<PAGE>
- --------------------------------------------------------------------------------
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 27, 1998
AmeriCredit Automobile Receivables Trust 1998-B
-----------------------------------------------
(Exact name of registrant as specified in its charter)
United States 333-36365 88-0359494
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
c/o AmeriCredit Financial 76107
Services, Inc. (Zip Code)
Attention: Chris A. Choate
200 Bailey Avenue
Fort Worth, Texas
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (017) 002 7000
--------------
(Former name or former address, if changed since last report)
- --------------------------------------------------------------------------------
<PAGE>
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 $2,200,000,000 in principal amount of Securities (the "Securities") on Form
S-3. Pursuant to the Registration Statement, AmeriCredit Automobile Receivables
Trust 1998-B (the "Trust") issued $116,000,000 Class A-1 5.629% Asset Backed
Notes, $174,000,000 Class A-2 Floating Rate Asset Backed Notes, $77,000,000
Class A-3 Floating Rate Asset Backed Notes, $108,000,000 Class A-4 6.06% Asset
Backed Notes and $50,000,000 Class A-5 6.12% Asset Backed Notes (collectively,
the "Notes") on May 27, 1998. 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 11, 1998, between the Trust and Bank One, N.A., 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 19, 1998 filed pursuant to Rule 424(b)(2) of the Act
with the Commission.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
-----------------------------------------------------
and Exhibits.
------------
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement, dated May 19, 1998 among AmeriCredit Financial
Services, Inc., as Servicer, AFS Funding Corp., as Seller, and Credit Suisse
First Boston Corporation, as Representative of the Underwriters.
4.1 Indenture, dated as of May 11, 1998 between AmeriCredit Automobile
Receivables Trust 1998-B and Bank One, N.A., as Trustee and Trust Collateral
Agent.
4.2 Trust Agreement, dated as of May 11, 1998, between AFS Funding Corp., as
Depositor, and Bankers Trust (Delaware), as Owner Trustee.
4.3 Sale and Servicing Agreement, dated as of May 11, 1998, among AmeriCredit
Automobile Receivables Trust 1998-B, AmeriCredit Financial Services, Inc., as
Servicer, AFS Funding Corp., as Seller, and Bank One, N.A., as Backup Servicer
and Trust Collateral Agent.
4.4 Note Guaranty Surety Bond, dated May 27, 1998 and delivered by Financial
Security Assurance Inc.
10.1 Purchase Agreement, dated as of May 11, 1998, among AmeriCredit
Financial Services, Inc. and CP Funding Corp., as Sellers, and AFS Funding
Corp., as Purchaser.
10.2 Indemnification Agreement, dated May 11, 1998, among Financial Security
Assurance Inc., as Insurer, AFS Funding Corp., as Seller, and Credit Suisse
First Boston Corporation, as Representative of the Underwriters.
23.1 Consent of Coopers & Lybrand L.L.P. regarding financial statements of the
Insurer and their report.
99.1 Statistical information for the receivables as of the Initial Cut-off
date.
3
<PAGE>
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 1998-B
By: AmeriCredit Financial Services, Inc., as Servicer
By: /s/ Preston Miller
-------------------
Name: Preston Miller
Title: Senior Vice President and Treasurer
Dated: May 27, 1998
4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement, dated May 19, 1998, among AmeriCredit
Financial Services, Inc., as Servicer, AFS Funding Corp., as
Seller, and Credit Suisse First Boston Corporation, as
Representative of the Underwriters.
4.1 Indenture, dated as of May 11, 1998, between AmeriCredit
Automobile Receivables Trust 1998-B and Bank One, N.A., as
Trustee and Trust Collateral Agent.
4.2 Trust Agreement, dated as of May 11, 1998, between AFS Funding
Corp., as Depositor, and Bankers Trust (Delaware), as Owner
Trustee.
4.3 Sale and Servicing Agreement, dated as of May 11, 1998, among
AmeriCredit Automobile Receivables Trust 1998-B, AmeriCredit
Financial Services, Inc., as Servicer, AFS Funding Corp., as
Seller, and Bank One, N.A., as Backup Servicer and Trust
Collateral Agent.
4.4 Note Guaranty Surety Bond, dated May 27, 1998, and delivered by
Financial Security Assurance Inc.
10.1 Purchase Agreement, dated as of May 11, 1998, among AmeriCredit
Financial Services, Inc. and CP Funding Corp., as Sellers, and
AFS Funding Corp., as Purchaser.
10.2 Indemnification Agreement, dated May 11, 1998, among Financial
Security Assurance Inc., as Insurer, AFS Funding Corp., as
Seller, and Credit Suisse First Boston Corporation, as
Representative of the Underwriters.
23.1 Consent of Coopers & Lybrand L.L.P. regarding financial
statements of the Insurer and their report.
99.1 Statistical information for the receivables as of the Initial
Cut-off date.
5
<PAGE>
EXHIBIT 1.1
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
Class A-1 5.629% Asset Backed Notes
Class A-2 Floating Rate Asset Backed Notes
Class A-3 Floating Rate Asset Backed Notes
Class A-4 6.06% Asset Backed Notes
Class A-5 6.12% Asset Backed Notes
UNDERWRITING AGREEMENT
----------------------
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representative of the Underwriters
Eleven Madison Avenue
New York, New York 10010 May 19, 1998
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 $116,000,000 Class A-1 5.629% Asset Backed Notes,
$174,000,000 Class A-2 Floating Rate Asset Backed Notes, $77,000,000 Class A-3
Floating Rate Asset Backed Notes, $108,000,000 Class A-4 6.06% Asset Backed
Notes, $50,000,000 and Class A-5 6.12% Asset Backed Notes (collectively, the
"Notes"). The Notes are to be issued by AmeriCredit Automobile Receivables
- ------
Trust 1998-B (the "Trust") pursuant to an Indenture, to be dated as of May 11,
-----
1998 (the "Indenture"), between the Trust and Bank One, N.A., 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 11, 1998, 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 11, 1998 (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
Period, from funds available under the Pre-Funded Amount. The Initial
<PAGE>
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, CP Funding Corp. ("CP Funding"), the Trust and the Note Insurer will
execute and deliver an Insurance Agreement dated as of May 11, 1998 (the
"Insurance Agreement") and (ii) the Seller, the Underwriters and the Note
- --------------------
Insurer will execute and deliver an Indemnification Agreement dated as of May
11, 1998 (the "Indemnification Agreement").
-------------------------
As used herein, the term "Sponsor Agreements" means the Sale and
------------------
Servicing Agreement dated as of May 11, 1998 among the Trust, the Sponsor, as
servicer, the Seller and Bank One, N.A., a national banking association, as
trust collateral agent (the "Sale and Servicing Agreement"), the Purchase
----------------------------
Agreement between the Sponsor, CP Funding and the Seller dated as of May 11,
1998 (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. Credit
Suisse First Boston Corporation 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 [28], 1998, 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. The Sponsor represents,
------------------------------
warrants and agrees with the Underwriters, that:
(i) A Registration Statement on Form S-3 (No. 333-36365) has (a) been
prepared by the Sponsor on such Form in conformity 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
2
<PAGE>
(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 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
3
<PAGE>
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.
(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.
4
<PAGE>
(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.
(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
5
<PAGE>
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.
(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.
(xvi) 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
6
<PAGE>
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, (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 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
7
<PAGE>
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
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.
8
<PAGE>
(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 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' 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
9
<PAGE>
10:00 a.m. New York City time on May [28], 1998 (the "Closing Date"), or at such
------------
other time or date as shall be agreed 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 Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
10
<PAGE>
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' 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
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.
11
<PAGE>
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 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
12
<PAGE>
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 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
13
<PAGE>
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.
(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.
14
<PAGE>
(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 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
15
<PAGE>
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 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.
16
<PAGE>
(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 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 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
17
<PAGE>
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.
(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.
18
<PAGE>
(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 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
19
<PAGE>
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 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
20
<PAGE>
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. Bank One, N.A. ("Bank One") shall have furnished to the
--------
Underwriters a certificate of Bank One, signed by one or more duly authorized
--------
officers of Bank One, dated the Closing Date, as to the due authorization,
--------
execution and delivery of the Indenture and the Sale and Servicing Agreement by
Bank One 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 circumstances under which
they were made, not misleading and (ii) there has been no change in the
financial condition of the Note Insurer since September 30, 1997, 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, the Class A-3 Notes, the Class A-4 Notes
and the Class A-5 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.
21
<PAGE>
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 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
22
<PAGE>
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. (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 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 (unless such Prospectus is amended or supplemented
after the Prospectus has been delivered pursuant to Rule 424(b)) 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
23
<PAGE>
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 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.
24
<PAGE>
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 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
25
<PAGE>
indemnified parties under this Section 9 consist 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 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; provided, however,
that in no case shall any Underwriter be responsible for any amount in excess
of the underwriting discount applicable to the Notes purchased by such
26
<PAGE>
Underwriter. 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 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
27
<PAGE>
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.
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
28
<PAGE>
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 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.
29
<PAGE>
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: Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Attention:
Fax: (212) 325-8259
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.
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
30
<PAGE>
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.
31
<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:/s/ Preston A. Miller
-------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
AFS FUNDING CORP.
By:/s/ Preston A. Miller
-------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
CONFIRMED AND ACCEPTED, as of
the date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on its own behalf and as Representative of the
Underwriters referred to in the foregoing Agreement
By:/s/ Erik A. Falk
---------------------------------
Name: Erik A. Falk
Title: Authorized Signatory
[Underwriting Agreement]
32
<PAGE>
Schedule 1
Underwriting
<TABLE>
<CAPTION>
Purchase Price (excluding accrued interest)
----------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5
--------------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Credit Suisse 99.81% 99.77% 99.75% 99.683063% 99.615788%
First Boston
Corporation
BancAmerica 99.81% 99.77% 99.75% 99.683063% 99.615788%
Robertson
Stephens
Chase 99.81% 99.77% 99.75% 99.683063% 99.615788%
Securities
Inc.
</TABLE>
<TABLE>
<CAPTION>
Notional Principal Amount
----------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5
--------------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Credit $ 38,668,000 $ 58,000,000 $25,668,000 $ 36,000,000 $16,668,000
Suisse
First
Boston
Corporation
BancAmerica 38,666,000 58,000,000 25,666,000 36,000,000 16,666,000
Robertson
Stephens
Chase 38,666,000 58,000,000 25,666,000 36,000,000 16,666,000
Securities Inc. --------------------- --------------- --------------- --------------- -------------
--------------------- --------------- --------------- --------------- -------------
TOTAL $116,000,000 $174,000,000 $77,000,000 $108,000,000 $50,000,000
</TABLE>
<TABLE>
<CAPTION>
Proceeds (excluding accrued interest)
----------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5
--------------------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Credit $ 38,594,530.80 $ 57,866,600.00 $25,603,830.00 $ 35,885,902.68 $16,603,959.54
Suisse
First
Boston
Corporation
BancAmerica 38,592,534.60 57,866,600.00 25,601,835.00 35,885,902.68 16,601,967.23
Robertson
Stephens
Chase 38,592,534.60 57,866,600.00 25,601,835.00 35,885,902.68 16,601,967.23
Securities --------------------- --------------- -------------- --------------- --------------
Inc.
--------------------- --------------- -------------- --------------- --------------
TOTAL $115,779,600.00 $173,599,800.00 $76,807,500.00 $107,657,708.04 $49,807,894.00
</TABLE>
<PAGE>
EXHIBIT 4.1
================================================================================
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
Class A-1 5.629% Asset Backed Notes
Class A-2 Floating Rate Asset Backed Notes
Class A-3 Floating Rate Asset Backed Notes
Class A-4 6.06% Asset Backed Notes
Class A-5 6.12% Asset Backed Notes
---------------------------------
INDENTURE
Dated as of May 11, 1998
-----------------------------------
BANK ONE, NA
Trustee and Trust Collateral Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................................3
SECTION 1.1 Definitions.....................................................3
SECTION 1.2 Incorporation by Reference of Trust Indenture Act..............11
SECTION 1.3 Rules of Construction..........................................11
ARTICLE II THE NOTES.................................................................12
SECTION 2.1 Form...........................................................12
SECTION 2.2 Execution, Authentication and Delivery.........................12
SECTION 2.3 Temporary Notes................................................13
SECTION 2.4 Registration; Registration of Transfer and Exchange............13
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.....................15
SECTION 2.6 Persons Deemed Owner...........................................16
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest..........16
SECTION 2.8 Cancellation...................................................17
SECTION 2.9 Release of Collateral..........................................17
SECTION 2.10 Book-Entry Notes...............................................17
SECTION 2.11 Notices to Clearing Agency.....................................18
SECTION 2.12 Definitive Notes...............................................18
ARTICLE III COVENANTS................................................................19
SECTION 3.1 Payment of Principal and Interest..............................19
SECTION 3.2 Maintenance of Office or Agency................................19
SECTION 3.3 Money for Payments to be Held in Trust.........................19
SECTION 3.4 Existence......................................................21
SECTION 3.5 Protection of Trust Estate.....................................21
SECTION 3.6 Opinions as to Trust Estate....................................22
SECTION 3.7 Performance of Obligations; Servicing of Receivables...........22
SECTION 3.8 Negative Covenants.............................................23
SECTION 3.9 Annual Statement as to Compliance..............................24
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.............24
SECTION 3.11 Successor or Transferee........................................26
SECTION 3.12 No Other Business..............................................27
SECTION 3.13 No Borrowing...................................................27
SECTION 3.14 Servicer's Obligations.........................................27
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities..............27
SECTION 3.16 Capital Expenditures...........................................27
SECTION 3.17 Compliance with Laws...........................................27
SECTION 3.18 Restricted Payments............................................27
SECTION 3.19 Notice of Events of Default....................................28
SECTION 3.20 Further Instruments and Acts...................................28
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust Agreement.28
SECTION 3.22 Income Tax Characterization....................................28
ARTICLE IV SATISFACTION AND DISCHARGE................................................28
SECTION 4.1 Satisfaction and Discharge of Indenture........................28
SECTION 4.2 Application of Trust Money.....................................29
SECTION 4.3 Repayment of Moneys Held by Paying Agent.......................29
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE V REMEDIES...............................................................................30
SECTION 5.1 Events of Default..........................................................30
SECTION 5.2 Rights Upon Event of Default...............................................31
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee............33
SECTION 5.4 Remedies...................................................................35
SECTION 5.5 Optional Preservation of the Receivables...................................36
SECTION 5.6 Priorities.................................................................37
SECTION 5.7 Limitation of Suits........................................................38
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal and Interest......38
SECTION 5.9 Restoration of Rights and Remedies.........................................38
SECTION 5.10 Rights and Remedies Cumulative.............................................39
SECTION 5.11 Delay or Omission Not a Waiver.............................................39
SECTION 5.12 Control by Noteholders.....................................................39
SECTION 5.13 Waiver of Past Defaults....................................................39
SECTION 5.14 Undertaking for Costs......................................................40
SECTION 5.15 Waiver of Stay or Extension Laws...........................................40
SECTION 5.16 Action on Notes............................................................40
SECTION 5.17 Performance and Enforcement of Certain Obligations.........................40
ARTICLE VI THE TRUSTEE AND THE TRUST COLLATERAL AGENT............................................41
SECTION 6.1 Duties of Trustee..........................................................41
SECTION 6.2 Rights of Trustee..........................................................43
SECTION 6.3 Individual Rights of Trustee...............................................44
SECTION 6.4 Trustee's Disclaimer.......................................................44
SECTION 6.5 Notice of Defaults.........................................................44
SECTION 6.6 Reports by Trustee to Holders..............................................45
SECTION 6.7 Compensation and Indemnity.................................................45
SECTION 6.8 Replacement of Trustee.....................................................45
SECTION 6.9 Successor Trustee by Merger................................................47
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee..............................47
SECTION 6.11 Eligibility: Disqualification..............................................48
SECTION 6.12 Preferential Collection of Claims Against Issuer...........................49
SECTION 6.13 Appointment and Powers.....................................................49
SECTION 6.14 Performance of Duties......................................................49
SECTION 6.15 Limitation on Liability....................................................49
SECTION 6.16 Reliance Upon Documents....................................................50
SECTION 6.17 Successor Trust Collateral Agent...........................................50
SECTION 6.18 Compensation...............................................................51
SECTION 6.19 Representations and Warranties of the Trust Collateral Agent...............52
SECTION 6.20 Waiver of Setoffs..........................................................52
SECTION 6.21 Control by the Controlling Party...........................................52
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................52
SECTION 7.1 Issuer To Furnish To Trustee Names and Addresses of Noteholders............52
SECTION 7.2 Preservation of Information; Communications to Noteholders.................53
SECTION 7.3 Reports by Issuer..........................................................53
SECTION 7.4 Reports by Trustee.........................................................54
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................................................54
SECTION 8.1 Collection of Money........................................................54
SECTION 8.2 Release of Trust Estate....................................................54
SECTION 8.3 Opinion of Counsel.........................................................55
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................55
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.....................55
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 9.2 Supplemental Indentures with Consent of Noteholders........................56
SECTION 9.3 Execution of Supplemental Indentures.......................................58
SECTION 9.4 Effect of Supplemental Indenture...........................................58
SECTION 9.5 Conformity With Trust Indenture Act........................................58
SECTION 9.6 Reference in Notes to Supplemental Indentures..............................58
ARTICLE X REDEMPTION OF NOTES....................................................................59
SECTION 10.1 Redemption.................................................................59
SECTION 10.2 Form of Redemption Notice..................................................59
SECTION 10.3 Notes Payable on Redemption Date...........................................60
ARTICLE XI MISCELLANEOUS.........................................................................60
SECTION 11.1 Compliance Certificates and Opinions, etc..................................60
SECTION 11.2 Form of Documents Delivered to Trustee.....................................62
SECTION 11.3 Acts of Noteholders........................................................63
SECTION 11.4 Notices, etc., to Trustee, Issuer and Rating Agencies......................63
SECTION 11.5 Notices to Noteholders; Waiver.............................................64
SECTION 11.6 Alternate Payment and Notice Provisions....................................65
SECTION 11.7 Conflict with Trust Indenture Act..........................................65
SECTION 11.8 Effect of Headings and Table of Contents...................................65
SECTION 11.9 Successors and Assigns.....................................................65
SECTION 11.10 Separability...............................................................65
SECTION 11.11 Benefits of Indenture......................................................65
SECTION 11.12 Legal Holidays.............................................................66
SECTION 11.13 GOVERNING LAW..............................................................66
SECTION 11.14 Counterparts...............................................................66
SECTION 11.15 Recording of Indenture.....................................................66
SECTION 11.16 Trust Obligation...........................................................66
SECTION 11.17 No Petition................................................................67
SECTION 11.18 Inspection.................................................................67
</TABLE>
iii
<PAGE>
INDENTURE dated as of May 11, 1998, between AMERICREDIT
AUTOMOBILE RECEIVABLES TRUST 1998-B, a Delaware business trust (the "Issuer"),
and BANK ONE, NA, 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
5.629% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 Floating Rate Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 Floating Rate Asset Backed Notes
(the "Class A-3 Notes"), Class A-4 6.06% Asset Backed Notes (the "Class A-4
Notes") and Class A-5 6.12% Asset Backed Notes (the "Class A-5 Notes," and
together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 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 Guaranteed Distributions, as defined in the Insurance
Agreement.
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 11, 1998 (as amended from
time to time, the "Insurance Agreement"), among the Security Insurer, the
Issuer, AmeriCredit Financial Services, Inc., AmeriCredit Corp., CP Funding
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 Noteholders and for the
benefit of the Security 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 end that the interests of such parties, recognizing the
priorities of their respective interests may be adequately and effectively
protected.
2
<PAGE>
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 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, New York, New York, Columbus, Ohio
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 Ohio are authorized or
obligated to be closed.
"Certificate" means a trust certificate evidencing the beneficial
interest of a Certificateholder in the Trust.
3
<PAGE>
"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 5.629% 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 5.629% 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, with respect to any Interest
Period, LIBOR plus .05% (computed on the basis of the actual number of days
elapsed in a 360-day year).
"Class A-2 Notes" means the Class A-2 Floating Rate 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 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, with respect to any Interest
Period, LIBOR plus .05% (computed on the basis of the actual number of days
elapsed in a 360-day year).
"Class A-3 Interest Rate" means, with respect to any Interest
Period, LIBOR plus .07% (computed on the basis of the actual number of days
elapsed in a 360-day year).
"Class A-3 Notes" means the Class A-3 Floating Rate 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.
"Class A-4 Interest Rate" means 6.06% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
4
<PAGE>
"Class A-4 Notes" means the Class A-4 6.06% Asset Backed Notes,
substantially in the form of Exhibit A-4.
"Class A-4 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-4 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-5 Interest Rate" means 6.12% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-5 Notes" means the Class A-5 6.12% Asset Backed Notes,
substantially in the form of Exhibit A-5.
"Class A-5 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-5 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 27, 1998.
"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 100 East Broad Street, 8th Floor, Columbus, Ohio 43215 (facsimile number
(614) 248-5195) Attention: Indenture Trust Administration 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
successor Trustee will notify the Noteholders and the Issuer).
5
<PAGE>
"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 Sale and
Servicing Agreement.
"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, any 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, 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.
"Guaranteed Distributions" has the meaning specified in the Note
Policy.
"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 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.
6
<PAGE>
"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
obligor 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 obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" 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.
"Insured Distribution Date" has the meaning specified in the Sale
and Servicing 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, the Class A-2 Interest Rate,
(iii) Class A-3 Notes, the Class A-3 Interest Rate, (iv) Class A-4 Notes, the
Class A-4 Interest Rate, and (v) Class A-5 Notes, the Class A-5 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, a Class A-3
Note, a Class A-4 Note and a Class A-5 Note.
7
<PAGE>
"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.
"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
Note Paying Agent in trust for the Noteholders (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
8
<PAGE>
(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 owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the 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 obligor 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
9
<PAGE>
that such action will not result in a reduction or withdrawal of the then
current rating of the Notes.
"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 or the
Trust Collateral Agent, 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 or the Trust
Collateral Agent 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 11, 1998, 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.
"State" means any one of the 50 states of the United States of
-----
America or the District of Columbia.
"Termination Date" means the latest of (i) the expiration of the
Note Policy and the return of the Note 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, Bank One, NA, 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.
10
<PAGE>
"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 Bank One, NA, 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.
"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;
11
<PAGE>
(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.
ARTICLE II
The Notes
SECTION 2.1 Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes and the Class A-5 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, A-3, A-4 and A-5,
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, A-3, A-4 and A-5 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 $116,000,000, Class A-2 Notes for original issue
in the aggregate principal amount of $174,000,000, Class A-3 Notes for original
issue in an aggregate principal amount of $77,000,000, Class A-4 Notes for
original issue in the aggregate principal amount of $108,000,000 and Class A-5
Notes for original issue in the aggregate principal amount of $50,000,000. The
Class A-1 Notes, Class A-2
12
<PAGE>
Notes, Class A-3 Notes, Class A-4 Notes and Class A-5 Notes outstanding at any
time may not exceed such amounts except as provided in Section 2.5.
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 Noteholder. 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.
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 conclusively rely upon a certificate executed on
behalf of the Note Registrar by an Executive Officer thereof as to the names and
addresses of the Noteholders of the Notes and the principal amounts and number
of such Notes.
13
<PAGE>
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 Noteholder, 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, A-3, A-4 and
A-5 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 Act, and (ii) accompanied by such other
documents as the Trustee may require.
Notwithstanding the foregoing, in the case of any sale or other
transfer of a Definitive Note, the transferor of such Definitive Note shall be
required to represent and warrant in writing that the prospective transferee
either (a) is not (i) an employee benefit plan (as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
which is subject to the provisions of Title I of ERISA, (ii) a plan (as defined
in section 4975(e)(1) of the Code), which is subject to Section 4975 of the
Code, or (iii) an entity whose underlying assets are deemed to be assets of a
plan described in (i) or (ii) above by reason of such plan's investment in the
entity (any such entity described in clauses (i) through (iii), a "Benefit Plan
Entity") or (b) is a Benefit Plan Entity and the acquisition and holding of the
Definitive Note by such prospective transferee is covered by a Department of
Labor Prohibited Transaction Class Exemption. Each transferee of a Book Entry
Note that is a Benefit Plan Entity shall be deemed to represent that its
acquisition and holding of the Book Entry Note is covered by a Department of
Labor Prohibited Transaction Class Exemption.
No service charge shall be made to a Noteholder 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
14
<PAGE>
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.
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.
15
<PAGE>
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, the Class A-3 Note, the Class A-4 Note
and the Class A-5 Note set forth in Exhibits A-1, A-2, A-3, A-4 and A-5,
respectively, and such interest shall be due and payable on each Distribution
Date and each Insured 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 or
Insured 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 a
Distribution Date or Insured Distribution Date or on the Final Scheduled
Distribution Date (or the Insured Distribution Date which immediately follows
such 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 or Insured Distribution Date, as applicable, as
provided in the forms of the Class A-1 Note, the Class A-2 Note, the Class A-3
Note, the Class A-4 Note and the Class A-5 Note set forth in Exhibits A-1, A-2,
A-3, A-4 and A-5, 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 Noteholders representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. 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.
16
<PAGE>
(c) If the Issuer defaults in a payment of interest on the
Notes, and such default is waived by the Controlling Party, 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 the immediately
following Insured Distribution Date, and, if such amount is not paid on such
following Insured Distribution Date, then 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 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 timely
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:
17
<PAGE>
(i) the provisions of this Section shall be in full force
and effect;
(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 Noteholders
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 the Noteholders 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 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
18
<PAGE>
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 fully 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, (iii) for the benefit of the Class A-3 Notes, to Class A-3
Noteholders, (iv) for the benefit of the Class A-4 Notes, to Class A-4
Noteholders, and (v) for the benefit of the Class A-5 Notes, to Class A-5
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 Columbus, Ohio, 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 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, Insured 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 Note 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
19
<PAGE>
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 obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Note 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 Note 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 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 Note Paying Agent to pay to the Trustee all sums held in trust by such Note
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which the sums were held by such Note Paying Agent; and upon such a payment
by any Note Paying Agent to the Trustee, such Note 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 Note 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 Note 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 the Trustee's
receipt of a written request by the Security Insurer to such effect, and
provided, further, that the Trustee or such Note Paying Agent, before being
20
<PAGE>
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 New York, 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 Note Paying Agent, at the last address of record for each such
Holder).
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
21
<PAGE>
(vi) pay all taxes or assessments levied or assessed upon
the Trust Estate when due.
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
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
22
<PAGE>
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.
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
23
<PAGE>
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, 1998), 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 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;
24
<PAGE>
(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 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
25
<PAGE>
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;
(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 1998-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 notice to the
Trustee stating that AmeriCredit Automobile Receivables Trust 1998-B is to be so
released.
26
<PAGE>
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.
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,
27
<PAGE>
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
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
28
<PAGE>
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
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 Note 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 Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Note 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
29
<PAGE>
be held and applied according to Section 3.3 and thereupon such Note Paying
Agent shall be released from all further liability with respect to such moneys.
ARTICLE V
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, (x) a payment due on a Distribution Date shall not be
considered "due" until the immediately following Insured
Distribution Date and (y) 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, (x) a
payment due on a Distribution Date shall not be considered "due"
until the immediately following Insured Distribution Date and (y)
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
30
<PAGE>
of which such misrepresentation or warranty was incorrect shall
not have been eliminated or otherwise cured, for a period of 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.
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
31
<PAGE>
Trustee shall continue to be entitled to make claims under the Note Policy
pursuant to the Sale and Servicing Agreement for Guaranteed Distributions 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 Guaranteed Distributions 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
Noteholders 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:
(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.
32
<PAGE>
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 pay to the Trustee, 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 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
33
<PAGE>
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 obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable federal or State bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the 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 Noteholders 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 Noteholders 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
34
<PAGE>
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 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
(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
35
<PAGE>
(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.
In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Trustee may, but need not, obtain and conclusively 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
36
<PAGE>
Trust Collateral Agent to maintain possession of the Trust Estate, the Trustee
may, but need not, obtain and conclusively 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 (provided there is no Servicer Event of Default), 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 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 FIRST through FIFTH
above.
(b) The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.6. 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.
37
<PAGE>
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;
(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 Noteholders 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
Noteholders 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 Noteholders, 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
38
<PAGE>
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 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 Trustee, 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 Noteholders 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
Noteholders 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 Article VI, 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.
SECTION 5.13 Waiver of Past Defaults. If an Insurer Default
shall have occurred and be continuing, prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.4, the
Noteholders of not less than a majority of the Outstanding
39
<PAGE>
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 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.
40
<PAGE>
(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, subject to
Article VI, 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
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 to which is a Party 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 willful
misconduct, except that:
41
<PAGE>
(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 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 6.1 and to the provisions of the TIA.
(h) The Trustee shall, upon two Business Days' prior notice to
the Trustee, permit any representative of the Security Insurer at the expense of
the Trust, 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
42
<PAGE>
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 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 Bank One, NA, 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 conclusively 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 willful 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 Noteholders or the
Controlling Party, pursuant to the provisions of this Indenture, unless such
Noteholders or the Controlling 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
43
<PAGE>
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 Noteholders
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.
(h) The Trustee shall not be liable for any losses on investments
except for losses resulting from the failure of the Trustee to make an
investment in accordance with instructions given in accordance hereunder. If the
Trustee acts as the Note Paying Agent or Note Registrar, the rights and
protections afforded to the Trustee shall be afforded to the Note Paying Agent
and Note Registrar.
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 Note Paying Agent, Note Registrar,
co-registrar or co-Note 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
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 two or more of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
Noteholders.
44
<PAGE>
SECTION 6.6 Reports by Trustee to Holders. The Trustee shall
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 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, the Backup Servicer's,
the Collateral Agent's and the Trust Collateral Agent's agents, counsel,
accountants and experts. The Issuer 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, Trust Collateral Agent, the Collateral Agent or the
Backup Servicer 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 XI of
the Sale and Servicing Agreement. The Issuer shall cause the Servicer to defend
the claim, the Trustee, Trust Collateral Agent, the Collateral Agent or the
Backup Servicer may have separate counsel and the Issuer 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 willful 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 or the earlier
resignation or removal of the Trustee or the Trust Collateral Agent or the
Collateral Agent or the Backup Servicer. When the Trustee, the Trust Collateral
Agent, the Collateral Agent or the Backup Servicer incurs expenses after the
occurrence of a Default specified in Section 5.1(v) or (vi) 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
45
<PAGE>
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
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
46
<PAGE>
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.
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.
47
<PAGE>
(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 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.
(e) Any and all amounts relating to the fees and expenses of the
co-trustee or separate trustee will be borne by the Trust Estate.
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
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
48
<PAGE>
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 Bank One,
NA as the Trust Collateral Agent with respect to the Collateral, and Bank One,
NA 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 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, subject to this Article, 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).
49
<PAGE>
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. 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 by a Responsible Officer of the Trust
Collateral Agent) 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 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 or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder unless it shall have received reasonable security or indemnity
satisfactory to the Trust Collateral Agent against 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 conclusively 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.
50
<PAGE>
(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 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.
51
<PAGE>
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 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 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
52
<PAGE>
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 June 30 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) 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.
53
<PAGE>
(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 May 31, beginning with May 31, 1998, 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 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 and other
amounts 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
54
<PAGE>
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, 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
55
<PAGE>
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;
(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 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
56
<PAGE>
interest thereon is payable, provided, that any change
necessitated by the assumption by the Backup Servicer or other
successor Servicer to the duties of AmeriCredit Financial
Services, Inc., as Servicer, which results in the Distribution
Date becoming the same date as the Insured Distribution Date
shall not be considered an event which requires the consent of
the Trustee, the Security Insurer or any Noteholder;
(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
or any Insured Distribution Date (including the calculation of
any of the individual components of such calculation) or to
affect the rights of the Noteholders 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 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
57
<PAGE>
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 amendments or modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive,
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.
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.
58
<PAGE>
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 Servicer or 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, the Class A-3 Prepayment Amount, the Class A-4 Prepayment
Amount and the Class A-5 Prepayment Amount.
(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;
59
<PAGE>
(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 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:
60
<PAGE>
(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 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.
61
<PAGE>
(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 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.
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,
62
<PAGE>
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 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 1998-B, in care of Bankers Trust
(Delaware), E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre
63
<PAGE>
Road, Suite 200, Wilmington, Delaware 19805 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 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
64
<PAGE>
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 [Reserved].
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 Trustee may exercise such right or power
65
<PAGE>
hereunder), but not its duties and obligations under 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, the Trust Collateral Agent 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, the Trust Collateral Agent 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, the Trust Collateral Agent or
the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Seller, the Servicer, the Owner Trustee, the Trust
Collateral Agent or the Trustee or of any successor or assign of the Seller, the
Servicer, the Trustee, the Trust Collateral Agent or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee, the Trust Collateral Agent and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any 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.
66
<PAGE>
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. Notwithstanding anything herein to the contrary, the foregoing shall
not be construed to prohibit (i) disclosure of any and all information that is
or becomes publicly known, (ii) disclosure of any and all information (A) if
required to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee any respects of the Trustee's business or that of its affiliates, (C)
pursuant to any subpoena, civil investigative demand or similar demand or
request of any court, regulatory authority, arbitrator or arbitration to which
the Trustee or an affiliate or an officer, director, employer or shareholder
thereof is a party, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated by the Indenture approved in advance by the Servicer
or the Issuer or (E) to any independent or internal auditor, agent, employee or
attorney of the Trustee having a need to know the same, provided that the
Trustee advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Servicer or the
Issuer.
[THIS SPACE LEFT INTENTIONALLY BLANK]
67
<PAGE>
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 1998-B,
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee
By:/s/ Louis Bodi (as attorney in fact)
----------------------------------------------
Name: Louis Bodi
Title: Vice President
BANK ONE, NA, not in its individual capacity but
solely as Trustee and Trust Collateral Agent
By:/s/ John Rothrock
----------------------------------------------
Name: John Rothrock
Title: Authorized Signer
<PAGE>
EXHIBIT A-1
REGISTERED $__________
No. RB-1-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
CLASS A-1 5.629% ASSET BACKED NOTES
AmeriCredit Automobile Receivables Trust 1998-B, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ______________________ DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $__________ and the
denominator of which is $__________ by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-1 Notes pursuant to the Indenture; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the _____ Insured
Distribution Date (the "Final Scheduled Distribution Date"). The Issuer will pay
interest on this Note at the rate per annum shown above on each Distribution
Date until the principal of this Note is paid or made available for payment.
Interest on this Note will accrue for each Distribution Date from the most
recent Distribution Date on which interest has been paid to but excluding such
Distribution Date or, if no interest has yet been paid, from May 27, 1998.
Interest will be computed on the basis of the actual number of days elapsed in a
360-day year. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and
A-1-1
<PAGE>
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount with respect to each
Distribution Date will be paid on or prior to the related Insured Distribution
Date, all as more fully set forth in the Indenture and the related Sale and
Servicing Agreement. The Record Date applicable to any Insured Distribution Date
is the Record Date applicable to the related Distribution Date.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-1-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1998-B
by
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
by
Name:
Title:
A-1-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May 27, 1998 BANK ONE, NA, not in its individual
capacity but solely as Trustee
by
----------------------------------
Authorized Signer
A-1-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-1 5.629% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture dated as of May 11, 1998 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Bank One, NA , as trustee (the "Trustee", which term
includes any successor Trustee under the Indenture) and as trust collateral
agent (the "Trust Collateral Agent"), which term includes any successor Trust
Collateral Agent) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture. All terms used in this Note
that are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes (together, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the fifth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, provided that such day for payment shall in no
event be earlier than the third Business Day of the month, commencing June 5,
1998. The term "Distribution Date," shall be deemed to include the Final
Scheduled Distribution Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to the Indenture. As described
above, a portion of the unpaid principal balance of this Note shall be due and
payable on the Redemption Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing or (ii) if an Insurer Default
shall have occurred and be continuing, on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture. All principal payments on the Class A-1 Notes shall be made pro
rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
A-1-5
<PAGE>
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Columbus, Ohio.
The Issuer shall pay interest on overdue installments of interest
at the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) in
whole, but not in part, at the option of the Servicer (with the consent of the
Security Insurer under certain circumstances), on any Distribution Date on or
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance, and (b) in part, on a pro rata basis, on the Distribution
Date on or immediately following the last day of the Funding Period.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by, the Holder hereof or his 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 Act, and (ii) accompanied by such other
documents as the Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the General Partner, 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 or employee of the Seller, the Servicer, the General
Partner, the Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Seller, the Servicer, the General
Partner, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the
A-1-6
<PAGE>
General Partner, 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 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.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Noteholders representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also contains provisions permitting
the Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
A-1-7
<PAGE>
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-1-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated 1
------------------------------- ---------------------------------
Signature Guaranteed:
------------------------------- ---------------------------------
- ---------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-9
<PAGE>
EXHIBIT A-2
REGISTERED $___________
No. RB-2-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
CLASS A-2 FLOATING RATE ASSET BACKED NOTES
AmeriCredit Automobile Receivables Trust 1998-B, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of _________________DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $___________ and the denominator of
which is $___________ by (ii) the aggregate amount, if any, payable from the
Note Distribution Account in respect of principal on the Class A-2 Notes
pursuant to the Indenture; provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the _____________ Insured
Distribution Date (the "Final Scheduled Distribution Date"). The Issuer will pay
interest on this Note at a floating rate per annum equal to LIBOR plus .05%
until the principal of this Note is paid or made available for payment. Interest
on this Note will accrue for each Distribution Date from the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, if no interest has yet been paid, from May 27, 1998.
Interest will be computed on the basis of the actual number of days elapsed in a
360-day year. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and
A-2-1
<PAGE>
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount with respect to each
Distribution Date will be paid on or prior to the related Insured Distribution
Date, all as more fully set forth in the Indenture and the related Sale and
Servicing Agreement. The Record Date applicable to any Insured Distribution Date
is the Record Date applicable to the related Distribution Date.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1998-B
by
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
by
Name:
Title:
A-2-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May 27, 1998 BANK ONE, NA, not in its individual
capacity but solely as Trustee
by
Authorized Signer
A-2-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-2 Floating Rate Asset Backed Notes (herein
called the "Class A-2 Notes"), all issued under an Indenture dated as of May 11,
1998 (such indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bank One, NA, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture) and as trust
collateral agent (the "Trust Collateral Agent"), which term includes any
successor Trust Collateral Agent) to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes (together, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the fifth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, provided, that such day for payment shall in
no event be earlier than the third Business Day of the month, commencing June 5,
1998. The term "Distribution Date," shall be deemed to include the Final
Scheduled Distribution Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to the Indenture. As described
above, a portion of the unpaid principal balance of this Note shall be due and
payable on the Redemption Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing or (ii) if an Insurer Default
shall have occurred and be continuing, on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture. All principal payments on the Class A-2 Notes shall be made pro
rata to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
A-2-5
<PAGE>
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Columbus, Ohio.
The Issuer shall pay interest on overdue installments of interest
at the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) in
whole, but not in part, at the option of the Servicer (with the consent of the
Security Insurer under certain circumstances), on any Distribution Date on or
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance, and (b) in part, on a pro rata basis, on the Distribution
Date on or immediately following the last day of the Funding Period.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by, the Holder hereof or his 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 Act, and (ii) accompanied by such other
documents as the Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the General Partner, 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 or employee of the Seller, the Servicer, the General
Partner, the Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Seller, the Servicer, the General
Partner, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the
A-2-6
<PAGE>
General Partner, 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 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.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Noteholders representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also contains provisions permitting
the Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
A-2-7
<PAGE>
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-2-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated :1
----------------------------------- -------------------------------
Signature Guaranteed:
----------------------------------- -------------------------------
- ---------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-9
<PAGE>
EXHIBIT A-3
REGISTERED $___________
No. RB-3-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
CLASS A-3 FLOATING RATE ASSET BACKED NOTES
AmeriCredit Automobile Receivables Trust 1998-B, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of _________________DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $___________ and the denominator of
which is $___________ by (ii) the aggregate amount, if any, payable from the
Note Distribution Account in respect of principal on the Class A-2 Notes
pursuant to the Indenture; provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the _____________ Insured
Distribution Date (the "Final Scheduled Distribution Date"). The Issuer will pay
interest on this Note at a floating rate per annum equal to LIBOR plus .07%
until the principal of this Note is paid or made available for payment. Interest
on this Note will accrue for each Distribution Date from the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, if no interest has yet been paid, from May 27, 1998.
Interest will be computed on the basis of the actual number of days elapsed in a
360-day year. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and
A-3-1
<PAGE>
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount with respect to each
Distribution Date will be paid on or prior to the related Insured Distribution
Date, all as more fully set forth in the Indenture and the related Sale and
Servicing Agreement. The Record Date applicable to any Insured Distribution Date
is the Record Date applicable to the related Distribution Date.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-3-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
by
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
by
Name:
Title:
A-3-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May 27, 1998 BANK ONE, NA, not in its individual
capacity but solely as Trustee
by
Authorized Signer
A-3-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-3 Floating Rate Asset Backed Notes (herein
called the "Class A-3 Notes"), all issued under an Indenture dated as of May 11,
1998 (such indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bank One, NA, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture) and as trust
collateral agent (the "Trust Collateral Agent"), which term includes any
successor Trust Collateral Agent) to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes (together, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the fifth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, provided, that such day for payment shall in
no event be earlier than the third Business Day of the month, commencing June 5,
1998. The term "Distribution Date," shall be deemed to include the Final
Scheduled Distribution Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to the Indenture. As described
above, a portion of the unpaid principal balance of this Note shall be due and
payable on the Redemption Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing or (ii) if an Insurer Default
shall have occurred and be continuing, on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture. All principal payments on the Class A-3 Notes shall be made pro
rata to the Class A-3 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
A-3-5
<PAGE>
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Columbus, Ohio.
The Issuer shall pay interest on overdue installments of interest
at the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) in
whole, but not in part, at the option of the Servicer (with the consent of the
Security Insurer under certain circumstances), on any Distribution Date on or
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance, and (b) in part, on a pro rata basis, on the Distribution
Date on or immediately following the last day of the Funding Period.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by, the Holder hereof or his 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 Act, and (ii) accompanied by such other
documents as the Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the General Partner, 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 or employee of the Seller, the Servicer, the General
Partner, the Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Seller, the Servicer, the
A-3-6
<PAGE>
General Partner, the Owner Trustee or the Trustee or of any successor or assign
of the Seller, the Servicer, the General Partner, 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 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.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Noteholders representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also contains provisions permitting
the Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
A-3-7
<PAGE>
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-3-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated :1
----------------------------------- -------------------------------
Signature Guaranteed:
----------------------------------- -------------------------------
- ---------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-9
<PAGE>
EXHIBIT A-4
REGISTERED $__________
No. RB-4-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
CLASS A-4 6.06% ASSET BACKED NOTES
AmeriCredit Automobile Receivables Trust 1998-B, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ____________________________________
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $___________
and the denominator of which is $___________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-4 Notes pursuant to the Indenture; provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the
_____________ Insured Distribution Date (the "Final Scheduled Distribution
Date"). The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or made
available for payment. Interest on this Note will accrue for each Distribution
Date from the most recent Distribution Date on which interest has been paid to
but excluding such Distribution Date or, if no interest has yet been paid, from
May 27, 1998. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and
A-4-1
<PAGE>
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount with respect to each
Distribution Date will be paid on or prior to the related Insured Distribution
Date, all as more fully set forth in the Indenture and the related Sale and
Servicing Agreement. The Record Date applicable to any Insured Distribution Date
is the Record Date applicable to the related Distribution Date.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-4-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
by
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
by
Name:
Title:
A-4-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May 27, 1998 BANK ONE, NA, not in its individual
capacity but solely as Trustee
by
Authorized Signer
A-4-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-4 6.06% Asset Backed Notes (herein called the
"Class A-4 Notes"), all issued under an Indenture dated as of May 11, 1998 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Bank One, NA, as trustee (the "Trustee", which term
includes any successor Trustee under the Indenture) and as trust collateral
agent (the "Trust Collateral Agent"), which term includes any successor Trust
Collateral Agent) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture. All terms used in this Note
that are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes (together, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the fifth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, provided, that such day for payment shall in
no event be earlier than the third Business Day of the month, commencing June 5,
1998. The term "Distribution Date," shall be deemed to include the Final
Scheduled Distribution Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to the Indenture. As described
above, a portion of the unpaid principal balance of this Note shall be due and
payable on the Redemption Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing or (ii) if an Insurer Default
shall have occurred and be continuing, on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture. All principal payments on the Class A-4 Notes shall be made pro
rata to the Class A-4 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
A-4-5
<PAGE>
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Columbus, Ohio.
The Issuer shall pay interest on overdue installments of interest
at the Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) in
whole, but not in part, at the option of the Servicer (with the consent of the
Security Insurer under certain circumstances), on any Distribution Date on or
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance, and (b) in part, on a pro rata basis, on the Distribution
Date on or immediately following the last day of the Funding Period.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by, the Holder hereof or his 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 Act, and (ii) accompanied by such other
documents as the Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the General Partner, 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 or employee of the Seller, the Servicer, the General
Partner, the Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Seller, the Servicer, the General
Partner, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the
A-4-6
<PAGE>
General Partner, 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 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.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Noteholders representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also contains provisions permitting
the Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
A-4-7
<PAGE>
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-4-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: 1
----------------------------------- ---------------------------------
Signature Guaranteed:
----------------------------------- ---------------------------------
- ---------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-4-9
<PAGE>
EXHIBIT A-5
REGISTERED $__________
No. RB-5-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
CLASS A-5 6.12% ASSET BACKED NOTES
AmeriCredit Automobile Receivables Trust 1998-B, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ____________________________________
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $___________
and the denominator of which is $___________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-5 Notes pursuant to the Indenture; provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the
_____________ Insured Distribution Date (the "Final Scheduled Distribution
Date"). The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or made
available for payment. Interest on this Note will accrue for each Distribution
Date from the most recent Distribution Date on which interest has been paid to
but excluding such Distribution Date or, if no interest has yet been paid, from
May 27, 1998. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and
A-5-1
<PAGE>
private debts. All payments made by the Issuer with respect to this Note shall
be applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount with respect to each
Distribution Date will be paid on or prior to the related Insured Distribution
Date, all as more fully set forth in the Indenture and the related Sale and
Servicing Agreement. The Record Date applicable to any Insured Distribution Date
is the Record Date applicable to the related Distribution Date.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-5-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1998-B
by
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
by
Name:
Title:
A-5-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May 27, 1998 BANK ONE, NA, not in its individual
capacity but solely as Trustee
by
Authorized Signer
A-5-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-5 6.12% Asset Backed Notes (herein called the
"Class A-5 Notes"), all issued under an Indenture dated as of May 11, 1998 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Bank One, NA, as trustee (the "Trustee", which term
includes any successor Trustee under the Indenture) and as trust collateral
agent (the "Trust Collateral Agent"), which term includes any successor Trust
Collateral Agent) to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture. All terms used in this Note
that are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes (together, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-5 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the fifth day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, provided, that such day for payment shall in
no event be earlier than the third Business Day of the month, commencing June 5,
1998. The term "Distribution Date," shall be deemed to include the Final
Scheduled Distribution Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to the Indenture. As described
above, a portion of the unpaid principal balance of this Note shall be due and
payable on the Redemption Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing or (ii) if an Insurer Default
shall have occurred and be continuing, on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture. All principal payments on the Class A-5 Notes shall be made pro
rata to the Class A-5 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
A-5-5
<PAGE>
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Columbus, Ohio.
The Issuer shall pay interest on overdue installments of interest
at the Class A-5 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) in
whole, but not in part, at the option of the Servicer (with the consent of the
Security Insurer under certain circumstances), on any Distribution Date on or
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance, and (b) in part, on a pro rata basis, on the Distribution
Date on or immediately following the last day of the Funding Period.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by, the Holder hereof or his 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 Act, and (ii) accompanied by such other
documents as the Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Servicer, the General Partner, 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 or employee of the Seller, the Servicer, the General
Partner, the Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Seller, the Servicer, the General
Partner, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the
A-5-6
<PAGE>
General Partner, 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 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.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Noteholders representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also contains provisions permitting
the Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
A-5-7
<PAGE>
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-5-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: 1
----------------------------------- ---------------------------------
Signature Guaranteed:
----------------------------------- ---------------------------------
- ---------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-5-9
<PAGE>
EXHIBIT 4.2
- --------------------------------------------------------------------------------
TRUST AGREEMENT
between
AFS FUNDING CORP.
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of May 11, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
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..........................................5
SECTION 2.7. Title to Trust Property.......................................5
SECTION 2.8. Situs of Trust................................................5
SECTION 2.9. Representations and Warranties of the Depositor...............6
SECTION 2.10. Covenants of the Certificateholder............................7
SECTION 2.11. Federal income tax treatment of the Trust.....................7
ARTICLE III. CERTIFICATE AND TRANSFER OF INTEREST.................................7
SECTION 3.1. Initial Ownership.............................................7
SECTION 3.2. The Certificate...............................................7
SECTION 3.3. Authentication of Certificate.................................8
SECTION 3.4. Registration of Transfer and Exchange of Certificate..........8
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.............9
SECTION 3.6. Persons Deemed Certificateholders.............................9
SECTION 3.7. Maintenance of Office or Agency...............................9
SECTION 3.8. Disposition In Whole But Not In Part.........................10
SECTION 3.9. ERISA Restrictions...........................................10
ARTICLE IV. VOTING RIGHTS AND OTHER ACTIONS.....................................10
SECTION 4.1. Prior Notice to Holder with Respect to Certain Matters.......10
SECTION 4.2. Action by Certificateholder with Respect to Certain Matters..11
SECTION 4.3. Restrictions on Certificateholder's Power....................11
SECTION 4.4. Rights of Security Insurer...................................11
ARTICLE V. AUTHORITY AND DUTIES OF OWNER TRUSTEE...............................12
SECTION 5.1. General Authority............................................12
SECTION 5.2. General Duties...............................................12
SECTION 5.3. Action upon Instruction......................................12
SECTION 5.4. No Duties Except as Specified in this Agreement
or in Instructions......................................13
SECTION 5.5. No Action Except under Specified Documents
or Instructions.........................................14
SECTION 5.6. Restrictions.................................................14
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VI. CONCERNING THE OWNER TRUSTEE........................................14
SECTION 6.1. Acceptance of Trusts and Duties..............................14
SECTION 6.2. Furnishing of Documents......................................15
SECTION 6.3. Representations and Warranties...............................15
SECTION 6.4. Reliance; Advice of Counsel..................................16
SECTION 6.5. Not Acting in Individual Capacity............................16
SECTION 6.6. Owner Trustee Not Liable for Certificate or Receivables......16
SECTION 6.7. Owner Trustee May Own Notes..................................17
SECTION 6.8. Payments from Owner Trust Estate.............................17
SECTION 6.9. Doing Business in Other Jurisdictions........................17
ARTICLE VII. COMPENSATION OF OWNER TRUSTEE.......................................18
SECTION 7.1. Owner Trustee's Fees and Expenses............................18
SECTION 7.2. Indemnification..............................................18
SECTION 7.3. Payments to the Owner Trustee................................18
SECTION 7.4. Non-recourse Obligations.....................................18
ARTICLE VIII. TERMINATION OF TRUST AGREEMENT......................................18
SECTION 8.1. Termination of Trust Agreement...............................18
ARTICLE IX. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..............20
SECTION 9.1. Eligibility Requirements for Owner Trustee...................20
SECTION 9.2. Resignation or Removal of Owner Trustee......................20
SECTION 9.3. Successor Owner Trustee......................................21
SECTION 9.4. Merger or Consolidation of Owner Trustee.....................21
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee................21
ARTICLE X. MISCELLANEOUS.............................................................23
SECTION 10.1. Supplements and Amendments...................................23
SECTION 10.2. No Legal Title to Owner Trust Estate in Certificateholder....24
SECTION 10.3. Limitations on Rights of Others..............................24
SECTION 10.4. Notices......................................................24
SECTION 10.5. Severability.................................................25
SECTION 10.6. Separate Counterparts........................................25
SECTION 10.7. Assignments; Security Insurer................................25
SECTION 10.8. No Recourse..................................................25
SECTION 10.9. Headings.....................................................25
SECTION 10.10. GOVERNING LAW................................................25
SECTION 10.11. Servicer.....................................................25
</TABLE>
EXHIBITS
EXHIBIT A FORM OF CERTIFICATE
EXHIBIT B FORM OF CERTIFICATE OF TRUST
<PAGE>
TRUST AGREEMENT dated as of May 11, 1998 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.
"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
E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite
200, Wilmington, Delaware 19805, 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.
<PAGE>
"Distribution Date" shall have the meaning set forth in the Sale
and Servicing Agreement.
"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 person in whose
name a Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such
term in Section 7.2.
"Indenture" shall mean the Indenture dated as of May 11, 1998,
among the Issuer and Bank One, NA, 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.
"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 11, 1998, 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
11, 1998, 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.
2
<PAGE>
"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, Bank One, N.A, 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.
(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.
3
<PAGE>
ARTICLE II.
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as
"AmeriCredit Automobile Receivables Trust 1998-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;
(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.
4
<PAGE>
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.
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 Ohio 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.
5
<PAGE>
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 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.
(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
6
<PAGE>
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.
(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
7
<PAGE>
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.
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 the 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.
A 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
8
<PAGE>
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 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 the 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.
9
<PAGE>
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
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 1986, 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
Holder 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
(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.
10
<PAGE>
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 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.
11
<PAGE>
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 $116,000,000, Class A-2 Notes in the
aggregate principal amount of $174,000,000, Class A-3 Notes in the aggregate
principal amount of $77,000,000, Class A-4 Notes in the aggregate principal
amount of $108,000,000 and Class A-5 Notes in the aggregate principal amount of
$50,000,000. 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, 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
12
<PAGE>
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
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
13
<PAGE>
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.
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;
14
<PAGE>
(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 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.
15
<PAGE>
(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, 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
16
<PAGE>
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 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.
17
<PAGE>
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 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 obligor 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
18
<PAGE>
purchase by the Servicer at its option of the corpus of the Trust 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
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
19
<PAGE>
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 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.
20
<PAGE>
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.
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
21
<PAGE>
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.
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
22
<PAGE>
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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.
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
23
<PAGE>
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, 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
24
<PAGE>
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.
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.
25
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
BANKERS TRUST (DELAWARE)
Owner Trustee
By:/s/ M. Lisa Wilkins
------------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
AFS FUNDING CORP.
Depositor
By:/s/ Preston A. Miller
------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
<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 1998-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:
------------------------------
The Trust was created pursuant to a Trust Agreement dated as of May 11,
1998 (the "Trust Agreement"), between the Seller and Bankers Trust (Delaware),
as owner trustee (the
<PAGE>
"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 11, 1998, among the Trust, Bank One, NA, as trustee and
indenture collateral agent, are five classes of Notes designated as "Class A-1
5.629% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2 Floating Rate
Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3 Floating Rate Asset
Backed Notes" (the "Class A-3 Notes"), "Class A-4 6.06% Asset Backed Notes" (the
"Class A-4 Notes") and "Class A-5 6.12% Asset Backed Notes" (the "Class A-5
Notes", together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 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 11, 1998 among
AmeriCredit Financial Services, Inc., CP Funding Corp. and the Seller and all
proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 5th day of
each month or, if such 5th day is not a Business Day, the next Business Day (the
"Distribution Date"), provided, that such day for payment shall in no event be
earlier than the third Business Day of such month, commencing on June 5, 1998,
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-5 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
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.
<PAGE>
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.
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
By:BANKERS TRUST (DELAWARE)
not in its individual capacity but
solely as Owner Trustee
Dated: By:
---------------------------
<PAGE>
(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 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
<PAGE>
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.
<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.
<PAGE>
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B
This Certificate of Trust of AmeriCredit Automobile Receivables
Trust 1998-B (the "Trust") is being duly executed and filed on behalf of the
Trust by the undersigned, as trustee, 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 1998-B.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is Bankers Trust (Delaware), E.A. Delle
Donne Corporate Center, Montgomery Building, 1011 Centre Road, Wilmington,
Delaware 19805-1266.
3. Effective Date. This Certificate of Trust will be effective
, , 199 .
- ------------- ----- --
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate of Trust in accordance with Section 3811(a)(1) of the Act.
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as
Trustee under a Trust Agreement
dated as of May 11, 1998.
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
SALE AND SERVICING
AGREEMENT
among
AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 1998-B,
Issuer,
AFS FUNDING CORP.,
Seller,
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer
and
BANK ONE, NA,
Backup Servicer and Trust Collateral Agent
Dated as of May 11, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS 1
SECTION 1.1. DEFINITIONS.........................................................1
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS......................................22
ARTICLE II CONVEYANCE OF RECEIVABLES 22
SECTION 2.1. CONVEYANCE OF INITIAL RECEIVABLES..................................22
SECTION 2.2. CONVEYANCE OF SUBSEQUENT RECEIVABLES...............................23
SECTION 2.3. FURTHER ENCUMBRANCE OF TRUST PROPERTY..............................26
ARTICLE III THE RECEIVABLES 27
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER...........................27
SECTION 3.2. REPURCHASE UPON BREACH.............................................27
SECTION 3.3. CUSTODY OF RECEIVABLES FILES.......................................28
ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES 29
SECTION 4.1. DUTIES OF THE SERVICER.............................................29
SECTION 4.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF RECEIVABLES;
LOCKBOX AGREEMENTS.............................................30
SECTION 4.3. REALIZATION UPON RECEIVABLES.......................................32
SECTION 4.4. INSURANCE..........................................................33
SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES......................35
SECTION 4.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER.............36
SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT....................36
SECTION 4.8. TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY SERVICER.......37
SECTION 4.9. PRELIMINARY SERVICER'S CERTIFICATE AND SERVICER'S CERTIFICATE......37
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF SERVICER
TERMINATION EVENT..............................................38
SECTION 4.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.............................39
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES....................................................39
SECTION 4.13. MONTHLY TAPE.......................................................40
SECTION 4.14. RETENTION AND TERMINATION OF SERVICER..............................40
SECTION 4.15. FIDELITY BOND AND ERRORS AND OMISSIONS POLICY......................41
ARTICLE V TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS 41
SECTION 5.1. ESTABLISHMENT OF TRUST ACCOUNTS....................................41
SECTION 5.2. CAPITALIZED INTEREST ACCOUNT.......................................43
SECTION 5.3. CERTAIN REIMBURSEMENTS TO THE SERVICER.............................44
SECTION 5.4. APPLICATION OF COLLECTIONS.........................................44
SECTION 5.5. WITHDRAWALS FROM SPREAD ACCOUNT....................................44
SECTION 5.6. ADDITIONAL DEPOSITS................................................45
SECTION 5.7. DISTRIBUTIONS......................................................45
SECTION 5.8. NOTE DISTRIBUTION ACCOUNT..........................................47
SECTION 5.9. PRE-FUNDING ACCOUNT................................................49
SECTION 5.10. STATEMENTS TO NOTEHOLDERS..........................................49
SECTION 5.11. OPTIONAL DEPOSITS BY THE INSURER...................................50
SECTION 5.12. DETERMINATION OF LIBOR.............................................50
ARTICLE VI THE NOTE POLICY 51
SECTION 6.1. CLAIMS UNDER NOTE POLICY...........................................51
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 6.2. PREFERENCE CLAIMS..................................................52
SECTION 6.3. SURRENDER OF POLICY................................................53
ARTICLE VII THE SELLER 53
SECTION 7.1. REPRESENTATIONS OF SELLER..........................................53
SECTION 7.2. CORPORATE EXISTENCE................................................55
SECTION 7.3. LIABILITY OF SELLER; INDEMNITIES...................................55
SECTION 7.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER....................................................56
SECTION 7.5. LIMITATION ON LIABILITY OF SELLER AND OTHERS.......................57
SECTION 7.6. SELLER MAY OWN CERTIFICATES OR NOTES...............................57
ARTICLE VIII THE SERVICER 57
SECTION 8.1. REPRESENTATIONS OF SERVICER........................................57
SECTION 8.2. LIABILITY OF SERVICER; INDEMNITIES.................................59
SECTION 8.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF THE SERVICER OR BACKUP SERVICER.............................61
SECTION 8.4. LIMITATION ON LIABILITY OF SERVICER, BACKUP SERVICER AND OTHERS....62
SECTION 8.5. DELEGATION OF DUTIES...............................................63
SECTION 8.6. SERVICER AND BACKUP SERVICER NOT TO RESIGN.........................63
ARTICLE IX DEFAULT 64
SECTION 9.1. SERVICER TERMINATION EVENT.........................................64
SECTION 9.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT.......................65
SECTION 9.3. APPOINTMENT OF SUCCESSOR...........................................66
SECTION 9.4. NOTIFICATION TO NOTEHOLDERS........................................67
SECTION 9.5. WAIVER OF PAST DEFAULTS............................................67
ARTICLE X TERMINATION 67
SECTION 10.1. OPTIONAL PURCHASE OF ALL RECEIVABLES...............................67
ARTICLE XI ADMINISTRATIVE DUTIES OF THE SERVICER 68
SECTION 11.1. ADMINISTRATIVE DUTIES..............................................68
SECTION 11.2. RECORDS............................................................70
SECTION 11.3. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER...............70
ARTICLE XII MISCELLANEOUS PROVISIONS 70
SECTION 12.1. AMENDMENT..........................................................70
SECTION 12.2. PROTECTION OF TITLE TO TRUST.......................................72
SECTION 12.3. NOTICES............................................................73
SECTION 12.4. ASSIGNMENT.........................................................74
SECTION 12.5. LIMITATIONS ON RIGHTS OF OTHERS....................................74
SECTION 12.6. SEVERABILITY.......................................................74
SECTION 12.7. SEPARATE COUNTERPARTS..............................................75
SECTION 12.8. HEADINGS...........................................................75
SECTION 12.9. GOVERNING LAW......................................................75
SECTION 12.10.ASSIGNMENT TO TRUSTEE..............................................75
SECTION 12.11.NONPETITION COVENANTS..............................................75
SECTION 12.12.LIMITATION OF LIABILITY OF OWNER TRUSTEE AND TRUSTEE...............75
SECTION 12.13.INDEPENDENCE OF THE SERVICER.......................................76
SECTION 12.14.NO JOINT VENTURE...................................................76
</TABLE>
ii
<PAGE>
EXHIBITS
Exhibit A - Form of Subsequent Transfer Agreement
Exhibit B - Form of Servicer's Certificate
Exhibit C - Form of Preliminary Servicer's Certificate
iii
<PAGE>
SALE AND SERVICING AGREEMENT dated as of May 11, 1998, among AMERICREDIT
AUTOMOBILE RECEIVABLES TRUST 1998-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 BANK ONE,
NA, 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 CP Funding Corp. 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 CP Funding Corp. 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) 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, with respect to any
Distribution Date, a written notice specifying the Accelerated Payment Amount
Shortfall for such Distribution Date.
<PAGE>
"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 any Collection Period the last
day of such Collection Period.
"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 to transfer Subsequent Receivables to the Trust, such
notice to designate the related, Subsequent Cutoff Date, Subsequent Transfer
Date and the approximate principal amount of Subsequent Receivables to be
transferred on such Subsequent Transfer Date.
"Additional Funds Available" means, with respect to any Insured
Distribution Date, the sum of (i) the Deficiency Claim Amount, if any, received
by the Trust Collateral Agent with respect to such Insured Distribution Date
plus (ii) the Insurer Optional Deposit, if any, received by the Trust Collateral
Agent with respect to such Insured Distribution 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
2
<PAGE>
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 Distribution Date, the sum
of (i) the Collected Funds for the related Collection Period, (ii) all Purchase
Amounts deposited in the Collection Account during the related Collection
Period, plus Investment Earnings with respect to the Trust Accounts for the
related Collection Period, (iii) the Monthly Capitalized Interest Amount with
respect to such 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
Distribution Date by the Trust Collateral Agent or Controlling Party for
distribution pursuant to Section 5.6 and Section 5.8 hereof, (v) if the
Distribution Date which immediately follows such Collection Period 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, (vi) the proceeds of any purchase or sale of the assets of the Trust
described in Section 10.1 hereof, and (vii) any amounts received by the Trust
Collateral Agent pursuant to the Cap Agreement with respect to the Class A-2
Notes and the Class A-3 Notes.
"Backup Servicer" means Bank One, NA
"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.
3
<PAGE>
"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
Ohio are authorized or obligated to be closed.
"Calculation Date" means the close of business on the last day of each
Collection Period.
"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.
"Cap Agreement" means, originally, that certain ISDA Master Interest
Rate Swap Agreement dated May 27, 1998 between the Trust Collateral Agent and
the Cap Provider, including the related Confirmation and Annex, and together
with any replacement therefore approved by the Insurer.
"Cap Payment" means any payment received by the Trust Collateral Agent
under the Cap Agreement.
"Cap Payment Date" means the [fourth] day of each month (or, if such
[fourth] day is not a Business Day, on the next following Business Day).
"Cap Provider" means, originally, Chase Bank of Texas, N.A., together
with any replacement thereafter approved by the Insurer.
"Capitalized Interest Account Initial Deposit" means $595,842.70
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, the Class A-3
Notes, the Class A-4 Notes or the Class A-5 Notes, as the context requires.
"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.
"Class A-4 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-5 Notes" has the meaning assigned to such term in the
Indenture.
"Closing Date" means May 27, 1998.
4
<PAGE>
"Collateral Agent" means Bank One, NA, 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 Collection Period, the
amount of funds in the Collection Account representing collections on the
Receivables during such Collection Period, including all Net Liquidation
Proceeds collected during such 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 May 11, 1998 and ending on the
close of business on May 29, 1998. 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 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 E.A. Delle Donne Corporate Center, Montgomery
Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19801, Attention:
Corp. Trust Dept., and (ii) with respect to the Trustee, the Trust Collateral
Agent and the Collateral Agent, the principal office thereof at which at any
particular time its corporate trust business shall be administered, which at the
time of execution of this agreement is 100 East Broad Street, Columbus, Ohio
43215, Attention: Indenture Trust Administration.
"CP Funding" means CP Funding Corp., a Nevada corporation.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in a proceeding related to an Insolvency Event shall
have issued an order reducing the amount owed on a Receivable or otherwise
modifying or restructuring the scheduled
5
<PAGE>
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 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 Insured Distribution
Date, the fourth Business Day immediately preceding such Insured 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
6
<PAGE>
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 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
(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
7
<PAGE>
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 Insured 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 Date" means, with respect to each Collection Period,
(x) for so long as AmeriCredit is the Servicer, the fifth
day of the following calendar month, or, if such day is not a Business
Day, the immediately following Business Day; provided, that such day for
payment shall in no event be earlier than the third Business Day of the
following month, commencing June 5, 1998; or
(y) if the Backup Servicer or other successor Servicer
becomes the Servicer, the twelfth day of the following calendar month,
or, if such day is not a Business Day, the immediately following
Business Day.
"Draw Date" means, with respect to any Insured Distribution Date, the
third Business Day immediately preceding such Insured 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 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
8
<PAGE>
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,
controlling party 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 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 1999 Insured Distribution Date, (ii) the Class A-2 Notes,
the June 2001 Insured Distribution Date, (iii) the Class A-3 Notes, the January
2002 Insured Distribution Date, (iv) the Class A-4 Notes, the December 2002
Insured Distribution Date, and (v) the Class A-5 Notes, the January 2005 Insured
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.
9
<PAGE>
"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 31, 1998.
"Indenture" means the Indenture dated as of May 11, 1998, among the
Issuer and Bank One, NA, as Trust Collateral Agent and Trustee, as the same may
be amended and supplemented from time to time.
"Initial Cutoff Date" means, with respect to any Initial Receivable, the
earlier of (x) May 11, 1998 and (y) the date of origination of such Initial
Receivable.
"Initial Receivables" means any Receivable conveyed to the Trust on the
Closing Date.
"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 11, 1998, 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.
10
<PAGE>
"Insured Distribution Date" means the twelfth day of each month, or, if
such twelfth day is not a Business Day, the next following Business Day. In the
event that, on any Distribution Date, the Noteholders did not receive the full
amount of the scheduled payment then due to them, such shortfall (together with,
in the case of an interest shortfall, interest thereon at the related Interest
Rate) shall be due and payable and shall be funded on the Insured Distribution
Date either from the Spread Account or from the proceeds of a drawing under the
Note Policy. The Record Date applicable to an Insured Distribution Date shall be
the Record Date applicable to the related Distribution Date.
"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:
(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 Insured
Distribution Date, an amount delivered by the Insurer pursuant to Section 5.11,
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
Insured Distribution Date; or (ii) to include such amount as part of the
Distribution Amount for such Insured 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 most recent Distribution Date on which interest
has been paid (or in the case of the first Distribution Date, from and including
the Closing Date) to, but excluding, the following Distribution Date. In the
case of the first Distribution Date, the Interest Period shall be nine days.
11
<PAGE>
"Interest Rate" means, with respect to (i) the Class A-1 Notes, 5.629%
per annum (computed on the basis of the actual number of days elapsed in a
360-day year), (ii) the Class A-2 Notes, LIBOR plus .05% (computed on the basis
of the actual number of days elapsed in a 360-day year), (iii) the Class A-3
Notes, LIBOR plus .07% (computed on the basis of the actual number of days
elapsed in a 360-day year), (iv) the Class A-4 Notes, 6.06% per annum (computed
on the basis of a 360-day year of twelve 30-day months) and (v) the Class A-5
Notes, 6.12% per annum (computed on the basis of a 360-day year of twelve 30-day
months).
"Investment Earnings" means, with respect to any date of determination
and Trust Account, the investment earnings on amounts on deposit in such Trust
Account on such date.
"Issuer" means AmeriCredit Automobile Receivables Trust 1998-B.
"LIBOR" has the meaning set forth in Section 5.12 hereof.
"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 11, 1998, by and among AmeriCredit, Bank One, Texas, NA, 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.
12
<PAGE>
"Mandatory Redemption Date" means the earlier of (i) the Distribution
Date in August, 1998 and (ii) if the last day of the Funding Period occurs on or
prior to the Calculation Date occuring in June or July 1998, then the
Distribution Date relating to such Calculation Date
"Monthly Capitalized Interest Amount" means in the case of the June,
July or August 1998 Distribution Dates, an amount equal to the difference
between (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 (A) the average daily aggregate principal amount of the Notes
during the period since the prior Distribution Date and (B) the Pool Balance as
of the last day of the second preceding Collection Period, or in the case of the
June 1998 Distribution Date, as of the Closing Date and (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.
"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.
13
<PAGE>
"Note Policy Claim Amount" means, for any Insured Distribution Date, the
sum of (x) the excess, if any, of (i) the sum of the Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount for the
related Distribution Date, together with, if such related Distribution Date was
the Mandatory Redemption Date, the Note Prepayment Amount over (ii) the sum of
(a) the amount actually deposited into the Note Distribution Account on such
related Distribution Date and (b) the Additional Funds Available, if any, for
such Insured Distribution Date plus (y) the Noteholders' Interest Carryover
Amount, if any, which has accrued since the related Distribution Date.
"Note Pool Factor" for each Class of Notes as of the close of business
on any date of determination 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.
"Note Shortfall Amount" means, for any Insured Distribution Date, the
sum of (x) the excess, if any, of (i) the sum of the Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount for the
related Distribution Date, together with, if such related Distribution Date was
the Mandatory Redemption Date, the Note Prepayment Amount over (ii) the amount
actually deposited into the Note Distribution Account on such related
Distribution Date plus (y) the Noteholders' Interest Carryover Amount, if any,
which has accrued since the related Distribution Date.
"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 Amount" means, with respect to any
Class of Notes and any date of determination, all or any portion of the
Noteholders' Monthly Interest Distributable Amount for the immediately preceding
Distribution Date and any outstanding Noteholders' Interest Carryover Amount on
such immediately preceding Distribution Date, which remains unpaid as of such
date of determination, plus interest on such unpaid amount, to the extent
permitted by law, at the respective Interest Rate borne by each Class of Notes
from such immediately preceding Distribution Date to but excluding such date of
determination.
14
<PAGE>
"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
Amount, if any 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, Class A-2 Notes and the Class A-3 Notes and (ii) a 360-day
year of twelve 30-day months in the case of the Class A-4 Notes and the Class
A-5 Notes.
"Noteholders' Monthly Interest Distributable Amount" means, with respect
to any Distribution Date and any Class of Notes, interest accrued during the
applicable Interest Period on the principal amount of the Notes of each Class
outstanding as of the end of the prior Distribution Date (or, in the case of the
first Distribution Date, as of the Closing Date); provided, that if such
principal balance is further reduced by a payment of principal on the Insured
Distribution Date which immediately follows such prior Distribution Date, then
such interest shall accrue (i) from and including such prior Distribution Date
to, but excluding, such related Insured Distribution Date, on the principal
balance outstanding as of the end of the prior Distribution Date (or, in the
case of the first Distribution Date, as of the Closing Date) and (ii) from and
including such Insured Distribution Date, to, but excluding, the following
Distribution Date, on the principal balance outstanding as of the end of such
Insured Distribution Date, calculated on the basis of a 360-day year and (a) the
actual number of days elapsed, in the case of the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes and (b) twelve 30-day months, in the case of the
Class A-4 Notes and the Class A-5 Notes.
"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-5 Notes is reduced to zero, 100%; (ii) relating
to the Distribution Date on which the principal amount of the Class A-5 Notes is
reduced to zero, the percentage equivalent of a fraction, the numerator of which
is the principal amount of the Class A-5 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%.
"Noteholders' Principal Carryover Amount" means, as of any date of
determination, all or any portion of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover Amount
from the preceding Distribution Date which remains unpaid as of such date of
determination.
"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
Amount, if any, 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 Amount as of the such 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).
15
<PAGE>
"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 satisfactory 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:
With respect to the June 1998 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 29, 1998.
With respect to the July 1998 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, 1998.
With respect to the August 1998 Distribution Date, 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).
"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.
16
<PAGE>
"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 $100,001,572.67.
"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.
"Preliminary Determination Date" means, with respect to any Collection
Period, the second Business Day preceding the Distribution Date in the next
calendar month.
"Preliminary Servicer's Certificate" means an Officers' Certificate of
the Servicer delivered pursuant to Section 4.9(a), substantially in the form of
Exhibit C.
"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 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 giving effect to distributions pursuant to clauses (i)
through (vi) of Section 5.7(b) hereof.
17
<PAGE>
"Purchase Agreement" means the Purchase Agreement among the Seller, CP
Funding and AmeriCredit, dated as of May 11, 1998, 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, CP Funding 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.
"Record Date" with respect to each Distribution Date means the Business
Day immediately preceding such Distribution Date, unless otherwise specified in
the Agreement. The "Record Date" for any Insured Distribution Date shall be the
"Record Date" applicable to the related Distribution Date.
"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.
18
<PAGE>
"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.
"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.
"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(b), 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.
19
<PAGE>
"Spread Account" means the account designated as such, established and
maintained pursuant to 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 11, 1998 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 1998-B Spread
Account Agreement Supplement dated as of May 11, 1998 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 2.5% of the
aggregate principal balance of the Initial Receivables on the Closing Date
(which is equal to $10,624,960.68).
"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 the date specified in the related
Subsequent Transfer Agreement, provided, however that such date shall be on or
before the Subsequent Transfer Date.
"Subsequent Purchase Agreement" means an agreement by and between the
Seller, CP Funding 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 2.5% 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.
20
<PAGE>
"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 but excluding any fees or expenses
related to extensions.
"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 11, 1998,
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, any managing director,
the chairman or vice-chairman of the executive committee of the board of
directors, the president, any vice president, assistant 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.
"Trustee" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
21
<PAGE>
"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 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
22
<PAGE>
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 in 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 and CP Funding under the Purchase Agreement; and
(h) the proceeds of any and all of the foregoing.
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;
23
<PAGE>
(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 the Subsequent Purchase Agreements, and the delivery
requirements, representations and warranties and the cure and repurchase
obligations of AmeriCredit and CP Funding 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;
24
<PAGE>
(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) as such information is provided to the Trust Collateral Agent by
the Servicer: (i) the weighted average APR of the Receivables
transferred to the Trust shall not be less than 18.0%, 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 60 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 in writing to the
Trust Collateral Agent 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;
(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
25
<PAGE>
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 the Trust Collateral Agent 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
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.
26
<PAGE>
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller. The Seller
hereby represents and warrants that each of the representations and warranties
set forth on the Schedule of Representations attached hereto as Schedule B is
true and correct 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.
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, notice 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 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 Trustee, the Backup Servicer, the Trust Collateral Agent,
Collateral Agent and the officers, directors, agents and employees thereof, 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.
27
<PAGE>
(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 and CP Funding 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 and
CP Funding 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 11, 1998, 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
(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
28
<PAGE>
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 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
29
<PAGE>
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 shall furnish
the Servicer with any limited 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, 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.
(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%; and
30
<PAGE>
(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).
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% (which information shall be set forth in
the related Servicer's Certificate), 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
Preliminary Determination 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 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
31
<PAGE>
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 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
32
<PAGE>
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 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 reasonably 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 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
33
<PAGE>
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 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
34
<PAGE>
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
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 and CP Funding hereby appoint the Trust Collateral Agent as their
attorney-in-fact to take any and all steps required to be
35
<PAGE>
performed by AmeriCredit or CP Funding pursuant to this Section 4.5(b) (it being
understood that and agreed that the Trust Collateral Agent shall have no
obligation to take such steps, except as pursuant to the Basic Documents to
which it is a party), including execution of certificates of title or any other
documents in the name and stead of AmeriCredit or CP Funding, 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, 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 except as otherwise expressly provided herein;
(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.
SECTION 4.7. Purchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Servicer, the Insurer, a Responsible Officer of the
Trust Collateral Agent, the Owner Trustee or a Responsible Officer of the
Trustee of a breach of any of the covenants set
36
<PAGE>
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. This section shall survive the termination of this Agreement and
the earlier removal or resignation of the Trustee and/or the Trust Collateral
Agent and/or the Backup Servicer.
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 Collateral Agent, the Backup Servicer, 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 Backup Servicer, the Trust Collateral Agent,
the Trustee, the Custodian, the Backup Servicer, the Collateral 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. Preliminary Servicer's Certificate and Servicer's
Certificate.
(a) No later than 10:00 am. Eastern time on each Preliminary
Determination Date, the Servicer shall deliver (facsimile delivery being
acceptable) to the Trustee, the Owner Trustee, the Trust Collateral Agent, the
Collateral Agent, the Backup Servicer, the Insurer, the Collateral Agent and
each Rating Agency a Preliminary Servicer's Certificate executed by a
Responsible Officer of the Servicer containing among other things, all
information necessary to enable the
37
<PAGE>
Trust Collateral Agent to give any notice required by Section 5.5(b) and to make
the distributions required by Sections 5.7(a) and 5.7(b).
(b) No later than 10:00 am. Eastern time on each Determination Date, the
Servicer shall deliver (facsimile delivery being acceptable) 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 and to make the distributions
required by Section 5.7(c), (ii) a listing of all Purchased Receivables and
Administrative Receivables purchased as of the related Accounting Date,
identifying the Receivables so purchased, (iii) all information necessary to
enable the Trust Collateral Agent to send the statements to Noteholders and the
Insurer required by Section 5.10, and (iv) all information necessary to enable
the Trust Collateral Agent to reconcile the aggregate cash flows, the Collection
Account for the related Collection Period, Distribution Date and Insured
Distribution Date, including the accounting required by Section 5.10.
Receivables purchased by the Servicer or by the Seller on the related Accounting
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.
(c) In the event that the Distribution Date is the date described in
clause (y) of the definition of "Distribution Date" (i.e., if AmeriCredit is no
longer the Servicer), then the information required by the Preliminary
Servicer's Certificate shall be added to the information required by the
Servicer's Certificate, and the expanded Servicer's Certificate shall be
delivered as required by paragraph (b) above.
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
year, if other than June 30) of each year, beginning on October 31, 1999, 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
38
<PAGE>
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, 1999, 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
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 affect 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.
39
<PAGE>
SECTION 4.13. Monthly Tape. On or before the Insured Distribution 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 preceding
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 Insured Distribution
Date. In the event that the Backup Servicer reports any discrepancies, the
Servicer and the Backup Servicer shall attempt to reconcile such discrepancies
prior to the next succeeding 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 next succeeding 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 next
succeeding Distribution Date, the Servicer shall cause the Independent
Accountants, at the Servicer's expense, to audit the Servicer's Certificate and,
prior to the last day of the month after the month in which such Servicer's
Certificate was delivered, reconcile the discrepancies. The effect, if any, of
such reconciliation shall be reflected in the Preliminary Servicer's Certificate
for the next succeeding Distribution Date, and/or 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 4.13. 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, 1998, 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
40
<PAGE>
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 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 4.14. 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. The Collection Account shall initially be
established with the Trust Collateral Agent.
(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. The Pre-Funding Account shall initially be
established with the Trust Collateral Agent.
(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 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 or, if earlier, on the following Insured
Distribution Date. Funds deposited in a Trust Account on the day immediately
preceding a Distribution Date or an Insured
41
<PAGE>
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
in writing for any funds on deposit in the Trust Accounts to the Trust
Collateral Agent by 1:00 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 the investment described in clause (g) of the definition of Eligible
Investments.
(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.
42
<PAGE>
(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 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
1998 the Trust Collateral Agent shall withdraw at the written direction of the
Servicer from the Capitalized
43
<PAGE>
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 1998 the Servicer shall instruct the Trust Collateral Agent in
writing 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 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 in writing 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 for the
related Collection Period plus (ii) the Prepayment Amount with respect to the
related Distribution Date is less than the sum of the amounts payable on the
related Distribution Date pursuant to clauses (i) through (v) of Section
44
<PAGE>
5.7(b), plus the Noteholders' Interest Carryover Amount, if any, which will
accrue from the related Distribution Date to the related Insured Distribution
Date (such deficiency being a "Deficiency Claim Amount") then on the Deficiency
Claim Date immediately preceding the related Insured Distribution Date, the
Trust Collateral Agent shall deliver to the Collateral Agent, the Owner Trustee,
the Insurer and the Servicer, by hand delivery or facsimile transmission, a
written notice (a "Deficiency Notice") specifying the Deficiency Claim Amount
for such Insured Distribution Date and 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 Insured Distribution Date.
Any Deficiency shall be delivered by 12:00 noon, Eastern time, on the
fourth Business Day preceding such Insured Distribution Date.
(b) In the event that the Preliminary Servicer's Certificate with
respect to any Preliminary Determination Date shall state that there shall be an
Accelerated Payment Amount Shortfall with respect to the related Distribution
Date, then on the Business Day preceding such Distribution Date, the Trust
Collateral Agent shall deliver to the Collateral Agent, the Insurer and the
Servicer, by hand delivery 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. Any Accelerated Payment Shortfall Notice shall be delivered
by 2:00 p.m. Eastern time, on the Business Day preceding such Distribution Date.
(c) The amounts distributed by the Collateral Agent to the Trust
Collateral Agent pursuant to a efficiency 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 Preliminary Determination 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.
(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 Preliminary Servicer's Certificate delivered on the related Preliminary
Determination Date) cause to be made the following transfers and distributions
in the amounts set forth in the Preliminary Servicer's Certificate for such
Distribution Date:
45
<PAGE>
(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 Preliminary Servicer's Certificate
delivered with respect to the related Preliminary Determination Date) 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 Available Funds, 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 Available Funds, 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 Available Funds to the Note Distribution Account,
the Noteholders' Interest Distributable Amount;
(iv) from the Available Funds to the Note Distribution Account,
the Noteholders' Principal Distributable Amount plus, on the Mandatory
Redemption Date, the Note Prepayment Amount;
(v) from the Available Funds, 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
46
<PAGE>
(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) On each Insured 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 in writing of any errors or
deficiencies with respect thereto) distribute from the Collection Account the
Additional Funds Available, if any, plus the Note Policy Claim Amount, if any,
in each case then on deposit in the Collection Account, and deposit in the Note
Distribution Account the Note Shortfall Amount, if any, for the related Insured
Distribution Date, which amount shall be applied solely to the payment of
amounts then due and unpaid on the Notes in accordance with the priorities set
forth in Section 5.8(a).
(d) 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
Sections 5.7(b) and 5.7(c) on the related Distribution Date and the related
Insured Distribution Date, as applicable.
SECTION 5.8. Note Distribution Account.
(a) On each Distribution Date (based solely on the information contained
in the Preliminary Servicer's Certificate) and each Insured Distribution Date
(based solely on the information in the Servicer's Certificate), as applicable,
the Trust Collateral Agent shall distribute all amounts on deposit in the Note
Distribution 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, the Class A-3
Notes, the Class A-4 Notes and the Class A-5 Notes, respectively, based
upon the pro rata share as represented by the relative Outstanding
Amount of each Class of Notes; provided, that if the aggregate remaining
amount in the Pre-Funding Account is $100,000 or less, such amount will
be applied exclusively to
47
<PAGE>
reduce the outstanding principal balance of the Class of Notes then
entitled to receive distributions of principal;
(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;
(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;
(vi) to the Holders of the Class A-4 Notes, the Noteholders'
Principal Distributable Amount and the Accelerated Principal Amount
until the outstanding principal balance of the Class A-4 Notes is
reduced to zero; and
(vii) to the Holders of the Class A-5 Notes, the Noteholders'
Principal Distributable Amount and the Accelerated Principal Amount
until the outstanding principal balance of the Class A-5 Notes is
reduced to zero.
(b) On each Insured 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 Insured 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 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 (c). 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 (including legal fees and expenses) incurred.
(d) Distributions required to be made to Noteholders on any Distribution
Date or any Insured 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
48
<PAGE>
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 and at the written direction of the Seller, in the Pre-Funding Account
$100,001,572.67 from the proceeds of the sale of the Notes. On each Subsequent
Transfer Date, the Servicer shall instruct the Trust Collateral Agent in writing
to withdraw from the Pre-Funding Account (i) an amount equal to 97.5% 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 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 in writing 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
Distribution Date, the Trust Collateral Agent shall provide each Noteholder of
record (with a copy to the Insurer and the Rating Agencies) 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;
49
<PAGE>
(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 Amount and the
Noteholders' Principal Carryover Amount;
(viii) the amount of the aggregate Realized Losses, if any, for
the second preceding Collection Period;
(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) and (vii)
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 an Insured 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 Insured 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.
SECTION 5.12. Determination of LIBOR.
The Trust Collateral Agent will determine LIBOR for purposes of
calculating the Interest Rate for the Class A-2 Notes and the Class A-3 Notes
for each given Interest Period on the second business day prior to the
commencement of each Interest Periods (each, a "LIBOR Determination Date"). For
purposes of calculating LIBOR, a business day means a Business Day and a day on
which banking institutions in the City of London, England are not required or
authorized by law to be closed.
"LIBOR" means, with respect to any Interest Period, the London interbank
offered rate for deposits in the U.S. dollars having a maturity of one month
commencing on the related LIBOR Determination Date (the "Index Maturity") which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR
Determination Date. If such rate does not appear on
50
<PAGE>
the Telerate page 3750, the rate for that day will be determined on the basis of
the rate at which deposits in U.S. dollars, having the Index Maturity and in a
principal amount of not less than U.S. $1,000,000 are offered at approximately
11:00 a.m., London Time, on such LIBOR Determination Date to prime banks in the
London interbank market by the Reference Banks. The Trust Collateral Agent will
request the principal London office of each of such Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that day will be the arithmetic mean, rounded upward, if necessary, to the
nearest 1/100,000 of 1% (0.0000001), with five one-millionths of a percentage
point rounded upward, of all such quotations. If fewer than two such quotations
are provided, the rate for that day will be the arithmetic mean, rounded upward
of necessary to the nearest 1/100,000 of 1% (0.0000001), with five one-
millionths of a percentage point rounded upward, of the offered per annum rates
that one or more leading banks in New York City, selected by the Trust
Collateral Agent, are quoting as of approximately 11:00, Eastern time, on such
LIBOR Determination Date to leading European banks for United States dollar
deposits for the Index Maturity; provided that if the banks selected as
aforesaid are not quoting as mentioned in this sentence, LIBOR in effect for the
applicable Interest Period will be LIBOR in effect for the previous Interest
Period.
"Telerate Page 3750" means the display page so designative on the Dow
Jones Telerate Services (or such other page as may replace that page on that
service for the purpose of displaying comparable name or rates).
"Reference Banks" means four major banks in the London interbank market
selected by the Trust Collateral Agent.
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 Insured Distribution Date. If the Note
Policy Claim Amount for such Insured Distribution Date is greater than zero, the
Trust Collateral Agent shall furnish to the Insurer no later than 12:00 noon
Eastern 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 Insured 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 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., Eastern time, on the later of (i) the
third Business Day following receipt on a Business Day of the Notice of Claim,
and (ii) the
51
<PAGE>
applicable Insured 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
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
52
<PAGE>
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 a Responsible Officer of
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, supersedes as 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, 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 and on which the Trustee, Collateral Agent, Trust
Collateral Agent and Backup Servicer may rely. 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.
53
<PAGE>
(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.
(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
54
<PAGE>
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.
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.
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.
55
<PAGE>
(a) The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Trust, the Insurer, the Trustee, Backup Servicer, Collateral
Agent and the Trust Collateral Agent and its officers, directors, employees and
agents 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, Backup Servicer, Collateral Agent and the Trust
Collateral Agent and the officers, directors, employees and agents thereof, 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, Collateral Agent and Backup Servicer
and the officers, directors, employees and agents thereof 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, Trustee, Trust Collateral Agent, Collateral Agent and Backup
Servicer respectively.
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 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
56
<PAGE>
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 Backup Servicer,
the 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 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.
57
<PAGE>
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 or CP Funding respectively;
(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 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
58
<PAGE>
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties;
(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, 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
59
<PAGE>
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. This section
shall survive the termination of this Agreement, or the earlier removal or
resignation of the Trustee, Trust Collateral Agent, Backup Servicer or the
Collateral Agent.
(f) The AmeriCredit shall indemnify the Trustee, the Trust Collateral
Agent, the Collateral Agent and the Backup Servicer, and the respective
officers, directors, agents and employees thereof against any and all loss,
liability or expense, (other than overhead and expenses incurred in the normal
course of business) incurred by each of them in connection with the acceptance
or administration of the Trust and the performance of their duties under the
Basic Documents other than if such loss, liability or expense was incurred by
the Trustee, Trust Collateral Agent or Collateral Agent as a result of any such
entity's willful misconduct, bad faith or negligence.
(g) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
60
<PAGE>
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, Trustee, Backup Servicer and 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)
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
61
<PAGE>
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.
(b) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement or for any errors of the Servicer contained
in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to
perform its obligations hereunder, and the Owner Trustee, the Trustee, the Trust
Collateral Agent, the Collateral Agent, the Backup Servicer, the Seller and the
Insurer and the Noteholders shall look only to the Servicer to perform such
obligations. The Backup Servicer, Trust Collateral Agent, the Trustee, the
Collateral Agent, the Owner Trustee and the Custodian shall have no
responsibility and shall not be in default hereunder or incur any liability for
any failure, error, malfunction or any delay in carrying out any of their
respective duties under this Agreement if such failure or delay results from the
Backup Servicer acting in accordance with information prepared or supplied by a
Person other than the Backup Servicer (or contractual agents) or the failure of
any such other Person to prepare or provide such information. The Backup
Servicer shall have no responsibility, shall not be in default and shall incur
no liability for (i) any act or failure to act of any third party (other than
its contractual agents), including the Servicer or the Controlling Party, (ii)
any inaccuracy or omission in a notice or communication received by the Backup
Servicer from any third party (other than its contractual agents), (iii) the
invalidity or unenforceability of any Receivable under applicable law, (iv) the
breach or inaccuracy of any representation or warranty made with respect to any
Receivable, or (v) the acts or omissions of any successor Backup Servicer.
(c) The parties expressly acknowledge and consent to Bank One, NA acting
in the possible dual capacity of Backup Servicer or successor Servicer and in
the capacity as Trust Collateral Agent. Bank One, NA may, in such dual or other
capacity, discharge its separate functions fully, without hindrance 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 Bank One, NA 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
62
<PAGE>
other parties hereto and the Noteholders except in the case of gross negligence
and willful misconduct by Bank One, NA.
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 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
(i) 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, (ii) the Backup Servicer may resign with the
written consent of the Insurer and (iii) if Bank One, NA resigns as the Trustee
under the Indenture it will no longer be the Backup Servicer.
63
<PAGE>
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;
(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
Insured 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
64
<PAGE>
(f) Any representation, warranty or statement of the Servicer made in
this Agreement or any certificate, report 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 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
65
<PAGE>
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 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, CP Funding, 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.
66
<PAGE>
(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 provided, however, it being understood
and agreed that the Insurer shall give prior notice to the Backup Servicer with
respect to the appointment of such successor and the payment of additional
compensation, if any. 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 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
67
<PAGE>
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 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 Collateral Agent, the Backup
Servicer, 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 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
68
<PAGE>
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.
(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 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;
69
<PAGE>
(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 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
70
<PAGE>
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 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, Trust Collateral Agent, Collateral Agent and Backup
Servicer shall be entitled to receive and conclusively rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel referred to in Section 12.2(h)(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 Section
12.1(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.
71
<PAGE>
SECTION 12.2. Protection of Title to Trust.
(a) The 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 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 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 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.
72
<PAGE>
(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, 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
73
<PAGE>
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 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.
74
<PAGE>
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.
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 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
75
<PAGE>
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 Bank One, NA, not in its individual
capacity but solely as Trust Collateral Agent and Backup Servicer and in no
event shall Bank One, NA, 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 Bank One, NA, 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.
76
<PAGE>
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 1998-B
by BANKERS TRUST (DELAWARE) not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust,
by /s/ Louis Bodi as attorney in fact
---------------------------------------
Name: Louis Bodi
Title: Vice President
AFS FUNDING CORP., Seller,
by /s/ Preston A. Miller
---------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
AMERICREDIT FINANCIAL SERVICES, INC., Servicer,
by /s/ Preston A. Miller
---------------------------------------
Name: Preston A. Miller
Title: Senior Vice President and
Treasurer
[Sale & Servicing Agreement]
<PAGE>
BANK ONE, NA,
not in its individual capacity but solely as
Backup Servicer
by /s/ John Rothrock
-----------------------------------
Name: John Rothrock
Title: Authorized Signer
Acknowledged and accepted by
BANK ONE, NA,
not in its individual capacity but solely
as Trust Collateral Agent
by /s/ John Rothrock
---------------------------------------
Name: John Rothrock
Title: Authorized Signer
[Sale and Servicing Agreement]
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
1
<PAGE>
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. Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to AmeriCredit and by AmeriCredit or CP
Funding 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.
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
1
<PAGE>
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.
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.
2
<PAGE>
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 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.
3
<PAGE>
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 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 72 months; (B) each Receivable had an original maturity of not more than 72
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 12.50% and not more than
33.00%; (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.
4
<PAGE>
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 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
1
<PAGE>
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.
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.
2
<PAGE>
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.
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.
3
<PAGE>
EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
Transfer No. of Subsequent Receivables pursuant to a Sale and Servicing
Agreement dated as of May 11, 1998, among THE AMERICREDIT AUTOMOBILE RECEIVABLES
TRUST 1998-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 BANK ONE, NA, an Ohio corporation
(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, _______________, 1998.
"Subsequent Transfer Date" shall mean. with respect to the Subsequent
Receivables
conveyed hereby, _____________, 1998.
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:
(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;
A-1
<PAGE>
(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 and CP Funding 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.
(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.
A-2
<PAGE>
(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 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.
A-3
<PAGE>
(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.
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.
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.
A-4
<PAGE>
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 1998-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:
BANK ONE, NA,
not in its individual
capacity but solely as
Trust Collateral Agent
by
----------------------------------
Title:
<PAGE>
EXHIBIT B
SERVICER'S CERTIFICATE
B-1
<PAGE>
EXHIBIT C
PRELIMINARY SERVICER'S CERTIFICATE
C-1
<PAGE>
EXHIBIT 4.4
FINANCIAL GUARANTY
INSURANCE POLICY
<TABLE>
<CAPTION>
<S> <C>
OBLIGOR: AmeriCredit Automobile Receivables Trust 1998-B Policy No.: 50685-N
OBLIGATIONS: $525,000,000 Asset Backed Notes, Classes A-1 through A-5, as Date of Issuance:
described in Endorsement No. 1 hereto May 27, 1998
</TABLE>
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 /s/ Russell Brewer II
-----------------------------
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 1998-B
OBLIGATIONS: $116,000,000 Class A-1 5.629% Asset Backed Notes
$174,000,000 Class A-2 Floating Rate Asset Backed Notes
$77,000,000 Class A-3 Floating Rate Asset Backed Notes
$108,000,000 Class A-4 6.06% Asset Backed Notes
$50,000,000, Class A-5 6.12% Asset Backed Notes
Policy No.: 50685-N
Date of Issuance: May 27, 1998
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 (i) Saturday or Sunday or (ii) a
------------
day on which banking institutions in the City of New York, New York or Ohio are
authorized or obligated by law or executive order to be closed.
"Holder" shall have the meaning set forth in the Indenture; provided,
------ --------
however 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 11, 1998, between the
---------
Obligor and Bank One, NA as Trustee and Trust Collateral Agent, as amended from
time to time with the consent of Financial Security.
"Indenture Trustee" means Bank One, NA 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,
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
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.
"Scheduled Payments" means, as to each Insured Distribution 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 Date of
-------------------
Issuance to and including 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.
2
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
"Trust Collateral Agent" means Bank One, NA 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 Security on the later
to occur of (a) 12:00 noon, New York City time, on the third Business Day
following such Receipt; and (b) 12:00 noon, 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; provided,
however, that by acceptance of this Policy the Trust Collateral Agent agrees to
provide upon request to Financial Security a notice and certificate in respect
of any such payments made by Financial Security. 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
3
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
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.
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 defense 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
4
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
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 face 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. 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 Trust Collateral Agent 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 /s/ Russell Brewer II
------------------------------
Authorized Officer
5
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
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
Re: AmeriCredit Automobile Receivables Trust 1998-B
-----------------------------------------------
The undersigned, a duly authorized officer of Bank One, NA (the "Trust
Collateral Agent"), hereby certifies to Financial Security Assurance Inc.
("Financial Security"), with reference to Financial Guaranty Insurance Policy
No. 50685-N dated May 27, 1998 (the "Policy") issued by Financial Security in
respect of the $116,000,000 Class A-1 5.629% Asset Backed Notes, $174,000,000
Class A-2 Floating Rate Asset Backed Notes, $77,000,000 Class A-3 Floating Rate
Asset Backed Notes, $108,000,000 Class A-4 6.06% Asset Backed Notes and
$50,000,000 Class A-5 6.12% Asset Backed Notes of the above-referenced Trust
(the "Obligations"), that:
(i) The Trust Collateral Agent is the Trust Collateral Agent under the
Indenture.
(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 $_________ (the "Shortfall") less than the
aggregate amount of Scheduled Payments due on ___________________.
(iii) The Trust Collateral Agent is making a claim under the Policy for
the Shortfall to be applied to the payment of Scheduled Payments.
(iv) The Trust Collateral Agent agrees that, following receipt of funds
from Financial Security, it shall (a) hold such amounts in trust and apply the
same directly to the payment of Scheduled Payments on the Obligations when due;
(b) not apply such funds for any other purpose; (c) not commingle such funds
with other funds held by the Trust Collateral Agent and (d) maintain an accurate
record of such payments with respect to each Obligation and the corresponding
claim on the Policy and proceeds thereof, and, if the Obligation is required to
be
A-1
<PAGE>
Policy No.: 50685-N Date of Issuance : May 27, 1998
surrendered or presented for such payment, shall stamp on each such Obligation
the legend "$[insert applicable amount] paid by Financial Security and the
balance hereof has been canceled and reissued" and then shall deliver such
Obligation to Financial Security.
(v) The Trust Collateral Agent, 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, 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 continuation 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.: 50685-N Date of Issuance : May 27, 1998
IN WITNESS WHEREOF, the Trust Collateral Agent has executed and delivered
this Notice of Claim and Certificate as of the __th day of __________, 19__.
BANK ONE, NA
as Trust Collateral Agent
By_________________________________
Title______________________________
- -----------------------------------------------------------------
For Financial Security or Fiscal Agent Use Only
Wire transfer sent on ____________ By ___________________________
Confirmation Number _____________________.
A-3
<PAGE>
EXHIBIT 10.1
PURCHASE AGREEMENT
BETWEEN
AFS FUNDING CORP.
PURCHASER
AMERICREDIT FINANCIAL SERVICES, INC.
SELLER
AND
CP FUNDING CORP.
SELLER
DATED AS OF
MAY 11, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
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 [Reserved]......................................................................... 3
SECTION 1.5 No Recourse........................................................................ 3
SECTION 1.6 Action by or Consent of Noteholders and Certificateholder.......................... 3
SECTION 1.7 Material Adverse Effect............................................................ 3
ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER
CONVEYED PROPERTY 4
SECTION 2.1 Conveyance of the Initial Receivables and the Initial Other Conveyed Property...... 4
SECTION 2.2 Conveyance of the Subsequent Receivables and the Subsequent Other Conveyed Property 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES..................................................... 4
SECTION 3.1 Representations and Warranties of AFS.............................................. 4
SECTION 3.2 Representations and Warranties of CP Funding....................................... 6
SECTION 3.3 Representations and Warranties of Purchaser........................................ 8
ARTICLE IV. COVENANTS OF SELLERS............................................................... 10
SECTION 4.1 Protection of Title of Purchaser................................................... 10
SECTION 4.2 Other Liens or Interests........................................................... 11
SECTION 4.3 Costs and Expenses................................................................. 11
SECTION 4.4 Indemnification.................................................................... 11
ARTICLE V. REPURCHASES........................................................................ 13
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.................................. 13
SECTION 5.2 Reassignment of Purchased Receivables.............................................. 15
SECTION 5.3 Waivers............................................................................ 15
ARTICLE VI. MISCELLANEOUS...................................................................... 15
SECTION 6.1 Liability of Sellers............................................................... 15
SECTION 6.2 Merger or Consolidation of Sellers or Purchaser.................................... 15
SECTION 6.3 Limitation on Liability of Sellers and Others...................................... 16
SECTION 6.4 Sellers May Own Notes or the Certificate........................................... 16
SECTION 6.5 Amendment.......................................................................... 16
SECTION 6.6 Notices............................................................................ 18
SECTION 6.7 Merger and Integration............................................................. 18
SECTION 6.8 Severability of Provisions......................................................... 18
SECTION 6.9 Intention of the Parties........................................................... 18
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
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
</TABLE>
SCHEDULES
Schedule A -- Schedule of Receivables from AFS
Schedule B -- Schedule of Receivables from CP Funding
Schedule C -- Representations and Warranties from AFS as to the Receivables
<PAGE>
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT, dated as of May 11, 1998, executed among AFS
Funding Corp., a Nevada corporation, as purchaser ("Purchaser"), CP Funding
Corp., a Nevada corporation, as seller ("CP Funding") and AmeriCredit Financial
Services, Inc., a Delaware corporation, as seller ("AFS" and together with CP
Funding, the "Sellers").
W I T N E S S E T H :
--------------------
WHEREAS, Purchaser has agreed to purchase from the Sellers, and the
Sellers, pursuant to this Agreement, are 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 the Sellers, 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 11, 1998, by and
among AFS Funding Corp. (as Seller), AmeriCredit Financial Services, Inc. (in
its individual capacity and as Servicer), AmeriCredit Automobile Receivables
Trust 1998-B (as Issuer) and Bank One, NA, 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 27, 1998.
------------
"Initial Other Conveyed Property" means all property conveyed by the
-------------------------------
Sellers to the Purchaser pursuant to this Agreement other than the Initial
Receivables.
"Initial Receivables" means the Receivables listed on the Schedules of
-------------------
Receivables attached hereto.
<PAGE>
"Issuer" means AmeriCredit Automobile Receivables Trust 1998-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 Policy, 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 Sellers'
----------------
representations and warranties hereunder or any other event which requires the
repurchase of a Receivable by AFS 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 Representations" means the Schedule of Representations
---------------------------
and Warranties attached hereto as Schedule C.
"Schedules of Receivables" means the schedules of Initial Receivables
------------------------
sold and transferred pursuant to this Agreement which are attached hereto as
Schedules A and B.
"Subsequent Cutoff Date" means the date specified in the related
----------------------
Subsequent Transfer Agreement, provided, however that such date shall be on or
before the Subsequent Transfer Date.
"Subsequent Other Conveyed Property" means all property conveyed by
----------------------------------
the Sellers to the Purchaser pursuant to the Subsequent Purchase Agreement other
than the Subsequent Receivables.
"Subsequent Purchase Agreement" means an agreement by and between the
-----------------------------
Sellers 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 Schedules A and B 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
2
<PAGE>
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 Bank One, NA, as trust collateral agent
----------------------
and any successor trust collateral agent appointed and acting pursuant to the
Sale and Servicing Agreement.
"Trustee" means Bank One, NA, 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 [Reserved]
----------
SECTION 1.5 No Recourse . Without limiting the obligations of Sellers
-----------
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 any stockholder, officer or director, as such, of Sellers,
or of any predecessor or successor of Sellers.
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 Sellers 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.
3
<PAGE>
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,
Sellers hereby sell, transfer, assign, and otherwise convey to Purchaser without
recourse (but without limitation of its obligations in this Agreement), and
Purchaser hereby purchases, all right, title and interest of Sellers in and to
the Initial Receivables and the Initial Other Conveyed Property. It is the
intention of Sellers 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 Sellers 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 Sellers' estates in the event of the filing of a bankruptcy petition by
or against Sellers under any bankruptcy or similar law.
(b) Simultaneously with the conveyance of the Initial Receivables and
the Initial Other Conveyed Property to Purchaser, Purchaser has paid or
caused to be paid to or upon the order of Sellers an amount equal to the
book value of the Initial Receivables on the books and records of the
Sellers, 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 Sellers 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 Sellers in and to the Subsequent Receivables and the Subsequent Other
Conveyed Property. It is the intention of Sellers 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
Sellers 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 Sellers' estates in the
event of the filing of a bankruptcy petition by or against Sellers under any
bankruptcy or similar law.
(b) 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 Sellers an amount equal to
the book value of the Subsequent Receivables on the books and records of
the Sellers, by wire transfer of immediately available funds.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of AFS . AFS 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
4
<PAGE>
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. AFS
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 AFS in the Trustee's own name on behalf of the
Noteholders.
(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. AFS 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. AFS 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. AFS 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; AFS 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
AFS's Related Documents have been duly authorized by AFS by all necessary
corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and AFS'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 AFS and creditors of and purchasers
from AFS; and this Agreement and AFS's Related Documents constitute legal,
valid and binding obligations of AFS 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.
5
<PAGE>
(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 incorporation or bylaws of AFS, or any indenture, agreement,
mortgage, deed of trust or other instrument to which AFS 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 AFS of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over AFS or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
--------------
pending or, to AFS's knowledge, threatened against AFS, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over AFS 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 AFS 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 AFS is
----------------------
located at 200 Bailey Avenue, Fort Worth, Texas 76107-1220.
SECTION 3.2 Representations and Warranties of CP Funding . CP Funding
--------------------------------------------
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. CP Funding 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 CP Funding in the Trustee's own name on behalf of the
Noteholders.
(a) Organization and Good Standing. CP Funding has been duly organized
------------------------------
and is validly existing as a corporation in good standing under the laws of
the State of
6
<PAGE>
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 to be transferred to Purchaser.
(b) Power and Authority. CP Funding 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; CP Funding 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 CP Funding's Related Documents have been duly authorized
by CP Funding by all necessary corporate action.
(c) Due Qualification. CP Funding 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) Valid Sale; Binding Obligations. This Agreement and CP Funding'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 CP Funding and
creditors of and purchasers from CP Funding; and this Agreement and CP
Funding's Related Documents constitute legal, valid and binding obligations
of CP Funding 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.
(e) 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 incorporation or bylaws of CP Funding, or any indenture,
agreement, mortgage, deed of trust or other instrument to which CP Funding
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 CP Funding of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over CP Funding or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to CP Funding's knowledge, threatened against CP Funding,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having
7
<PAGE>
jurisdiction over CP Funding 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 CP Funding 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.
(g) Chief Executive Office. The chief executive office of CP Funding
----------------------
is located at 1325 Airmotive Way, Suite 130, Reno, Nevada 89502.
SECTION 3.3 Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
makes the following representations and warranties, on which Sellers rely 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 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
8
<PAGE>
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 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, Sellers covenant and agree that they will not take any
action to pursue any remedy that they 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. Sellers and Purchaser agree that damages will not be an adequate remedy
for such breach
9
<PAGE>
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 SELLERS
SECTION 4.1 Protection of Title of Purchaser.
----------- --------------------------------
(a) At or prior to the Closing Date, each Seller shall have filed or
caused to be filed a UCC-1 financing statement, executed by such 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 Texas and in such other locations as
Purchaser shall have required. At or prior to any Subsequent Transfer
Date, each Seller shall file or cause to be filed a UCC-1 financing
statement executed by such 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, Sellers 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. Sellers 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 either Seller fails to perform its obligations under this subsection,
Purchaser, Issuer or the Trust Collateral Agent may do so, at the expense
of such Seller.
(b) Sellers shall not change their name, identity, or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed by Sellers (or by Purchaser,
Issuer or the Trust Collateral Agent on behalf of Sellers) in accordance
with paragraph (a) above seriously misleading within the meaning of (S) 9-
402(7) of the UCC, unless they 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) Sellers 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 their principal executive offices, 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. AFS shall at all times maintain each office
from which it services Receivables and its principal executive office
within the United States of America.
10
<PAGE>
(d) Prior to the Closing Date and with respect to Subsequent
Receivables, the Subsequent Transfer Date, AFS 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 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. AFS 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, AFS'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 AFS'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 Sellers 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,
Sellers 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, Sellers 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 Sellers
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 Sellers.
SECTION 4.3 Costs and Expenses . Sellers 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) Sellers 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 Sellers'
representations and warranties contained herein.
(b) Sellers 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,
11
<PAGE>
losses, damages, claims, and liabilities, arising out of or resulting from
the use, ownership or operation by Sellers or any affiliate thereof of a
Financed Vehicle.
(c) Sellers 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) Sellers agree 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 Sellers 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 Sellers under this Agreement or imposed against such Persons.
(e) Sellers agree 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 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 Sellers under this Agreement or imposed against
such Persons.
(f) Sellers 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,
12
<PAGE>
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 Sellers in the performance
of their duties under this Agreement or by reason of reckless disregard of
Sellers' obligations and duties under this Agreement.
(g) Sellers 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
Sellers of federal or state securities laws in connection with the
registration or the sale of the Notes.
(h) Sellers 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) Sellers 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 Sellers' 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 and the Certificate. The indemnity obligations hereunder shall be in
addition to any obligation that Sellers may otherwise have.
ARTICLE V.
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty. Upon the
-------------------------------------------------
occurrence of a Repurchase Event, AFS 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, AFS 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 AFS to
repurchase any Receivable, as to which a breach occurred and is continuing,
shall, if such obligation is fulfilled, constitute the sole remedy against AFS
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
13
<PAGE>
Section 5.1 are intended to grant the Issuer and the Trust Collateral Agent a
direct right against AFS to demand performance hereunder, and in connection
therewith, AFS 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 AFS under this Section shall not
terminate upon a termination of AFS 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 AFS, AFS 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.
14
<PAGE>
SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit in the
-------------------------------------
Collection Account of the Purchase Amount of any Receivable repurchased by AFS
under Section 5.1 hereof, Purchaser and the Issuer shall take such steps as may
be reasonably requested by AFS in order to assign to AFS all of Purchaser's and
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 AFS 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 AFS,
take such steps as AFS 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 Sellers. Sellers shall be liable in accordance
--------------------
herewith only to the extent of the obligations in this Agreement specifically
undertaken by Sellers and the representations and warranties of Sellers.
SECTION 6.2 Merger or Consolidation of Sellers or Purchaser. Any
-----------------------------------------------
corporation or other entity (i) into which Sellers or Purchaser may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Sellers
or Purchaser is a party or (iii) succeeding to the business of Sellers 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 Sellers or Purchaser, as the case may be, under this Agreement and, whether
or not such assumption agreement is executed, shall be the successor to Sellers
or Purchaser, as the case may be, hereunder (without relieving Sellers or
Purchaser of their 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. Sellers or Purchaser shall promptly inform the
other party, the Issuer, the Trust 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
15
<PAGE>
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,
3.2 and 3.3 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) Sellers 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) Sellers
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 Sellers and Others. Sellers 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.
Sellers 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 Sellers May Own Notes or the Certificate. Subject to the
----------------------------------------
provisions of the Sale and Servicing Agreement, Sellers and any Affiliate of
Sellers may in their individual or any other capacity become the owner or
pledgee of Notes or the Certificate with the same rights as they would have if
they were not Sellers or an Affiliate thereof.
SECTION 5.5 Amendment.
---------
(a) This Agreement may be amended by Sellers 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 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 Sellers
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
16
<PAGE>
any manner the rights of the Certificateholder or Noteholders; provided,
--------
however, the Sellers provide the Trust Collateral Agent with an Opinion of
-------
Counsel, (which may be provided by the Sellers' 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, Sellers
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.
17
<PAGE>
SECTION 6.6 Notices. All demands, notices and communications to Sellers
-------
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 Sellers, to AmeriCredit Financial
Services, Inc., 200 Bailey Avenue, Fort Worth, Texas 76107-1220, Attention:
Chief Financial Officer, or (b) in the case of Purchaser, to AFS Funding Corp.,
1325 Airmotive Way, Reno, Nevada 89502, Attention: Chief Financial Officer, or
such other address as shall be 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 Sellers 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 Sellers to Purchaser, and that the Receivables and the Other
Conveyed Property shall not be a part of Sellers' estates 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 Sellers. 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 Sellers,
the parties intend that Sellers shall have granted to Purchaser a security
interest in all of Sellers' 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.
18
<PAGE>
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
----------------------------------------------------
Property to the Issuer. Sellers acknowledge 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. Sellers acknowledge and consent to such conveyance and pledge and
waive any further notice thereof and covenant and agree that the representations
and warranties of Sellers 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, Sellers covenant and agree to perform their
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, Sellers 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 Sellers under this Agreement against
Sellers 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 Sellers 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.
19
<PAGE>
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 /s/ Preston A. Miller
----------------------
Name: Preston A. Miller
Title: Senior Vice President and Treasurer
AMERICREDIT FINANCIAL SERVICES,
INC., as Seller
By /s/ Preston A. Miller
---------------------
Name: Preston A. Miller
Title: Senior Vice President and Treasurer
CP FUNDING CORP., as Seller
By /s/ Preston A. Miller
---------------------
Name: Preston A. Miller
Title: Senior Vice President and Treasurer
Accepted:
BANK ONE, NA,
as Trustee and Trust Collateral Agent
By /s/ John Rothrock
-----------------
Name: John Rothrock
Title: Authorized Signatory
[Purchase Agreement]
20
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES FROM AFS
21
<PAGE>
SCHEDULE B
SCHEDULE OF RECEIVABLES FROM CP FUNDING
22
<PAGE>
SCHEDULE C (TO THE PURCHASE AGREEMENT)
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
AMERICREDIT FINANCIAL SERVICES, INC. ("AMERICREDIT")
----------------------------------------------------
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 either (A)
to AFS Funding Corp. ("AFS Funding") or (B) to CP Funding Corp. ("CP Funding")
and by CP Funding to AFS Funding 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.
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
23
<PAGE>
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. Schedules of Receivables. The information set forth in the
------------------------
Schedules 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, AmeriCredit 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 AFS Funding by either AmeriCredit or
CP Funding and resold by the AFS Funding to the Trust in accordance with the
terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by AmeriCredit
-------------
to AFS Funding and 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
Schedules 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 either AmeriCredit or CP Funding 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.
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
24
<PAGE>
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 AFS Funding pursuant to this Agreement or Subsequent Purchase
Agreement, as applicable, either AmeriCredit or CP Funding 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 both AmeriCredit and CP Funding, AFS
Funding 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. Neither AmeriCredit nor CP Funding
has 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 either AmeriCredit or CP Funding 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 AmeriCredit 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, AmeriCredit has received written evidence
from the related Dealer that such Lien Certificate showing AmeriCredit as first
lienholder has been applied for and AmeriCredit's security interest has been
validly assigned by AmeriCredit either (A) to AFS Funding or (B) to CP Funding
and by CP Funding to AFS Funding pursuant to this Agreement. Immediately after
the sale, transfer and assignment thereof by either AmeriCredit or CP Funding to
AFS Funding, each Receivable will be secured by an enforceable and perfected
first priority security interest in the Financed Vehicle in favor of AFS Funding
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 AFS Funding 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. Neither AmeriCredit nor CP Funding have done
-------------
anything to convey any right to any Person that would result in such Person
having a right to payments due under the
25
<PAGE>
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 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 Schedules 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 72 months; (B) each Receivable had an original maturity of not more than 72
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 12.50% and not more than
33.00%; (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.
26
<PAGE>
Execution Copy
EXHIBIT 10.2
- ------------------------------------------------------------------------------
INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.,
AFS FUNDING CORP.
and
CREDIT SUISSE FIRST BOSTON CORPORATION
Dated as of May 11, 1998
$116,000,000 Class A-1 5.629% Asset Backed Notes
$174,000,000 Class A-2 Floating Rate Asset Backed Notes
$77,000,000 Class A-3 Floating Rate Asset Backed Notes
$108,000,000 Class A-4 6.06% Asset Backed Notes
$50,000,000 Class A-5 6.12% Asset Backed Notes
- ------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
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..................................................... 9
</TABLE>
EXHIBIT A -- Opinion of Assistant General Counsel
i
<PAGE>
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of May 11, 1998 among FINANCIAL SECURITY
ASSURANCE INC. ("Financial Security"), AFS FUNDING CORP., (the "Seller") and
------------------ ------
CREDIT SUISSE FIRST BOSTON CORPORATION, as the Representative (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 11, 1998 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
1
<PAGE>
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 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, collectively, the Prospectus relating to the Securities
----------
dated October 9, 1997 and the Prospectus Supplement dated May 19, 1998 (the
"Prospectus Supplement") relating to the Securities.
"Representative" means Credit Suisse First Boston Corporation as
--------------
representative of the Underwriters.
"Securities" means the Trust's $116,000,000 Class A-1 5.629% Asset Backed
----------
Notes, $174,000,000 Class A-2 Floating Rate Asset Backed Notes, $77,000,000
Class A-3 Floating Rate Asset Backed Notes, $108,000,000 Class A-4 6.06% Asset
Backed Notes and $50,000,000 Class A-5 6.12% Asset Backed Notes issued pursuant
to the (Series 1998-B Indenture).
"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, as amended
------------------------
and restated, dated as of May 11, 1998, 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" means the Series 1998-B Supplement to
-----------------------------------
Spread Account Agreement, dated as of May 11, 1998, among Financial Security,
AFS Funding Corp., the collateral agent named therein and the trustees specified
therein.
2
<PAGE>
"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 1998-B.
-----
"Underwriters" means Credit Suisse First Boston Corporation, BancAmerica
------------
Robertson Stephens and Chase Securities Inc., 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
----------------------
11, 1998 among the Seller, AmeriCredit Financial Services, Inc. and the
Underwriters.
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.
3
<PAGE>
(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).
(f) Financial Information. The consolidated balance sheets of
---------------------
Financial Security as of December 31, 1997 and December 31, 1996 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, 1998, 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 Supplement set forth under the caption "The Insurer" (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 Supplement 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
4
<PAGE>
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 Assistant General Counsel, to the effect set
forth in Exhibit A attached hereto, dated such closing date and addressed
to the Seller and the Underwriters.
(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 Ratings Services 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:
5
<PAGE>
"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."
(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 Prospectus Supplement, the Underwriter Information is limited to the
information set forth (i) in the sixth and seventh 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
6
<PAGE>
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 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
7
<PAGE>
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 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
8
<PAGE>
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.
If to Financial Security: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President -- Surveillance
Department (with a copy to the attention of the
General Counsel)
Re: AmeriCredit Automobile Receivables Trust
1998-B
Confirmation: (212) 826-0100
Telecopy Nos.: (212) 339-3518,
(212) 339-3529
If to the Seller: AFS Funding Corp.
1325 Airmotive Way
Reno, Nevada 89502
Attention: General Counsel
Confirmation:
Telecopy No.:
If to the Underwriters: Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Attention: Joseph D. Fashano
Confirmation:
Telecopy No.:
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9
<PAGE>
(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]
10
<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 /s/ Ray Galkowski
-----------------
Name: Ray Galkowski
-------------
Authorized Officer
AFS FUNDING CORP.
By /s/ Preston A. Miller
---------------------
Name: Preston A. Miller
-----------------
Title: Senior Vice President and Treasurer
-----------------------------------
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ Erik A. Falk
----------------
Name: Erik A. Falk
------------
Title: Vice President
--------------
11
<PAGE>
EXHIBIT A
OPINION OF ASSISTANT 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, 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, 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 "The Insurer" in the Prospectus (the
"Offering Document") of the Seller with
- ------------------
12
<PAGE>
respect to the Securities. The information provided 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).
13
<PAGE>
EXHIBIT 23.1
CONSENT of INDEPENDENT ACCOUNTANTS
_______
We consent to the incorporation by reference in the Prospectus Supplement of AFS
Funding Corp. dated May 19, 1998 relating to the AmeriCredit Automobile
Receivables trust 1998-B of our report dated January 26, 1998, on our audits of
the consolidated financial statements of Financial Security Assurance Inc. and
Subsidiaries as of December 31, 1997 and 1996, and for each of the three years
in the period ended December 31, 1997. We also consent to the reference to our
Firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
New York, New York
June 3, 1998
<PAGE>
EXHIBIT 99.1
Composition of the Receivables
1998-B
<TABLE>
<CAPTION>
New Used Total
-------------- --------------- ---------------
<S> <C> <C> <C>
Aggregate Principal Balance(1) $67,609,934.61 $357,388,492.72 $424,998,427.33
Number of Receivables in Pool 4,518 30,388 34,906
Percent of Pool by Principal Balance 15.91% 84.09%
Average Principal Balance $14,964.57 $11,760.84 $12,175.51
Range of Principal Balances ($391.12 to $29,805.17) ($279.10 to $29,932.02)
Weighted Average APR (1) 17.10% 19.16% 18.83%
Range of APRs (12.00% to 26.00%) (12.00% to 29.99%)
Weighted Average Remaining Term 58 55 55
Range of Remaining Terms (4 to 72 months) (3 to 72 months)
Weighted Average Original Term 60 56 57
Range of Original Terms (18 to 72 months) (12 to 72 months)
</TABLE>
- --------------------------------------------------------------------------------
(1) Aggregate Principal Balance includes some portion of accrued interest.
As a result, the Weighted Average APR of the Receivables may not be
equivalent to the Contracts' aggregate yield on the Aggregate Principal
Balance.
Distribution of the Receivables by APR as of the Cutoff Date
<TABLE>
<CAPTION>
Aggregate Principal
Balance as of Cutoff Percent of Aggregate Number of Percent of Number of
APR Range (1) Date Principal Balance (2) Receivables Receivables (2)
- --------------------- ----------------- ---------------------- ----------- -------------------
<S> <C> <C> <C> <C>
12.000% to 12.999% $25,750,922 6.06% 1,674 4.80%
13.000% to 13.999% 11,553,115 2.72% 730 2.09%
14.000% to 14.999% 10,332,130 2.43% 660 1.89%
15.000% to 15.999% 21,955,446 5.17% 1,436 4.11%
16.000% to 16.999% 21,778,317 5.12% 1,504 4.31%
17.000% to 17.999% 39,133,376 9.21% 2,913 8.35%
18.000% to 18.999% 82,752,047 19.47% 6,702 19.20%
19.000% to 19.999% 40,068,374 9.43% 3,227 9.24%
20.000% to 20.999% 48,180,040 11.34% 4,084 11.70%
21.000% to 21.999% 70,510,718 16.59% 6,628 18.99%
22.000% to 22.999% 22,582,011 5.31% 2,171 6.22%
23.000% to 23.999% 17,847,550 4.20% 1,757 5.03%
24.000% to 24.999% 7,860,695 1.85% 806 2.31%
25.000% to 25.999% 3,601,164 0.85% 451 1.29%
26.000% to 26.999% 746,309 0.18% 114 0.33%
27.000% to 27.999% 146,103 0.03% 19 0.05%
28.000% to 28.999% 35,436 0.01% 6 0.02%
29.000% to 29.999% 164,676 0.04% 24 0.07%
------------ ------- ------ -------
TOTAL $424,998,427 100.00% 34,906 100.00%
============ ======= ====== =======
</TABLE>
- --------------------------------------------------------------------------
(1) Aggregate Principal Balances include some portion of accrued interest.
Indicated APR's represent APR's on Principal Balance net
of such accrued interest.
(2) Percentages may not add to 100% because of rounding.
<PAGE>
Distribution of the Receivables by Geographic Location of Obligor
1998-B
<TABLE>
<CAPTION>
Aggregate Principal
Balance as of Cutoff Percent of Aggregate Number of Percent of Number of
State Date Principal Balance (1) Receivables Receivables (1)
- --------------------- -------------------- --------------------- ----------- ---------------------
<S> <C> <C> <C> <C>
California $55,666,977.36 13.10% 4,289 12.29%
Texas 42,950,284.30 10.11% 3,621 10.37%
Florida 25,969,916.72 6.11% 2,111 6.05%
Illinois 22,909,749.78 5.39% 1,831 5.25%
New York 22,272,965.95 5.24% 1,754 5.02%
Pennsylvania 21,122,757.27 4.97% 1,756 5.03%
Ohio 20,492,356.75 4.82% 1,724 4.94%
Virginia 18,828,529.42 4.43% 1,465 4.20%
Arizona 17,550,828.65 4.13% 1,482 4.25%
New Jersey 16,229,011.21 3.82% 1,329 3.81%
Georgia 15,193,994.81 3.58% 1,168 3.35%
Michigan 15,047,629.37 3.54% 1,266 3.63%
North Carolina 12,827,616.71 3.02% 1,039 2.98%
Washington 11,261,269.98 2.65% 969 2.78%
Massachusetts 9,530,362.19 2.24% 729 2.09%
Tennessee 9,016,167.50 2.12% 707 2.03%
Missouri 8,118,675.12 1.91% 751 2.15%
Kentucky 7,433,673.59 1.75% 625 1.79%
Nevada 7,370,321.12 1.73% 620 1.78%
Minnesota 6,599,851.03 1.55% 528 1.51%
Colorado 5,814,723.67 1.37% 578 1.66%
Maryland 5,185,084.18 1.22% 492 1.41%
South Carolina 5,156,182.50 1.21% 403 1.15%
Oklahoma 4,689,924.12 1.10% 438 1.25%
Indiana 4,216,516.06 0.99% 396 1.13%
Utah 4,122,492.78 0.97% 357 1.02%
Connecticut 3,929,192.28 0.92% 325 0.93%
Wisconsin 3,711,062.09 0.87% 310 0.89%
Oregon 3,508,511.23 0.83% 298 0.85%
Kansas 3,383,169.10 0.80% 288 0.83%
New Mexico 2,418,462.89 0.57% 192 0.55%
Mississippi 2,125,909.13 0.50% 158 0.45%
Other (2) 10,344,258.47 2.43% 907 2.60%
TOTAL $424,998,427.33 100.00% 34,906 100.00%
</TABLE>
- -------------------------------------------------------------------------------
(1) Percentages may not add to 100% because of rounding.
(2) States with principal balances less than $2,000,000.
