenture (including without limitation Sections 5.4(a), 5.12, 5.13 and 5.17)
and regardless of whether an Insurer Default shall have occurred and be
continuing, if the Issuer fails to perform its obligations under Section 10.1(b)
hereof when and as due, the Trustee may in its discretion (and without the
consent of the Controlling Party) proceed to protect and enforce its rights and
the rights of the Noteholders by such appropriate proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law;
provided that the Trustee shall only be entitled to take any such actions
without the consent of the Controlling Party to the extent such actions (x) are
taken only to enforce the Issuer's obligations to redeem the principal amount of
Notes and (y) are taken only against the portion of the Collateral, if any,
consisting of the Pre-Funding Account, the Capitalized Interest Account, any
investments therein and any proceeds thereof.
(e) In case there shall be pending, relative to the Issuer or any
other obliger upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or
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similar official shall have been appointed for or taken possession of the Issuer
or its property or such other obliger or Person, or in case of any other
comparable judicial proceedings relative to the Issuer or other obliger upon the
Notes, or to the creditors or property of the Issuer or such other obliger, the
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence,
bad faith or willful misconduct) and of the Noteholders allowed in such
proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all
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advances made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith.
(f) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
(g) All rights of action and of asserting claims under this
Indenture, the Spread Account Agreement or under any of the Notes, may be
enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(h) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture or
the Spread Account Agreement), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Noteholder a
party to any such proceedings.
SECTION 5.4 Remedies. (a) If an Event of Default shall have occurred
and be continuing, the Controlling Party may do one or more of the following
(subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Trustee and the Holders of the Notes; and
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(iv) direct the Trust Collateral Agent to sell the Trust Estate
or any portion thereof or rights or interest therein, at one or more
public or private sales called and conducted in any manner permitted by
law; provided, however, that
(A) if the Security Insurer is the Controlling Party, the
Security Insurer may not sell or otherwise liquidate the Trust
Estate following an Insurance Agreement Indenture Cross Default
unless
(I) such Insurance Agreement Indenture Cross Default
arises from a claim being made on the Note Policy or from the
insolvency of the Trust or the Seller, or
(II) the proceeds of such sale or liquidation distributable
to the Noteholders are sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal and
interest; or
(B) if the Trustee is the Controlling Party, the Trustee may
not sell or otherwise liquidate the Trust Estate following an Event
of Default unless
(I) such Event of Default is of the type
described in Section 5.01(i) or (ii), or
(II) either
(x) the Holders of 100% of the Outstanding Amount of the
Notes consent thereto,
(y) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such
Notes for principal and interest, or
(z) the Trustee determines that the Trust Estate will
not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and
payable, and the Trustee provides prior written notice to
the Rating Agencies and obtains the consent of Holders of
66-2/3% of the Outstanding Amount of the Notes.
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In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
SECTION 5.5 Optional Preservation of the Receivables. If the Trustee
is the Controlling Party and if the Notes have been declared to be due and
payable under Section 5.2 following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, the Trustee may, but need
not, elect to direct the Trust Collateral Agent to maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Trustee shall take such desire into account when
determining whether or not to direct the Trust Collateral Agent to maintain
possession of the Trust Estate. In determining whether to direct the Trust
Collateral Agent to maintain possession of the Trust Estate, the Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.6 Priorities.
(a) Following (1) the acceleration of the Notes pursuant to Section
5.2 or (2) if an Insurer Default shall have occurred and be continuing, the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iv),
5.1(v) or 5.1(vi) of the Indenture or (3) the receipt of Insolvency Proceeds
pursuant to Section 10.1(b) of the Sale and Servicing Agreement, the
Distribution Amount, including any money or property collected pursuant to
Section 5.4 of the Indenture and any such Insolvency Proceeds, shall be applied
by the Trust Collateral Agent on the related Distribution Date in the following
order of priority:
FIRST: amounts due and owing and required to be distributed to the
Servicer, the Owner Trustee, the Trustee, the Collateral Agent, Back Up
Servicer and the Trust Collateral Agent, respectively, pursuant to
priorities (i) and (ii) of Section 5.7(b) of the Sale and Servicing
Agreement and not previously distributed, in the order of such priorities
and without preference or priority of any kind within such priorities;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or
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priority of any kind, according to the amounts due and payable on
the Notes for interest;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal;
FOURTH: amounts due and owing and required to be distributed to the
Security Insurer pursuant to priority (v) of Section 5.7(b) of the Sale
and Servicing Agreement and not previously distributed); and
FIFTH: to the Collateral Agent to be applied as provided in the
Spread Account Agreement;
provided that any amounts collected from the Pre-Funding Account or the
Capitalized Interest Account shall be paid, first, for amounts due and unpaid on
the Notes for principal for distribution to Noteholders in accordance with
Section 10.1(b) and, second, in accordance with priorities ONE through FIFTH
above.
(b) The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to each Noteholder and the Trustee a notice
that states the record date, the payment date and the amount to be paid.
SECTION 5.7 Limitation of Suits. No Holder of any Note shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to the Trustee to institute such
proceeding in respect of such Event of Default in its own name as Trustee
hereunder;
(iii) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities
to be incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such proceedings;
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(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be continuing;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies. If the Controlling
Party or any Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Controlling Party or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative
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and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 Delay or Omission Not a Waiver. No delay or omission of
the Controlling Party or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.12 Control by Noteholders. If the Trustee is the
Controlling Party, the Holders of a majority of the Outstanding Amount of the
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to the Notes
or exercising any trust or power conferred on the Trustee; provided that
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction
to the Trustee to sell or liquidate the Trust Estate shall be by the
Holders of Notes representing not less than 100% of the Outstanding Amount
of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to sell
or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
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Section 5.13 Waiver of Past Defaults. If an Insurer Default shall
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.4, the Holders of Notes of not
less than a majority of the Outstanding Amount of the Notes may waive any past
Default or Event of Default and its consequences except a Default (a) in payment
of principal of or interest on any of the Notes or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
the Holder of each Note. In the case of any such waiver, the Issuer, the Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.14 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent
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that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 5.16 Action on Notes. The Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Trust Estate or upon any of the assets of
the Issuer.
SECTION 5.17 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Trustee to do so and at the Servicer's
expense, the Issuer agrees to take all such lawful action as the Trustee may
request to compel or secure the performance and observance by the Seller and the
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Sale and Servicing Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the Servicer of
each of their obligations under the Sale and Servicing Agreement.
(b) If the Trustee is a Controlling Party and if an Event of Default
has occurred and is continuing, the Trustee may, and, at the written direction
of the Holders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement,
and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
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The Trustee and the Trust Collateral Agent
SECTION 6.1 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and the Basic Documents and use the same degree
of care and skill in its exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of
Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
however, the Trustee shall examine the certificates and opinions to
determine whether or not they conform on their face to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by
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law or the terms of this Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(h) The Trustee shall, upon one Business Day's prior notice to the
Trustee, permit any representative of the Security Insurer, during the Trustee's
normal business hours, to examine all books of account, records, reports and
other papers of the Trustee relating to the Notes, to make copies and extracts
therefrom and to discuss the Trustee's affairs and actions, as such affairs and
actions relate to the Trustee's duties with respect to the Notes, with the
Trustee's officers and employees responsible for carrying out the Trustee's
duties with respect to the Notes.
(i) The Trustee shall, and hereby agrees that it will, perform all
of the obligations and duties required of it under the Sale and Servicing
Agreement.
(j) The Trustee shall, and hereby agrees that it will, hold the Note
Policy in trust, and will hold any proceeds of any claim on the Note Policy in
trust solely for the use and benefit of the Noteholders.
(k) Without limiting the generality of this Section 6.1, the Trustee
shall have no duty (i) to see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Financed Vehicles, or to see to the
maintenance of any such recording or filing or depositing or to any recording,
refiling or redepositing of any thereof, (ii) to see to any insurance of the
Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii)
to see to the payment or discharge of any tax, assessment or other governmental
charge or any Lien or encumbrance of any kind owing with respect to, assessed or
levied against any part of the Trust, (iv) to confirm or verify the contents of
any reports or certificates delivered to the Trustee pursuant to this Indenture
or the Sale and Servicing Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or
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parties, or (v) to inspect the Financed Vehicles at any time or ascertain or
inquire as to the performance of observance of any of the Issuer's, the Seller's
or the Servicer's representations, warranties or covenants or the Servicer's
duties and obligations as Servicer and as custodian of the Receivable Files
under the Sale and Servicing Agreement.
(l) In no event shall LaSalle National Bank, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Business Trust Statute, common law, or the Trust Agreement.
SECTION 6.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of,
AmeriCredit Financial Services, Inc., or any other such agent, attorney,
custodian or nominee appointed with due care by it hereunder.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to institute, conduct
or defend any litigation under this Indenture or in relation to this Indenture,
at the request, order or direction of any of the Holders of Notes or the
Controlling Party, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Controlling
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Party shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred therein or thereby;
provided, however, that the Trustee shall, upon the occurrence of an Event of
Default (that has not been cured), exercise the rights and powers vested in it
by this Indenture with reasonable care and skill.
(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Security
Insurer (so long as no Insurer Default shall have occurred and be continuing) or
(if an Insurer Default shall have occurred and be continuing) by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Estate or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults. If an Event of Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default within 90 days
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after such knowledge or notice occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Trustee to Holders. The Trustee shall on
deliver to each Noteholder such information as may be reasonably required to
enable such Holder to prepare its Federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity. (a) Pursuant to Section
5.7(b) of the Sale and Servicing Agreement, the Issuer shall, or shall cause the
Servicer to, pay to the Trustee from time to time compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall or shall cause the Servicer to
reimburse the Trustee and the Trust Collateral Agent for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's and the Trust Collateral Agent's agents, counsel, accountants and
experts. The Issuer shall or shall cause the Servicer to indemnify the Trustee,
the Trust Collateral Agent and their respective officers, directors, employees
and agents against any and all loss, liability or expense (including attorneys'
fees and expenses) incurred by each of them in connection with the acceptance or
the administration of this trust and the performance of its duties hereunder.
The Trustee or Trust Collateral Agent shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Trustee or
Trust Collateral Agent to so notify the Issuer and the Servicer shall not
relieve the Issuer of its obligations hereunder or the Servicer of its
obligations under Article XII of the Sale and Servicing Agreement. The Issuer
shall or shall cause the Servicer to defend the claim, the Trustee or Trust
Collateral Agent may have separate counsel and the Issuer shall or shall cause
the Servicer to pay the fees and expenses of such counsel. Neither the Issuer
nor the Servicer need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee or Trust Collateral Agent through
the Trustee's or Trust Collateral Agent's own wilful misconduct, negligence or
bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(v) or (vi)
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with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Basic Documents, the Trustee agrees that
the obligations of the Issuer (but not the Servicer) to the Trustee hereunder
and under the Basic Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of the Certificateholder or any
Noteholder. In addition, the Trustee agrees that its recourse to the Issuer, the
Trust Estate, the Seller and amounts held pursuant of the Spread Account
Agreement shall be limited to the right to receive the distributions referred to
in Section 5.7(b) of the Sale and Servicing Agreement.
SECTION 6.8 Replacement of Trustee. The Trustee may resign at any
time by so notifying the Issuer and the Security Insurer. The Issuer may and, at
the request of the Security Insurer (unless an Insurer Default shall have
occurred and be continuing) shall, remove the Trustee, if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of
the Trustee in an involuntary case or proceeding under federal or state
banking or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Trustee or for any substantial
part of the Trustee's property, or ordering the winding-up or liquidation
of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, or consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, conservator, sequestrator (or
other similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of
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creditors or fails generally to pay its debts as such debts become due or
takes any corporate action in furtherance of any of the foregoing; or
(v) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing). If the Issuer fails to appoint such a
successor Trustee, the Security Insurer may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee the Security Insurer (provided that no
Insurer Default shall have occurred and be continuing) and to the Issuer.
Thereupon the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the retiring Trustee under this Indenture subject to satisfaction of
the Rating Agency Condition. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 6.8 and payment of all fees and expenses owed to the
outgoing Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
Issuer's and the Servicer's obligations under Section 6.7 shall continue for the
benefit of the retiring Trustee.
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SECTION 6.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee with the consent of the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being
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understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
invest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11 Eligibility: Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
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recent published annual report of condition and it shall have a long term debt
rating of BBB- or better by the Rating Agencies. The Trustee shall provide
copies of such reports to the Security Insurer upon request. The Trustee shall
comply with TIA ss. 310(b), including the optional provision permitted by the
second sentence of TIA ss. 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
SECTION 6.13 Appointment and Powers. Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints LaSalle
National Bank as the Trust Collateral Agent with respect to the Collateral, and
LaSalle National Bank hereby accepts such appointment and agrees to act as Trust
Collateral Agent with respect to the Indenture Collateral for the Issuer Secured
Parties, to maintain custody and possession of such Indenture Collateral (except
as otherwise provided hereunder) and to perform the other duties of the Trust
Collateral Agent in accordance with the provisions of this Indenture and the
other Basic Documents. Each Issuer Secured Party hereby authorizes the Trust
Collateral Agent to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Trust Collateral Agent
by the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Trust Collateral Agent
shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Trust Collateral Agent
shall not act in accordance with any instructions (i) which are not authorized
by, or in violation of the provisions of, this Indenture, (ii) which are in
violation of any applicable law, rule or regulation or (iii) for which the Trust
Collateral Agent has not received reasonable indemnity. Receipt of such
instructions shall not be a condition to the exercise by the Trust Collateral
Agent of its express duties hereunder, except where this Indenture provides that
the Trust Collateral Agent is permitted to act only following and in accordance
with such instructions.
SECTION 6.14 Performance of Duties. The Trust Collateral Agent shall
have no duties or responsibilities
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except those expressly set forth in this Indenture and the other Basic Documents
to which the Trust Collateral Agent is a party or as directed by the Controlling
Party in accordance with this Indenture. The Trust Collateral Agent shall not be
required to take any discretionary actions hereunder except at the written
direction and with the indemnification of the Controlling Party. The Trust
Collateral Agent shall, and hereby agrees that it will, perform all of the
duties and obligations required of it under the Sale and Servicing Agreement.
SECTION 6.15 Limitation on Liability. Neither the Trust Collateral
Agent nor any of its directors, officers or employees shall be liable for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Trust Collateral Agent shall be liable for its
negligence, bad faith or willful misconduct; nor shall the Trust Collateral
Agent be responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Issuer of this Indenture or any of the Indenture
Collateral (or any part thereof). Notwithstanding any term or provision of this
Indenture, the Trust Collateral Agent shall incur no liability to the Issuer or
the Issuer Secured Parties for any action taken or omitted by the Trust
Collateral Agent in connection with the Indenture Collateral, except for the
negligence, bad faith or willful misconduct on the part of the Trust Collateral
Agent, and, further, shall incur no liability to the Issuer Secured Parties
except for negligence, bad faith or willful misconduct in carrying out its
duties to the Issuer Secured Parties. Subject to Section 6.16, the Trust
Collateral Agent shall be protected and shall incur no liability to any such
party in relying upon the accuracy, acting in reliance upon the contents, and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Trust Collateral Agent
to be genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge to the contrary) the Trust Collateral Agent shall not
be required to make any independent investigation with respect thereto. The
Trust Collateral Agent shall at all times be free independently to establish to
its reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Basic
Documents. The Trust Collateral Agent may consult with counsel, and shall not be
liable for any action taken or omitted to be taken by it hereunder in good faith
and in accordance with the written advice of such counsel. The Trust Collateral
Agent shall not be under any obligation to exercise any of the remedial rights
or powers vested in it by this Indenture or to follow any direction from the
Controlling Party unless it shall have received reasonable security or indemnity
satisfactory to the Trust Collateral Agent against
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the costs, expenses and liabilities which might be incurred by it.
SECTION 6.16 Reliance Upon Documents. In the absence of negligence,
bad faith or willful misconduct on its part, the Trust Collateral Agent shall be
entitled to rely on any communication, instrument, paper or other document
reasonably believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons and shall have no liability in acting, or
omitting to act, where such action or omission to act is in reasonable reliance
upon any statement or opinion contained in any such document or instrument.
SECTION 6.17 Successor Trust Collateral Agent.
(a) Merger. Any Person into which the Trust Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Trust Collateral Agent is a party, shall (provided
it is otherwise qualified to serve as the Trust Collateral Agent hereunder) be
and become a successor Trust Collateral Agent hereunder and be vested with all
of the title to and interest in the Indenture Collateral and all of the trusts,
powers, discretions, immunities, privileges and other matters as was its
predecessor without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, except to the extent, if any, that any
such action is necessary to perfect, or continue the perfection of, the security
interest of the Issuer Secured Parties in the Indenture Collateral; provided
that any such successor shall also be the successor Trustee under Section 6.9.
(b) Resignation. The Trust Collateral Agent and any successor Trust
Collateral Agent may resign at any time by so notifying the Issuer and the
Security Insurer; provided that the Trust Collateral Agent shall not so resign
unless it shall also resign as Trustee hereunder.
(c) Removal. The Trust Collateral Agent may be removed by the
Controlling Party at any time (and should be removed at any time that the
Trustee has been removed), with or without cause, by an instrument or concurrent
instruments in writing delivered to the Trust Collateral Agent, the other Issuer
Secured Party and the Issuer. A temporary successor may be removed at any time
to allow a successor Trust Collateral Agent to be appointed pursuant to
subsection (d) below. Any removal pursuant to the provisions of this subsection
(c) shall take effect only upon the date which is
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the latest of (i) the effective date of the appointment of a successor Trust
Collateral Agent and the acceptance in writing by such successor Trust
Collateral Agent of such appointment and of its obligation to perform its duties
hereunder in accordance with the provisions hereof, and (ii) receipt by the
Controlling Party of an Opinion of Counsel to the effect described in Section
3.6.
(d) Acceptance by Successor. The Controlling Party shall have the
sole right to appoint each successor Trust Collateral Agent. Every temporary or
permanent successor Trust Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Trustee, each Issuer
secured Party and the Issuer an instrument in writing accepting such appointment
hereunder and the relevant predecessor shall execute, acknowledge and deliver
such other documents and instruments as will effectuate the delivery of all
Indenture Collateral to the successor Trust Collateral Agent, whereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and obligations
of its predecessor. Such predecessor shall, nevertheless, on the written request
of either Issuer Secured Party or the Issuer, execute and deliver an instrument
transferring to such successor all the estates, properties, rights and powers of
such predecessor hereunder. In the event that any instrument in writing from the
Issuer or an Issuer Secured Party is reasonably required by a successor Trust
Collateral Agent to more fully and certainly vest in such successor the estates,
properties, rights, powers, duties and obligations vested or intended to be
vested hereunder in the Trust Collateral Agent, any and all such written
instruments shall, at the request of the temporary or permanent successor Trust
Collateral Agent, be forthwith executed, acknowledged and delivered by the
Trustee or the Issuer, as the case may be. The designation of any successor
Trust Collateral Agent and the instrument or instruments removing any Trust
Collateral Agent and appointing a successor hereunder, together with all other
instruments provided for herein, shall be maintained with the records relating
to the Indenture Collateral and, to the extent required by applicable law, filed
or recorded by the successor Trust Collateral Agent in each place where such
filing or recording is necessary to effect the transfer of the Indenture
Collateral to the successor Trust Collateral Agent or to protect or continue the
perfection of the security interests granted hereunder.
SECTION 6.18 Compensation. The Trust Collateral Agent shall not be
entitled to any compensation for the performance of its duties hereunder other
than the compensation it is entitled to receive in its capacity as Trustee.
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SECTION 6.19 Representations and Warranties of the Trust Collateral
Agent. The Trust Collateral Agent represents and warrants to the Issuer and to
each Issuer Secured Party as follows:
(a) Due Organization. The Trust Collateral Agent is a national
banking association, duly organized, validly existing and in good standing under
the laws of the United States and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.
(b) Corporate Power. The Trust Collateral Agent has all requisite
right, power and authority to execute and deliver this Indenture and to perform
all of its duties as Trust Collateral Agent hereunder.
(c) Due Authorization. The execution and delivery by the Trust
Collateral Agent of this Indenture and the other Transaction Documents to which
it is a party, and the performance by the Trust Collateral Agent of its duties
hereunder and thereunder, have been duly authorized by all necessary corporate
proceedings and no further approvals or filings, including any governmental
approvals, are required for the valid execution and delivery by the Trust
Collateral Agent, or the performance by the Trust Collateral Agent, of this
Indenture and such other Basic Documents.
(d) Valid and Binding Indenture. The Trust Collateral Agent has duly
executed and delivered this Indenture and each other Basic Document to which it
is a party, and each of this Indenture and each such other Basic Document
constitutes the legal, valid and binding obligation of the Trust Collateral
Agent, enforceable against the Trust Collateral Agent in accordance with its
terms, except as (i) such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
SECTION 6.20 Waiver of Setoffs. The Trust Collateral Agent hereby
expressly waives any and all rights of setoff that the Trust Collateral Agent
may otherwise at any time have under applicable law with respect to any Trust
Account and agrees that amounts in the Trust Accounts shall at all times be held
and applied solely in accordance with the provisions hereof.
SECTION 6.21 Control by the Controlling Party. The Trust Collateral
Agent shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party, except that if any
Event of Default shall have occurred and be continuing, the
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Trust Collateral Agent shall act upon and comply with notices and instructions
given by the Controlling Party alone in the place and stead of the Issuer.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish To Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such Record
Date, (b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Note Registrar,
no such list shall be required to be furnished. The Trustee or, if the Trustee
is not the Note Registrar, the Issuer shall furnish to the Security Insurer in
writing on an annual basis on each March 31 and at such other times as the
Security Insurer may request a copy of the list.
SECTION 7.2 Preservation of Information; Communications to
Noteholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
SECTION 7.3 Reports by Issuer. (a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe)
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which the Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance
by the Issuer with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Noteholders described in TIA ss. 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) as may be required
by rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.4 Reports by Trustee. If required by TIA ss. 313(a),
within 60 days after each November 30, beginning with November 30, 1997, the
Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a brief
report dated as of such date that complies with TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders
shall be filed by the Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Trustee if and
when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trust Collateral Agent pursuant to this Indenture and the Sale
and Servicing Agreement. The Trustee shall apply all such money received by it,
or cause the Trust Collateral Agent to apply all money received by it as
provided in this Indenture and the Sale and Servicing Agreement. Except as
otherwise expressly provided
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in this Indenture or in the Sale and Servicing Agreement, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.7, the Trust Collateral Agent may,
and when required by the provisions of this Indenture shall, execute instruments
to release property from the lien of this Indenture, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Trust Collateral Agent as
provided in this Article VIII shall be bound to ascertain the Trust Collateral
Agent's authority, inquire into the satisfaction of any conditions precedent or
see to the application of any moneys.
(b) The Trust Collateral Agent shall, at such time as there are no
Notes outstanding and all sums due the Trustee pursuant to Section 6.7 have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Trust Accounts. The Trustee
shall release property from the lien of this Indenture pursuant to this Section
8.2(b) only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA ss.ss. 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.
SECTION 8.3 Opinion of Counsel. The Trust Collateral Agent shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.2(a), accompanied by copies of any instruments
involved, and the Trustee shall also require as a condition to such action, an
Opinion of Counsel in form and substance satisfactory to the Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation,
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on the accuracy and validity of any certificate or other instrument delivered to
the Trustee in connection with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with the consent of the
Security Insurer (unless an Insurer Default shall have occurred and be
continuing) and with prior notice to the Rating Agencies by the Issuer, as
evidenced to the Trustee, the Issuer and the Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Trust Collateral Agent any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Trust Collateral Agent;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action
shall not adversely affect the interests of the Holders of the Notes;
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(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as
may be expressly required by the TIA.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with prior
notice to the Rating Agencies by the Issuer, as evidenced to the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies, with the consent of the Security Insurer (unless
an Insurer Default shall have occurred and be continuing) and with the consent
of the Holders of not less than a majority of the outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that, subject to
the express rights of the Security Insurer under the Basic Documents, no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the
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principal amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provision of this Indenture
relating to the application of collections on, or the proceeds of the sale
of, the Trust Estate to payment of principal of or interest on the Notes,
or change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or liquidate
the Trust Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vii) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Holders of Notes to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein or
in any of
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the Basic Documents, terminate the lien of this Indenture on any property
at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture.
The Trustee may determine whether or not any Notes would be affected
by any supplemental indenture and any such determination shall be conclusive
upon the Holders of all Notes, whether theretofore or thereafter authenticated
and delivered hereunder. The Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
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SECTION 9.5 Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Seller pursuant to Section
10.1(a) of the Sale and Servicing Agreement, on any Distribution Date on which
the Servicer exercises its option to purchase the Trust Estate pursuant to said
Section 10.1(a), for a purchase price equal to the Redemption Price; provided,
however, that the Issuer has available funds sufficient to pay the Redemption
Price. The Servicer or the Issuer shall furnish the Security Insurer and the
Rating Agencies notice of such redemption. If the Notes are to be redeemed
pursuant to this Section 10.1(a), the Servicer or the Issuer shall furnish
notice of such election to the Trustee not later than 35 days prior to the
Redemption Date and the Issuer shall deposit with the Trustee in the Note
Distribution Account the Redemption Price of the Notes to be redeemed whereupon
all such Notes shall be due and payable on the Redemption Date upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes.
(b) In the event that on the Distribution Date on which the Funding
Period ends (or on the Distribution Date on or immediately following the last
day of the Funding Period, if the Funding Period does not end on a Distribution
Date), the Pre-Funded Amount after giving effect to the purchase of all
Subsequent Receivables, including any such purchase on such Redemption Date, the
Notes will be redeemed in part, on a pro rata basis, in an aggregate principal
amount equal to the Class A-1 Prepayment Amount, the Class A-2 Prepayment Amount
and the Class A-3 Prepayment Amount.
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(c) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon. If amounts are
to be paid to Noteholders pursuant to this Section 10.1(c), the Servicer or the
Issuer shall, to the extent practicable, furnish notice of such event to the
Trustee not later than 45 days prior to the Redemption Date whereupon all such
amounts shall be payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice. (a) Notice of redemption
under Section 10.1(a) shall be given by the Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes and the place where such Notes
are to be surrendered for payment of the Redemption Price (which shall be
the office or agency of the Issuer to be maintained as provided in Section
3.2); and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption of the Notes shall be given by the Trustee in
the name and at the expense of the Issuer. Failure to give notice of redemption,
or any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the
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date to which accrued interest is calculated for purposes of calculating the
Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Trustee or the Trust Collateral
Agent to take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee or the Trust Collateral Agent, as the case may be, and to
the Security Insurer if the application or request is made to the Trust
Collateral Agent (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Trust Collateral Agent
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that is to be made the basis for the release of any property or securities
subject to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.1(a) or elsewhere in this Indenture, furnish to
the Trust Collateral Agent and the Security Insurer an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Trust
Collateral Agent and the Security Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the Trust
Collateral Agent and the Security Insurer an Independent Certificate as to
the same matters, if the fair value to the Issuer of the securities to be
so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than 1% percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or securities
are to be released from the lien of this Indenture, the Issuer shall also
furnish to the Trust Collateral Agent and the Security Insurer an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair
the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee and
the Security Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Trust Collateral Agent and the
Security Insurer an Independent Certificate as to the same matters if the
fair value of the property or securities and of all other property other
than Purchased Receivables and Defaulted Receivables, or securities
released from the lien of this
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Indenture since the commencement of the then current calendar year, as set
forth in the certificates required by clause (iii) above and this clause
(iv), equals 10% or more of the Outstanding Amount of the Notes, but such
certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than 1 percent of the
then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
of Receivables as and to the extent permitted or required by the Basic
Documents and (B) make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4 Notices. etc. to Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or
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other documents provided or permitted by this Indenture to be made upon, given
or furnished to or filed with:
(a) The Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Trustee at its Corporate
Trust Office, or
(b) The Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
deemed to have been duly given upon receipt to the Issuer addressed to:
AmeriCredit Automobile Receivables Trust 1997-B, in care of Bankers Trust
(Delaware) 1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801
Attention: Lisa Wilkins, with a copy to Bankers Trust Company, 4 Albany Street,
New York, New York 10006, Attention: Corporate Trust Agency, or at any other
address previously furnished in writing to the Trustee by Issuer. The Issuer
shall promptly transmit any notice received by it from the Noteholders to the
Trustee.
(c) The Security Insurer by the Issuer or the Trustee shall be
sufficient for any purpose hereunder if in writing and mailed by registered mail
or personally delivered or telexed or telecopied to the recipient as follows:
To the Security Insurer: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Telex No.: (212) 688-3101
Confirmation: (212)826-0100
Telecopy Nos.: (212)339-3518 or
(212) 339-3529
(In each case in which notice or other communication to the Security Insurer
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of the Security Insurer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head--Financial Guaranty Group "URGENT MATERIAL ENCLOSED.")
Notices required to be given to the Rating Agencies
by the Issuer, the Trustee or the Owner Trustee shall be in
writing, personally delivered, delivered by overnight courier
or mailed certified mail, return receipt requested to (i) in
the case of Moody's, at the following address: Moody's
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Investors Service, Inc., 99 Church Street, New York, New York 10004 and (ii) in
the case of S&P, at the following address: Standard & Poor's Ratings Services,
26 Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner here
in provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Trustee or any Paying Agent
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices, provided that
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such methods are reasonable and consented to by the Trustee (which consent shall
not be unreasonably withheld). The Issuer will furnish to the Trustee a copy of
each such agreement and the Trustee will cause payments to be made and notices
to be given in accordance with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ss.ss. 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of the Trust Collateral
Agent in this Indenture shall bind its successors.
SECTION 11.10 Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. The Security Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other person with an Ownership interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Security Insurer may disclaim any of its rights and powers
under this Indenture (in which case the Indenture Trustee may exercise such
right or power hereunder), but not its duties and obligations under
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the Note Policy, upon delivery of a written notice to the Trustee.
SECTION 11.12 Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee and the Security Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
person secured hereunder or for the enforcement of any right or remedy granted
to the Trustee or the Trust Collateral Agent under this Indenture or the
Collateral Agent under the Spread Account Agreement.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Owner Trustee or the Trustee on the Notes or under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith, against (i) the Seller, the Servicer, the Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Seller, the Servicer, the Trustee or the Owner Trustee
in its individual capacity, any holder of a beneficial interest in the Issuer,
the Seller, the Servicer, the Owner Trustee or the Trustee or of any successor
or assign of the Seller, the Servicer, the Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee and the
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Owner Trustee have no such obligations in their individual capacity) and except
that any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.
SECTION 11.17 No Petition. The Trustee and the Trust Collateral
Agent, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against
the Seller, or the Issuer, or join in any institution against the Seller, or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the Basic Documents.
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Trustee or of the
Security Insurer, during the Issuer's normal business hours, to examine all the
books of account, records, reports, and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its Obligations hereunder.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1997-B,
By: BANKERS TRUST (DELAWARE), not
in its individual capacity but
solely as Owner Trustee,
By:
----------------------------------
Name:
Title:
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Trustee and Trust Collateral Agent,
By:
----------------------------------
Name: Shashank Mishra
Title: Vice President
[Indenture]
- --------------------------------------------------------------------------------
TRUST AGREEMENT
between
AFS FUNDING CORP.
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of May 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. Definitions...................................... 1
SECTION 1.1. Capitalized Terms................................ 1
SECTION 1.2. Other Definitional Provisions.................... 3
ARTICLE II. Organization..................................... 4
SECTION 2.1. Name............................................. 4
SECTION 2.2. Office........................................... 4
SECTION 2.3. Purposes and Powers.............................. 4
SECTION 2.4. Appointment of Owner Trustee..................... 5
SECTION 2.5. Initial Capital Contribution of Trust
Estate........................................... 5
SECTION 2.6. Declaration of Trust............................. 6
SECTION 2.7. Title to Trust Property.......................... 6
SECTION 2.8. Situs of Trust................................... 6
SECTION 2.9. Representations and Warranties of the
Depositor........................................ 6
SECTION 2.10. Covenants of the Certificateholder............... 8
SECTION 2.11. Federal income tax treatment of the
Trust............................................ 8
ARTICLE III. Certificate and Transfer of Interest..................... 9
SECTION 3.1. Initial Ownership................................ 9
SECTION 3.2. The Certificate.................................. 9
SECTION 3.3. Authentication of Certificate.................... 9
SECTION 3.4. Registration of Transfer and Exchange
of Certificate................................... 10
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates..................................... 10
SECTION 3.6. Persons Deemed Certificateholders................ 11
SECTION 3.7. Maintenance of Office or Agency.................. 11
SECTION 3.8. Disposition In Whole But Not In Part............. 11
SECTION 3.9. ERISA Restrictions............................... 12
ARTICLE IV. Voting Rights and Other Actions................................ 12
SECTION 4.1. Prior Notice to Holder with Respect to
Certain Matters................................. 12
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SECTION 4.2. Action by Certificateholder with
Respect to Certain Matters....................... 13
SECTION 4.3. Restrictions on Certificateholder's
Power............................................ 13
SECTION 4.4. Rights of Security Insurer....................... 14
ARTICLE V. Authority and Duties of Owner Trustee.................... 14
SECTION 5.1. General Authority................................ 14
SECTION 5.2. General Duties................................... 14
SECTION 5.3. Action upon Instruction.......................... 15
SECTION 5.4. No Duties Except as Specified in this
Agreement or in Instructions..................... 16
SECTION 5.5. No Action Except under Specified
Documents or Instructions........................ 16
SECTION 5.6. Restrictions..................................... 17
ARTICLE VI. Concerning the Owner Trustee................................... 17
SECTION 6.1. Acceptance of Trusts and Duties.................. 17
SECTION 6.2. Furnishing of Documents.......................... 18
SECTION 6.3. Representations and Warranties................... 18
SECTION 6.4. Reliance; Advice of Counsel...................... 19
SECTION 6.5. Not Acting in Individual Capacity................ 20
SECTION 6.6. Owner Trustee Not Liable for
Certificate or Receivables....................... 20
SECTION 6.7. Owner Trustee May Own Notes...................... 20
SECTION 6.8. Payments from Owner Trust Estate................. 21
SECTION 6.9. Doing Business in Other Jurisdictions............ 21
ARTICLE VII. Compensation of Owner Trustee............................ 21
SECTION 7.1. Owner Trustee's Fees and Expenses................ 21
SECTION 7.2. Indemnification.................................. 22
SECTION 7.3. Payments to the Owner Trustee.................... 22
SECTION 7.4. Non-recourse Obligations......................... 22
ARTICLE VIII. Termination of Trust Agreement........................... 22
SECTION 8.1. Termination of Trust Agreement................... 22
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ARTICLE IX. Successor Owner Trustees and Additional Owner
Trustees................................................. 24
SECTION 9.1. Eligibility Requirements for Owner
Trustee.......................................... 24
SECTION 9.2. Resignation or Removal of Owner
Trustee.......................................... 24
SECTION 9.3. Successor Owner Trustee.......................... 25
SECTION 9.4. Merger or Consolidation of Owner
Trustee.......................................... 26
SECTION 9.5. Appointment of Co-Trustee or Separate
Trustee.......................................... 26
ARTICLE X. Miscellaneous............................................ 28
SECTION 10.1. Supplements and Amendments....................... 28
SECTION 10.2. No Legal Title to Owner Trust Estate in
Certificateholder................................ 29
SECTION 10.3. Limitations on Rights of Others.................. 29
SECTION 10.4. Notices.......................................... 29
SECTION 10.5. Severability..................................... 30
SECTION 10.6. Separate Counterparts............................ 30
SECTION 10.7. Assignments; Security Insurer.................... 30
SECTION 10.8. No Recourse...................................... 30
SECTION 10.9. Headings......................................... 31
SECTION 10.10. GOVERNING LAW.................................... 31
SECTION 10.11. Servicer......................................... 31
iii
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EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
iv
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TRUST AGREEMENT dated as of May 1, 1997 between AFS FUNDING CORP., a
Nevada corporation (the "Seller"), and Bankers Trust (Delaware), a Delaware
banking corporation as Owner Trustee.
ARTICLE I.
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"AmeriCredit" shall mean AmeriCredit Financial Services, Inc.
"Agreement" shall mean this Trust Agreement, as the same may be amended
and supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Certificate of Trust, the
Sale and Servicing Agreement, the Spread Account Agreement, the Spread Account
Agreement Supplement, the Insurance Agreement, the Indenture and the other
documents and certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 et. seq. as the same may be amended from time to
time.
"Certificate" means a trust certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A
attached hereto.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to Section 3.4.
<PAGE>
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at 1001
Jefferson Street, Suite 550, Wilmington, Delaware 19801, with a copy of all
notices and other documents to be also furnished to Bankers Trust Company, 4
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Group, Structured Finance, 10th floor, or at such other address as the Owner
Trustee may designate by notice to the Depositor, or the principal corporate
trust office of any successor Owner Trustee (the address of which the successor
owner trustee will notify the Depositor).
"Depositor" shall mean the Seller in its capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"Expenses" shall have the meaning assigned to such term in Section 7.2.
"Holder" or "Certificateholder" shall mean the Seller.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 7.2.
"Indenture" shall mean the Indenture dated as of May 1, 1997, among the
Issuer and LaSalle National Bank, as Trust Collateral Agent and Trustee, as the
same may be amended and supplemented from time to time.
"Owner Trust Estate" shall mean 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 Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Sale and
Servicing Agreement and the Spread Account Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to any Distribution Date, the close
of business on the last Business Day immediately preceding such Distribution
Date.
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"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
among the Trust, the Seller, AmeriCredit Financial Services, Inc. and the Trust
Collateral Agent, dated as of May 1, 1997, as the same may be amended and
supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Security Insurer" shall mean Financial Security Assurance Inc., or its
successor in interest.
"Spread Account" shall mean the Series Spread Account established and
maintained pursuant to the Spread Account Agreement.
"Spread Account Agreement" shall mean the Spread Account Agreement, dated
as of December 1, 1994 as amended and restated dated as of May 1, 1997, among
the Seller, the Security Insurer, and the Trust Collateral Agent, as the same
may be amended, supplemented or otherwise modified in accordance with the terms
thereof.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Collateral Agent" shall mean, initially, LaSalle National Bank, in
its capacity as collateral agent, including its successors in interest, until
and unless a successor Person shall have become the Trust Collateral Agent
pursuant to the Sale and Servicing Agreement, and thereafter "Trust Collateral
Agent" shall mean such successor Person.
SECTION 1.2. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Spread Account Agreement or in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
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<PAGE>
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II.
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as
"AmeriCredit Automobile Receivables Trust 1997-B", in which name the Owner
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.
SECTION 2.2. Office. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholder.
SECTION 2.3. Purposes and Powers. (a) The purpose of the Trust is, and the
Trust shall have the power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, and to sell the Notes;
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<PAGE>
(ii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account, the Capitalized Interest Account and the Spread
Account and to pay the organizational, start-up and transactional expenses
of the Trust and to pay the balance to the Depositor pursuant to the Sale
and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate to the Trust Collateral Agent pursuant to the Indenture for
the benefit of the Security Insurer and the Indenture Trustee on behalf of
the Noteholders and to hold, manage and distribute to the
Certificateholder pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Estate released from the Lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
Certificateholder and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate. The
Depositor shall pay organizational expenses of the Trust as they may arise.
5
<PAGE>
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Holder, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and to the extent not
inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
The Holder shall not have any personal liability for any liability or
obligation of the Trust.
SECTION 2.7. Title to Trust Property. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Holder shall not have legal title to any part of the Trust
Property. The Holder shall be entitled to receive distributions with respect to
its undivided ownership interest therein only in accordance with Article VIII.
No transfer, by operation of law or otherwise, of any right, title or interest
by the Certificateholder of its ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
SECTION 2.8. Situs of Trust. The Trust will be located and administered in
the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware, the State of
Illinois or the State of New York. Payments will be received by the Trust only
in Delaware or New York and payments will be made by the Trust only from
Delaware or New York. The Trust shall not have any employees in any state other
than Delaware; provided, however, that nothing herein shall restrict or prohibit
the Owner Trustee, the Servicer or any agent of the Trust from having employees
within or without the State of Delaware. The only office of the Trust will be at
the Corporate Trust Office in Delaware.
SECTION 2.9. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust
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and issuing the Certificate and upon which the Security Insurer relies in
issuing the Note Policy.
(a) Organization and Good Standing. The Depositor is duly organized and
validly existing as a Nevada corporation with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted and is proposed to be conducted
pursuant to this Agreement and the Basic Documents.
(b) Due Qualification. It 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 its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Basic Documents requires such qualification.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.
(d) No Consent Required. No consent, license, approval or authorization or
registration or declaration with, any Person or with any governmental authority,
bureau or agency is required in connection with the execution, delivery or
performance of this Agreement and the Basic Documents, except for such as have
been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Depositor, or any material indenture, agreement
or other instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
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(f) No Proceedings. There are no proceedings or investigations pending or,
to its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of
the Certificate or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax attributes of the
Certificate.
SECTION 2.10. Covenants of the Certificateholder. The Certificateholder
agrees:
(a) to be bound by the terms and conditions of the Certificate of which
the Holder is the beneficial owner and of this Agreement, including any
supplements or amendments hereto and to perform the obligations of a Holder as
set forth therein or herein, in all respects as if it were a signatory hereto.
This undertaking is made for the benefit of the Trust, the Owner Trustee and the
Security Insurer; and
(b) until the completion of the events specified in Section 8.1(d), not
to, for any reason, institute proceedings for the Trust to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of its property, or cause or permit the Trust to make any assignment for
the benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt or
take any action in furtherance of any such action.
SECTION 2.11. Federal income tax treatment of the Trust. (a) For so long
as the Trust has a single owner for federal income tax purposes, it will,
pursuant to Treasury Regulations promulgated under section 7701 of the Code, be
disregarded as an entity distinct from the Certificateholder for all federal
income tax purposes. Accordingly, for federal income tax purposes, the
Certificateholder will be treated as (i) owning all assets owned by the Trust,
(ii) having incurred all liabilities incurred by the Trust, and (iii) all
transactions between the Trust and the Certificateholder will be disregarded.
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(b) In the event that the Trust has two equity owners for federal income
tax purposes, the Trust will be treated as a partnership. At any such time that
the Trust has two equity owners, this Agreement will be amended, in accordance
with Section 10.1 herein, and appropriate provisions will be added so as to
provide for treatment of the Trust as a partnership.
ARTICLE III.
Certificate and Transfer of Interest
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Certificate, the Depositor shall be the sole beneficiary of the Trust.
SECTION 3.2. The Certificate. The Certificate shall be executed on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Owner Trustee. A Certificate bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of
authentication and delivery of such Certificate. A transferee of a Certificate
shall become a Certificateholder, and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder, upon due
registration of such Certificate in such transferee's name pursuant to Section
3.4.
SECTION 3.3. Authentication of Certificate. Concurrently with the initial
sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificate to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further corporate
action by the Depositor, in authorized denominations. No Certificate shall
entitle its holder to any benefit under this Agreement, or shall be valid for
any purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or Bankers Trust Company as the Owner Trustee's authentication
agent, by manual signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered
hereunder. The Certificate shall be dated the date of its authentication.
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SECTION 3.4. Registration of Transfer and Exchange of Certificate. The
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.7, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee shall provide
for the registration of the Certificate and of transfers and exchanges of the
Certificate as herein provided. Bankers Trust Company shall be the initial
Certificate Registrar.
The Certificate Registrar shall provide the Trust Collateral Agent with
the name and address of the Certificateholder on the Closing Date. Upon any
transfers of the Certificate, the Certificate Registrar shall notify the Trust
Collateral Agent of the name and address of the transferee in writing, by
facsimile, on the day of such transfer.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.7, the Owner Trustee shall
execute, authenticate and deliver (or shall cause Bankers Trust Company as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee, a new Certificate dated the date of authentication by the Owner
Trustee or any authenticating agent.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of the Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of the
Certificate.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate shall be surrendered to the Certificate Registrar, or if
the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall
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be delivered to the Certificate Registrar, the Owner Trustee and (unless an
Insurer Default shall have occurred and be continuing) the Security Insurer,
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee, or Bankers Trust Company, as the Owner
Trustee's authenticating agent, shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person by virtue of
becoming a Certificateholder in accordance with this Agreement shall be deemed
to be bound by the terms of this Agreement. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and the Security Insurer and any agent of the Owner Trustee, the
Certificate Registrar and the Security Insurer, may treat the Person in whose
name any Certificate shall be registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
the Sale and Servicing Agreement and for all other purposes whatsoever, and none
of the Owner Trustee, the Certificate Registrar or the Security Insurer nor any
agent of the Owner Trustee, the Certificate Registrar or the Security Insurer
shall be bound by any notice to the contrary.
SECTION 3.7. Maintenance of Office or Agency. The Owner Trustee shall
maintain in New York, an office or offices or agency or agencies where the
Certificate may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the
Certificate and the Basic Documents may be served. The Owner Trustee initially
designates Bankers Trust Company, 4 Albany Street, New York, New York 10006, as
its principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholder and (unless
an Insurer Default shall have occurred and be continuing) the Security Insurer
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.8. Disposition In Whole But Not In Part. The Certificate may be
transferred in whole but not in part. Any attempted transfer of the Certificate
that would divide the ownership of the Trust Estate shall be
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void. The Certificate is only transferable (i) to an Affiliate of AmeriCredit
Corp. whose stock has been pledged to the Security Insurer or (ii) to another
entity with the prior written consent of the Security Insurer in its sole
discretion. The Owner Trustee shall cause any Certificate issued to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE LIMITED
CONDITIONS SPECIFIED IN THE TRUST AGREEMENT".
SECTION 3.9. ERISA Restrictions. The Certificate may not be acquired by or
for the account of (i) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that
is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1985, as amended, or (iii)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding its
beneficial ownership interest in its Certificate, the Owner thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
ARTICLE IV.
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holder with Respect to Certain Matters. With
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholder in writing of the proposed action and the
Certificateholder shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that the Certificateholder has withheld
consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute or unless such amendment would not materially and adversely affect the
interests of the Holder);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholder; or
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(d) except pursuant to Section 12.1(b) of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholder.
The Owner Trustee shall notify the Certificateholder in writing of any
appointment of a successor Note Registrar or Trust Collateral Agent within five
Business Days after receipt of notice thereof.
SECTION 4.2. Action by Certificateholder with Respect to Certain Matters.
The Owner Trustee shall not have the power, except upon the direction of the
Certificateholder or the Security Insurer in accordance with the Basic
Documents, to (a) remove the Servicer under the Sale and Servicing Agreement
pursuant to Section 7.1 thereof or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Certificateholder and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholder.
SECTION 4.3. Restrictions on Certificateholder's Power. (a) The
Certificateholder shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) The Certificateholder shall not have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless the Certificateholder is the Instructing
Party pursuant to Section 5.3 and unless the Certificateholder previously shall
have given to the Owner Trustee a written notice of default and of the
continuance thereof, as provided in this Agreement, and also unless
Certificateholder shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 5.3. For the protection and enforcement of the
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provisions of this Section, the Certificateholder and the Owner Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 4.4. Rights of Security Insurer. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
business trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust.
ARTICLE V.
Authority and Duties of Owner Trustee
SECTION 5.1. General Authority. (a) The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
Class A-1 Notes in the aggregate principal amount of $68,000,000, Class A-2
Notes in the aggregate principal amount of $96,250,000 and Class A-3 Notes in
the aggregate principal amount of $85,750,000. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Instructing
Party recommends with respect to the Basic Documents so long as such activities
are consistent with the terms of the Basic Documents.
(b) The Owner Trustee shall sign on behalf of the Trust any applicable tax
returns of the Trust, unless applicable law requires a Certificateholder to sign
such documents.
SECTION 5.2. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Holder,
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subject to the Basic Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Basic Document, and the Owner Trustee shall not
be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement.
SECTION 5.3. Action upon Instruction. (a) Subject to Article IV and the
terms of the Spread Account Agreement, the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) or the
Certificateholder (if an Insurer Default shall have occurred and be continuing)
(the "Instructing Party") shall have the exclusive right to direct the actions
of the Owner Trustee in the management of the Trust, so long as such
instructions are not inconsistent with the express terms set forth herein or in
any Basic Document. The Instructing Party shall not instruct the Owner Trustee
in a manner inconsistent with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action hereunder
or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in
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conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
SECTION 5.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 5.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 5.5. No Action Except under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 5.3.
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SECTION 5.6. Restrictions. The Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholder shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
ARTICLE VI.
Concerning the Owner Trustee
SECTION 6.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.3 expressly made by the Owner
Trustee, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
5.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment made
by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the
Instructing Party, the Servicer or the Certificateholder;
(c) no provision of this Agreement or any Basic Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Basic
Document if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
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(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificate of
authentication on the Certificate, and the Owner Trustee shall in no event
assume or incur any liability, duty or obligation to the Security Insurer,
Trustee, Trust Collateral Agent, the Collateral Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the Basic
Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct of
the Security Insurer, the Trustee, the Trust Collateral Agent or the Servicer
under any of the Basic Documents or otherwise and the Owner Trustee shall have
no obligation or liability to perform the obligations under this Agreement or
the Basic Documents that are required to be performed by the Trustee under the
Indenture or the Trust Collateral Agent or the Servicer under the Sale and
Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of the
Instructing Party or the Certificateholder, unless such Instructing Party or
Certificateholder has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence, bad faith or willful misconduct in the
performance of any such act.
SECTION 6.2. Furnishing of Documents. The Owner Trustee shall furnish to
the Certificateholder promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 6.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, the Holder and the
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Security Insurer (which shall have relied on such representations and warranties
in issuing the Note Policy), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and deliver
this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby nor compliance by
it with any of the terms or provisions hereof will contravene any federal or
Delaware state law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
SECTION 6.4. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel,
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accountants and other skilled persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such persons and according
to such opinion not contrary to this Agreement or any Basic Document.
SECTION 6.5. Not Acting in Individual Capacity. Except as provided in this
Article VI, in accepting the trusts hereby created Bankers Trust (Delaware) acts
solely as Owner Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document shall look only to the
Owner Trust Estate for payment or satisfaction thereof.
SECTION 6.6. Owner Trustee Not Liable for Certificate or Receivables. The
recitals contained herein and in the Certificate (other than the signature and
countersignature of the Owner Trustee on the Certificate) shall be taken as the
statements of the Depositor and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any Basic Document or of the
Certificate (other than the signature and countersignature of the Owner Trustee
on the Certificate) or the Notes, or of any Receivable or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificateholder under this
Agreement or the Noteholders under the Indenture, including, without limitation:
the existence, condition and ownership of any Financed Vehicle; the existence
and enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor, the Servicer or any other Person
with any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation or any
action of the Trustee or the Servicer or any subservicer taken in the name of
the Owner Trustee.
SECTION 6.7. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of the Notes
and may deal with the Depositor, the Trustee and the
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Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
SECTION 6.8. Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Bankers Trust (Delaware), or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 6.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither Bankers Trust (Delaware) or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 9.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Bankers Trust (Delaware) (or any successor
thereto); or (iii) subject Bankers Trust (Delaware) (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VII.
Compensation of Owner Trustee
SECTION 7.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between AmeriCredit and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may
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<PAGE>
employ in connection with the exercise and performance of its rights and its
duties hereunder and under the Basic Documents.
SECTION 7.2. Indemnification. The Depositor shall be liable as primary
obliger for, and shall indemnify the Owner Trustee and its officers, directors,
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Depositor shall not be liable for or required to indemnify the Owner
Trustee from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 6.1. The indemnities contained in
this Section and the rights under Section 7.1 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Depositor which approval shall not be
unreasonably withheld.
SECTION 7.3. Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
SECTION 7.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of the Holder.
ARTICLE VIII.
Termination of Trust Agreement
SECTION 8.1. Termination of Trust Agreement. (a) This Agreement and the
Trust shall terminate and be of no further force or effect upon the latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust
22
<PAGE>
as described in Section 10.1 of the Sale and Servicing Agreement) and the
subsequent distribution of amounts in respect of such Receivables as provided in
the Basic Documents, or (ii) the payment to the Certificateholder of all amounts
required to be paid to it pursuant to this Agreement and the payment to the
Security Insurer of all amounts payable or reimbursable to it pursuant to the
Sale and Servicing Agreement; provided, however, that the rights to
indemnification under Section 7.2 and the rights under Section 7.1 shall survive
the termination of the Trust. The Servicer shall promptly notify the Owner
Trustee and the Security Insurer of any prospective termination pursuant to this
Section. The bankruptcy, liquidation, dissolution, death or incapacity of the
Certificateholder, shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle the Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Neither the Depositor nor the Certificateholder shall be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholder shall surrender the Certificate to the
Trust Collateral Agent for payment of the final distribution and cancellation,
shall be given by the Owner Trustee by letter to the Certificateholder mailed
within five Business Days of receipt of notice of such termination from the
Servicer given pursuant to Section 10.1(c) of the Sale and Servicing Agreement,
stating (i) the Distribution Date upon or with respect to which final payment of
the Certificate shall be made upon presentation and surrender of the Certificate
at the office of the Trust Collateral Agent therein designated, (ii) the amount
of any such final payment, (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificate at the office of the Trust
Collateral Agent therein specified and (iv) interest will cease to accrue on the
Certificate. The Owner Trustee shall give such notice to the Trust Collateral
Agent at the time such notice is given to the Certificateholder. Upon
presentation and surrender of the Certificate, the Trust Collateral Agent shall
cause to be distributed to the Certificateholder amounts distributable on such
Distribution Date pursuant to Section 5.7 of the Sale and Servicing Agreement.
In the event that the Certificateholder shall not surrender the
Certificate for cancellation within six months after the date specified in the
above mentioned written notice, the Owner Trustee shall give a second written
notice to the Certificateholder to surrender the Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice all the Certificate shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
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<PAGE>
agent to take appropriate steps, to contact the Certificateholder concerning
surrender of its Certificate, and the cost thereof shall be paid out of the
funds and other assets that shall remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies shall be distributed,
subject to applicable escheat laws, by the Owner Trustee to the Holder.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE IX.
Successor Owner Trustees and Additional Owner Trustees
SECTION 9.1. Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a corporation (i) satisfying the provisions of Section
3807(a) of the Business Trust Statute; (ii) authorized to exercise corporate
trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 9.2.
SECTION 9.2. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Depositor, the Security Insurer and the
Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee, provided that the Depositor shall
have received written confirmation from each of the Rating Agencies that the
proposed appointment will not result in an increased capital charge to the
Security Insurer by either of the Rating Agencies. If no successor Owner Trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Owner Trustee or the
Security Insurer may petition
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any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.1 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor with the consent of the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing) may remove the Owner Trustee.
If the Depositor shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed, one copy to the
Security Insurer and one copy to the successor Owner Trustee and payment of all
fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Depositor shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 9.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.2 shall execute, acknowledge and deliver to the
Depositor, the Servicer, the Security Insurer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Depositor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
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No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to the Certificateholder, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 9.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 9.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided
further that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject, unless an
Insurer Default shall have occurred and be continuing, to the approval of the
Security Insurer (which approval shall not be unreasonably withheld) shall have
the power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 9.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.3.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not
authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
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Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE X.
Miscellaneous
SECTION 10.1. Supplements and Amendments. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing) and with prior written notice to the Rating Agencies, without
the consent of any of the Noteholders or the Certificateholder, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel which may be based upon a certificate of the Servicer,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time, with the prior
written consent of the Security Insurer (so long as an Insurer Default shall not
have occurred and be continuing) by the Depositor and the Owner Trustee, with
prior written notice to the Rating Agencies, to the extent such amendment
materially and adversely affects the interests of the Noteholders, with the
consent of the Noteholders evidencing not less than a majority of the
Outstanding Amount of the Notes and, the consent of the Certificateholder (which
consent of any Holder of a Certificate or Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder) 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 Certificateholder;
provided, however, that, subject to the express rights of the Security Insurer
under the Basic Documents, no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or the Certificateholder or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and the Certificateholder.
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 the Certificateholder, the Trustee and each of the Rating Agencies.
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It shall not be necessary for the consent of Certificateholder, the
Noteholders or the Trustee pursuant to this Section 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 the Certificateholder provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholder shall be subject to such reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution of
any amendment to the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. No Legal Title to Owner Trust Estate in Certificateholder.
The Certificateholder shall not have legal title to any part of the Owner Trust
Estate. The Certificateholder shall be entitled to receive distributions in
accordance with Articles VIII. No transfer, by operation of law or otherwise, of
any right, title or interest of the Certificateholder to and in its ownership
interest in the Owner Trust Estate shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 10.3. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Certificateholder, the Servicer and, to the extent expressly provided herein,
the Security Insurer, the Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 10.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to AFS Funding Corp., 1325 Airmotive Way, Reno,
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Nevada 89502; if to the holder of the Security Insurer, addressed to Security
Insurer, Financial Security Assurance Inc., 350 Park Avenue, New York, NY 10022,
Attention: Surveillance Department, Telex No.: (212) 688-3101, Confirmation:
(212) 826-0100, Telecopy Nos.: (212) 339-3518, (212) 339-3529 (in each case in
which notice or other communication to Financial Security refers to an Event of
Default, a claim on the Note Policy or with respect to which failure on the part
of Financial Security to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head-Financial Guaranty
Group "URGENT MATERIAL ENCLOSED"); or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of the
Holder. Any notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 10.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.6. 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 10.7. Assignments; Security Insurer. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
SECTION 10.8. No Recourse. The Certificateholder by accepting a
Certificate acknowledges that the Certificate represents a beneficial interest
in the Trust only and do not represent interests in or obligations of the
Seller, the Servicer, the Owner Trustee, the Trustee, the Security Insurer or
any Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificate or the Basic Documents.
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SECTION 10.9. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.11. Servicer. The Servicer is authorized to prepare, or cause
to be prepared, execute and deliver on behalf of the Trust all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Trust or Owner Trustee to prepare, file or deliver pursuant to the Basic
Documents. Upon written request, the Owner Trustee shall execute and deliver to
the Servicer a limited power of attorney appointing the Servicer the Trust's
agent and attorney-in-fact to prepare, or cause to be prepared, execute and
deliver all such documents, reports, filings, instruments, certificates and
opinions.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.
BANKERS TRUST (DELAWARE)
Owner Trustee
By:
------------------------------
Name:
Title:
AFS FUNDING CORP.
Depositor
By:
------------------------------
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
[Trust Agreement]
<PAGE>
EXHIBIT A
NUMBER
R-
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS NOT TRANSFERABLE,
EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT
---------------------------------
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by AFS Funding Corp.
(This Certificate does not represent an interest in or obligation of AFS Funding
Corp. or any of its Affiliates, except to the extent described below.)
THIS CERTIFIES THAT AFS Funding Corp. is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in certain
distributions of AmeriCredit Automobile Receivables Trust 1997-B (the "Trust")
formed by AFS Funding Corp., a Nevada corporation (the "Seller").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust
Agreement.
BANKERS TRUST (DELAWARE) BANKERS TRUST (DELAWARE)
not in its individual not in its individual
capacity but solely as capacity but solely as
Owner Trustee or Owner Trustee
By BANKERS TRUST COMPANY,
by Authenticating Agent
-------------------------------
by
-------------------------------
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<PAGE>
The Trust was created pursuant to a Trust Agreement dated as of May 1,
1997 (the "Trust Agreement"), between the Seller and Bankers Trust (Delaware),
as owner trustee (the "Owner Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This is the duly authorized Certificate designated as "Asset Backed
Certificate" (herein called the "Certificate"). Also issued under the Indenture
dated as of May 1, 1997, among the Trust, LaSalle National Bank, as trustee and
indenture collateral agent, are three classes of Notes designated as "Class A-1
5.79% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2 6.36% Asset Backed
Notes" (the "Class A-2 Notes") and "Class A-3 6.67% Asset Backed Notes" (the
"Class A-3 Notes", together with the Class A-2 Notes and the Class A-1 Notes,
the "Notes"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the Trust includes a pool of retail
installment sale contracts secured by new and used automobiles, vans or light
duty trucks (the "Receivables"), all monies due thereunder on or after Initial
Cutoff Date, security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, proceeds from claims on certain insurance
policies and certain other rights under the Trust Agreement and the Sale and
Servicing Agreement, all right, to and interest of the Seller in and to the
Purchase Agreement dated as of May 1, 1997 between AmeriCredit Financial
Services, Inc. and the Seller and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 12th day of
each month or, if such 12th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on June 12, 1997, to the Person in whose
name is on this Certificate the amount to be distributed to the
Certificateholder on such Distribution Date. No principal will be paid on the
Certificate until the Class A-3 Notes have been paid in full.
The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder without the presentation or surrender of this Certificate or
the making of any notation hereon. Except as otherwise provided in the Trust
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Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
3
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IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
AMERICREDIT AUTOMOBILE
RECEIVABLES TRUST 1997-B
By: BANKERS TRUST
(DELAWARE) not in its
individual capacity but solely as
Owner Trustee
Dated: By:
-------------------------------------
4
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(Reverse of Certificate)
The Certificate does not represent an obligation of, or an interest in,
the Seller, the Servicer, the Owner Trustee or any Affiliates of any of them and
no recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement, the
Indenture or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections with respect to the Receivables, all as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Seller, and at such
other places, if any, designated by the Seller, by any Certificateholder upon
written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller under the Trust Agreement at any time by the Seller and the Owner Trustee
with the consent of the Note Majority and the Certificateholder. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Certificateholder.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the Borough of Manhattan, The City of New York, accompanied
by a written instrument of transfer in form satisfactory to the Owner Trustee
and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon a new Certificate
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Bankers Trust Company. No service charge will be made for any
such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Security Insurer and any agent of the Owner Trustee
or the Security Insurer may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of
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<PAGE>
the Owner Trustee, the Security Insurer nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to the
Certificateholder of all amounts required to be paid to it pursuant to the Trust
Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. The Servicer of the Receivables may at its
option purchase the corpus of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Certificate; however, such right
of purchase is exercisable, subject to certain restrictions, only as of the last
day of any Monthly Period as of which the Pool Balance is 10% or less of the
Original Pool Balance. The Certificate is also subject to mandatory prepayment,
pro rata on the basis of the initial Certificate Balance, on the Distribution
Date on or immediately following the last day of the Funding Period in the event
that any portion of the Pre-Funded Amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all Subsequent Receivables,
including any purchase of Subsequent Receivables on such date. The aggregate
principal amount of the Certificate to be prepaid will be an amount equal to the
Certificate Prepayment Amount.
The Certificate may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e) (1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Certificate or of any
Receivable or related document.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual or facsimile signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________________________ Attorney to transfer said Certificate on
the books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
*
-------------------------
Signature
Guaranteed:
*
-------------------------
- ----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
7
<PAGE>
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1997-B
This Certificate of Trust of AmeriCredit Automobile Receivables Trust
1997-B (the "Trust"), dated as of ______ ___, 199_, is being duly executed and
filed by _________________________________________, a ____________, and
________________, an individual, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is AmeriCredit
Automobile Receivables Trust 1997-B.
2. This Certificate of Trust will be effective _____________, _____,
199__.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
BANKERS TRUST
(DELAWARE),
not in its individual capacity but
solely as owner trustee of the
Trust.
By:
---------------------------------
Name:
Title:
8
- --------------------------------------------------------------------------------
SALE AND SERVICING
AGREEMENT
among
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1997-B,
Issuer,
AFS FUNDING CORP.,
Seller,
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer
and
LASALLE NATIONAL BANK,
Backup Servicer and Trust Collateral Agent
Dated as of May 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Definitions
SECTION 1.1. Definitions.................................. 1
SECTION 1.2. Other Definitional Provisions................ 26
ARTICLE II Conveyance of Receivables
SECTION 2.1. Conveyance of Initial Receivables............ 27
SECTION 2.2. Conveyance of Subsequent
Receivables.................................. 28
SECTION 2.3. Further Encumbrance of Trust
Property..................................... 31
ARTICLE III The Receivables
SECTION 3.1. Representations and Warranties of
Seller....................................... 33
SECTION 3.2. Repurchase upon Breach....................... 33
SECTION 3.3. Custody of Receivables Files................. 34
ARTICLE IV Administration and Servicing of
Receivables
SECTION 4.1. Duties of the Servicer....................... 35
SECTION 4.2. Collection of Receivable Payments;
Modifications of Receivables; Lockbox
Agreements................................... 37
SECTION 4.3. Realization Upon Receivables................. 40
SECTION 4.4. Insurance.................................... 41
SECTION 4.5. Maintenance of Security Interests
in Vehicles.................................. 43
SECTION 4.6. Covenants, Representations, and
Warranties of Servicer....................... 44
SECTION 4.7. Purchase of Receivables Upon Breach of
Covenant..................................... 46
SECTION 4.8. Total Servicing Fee; Payment of
Certain Expenses by Servicer................. 46
SECTION 4.9. Servicer's Certificate....................... 47
SECTION 4.10. Annual Statement as to Compliance,
Notice of Servicer Termination
Event........................................ 47
SECTION 4.11. Annual Independent Accountants'
Report....................................... 48
SECTION 4.12. Access to Certain Documentation and
Information Regarding Receivables............ 49
SECTION 4.13. Monthly Tape................................. 49
SECTION 4.14. Retention and Termination of
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Servicer..................................... 50
SECTION 4.15. Fidelity Bond and Errors and
Omissions Policy............................. 51
ARTICLE V Trust Accounts; Distributions; Statements to
Noteholders
SECTION 5.1. Establishment of Trust Accounts.............. 51
SECTION 5.2. Capitalized Interest Account................. 54
SECTION 5.3. Certain Reimbursements to the
Servicer..................................... 55
SECTION 5.4. Application of Collections................... 55
SECTION 5.5. Withdrawals from Spread Account.............. 55
SECTION 5.6. Additional Deposits.......................... 56
SECTION 5.7. Distributions................................ 56
SECTION 5.8. Note Distribution Account.................... 58
SECTION 5.9. Pre-Funding Account.......................... 60
SECTION 5.10. Statements to Noteholders.................... 61
SECTION 5.11. Optional Deposits by the Insurer............. 62
ARTICLE VI The Note Policy
SECTION 6.1. Claims Under Note Policy..................... 62
SECTION 6.2. Preference Claims............................ 64
SECTION 6.3. Surrender of Policy.......................... 65
ARTICLE VII The Seller
SECTION 7.1. Representations of Seller.................... 65
SECTION 7.2. Corporate Existence.......................... 67
SECTION 7.3. Liability of Seller; Indemnities............. 68
SECTION 7.4. Merger or Consolidation of, or
Assumption of the Obligations of,
Seller....................................... 69
SECTION 7.5. Limitation on Liability of Seller
and Others................................... 69
SECTION 7.6. Seller May Own Certificates or
Notes........................................ 70
ARTICLE VIII The Servicer
SECTION 8.1. Representations of Servicer.................. 70
SECTION 8.2. Liability of Servicer; Indemnities........... 72
SECTION 8.3. Merger or Consolidation of, or
Assumption of the Obligations of
the Servicer or Backup Servicer.............. 74
SECTION 8.4. Limitation on Liability of
Servicer, Backup Servicer and Others......... 75
SECTION 8.5. Delegation of Duties......................... 76
SECTION 8.6. Servicer and Backup Servicer Not to
Resign....................................... 76
ARTICLE IX Default
ii
<PAGE>
SECTION 9.1. Servicer Termination Event................... 77
SECTION 9.2. Consequences of a Servicer Termination
Event........................................ 79
SECTION 9.3. Appointment of Successor..................... 80
SECTION 9.4. Notification to Noteholders.................. 82
SECTION 9.5. Waiver of Past Defaults...................... 82
ARTICLE X Termination
SECTION 10.1. Optional Purchase of All
Receivables.................................. 82
ARTICLE XI Administrative Duties of the
Servicer
SECTION 11.1. Administrative Duties........................ 83
SECTION 11.2. Records...................................... 86
SECTION 11.3. Additional Information to be
Furnished to the Issuer...................... 86
ARTICLE XII Miscellaneous Provisions
SECTION 12.1. Amendment.................................... 86
SECTION 12.2. Protection of Title to Trust................. 87
SECTION 12.3. Notices...................................... 90
SECTION 12.4. Assignment................................... 91
SECTION 12.5. Limitations on Rights of Others.............. 91
SECTION 12.6. Severability................................. 91
SECTION 12.7. Separate Counterparts........................ 91
SECTION 12.8. Headings..................................... 92
SECTION 12.9. Governing Law................................ 92
SECTION 12.10. Assignment to Trustee........................ 92
SECTION 12.11. Nonpetition Covenants........................ 92
SECTION 12.12. Limitation of Liability of Owner
Trustee and Trustee.......................... 92
SECTION 12.13. Independence of the Servicer................. 93
SECTION 12.14. No Joint Venture............................. 93
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Schedule of Representations
Schedule C - Servicing Policies and Procedures
EXHIBITS
Exhibit A - Form of Subsequent Transfer Agreement
Exhibit B - Form of Servicer's Certificate
iii
<PAGE>
SALE AND SERVICING AGREEMENT dated as of May 1, 1997, among
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1997-B, a Delaware business trust (the
"Issuer"), AFS FUNDING CORP., a Nevada corporation (the "Seller"), and
AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation (the "Servicer"),
and LASALLE NATIONAL BANK, a national banking association, in its capacity as
Backup Servicer and Trust Collateral Agent.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
acquired by AmeriCredit Financial Services, Inc. through motor vehicle dealers;
WHEREAS the Seller has purchased such receivables from AmeriCredit
Financial Services, Inc. and is willing to sell such receivables to the Issuer;
WHEREAS the Issuer desires to purchase additional receivables
arising in connection with motor vehicle retail installment sale contracts to be
acquired by AmeriCredit Financial Services, Inc. through motor vehicle dealers;
WHEREAS the Seller has an agreement to purchase such additional
receivables from AmeriCredit Financial Services, Inc. and is willing to sell
such receivables to the Issuer;
WHEREAS the Servicer is willing to service all such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Accelerated Payment Amount Shortfall" means, with respect to any
Distribution Date, the excess, if any, of (i) the greater of (a) the excess, if
any, on such Distribution Date of the Pro Forma Note Balance for such
Distribution Date over the Required Pro Forma Note Balance for such Distribution
Date and (b) the amount necessary (after taking into account the distributions
to be made on such Distribution Date pursuant to Section 5.7(b)(i) through (vi)
to reduce the principal balance of the Class A-1 Notes to zero, over (ii)
<PAGE>
the excess of amount of Available Funds (but net of any net Investment Earnings
on deposit in the Collection Account) on such Distribution Date over the amounts
payable on such Distribution Date pursuant to Section 5.7(b)(i) through (vi).
"Accelerated Payment Shortfall Notice" means, a written notice
specifying the Accelerated Payment Amount Shortfall for such Distribution Date.
"Accelerated Payment Termination Date" means the later to occur of
(i) first Distribution Date on which the Pro Forma Note Balance equals the
Required Pro Forma Note Balance and (ii) the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero.
"Accelerated Principal Amount" for a Distribution Date will equal
the lesser of
(x) the sum of (i) excess, if any, of the amount of Available
Funds on such Distribution Date over the amounts payable on such
Distribution Date pursuant to clauses (i) through (vi) of Section
5.7(b) hereof plus (ii) amounts, if any, available in accordance
with the terms of the Spread Account Agreement; and
(y) the greater of (a) the excess, if any, on such
Distribution Date of (i) the Pro Forma Note Balance for such
Distribution Date over (ii) the Required Pro Forma Note Balance for
such Distribution Date and (b) the amount necessary (after taking
into account all other distributions to be made on such date) to
reduce the principal balance of the Class A-1 Notes to zero.
Notwithstanding the foregoing, the requirement to pay Accelerated
Principal Amounts will terminate on the Accelerated Payment
Termination Date.
The Insurer does not guarantee the payment of Accelerated Principal
Amounts.
"Accountants' Report" means the report of a firm of nationally
recognized independent accountants described in Section 4.11.
"Accounting Date" means, with respect to a Distribution Date, the
last day of the Collection Period immediately preceding such Distribution Date.
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.2 of this Agreement, notice of
the Seller's election
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<PAGE>
to transfer Subsequent Receivables to the Trust, such notice to designate the
related Subsequent Transfer Date and the approximate principal amount of
Subsequent Receivables to be transferred on such Subsequent Transfer Date.
"Administrative Receivable" means, with respect to any Collection
Period, a Receivable which the Servicer is required to purchase pursuant to
Section 4.7 or which the Servicer has elected to purchase pursuant to Section
4.4(c) on the Determination Date with respect to such Collection Period.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any 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.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that became a Liquidated Receivable prior to the end of the
related Collection Period and (ii) any Receivable that became a Purchased
Receivable prior to the end of the related Collection Period) as of the date of
determination.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"AmeriCredit" means AmeriCredit Financial Services, Inc.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the Financed
Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service and warranty contracts, other items
customarily financed as part of retail automobile installment sale contracts or
promissory notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the related
Contract.
"Available Funds" means, with respect to any Determination Date, the
sum of (i) the Collected Funds for such Determination Date, (ii) all Purchase
Amounts deposited in the Collection Account during the related Collection
Period, plus Investment Earnings with respect to the Trust
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<PAGE>
Accounts for the related Distribution Date, (iii) the Monthly Capitalized
Interest Amount with respect to the related Distribution Date, (iv) following
the acceleration of the Notes pursuant to Section 5.2 of the Indenture, the
amount of money or property collected pursuant to Section 5.7 of the Indenture
since the preceding Determination Date by the Trust Collateral Agent or
Controlling Party for distribution pursuant to Section 5.6 and Section 5.8
hereof, (v) if such Determination Date immediately precedes the Mandatory
Redemption Date, any Pre-Funded Amount to be deposited into the Collection
Account on such Distribution Date pursuant to Section 5.7(a) hereof, and (vi)
the proceeds of any purchase or sale of the assets of the Trust described in
Section 10.1 hereof.
"Backup Servicer" means LaSalle National Bank.
"Base Servicing Fee" means, with respect to any Collection Period,
the fee payable to the Servicer for services rendered during such Collection
Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied
by the Pool Balance as of the opening of business on the first day of such
Collection Period.
"Basic Documents" means this Agreement, the Certificate of Trust,
the Trust Agreement, the Indenture, the Spread Account Agreement, the Spread
Account Agreement Supplement and other documents and certificates delivered in
connection therewith.
"Business Day" means a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of Delaware, Texas, New York
or Illinois are authorized or obligated to be closed.
"Calendar Quarter" means the three-month period ending on the last
day of March, June, September or December.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.2.
"Capitalized Interest Account Initial Deposit" means $383,775.75
deposited on the Closing Date.
"Certificate" means the trust certificate evidencing the beneficial
interest of the Certificateholder in the Trust.
"Certificateholder" means the Person in whose name the Certificate
is registered.
"Class" means the Class A-1 Notes, the Class A-2 Notes or the Class
A-3 Notes, as the context requires.
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<PAGE>
"Class A-1 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-2 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-3 Notes" has the meaning assigned to such term in the
Indenture.
"Closing Date" means May 21, 1997.
"Collateral Agent" means LaSalle National Bank, in its capacity as
Collateral Agent under the Spread Account Agreement.
"Collateral Insurance" shall have the meaning set forth in Section
4.4(a).
"Collected Funds" means, with respect to any Determination Date, the
amount of funds in the Collection Account representing collections on the
Receivables during the related Collection Period, including all Net Liquidation
Proceeds collected during the related Collection Period (but excluding any
Purchase Amounts).
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.1.
"Collection Period" means, with respect to the first Distribution
Date, the period beginning on the close of business on April 30, 1997 and ending
on the close of business on May 31, 1997. With respect to each subsequent
Distribution Date, the preceding calendar month. Any amount stated "as of the
close of business of the last day of a Collection Period" shall give effect to
the following calculations as determined as of the end of the day on such last
day: (i) all applications of collections, and (ii) all distributions.
"Collection Records" means all manually prepared or computer
generated records relating to collection efforts or payment histories with
respect to the Receivables.
"Computer Tape" means the computer tapes or other electronic media
furnished by AFS Funding Corp. to the Issuer and its assigns describing certain
characteristics of the Initial Receivables as of the Cutoff Date and of
Subsequent Receivables as of the related Subsequent Cutoff Date.
"Contract" means a motor vehicle retail installment sale contract.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing and the
5
<PAGE>
Trust Collateral Agent for the benefit of the Noteholders, in the event the
Insurer Default shall have occurred and be continuing.
"Corporate Trust Office" means (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which at the
time of execution of this agreement is 1001 Jefferson Street, Suite 550,
Wilmington, Delaware 19801, Attention: Corp. Trust Dept., and (ii) with respect
to the Trustee, the Trust Collateral Agent and the Collateral Agent, the
principal corporate trust office of the Trustee, which at the time of execution
of this agreement is 135 S. LaSalle Street, Suite 1740, Chicago, Illinois 60674-
4104, Attention: Asset Backed Securities Trust Administration-AmeriCredit
1997-B.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
the scheduled payments to be made on a Receivable, an amount equal to (i) the
excess of the principal balance of such Receivable immediately prior to such
order over the principal balance of such Receivable as so reduced and/or (ii) if
such court shall have issued an order reducing the effective rate of interest on
such Receivable, the excess of the principal balance of such Receivable
immediately prior to such order over the net present value (using as the
discount rate the higher of the APR on such Receivable or the rate of interest,
if any, specified by the court in such order) of the scheduled payments as so
modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on
the date of issuance of such order.
"Custodian" means AmeriCredit and any other Person named from time
to time as custodian in any Custodian Agreement acting as agent for the Trust
Collateral Agent, which Person must be acceptable to the Controlling Party (the
Custodian as of the Closing Date is acceptable to the Insurer as of the Closing
Date).
"Custodian Agreement" means any Custodian Agreement from time to
time in effect between the Custodian named therein and the Trust Collateral
Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof, which Custodian Agreement and any
amendments, supplements or modifications thereto shall be acceptable to the
Controlling Party (the Custodian Agreement which is effective on the Closing
Date is acceptable to the Controlling Party).
"Dealer" means a dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to
6
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AmeriCredit under a Dealer Agreement or pursuant to a Dealer Assignment.
"Dealer Agreement" means any agreement between a Dealer and
AmeriCredit relating to the acquisition of Receivables from a Dealer by
AmeriCredit.
"Dealer Assignment" means, with respect to a Receivable, the
executed assignment executed by a Dealer conveying such Receivable to
AmeriCredit.
"Dealer Underwriting Guide" means the underwriting manual used by
AmeriCredit in the purchase of Receivables as amended from time to time.
"Deficiency Claim Amount" shall have the meaning set forth in
Section 5.5.
"Deficiency Claim Date" means, with respect to any Distribution
Date, the fourth Business Day immediately preceding such Distribution Date.
"Deficiency Notice" shall have the meaning set forth in Section 5.5.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trust Collateral Agent
or its nominee or custodian by physical delivery to the Trust Collateral Agent
or its nominee or custodian endorsed to, or registered in the name of, the Trust
Collateral Agent or its nominee or custodian or endorsed in blank, and, with
respect to a certificated security (as defined in Section 8-102 of the UCC)
transfer thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, the Trust Collateral Agent or its nominee or
custodian or endorsed in blank to a financial intermediary (as defined in
Section 8-313 of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated securities as
belonging to the Trust Collateral Agent or its nominee or custodian and the
sending by such financial intermediary of a confirmation of the purchase of such
certificated security by the Trust Collateral Agent or its nominee or custodian,
or (ii) by delivery thereof to a "clearing corporation" (as defined in Section
8-102(3) of the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the
7
<PAGE>
appropriate securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation's exclusive control,
the sending of a confirmation by the financial intermediary of the purchase by
the Trust Collateral Agent or its nominee or custodian of such securities and
the making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Trust Collateral
Agent or its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall be in the
name of the Trust Collateral Agent or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Trust Account Property to
the Trust Collateral Agent or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
the Trust Collateral Agent or its nominee or custodian of the purchase by the
Trust Collateral Agent or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its books
and records identifying such book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations as belonging to the
Trust Collateral Agent or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the Trust
Collateral Agent or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect complete transfer of
ownership of any such Trust Account Property to the Trust Collateral Agent or
its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof; and
8
<PAGE>
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trust Collateral Agent or its
nominee or custodian of such uncertificated security, the making by such
financial intermediary of entries on its books and records identifying such
uncertificated certificates as belonging to the Trust Collateral Agent or its
nominee or custodian.
"Depositor" shall mean the Seller in its capacity as Depositor under
the Trust Agreement.
"Determination Date" means, with respect to any Collection Period,
the earlier of (i) the fourth Business Day preceding the Distribution Date in
the next calendar month, and (ii) the 5th day of the next calendar month, or if
such 5th day is not a Business Day, the next succeeding Business Day.
"Distribution Amount" means, with respect to a Distribution Date,
the sum of (i) the Available Funds for the immediately preceding Determination
Date, plus (ii) the Deficiency Claim Amount, if any, received by the Trust
Collateral Agent with respect to such Distribution Date plus (iii) the Insurer
Optional Deposit, if any, received by the Trust Collateral Agent with respect to
such Distribution Date.
"Distribution Date" means, with respect to each Collection Period,
the twelfth day of the following calendar month, or if such day is not a
Business Day, the immediately following Business Day, commencing on June 12,
1997.
"Draw Date" means, with respect to any Distribution Date, the third
Business Day immediately preceding such Distribution Date.
"Electronic Ledger" means the electronic master record of the retail
installment sales contracts or installment loans of the Servicer.
"Eligible Deposit Account" means either (a) a segregated account
with a depository institution acceptable to the Insurer and rated "A-1" by
Standard & Poor's, for so long as the Class A-1 Notes are outstanding, or (b) a
segregated trust account with the corporate trust department of a depository
institution acceptable to the Insurer 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
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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 Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof or the District of Columbia (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); provided, however, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Distribution Date), the commercial paper or
other short-term senior 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) of such depository institution or trust
company shall have a credit rating from Standard & Poor's of A-1+ and from
Moody's of P-1;
(c) commercial paper and demand notes investing solely in commercial
paper having, at the time of the investment or contractual commitment to invest
therein, a rating from Standard & Poor's of A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds for which the
Trust Collateral Agent or the Owner Trustee in each of their individual
capacities or any of their respective Affiliates is investment manager or
advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and from
Moody's of Aaa and having been approved by the Insurer;
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or
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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
depository institution or trust company (acting as principal) referred to in
clause (b) above; and
(g) any other investment which would satisfy the Rating Agency
Condition and is consistent with the ratings of the Securities and which, so
long as no Insurer Default shall have occurred and be continuing, has been
approved by the Insurer.
Any of the foregoing Eligible Investments may be purchased by or
through the Owner Trustee or the Trust Collateral Agent or any of their
respective Affiliates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means with respect to (i) the
Class A-1 Notes, the June 1998 Distribution Date, (ii) the Class A-2 Notes, the
September 2000 Distribution Date, and (iii) the Class A-3 Notes, the February
2003 Distribution Date.
"Financed Vehicle" means an automobile or light-duty truck van or
minivan, together with all accessions thereto, securing an Obligor's
indebtedness under the respective Receivable.
"Force-Placed Insurance" has the meaning ascribed thereto in Section
4.4 hereof.
"Funding Period" means the period beginning on and including the
Closing Date and ending on the first to occur of (a) the first date on which the
amount on deposit in the Pre-Funding Account (after giving effect to any
transfers therefrom in connection with the transfer of Subsequent Receivables to
the Issuer on such date) is less than $100,000, (b) the date on which an Event
of Default or a Servicer Termination Event occurs and (c) July 18, 1997.
"Indenture" means the Indenture dated as of May 1, 1997, among the
Issuer and LaSalle National Bank, as Trust Collateral Agent and Trustee, as the
same may be amended and supplemented from time to time.
"Initial Cutoff Date" means May 1, 1997 and the date of origination
of such Initial Receivable.
"Initial Receivables" means any Receivable conveyed to the Trust on
the Closing Date.
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"Insolvency Event" means, with respect to a specified Person, (a)
the filing of a petition against such Person or the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation or
such Person's affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Insurance Add-On Amount" means the premium charged to the Obligor
in the event that the Servicer obtains Force-Placed Insurance pursuant to
Section 4.4.
"Insurance Agreement" means the Insurance and Indemnity Agreement,
dated as of May 1, 1997, among the Insurer, the Trust, the Seller, AmeriCredit
Corp. and AmeriCredit.
"Insurance Agreement Event of Default" means an "Event of Default"
as defined in the Insurance Agreement.
"Insurance Policy" means, with respect to a Receivable, any
insurance policy (including the insurance policies described in Section 4.4
hereof) benefiting the holder of the Receivable providing loss or physical
damage, credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.
"Insurer" means Financial Security Assurance, Inc., a monoline
insurance company incorporated under the laws of the State of New York, or any
successor thereto, as issuer of the Note Policy.
"Insurer Default" means the occurrence and continuance of any of the
following events:
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(a) the Insurer shall have failed to make a payment required under
the Note Policy in accordance with its terms;
(b) The Insurer shall have (i) filed a petition or commenced any
case or proceeding under any provision or chapter of the United States
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made
a general assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the United States Bankruptcy Code or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Insurer or for all or any material portion of its
property or (ii) authorizing the taking of possession by a custodian, trustee,
agent or receiver of the Insurer (or the taking of possession of all or any
material portion of the property of the Insurer).
"Insurer Optional Deposit" means, with respect to any Distribution
Date, an amount delivered by the Insurer pursuant to Section 5.12, at its sole
option, other than amounts in respect of a Note Policy Claim Amount to the Trust
Collateral Agent for deposit into the Collection Account for any of the
following purposes: (i) to provide funds in respect of the payment of fees or
expenses of any provider of services to the Trust with respect to such
Distribution Date; or (ii) to include such amount as part of the Distribution
Amount for such Distribution Date to the extent that without such amount a draw
would be required to be made on the Note Policy.
"Interest Period" means, with respect to any Distribution Date, the
period from and including the Closing Date (in the case of the first
Distribution Date) or from and including the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date.
"Interest Rate" means, with respect to (i) the Class A-1 Notes,
5.79% per annum (computed on the basis of the actual number of days elapsed in a
360-day year), (ii) the Class A-2 Notes, 6.36% per annum (computed on the basis
of a 360-day year of twelve 30-day months), and (iii) the Class A-3 Notes, 6.67%
per annum (computed on the basis of a 360-day year of twelve 30-day months).
"Investment Earnings" means, with respect to any Distribution Date
and Trust Account, the investment earnings
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on amounts on deposit in such Trust Account on such Distribution Date.
"Issuer" means AmeriCredit Automobile Receivables
Trust 1997-B.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
"Liquidated Receivable" means, with respect to any Collection
Period, a Receivable as to which (i) 90 days have elapsed since the Servicer
repossessed the Financed Vehicle, (ii) the Servicer has determined in good faith
that all amounts it expects to recover have been received, or (iii) 5% or more
of a Scheduled Payment shall have become 120 or more days delinquent, except in
the case of a repossessed Financed Vehicle.
"Lockbox Account" means an account maintained on behalf of the Trust
Collateral Agent by the Lockbox Bank pursuant to Section 4.2(d).
"Lockbox Agreement" means the Tri-Party Remittance Processing
Agreement, dated as of May 1, 1997, by and among AmeriCredit, Bank One, Texas,
N.A., and the Trust Collateral Agent, as such agreement may be amended or
supplemented from time to time, unless the Trust Collateral Agent shall cease to
be a party thereunder, or such agreement shall be terminated in accordance with
its terms, in which event "Lockbox Agreement" shall mean such other agreement,
in form and substance acceptable to the Controlling Party, among the Servicer,
the Trust Collateral Agent and the Lockbox Bank.
"Lockbox Bank" means a depository institution named by the Servicer
and acceptable to the Controlling Party.
"Mandatory Redemption Date" means the earlier of (i) the
Distribution Date in August, 1997 and (ii) if the last day of the Funding Period
occurs on or prior to the Determination
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Date in June or July 1997, then the Distribution Date occurring in June or July
1997.
"Monthly Capitalized Interest Amount" means in the case of the June,
July or August 1997 Distribution Dates, an amount equal to the excess of (i) the
product of (x) a fraction the numerator of which is the actual number of days
elapsed in the related Interest Period and the denominator of which is 360, (y)
the weighted average of each Interest Rate and (z) the difference between (i)
the aggregate principal amount of the Notes immediately prior to the applicable
Distribution Date and (ii) the Pool Balance as of the last day of the second
preceding Collection Period, or in the case of the June Distribution Date, as of
the Closing Date over (ii) the Pre-Funding Earnings for such Distribution Date.
"Monthly Extension Rate" means, with respect to any Accounting Date,
the fraction, expressed as a percentage, the numerator of which is the aggregate
Principal Balance of Receivables whose payments are extended during the related
Collection Period and the denominator of which is the aggregate Principal
Balance of Receivables as of the immediately preceding Accounting Date.
"Monthly Records" means all records and data maintained by the
Servicer with respect to the Receivables, including the following with respect
to each Receivable: the account number; the originating Dealer; Obligor name;
Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment date;
final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount of Scheduled
Payment; current Insurance Policy expiration date; and past due late charges.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Net Liquidation Proceeds" means, with respect to a Liquidated
Receivable, all amounts realized with respect to such Receivable (other than
amounts withdrawn from the Spread Account and drawings under the Note Policy)
net of (i) reasonable expenses incurred by the Servicer in connection with the
collection of such Receivable and the repossession and disposition of the
Financed Vehicle and (ii) amounts that are required to be refunded to the
Obligor on such Receivable; provided, however, that the Liquidation Proceeds
with respect to any Receivable shall in no event be less than zero.
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"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1.
"Note Majority" means a majority by principal amount of the
Noteholders.
"Note Policy" means the financial guaranty insurance policy issued
by the Insurer to the Trust Collateral Agent, as agent for the Trustee, for the
benefit of the Noteholders.
"Note Policy Claim Amount" means, for any Distribution Date, shall
equal the lesser of (i) the sum of the Noteholders' Interest Distributable
Amount and Noteholders' Principal Distributable Amount for such Distribution
Date and (ii) the excess, if any, of the amount required to be distributed
pursuant to clauses (i) through (iv) of Section 5.7(b) hereof over the
Distribution Amount with respect to such Distribution Date, plus, on the
Mandatory Redemption Date the Note Prepayment Amount.
"Note Pool Factor" for each Class of Notes as of the close of
business on a Distribution Date means a seven-digit decimal figure equal to the
outstanding principal amount of such Class of Notes divided by the original
outstanding principal amount of such Class of Notes.
"Note Prepayment Amount" means, as of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Receivables on such date, an amount equal to the
Noteholders' pro rata share (based on the respective current outstanding
principal balance of each Class of Notes) of the Pre-Funded Amount as of such
Distribution Date; provided, that if the aggregate remaining amount in the
Pre-Funding Account is $100,000 or less, such amount will be applied exclusively
to reduce the outstanding principal balance of the Class of Notes then entitled
to receive distributions of principal.
"Noteholders' Accelerated Principal Amount" means, with respect to
any Distribution Date, the Noteholders' Percentage of the Accelerated Principal
Amount on such Distribution Date, if any.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders'
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Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that was actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rate borne by
each Class of Notes from such preceding Distribution Date to but excluding the
current Distribution Date.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. Interest shall be computed on
the basis of (i) the actual number of days elapsed in a 360-day year in the case
of the Class A-1 Notes and (ii) a 360-day year of twelve 30-day months in the
case of the Class A-2 Notes and the Class A-3 Notes.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, the product of (i)(A) in the case of the Class
A-1 Notes, the product of the Interest Rate for such Class and a fraction, the
numerator of which is the number of days elapsed from and including the prior
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date and the
denominator of which is 360 and (B) in the case of the Class A-2 Notes and the
Class A-3 Notes, one-twelfth of the Interest Rate for such Class (or, in the
case of the first Distribution Date, the Interest Rate for such Class multiplied
by a fraction, the numerator of which is the number of days elapsed from and
including the Closing Date to but excluding such Distribution Date and the
denominator of which is 360) and (ii) the outstanding principal amount of the
Notes of such Class immediately preceding such Distribution Date.
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Principal
Distributable Amount.
"Noteholders' Percentage" means with respect to any Determination
Date (i) relating to a Distribution Date prior to the Distribution Date on which
the principal amount of the Class A-3 Notes is reduced to zero, 100%; (ii)
relating to the Distribution Date on which the principal amount of the Class A-3
Notes is reduced to zero, the percentage equivalent of a fraction, the numerator
of which is the principal amount of the Class A-3 Notes immediately prior to
such Distribution Date, and the denominator of which is the Principal
Distributable Amount; and (iii) relating to any other Distribution Date, 0%.
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"Noteholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that was actually deposited in the Note Distribution Account on such
Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, (other than the Final Scheduled Distribution Date for any
Class of Notes), the sum of the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date. The Noteholders'
Principal Distributable Amount on the Final Scheduled Distribution Date for any
Class of Notes will equal the sum of (i) the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date, (ii) the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date, and
(iii) the excess of the outstanding principal amount of such Class of Notes, if
any, over the amounts described in clauses (i) and (ii).
"Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means a certificate signed by the chairman
of the board, the president, any executive vice president or any vice president,
any treasurer, assistant treasurer, secretary or assistant secretary of the
Seller or the Servicer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel reasonably
acceptable to the Insurer, which opinion is acceptable in form and substance to
the Trust Collateral Agent and, if such opinion or a copy thereof is required by
the provisions of this Agreement to be delivered to the Insurer, to the Insurer.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Subsequent Cutoff Dates.
"Other Conveyed Property" means all property conveyed by the Seller
to the Trust pursuant to Section 2.1(b) through (h) of this Agreement.
"Overfunded Capitalized Interest Amount" means:
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With respect to the June 1997 Distribution Date, the excess of (a)
the amount on deposit in the Capitalized Interest Account on such Distribution
Date (after giving effect to the transfer of the Monthly Capitalized Interest
Amount to the Collection Account on such date) over (b) the product of (i)
1/360, (ii) 2.50%, (iii) 60 and (iv) the amount on deposit in the Pre-Funding
Account (excluding Pre-Funding Earnings) at the close of business on May 31,
1997.
With respect to the July 1997 Distribution Date, the excess of (a)
the amount on deposit in the Capitalized Interest Account on such Distribution
Date (after giving effect to the transfer of the Monthly Capitalized Interest
Amount to the Collection Account on such date) over (b) the product of (i)
1/360, (ii) 2.50%, (iii) 30 and (iv) the amount on deposit in the Pre-Funding
Account (excluding Pre-Funding Earnings) at the close of business on June 30,
1997.
With respect to the August 1997 Distribution Date, the excess of (a)
the amount on deposit in the Capitalized Interest Account on such Distribution
Date (after giving effect to the transfer of the Monthly Capitalized Interest
Amount to the Collection Account on such date) over (b) the product of (i)
1/360, (ii) 2.50%, (iii) 0 and (iv) the amount on deposit in the Pre-Funding
Account (excluding Pre-Funding Earnings) at the close of business on July 31,
1997.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means Bankers Trust (Delaware), not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, its
successors in interest or any successor Owner Trustee under the Trust Agreement.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of any date of determination, the aggregate
Principal Balance of the Receivables (excluding Purchased Receivables and
Liquidated Receivables).
"Pre-Funded Amount" means, with respect to any Distribution Date,
the amount on deposit in the Pre-Funding Account, (exclusive of Pre-Funding
Earnings) which initially shall be $62,500,002.61.
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"Pre-Funding Account" has the meaning specified in Section 5.1.
"Pre-Funding Earnings" means any Investment Earnings on amounts on
deposit in the Pre-Funding Account.
"Prepayment Amount" means the amount deposited in the Collection
Account from the Pre-Funding Account on the Mandatory Redemption Date pursuant
to Section 5.7(a)(ii) hereof.
"Principal Balance" means, with respect to any Receivable, as of any
date, the sum of (x) the Amount Financed minus (i) that portion of all amounts
received on or prior to such date and allocable to principal in accordance with
the terms of the Receivable and (ii) any Cram Down Loss in respect of such
Receivable plus (y) the accrued and unpaid interest on such Receivable.
"Principal Carryover Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Principal Distributable Amount plus
any outstanding Principal Carryover Shortfall from the preceding Distribution
Date over the amount of principal deposited in the Note Distribution Account
with respect to such current Distribution Date.
"Principal Distributable Amount" means, with respect to any
Distribution Date, the amount equal to the excess, if any, of (x) the sum of (i)
the principal portion of all Collected Funds received during the immediately
preceding Collection Period (other than Liquidated Receivables and Purchased
Receivables), (ii) the Principal Balance of all Receivables that became
Liquidated Receivables during the related Collection Period (other than
Purchased Receivables), (iii) the principal portion of the Purchase Amounts
received with respect to all Receivables that became Purchased Receivables
during the related Collection Period, (iv) in the sole discretion of the
Insurer, the Principal Balance of all the Receivables that were required to be
purchased pursuant to Sections 3.2 and 4.7, during such Collection Period but
were not purchased, (v) the aggregate amount of Cram Down Losses that shall have
occurred during the related Collection Period; and (vi) following the
acceleration of the Notes pursuant to Section 5.2 of the Indenture, the amount
of money or property collected pursuant to Section 5.4 of the Indenture since
the preceding Determination Date by the Trust Collateral Agent or Controlling
Party for distribution pursuant to Section 5.7 hereof over (y) the Step-Down
Amount, if any, for such Distribution Date.
"Pro Forma Note Balance" means, with respect to any Distribution
Date, the aggregate remaining principal balance of the Notes outstanding on such
Distribution Date, after
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giving effect to distributions pursuant to clauses (i) through (vi) of Section
5.7(b) hereof.
"Purchase Agreement" means the Purchase Agreement between the Seller
and AmeriCredit, dated as of May 1, 1997, pursuant to which the Seller acquired
the Initial Receivables, as such Agreement may be amended from time to time.
"Purchase Amount" means, with respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on the Receivable, after giving
effect to the receipt of any moneys collected (from whatever source) on such
Receivable, if any.
"Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant to
Section 4.7 or repurchased by the Seller or AmeriCredit pursuant to Section 3.2
or Section 10.1(a).
"Rating Agency" means Moody's and Standard & Poor's. If no such
organization or successor maintains a rating on the Securities, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Seller and acceptable to the Insurer (so
long as an Insurer Default shall not have occurred and be continuing), notice of
which designation shall be given to the Trust Collateral Agent, the Owner
Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each of
the Rating Agencies shall have notified the Seller, the Servicer, the Insurer,
the Owner Trustee and the Trust Collateral Agent in writing that such action
will not result in a reduction or withdrawal of the then current rating of any
Class of Notes.
"Realized Losses" means, with respect to any Receivable that becomes
a Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Net Liquidation Proceeds to the extent allocable to principal.
"Receivable" means any Contract listed on Schedule A, as such
Schedule shall be amended to reflect the transfer of Subsequent Receivables to
the Trust (which Schedule may be in the form of microfiche or a disk).
"Receivable Files" means the documents specified in Section 3.3.
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"Record Date" with respect to each Distribution Date means the
Business Day immediately preceding such Distribution Date, unless otherwise
specified in the Agreement.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.
"Required Pro Forma Note Balance" means, with respect to any
Distribution Date, a dollar amount equal to the product of (x) 90% and (y) the
sum of the Pool Balance and the Pre-Funded Amount as of the end of the prior
Collection Period.
"Schedule of Receivables" means the schedule of all retail
installment sales contracts and promissory notes originally held as part of the
Trust which is attached as Schedule A.
"Schedule of Representations" the Schedule of Representations and
Warranties attached hereto as Schedule B.
"Scheduled Payment" means, with respect to any Collection Period for
any Receivable, the amount set forth in such Receivable as required to be paid
by the Obligor in such Collection Period. If after the Closing Date, the
Obligor's obligation under a Receivable with respect to a Collection Period has
been modified so as to differ from the amount specified in such Receivable as a
result of (i) the order of a court in an insolvency proceeding involving the
Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940 or
(iii) modifications or extensions of the Receivable permitted by Section 4.2(b),
the Scheduled Payment with respect to such Collection Period shall refer to the
Obligor's payment obligation with respect to such Collection Period as so
modified.
"Seller" means AFS Funding Corp., a Nevada corporation, and its
successors in interest to the extent permitted hereunder.
"Series 1997-B Spread Account" means the account designated as such,
established and maintained pursuant to the Spread Account Agreement Supplement.
"Service Contract" means, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle.
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"Servicer" means AmeriCredit Financial Services, Inc., as the
servicer of the Receivables, and each successor Servicer pursuant to
Section 9.3.
"Servicer Termination Event" means an event specified in
Section 9.1.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.9, substantially in the form of Exhibit
B.
"Servicing Fee" has the meaning specified in Section 4.8.
"Servicing Fee Rate" means 2.25% per annum.
"Simple Interest Method" means the method of allocating a fixed
level payment on an obligation between principal and interest, pursuant to which
the portion of such payment that is allocated to interest is equal to the
product of the fixed rate of interest on such obligation multiplied by the
period of time (expressed as a fraction of a year, based on the actual number of
days in the calendar month and 365 days in the calendar year) elapsed since the
preceding payment under the obligation was made.
"Simple Interest Requisite Amount" means a Receivable under which
the portion of the payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Spread Account Requisite Amount" has the meaning
specified in the Spread Account Agreement Supplement.
"Spread Account Agreement" means the Spread Account Agreement dated
as of December 1, 1994, as amended and restated as of May 1, 1997 among the
Insurer, the Seller and the Collateral Agent, as the same may be modified,
supplemented or otherwise amended in accordance with the terms thereof.
"Spread Account Agreement Supplement" means the Series 1997-B Spread
Account Agreement Supplement dated as of May 1, 1997 among the Insurer, the
Seller and the Collateral Agent, as the same may be modified, supplemented or
otherwise amended in accordance with the terms thereof.
"Spread Account Initial Deposit" means an amount equal to 8% of the
aggregate principal balance of the Initial Receivables on the Closing Date
(which is equal to $15,000,000).
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"Standard & Poor's" means Standard & Poor's Ratings Services, or its
successor.
"Step-Down Amount" means, with respect to any Distribution Date, the
excess, if any, of (x) the Required Pro Forma Note Balance over (y) the Pro
Forma Note Balance on such Distribution Date, calculated for this purpose only
without deduction for any Step-Down Amount (i.e., assuming that the entire
amount described in clause (x) of the definition of "Principal Distributable
Amount" is distributed as principal on the Notes).
"Subsequent Cutoff Date" means (i) the last day of the month
preceding the month in which particular Subsequent Receivables are conveyed to
the Trust pursuant to this Agreement or (ii) if any such Subsequent Receivable
is originated in the month of the related Subsequent Transfer Date, the date of
origination.
"Subsequent Purchase Agreement" means an agreement by and between
the Seller and AmeriCredit pursuant to which the Seller will acquire Subsequent
Receivables.
"Subsequent Receivables" means the Receivables transferred to the
Issuer pursuant to Section 2.2, which shall be listed on Schedule A to the
related Subsequent Transfer Agreement.
"Subsequent Spread Account Deposit" means, with respect to each
Subsequent Transfer Date, an amount equal to 8% of the aggregate principal
balance of Subsequent Receivables as of the related Subsequent Cutoff Date
transferred to the Trust on such Subsequent Transfer Date from amounts released
from the Pre-Funding Account.
"Subsequent Transfer Agreement" means the agreement among the
Issuer, the Seller and the Servicer, substantially in the form of Exhibit A.
"Subsequent Transfer Date" means, with respect to Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Funding Period on which Subsequent Receivables are to be transferred to the
Trust pursuant to this Agreement, and a Subsequent Transfer Agreement is
executed and delivered to the Trust.
"Supplemental Servicing Fee" means, with respect to any Collection
Period, all administrative fees, expenses and charges paid by or on behalf of
Obligors, including late fees, prepayment fees and liquidation fees collected on
the Receivables during such Collection Period.
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"Trigger Event" has the meaning assigned thereto in the Spread
Account Agreement Supplement.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.1.
"Trust Agreement" means the Trust Agreement dated as of May 1, 1997,
between the Seller and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Collateral Agent" means the Person acting as Trust Collateral
Agent hereunder, its successors in interest and any successor Trust Collateral
Agent hereunder.
"Trust Officer" means, (i) in the case of the Trust Collateral
Agent, the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller and any assistant
controller or any other officer of the Trust Collateral Agent customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject, and (ii) in the case
of the Owner Trustee, any officer in the corporate trust office of the Owner
Trustee or any agent of the Owner Trustee under a power of attorney with direct
responsibility for the administration of this Agreement or any of the Basic
Documents on behalf of the Owner Trustee.
"Trust Property" means the property and proceeds conveyed pursuant
to Section 2.1, together with certain monies paid on or after the Initial
Cut-off Date, the Note Policy, the Collection Account (including all Eligible
Investments therein and all proceeds therefrom), the Lockbox Account and certain
other rights under this Agreement. Although the Seller has pledged the Spread
Account to the Trust Collateral Agent and the Insurer pursuant to the Spread
Account Agreement, the Spread Account shall not under any circumstances be
deemed to be a part of or otherwise includable in the Trust or the Trust
Property.
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"Trustee" means the Person acting as Trustee under the Indenture,
its successors in interest and any successor trustee under the Indenture.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction on the date of the Agreement.
SECTION 1.2. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture, or, if not defined therein,
in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate
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delivered in connection herewith means such agreement, instrument or statute as
from time to time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Initial Receivables. In consideration of
the Issuer's delivery to or upon the order of the Seller on the Closing Date of
the net proceeds from the sale of the Notes and the other amounts to be
distributed from time to time to the Seller in accordance with the terms of this
Agreement, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the obligations set forth
herein), all right, title and interest of the Seller in and to:
(a) the Initial Receivables and all moneys received thereon after
the Initial Cutoff Date;
(b) an assignment of the security interests in the Financed Vehicles
granted by Obligors pursuant to the Initial Receivables and any other interest
of the Seller such Financed Vehicles;
(c) any proceeds and the right to receive proceeds with respect to
the Initial Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors and any
proceeds from the liquidation of the Initial Receivables;
(d) all rights of the Seller against Dealers pursuant to Dealer
Agreements;
(e) all rights under any Service Contracts on the related Financed
Vehicles;
(f) the related Receivables Files;
(g) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement,
including the Seller's rights under the Purchase Agreement, and the delivery
requirements, representations and warranties and the cure and repurchase
obligations of AmeriCredit under the Purchase Agreement; and
(h) the proceeds of any and all of the foregoing.
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It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Trust Property from the Seller to the Issuer and the beneficial interest
in and title to the Receivables and the other Trust Property shall not be part
of the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the transfer and assignment contemplated hereby is
held not to be a sale, this Agreement shall constitute a grant of a security
interest in the property referred to in this Section for the benefit of the
Noteholders and the Insurer.
SECTION 2.2. Conveyance of Subsequent Receivables.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Issuer's delivery on each related Subsequent Transfer Date
to or upon the order of the Seller of the amount described in Section 5.9(a) to
be delivered to the Seller, the Seller does hereby sell, transfer, assign, set
over and otherwise convey to the Issuer without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller in
and to:
(i) the Subsequent Receivables listed on Schedule A to the related
Subsequent Transfer Agreement;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and any other interest of
the Seller in such Financed Vehicles;
(iii) any proceeds and the right to receive proceeds with respect to
such Subsequent Receivables from claims on any physical damage, credit
life or disability insurance policies covering the related Financed
Vehicles or Obligors and any proceeds from the liquidation of such
Subsequent Receivables;
(iv) all rights of the Seller against the Dealers pursuant to Dealer
Agreements;
(v) all rights under any Service Contracts on the related Financed
Vehicles:
(vi) the related Receivables Files;
(vii) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under each of the
Subsequent Purchase Agreements, including the Seller's rights under each
of
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the Subsequent Purchase Agreements, and the delivery requirements,
representations and warranties and the cure and repurchase obligations of
AmeriCredit under each of the Subsequent Purchase Agreements, on or after
the related Subsequent Cutoff Date; and
(viii) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Trust Collateral Agent, the
Owner Trustee, the Insurer and the Rating Agencies with an Addition Notice
not later than five days prior to such Subsequent Transfer Date and shall
have provided any information reasonably requested by any of the foregoing
with respect to the Subsequent Receivables;
(ii) the Seller shall have delivered to the Owner Trustee and the
Trust Collateral Agent a duly executed Subsequent Transfer Agreement which
shall include supplements to Schedule A, listing the Subsequent
Receivables;
(iii) the Seller shall, to the extent required by Section 4.2, have
deposited in the Collection Account all collections in respect of the
Subsequent Receivables;
(iv) as of each Subsequent Transfer Date, (A) the Seller shall not
be insolvent and shall not become insolvent as a result of the transfer of
Subsequent Receivables on such Subsequent Transfer Date, (B) the Seller
shall not intend to incur or believe that it shall incur debts that would
be beyond its ability to pay as such debts mature, (C) such transfer shall
not have been made with actual intent to hinder, delay or defraud any
Person and (D) the assets of the Seller shall not constitute unreasonably
small capital to carry out its business as conducted;
(v) the Funding Period shall not have terminated;
(vi) after giving effect to any transfer of Subsequent Receivables
on a Subsequent Transfer Date, the Receivables transferred to the Trust
pursuant hereto shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial Cutoff Date and
the Subsequent Receivables on the related Subsequent Cutoff Dates): (i)
the weighted average APR of
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the Receivables transferred to the Trust shall not be less than 19%,
unless, with the prior consent of the Rating Agencies and the Insurer, the
Seller increases the Spread Account Initial Deposit with respect to such
Subsequent Receivables by the amount required by the Insurer; (ii) the
weighted average remaining term of the Receivables transferred to the
Trust shall not be greater than 56 months; and (iii) not more than 35% of
the Aggregate Principal Balance shall have Obligors whose mailing
addresses are in Texas and California;
(vii) each of the representations and warranties made by the Seller
pursuant to Section 3.1 with respect to the Subsequent Receivables to be
transferred on such Subsequent Transfer Date shall be true and correct as
of the related Subsequent Transfer Date, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to
such Subsequent Transfer Date;
(viii) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date indicate in its computer files that the
Subsequent Receivables identified in the Subsequent Transfer Agreement
have been sold to the Trust pursuant to this Agreement;
(ix) the Seller shall have taken any action required to maintain the
first priority perfected ownership interest of the Trust in the Owner
Trust Estate and the first perfected security interest of the Trust
Collateral Agent in the Collateral;
(x) no selection procedures adverse to the interests of the
Noteholders or the Insurer shall have been utilized in selecting the
Subsequent Receivables;
(xi) the addition of any such Subsequent Receivables shall not
result in a material adverse tax consequence to the Trust or the
Noteholders;
(xii) the Seller shall have delivered (A) to the Rating Agencies and
the Insurer an Opinion of Counsel with respect to the transfer of such
Subsequent Receivables substantially in the form of the Opinion of Counsel
delivered to the Rating Agencies and the Insurer on the Closing Date and
(B) to the Trust Collateral Agent the Opinion of Counsel required by
Section 12.2(i)(1);
(xiii) Standard & Poor's shall have confirmed that the rating on the
Notes shall not be withdrawn or reduced as a result of the transfer of
such Subsequent Receivables to the Trust;
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(xiv) the Insurer (so long as no Insurer Default shall have occurred
and be continuing), in its absolute and sole discretion, shall have
approved the transfer of such Subsequent Receivables to the Trust and the
Insurer shall have been reimbursed for any fees and expenses incurred by
the Insurer in connection with the granting of such approval;
(xv) the Seller shall simultaneously transfer the Subsequent Spread
Account Deposit to the Trust Collateral Agent with respect to the
Subsequent Receivables transferred on such Subsequent Transfer Date; and
(xvi) the Seller shall have delivered to the Insurer and the Trust
Collateral Agent an Officers' Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b).
The Seller covenants that in the event any of the foregoing
conditions precedent are not satisfied with respect to any Subsequent Receivable
on the date required as specified above, the Seller will immediately repurchase
such Subsequent Receivable from the Trust, at a price equal to the Purchase
Amount thereof, in the manner specified in Section 4.7.
SECTION 2.3. Further Encumbrance of Trust Property. (a) Immediately
upon the conveyance to the Trust by the Seller of any item of the Trust Property
pursuant to Section 2.01, all right, title and interest of the Seller in and to
such item of Trust Property shall terminate, and all such right, title and
interest shall vest in the Trust, in accordance with the Trust Agreement and
Sections 3802 and 3805 of the Business Trust Statute (as defined in the Trust
Agreement).
(b) Immediately upon the vesting of the Trust Property in the Trust,
the Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property. Pursuant to the Indenture, the Trust shall grant a security interest
in the Trust Property to secure the repayment of the Notes. The Certificates
shall represent the beneficial ownership interest in the Trust Property, and the
Certificateholders shall be entitled to receive distributions with respect
thereto as set forth herein.
(c) Following the payment in full of the Notes and the release and
discharge of the Indenture, all covenants of the Issuer under Article III of the
Indenture shall, until payment in full of the Certificates, remain as covenants
of the Issuer for the benefit of the Certificateholders, enforceable by the
Certificateholders to the same extent as such covenants were enforceable by the
Noteholders prior to the discharge of the Indenture. Any rights of the Trustee
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under Article III of the Indenture, following the discharge of the Indenture,
shall vest in Certificateholders.
(d) The Trust Collateral Agent shall, at such time as there are no
Securities outstanding and all sums due to (i) the Trustee pursuant to the
Indenture and (ii) the Trust Collateral Agent pursuant to this Agreement, have
been paid, release any remaining portion of the Trust Property to the Seller.
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ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller. The Seller
makes the following representations and warranties as to the Receivables on
which the Issuer is deemed to have relied in acquiring the Receivables and upon
which the Insurer shall be deemed to rely in issuing the Note Policy. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial Receivables, and
as of the related Subsequent Transfer Date in case of the Subsequent
Receivables, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) Schedule of Representations. The representations and warranties
set forth on the Schedule of Representations attached hereto as Schedule B are
true and correct.
SECTION 3.2. Repurchase upon Breach.
(a) The Seller, the Servicer, the Insurer, the Trust Collateral
Agent or the Owner Trustee, as the case may be, shall inform the other parties
to this Agreement promptly, in writing, upon the discovery of any breach of the
Seller's representations and warranties made pursuant to Section 3.1. As of the
last day of the second (or, if the Seller so elects, the first) month following
the discovery by the Seller or receipt by the Seller of notice of such breach,
unless such breach is cured by such date, the Seller shall have an obligation to
repurchase any Receivable in which the interests of the Noteholders or the
Insurer are materially and adversely affected by any such breach as of such
date. The "second month" shall mean the month following the month in which
discovery occurs or notice is given, and the "first month" shall mean the month
in which discovery occurs or notice is given. In consideration of and
simultaneously with the repurchase of the Receivable, the Seller shall remit, or
cause AmeriCredit to remit, to the Collection Account the Purchase Amount in the
manner specified in Section 5.6 and the Issuer shall execute such assignments
and other documents reasonably requested by such person in order to effect such
repurchase. The sole remedy of the Issuer, the Owner Trustee, the Trust
Collateral Agent, the Trustee or the Noteholders with respect to a breach of
representations and warranties pursuant to Section 3.1 and the agreement
contained in this Section shall be the repurchase of Receivables pursuant to
this Section, subject to the conditions contained herein or to enforce the
obligation of AmeriCredit to the Seller to repurchase such
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Receivables pursuant to the Purchase Agreement. Neither the Owner Trustee, the
Trust Collateral Agent nor the Trustee shall have a duty to conduct any
affirmative investigation as to the occurrence of any conditions requiring the
repurchase of any Receivable pursuant to this Section.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by the Seller, the Seller shall indemnify
the Trust, the Backup Servicer, the Trust Collateral Agent, the Insurer, and the
Noteholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
(b) Pursuant to Section 2.1 of this Agreement, the Seller conveyed
to the Trust all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement
including the Seller's rights under the Purchase Agreement and the delivery
requirements, representations and warranties and the cure or repurchase
obligations of AmeriCredit thereunder. The Seller hereby represents and warrants
to the Trust that such assignment is valid, enforceable and effective to permit
the Trust to enforce such obligations of AmeriCredit under the Purchase
Agreement.
SECTION 3.3. Custody of Receivables Files.
(a) In connection with the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to the Trust pursuant to this
Agreement and simultaneously with the execution and delivery of this Agreement,
the Trust Collateral Agent shall enter into the Custodian Agreement with the
Custodian, dated as of May 1, 1997, pursuant to which the Trust Collateral Agent
shall revocably appoint the Custodian, and the Custodian shall accept such
appointment, to act as the agent of the Trust Collateral Agent as custodian of
the following documents or instruments in its possession which shall be
delivered to the Custodian as agent of the Trust Collateral Agent on or before
the Closing Date (with respect to each Receivable):
(i) The fully executed original of the Receivable (together with any
agreements modifying the Receivable, including without limitation any
extension agreements);
(ii) The original credit application, or a copy thereof, of each
Obligor, fully executed by each such Obligor on AmeriCredit's customary
form, or on a form approved by AmeriCredit, for such application; and
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(iii) The original certificate of title (when received) and
otherwise such documents, if any, that AmeriCredit keeps on file in
accordance with its customary procedures indicating that the Financed
Vehicle is owned by the Obligor and subject to the interest of AmeriCredit
as first lienholder or secured party (including any Lien Certificate
received by AmeriCredit), or, if such original certificate of title has
not yet been received, a copy of the application therefor, showing
AmeriCredit as secured party.
The Trust Collateral Agent may act as the Custodian, in which case the
Trust Collateral Agent shall be deemed to have assumed the obligations of the
Custodian specified in the Custodian Agreement.
(b) Upon payment in full of any Receivable, the Servicer will notify
the Custodian pursuant to a certificate of an officer of the Servicer (which
certificate shall include a statement to the effect that all amounts received in
connection with such payments which are required to be deposited in the
Collection Account pursuant to Section 4.1 have been so deposited) and shall
request delivery of the Receivable and Receivable File to the Servicer. From
time to time as appropriate for servicing and enforcing any Receivable, the
Custodian shall, upon written request of an officer of the Servicer and delivery
to the Custodian of a receipt signed by such officer, cause the original
Receivable and the related Receivable File to be released to the Servicer. The
Servicer's receipt of a Receivable and/or Receivable File shall obligate the
Servicer to return the original Receivable and the related Receivable File to
the Custodian when its need by the Servicer has ceased unless the Receivable is
repurchased as described in Section 3.2 or 4.7.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of the Servicer. The Servicer is hereby
authorized to act as agent for the Trust and in such capacity shall manage,
service, administer and make collections on the Receivables, and perform the
other actions required by the Servicer under this Agreement. The Servicer agrees
that its servicing of the Receivables shall be carried out in accordance with
customary and usual procedures of institutions which service motor vehicle
retail installment sales contracts and, to the extent more exacting, the degree
of skill and attention that the Servicer exercises from time to time with
respect to all comparable motor vehicle receivables that it services for itself
or others. In performing such duties, so long as AmeriCredit is the
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Servicer, it shall comply with the policies and procedures attached hereto as
Schedule C. The Servicer's duties shall include, without limitation, collection
and posting of all payments, responding to inquiries of Obligors on the
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting any required tax information to Obligors, monitoring the collateral,
complying with the terms of the Lockbox Agreement, accounting for collections
and furnishing monthly and annual statements to the Trust Collateral Agent, the
Trustee and the Insurer with respect to distributions, monitoring the status of
Insurance Policies with respect to the Financed Vehicles and performing the
other duties specified herein. The Servicer shall also administer and enforce
all rights and responsibilities of the holder of the Receivables provided for in
the Dealer Agreements (and shall maintain possession of the Dealer Agreements,
to the extent it is necessary to do so), the Dealer Assignments and the
Insurance Policies, to the extent that such Dealer Agreements, Dealer
Assignments and Insurance Policies relate to the Receivables, the Financed
Vehicles or the Obligors. To the extent consistent with the standards, policies
and procedures otherwise required hereby, the Servicer shall follow its
customary standards, policies, and procedures and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Trust to execute and deliver, on behalf
of the Trust, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Receivables and with respect to the Financed Vehicles; provided,
however, that notwithstanding the foregoing, the Servicer shall not, except
pursuant to an order from a court of competent jurisdiction, release an Obligor
from payment of any unpaid amount under any Receivable or waive the right to
collect the unpaid balance of any Receivable from the Obligor. The Servicer is
hereby authorized to commence, in it's own name or in the name of the Trust, a
legal proceeding to enforce a Receivable pursuant to Section 4.3 or to commence
or participate in any other legal proceeding (including, without limitation, a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences or participates in such a legal
proceeding in its own name, the Trust shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer solely for purposes of
commencing or participating in any such proceeding as a party or claimant, and
the Servicer is authorized and empowered by the Trust to execute and deliver in
the Servicer's name any notices, demands, claims, complaints, responses,
affidavits or other documents or instruments in connection with any such
proceeding. The Trust Collateral Agent and the Owner Trustee
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shall furnish the Servicer with any powers of attorney and other documents which
the Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
SECTION 4.2. Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements.
(a) Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all comparable automobile receivables that it
services for itself or others and otherwise act with respect to the Receivables,
the Dealer Agreements, the Dealer Assignments, the Insurance Policies and the
Other Conveyed Property in such manner as will, in the reasonable judgment of
the Servicer, maximize the amount to be received by the Trust with respect
thereto. The Servicer is authorized in its discretion to waive any prepayment
charge, late payment charge or any other similar fees that may be collected in
the ordinary course of servicing any Receivable.
(b) The Servicer may at any time agree to a modification or
amendment of a Receivable in order to (i) change the Obligor's regular due date
to a date within the Collection Period in which such due date occurs or (ii) re-
amortize the scheduled payments on the Receivable following a partial prepayment
of principal.
(c) The Servicer may grant payment extensions on, or other
modifications or amendments to, a Receivable (in addition to those modifications
permitted by Section 4.2(b)) in accordance with its customary procedures if the
Servicer believes in good faith that such extension, modification or amendment
is necessary to avoid a default on such Receivable, will maximize the amount to
be received by the Trust with respect to such Receivable, and is otherwise in
the best interests of the Trust; provided, however, that:
(i) The aggregate period of all extensions on a Receivable shall
not exceed six months;
(ii) In no event may a Receivable be extended beyond the Collection
Period immediately preceding the Final Scheduled Distribution Date;
(iii) The average Monthly Extension Rate for any three consecutive
calendar months shall not exceed 4%;
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(iv) So long as an Insurer Default shall not have occurred and be
continuing, the Servicer shall not amend or modify a Receivable (except as
provided in Section 4.2(b) and this Section 4.2(c)) without the consent of
the Insurer or a Note Majority (if an Insurer Default shall have occurred
and be continuing); and
(v) No such extension, modification or amendment shall be granted
more than 90 days after the Closing Date if such action would have the
effect of causing such Receivable to be deemed to have been exchanged for
another Receivable within the meaning of Section 1001 of the Internal
Revenue Code of 1986, as amended, or any proposed, temporary or final
Treasury Regulations issued thereunder.
With respect to clause (iii) of this Section 4.2(c), in the event
the average of the Monthly Extension Rates calculated with respect to three
consecutive calendar months exceeds 4%, the Servicer shall, on the third such
Accounting Date, purchase from the Trust the Receivables with respect to which
payment had been extended (starting with the Receivables most recently so
extended) in an aggregate Principal Balance equal to the product of (i) the
difference between such average of Monthly Extension Rates and 4% and (ii) the
Aggregate Principal Balance, and pay the related Purchase Amount on the related
Deposit Date; provided, however, that in the event the Backup Servicer shall be
acting as Servicer hereunder, the foregoing sentence shall apply only in respect
of Receivables as to which payments had been extended by such Backup Servicer.
(d) The Servicer shall use its best efforts to notify or direct
Obligors to make all payments on the Receivables, whether by check or by direct
debit of the Obligor's bank account, to be made directly to one or more Lockbox
Banks, acting as agent for the Trust pursuant to a Lockbox Agreement. The
Servicer shall use its best efforts to notify or direct any Lockbox Bank to
deposit all payments on the Receivables in the Lockbox Account no later than the
Business Day after receipt, and to cause all amounts credited to the Lockbox
Account on account of such payments to be transferred to the Collection Account
no later than the second Business Day after receipt of such payments. The
Lockbox Account shall be a demand deposit account held by the Lockbox Bank, or
at the request of the Controlling Party, an Eligible Account.
Prior to the Closing Date, the Servicer shall have notified each
Obligor that makes its payments on the Receivables by check to make such
payments thereafter directly to the Lockbox Bank (except in the case of Obligors
that have already been making such payments to the Lockbox Bank), and
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shall have provided each such Obligor with remittance invoices in order to
enable such Obligors to make such payments directly to the Lockbox Bank for
deposit into the Lockbox Account, and the Servicer will continue, not less often
than every three months, to so notify those Obligors who have failed to make
payments to the Lockbox Bank. If and to the extent requested by the Controlling
Party, the Servicer shall request each Obligor that makes payment on the
Receivables by direct debit of such Obligor's bank account, to execute a new
authorization for automatic payment which in the judgment of the Controlling
Party is sufficient to authorize direct debit by the Lockbox Bank on behalf of
the Trust. If at any time, the Lockbox Bank is unable to directly debit an
Obligor's bank account that makes payment on the Receivables by direct debit and
if such inability is not cured within 15 days or cannot be cured by execution by
the Obligor of a new authorization for automatic payment, the Servicer shall
notify such Obligor that it cannot make payment by direct debit and must
thereafter make payment by check.
Notwithstanding any Lockbox Agreement, or any of the provisions of
this Agreement relating to the Lockbox Agreement, the Servicer shall remain
obligated and liable to the Trust, the Trust Collateral Agent and Noteholders
for servicing and administering the Receivables and the Other Conveyed Property
in accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue thereof, provided, however, that the foregoing
shall not apply to any Backup Servicer for so long as a Lockbox Bank is
performing its obligations pursuant to the terms of a Lockbox Agreement.
In the event of a termination of the Servicer, the successor
Servicer shall assume all of the rights and obligations of the outgoing Servicer
under the Lockbox Agreement subject to the terms hereof. In such event, the
successor Servicer shall be deemed to have assumed all of the outgoing
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such Lockbox Agreement to the same extent as if such Lockbox
Agreement had been assigned to the successor Servicer, except that the outgoing
Servicer shall not thereby be relieved of any liability or obligations on the
part of the outgoing Servicer to the Lockbox Bank under such Lockbox Agreement.
The outgoing Servicer shall, upon request of the Trust Collateral Agent, but at
the expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to each such Lockbox Agreement and an accounting
of amounts collected and held by the Lockbox Bank and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lockbox Agreement to
the successor Servicer. In the event that the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) or a Note Majority (if an
Insurer Default shall have occurred
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and be continuing) elects to change the identity of the Lockbox Bank, the
outgoing Servicer, at its expense, shall cause the Lockbox Bank to deliver, at
the direction of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or a Note Majority (if an Insurer Default shall have
occurred and be continuing) to the Trust Collateral Agent or a successor Lockbox
Bank, all documents and records relating to the Receivables and all amounts held
(or thereafter received) by the Lockbox Bank (together with an accounting of
such amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of the lockbox arrangements and the Servicer shall notify the
Obligors to make payments to the Lockbox established by the successor.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Lockbox Bank for deposit into
the Collection Account, in either case, without deposit into any intervening
account and as soon as practicable, but in no event later than the Business Day
after receipt thereof.
SECTION 4.3. Realization Upon Receivables.
(a) Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall use its best efforts to repossess (or
otherwise comparably convert the ownership of) and liquidate any Financed
Vehicle securing a Receivable with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed, as soon as is practicable
after default on such Receivable but in no event later than the date on which
all or any portion of a Scheduled Payment has become 91 days delinquent;
provided, however, that the Servicer may elect not to repossess a Financed
Vehicle within such time period if in its good faith judgment it determines that
the proceeds ultimately recoverable with respect to such Receivable would be
increased by forbearance. The Servicer is authorized to follow such customary
practices and procedures as it shall deem necessary or advisable, consistent
with the standard of care required by Section 4.1, which practices and
procedures may include reasonable efforts to realize upon any recourse to
Dealers, the sale of the related Financed Vehicle at public or private sale, the
submission of claims under an Insurance Policy and other actions by the Servicer
in order to realize upon such a Receivable. The foregoing is subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with any repair or
towards the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession shall increase the proceeds
of liquidation of the related Receivable by an amount greater than the amount of
such expenses. All amounts received upon
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liquidation of a Financed Vehicle shall be remitted directly by the Servicer to
the Collection Account without deposit into any intervening account as soon as
practicable, but in no event later than the Business Day after receipt thereof.
The Servicer shall be entitled to recover all reasonable expenses incurred by it
in the course of repossessing and liquidating a Financed Vehicle into cash
proceeds, but only out of the cash proceeds of such Financed Vehicle, any
deficiency obtained from the Obligor or any amounts received from the related
Dealer, which amounts in reimbursement may be retained by the Servicer (and
shall not be required to be deposited as provided in Section 4.2(e)) to the
extent of such expenses. The Servicer shall pay on behalf of the Trust any
personal property taxes assessed on repossessed Financed Vehicles. The Servicer
shall be entitled to reimbursement of any such tax from Net Liquidation Proceeds
with respect to such Receivable.
(b) If the Servicer elects to commence a legal proceeding to enforce
a Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trust to the Servicer of the rights under
such Dealer Agreement and Dealer Assignment for purposes of collection only. If,
however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Dealer Agreement or Dealer Assignment on the grounds
that it is not a real party in interest or a Person entitled to enforce the
Dealer Agreement or Dealer Assignment, the Owner Trustee and/or the Trust
Collateral Agent, at the Servicer's expense, or the Seller, at the Seller's
expense, shall take such steps as the Servicer deems necessary to enforce the
Dealer Agreement or Dealer Assignment, including bringing suit in its name or
the name of the Seller or of the Trust and the Owner Trustee and/or the Trust
Collateral Agent for the benefit of the Noteholders. All amounts recovered shall
be remitted directly by the Servicer as provided in Section 4.2(e).
SECTION 4.4. Insurance.
(a) The Servicer shall require, in accordance with its customary
servicing policies and procedures, that each Financed Vehicle be insured by the
related Obligor under the Insurance Policies referred to in Paragraph 24 of the
Schedule of Representations and Warranties and shall monitor the status of such
physical loss and damage insurance coverage thereafter, in accordance with its
customary servicing procedures. Each Receivable requires the Obligor to maintain
such physical loss and damage insurance, naming AmeriCredit and its successors
and assigns as additional insureds, and permits the holder of such Receivable to
obtain physical loss and damage insurance at the expense of the Obligor if the
Obligor fails to maintain such insurance. If the Servicer shall determine that
an Obligor has failed to obtain or
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maintain a physical loss and damage Insurance Policy covering the related
Financed Vehicle which satisfies the conditions set forth in clause (i)(a) of
such Paragraph 24 (including, without limitation, during the repossession of
such Financed Vehicle) the Servicer may enforce the rights of the holder of the
Receivable under the Receivable to require the Obligor to obtain such physical
loss and damage insurance in accordance with its customary servicing policies
and procedures. The Servicer may maintain a vendor's single interest or other
collateral protection insurance policy with respect to all Financed Vehicles
("Collateral Insurance") which policy shall by its terms insure against physical
loss and damage in the event any Obligor fails to maintain physical loss and
damage insurance with respect to the related Financed Vehicle. All policies of
Collateral Insurance shall be endorsed with clauses providing for loss payable
to the Servicer. Costs incurred by the Servicer in maintaining such Collateral
Insurance shall be paid by the Servicer.
(b) The Servicer may, if an Obligor fails to obtain or maintain a
physical loss and damage Insurance Policy, obtain insurance with respect to the
related Financed Vehicle and advance on behalf of such Obligor, as required
under the terms of the insurance policy, the premiums for such insurance (such
insurance being referred to herein as "Force-Placed Insurance"). All policies of
Force-Placed Insurance shall be endorsed with clauses providing for loss payable
to the Servicer. Any cost incurred by the Servicer in maintaining such
Force-Placed Insurance shall only be recoverable out of premiums paid by the
Obligors or Net Liquidation Proceeds with respect to the Receivable, as provided
in Section 4.4(c).
(c) In connection with any Force-Placed Insurance obtained
hereunder, the Servicer may, in the manner and to the extent permitted by
applicable law, require the Obligors to repay the entire premium to the
Servicer. In no event shall the Servicer include the amount of the premium in
the Amount Financed under the Receivable. For all purposes of this Agreement,
the Insurance Add-On Amount with respect to any Receivable having Force-Placed
Insurance will be treated as a separate obligation of the Obligor and will not
be added to the Principal Balance of such Receivable, and amounts allocable
thereto will not be available for distribution on the Notes and the
Certificates. The Servicer shall retain and separately administer the right to
receive payments from Obligors with respect to Insurance Add-On Amounts or
rebates of Forced-Placed Insurance premiums. If an Obligor makes a payment with
respect to a Receivable having Force-Placed Insurance, but the Servicer is
unable to determine whether the payment is allocable to the Receivable or to the
Insurance Add-On Amount, the payment shall be applied first to any unpaid
Scheduled Payments and then to the Insurance Add-On Amount. Net Liquidation
Proceeds on any Receivable will be
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used first to pay the Principal Balance and accrued interest on such Receivable
and then to pay the related Insurance Add-On Amount. If an Obligor under a
Receivable with respect to which the Servicer has placed Force-Placed Insurance
fails to make scheduled payments of such Insurance Add-On Amount as due, and the
Servicer has determined that eventual payment of the Insurance Add-On Amount is
unlikely, the Servicer may, but shall not be required to, purchase such
Receivable from the Trust for the Purchase Amount on any subsequent
Determination Date. Any such Receivable, and any Receivable with respect to
which the Servicer has placed Force-Placed Insurance which has been paid in full
(excluding any Insurance Add-On Amounts) will be assigned to the Servicer.
(d) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce an Insurance Policy on the grounds that
it is not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Owner Trustee and/or the Trust Collateral Agent, at the Servicer's
expense, or the Seller, at the Seller's expense, shall take such steps as the
Servicer deems necessary to enforce such Insurance Policy, including bringing
suit in its name or the name of the Trust and the Owner Trustee and/or the Trust
Collateral Agent for the benefit of the Noteholders.
(e) The Servicer will cause itself and may cause the Trust
Collateral Agent to be named as named insured under all policies of Collateral
Insurance.
SECTION 4.5. Maintenance of Security Interests in Vehicles.
(a) Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps on behalf of the Trust as are
necessary to maintain perfection of the security interest created by each
Receivable in the related Financed Vehicle, including but not limited to
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
the security interest granted by the Obligors under the respective Receivables.
The Trust Collateral Agent hereby authorizes the Servicer, and the Servicer
agrees, to take any and all steps necessary to re-perfect such security interest
on behalf of the Trust as necessary because of the relocation of a Financed
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Vehicle or for any other reason. In the event that the assignment of a
Receivable to the Trust is insufficient, without a notation on the related
Financed Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Trust, the Servicer hereby agrees that AmeriCredit's
designation as the secured party on the certificate of title is in its capacity
as Servicer as agent of the Trust.
(b) Upon the occurrence of an Insurance Agreement Event of Default,
the Insurer may (so long as an Insurer Default shall not have occurred and be
continuing) instruct the Trust Collateral Agent and the Servicer to take or
cause to be taken, or, if an Insurer Default shall have occurred, upon the
occurrence of a Servicer Termination Event, the Trust Collateral Agent and the
Servicer shall take or cause to be taken such action as may, in the opinion of
counsel to the Controlling Party, be necessary to perfect or re-perfect the
security interests in the Financed Vehicles securing the Receivables in the name
of the Trust by amending the title documents of such Financed Vehicles or by
such other reasonable means as may, in the opinion of counsel to the Controlling
Party, be necessary or prudent. AmeriCredit hereby agrees to pay all expenses
related to such perfection or reperfection and to take all action necessary
therefor. In addition, prior to the occurrence of an Insurance Agreement Event
of Default, the Controlling Party may instruct the Trust Collateral Agent and
the Servicer to take or cause to be taken such action as may, in the opinion of
counsel to the Controlling Party, be necessary to perfect or re-perfect the
security interest in the Financed Vehicles underlying the Receivables in the
name of the Trust, including by amending the title documents of such Financed
Vehicles or by such other reasonable means as may, in the opinion of counsel to
the Controlling Party, be necessary or prudent; provided, however, that if the
Controlling Party requests that the title documents be amended prior to the
occurrence of an Insurance Agreement Event of Default, the out-of-pocket
expenses of the Servicer or the Trust Collateral Agent in connection with such
action shall be reimbursed to the Servicer or the Trust Collateral Agent, as
applicable, by the Controlling Party. AmeriCredit hereby appoints the Trust
Collateral Agent as its attorney-in-fact to take any and all steps required to
be performed by AmeriCredit pursuant to this Section 4.5(b), including execution
of certificates of title or any other documents in the name and stead of
AmeriCredit, and the Trust Collateral Agent hereby accepts such appointment.
SECTION 4.6. Covenants, Representations, and Warranties of
Servicer. By its execution and delivery of this Agreement, the Servicer makes
the following representations,
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warranties and covenants on which the Trust Collateral Agent relies in accepting
the Receivables, on which the Trustee relies in authenticating the Notes and on
which the Insurer relies in issuing the Note Policy.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Financed Vehicle securing each Receivable
shall not be released in whole or in part from the security interest
granted by the Receivable, except upon payment in full of the Receivable
or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do nothing to impair the
rights of the Trust or the Noteholders in the Receivables, the Dealer
Agreements, the Dealer Assignments, the Insurance Policies or the Other
Conveyed Property;
(iii) No Amendments. The Servicer shall not extend or otherwise
amend the terms of any Receivable, except in accordance with Section 4.2;
and
(iv) Restrictions on Liens. The Servicer shall not (i) create, incur
or suffer to exist, or agree to create, incur or suffer to exist, or
consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any
Lien or restriction on transferability of the Receivables except for the
Lien in favor of the Trust Collateral Agent for the benefit of the
Noteholders and Insurer, the Lien imposed by the Spread Account Agreement
Supplement in favor of the Collateral Agent for the benefit of the Trust
Collateral Agent and Insurer, and the restrictions on transferability
imposed by this Agreement or (ii) sign or file under the Uniform
Commercial Code of any jurisdiction any financing statement which names
AmeriCredit or the Servicer as a debtor, or sign any security agreement
authorizing any secured party thereunder to file such financing statement,
with respect to the Receivables, except in each case any such instrument
solely securing the rights and preserving the Lien of the Trust Collateral
Agent, for the benefit of the Noteholders and the Insurer.
(b) The Servicer represents, warrants and covenants as of the
Closing Date as to itself that the representations and warranties set forth on
the Schedule of Representations attached hereto as Schedule B are true and
correct, provided that such representations and warranties contained therein and
herein shall not apply to any entity other than AmeriCredit.
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SECTION 4.7. Purchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Servicer, the Insurer, the Trust Collateral Agent, the
Owner Trustee or the Trustee of a breach of any of the covenants set forth in
Sections 4.5(a) or 4.6(a), the party discovering such breach shall give prompt
written notice to the others; provided, however, that the failure to give any
such notice shall not affect any obligation of AmeriCredit as Servicer under
this Section. As of the second Accounting Date following its discovery or
receipt of notice of any breach of any covenant set forth in Sections 4.5(a) or
4.6(a) which materially and adversely affects the interests of the Noteholders
or the Insurer in any Receivable (including any Liquidated Receivable) (or, at
AmeriCredit's election, the first Accounting Date so following) or the related
Financed Vehicle, AmeriCredit shall, unless such breach shall have been cured in
all material respects, purchase from the Trust the Receivable affected by such
breach and, on the related Determination Date, AmeriCredit shall pay the related
Purchase Amount. It is understood and agreed that the obligation of AmeriCredit
to purchase any Receivable (including any Liquidated Receivable) with respect to
which such a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against AmeriCredit for such breach
available to the Insurer, the Noteholders, the Owner Trustee or the Trust
Collateral Agent; provided, however, that AmeriCredit shall indemnify the Trust,
the Backup Servicer, the Collateral Agent, the Insurer, the Owner Trustee, the
Trust Collateral Agent, the Trustee and the Noteholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach.
SECTION 4.8. Total Servicing Fee; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall be entitled to receive
out of the Collection Account the Basic Servicing Fee and any Supplemental
Servicing Fee for the related Collection Period pursuant to Section 5.7. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer,
expenses incurred in connection with distributions and reports made by the
Servicer to Noteholders or the Insurer and all other fees and expenses of the
Owner Trustee, the Trust Collateral Agent or the Trustee, except taxes levied or
assessed against the Trust, and claims against the Trust in respect of
indemnification, which taxes and claims in respect of indemnification against
the Trust are expressly stated to be for the account of AmeriCredit). The
Servicer shall be liable for the fees and expenses of the Owner Trustee, the
Trust Collateral Agent, the Trustee, the Custodian, the Backup Servicer, the
Collateral
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Agent, the Lockbox Bank (and any fees under the Lockbox Agreement) and the
Independent Accountants. Notwithstanding the foregoing if the Servicer shall not
be AmeriCredit, a successor to AmeriCredit as Servicer including the backup
servicer permitted by Section 9.3 shall not be liable for taxes levied or
assessed against the Trust or claims against the Trust in respect of
indemnification, or the fees and expenses referred to above.
SECTION 4.9. Servicer's Certificate. No later than 10:00 am. New
York City time on each Determination Date, the Servicer shall deliver to the
Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the
Insurer, the Collateral Agent and each Rating Agency a Servicer's Certificate
executed by a Responsible Officer of the Servicer containing among other things,
(i) all information necessary to enable the Trust Collateral Agent to make any
withdrawal and deposit required by Section 5.5, to give any notice required by
Section 5.5(b) and to make the distributions required by Sections 5.7, (ii) all
information necessary to enable the Trust Collateral Agent to send the
statements to Noteholders and the Insurer required by Section 5.10, (iii) a
listing of all Warranty Receivables and Administrative Receivables purchased as
of the related Determination Date, identifying the Receivables so purchased and
(iv) all information necessary to enable the Trust Collateral Agent to reconcile
all deposits to, and withdrawals from, the Collection Account for the related
Collection Period and Distribution Date, including the accounting required by
Section 5.10. Receivables purchased by the Servicer or by the Seller on the
related Determination Date and each Receivable which became a Liquidated
Receivable or which was paid in full during the related Collection Period shall
be identified by account number (as set forth in the Schedule of Receivables).
In addition to the information set forth in the preceding sentence, the
Servicer's Certificate shall also contain the following information: (a) the
Delinquency Ratio, Average Delinquency Ratio, Cumulative Default Ratio and
Cumulative Net Loss Ratio (as such terms are defined in the Spread Account
Agreement) for such Determination Date; (b) whether any Trigger Event has
occurred as of such Determination Date; (c) whether any Trigger Event that may
have occurred as of a prior Determination Date is deemed cured as of such
Determination Date; and (d) whether to the knowledge of the Servicer an
Insurance Agreement Event of Default has occurred.
SECTION 4.10. Annual Statement as to Compliance, Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Trustee, the Owner Trustee,
the Trust Collateral Agent, the Backup Servicer, the Insurer and each Rating
Agency, on or before October 31 (or 120 days after the end of the Servicer's
fiscal
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year, if other than June 30) of each year, beginning on October 31, 1998, an
officer's certificate signed by any Responsible Officer of the Servicer, dated
as of June 30 (or other applicable date) of such year, stating that (i) a review
of the activities of the Servicer during the preceding 12-month period (or such
other period as shall have elapsed from the Closing Date to the date of the
first such certificate) and of its performance under this Agreement has been
made under such officer's supervision, and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, the Owner Trustee,
the Trust Collateral Agent, the Backup Servicer, the Insurer, the Collateral
Agent, and each Rating Agency, promptly after having obtained knowledge thereof,
but in no event later than two (2) 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 Termination Event under Section
9.1(a). The Seller or the Servicer shall deliver to the Trustee, the Owner
Trustee, the Trust Collateral Agent, the Backup Servicer, the Insurer, the
Collateral Agent, the Servicer or the Seller (as applicable) and each Rating
Agency promptly after having obtained knowledge thereof, but in no event later
than two (2) 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 Termination Event under any other clause of
Section 9.1.
SECTION 4.11. Annual Independent Accountants' Report.
The Servicer shall cause a firm of nationally recognized independent
certified public accountants (the "Independent Accountants"), who may also
render other services to the Servicer or to the Seller, to deliver to the
Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the
Insurer and each Rating Agency, on or before October 31 (or 120 days after the
end of the Servicer's fiscal year, if other than June 30) of each year,
beginning on October 31, 1998, with respect to the twelve months ended the
immediately preceding June 30 (or other applicable date) (or such other period
as shall have elapsed from the Closing Date to the date of such certificate), a
statement (the "Accountants' Report") addressed to the Board of Directors of the
Servicer, to the Trustee, the Owner Trustee, the Trust Collateral Agent, the
Backup Servicer and to the Insurer, to the effect that such firm has audited the
books and records of AmeriCredit Corp., in which the Servicer is included as a
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consolidated subsidiary, and issued its report thereon in connection with the
audit report on the consolidated financial statements of AmeriCredit Corp. and
that (1) such audit was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (2) the firm is independent of the Seller and the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants, and (3) includes a report on the application of
agreed upon procedures to three randomly selected Servicer's Certificates
including the delinquency, default and loss statistics required to be specified
therein noting whether any exceptions or errors in the Servicer's Certificates
were found.
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to representatives of the
Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer and
the Insurer reasonable access to the documentation regarding the Receivables. In
each case, such access shall be afforded without charge but only upon reasonable
request and during normal business hours. Nothing in this Section shall derogate
from the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
SECTION 4.13. Monthly Tape. On or before the Determination Date, but
in no event later than the seventh calendar day, of each month, the Servicer
will deliver to the Trust Collateral Agent and the Backup Servicer a computer
tape and a diskette (or any other electronic transmission acceptable to the
Trust Collateral Agent and the Backup Servicer) in a format acceptable to the
Trust Collateral Agent and the Backup Servicer containing the information with
respect to the Receivables as of the preceding Accounting Date necessary for
preparation of the Servicer's Certificate relating to the immediately succeeding
Determination Date and necessary to determine the application of collections as
provided in Section 5.4. The Backup Servicer shall use such tape or diskette (or
other electronic transmission acceptable to the Trust Collateral Agent and the
Backup Servicer) to verify the Servicer's Certificate delivered by the Servicer,
and the Backup Servicer shall certify to the Controlling Party that it has
verified the Servicer's Certificate in accordance with this Section and shall
notify the Servicer and the Controlling Party of any discrepancies, in each
case, on or before the second Business Day following the Determination Date. In
the event that the Backup Servicer reports any discrepancies, the Servicer and
the Backup Servicer shall
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attempt to reconcile such discrepancies prior to the related Distribution Date,
but in the absence of a reconciliation, the Servicer's Certificate shall control
for the purpose of calculations and distributions with respect to the related
Distribution Date. In the event that the Backup Servicer and the Servicer are
unable to reconcile discrepancies with respect to a Servicer's Certificate by
the related Distribution Date, the Servicer shall cause the Independent
Accountants, at the Servicer's expense, to audit the Servicer's Certificate and,
prior to the third Business Day, but in no event later than the fifth calendar
day, of the following month, reconcile the discrepancies. The effect, if any, of
such reconciliation shall be reflected in the Servicer's Certificate for such
next succeeding Determination Date. In addition, upon the occurrence of a
Servicer Termination Event the Servicer shall, if so requested by the
Controlling Party deliver to the Backup Servicer its Collection Records and its
Monthly Records within 15 days after demand therefor and a computer tape
containing as of the close of business on the date of demand all of the data
maintained by the Servicer in computer format in connection with servicing the
Receivables. Other than the duties specifically set forth in this Agreement, the
Backup Servicer shall have no obligations hereunder, including, without
limitation, to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer shall have no liability for any actions taken or
omitted by the Servicer.
SECTION 4.14. Retention and Termination of Servicer. The Servicer
hereby covenants and agrees to act as such under this Agreement for an initial
term, commencing on the Closing Date and ending on June 30, 1997, which term
shall be extendible by the Controlling Party for successive quarterly terms
ending on each successive September 30, December 31 and March 31 (or, pursuant
to revocable written standing instructions from time to time to the Servicer and
the Trust Collateral Agent for any specified number of terms greater than one),
until the Notes and the Securities are paid in full. Each such notice (including
each notice pursuant to standing instructions, which shall be deemed delivered
at the end of successive quarterly terms for so long as such instructions are in
effect) (a "Servicer Extension Notice") shall be delivered by the Insurer to the
Trust Collateral Agent and the Servicer. The Servicer hereby agrees that, as of
the date hereof and upon its receipt of any such Servicer Extension Notice, the
Servicer shall become bound, for the initial term beginning on the Closing Date
and for the duration of the term covered by such Servicer Extension Notice, to
continue as the Servicer subject to and in accordance with the other provisions
of this Agreement. Until such time as an Insurer Default shall have occurred and
be continuing the Trust Collateral Agent agrees that if as of the fifteenth day
prior to the last day of any term of the
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Servicer the Trust Collateral Agent shall not have received any Servicer
Extension Notice from the Insurer, the Trust Collateral Agent will, within five
days thereafter, give written notice of such non-receipt to the Insurer and the
Servicer.
SECTION 4.15. Fidelity Bond and Errors and Omissions Policy. The
Servicer has obtained, and shall continue to maintain in full force and effect,
a Fidelity Bond and Errors and Omissions Policy of a type and in such amount as
is customary for servicers engaged in the business of servicing automobile
receivables.
ARTICLE V
Trust Accounts; Distributions;
Statements to Noteholders
SECTION 5.1. Establishment of Trust Accounts.
(a)(i) The Trust Collateral Agent, on behalf of the Noteholders and
the Insurer, shall establish and maintain in its own name an Eligible
Deposit Account (the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of
the Trust Collateral Agent on behalf of the Noteholders and the Insurer.
(ii) The Trust Collateral Agent, on behalf of the Noteholders, shall
establish and maintain in its own name an Eligible Deposit Account (the
"Note Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Trust
Collateral Agent on behalf of the Noteholders and the Insurer. The Note
Distribution Account shall initially be established with the Trust
Collateral Agent.
(iii) The Trust Collateral Agent, on behalf of the Noteholders and
the Insurer, shall establish and maintain in its own name an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Trust Collateral Agent on behalf of the Noteholders and the
Insurer.
(b) Funds on deposit in the Collection Account, the Pre-Funding
Account, the Note Distribution Account and the Capitalized Interest Account
(collectively, the "Trust Accounts") and the Lockbox Accounts shall be invested
by the Trust Collateral Agent (or any custodian with respect to funds on deposit
in any such account) in Eligible Investments selected in writing by the Servicer
(pursuant to standing
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instructions or otherwise). All such Eligible Investments shall be held by or on
behalf of the Trust Collateral Agent for the benefit of the Noteholders and the
Insurer, as applicable. Other than as permitted by the Rating Agencies and the
Insurer, funds on deposit in any Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the close
of business on the Business Day immediately preceding the following Distribution
Date. Funds deposited in a Trust Account on the day immediately preceding a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight. All Eligible Investments will be held to maturity.
(c) All investment earnings of moneys deposited in the Trust
Accounts shall be deposited (or caused to be deposited) by the Trust Collateral
Agent in the Collection Account, and any loss resulting from such investments
shall be charged to such account. The Servicer will not direct the Trust
Collateral Agent to make any investment of any funds held in any of the Trust
Accounts unless the security interest granted and perfected in such account will
continue to be perfected in such investment, in either case without any further
action by any Person, and, in connection with any direction to the Trust
Collateral Agent to make any such investment, if requested by the Trust
Collateral Agent, the Servicer shall deliver to the Trust Collateral Agent an
Opinion of Counsel, acceptable to the Trust Collateral Agent, to such effect.
(d) The Trust Collateral Agent shall not in any way be held liable
by reason of any insufficiency in any of the Trust Accounts resulting from any
loss on any Eligible Investment included therein except for losses attributable
to the Trust Collateral Agent's negligence or bad faith or its failure to make
payments on such Eligible Investments issued by the Trust Collateral Agent, in
its commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(e) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Trust
Collateral Agent by 2:00 p.m. Eastern Time (or such other time as may be agreed
by the Issuer and Trust Collateral Agent) on any Business Day; or (ii) a Default
or Event of Default shall have occurred and be continuing with respect to the
Notes but the Notes shall not have been declared due and payable, or, if such
Notes shall have been declared due and payable following an Event of Default,
amounts collected or receivable from the Trust Property are being applied as if
there had not been such a declaration; then the Trust Collateral Agent shall, to
the fullest extent practicable, invest and reinvest funds in the Trust Accounts
in one or more Eligible Investments.
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(f)(i) The Trust Collateral Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (excluding all Investment Earnings on the
Collection Account) and all such funds, investments, proceeds and income
shall be part of the Owner Trust Estate. Except as otherwise provided
herein, the Trust Accounts shall be under the sole dominion and control of
the Trust Collateral Agent for the benefit of the Noteholders, as the case
may be, and the Insurer. If, at any time, any of the Trust Accounts ceases
to be an Eligible Deposit Account, the Trust Collateral Agent (or the
Servicer on its behalf) shall within five Business Days (or such longer
period as to which each Rating Agency and the Insurer may consent)
establish a new Trust Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account. In
connection with the foregoing, the Servicer agrees that,in the event that
any of the Trust Accounts are not accounts with the Trust Collateral
Agent, the Servicer shall notify the Trust Collateral Agent in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit
Account.
(ii) With respect to the Trust Account Property, the Trust
Collateral Agent agrees that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts; and,
except as otherwise provided herein, each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the
Trust Collateral Agent, and the Trust Collateral Agent shall have
sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Trust Collateral Agent in
accordance with paragraph (a) of the definition of "Delivery" and
shall be held, pending maturity or disposition, solely by the Trust
Collateral Agent or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely for the Trust
Collateral Agent;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Trust Collateral Agent, pending maturity or
disposition, through continued
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book-entry registration of such Trust Account Property as described
in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by
clause (C) above shall be delivered to the Trust Collateral Agent in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trust Collateral Agent, pending maturity
or disposition, through continued registration of the Trust
Collateral Agent's (or its nominee's) ownership of such security.
(g) The Servicer shall have the power, revocable by the Insurer or,
with the consent of the Insurer by the Trustee or by the Owner Trustee with the
consent of the Trustee, to instruct the Trust Collateral Agent to make
withdrawals and payments from the Trust Accounts for the purpose of permitting
the Servicer and the Trust Collateral Agent to carry out its respective duties
hereunder.
SECTION 5.2. Capitalized Interest Account.
(a) The Servicer shall cause the Trust Collateral Agent to establish
and maintain an Eligible Deposit Account (the "Capitalized Interest Account")
with the Trust Collateral Agent, bearing a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of the Noteholders
and the Insurer.
On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Capitalized Interest Account Initial Deposit into the Capitalized
Interest Account.
(b) (i) On the Distribution Dates occurring in June, July and August
of 1997 the Trust Collateral Agent shall withdraw from the Capitalized Interest
Account the Monthly Capitalized Interest Amount for such Distribution Date and
deposit such amount in the Collection Account as further provided in Section
5.7.
(ii) On the Distribution Dates occurring in June, July and August of
1997 the Servicer shall instruct the Trust Collateral Agent to withdraw from the
Capitalized Interest Account and pay to the Seller on such Distribution Date an
amount equal to the Overfunded Capitalized Interest Amount for such Distribution
Date. Any amounts remaining in the Capitalized Interest Account on the
Distribution Date which immediately follows the end of the Funding Period after
taking into account the transfer pursuant to Section 5.7(a)(i) shall be remitted
by the Trust Collateral Agent to the Seller. Upon any such distributions to the
Seller, the Noteholders, the
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Certificateholders and the Insurer will have no further rights in, or claims to,
such amounts.
SECTION 5.3. Certain Reimbursements to the Servicer. The Servicer
will be entitled to be reimbursed from amounts on deposit in the Collection
Account with respect to a Collection Period for amounts previously deposited in
the Collection Account but later determined by the Servicer to have resulted
from mistaken deposits or postings or checks returned for insufficient funds.
The amount to be reimbursed hereunder shall be paid to the Servicer on the
related Distribution Date pursuant to Section 5.7(b)(i) upon certification by
the Servicer of such amounts and the provision of such information to the Trust
Collateral Agent and the Insurer as may be necessary in the opinion of the
Insurer to verify the accuracy of such certification. In the event that the
Insurer has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section, the Insurer shall (unless
an Insurer Default shall have occurred and be continuing) give the Trust
Collateral Agent notice to such effect, following receipt of which the Trust
Collateral Agent shall not make a distribution to the Servicer in respect of
such amount pursuant to Section 5.7, or if the Servicer prior thereto has been
reimbursed pursuant to Section 5.7, the Trust Collateral Agent shall withhold
such amounts from amounts otherwise distributable to the Servicer on the next
succeeding Distribution Date.
SECTION 5.4. Application of Collections. All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor, (other than Supplemental Servicing Fees
with respect to such Receivable, to the extent collected) shall be applied to
interest and principal in accordance with the Simple Interest Method.
All amounts collected that are payable to the Servicer as
Supplemental Servicing Fees hereunder shall be deposited in the Collection
Account and paid to the Servicer in accordance with Section 5.7(b).
SECTION 5.5. Withdrawals from Spread Account.
(a) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the sum of (i) the Available Funds plus (ii)
the Prepayment Amount with respect to such Determination Date is less than the
sum of the amounts payable on the related Distribution Date pursuant to clauses
(i) through (v) of Section 5.7(b) (such deficiency being a "Deficiency Claim
Amount") then on the
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Deficiency Claim Date immediately preceding such Distribution Date, the Trust
Collateral Agent shall deliver to the Collateral Agent, the Owner Trustee, the
Insurer and the Servicer, by hand delivery, telex or facsimile transmission, a
written notice (a "Deficiency Notice") specifying the Deficiency Claim Amount
for such Distribution Date, the Note Policy Claim Amount, if any. Such
Deficiency Notice shall direct the Collateral Agent to remit such Deficiency
Claim Amount (to the extent of the funds available to be distributed pursuant to
the Spread Account Agreement) to the Trust Collateral Agent for deposit in the
Collection Account on the related Distribution Date.
(b) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that there shall be an Accelerated Payment Amount
Shortfall with respect to the related Distribution Date, then on the fourth
Business Day preceding such Distribution Date, the Trust Collateral Agent shall
deliver to the Collateral Agent, the Insurer and the Servicer, by hand delivery,
a telex or facsimile transmission, an Accelerated Payment Shortfall Notice. Such
Accelerated Payment Shortfall Notice shall direct the Collateral Agent to remit
such Accelerated Payment Amount Shortfall to the Trust Collateral Agent (to the
extent of funds available to be distributed in the Spread Account Agreement) for
deposit in the Collection Account on the related Distribution Date.
(c) Any Deficiency Notice or Accelerated Payment Shortfall Notice
shall be delivered by 2:00 p.m., New York City time, on the fourth Business Day
preceding such Distribution Date. The amounts distributed by the Collateral
Agent to the Trust Collateral Agent pursuant to a Deficiency Notice or
Accelerated Payment Shortfall Notice shall be deposited by the Trust Collateral
Agent into the Collection Account pursuant to Section 5.6.
SECTION 5.6. Additional Deposits. (a) The Servicer and the Seller,
as applicable, shall deposit or cause to be deposited in the Collection Account
on the Determination Date following the date on which such obligations are due
the aggregate Purchase Amount with respect to Purchased Receivables. On or
before each Draw Date, the Trust Collateral Agent shall remit to the Collection
Account any amounts delivered to the Trust Collateral Agent by the Collateral
Agent.
(b) The proceeds of any purchase or sale of the assets of the Trust
described in Section 10.1 hereof shall be deposited in the Collection Account.
SECTION 5.7. Distributions.
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(a) No later than 11:00 a.m. New York time on each Distribution
Date, the Trust Collateral Agent shall (based solely on the information
contained in the Servicer's Certificate delivered on the related Determination
Date unless the Insurer shall have notified the Trust Collateral Agent of any
errors or deficiencies with respect thereto) cause to be made the following
transfers and distributions in the amounts set forth in the Servicer's
Certificate for such Distribution Date:
(i) During the Funding Period, from the Capitalized Interest
Account to the Collection Account, in immediately available funds, the
Monthly Capitalized Interest Amount for such Distribution Date; and
(ii) If such Distribution Date is the Mandatory Redemption Date,
from the Pre-Funding Account to the Collection Account, in immediately
available funds, the Pre-Funded Amount after giving effect to the purchase
of Subsequent Receivables, if any, on the Mandatory Redemption Date.
(b) On each Distribution Date, the Trust Collateral Agent shall
(based solely on the information contained in the Servicer's Certificate
delivered with respect to the related Determination Date unless the Insurer
shall have notified the Trust Collateral Agent of any errors or deficiencies
with respect thereto) distribute the following amounts from the Collection
Account unless otherwise specified, to the extent of the sources of funds stated
to be available therefor, and in the following order of priority:
(i) from the Distribution Amount, to the Servicer, the Base
Servicing Fee for the related Collection Period, any Supplemental
Servicing Fees for the related Collection Period, and any amounts
specified in Section 5.3, to the extent the Servicer has not reimbursed
itself in respect of such amounts pursuant to Section 5.3 and to the
extent not retained by the Servicer;
(ii) from the Distribution Amount, to each of the Lockbox Banks, the
Trustee and the Owner Trustee, their respective accrued and unpaid
trustees' fees and expenses and any accrued and unpaid fees and expenses
of the Trust Collateral Agent (in each case, to the extent such fees have
not been previously paid by the Servicer and provided that such fees shall
not exceed $300,000 in the aggregate in any calendar year);
(iii) from the Distribution Amount and from amounts, if any, paid
under the Note Policy with respect to such
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Distribution Date, to the Note Distribution Account, the Noteholders'
Interest Distributable Amount;
(iv) from the Distribution Amount and from amounts, if any, paid
under the Note Policy with respect to such Distribution Date to the Note
Distribution Account, the Noteholders' Principal Distributable Amount
plus, on the Mandatory Redemption Date, the Note Prepayment Amount;
(v) from the Distribution Amount, to the Insurer, to the extent of
any amounts owing to the Insurer under the Insurance Agreement and not
paid;
(vi) from Available Funds (minus the amount of Investment Earnings
relating to the Collection Account (provided, that such amount so
remaining after deduction of such Investment Earnings shall not be less
than zero)), to the Spread Account, an amount, if necessary, required to
increase the amount therein to its then required level;
(vii) from Available Funds (minus the amount of Investment Earnings
relating to the Collection Account (provided, that such amount so
remaining after deduction of such Investment Earnings shall not be less
than zero)) and amounts, if any, received by the Trust Collateral Agent in
respect of the Accelerated Payment Amount Shortfall, to the Note
Distribution Account, the Noteholders' Accelerated Principal Amount; and
(viii) from Available Funds, any remaining Available Funds to the
Collateral Agent for deposit in the Spread Account;
provided, however, that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing and an Event of Default
pursuant to Section 5.1(i), 5.1(ii), 5.1(iv), 5.1(v) or 5.1(vi) of the Indenture
shall have occurred and be continuing, or (C) the receipt of Insolvency Proceeds
pursuant to Section 10.1(b), amounts deposited in the Note Distribution Account
(including any such Insolvency Proceeds) shall be paid to the Noteholders,
pursuant to Section 5.6 of the Indenture.
(c) In the event that the Collection Account is maintained with an
institution other than the Trust Collateral Agent, the Servicer shall instruct
and cause such institution to make all deposits and distributions pursuant to
Section 5.7(b) on the related Distribution Date.
SECTION 5.8. Note Distribution Account. (a) On each Distribution
Date, the Trust Collateral Agent shall distribute all amounts on deposit in the
Note Distribution
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Account to Noteholders in respect of the Notes to the extent of amounts due and
unpaid on the Notes for principal and interest in the following amounts and in
the following order of priority:
(i) accrued and unpaid interest on the Notes; provided that if
there are not sufficient funds in the Note Distribution Account to pay the
entire amount of accrued and unpaid interest then due on each Class of
Notes, the amount in the Note Distribution Account shall be applied to the
payment of such interest on each Class of Notes pro rata on the basis of
the amount of accrued and unpaid interest due on each Class of Notes;
(ii) any amounts deposited in the Note Distribution Account with
respect to the Note Prepayment Amount, shall be distributed to the Holders
of the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
respectively, based upon the pro rata share as represented by the relative
Outstanding Amount of each Class of Notes;
(iii) to the Holders of the Class A-1 Notes, the Noteholders'
Principal Distributable Amount and the Accelerated Principal Amount until
the outstanding principal balance of the Class A-1 Notes is reduced to
zero;
(iv) to the Holders of the Class A-2 Notes, the Noteholders'
Principal Distributable Amount and the Accelerated Principal Amount until
the outstanding principal balance of the Class A-2 Notes is reduced to
zero; and
(v) to the Holders of the Class A-3 Notes, the Noteholders'
Principal Distributable Amount and the Accelerated Principal Amount until
the outstanding principal balance of the Class A-3 Notes is reduced to
zero.
(b) On each Distribution Date, the Trust Collateral Agent shall
send to each Noteholder the statement provided to the Trust Collateral Agent by
the Servicer pursuant to Section 5.10 hereof on such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Noteholder, such tax shall reduce the
amount otherwise distributable to the Noteholder in accordance with this
Section. The Trust Collateral Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Noteholders sufficient funds for the
payment of any tax attributable to the Trust (but such authorization shall not
prevent the Trust Collateral Agent from contesting any such
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tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a Noteholder shall be treated as cash
distributed to such Noteholder at the time it is withheld by the Trust and
remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-US Noteholder), the Trust Collateral Agent may in its sole
discretion withhold such amounts in accordance with this clause (f). In the
event that a Noteholder wishes to apply for a refund of any such withholding
tax, the Trust Collateral Agent shall reasonably cooperate with such Noteholder
in making such claim so long as such Noteholder agrees to reimburse the Trust
Collateral Agent for any out-of-pocket expenses incurred.
(d) Distributions required to be made to Noteholders on any
Distribution Date shall be made to each Noteholder of record on the preceding
Record Date either by (i) wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if such Noteholder shall have provided to the Note Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date and such Holder's Notes in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) by check mailed to such
Noteholder at the address of such holder appearing in the Note Register.
Notwithstanding the foregoing, the final distribution in respect of any Note
(whether on the Final Scheduled Distribution Date or otherwise) will be payable
only upon presentation and surrender of such Note at the office or agency
maintained for that purpose by the Note Registrar pursuant to Section 2.4 of the
Indenture.
(e) Subject to Section 5.1 and this section, monies received by the
Trust Collateral Agent hereunder need not be segregated in any manner except to
the extent required by law and may be deposited under such general conditions as
may be prescribed by law, and the Trust Collateral Agent shall not be liable for
any interest thereon.
SECTION 5.9. Pre-Funding Account.
(a) On the Closing Date, the Trust Collateral Agent will deposit, on
behalf of the Seller, in the Pre-Funding Account $62,500,002.61 from the
proceeds of the sale of the Notes. On each Subsequent Transfer Date, the
Servicer shall instruct the Trust Collateral Agent to withdraw from the Pre-
Funding Account (i) an amount equal to 91% of the Principal Balance of the
Subsequent Receivables transferred to the Issuer on such Subsequent Transfer
Date and to distribute such amount to or upon the order of the Seller upon
satisfaction of
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the conditions set forth in this Agreement with respect to such transfer and
(ii) an amount equal to the Subsequent Spread Account Deposit on such Subsequent
Transfer Date upon satisfaction of the conditions set forth in this Agreement
with respect to such transfer.
(b) If the Pre-Funded Amount has not been reduced to zero on the
date on which the Funding Period ends after giving effect to any reductions in
the Pre-Funded Amount on such date, the Servicer shall instruct the Trust
Collateral Agent to withdraw from the Pre-Funding Account on the Mandatory
Redemption Date the Pre-Funded Amount (exclusive of any Pre-Funding Earnings)
and deposit an amount equal to the Note Prepayment Amount in the Note
Distribution Account.
SECTION 5.10. Statements to Noteholders. On or prior to each
Determination Date, the Servicer shall provide to the Trust Collateral Agent
(with a copy to the Insurer and the Rating Agencies) for the Trust Collateral
Agent to forward to each Noteholder of record a statement setting forth at least
the following information as to the Notes to the extent applicable:
(i) the amount of such distribution allocable to principal of each
Class of Notes;
(ii) the amount of such distribution allocable to interest on or
with respect to each Class of Notes;
(iii) the amount of such distribution payable out of amounts
withdrawn from the Spread Account or pursuant to a claim on the Note
Policy;
(iv) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(v) the aggregate outstanding principal amount of each Class of the
Notes and the Note Pool Factor for each such Class after giving effect to
payments allocated to principal reported under (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period and/or due but unpaid with
respect to such Collection Period or prior Collection Periods, as the case
may be;
(vii) the Noteholders' Interest Carryover Shortfall and the
Noteholders' Principal Carryover Shortfall;
(viii) the amount of the aggregate Realized Losses, if any, for the
second preceding Collection Period;
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(ix) the aggregate Purchase Amounts for Receivables, if any, that
were repurchased in such period;
(x) for Distribution Dates during the Funding Period (if any), the
remaining Pre-Funded Amount; and
(xi) for the final Subsequent Transfer Date, the amount of any
remaining Pre-Funded Amount that has not been used to fund the purchase of
Subsequent Receivables and is passed through as principal to Noteholders.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (vi), (vii), (xi)
and (xii) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof).
SECTION 5.11. Optional Deposits by the Insurer. The Insurer shall at
any time, and from time to time, with respect to a Distribution Date, have the
option (but shall not be required, except in accordance with the terms of the
Note Policy) to deliver amounts to the Trust Collateral Agent for deposit into
the Collection Account for any of the following purposes: (i) to provide funds
in respect of the payment of fees or expenses of any provider of services to the
Trust with respect to such Distribution Date, or (ii) to include such amount to
the extent that without such amount a draw would be required to be made on the
Note Policy.
ARTICLE VI
The Note Policy
SECTION 6.1. Claims Under Note Policy.
(a) In the event that the Trust Collateral Agent has delivered a
Deficiency Notice with respect to any Determination Date pursuant to Section 5.5
hereof, the Trust Collateral Agent shall on the related Draw Date determine the
Note Policy Claim Amount for the related Distribution Date. If the Note Policy
Claim Amount for such Distribution Date is greater than zero, the Trust
Collateral Agent shall furnish to the Insurer no later than 12:00 noon New York
City time on the related Draw Date a completed Notice of Claim (as defined in
(b) below) in the amount of the Note Policy Claim Amount. Amounts paid by the
Insurer pursuant to a claim submitted under this Section shall be deposited by
the Trust Collateral Agent into the Note Distribution Account for payment to
Noteholders on the related Distribution Date.
(b) Any notice delivered by the Trust Collateral Agent to the
Insurer pursuant to subsection 6.1(a) shall specify the Note Policy Claim Amount
claimed under the Note
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Policy and shall constitute a "Notice of Claim" under the Note Policy. In
accordance with the provisions of the Note Policy, the Insurer is required to
pay to the Trust Collateral Agent the Note Policy Claim Amount properly claimed
thereunder by 10:00 a.m., New York City time, on the later of (i) the third
Business Day following receipt on a Business Day of the Notice of Claim, and
(ii) the applicable Distribution Date. Any payment made by the Insurer under the
Note Policy shall be applied solely to the payment of the Notes, and for no
other purpose.
(c) The Trust Collateral Agent shall (i) receive as attorney-in-fact
of each Noteholder any Note Policy Claim Amount from the Insurer and (ii)
deposit the same in the Collection Account for distribution to Noteholders. Any
and all Note Policy Claim Amounts disbursed by the Trust Collateral Agent from
claims made under the Note Policy shall not be considered payment by the Trust
or from the Spread Account with respect to such Notes, and shall not discharge
the obligations of the Trust with respect thereto. The Insurer shall, to the
extent it makes any payment with respect to the Notes, become subrogated to the
rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Notes by or on
behalf of the Insurer, the Trust Collateral Agent shall assign to the Insurer
all rights to the payment of interest or principal with respect to the Notes
which are then due for payment to the extent of all payments made by the
Insurer, and the Insurer may exercise any option, vote, right, power or the like
with respect to the Notes to the extent that it has made payment pursuant to the
Note Policy. To evidence such subrogation, the Note Registrar shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt from
the Insurer of proof of payment by the Insurer of any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount. The
foregoing subrogation shall in all cases be subject to the rights of the
Noteholders to receive all Scheduled Payments (as defined in the Note Policy) in
respect of the Notes.
(d) The Trust Collateral Agent shall keep a complete and accurate
record of all funds deposited by the Insurer into the Collection Account and the
allocation of such funds to payment of interest on and principal paid in respect
of any Note. The Insurer shall have the right to inspect such records at
reasonable times upon one Business Day's prior notice to the Trust Collateral
Agent.
(e) The Trust Collateral Agent shall be entitled to enforce on
behalf of the Noteholders the obligations of the Insurer under the Note Policy.
Notwithstanding any other provision of this Agreement or any Basic Document, the
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Noteholders are not entitled to institute proceedings directly against the
Insurer.
SECTION 6.2. Preference Claims. (a) In the event that the Trust
Collateral Agent has received a certified copy of an order of the appropriate
court that any Noteholders' Interest Distributable Amount or Noteholders'
Principal Distributable Amount paid on a Note has been avoided in whole or in
part as a preference payment under applicable bankruptcy law, the Trust
Collateral Agent shall so notify the Insurer, shall comply with the provisions
of the Note Policy to obtain payment by the Insurer of such avoided payment, and
shall, at the time it provides notice to the Insurer, notify Holders of the
Notes by mail that, in the event that any Noteholder's payment is so
recoverable, such Noteholder will be entitled to payment pursuant to the terms
of the Note Policy. The Trust Collateral Agent shall furnish to the Insurer its
records evidencing the payments of principal of and interest on Notes, if any,
which have been made by the Trust Collateral Agent and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of the Note Policy, the Insurer will make such payment on behalf of
the Noteholder to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order (as defined in the Note Policy) and not to the
Trust Collateral Agent or any Noteholder directly (unless a Noteholder has
previously paid such payment to the receiver, conservator, debtor-in-possession
or trustee in bankruptcy, in which case the Insurer will make such payment to
the Trust Collateral Agent for distribution to such Noteholder upon proof of
such payment reasonably satisfactory to the Insurer).
(b) The Trust Collateral Agent shall promptly notify the Insurer of
any proceeding or the institution of any action (of which the Trust Collateral
Agent has actual knowledge) seeking the avoidance as a preferential transfer
under applicable bankruptcy, insolvency, receivership, rehabilitation or similar
law (a "Note Preference Claim") of any distribution made with respect to the
Notes. Each Holder, by its purchase of Notes, and the Trust Collateral Agent
hereby agree that so long as an Insurer Default shall not have occurred and be
continuing, the Insurer may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim including, without limitation, (i) the direction of any appeal
of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Insurer, but subject to reimbursement as provided in the Insurance
Agreement. In addition, and without limitation of the foregoing, as set forth in
Section 6.1(c), the Insurer shall be subrogated to, and each Noteholder and the
Trust Collateral Agent hereby delegate and assign, to the fullest extent
permitted by law,
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the rights of the trustee and each Noteholder in the conduct of any proceeding
with respect to a Preference Claim, including, without limitation, all rights of
any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim.
SECTION 6.3. Surrender of Policy. The Trust Collateral Agent shall
surrender the Note Policy to the Insurer for cancellation upon the expiration of
such policy in accordance with the terms thereof.
ARTICLE VII
The Seller
SECTION 7.1. Representations of Seller. The Seller makes the
following representations on which the Insurer shall be deemed to have relied in
executing and delivering the Note Policy and on which the Issuer is deemed to
have relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case
of Initial Receivables, and as of the applicable Subsequent Transfer Date, in
the case of Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) Schedule of Representations. The representations and warranties set
forth on the Schedule of Representations attached hereto as Schedule B are true
and correct.
(b) 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 Nevada, with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property transferred to the Trust.
(c) 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 where the failure to do so would materially and
adversely affect Seller's ability to transfer the Receivables and the Other
Conveyed Property to the Trust pursuant to this Agreement, or the validity or
enforceability of the Receivables and the Other Conveyed Property or to perform
Seller's obligations hereunder and under the Seller's Basic Documents.
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(d) Power and Authority. The Seller has the power and authority to execute
and deliver this Agreement and its Basic Documents and to carry out its terms
and their terms, respectively; the Seller has full power and authority to sell
and assign the Receivables and the Other Conveyed Property to be sold and
assigned to and deposited with the Trust by it and has duly authorized such sale
and assignment to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the Seller's Basic
Documents have been duly authorized by the Seller by all necessary corporate
action.
(e) Valid Sale, Binding Obligations. This Agreement effects a valid sale,
transfer and assignment of the Receivables and the Other Conveyed Property,
enforceable against the Seller and creditors of and purchasers from the Seller;
and this Agreement and the Seller's Basic Documents, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The consummation of the transactions contemplated by
this Agreement and the Basic Documents and the fulfillment of the terms of this
Agreement and the Basic Documents shall not conflict with, result in any breach
of any of the terms and provisions of or constitute (with or without notice,
lapse of time or both) a default under the certificate of incorporation or
by-laws of the Seller, or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, 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.
(g) No Proceedings. There are no proceedings or investigations pending or,
to the Seller's knowledge, threatened against the Seller, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of the Basic Documents, (B)
seeking to prevent the issuance of the Securities or the consummation of any of
the
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transactions contemplated by this Agreement or any of the Basic Documents, (C)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents, or (D) seeking
to adversely affect the federal income tax or other federal, state or local tax
attributes of the Securities.
(h) Chief Executive Office. The chief executive office of the Seller is at
1325 Airmotive Way, Reno, Nevada 89502.
SECTION 7.2. Corporate Existence. (a) During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, any Subsequent
Transfer Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain corporate records and books of account
separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the Seller
shall not commingle its assets and funds with those of its Affiliates;
(iii) the Seller shall hold such appropriate meetings of its Board of
Directors as are necessary to authorize all the Seller's corporate actions
required by law to be authorized by the Board of Directors, shall keep
minutes of such meetings and of meetings of its stockholder(s) and observe
all other customary corporate formalities (and any successor Seller not a
corporation shall observe similar procedures in accordance with its
governing documents and applicable law);
(iv) the Seller shall at all times hold itself out to the public
under the Seller's own name as a legal entity separate and distinct from
its Affiliates; and
(v) all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's-length basis.
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SECTION 7.3. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust, the Insurer, the Trustee and the Trust Collateral
Agent 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 and
any of the Basic Documents (except any income taxes arising out of fees paid to
the Owner Trustee, the Trust Collateral Agent, the Trustee and the Insurer and
except any taxes to which the Owner Trustee, the Trust Collateral Agent or the
Trustee may otherwise be subject to), including any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with respect
to, federal or other income taxes arising out of distributions on the Notes) and
costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trustee, and the Trust Collateral Agent, the Insurer and
the Noteholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii) the
Seller's or the Issuer's violation of Federal or state securities laws in
connection with the offering and sale of the Notes.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee, Trustee, Trust Collateral Agent and Backup Servicer and its officers,
directors, employees and agents from and against any and all costs, expenses,
losses, claims, damages and liabilities arising out of, or incurred in
connection with the acceptance or performance of the trusts and duties set forth
herein and in the Basic Documents except to the extent that such cost, expense,
loss, claim, damage or liability shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Trustee or the Trust Collateral Agent and the
termination of this Agreement or the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and other
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and
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the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Seller, without interest.
SECTION 7.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) the Seller shall have received the
written consent of the Insurer prior to entering into any such transaction, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.1 shall have been breached and no Servicer
Termination Event, and no event which, after notice or lapse of time, or both,
would become a Servicer Termination Event shall have happened and be continuing,
(iii) the Seller shall have delivered to the Owner Trustee, the Trust Collateral
Agent, the Trustee and the Insurer an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iv) the Rating Agency Condition shall have been
satisfied with respect to such transaction and (v) the Seller shall have
delivered to the Owner Trustee, the Trust Collateral Agent, the Trustee and the
Insurer an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Trust Collateral Agent, the Owner Trustee and the
Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 7.5. 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
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arising under any Basic Document. The Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability.
SECTION 7.6. Seller May Own Certificates or Notes. The Seller and
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Seller or an Affiliate thereof, except as expressly provided
herein or in any Basic Document. Notes or Certificates so owned by the Seller or
such Affiliate shall have an equal and proportionate benefit under the
provisions of the Basic Documents, without preference, priority, or distinction
as among all of the Notes or Certificates; provided, however, that any Notes or
Certificates owned by the Seller or any Affiliate thereof, during the time such
Notes or Certificates are owned by them, shall be without voting rights for any
purpose set forth in the Basic Documents and will not be entitled to the
benefits of the Note Policy. The Seller shall notify the Owner Trustee, the
Trustee, the Trust Collateral Agent and the Insurer promptly after it or any of
its Affiliates become the owner of a Certificate or a Note.
ARTICLE VIII
The Servicer
SECTION 8.1. Representations of Servicer. The Servicer makes the
following representations on which the Insurer shall be deemed to have relied in
executing and delivering the Note Policy and on which the Issuer is deemed to
have relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case
of the Initial Receivables, and as of the applicable Subsequent Transfer Date,
in the case of the Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(i) Representations and Warranties. The representations and
warranties set forth on the Schedule of Representations attached hereto as
Schedule B are true and correct, provided that such representations and
warranties contained therein and herein shall not apply to any entity
other than AmeriCredit;
(ii) Organization and Good Standing. The Servicer has been duly
organized and is validly existing and in good standing under the laws of
its jurisdiction of organization, with power, authority and legal right to
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own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to enter
into and perform its obligations under this Agreement;
(iii) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement) requires
or shall require such qualification;
(iv) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and its Basic Documents and to carry
out its terms and their terms, respectively, and the execution, delivery
and performance of this Agreement and the Servicer's Basic Documents have
been duly authorized by the Servicer by all necessary corporate action;
(v) Binding Obligation. This Agreement and the Servicer's Basic
Documents shall constitute legal, valid and binding obligations of the
Servicer enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(vi) No Violation. The consummation of the transactions contemplated
by this Agreement and the Servicer's Basic Documents, and the fulfillment
of the terms of this Agreement and the Servicer's Basic Documents, shall
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Servicer, or any
indenture, agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which it is bound, or result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to the Servicer of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties;
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(vii) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the Servicer,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or any of
the Basic Documents, (B) seeking to prevent the issuance of the Securities
or the consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, or (C) seeking any determination
or ruling that might materially and adversely affect the performance by
the Servicer of its obligations under, or the validity or enforceability
of, this Agreement or any of the Basic Documents or (D) seeking to
adversely affect the federal income tax or other federal, state or local
tax attributes of the Securities;
(viii) No Consents. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement which has not
already been obtained.
SECTION 8.2. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such) shall be liable hereunder only
to the extent of the obligations in this Agreement specifically undertaken by
the Servicer and the representations made by the Servicer.
(b) The Servicer shall defend, indemnify and hold harmless the Trust, the
Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the
Insurer, their respective officers, directors, agents and employees, and the
Noteholders from and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of any Financed Vehicle;
(c) The Servicer (when the Servicer is AmeriCredit) shall indemnify,
defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the
Owner Trustee, the Backup Servicer, the Insurer, their respective officers,
directors, agents and employees and the Noteholders from and against any taxes
that may at any time be asserted against any of such parties with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, tangible or intangible personal property,
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privilege or license taxes (but not including any federal or other income taxes,
including franchise taxes asserted with respect to, and as of the date of, the
sale of the Receivables and the Other Conveyed Property to the Trust or the
issuance and original sale of the Securities) and costs and expenses in
defending against the same;
The Servicer (when the Servicer is not AmeriCredit) shall indemnify,
defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the
Owner Trustee, the Backup Servicer, the Insurer, their respective officers,
directors, agents and employees and the Noteholders from and against any taxes
with respect to the sale of Receivables in connection with servicing hereunder
that may at any time be asserted against any of such parties with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes asserted with respect to, and as of the date of, the sale of the
Receivables and the Other Conveyed Property to the Trust or the issuance and
original sale of the Securities) and costs and expenses in defending against the
same; and
(d) The Servicer shall indemnify, defend and hold harmless the Trust, the
Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the
Insurer, their respective officers, directors, agents and employees and the
Noteholders 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 Trust, the Trustee,
the Trust Collateral Agent, the Backup Servicer, the Insurer or the Noteholders
by reason of the breach of this Agreement by the Servicer, the negligence,
misfeasance, or bad faith of the Servicer in the performance of its duties under
this Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement.
(e) AmeriCredit shall indemnify, defend and hold harmless the Trust, the
Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the
Insurer, their respective officers, directors, agents and employees and the
Noteholders from and against any loss, liability or expense incurred by reason
of the violation by Servicer or Seller of federal or state securities laws in
connection with the registration or the sale of the Securities.
(f) Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer has made any indemnity payments pursuant to this Article and the
recipient
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thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts collected to the Servicer, without interest.
SECTION 8.3. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer or Backup Servicer.
(a) AmeriCredit shall not merge or consolidate with any other
person, convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit any other Person to become the successor to
AmeriCredit's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be
capable of fulfilling the duties of AmeriCredit contained in this Agreement and
shall be acceptable to the Controlling Party, and, if an Insurer Default shall
have occurred and be continuing, shall be an Eligible Servicer. Any corporation
(i) into which AmeriCredit may be merged or consolidated, (ii) resulting from
any merger or consolidation to which AmeriCredit shall be a party, (iii) which
acquires by conveyance, transfer, or lease substantially all of the assets of
AmeriCredit, or (iv) succeeding to the business of AmeriCredit, in any of the
foregoing cases shall execute an agreement of assumption to perform every
obligation of AmeriCredit under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to AmeriCredit under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement, anything in this Agreement
to the contrary notwithstanding; provided, however, that nothing contained
herein shall be deemed to release AmeriCredit from any obligation. AmeriCredit
shall provide notice of any merger, consolidation or succession pursuant to this
Section to the Owner Trustee, the Trust Collateral Agent, the Noteholders, the
Insurer and each Rating Agency. Notwithstanding the foregoing, AmeriCredit shall
not merge or consolidate with any other Person or permit any other Person to
become a successor to AmeriCredit's business, unless (x) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 4.6 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation of
such transaction) and no event that, after notice or lapse of time, or both,
would become an Insurance Agreement Event of Default shall have occurred and be
continuing, (y) AmeriCredit shall have delivered to the Owner Trustee, the Trust
Collateral Agent, the Rating Agencies and the Insurer an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent, if any, provided for in this Agreement relating to
such transaction have been complied with, and (z)
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AmeriCredit shall have delivered to the Owner Trustee, the Trust Collateral
Agent, the Rating Agencies and the Insurer an Opinion of Counsel, stating in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Trust in the Receivables
and the Other Conveyed Property and reciting the details of the filings or (B)
no such action shall be necessary to preserve and protect such interest.
(b) Any corporation (i) into which the Backup Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer, or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Backup Servicer under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding; provided, however, that nothing contained herein shall
be deemed to release the Backup Servicer from any obligation.
SECTION 8.4. Limitation on Liability of Servicer, Backup Servicer
and Others.
(a) Neither AmeriCredit, the Backup Servicer nor any of the directors or
officers or employees or agents of AmeriCredit or Backup Servicer shall be under
any liability to the Trust or the Noteholders, except as provided in this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement; provided, however, that this provision shall not
protect AmeriCredit, the Backup Servicer or any such person against any
liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith or negligence (excluding errors in
judgment) in the performance of duties; provided further that this provision
shall not affect any liability to indemnify the Trust Collateral Agent and the
Owner Trustee for costs, taxes, expenses, claims, liabilities, losses or damages
paid by the Trust Collateral Agent and the Owner Trustee, in their individual
capacities. AmeriCredit, the Backup Servicer and any director, officer, employee
or agent of AmeriCredit or Backup Servicer may rely in good faith on the written
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.
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(b) Notwithstanding anything herein to the contrary, the Backup Servicer
shall not be liable for any obligation of the Servicer contained in this
Agreement, and the Trust Collateral Agent and the Owner Trustee, the Seller, the
Insurer and the Noteholders shall look only to the Servicer to perform such
obligations.
(c) The parties expressly acknowledge and consent to LaSalle National Bank
acting in the possible dual capacity of Backup Servicer or successor Servicer
and in the capacity as Trust Collateral Agent. LaSalle National Bank may, in
such dual or other capacity, discharge its separate functions fully, without
hinderance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by LaSalle of express duties set
forth in the this Agreement in any of such capacities, all of which defenses,
claims or assertions are hereby expressly waived by the other parties hereto and
the Noteholders except in the case of gross negligence and willful misconduct by
LaSalle National Bank.
SECTION 8.5. Delegation of Duties. The Servicer may delegate duties under
this Agreement to an Affiliate of AmeriCredit with the prior written consent of
the Insurer (unless an Insurer Default shall have occurred and be continuing),
the Trust Collateral Agent, the Owner Trustee and the Backup Servicer. The
Servicer also may at any time perform through sub-contractors the specific
duties of (i) repossession of Financed Vehicles, (ii) tracking Financed
Vehicles' insurance and (iii) pursuing the collection of deficiency balances on
certain Liquidated Receivables, in each case, without the consent of the Insurer
and may perform other specific duties through such sub-contractors in accordance
with Servicer's customary servicing policies and procedures, with the prior
consent of the Insurer; provided, however, that no such delegation or
sub-contracting duties by the Servicer shall relieve the Servicer of its
responsibility with respect to such duties. So long as no Insurer Default shall
have occurred and be continuing neither AmeriCredit or any party acting as
Servicer hereunder shall appoint any subservicer hereunder without the prior
written consent of the Insurer, the Trustee and the Backup Servicer.
SECTION 8.6. Servicer and Backup Servicer Not to Resign. Subject to the
provisions of Section 8.3, neither the Servicer nor the Backup Servicer shall
resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except upon a determination that by reason of a
change in legal requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal requirements in a manner which
would have a material adverse effect on the Servicer or the Backup
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Servicer, as the case may be, and the Insurer (so long as an Insurer Default
shall not have occurred and be continuing) or a Note Majority (if an Insurer
Default shall have occurred and be continuing) does not elect to waive the
obligations of the Servicer or the Backup Servicer, as the case may be, to
perform the duties which render it legally unable to act or to delegate those
duties to another Person. Any such determination permitting the resignation of
the Servicer or Backup Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered and acceptable to the Trust Collateral Agent, the Owner
Trustee and the Insurer (unless an Insurer Default shall have occurred and be
continuing). No resignation of the Servicer shall become effective until, so
long as no Insurer Default shall have occurred and be continuing the Backup
Servicer or an entity acceptable to the Insurer shall have assumed the
responsibilities and obligations of the Servicer or, if an Insurer Default shall
have occurred and be continuing, the Backup Servicer or a successor Servicer
that is an Eligible Servicer shall have assumed the responsibilities and
obligations of the Servicer. No resignation of the Backup Servicer shall become
effective until, so long as no Insurer Default shall have occurred and be
continuing, an entity acceptable to the Insurer shall have assumed the
responsibilities and obligations of the Backup Servicer or, if an Insurer
Default shall have occurred and be continuing a Person that is an Eligible
Servicer shall have assumed the responsibilities and obligations of the Backup
Servicer; provided, however, that in the event a successor Backup Servicer is
not appointed within 60 days after the Backup Servicer has given notice of its
resignation and has provided the Opinion of Counsel required by this Section,
the Backup Servicer may petition a court for its removal.
ARTICLE IX
Default
SECTION 9.1. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deliver to the Trust Collateral
Agent for distribution to Noteholders any proceeds or payment required to be so
delivered under the terms of this Agreement that continues unremedied for a
period of two Business Days (one Business Day with respect to payment of
Purchase Amounts) after written notice is received by the Servicer from the
Trust Collateral Agent or (unless an Insurer Default shall have occurred and be
continuing) the Insurer or after discovery of such failure by a Responsible
Officer of the Servicer;
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(b) Failure by the Servicer to deliver to the Trust Collateral Agent
and (so long as an Insurer Default shall not have occurred and be continuing)
the Insurer the Servicer's Certificate by the fourth Business Day prior to the
Distribution Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 8.3(a);
(c) Failure on the part of the Servicer duly to observe or perform
any other covenants or agreements of the Servicer set forth in this Agreement,
which failure (i) materially and adversely affects the rights of Noteholders
(determined without regard to the availability of funds under the Note Policy),
or of the Insurer (unless an Insurer Default shall have occurred and be
continuing), and (ii) continues unremedied for a period of 30 days after
knowledge thereof by the Servicer or after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trust Collateral Agent or the Insurer (or, if an Insurer Default
shall have occurred and be continuing by any Noteholder);
(d) The entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Servicer in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any substantial
part of its property or ordering the winding up or liquidation of the affairs of
the Servicer and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days or the commencement of an involuntary
case under the federal bankruptcy laws, as now or hereinafter in effect, or
another present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or
(e) The commencement by the Servicer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other present or
future, federal or state, bankruptcy, insolvency or similar law, or the consent
by the Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Servicer or of any substantial part of its property or the making by the
Servicer of an assignment for the benefit of creditors or the failure by the
Servicer generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer in furtherance of any of the foregoing; or
(f) Any representation, warranty or statement of the Servicer made
in this Agreement or any certificate, report
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or other writing delivered pursuant hereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made, and the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Trust or the Noteholders and, within 30 days after
knowledge thereof by the Servicer or after written notice thereof shall have
been given to the Servicer by the Trust Collateral Agent or the Insurer (or, if
an Insurer Default shall have occurred and be continuing, a Noteholder), the
circumstances or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured; or
(g) So long as an Insurer Default shall not have occurred and be
continuing, the Insurer shall not have delivered a Servicer Extension Notice
pursuant to Section 4.14; or
(h) So long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Event of Default or under any other Insurance
and Indemnity Agreement relating to any Series an Event of Default thereunder
shall have occurred; or
(i) A claim is made under the Note Policy.
SECTION 9.2. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be continuing, the Insurer (or, if an
Insurer Default shall have occurred and be continuing either the Trust
Collateral Agent, (to the extent it has knowledge thereof) a Note Majority), by
notice given in writing to the Servicer (and to the Trust Collateral Agent if
given by the Insurer or the Noteholders) or by non-extension of the term of the
Servicer as referred to in Section 4.14 may terminate all of the rights and
obligations of the Servicer under this Agreement. On or after the receipt by the
Servicer of such written notice or upon termination of the term of the Servicer,
all authority, power, obligations and responsibilities of the Servicer under
this Agreement, whether with respect to the Notes, the Certificates or the Other
Conveyed Property or otherwise, automatically shall pass to, be vested in and
become obligations and responsibilities of the Backup Servicer (or such other
successor Servicer appointed by the Controlling Party); provided, however, that
the successor Servicer shall have no liability with respect to any obligation
which was required to be performed by the terminated Servicer prior to the date
that the successor Servicer becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated Servicer. The
successor Servicer is authorized and empowered by this Agreement to execute and
deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise,
any and
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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 the Other Conveyed Property and related documents to show the Trust as
lienholder or secured party on the related Lien Certificates, or otherwise. The
terminated Servicer agrees to cooperate with the successor Servicer in effecting
the termination of the responsibilities and rights of the terminated Servicer
under this Agreement, including, without limitation, the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the terminated Servicer for deposit, or have been deposited
by the terminated Servicer, in the Collection Account or thereafter received
with respect to the Receivables and the delivery to the successor Servicer of
all Receivable Files, Monthly Records and Collection Records and a computer tape
in readable form as of the most recent Business Day containing all information
necessary to enable the successor Servicer or a successor Servicer to service
the Receivables and the Other Conveyed Property. If requested by the Controlling
Party, the successor Servicer shall terminate the Lockbox Agreement and direct
the Obligors to make all payments under the Receivables directly to the
successor Servicer (in which event the successor Servicer shall process such
payments in accordance with Section 4.2(e)), or to a lockbox established by the
successor Servicer at the direction of the Controlling Party, at the successor
Servicer's expense. The terminated Servicer shall grant the Trust Collateral
Agent, the successor Servicer and the Controlling Party reasonable access to the
terminated Servicer's premises at the terminated Servicer's expense.
SECTION 9.3. Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 9.2, upon non-extension of the servicing term
as referred to in Section 4.14, or upon the resignation of the Servicer pursuant
to Section 8.6, the Backup Servicer (unless the Insurer shall have exercised its
option pursuant to Section 9.3(b) to appoint an alternate successor Servicer)
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for in
this Agreement, and shall be subject to all the rights, responsibilities,
restrictions, duties, liabilities and termination provisions relating thereto
placed on the Servicer by the terms and provisions of this Agreement except as
otherwise stated herein. The Trust Collateral Agent and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. If a successor Servicer is acting as Servicer
hereunder, it shall be subject to term-to-term servicing as
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referred to in Section 4.14 and to termination under Section 9.2 upon the
occurrence of any Servicer Termination Event applicable to it as Servicer.
(b) The Controlling Party may exercise at any time its right to
appoint as Backup Servicer or as successor to the Servicer a Person other than
the Person serving as Backup Servicer at the time, and (without limiting its
obligations under the Note Policy) shall have no liability to the Trust
Collateral Agent, AmeriCredit, the Seller, the Person then serving as Backup
Servicer, any Noteholders or any other Person if it does so. Notwithstanding the
above, if the Backup Servicer shall be legally unable or unwilling to act as
Servicer, and an Insurer Default shall have occurred and be continuing, the
Backup Servicer, the Trust Collateral Agent or a Note Majority may petition a
court of competent jurisdiction to appoint any Eligible Servicer as the
successor to the Servicer. Pending appointment pursuant to the preceding
sentence, the Backup Servicer shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment. Subject to Section 8.6, no provision of this Agreement shall be
construed as relieving the Backup Servicer of its obligation to succeed as
successor Servicer upon the termination of the Servicer pursuant to Section 9.2,
the resignation of the Servicer pursuant to Section 8.6 or the non-extension of
the servicing term of the Servicer, as referred to in Section 4.14. If upon the
termination of the Servicer pursuant to Section 9.2 or the resignation of the
Servicer pursuant to Section 8.6, the Controlling Party appoints a successor
Servicer other than the Backup Servicer, the Backup Servicer shall not be
relieved of its duties as Backup Servicer hereunder.
(c) Any successor Servicer 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 the Servicer had not
resigned or been terminated hereunder. If any successor Servicer is appointed as
a result of the Backup Servicer's refusal (in breach of the terms of this
Agreement) to act as Servicer although it is legally able to do so, the Insurer
and such successor Servicer may agree on reasonable additional compensation to
be paid to such successor Servicer by the Backup Servicer, which additional
compensation shall be paid by such breaching Backup Servicer in its individual
capacity and solely out of its own funds. If any successor Servicer is appointed
for any reason other than the Backup Servicer's refusal to act as Servicer
although legally able to do so, the Insurer and such successor Servicer may
agree on additional compensation to be paid to such successor Servicer, which
additional compensation shall be payable as provided in the
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Spread Account Agreement and shall in no event exceed $150,000. In addition, any
successor Servicer shall be entitled, as provided in the Spread Account
Agreement, to reasonable transition expenses incurred in acting as successor
Servicer.
SECTION 9.4. Notification to Noteholders. Upon any termination of,
or appointment of a successor to, the Servicer, the Trust Collateral Agent shall
give prompt written notice thereof to each Noteholder and to the Rating
Agencies.
SECTION 9.5. Waiver of Past Defaults. So long as no Insurer Default
shall have occurred and be continuing, the Insurer (or, if an Insurer Default
shall have occurred and be continuing, the Note Majority) may, on behalf of all
Noteholders, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.
ARTICLE X
Termination
SECTION 10.1. Optional Purchase of All Receivables. (a) On the last
day of any Collection Period as of which the Pool Balance shall be less than or
equal to 10% of the Original Pool Balance, the Servicer and the Seller each
shall have the option to purchase the Owner Trust Estate, other than the Trust
Accounts (with the consent of the Insurer if such purchase would result in a
claim on the Note Policy or would result in any amount owing to the Insurer
under the Insurance Agreement remaining unpaid); provided, however, that the
amount to be paid for such purchase (as set forth in the following sentence)
shall be sufficient to pay the full amount of principal, premium, if any, and
interest then due and payable on the Notes and the Certificates. To exercise
such option, the Servicer or the Seller, as the case may be, shall deposit
pursuant to Section 5.6 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables (including Liquidated
Receivables), plus the appraised value of any other property held by the Trust,
such value to be determined by an appraiser mutually agreed upon by the
Servicer, the Insurer and the Trust Collateral Agent, and shall succeed to all
interests in and to the Trust.
(b) Upon any sale of the assets of the Trust pursuant to Section 8.1
of the Trust Agreement, the Servicer
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shall instruct the Trust Collateral Agent to deposit the proceeds from such sale
after all payments and reserves therefrom (including the expenses of such sale)
have been made (the "Insolvency Proceeds") in the Collection Account.
(c) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Trustee, the Trust Collateral Agent, the
Insurer and the Rating Agencies as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trust Collateral Agent pursuant to this Agreement.
ARTICLE XI
Administrative Duties of the Servicer
SECTION 11.1. Administrative Duties.
(a) Duties with Respect to the Indenture. The Servicer shall perform
all its duties and the duties of the Issuer under the Indenture. In addition,
the Servicer shall consult with the Owner Trustee as the Servicer deems
appropriate regarding the duties of the Issuer under the Indenture. The Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the Indenture, including, without limitation,
pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9, 3.10, 3.17, 5.1, 5.4, 7.3, 8.3,
9.2, 9.3, 11.1 and 11.15 of the Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall perform such
calculations and shall prepare for execution by the Issuer or the Owner Trustee
or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer or the Owner
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Trustee to prepare, file or deliver pursuant to this Agreement or any of the
Basic Documents or under state and federal tax and securities laws, and at the
request of the Owner Trustee shall take all appropriate action that it is the
duty of the Issuer to take pursuant to this Agreement or any of the Basic
Documents, including, without limitation, pursuant to Sections 2.6 and 2.11 of
the Trust Agreement. In accordance with the directions of the Issuer or the
Owner Trustee, the Servicer shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Issuer or the Owner Trustee and
are reasonably within the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for promptly
notifying the Owner Trustee and the Trust Collateral Agent in the event that any
withholding tax is imposed on the Issuer's payments (or allocations of income)
to an Owner (as defined in the Trust Agreement) as contemplated this Agreement.
Any such notice shall be in writing and specify the amount of any withholding
tax required to be withheld by the Owner Trustee or the Trust Collateral Agent
pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for performance of
the duties of the Issuer set forth in Section 5.1(a), (b), (c) and (d) of the
Trust Agreement with respect to, among other things, accounting and reports to
Owners (as defined in the Trust Agreement); provided, however, that once
prepared by the Servicer the Owner Trustee shall retain responsibility for the
distribution of the Schedule K-1s necessary to enable the Certificateholder to
prepare its federal and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 9.2 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Servicer under this Agreement
or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into transactions with
or otherwise deal with any of its Affiliates; provided, however, that the terms
of any such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Servicer's opinion, no less
favorable to the Issuer in any material respect.
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(c) Tax Matters. The Servicer shall prepare and file, on behalf of
the Seller, all tax returns, tax elections, financial statements and such annual
or other reports attributable to the activities engaged in by the Issuer as are
necessary for preparation of tax reports, including without limitation forms
1099. All tax returns will be signed by the Seller.
(d) Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article XII unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner Trustee and, with
respect to items (A), (B), (C) and (D) below, the Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Receivables);
(C) the amendment, change or modification of this Agreement or
any of the Basic Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Trustees pursuant to the Indenture or
the appointment of Successor Servicers or the consent to the
assignment by the Note Registrar, Paying Agent or Trustee of its
obligations under the Indenture; and
(E) the removal of the Trustee or the Trust Collateral Agent.
(e) Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Indenture Trust Property pursuant to Section 5.5
of the Indenture, (3) take any other action that the Issuer directs the Servicer
not to take on its behalf or (4) in connection with its duties
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hereunder assume any indemnification obligation of any other Person.
(f) The Backup Servicer or any successor Servicer shall not be
responsible for any obligations or duties of the servicer under Section 11.1.
SECTION 11.2. Records. The Servicer shall maintain appropriate books
of account and records relating to services performed under this Agreement,
which books of account and records shall be accessible for inspection by the
Issuer at any time during normal business hours.
SECTION 11.3. Additional Information to be Furnished to the Issuer.
The Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
ARTICLE XII
Miscellaneous Provisions
SECTION 12.1. Amendment. (a) This Agreement may be amended from time
to time by the parties hereto, with the consent of the Trustee (which consent
may not be unreasonably withheld), with the prior written consent of the Insurer
(so long as no Insurer Default has occurred and is continuing) but without the
consent of any of the Noteholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel delivered to Owner
Trustee and the Trustee, adversely affect in any material respect the interests
of any Noteholder; provided further that if an Insurer Default has occurred and
is continuing, such action shall not materially adversely affect the interests
of the Insurer.
This Agreement may also be amended from time to time by the parties
hereto, with the consent of the Insurer, the consent of the Trustee, the consent
of the Holders of Notes evidencing not less than a majority of the outstanding
principal amount of the Notes 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; provided, however,
that no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be
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required to be made for the benefit of the Noteholders or (b) reduce the
aforesaid percentage of the outstanding principal amount of the Notes, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes of each class affected
thereby; provided further, that if an Insurer Default has not occurred and is
continuing, such action shall not materially adversely affect the interest of
the Insurer.
Promptly after the execution of any such amendment or consent, the
Trust Collateral Agent shall furnish written notification of the substance of
such amendment or consent to each Noteholder and the Rating Agencies.
It shall not be necessary for the consent of Noteholders pursuant to
this Section 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 provided for in this Agreement) and of evidencing the authorization
of any action by Noteholders shall be subject to such reasonable requirements as
the Trustee or the Owner Trustee, as applicable, may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel referred to in Section 12.2(i)(1)
has been delivered. The Owner Trustee, the Trust Collateral Agent, the Backup
Servicer and the Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Issuer's, the Owner Trustee's, the Trust Collateral
Agent's, the Backup Servicer's or the Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
(b) Notwithstanding anything to the contrary contained in subsection
13.1(a) above, the provisions of the Agreement relating to (i) the Spread
Account Agreement Supplement, the Spread Account, the Specified Spread Account
Requirement, a Trigger Event or any component definition of a Trigger Event and
(ii) any additional sources of funds which may be added to the Spread Account or
uses of funds on deposit in the Spread Account may be amended in any respect by
the Seller, the Servicer, the Insurer and the Collateral Agent (the consent of
which shall not be withheld or delayed with respect to any amendment that does
not adversely affect the Collateral Agent) without the consent of, or notice to,
the Noteholders.
SECTION 12.2. Protection of Title to Trust. (a) The Seller shall
execute and file such financing
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statements and cause to be executed and filed such continuation 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 Issuer and the interests of the Trust
Collateral Agent in the Receivables and in the proceeds thereof. The Seller
shall deliver (or cause to be delivered) to the Insurer, the Owner Trustee and
the Trust Collateral Agent file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of
the UCC, unless it shall have given the Insurer, the Owner Trustee, the Trust
Collateral Agent and the Trustee at least five days' prior written notice
thereof and shall have promptly filed appropriate amendments to all previously
filed financing statements or continuation statements. Promptly upon such
filing, the Seller or the Servicer, as the case may be, shall deliver an Opinion
of Counsel in form and substance reasonably satisfactory to the Insurer, stating
either (A) all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Trust and the Trust Collateral Agent 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) no such action shall be necessary to preserve and
protect such interest.
(c) Each of the Seller and the Servicer shall have an obligation to
give the Insurer, the Owner Trustee, the Trust Collateral Agent and the Trustee
at least 60 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment. The Servicer shall at all times maintain each
office from which it shall service 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
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time deposited in the Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Trust in
such Receivable and that such Receivable is owned by the Trust. Indication of
the Trust's interest in a Receivable shall be deleted from or modified on the
Servicer's computer systems when, and only when, the related Receivable shall
have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Trust.
(g) Upon request, the Servicer shall furnish to the Insurer, the
Owner Trustee or to the Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(h) The Servicer shall deliver to the Insurer, the Owner Trustee and
the Trustee:
(1) promptly after the execution and delivery of the Agreement and,
if required pursuant to Section 12.1, of each amendment, an Opinion of
Counsel stating that, in the opinion of such Counsel, in form and
substance reasonably satisfactory to the Insurer, either (A) all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Trust and
the Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are given,
or (B) no such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date,
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an Opinion of Counsel, dated as of a date during such 90-day period,
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Trust and
the Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are given,
or (B) no such action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
SECTION 12.3. Notices. All demands, notices and communications upon
or to the Seller, the Servicer, the Owner Trustee, the Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered, or
mailed by certified mail, return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Seller to AFS Funding Corp.,
1325 Airmotive Way, Reno, Nevada 89502, (b) in the case of the Servicer to
AmeriCredit Financial Services, Inc., 200 Bailey Avenue, Fort Worth, Texas
76107-1220, Attention: Chief Financial Officer, (c) in the case of the Issuer or
the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, with a
copy to Bankers Trust Company, 4 Albany Street, New York, New York 10006,
Attention: Corporate Trust Agency, Structured Finance, 10th floor, (d) in the
case of the Trustee, the Trust Collateral Agent or the Collateral Agent, at the
Corporate Trust Office, (e) in the case of the Insurer, to Financial Security
Assurance Inc., 350 Park Avenue, New York, New York 10022; Attention: Senior
Vice President, Surveillance (in each case in which notice or other
communication to the Insurer refers to a Servicer Termination Event, a claim on
the Note Policy, a Deficiency Notice pursuant to Section 5.5 of this Agreement
or with respect to which failure on the part of the Insurer to respond shall be
deemed to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of each of the General
Counsel and the Head -Financial Guaranty Group and shall be marked to indicate
"URGENT MATERIAL ENCLOSED"); (f) in the case of Moody's, to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007; and (g) in the case of Standard & Poor's, to Standard & Poor's Ratings
Group, 25 Broadway - 15th Floor, New York, New York 10004, Attention: Asset
Backed Surveillance Department. Any notice required or permitted to be mailed to
a Noteholder shall be given by first class mail, postage prepaid, at the address
of such Holder as shown in the Note Register. Any notice so mailed within the
time prescribed in the Agreement
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shall be conclusively presumed to have been duly given, whether or not the
Noteholder shall receive such notice.
SECTION 12.4. Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained herein,
except as provided in Sections 7.4 and 8.3 and as provided in the provisions of
this Agreement concerning the resignation of the Servicer, this Agreement may
not be assigned by the Seller or the Servicer without the prior written consent
of the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the
Trustee and the Insurer (or if an Insurer Default shall have occurred and be
continuing the Holders of Notes evidencing not less than 66% of the principal
amount of the outstanding Notes).
SECTION 12.5. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the parties hereto, the Trustee and
the Noteholders, as third-party beneficiaries. The Insurer and its successors
and assigns shall be a third-party beneficiary to the provisions of this
Agreement, and shall be entitled to rely upon and directly enforce such
provisions of this Agreement so long as no Insurer Default shall have occurred
and be continuing. Except as expressly stated otherwise herein, any right of the
Insurer to direct, appoint, consent to, approve of, or take any action under
this Agreement, shall be a right exercised by the Insurer in its sole and
absolute discretion. The Insurer may disclaim any of its rights and powers under
this Agreement (but not its duties and obligations under the Note Policy) upon
delivery of a written notice to the Owner Trustee. Nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 12.6. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 12.7. 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.
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SECTION 12.8. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 12.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.10. Assignment to Trustee. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the benefit
of the Noteholders 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 Trustee.
SECTION 12.11. Nonpetition Covenants. (a) 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 termination of this Agreement
with respect to the Issuer, 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.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date that is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce to, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Seller or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller.
SECTION 12.12. Limitation of Liability of Owner Trustee and Trustee.
(a) Notwithstanding anything contained herein to the contrary, this Agreement
has been countersigned by Bankers Trust (Delaware) not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Bankers Trust (Delaware) in its individual
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capacity or, except as expressly provided in the Trust Agreement, as Owner
Trustee 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 Articles V, VI and VII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by LaSalle National Bank, not in its
individual capacity but solely as Trust Collateral Agent and Backup Servicer and
in no event shall LaSalle National Bank, 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.
(c) In no event shall LaSalle National Bank, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Business Trust Statute, common law, or the Trust Agreement.
SECTION 12.13. Independence of the Servicer. For all purposes of
this Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer, the Trust Collateral Agent and Backup
Servicer or the Owner Trustee with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by this Agreement, the Servicer shall have no authority to act for or
represent the Issuer or the Owner Trustee in any way and shall not otherwise be
deemed an agent of the Issuer or the Owner Trustee.
SECTION 12.14. No Joint Venture. Nothing contained in this Agreement
(i) shall constitute the Servicer and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1997-B
by BANKERS TRUST (DELAWARE) not
in its individual capacity but
solely as Owner Trustee on behalf
of the Trust,
by
----------------------------
Title:
AFS FUNDING CORP., Seller,
by
----------------------------
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer,
by
----------------------------
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
LASALLE NATIONAL BANK,
not in its individual capacity
but solely as Backup Servicer
and Trust Collateral Agent
by
----------------------------
Name: Shashank Mishra
Title: Vice President
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
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SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
1. Characteristics of Receivables. Each Receivable (A) was originated by a
Dealer for the retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business in accordance with AmeriCredit's credit policies and such
Dealer had all necessary licenses and permits to originate Receivables in the
state where such Dealer was located, was fully and properly executed by the
parties thereto, was purchased by AmeriCredit from such Dealer under an existing
Dealer Agreement or pursuant to a Dealer Assignment with AmeriCredit and was
validly assigned by such Dealer to AmeriCredit pursuant to a Dealer Assignment,
(B) contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for realization against the
collateral security, (C) is a Receivable which provides for level monthly
payments (provided that the period in the first Collection Period and the
payment in the final Collection Period of the Receivable may be minimally
different from the normal period and level payment) which, if made when due,
shall fully amortize the Amount Financed over the original term and (D) has not
been amended or collections with respect to which waived, other than as
evidenced in the Receivable File relating thereto.
2. No Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to AmeriCredit and by AmeriCredit to the
Seller without any fraud or misrepresentation on the part of such Dealer in any
case.
3. Compliance with Law. All requirements of applicable federal, state and
local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Moss-Magnuson Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors'
Civil Relief Act of 1940, each applicable state Motor Vehicle Retail Installment
Sales Act, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws) in respect of the Receivables and the Financed Vehicles,
have been complied with in all material respects, and each Receivable and the
sale of the Financed Vehicle evidenced by each Receivable complied at the time
it was originated or made and now complies in all material respects with all
applicable legal requirements.
4. Origination. Each Receivable was originated in the United States.
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5. Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation of the Obligor thereon, enforceable by the
holder thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the Cutoff Date of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended; and all parties to each Receivable had
full legal capacity to execute and deliver such Receivable and all other
documents related thereto and to grant the security interest purported to be
granted thereby.
6. No Government Obligor. No Obligor is the United States of America or
any State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the related Cutoff Date no Obligor had been
identified on the records of AmeriCredit as being the subject of a current
bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the Schedule of
Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the related
Cutoff Date.
9. Marking Records. By the Closing Date or Subsequent Transfer Date, as
applicable, the Seller will have caused the portions of the Electronic Ledger
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivables have been sold to the Seller by the Servicer and resold by the
Seller to the Trust in accordance with the terms of the Sale and Servicing
Agreement.
10. Computer Tape. The Computer Tape made available by the Seller to the
Trust on the Closing Date or Subsequent Transfer Date, as applicable, was
complete and accurate as of the related Cutoff Date and includes a description
of the same Receivables that are described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the Noteholders
or the Insurer were utilized in selecting the Receivables from those receivables
owned by the Seller which met the selection criteria contained in the Sale and
Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within the
meaning of the UCC as in effect in the States
of Texas and New York.
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13. One Original. There is only one original executed copy of each
Receivable.
14. Receivable Files Complete. There exists a Receivable File pertaining
to each Receivable and such Receivable File contains (a) a fully executed
original of the Receivable, (b) the original executed credit application, or a
copy thereof and (c) the original Lien Certificate or application therefor. Each
of such documents which is required to be signed by the Obligor has been signed
by the Obligor in the appropriate spaces. All blanks on any form have been
properly filled in and each form has otherwise been correctly prepared. The
complete Receivable File for each Receivable currently is in the possession of
the Custodian.
15. Receivables in Force. No Receivable has been satisfied, subordinated
or rescinded, and the Financed Vehicle securing each such Receivable has not
been released from the lien of the related Receivable in whole or in part. No
terms of any Receivable have been waived, altered or modified in any respect
since its origination, except by instruments or documents identified in the
Receivable File. No Receivable has been modified as a result of application of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
16. Lawful Assignment. No Receivable was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Securities.
17. Good Title. Immediately prior to the conveyance of the Receivables to
the Trust pursuant to this Agreement or Subsequent Transfer Agreement, as
applicable, the Seller was the sole owner thereof and had good and indefeasible
title thereto, free of any Lien and, upon execution and delivery of this
Agreement by the Seller, the Trust shall have good and indefeasible title to and
will be the sole owner of such Receivables, free of any Lien. No Dealer has a
participation in, or other right to receive, proceeds of any Receivable. The
Seller has not taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the related
Insurance Policies or the related Dealer Agreements or Dealer Assignments or to
payments due under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created or
shall create a valid, binding and enforceable first priority security interest
in favor of the Seller in the Financed Vehicle. The Lien Certificate and
original certificate of title for each Financed Vehicle show, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate
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will be received within 180 days of the Closing Date or Subsequent Transfer
Date, as applicable, and will show the Seller named as the original secured
party under each Receivable as the holder of a first priority security interest
in such Financed Vehicle. With respect to each Receivable for which the Lien
Certificate has not yet been returned from the Registrar of Titles, the Seller
has received written evidence from the related Dealer that such Lien Certificate
showing the Seller as first lienholder has been applied for and the Seller's
security interest has been validly assigned by the Seller to the Trust pursuant
to this Agreement. Immediately after the sale, transfer and assignment thereof
by the Seller to the Trust, each Receivable will be secured by an enforceable
and perfected first priority security interest in the Financed Vehicle in favor
of the Trustee as secured party, which security interest is prior to all other
Liens upon and security interests in such Financed Vehicle which now exist or
may hereafter arise or be created (except, as to priority, for any lien for
taxes, labor or materials affecting a Financed Vehicle). As of the related
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof and the Other Conveyed Property have been made, taken or performed.
20. No Impairment. The Seller has not done anything to convey any right to
any Person that would result in such Person having a right to payments due under
the Receivable or otherwise to impair the rights of the Trust, the Insurer, the
Trustee, the Trust Collateral Agent and the Noteholders in any Receivable or the
proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to AmeriCredit with respect to such Receivable.
22. No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Receivable.
23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 30 days), and no condition exists or event has
occurred
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and is continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the terms of
any Receivable, and there has been no waiver of any of the foregoing. As of the
related Cutoff Date no Financed Vehicle had been repossessed.
24. Insurance. At the time of a purchase of a Receivable by AmeriCredit
from a Dealer, each Financed Vehicle is required to be covered by a
comprehensive and collision insurance policy (i) in an amount at least equal to
the lesser of (a) its maximum insurable value or (b) the principal amount due
from the Obligor under the related Receivable, (ii) naming AmeriCredit as loss
payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive and
collision coverage. Each Receivable requires the Obligor to maintain physical
loss and damage insurance, naming AmeriCredit and its successors and assigns as
additional insured parties, and each Receivable permits the holder thereof to
obtain physical loss and damage insurance at the expense of the Obligor if the
Obligor fails to do so. No Financed Vehicle is insured under a policy of
Force-Placed Insurance on the related Cutoff Date.
25. Past Due. At the related Cutoff Date no Receivable was more than 30
days past due.
26. Remaining Principal Balance. At the related Cutoff Date the Principal
Balance of each Receivable set forth in the Schedule of Receivables is true and
accurate in all material respects.
27. Certain Characteristics of Initial Receivables. (A) Each Initial
Receivable had a remaining maturity, as of the Initial Cutoff Date, of not more
than 60 months; (B) each Receivable had an original maturity of not more than 60
months; (C) each Initial Receivable had a remaining Principal Balance as of the
Initial Cutoff Date of at least $250 and not more than $30,000; (D) each Initial
Receivable has an Annual Percentage Rate of at least 14.25% and not more than
32.00%; (E) no Initial Receivable was more than 30 days past due as of the
Initial Cutoff Date and (F) no funds have been advanced by AmeriCredit, any
Dealer, or anyone acting on behalf of any of them in order to cause any Initial
Receivable to qualify under clause (E) above.
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SCHEDULE C
SERVICING POLICIES AND PROCEDURES
Note: Applicable Time Periods Will Vary by State
Compliance with state collection laws is required of all AmeriCredit Collection
Personnel. Additionally, AmeriCredit has chosen to follow the guidelines of the
Federal Fair Debt Collection Practices Act (FDCPA).
The Collection Process
Customer is issued a monthly billing statement 16 to 20 days before payment is
due.
A. All accounts are issued to the Computer Assisted Collection System (CACS)
at 5 days delinquent or at such other dates of delinquency as determined
by historical payment patterns of the account.
B. Accounts are then segregated into two groups, those less
than 30 days delinquent and those over 30 days
delinquent.
C. Accounts less than 30 days delinquent are further segregated into accounts
that have good residential and business phone numbers and those that do
not.
D. For those that have good phone numbers, they are assigned to the Melita
Group.
E. For those without good phone numbers, they are assigned to the front-end
collector.
F. In both groups, all reasonable collection efforts are made to avoid the
account rolling over 30 days delinquent, including the use of collection
letters. Collection letters may be utilized between 15 and 25 days
delinquent.
G. At the time the account reaches 31 days delinquent, it is assigned to a
mid-range collector. At this time the collector identifies the necessity
of any default notification required by state law.
H. Once the account exceeds 60 days in delinquency, it is assigned to a
hard-core collector. The hard-core collector then continues the collection
effort. If the account cannot be resolved through normal collection
efforts, i.e., satisfactory payment arrangements, then
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the account may be submitted for repossession approval, either voluntary
or by an approved outside contractor or if necessary for sequestration
approval. All repossessions and sequestrations must be approved by an
Officer.
I. CACS allows the individual collector to accurately document and update
each account pertaining to telephone calls and correspondence created as a
result of contact with the customer.
Repossessions
If repossession of the collateral occurs, whether voluntary or involuntary, the
following steps are taken:
A. Notification of repossession to proper authorities when necessary.
B. Inventory of all personal property is taken and a condition report is done
on the vehicle. Pictures are also taken of the vehicle.
C. Written notification, as required by state law, to customer(s) concerning
their rights of redemption or reinstatement along with information on how
to obtain any personal property that was in the vehicle at the time of
repossession.
D. Written request to the originating dealer for all refunds due for dealer
adds.
E. Collateral disposition through public or private sale, (dictated by state
law), in a commercially reasonable manner, whenever possible through a
Manheim or Adessa Auto Auction.
F. After the collateral is liquidated, the debtor(s) is notified in writing
of the deficiency balance owed, if any.
Use of Due Date Changes
Due dates may be changed subject to the following conditions:
A. The account is contractually current or will be brought
current with the due date change.
B. Due date changes cannot exceed the total of 15 days over
the life of the contract.
C. The first installment payment has been paid in full.
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D. Only one date change in a twelve month period.
E. Any exceptions to the above stated policy must be approved by an Officer.
Use of Payment Deferments
A payment deferral is offered to customers who have encountered temporary
financial difficulties.
A. Minimum of six payments have been made on the account.
B. The account will be brought current with the deferment,
but not paid ahead.
C. A deferment fee is collected on all transactions.
D. Only one deferment transaction can be performed in a
twelve month period.
E. No more than two payments may be deferred in a twelve month period, and no
more than eight total payments may be deferred over the life of the loan.
F. Any exceptions to the above stated policy must be
approved by an Officer.
Charge-Offs
A. When a Post Repossession Notice is generated on an account, the account
may be partially charged-off on the date that the notice legally expires.
The partial charge-off calculation is based on the expected residual value
of the vehicle at time of sale. Adjustments to the account are made once
final liquidation of the vehicle occurs.
B. It is AmeriCredit's policy that any account that is not
successfully recovered by 180 days delinquent is
submitted to an Officer for approval and charge-off.
C. It is AmeriCredit's policy to carry all Chapter 13 bankruptcy accounts
until confirmation of the plan. Once the plan is approved, a partial
charge-off is taken for the unsecured portion of the account. On fully
reaffirmed Chapter 7 bankruptcy accounts, the accounts are deferred
current at the time of discharge.
Deficiency Collections
A. Contact is made with the customer in an attempt to establish acceptable
payment arrangements or settlements on the account.
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B. If the customer is unwilling to do so, AmeriCredit may invoke any legal
collection remedy that the state allows, i.e., judgements, garnishments,
etc.
4
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EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
TRANSFER No. ___ OF SUBSEQUENT Receivables pursuant to a Sale and
Servicing Agreement dated as of May 1, 1997, among THE AMERICREDIT AUTOMOBILE
RECEIVABLES TRUST 1997-B, a Delaware business trust (the "Issuer"), AFS FUNDING
CORP., a Nevada corporation (the "Seller"), AMERICREDIT FINANCIAL SERVICES, INC.
a Delaware corporation (the "Servicer"), and LASALLE NATIONAL BANK, a national
banking association (the "Trust Collateral Agent").
W I T N E S S E T H:
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller
wishes to convey the Subsequent Receivables to the Issuer; and
WHEREAS, the Issuer is willing to accept such conveyance subject to
the terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller, the Servicer and the Trust
Collateral Agent hereby agree as follows:
1. Defined Terms. Capitalized terms used herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.
"Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, _______________, 1997.
"Subsequent Transfer Date" shall mean. with respect to the
Subsequent Receivables conveyed hereby, _____________, 1997.
2. Schedule of Receivables. Annexed hereto is a supplement to
Schedule A to the Sale and Servicing Agreement listing the Receivables that
constitute the Subsequent Receivables to be conveyed pursuant to this Agreement
on the Subsequent Transfer Date.
3. Conveyance of Subsequent Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of $____________, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse (except as expressly provided in the Sale and Servicing
Agreement), all right, title and interest of the Seller in and to:
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(a) the Subsequent Receivables and all moneys received thereon, on
and after the related Subsequent Cutoff Date;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any other interest of
the Seller in such Financed Vehicles;
(c) any proceeds and the right to receive proceeds with respect to
the Subsequent Receivables from claim and the right to receive proceeds on
any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors;
(d) all rights of the Seller against the Dealers;
(e) any proceeds with respect to the Subsequent Receivables from
recourse to Dealers in respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment
in full is unlikely;
(f) the related Receivables Files;
(g) its rights and benefits, but none of its obligations or burdens,
under the Subsequent Transfer Agreement, including the delivery
requirements, representations and warranties and the cure and repurchase
obligations of AmeriCredit under the Subsequent Purchase Agreement, on or
after the Subsequent Cutoff Date; and
(h) the proceeds of any and all of the foregoing.
4. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Issuer as of the date of this Agreement and as of
the Subsequent Transfer Date that:
(a) Schedule of Representations. The representations and warranties
set forth on the Schedule of Representations attached hereto as Schedule B are
true and correct.
(b) 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 Nevada, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property transferred to the Trust.
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(c) 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 where the failure to do so would
materially and adversely affect Seller's ability to transfer the Receivables and
the Other Conveyed Property to the Trust pursuant to this Agreement, or the
validity or enforceability of the Receivables and the Other Conveyed Property or
to perform Seller's obligations hereunder and under the Seller's Basic
Documents.
(d) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and its Basic Documents and to carry out its
terms and their terms, respectively; the Seller has full power and authority to
sell and assign the Receivables and the Other Conveyed Property to be sold and
assigned to and deposited with the Trust by it and has duly authorized such sale
and assignment to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the Seller's Basic
Documents have been duly authorized by the Seller by all necessary corporate
action.
(e) Valid Sale, Binding Obligations. This Agreement effects a valid
sale, transfer and assignment of the Receivables and the Other Conveyed
Property, enforceable against the Seller and creditors of and purchasers from
the Seller; and this Agreement and the Seller's Basic Documents, when duly
executed and delivered, shall constitute legal, valid and binding obligations of
the Seller enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The consummation of the transactions contemplated
by this Agreement and the Basic Documents and the fulfillment of the terms of
this Agreement and the Basic Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the certificate of incorporation
or by-laws of the Seller, or any indenture, agreement, mortgage, deed of trust
or other instrument to which the Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, order, rule
or regulation applicable to the Seller of any court or of any federal or state
regulatory body,
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administrative agency or other governmental instrumentality having jurisdiction
over the Seller or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of the Basic Documents, (B)
seeking to prevent the issuance of the Securities or the consummation of any of
the transactions contemplated by this Agreement or any of the Basic Documents,
(C) seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement or any of the Basic Documents, or (D)
seeking to adversely affect the federal income tax or other federal, state or
local tax attributes of the Securities.
(h) Chief Executive Office. The chief executive office of the Seller
is at 1325 Airmotive Way, Reno, Nevada 89502.
(i) Principal Balance. The aggregate Principal Balance of the
Receivables listed on the supplement to Schedule A annexed hereto and conveyed
to the Issuer pursuant to this Agreement as of the Subsequent Cutoff Date is
$____________.
5. Conditions Precedent. The obligation of the Issuer to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Subsequent Transfer Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section 6.1
of the Sale and Servicing Agreement shall be true and correct as of the date of
this Agreement and as of the Subsequent Transfer Date.
(b) Sale and Servicing Agreement Conditions. Each of the conditions
set forth in Section 2.2(b) to the Sale and Servicing Agreement shall have been
satisfied.
(c) Additional Information. The Seller shall have delivered to the
Issuer such information as was reasonably requested by the Issuer to satisfy
itself as to (i) the accuracy of the representations and warranties set forth in
Section 4 of this Agreement and in Section 6.1 of the Sale and Servicing
Agreement and (ii) the satisfaction of the conditions set forth in this Section
5.
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6. Ratification of Agreement. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the Issuer, the Seller and the Servicer have
caused this Agreement to be duly executed and delivered by their respective duly
authorized officers as of day and the year first above written.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1997-B
by BANKERS TRUST (DELAWARE) not
in its individual capacity but
solely as Owner Trustee on
behalf of the Trust,
by
----------------------------
Title:
AFS FUNDING CORP., Seller,
by
----------------------------
Title:
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer,
by
----------------------------
Title:
Acknowledged and Accepted:
LASALLE NATIONAL BANK,
not in its individual
capacity but solely as
Trust Collateral Agent
by
------------------------
Title:
[Sale and Servicing Agreement]
<PAGE>
EXHIBIT B
SERVICER'S CERTIFICATE
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FINANCIAL GUARANTY
INSURANCE POLICY
Obligor: AmeriCredit Automobile Receivables Trust 1997-B Policy No.: 50588-N
Obligations: $250,000,000 Asset Backed Notes, as Date of Issuance: 5/21/97
described in Endorsement No. 1
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for
consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY GUARANTEES to
each Holder, subject only to the terms of this Policy (which includes each
endorsement hereto), the full and complete payment by the Obligor of Scheduled
Payments of principal of, and interest on, the Obligations.
For the further protection of each Holder, Financial Security
irrevocably and unconditionally guarantees :
(a) payment of the amount of any distribution of principal of, or
interest on, the Obligations made during the Term Of This Policy to such
Holder that is subsequently avoided in whole or in part as a preference
payment under applicable law (such payment to be made by Financial
Security in accordance with Endorsement No. 1 hereto).
(b) payment of any amount required to be paid under this Policy by
Financial Security following Financial Security's receipt of notice as
described in Endorsement No. 1 hereto.
Financial Security shall be subrogated to the rights of each Holder
to receive payments under the Obligations to the extent of any payment by
Financial Security hereunder.
Except to the extent expressly modified by an endorsement hereto,
the following terms shall have the meanings specified for all purposes of this
Policy. "Holder" means the registered owner of any Obligation as indicated on
the registration books maintained by or on behalf of the Obligor for such
purpose or, if the Obligation is in bearer form, the holder of the Obligation.
"Scheduled Payments" means payments which are scheduled to be made during the
Term Of This Policy in accordance with the original terms of the Obligations
when issued and without regard to any amendment or modification of such
Obligations thereafter; payments which become due on an accelerated basis as a
result of (a) a default by the Obligor, (b) an election by the Obligor to pay
principal on an accelerated basis or (c) any other cause, shall not constitute
"Scheduled Payments" unless Financial Security shall elect, in its sole
discretion, to pay such principal due upon such acceleration together with any
accrued interest to the date of acceleration. "Term Of This Policy" shall have
the meaning set forth in Endorsement No. 1 hereto.
This Policy sets forth in full the undertaking of Financial
Security, and shall not be modified, altered or affected by any other agreement
or instrument, including any modification or amendment thereto, or by the
merger, consolidation or dissolution of the Obligor. Except to the extent
expressly modified by an endorsement hereto, the premiums paid in respect of
this Policy are nonrefundable for any reason whatsoever, including payment, or
provision being made for payment, of the Obligations prior to maturity. This
Policy may not be canceled or revoked during the Term Of This Policy. THIS
POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED
IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused
this Policy to be executed on its behalf by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By
----------------------------------
AUTHORIZED OFFICER
A subsidiary of Financial Security Assurance Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022 (212) 826-0100
Form 100NY (5/89)
<PAGE>
ENDORSEMENT NO. 1
FINANCIAL SECURITY 350 Park Avenue
ASSURANCE INC. New York, New York 10022
OBLIGOR: AmeriCredit Automobile Receivables Trust 1997-B
OBLIGATIONS: $68,000,000 Class A-1 5.79% Asset Backed Notes
$96,250,000 Class A-2 6.36% Asset Backed Notes
$85,750,000 Class A-3 6.67% Asset Backed Notes
Policy No.: 50588-N
Date of Issuance: May 1, 1997
1. Definitions. For all purposes of this Policy, the terms specified below
shall have the meanings or constructions provided below. Capitalized terms used
herein and not otherwise defined herein shall have the meanings provided in the
Indenture unless otherwise specified.
"Business Day" means any day other than a Saturday, Sunday, legal holiday
or other day on which commercial banking institutions in the Fort Worth, Texas,
New York, New York or Chicago, Illinois, or any other location of any successor
Servicer, successor Indenture Trustee, successor Owner Trustee or successor
Trust Collateral Agent are authorized or obligated by law, executive order, or
governmental decree to remain closed.
"Holder" shall not include the Obligor or any affiliates or successors
thereof in the event the Obligor, or any such affiliate or successor, is a
registered or beneficial owner of the Obligation.
"Indenture" means the Indenture, dated as of May 1, 1997, between the
Obligor and LaSalle National Bank, as Trustee and Trust Collateral Agent.
"Indenture Trustee" means LaSalle National Bank, in its capacity as
Trustee under the Indenture and any successor in such capacity.
"Policy" means this Financial Guaranty Insurance Policy and includes each
endorsement thereto.
"Receipt" and "Received" mean actual delivery to Financial Security and to
the Fiscal Agent (as defined below), if any, prior to 12:00 noon, New York City
time, on a Business Day; delivery either on a day that is not a Business Day, or
after 12:00 noon, New York City time, shall be deemed to be receipt on the next
succeeding Business Day. If any notice or certificate given hereunder by the
Trust Collateral Agent is not in proper form or is not properly completed,
executed or delivered, it shall be deemed not to have been Received, and
Financial Security or its Fiscal Agent shall promptly so advise the Trust
Collateral Agent and the Trust Collateral Agent may submit an amended notice.
<PAGE>
Policy No.: 50588-N Date of Issuance: May 21, 1997
"Scheduled Payments" means, as to each Payment Date, the payment to be
made to Holders in accordance with the original terms of the Obligations when
issued and without regard to any subsequent amendment or modification of the
Obligations or of the Indenture except amendments or modifications to which
Financial Security has given its prior written consent, in an amount equal to
(i) the Noteholders' Interest Distributable Amount and (ii) the Noteholders'
Principal Distributable Amount. Scheduled Payments do not include payments which
become due on an accelerated basis as a result of (a) a default by the Obligor,
(b) an election by the Obligor to pay principal on an accelerated basis, (c) the
occurrence of an Event of Default under the Indenture or (d) any other cause,
unless Financial Security elects, in its sole discretion, to pay in whole or in
part such principal due upon acceleration, together with any accrued interest to
the date of acceleration. In the event Financial Security does not so elect,
this Policy will continue to guarantee payment on the Notes in accordance with
their original terms. Scheduled Payments shall not include (x) any portion of a
Noteholders' Interest Distributable Amount due to Noteholders because a notice
and certificate in proper form as required by paragraph 2 hereof was not timely
Received by Financial Security, (y) any portion of a Noteholders' Interest
Distributable Amount due to Noteholders representing interest on any
Noteholders' Interest Carryover Shortfall accrued from and including the date of
payment of the amount of such Noteholders' Interest Carryover Shortfall pursuant
hereto, or (z) any Note Prepayment Amounts, unless Financial Security elects, in
its sole discretion, to pay such amount in whole or in part. Scheduled Payments
shall not include any amounts due in respect of the Obligations attributable to
any increase in interest rate, penalty or other sum payable by the Obligor by
reason of any default or event of default in respect of the Obligations, or by
reason of any deterioration of the credit worthiness of the Obligor, nor shall
Scheduled Payments include, nor shall coverage be provided under this Policy in
respect of, any taxes, withholding or other charge with respect to any Holder
imposed by any governmental authority due in connection with the payment of any
Scheduled Payment to a Holder.
"Term of this Policy" means the period from and including the Closing Date
to and including the latest of the date on which (i) all Scheduled Payments have
been paid or deemed to be paid within the meaning of Section 4.1 of the
Indenture; (ii) any period during which any Scheduled Payment could have been
avoided in whole or in part as a preference payment under applicable bankruptcy,
insolvency, receivership or similar law shall have expired and (iii) if any
proceedings requisite to avoidance as a preference payment have been commenced
prior to the occurrence of (i) and (ii), a final and nonappealable order in
resolution of each such proceeding has been entered.
"Trust Collateral Agent" means LaSalle National Bank, in its capacity as
Trust Collateral Agent under the Indenture, acting as agent for the Indenture
Trustee in accordance with the terms of the Indenture, and any successor in such
capacity.
2. Notices and Conditions to Payment in Respect of Scheduled Payments.
Following Receipt by Financial Security of a notice and certificate from the
Trust Collateral Agent in the form attached as Exhibit A to this Endorsement,
Financial Security will pay any amount payable hereunder in respect of Scheduled
Payments on the Obligations out of the funds of Financial
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<PAGE>
Policy No.: 50588-N Date of Issuance: May 21, 1997
Security on the later to occur of (a) 10:00 a.m., New York City time, on the
third Business Day following such Receipt; and (b) 10:00 a.m., New York City
time, on the date on which such payment is due on the Obligations. Payments due
hereunder in respect of Scheduled Payments will be disbursed to the Trust
Collateral Agent by wire transfer of immediately available funds.
Financial Security shall be entitled to pay any amount hereunder in
respect of Scheduled Payments on the Obligations, including any amount due on
the Obligations on an accelerated basis, whether or not any notice and
certificate shall have been Received by Financial Security as provided above.
Financial Security shall be entitled to pay hereunder any amount due on the
Obligations on an accelerated basis at any time or from time to time, in whole
or in part, prior to the scheduled date of payment thereof; Scheduled Payments
insured hereunder shall not include interest, in respect of principal paid
hereunder on an accelerated basis, accruing from after the date of such payment
of principal. Financial Security's obligations hereunder in respect of Scheduled
Payments shall be discharged to the extent funds are disbursed by Financial
Security as provided herein whether or not such funds are properly applied by
the Trust Collateral Agent.
3. Notices and Conditions to Payment in Respect of Scheduled Payments
Avoided as Preference Payments. If any Scheduled Payment is avoided as a
preference payment under applicable bankruptcy, insolvency, receivership or
similar law, Financial Security will pay such amount out of the funds of
Financial Security on the later of (a) the date when due to be paid pursuant to
the Order referred to below or (b) the first to occur of (i) the fourth Business
Day following Receipt by Financial Security from the Trust Collateral Agent of
(A) a certified copy of the order of the court or other governmental body which
exercised jurisdiction to the effect that the Holder is required to return
principal of or interest paid on the Obligations during the Term of this Policy
because such payments were avoidable as preference payments under applicable
bankruptcy law (the "Order"), (B) a certificate of the Holder that the Order has
been entered and is not subject to any stay and (C) an assignment duly executed
and delivered by the Holder, in such form as is reasonably required by Financial
Security, and provided to the Holder by Financial Security, irrevocably
assigning to Financial Security all rights and claims of the Holder relating to
or arising under the Obligations against the estate of the Obligor or otherwise
with respect to such preference payment or (ii) the date of Receipt by Financial
Security from the Trust Collateral Agent of the items referred to in clauses
(A), (B) and (C) above if, at least four Business Days prior to such date of
Receipt, Financial Security shall have Received written notice from the Trust
Collateral Agent that such items were to be delivered on such date and such date
was specified in such notice. Such payment shall be disbursed to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order
and not to the Trust Collateral Agent or any Holder directly (unless a Holder
has previously paid such amount to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which case
such payment shall be disbursed to the Trust Collateral Agent for distribution
to such Holder upon proof of such payment reasonably satisfactory to Financial
Security). In connection with the foregoing, Financial Security shall have the
rights provided pursuant to Section 6.2 of the Sale and Servicing Agreement.
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Policy No.: 50588-N Date of Issuance: May 21, 1997
4. Governing Law. This Policy shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflict of laws principles thereof.
5. Fiscal Agent. At any time during the Term of this Policy, Financial
Security may appoint a fiscal agent (the "Fiscal Agent") for purposes of this
Policy by written notice to the Trust Collateral Agent at the notice address
specified in the Indenture specifying the name and notice address of the Fiscal
Agent. From and after the date of receipt of such notice by the Trust Collateral
Agent, (i) copies of all notices and documents required to be delivered to
Financial Security pursuant to this Policy shall be simultaneously delivered to
the Fiscal Agent and to Financial Security and shall not be deemed Received
until Received by both, and (ii) all payments required to be made by Financial
Security under this policy may be made directly by Financial Security or by the
Fiscal Agent on behalf of Financial Security. The Fiscal Agent is the agent of
Financial Security only and the Fiscal Agent shall in no event be liable to any
Holder for any acts of the Fiscal Agent or any failure of Financial Security to
deposit, or cause to be deposited, sufficient funds to make payments due under
the Policy.
6. Waiver of Defenses. To the fullest extent permitted by applicable law,
Financial Security agrees not to assert, and hereby waives, for the benefit of
each Holder, all rights (whether by counterclaim, setoff or otherwise) and
defenses (including, without limitation, the defenses of fraud), whether
acquired by subrogation, assignment or otherwise, to the extent that such rights
and defenses may be available to Financial Security to avoid payment of its
obligations under this Policy in accordance with the express provisions of this
Policy.
7. Notices. All notices to be given hereunder shall be in writing (except
as otherwise specifically provided herein) and shall be mailed by registered
mail or personally delivered or telecopied to Financial Security as follows:
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President - Surveillance
Telecopy No.: (212) 339-3518
Confirmation: (212) 826-0100
Financial Security may specify a different address or addresses by writing
mailed or delivered to the Trust Collateral Agent.
8. Priorities. In the event that any term or provision of the fact of this
Policy is inconsistent with the provisions of this Endorsement, the provisions
of this Endorsement shall take precedence and shall be binding.
9. Exclusions From Insurance Guaranty Funds. This Policy is not covered by
the Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
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Policy No.: 50588-N Date of Issuance: May 21, 1997
This Policy is not covered by the Florida Insurance Guaranty Association created
under Part II of Chapter 631 of the Florida Insurance Code. In the event that
Financial Security were to become insolvent, any claims arising under this
Policy are excluded from coverage by the California Insurance Guaranty
Association, established pursuant to Article 14.2 of Chapter 1 of Part 2 of
Division 1 of the California Insurance Code.
10. Surrender of Policy. The Holder shall surrender this Policy to
Financial Security for cancellation upon expiration of the Term of this Policy.
IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused this
Endorsement No. 1 to be executed by its Authorized officer.
FINANCIAL SECURITY ASSURANCE INC.
By
----------------------------------
Authorized officer
5
<PAGE>
Policy No.: 50588-N Date of Issuance: May 21, 1997
EXHIBIT A
To Endorsement No. 1
NOTICE OF CLAIM AND CERTIFICATE
(Letterhead of Trust Collateral Agent)
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President
Re: AmeriCredit Automobile Receivables Trust 1997-B
The undersigned, a duly authorized officer of LaSalle National Bank (the
"Trust Collateral Agent"), hereby certifies to Financial Security Assurance Inc.
("Financial Security"), with reference to Financial Guaranty Insurance Policy
No. 50588-N dated May 1, 1997 (the "Policy") issued by Financial Security in
respect of the $68,000,000 Class A-1 5.79% Asset Backed Notes, $96,250,000 Class
A-2 6.36% Asset Backed Notes and $85,750,000 Class A-3 6.67% Asset Backed Notes
of the above referenced Trust (the "Obligations"), that:
(i) The Trust Collateral Agent is the Trust Collateral Agent under
the Indenture, acting as agent for the Indenture Trustee in accordance
with the terms of the Indenture, for the Holders.
(ii) The sum of all amounts on deposit (or scheduled to be on
deposit) in the Note Distribution Account and available for distribution
to the Holders pursuant to the Indenture will be $_________ (the
"Shortfall") less than the aggregate amount of Scheduled Payments due on
___________________.
(iii) The Trust Collateral Agent is making a claim under the Policy
for the Shortfall to be applied to the payment of Scheduled Payments.
(iv) The Trust Collateral Agent agrees that, following receipt of
funds from Financial Security, it shall (a) hold such amounts in trust and
apply the same directly to the payment of Scheduled Payments on the
Obligations when due; (b) not apply such funds for any other purpose; (c)
not commingle such funds with other funds held by the Trust Collateral
Agent and (d) maintain an accurate record of such payments with respect to
each Obligation and the corresponding claim on the Policy and proceeds
thereof, and, if the Obligation is required to be surrendered or presented
for such payment, shall stamp on each such Obligation the legend $"[insert
applicable amount] paid by Financial Security and the
A-1
<PAGE>
Policy No.: 50588-N Date of Issuance: May 21, 1997
balance hereof has been cancelled and reissued" and then shall deliver
such Obligation to Financial Security.
(v) The Trust Collateral Agent, as agent for the Indenture Trustee,
on behalf of the Holders, hereby assigns to Financial Security the rights
of the Holders with respect to the Obligations to the extent of any
payments under the Policy, including, without limitation, any amounts due
to the Holders in respect of securities law violations arising from the
offer and sale of the Obligations. The foregoing assignment is in addition
to, and not in limitation of, rights of subrogation otherwise available to
Financial Security in respect of such payments. Payments to Financial
Security in respect of the foregoing assignment shall in all cases be
subject to and subordinate to the rights of the Holders to receive all
Scheduled Payments in respect of the Obligations. The Trust Collateral
Agent shall take such action and deliver such instruments as may be
reasonably requested or required by Financial Security to effectuate the
purpose or provisions of this clause (v).
(vi) The Trust Collateral Agent, as agent for the Indenture Trustee
on its behalf and on behalf of the Holders, hereby appoints Financial
Security as agent and attorney-in-fact for the Trust Collateral Agent and
each such Holder in any legal proceeding with respect to the Obligations.
The Trust Collateral Agent hereby agrees that, so long as an Insurer
Default (as defined in the Indenture) shall not exist, Financial Security
may at any time during the contribution of any proceeding by or against
the Obligor under the United States Bankruptcy Code or any other
applicable bankruptcy, insolvency, receivership, rehabilitation or similar
law (an "Insolvency Proceeding") direct all matters relating to such
Insolvency Proceeding, including without limitation, (A) all matters
relating to any claim in connection with an Insolvency Proceeding seeking
the avoidance as a preferential transfer of any payment made with respect
to the Obligations (a "Preference Claim"), (B) the direction of any appeal
of any order relating to any Preference Claim at the expense of Financial
Security but subject to reimbursement as provided in the Insurance
Agreement and (C) the posting of any surety, supersedeas or performance
bond pending any such appeal. In addition, the Trust Collateral Agent
hereby agrees that Financial Security shall be subrogated to, and the
Trust Collateral Agent on its behalf and on behalf of each Holder, hereby
delegates and assigns, to the fullest extent permitted by law, the rights
of the Trust Collateral Agent and each Holder in the conduct of any
Insolvency Proceeding, including, without limitation, all rights of any
party to an adversary proceeding or action with respect to any court order
issued in connection with any such Insolvency Proceeding.
(vii) Payment should be made by wire transfer directed to [SPECIFY
ACCOUNT].
Unless the context otherwise requires, capitalized terms used in this
Notice of Claim and Certificate and not defined herein shall have the meanings
provided in the Policy.
A-2
<PAGE>
Policy No.: 50588-N Date of Issuance: May 21, 1997
IN WITNESS WHEREOF, the Trust Collateral Agent has executed and delivered
this Notice of Claim and Certificate as of the ____ day of _____________, ____.
LASALLE NATIONAL BANK
as Trust Collateral Agent
By
-----------------------------------
Title
--------------------------------
- ---------------------------------------------
For Financial Security or
Fiscal Agent Use Only
Wire transfer sent on ____________ by ___________________________
Confirmation Number _____________________.
A-3
PURCHASE AGREEMENT
between
AFS FUNDING CORP.
Purchaser
and
AMERICREDIT FINANCIAL SERVICES, INC.
Seller
dated as of
May 1, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.................................................... 1
SECTION 1.1 General........................................... 1
SECTION 1.2 Specific Terms.................................... 1
SECTION 1.3 Usage of Terms.................................... 3
SECTION 1.4 Certain References................................ 3
SECTION 1.5 No Recourse....................................... 4
SECTION 1.6 Action by or Consent of Noteholders
and Certificateholders............................ 4
SECTION 1.7 Material Adverse Effect........................... 4
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY.................... 4
SECTION 2.1 (a) Conveyance of the Initial
Receivables and the Initial Other
Conveyed Property.................................. 4
(b) Purchase Price................................ 5
SECTION 2.2 (a) Conveyance of the Subsequent
Receivables and the Subsequent
Other Conveyed Property............................ 5
(b) Purchase Price................................ 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES..................... 5
SECTION 3.1 Representations and Warranties of Seller........... 5
SECTION 3.2 Representations and Warranties of Purchaser........ 7
ARTICLE IV
COVENANTS OF SELLER................................ 9
SECTION 4.1 Protection of Title of Purchaser................... 9
SECTION 4.2 Other Liens or Interests........................... 11
SECTION 4.3 Costs and Expenses................................. 11
SECTION 4.4 Indemnification.................................... 11
ARTICLE V
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REPURCHASES........................................ 14
SECTION 5.1 Repurchase of Receivables Upon
Breach of Warranty................................. 14
SECTION 5.2 Reassignment of Purchased Receivables.............. 15
SECTION 5.3 Waivers............................................ 15
ARTICLE VI
MISCELLANEOUS...................................... 15
SECTION 6.1 Liability of Seller................................ 15
SECTION 6.2 Merger or Consolidation of Seller or Purchaser..... 15
SECTION 6.3 Limitation on Liability of Seller and Others....... 16
SECTION 6.4 Seller May Own Notes or Certificates............... 16
SECTION 6.5 Amendment.......................................... 16
SECTION 6.6 Notices............................................ 17
SECTION 6.7 Merger and Integration............................. 18
SECTION 6.8 Severability of Provisions......................... 18
SECTION 6.9 Intention of the Parties........................... 18
SECTION 6.10 Governing Law..................................... 18
SECTION 6.11 Counterparts...................................... 18
SECTION 6.12 Conveyance of the Receivables
and the Other Conveyed Property
to the Issuer..................................... 19
SECTION 6.13 Nonpetition Covenant.............................. 19
ii
<PAGE>
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of May 1, 1997, executed between
AFS Funding Corp., a Nevada corporation, as purchaser ("Purchaser"), and
AmeriCredit Financial Services, Inc., a Delaware corporation, as seller
("Seller").
W I T N E S S E T H :
WHEREAS, Purchaser has agreed to purchase from Seller, and Seller,
pursuant to this Agreement, is transferring to Purchaser the Initial Receivables
and Other Conveyed Property and with respect to the Subsequent Receivables will
transfer on the related Subsequent Transfer Date the Subsequent Receivables and
the Subsequent Other Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, Purchaser and Seller, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General. The specific terms defined in this Article
include the plural as well as the singular. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Sale and Servicing Agreement dated as of
May 1, 1997, by and among AFS Funding Corp. (as Seller), AmeriCredit Financial
Services, Inc. (in its individual capacity and as Servicer), AmeriCredit
Automobile Receivables Trust 1997-B (as Issuer) and LaSalle National Bank, as
Backup Servicer and Trust Collateral Agent.
SECTION 1.2 Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" shall mean this Purchase Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means May 21, 1997.
<PAGE>
"Initial Other Conveyed Property" means all property conveyed by the
Seller to the Purchaser pursuant to this Agreement other than the Initial
Receivables.
"Initial Receivables" means the Receivables listed on the Schedule
of Receivables attached hereto.
"Issuer" means AmeriCredit Automobile Receivables Trust 1997-B.
"Other Conveyed Property" means all property conveyed by the
Purchaser to the Trust pursuant to Sections 2.1(b),(c),(d),(e),(f) and (h) of
the Sale and Servicing Agreement.
"Owner Trustee" means Bankers Trust (Delaware), as Owner Trustee
appointed and acting pursuant to the Trust Agreement.
"Receivables" means the Initial Receivables and the Subsequent
Receivables.
"Related Documents" means with respect to the Subsequent
Receivables, the Subsequent Purchase Agreement, the Notes, the Certificate, the
Custodian Agreement, the Sale and Servicing Agreement, the Indenture, the Trust
Agreement, the Policies, the Spread Account Agreement, the Spread Account
Agreement Supplement, the Insurance Agreement, the Lockbox Agreement and the
Underwriting Agreement. The Related Documents to be executed by any party are
referred to herein as "such party's Related Documents," "its Related Documents"
or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of
Seller's representations and warranties hereunder or any other event which
requires the repurchase of a Receivable by Seller under the Sale and Servicing
Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement referred to in Section 1.1 hereof.
"Schedule of Receivables" means the schedule of Initial Receivables
sold and transferred pursuant to this Agreement which is attached hereto as
Schedule A.
"Schedule of Representations" means the Schedule of Representations
and Warranties attached hereto as Schedule B.
"Subsequent Cutoff Date" means (i) the last day of the month
preceding the month in which particular Subsequent Receivables are conveyed to
the Purchaser pursuant to this Agreement or (ii) if any such Subsequent
Receivable is originated in the month of the related Subsequent Transfer Date,
the date of origination.
2
<PAGE>
"Subsequent Other Conveyed Property" means all property conveyed by
the Seller to the Purchaser pursuant to the Subsequent Purchase Agreement other
than the Subsequent Receivables.
"Subsequent Purchase Agreement" means an agreement by and between
the Seller and the Purchaser pursuant to which the Purchaser will acquire
Subsequent Receivables.
"Subsequent Receivables" means the Receivables transferred to the
Purchaser pursuant to Section 2.2, which shall be listed on Schedule A to the
related Subsequent Purchase Agreement.
"Subsequent Transfer Date" means, with respect to Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Funding Period on which Subsequent Receivables are to be transferred to the
Purchaser pursuant to this Agreement, and a Subsequent Purchase Agreement is
executed and delivered.
"Trust Collateral Agent" means LaSalle National Bank, as trust
collateral agent and any successor trust collateral agent appointed and acting
pursuant to the Sale and Servicing Agreement.
"Trustee" means LaSalle National Bank, as trustee and any successor
Trustee appointed and acting pursuant to the Indenture.
SECTION 1.3 Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Sale and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.4 Certain References. All references to the Principal
Balance of a Receivable as of an Accounting Date shall refer to the close of
business on such day, or as of the first day of a Monthly Period shall refer to
the opening of business on such day. All references to the last day of a Monthly
Period shall refer to the close of business on such day.
SECTION 1.5 No Recourse. Without limiting the obligations of Seller
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against
3
<PAGE>
any stockholder, officer or director, as such, of Seller, or of any predecessor
or successor of Seller.
SECTION 1.6 Action by or Consent of Noteholders and
Certificateholder. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or the Certificateholder, such
provision shall be deemed to refer to the Certificateholder or Noteholder, as
the case may be, of record as of the Record Date immediately preceding the date
on which such action is to be taken, or consent given, by Noteholders or the
Certificateholder. Solely for the purposes of any action to be taken, or
consented to, by Noteholders or the Certificateholder, any Note or Certificate
registered in the name of the Seller or any Affiliate thereof shall be deemed
not to be outstanding; provided, however, that, solely for the purpose of
determining whether the Trustee or the Trust Collateral Agent is entitled to
rely upon any such action or consent, only Notes or Certificates which the Owner
Trustee, the Trustee or the Trust Collateral Agent, respectively, knows to be so
owned shall be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever a determination is to
be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Noteholders (or any similar or analogous determination), such
determination shall be made without taking into account the funds available from
claims under the Policy.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 (a) Conveyance of the Initial Receivables and the
Initial Other Conveyed Property. Subject to the terms and conditions of this
Agreement, Seller hereby sells, transfers, assigns, and otherwise conveys to
Purchaser without recourse (but without limitation of its obligations in this
Agreement), and Purchaser hereby purchases, all right, title and interest of
Seller in and to the Initial Receivables and the Initial Other Conveyed
Property. It is the intention of Seller and Purchaser that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the Initial
Receivables and the Initial Other Conveyed Property from Seller to Purchaser,
conveying good title thereto free and clear of any liens, and the beneficial
interest in and title to the Initial Receivables and the Initial Other Conveyed
Property shall not be part of Seller's estate in the event of the filing of a
bankruptcy petition by or against Seller under any bankruptcy or similar law.
(b) Purchase Price. Simultaneously with the conveyance of the
Initial Receivables and the Initial Other Conveyed Property to
4
<PAGE>
Purchaser, Purchaser has paid or caused to be paid to or upon the order of
Seller an amount equal to the book value of the Initial Receivables on the books
and records of the Seller, by wire transfer of immediately available funds.
SECTION 2.2 (a) Conveyance of the Subsequent Receivables and the
Subsequent Other Conveyed Property. On each Subsequent Transfer Date and
simultaneously with the execution and delivery of the related Subsequent
Purchase Agreement, the Seller shall sell, transfer, assign, and otherwise
convey to Purchaser without recourse (but without limitation of its obligations
in this Agreement), and Purchaser shall purchase, all right, title and interest
of Seller in and to the Subsequent Receivables and the Subsequent Other Conveyed
Property. It is the intention of Seller and Purchaser that the transfer and
assignment contemplated by such Agreement shall constitute a sale of the
Subsequent Receivables and the Subsequent Other Conveyed Property from Seller to
Purchaser, conveying good title thereto free and clear of any liens, and the
beneficial interest in and title to the Subsequent Receivables and the
Subsequent Other Conveyed Property shall not be part of Seller's estate in the
event of the filing of a bankruptcy petition by or against Seller under any
bankruptcy or similar law.
(b) Purchase Price. Simultaneously with the conveyance of the
Subsequent Receivables and the Subsequent Other Conveyed Property to Purchaser,
Purchaser shall pay or cause to be paid to or upon the order of Seller an amount
equal to the book value of the Subsequent Receivables on the books and records
of the Seller, by wire transfer of immediately available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Seller. Seller makes
the following representations and warranties as of the date hereof and as of the
Subsequent Transfer Date, as the case may be, on which Purchaser relies in
purchasing the Receivables and the Other Conveyed Property and in transferring
the Receivables and the Other Conveyed Property to the Issuer under the Sale and
Servicing Agreement and on which the Insurer will rely in issuing the Policies.
Such representations are made as of the execution and delivery of this Agreement
and as of the execution and delivery of any Subsequent Purchase Agreement, but
shall survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property hereunder and under any Subsequent Purchase Agreement, and the
sale, transfer and assignment thereof by Purchaser to the Issuer under the Sale
and Servicing Agreement. Seller and Purchaser agree that Purchaser will assign
to Issuer all Purchaser's rights under this Agreement and that the Trustee will
thereafter be entitled to enforce this Agreement against Seller in the Trustee's
own name on behalf of the Noteholders.
5
<PAGE>
(a) Schedule of Representations. The representations and warranties
set forth on the Schedule of Representations with respect to the Initial
Receivables as of the date hereof, and with respect to the Subsequent
Receivables as of the related Subsequent Transfer Date, are true and
correct.
(b) Organization and Good Standing. 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 currently owned and
such business is currently conducted, and had at all relevant times, and
now has, power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property to be transferred to
Purchaser.
(c) Due Qualification. 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 its property or the conduct of its business requires such
qualification.
(d) Power and Authority. Seller has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry
out its terms and their terms, respectively; Seller has full power and
authority to sell and assign the Receivables and the Other Conveyed
Property to be sold and assigned to and deposited with Purchaser hereunder
and has duly authorized such sale and assignment to Purchaser by all
necessary corporate action; and the execution, delivery and performance of
this Agreement and Seller's Related Documents have been duly authorized by
Seller by all necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and Seller's
Related Documents have been duly executed and delivered, shall effect a
valid sale, transfer and assignment of the Receivables and the Other
Conveyed Property to the Purchaser, enforceable against Seller and
creditors of and purchasers from Seller; and this Agreement and Seller's
Related Documents constitute legal, valid and binding obligations of
Seller enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The consummation of the transactions contemplated
by this Agreement and the Related Documents and the fulfillment of the
terms of this Agreement and the Related Documents shall not conflict with,
result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, the
articles of
6
<PAGE>
incorporation or bylaws of Seller, or any indenture, agreement, mortgage,
deed of trust or other instrument to which Seller is a party or by which
it is bound, or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
the Spread Account Agreement, the Sale and Servicing Agreement and the
Indenture, or violate any law, order, rule or regulation applicable to
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over Seller or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to Seller's knowledge, threatened against Seller, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over Seller or its
properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the Notes or
the consummation of any of the transactions contemplated by this Agreement
or any of the Related Documents, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by Seller of
its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents or (iv) seeking to affect
adversely the federal income tax or other federal, state or local tax
attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder or under the Sale and Servicing
Agreement.
(h) Chief Executive Office. The chief executive office of Seller is
located at 200 Bailey Avenue, Fort Worth, Texas 76107-1220.
SECTION 3.2 Representations and Warranties of Purchaser. Purchaser
makes the following representations and warranties, on which Seller relies in
selling, assigning, transferring and conveying the Receivables and the Other
Conveyed Property to Purchaser hereunder. Such representations are made as of
the execution and delivery of this Agreement, but shall survive the sale,
transfer and assignment of the Receivables and the Other Conveyed Property
hereunder and the sale, transfer and assignment thereof by Purchaser to the
Issuer under the Sale and Servicing Agreement.
(a) Organization and Good Standing. Purchaser has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Nevada, with the power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and has, full power, authority and legal right to acquire
and own the Receivables and the Other Conveyed Property, and to transfer
the Receivables and the
7
<PAGE>
Other Conveyed Property to the Issuer pursuant to the Sale and Servicing
Agreement.
(b) Due Qualification. Purchaser is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect Purchaser's ability to acquire the
Receivables or the Other Conveyed Property, and to transfer the
Receivables and the Other Conveyed Property to the Issuer pursuant to the
Sale and Servicing Agreement, or the validity or enforceability of the
Receivables and the Other Conveyed Property or to perform Purchaser's
obligations hereunder and under the Purchaser's Related Documents.
(c) Power and Authority. Purchaser has the power, authority and
legal right to execute and deliver this Agreement and to carry out the
terms hereof and to acquire the Receivables and the Other Conveyed
Property hereunder; and the execution, delivery and performance of this
Agreement and all of the documents required pursuant hereto have been duly
authorized by Purchaser by all necessary action.
(d) No Consent Required. Purchaser is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of this Agreement and the Related Documents, except for such
as have been obtained, effected or made.
(e) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(f) No Violation. The execution, delivery and performance by
Purchaser of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do
not and will 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 bylaws of Purchaser,
or conflict with or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which
Purchaser is a party or by which Purchaser is bound or to which any of its
properties are subject, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any
8
<PAGE>
such indenture, agreement, mortgage, deed of trust or other instrument
(other than the Sale and Servicing Agreement and the Spread Account
Agreement), or violate any law, order, rule or regulation, applicable to
Purchaser or its properties, of any federal or state regulatory body, any
court, administrative agency, or other governmental instrumentality having
jurisdiction over Purchaser or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Purchaser, threatened against Purchaser,
before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality having jurisdiction over
Purchaser or its properties: (i) asserting the invalidity of this
Agreement or any of the Related Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by Purchaser of
its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents or (iv) that may adversely
affect the federal or state income tax attributes of, or seeking to impose
any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Receivables and the Other Conveyed Property hereunder
or the transfer of the Receivables and the Other Conveyed Property to the
Issuer pursuant to the Sale and Servicing Agreement.
In the event of any breach of a representation and warranty made by
Purchaser hereunder, Seller covenants and agrees that it will not take any
action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes,
Certificates, pass-through certificates or other similar securities issued by
Purchaser, or a trust or similar vehicle formed by Purchaser, have been paid in
full. Seller and Purchaser agree that damages will not be an adequate remedy for
such breach and that this covenant may be specifically enforced by Purchaser,
Issuer or by the Trustee on behalf of the Noteholders and Owner Trustee on
behalf of the Certificateholder.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 Protection of Title of Purchaser.
(a) At or prior to the Closing Date, Seller shall have filed or
caused to be filed a UCC-1 financing statement, executed by Seller as
seller or debtor, naming Purchaser as purchaser or secured party and
describing the Initial Receivables and the Initial Other Conveyed Property
being sold by it to Purchaser as collateral, with the office of the
Secretary of State of the State of
9
<PAGE>
Texas and in such other locations as Purchaser shall have required. At or
prior to any Subsequent Transfer Date, the Seller shall file or cause to
be filed a UCC-1 financing statement executed by the Seller, as seller or
debtor, naming the Purchaser as purchaser or secured party and describing
the Subsequent Receivables and the Subsequent Other Conveyed Property
being sold by it to the Purchaser as collateral, with the office of the
Secretary of State of the State of Texas and in such other locations as
Purchaser shall require. From time to time thereafter, Seller shall
execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places
as may be required by law fully to preserve, maintain and protect the
interest of Purchaser under this Agreement, of the Issuer under the Sale
and Servicing Agreement and of the Trust Collateral Agent under the
Indenture in the Receivables and the Other Conveyed Property and in the
proceeds thereof. Seller shall deliver (or cause to be delivered) to
Purchaser, the Trust Collateral Agent and the Insurer file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon
as available following such filing. In the event that Seller fails to
perform its obligations under this subsection, Purchaser, Issuer or the
Trust Collateral Agent may do so, at the expense of Seller.
(b) Seller shall not change its name, identity, or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed by Seller (or by Purchaser,
Issuer or the Trust Collateral Agent on behalf of Seller) in accordance
with paragraph (a) above seriously misleading within the meaning of ss.
9-402(7) of the UCC, unless it shall have given Purchaser, Issuer and the
Trust Collateral Agent at least 60 days' prior written notice thereof, and
shall promptly file appropriate amendments to all previously filed
financing statements and continuation statements.
(c) Seller shall give Purchaser, the Issuer, the Insurer (so long as
an Insurer Default shall not have occurred and be continuing) and the
Trust Collateral Agent at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation
statement or of any new financing statement. Seller shall at all times
maintain each office from which it services Receivables and its principal
executive office within the United States of America.
(d) Prior to the Closing Date and with respect to Subsequent
Receivables, the Subsequent Transfer Date, Seller has maintained accounts
and records as to each Receivable accurately and in sufficient detail to
permit (i) the reader thereof to know at any time as of or prior to the
Closing Date and with respect to Subsequent Receivables, the Subsequent
Transfer Date, the
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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
Principal Balance as of the Closing Date and with respect to Subsequent
Receivables, the Subsequent Transfer Date. Seller shall maintain its
computer systems so that, from and after the time of sale under this
Agreement of the Receivables to Purchaser, and the conveyance of the
Receivables by Purchaser to the Issuer, Seller's master computer records
(including archives) that shall refer to a Receivable indicate clearly
that such Receivable has been sold to Purchaser and has been conveyed by
Purchaser to the Issuer. Indication of the Issuer's ownership of a
Receivable shall be deleted from or modified on Seller's computer systems
when, and only when, the Receivable shall become a Purchased Receivable or
shall have been paid in full.
(e) If at any time Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in any motor vehicle
receivables to any prospective purchaser, lender or other transferee,
Seller shall give to such prospective purchaser, lender, or other
transferee computer tapes, records, or print-outs (including any restored
from archives) that, if they shall refer in any manner whatsoever to any
Receivable (other than a Purchased Receivable), shall indicate clearly
that such Receivable has been sold to Purchaser, sold by Purchaser to
Issuer, and is owned by the Issuer.
SECTION 4.2 Other Liens or Interests. Except for the conveyances
hereunder, Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on the Receivables
or the Other Conveyed Property or any interest therein, and Seller shall defend
the right, title, and interest of Purchaser and the Issuer in and to the
Receivables and the Other Conveyed Property against all claims of third parties
claiming through or under Seller.
SECTION 4.3 Costs and Expenses. Seller shall pay all reasonable
costs and disbursements in connection with the performance of its obligations
hereunder and under its Related Documents.
SECTION 4.4 Indemnification.
(a) Seller shall defend, indemnify and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder from and against
any and all costs, expenses, losses, damages, claims, and liabilities,
arising out of or resulting from any breach of any of Seller's
representations and warranties contained herein.
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(b) Seller shall defend, indemnify and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder 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 Seller
or any affiliate thereof of a Financed Vehicle.
(c) Seller shall defend, indemnify and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder against any and
all costs, expenses, losses, damages, claims and liabilities arising out
of or resulting from any action taken, or failed to be taken, by it in
respect of any portion of the Receivables other than in accordance with
this Agreement or the Sale and Servicing Agreement.
(d) Seller agrees to pay, and shall defend, indemnify and hold
harmless Purchaser, the Issuer, the Trust Collateral Agent, the Trustee,
the Backup Servicer, the Owner Trustee, the Noteholders and the
Certificateholder from and against any taxes that may at any time be
asserted against Purchaser, the Issuer, the Trust Collateral Agent, the
Trustee, the Backup Servicer, the Owner Trustee, the Noteholders and the
Certificateholder with respect to the transactions contemplated in this
Agreement, including without limitation, any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege,
or license taxes (but not including any taxes asserted with respect to,
and as of the date of, the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to Purchaser and by Purchaser
to the Issuer or the issuance and original sale of the Notes or issuance
of the Certificate, or asserted with respect to ownership of the
Receivables and Other Conveyed Property which shall be indemnified by
Seller pursuant to clause (e) below, or federal, state or other income
taxes, arising out of distributions on the Notes or the Certificate or
transfer taxes arising in connection with the transfer of the Notes or the
Certificate) and costs and expenses in defending against the same, arising
by reason of the acts to be performed by Seller under this Agreement or
imposed against such Persons.
(e) Seller agrees to pay, and to indemnify, defend and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Trustee, the Backup
Servicer, the Owner Trustee, the Noteholders and the Certificateholder
from, any taxes which may at any time be asserted against such Persons
with respect to, and as of the date of, the conveyance or ownership of the
Receivables or the Other Conveyed Property hereunder and under any
Subsequent Purchase Agreement and the conveyance or ownership of the
Receivables under the Sale and Servicing Agreement or the issuance and
original sale of the Notes or the issuance of the Certificate, including,
without limitation, any sales, gross receipts, personal property, tangible
or intangible
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personal property, privilege or license taxes (but not including any
federal or other income taxes, including franchise taxes, arising out of
the transactions contemplated hereby or transfer taxes arising in
connection with the transfer of the Notes or the Certificate) and costs
and expenses in defending against the same, arising by reason of the acts
to be performed by Seller under this Agreement or imposed against such
Persons.
(f) Seller shall defend, indemnify, and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder 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 Purchaser, the Issuer, the Trust
Collateral Agent, the Trustee, the Backup Servicer, the Owner Trustee, the
Noteholders or the Certificateholder through the negligence, willful
misfeasance, or bad faith of Seller in the performance of its duties under
this Agreement or by reason of reckless disregard of Seller's obligations
and duties under this Agreement.
(g) Seller shall indemnify, defend and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder from and against
any loss, liability or expense incurred by reason of the violation by
Seller of federal or state securities laws in connection with the
registration or the sale of the Notes.
(h) Seller shall indemnify, defend and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the
Owner Trustee, the Noteholders and the Certificateholder from and against
any loss, liability or expense imposed upon, or incurred by, Purchaser,
the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer,
the Owner Trustee, the Noteholders or the Certificateholder as result of
the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law.
(i) Seller shall defend, indemnify, and hold harmless Purchaser from
and against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or
performance of Seller's trusts and duties as Servicer under the Sale and
Servicing Agreement, except to the extent that such cost, expense, loss,
claim, damage, or liability shall be due to the willful misfeasance, bad
faith, or negligence (except for errors in judgment) of Purchaser.
Indemnification under this Section 4.4 shall include reasonable fees
and expenses of counsel and expenses of litigation and shall survive payment of
the Notes
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and the Certificate. The indemnity obligations hereunder shall be in addition to
any obligation that Seller may otherwise have.
ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty. Upon
the occurrence of a Repurchase Event, Seller shall, unless the breach which is
the subject of such Repurchase Event shall have been cured in all material
respects, repurchase the Receivable relating thereto from the Issuer and,
simultaneously with the repurchase of the Receivable, Seller shall deposit the
Purchase Amount in full, without deduction or offset, to the Collection Account,
pursuant to Section 3.2 of the Sale and Servicing Agreement. It is understood
and agreed that, except as set forth in Section 6.1 hereof, the obligation of
Seller to repurchase any Receivable, as to which a breach occurred and is
continuing, shall, if such obligation is fulfilled, constitute the sole remedy
against Seller for such breach available to Purchaser, the Issuer, the Insurer,
the Backup Servicer, the Noteholders, the Certificateholder, the Trust
Collateral Agent on behalf of the Noteholders or the Owner Trustee on behalf of
the Certificateholder. The provisions of this Section 5.1 are intended to grant
the Issuer and the Trust Collateral Agent a direct right against Seller to
demand performance hereunder, and in connection therewith, Seller waives any
requirement of prior demand against Purchaser with respect to such repurchase
obligation. Any such repurchase shall take place in the manner specified in
Section 3.2 of the Sale and Servicing Agreement. Notwithstanding any other
provision of this Agreement or the Sale and Servicing Agreement to the contrary,
the obligation of Seller under this Section shall not terminate upon a
termination of Seller as Servicer under the Sale and Servicing Agreement and
shall be performed in accordance with the terms hereof notwithstanding the
failure of the Servicer or Purchaser to perform any of their respective
obligations with respect to such Receivable under the Sale and Servicing
Agreement.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by Seller, Seller shall indemnify the
Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Owner
Trustee, the Insurer, the Noteholders and the Certificateholder against all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel, which may be asserted against or incurred by any
of them as a result of third party claims arising out of the events or facts
giving rise to such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit in
the Collection Account of the Purchase Amount of any Receivable repurchased by
Seller under Section 5.1 hereof, Purchaser and the Issuer shall take such steps
as may be reasonably requested by Seller in order to assign to Seller all of
Purchaser's and
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the Issuer's right, title and interest in and to such Receivable and all
security and documents and all Other Conveyed Property conveyed to Purchaser and
the Issuer directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of Purchaser or the Issuer. Such assignment
shall be a sale and assignment outright, and not for security. If, following the
reassignment of a Purchased Receivable, in any enforcement suit or legal
proceeding, it is held that Seller may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, Purchaser and the Issuer shall, at the expense of
Seller, take such steps as Seller deems reasonably necessary to enforce the
Receivable, including bringing suit in Purchaser's or in the Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of Purchaser,
or the Issuer as assignee of Purchaser, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Liability of Seller. Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
SECTION 6.2 Merger or Consolidation of Seller or Purchaser. Any
corporation or other entity (i) into which Seller or Purchaser may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Seller or
Purchaser is a party or (iii) succeeding to the business of Seller or Purchaser,
in the case of Purchaser, which corporation has a certificate of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in Purchaser's certificate of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of Seller
or Purchaser, as the case may be, under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to Seller or Purchaser,
as the case may be, hereunder (without relieving Seller or Purchaser of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further action by any of the
parties to this Agreement. Notwithstanding the foregoing, so long as an Insurer
Default shall not have occurred and be continuing, Purchaser shall not merge or
consolidate with any other Person or permit any other Person to become the
successor to Purchaser's business without the prior written consent of the
Insurer. Seller or Purchaser shall promptly inform the other party, the Issuer,
the Trust
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Collateral Agent, the Owner Trustee and, so long as an Insurer Default shall not
have occurred and be continuing, the Insurer of such merger, consolidation or
purchase and assumption. Notwithstanding the foregoing, as a condition to the
consummation of the transactions referred to in clauses (i), (ii) and (iii)
above, (x) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Sections 3.1 and 3.2 of this
Agreement shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an event of default under the Insurance Agreement, shall have occurred
and be continuing, (y) Seller or Purchaser, as applicable, shall have delivered
written notice of such consolidation, merger or purchase and assumption to the
Rating Agencies prior to the consummation of such transaction and shall have
delivered to the Issuer and the Trust Collateral Agent an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section 6.2 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, and (z) Seller or Purchaser, as
applicable, shall have delivered to the Issuer and the Trust Collateral Agent an
Opinion of Counsel, stating, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Issuer and the Trust Collateral Agent in the Receivables and reciting the
details of the filings or (B) no such action shall be necessary to preserve and
protect such interest.
SECTION 6.3 Limitation on Liability of Seller and Others. Seller and
any director, officer, employee or agent 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.
Seller shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement or
its Related Documents and that in its opinion may involve it in any expense or
liability.
SECTION 6.4 Seller May Own Notes or the Certificate. Subject to the
provisions of the Sale and Servicing Agreement, Seller and any Affiliate of
Seller may in its individual or any other capacity become the owner or pledgee
of Notes or the Certificate with the same rights as it would have if it were not
Seller or an Affiliate thereof.
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Seller and Purchaser with the
prior written consent of the Insurer (so long as an Insurer Default shall
not have occurred and be continuing) but without the consent of the Trust
Collateral Agent, the Owner Trustee, the Certificateholder or any of the
Noteholders (i) to cure any ambiguity or (ii) to correct any provisions in
this
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Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel delivered to the Issuer, the Owner Trustee and the
Trust Collateral Agent, adversely affect in any material respect the
interests of any Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time by Seller
and Purchaser, with the prior written consent of the Insurer (so long as
an Insurer Default shall not have occurred and be continuing) and with the
consent of the Trust Collateral Agent and, if required, the
Certificateholder and the Noteholders, in accordance with the Sale and
Servicing Agreement, 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
Certificateholder or Noteholders; provided, however, the Seller provides
the Trust Collateral Agent with an Opinion of Counsel, (Which may be
provided by the Seller's Internal Counsel) that no such amendment shall
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.
(c) Prior to the execution of any such amendment or consent, Seller
shall have furnished written notification of the substance of such
amendment or consent to each Rating Agency.
(d) It shall not be necessary for the consent of Certificateholder
or Noteholders pursuant to this Section 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 of evidencing the authorization of the execution thereof by
Certificateholder or Noteholders shall be subject to such reasonable
requirements as the Trust Collateral Agent may prescribe, including the
establishment of record dates. The consent of a Holder of a Certificate or
a Note given pursuant to this Section or pursuant to any other provision
of this Agreement shall be conclusive and binding on such Holder and on
all future Holders of such Certificate or Note and of any Certificate or
Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the
Certificate or Note.
SECTION 6.6 Notices. All demands, notices and communications to
Seller or Purchaser hereunder shall be in writing, personally delivered, or sent
by telecopier (subsequently confirmed in writing), reputable overnight courier
or mailed by certified mail, return receipt requested, and shall be deemed to
have been given upon receipt (a) in the case of Seller, to AmeriCredit Financial
Services, Inc., 200 Bailey Avenue, Fort Worth, Texas 76107-1220, Attention:
Chief Financial Officer, or (b) in case of Purchaser, to AFS Funding Corp., 1325
Airmotive Way, Reno, Nevada 89502, Attention: Chief Financial Officer, or such
other address as shall be
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designated by a party in a written notice delivered to the other party or to the
Issuer, Owner Trustee or the Trust Collateral Agent, as applicable.
SECTION 6.7 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9 Intention of the Parties. The execution and delivery of
this Agreement shall constitute an acknowledgment by Seller and Purchaser that
they intend that the assignment and transfer herein contemplated constitute a
sale and assignment outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of any
Liens, from Seller to Purchaser, and that the Receivables and the Other Conveyed
Property shall not be a part of Seller's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of, or with respect to Seller. In the event
that such conveyance is determined to be made as security for a loan made by
Purchaser, the Issuer, the Noteholders or the Certificateholder to Seller, the
parties intend that Seller shall have granted to Purchaser a security interest
in all of Seller's right, title and interest in and to the Receivables and the
Other Conveyed Property conveyed pursuant to Section 2.1 hereof, and that this
Agreement shall constitute a security agreement under applicable law.
SECTION 6.10 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws thereof and the obligations, rights and remedies
of the parties under this Agreement shall be determined in accordance with such
laws.
SECTION 6.11 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
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SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
Property to the Issuer. Seller acknowledges that Purchaser intends, pursuant to
the Sale and Servicing Agreement, to convey the Receivables and the Other
Conveyed Property, together with its rights under this Agreement, to the Issuer
on the date hereof and on the Subsequent Transfer Date in the case of Subsequent
Receivables. Seller acknowledges and consents to such conveyance and pledge and
waives any further notice thereof and covenants and agrees that the
representations and warranties of Seller contained in this Agreement and the
rights of Purchaser hereunder are intended to benefit the Insurer, the Issuer,
the Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholder. In furtherance of the foregoing, Seller covenants and agrees
to perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Insurer, the Issuer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholder and that,
notwithstanding anything to the contrary in this Agreement, Seller shall be
directly liable to the Issuer, the Owner Trustee, the Trust Collateral Agent,
the Noteholders and the Certificateholder (notwithstanding any failure by the
Servicer, the Backup Servicer or the Purchaser to perform their respective
duties and obligations hereunder or under Related Documents) and that the Trust
Collateral Agent may enforce the duties and obligations of Seller under this
Agreement against Seller for the benefit of the Insurer, the Owner Trustee, the
Trust Collateral Agent, the Noteholders and the Certificateholder.
SECTION 6.13 Nonpetition Covenant. Neither Purchaser nor Seller
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Purchaser or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Purchaser or the Issuer or any
substantial part of their respective property, or ordering the winding up or
liquidation of the affairs of the Purchaser or the Issuer.
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IN WITNESS WHEREOF, the parties have caused this Purchase Agreement
to be duly executed by their respective officers as of the day and year first
above written.
AFS FUNDING CORP.,
as Purchaser
By
------------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
as Seller
By
------------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and Treasurer
Accepted:
LASALLE NATIONAL BANK,
As Trustee and Trust Collateral Agent
By
-------------------------------------
Name:
Title:
[Purchase Agreement]
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
A-1
<PAGE>
SCHEDULE B
(TO THE PURCHASE AGREEMENT)
REPRESENTATIONS AND WARRANTIES OF SELLER
1. Characteristics of Receivables. Each Receivable (A) was originated by a
Dealer for the retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business in accordance with AmeriCredit's credit policies and such
Dealer had all necessary licenses and permits to originate Receivables in the
state where such Dealer was located, was fully and properly executed by the
parties thereto, was purchased by AmeriCredit from such Dealer under an existing
Dealer Agreement or pursuant to a Dealer Assignment with AmeriCredit and was
validly assigned by such Dealer to AmeriCredit pursuant to a Dealer Assignment,
(B) contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for realization against the
collateral security, (C) is a Receivable which provides for level monthly
payments (provided that the period in the first Collection Period and the
payment in the final Collection Period of the Receivable may be minimally
different from the normal period and level payment) which, if made when due,
shall fully amortize the Amount Financed over the original term and (D) has not
been amended or collections with respect to which waived, other than as
evidenced in the Receivable File relating thereto.
2. No Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to AmeriCredit and by AmeriCredit to the
Seller without any fraud or misrepresentation on the part of such Dealer in any
case.
3. Compliance with Law. All requirements of applicable federal, state and
local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Moss-Magnuson Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors'
Civil Relief Act of 1940, each applicable state Motor Vehicle Retail Installment
Sales Act, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws) in respect of the Receivables and the Financed Vehicles,
have been complied with in all material respects, and each Receivable and the
sale of the Financed Vehicle evidenced by each Receivable complied at the time
it was originated or made and now complies in all material respects with all
applicable legal requirements.
4. Origination. Each Receivable was originated in the United States.
<PAGE>
5. Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation of the Obligor thereon, enforceable by the
holder thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the Cutoff Date of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended; and all parties to each Receivable had
full legal capacity to execute and deliver such Receivable and all other
documents related thereto and to grant the security interest purported to be
granted thereby.
6. No Government Obligor. No Obligor is the United States of America or
any State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the related Cutoff Date no Obligor had been
identified on the records of AmeriCredit as being the subject of a current
bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the Schedule of
Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the related
Cutoff Date.
9. Marking Records. By the Closing Date or Subsequent Transfer Date, as
applicable, the Seller will have caused the portions of the Electronic Ledger
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivables have been sold to the Seller by the Servicer and resold by the
Seller to the Trust in accordance with the terms of the Sale and Servicing
Agreement.
10. Computer Tape. The Computer Tape made available by the Seller to the
Trust on the Closing Date or Subsequent Transfer Date, as applicable, was
complete and accurate as of the related Cutoff Date and includes a description
of the same Receivables that are described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the Noteholders
or the Insurer were utilized in selecting the Receivables from those receivables
owned by the Seller which met the selection criteria contained in the Sale and
Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within the
meaning of the UCC as in effect in the States of Texas and New York.
13. One Original. There is only one original executed copy of each
Receivable.
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<PAGE>
14. Receivable Files Complete. There exists a Receivable File pertaining
to each Receivable and such Receivable File contains (a) a fully executed
original of the Receivable, (b) the original executed credit application, or a
copy thereof and (c) the original Lien Certificate or application therefor. Each
of such documents which is required to be signed by the Obligor has been signed
by the Obligor in the appropriate spaces. All blanks on any form have been
properly filled in and each form has otherwise been correctly prepared. The
complete Receivable File for each Receivable currently is in the possession of
the Custodian.
15. Receivables in Force. No Receivable has been satisfied, subordinated
or rescinded, and the Financed Vehicle securing each such Receivable has not
been released from the lien of the related Receivable in whole or in part. No
terms of any Receivable have been waived, altered or modified in any respect
since its origination, except by instruments or documents identified in the
Receivable File. No Receivable has been modified as a result of application of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
16. Lawful Assignment. No Receivable was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Notes.
17. Good Title. Immediately prior to the conveyance of the Receivables to
the Trust pursuant to this Agreement or Subsequent Transfer Agreement, as
applicable, the Seller was the sole owner thereof and had good and indefeasible
title thereto, free of any Lien and, upon execution and delivery of this
Agreement by the Seller, the Trust shall have good and indefeasible title to and
will be the sole owner of such Receivables, free of any Lien. No Dealer has a
participation in, or other right to receive, proceeds of any Receivable. The
Seller has not taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the related
Insurance Policies or the related Dealer Agreements or Dealer Assignments or to
payments due under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created or
shall create a valid, binding and enforceable first priority security interest
in favor of the Seller in the Financed Vehicle. The Lien Certificate and
original certificate of title for each Financed Vehicle show, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate will be received within 180 days of the Closing
Date or Subsequent Transfer Date, as applicable, and will show the Seller named
as the original secured party under each Receivable as the holder of a first
priority security interest in such Financed Vehicle. With respect to each
Receivable for which the Lien Certificate has not yet been returned from the
Registrar of Titles, the Seller has received written evidence from the related
Dealer that such Lien Certificate showing the Seller as first lienholder has
been applied for and the Seller's security
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interest has been validly assigned by the Seller to the Trust pursuant to this
Agreement. Immediately after the sale, transfer and assignment thereof by the
Seller to the Trust, each Receivable will be secured by an enforceable and
perfected first priority security interest in the Financed Vehicle in favor of
the Trustee as secured party, which security interest is prior to all other
Liens upon and security interests in such Financed Vehicle which now exist or
may hereafter arise or be created (except, as to priority, for any lien for
taxes, labor or materials affecting a Financed Vehicle). As of the related
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof and the Other Conveyed Property have been made, taken or performed.
20. No Impairment. The Seller has not done anything to convey any right to
any Person that would result in such Person having a right to payments due under
the Receivable or otherwise to impair the rights of the Trust, the Insurer, the
Trustee, the Trust Collateral Agent and the Noteholders in any Receivable or the
proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to AmeriCredit with respect to such Receivable.
22. No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Receivable.
23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 30 days), and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Receivable, and there has been no waiver of any of the
foregoing. As of the related Cutoff Date no Financed Vehicle had been
repossessed.
24. Insurance. At the time of a purchase of a Receivable by AmeriCredit
from a Dealer, each Financed Vehicle is required to be covered by a
comprehensive and collision insurance policy (i) in an amount at least equal to
the lesser of (a) its maximum insurable value or (b) the principal amount due
from the Obligor under the related Receivable, (ii) naming AmeriCredit as loss
payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
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comprehensive and collision coverage. Each Receivable requires the Obligor to
maintain physical loss and damage insurance, naming AmeriCredit and its
successors and assigns as additional insured parties, and each Receivable
permits the holder thereof to obtain physical loss and damage insurance at the
expense of the Obligor if the Obligor fails to do so. No Financed Vehicle is
insured under a policy of Force-Placed Insurance on the related Cutoff Date.
25. Past Due. At the related Cutoff Date no Receivable was more than 30
days past due.
26. Remaining Principal Balance. At the related Cutoff Date the Principal
Balance of each Receivable set forth in the Schedule of Receivables is true and
accurate in all material respects.
27. Certain Characteristics of Initial Receivables. (A) Each Initial
Receivable had a remaining maturity, as of the Initial Cutoff Date, of not more
than 60 months; (B) each Receivable had an original maturity of not more than 60
months; (C) each Initial Receivable had a remaining Principal Balance as of the
Initial Cutoff Date of at least $250 and not more than $30,000; (D) each Initial
Receivable has an Annual Percentage Rate of at least 14.25% and not more than
32.00%; (E) no Initial Receivable was more than 30 days past due as of the
Initial Cutoff Date and (F) no funds have been advanced by AmeriCredit, any
Dealer, or anyone acting on behalf of any of them in order to cause any Initial
Receivable to qualify under clause (E) above.
B-5
Execution Copy
- --------------------------------------------------------------------------------
INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.,
AFS FUNDING CORP.
and
BEAR, STEARNS & CO. INC.
Dated as of May 1, 1997
$68,000,000 Class A-1 5.79% Asset Backed Notes
$96,250,000 Class A-2 6.36% Asset Backed Notes
$85,750,000 Class A-3 _6.67% Asset Backed Notes
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Definitions.................................................... 1
Section 2. Representations, Warranties and Agreements of Financial
Security....................................................... 3
Section 3. Representations, Warranties and Agreements of the
Underwriters................................................... 5
Section 4. Indemnification................................................ 6
Section 5. Indemnification Procedures..................................... 7
Section 6. Contribution................................................... 8
Section 7. Miscellaneous.................................................. 8
EXHIBIT A -- Opinion of Associate General Counsel
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INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of May 1, 1997, among FINANCIAL
SECURITY ASSURANCE INC. ("Financial Security"), AFS FUNDING CORP., (the
"Seller") and BEAR, STEARNS & CO. INC., as representative of the Underwriters
(as defined below):
Section 1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings provided below:
"Agreement" means this Indemnification Agreement, as amended from time to
time.
"Federal Securities Laws" means the Securities Act, the Securities
Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company
Act of 1940, the Investment Advisers Act of 1940 and the Public Utility Holding
Company Act of 1935, each as amended from time to time, and the rules and
regulations in effect from time to time under such Acts.
"Financial Security Agreements" means this Agreement, the Stock Pledge
Agreement, the Spread Account Agreement, the Spread Account Agreement Supplement
and the Insurance Agreement.
"Financial Security Information" has the meaning provided in Section 2(g)
hereof.
"Financial Security Party" means any of Financial Security, its parent,
subsidiaries and affiliates, and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 4 hereof.
"Indemnifying Party" means any party required to provide indemnification
pursuant to Section 4 hereof.
"Insurance Agreement" means the Insurance and Indemnity Agreement, dated
as of May 1, 1997 among Financial Security, the Trust, AmeriCredit Financial
Services, Inc., AFS Funding Corp. and AmeriCredit Corp.
"Losses" means (a) any actual out-of-pocket damages incurred by the party
entitled to indemnification or contribution hereunder, (b) any actual
out-of-pocket costs or expenses incurred by such party, including reasonable
fees or expenses of its counsel and other expenses incurred in connection with
investigating or defending any claim, action or other proceeding which entitle
such party to be indemnified hereunder (subject to the limitations set forth in
Section 5 hereof), to the extent not paid, satisfied or reimbursed from funds
provided by any other Person other than an affiliate of such party (provided
that the foregoing shall not create or imply any obligation to pursue recourse
against any such other Person), plus (c) interest on the amount paid by the
party entitled to indemnification or contribution from the date of such
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<PAGE>
payment to the date of payment by the party who is obligated to indemnify or
contribute hereunder at the statutory rate applicable to judgments for breach of
contract.
"Offering Document" means the Prospectus and any other material or
documents delivered by the Underwriters to any Person in connection with the
offer or sale of the Securities.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization or other organization or entity (whether
governmental or private).
"Policy" means the financial guaranty insurance policy delivered by
Financial Security with respect to the Securities.
"Prospectus" means the Prospectus relating to the Securities dated
February 28, 1997, and the Prospectus Supplement dated May 15, 1997 (the
"Prospectus Supplement") relating to the Securities.
"Representative" means Bear, Stearns & Co. Inc. as representative of the
Underwriters.
"Securities" means $68,000,000 Class A-1 5.79% Asset Backed Notes, the
$96,250,000 Class A-2 6.36 Asset Backed Notes and the $85,750,000 Class A-3
6.67% Asset Backed Notes.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Seller Party" means any of the Seller, its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
"Spread Account Agreement" means the Spread Account Agreement dated as of
December 1, 1994, as amended and restated on May 1, 1997, among Financial
Security, AFS Funding Corp., the collateral agent named therein and the trustees
specified therein, as the same may be amended, supplemented or otherwise
modified in accordance with the terms thereof.
Spread Account Agreement Supplement: The Spread Account Agreement
Supplement means the Series 1997-B Supplement to Spread Account Agreement dated
as of May 1, 1997, among Financial Security, AFS Funding Corp., the collateral
agent named therein and the trustees specified therein.
"Stock Pledge Agreement" means the Stock Pledge Agreement, dated as of May
1, 1996 among Financial Security, AmeriCredit Financial Services, Inc. and the
collateral agent named therein, as the same may be amended, supplemented or
otherwise modified in accordance with the terms thereof.
"Trust" means AmeriCredit Automobile Receivables Trust 1997-B.
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<PAGE>
"Underwriters" means Bear, Stearns & Co. Inc. and Credit Suisse First
Boston, as underwriters.
"Underwriter Information" has the meaning provided in Section 3(c) hereof.
"Underwriter Party" means any of the Underwriters, its respective parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such item is used in the Securities Act) of
any of the foregoing.
"Underwriting Agreement" means the Underwriting Agreement, dated as of May
15, 1997 among the Seller, AmeriCredit Financial Services, Inc. and the
Representative.
Section 2. Representations, Warranties and Agreements of Financial
Security. Financial Security represents, warrants and agrees as follows:
(a) Organization, Etc. Financial Security is a stock insurance
company duly organized, validly existing and authorized to transact
financial guaranty insurance business under the laws of the State of New
York.
(b) Authorization, Etc. The Policy and the Financial Security
Agreements have been duly authorized, executed and delivered by Financial
Security.
(c) Validity, Etc. The Policy and the Financial Security Agreements
constitute valid and binding obligations of Financial Security,
enforceable against Financial Security in accordance with their terms,
subject, as to the enforcement of remedies, to bankruptcy, insolvency,
reorganization, rehabilitation, moratorium and other similar laws
affecting the enforceability of creditors' rights generally applicable in
the event of the bankruptcy or insolvency of Financial Security and to the
application of general principles of equity and subject, in the case of
this Agreement, to principles of public policy limiting the right to
enforce the indemnification provisions contained herein.
(d) Exemption From Registration. The Policy is exempt from
registration under the Securities Act.
(e) No Conflicts. Neither the execution or delivery by Financial
Security of the Policy or the Financial Security Agreements, nor the
performance by Financial Security of its obligations thereunder, will
conflict with any provision of the certificate of incorporation or the
bylaws of Financial Security nor result in a breach of, or constitute a
default under, any material agreement or other instrument to which
Financial Security is a party or by which any of its property is bound nor
violate any judgment, order or decree applicable to Financial Security of
any governmental or regulatory body, administrative agency, court or
arbitrator having jurisdiction over Financial Security (except that, in
the published opinion of the Securities and Exchange Commission, the
indemnification provisions of this Agreement, insofar as they relate to
indemnification for liabilities arising under the Securities Act, are
against public policy as expressed in the Securities Act and are therefore
unenforceable).
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(f) Financial Information. The consolidated balance sheets of
Financial Security as of December 31, 1996 and December 31, 1995 and the
related consolidated statements of income, changes in shareholder's equity
and cash flows for the fiscal years then ended, and the interim
consolidated balance sheet of Financial Security as of March 31, 1997, and
the related statements of income, changes in shareholder equity and cash
flows for the interim period then ended, which are incorporated by
reference in the Prospectus, fairly present in all material respects the
financial condition of Financial Security as of such dates and for such
periods in accordance with generally accepted accounting principles
consistently applied (subject as to interim statements to normal year-end
adjustments) and since the date of the most current interim consolidated
balance sheet referred to above there has been no change in the financial
condition of Financial Security which would materially and adversely
affect its ability to perform its obligations under the Policy.
(g) Financial Security Information. The information in the
Prospectus set forth under the caption "Financial Security Assurance Inc."
(as revised from time to time in accordance with the provisions hereof,
the "Financial Security Information") is limited and does not purport to
provide the scope of disclosure required to be included in a prospectus
with respect to a registrant in connection with the offer and sale of
securities of such registrant registered under the Securities Act. Within
such limited scope of disclosure, however, as of the date of the
Prospectus and as of the date hereof, the Financial Security Information
does not contain any untrue statement of a material fact, or omit to state
a material fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading.
(h) Additional Information. Financial Security will furnish to the
Underwriters or the Seller, upon request of the Underwriters or the
Seller, as the case may be, copies of Financial Security's most recent
financial statements (annual or interim, as the case may be) which fairly
present in all material respects the financial condition of Financial
Security as of the dates and for the periods indicated, in accordance with
generally accepted accounting principles consistently applied except as
noted therein (subject, as to interim statements, to normal year-end
adjustments). In addition, if the delivery of an Prospectus relating to
the Securities is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Securities, the Seller or the Underwriters will
notify Financial Security of such requirement to deliver an Prospectus and
Financial Security will promptly provide the Underwriters and the Seller
with any revisions to the Financial Security Information that are in the
judgment of Financial Security necessary to prepare an amended Prospectus
or a supplement to the Prospectus.
(i) Opinion of Counsel. Financial Security will furnish to the
Underwriters and the Seller on the closing date for the sale of the
Securities an opinion of its Associate General Counsel, to the effect set
forth in Exhibit A attached hereto, dated such closing date and addressed
to the Seller and the Underwriters.
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<PAGE>
(j) Consents and Reports of Independent Accountants. Financial
Security will furnish to the Underwriters and the Seller, upon request, as
comfort from its independent accountants in respect of its financial
condition, (i) at the expense of the Person specified in the Insurance
Agreement, a copy of the Prospectus, including either a manually signed
consent or a manually signed report of Financial Security's independent
accountants and (ii) the quarterly review letter by Financial Security's
independent accountants in respect of the most recent interim financial
statements of Financial Security.
Nothing in this Agreement shall be construed as a representation or warranty by
Financial Security concerning the rating of its claims-paying ability by Moody's
Investors Service, Inc. or Standard & Poor's Rating Group or any other rating
agency (collectively, the "Rating Agencies"). The Rating Agencies, in assigning
such ratings, take into account facts and assumptions not described in the
Prospectus and the facts and assumptions which are considered by the Rating
Agencies, and the ratings issued thereby, are subject to change over time.
Section 3. Representations, Warranties and Agreements of the Underwriters.
Each of the Underwriters represents, warrants and agrees as follows:
(a) Compliance With Laws. Such Underwriter will comply in all
material respects with all legal requirements in connection with offers
and sales of the Securities and make such offers and sales in the manner
provided in the Prospectus.
(b) Offering Document. Such Underwriter will not use, or distribute
to other broker-dealers for use, any Offering Document in connection with
the offer and sale of the Securities unless such Offering Document
includes such information as has been furnished by Financial Security for
inclusion therein and the information therein concerning Financial
Security has been approved by Financial Security in writing. Financial
Security hereby consents to the information in respect of Financial
Security included in the Prospectus. Each Offering Document will include
the following statement:
"The Policy is not covered by the property/casualty insurance
security fund specified in Article 76 of the New York Insurance
Law".
Each Offering Document including financial information with respect to
Financial Security prepared in accordance with generally accepted
accounting principles will include the following statement immediately
preceding such financial information:
"The New York State Insurance Department recognizes only statutory
accounting practices for determining and reporting the financial
condition and results of operations of an insurance company, for
determining its solvency under the New York Insurance Law, and for
determining whether its financial condition warrants the payment of
a dividend to its stockholders. No consideration is given by the New
York State Insurance Department to financial statements prepared in
accordance with generally accepted accounting principles in making
such determinations."
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<PAGE>
(c) Underwriter Information. All material provided by the
Underwriters for inclusion in the Prospectus (as revised from time to
time, the "Underwriter Information"), insofar as such information relates
to the Underwriters, is true and correct in all material respects. In
respect of the Preliminary Prospectus Supplement, the Underwriter
Information is limited to the information set forth (i) in the seventh and
eighth paragraphs of the cover page, (ii) the first full paragraph of page
S-3, and (iii) under the caption "Underwriting" and in respect of the
Final Prospectus Supplement, the Underwriter Information is limited to the
information set forth (i) in the fifth and sixth paragraphs of the cover
page, (ii) the first full paragraph of page S-3, and (iii) under the
caption "Underwriting".
Section 4. Indemnification.
(a) Financial Security agrees, upon the terms and subject to the
conditions provided herein, to indemnify, defend and hold harmless each
Seller Party and each Underwriter Party against (i) any and all Losses
incurred by them with respect to the offer and sale of the Securities and
resulting from Financial Security's breach of any of its representations,
warranties or agreements set forth in Section 2 hereof and (ii) any and
all Losses to which any Seller Party or Underwriter Party may become
subject, under the Securities Act or otherwise, insofar as such Losses
arise out of or result from an untrue statement of a material fact
contained in any Offering Document or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or omission was made in the
Financial Security Information included therein in accordance with the
provisions hereof.
(b) Each of the Underwriters, agrees, upon the terms and subject to
the conditions provided herein, to indemnify, defend and hold harmless
each Financial Security Party and each Seller Party against (i) any and
all Losses incurred by them with respect to the offer and sale of the
Securities and resulting from the Underwriters' breach of any of its
representations, warranties or agreements set forth in Section 3 hereof
and (ii) any and all Losses to which any Financial Security Party or
Seller Party may become subject, under the Securities Act or otherwise,
insofar as such Losses arise out of or result from an untrue statement of
a material fact contained in any Offering Document or the omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or omission was made in
the Underwriter Information included therein.
(c) Upon the incurrence of any Losses for which a party is entitled
to indemnification hereunder, the Indemnifying Party shall reimburse the
Indemnified Party promptly upon establishment by the Indemnified Party to
the Indemnifying Party of the Losses incurred.
Section 5. Indemnification Procedures. Except as provided below in Section
6 with respect to contribution, the indemnification provided herein by an
Indemnifying Party shall be
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<PAGE>
the exclusive remedy of any and all Indemnified Parties for the breach of a
representation, warranty or agreement hereunder by an Indemnifying Party;
provided, however, that each Indemnified Party shall be entitled to pursue any
other remedy at law or in equity for any such breach so long as the damages
sought to be recovered shall not exceed the Losses incurred thereby resulting
from such breach. In the event that any action or regulatory proceeding shall be
commenced or claim asserted which may entitle an Indemnified Party to be
indemnified under this Agreement, such party shall give the Indemnifying Party
written or telegraphic notice of such action or claim reasonably promptly after
receipt of written notice thereof. The Indemnifying Party shall be entitled to
participate in and, upon notice to the Indemnified Party, assume the defense of
any such action or claim in reasonable cooperation with, and with the reasonable
cooperation of, the Indemnified Party. The Indemnified Party will have the right
to employ its own counsel in any such action in addition to the counsel of the
Indemnifying Party, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party, unless (a) the employment of counsel by the
Indemnified Party at its expense has been authorized in writing by the
Indemnifying Party, (b) the Indemnifying Party has not in fact employed counsel
satisfactory to Financial Security to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, or (c)
the named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnifying Party and one or more Indemnified
Parties, and the Indemnified Parties shall have been advised by counsel that (A)
there may be one or more legal defenses available to them which are different
from or additional to those available to the Indemnifying Party and (B) the
representation of the Indemnifying Party and such Indemnified Parties by the
same counsel would be inappropriate or contrary to prudent practice (in which
case, if such Indemnified Parties notify the Indemnifying Party in writing that
they elect to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Parties, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all Seller Parties, one such firm
for all Underwriter Parties and one such firm for all Financial Security
Parties, as the case may be, which firm shall be designated in writing by the
Seller in respect of the Seller Parties, by the Underwriters in respect of the
Underwriter Parties and by Financial Security in respect of the Financial
Security Parties), in each of which cases the fees and expenses of counsel will
be at the expense of the Indemnifying Party and all such fees and expenses will
be reimbursed promptly as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such claim or action unless the Indemnifying
Party shall have consented thereto or be in default in its obligations
hereunder. Any failure by an Indemnified Party to comply with the provisions of
this Section shall relieve the Indemnifying Party of liability only if such
failure is prejudicial to the position of the Indemnifying Party and then only
to the extent of such prejudice.
Section 6. Contribution.
(a) To provide for just and equitable contribution if the
indemnification provided by any Indemnifying Party is determined to be
unavailable for any Indemnified
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Party (other than due to application of this Section), each Indemnifying
Party shall contribute to the Losses arising from any breach of any of its
representations, warranties or agreements contained in this Agreement on
the basis of the relative fault of each of the parties as set forth in
Section 6(b) below; provided, however, that an Indemnifying Party shall in
no event be required to contribute to all Indemnified Parties an aggregate
amount in excess of the Losses incurred by such Indemnified Parties
resulting from the breach of representations, warranties or agreements
contained in this Agreement.
(b) The relative fault of each Indemnifying Party, on the one hand,
and of each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged breach
of, any representations, warranties or agreements contained in this
Agreement relates to information supplied by, or action within the control
of, the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such breach.
(c) The parties agree that Financial Security shall be solely
responsible for the Financial Security Information and the Underwriters
shall be solely responsible for the Underwriter Information and that the
balance of each Offering Document shall be the responsibility of the
Seller.
(d) Notwithstanding anything in this Section 6 to the contrary, the
Underwriters shall not be required to contribute an amount in excess of
the amount by which the total price of the Securities underwritten by the
Underwriters exceeds the amount of any damages that the Underwriters have
otherwise been required to pay in respect of such untrue statement or
omission.
(e) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to
contribution promptly upon establishment by the party entitled to
contribution to the contributor of the Losses incurred.
Section 7. Miscellaneous.
(a) Notices. All notices and other communications provided for under
this Agreement shall be delivered to the address set forth below or to
such other address as shall be designated by the recipient in a written
notice to the other party or parties hereto.
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If to Financial Security: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President --
Surveillance (with a copy to the attention
of the General Counsel)
If to the Seller: AFS Funding Corp.
1325 Airmotive Way
Reno, Nevada 89502
Attention: General Counsel
If to the Underwriters: Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Jeffrey Moses
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(c) Assignments. This Agreement may not be assigned by any party
without the express written consent of each other party. Any assignment
made in violation of this Agreement shall be null and void.
(d) Amendments. Amendments of this Agreement shall be in writing
signed by each party hereto.
(e) Survival, Etc. The indemnity and contribution agreements
contained in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of any
Indemnifying Party, (ii) the issuance of the Securities or (iii) any
termination of this Agreement or the Policy. The indemnification provided
in this Agreement will be in addition to any liability which the parties
may otherwise have and shall in no way limit any obligations of the Seller
under the Initial Purchase Agreement or the Insurance Agreement.
(f) Counterparts. This Agreement may be executed in counterparts by
the parties hereto, and all such counterparts shall constitute one and the
same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indemnification
Agreement to be duly executed and delivered as of the date first above written.
FINANCIAL SECURITY ASSURANCE INC.
By
---------------------------------
Name:
------------------------------
Authorized Officer
AFS FUNDING CORP.
By
---------------------------------
Name:
------------------------------
Title:
-----------------------------
BEAR, STEARNS & CO. INC.
as Representative
By
---------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT A
OPINION OF GENERAL COUNSEL
Based upon the foregoing, I am of the opinion that:
1. Financial Security is a stock insurance company duly organized, validly
existing and authorized to transact financial guaranty insurance business under
the laws of the State of New York.
2. The Policy and the Financial Security Agreements have been duly
authorized, executed and delivered by Financial Security.
3. The Policy and the Financial Security Agreements constitute valid and
binding obligations of Financial Security, enforceable against Financial
Security in accordance with their terms, subject, as to the enforcement of
remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium
and other similar laws affecting the enforceability of creditors' rights
generally applicable in the event of the bankruptcy or insolvency of Financial
Security and to the application of general principles of equity and subject, in
the case of the Indemnification Agreement, to principles of public policy
limiting the right to enforce the indemnification provisions contained therein
insofar as they relate to indemnification for liabilities arising under
applicable securities laws.
4. The Policy is exempt from registration under the Securities Act of
1933, as amended (the "Act").
5. Neither the execution or delivery by Financial Security of the Policy
or the Financial Security Agreements, nor the performance by Financial Security
of its obligations thereunder, will conflict with any provision of the
certificate of incorporation or the bylaws of Financial Security or violate any
law or regulation, which violation would impair the binding effect or
enforceability of the Policy or any of the Agreements or, to the best of my
knowledge (after due inquiry), result in a breach of, or constitute a default
under, any agreement or other instrument to which Financial Security is a party
or by which it or any of its property is bound or, to the best of my knowledge
(after due inquiry), violate any judgment, order or decree applicable to
Financial Security of any governmental or regulatory body, administrative
agency, court or arbitrator having jurisdiction over Financial Security (except
that in the published opinion of the Securities and Exchange Commission the
indemnification provisions of the Indemnification Agreement, insofar as they
relate to indemnification for liabilities arising under the Act, are against
public policy as expressed in the Act and are therefore unenforceable).
In addition, please be advised that I have reviewed the description of
Financial Security under the caption "Financial Security Assurance Inc." in the
Prospectus dated February 28, 1997 (the "Offering Document") of the Seller with
respect to the Securities. The information provided
<PAGE>
in the Offering Document with respect to Financial Security is limited and does
not purport to provide the scope of disclosure required to be included in a
prospectus with respect to a registrant under the Act in connection with the
public offer and sale of securities of such registrant. Within such limited
scope of disclosure, however, there has not come to my attention any information
which would cause me to believe that the description of Financial Security
referred to above, as of the date of the Offering Document or as of the date of
this opinion, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except that I express no opinion with respect to any financial
statements or other financial information contained or referred to therein).
[Letterhead of Coopers & Lybrand]
CONSENT OF INDEPENDENT ACCOUNTANTS
-------
We consent to the incorporation by reference in the Prospectus Supplement dated
May 15, 1997 (to Prospectus dated February 28, 1997) of AFS Funding Corp.,
relating to AmeriCredit Automobile Receivables Trust 1997-B of our report dated
January 24, 1997 on our audits of the consolidated financial statements of
Financial Security Assurance Inc. and Subsidiaries as of December 31, 1996 and
1995, and for each of the three years in the period ended December 31, 1996. We
also consent to the reference to our Firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
New York, New York
May 15, 1997
EXHIBIT A
FORM OF INVESTOR'S LETTER
[__________]
Advanta Business Services Corp.
1020 Laurel Oak Road
Voorhees, NJ 08043
Ladies and Gentlemen:
We propose to purchase $[__________] in original aggregate principal
amount of Advanta Business Receivables Master Asset-Backed Financing Facility,
Series [_____] Note (the "Series Note"). The Note was issued pursuant to the
Master Leasing Receivables Asset-Backed Financing Facility Agreement, dated as
of May 1, 1997 (the "Master Facility Agreement") among Advanta Business Services
Corp., as servicer (the "Servicer"), and Advanta Leasing Receivables III
("ALRC") and The Chase Manhattan Bank, as trustee (the "Trustee"), the Series
[_____] Supplement to the Master Facility Agreement, dated as of [_____] (the
"Series Supplement"), among the Servicer, ALRC, Advanta Business Receivables LLC
("ABR LLC" together with ALRC, the "Series Obligors") and The Chase Manhattan
Bank, as trustee (the "Trustee") and the Note Purchase Agreement, dated as of
[__________] (the "Note Purchase Agreement"), among the Series Obligors,
[__________] and [__________]. Capitalized terms used herein but not otherwise
defined shall have the same meaning as in the Indenture.
In connection with out proposed purchase of the Series Note, we
agree to the following terms and conditions and make the representations and
warranties stated herein with the express understanding that they will be relied
upon by the Series Obligors and the Trustee.
1. We understand that the Series Note has not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or registered or
qualified under any state securities or "Blue Sky" laws and are being sold to us
in a transaction that is exempt from the registration requirements of the
Securities Act and the registration or qualification requirements of such state
laws.
2. We are (check as applicable):
__ (a) a "Qualified Institutional Buyer" (as defined in Rule
144A under the Securities Act).
__ (b) an institutional investor that has such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of an
investment in the Series Note and is able to bear the
economic risk of an investment in the Series Note.
__ (c) an "accredited investor" as defined in Rule 501
promulgated under the Securities Act that has such
knowledge and experience
<PAGE>
in financial and business matters as to be capable of
evaluating the merits and risks of investment in the
Series Note and is able to bear the economic risk of
investment in the Series Note.
3. We agree that, to the extent that Section 2(a) of this letter is
applicable, that the Series Note will not be transferred unless such transfer is
made in reliance on Rule 144A or unless some other exemption from the
registration requirements of the Securities Act, or any applicable state
securities law, is available.
4. To the extent that Section 2(b) or (c) of this letter is
applicable, that we are acquiring the Series Note (i) solely for investment
purposes for our own account or for accounts as to which we exercise sole
investment discretion and not with a view to any resale or distribution of the
Series Note in whole or in part, or (ii) otherwise for purposes which will not
constitute a distribution of securities under the Securities Act, or under any
state securities of "Blue Sky" laws subject, nevertheless, to the understanding
that disposition of our property shall at all times be and remain within our
control, and under no circumstances will we attempt to sell, pledge, hypothecate
or otherwise transfer all or any portion of our interest in the Series Note
except in accordance with the terms of the Series Note, the Master Facility
Agreement and Series Supplement.
5. We agree not to sell the Series Note in whole or in part, unless
the subsequent purchaser agrees to be subject to the same representations and
warranties as were applicable to us in acquiring the Series Note and funding our
respective investments therein.
6. We understand that the Series Note shall bear a legend to
substantially the following effect:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND HAS NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
REGULATORY AUTHORITY OF ANY STATE. THIS NOTE HAS BEEN OFFERED AND SOLD
PRIVATELY. THE HOLDER HEREOF ACKNOWLEDGES THAT THESE SECURITIES ARE
"RESTRICTED SECURITIES" THAT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT AND AGREES FOR THE BENEFIT OF THE OBLIGORS AND ITS AFFILIATES THAT
THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR
(B) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION.
2
<PAGE>
7. We understand that there is no public market for the Series Note
and it is unlikely that such market will develop.
8. We are authorized to invest in the Series Note.
9. We certify that, in acquiring the Series Note, we have complied
with any applicable guidelines or regulations for or limitations on investments
established by each regulatory agency or body, if any, which has jurisdiction
over investments made by us and that our acquisition and retention of the Series
Note will not violate the limitations on possession contained in any such
guidelines, regulations or limitations.
10. We further agree to be bound by all of the terms and conditions
of ownership of the Series Note contained in the Master Facility Agreement and
Series Supplement, as the same may be amended from time to time.
Very truly yours,
[ ]
--------------------
By:
----------------------------
Name:
Authorized Agent:
3
