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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _______________________
Commission file number 1-10667
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AmeriCredit Corp.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-2291093
------------------------------- ---------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 Bailey Avenue, Fort Worth, Texas 76107
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(Address of principal executive offices)
(Zip Code)
(817) 332-7000
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(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
There were 29,107,032 shares of common stock, $.01 par value outstanding as of
January 31, 1997.
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AMERICREDIT CORP.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
----
Consolidated Balance Sheets -
December 31, 1996 and June 30, 1996 ...................... 3
Consolidated Income Statements -
Three Months and Six Months Ended
December 31, 1996 and 1995 ............................... 4
Consolidated Statements of Cash Flows -
Six Months Ended December 31, 1996 and 1995 .............. 5
Notes to Consolidated Financial
Statements ............................................... 6
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations ............................. 12
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote
of Security Holders ................................... 26
Item 6. Exhibits and Reports on Form 8-K ...................... 26
SIGNATURE .......................................................... 29
2
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PART I - FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
AMERICREDIT CORP.
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
December 31, June 30,
ASSETS 1996 1996
------------ --------
Cash and cash equivalents $ 5,091 $ 2,145
Investment securities 6,503 6,558
Finance receivables, net 227,800 250,484
Excess servicing receivable 59,780 33,093
Restricted cash 46,327 15,304
Property and equipment, net 9,818 7,670
Deferred income taxes 287 9,995
Goodwill 7,305
Other assets 6,971 4,910
-------- --------
Total assets $369,882 $330,159
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Bank line of credit $114,900 $ 86,000
Mortgage warehouse facility 3,573
Automobile receivables-backed notes 40,543 67,847
Notes payable 1,520 418
Accrued taxes and expenses 22,064 12,669
-------- --------
Total liabilities 182,600 166,934
-------- --------
Shareholders' equity:
Common stock, $.01 par value
per share; 120,000,000 shares
authorized; 33,372,236 and
32,640,963 shares issued 336 326
Additional paid-in capital 201,169 190,005
Retained earnings (deficit) 12,037 (5,233)
-------- --------
213,542 185,098
Treasury stock, at cost
(4,435,683 and 4,120,483 shares) (26,260) (21,873)
-------- --------
Total shareholders' equity 187,282 163,225
-------- --------
Total liabilities and shareholders'
equity $369,882 $330,159
-------- --------
-------- --------
The accompanying notes are an integral part
of these consolidated financial statements
3
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AMERICREDIT CORP.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
December 31, December 31,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenue:
Finance charge income $10,739 $13,852 $21,503 $27,229
Gain on sale of receivables 15,561 5,621 28,151 5,621
Servicing fee income 4,599 215 8,242 215
Investment income 684 275 1,152 556
Other income 292 298 622 563
---------- ---------- ---------- ----------
31,875 20,261 59,670 34,184
---------- ---------- ---------- ----------
Costs and expenses:
Operating expenses 11,920 5,538 21,747 10,442
Provision for losses 1,614 2,145 3,231 4,112
Interest expense 3,386 3,748 6,612 6,862
---------- ---------- ---------- ----------
16,920 11,431 31,590 21,416
---------- ---------- ---------- ----------
Income before income taxes 14,955 8,830 28,080 12,768
Provision for income taxes 5,757 3,244 10,810 4,662
---------- ---------- ---------- ----------
Net income $ 9,198 $ 5,586 $17,270 $ 8,106
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share $ .30 $ .18 $ .57 $ .26
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average shares
and share equivalents 30,678,189 31,120,461 30,420,676 31,130,423
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
The accompanying notes are an integral part
of these consolidated financial statements
4
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AMERICREDIT CORP.
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Six Months Ended
December 31,
-----------------------
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 17,270 $ 8,106
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 904 778
Provision for losses 3,231 4,112
Deferred income taxes 10,682 4,126
Gain on sale of receivables (27,851) (5,621)
Amortization of excess servicing receivable 12,117
Changes in assets and liabilities:
Other assets (2,134) (1,068)
Accrued taxes and expenses 9,195 713
--------- ---------
Net cash provided by operating
activities 23,414 11,146
--------- ---------
Cash flows from investing activities:
Purchases and originations of auto
receivables (354,448) (155,427)
Purchases and originations of
mortgage receivables (7,748)
Principal collections and recoveries on
auto receivables 36,147 51,748
Net proceeds from sale of auto receivables 332,982 64,556
Net proceeds from sale of mortgage receivables 4,839
Purchases of property and equipment (1,641) (1,266)
Proceeds from disposition of property and
equipment 17 4
Proceeds from maturities of investment
securities 55 2,987
Increase in restricted cash (31,023) (2,373)
--------- ---------
Net cash used by investing activities (20,820) (39,771)
--------- ---------
Cash flows from financing activities:
Borrowings on bank line of credit 304,400 116,500
Payments on bank line of credit (275,500) (61,900)
Net increase in mortgage warehouse facility 264
Payments on automobile
receivables-backed notes (27,304) (35,159)
Payments on notes payable (221) (146)
Purchase of treasury stock (4,387) (8,059)
Proceeds from issuance of common stock 3,100 1,539
--------- ---------
Net cash provided by financing activities 352 12,775
--------- ---------
Net increase (decrease) in cash and cash
equivalents 2,946 (15,850)
Cash and cash equivalents at beginning of period 2,145 18,314
--------- ---------
Cash and cash equivalents at end of period $ 5,091 $ 2,464
--------- ---------
--------- ---------
The accompanying notes are an integral part
of these consolidated financial statements
5
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AMERICREDIT CORP.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
AmeriCredit Corp. and its wholly-owned subsidiaries ("the Company"). All
significant intercompany accounts and transactions have been eliminated in
consolidation.
The consolidated financial statements as of December 31, 1996 and for the
periods ended December 31, 1996 and 1995 are unaudited, but in management's
opinion, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for such interim
periods. The results for interim periods are not necessarily indicative of
results for a full year.
The interim period financial statements, including the notes thereto, are
condensed and do not include all disclosures required by generally accepted
accounting principles. Such interim period financial statements should be read
in conjunction with the Company's consolidated financial statements which were
included in the Company's 1996 Annual Report to Shareholders.
NOTE 2 - FINANCE RECEIVABLES
Finance receivables consist of the following (in thousands):
December 31, June 30,
1996 1996
---- ----
Auto receivables $233,792 $264,086
Less allowance for losses (12,173) (13,602)
-------- --------
221,619 250,484
Mortgage receivables 6,181
-------- --------
Finance receivables, net $227,800 $250,484
-------- --------
-------- --------
6
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A summary of the allowance for losses is as follows (in thousands):
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
Balance at beginning of period $12,598 $22,174 $13,602 $19,951
Provision for losses 1,614 2,145 3,231 4,112
Acquisition fees 6,237 3,670 12,809 7,555
Allowance related to receivables
sold (3,962) (4,225) (8,404) (4,225)
Net charge-offs-auto receivables (4,314) (4,588) (9,065) (8,181)
Net charge-offs-other (204) (240)
------- ------- ------- -------
Balance at end of period $12,173 $18,972 $12,173 $18,972
------- ------- ------- -------
------- ------- ------- -------
NOTE 3 - EXCESS SERVICING RECEIVABLE
As of December 31, 1996 and June 30, 1996, the Company was servicing
$527,924,000 and $259,895,000, respectively, of automobile sales finance
contracts which have been sold to certain special purpose financing trusts (the
"Trusts").
Excess servicing receivable consists of the following (in thousands):
December 31, June 30,
1996 1996
------------ --------
Estimated future net cash flows before
allowance for credit losses $116,037 $ 63,457
Allowance for credit losses (49,313) (25,616)
-------- --------
Estimated future net cash flows 66,724 37,841
Unamortized discount at 12% (6,944) (4,748)
-------- --------
$ 59,780 $ 33,093
-------- --------
-------- --------
7
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A summary of excess servicing receivable is as follows (in thousands):
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
Balance at beginning of period $42,656 $ 0 $ 33,093 $ 0
Excess servicing related to
receivables sold 23,748 9,243 38,804 9,243
Amortization (6,624) 0 (12,117) 0
------- ------ -------- -------
Balance at end of period $59,780 $9,243 $ 59,780 $ 9,243
------- ------ -------- -------
------- ------ -------- -------
NOTE 4 - ACQUISITION
In November 1996, the Company acquired Rancho Vista Mortgage Corporation
("RVMC"), a California corporation, which originates and sells home equity
mortgage loans in 17 states. The purchase price of $7,100,000 consisted of
400,000 shares of common stock. The acquisition has been accounted for as a
purchase and the excess of the purchase price over net assets acquired was
assigned to goodwill. The results of operations of RVMC have been included in
the consolidated financial statements since the acquisition date. In January
1997, RVMC changed its name to Americredit Corporation of California and now
operates under the name AmeriCredit Mortgage Services.
NOTE 5 - DEBT
The Company has a revolving credit agreement with a group of banks under which
the Company may borrow up to $240 million, subject to a defined borrowing base.
Aggregate borrowings of $114,900,000 and $86,000,000 were outstanding as of
December 31, 1996 and June 30, 1996, respectively. Borrowings under the credit
agreement are collateralized by certain auto receivables and bear interest,
based upon the Company's option, at either the prime rate (8.25% as of December
31, 1996) or various market London Interbank Offered Rates ("LIBOR") plus
1.25%. The Company is also required to pay an annual commitment fee equal to
1/4% of the unused portion of the credit agreement. The credit agreement,
which expires in October 1997, contains various restrictive covenants requiring
certain minimum financial ratios and results and placing certain limitations on
the incurrence of additional debt, capital expenditures, cash dividends and
repurchase of common stock.
8
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On February 4, 1997, the Company completed a private placement of $125 million
of 9 1/4% Senior Notes due 2004. Interest on the notes is payable semi-
annually, commencing in August 1997. The notes, which are unsecured, may be
redeemed at the option of the Company after February 2001 at a premium
declining to par in February 2003. The Indenture pursuant to which the notes
were issued contains restrictions including limitations on the Company's
ability to incur additional indebtedness other than certain secured
indebtedness, pay cash dividends and repurchase common stock.
On February 6, 1997, the Company entered into a mortgage warehouse facility
with a bank under which the Company may borrow up to $75 million, subject to a
defined borrowing base. Borrowings under the facility will be collateralized
by certain mortgage receivables and will bear interest, based upon the
Company's option, at either the prime rate or various market London Interbank
Offered Rates ("LIBOR") plus 1.25%. The Company is also required to pay an
annual commitment fee equal to 1/8% of the unused portion of the facility. The
facility expires in February 1998.
9
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Automobile receivables-backed notes consist of the following (in thousands):
December 31, June 30,
1996 1996
------------ --------
Series 1994-A notes, interest at 8.19%,
collateralized by certain auto
receivables in the principal amount
of $7,605, final maturity in
December 1999. $ 6,833 $13,671
Series 1995-A notes, interest at 6.55%,
collateralized by certain auto
receivables in the principal
amount of $36,642, final maturity
in September 2000. 33,710 54,176
------- -------
$40,543 $67,847
------- -------
------- -------
NOTE 6 - INCOME TAXES
The Company's effective income tax rate on income before income taxes differs
from the U.S. statutory tax rate as follows:
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1996 1995 1996 1995
----- ----- ----- -----
U.S. statutory tax rate 35.0% 35.0% 35.0% 35.0%
Other 3.5 1.7 3.5 1.5
---- ---- ---- ----
38.5% 36.7% 38.5% 36.5%
---- ---- ---- ----
---- ---- ---- ----
10
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NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest costs and income taxes consist of the following (in
thousands):
Six Months Ended
December 31,
--------------------
1996 1995
------ ------
Interest costs (none capitalized) $6,456 $6,369
Income taxes 228 898
During the six months ended December 31, 1996, the Company entered into capital
lease obligations of $1,258,000 for the purchase of certain equipment.
11
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company generates earnings and cash flow primarily through the purchase,
retention, securitization and servicing of automobile receivables. The Company
purchases contracts from franchised and select independent dealerships. To
fund the acquisition of receivables prior to securitization, the Company
utilizes borrowings under its bank line of credit. The Company generates
finance charge income on its owned receivables pending securitization and pays
interest expense on borrowings under its bank line of credit.
The Company sells receivables to securitization trusts ("Trusts") or special
purpose finance subsidiaries that, in turn sell asset-backed securities to
investors. By securitizing these receivables, the Company is able to lock in
the gross interest rate spread between the yield on such receivables and the
interest rate paid on the asset-backed securities. The Company recognizes a
gain on the sale of the receivables to the Trusts which represents the
difference between the sale proceeds to the Company, net of transaction costs,
and the Company's net carrying value of the receivables, plus the present
value of the estimated future excess cash flows to be received by the Company
over the life of the securitization. Monthly excess cash flow distributions
are received from the Trusts resulting from the difference between the interest
received from the obligors on the receivables and the interest paid to
investors in the asset-backed securities, net of losses and expenses.
The Company typically begins to receive excess cash flow distributions
approximately five to seven months after the receivables are securitized,
although these time periods may be shorter or longer depending upon the
structure of the securitization. Prior to such time as the Company begins to
receive excess cash flow, excess cash flow is utilized to fund credit
enhancement requirements to secure financial guaranty insurance policies
issued by an insurance company to protect investors in the asset-backed
securities from losses. Once predetermined credit enhancement requirements are
reached and maintained, excess cash flow is distributed to the Company. In
addition to excess cash flow, the Company earns base servicing fees of between
2.25% and 2.50% per annum of the outstanding principal balance of receivables
securitized.
In November 1996, the Company acquired Rancho Vista Mortgage Company ("RVMC"),
which originates and sells home equity mortgage loans in 17 states. The name
of RVMC has been changed to Americredit Corporation of California. The
12
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acquisition has been accounted for as a purchase and the results of operations
for RVMC have been included in the consolidated financial statements since the
acquisition date. Receivables originated in this business are referred to as
mortgage receivables. Such receivables are generally packaged and sold to
investors for cash on a servicing released, whole-loan basis. The Company
recognizes a gain at the time of sale.
While the Company has been primarily involved in the above activities since
September 1992, the Company had previously operated in other businesses. For
purposes of the following discussion, receivables originated in businesses
previously operated by the Company are referred to as other receivables and
revenue earned therein is referred to as other finance charge income.
13
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RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1996 AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1995
REVENUE:
The Company's average managed receivables outstanding consisted of the
following (in thousands):
Three Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto:
Owned $215,644 $277,222
Serviced 486,087 34,836
-------- --------
701,731 312,058
Mortgage 4,753
Other 533
-------- --------
$706,484 $312,591
-------- --------
-------- --------
Average managed receivables outstanding increased by 126% as a result of higher
loan purchase volume. The Company purchased $183.5 million of auto loans during
the three months ended December 31, 1996, compared to purchases of $86.6 million
during the three months ended December 31, 1995. This growth resulted from loan
production at branches open during both periods as well as expansion of the
Company's loan production capacity. The Company operated 66 auto lending branch
offices as of December 31, 1996, compared to 42 as of December 31, 1995.
The Company purchased $7.7 million of mortgage loans from the date of
acquisition of RVMC through December 31, 1996.
14
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The Company's finance charge income consisted of the following (in thousands):
Three Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto $ 10,708 $ 13,846
Mortgage 31
Other 6
-------- --------
$ 10,739 $ 13,852
-------- --------
-------- --------
The decrease in finance charge income is due to a reduction of 22% in average
auto receivables outstanding for the three months ended December 31, 1996
versus the three months ended December 31, 1995. Prior to December 1995, all
of the auto finance contracts purchased by the Company were held as owned auto
receivables on the Company's consolidated balance sheets. The Company began
selling finance receivables to the Trusts in December 1995, reducing average
owned receivables with corresponding increases in average serviced receivables.
The Company's effective yield on its owned auto receivables decreased to 19.7%
from 19.8%.
The gain on sale of receivables consists of the following (in thousands):
Three Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto $15,261 $ 5,621
Mortgage 300
------- -------
$15,561 $ 5,621
------- -------
------- -------
The increase in gain on sale of auto receivables resulted from the sale of
$190.4 million of receivables in the three months ended December 31, 1996 as
compared to $65.0 million of receivables sold in the three months ended
December 31, 1995. The gains amounted to 8.0% and 8.6% of the sales proceeds
for the three months ended December 31, 1996 and 1995, respectively.
The gain on sale of mortgage receivables resulted from the sale of $4.8 million
of mortgage receivables.
15
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Servicing fee income increased to $4,599,000, or 3.8% of average serviced
receivables, for the three months ended December 31, 1996 as compared to
$215,000, or 2.4% of average serviced receivables, for the three months ended
December 31, 1995. Servicing fee income represents net excess servicing fees,
base servicing fees and other fees earned by the Company as servicer of the
auto receivables sold to the Trusts. The growth in servicing fee income is
primarily due to the increase in average serviced auto receivables for the
three months ended December 31, 1996 compared to the three months ended
December 31, 1995.
COSTS AND EXPENSES:
Operating expenses as an annualized percentage of average managed receivables
outstanding decreased to 6.7% (6.5% excluding operating expenses of $350,000
related to the mortgage business) for the three months ended December 31, 1996
as compared to 7.0% for the three months ended December 31, 1995. The ratio
improved as a result of economies of scale realized from a growing receivables
portfolio and automation of loan origination, processing and servicing
functions. The dollar amount of operating expenses increased by $6.4 million,
or 115%, primarily due to the addition of auto lending branch offices and
management, auto loan processing and servicing staff and the recently acquired
mortgage business.
The provision for losses decreased to $1.6 million for the three months ended
December 31, 1996 as compared to $2.1 million for the three months ended
December 31, 1995. Further discussion concerning the provision for losses is
included under the caption, "Finance Receivables".
Interest expense decreased to $3.4 million for the three months ended December
31, 1996 from $3.7 million for the three months ended December 31, 1995 due to
lower debt levels and effective rates of interest. Average debt outstanding
was $169.3 million and $171.3 million for the three months ended December 31,
1996 and 1995, respectively. The Company's effective rate of interest paid on
its debt decreased to 7.9% from 8.7%.
The Company's effective income tax rate increased to 38.5% for the three months
ended December 31, 1996 from 36.7% for the three months ended December 31, 1995
due to a larger portion of the Company's income being generated in states which
have higher tax rates.
16
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SIX MONTHS ENDED DECEMBER 31, 1996 AS COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 1995
Revenue:
The Company's average managed receivables outstanding consisted of the
following (in thousands):
Six Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto:
Owned $217,156 $268,571
Serviced 424,366 19,906
-------- --------
641,522 288,477
Mortgage 4,753
Other 774
-------- --------
$646,275 $289,251
-------- --------
-------- --------
Average managed receivables outstanding increased by 123% as a result of higher
loan purchase volume. The Company purchased $359.4 million of auto loans during
the six months ended December 31, 1996, compared to purchases of $161.3 million
during the six months ended December 31, 1995. This growth resulted from loan
production at branches open during both periods as well as expansion of the
Company's loan production capacity. The Company operated 66 auto lending
branch offices as of December 31, 1996, compared to 42 as of December 31, 1995.
The Company purchased $7.7 million of mortgage loans from the date of
acquisition of RVMC through December 31, 1996.
The Company's finance charge income consisted of the following (in thousands):
Six Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto $ 21,472 $ 27,208
Mortgage 31
Other 21
-------- --------
$ 21,503 $ 27,229
-------- --------
-------- --------
17
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The decrease in finance charge income is due to a reduction of 19% in average
owned auto receivables outstanding for the six months ended December 31, 1996
versus the six months ended December 31, 1995. Prior to December 1995, all of
the auto finance contracts purchased by the Company were held as owned auto
receivables on the Company's consolidated balance sheets. The Company began
selling auto receivables to the Trusts in December 1995, reducing average owned
receivables with corresponding increases in average serviced receivables.
The Company's effective yield on its owned auto finance receivables decreased
to 19.6% from 20.1%.
The gain on sale of receivables consists of the following (in thousands):
Six Months Ended
December 31,
--------------------
1996 1995
---- ----
Auto $27,851 $ 5,621
Mortgage 300
------- -------
$28,151 $ 5,621
------- -------
------- -------
The increase in gain on sale of auto receivables resulted from the sale of
$345.6 million of receivables in the six months ended December 31, 1996 as
compared to $65.0 million of receivables sold in the six months ended December
31, 1995. The gains amounted to 8.1% and 8.6% of the sales proceeds for the
six months ended December 31, 1996 and 1995, respectively.
The gain on sale of mortgage receivables resulted from the sale of $4.8 million
of mortgage receivables.
Servicing fee income increased to $8.2 million, or 3.9% of average serviced
receivables, for the six months ended December 31, 1996 as compared to
$215,000, or 2.4% of average serviced receivables, for the six months ended
December 31, 1995. Servicing fee income represents net excess servicing fees,
base servicing fees and other fees earned by the Company as servicer of the
auto receivables sold to the Trusts. The growth in servicing fee income is
primarily due to the increase in average serviced auto receivables for the six
months ended December 31, 1996 compared to the six months ended December 31,
1995.
COSTS AND EXPENSES:
18
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Operating expenses as an annualized percentage of average managed receivables
outstanding decreased to 6.7% (6.6% excluding operating expenses of $350,000
related to the mortgage business) for the six months ended December 31, 1996 as
compared to 7.2% for the six months ended December 31, 1995. The ratio improved
as a result of economies of scale realized from a growing receivables portfolio
and automation of loan origination, processing and servicing functions. The
dollar amount of operating expenses increased by $11.3 million, or 108%,
primarily due to the addition of auto lending branch offices and management,
auto loan processing and servicing staff and the recently acquired mortgage
business.
The provision for losses decreased to $3.2 million for the six months ended
December 31, 1996 as compared to $4.1 million for the six months ended December
31, 1995. Further discussion concerning the provision for losses is included
under the caption, "Finance Receivables".
Interest expense decreased to $6.6 million for the six months ended December
31, 1996 from $6.9 million for the six months ended December 31, 1995 due to
lower effective rates of interest. Average debt outstanding was $165.7 million
and $158.2 million for the six months ended December 31, 1996 and 1995,
respectively. The Company's effective rate of interest paid on its debt
decreased to 7.9% from 8.6%.
The Company's effective income tax rate increased to 38.5% for the six months
ended December 31, 1996 from 36.5% for the six months ended December 31, 1995
due to a larger portion of the Company's income being generated in states which
have higher tax rates.
FINANCE RECEIVABLES
The Company provides financing in relatively high-risk markets, and therefore,
charge-offs are anticipated. The Company records a periodic provision for
losses as a charge to operations and a related allowance for losses in the
consolidated balance sheets as a reserve against estimated future losses in the
owned auto receivables portfolio. The Company typically purchases individual
automobile finance contracts for a non-refundable acquisition fee on a non-
recourse basis. Such acquisition fees are also recorded in the consolidated
balance sheets as an allowance for losses. The calculation of excess servicing
receivable includes an allowance for estimated future losses over the remaining
term of the auto receivables sold to the Trusts and serviced by the Company.
19
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The Company sells the mortgage receivables for cash on a servicing released,
whole-loan basis. Such receivables are generally held by the Company for less
than 90 days. Accordingly, no allowance for losses is provided by the Company
for the mortgage receivables.
The Company reviews static pool origination and charge-off relationships,
charge-off experience factors, collections information, delinquency reports,
estimates of the value of the underlying collateral, economic conditions and
trends and other information in order to make the necessary judgments as to the
appropriateness of the periodic provision for losses and the allowance for
losses. Although the Company uses many resources to assess the adequacy of the
allowance for losses, there is no precise method for accurately estimating the
ultimate losses in the receivables portfolio.
The following table presents certain data related to the receivables portfolio
(dollars in thousands):
<TABLE>
December 31,
1996
-------------------------------------------
Balance
Auto Sheet Auto Total
Owned Mortgage Total Serviced Portfolio
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Principal amount of receivables $233,792 $ 6,181 $239,973 $527,924 $767,897
-------- --------
-------- --------
Allowance for losses (12,173) (12,173) $(49,313)(1) $(61,486)
-------- ------- -------- -------- --------
-------- --------
Finance receivables, net $221,619 $ 6,181 $227,800
-------- ------- --------
-------- ------- --------
Number of outstanding contracts 25,015 65 55,324 80,339 (2)
-------- ------- -------- --------
-------- ------- -------- --------
Average amount of outstanding
contract (principal amount)
(in dollars) $ 9,346 $95,092 $ 9,542 $ 9,481 (2)
-------- ------- -------- --------
-------- ------- -------- --------
Allowance for losses as a percentage
of receivables 5.2% 9.3% 8.1%(2)
-------- -------- --------
-------- -------- --------
</TABLE>
(1) The allowance for losses related to serviced auto receivables is netted
against excess servicing receivable in the Company's consolidated balance
sheets.
(2) Includes auto receivables only.
20
<PAGE>
The following is a summary of managed auto receivables which are more than 60
days delinquent (dollars in thousands):
December 31,
--------------------
1996 1995
------- -------
Delinquent contracts $28,251 $12,625
Delinquent contracts as a percentage
of managed auto receivables 3.7% 3.7%
The following table presents charge-off data with respect to the Company's
managed auto receivables portfolio (dollars in thousands):
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ------------------
1996 1995 1996 1995
------ ------ ------ ------
Net charge-offs:
Owned $4,314 $4,588 $ 9,065 $8,181
Serviced 5,397 34 8,684 34
------ ------ ------- ------
$9,711 $4,622 $17,749 $8,215
------ ------ ------- ------
------ ------ ------- ------
Net charge-offs as an
annualized percentage of
average managed auto
receivables outstanding 5.5% 5.9% 5.5% 5.7%
------ ------ ------- ------
------ ------ ------- ------
The Company recorded periodic provisions for losses as charges to operations of
$1.6 million and $2.1 million for the three months ended December 31, 1996 and
1995, respectively, and $3.2 million and $4.1 million for the six months ended
December 31, 1996 and 1995, respectively. The decreased loss provisions are a
result of lower average owned auto receivables outstanding for the periods
ended December 31, 1996 versus the periods ended December 31, 1995.
The Company began its automobile finance business in September 1992 and the
Company has grown its managed auto receivables portfolio to $761.7 million as
of December 31, 1996. The Company expects that its delinquency and charge-offs
will increase over time as the portfolio matures and its receivables growth
rate moderates. Accordingly, the delinquency and charge-off data above is not
necessarily indicative of delinquency and charge-off experience that could be
expected for a more seasoned portfolio.
21
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows are summarized as follows (in thousands):
Six Months Ended
December 31,
----------------------
1996 1995
------- --------
Operating activities $ 23,414 $ 11,146
Investing activities (20,820) (39,771)
Financing activities 352 12,775
-------- --------
Net increase (decrease) in
cash and cash equivalents $ 2,946 ($15,850)
-------- --------
-------- --------
In addition to the net change in cash and cash equivalents shown above, the
Company also had net decreases in investment securities of $55,000 and
$2,987,000 for the six months ended December 31, 1996 and 1995, respectively.
Such amounts are included as investing activities in the above table.
The Company's primary sources of cash have been collections and recoveries on
its finance receivables portfolio, borrowings under its bank line of credit,
the issuance of automobile receivables-backed securities and excess cash flow
distributions from the Trusts.
The Company's bank line of credit arrangement with a group of banks provides
for borrowings up to $240 million, subject to a defined borrowing base. The
facility matures in October 1997. The Company utilizes the line of credit to
fund its daily auto lending activities and operations. A total of $114.9
million was outstanding under the line of credit as of December 31, 1996.
On February 4, 1997, the Company completed a private placement of $125 million
of 9 1/4% Senior notes due 2004. Interest on the notes is payable semi-
annually, commencing in August 1997. The notes, which are unsecured, may be
redeemed at the option of the Company after February 2001 at a premium
declining to par in February 2003. The net proceeds from the offering were
used to pay down outstanding borrowings under the bank line of credit.
On February 6, 1997, the Company entered into a mortgage warehouse facility
with a bank under which the Company may borrow up to $75 million, subject to a
defined borrowing base. Borrowings under the facility will be collateralized
by certain mortgage receivables and will bear interest, based upon the
Company's option, at either the prime rate or various market London Interbank
Offered Rates ("LIBOR") plus 1.25%. The Company is also required to pay an
22
<PAGE>
annual commitment fee equal to 1/8% of the unused portion of the facility. The
facility expires in February 1998.
In November 1996, the Company completed its seventh securitization transaction
with the issuance of $200 million of automobile receivables-backed securities
through the AmeriCredit Automobile Receivables Trust 1996-D. The proceeds from
the transaction were used to repay a portion of the borrowings then outstanding
under the Company's bank line of credit.
The Company's primary use of cash has been purchases and originations of auto
receivables. The Company purchased $359.4 million of auto finance contracts
during the six months ended December 31, 1996 requiring cash of $354.4 million,
net of acquisition fees and other factors. The Company operated 66 auto
lending branch offices and had a number of marketing representatives as of
December 31, 1996. The Company plans to open fifteen additional branches in the
remainder of fiscal 1997. The Company may also expand loan production capacity
at existing offices where appropriate. While the Company has been able to
establish and grow its automobile finance business thus far, there can be no
assurance that future expansion will be successful due to competitive,
regulatory, market, economic or other factors.
The Company's Board of Directors has authorized the repurchase of up to
6,000,000 shares of the Company's common stock. A total of 4,594,700 shares at
an aggregate purchase price of $27.3 million had been purchased pursuant to
this program through December 31, 1996. Certain restrictions contained in the
Indenture pursuant to which the 9 1/4% Senior Notes were issued prevent the
Company from repurchasing additional common stock for the remainder of fiscal
1997 and limit the amount of common stock which may be repurchased thereafter.
As of December 31, 1996, the Company had $11.6 million in cash and cash
equivalents and investment securities. The Company also had available borrowing
capacity of $125.8 million under its bank line of credit pursuant to the
borrowing base requirement of such credit agreement, and as adjusted for the
application of the net proceeds from the 9 1/4% Senior Note offering in
February 1997. The Company estimates that it will require additional external
capital for the remainder of fiscal 1997 in addition to these existing capital
resources, collections and recoveries on its finance receivables portfolio and
excess cash flow distributions from the Trusts in order to fund expansion of
its automobile and mortgage lending businesses, capital expenditures, and other
costs and expenses.
The Company anticipates that such funding may be in the form of additional
automobile receivables-backed securities transactions and implemention of other
23
<PAGE>
warehouse financing facilities. There can be no assurance that funding will be
available to the Company through these sources, or if available, that it will
be on terms acceptable to the Company.
Since the Company's funding strategy is dependent upon the issuance of interest-
bearing securities and the incurrence of other debt, fluctuations in interest
rates impact the Company's profitability. The Company uses several strategies
to minimize the risk of interest rate fluctuations including the use of hedging
instruments, the regular sale of finance receivables to the Trusts and pre-
funding securitizations, whereby the amount of asset-backed securities issued
in a securitization exceeds the amount of receivables initially sold to the
Trust. The proceeds from the pre-funded portion are held in an escrow account
until the Company sells additional receivables to the Trust in amounts up to
the balance of the pre-funded escrow account. In pre-funded securitizations,
the Company locks in the borrowing costs with respect to the loans it
subsequently purchases and delivers to the Trust. However, the Company incurs
an expense in pre-funded securitizations equal to the difference between the
money market yields earned on the proceeds held in escrow prior to subsequent
delivery of loans and the interest rate paid on the asset-backed securities
outstanding. There can be no assurance that these strategies will be effective
in minimizing interest rate risk or that increases in interest rates will not
have an adverse effect on the Company's profitability.
24
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not Applicable
Item 2. CHANGES IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On November 13, 1996, the Company held its Annual Meeting of
Shareholders. The shareholders voted upon the election of eight
directors, the approval and adoption of the 1996 Limited Stock
Option Plan for AmeriCredit Corp. and the ratification of the
appointment of the Company's independent auditors. Each of the
eight nominees identified in the Company's proxy statement, filed
pursuant to Rule 14a-6 of the Securities Exchange Act of 1934,
were elected at the meeting to hold office until the next annual
meeting or until their successors are duly elected and qualified.
The shareholders approved and adopted the 1996 Limited Stock
Option Plan for AmeriCredit Corp., with 19,967,078 shares voting
in favor, 4,735,447 shares voting against and 47,100 shares
withheld. The Company's selection of independent auditors was
also ratified.
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
25
<PAGE>
10.1 Second Restated Revolving Credit Agreement, dated as of
October 7, 1996, between AmeriCredit Corp. and subsidiaries
and Wells Fargo Bank (Texas), National Association, Bank One,
Texas, N.A., LaSalle National Bank, The Sumitomo Bank
Limited, Harris Trust and Savings Bank, Comerica Bank -
Texas, Texas Commerce Bank National Association, BankAmerica
Business Credit, Inc. and The Bank of Nova Scotia, as amended
by that certain First Amendment to Second Restated Revolving
Credit Agreement, dated as of Janauary 22, 1997, between the
same parties.
10.2 Indenture, dated as of February 4, 1997, between AmeriCredit
Corp. and subsidiaries and Bank One, Columbus, NA, with form
of 9 1/4% Senior Notes due 2004 attached as exhibit.
10.3 Purchase Agreement, dated as of January 30, 1997, between
AmeriCredit Corp. and subsidiaries and Smith Barney Inc.,
Montgomery Securities, Piper Jaffray Inc. and Wheat First
Butcher Singer.
10.4 A/B Exchange Registration Rights Agreement, dated as of
February 4, 1997, between AmeriCredit Corp. and subsidiaries
and Smith Barney Inc., Montgomery Securities, Piper Jaffray
Inc. and Wheat First Butcher Singer.
11.1 Statement Re Computation of Per Share Earnings
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarterly period ended December 31, 1996.
26
<PAGE>
On January 8, 1997 and again on February 5, 1997, the Company
filed reports on Form 8-K related to the private offering and
subsequent issuance of $125 million of 9 1/4% Senior Notes
due 2004. On February 6, 1997, a subsidiary of the Company
filed several reports on Form 8-K with information relating
to AmeriCredit Automobile Receivables Trust 1996-B,
AmeriCredit Automobile Receivables Trust 1996-C and
AmeriCredit Automobile Receivables Trust 1996-D, covering
periods prior to December 31, 1996.
27
<PAGE>
SIGNATURE
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 thereunto duly authorized.
AmeriCredit Corp.
-------------------------------
(Registrant)
Date: February 13, 1996 By: /s/ Daniel E. Berce
--------------------------------
(Signature)
Daniel E. Berce
Chief Financial Officer
28
<PAGE>
FIRST AMENDMENT TO
SECOND RESTATED REVOLVING CREDIT AGREEMENT
This First Amendment To Second Restated Revolving Credit Agreement (this
"First Amendment") is made by and among AMERICREDIT CORP., a Texas corporation
("Company"), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation,
AMERICREDIT OPERATING CO., INC., a Delaware corporation (individually, a
"Borrower" and collectively, the "Borrowers"), AMERICREDIT PREMIUM FINANCE,
INC., a Delaware corporation, and ACF INVESTMENT CORP., a Delaware corporation,
and WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, BANK ONE, TEXAS, N.A.,
LASALLE NATIONAL BANK, THE SUMITOMO BANK, LIMITED, HARRIS TRUST AND SAVINGS
BANK, COMERICA BANK-TEXAS, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, BANKAMERICA
BUSINESS CREDIT, INC. and THE BANK OF NOVA SCOTIA (collectively, the "Banks"),
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as agent for the Banks ("Agent")
and BANK ONE, TEXAS, N.A. ("Co-Agent").
WHEREAS, on October 7, 1996, the parties entered into that one certain
Second Restated Revolving Credit Agreement (the "Credit Agreement") providing
for a revolving credit facility to Borrowers in the maximum amount of
$240,000,000 at any one time outstanding; and
WHEREAS, Borrowers and Guarantors propose to issue $125,000,000 in Senior
Notes and Subsidiary guarantees thereof pursuant to a Preliminary Offering
Memorandum dated January 20, 1997, and Banks consent to such issuances of Senior
Notes and Subsidiary guarantees as they are described in the Preliminary
Offering Memorandum; and
WHEREAS, Borrowers and Guarantors have requested Banks to amend the Credit
Agreement so that its terms will not conflict with the issuance of the Senior
Notes and Subsidiary guarantees thereof; and
NOW THEREFORE, for good and valuable consideration, the receipt and total
sufficiency of which is hereby acknowledged, it is agreed by and among the
parties as follows:
<PAGE>
1.
Section 9.04, Section 9.05 and 9.12 of the Credit Agreement are amended to
read in their entirety as follows:
9.04. LIMITATION ON ADDITIONAL INDEBTEDNESS. Incur or assume or
permit any of its Subsidiaries to incur or assume any Indebtedness, except
for (i) the indebtedness evidenced by the Notes; (ii) trade debt incurred in
the ordinary course of business; (iii) up to but not exceeding ten million
dollars ($10,000,000) in the aggregate at any time (excluding indebtedness in
the aggregate amount of up to $125,000,000 evidenced by Senior Notes);
(iv) indebtedness arising from Securitizations; (v) indebtedness arising under
an Additional Warehouse Facility, (vi) indebtedness of the Mortgage Subsidiary;
(vii) Guarantees by any of Borrowers or the Guarantors with respect to the
Mortgage Subsidiary; and (viii) indebtedness in an aggregate amount of up to
one hundred twenty-five million dollars ($125,000,000) evidenced by Senior
Notes. As used herein, the term "Senior Notes" shall mean those senior
unsecured notes of the Company due 2004 and all Guarantees thereof by the
other Borrowers, Guarantors and the Mortgage Subsidiary to be sold pursuant
to a Preliminary Offering Memorandum dated January 20, 1997 and issued or to
be issued pursuant to an Indenture between the Company and the trustee named
therein, and any new issue of debt securities of the Company and all
Guarantees thereof by the other Borrowers, Guarantors and the Mortgage
Subsidiary with the same terms issued in exchange for such senior unsecured
notes; or
9.05. RESTRICTIONS ON DIVIDENDS ON CAPITAL STOCK. Pay any dividends
or make any distributions on or with respect to its outstanding capital stock
except to Company or its wholly-owned Subsidiaries or purchase or redeem any of
its capital stock in excess of the sum of fifteen million dollars ($15,000,000)
and the aggregate amount of
-2-
<PAGE>
new equity received by Company as a result of the sale of capital stock of
Company or the exercise of options relating to the capital stock of Company
during any trailing twelve (12) months; or
9.12. NO GRANT OF NEGATIVE PLEDGE. Agree with any Person not to create
or suffer to exist any mortgage, pledge, security interest or encumbrance or
Lien upon any of its property or assets now owned or hereafter acquired
except with respect to the property or assets of the Mortgage Subsidiary or
in connection with the issuance of the Senior Notes; or
2.
Except as amended above and by this First Amendment, the Credit Agreement
is ratified and confirmed and shall remain in full force and effect.
3.
Borrowers agree to pay all costs and expenses incurred by Banks in
connection with this First Amendment.
4.
This First Amendment may be executed in multiple counterparts, each of
which shall constitute an original.
5.
This First Amendment shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
6.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS
-3-
<PAGE>
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
Executed to be effective as of January 22, 1997.
AMERICREDIT CORP., a Texas
corporation
By:
-----------------------------------------
Preston Miller, Vice President
AMERICREDIT FINANCIAL SERVICES,
INC., a Delaware corporation
By:
-----------------------------------------
Preston Miller, Senior Vice President
AMERICREDIT OPERATING CO., INC., a
Delaware corporation
By:
-----------------------------------------
Preston Miller, Senior Vice President
BORROWERS
AMERICREDIT PREMIUM FINANCE,
INC., a Delaware corporation
By:
-----------------------------------------
Preston Miller, Senior Vice President
ACF INVESTMENT CORP., a Delaware
corporation
By:
-----------------------------------------
Preston Miller, Senior Vice President
GUARANTORS
-4-
<PAGE>
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By:
-----------------------------------------
Susan B. Sheffield, Vice President
BANK ONE, TEXAS, N.A.
By:
-----------------------------------------
J. Michael Wilson, Vice President
LASALLE NATIONAL BANK
By:
-----------------------------------------
Terry M. Keating, First Vice
President
THE SUMITOMO BANK LIMITED
By:
-----------------------------------------
John J. O'Neill, Vice President and
Manager
By:
-----------------------------------------
Julie Schell, Vice President
HARRIS TRUST AND SAVINGS BANK
By:
-----------------------------------------
Robert G. Bomben, Vice President
-5-
<PAGE>
COMERICA BANK-TEXAS
By:
-----------------------------------------
Jeffrey A. Moten, Vice
President
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Buddy Wurthrich, Vice President
BANKAMERICA BUSINESS CREDIT, INC.
By:
-----------------------------------------
Joseph P. LaCognata, Executive
Vice President
THE BANK OF NOVA SCOTIA
By:
-----------------------------------------
F. C. H. Asby, Senior Manager-
Loan Operations
BANKS
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By:
-----------------------------------------
Susan B. Sheffield, Vice President
AGENT
BANK ONE, TEXAS, N.A.
By:
-----------------------------------------
J. Michael Wilson, Vice President
CO-AGENT
-6-
<PAGE>
SECOND RESTATED
REVOLVING CREDIT AGREEMENT
This Second Restated Revolving Credit Agreement (this "Loan Agreement") is
entered into by and among AMERICREDIT CORP., a Texas corporation ("Company"),
AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation, AMERICREDIT
OPERATING CO., INC., a Delaware corporation, AMERICREDIT PREMIUM FINANCE, INC.,
a Delaware corporation, and ACF INVESTMENT CORP., a Delaware corporation, and
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, BANK ONE, TEXAS, N.A., LASALLE
NATIONAL BANK, THE SUMITOMO BANK, LIMITED, HARRIS TRUST AND SAVINGS BANK,
COMERICA BANK-TEXAS, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, BANKAMERICA
BUSINESS CREDIT, INC. and THE BANK OF NOVA SCOTIA (collectively, the "Banks"),
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as agent for the Banks ("Agent")
and BANK ONE, TEXAS, N.A. ("Co-Agent").
W I T N E S S E T H:
WHEREAS, AmeriCredit Corp., AmeriCredit Financial Services, Inc., Agent and
certain of Banks entered into that one certain Revolving Credit Agreement dated
September 21, 1994; and
WHEREAS, AmeriCredit Corp., AmeriCredit Financial Services, Inc.,
AmeriCredit Operating Co., Inc., Guarantors, Agent and certain of the Banks
entered into that one certain Restated Revolving Credit Agreement dated June 2,
1995 (the "Prior Loan Agreement"); and
WHEREAS, AmeriCredit Corp., AmeriCredit Financial Services, Inc.,
AmeriCredit Operating Co., Inc. (individually, a "Borrower" and collectively,
the "Borrowers"), Guarantors, Agent and Banks have agreed to amend and restate
the Prior Loan Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other valuable consideration, the parties hereto do hereby agree to
amend and restate the Prior Loan Agreement in its entirety as follows:
ARTICLE I
DEFINITION OF TERMS
For the purposes of this Loan Agreement, unless the context requires
otherwise, the following terms shall have the respective meanings assigned to
them in this Article I below:
<PAGE>
"ADDITIONAL WAREHOUSE FACILITY" shall mean any additional nonrecourse
credit facility or arrangement, other than a Securitization, pursuant to which
Borrowers or their Affiliates sell or refinance Finance Contracts securing
Obligations under the Loan Documents.
"ADJUSTED INDEBTEDNESS" shall mean the Indebtedness of Company and its
Subsidiaries, less obligations related to Securitizations and Obligations
related to Additional Warehouse Facilities, that are in each case nonrecourse to
the Borrowers.
"ADJUSTED INTERBANK RATE" shall, with respect to each Interest Period, mean
on any day thereof the quotient of (a) the Interbank Offered Rate with respect
to such Interest Period, DIVIDED BY (b) the remainder of 1.00 MINUS the
Eurodollar Reserve Requirement in effect on such day.
"ADVANCE" shall have the meaning assigned to it in Section 2.01 hereof.
"AFFILIATE" of any designated Person means any Person that has a
relationship with the designated Person whereby either of such Persons directly
or indirectly controls or is controlled by or is under common control with the
other, or holds or beneficially owns five percent (5%) or more of any class of
voting securities of the other. For this purpose, "control" means the power,
direct or indirect, of one Person to direct or cause direction of the management
and policies of another, whether by contract, through voting securities or
otherwise. Notwithstanding the foregoing, no Person shall be deemed to be an
Affiliate of another solely by reason of such Person's being a participant in a
joint operating group or joint undivided ownership group. For purposes of this
Loan Agreement, the term "Affiliate" shall include special purpose subsidiary
corporations and trusts formed or sponsored by the Company or its subsidiaries
for the purpose of facilitating one or more Securitizations.
"APPLICABLE MARGIN" shall mean the percentage set forth below opposite the
rating by Standard & Poors, Moody's Investor Service or Fitch Investor Service
in effect with respect to the Indebtedness of Borrowers to Banks on the date of
the particular Eurodollar Borrowing:
DEBT RATING PERCENTAGE
----------- ----------
Unrated or less than
BBB-/Baa3 1.55%
BBB-/Baa3 1.40%
BBB/Baa2 or higher 1.25%
-2-
<PAGE>
In the event that the Ratings are not the same at a particular time, the
Applicable Margin shall be based upon the highest rating assigned to such
Indebtedness by Standard & Poors, Moody's Investor Service or Fitch Investor
Service.
"ARBITRATION PROGRAM" shall have the meaning assigned to it in Article XI
hereof.
"BANKS" shall mean Wells Fargo Bank (Texas), National Association and all
other banks which are parties to this Loan Agreement or any amendment thereto.
"BORROWERS" shall mean AmeriCredit Corp., a Texas corporation, AmeriCredit
Financial Services, Inc., a Delaware corporation, and AmeriCredit Operating Co.,
Inc., a Delaware corporation.
"BUSINESS DAY" shall mean a day upon which business is transacted by
national banks in Fort Worth, Texas, New York, New York and San Francisco,
California.
"CAPITAL LEASE" shall mean, as of any date, any lease of property, real or
personal, which would be capitalized on a balance sheet of the lessee prepared
as of such date, in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" shall mean any rental obligation which, under
GAAP, is or will be required to be capitalized on the books of the Company or
any Subsidiary, taken at the amount thereof accounted for as indebtedness (net
of interest expense) in accordance with GAAP.
"COMMITMENT" shall have the meaning assigned to it in Section 2.01 hereof.
"CONSEQUENTIAL LOSS" shall, with respect to the payment by any of Borrowers
or any of Guarantors of all or any portion of the then outstanding principal
amount of any Bank's Eurodollar Advance on a day other than the last day of the
Interest Period related thereto, mean any loss, cost or expense incurred by such
Bank as a result of the timing of such payment or in redepositing such principal
amount, including the sum of (i) the interest which, but for such payment, such
Bank would have earned in respect of such principal amount so paid, for the
remainder of the Interest Period applicable to such sum, reduced, if such Bank
is able to redeposit such principal amount so paid for the balance of such
Interest Period, by the interest earned by such Bank as a result of so
redepositing such principal amount PLUS (ii) any expense or penalty incurred by
such Bank on redepositing such principal amount.
"CONSOLIDATED" shall mean the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc., refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
-3-
<PAGE>
"CONTROLLED GROUP" shall mean (i) the controlled group of corporations as
defined in section 1563 of the United States Internal Revenue Code of 1986, as
amended, or (ii) the group of trades or business under common control as defined
in section 414(c) of the United States Internal Revenue Code of 1986, as
amended, of which Company is part or may become a part.
"DEALER" shall mean a retail vendor of motor vehicles from which
AmeriCredit Financial Services, Inc. acquires Finance Contracts which is not an
Affiliate of any of Borrowers.
"DEALER DISCOUNT" shall mean, with respect to a Finance Contract, the
amount equal to the difference between (i) the face amount of the Finance
Contract, less unearned interest or finance charges and fees, and (ii) the
amount of cash advanced to the Dealer for the purchase of such Finance Contract.
"DELINQUENT LOANS" shall mean Net Indirect Loans having an installment
payment or final payment which is more than 60 days past due (without regard to
any grace period) on a contractual basis except Net Indirect Loans which were
secured by a motor vehicle that has been repossessed.
"DIVIDENDS", in respect of any corporation, shall mean:
(1) Cash distributions or any other distributions on, or in
respect of, any class of capital stock of such corporation,
except for distributions made solely in shares of stock of
the same class; and
(2) Any and all funds, cash or other payments made in respect of
the redemption, repurchase or acquisition of such stock,
unless such stock shall be redeemed or acquired through the
exchange of such stock with stock of the same class.
"DOLLARS" and the sign "$" shall mean lawful currency of the United States
of America.
"DOMESTIC FINANCE CONTRACT" shall mean a Finance Contract that is
denominated and payable only in Dollars.
"EBIT" shall mean income from operations after deducting all expenses
except interest and taxes and eliminating all extraordinary items.
"ELIGIBLE FINANCE CONTRACT" shall mean a Finance Contract,
(i) that is secured by an Eligible Vehicle,
-4-
<PAGE>
(ii) that represents a Domestic Finance Contract to an Obligor (other
than an Affiliate of Borrower),
(iii) that was originated by a Dealer unless otherwise consented
to in writing by the Agent (which consent shall not be unreasonably
withheld),
(iv) that is not delinquent (without regard to any stated grace
period) more than thirty (30) days on a contractual basis prior to any
repossession of the related Eligible Vehicle,
(v) that has not been modified in any respect, unless the Finance
Contract constitutes an Eligible Modified Finance Contract,
(vi) in respect of which the related Eligible Vehicle has not been
repossessed,
(vii) that is not a Stayed Loan,
(viii) that, as set forth in a written opinion, in form and
substance, and from legal counsel, reasonably satisfactory to the Agent,
constitutes chattel paper in which a security interest may be perfected
under the UCC of the applicable jurisdiction by filing financing statements
and making a notation of the security interests on the chattel paper and
without taking possession of either the agreements evidencing such Finance
Contract or related certificates of title.
(ix) that is not subject to a Lien in favor of a Person other than the
Agent on behalf of the Banks and that is not subject to a Securitization or
an Additional Warehouse Facility; and
(x) in respect of which the representations and warranties set forth
in the Security Agreement are true.
"ELIGIBLE MODIFIED FINANCE CONTRACT" shall mean a Finance Contract that
has been modified in any way which affects the contractual timing or amount of
any installment payment due under such Finance Contract and which satisfies each
of the following conditions: (1) no installment payment was more than sixty (60)
days past due at the time of any modification, (2) no modification extended the
original maturity date by more than ninety (90) days, (3) no modification caused
a permanent reduction in any monthly installment payment by more than five
percent (5%), (4) the modification did not permit the deferral of more than two
(2) installment payments, (5) not more than one (1) modification involving the
deferral of two (2) installment payments or not more than two (2) modifications
involving the deferral of one (1)
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installment payment has occurred during any twelve (12) month period, and (6)
is otherwise an Eligible Finance Contract.
"ELIGIBLE VEHICLE" shall mean a new or used motor vehicle that (i) to the
best of any Borrower's knowledge is not acquired for use in a commercial
enterprise or as part of a fleet, and (ii) in respect of which any of Borrowers
(a) has, within forty five (45) days following the date of a Finance Contract,
properly filed an application seeking to obtain legal title or a first priority
lien under the applicable provisions of the motor vehicle or other similar law
of the applicable jurisdiction and (b) has obtained or obtains, within one
hundred fifty (150) days following the date of a Finance Contract, legal title
or a first priority lien under applicable provisions of the motor vehicle or
other similar law of the applicable jurisdiction.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, together with all regulations issued pursuant thereto.
"ENVIRONMENTAL CLAIM" shall mean any written notice by any Person alleging
potential liability or responsibility for (a) any removal or remedial action,
including, without limitation, any clean-up, removal or treatment of any
Hazardous Material or any action to prevent or minimize the release or movement
of any Hazardous Materials through or in the air, soil, surface water, ground
water or other property, (b) damage to the environment, or costs with respect
thereto, or (c) personal injury (including sickness, disease or death),
resulting from or based upon (i) the presence, release or movement (including
sudden or nonsudden, accidental or nonaccidental, leaks or spills) of any
Hazardous Material at, in or from the environment or any property, whether or
not owned by the Company, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or any permit issued
to Company or any of its Subsidiaries pursuant to any Environmental Law.
"ENVIRONMENTAL LAWS" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.), the Clean Air Act
(42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 ET SEQ.), and the Occupational Safety and Health Act (29 U.S.C.
Section 651 ET SEQ.), as such laws have been or hereafter may be amended or
supplemented, and any and all analogous future federal, or present and future
state or local laws, and similar laws of jurisdictions other than the United
States, to which Company or any of its Subsidiaries or any of its or their
properties are subject.
"EURODOLLAR ADVANCE" shall mean any principal amount under a Note with
respect to which the interest rate is calculated by reference to the Adjusted
Interbank Rate for a particular Interest Period.
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"EURODOLLAR BORROWING" shall mean any Borrowing composed of
Eurodollar Advances.
"EURODOLLAR BUSINESS DAY" shall mean a Business Day on which dealings in
Dollars are carried out in the London Interbank market.
"EURODOLLAR RESERVE REQUIREMENT" shall, on any day, mean that percentage
(expressed as a decimal fraction rounded up to the nearest 1/100th) which is in
effect on such day, as provided by the Board of Governors of the Federal Reserve
System (or any successor governmental body) applied for determining the maximum
reserve requirements (including without limitation, basic, supplemental,
marginal and emergency reserves) under Regulation D with respect to
"Eurocurrency liabilities" as currently defined in Regulation D, or under any
similar or successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding. Each determination by Agent of the Eurodollar Reserve
Requirement shall, in the absence of manifest error, be conclusive and binding.
"EVENT OF DEFAULT" shall have the meaning assigned to it in Article X
hereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation (or any
successor thereof).
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by Agent.
"FINANCE CONTRACT" shall mean a motor vehicle installment sales contract
assigned to AmeriCredit Financial Services, Inc. or an Affiliate of AmeriCredit
Financial Services, Inc. that is secured by title to, security interests in, or
liens on a motor vehicle under applicable provisions of the motor vehicle or
other similar law of the jurisdiction in which the motor vehicle is titled and
registered by the purchaser at the time the contract is originated.
"FLOATING BASE ADVANCE" shall mean any principal amount under a Note with
respect to which the interest rate is calculated by reference to the Floating
Base Rate.
"FLOATING BASE BORROWING" shall mean any Borrowing composed of Floating
Base Advances.
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"FLOATING BASE RATE" shall mean the greater of (a) the Floating Prime Rate
in effect from day to day or (b) the Federal Funds Rate plus one half of one
percent (.5%).
"FLOATING PRIME RATE" shall mean, on any date, the rate of interest most
recently announced within Wells Fargo Bank, N.A. at its principal office in San
Francisco, California as its Prime Rate, with the understanding that such Prime
Rate is one of its base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Wells Fargo Bank, N.A. may designate.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" shall mean those
generally accepted accounting principles and practices which are recognized as
such by the American Institute of Certified Public Accountants pursuant to its
Statement on Auditing Standards No. 69 and which are consistently applied for
all periods after the date hereof so as to properly reflect the financial
condition, and the results of operations and cash flows of Company on a
consolidated basis, except that any accounting principle or practice required to
be changed by the American Institute of Certified Public Accountants in order to
continue as a generally accepted accounting principle or practice may so be
changed.
"GOVERNMENTAL AUTHORITY" shall mean any government (or any political
subdivision or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over any of Borrowers or any of their
Subsidiaries or any of its or their business, operations or properties.
"GUARANTOR" shall mean any of the Guarantors.
"GUARANTORS" shall mean AmeriCredit Premium Finance, Inc., a Delaware
corporation, and ACF Investment Corp., a Delaware corporation, and any other
corporation which executes a Guaranty Agreement after the date of this Loan
Agreement.
"GUARANTY" of any Person shall mean any contract, agreement or
understanding of such Person pursuant to which such Person guarantees, or in
effect guarantees, any Indebtedness of any other Person (the "Primary Obligor")
in any manner, whether directly or indirectly, including without limitation
agreements:
(1) to purchase such Indebtedness or any property constituting security
therefor;
(2) to advance or supply funds (a) for the purchase or payment of such
Indebtedness, or (b) to maintain working capital or other balance
sheet
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conditions, or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness;
(3) to purchase property, securities or services primarily for the purpose
of assuring the holder of such Indebtedness of the ability of the
Primary Obligor to make payment of the Indebtedness; or
(4) otherwise to assure the holder of the Indebtedness of the Primary
Obligor against loss in respect thereof; EXCEPT THAT "Guaranty" shall
not include the endorsement by Company or a Subsidiary in the ordinary
course of business of negotiable instruments or documents for deposit
or collection.
"GUARANTY AGREEMENT" shall mean the guaranty agreement executed by the
Guarantors, in the form of EXHIBIT C hereto, as the same may be amended or
supplemented from time to time.
"HAZARDOUS MATERIALS" shall mean those substances which are regulated by or
form the basis of liability under any Environmental Laws.
"INDEBTEDNESS" shall mean, with respect to any Person, all indebtedness,
obligations and liabilities of such Person, including without limitation:
(1) all "liabilities" which would be reflected on a balance
sheet of such Person, prepared in accordance with Generally
Accepted Accounting Principles;
(2) all obligations of such Person in respect of any Capital
Lease; and
(3) all obligations of such Person in respect of any Guaranty.
"INDIRECT LOAN" shall mean any Finance Contract or promissory note received
for or in connection with the financing of the sale of a motor vehicle by a
Dealer.
"INTERBANK OFFERED RATE" shall mean, with respect to each Interest Period,
the average of the rate of interest (rounded upwards, if necessary to the next
1/16th of 1%) at which deposits in an amount approximately equal to the
requested Borrowing and for the same term as the particular Interest Period are
offered to Agent in the London Interbank Eurodollar market for delivery on the
first day of the Interest Period as determined at 11:00 A.M. (London, England
time) two (2) Eurodollar Business Days prior thereto.
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"INTEREST COVERAGE RATIO" shall mean (a) the sum of EBIT and the
amortization of excess servicing receivables LESS the gain on sale of Finance
Contracts DIVIDED BY (b) total interest expense.
"INTEREST PERIOD" shall mean, with respect to a Eurodollar Advance, a
period commencing:
(i) on the borrowing date of such Eurodollar Advance made pursuant to
Section 2.02 of this Loan Agreement; or
(ii) on the Conversion Date pertaining to such Eurodollar Advance, if
such Eurodollar Advance is made pursuant to a conversion as
described in Section 2.02(c) hereof; or
(iii) on the date of borrowing specified in the Request for Borrowing in
the case of a rollover to a successive Interest Period,
and ending one (1), two (2) or three (3) months thereafter (in the case of a
Eurodollar Advance), as Borrowers shall elect in accordance with Section 2.02(c)
of this Loan Agreement; provided, that:
(A) any Interest Period which would otherwise end on a day which is not
a Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day UNLESS such Eurodollar Business Day falls in
another calendar month in which case such Interest Period shall end
on the next preceding Eurodollar Business Day;
(B) any Interest Period which begins on the last Eurodollar Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month or at the end of such
Interest Period) shall, subject to clause (A) above, end on the last
Eurodollar Business Day of a calendar month; and
(C) if the Interest Period for any Eurodollar Advance would otherwise end
after the Termination Date such Interest Period shall end on the
Termination Date.
"INVESTMENT" shall mean any direct or indirect purchase or other
acquisition of, or a beneficial interest in, capital stock or other securities
or ownership interests of any other Person, or any direct or indirect loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution to or investment in any other Person, including without
limitation the incurrence or sufferance of Indebtedness or
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accounts receivable of any other Person which are not current assets or do
not arise from sales to that other Person in the ordinary course of business.
"LAW" shall mean all statutes, laws, ordinances, rules, regulations,
orders, writs, injunctions or decrees of any Tribunal.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including without limitation, any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement or other similar form of public notice under the Laws of any
jurisdiction.
"LOAN DOCUMENTS" shall mean this Loan Agreement, the Notes, (including any
renewals, extensions and refundings thereof), the Security Agreement, the
Guaranty Agreement, and any agreements or documents (and with respect to this
Loan Agreement, and such other agreements and documents, any amendments or
supplements thereto or modifications thereof) executed or delivered pursuant to
the terms of this Loan Agreement.
"MAJORITY BANKS" shall mean, at any time, Banks holding Notes representing
at least sixty-six and 2/3 percent (66 2/3%) of the aggregate unpaid principal
amount of the aggregate Revolving Credit Loans or if no Revolving Credit Loans
are at the time outstanding, Banks having at least sixty-six and 2/3 percent (66
2/3%) of the Total Revolving Credit Commitment.
"MATERIAL ADVERSE EFFECT" shall mean any act, circumstance, or event that
(i) could have any adverse effect whatsoever upon the validity or enforceability
of the Loan Documents, (ii) causes or, with notice or lapse of time, or both,
could cause an Event of Default under this Loan Agreement, (iii) is or
reasonably could be expected to be material and adverse to the financial
condition or business operations of any of Borrowers or their Subsidiaries on a
Consolidated basis, or (iv) could reasonably be expected to impair the ability
of any of Borrowers to perform their respective obligations under the Loan
Documents in any material respect.
"MAXIMUM RATE" shall mean, on any day, the highest nonusurious rate of
interest (if any) permitted by applicable law on such day. Banks hereby notify
Borrowers that, and disclose to Borrowers that, for purposes of Tex. Rev. Civ.
Stat. Ann. Art. 5069-1.04, as it may from time to time be amended, the
"applicable rate ceiling" shall be the "indicated rate" ceiling from time to
time in effect as limited by Art. 5069-1.04(b); provided, however, that to the
extent permitted by applicable law, Banks reserve the right to change the
"applicable rate ceiling" from time to time by further notice and disclosure to
Borrowers; and, provided further, that the "highest nonusurious rate of interest
permitted by applicable law" for purposes of this Loan
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Agreement and the Notes shall not be limited to the applicable rate ceiling
under Art. 5069-1.04 if federal laws or other state laws now or hereafter in
effect and applicable to this Loan Agreement and the Notes (and the interest
contracted for, charged and collected hereunder or thereunder) shall permit a
higher rate of interest.
"MORTGAGE SUBSIDIARY" shall mean any subsidiary of Borrowers (whether now
existing or hereafter formed or acquired) engaged in the business of making,
originating or taking assignments of residential mortgage loans to consumer
borrowers.
"NET AMOUNT" shall mean with respect to Eligible Finance Contracts, as of
any date, the outstanding face amount thereof as of such date, MINUS (1)
(without duplication) to the extent included in the face amount thereof,
unearned interest or finance charges with respect to future periods (or
reserves with respect to unearned interest or finance charges) and (2) the
aggregate amount by which the aggregate unpaid principal balance of Eligible
Finance Contracts which have been modified during the preceding three (3)
month period exceeds three and one-half percent (3.5%) of the aggregate
unpaid principal balance of all Eligible Finance Contracts.
"NET CREDIT LOSSES" shall mean, for any period, the actual aggregate amount
of principal of Indirect Loans charged off prior to the application of the
Dealer Discount or reserves during such period LESS the aggregate amount of
Recoveries on Indirect Loans during such period.
"NET INCOME" or "NET LOSS" shall mean, with respect to any period, the
consolidated net earnings or net loss, as the case may be, of Company and its
Subsidiaries for such period as determined in accordance with GAAP.
"NET INDIRECT LOANS" shall mean the aggregate amount of all Indirect Loans
LESS the amount of unearned finance charges.
"NOTES" shall mean the promissory notes executed by Borrowers and delivered
pursuant to the terms of this Loan Agreement, together with any renewals,
extensions or modifications thereof. "Note" shall mean any of the Notes.
"OBLIGATIONS" shall mean all present and future indebtedness, obligations,
and liabilities of Borrowers to Banks or any of Banks, and all renewals and
extensions thereof, or any part thereof, arising pursuant to this Loan Agreement
or represented by the Notes, and all interest accruing thereon, and reasonable
attorneys' fees incurred in the enforcement or collection thereof, regardless of
whether such indebtedness, obligations and liabilities are direct, indirect,
fixed, contingent, joint, several or joint and several; together with all
indebtedness, obligations and liabilities of Borrowers
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evidenced or arising pursuant to any of the other Loan Documents, and all
renewals and extensions thereof, or part thereof.
"OBLIGOR" shall mean any one or more individuals (other than a Dealer) who
are liable in whole or in part on a Finance Contract (determined without regard
to limitations, if any, on recourse).
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
Company by its Chief Executive Officer, President, one of its Executive Vice
Presidents, its Chief Financial Officer or its Controller.
"PAST DUE RATE" shall mean the lesser of (a) the Floating Base Rate in
effect from day-to-day, plus five percent (5.0%), or (b) the Maximum Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"PERCENTAGE" shall mean, with respect to any Bank, such Bank's
proportionate share of the Total Revolving Credit Commitment, as set forth in
Section 2.01 opposite its name under the heading "Revolving Commitment
Percentage."
"PERMITTED LIENS" shall mean: (i) Liens on equipment and fixed assets,
including purchase money Liens, relating to or securing obligations in an
aggregate amount not to exceed ten million dollars ($10,000,000); (ii) pledges
or deposits made to secure payment of Worker's Compensation (or to participate
in any fund in connection with Worker's Compensation), unemployment insurance,
pensions or social security programs; (iii) Liens imposed by mandatory
provisions of law such as for materialmen's, mechanics, warehousemen's and other
like Liens arising in the ordinary course of business, securing Indebtedness
whose payment is not yet due unless the same are being contested in good faith
and for which adequate reserves have been provided; (iv) Liens for taxes,
assessments and governmental charges or levies imposed upon a Person or upon
such Person's income or profits or property, if the same are not yet due and
payable or if the same are being contested in good faith and as to which
adequate reserves have been provided; (v) Liens with respect to good faith
deposits in connection with tenders, leases, real estate bids or contracts
(other than contracts involving the borrowing of money unless such Liens are
otherwise Permitted Liens), pledges or deposits to secure public or statutory
obligations, deposits to secure (or in lieu of) surety, stay, appeal or customs
bonds and deposits to secure the payment of taxes, assessments, customs duties
or other similar charges; (vi) encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of real property, provided that such
do not impair the use of such property for the uses intended, and none of which
is violated by Company or any of its Subsidiaries in
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connection with existing or proposed structures or land use; and (vii) Liens
and encumbrances created and existing in connection with Securitizations and
any Additional Warehouse Facility.
"PERSON" shall mean and include an individual, partnership, joint venture,
corporation, trust, Tribunal, unincorporated organization or government or any
department, agency or political subdivision thereof.
"PLAN" shall mean an employee benefit plan or other plan maintained by
Company for employees of Company and any of its Subsidiaries and/or covered by
Title IV of ERISA, or subject to the minimum funding standards under Section 412
of the Internal Revenue Code of 1986, as amended.
"RATINGS" shall mean the rating assigned to the Indebtedness of Borrowers
to Banks by Standard and Poors, Moody Investor Service and Fitch Investor
Service.
"RECOVERIES" shall mean amounts realized on the sale of collateral securing
a Finance Contract, rebates on ancillary products and collections on charged-off
deficiencies and proceeds of insurance claims related to the collateral less
direct costs of repossession.
"REGULATION U" shall mean Regulation U promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any other
regulation hereafter promulgated by said Board to replace the prior Regulation U
and having substantially the same function.
"REGULATION X" shall mean Regulation X promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 224, or any other
regulation hereafter promulgated by said Board to replace the prior Regulation X
and having substantially the same function.
"REGULATORY DEFECT" shall mean (i) any failure of any of Borrowers or
any of the Guarantors to comply with any of the rules, regulations and other
requirements as contemplated in Section 7.11 hereof which would have a
Material Adverse Effect, and/or (ii) any unfavorable examination report shall
be received by any of Borrowers or any of the Guarantors from any
Governmental Authority regarding any of the businesses or activities in which
the Borrowers and Guarantors are engaged, if such report would have a
Material Adverse Effect.
"REPORTABLE EVENT" shall have the meaning assigned to that term in Title IV
of ERISA.
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"REVOLVING CREDIT BORROWING BASE" shall mean, as of any date of
calculation, an amount equal to eighty percent (80%) of the Net Amount of
Eligible Finance Contracts pledged to the Agent for the ratable benefit of the
Banks pursuant to the Security Agreement; provided, however, if the ratio of the
aggregate Dealer Discount to Net Indirect Loans originated in a trailing three
(3) month period exceeds eight percent (8.0%), such Revolving Credit Borrowing
Base advance rate percentage of the Net Amount of Eligible Finance Contracts
shall be reduced by two percentage points for each full percentage point that
the ratio of the aggregate Dealer Discount to Net Indirect Loans originated in a
trailing three (3) month period, as of any date of calculation, exceeds eight
percent (8.0%).
"REVOLVING CREDIT LOANS" shall have the meaning assigned to it in Section
2.01 hereof.
"SECURITIZATION" shall mean a transaction wherein an identified pool of
Finance Contracts and related documents subject to a security interest in favor
of Banks are sold, pledged or conveyed by AmeriCredit Financial Services, Inc.,
or an Affiliate thereof, to a trustee, grantor trust or other special purpose
financing entity as collateral security for the issuance by AmeriCredit
Financial Services, Inc. or such Affiliate of notes, certificates or other
evidence of indebtedness.
"SECURITY AGREEMENT" shall mean the Restated Security Agreement, dated as
of October 4, 1996, delivered by Borrowers to the Agent for the benefit of the
Banks, granting the security interests in certain of the properties and assets
of each of Borrowers described therein, as amended or supplemented from time to
time.
"STAYED LOAN" shall mean a Finance Contract:
(i) as to which an Obligor obligated on such Finance Contract (any
such Obligor, together with its Subsidiaries, herein, collectively, the
"Applicable Obligor"), shall file a petition or seek relief under or take
advantage of any insolvency law; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator, custodian or conservator of itself or of the whole or
substantially all of its property; file or consent to a petition under any
chapter of the United States Bankruptcy Code, as amended (11 U.S.C. Section
101 ET SEQ.), or file a petition or seek relief under or take advantage of
any other similar law or statute of the United States of America, any state
thereof or any foreign country; or
(ii) as to which a court of competent jurisdiction shall enter an
order, judgment or decree appointing or authorizing a receiver, trustee,
liquidator, custodian or conservator of the Applicable Obligor or of the
whole or substantially all of its property, or enter an order for relief
against the
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Applicable Obligor in any case commenced under any chapter of the
United States Bankruptcy Code, as amended, or grant relief under any
similar law or statute of the United States of America, any state thereof
or any foreign country; or as to which, under the provisions of any law
for the relief or aid of debtors, a court of competent jurisdiction or a
receiver, trustee, liquidator, custodian or conservator shall assume
custody or control or take possession of the Applicable Obligor or of the
whole or substantially all of its property; or as to which there is
commenced against the Applicable Obligor any proceeding for any of the
foregoing relief or as to which a petition is filed against the Applicable
Obligor under any chapter of the United States Bankruptcy Code, as amended,
or under any other similar law or statute of the United States of America
or any state thereof or any foreign country and such proceeding or petition
remains undismissed for a period of 60 days; or as to which the applicable
Obligor by any act indicates its consent to, approval of or acquiescence in
any such proceeding or petition;
PROVIDED, HOWEVER, that a Finance Contract shall cease to be a Stayed Loan
at such time as so long as (A) all principal, interest and other amounts
theretofore due and payable according to the terms of such Finance Contract
(as such terms have been approved, adjusted and/or confirmed pursuant to
court order or otherwise in any proceeding referred to in clause (i) or
(ii) of this definition) have been irrevocably paid to or collected or
received by Borrower and all such amounts thereafter due and payable shall
be paid to or collected or received by the Borrower when due (or within any
stated grace period) and (B) such Finance Contract shall be secured to the
same extent as before such Finance Contract first became a Stayed Loan and
no dispute regarding the existence, validity or priority of such security
shall be pending in any court or asserted in any pending appeal.
"SUBSIDIARY" shall mean, as to any particular parent corporation, any
corporation of which more than fifty percent (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more corporations
which themselves have more than fifty percent (by number of votes) of their
Voting Stock owned by such parent corporation. As used herein, the term
"Subsidiary" shall also mean any "Subsidiary" of the Company.
"TAXES" shall mean all taxes, levies, assessments, fees, withholdings or
other charges at any time imposed by any Laws or Tribunal.
"TANGIBLE NET WORTH" shall mean, as of any date, the total shareholders'
equity (including capital stock both common and preferred, additional
paid-in capital and retained earnings after deducting treasury stock) which
would appear on a consolidated balance sheet of Company prepared as of such date
in accordance with
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Generally Accepted Accounting Principles LESS intangible assets which would
appear on a consolidated balance sheet of Company prepared as of such date in
accordance with General Accepted Accounting Principles.
"TERMINATION DATE" shall mean October 3, 1997.
"UCC" shall mean, with respect to any jurisdiction, the Uniform Commercial
Code as then in effect in that jurisdiction. References to terms defined in the
UCC shall mean such terms in the UCC as in effect in such jurisdiction.
"VOTING STOCK" shall mean, with respect to any Subsidiary, any shares of
any class of stock of such Subsidiary having general voting power under ordinary
circumstances to elect a majority of the Board of Directors of such Subsidiary
irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency.
OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Loan Agreement shall have the
above-defined meanings when used in the Notes or any Loan Documents,
certificate, report or other document made or delivered pursuant to this Loan
Agreement, unless the context therein shall otherwise require.
(b) Defined terms used herein in the singular shall import the plural and
VICE VERSA.
(c) The words "hereof," "herein," "hereunder" and similar terms when used
in this Loan Agreement shall refer to this Loan Agreement as a whole and not to
any particular provision of this Loan Agreement.
(d) All financial and other accounting terms not otherwise defined herein
shall be defined and calculated in accordance with Generally Accepted Accounting
Principles consistently applied.
ARTICLE II
REVOLVING CREDIT LOANS
2.01. REVOLVING CREDIT COMMITMENT.
(a) REVOLVING LOAN COMMITMENTS. Subject to the terms and conditions of
this Loan Agreement and the Revolving Credit Borrowing Base limitation in
Section 2.01(b), each Bank severally agrees to extend to Borrowers, from the
date hereof
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through the Termination Date (the "Revolving Credit Period"), a revolving
line of credit which shall not exceed at any one time outstanding the amount
set forth opposite its name below (for each Bank, such amount is hereinafter
referred to as its "Commitment"):
COMMITMENT
PERCENTAGE
BANKS COMMITMENT (ROUNDED)
----- ------------ ----------
Wells Fargo Bank (Texas), $ 45,000,000 18.7500%
National Association
Bank One, Texas, N.A. 40,000,000 16.6666%
LaSalle National Bank 30,000,000 12.5000%
Texas Commerce Bank National $ 25,000,000 10.4166%
Association
The Sumitomo Bank, Limited 20,000,000 8.3333%
Harris Trust and Savings Bank 20,000,000 8.3333%
Comerica Bank-Texas 20,000,000 8.3333%
BankAmerica Business Credit, Inc. 25,000,000 10.4166%
The Bank of Nova Scotia $ 15,000,000 6.2500%
------------ --------
$240,000,000 100.0000%
------------ --------
------------ --------
No Bank shall be obligated to make any Advance under this Section 2.01 and
Section 2.02 if, immediately after giving effect thereto, the aggregate amount
of all indebtedness and obligations of Borrowers to such Bank under Section 2.01
and Section 2.02 exceeds the lesser of (a) such Bank's Commitment or (b) an
amount equal to such Bank's Percentage TIMES the Revolving Credit Borrowing Base
in effect at such time.
Within the limits of this Section 2.01, during the Revolving Credit Period,
Borrowers may borrow, prepay pursuant to Section 3.03 hereof and reborrow under
this Section 2.01; provided, however, the total number of unpaid Eurodollar
Borrowings shall not exceed five (5) at any time. Each Borrowing pursuant to
this Section 2.01 and Section 2.02 shall be funded ratably by Banks in
proportion to their respective Percentages. Each advance made by a Bank under
Section 2.01 and Section 2.02 is herein called an "Advance"; all Advances made
by a Bank hereunder are
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herein collectively called a "Revolving Credit Loan"; the aggregate unpaid
principal balance of all Advances made by Banks hereunder are herein
collectively called the "Revolving Credit Loans"; and the combined Advances
made by Banks on any given day are herein collectively called a "Borrowing".
The "Total Commitment" shall be two hundred forty million dollars
($240,000,000).
(b) BORROWING BASE LIMITATION. The maximum aggregate amount outstanding
at any time under the Revolving Credit Loans shall not exceed the Revolving
Credit Borrowing Base then in effect.
(c) BORROWING BASE DEFICIENCY. If the aggregate unpaid principal balance
of the Revolving Credit Loans shall at any time exceed the Revolving Credit
Borrowing Base then in effect (the "Borrowing Base Deficiency"), Borrowers shall
pay to Agent within one (1) Business Day of the date of the earlier of the most
recent Borrowing Base Certificate which discloses a Borrowing Base Deficiency or
the date of notification to Borrowers by Agent of the existence of a Borrowing
Base Deficiency an amount equal to such Borrowing Base Deficiency so that the
aggregate unpaid principal balance of the Revolving Credit Loans (after giving
effect to such payment) is not in excess of the Revolving Credit Borrowing Base
then in effect.
(d) LOAN ORIGINATION FEE. At the time of execution of this Agreement,
Borrowers shall pay to each Bank, including Agent, a loan origination fee in an
amount equal to the sum of (i) one sixteenth percent (.0625%) of each such
Bank's Revolving Commitment under the Prior Loan Agreement and (ii) one eighth
percent (.125%) of the positive difference between such Bank's Commitment under
this Loan Agreement and such Bank's Revolving Commitment under the Prior Loan
Agreement.
(e) UNUSED LINE FEE. In addition to the payments provided for in
Article III hereof, Borrowers shall pay to Agent, for the account of each Bank,
on the first day of each fiscal quarter of Company beginning January 1, 1997
during the period ending on the Termination Date a loan commitment fee at the
rate of one quarter of one percent (.25%) per annum (calculated on the basis of
a year consisting of 360 days) of the average daily amount of each such Bank's
Commitment which was unused during the immediately preceding fiscal quarter of
Company. Borrowers and Banks acknowledge and agree that the commitment fees
payable hereunder are bona fide commitment fees and are intended as reasonable
compensation to Banks for committing to make funds available to Borrowers as
described herein and for no other purpose.
2.02. MANNER OF BORROWING.
(a) REQUEST FOR BORROWING. Each request by Borrowers to Agent for a
Borrowing under Section 2.01 hereof (a "Request for Borrowing") shall be in
writing
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and specify the aggregate amount of such requested Borrowing, the requested
date of such Borrowing, and, when the Request for Borrowing specifies a
Eurodollar Borrowing, the Interest Period which shall be applicable thereto;
provided, however, that the aggregate number of unpaid Eurodollar Borrowings
shall not exceed five (5) at any time. Borrowers shall furnish to Agent the
Request for Borrowing by at least 11:00 a.m. (Fort Worth time) three (3)
Eurodollar Business Days prior to the requested Eurodollar Borrowing date
(which must be a Eurodollar Business Day) and by at least 11:00 a.m. (Fort
Worth time) on the requested borrowing date (which must be a Business Day)
for a Floating Base Advance. Any Request for Borrowing shall: (i) in the
case of a Floating Base Borrowing, be in the form attached hereto as EXHIBIT
"C," and (ii) in the case of a Eurodollar Borrowing, be in the form attached
hereto as EXHIBIT "D." Each Floating Base Borrowing shall be in an aggregate
principal amount of five hundred thousand dollars ($500,000.00) or any higher
integral multiple of one hundred thousand dollars ($100,000.00). Each
Eurodollar Borrowing shall be in an amount of at least one million dollars
($1,000,000.00) or any higher integral multiple of $1,000,000.00.
Prior to making a Request for Borrowing, Borrowers may (without specifying
whether the anticipated Borrowing shall be a Floating Base Borrowing or
Eurodollar Borrowing) request that Agent provide Borrowers with the most recent
Interbank Offered Rate available to Agent. Agent shall endeavor to provide such
quoted rates to Borrowers on the date of such request.
Each Request for Borrowing shall be irrevocable and binding on Borrowers
and, in respect of the Borrowing specified in such Request for Borrowing,
Borrowers shall indemnify each Bank against any cost, loss or expense incurred
by such Bank as a result of any failure to fulfill, on or before the date
specified for such Borrowing, the conditions to such Advance set forth herein,
including without limitation, any cost, loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any Bank
to fund the Advance to be made by such Bank as part of such Borrowing when such
Advance, as a result of such failure, is not made on such date.
After receiving a Request for Borrowing in the manner provided herein,
Agent shall promptly notify each Bank by telephone (confirmed immediately by
telecopy, telex or cable), telecopy, telex or cable of the amount of the
Borrowing and such Bank's pro rata share of such Borrowing, the date on which
the Borrowing is to be made, the interest option selected and, if applicable,
the Interest Period selected.
(b) FUNDING. Each Bank shall, before 2:00 P.M. (Fort Worth time) on the
date of such Borrowing specified in the notice received from Agent pursuant to
Section 2.02(a), deposit such Bank's ratable portion of such Borrowing in
immediately available funds to Agent's account. Upon fulfillment of all
applicable conditions set
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forth herein and after receipt by Agent of such funds, Agent shall pay or
deliver such proceeds to or upon the order of Borrowers at the principal
office of Agent in immediately available funds. The failure of any Bank to
make any Advance required to be made by it hereunder shall not relieve any
other Bank of its obligation to make its Advance hereunder. If any Bank
shall fail to provide its ratable portion of such funds and if all conditions
to such Borrowing shall have been satisfied, the Agent will make available
such funds as shall have been received by it from the other Banks, in
accordance with this Section 2.02(b). Neither Agent nor any Bank shall be
responsible for the performance by any other Bank of its obligations
hereunder. In the event of any failure by a Bank to make an Advance required
hereunder, the other Banks may (but shall not be required to) purchase (on a
pro rata basis, according to their respective Percentages) such Bank's
Revolving Credit Note. Upon the failure of a Bank to make an Advance required
to be made by it hereunder, the Agent shall use good faith efforts to obtain
one or more banks, acceptable to Borrowers and Agent, to replace such Bank,
but neither the Agent nor any other Bank shall have any liability or
obligation whatsoever as a result of the failure to obtain a replacement for
such Bank.
Unless the Agent shall have received notice from a Bank prior to the date
of any Borrowing that such Bank will not make available to the Agent such Bank's
ratable portion of such Borrowing, the Agent may assume that such Bank has made
such portion available to the Agent on the date of such Borrowing in accordance
with Section 2.02(b) and the Agent may, in reliance upon such assumption, make
available to or on behalf of Borrowers on such date a corresponding amount. If
and to the extent such Bank shall not have so made such ratable portion
available to the Agent, such Bank severally agrees to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to or on behalf of
Borrowers until the date such amount is repaid to the Agent at the rate per
annum equal to the Federal Funds Rate. If such Bank shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Advance as part of such Borrowing for purposes of this Agreement.
(c) SELECTION OF INTEREST OPTION. Upon making a Request for Borrowing
under Section 2.02(a) hereof, Borrowers shall advise Agent as to whether the
Borrowing shall be (i) a Eurodollar Borrowing, in which case Borrowers shall
specify the applicable Interest Period therefor, or (ii) a Floating Base
Borrowing. At least three (3) Eurodollar Business Days prior to the termination
of each Interest Period with respect to a Eurodollar Borrowing, Borrowers shall
give Agent written notice (the "Rollover Notice") of the interest option which
shall be applicable to such Borrowing upon the expiration of such Interest
Period. If Borrowers shall specify that such Borrowing shall be a Eurodollar
Borrowing, such Rollover Notice shall also specify the length of the succeeding
Interest Period selected by Borrowers with respect to such Borrowing. Each
Rollover Notice shall be irrevocable and effective upon notification thereof to
Agent. If the required Rollover Notice shall not have been timely received by
Agent prior to
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the expiration of the then relevant Interest Period, then Borrowers shall be
deemed to have elected to have such Borrowing be a Floating Base Borrowing.
With respect to any Floating Base Borrowing, Borrowers shall have the right,
on any Eurodollar Business Day (a "Conversion Date") to convert such Floating
Base Borrowing to a Eurodollar Borrowing by giving Agent a Rollover Notice of
such selection at least three (3) Eurodollar Business Days prior to such
Conversion Date.
Notwithstanding anything to the contrary contained herein, Borrowers shall
have no right to request a Eurodollar Borrowing if (1) an Event of Default has
occurred and is continuing or (2) the interest rate applicable thereto under
Section 2.03 hereof would exceed the Maximum Rate in effect on the first day of
the Interest Period applicable to such Eurodollar Borrowing.
Each Rollover Notice shall be irrevocable and binding upon Borrowers, and
in respect of the Borrowing, conversion or extension specified in such Rollover
Notice, Borrowers shall indemnify and hold harmless each Bank against any cost,
loss or expense incurred by such Bank as a result of any failure to convert or
extend as specified in such Rollover Notice, including without limitation, any
loss, cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds required by any Bank to fund, convert or extend the
Advance specified in such Rollover Notice.
2.03. INTEREST RATE. The unpaid principal of each Floating Base Advance
shall bear interest from the date of advance until paid at a rate per annum
which shall from day to day, be equal to the lesser of: (a) the Floating Base
Rate or (b) the Maximum Rate. The unpaid principal of each Eurodollar Advance
shall bear interest from the date of Advance until paid at a rate per annum
which shall be equal to the lesser of (a) the sum of the Adjusted Interbank Rate
for the applicable Interest Period, plus the Applicable Margin or (b) the
Maximum Rate. All past due principal of, and to the extent permitted by
applicable law, interest on the Notes shall bear interest at the Past Due Rate.
Notwithstanding the foregoing, the unpaid principal balance of the Notes shall
bear interest as provided in Section 3.04(b) hereof, upon the occurrence of the
circumstances described in such section.
ARTICLE III
NOTES AND INTEREST RATE PAYMENTS
3.01. PROMISSORY NOTES. The Advances under Section 2.02(a) and Section
2.02(b) hereof by a Bank shall be evidenced by a promissory note (each a "Note"
and collectively, the "Notes") of Borrowers, which Note shall (i) be dated the
date hereof, (ii) be in the amount of such Bank's Commitment, (iii) be payable
to the order of such Bank at the office of Agent, (iv) bear interest in
accordance with Section 2.03 hereof,
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and (v) be in the form of EXHIBIT "A" attached hereto with blanks appropriately
completed in conformity herewith. Notwithstanding the principal amount of any
Bank's Note as stated on the face thereof, the amount of principal actually
owing on such Note at any given time shall be in the aggregate of all Advances
theretofore made to Borrowers hereunder, less all payments of principal
theretofore actually received hereunder by Bank. Each Bank is authorized, but
is not required, to endorse on the schedule attached to its Note appropriate
notations evidencing the date and amount of each Advance as well as the amount
of each payment made by Borrowers hereunder.
3.02. PRINCIPAL PAYMENTS ON REVOLVING CREDIT LOANS. Subject to Article X,
the unpaid principal amount of each Note, and all accrued but unpaid interest
thereon, shall be due and payable on the Termination Date.
3.03. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Borrowers may prepay the principal of any
Floating Base Advance upon one (1) Business Day's prior notice without premium
or penalty, and of any Eurodollar Advance upon three (3) Business Days prior
notice; provided, however, that (i) each prepayment of less than the full
outstanding principal balance of the Notes shall be in an amount equal to one
hundred thousand dollars ($100,000.00) or an integral multiple thereof, and
(ii) if Borrowers shall prepay the principal of any Eurodollar Advance on any
date other than the last day of the Interest Period applicable thereto,
Borrowers shall make the payments required by Section 4.05 hereof.
(b) GENERAL PREPAYMENT PROVISIONS. Any prepayment of a Note hereunder
shall be (i) made together with interest accrued (through the date of such
prepayment) on the principal amount prepaid, and (ii) applied first to accrued
interest and then to principal.
3.04. PAYMENT OF INTEREST ON THE NOTES.
(a) REVOLVING CREDIT NOTES. The interest on the unpaid principal amount
of each Floating Base Advance under each Note shall be payable monthly as it
accrues on the first Business Day of each month commencing November 1, 1996, and
on the Termination Date. Interest on the unpaid principal amount of each
Eurodollar Advance under each Note shall be payable on the last day of
applicable Interest Period. Should any installment of interest become due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day.
(b) RECAPTURE RATE. If, on any interest payment date, Agent does not
receive interest (for the account of any Bank) on such Bank's Note computed (as
if no
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Maximum Rate limitations were applicable) at the applicable contract rate
described herein, because the applicable contract rate exceeds or has exceeded
the Maximum Rate, then Borrowers shall, upon the written demand of Agent or such
Bank, pay to such Bank, in addition to interest otherwise required hereunder, on
each interest payment date thereafter, the Excess Interest Amount (hereinafter
defined) calculated as of such later interest payment date; provided, however,
that in no event shall Borrowers be required to pay, for any appropriate
computation period, interest at a rate exceeding the Maximum Rate effective
during such period. The term "Excess Interest Amount" shall mean, on any date,
with respect to the Note of any Bank, the amount by which (a) the amount of all
interest which would have accrued prior to such date on the principal of such
Note (had the applicable contract rate(s) described herein at all times been in
effect, without limitation by the Maximum Rate) EXCEEDS (b) the aggregate amount
of interest actually paid to such Bank on such Note on or prior to such date.
3.05. CALCULATION OF INTEREST RATES. Interest on the unpaid principal of
each Eurodollar Advance shall be calculated on the basis of the actual days
elapsed in a year consisting of 360 days. Interest on the unpaid principal of
each Floating Base Advance shall be calculated on the basis of the actual days
elapsed in a year consisting of 360 days.
3.06. MANNER AND APPLICATION OF PAYMENTS. All payments of principal of,
and interest on, any Note shall be made by Borrowers to Agent before 11:00 a.m.
(Fort Worth time), in Federal or other immediately available funds at Agent's
principal banking office in Fort Worth, Texas. Should the principal of, or any
installment of the principal or interest on, any Note, become due and payable on
a day other than a Business Day or a Eurodollar Business Day, as the case may
be, the maturity thereof shall be extended to the next succeeding Business Day
or Eurodollar Business Day, as the case may be. Each payment received by the
Agent hereunder for the account of a Bank shall be promptly distributed by Agent
to such Bank. All payments made on any Note shall be credited, to the extent of
the amount thereof, in the following manner: (i) first, against the amount of
interest accrued and unpaid on the Note as of the date of such payment;
(ii) second, against all principal (if any) due and owing on the Note; (iii)
third, as a prepayment of outstanding Floating Base Advances under the Note; and
(iv) fourth, as a prepayment of outstanding Eurodollar Advances under the Note.
Subject to the foregoing, payments and prepayments of principal of the Notes
shall be applied to such outstanding Floating Base Advances and Eurodollar
Advances under the Notes as Borrowers shall select; provided, however, that
Borrowers shall select Floating Base Advances and Eurodollar Advances to be
repaid in a manner designated to minimize the Consequential Loss, if any,
resulting from such payments; and provided further that, if Borrowers shall fail
to select the Floating Base Advances and Eurodollar Advances to which such
payments are to be applied, or if an Event of
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Default has occurred and is continuing at the time of such payment, then
Agent shall apply the payment first to Floating Base Advances and then to
Eurodollar Advances.
3.07. PRO RATA TREATMENT. Each payment received by Agent hereunder for
account of Banks or any of them on the Notes shall be distributed to each Bank
entitled to share in such payment, PRO RATA in proportion to the then unpaid
principal balance of the Note of each Bank. Unless Agent shall have received
notice from Borrowers prior to the date on which any payment is due to Banks
hereunder that Borrowers will not make such payment in full, Agent may assume
that Borrowers have made such payment in full to Agent on such date and Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent Borrowers shall not have so made such payment in full to Agent, each Bank
shall repay to Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to Agent,
at the Federal Funds Rate.
3.08. LENDING OFFICE. Each Bank may (a) designate its principal office or
a foreign branch, subsidiary or affiliate of such Bank as its lending office
(and the office to whose accounts payments are to be credited) for any
Eurodollar Advance, (b) designate its principal office or a domestic branch,
subsidiary or affiliate as its lending office (and the office to whose accounts
payments are to be credited) for any Floating Base Advance and (c) change its
lending offices from time to time by notice to Agent and Borrowers; provided,
however, no Bank shall designate a foreign branch without the consent of
Borrowers if such designation would subject interest payments hereunder to
withholding for Taxes. In such event, such Bank shall continue to hold the Note
evidencing its loans for the benefit and account of such foreign branch,
subsidiary or affiliate. Each Bank shall be entitled to fund all or any portion
of its Revolving Credit Loan in any manner that it deems appropriate, but for
the purposes of this Agreement such Bank shall, regardless of such Bank's actual
means of funding, be deemed to have funded its Loan in accordance with the
interest option from time to time selected by Borrowers for such Borrowing.
3.09. TAXES.
(a) Any and all payments by Borrowers hereunder or under the Notes shall
be made, in accordance with Section 3.06, free and clear of and without
deduction for any and all present or future Taxes, excluding, in the case of
each Bank and Agent, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank or Agent (as the case
may be) is organized or is or should be qualified to do business or any
political subdivision thereof and, in the case of each Bank Taxes imposed on its
income and franchise taxes imposed on it by the jurisdiction of such Bank's
lending office or any political subdivision thereof. If
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Borrowers shall be required by law to deduct any Taxes (i.e., Taxes for which
any Borrower is responsible under the preceding sentence) from or in respect
of any sum payable hereunder or under any Note to any Bank or Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 3.09) such Bank or Agent receives an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrowers shall make such deductions and (iii) Borrowers shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Loan Documents
from the execution, delivery, or registration of, or otherwise with respect to,
this Agreement or the other Loan Documents (hereinafter referred to as "Other
Taxes").
(c) Borrowers will indemnify each Bank and Agent for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 3.09) paid by
such Bank or Agent (as the case may be) or any liability (including penalties
and interest) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within thirty (30) days from the date such Bank or Agent makes
written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes,
Borrowers will furnish to Agent, at its address referred to in Section 13.02,
the original or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of Company
hereunder, the agreements and obligations of Borrowers contained in this Section
3.09 shall survive the payment in full of the Obligation and the termination of
the Commitments.
(f) Each Bank agrees to use good faith efforts to carry out its
obligations under this Loan Agreement in such a way as to reduce the amount of
Taxes attributable to the Revolving Credit Loans, including the use of a
different lending office, as long as in the good faith opinion of such Bank such
actions would not have a material adverse effect upon it.
3.10. SHARING OF PAYMENTS. If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Advances made by it in excess of its ratable share
of payments on account of the Advances made by all Banks, such Bank shall
forthwith purchase from
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the other Banks such participations in the Advances made by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably
with each of them, PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank, such
purchase from each Bank shall be rescinded and such other Banks shall repay
to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such other Bank's ratable share (according
to the proportion of (i) the amount of such Bank's required repayment, to
(ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the
total amount recovered. Borrowers agree that any Bank so purchasing a
participation from another Bank pursuant to this Section 3.10 may, to the
fullest extent permitted by law exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully
as if such Bank were the direct creditor of Borrowers in the amount of such
participation.
3.11. JOINT AND SEVERAL LIABILITY. The Borrowers shall be liable for all
amounts due to the Agent and to the Banks under this Loan Agreement, regardless
of which the Borrowers actually receives the Revolving Credit Loans or other
extensions of credit hereunder or the amount of such Revolving Credit Loans
received or the manner in which the Agent or the Banks account for such
Revolving Credit Loans or other extensions of credit on their books and records.
The Obligations with respect to Revolving Credit Loans made to a Borrower, and
the Obligations of a Borrower arising as a result of the joint and several
liability of the Borrower hereunder, with respect to Revolving Credit Loans made
to the other Borrowers, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of each of the Borrowers.
The Obligations arising as a result of the joint and several liability of
the Borrowers hereunder with respect to Revolving Credit Loans or other
extensions of credit made to the other Borrowers shall, to the fullest extent
permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrowers or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrowers, (ii) the absence of any attempt to
collect the Obligations from the other Borrowers, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any indulgence
by the Agent and the Banks with respect to any provision of any instrument
evidencing the Obligations of the other Borrowers, or any part thereof, or any
other agreement now or hereafter executed by the other Borrowers and delivered
to the Agent and the Banks, (iv) the failure by the Agent and the Banks to take
any steps to perfect and maintain their security interest in, or to preserve
their rights to, any security or collateral for the Obligations of the other
Borrowers, (v) the Agent's or the Banks' election, in any proceeding instituted
under the Bankruptcy Code, of the
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application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing
or grant of a security interest by the other Borrowers, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any
portion of the Agent's or the Banks' claim(s) for the repayment of the
Obligations of the other Borrowers under Section 502 of the Bankruptcy Code,
or (viii) any other circumstances which might constitute a legal or equitable
discharge or defense of a Guarantor or of the other Borrowers. With respect
to the Borrowers' Obligations arising as a result of the joint and several
liability of the Borrowers with respect to Revolving Credit Loans or other
extensions of credit made to the other Borrowers, each Borrower waives, until
the Obligations shall have been paid in full and the Loan Agreement shall
have been terminated, any right to enforce any right of subrogation or any
remedy which the Agent and the Banks now have or may have hereafter have
against the other Borrowers, any endorser or any guarantor of all or any part
of the Obligations, and any benefit of, and any right to participate in, any
security or collateral given to the Agent or to the Banks to secure payment
of the Obligations or any other liability of the other Borrowers to the Agent
and the Banks.
Upon any Event of Default, the Agent and the Banks may proceed directly and
at once, without notice, against any of the Borrowers to collect and recover the
full amount, or any portion of the Obligations, without first proceeding against
the other Borrowers or any other Person, or against any security or collateral
for the Obligations. The Borrowers consent and agree that the Agent and the
Banks shall be under no obligation to marshall any assets in favor of the
Borrowers or against or in payment of any or all of the Obligations.
ARTICLE IV
SPECIAL PROVISIONS FOR EURODOLLAR LOANS
4.01. INADEQUACY OF EURODOLLAR LOAN PRICING. If with respect to an
Interest Period for any Eurodollar Borrowing:
(i) Agent determines that, by reason of circumstances affecting the
Interbank Eurodollar market generally, deposits in Dollars (in the
applicable amounts) are not being offered to Banks in the Interbank
Eurodollar market for such Interest Period, or
(ii) Majority Banks advise Agent that the Interbank Offered Rate as
determined by Agent will not adequately and fairly reflect the cost to
such Banks of maintaining or funding the Eurodollar Borrowing for such
Interest Period,
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then Agent shall forthwith give notice thereof to Borrowers, whereupon, until
Agent notifies Borrowers that the circumstances giving rise to such suspension
no longer exist, (a) the obligation of Banks to make Eurodollar Advances shall
be suspended and (b) Borrowers shall either (i) repay in full the then
outstanding principal amount of the Eurodollar Advances, together with accrued
interest thereon on the last day of the then current Interest Period applicable
to such Eurodollar Advances, or (ii) convert such Eurodollar Advances to
Floating Base Advances in accordance with Section 2.02(c) of this Loan Agreement
on the last day of the then current Interest Period applicable to each such
Eurodollar Advance.
4.02. ILLEGALITY. If, after the date of this Loan Agreement, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank to make,
maintain or fund its Eurodollar Advances, and such Bank shall so notify Agent,
Agent shall forthwith give notice thereof to Banks and Borrowers. Before giving
any notice pursuant to this Subsection, such Bank shall designate a different
Eurodollar lending office if such designation will avoid the need for giving
such notice and will not be materially disadvantageous to such Bank (as
determined in good faith by such Bank). Upon receipt of such notice, the
obligation of such Bank to make Eurodollar Advances shall be suspended until
receipt of notice from such Bank that such circumstances giving rise to such
suspension no longer exist and Borrowers shall either (i) repay in full the then
outstanding principal amount of the Eurodollar Advance of such Bank, together
with accrued interest thereon, or (ii) convert such Eurodollar Advance to a
Floating Base Advance, in either case on (a) the last day of the then current
Interest Period applicable to such Eurodollar Advance if such Bank may lawfully
continue to maintain and fund such Eurodollar Advance to such day or
(b) immediately if such Bank may not lawfully continue to fund and maintain such
Eurodollar Advance to such day.
4.03. INCREASED COSTS FOR EURODOLLAR LOANS. If any Governmental
Authority, central bank or other comparable authority, shall at any time
after the date of this Agreement impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System but excluding any reserve requirement included
in the Eurodollar Reserve Requirement of such Bank), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank, or shall impose on any Bank (or its
Eurodollar lending office) or the Interbank Eurodollar market any other
condition affecting its Eurodollar Advances, any Note, or its obligation to
make Eurodollar Advances; and the result of any of the foregoing is to
increase the cost to such Bank of making or maintaining its Eurodollar
Advances, or to reduce the amount of any sum
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received or receivable by such Bank under this Agreement or the Note by an
amount reasonably deemed by such Bank to be material; then, within five (5)
days after demand by such Bank (with a copy to Agent), Borrowers shall pay to
Agent, for the account of such Bank, such additional amount or amounts as
will compensate such Bank for such increased cost or reduction. Each Bank
will promptly notify Borrowers and Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. If any Bank demands compensation under this Section, then
Borrowers may at any time, upon at least five (5) Business Days' prior notice
to such Bank through Agent, either (i) repay in full the then outstanding
Eurodollar Advances of such Bank, together with accrued interest thereon to
the date of prepayment or (ii) convert such Eurodollar Advances to Floating
Base Advances in accordance with the provisions of this Loan Agreement;
provided, however, that Borrowers shall be liable for any Consequential Loss
arising pursuant to such actions. Each Bank agrees to use good faith efforts
to carry out its obligations under this Loan Agreement in such a way as to
reduce the amount of Taxes attributable to the Revolving Credit Loans,
including the use of a different lending office, as long as in the good faith
opinion of such Bank such actions would not have a material adverse effect
upon it.
4.04. EFFECT ON INTEREST OPTIONS. If notice has been given pursuant to
Section 4.02 or Section 4.03 requiring the Eurodollar Advances of any Bank to
be repaid or converted, then unless and until such Bank notifies Borrowers
that the circumstances giving rise to such repayment no longer apply, all
Advances shall be Floating Base Advances. If such Bank notifies Borrowers
that the circumstances giving rise to such repayment no longer apply,
Borrowers may thereafter select Advances to be Eurodollar Advances in
accordance with Section 2.02(c) of this Loan Agreement.
4.05. PAYMENTS NOT AT END OF INTEREST PERIOD. If Borrowers make any
payment of principal with respect to any Eurodollar Borrowing on any day other
than the last day of an Interest Period applicable to such Eurodollar Borrowing
(including payments made pursuant to Sections 4.02 or 4.03), then Borrowers
shall reimburse each Bank on demand the Consequential Loss incurred by it as a
result of the timing of such payment. A certificate of each Bank setting forth
the basis for the determination of the amount of Consequential Loss shall be
delivered to Borrowers through Agent and shall, in the absence of manifest
error, be conclusive and binding. Any conversion of a Eurodollar Borrowing to a
Floating Base Borrowing on any day other than the last day of the Interest
Period for such Eurodollar Borrowing shall be deemed a payment for purposes of
this Section.
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ARTICLE V
SECURITY
5.01 LIENS AND SECURITY INTERESTS. The Obligations and the Notes shall be
secured by a first priority security interest in all Finance Contracts
evidencing Indirect Loans (except Finance Contracts subject to a Securitization
or Additional Warehouse Facility) and proceeds of sale of collateral securing
Finance Contracts (except Finance Contracts subject to a Securitization or
Additional Credit Facility) and all promissory notes payable to any of
Borrowers.
5.02 GUARANTY DOCUMENTS. To secure the Obligations and the Notes, each of
the Guarantors shall execute and deliver to Agent the Guaranty Agreements.
ARTICLE VI
CONDITIONS PRECEDENT
6.01. INITIAL ADVANCES. The obligation of each Bank to make the Revolving
Credit Loan herein provided for and the initial Advances thereunder is subject
to the condition precedent that, on or before the date of such Advance, Agent
shall have received for each Bank the following, each dated the date of such
Advance, in form and substance satisfactory to Agent and such Bank:
(a) REVOLVING CREDIT NOTES. A duly executed promissory note, drawn to
the order of each Bank, in the form of EXHIBIT A attached hereto with
appropriate insertions.
(b) SECURITY AGREEMENT. Security Agreement executed by Borrowers
covering all now existing and hereafter arising Finance Contracts evidencing
Indirect Loans except Finance Contracts subject to a Securitization or an
Additional Warehouse Facility.
(c) FINANCING STATEMENTS. Financing statements executed by each of
Borrowers covering all now existing and hereafter arising Finance Contracts
evidencing Indirect Loans except Finance Contracts subject to a Securitization
or an Additional Warehouse Facility.
(d) GUARANTY AGREEMENT. The Guaranty Agreement in the form of EXHIBIT B
executed by AmeriCredit Premium Finance, Inc. and ACF Investment Corp.
(e) AGENT'S FEE AGREEMENT. Agent's fee agreement between Borrowers
and Agent and the agent's fee payable to Agent.
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(f) BORROWING BASE. A borrowing base certificate satisfying the
requirements of Section 8.01.
(g) ARTICLES OF INCORPORATION OF BORROWERS. A copy of the Articles of
Incorporation of each of Borrowers and all amendments thereto.
(h) BYLAWS OF BORROWERS. A certified copy of the bylaws of each of
Borrowers.
(i) RESOLUTIONS OF BORROWERS. Resolutions of each of Borrowers
authorizing the execution of this Loan Agreement duly adopted by the Board of
Directors of each of Borrowers and accompanied by a certificate of the Secretary
of Company stating that such resolutions are true and correct, have not been
altered or repealed and are in full force and effect.
(j) INCUMBENCY CERTIFICATE OF BORROWERS. An incumbency certificate with
respect to each of Borrowers executed by the appropriate officers of such
Borrower.
(k) CERTIFICATES OF EXISTENCE AND ACCOUNT STATUS FOR BORROWERS. A
current certificate of existence and good standing from the state of
incorporation of each of Borrowers and a current certificate of account status
from the Comptroller of Public Accounts of the State of Texas.
(l) AUTHORITY TO TRANSACT BUSINESS. Certificate evidencing the
authority of each of Borrowers to conduct or transact business in the State of
Texas and in all other states in which any of them conducts or transacts
business.
(m) ARTICLES OF INCORPORATION OF THE GUARANTORS. A copy of the Articles
of Incorporation of each of the Guarantors and all amendments thereto.
(n) BYLAWS OF EACH GUARANTOR. A certified copy of the bylaws of each of
the Guarantors.
(o) RESOLUTIONS OF EACH GUARANTOR. Resolutions of each one of the
Guarantors approving the execution of the Guaranty Agreement duly adopted by the
Board of Directors of each of such Guarantors and accompanied by a certificate
of the Secretary of each of such Guarantors stating that such resolutions are
true and correct, have not been altered or repealed and are in full force and
effect.
(p) INCUMBENCY CERTIFICATES OF GUARANTORS. An incumbency certificate
with respect to each Guarantor executed by the appropriate officers of each such
Guarantor.
(q) CERTIFICATES OF EXISTENCE AND ACCOUNT STATUS FOR EACH GUARANTOR. A
current certificate of existence from the state of incorporation of each
Guarantor and
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a certificate of account status from the Comptroller of Public Accounts of
the State of Texas for each Guarantor.
(r) AUTHORITY TO TRANSACT BUSINESS. Certificate evidencing the
authority of each Guarantor to conduct or transact business in each state in
which each such Guarantor conducts or transacts business.
(s) OPINION OF COUNSEL. An executed opinion of counsel to Borrowers and
each of the Guarantors.
(t) LOAN ORIGINATION FEES. The loan origination fees described in
Section 2.01(d).
(u) FINANCIAL STATEMENT. Audited financial statement of Borrower for
its fiscal year ended June 30, 1996, together with an unqualified opinion from
a recognized accounting firm of national standing.
(v) FIELD EXAMINATION. Field examination of collateral conducted by
Agent which is satisfactory to Agent and Banks.
6.02. ALL ADVANCES. The obligations of each Bank to make any Advance
under this Loan Agreement (including the initial Advance) shall be subject to
the following conditions precedent:
(a) NO DEFAULTS. As of the date of the making of such Advance, there
exists no Event of Default or event which with notice or lapse of time or both
could constitute an Event of Default.
(b) COMPLIANCE WITH LOAN AGREEMENT. Borrowers shall have performed and
complied in all material respects with all agreements and conditions contained
herein and in the Loan Documents which are required to be performed or complied
with by Borrowers before or at the date of such Advance or conversion.
(c) REQUEST FOR BORROWING. In the case of any Borrowing, Agent shall
have received from Borrowers a Request for Borrowing in the form of EXHIBIT "C"
or EXHIBIT "D" attached hereto, dated as of the date of such Advance and signed
by an authorized officer of the Borrowers, all of the statements of which shall
be true and correct, certifying that, as of the date thereof, (i) all of the
representations and warranties of Borrowers contained in this Loan Agreement and
each of the Loan Documents executed by Borrowers are true and correct, (ii) no
event has occurred and is continuing, or would result from the Advance, which
constitutes an Event of Default or which, with the lapse of time or giving of
notice or both, would constitute an Event of Default, and (iii) such other facts
as Agent may reasonably request.
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(d) NO MATERIAL ADVERSE CHANGE. As of the date of making such Advance, no
change has occurred in the business or financial condition of the Company and
its Subsidiaries on a Consolidated basis as reflected on the financial statement
of Company for its fiscal year ended June 30, 1996 which causes or could cause a
Material Adverse Effect.
(e) REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Article VII (other than the representations and warranties
contained in Section 7.07) hereof shall be true in all material respects on the
date of making of such Advance, with the same force and effect as though made on
and as of that date.
(f) BANKRUPTCY PROCEEDINGS. No proceeding or case under the United States
Bankruptcy Code shall have been commenced by or against any of Borrowers or any
Guarantor.
(g) FINANCING STATEMENTS. If requested and prepared by Agent but not
less frequently than monthly, Borrowers shall have executed and delivered to
Agent financing statements covering all Finance Contracts evidencing Indirect
Loans except Finance Contracts subject to (i) a Securitization or (ii) an
Additional Warehouse Facility .
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
To induce Banks to make the Revolving Credit Loans, Borrowers represent
and warrant to Banks that:
7.01. ORGANIZATION AND GOOD STANDING OF BORROWERS. Each of Borrowers is a
corporation duly organized and existing in good standing under the laws of the
state of its incorporation, is duly qualified as a foreign corporation and in
good standing in all states in which the failure to so qualify would have a
Material Adverse Effect and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged and is
or will be qualified in those states wherein it will transact business in the
future and where the failure to so qualify would have a Material Adverse Effect.
7.02. ORGANIZATION AND GOOD STANDING OF THE GUARANTORS. Each of the
Guarantors is a corporation duly organized and existing in good standing under
the laws of the state of its incorporation, is duly qualified as a foreign
corporation and in good standing in all states in which the failure to so
qualify would have a Material Adverse Effect and has the corporate power and
authority to own its properties and
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assets and to transact the business in which it is engaged and is or will be
qualified in those states wherein it will transact business in the future and
where the failure to so qualify would have a Material Adverse Effect.
7.03. AUTHORIZATION AND POWER. Each of Borrowers has the corporate power
and requisite authority to execute, deliver and perform this Loan Agreement and
the other Loan Documents to be executed by such Borrower; each of Borrowers is
duly authorized to, and has taken all corporate action necessary to authorize
such Borrower to, execute, deliver and perform this Loan Agreement, the Notes
and such other Loan Documents and is and will continue to be duly authorized to
perform this Agreement, the Notes and such other Loan Documents. Each of the
Guarantors has the corporate power and requisite authority to execute, deliver
and perform the Guaranty Agreement.
7.04. NO CONFLICTS OR CONSENTS. Neither the execution and delivery of
this Loan Agreement, the Notes, the Guaranty Agreement or the other Loan
Documents, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or with the
terms and provisions thereof, will contravene or materially conflict with any
provision of law, statute or regulation to which any of Borrowers or any of the
Guarantors is subject or any judgment, license, order or permit applicable to
any of Borrowers or any of the Guarantors, or any indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument to which any of
Borrowers or any of the Guarantors is a party or by which any of Borrowers or
any of the Guarantors may be bound, or to which any of Borrowers or any of the
Guarantors may be subject, or violate any provision of the Charter or Bylaws of
any of Borrowers or any of the Guarantors. No consent, approval, authorization
or order of any court or governmental authority or third party is required in
connection with the execution and delivery by any of Borrowers or any of the
Guarantors of the Loan Documents or to consummate the transactions contemplated
hereby or thereby.
7.05. ENFORCEABLE OBLIGATIONS. This Loan Agreement, the Notes, the
Security Agreement, the Guaranty Agreement and the other Loan Documents are the
legal and binding obligations of the corporation executing such Loan Documents,
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.
7.06. NO LIENS. Except for Permitted Liens, all of the properties and
assets of Borrowers and their Subsidiaries are free and clear of all mortgages,
liens, encumbrances and other adverse claims of any nature, and such corporation
has and will have good and marketable title to such properties and assets.
7.07. FINANCIAL CONDITION. Company has delivered to Agent copies of the
Consolidated balance sheet of Company and its Subsidiaries as of June 30, 1996,
and
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the related consolidated statements of income, shareholders' equity and cash
flows for the period ended such date; such financial statements are true and
correct in all material respects, fairly present the financial condition of
Company and its Subsidiaries as of such date and have been prepared in
accordance with Generally Accepted Accounting Principles applied on a basis
consistent with that of prior periods except for the exclusion of footnotes and
normal adjustments; as of the date hereof, there are no obligations, liabilities
or indebtedness (including contingent and indirect liabilities and obligations
or unusual forward or long-term commitments) of Company and its Subsidiaries
which are (separately or in the aggregate) material and are not reflected in
such financial statements or disclosed in writing to Agent; no changes having a
Material Adverse Effect have occurred in the financial condition or business of
any Borrower since June 30, 1996.
7.08. FULL DISCLOSURE. There is no material fact that Borrowers have not
disclosed to Agent and Banks which could have a Material Adverse Effect on the
properties, business, prospects or condition (financial or otherwise) of any of
Borrowers or any of the Guarantors. Neither the financial statements referred
to in Section 7.07 hereof, nor any certificate or statement delivered herewith
or heretofore by any of Borrowers to Banks in connection with negotiation of
this Loan Agreement, contains any untrue statement of a material fact or omits
to state any material fact necessary to keep the statements contained herein or
therein from being misleading in any material respect.
7.09. NO DEFAULT. No event has occurred and is continuing which
constitutes an Event of Default or which, with the lapse of time or giving of
notice or both, would constitute an Event of Default.
7.10. NO LITIGATION. Except as described in EXHIBIT E attached hereto,
there are no actions, suits or legal, equitable, arbitration or administrative
proceedings pending, or to the knowledge of Borrowers threatened, against any of
Borrowers or any of the Guarantors that would, if adversely determined, have a
Material Adverse Effect.
7.11. REGULATORY DEFECTS. As of the date hereof, Borrowers have advised
Banks, in writing, of all Regulatory Defects of which any of Borrowers has been
advised or has knowledge.
7.12. USE OF PROCEEDS; MARGIN STOCK. The proceeds of the Revolving Credit
Loans will be used by the Borrowers and the Guarantors solely for working
capital for and general corporate purposes of AmeriCredit Corp., AmeriCredit
Financial Services, Inc. and AmeriCredit Operating Co., Inc. None of such
proceeds will be used for the purpose of purchasing or carrying any "margin
stock" as defined in Regulation U or G of the Board of Governors of the Federal
Reserve System (12 C.F.R. Part 221 and 207), or for the purpose of reducing or
retiring any indebtedness which was originally
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incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of
such Regulation U or G. No Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stocks. No Borrower
nor any Person acting on behalf of Borrowers has taken or will take any
action which might cause the Notes or any of the other Loan Documents,
including this Loan Agreement, to violate Regulations U or G or any other
regulations of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. None of Borrowers own any "margin stock" except
for that described in the financial statements referred to in Section 7.07
hereof and, as of the date hereof, the aggregate value of all "margin stock"
owned by Borrowers and their Subsidiaries does not exceed 25% of the
aggregate value of all of the assets of Company and its Subsidiaries.
7.13. NO FINANCING OF CORPORATE TAKEOVERS. Except as permitted by Section
9.07, no proceeds of the Revolving Credit Loans will be used to acquire any
security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, including particularly (but without limitation)
Sections 13(d) and 14(d) thereof.
7.14. TAXES. Except as previously disclosed to Bank, all tax returns
required to be filed by each of Borrowers and their Subsidiaries in any
jurisdiction have been filed or will be filed prior to the date on which the tax
payable with respect to such return will become delinquent and all taxes
(including mortgage recording taxes), assessments, fees and other governmental
charges upon any of Borrowers or any of their Subsidiaries or upon any of their
respective properties, income or franchises have been paid prior to the time
that such taxes could give rise to a lien thereon. To the best of each
Borrower's knowledge, there is no proposed tax assessment against any of
Borrowers except as disclosed to Banks.
7.15. PRINCIPAL OFFICE, ETC. The principal office, chief executive office
and principal place of business of each of Borrowers is at 200 Bailey Avenue,
Fort Worth, Tarrant County, Texas 76107, and Borrowers maintain their principal
records and books at such address.
7.16. ERISA. (a) No Reportable Event has occurred and is continuing with
respect to any Plan; (b) PBGC has not instituted proceedings to terminate any
Plan; (c) neither the Borrowers, any member of the Controlled Group, nor any
duly appointed administrator of a Plan (i) has incurred any liability to PBGC
with respect to any Plan other than for premiums not yet due or payable or (ii)
has instituted or intends to institute proceedings to terminate any Plan under
Section 4041 or 4041A of ERISA or withdraw from any Multi-Employer Pension Plan
(as that term is defined in Section 3(37) of ERISA); and (d) each Plan of
Company or its Subsidiaries has been
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maintained and funded in all material respects in accordance with its terms
and with all provisions of ERISA applicable thereto.
7.17. COMPLIANCE WITH LAW. Except as described on EXHIBIT F, Company and
each of its Subsidiaries are in compliance in all material respects with all
laws, rules, regulations, ordinances, orders and decrees which are applicable to
Company, any of its Subsidiaries or any of their respective properties or
business, the failure to comply with which could have a Material Adverse Effect,
including all Environmental Laws. Neither Company nor any Subsidiary has been
notified by any Governmental Authority that Company or any Subsidiary has failed
to comply with any such laws, rules, regulations, orders or decrees, the failure
to comply with which would result in a Material Adverse Effect, nor has Company
or any Subsidiary been notified of any Environmental Claim except as described
in EXHIBIT G.
7.18. GOVERNMENT REGULATION. No Borrower nor any of the Guarantors are
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Investment Company Act of 1940, the Interstate Commerce
Act (as any of the preceding acts have been amended), or any other law (other
than Regulation X) which regulates the incurring by Company or any of its
Subsidiaries of indebtedness, including but not limited to laws relating to
common contract carriers or the sale of electricity, gas, steam, water, or other
public utility services.
7.19. INSIDER. Company is not, and no Person having "control" (as that
term is defined in 12 U.S.C. Section 375(b)(5) or in regulations promulgated
pursuant thereto) of Company is, an "executive officer", "director", or "person
who directly or indirectly or in concert with one or more persons owns,
controls, or has the power to vote more than 10% of any class of voting
securities" (as those terms are defined in 12 U.S.C. Section 375(b) or in
regulations promulgated pursuant thereto) of any Bank, of a bank holding company
of which any Bank is a subsidiary, or of any subsidiary of a bank holding
company of which Bank is a subsidiary, or of any bank at which Bank maintains a
correspondent account, or of any bank which maintains a correspondent account
with any Bank.
7.20. SUBSIDIARIES. Company directly owns all of the capital stock of
AmeriCredit Financial Services, Inc., AmeriCredit Operating Co., Inc.,
AmeriCredit Premium Finance, Inc. and ACF Investment Corp., in each case free
and clear from all liens, security interests, charges and encumbrances.
7.21. SOLVENCY. Excluding intercompany indebtedness, Company and each of
its Subsidiaries now have capital sufficient to carry on their businesses and
transactions and all business and transactions in which they are about to
engage, and for which they have projected, and are now solvent and able to pay
their debts as they mature and each of Company and its Subsidiaries now owns
property having a value,
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both at fair valuation and at present fair saleable value greater than the
amount required to pay its respective debts. Excluding intercompany indebtedness
and without giving effect to the Guaranty Agreement, no Guarantor is "insolvent"
on the date hereof (that is, the sum of such Guarantor's absolute and contingent
liabilities does not exceed the fair market value of such Guarantor's assets).
Each Guarantor has received or will receive good and fair consideration for its
liability and obligations incurred in connection with the Guaranty Agreement,
and the incurrence of its liability under the Guaranty Agreement in return for
such consideration may reasonably be expected to benefit each Guarantor,
directly or indirectly.
7.22. ENVIRONMENTAL MATTERS. Except as described in EXHIBIT "G" attached
hereto, none of the properties of Company or its Subsidiaries which are
presently owned has been used at any time during their ownership to generate,
manufacture, refine, transport, treat, store, handle, dispose, transfer,
produce, process, or in any manner deal with Hazardous Materials. Except as
described in EXHIBIT "G" attached hereto, there are no past, pending or, to the
best of Company's knowledge, threatened or potential Environmental Claims
against Company or any of its Subsidiaries or with respect to any properties
presently owned or controlled by Company or any of its Subsidiaries. Except as
described in EXHIBIT "G" attached hereto, there are no underground storage tanks
located on any of the properties presently owned or controlled by Company or any
of its Subsidiaries and, to Company's best knowledge, there never have been any
underground storage tanks located on any of the properties presently owned or
controlled by Company or any of its Subsidiaries, and the Company has received
no actual (as contrasted with constructive) notification of any Environmental
Claims relating to any property contiguous to any property owned or controlled
by Company or any of its Subsidiaries.
7.23. ENDORSEMENT OF INDIRECT LOANS. Borrowers have endorsed to Agent
all Finance Contracts evidencing Indirect Loans except Finance Contracts that
are subject to (a) a Securitization or (b) an Additional Warehouse Facility.
7.24. REPRESENTATIONS AND WARRANTIES. Each Request for Borrowing shall
constitute, without the necessity of specifically containing a written
statement, a representation and warranty by Borrowers that no Event of Default,
or any event which with the giving of notice or lapse of time or both would
constitute, mature into or become an Event of Default, shall have occurred and
be continuing and that all representations and warranties contained in this
ARTICLE VII (other than in Section 7.07) or in any other Loan Document are true
and correct at and as of the date the Advance is to be made.
7.25. SURVIVAL OF REPRESENTATIONS, ETC. All representations and
warranties made herein are true and correct when made by Borrowers and shall
survive delivery
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of the Notes and the Guaranty Agreement and the making of the Revolving
Credit Loan and any investigation at any time made by or on behalf of Agent
or any Bank shall not diminish Agent or such Bank's right to rely thereon.
ARTICLE VIII
AFFIRMATIVE COVENANTS
So long as Banks have any commitment to make Advances hereunder and until
payment in full of the Notes and the Obligation, Borrowers agree and covenant
that Borrowers will (unless Majority Banks shall otherwise consent in writing):
8.01. BORROWING BASE CERTIFICATE. Within two (2) weeks after the
fifteenth and last days of each month, Borrowers shall furnish to Agent a
certificate in form satisfactory to Agent executed by the chief financial
officer or controller of each of Borrowers reflecting in detail a computation
of the Revolving Credit Borrowing Base as of the fifteenth and last days of
each month.
8.02. COMPLIANCE CERTIFICATES. Within thirty (30) days after the end
of each calendar month hereafter, Borrowers shall deliver to Agent a
certificate executed by the chief financial officer or controller of each of
Borrowers stating that a review of its activities during such month has been
made under his supervision and that such Borrower has observed, performed and
fulfilled each and every obligation and covenant contained herein and is not
in default under any of the same or, if any such default shall have occurred,
specifying the nature and status thereof.
8.03. MONTHLY STATEMENTS. Within thirty (30) days after the end of
each calendar month, Company shall furnish to Agent copies of the
consolidated balance sheet of Company and its Subsidiaries as of the close of
such calendar month, and consolidated statements of income and of cash flow
of Company and its Subsidiaries for the portion of the year then ended
prepared in accordance with GAAP, in each case setting forth in comparative
form the figures for the preceding year.
8.04 QUARTERLY STATEMENTS. Within forty five (45) days after the end
of each fiscal quarter of Company, Company shall furnish to Agent copies of
the consolidated and consolidating balance sheet of Company and its
Subsidiaries as of the close of such fiscal quarter and consolidated and
consolidating statements of income and consolidated statements of cash flow
of Company and its Subsidiaries for the portion of the year then ended
prepared in accordance with GAAP.
8.05. AUDITED ANNUAL STATEMENTS. As soon as available and in any event
within one hundred twenty (120) days after the close of each fiscal year of
Company, Company shall furnish to each of Banks copies of the Consolidated
balance sheet of Company and its
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Subsidiaries as of the close of such fiscal year and Consolidated statements
of income, shareholders' equity and the statement of cash flow of Company and
its Subsidiaries for such fiscal year, in each case setting forth in comparative
form the figures for the preceding fiscal year and accompanied by a separate
opinion (which shall not be qualified by reason of any limitation imposed by
Company) of independent public accountants of recognized national standing
selected by Company and satisfactory to Agent, to the effect that such financial
statements have been prepared in accordance with Generally Accepted Accounting
Principles, and that the examination of such accounts in connection with such
financial statements has been made in accordance with generally accepted
auditing standards. In addition, as soon as available and in any event within
120 days after the close of each fiscal year, Company shall furnish to each of
Banks a report of independent public accountants of recognized standing selected
by Company and satisfactory to Agent containing a computation of the covenants
contained in Sections 9.01, 9.02, 9.04, 9.05, 9.06, 9.07, 9.10, 9.13 and 9.14,
all in reasonable detail.
8.06. SEC AND OTHER REPORTS. Promptly upon transmission thereof,
Company shall furnish Agent with copies of all financial statements, proxy
statements, notices and reports which Company sends to its public security
holders and copies of all registration statements (without exhibits) and all
reports which it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission).
8.07. DELINQUENCIES. Within thirty (30) days after the end of each
month, Borrowers shall furnish to Agent (a) a summary report reflecting the
amount of all delinquencies and charge-offs for Net Indirect Loans, the
percentage of Net Indirect Loans which are delinquent, and the percentage of
Net Indirect Loans which have been charged off and (b) a summary report
reflecting the amount of all Net Indirect Loans that are past due by cycle.
8.08. LIST OF INDIRECT LOANS. Within thirty (30) days after the end
of each calendar month, Borrowers shall furnish to Agent two (2) copies of a
list of all Finance Contracts and promissory notes evidencing Net Indirect
Loans (other than Finance Contracts subject to a Securitization or subject to
an Additional Warehouse Facility) that reflects the name, address and account
number of each Obligor and the unpaid principal balance of each Finance
Contract and promissory note as of the end of such preceding calendar month.
8.09. CHARGE OFF VINTAGE REPORTS. Within thirty (30) days after the
end of each month, Borrowers shall furnish Agent with a delinquency and
charge-off vintage report reflecting the percentage of Net Indirect Loans
which are delinquent and which have been charged off by month of origination
accompanied by the supporting data.
8.10. ROLLFORWARD REPORT. Within thirty (30) days after the end of
each month, Borrowers shall furnish to Agent a notes receivable rollforward
report reflecting all originations, collections, charge-offs, pay-offs and
ending balances for Net Indirect Loans.
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8.11. REPOSSESSIONS. Within thirty (30) days after the end of each
month, Borrowers shall furnish to Agent a summary report reflecting the
aggregate principal amount of Finance Contracts in respect of which the
related motor vehicle has been repossessed during the reporting period,
excluding Finance Contracts which have been charged off.
8.12. MODIFIED CONTRACTS. Within thirty (30) days after the end of
each month, Borrowers shall furnish to Agent a summary report reflecting the
principal amount of all Finance Contracts that have been modified in any way
during the reporting period which affects the contractual timing or amount of
any installment payment due under such Finance Contract.
8.13. MATERIAL EVENTS. Each of the Borrowers shall promptly notify
Agent of (i) any Material Adverse Effect in its financial condition or
business; (ii) any material default under any material agreement, contract or
other instrument to which such Borrower is a party or by which any of its
properties are bound, or any acceleration of any maturity of any Indebtedness
owing by such Borrower, (iii) any material adverse claim against or affecting
such Borrower or any of its properties which might or could reasonably be
expected to have a Material Adverse Effect; (iv) any litigation, or any claim
or controversy which might become the subject of litigation, against such
Borrower or affecting any of such Borrower's property, if such litigation or
potential litigation might be expected to have or could reasonably be
expected to have, in the event of any unfavorable outcome, a Material Adverse
Effect or might or could reasonably be expected to cause an Event of Default;
(v) any material change in underwriting standards or criteria and (vi) a
change in the executive officers of any of Borrowers.
8.14. INSURANCE. Each Borrower shall maintain on its properties
insurance of responsible and reputable companies in such amounts and covering
such risks as is prudent and is usually carried by companies engaged in
businesses similar to that of such Borrower; each Borrower shall furnish
Agent, on request, with certified copies of insurance policies or other
appropriate evidence of compliance with the foregoing covenant.
8.15. LICENSES. Borrowers shall preserve and maintain all material
licenses, privileges, franchises, certificates and the like necessary for the
operation of their respective business.
8.16. COMPLIANCE WITH LOAN DOCUMENTS. Borrowers will comply in all
material respects with any and all covenants and provisions of this Loan
Agreement, the Notes and all other of the Loan Documents.
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8.17. COMPLIANCE WITH MATERIAL AGREEMENTS. Borrowers will comply in
all material respects with all material agreements, indentures, mortgages or
documents binding on it or affecting their properties or business where the
failure to so comply would have a Material Adverse Effect.
8.18. OPERATIONS AND PROPERTIES. Borrowers will act prudently and in
accordance with customary industry standards in managing or operating its
assets, properties, business and investments; Borrowers will keep in good
working order and condition, ordinary wear and tear excepted, all of their
respective assets and properties which are necessary to the conduct of its
business except for worn out or obsolete assets which have been replaced.
8.19. BOOKS AND RECORDS; ACCESS. Upon prior written notice, Borrowers
will give any representative of any Bank access during all business hours to,
and permit such representative to examine, copy or make excerpts from, any
and all books, records and documents in the possession of Borrowers and
relating to its affairs, and to inspect any of the properties of Borrowers
and discuss their respective affairs with their respective officers,
directors, employees and representatives. Borrowers will maintain complete
and accurate books and records of its transactions in accordance with good
accounting practices.
8.20. COMPLIANCE WITH LAW. Company will comply with and will cause
each Subsidiary to comply with all applicable laws, rules, regulations, and
all orders of any Governmental Authority applicable to it or any of its
property, business operations or transactions, a breach of which could have a
Material Adverse Effect on Company's or any Subsidiary's financial condition,
business or credit.
8.21. ERISA COMPLIANCE. Each Borrower shall (a) at all times, make
prompt payment of all contributions required under all Plans and required to
meet the minimum funding standard set forth in ERISA with respect to its
Plans; (b) notify each Bank immediately of any fact, including, but not
limited to, any Reportable Event arising in connection with any of its Plans,
which might constitute grounds for termination thereof by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan, together with a statement, if requested by a Bank, as
to the reason therefor and the action, if any, proposed to be taken with
respect thereto; and (c) furnish to each Bank, upon its request, such
additional information concerning any of its Plans as may be reasonably
requested.
8.22. ADDITIONAL INFORMATION. Borrowers shall promptly furnish to
Agent, at Agent's request, such additional financial or other information
concerning assets, liabilities, operations and transactions of Borrowers as
Agent may from time to time reasonably request.
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8.23. PRINCIPAL DEPOSITORY. Borrowers shall use Agent as their
principal depository; Borrowers shall use the lockbox services of Agent.
8.24. GUARANTY OF SUBSIDIARY CORPORATIONS. Borrowers shall cause each
Subsidiary formed or acquired after the date of this Agreement to execute a
Guaranty of the Notes within ten (10) days after the date of formation or
acquisition of such Subsidiary except (i) any special purpose Subsidiary
formed solely for the purpose of consummating a Securitization and (ii) the
Mortgage Subsidiary.
8.25. FINANCING STATEMENTS. If requested by Agent, each of Borrowers
shall execute and deliver to Agent new financing statements in form
satisfactory to Agent at the time it commences conducting business in any
state in which it has not previously conducted business.
8.26. FIELD TESTS. Borrowers shall from time to time permit Banks to
conduct field examinations at the expense of Banks. Borrowers shall permit
Agent to conduct a field examination annually at the expense of Borrowers.
8.27. DELIVERY OF INDIRECT LOANS. At the request of Agent or Majority
Banks after the occurrence of an Event of Default, Borrowers shall promptly
deliver to Agent all Finance Contracts and promissory notes evidencing
Indirect Loans duly endorsed or assigned to Agent other than Indirect Loans
subject to a Securitization or an Additional Warehouse Facility.
8.28. INSPECTION OF INDIRECT LOANS. Borrowers shall permit Agent and
its officers and representatives to inspect all Finance Contracts (except
Finance Contracts subject to a Securitization or an Additional Warehouse
Facility) and promissory notes evidencing Indirect Loans once each month
during normal business hours.
8.29 CAPITAL ADEQUACY. If any Bank shall have determined that the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the affect of reducing
the rate of return on such Bank's capital as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for
such adoption, change or compliance by an amount deemed by such Bank to be
material, then from time-to-time, within 15 days after demand by such Bank,
the Borrowers shall pay, without duplication, to such Bank such additional
amount or amounts as will compensate such Bank for such reduction. Said
demand shall include in reasonable detail the amount of and the cause of such
compensation demand.
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8.30. FURTHER ASSURANCES. Upon request of the Agent, Borrowers
agree to promptly cure any defects in the creation, issuance, execution and
delivery of this Loan Agreement or in the Loan Documents. Each of Borrowers,
at their expense, will further promptly execute and deliver to Agent upon
request all such other and further documents, agreements and instruments in
compliance with or accomplishment of the covenants and agreements of
Borrowers hereunder, or to further evidence and more fully describe the
obligations of Borrowers hereunder, or to correct any omissions herein, or to
more fully state the obligations set out herein.
ARTICLE IX
NEGATIVE COVENANTS
So long as Banks have any commitment to make Advances hereunder, and
until full payment of the Notes and the performance of the Obligation,
Borrowers covenant and agree that neither Borrowers nor any of their
respective Subsidiaries will, unless Majority Banks otherwise consent in
writing:
9.01. RATIO OF ADJUSTED INDEBTEDNESS TO TANGIBLE NET WORTH. Permit
the ratio of the total amount of the Adjusted Indebtedness of Company and its
Subsidiaries to the Tangible Net Worth of Company and its Subsidiaries on a
Consolidated basis to be more than 2.5 to 1.0 at any time; or
9.02. MINIMUM INTEREST COVERAGE RATIO. Permit the Interest Coverage
Ratio computed on a trailing twelve (12) month basis to be less than 2.2 to
1.0 at any time; or
9.03. LOSS. Incur any net loss on a consolidated basis determined
in accordance with GAAP during any trailing three (3) month period; or
9.04. LIMITATION ON ADDITIONAL INDEBTEDNESS. Incur or assume or
permit any of its Subsidiaries to incur or assume any Indebtedness, except
for (i) the indebtedness evidenced by the Notes; (ii) trade debt incurred in
the ordinary course of business; (iii) up to but not exceeding ten million
dollars ($10,000,000) in the aggregate at any time; (iv) indebtedness arising
from Securitizations; (v) indebtedness arising under an Additional Warehouse
Facility, (vi) indebtedness of the Mortgage Subsidiary and (vii) Guarantees
by any of Borrowers or the Guarantors with respect to the Mortgage
Subsidiary; or
9.05. RESTRICTIONS ON DIVIDENDS ON CAPITAL STOCK. Pay any
dividends or make any distributions on or with respect to its outstanding
capital stock or purchase, redeem or purchase any of its capital stock in
excess of the sum of fifteen million dollars ($15,000,000) and the aggregate
amount of new equity received by Company
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as a result of the sale of capital stock of Company or the exercise of
options relating to the capital stock of Company during any trailing twelve
(12) months; or
9.06. LOSSES TO NET INDIRECT LOANS. Permit the ratio of Net Credit
Losses during the prior 12 months to the sum of month end balances of Net
Indirect Loans over the prior 13 months DIVIDED BY 13 to be greater than .10
to 1.0 at any time; or
9.07. DELINQUENT LOANS TO NET INDIRECT LOANS. Permit the ratio of
Delinquent Loans to Net Indirect Loans to be greater than .06 to 1.0 at any
time; or
9.08. LIQUIDATION; MERGERS. Liquidate, dissolve or reorganize; or
merge with any other corporation or entity unless Company or one of its
Subsidiaries is the survivor of such merger; or make or permit any of its
Subsidiaries to make any other substantial change in its capitalization or
its business; or
9.09. ENTER INTO TRANSACTION WITH AFFILIATEs. Enter into, or be a
party to, any transaction with any Affiliate, Subsidiary or shareholder of
Company, except (i) as permitted by this Agreement, (ii) in the ordinary
course of and pursuant to the reasonable requirements of Company's business
and upon fair and reasonable terms which are fully disclosed to Agent or
(iii) sales of equity securities to its current shareholders other than
management in connection with future financing upon fair and reasonable terms
which are fully disclosed to Agent which are no less favorable to Company
than would be in an arm's length transaction with Person's not an Affiliate;
or
9.10. BUSINESS ACQUISITIONS AND INVESTMENTS. Purchase or otherwise
acquire by merger or otherwise all or substantially all of the assets of any
other corporation, partnership or person or make Investments in Subsidiaries
in excess of twenty five million dollars ($25,000,000) in the aggregate; or
9.11. NEGATIVE PLEDGE. Create or suffer to exist any mortgage,
pledge, security interest, conditional sale or other title retention
agreement, charge, encumbrance or other Lien (whether such interest is based
on common law, statute, other law or contract) upon any of its property or
assets, now owned or hereafter acquired, except for Permitted Liens and Liens
in favor of Agent and Liens granted by the Mortgage Subsidiary; or
9.12. NO GRANT OF NEGATIVE PLEDGE. Agree with any Person not to
create or suffer to exist any mortgage, pledge, security interest or
encumbrance or Lien upon any of its property or assets now owned or hereafter
acquired except with respect to the property or assets of the Mortgage
Subsidiary; or
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9.13. SALE OF ASSETS. Sell or permit any Subsidiary other than the
Mortgage Subsidiary to sell any of its material assets except in the ordinary
course of business; or
9.14. GUARANTIES. Permit the aggregate amount of the indebtedness
and obligations of the Mortgage Subsidiary guaranteed by Borrowers or
Guarantors to exceed seventy five million dollars ($75,000,000) in the
aggregate at any one time.
9.15. CHANGE IN BUSINESS. Borrowers shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, engage in any business
other than those in which each of them is presently engaged except the
mortgage business to be engaged in by the Mortgage Subsidiary.
If any action or failure to act by Company or any Subsidiary violates any
covenant or obligations of Borrowers contained herein, then such violation
shall not be excused by the fact that such action or failure to act would
otherwise be required or permitted by any covenant (or exception to any
covenant) other than the covenant violated.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES UPON EVENT OF DEFAULT
10.01. EVENTS OF DEFAULT. An "Event of Default" shall exist if any one
or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:
(a) Borrowers shall fail to pay when due any principal of, or interest
on any Note, or any other fee or payment due hereunder or under any of the
Loan Documents; or
(b) Any representation or warranty made under this Loan Agreement, or
any of the Loan Documents or in any certificate or statement furnished to or
made to Banks pursuant hereto or in connection herewith shall prove to be
untrue or inaccurate in any material respect as of the date on which such
representation or warranty is made; or
(c) Failure of any of Borrowers to observe, keep and perform any of the
covenants or agreements in Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.06, 8.07,
8.08, 8.09, 8.10, 8.11 or 8.12 and the continuance of such failure for a
period of at least ten (10) days after receipt of written notice from Agent
to Borrowers specifying such failure; or
(d) Failure or refusal of any of Borrowers to observe, keep and perform
any of the covenants, agreements and obligations hereunder or any of the Loan
Documents (except the covenants in Sections 8.01, 8.02, 8.03, 8.04, 8.05,
8.06, 8.07, 8.08, 8.09, 8.10,
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8.11 and 8.12) and the continuance of such failure or refusal for a period of
twenty (20) days after receipt of written notice from Agent to Borrowers
specifying such failure; or
(e) Any of Borrowers or any of their respective Subsidiaries shall (i)
apply for or consent to the appointment of a receiver, custodian, trustee,
intervenor or liquidator of all or a substantial part of its assets, (ii)
voluntarily become the subject of a bankruptcy, reorganization or insolvency
proceeding or be insolvent or admit in writing that it is unable to pay its
debts as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) file a petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy or
insolvency laws, (v) file an answer admitting the material allegations of, or
consent to, or default in answering, a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding, or (vi) become the
subject of an order for relief under any bankruptcy, reorganization or
insolvency proceeding; or
(f) An order, judgment or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition
appointing a receiver, custodian, trustee, intervenor or liquidator of any of
Borrowers or any of their Subsidiaries or of all or substantially all of
their respective assets, and such order, judgment or decree shall continue
unstayed and in effect for a period of sixty (60) days; or a complaint or
petition shall be filed against any of Borrowers or any of their respective
Subsidiaries seeking or instituting a bankruptcy, insolvency, reorganization,
rehabilitation or receivership proceeding of any of Borrowers or any of their
respective Subsidiaries, and such petition or complaint shall not have been
dismissed within sixty (60) days; or
(g) Any final judgment(s) for the payment of money in excess of the sum
of five hundred thousand dollars ($500,000) in the aggregate shall be
rendered against any of Borrowers or any of their respective Subsidiaries and
such judgment or judgments shall not be satisfied or discharged at least ten
(10) days prior to the date on which any of its assets could be lawfully sold
to satisfy such judgment; or
(h) There shall occur any change in the condition (financial or
otherwise) of any of Borrowers or any of their respective Subsidiaries which,
in the reasonable opinion of Majority Banks, has a Material Adverse Effect; or
(i) The occurrence of a default or an event of default under any
Securitization, Additional Warehouse Facility or similar arrangement to which
any of Borrowers or any of their respective Subsidiaries is a party; or
(j) Default shall occur under any Indebtedness for borrowed money
issued, assumed or guaranteed by any of Borrowers or any of their respective
Subsidiaries or under any indenture, agreement or other instrument under
which the same may be
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issued and such default shall continue for a period of time sufficient to
permit the acceleration of maturity of such Indebtedness or any such
Indebtedness shall not be paid when due.
10.02. REMEDIES UPON EVENT OF DEFAULT. If an Event of Default shall
have occurred and be continuing, then Agent shall, at the request of Majority
Banks, exercise any one or more of the following rights and remedies, and any
other remedies in any of the Loan Documents, as Majority Banks in their sole
discretion, may deem necessary or appropriate: (i) declare the principal of,
and all interest then accrued on, the Notes and any other liabilities
hereunder to be forthwith due and payable, whereupon the same shall forthwith
become due and payable without presentment, demand, protest, notice of
default, notice of acceleration or notice of intention to accelerate or other
notice of any kind, all of which Borrowers hereby expressly waive, anything
contained herein or in the Notes to the contrary notwithstanding, (ii) refuse
to make any additional Advances under the Notes, (iii) reduce any claim to
judgment, (iv) apply to the payment of the Notes all collections received in
the lockbox with Agent to which payments on the Eligible Finance Contracts
pledged to Agent and Banks are sent and/or (v) without notice of default or
demand, pursue and enforce any of Banks' rights and remedies under the Loan
Documents or otherwise provided under or pursuant to any applicable law or
agreement. Notwithstanding the foregoing, in the event of the occurrence of
an Event of Default under Section 10.01(e) or Section 10.01(f), the entire
amount of principal of, and interest then accrued on, the Notes shall
automatically be immediately due and payable, without demand, notice of
default, notice of acceleration or notice of any kind, all of which Borrowers
hereby expressly waive and the Revolving Commitment of each of the Banks
shall terminate.
Borrowers hereby designate and appoint Agent as its attorney-in-fact to
endorse to Agent for the benefit of Banks after the occurrence of an Event of
Default all checks deposited in the lockbox with Agent to which payments on
the Eligible Finance Contracts pledged to Agent and Banks are sent. This
power of attorney is irrevocable and is coupled with an interest.
10.03. PERFORMANCE BY BANKS. Should any of Borrowers fail to perform
in any material respect any covenant, duty or agreement contained herein or
in any of the Loan Documents, Agent or Banks may, at their option, perform
or attempt to perform such covenant, duty or agreement on behalf of the
Borrowers following written notice to Borrowers of such intention to perform.
In such event, Borrowers shall, at the request of Agent or Banks, promptly
pay any amount reasonably expended by Agent or Banks in performance or
attempted performance to Agent at its principal office in Fort Worth, Texas,
together with interest thereon at the Past Due Rate from the date of such
expenditure until paid. Notwithstanding the foregoing, it is expressly
understood that neither Banks nor Agent assume any liability or
responsibility (except liability attributable to their gross negligence or
willful misconduct) for the
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performance of any duties of Borrowers hereunder or under any of the Loan
Documents or other control over the management and affairs of the Borrowers.
10.04. REMEDIES CUMULATIVE. All covenants, conditions, provisions,
warranties, indemnities and other undertakings of Borrowers contained in this
Agreement, or in any document referred to herein or in any agreement
supplementary hereto or in any of the Loan Documents shall be deemed
cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions or agreements of Borrowers contained herein. The
failure or delay of Agent or Banks to exercise or enforce any rights, liens,
powers or remedies hereunder or under any of the aforesaid agreements or
other documents against any security shall not operate as a waiver of such
liens, rights, powers and remedies, but all such rights, powers and remedies
shall continue in full force and effect until the loans evidenced by the
Notes and the entire Obligation of Borrowers to Banks shall have been fully
satisfied, and all rights, liens, powers and remedies herein provided for are
cumulative and none are exclusive.
ARTICLE XI
ARBITRATION PROGRAM
11.01. BINDING ARBITRATION. Upon the demand of any party, whether made
before or after the institution of any judicial proceeding, any Dispute (as
defined below) shall be resolved by binding arbitration in accordance with
the terms of this Arbitration Program. A "Dispute" shall include any action,
dispute, claim, or controversy of any kind (e.g., whether in contract or in
tort, statutory or common law, legal or equitable, or otherwise) now existing
or hereafter arising between the parties in any way arising out of,
pertaining to or in connection with (1) the agreement, document or instrument
to which this Arbitration Program is attached or in which it is referred to
or any related agreements, documents, or instruments (the "Documents"), (2)
all past, present or future loans, notes instruments, drafts, credits,
accounts, deposit accounts, safe deposit boxes, safekeeping agreements,
guarantees, letters of credit, goods or services, or other transactions,
contracts or agreements of any kind whatsoever, (3) any past, present or
future incidents, omissions, acts, practices, or occurrences causing injury
to either party whereby the other party or its agents, employees, or
representatives may be liable, in whole or in part, or (4) any aspect of the
past, present or future relationships of the parties including any agency,
independent contractor or employment relationship but excluding claims for
workers' compensation and unemployment benefits ("Relationship"). Any party
to this Arbitration Program may, by summary proceedings (e.g., a plea in
abatement or motion to stay further proceedings), bring any action in court
to compel arbitration of any Disputes. Any party who fails or refuses to
submit to binding arbitration following a lawful demand by the opposing party
shall bear all costs and expenses incurred by the opposing party in
compelling arbitration of any Dispute. The parties agree that by engaging in
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activities with or involving each other as described above, they are
participating in transactions involving interstate commerce. THE PARTIES
UNDERSTAND THAT PURSUANT TO THIS ARBITRATION PROGRAM, DISPUTES SUBMITTED TO
ARBITRATION WILL NOT BE DECIDED THROUGH LITIGATION IN FEDERAL OR STATE COURTS
BEFORE A JUDGE OR JURY.
11.02. GOVERNING RULES. All Disputes between the parties shall be
resolved by binding arbitration administered by the American Arbitration
Association (the "AAA") in accordance with the Commercial Arbitration Rules
of the AAA, the Federal Arbitration Act (Title 9 of the United States Code)
and to the extent the foregoing are inapplicable, unenforceable or invalid,
the laws of the State of Texas. In the event of any inconsistency between
this Arbitration Program and such rules and statutes, this Arbitration
Program shall control. Judgment upon any award rendered hereunder may be
entered in any court having jurisdiction; provided, however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank
of the protections afforded to it under 12 U.S.C. Section 91 or Texas Banking
Code Art. 342-609.
11.03. NO WAIVER; PRESERVATION OF REMEDIES; MULTIPLE Parties. No
provision of, nor the exercise of any rights under, this Arbitration Program
shall limit the right of any party, during any Dispute to seek, use, and
employ ancillary or preliminary remedies, judicial or otherwise, for the
purpose of realizing upon, preserving, protecting, foreclosing or proceeding
under forcible entry and detainer for possession of any real or personal
property, and any such action shall not be deemed an election of remedies.
Such rights shall include, without limitation, rights and remedies relating
to (1) foreclosing against any real or personal property collateral or other
security, (2) exercising self-help remedies including set off rights or (3)
obtaining provisional or ancillary remedies such as injunctive relief,
sequestration, attachment, garnishment, or the appointment of a receiver from
a court having jurisdiction. Such rights can be exercised at any time except
to the extent such action is contrary to a final award or decision in any
arbitration proceeding. The institution and maintenance of an action for
judicial relief or pursuit of provisional or ancillary remedies or exercise
of self-help remedies shall not constitute a waiver of the right of any
party, including the plaintiff, to submit the Dispute to arbitration nor
render inapplicable the compulsory arbitration provisions hereof. In
Disputes involving indebtedness or other monetary obligations, each party
agrees that the other party may proceed against all liable persons, jointly
and severally, or against one or more of them, less than all, without
impairing rights against other liable persons. No party shall be required to
join the principal obligor or any other liable persons (e.g., sureties or
guarantors) in any proceeding against a particular person. A party may
release or settle with one or more liable persons as the party deems fit
without releasing or impairing rights to proceed against any persons not so
released.
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11.04. ARBITRATOR POWERS AND QUALIFICATIONS; AWARDS; MODIFICATION OR
VACATION OF AWARD. Arbitrators are empowered to resolve Disputes by summary
rulings. Arbitrators shall resolve all Disputes in accordance with the
applicable substantive law. All statutes of limitation applicable to any
Dispute shall apply to any proceeding in accordance with this Arbitration
Program. Any arbitrator selected shall be required to be a practicing
attorney licensed to practice law in the State of Texas and shall be required
to be experienced and knowledgeable in the substantive laws applicable to the
subject matter of the Dispute. With respect to a Dispute in which the claims
or amounts in controversy do not exceed $1,000,000, a single arbitrator shall
be chosen and shall resolve the Dispute by rendering an award not to exceed
$1,000,000, including all damages of any kind whatsoever, including costs,
fees and expenses. A Dispute involving claims or amounts in controversy
exceeding $1,000,000 shall be decided by a majority vote of a panel of three
arbitrators (an "Arbitration Panel"), the determination of any two of the
three arbitrators constituting the determination of the Arbitration Panel,
provided, however, that all three Arbitrators on the Arbitration Panel must
actively participate in all hearings and deliberations. Arbitrators
including any Arbitration Panel, may grant any remedy or relief deemed just
and equitable and within the scope of this Arbitration Program and may also
grant such ancillary relief as is necessary to make effective any award.
Arbitrators shall be empowered to impose sanctions and to take such other
actions as they deem necessary to the same extent a judge could pursuant to
the Federal Rules of Civil Procedure, the Texas Rules of Civil Procedure and
applicable law. Arbitrators and Arbitration Panels shall be required to make
specific, written findings of fact and conclusions of law. The determination
of an Arbitrator or Arbitration Panel shall be binding on all parties and
shall not be subject to further review or appeal except as otherwise allowed
by applicable law.
11.05. OTHER MATTERS AND MISCELLANEOUS. To the maximum extent
practicable, the AAA, the Arbitrator (or the Arbitration Panel, as
appropriate) and the parties shall take any action necessary to require that
an arbitration proceeding hereunder be concluded within 180 days of the
filing of the Dispute with the AAA. Arbitration proceedings hereunder shall
be conducted in the State of Texas at a location selected by the Arbitrator.
With respect to any Dispute, each party agrees that all discovery activities
shall be expressly limited to matters directly relevant to the Dispute and
any Arbitrator, Arbitration Panel and the AAA shall be required to fully
enforce this requirement. This Arbitration Program constitutes the entire
agreement of the parties with respect to its subject matter and supersedes
all prior discussions, arrangements, negotiations, and other communications
on dispute resolution. The provisions of this Arbitration Program shall
survive any termination, amendment, or expiration of the Documents or the
Relationship, unless the parties otherwise expressly agree in writing. To
the extent permitted by applicable law, Arbitrators, including any
Arbitration Panel, shall have the power to award recovery of all costs and
fees (including attorneys' fees, administrative fees, and arbitrators' fees)
to the prevailing
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party. This Arbitration Program may be amended, changed, or modified only by
the express provisions of a writing which specifically refers to this
Arbitration Program and which is signed by all the parties hereto. If any
term, covenant, condition, or provision of this Arbitration Program is found
to be unlawful, invalid or unenforceable, such illegality or invalidity or
unenforceability shall not affect the legality, validity, or enforceability
of the remaining parts of this Arbitration Program, and all such remaining
parts hereof shall be valid and enforceable and have full force and effect as
if the illegal, invalid, or unenforceable part had not been included. Each
party agrees to keep all Disputes and arbitration proceedings strictly
confidential, except for disclosures of information required in the ordinary
course of business of the parties or by applicable law or regulation.
ARTICLE XII
THE AGENT
12.01. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes Agent to take such action on its behalf and to
exercise such powers under the Loan Documents as are delegated to Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. With respect to its Commitment, the Advances made by it and the
Notes issued to it, Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include the Agent in its capacity as a Bank. The Agent and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, Borrowers,
and any Person which may do business with Borrowers, all as if Agent were not
Agent hereunder and without any duty to account therefor to Banks.
12.02. NOTE HOLDERS. Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with it
signed by such payee and in form satisfactory to Agent.
12.03. CONSULTATION WITH COUNSEL. Banks agree that Agent may consult
with legal counsel selected by it and shall not be liable for any action
taken or suffered in good faith by them in accordance with the advice of such
counsel.
12.04. DOCUMENTS. Agent shall not be under a duty to examine or pass
upon the validity, effectiveness, enforceability, genuineness or value of any
of the Loan Documents or any other instrument or document furnished pursuant
thereto or in connection therewith, and Agent shall be entitled to assume
that the same are valid, effective, enforceable and genuine and what they
purport to be.
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12.05. RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving written notice thereof to Banks and Borrowers and the
Agent may be removed at any time with or without cause by Majority Banks.
Upon any such resignation or removal, Majority Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so
appointed by Majority Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation or
Majority Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article 12 shall continue in effect for its benefit in respect to any actions
taken or omitted to be taken by it while it was acting as Agent.
12.06. RESPONSIBILITY OF AGENT. It is expressly understood and agreed
that the obligations of Agent under the Loan Documents are only those
expressly set forth in the Loan Documents and that Agent shall be entitled to
assume that no Event of Default or event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default has occurred and
is continuing, unless Agent has actual knowledge of such fact or has received
notice from a Bank that such Bank considers that an Event of Default or such
event has occurred and is continuing and specifying the nature thereof.
Agent shall furnish to each of Banks within five (5) Business Days receipt
copies of the documents, statements and reports furnished to Agent pursuant
to Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.06, 8.07, 8.09, 8.10, 8.11 and
8.12. Banks recognize and agree, that for purposes of Section 2.02(b)
hereof, Agent shall not be required to determine independently whether the
conditions described in Sections 6.02(a), (b), (c), (d) and (e) have been
satisfied except for the receipt of a Request For Borrowing and, in
disbursing funds to Borrowers, may rely fully upon statements contained in
the relevant Request for Borrowing. Neither Agent nor any of its directors,
officers or employees shall be liable for any action taken or omitted to be
taken by it under or in connection with the Loan Documents, except for its
own gross negligence or willful misconduct. Agent shall incur no liability
under or in respect of any of the Loan Documents by acting upon any notice,
consent, certificate, warranty or other paper or instrument reasonably
believed by it to be genuine or authentic or to be signed by the proper party
or parties, or with respect to anything which it may do or refrain from doing
in the reasonable exercise of its judgment, or which may seem to it to be
necessary or desirable in the premises.
The relationship between Agent and each of the Banks is only that of
agent and principal and has no fiduciary aspects, and Agent's duties
hereunder are acknowledged
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to be only ministerial and not involving the exercise of discretion on its
part. Nothing in this Loan Agreement or elsewhere contained shall be
construed to impose on Agent any duties or responsibilities other than those
for which express provision is herein made. In performing its duties and
functions hereunder, Agent does not assume and shall not be deemed to have
assumed, and hereby expressly disclaims, any obligation or responsibility
toward or any relationship of agency or trust with or for, Borrowers. As to
any matters not expressly provided for by this Loan Agreement (including,
without limitation, enforcement or collection of the Notes), Agent shall not
be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of Majority Banks or
all the Banks where unanimity is required and such instructions shall be
binding upon all Banks and all holders of Notes; PROVIDED, HOWEVER, that
Agent shall not be required to take any action which exposes Agent to
personal liability or which is contrary to this Loan Agreement or applicable
law.
12.07. NOTICES OF EVENT OF DEFAULT. In the event that Agent shall have
acquired actual knowledge of any Event of Default or of an event which, with
the giving of notice or the lapse of time, or both, would constitute an Event
of Default, Agent shall promptly give written notice thereof to the other
Banks.
12.08. INDEPENDENT INVESTIGATION. Each of the Banks severally
represents and warrants to Agent that it has made its own independent
investigation and assessment of the financial condition and affairs of the
Borrowers in connection with the making and continuation of its participation
in the Loans hereunder and has not relied exclusively on any information
provided to such Bank by Agent in connection herewith, and each Bank
represents, warrants and undertakes to Agent that it shall continue to make
its own independent appraisal of the creditworthiness of the Borrowers while
the Loans are outstanding or its commitment hereunder is in force.
12.09. INDEMNIFICATION. Banks agree to indemnify Agent (to the extent
not reimbursed by Borrowers), ratably according to the proportion that the
respective principal amounts of the Note held by each of them bears to the
sum of the aggregate principal amount of the Notes, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in any way
relating to or arising out of the Loan Documents or any action taken or
omitted by Agent under the Loan Documents, provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct.
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12.10. BENEFIT OF ARTICLE XII. The agreements contained in this
Article XII are solely for the benefit of Agent and the Banks, and are not
for the benefit of, or to be relied upon by, the Borrowers, or any third
party.
12.11. NOT A LOAN TO AGENT; NO DUTY TO REPURCHASE. No amount paid by
any Bank hereunder shall be considered a loan to Agent. Agent shall have no
obligation to repurchase any interest from any Bank.
12.12. BANK'S REPRESENTATIONS. Each Bank represents and warrants to
Agent and the other Banks that: (a) it is engaged in the business of
entering into commercial lending transactions (including transactions of the
nature contemplated herein) and can bear the economic risk related to the
same; and (b) it does not consider the obligations hereunder to constitute
the "purchase" or "sale" of a "security" within the meaning of any federal or
state securities statute or law, or any rule or regulation under any of the
foregoing.
12.13 CO-AGENT. It is expressly understood and agreed that Bank One,
Texas, N.A. shall have no responsibility or obligations as a co-agent
hereunder other than its obligations as a Bank under this Loan Agreement.
ARTICLE XIII
MISCELLANEOUS
13.01. WAIVER. No failure to exercise, and no delay in exercising, on
the part of any Bank, any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other further
exercise thereof or the exercise of any other right. The rights of Banks
hereunder and under the Loan Documents shall be in addition to all other
rights provided by law. No notice or demand given in any case shall
constitute a waiver of the right to take other action in the same, similar or
other instances without such notice or demand.
13.02. NOTICES. Any notices or other communications required or
permitted to be given by this Agreement or any other documents relating to
the loans evidenced by the Notes (the "Loan Documents") must be given in
writing and personally delivered, sent by telecopy or telex (answerback
received) or mailed by prepaid certified or registered mail, return receipt
requested, to the party to whom such notice or communication is directed at
the address of such party as follows:
Borrowers: AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
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FAX No. (817) 336-9519
AmeriCredit Financial Services, Inc.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
FAX No. (817) 336-9519
AmeriCredit Operating Co., Inc.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
FAX No. (817) 336-9519
Agent: Wells Fargo Bank (Texas), National Association
309 W. Seventh Street, Suite 1100
Fort Worth, Texas 76102
Attn: Steve Wood
FAX No. (817) 885-1110
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Attn: Agency Department - Shelley Johnson
FAX No. (415) 512-9408
Any such notice or other communication shall be deemed to have been given on
the date it is personally delivered or sent by telecopy or telex as aforesaid
or, if mailed, on the second day after it is mailed as aforesaid (whether
actually received or not). Any party may change its address for purposes of
this Loan Agreement by giving notice of such change to all other parties
pursuant to this Section 13.02. Any notice given hereunder by Borrowers to
Agent shall constitute notice to all of the Banks.
13.03. PAYMENT OF EXPENSES. Borrowers agree to pay all costs and
expenses of Banks (including, without limitation, the reasonable attorneys'
fees of Banks' outside legal counsel) incurred by Banks in connection with
the preservation and enforcement (which include work-outs and bankruptcy
related matters) of Banks' rights under this Loan Agreement, the Notes,
and/or the other Loan Documents, and all reasonable costs and expenses of
Banks (including without limitation the reasonable fees and expenses of
Banks' outside legal counsel) in connection with the negotiation,
preparation, execution and delivery of this Loan Agreement, the Notes, and
the other Loan Documents and any and all amendments, modifications and
supplements thereof or thereto.
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13.04. MAXIMUM INTEREST RATE. Regardless of any provisions contained
in this Loan Agreement, the Notes or in any of the other Loan Documents,
Banks shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and, in the event any Bank ever receives, collects or applies as
interest any such excess, such amount which would be excessive interest shall
be deemed to be a partial prepayment of principal and treated hereunder as
such, and, if the principal amount of the Obligations is paid in full, any
remaining excess shall forthwith be paid to Borrowers. In determining
whether or not the interest paid or payable under any specific contingency
exceeds the Maximum Rate, Borrowers and Banks shall, to the maximum extent
permitted by applicable law, (i) characterize any nonprincipal payments
(other than payments which are expressly designated as interest payments
hereunder) as an expense, fee, or premium, rather than as interest, (ii)
exclude voluntary prepayments and the effect thereof, and (iii) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of the indebtedness so that interest
paid by Borrowers does not exceed the Maximum Rate; provided that, if a Note
is paid and performed in full prior to the end of the full contemplated term
thereof, and if the interest received for the actual period of existence
thereof exceeds the Maximum Rate, Banks shall refund to Borrowers the amount
of such excess or credit the amount of such excess against the principal
amount of the Notes and, in such event, Banks shall not be subject to the
penalties provided by any laws for contracting for, charging, taking,
reserving or receiving interest in excess of the Maximum Rate.
13.05. AMENDMENTS, WAIVERS, ETC. Agent may enter into any amendment or
modification of, or may waive compliance with the terms of, any of the Loan
Documents with the written direction of the Majority Banks; PROVIDED THAT the
consent of all Banks shall be required before Agent may take or omit to take
any action under any of the Loan Documents directly affecting (a) the
extension of the maturity of or the postponement of the payment of any
portion of the principal of or interest on Revolving Credit Loans or any fees
relating thereto, (b) a reduction of or increase in the principal amount of
or rate of interest payable on Revolving Credit Loans or any fees related
thereto, (c) the release of any of Borrowers, (d) the release of any of the
Guarantors, (e) the release of any collateral except in the case of a
Securitization or an Additional Warehouse Facility or (f) any material change
in the definition of Revolving Credit Borrowing Base, in the definition of
Net Amount or in the definition of Eligible Finance Contract. Nor shall any
of the following occur without the consent of all Banks: (a) any amendment
to the definition of Majority Banks, or (b) any amendment to this Section
13.05. The Commitment of a Bank shall not be increased without the consent
of such Bank. If any Bank is unwilling to consent to any amendment or
modification of, or waiver of compliance with, the Loan Agreement (where the
consent of such Bank is required), the consenting Majority Banks shall have
the right, but not the obligation, to repurchase such Bank's Percentage of
the Obligation at such time for a purchase price equal to Bank's Percentage
of any and all unpaid Advances made by Agent to the
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Borrowers under the Loan Agreement, any and all unpaid interest thereon and
unpaid accrued fees or other amounts owing to such Bank.
13.06. GOVERNING LAW. This Loan Agreement has been prepared, is being
executed and delivered, and is intended to be performed in the State of
Texas, and the substantive laws of such state and the applicable federal laws
of the United States of America shall govern the validity, construction,
enforcement and interpretation of this Loan Agreement and all of the other
Loan Documents.
13.07. INVALID PROVISIONS. If any provision of any Loan Document is
held to be illegal, invalid or unenforceable under present or future laws
during the term of this Loan Agreement, such provision shall be fully
severable; such Loan Document shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of
such Loan Document; and the remaining provisions of such Loan Document shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from such Loan
Document. Furthermore, in lieu of each such illegal, invalid or
unenforceable provision, there shall be added as part of such Loan Document a
provision mutually agreeable to Borrowers, Agent and Majority Banks as
similar in terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable. In the event Borrowers,
Agent and Majority Banks are unable to agree upon a provision to be added to
the Loan Document within a period of ten (10) Business Days after a provision
of the Loan Document is held to be illegal, invalid or unenforceable, then a
provision reasonably acceptable to Agent and Majority Banks as similar in
terms to the illegal, invalid or unenforceable provision as is possible and
be legal, valid and enforceable shall be added automatically to such Loan
Document. In either case, the effective date of the added provision shall be
the date upon which the prior provision was held to be illegal, invalid or
unenforceable.
13.08. HEADINGS. Section headings are for convenience of reference
only and shall in no way affect the interpretation of this Loan Agreement.
13.09. PARTICIPATION AGREEMENTS AND ASSIGNMENTS. (a)(i) Subject to
Section 13.09(a)(ii), each Bank may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Loan Agreement
(including, without limitation, all or a portion of its Commitment, the Loan
owing to it and the Note held by it) and the other Loan Documents; PROVIDED,
HOWEVER, that (A) no such assignment shall be made except to an Affiliate
unless such assignment and assignee have been approved by the Agent and, so
long as no Events of Default exists, the Borrowers, such approvals not to be
unreasonably withheld, (B) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations of the assignor under
this Loan Agreement and the other Loan Documents, and no assignment shall be
made unless it covers a pro rata share of all rights and obligations of such
assignor under this Loan
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Agreement and the other Loan Documents, (C) the amount of the Commitment of
the assigning Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance substantially in
the form of EXHIBIT H (hereinafter referred to as the "Assignment and
Acceptance") with respect to such assignment) shall, unless otherwise agreed
to by the Agent, in no event be less than $10,000,000 or, if less, the
entirety of its Commitment and shall be an integral multiple of $1,000,000,
(D) each such assignment shall be to an Eligible Assignee (defined below),
(E) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (defined below), an
Assignment and Acceptance, together with any Note subject to such assignment
and (F) Agent receives a fee from the assignor in the amount of $2,500. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (1) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations of a Bank
under the Loan Documents, (2) the assigning Bank thereunder shall, to the
extent that rights and obligations under the Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Loan
Agreement, such Bank shall cease to be a party hereto), and (3) Section
2.01(a) shall be deemed to have been automatically amended to reflect the
revised Commitments. As used herein, "Eligible Assignee" shall mean (a) any
Bank or any Affiliate of any Bank; (b) a commercial bank organized under the
laws of the United States, or any state thereof, and having total assets in
excess of $1,000,000,000 and having deposits rated in either of the two
highest generic letter rating categories (without regard to subcategories)
from either Standard & Poor's Corporation or Moody's Investors Service, Inc.;
(c) a commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development
("OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through
a branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any
country which is a member of the OECD; and (e) any other financial
institution approved by the Agent.
(ii) In the event any Bank desires to transfer all or any portion of
its rights and obligations under the Loan Documents, it shall give the
Borrowers and the Agent prior written notice of the identity of such
transferee and the terms and conditions of such transfer (a "TRANSFER
NOTICE"). So long as no Event of Default has occurred and is continuing, the
Borrowers may, no later than ten (10) days following receipt of such Transfer
Notice, designate an alternative
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transferee and such Bank shall thereupon be obligated to sell the interests
specified in such Transfer Notice to such alternative transferee, subject to
the following: (A) such transfer shall be made on the same terms and
conditions outlined in such Transfer Notice, (B) such transfer shall
otherwise comply with the terms and conditions of the Loan Documents
(including Section 13.09(a)(i), and (C) such alternative transferee must be
an Eligible Assignee approved by the Agent. If the Borrowers shall fail to
designate an alternative transferee within such ten (10) day period, such
Bank shall, subject to compliance with the other terms and provisions hereof,
be free to consummate the transfer described in such Transfer Notice.
(b) By executing and delivering an Assignment and Acceptance
substantially in the form of EXHIBIT H, the assigning Bank thereunder and the
assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and
Acceptance, such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Loan Agreement or any other instrument or document furnished
pursuant hereto, (ii) such assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of its
obligations under this Loan Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received
a copy of this Loan Agreement and the other Loan Documents, together with
copies of the financial statements referred to in Section 7.07 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon any of the Banks
(including such assigning Bank) and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Loan Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Agent to take such action on its behalf and to
exercise such powers under this Loan Agreement and the other Loan Documents
as are delegated to such Person by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Loan Agreement and the other Loan Documents are
required to be performed by it as a Bank.
(c) The Agent shall maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Banks and the Commitment of, and principal amount
of the Notes owing to, each Bank from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers and each of the Banks may treat each
Person whose name is recorded in the
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Register as a Bank hereunder for all purposes of this Loan Agreement. The
Register shall be available for inspection by the Borrowers or any of the
Banks at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee representing that it is an Eligible Assignee,
together with any Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of EXHIBIT H hereto and satisfies all other requirements set forth in this
Section 13.09, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrowers and the other Banks. Within five (5) Business Days
after its receipt of such notice, the Borrowers, at their own expense, shall
execute and deliver to the Agent, in exchange for the surrendered Note, a new
Note to the order of such Eligible Assignee in an amount corresponding to the
Commitment assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Bank has retained a Commitment hereunder, a
new Note to the order of the assigning Bank in an amount corresponding to the
Commitment retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form prescribed by EXHIBIT H
hereto.
(e) Each Bank may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Loan Agreement and the other Loan Documents (including, without limitation,
all or a portion of its Commitment and the Notes owing to it); PROVIDED,
HOWEVER, that (i) such Bank's obligations under this Loan Agreement
(including, without limitation, its Commitment to the Borrowers hereunder)
and the other Loan Documents shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the participating banks or other entities shall not be
considered a "Bank" for purposes of the Loan Documents, (iii) the
participating banks or other entities shall be entitled to the cost
protection provision contained in Section 4.03 and Section 4.05, in each case
to the same extent that the Bank from which such participating bank or other
entity acquired its participations would be entitled to the benefit of such
cost protection provisions and (iv) the Borrowers and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Loan Agreement and the other Loan
Documents, and such Bank shall retain the sole right to enforce the
obligations of the Borrowers relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Loan Agreement
(other than amendments, modifications or waivers with respect to the amounts
of any fees payable hereunder or the amount of principal of or the rate at
which interest is payable on the Notes, or the dates fixed for payments of
principal or interest on the Notes).
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(f) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 13.09, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrowers furnished to such Bank by or on behalf
of the Borrowers; PROVIDED that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall agree
(subject to customary exceptions) to preserve the confidentiality of any
confidential information relating to the Borrowers received from such Bank.
(g) The obligations of the Banks in this Loan Agreement, the Notes and
any other Loan Documents shall not be assignable or transferable by Borrowers
and any purported assignment or transfer shall, as to the Agent and Banks, be
of no force and effect.
13.10. ARTICLE 15.10(b). Borrowers and Banks hereby agree that, except
for Article 15.10(b) thereof, the provisions of Charter 15 of Title 79 of the
Revised Civil Statutes of Texas, 1925, as amended (regulating certain
revolving credit loans and revolving triparty accounts) shall not apply to
the Loan Documents.
13.11. SURVIVAL. All representations and warranties made by Borrowers
herein shall survive delivery of the Notes and the making of the Revolving
Credit Loans.
13.12. NO THIRD PARTY BENEFICIARY. The parties do not intend the
benefits of this Agreement to inure to any third party, nor shall this Loan
Agreement be construed to make or render Banks liable to any materialman,
supplier, contractor, subcontractor, purchaser or lessee of any property
owned by Borrowers, or for debts or claims accruing to any such persons
against Borrowers. Notwithstanding anything contained herein or in the
Notes, or in any other Loan Document, or any conduct or course of conduct by
any or all of the parties hereto, before or after signing this Loan Agreement
or any of the other Loan Documents, neither this Loan Agreement nor any other
Loan Document shall be construed as creating any right, claim or cause of
action against Banks, or any of its officers, directors, agents or employees,
in favor of any materialman, supplier, contractor, subcontractor, purchaser
or lessee of any property owned by Borrowers, nor to any other person or
entity other than Borrowers.
13.13. COUNTERPARTS. This Loan Agreement may be executed by one or
more of the parties to this Loan Agreement on any number of separate
counterparts (including by facsimile transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Loan Agreement signed by all the
parties shall be lodged with the Borrowers and the Agent.
13.14. FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
-63-
<PAGE>
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
-64-
<PAGE>
EXECUTED effective as of the 7th day of October 1996.
AMERICREDIT CORP., a Texas
corporation
By:
-----------------------------------------
Daniel E. Berce, Executive Vice President
AMERICREDIT FINANCIAL SERVICES,
INC., a Delaware corporation
By:
-----------------------------------------
Daniel E. Berce, Executive Vice President
AMERICREDIT OPERATING CO., INC., a
Delaware corporation
By:
-----------------------------------------
Daniel E. Berce, Executive Vice President
BORROWERS
AMERICREDIT PREMIUM FINANCE,
INC., a Delaware corporation
By:
-----------------------------------------
Daniel E. Berce, President
ACF INVESTMENT CORP., a Delaware
corporation
By:
-----------------------------------------
Daniel E. Berce, Executive Vice President
-65-
<PAGE>
GUARANTORS
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By:
------------------------------------------
Steve Wood, Senior
Vice President
BANK ONE, TEXAS, N.A.
By:
------------------------------------------
J. Michael Wilson, Vice President
LASALLE NATIONAL BANK
By:
------------------------------------------
Terry M. Keating, First Vice
President
THE SUMITOMO BANK LIMITED
By:
------------------------------------------
John J. O'Neill, Vice President and
Manager
By:
------------------------------------------
Julie Schell, Vice President
HARRIS TRUST AND SAVINGS BANK
By:
------------------------------------------
-66-
<PAGE>
Michael A. Houlihan, Vice
President
COMERICA BANK-TEXAS
By:
------------------------------------------
Jeffrey A. Moten, Vice
President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By:
------------------------------------------
Buddy Wurthrich, Vice President
BANKAMERICA BUSINESS CREDIT, INC.
By:
------------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
THE BANK OF NOVA SCOTIA
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
BANKS
WELLS FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By:
------------------------------------------
Steve Wood, Senior Vice President
AGENT
BANK ONE, TEXAS, N.A.
-67-
<PAGE>
By:
------------------------------------------
J. Michael Wilson, Vice President
CO-AGENT
<PAGE>
L&W DRAFT - FEBRUARY 1, 1997
SMITH BARNEY - AMERICREDIT
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMERICREDIT CORP.
As Issuer
AMERICREDIT FINANCIAL SERVICES, INC.,
AMERICREDIT OPERATING CO., INC.,
AMERICREDIT PREMIUM FINANCE, INC.,
AMERICREDIT CORPORATION OF CALIFORNIA,
(FORMERLY KNOWN AS RANCHO VISTA MORTGAGE CORPORATION) AND
ACF INVESTMENT CORP.
As Guarantors
---------------------------
$125,000,000
SERIES A AND SERIES B
9 1/4% SENIOR NOTES DUE 2004
-----------------------
INDENTURE
Dated as of February 4, 1997
-----------------------
-----------------------
BANK ONE, COLUMBUS, NA
As Trustee
-----------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;11.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05,11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . . 14
Section 1.03. Incorporation by Reference of Trust Indenture Act. . . . 14
Section 1.04. Rules of Construction. . . . . . . . . . . . . . . . . . 15
ARTICLE 2 - THE NOTES
Section 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . . 15
Section 2.02. Execution and Authentication . . . . . . . . . . . . . . 16
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . 16
Section 2.04. Paying Agent to Hold Money in Trust. . . . . . . . . . . 17
Section 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . 17
Section 2.07. Replacement Notes. . . . . . . . . . . . . . . . . . . . 22
Section 2.09. Treasury Notes . . . . . . . . . . . . . . . . . . . . . 23
Section 2.10. Temporary Notes. . . . . . . . . . . . . . . . . . . . . 23
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . 24
ARTICLE 3 - REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . 24
Section 3.02. Selection of Notes to Be Redeemed. . . . . . . . . . . . 24
Section 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . 25
Section 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . 25
Section 3.05. Deposit of Redemption Price. . . . . . . . . . . . . . . 26
Section 3.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . 26
Section 3.07. Optional Redemption. . . . . . . . . . . . . . . . . . . 26
Section 3.08. Mandatory Redemption . . . . . . . . . . . . . . . . . . 27
Section 3.09. Offer to Purchase by Application of Excess Proceeds. . . 27
ARTICLE 4 - COVENANTS
Section 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . . 28
Section 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . 29
Section 4.03. Reports. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.04. Compliance Certificate . . . . . . . . . . . . . . . . . 30
Section 4.05. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.06. Stay, Extension and Usury Laws . . . . . . . . . . . . . 31
Section 4.07. Restricted Payments. . . . . . . . . . . . . . . . . . . 31
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . 33
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 4.10. Asset Sales. . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.11. Transactions with Affiliates . . . . . . . . . . . . . . 36
Section 4.12. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.13. Line of Business . . . . . . . . . . . . . . . . . . . . 37
i
<PAGE>
Section 4.14. Corporate Existence. . . . . . . . . . . . . . . . . . . 37
Section 4.15. Offer to Repurchase Upon Change of Control . . . . . . . 37
Section 4.16. Limitation on Issuances and Sales of Capital Stock of
Wholly Owned Subsidiaries . . . . . . . . . . . . . . . .39
Section 4.17. Payments for Consent . . . . . . . . . . . . . . . . . . 39
Section 4.18. Limitation on Investment Company Status. . . . . . . . . 39
Section 4.19. Additional Subsidiary Guarantees . . . . . . . . . . . . 39
ARTICLE 5 - SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets . . . . . . . . 39
Section 5.02. Successor Corporation Substituted. . . . . . . . . . . . 40
ARTICLE 6 - DEFAULTS AND REMEDIES
Section 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . 40
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . 43
Section 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . . . . 43
Section 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . 43
Section 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . 43
Section 6.07. Rights of Holders of Notes to Receive Payment. . . . . . 44
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . 44
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . 44
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . 45
ARTICLE 7 - TRUSTEE
Section 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . 45
Section 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . 46
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . 47
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . 47
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . 47
Section 7.06. Reports by Trustee to Holders of the Notes . . . . . . . 47
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . 48
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . 48
Section 7.09. Successor Trustee by Merger, etc . . . . . . . . . . . . 49
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . 49
Section 7.11. Preferential Collection of Claims Against Company. . . . 50
ARTICLE 8 - LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.02. Legal Defeasance and Discharge . . . . . . . . . . . . . 50
Section 8.03. Covenant Defeasance. . . . . . . . . . . . . . . . . . . 50
Section 8.04. Conditions to Legal or Covenant Defeasance . . . . . . . 51
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. . . . . . . . . . 52
Section 8.06. Repayment to Company . . . . . . . . . . . . . . . . . . 53
Section 8.07. Reinstatement. . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 9 - AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes. . . . . . . . . . . 53
Section 9.02. With Consent of Holders of Notes . . . . . . . . . . . . 54
ii
<PAGE>
Section 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . 55
Section 9.04. Revocation and Effect of Consents. . . . . . . . . . . . 55
Section 9.05. Notation on or Exchange of Notes . . . . . . . . . . . . 55
Section 9.06. Trustee to Sign Amendments, etc. . . . . . . . . . . . . 56
ARTICLE 10 - SUBSIDIARY GUARANTEES
Section 10.01. Subsidiary Guarantees. . . . . . . . . . . . . . . . . . 56
Section 10.02. Execution and Delivery of Subsidiary Guarantees. . . . . 57
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms . . . 57
Section 10.04. Releases Following Sale of Assets. . . . . . . . . . . . 58
Section 10.05. Limitation on Guarantor Liability. . . . . . . . . . . . 58
Section 10.06. "Trustee" to Include Paying Agent. . . . . . . . . . . . 59
ARTICLE 11- MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . 59
Section 11.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.03. Communication by Holders of Notes with Other Holders of
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.04. Certificate and Opinion as to Conditions Precedent . . . 60
Section 11.05. Statements Required in Certificate or Opinion. . . . . . 61
Section 11.06. Rules by Trustee and Agents. . . . . . . . . . . . . . . 61
Section 11.07. No Personal Liability of Directors, Officers, Employees
and Stockholders . . . . . . . . . . . . . . . . . . . . 61
Section 11.08. Governing Law. . . . . . . . . . . . . . . . . . . . . . 61
Section 11.09. No Adverse Interpretation of Other Agreements. . . . . . 61
Section 11.10. Successors . . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.11. Severability . . . . . . . . . . . . . . . . . . . . . . 62
Section 11.12. Counterpart Originals. . . . . . . . . . . . . . . . . . 62
Section 11.13. Table of Contents, Headings, etc . . . . . . . . . . . . 62
iii
<PAGE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF SUBSIDIARY GUARANTEE
iv
<PAGE>
INDENTURE dated as of February 4, 1997 between AmeriCredit Corp., a
Texas corporation (the "COMPANY"), AmeriCredit Financial Services, Inc., a
Delaware corporation, AmeriCredit Operating Co., Inc., a Delaware
corporation, ACF Investment Corp., a Delaware corporation, AmeriCredit
Premium Finance, Inc., a Delaware corporation, and Americredit Corporation of
California (formerly known as Rancho Vista Mortgage Corporation), a
California corporation (together with all other Persons who execute a
Subsidiary Guarantee pursuant to the terms of this Indenture, the
"GUARANTORS") and Bank One, Columbus, NA, as trustee (the "TRUSTEE").
The Company, the Guarantors and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the
Holders of the 9 1/4% Series A Senior Notes due 2004 (the "SERIES A NOTES")
and the 9 1/4% Series B Senior Notes due 2004 (the "SERIES B NOTES" and,
together with the Series A Notes, the "NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRETED VALUE" means, with respect to discount Indebtedness, as
of any date of determination prior to the end of the "discount" or "zero
coupon" period for such discount Indebtedness, the sum of (a) the initial
offering price of such Indebtedness and (b) that portion of the excess of the
principal amount at maturity of such Indebtedness over such initial offering
price as shall have been accreted thereon from the date of issuance of such
discount Indebtedness through the date of determination.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or
in contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"ACQUISITION FEES" means, with respect to any Eligible Receivables
as of any date, the discount or cash payments received by the Company from
dealers and other Persons with respect to the Eligible Receivables purchased
from such dealer or other Person and owned by the Company or its Restricted
Subsidiaries as of such date.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or
otherwise; PROVIDED that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
<PAGE>
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depository that apply to such transfer or exchange.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of
a sale and leaseback) other than sales of Receivables in connection with
Securitizations, Warehouse Facilities or Credit Facilities in the ordinary
course of business consistent with past practices (PROVIDED that the sale,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole will be governed
by Section 4.15 hereof and/or Section 5.01 hereof and not by the provisions
of Section 4.10 hereof), and (ii) the issue or sale by the Company or any of
its Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in
the case of either clause (i) or (ii), whether in a single transaction or a
series of related transactions (a) that have a fair market value in excess of
$500,000 or (b) for net proceeds in excess of $500,000. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Wholly-Owned
Restricted Subsidiary or by a Wholly-Owned Restricted Subsidiary to the
Company or to another Wholly-Owned Restricted Subsidiary, (ii) an issuance of
Equity Interests by a Wholly-Owned Restricted Subsidiary to the Company or to
another Wholly-Owned Restricted Subsidiary, and (iii) a Restricted Payment
that is permitted by Section 4.07 hereof will not be deemed to be Asset Sales.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors or other
governing body charged with the ultimate management of any Person, or any
duly authorized committee thereof.
"BORROWING BASE" means, as of any date, an amount equal to the sum
of (i) 80% of the aggregate amount of Receivables (other than loans secured
by residential mortgages) owned by the Company and its Wholly-Owned
Restricted Subsidiaries as of such date that are not in default, excluding
(A) any Receivables that were acquired or originated with Permitted Warehouse
Debt, (B) any Receivables that are held by a Securitization Trust, and (C)
any Receivables that are subject to Liens other than Liens securing
Obligations under Credit Facilities; (ii) 60% of the book value (determined
on a consolidated basis in accordance with GAAP) of interests in portfolios
of securitized Receivables that are owned by the Company and its Wholly-Owned
Restricted Subsidiaries as of such date and that are not subject to any Liens
other than Liens to secure Obligations under Credit Facilities; and (iii) 98%
of the aggregate amount of Receivables that consist of loans secured by
residential mortgages owned by the Company and its Wholly-Owned Restricted
Subsidiaries as of such date that are not in default, excluding (A) any such
loans that were acquired or originated with Permitted Warehouse Debt, (B) any
such loans that are held by a Securitization Trust, and (C) any such loans
that are subject to Liens other than Liens securing Obligations under Credit
Facilities.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
2
<PAGE>
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of $500 million
and a Keefe Bank Watch Rating of "B" or better, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the
types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act) other than in the ordinary course of
business; (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any "person" (as defined above), becomes the "beneficial owner"
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
subsequent condition), directly or indirectly, of more than 50% of the Voting
Stock of the Company (measured by voting power rather than number of shares);
(iv) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or (v) the Company
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance); PROVIDED, HOWEVER, that
this clause (v) shall not apply to any such consolidation or merger if,
immediately after the consummation of such transaction and after giving
effect thereto, the ratings assigned to the Notes by Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group are equal to or higher than
Baa3 (or the equivalent) and BBB- (or the equivalent), respectively.
"CONSOLIDATED INDEBTEDNESS" means, with respect to any Person as of
any date of determination, the sum, without duplication, of (i) the total
amount of Indebtedness of such Person and its Restricted Subsidiaries, PLUS
(ii) the total amount of Indebtedness of any other Person, to the extent that
such
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Indebtedness has been Guaranteed by the referent Person or one or more of its
Restricted Subsidiaries, PLUS (iii) the aggregate liquidation value of all
Disqualified Stock of such Person and all preferred stock of Restricted
Subsidiaries of such Person, in each case, determined on a consolidated basis
in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, with respect to any Person, as
of any date of determination, the ratio of (i) the Consolidated Indebtedness
of such Person as of such date, excluding, however, all (A) borrowings under
Credit Facilities that constitute Permitted Debt, (B) Permitted Warehouse
Debt and (C) Hedging Obligations that constitute Permitted Debt to (ii) the
Consolidated Net Worth of such Person as of such date.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in
accordance with GAAP); PROVIDED that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person or a
Wholly-Owned Restricted Subsidiary thereof, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary
of that Net Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of any
cash received by such Person upon issuance of such preferred stock, less (x)
all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business
made within 12 months after the acquisition of such business) subsequent to
the date of this Indenture in the book value of any asset owned by such
Person or a consolidated Subsidiary of such Person, (y) all investments as of
such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to
which the Trustee may give notice to the Company.
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"CREDIT AGREEMENT" means the Second Restated Revolving Credit
Agreement, dated as of October 7, 1996, by and among the Company, certain of
its Restricted Subsidiaries and the several banks named therein, providing
for up to $240 million of revolving credit borrowings, including all related
notes, Guarantees, security agreements, collateral documents, and other
instruments and agreements executed in connection therewith.
"CREDIT ENHANCEMENT AGREEMENTS" means, collectively, any documents,
instruments or agreements entered into by the Company, any of its Restricted
Subsidiaries or any of the Securitization Trusts exclusively for the purpose
of providing credit support for the Securitization Trusts or any of their
respective Indebtedness or asset-backed securities.
"CREDIT FACILITIES" means, with respect to the Company or any of
its Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Credit Agreement) with banks or other institutional lenders
providing for revolving credit loans; PROVIDED that in no event will any such
facility that constitutes a Warehouse Facility be deemed to qualify as a
Credit Facility.
"DEFAULT" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto, except that such Note shall
not have the information called for by footnotes 1 and 2 thereof.
"DEPOSITORY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depository with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the Holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature.
"ELIGIBLE RECEIVABLES" means, at any time, all Receivables owned by
the Company or any of its Restricted Subsidiaries that meet the sale or loan
eligibility criteria set forth in the Warehouse Facility pursuant to which
the applicable Receivables were financed; excluding, however, any Receivables
that are pledged to secure, or were acquired or originated with, borrowings
under a Credit Facility and excluding any such Receivables held by a
Securitization Trust.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
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"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth
in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means up to $39.5 million in aggregate
principal amount of Indebtedness of the Company and its Subsidiaries (other
than Indebtedness under the Credit Agreement) in existence on the date of
this Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time
and consistently applied.
"GLOBAL NOTE" means the global note in the form of Exhibit A hereto
bearing the Private Placement Legend and deposited with and registered in the
name of the Depository or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in reliance on
Rule 144A.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part
of any Indebtedness.
"GUARANTORS" means each of (i) AmeriCredit Financial Services,
Inc., a Delaware corporation, AmeriCredit Operating Co., Inc., a Delaware
corporation, ACF Investment Corp., a Delaware corporation, Americredit
Corporation of California (formerly known as Rancho Vista Mortgage
Corporation), a California corporation and AmeriCredit Premium Finance, Inc.,
a Delaware corporation, and (ii) any other subsidiary that executes a
Subsidiary Guarantee in accordance with the provisions of Section 4.19
hereof, and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all indebtedness of others secured by a Lien on any asset of such Person
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(whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person. The amount of any Indebtedness outstanding
as of any date shall be (i) the accreted value thereof, in the case of any
Indebtedness that does not require current payments of interest, and (ii) the
principal amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, the Company shall be deemed
to have made an Investment on the date of any such sale or disposition equal
to the fair market value of the Equity Interests of such Subsidiary not sold
or disposed of in an amount determined in accordance with Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i)
any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or (b) the disposition of any securities by such Person or any
of its Restricted
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Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring
gain (but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied
to the repayment of Indebtedness secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance
with GAAP.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender; and (ii) no default
with respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Notes) of the Company or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity; and (iii) as to
which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"NON-U.S. PERSON" means a person who is not a U.S. Person.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING" means the Offering of the Notes by the Company.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, a vice chairman, the principal financial officer, the
treasurer or the principal accounting officer of the Company, that meets the
requirements of Section 11.05 hereof.
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"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company,
any Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to DTC, a Person who has an
account with DTC.
"PERMITTED BUSINESS" means the business of purchasing, originating,
brokering and marketing, pooling and selling, securitizing and servicing
Receivables, and entering into agreements and engaging in transactions
incidental to the foregoing.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or
in a Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor;
(b) any Investment in Cash Equivalents; (c) any Investment by the Company or
any Subsidiary of the Company in a Person, if as a result of such Investment
(i) such Person becomes a Wholly-Owned Restricted Subsidiary of the Company
and a Guarantor that is engaged in a Permitted Business or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor and
that is engaged in a Permitted Business; (d) any Restricted Investment made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.10 hereof; (e) any
acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company; (f) Investments by the
Company or any of its Subsidiaries in Securitization Trusts in the ordinary
course of business in connection with or arising out of Securitizations; (g)
purchases of all remaining outstanding asset-backed securities of any
Securitization Trust for the purpose of relieving the Company or a Subsidiary
of the Company of the administrative expense of servicing such Securitization
Trust, but only if 90% or more of the aggregate principal amount of the
original asset-backed securities of such Securitization Trust have previously
been retired; and (h) other Investments by the Company or any of its
Subsidiaries in any Person (other than an Affiliate of the Company that is
not also a Subsidiary of the Company) that do not exceed $5.0 million in the
aggregate at any one time outstanding (measured as of the date made and
without giving effect to subsequent changes in value).
"PERMITTED LIENS" means (i) Liens existing on the date of this
Indenture; (ii) Liens on Eligible Receivables and the proceeds thereof to
secure Permitted Warehouse Debt or permitted Guarantees thereof; (iii) Liens
to secure revolving credit borrowings under Credit Facilities, PROVIDED that
such borrowings were permitted by this Indenture to be incurred; (iv) Liens
on Receivables and the proceeds thereof incurred in connection with
Securitizations or permitted Guarantees thereof; (v) Liens on spread accounts
and excess servicing receivable, Liens on the stock of Restricted
Subsidiaries of the Company substantially all of the assets of which are
spread accounts and excess servicing receivable and Liens on interests in
Securitization Trusts, in each case incurred in connection with Credit
Enhancement Agreements; (vi) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company; (vii) Liens on property existing at the time
of acquisition thereof by the Company or any Restricted Subsidiary of the
Company, PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition; (viii) Liens securing Indebtedness
incurred to finance the construction or purchase of property of the Company
or any of its Wholly-Owned Restricted Subsidiaries (but excluding Capital
Stock of another Person); PROVIDED, HOWEVER, that any such Lien may not
extend to any other
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property owned by the Company or any of its Restricted Subsidiaries at the
time the Lien is incurred, and the Indebtedness secured by the Lien may not
be incurred more than 180 days after the latter of the acquisition or
completion of construction of the property subject to the Lien; PROVIDED,
FURTHER, that the Amount of Indebtedness secured by such Liens do not exceed
the fair market value (as evidenced by a resolution of the Board of Directors
of the Company set forth in an Officers' Certificate delivered to the
Trustee) of the property purchased or constructed with the proceeds of such
Indebtedness; (ix) Liens to secure any Permitted Refinancing Indebtedness
incurred to refinance any Indebtedness secured by any Lien referred to in the
foregoing clauses (i) through (viii), PROVIDED, HOWEVER, that such new Lien
shall be limited to all or part of the same property that secured the
original Lien and the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the outstanding principal amount or, if
greater, committed amount of the Indebtedness described under clauses (i)
through (viii), as the case may be, at the time the original Lien became a
permitted Lien; (x) Liens in favor of the Company; (xi) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of
the Company with respect to obligations that do not exceed $1.0 million in
the aggregate at any one time outstanding; (xii) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business (including, without limitation, landlord Liens on leased
properties); (xiii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
PROVIDED that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefor; (xiv) Liens on assets
of Guarantors to secure Senior Guarantor Debt of such Guarantors that was
permitted by this Indenture to be incurred; and (xv) Liens on assets of
Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted
Subsidiaries.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than Permitted Warehouse Debt or intercompany
Indebtedness); PROVIDED that: (i) the principal amount (or accreted value,
if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"PERMITTED WAREHOUSE DEBT" means Indebtedness of the Company or a
Restricted Subsidiary of the Company outstanding under one or more Warehouse
Facilities; PROVIDED, HOWEVER, that (i) the assets purchased with proceeds of
such warehouse debt are or, prior to any funding under the Warehouse Facility
with respect to such assets, were eligible to be recorded as held for sale on
the consolidated balance sheet of the Company in accordance with GAAP, (ii)
such warehouse debt will be deemed Permitted Warehouse
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Debt (a) in the case of a Purchase Facility, only to the extent the holder of
such warehouse debt has no contractual recourse to the Company and/or its
Restricted Subsidiaries to satisfy claims in respect of such warehouse debt
in excess of the realizable value of the Receivables financed thereby, and
(b) in the case of any other Warehouse Facility, only to the lesser of (A)
the amount advanced by the lender with respect to the Receivables financed
under such Warehouse Facility, and (B) the principal amount of such
Receivables and (iii) any such Indebtedness has not been outstanding in
excess of 364 days.
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust, joint venture, or a
governmental agency or political subdivision thereof.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except as
otherwise permitted by the provisions of this Indenture.
"PURCHASE FACILITY" means any Warehouse facility in the form of a
purchase and sale facility pursuant to which the Company or any of its
Subsidiaries sells Receivables to a financial institution and retains the
right of first refusal upon the subsequent resale of such Receivables by such
financial institution.
"RECEIVABLES" means (i) consumer installment sale contracts and
loans evidenced by promissory notes secured by new and used automobiles and
light trucks, (ii) other consumer installment sale contracts or lease
contracts and (iii) loans secured by residential mortgages, in the case of
each of the clauses (i), (ii) and (iii), that are purchased or originated in
the ordinary course of business by the Company or any Restricted Subsidiary
of the Company; PROVIDED, HOWEVER, that for purposes of determining the
amount of a Receivable at any time, such amount shall be determined in
accordance with GAAP, consistently applied, as of the most recent practicable
date.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of February 4, 1997, by and among the Company, the
Guarantors and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to time.
"REGULATION S" means Regulation S promulgated under the Securities
Act.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
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 his knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 under the Securities Act.
"RULE 144A" means Rule 144A under the Securities Act.
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"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION" means a public or private transfer of Receivables
in the ordinary course of business and by which the Company or any of its
Restricted Subsidiaries directly or indirectly securitizes a pool of
specified Receivables including any such transaction involving the sale of
specified Receivables to a Securitization Trust.
"SECURITIZATION TRUST" means any Person (whether or not a
Subsidiary of the Company) established exclusively for the purpose of issuing
securities in connection with any Securitization, the obligations of which
are without recourse to the Company or any of the Guarantors (including,
without limitation, any special purpose Subsidiary of the Company formed
exclusively for the purpose of satisfying the requirements of Credit
Enhancement Agreements and regardless of whether such Subsidiary is an issuer
of securities), PROVIDED that such Person is not an obligor with respect to
any Indebtedness of the Company or any Guarantor other than under Credit
Enhancement Agreements. As of the date of this Indenture, AFS Funding Corp.
shall be deemed to satisfy the requirements of the foregoing definition.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date hereof.
"SPECIAL PURPOSE FINANCE SUBSIDIARIES" means AmeriCredit
Receivables Finance Corp. and AmeriCredit Receivables Finance Corp. 1995-A.
"SPECIFIED SENIOR INDEBTEDNESS" means (i) the Indebtedness of any
Person, whether outstanding on the date of this Indenture or thereafter
incurred and (ii) accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization
relating to such Person to the extent post filing interest is allowed in such
proceeding) in respect of (A) Indebtedness of such Person for money borrowed
and (B) Indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable
unless, in the case of either clause (i) or (ii), in the instrument creating
or evidencing the same pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Notes; PROVIDED, HOWEVER, that Specified Senior Indebtedness shall not
include (1) any obligation of such Person to any Subsidiary of such Person,
(2) any liability for Federal, state, local or other taxes owed or owing by
such Person, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (4) any obligations in respect of
Capital Stock of such Person or (5) that portion of any Indebtedness which at
the time of incurrence is incurred in violation of this Indenture.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any
contingent obligations to repay,
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redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEE" means the Guarantee of the Notes by each of
the Guarantors pursuant to Article 11 hereof and in the form of Guarantee
attached hereto as Exhibit C and any additional Guarantee of the Notes to be
executed by any Restricted Subsidiary pursuant to Section 4.19 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRANSFER RESTRICTED SECURITIES" means securities that bear or are
required to bear the legend set forth in Section 2.06(g) hereof.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UNRESTRICTED GLOBAL NOTE" means one or more global Notes that do
not and are not required to bear the Private Placement Legend and are
deposited with and registered in the name of the Depository or its nominee.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not and are not required to bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution; but only to the extent that such
Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not
party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company; (c)
is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries; and (e) has at least one director on its
board of directors that is not a director or executive officer of the Company
or any of its Restricted Subsidiaries and has at least one executive officer
that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board
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Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and
was permitted by the covenant in Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant in Section 4.09, the Company
shall be in default of such covenant). The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under
Consolidated Leverage Ratio test set forth in the first paragraph of Section
4.09, calculated on a pro forma basis as if such designation had occurred at
the end of the applicable fiscal quarter, and (ii) no Default or Event of
Default would be in existence following such designation.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WAREHOUSE FACILITY" means any funding arrangement with a financial
institution or other lender or purchaser to the extent (and only to the
extent) funding thereunder is used exclusively to finance or refinance the
purchase or origination of Receivables by the Company or a Restricted
Subsidiary of the Company for the purpose of (i) pooling such Receivables
prior to Securitization or (ii) sale, in each case in the ordinary course of
business, including Purchase Facilities.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"............................. 4.11
"Asset Sale Offer".................................. 3.09
"Change of Control Offer"........................... 4.15
"Change of Control Payment"......................... 4.15
"Change of Control Payment Date".................... 4.15
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"Covenant Defeasance"............................... 8.03
"DTC"............................................... 2.03
"Event of Default".................................. 6.01
"Excess Proceeds"................................... 4.10
"incur"............................................. 4.09
"insolvent"......................................... 10.05
"Legal Defeasance".................................. 8.02
"Offer Amount"...................................... 3.09
"Offer Period"...................................... 3.09
"Paying Agent"...................................... 2.03
"Permitted Debt".................................... 4.09
"Purchase Date"..................................... 3.09
"Registrar"......................................... 2.03
"Restricted Payments"............................... 4.07
SECTION 1.03. 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:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
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(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may be issued in
the form of Definitive Notes or Global Notes, as specified by the Company.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and
the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnote 1 and 2
thereto). Notes issued in definitive form shall be substantially in the form
of Exhibit A attached hereto (but without including the text referred to in
footnote 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Notes from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction
of the Trustee, in accordance with instructions given by the Holder thereof
as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
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A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
two Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. Notes to be so issued
shall be either Definitive Notes or Global Notes, as specified by the Company
in such order. The aggregate principal amount of Notes outstanding at any
time may not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "REGISTRAR" includes any co-registrar and
the term "PAYING AGENT" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global
Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment
of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require
a Paying Agent to pay all money held by it to the Trustee. The Company at
any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the
Notes.
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SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied
by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from such
Holder (in substantially the form of Exhibit B
hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "QUALIFIED INSTITUTIONAL BUYER"
(as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration
in accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from
the registration requirements of the Securities
Act, a
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certification to that effect from such Holdder
(in substantially the form of Exhibit B
hereto) and an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the
Company and to the Registrar to the effect that
such transfer is in compliance with the Securities
Act.
(b) TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN A
GLOBAL NOTE. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Definitive Note is
being transferred by such Holder to a "QUALIFIED INSTITUTIONAL
BUYER" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the Global
Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is
customary for the Depository, from the Depository or its
nominee on behalf of any Person having a beneficial interest
in a Global Note, and, in the case of a Transfer Restricted
Security, the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as
being the beneficial owner, a certification to
that effect from such Person (in substantially the
form of Exhibit B hereto); or
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(B) if such beneficial interest is being transferred
to a "QUALIFIED INSTITUTIONAL BUYER" (as defined
in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transferor
(in substantially the form of Exhibit B hereto);
or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor
(in substantially the form of Exhibit B hereto)
and an Opinion of Counsel from the transferee or
transferor reasonably acceptable to the Company
and to the Registrar to the effect that such
transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute
and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and
deliver to the transferee a Definitive Note in the
appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes
are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF DEPOSITORY. If
at any time:
(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository
for the Global Notes and a successor Depository for the
Global Notes is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Notes under this Indenture,
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then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) LEGENDS. The following legend shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraphs (ii) and (iii)
below, each Global Note and each Definitive Note (and
all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
Securities Act:
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(A) in the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
first legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the first legend
set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.06(c) hereof;
PROVIDED, HOWEVER, that with respect to any request for
an exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the first legend set forth in (i) above,
which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the
form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of
an authentication order in accordance with Section 2.02
hereof, the Trustee shall authenticate Series B Notes in
exchange for Series A Notes accepted for exchange in the
Exchange Offer, which Series B Notes shall not bear the
legend set forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of such Notes, in
each case unless the Holder of such Series A Notes is either
(A) a broker-dealer, (B) a Person participating in the
distribution of the Series A Notes or (C) a Person who is an
affiliate (as defined in Rule 144A) of the Company.
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10,
4.15 and 9.05 hereto).
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(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations of
the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the
opening of business 15 days before the day of any
selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on
the day of selection; or
(B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note
being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding
interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name any
Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of
and interest on such Notes, and neither the Trustee,
any Agent nor the Company shall be affected by notice
to the contrary.
(vii)The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes
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shall be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (a) the clause of this Indenture pursuant to
which the redemption shall occur, (b) the redemption date, (c) the principal
amount of Notes to be redeemed and (d) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
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SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money
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deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.07 prior to February 1, 2001. Thereafter, the Company shall have the option
to redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on February 1 of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2001....................................104.625%
2002....................................102.313%
2003 and thereafter.....................100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to February 1, 2000, the Company may on any one or
more occasions redeem up to an aggregate of $25.0 million in principal amount
of Notes at a redemption price of 109 1/4% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to
the redemption date, with the net cash proceeds of a public offering of
common stock of the Company; PROVIDED that at least $75.0 million in
aggregate principal amount of Notes remain outstanding immediately after the
occurrence of such redemption; and PROVIDED, FURTHER, that such redemption
shall occur within 45 days of the date of the closing of such public offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
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SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "ASSET
SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "OFFER PERIOD"). No later than
five Business Days after the termination of the Offer Period (the "PURCHASE
DATE"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "OPTION OF HOLDER TO ELECT PURCHASE" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
depository, if
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appointed by the Company, or a Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depository or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to
be purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
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The Company shall pay all Liquidated Damages, if any, in the same manner on
the dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. REPORTS.
(a) Whether or not the Company is required by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company shall
furnish to the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries (showing in reasonable detail,
either on the face of the financial statements or in the footnotes thereto and
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, the financial condition and results of operations of the Company and
its Restricted Subsidiaries separately from the financial condition and results
of operations of the Unrestricted Subsidiaries of the Company) and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, the Company shall file a copy of
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all such information and reports with the SEC for public availability (unless
the SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(b) For so long as any Notes remain outstanding, the Company and the
Subsidiary Guarantors shall furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
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SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company or other Affiliate of the Company (other than any
such Equity Interests owned by the Company or any Wholly-Owned Restricted
Subsidiary of the Company); (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in the first paragraph of Section 4.09
hereof; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted
by clause (ii) of the next succeeding paragraph), is less than the sum of
(i) 25% of the aggregate cumulative Consolidated Net Income of the Company
for the period (taken as one accounting period) from and after the last day
of the first fiscal quarter immediately following the date of this
Indenture to the end of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company from the issue or sale since the date
of this Indenture of Equity Interests of the Company (other than
Disqualified Stock) or of Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other than
Equity Interests (or
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Disqualified Stock or convertible debt securities) sold to a Subsidiary
of the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus
(iii) to the extent that any Restricted Investment that was
made after the date of this Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition,
if any) and (B) the initial amount of such Restricted Investment.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock); PROVIDED that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause (c)
(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase or
other acquisition of subordinated Indebtedness with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any
dividend by a Restricted Subsidiary of the Company to the holders of its common
Equity Interests on a PRO RATA basis; and (v) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
or any Restricted Subsidiary of the Company held by any member of the Company's
(or any of its Restricted Subsidiaries') management pursuant to any management
equity subscription agreement or stock option agreement in effect as of the date
of this Indenture; PROVIDED that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$250,000 in any twelve-month period and no Default or Event of Default shall
have occurred and be continuing immediately after such transaction.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default; PROVIDED that in no event shall the business currently operated by
AmeriCredit Financial Services, Inc. be transferred to or held by an
Unrestricted Subsidiary. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated shall be deemed to
be Restricted Payments at the time of such designation and shall reduce the
amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments shall be deemed to constitute
Investments in an amount equal to the greater of (y) the net book value of such
Investments at the time of such designation or (z) the fair market value of such
Investments at the time of such designation. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors of the Company whose resolution with respect thereto
shall be delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value exceeds $10.0 million. Not
later than 15 days after the end of any fiscal quarter during which any
Restricted Payment is made, the Company shall deliver to the Trustee an
Officers'
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Certificate stating that all Restricted Payments made during such fiscal
quarter were permitted and setting forth the basis upon which the
calculations required by this Section 4.07 hereof were computed, together
with a copy of any fairness opinion or appraisal required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (a) this Indenture and the Notes,
(b) applicable law, (c) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, PROVIDED that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred, (d) by
reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (e) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (f) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (g) the requirements of any
Securitization that are exclusively applicable to any bankruptcy remote special
purpose Restricted Subsidiary of the Company formed in connection therewith, (h)
the requirements of any Credit Enhancement Agreement or (i) in the case of
clause (iii) above, restrictions contained in security agreements securing
Indebtedness of Guarantors relating to the properties or assets of Guarantors
subject to the Liens created thereby, PROVIDED that such Liens were otherwise
permitted to be incurred under this Indenture.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "INCUR") any Indebtedness (including Acquired Debt) and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER, that the
Company and the Guarantors may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock or preferred stock if the Consolidated
Leverage Ratio of the Company, calculated on a pro forma basis after giving
effect to the incurrence or issuance of the additional Indebtedness to be
incurred or the Disqualified Stock or preferred stock to be issued, would have
been less than 2.0 to 1.
The provisions of the first paragraph of this covenant shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
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(i) the existence of Credit Facilities and the Guarantees thereof by
the Guarantors and the incurrence by the Company and/or any of the
Guarantors of revolving credit Indebtedness pursuant to one or more Credit
Facilities the proceeds of which are applied to purchase or originate
Receivables; PROVIDED that the aggregate principal amount of all revolving
credit Indebtedness outstanding under all Credit Facilities after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance, defease, renew or replace any Indebtedness
incurred pursuant to this clause (i) and with letters of credit being
deemed to have a principal amount equal to the maximum potential liability
of the Company and its Restricted Subsidiaries thereunder, does not at any
time exceed the amount of the Borrowing Base (any such outstanding
Indebtedness that exceeds the amount of the Borrowing Base as of the close
of any Business Day shall cease to be Permitted Debt pursuant to this
clause (i) as of the close of business on the third Business Day thereafter
and shall be deemed to be an incurrence of such Indebtedness that is not
permitted by this clause (i) by the Company or such Guarantor, as
applicable, as of such third Business Day);
(ii) the existence of Warehouse Facilities, regardless of amount, and
the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Warehouse Debt in an aggregate principal amount at any time
outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed 100% of the aggregate principal
amount (exclusive of Acquisition Fees included therein) of all Eligible
Receivables owned by the Company and its Restricted Subsidiaries (or such
Warehouse Facilities in the case of Permitted Warehouse Debt in the form of
repurchase agreements) at such time;
(iii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Company of Indebtedness represented by the
Notes and the incurrence by the Guarantors of the Subsidiary Guarantees;
(v) obligations of the Company and its Restricted Subsidiaries under
Credit Enhancement Agreements;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance, defease, renew or
replace any Indebtedness (other than Permitted Warehouse Debt or
intercompany Indebtedness) that was permitted by this Indenture to be
incurred;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of the Guarantors; PROVIDED, HOWEVER, that (i) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all Obligations with respect to the
Notes and (ii)(A) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than the
Company or a Guarantor and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Guarantor
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (vii);
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(viii) the issuance by a Restricted Subsidiary of preferred stock to
the Company or to any of the Guarantors; PROVIDED, HOWEVER, that any
subsequent event or issuance or transfer of any Capital Stock that results
in the owner of such preferred stock ceasing to be a Guarantor of the
Company or any subsequent transfer of such preferred stock to a Person
other than the Company or any of the Guarantors, shall be deemed to be an
issuance of preferred stock by such Restricted Subsidiary that was not
permitted by this clause (viii);
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred (y) for the purpose
of fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (z) for the purpose of hedging, fixing or capping interest
rate risk in connection with any completed or pending Securitization;
(x) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09;
(xi) the incurrence by the Company's Unrestricted Subsidiaries of Non-
Recourse Debt, PROVIDED, HOWEVER, that if any such Indebtedness ceases to
be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this clause (xi); and
(xii) the incurrence by the Company of additional Indebtedness in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (xii), not to exceed $5.0 million.
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, incur any Indebtedness that is contractually subordinated to
any Indebtedness of the Company or any such Restricted Subsidiary unless such
Indebtedness is also contractually subordinated to the Notes, or the Subsidiary
Guarantee of such Restricted Subsidiary (as applicable), on substantially
identical terms; PROVIDED, HOWEVER, that no Indebtedness shall be deemed to be
contractually subordinated to any other Indebtedness solely by virtue of being
unsecured.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness shall be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board
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of Directors of the Company set forth in an Officers' Certificate delivered to
the Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 85% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of cash; PROVIDED
that the amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any Guarantee thereof) that
are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary
from further liability and (y) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to
be cash for purposes of this provision.
Within 180 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds (a) to permanently reduce
Specified Senior Indebtedness of the Company and its Restricted Subsidiaries;
PROVIDED, HOWEVER, that such Net Proceeds shall be applied to all Specified
Senior Indebtedness of the Company and its Restricted Subsidiaries on a PRO RATA
basis, or (b) to an Investment, the making of a capital expenditure or the
acquisition of Receivables or other tangible assets, in each case, in or with
respect to a Permitted Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce Indebtedness under Credit
Facilities and/or Warehouse Facilities or otherwise invest such Net Proceeds in
any manner that is not prohibited by this Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first sentence
of this paragraph shall be deemed to constitute "EXCESS PROCEEDS." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall be
required to make an offer to all Holders of Notes (an "ASSET SALE OFFER") to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in this Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes.
If the aggregate principal amount of Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a PRO RATA basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors of the Company set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors of the Company and (b) with
respect to any Affiliate Transaction or series of related Affiliate
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Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from
a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; PROVIDED that (x) any employment agreement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary, (y) transactions between or among the
Company and/or its Restricted Subsidiaries and (z) Restricted Payments that
are permitted by Section 4.07 hereof, in each case, shall not be deemed
Affiliate Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
SECTION 4.13. LINE OF BUSINESS.
The Company shall not, and shall not permit any or its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Subsidiaries
taken as a whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "CHANGE OF CONTROL OFFER") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "CHANGE OF CONTROL PAYMENT"). Within ten days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "CHANGE OF CONTROL PAYMENT DATE"). The notice, which shall govern
the terms of the Change of Control Offer, shall state:
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(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be
accepted for payment;
(2) the amount of the Change of Control Payment and the Change
of Control Payment Date, which date shall be no earlier than
30 days nor later than 60 days from the date such notice is
mailed;
(3) that any Notes not tendered will continue to accrue interest
in accordance with the terms of the Indenture;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have Securities purchased pursuant
to the Change of Control Offer will be required to surrender
their Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to
the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of
business on the Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase, and a
statement that such Holder is withdrawing its election to
have such Notes purchased;
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such Change
of Control (including, but not limited to, if available,
information which respect to PRO FORMA historical and
projected financial information after giving effect to such
Change of Control, information regarding the Person or
Persons acquiring control and such Person's or Persons'
business plans going forward).
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof
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being purchased by the Company. The Paying Agent shall promptly mail to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; PROVIDED that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(c) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
SECTION 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY
OWNED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly-Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly-Owned Restricted Subsidiary
of the Company to any Person (other than the Company or a Wholly-Owned
Restricted Subsidiary of the Company that is a Guarantor), unless (a) such
transfer, conveyance, sale, lease or other disposition is of all the Capital
Stock of such Wholly-Owned Restricted Subsidiary and (b) the cash Net Proceeds
from such transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.10 hereof, and (ii) shall not permit any Wholly-Owned
Restricted Subsidiary of the Company to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or a Wholly-Owned
Restricted Subsidiary of the Company.
SECTION 4.17. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.18. LIMITATION ON INVESTMENT COMPANY STATUS.
The Company and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Company to
register as an "investment company" under the Investment Company Act of 1940, as
amended.
SECTION 4.19. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or create
another Subsidiary after the date of this Indenture, then such newly acquired or
created Subsidiary shall execute a Subsidiary Guarantee and deliver an opinion
of counsel, in accordance with the terms of this Indenture; PROVIDED, that the
foregoing
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shall not apply to Subsidiaries that (i) have properly been designated as
Unrestricted Subsidiaries in accordance with this Indenture for so long as
they continue to constitute Unrestricted Subsidiaries or (ii) qualify as
Securitization Trusts for so long as they continue to constitute
Securitization Trusts.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately before and after such transaction
no Default or Event of Default exists; and (iv) except in the case of a merger
of the Company with or into a Wholly-Owned Restricted Subsidiary of the Company,
the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (A) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
end of the applicable fiscal quarter, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Leverage Ratio test set
forth in the first paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; PROVIDED, HOWEVER, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all or
substantially all of the Company's assets that meets the requirements of Section
5.01 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default:"
(i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes;
(ii) default in payment when due of the principal of or premium, if
any, on the Notes;
(iii) failure by the Company or any of its Subsidiaries to comply with
its obligations in the covenants or other agreements contained in
Sections 4.08, 4.09, 4.10 or 4.15 hereof;
(iv) failure by the Company or any of its Subsidiaries for 30 days
after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply
with any of the other covenants or agreements in this Indenture;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of this Indenture, which default:
(a) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
on the date of such default (a "PAYMENT DEFAULT"), or
(b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount
of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(vi) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $2.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days;
(vii) any Subsidiary Guarantee shall be held in an judicial
proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person
acting in behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee; and
(viii) the Company or any of its Subsidiaries pursuant to or within
the meaning of Bankruptcy Law:
(a) commences a voluntary case,
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(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) generally is not paying its debts as they become due; or
(ix) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any of its
Subsidiaries in an involuntary case;
(b) appoints a custodian of the Company or any of its
Subsidiaries or for all or substantially all of the property of
the Company or any of its Subsidiaries; or
(c) orders the liquidation of the Company or any of its
Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under this Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising under clauses (viii) and
(ix) of Section 6.01 hereof with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes shall become due and payable
without further action or notice. Holders of the Notes shall not enforce this
Indenture or the Notes except as provided in this Indenture. Subject to the
limitations set forth in this Indenture, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of this Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
February 1, 2001 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes
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prior to February 1, 2001, then the premium specified in below shall also
become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
YEAR PERCENTAGE
---- ----------
1997 ............. 116.190%
1998 ............. 113.877%
1999 ............. 111.564%
2000 ............. 109.251%
2001 ............. 106.938%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (PROVIDED,
HOWEVER, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
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SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and 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, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial
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proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and, the costs and
expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any, and
interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
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 or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, 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 to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holders shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon 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 Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expenses that might be incurred by it in compliance with such request or
direction.
SECTION 7.03. 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 Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee 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 Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. 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 Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, PROVIDED
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
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date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15 and 4.16 hereof with respect to the outstanding Notes on
and after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(iv) through 6.01(ix) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of
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independent public accountants, to pay the principal of, premium and
Liquidated Damages, if any, and interest on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption
date, as the case may be;
(b) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the incurrence of Indebtedness all or
a portion of the proceeds of which will be used to defease the Notes
pursuant to this Article 8 concurrently with such incurrence) or
insofar as Sections 6.01(viii) or 6.01(ix) hereof is concerned, at any
time in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that on the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
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SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), 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
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the
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Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Notes; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Section 3.09, 4.10 and
4.15 hereof) and the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a tender offer or exchange offer for the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a
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majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for the
Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a non-
consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the
redemption of the Notes except as provided above with respect to
Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on
the Notes;
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(g) waive a redemption payment with respect to any Note other
than a payment required by Sections 3.09, 4.10 and 4.15; or
(h) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
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ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. SUBSIDIARY GUARANTEES.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the Obligations of the
Company hereunder or thereunder, that: (a) the principal of and interest and
Liquidated Damages, if any, on the Notes shall be promptly paid in full when
due, whether at maturity, by acceleration, redemption, repurchase or otherwise,
and interest on the overdue principal of and interest and Liquidated Damages, if
any, on the Notes, if lawful, and all other Obligations of the Company to the
Holders or the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, that same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, redemption, repurchase or otherwise. Failing payment
when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors shall be jointly and severally obligated to pay
the same immediately. The Guarantors hereby agree that their Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the Obligations contained in the
Notes and this Indenture. If any Holder of Notes or the Trustee is required by
any court or otherwise to return to the Company or Guarantors, or any custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or Guarantors, any amount paid either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it shall not be
entitled to any right of subrogation in relation to the Holders of Notes in
respect of any Obligations guaranteed hereby until payment in full of all
Obligations guaranteed hereby. Each Guarantor further agrees that, as between
the Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
To evidence its Subsidiary Guarantee set forth in Section 10.01
hereof, each Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit C (executed by the
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manual or facsimile signature of one of its Officers) shall be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture shall be executed on behalf of such Guarantor
by an Officer of such Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 10.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture or in any of the Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor or shall
prevent any sale or conveyance of the property of a Guarantor, as an entirety or
substantially as an entirety, to the Company.
(b) Except as provided in Section 10.03(a) hereof or in a transaction
referred to in Section 10.04 hereof, no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another corporation, Person or entity
unless: (i) subject to the provisions of Section 10.04 hereof, the Person formed
by or surviving any such consolidation or merger (if other than such Guarantor)
shall assume all the Obligations of such Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes and this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) such Guarantor, or any
Person formed by or surviving and such consolidation or merger, would have a
Consolidated Net Worth (immediately after giving effect to such transaction)
equal to or greater than the Consolidated Net Worth of such Guarantor
immediately prior to such transaction; and (iv) the Company would be permitted
by virtue of the Company's pro forma Consolidated Leverage Ratio, immediately
after giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness (other than Permitted Debt) pursuant to Section 4.09 hereof.
Subject to Section 10.04 hereof, in case of any such consolidation, merger, sale
or conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor corporation shall
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. Such successor corporation thereupon may
cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon
all of the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees
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theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets of any Guarantor (including, if
applicable, all of the Capital Stock of any Guarantor), any Liens in favor of
the Trustee in the assets sold thereby shall be released; PROVIDED that in the
event of an Asset Sale, the Net Proceeds from such sale or other disposition are
treated in accordance with the provisions of Section 4.10 hereof. In the event
of a sale or other disposition of all of the assets of any Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the Capital Stock of such Guarantor in accordance with the provisions of this
Indenture) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Guarantor), shall be released and
relieved of its Obligations under its Subsidiary Guarantee and Section 10.03
hereof; PROVIDED that in the event of an Asset Sale, the Net Proceeds from such
sale or other disposition are treated in accordance with the provisions of
Section 4.10 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including, without limitation, Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its Obligations under its Subsidiary Guarantee. Any
Guarantor not released from its Obligations under its Subsidiary Guarantee shall
remain liable for the full amount of principal of and interest and Liquidated
Damages, if any, on the Notes and for the other Obligations of any Guarantor
under this Indenture as provided in this Article 10. The release of any
Guarantor pursuant to this Section 10.04 shall be effective whether or not such
release shall be noted on any Note then outstanding or thereafter authenticated
and delivered.
SECTION 10.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be that amount
from time to time equal to the aggregate liability of such Guarantor thereunder,
but shall be limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Notes and this Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "INSOLVENT" (as
such term is defined in the federal Bankruptcy Law and in the debtor and
creditor law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee was entered into, after giving
effect to the incurrence of existing Indebtedness immediately prior to such
time; PROVIDED that, it shall be a presumption in any lawsuit or other
proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or debtor
in possession or trustee in bankruptcy of such Guarantor, otherwise proves in
such a lawsuit that the aggregate liability of such Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the solvency
or sufficiency of capital of a Guarantor in accordance with the previous
sentence, the right of such Guarantor to contribution from other Guarantors and
any other rights such Guarantor may have, contractual or otherwise, shall be
taken into account.
SECTION 10.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
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In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "TRUSTEE"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or any Guarantor:
AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, TX 76107
Telecopier No.: (817) 882-7101
Attention: Chief Financial Officer
With a copy to:
Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, TX 75202
Telecopier No.: (214) 855-4300
Attention: L. Steven Leshin
If to the Trustee:
Bank One, Columbus, NA
c/o Banc One Trust Company, NA
100 East Broad Street, 8th Floor
Columbus, OH 43215
Telecopier No.: (614) 248-5195
Attention: Ted Kravits
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The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
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(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company and each Guarantor in this Indenture and
the Notes shall bind their respective successors, except as expressly provided
otherwise herein. All agreements of the Trustee in this Indenture shall bind
its successors.
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SECTION 11.11. SEVERABILITY.
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 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[signature page follows]
64
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
65
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICREDIT CORP. AMERICREDIT PREMIUM FINANCE, INC.
By By
------------------------------ ------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial President, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC. AMERICREDIT CORPORATION OF CALIFORNIA
(FORMERLY KNOWN AS RANCHO VISTA MORTGAGE
CORPORATION)
By By
------------------------------ ------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial Vice Chairman, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT OPERATING CO., INC. ACF INVESTMENT CORP.
By By
------------------------------ ------------------------------
Daniel E. Berce Daniel E. Berce
Executive Vice President, Chief Vice President, Chief Financial
Financial Officer and Treasurer Officer and Treasurer
BANK ONE, COLUMBUS, NA
By
--------------------------------
Ted Kravits
Assistant Vice President
66
<PAGE>
EXHIBIT A
(Face of Note)
- --------------------------------------------------------------------------------
CUSIP/CINS
------------
9 1/4% [Series A] [Series B] Senior Notes due 2004
No. $
------ ----------
AMERICREDIT CORP.
promises to pay to
------------------------------------------
or registered assigns,
the principal sum of
------------------------------------------
Dollars on February 1, 2004.
Interest Payment Dates: August 1, and February 1
Record Dates: July 15, and January 15
Dated: , 199
--------------- --
AMERICREDIT CORP.
By:
--------------------------
Name:
Title:
(SEAL)
By:
--------------------------
Name:
Title:
(SEAL)
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
BANK ONE, COLUMBUS, NA,
as Trustee
By:
--------------------------------
Name:
Title:
A-1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Back of Note)
9 1/4% [Series A] [Series B] Senior Notes due 2004
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.](1)
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. AmeriCredit Corp., a Texas corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Note at 9 1/4% per
annum from and including February 4, 1997 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on August 1 and February 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; PROVIDED that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; PROVIDED,
FURTHER, that the first Interest Payment Date shall be August 1, 1997. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the July 15 or January 15 next
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such purpose
within or
- ------------------
(1) This paragraph should be included only if the Note is issued in global form.
A-2
<PAGE>
without the City and State of New York, or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be 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 private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank One, Columbus, NA, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
February 4, 1997 ("INDENTURE") between the Company, the Guarantors named therein
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts
with the express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling. The Notes are general unsecured obligations of
the Company limited to $100 million in aggregate principal amount, plus amounts,
if any, sufficient to pay interest, premium and Liquidated Damages on
outstanding Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Paragraph 5, the Company
shall not have the option to redeem the Notes prior to February 1, 2001.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on February 1 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2001 .......................... 104.625%
2002 .......................... 102.313%
2003 and thereafter ........... 100.000%
(b) Notwithstanding the provisions of clause (a) of this paragraph 5, at
any time prior to February 1, 2000, the Company may on any one or more occasions
redeem up to an aggregate of $25.0 million in principal amount of Notes at a
redemption price of 109 1/4% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of a public offering of common stock of the Company;
PROVIDED that at least $75.0 million in aggregate principal amount of Notes
remain outstanding immediately after the occurrence of such redemption; and
PROVIDED, further, that such redemption shall occur within 45 days of the date
of the closing of such public offering.
6. MANDATORY REDEMPTION.
A-3
<PAGE>
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase. Within
10 days following any Change of Control, the Company shall mail a notice to each
Holder as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales and the
aggregate amount of Excess Proceeds exceeds $10 million, the Company shall
commence an offer to all Holders of Notes (an "ASSET SALE OFFER") pursuant to
Section 3.09 of the Indenture to purchase the maximum principal amount of Notes
that may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, to the date fixed for the closing of
such offer, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use
such deficiency for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a PRO RATA
basis. Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
(c) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
A-4
<PAGE>
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes; (ii) default in payment when due
of the principal of or premium, if any, on the Notes; (iii) failure by the
Company or any of its Subsidiaries to comply with its obligations under
covenants and agreements set forth in Sections 4.08, 4.09, 4.10 or 4.15 of the
Indenture; (iv) failure by the Company or any of its Subsidiaries for 30 days
after notice from the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with any of the other
covenants or agreements in the Indenture; (v) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries) whether such Indebtedness or Guarantee now exists, or is
created after the date of the Indenture, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "PAYMENT DEFAULT") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more; (vi) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $2.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in an judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting in behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee; and (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company, any Significant Subsidiary or any group
of Subsidiaries that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to deliver
to the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of
A-5
<PAGE>
any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities shall have all the rights set forth in the
A/B Exchange Registration Rights Agreement dated as of February 4, 1997, between
the Company, the Guarantors and the other parties named on the signature pages
thereof (the "REGISTRATION RIGHTS AGREEMENT").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, TX 76107
Attention: Chief Financial Officer
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
-----------------------------
Your Signature:
---------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $___________
Date:
-----------------------------
Your Signature:
---------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
----------------------------
Signature Guarantee.
A-8
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<S> <C> <C> <C> <C>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- --------------------- --------------------- ----------------------- ----------------------
</TABLE>
- ----------
2. This should be included only if the Note is issued in global form.
A-9
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
Re: 9 1/4% Senior Notes due 2004 of AmeriCredit Corp.
This Certificate relates to $_____ principal amount of Notes held in
*________ book-entry or *_______ definitive form by ________________ (the
"Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Note held by the Depository a Note
or Notes in definitive, registered form of authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
/ / In connection with such request and in respect of each such Note,
the Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above captioned Notes and as provided in Section
2.06 of such Indenture, the transfer of this Note does not require
registration under the Securities Act (as defined below) because:*
/ / Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
/ / Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(A) or Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B)
or Section 2.06(d)(i)(B) of the Indenture.)
- ---------------
*Check applicable box.
B-1
<PAGE>
/ / Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
/ / Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of
Counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this Certificate (in satisfaction of Section
2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the Indenture).
---------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------
Date:
----------------------------------
- ---------------
*Check applicable box.
B-2
<PAGE>
EXHIBIT C
SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally guarantees
to each Holder of Notes authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the Obligations of the Company
to the Holders or the Trustee under the Notes or under the Indenture, that:
(a) the principal of, and premium and Liquidated Damages, if any, and
interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption, repurchase or otherwise, and interest
on overdue principal of interest and Liquidated Damages if any, on any Note,
if any, if lawful and all other Obligations of the Company to the Holders or
the Trustee under the Indenture or under the Notes shall be promptly paid in
full or performed, all in accordance with the terms thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such
other Obligations, the same will be promptly paid in full when due in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, for whatever reason, the Guarantors will be jointly and
severally obligated to pay the same immediately.
The Obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture, and reference is hereby made to
such Indenture for the precise terms of this Subsidiary Guarantee. The terms
of Article 10 of the Indenture are incorporated herein by reference.
No director, officer, employee, incorporator or stockholder, as such,
past, present or future, of each of the Guarantors shall have any personal
liability under this Subsidiary Guarantee by reason of its status as such
director, officer, employee incorporator or stockholder.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full
and final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders of Notes and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
In certain circumstances more fully described in the Indenture, any
Guarantor may be released from its liability under this Subsidiary Guarantee,
and any such release will be effective whether or not noted hereon.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability will be that amount from
time to time equal to the aggregate liability of such Guarantor hereunder,
but shall be limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent"
(as such term is defined in the federal Bankruptcy Law and in the debtor and
creditor law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into,
after giving effect to the incurrence
C-1
<PAGE>
of existing Indebtedness immediately prior to such time; PROVIDED that, it
shall be a presumption in any lawsuit or other proceeding in which such
Guarantor is a party that the amount guaranteed pursuant to its Subsidiary
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Guarantor, or debtor in possession or
trustee in bankruptcy of such Guarantor, otherwise proves in such a lawsuit
that the aggregate liability of such Guarantor is limited to the amount set
forth in clause (ii). The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors and any other rights such Guarantor may
have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
AMERICREDIT PREMIUM FINANCE, INC.
By
-------------------------------
Daniel E. Berce
President, Chief Financial
Officer and Treasurer
<TABLE>
<S> <C>
AMERICREDIT FINANCIAL SERVICES, INC. AMERICREDIT CORPORATION OF CALIFORNIA (FORMERLY
KNOWN AS RANCHO VISTA MORTGAGE CORPORATION)
By By
-------------------------------- --------------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial Vice Chairman, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT OPERATING CO., INC. ACF INVESTMENT CORP.
By By
-------------------------------- --------------------------------------
Daniel E. Berce Daniel E. Berce
Executive Vice President, Chief Financial Vice President, Chief Financial
Officer and Treasurer Officer and Treasurer
</TABLE>
C-2
<PAGE>
$125,000,000
AMERICREDIT CORP.
9 1/4% SENIOR NOTES DUE 2004
PURCHASE AGREEMENT
January 30, 1997
SMITH BARNEY INC.
MONTGOMERY SECURITIES
PIPER JAFFRAY INC.
WHEAT FIRST BUTCHER SINGER
C/O SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
AmeriCredit Corp., a Texas corporation (the "Company"), proposes,
upon the terms and conditions set forth herein, to issue and sell to you, as
the initial purchasers (the "Initial Purchasers"), $125,000,000 in aggregate
principal amount of its 9 1/4% Series A Senior Notes due 2004 (the "Series A
Notes"). The Company's obligations under the Series A Notes, including the
due and punctual payment of principal and interest on the Series A Notes,
will be unconditionally guaranteed (the "Series A Subsidiary Guarantees") by
each of AmeriCredit Financial Services, Inc., a Delaware corporation,
AmeriCredit Operating Co., Inc., a Delaware corporation, ACF Investment
Corp., a Delaware corporation, AmeriCredit Premium Finance, Inc., a Delaware
corporation, and Americredit Corporation of California (formerly known as
Rancho Vista Mortgage Corporation), a California corporation (collectively
the "Guarantors"). As used herein, the term "Series A Notes" shall include
the Series A Subsidiary Guarantees thereof by the Guarantors, unless the
context otherwise requires. The Guarantors and AmeriCredit Receivables
Finance Corp., a Delaware corporation, AmeriCredit Receivables Finance Corp.
1995-A, a Delaware corporation, and AFS Funding Corp., a Nevada corporation,
are collectively referred to herein as the "Subsidiaries." The Series A
Notes will (i) have the terms and provisions which are summarized in the
Offering Memorandum (as defined herein), (ii) be in the forms specified by
the Initial Purchasers pursuant to Section 3 hereof, and (iii) be issued
pursuant to the provisions of an Indenture, to be dated as of February 4,
1997 (the "Indenture"), between the Company, the Guarantors and Bank One,
Columbus, NA, as Trustee (the "Trustee").
The Company and the Guarantors wish to confirm as follows their
agreement with you the Initial Purchasers in connection with the purchase and
resale of the Series A Notes.
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1. PRELIMINARY OFFERING MEMORANDUM AND OFFERING MEMORANDUM. The
Series A Notes will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company
and the Guarantors have prepared a preliminary offering memorandum, dated
January 20, 1997 (the "Preliminary Offering Memorandum"), and an offering
memorandum, dated January 30, 1997 (the "Offering Memorandum"), setting forth
information regarding the Company, the Guarantors, the Series A Notes and the
Series B Notes (as defined herein). Any references herein to the Preliminary
Offering Memorandum and the Offering Memorandum shall be deemed to include all
amendments and supplements thereto. The Company and the Guarantors hereby
confirm that they have authorized the use of the Preliminary Offering Memorandum
and the Offering Memorandum in connection with the offering and resale of the
Series A Notes by the Initial Purchasers.
The Company and the Guarantors understand that the Initial Purchasers
propose to make offers (the "Exempt Resales") of the Series A Notes purchased by
the Initial Purchasers hereunder only on the terms set forth in the Offering
Memorandum, and Section 2 hereof, as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, solely to (i)
persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers" as defined in Rule 144A under the Act ("QIBs") and (ii) a
limited number of other institutional "accredited investors," as defined in Rule
501(a) (1), (2), (3) and (7) under the Act, that make the representations and
agreements to the Company specified in Annex A to the Offering Memorandum (each,
an "Accredited Institution") (such persons specified in clauses (i) and (ii)
being referred to herein as the "Eligible Purchasers").
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Series A Notes (and all securities issued in
exchange therefor, in substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S.
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULES 904
UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE
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JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
It is also understood and acknowledged that holders (including
subsequent transferees) of the Series A Notes will have the registration rights
set forth in the registration rights agreement (the "Registration Rights
Agreement"), to be dated the Closing Date, in substantially the form of Exhibit
A hereto, for so long as such Series A Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission under the circumstances set forth therein,
(i) a registration statement under the Act relating to the Company's 9 1/4%
Series B Notes due 2004 (the "Series B Notes") and the guarantees thereof (the
"Series B Subsidiary Guarantees") by the Guarantors to be offered in exchange
for the Series A Notes (the "Registered Exchange Offer") and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the Act
relating to the resale by certain holders of the Series A Notes, and to use its
best efforts to cause such registration statements to be declared effective. As
used herein, the term "Series B Notes" shall include the Series B Subsidiary
Guarantees thereof by the Guarantors, unless the context otherwise requires and
the Series A Notes and the Series B Notes, are hereinafter referred to
collectively as the "Notes." This Agreement, the Indenture, the Notes, the
Series A Subsidiary Guarantees, the Series B Subsidiary Guarantees and the
Registration Rights Agreement are hereinafter referred to collectively as the
"Operative Documents."
2. AGREEMENTS TO SELL, PURCHASE AND RESELL. (a) The Company and the
Guarantors hereby agree, on the basis of the representations, warranties and
agreements of the Initial Purchasers contained herein and subject to all the
terms and conditions set forth herein, to issue and sell to the Initial
Purchasers and, upon the basis of the representations, warranties and agreements
of the Company and the Guarantors herein contained and subject to all the terms
and conditions set forth herein, each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 96.995% of the
principal amount thereof, the principal amount of Series A Notes set forth
opposite the name of such Initial Purchaser in Schedule I hereto. The Company
and the Guarantors shall not be obligated to deliver any of the securities to be
delivered hereunder except upon payment for all of the securities to be
purchased as provided herein.
(b) Each of the Initial Purchasers hereby represents and warrants to
the Company and the Guarantors that it will offer the Series A Notes for sale
upon the terms and conditions set forth in this Agreement and in the Offering
Memorandum. Each of the Initial Purchasers hereby represents and warrants to,
and agrees with, the Company and the Guarantors that such Initial Purchaser (i)
is either a QIB or an Accredited Institution, in either case with such knowledge
and experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Series A Notes; (ii) is
purchasing the Series A Notes pursuant to a private sale exempt from
registration under the Act; (iii) in connection with the Exempt Resales, will
solicit offers to buy the Notes only from, and will offer to sell the Notes only
to, the Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the
Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any
form of general solicitation or general advertising (within the meaning of
Regulation D; including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Series A Notes. The Initial Purchasers have
advised the Company that they will offer the Series A Notes to Eligible
Purchasers at a price initially equal to 99.745% of the principal amount
thereof, plus accrued interest, if any, from the date of issuance of the Series
A Notes. Such price
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may be changed by the Initial Purchasers at any time thereafter without
notice.
Each of the Initial Purchasers understands that the Company and the
Guarantors and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 7(d) and 7(g) hereof, counsel to the Company and
counsel to the Initial Purchasers, will rely upon the accuracy and truth of the
foregoing representations, warranties and agreements and the Initial Purchasers
hereby consents to such reliance.
3. DELIVERY OF THE SERIES A NOTES AND PAYMENT THEREFOR. Delivery to
the Initial Purchasers of and payment for the Series A Notes shall be made at
the office of Jenkens & Gilchrist, P.C., 1445 Ross Avenue, Dallas, TX, at 9:00
A.M., New York City time, on February 4, 1997 (the "Closing Date"). The place
of closing for the Series A Notes and the Closing Date may be varied by
agreement between the Initial Purchasers and the Company.
The Series A Notes will be delivered to the Initial Purchasers
against payment of the purchase price therefor in immediately available
funds. The Series A Notes will be evidenced by a single global security in
definitive form (the "Global Note") and/or by additional definitive
securities, and will be registered, in the case of the Global Note, in the
name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), and in
the other cases, in such names and in such denominations as the Initial
Purchasers shall request prior to 9:30 A. M., New York City time, on the
second business day preceding the Closing Date. The Series A Notes to be
delivered to the Initial Purchasers shall be made available to the Initial
Purchasers in New York City for inspection and packaging not later than 9:30
A.M., New York City time, on the business day next preceding the Closing Date.
4. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. The Company and
the Guarantors jointly and severally agree with each Initial Purchaser as
follows:
(a) The Company and the Guarantors will furnish to the Initial
Purchasers, without charge, as of the date of the Offering Memorandum, such
number of copies of the Offering Memorandum as may then be amended or
supplemented as they may reasonably request.
(b) The Company and the Guarantors will not make any amendment or
supplement to the Preliminary Offering Memorandum or to the Offering
Memorandum of which the Initial Purchasers shall not previously have been
advised or to which they shall reasonably object after being so advised.
(c) Prior to the execution and delivery of this Agreement, the
Company and the Guarantors shall have delivered or will deliver to the Initial
Purchasers, without charge, in such quantities as the Initial Purchasers shall
have requested or may hereafter reasonably request, copies of the Preliminary
Offering Memorandum. The Company and each of the Guarantors consent to the use,
in accordance with the securities or Blue Sky laws of the jurisdictions in which
the Series A Notes are offered by the Initial Purchasers and by dealers, prior
to the date of the Offering Memorandum, of each Preliminary Offering Memorandum
so furnished by the Company and the Guarantors. The Company and each of the
Guarantors consent to the use of the Offering Memorandum in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Series A Notes are
offered by the Initial Purchasers and by all dealers to whom Series A Notes may
be sold, in connection with the offering and sale of the Series A Notes.
(d) If, at any time prior to completion of the distribution of the
Series A Notes by the Initial Purchasers to Eligible Purchasers, any event shall
occur that in the judgment of the Company, any of the Guarantors or in the
opinion of counsel for the Initial Purchasers should be set forth in the
Offering
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Memorandum in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Offering Memorandum in order to comply
with any law, the Company and the Guarantors will forthwith prepare an
appropriate supplement or amendment thereto or such document, and will
expeditiously furnish to the Initial Purchasers and dealers a reasonable
number of copies thereof.
(e) The Company and each of the Guarantors will cooperate with the
Initial Purchasers and with their counsel in connection with the qualification
of the Series A Notes for offering and sale by the Initial Purchasers and by
dealers under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
qualification; PROVIDED, that in no event shall the Company or any of the
Guarantors be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to service
of process in suits, other than those arising out of the offering or sale of the
Series A Notes, in any jurisdiction where it is not now so subject.
(f) So long as any of the Notes are outstanding, the Company and the
Guarantors will furnish to the Initial Purchasers (i) as soon as available, a
copy of each report of the Company mailed to stockholders generally or filed
with any stock exchange or regulatory body and (ii) from time to time such other
information concerning the Company and/or the Guarantors as the Initial
Purchasers may reasonably request.
(g) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than by
notice given by the Initial Purchasers terminating this Agreement pursuant to
Section 10 hereof) or if this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Company or any
of the Guarantors to comply with the terms or fulfill any of the conditions of
this Agreement, the Company and the Guarantors agree to reimburse the Initial
Purchasers for all out-of-pocket expenses (including reasonable fees and
expenses of its counsel) reasonably incurred by it in connection herewith, but
without any further obligation on the part of the Company or any of the
Guarantors for loss of profits or otherwise.
(h) The Company and the Guarantors will apply the net proceeds from
the sale of the Series A Notes to be sold by it hereunder substantially in
accordance with the description set forth in the Offering Memorandum under the
caption "Use of Proceeds."
(i) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Company and the Guarantors have
not taken, nor will any of them take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Notes to facilitate the sale
or resale of the Notes. Except as permitted by the Act, the Company and the
Guarantors will not distribute any offering material in connection with the
Exempt Resales.
(j) The Company and the Guarantors will use their best efforts to
permit the Notes to be designated Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL Market and to permit the Notes to be eligible
for clearance and settlement through DTC.
(k) From and after the Closing Date, so long as any of the Notes are
outstanding and are "restricted securities" within the meaning of the Rule
144(a)(3) under the Act or, if earlier, until three
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years after the Closing Date, and during any period in which the Company is
not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company and the Guarantors will furnish to
holders of the Notes and prospective purchasers of Notes designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Act to permit compliance with Rule 144A in connection with resale of the
Notes.
(l) The Company and the Guarantors have complied and will comply with
all provisions of Florida Statutes Section 517.075 relating to issuers doing
business with Cuba.
(m) The Company and the Guarantors agree not to sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale of the Series A Notes
in a manner that would require the registration under the Act of the sale to the
Initial Purchasers or the Eligible Purchasers of the Series A Notes.
(n) The Company and the Guarantors agree to comply with all the terms
and conditions of the Registration Rights Agreement and all agreements set forth
in the representation letters of the Company and the Guarantors to DTC relating
to the approval of the Notes by DTC for "book entry" transfer.
(o) The Company and the Guarantors agree to cause the Exchange Offer,
if available, to be made in the appropriate form, as contemplated by the
Registration Rights Agreement, to permit registration of the Series B Notes to
be offered in exchange for the Series A Notes, and to comply with all applicable
federal and state securities laws in connection with the Registered Exchange
Offer.
(p) The Company and the Guarantors agree that prior to any
registration of the Notes pursuant to the Registration Rights Agreement, or at
such earlier time as may be required, the Indenture shall be qualified under the
Trust Indenture Act of 1939 (the "1939 Act") and any necessary supplemental
indentures will be entered into in connection therewith.
(q) The Company and the Guarantors will not voluntarily claim, and
will resist actively all attempts to claim, the benefit of any usury laws
against holders of the Notes.
(r) The Company and the Guarantors will do and perform all things
required or necessary to be done and performed under this Agreement by them
prior to the Closing Date, and to satisfy all conditions precedent to the
Initial Purchasers' obligations hereunder to purchase the Series A Notes.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND EACH OF THE
GUARANTORS. The Company and each of the Guarantors, represent and warrant to
each of the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and Offering Memorandum with
respect to the Series A Notes have been prepared by the Company and the
Guarantors for use by the Initial Purchasers in connection with the Exempt
Resales. No order or decree preventing the use of the Preliminary Offering
Memorandum or the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company or any of the
Guarantors, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering Memorandum
as of their
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respective dates and the Offering Memorandum as of the Closing Date, did not
or will not at any time 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, except that this representation
and warranty does not apply to statements in or omissions from the
Preliminary Offering Memorandum and Offering Memorandum made in reliance upon
and in conformity with information relating to the Initial Purchasers
furnished to the Company in writing by or on behalf of the Initial Purchasers
expressly for use therein.
(c) The market-related and customer-related data and estimates
included under the captions "Offering Memorandum Summary-The Company" and
"Business-Market and Competition" in the Preliminary Offering Memorandum and the
Offering Memorandum are based on or derived from sources which the Company
believes to be reliable and accurate.
(d) The Indenture has been duly and validly authorized by the Company
and the Guarantors, and upon its execution and delivery and, assuming due
authorization, execution and delivery by the Trustee, will constitute the valid
and binding agreement of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms, subject to the
qualification that the enforceability of the Company's and the Guarantors'
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles; no
qualification of the Indenture under the 1939 Act is required in connection with
the offer and sale of the Series A Notes contemplated hereby or in connection
with the Exempt Resales.
(e) The Series A Notes have been duly and validly authorized by the
Company and when duly executed by the Company in accordance with the terms of
the Indenture and, assuming due authentication of the Series A Notes by the
Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the Company in accordance with
their terms, subject to the qualification that the enforceability of the
Company's obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles.
(f) The Series B Notes have been duly and validly authorized by the
Company and if and when duly issued and authenticated in accordance with the
terms of the Indenture and delivered in accordance with the Exchange Offer
provided for in the Registration Rights Agreement, will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, subject to the
qualification that the enforceability of the Company's obligations thereunder
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally
and by general equitable principles.
(g) The Series A Subsidiary Guarantees have been duly and validly
authorized by the Guarantors and when duly executed and delivered by the
Guarantors in accordance with the terms of the Indenture and upon the due
execution, authentication and delivery of the Series A Notes in accordance with
the Indenture and the issuance of the Series A Notes in the sale to the Initial
Purchasers contemplated by this Agreement, will constitute valid and binding
obligations of the Guarantors, enforceable against the Guarantors in accordance
with their terms, subject to the qualification that the enforceability of the
Guarantors' obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general
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equitable principles.
(h) The Series B Subsidiary Guarantees have been duly and validly
authorized by the Guarantors and if and when duly executed and delivered by the
Guarantors in accordance with the terms of the Indenture and upon the due
execution and authentication of the Series B Notes in accordance with the
Indenture and the issuance and delivery of the Series B Notes in the Exchange
Offer contemplated by the Registration Rights Agreement, will constitute valid
and binding obligations of the Guarantors, enforceable against the Guarantors in
accordance with their terms, subject to the qualification that the
enforceability of the Guarantors' obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
(i) The Company, AmeriCredit Financial Services, Inc., AmeriCredit
Operating Co., Inc., AmeriCredit Premium Finance, Inc. and ACF Investment Corp.
(collectively the "Borrowers"), have entered into an agreement (the "Credit
Agreement Amendment"), dated as of January 22, 1997, with Wells Fargo Bank
(Texas), National Association and certain other banks named therein. The Credit
Agreement Amendment became effective on January 22, 1997 and amended Section
9.05 of the credit agreement (the "Credit Agreement"), dated as of October 7,
1996, by and among the Borrowers and Wells Fargo Bank (Texas), National
Association and certain other banks named therein, to clarify that the Credit
Agreement does not prohibit, limit or otherwise restrict the payment of
dividends or other payments on or with respect to the capital stock of any of
the Subsidiaries to any other of the Subsidiaries or the Company.
(j) (A) The Credit Agreement constitutes the valid and binding
obligation of the Borrowers, enforceable against the Borrowers in accordance
with its terms, subject to the qualification that the enforceability of the
Borrowers' obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles;
(B) the Borrowers will have at least $100 million of borrowings available to
them under the Credit Agreement (giving effect to the borrowing base
requirements of the Credit Agreement) after the Closing of the sale of the
Series A Notes hereunder, the receipt by the Company of the proceeds therefore
and the application of such proceeds as described under the caption "Use of
Proceeds" in the Offering Memorandum; and (C) all representation and warranties
made by the Borrowers in Article VII of the Credit Agreement are true and
correct in all material respects as of the date hereof.
(k) The Company and the Guarantors have obtained, in writing, all
consents and waivers required under the terms of the Credit Agreement and
existing Credit Enhancement Agreements (as defined in the Indenture) necessary
to ensure that the execution and delivery of, and the performance of all of the
transactions contemplated by, the Operative Documents will not conflict with or
constitute a breach of, or a default under, the Credit Agreement or any Credit
Enhancement Agreement.
(l) All the shares of capital stock of the Company outstanding prior
to the issuance of the Series A Notes have been duly authorized and validly
issued and are fully paid and nonassessable; the authorized capital stock of the
Company conforms to the description thereof under the caption "Capitalization"
in the Offering Memorandum.
(m) The Company is a corporation duly incorporated and validly
existing and in good standing under the laws of Texas with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
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so to register or qualify or to be in good standing does not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect").
(n) Neither the Company nor any of the Subsidiaries owns capital
stock of any corporation or entity (excluding interests in Company-sponsored
securitizations) other than the Subsidiaries and a 10% interest in PNL Asset
Management Company. Each of the Subsidiaries is a corporation duly incorporated
and validly existing and in good standing under the laws of its jurisdiction of
its incorporation, with all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify or be in good
standing does not have a Material Adverse Effect. All the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and are wholly owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear of
any lien, adverse claim, security interest, equity or other encumbrance, except
as specifically described in the Offering Memorandum under the Caption
"Description Of Other Debt."
(o) There are no legal or governmental proceedings pending or, to the
knowledge of the Company or any of the Guarantors, threatened, against the
Company or any of the Subsidiaries or to which the Company or any of the
Subsidiaries or to which any of their respective properties, is subject, that
are not disclosed in the Offering Memorandum and which, if adversely decided,
are reasonably likely to cause a Material Adverse Effect or to materially affect
the issuance of the Notes or the consummation of the other transactions
contemplated by the Operative Documents. The Offering Memorandum contains
accurate summaries of all material agreements, contracts, indentures, leases or
other instruments required to be described or summarized therein. Neither the
Company nor any of the Subsidiaries is involved in any strike, job action or
labor dispute with any group of employees, and, to the Company's knowledge, no
such action or dispute is threatened.
(p) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries except where any such
violation or violations in the aggregate would not have a Material Adverse
Effect or (ii) in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound, except as may be
disclosed in the Offering Memorandum.
(q) None of the issuance, offer or sale of the Series A Notes, the
execution, delivery or performance by the Company and the Guarantors of this
Agreement or the other Operative Documents, compliance by the Company and the
Guarantors with the provisions hereof or thereof nor consummation by the Company
and the Guarantors of the transactions contemplated hereby or thereby (i)
requires any consent, approval, authorization or other order of, or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required in
connection with the registration under the Act of the Series B Notes in
accordance with the Registration Rights Agreement, qualification of the
Indenture under the 1939 Act and compliance with the securities or Blue Sky laws
of various jurisdictions), or conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
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documents, of the Company or any of the Subsidiaries or (ii) conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under any material agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to the terms of any agreement or instrument
to which any of them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is subject.
(r) The accountants, Coopers & Lybrand L.L.P., who have certified the
financial statements included as part of the Offering Memorandum, are
independent public accountants under Rule 101 of the AICPA's Code of
Professional Conduct, and its interpretation and rulings.
(s) The financial statements, together with related notes forming
part of the Offering Memorandum, present fairly in all material respects the
consolidated financial position, results of operations and changes in
stockholders' equity and cash flows of the Company and the Subsidiaries on the
basis stated in the Offering Memorandum at the respective dates or for the
respective periods to which they apply; such statements and related notes have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein, and meet the requirements of Regulation S-X under the Act for
registration statements on Form S-1; and the other financial and statistical
information and data set forth in the Offering Memorandum is accurately
presented and, to the extent such information and data is derived from the
financial books and records of the Company, is prepared on a basis consistent
with such financial statements and the books and records of the Company.
(t) The Company and the Guarantors have all requisite power and
authority to execute, deliver and perform their obligations under this Agreement
and the Registration Rights Agreement; the execution and delivery of, and the
performance by the Company and the Guarantors of their obligations under this
Agreement and the Registration Rights Agreement have been duly and validly
authorized by the Company and the Guarantors; this Agreement has been duly
executed and delivered by the Company and the Guarantors and constitutes the
valid and binding agreements of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with their terms, except as
the enforcement hereof and thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity, and except as
rights to indemnity and contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public policy; and the
Registration Rights Agreement, when duly executed and delivered by the Company
and the Guarantors, will constitute the valid and binding agreements of the
Company and the Guarantors, enforceable against the Company and the Guarantors
in accordance with their terms, except as the enforcement hereof and thereof may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to the applicability of
general principles of equity, and except as rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities laws or
principles of public policy.
(u) Except as disclosed in, or specifically contemplated by, the
Offering Memorandum, subsequent to the date as of which such information is
given in the Offering Memorandum, neither the Company nor any of the
Subsidiaries has incurred any liability or obligation (including, without
limitation, any liability or obligation in connection with the securitization of
Receivables or Credit Enhancement Agreements (as such terms are defined in the
Indenture)), direct or contingent, or entered into any transaction, in each case
not in the ordinary course of business, that is material to the Company and the
Subsidiaries
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taken as a whole, and there has not been any material change in the capital
stock, or material increase in the short-term or long-term debt, of the
Company or any of the Subsidiaries or any material adverse change, or any
development involving or which would reasonably be expected to involve a
prospective material adverse change, in the condition (financial or other),
business, properties, net worth or results of operations of the Company, the
Subsidiaries taken as a whole.
(v) Each of the Company and the Subsidiaries has good and
indefeasible title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the Offering
Memorandum and all the material property described in the Offering Memorandum as
being held under lease by each of the Company and the Subsidiaries is held by it
under valid, subsisting and enforceable leases, with only such exceptions as in
the aggregate are not materially burdensome and do not interfere with the
conduct of the business of the Company and the Subsidiaries taken as a whole.
(w) Except as permitted by the Act, the Company and the Guarantors
have not distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Series A Notes, will not distribute any
offering material in connection with the offering and sale of the Series A Notes
other than the Preliminary Offering Memorandum and Offering Memorandum.
(x) Each of the Company and the Subsidiaries has such permits,
licenses, franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities ("Permits") as are
necessary under applicable law to own their respective properties and to
conduct their respective businesses in the manner described in the Offering
Memorandum, except to the extent that the failure to have such Permits would
not have a Material Adverse Effect; the Company and each of the Subsidiaries
have fulfilled and performed in all material respects, all their respective
material obligations with respect to the Permits, and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such Permit, subject in each case to such qualification
as may be set forth in the Offering Memorandum and except to the extent that
any such revocation or termination would not have a Material Adverse Effect;
and, except as described in the Offering Memorandum, none of the Permits
contains any restriction that is materially burdensome to the Company or any
of the Subsidiaries.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(z) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any of the
Subsidiaries has made any payment of funds of the Company or any of the
Subsidiaries or received or retained any funds in violation of any law, rule
or regulation, which violation would have a Material Adverse Effect.
(aa) Except as disclosed in the Offering Memorandum, the Company and
each of the Subsidiaries have filed all tax returns required to be filed, which
returns are true and correct in all material respects, and neither the Company
nor any of the Subsidiaries is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto, except
where the failure to
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<PAGE>
file such returns and make such payments would not have a Material Adverse
Effect.
(bb) No holder of any security of the Company or any of the
Subsidiaries has any right to request or demand registration of shares of
common stock or any other security of the Company because of the consummation
of the transactions contemplated by this Agreement or the Registration Rights
Agreement. Except as described in or contemplated by the Offering
Memorandum, there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans or
arrangements to issue, any shares of capital stock of any of the Subsidiaries
or any security convertible into or exchangeable or exercisable for capital
stock of any of the Subsidiaries.
(cc) The Company and each of the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Offering Memorandum as being owned by any of them
or necessary for the conduct of their respective businesses, and the Company
is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company and the Subsidiaries with respect to the
foregoing.
(dd) The Company and the Guarantors are not and, upon sale of the
Series A Notes to be issued and sold thereby in accordance herewith and the
application of the net proceeds to the Company of such sale as described in the
Offering Memorandum under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(ee) When the Series A Notes are issued and delivered pursuant to
this Agreement, such Series A Notes will not be of the same class (within the
meaning of Rule 144A(d)(3) under the Act) as any security of the Company that
is listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated interdealer
quotation system.
(ff) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Act) of the Company has
directly, or through any agent (provided that no representation is made as to
the Initial Purchasers or any person acting on its behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Act) which is or will be integrated with the
offering and sale of the Notes in a manner that would require the
registration of the Series A Notes under the Act or (ii) engaged in any form
of general solicitation or general advertising (within the meaning of
Regulation D; including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising) in connection with the offering of the Series A Notes.
(gg) The Company and the Guarantors are not required to deliver the
information specified in Rule 144A(d)(4) in connection with the offering and
resale of the Series A Notes by the Initial Purchasers.
(hh) Assuming (i) that the representations and warranties in
Section 2 hereof are true, (ii) the Initial Purchasers comply with the
covenants set forth in Section 2 hereof and (iii) that each person to whom
the Initial Purchasers offer, sell or deliver the Series A Notes is a QIB or
an Accredited Institution, the purchase and sale of the Series A Notes
pursuant hereto (including the Initial Purchasers' proposed offering of the
Series A Notes on the terms and in the manner set forth in the Offering
Memorandum and Section 2 hereof) is exempt from the registration requirements
of the Act.
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(ii) The execution and delivery of this Agreement and the other
Operative Documents and the sale of the Series A Notes to the Initial
Purchasers or by the Initial Purchasers to Eligible Purchasers will not
involve any prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code. The representation made by the Company and the
Guarantors in the preceding sentence is made in reliance upon and subject to
the accuracy of, and compliance with, the representations and covenants made
or deemed made by the Eligible Purchasers as set forth in the Offering
Memorandum under the section entitled "Notice to Investors."
(jj) The Company and the Subsidiaries have regular and ongoing
regulatory compliance programs and procedures that are adequate to ensure
that 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 and the Federal Trade Commission Act) with respect to
Receivables owned and/or serviced by the Company or its Subsidiaries have
been complied with in all material respects and to the Company's knowledge,
all such Receivables now comply with all such applicable legal requirements.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each
Guarantor jointly and severally agree to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or Offering Memorandum,
or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to the Initial Purchasers furnished in writing to the
Company by or on behalf of the Initial Purchasers expressly for use in
connection therewith; PROVIDED, HOWEVER, that the indemnification contained
in this paragraph (a) with respect to the Preliminary Offering Memorandum
shall not inure to the benefit of any Initial Purchaser (or to the benefit of
any person controlling such Initial Purchaser) on account of any such loss,
claim, damage, liability or expense arising from the sale of the Series A
Notes by such Initial Purchaser to any person if the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Offering Memorandum was corrected in the
Offering Memorandum and the Initial Purchaser sold Series A Notes to that
person without sending or giving at or prior to the written confirmation of
such sale, a copy of the Offering Memorandum (as then amended or
supplemented) if the Company has previously furnished sufficient copies
thereof to the Initial Purchaser on a timely basis to permit such sending or
giving. The foregoing indemnity agreement shall be in addition to any
liability which the Company and the Guarantors may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Initial Purchasers or any person controlling the Initial Purchasers in
respect of which indemnity may be sought against the Company and the
Guarantors, the Initial Purchasers or such controlling person shall promptly
notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the
defense thereof, including the employment of counsel and payment of all fees
and expenses. The Initial Purchasers or any such controlling person shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Initial Purchasers or
such controlling person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying
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parties have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both the Initial Purchasers or such controlling person and
the indemnifying parties and the Initial Purchasers or such controlling
person shall have been advised in writing by its counsel that representation
of such indemnified party and any indemnifying party by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in which case
the indemnifying party shall not have the right to assume the defense of such
action, suit or proceeding on behalf of the Initial Purchasers or such
controlling person). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Initial Purchasers and controlling persons not having actual or potential
differing interests with the Initial Purchasers or among themselves, which
firm shall be designated in writing by Smith Barney Inc., and that all such
fees and expenses shall be reimbursed as they are incurred. The indemnifying
parties shall not be liable for any settlement of any such action, suit or
proceeding effected without their written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless the Initial Purchasers, to the extent provided in paragraph
(a), and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and the Guarantors, and their directors
and officers, and any person who controls the Company or any Guarantor within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the indemnity from the Company and the Guarantors to the Initial
Purchasers set forth in paragraph (a) hereof, but only with respect to
information relating to the Initial Purchasers furnished in writing by or on
behalf of the Initial Purchasers expressly for use in the Preliminary Offering
Memorandum or Offering Memorandum. If any action, suit or proceeding shall be
brought against the Company or the Guarantors, any of their directors or
officers, or any such controlling person based on the Preliminary Offering
Memorandum or Offering Memorandum, and in respect of which indemnity may be
sought against the Initial Purchasers pursuant to this paragraph (c), the
Initial Purchasers shall have the rights and duties given to the Company and the
Guarantors by paragraph (b) above (except that if the Company and the Guarantors
shall have assumed the defense thereof the Initial Purchasers shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
Initial Purchasers' expense), and the Company and the Guarantors, their
directors and officers, and any such controlling person shall have the rights
and duties given to the Initial Purchasers by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Initial Purchasers may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable (except if inapplicable according to its terms) to an indemnified
party under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Initial Purchasers on the other hand from the
offering of the Series A 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 Company and the Guarantors on the one hand and
the Initial Purchasers on the other in connection with the statements or
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<PAGE>
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
received by the Initial Purchasers, in each case as set forth in the table on
the cover page of the Offering Memorandum. The relative fault of the Company
and the Guarantors on the one hand and the Initial Purchasers on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company and the Guarantors on the one hand or by the Initial Purchasers
on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company, the Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 6, the Initial Purchasers
shall not be required to contribute any amount in excess of the amount by
which the total price of the Series A Notes underwritten by it and
distributed to the public exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 6 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred
but only to the extent that such losses, claims, damages, liabilities or
expenses are required to be paid by an indemnified party. The indemnity and
contribution agreements contained in this Section 6 and the representations
and warranties of the Company and the Guarantors set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of the Initial Purchasers or any person
controlling the Initial Purchasers, the Company and the Guarantors, their
directors or officers or any person controlling the Company or the
Guarantors, (ii) acceptance of any Series A Notes and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to the
Initial Purchasers or any person controlling the Initial Purchasers, or to
the Company and the Guarantors, their directors or officers or any person
controlling the Company or the Guarantors, shall be entitled to the benefits
of the indemnity, contribution and reimbursement agreements contained in this
Section 6.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any 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 claims that are the
subject matter of such action, suit or proceeding.
7. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase the Series A Notes hereunder
are subject to the following conditions:
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(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum, or any
order asserting that the transactions contemplated by this Agreement are subject
to the registration requirements of the Act shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company or any of the Guarantors, be contemplated. No
stop order suspending the sale of the Series A Notes in any jurisdiction
designated by the Initial Purchasers shall have been issued and no proceedings
for that purpose shall have been commenced or shall be pending or, to the
knowledge of the Company or any of the Guarantors, shall be contemplated.
(b) Subsequent to the date as of which information is given in the
Offering Memorandum, except as otherwise stated in the Offering Memorandum,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Offering Memorandum, which in the opinion
of the Initial Purchasers, would materially adversely affect the market for the
Series A Notes, or (ii) any event or development relating to or involving the
Company , any of its Subsidiaries or any officer or director of the Company or
any of its Subsidiaries which makes any statement made in the Offering
Memorandum untrue or which, in the opinion of the Company, the Guarantors and
their counsel or the Initial Purchasers and their counsel, requires the making
of any addition to or change in the Offering Memorandum in order to state a
material fact required by any law to be stated therein or necessary in order to
make the statements therein not misleading, if amending or supplementing the
Offering Memorandum to reflect such event or development would, in the opinion
of the Initial Purchasers, materially adversely affect the market for the Series
A Notes.
(c) The Final Offering Memorandum shall have been printed and copies
thereof distributed to the Initial Purchasers in such quantities as shall have
been previously specified by them not later than 9:00 a.m., New York City time,
on Febraury 3, 1997, or at such later date and time as the Initial Purchasers
may approve in writing.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion of Jenkens & Gilchrist, P.C., counsel for the Company, dated the Closing
Date and addressed to the Initial Purchasers, to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of Texas with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum;
(ii) Each of the Subsidiaries is a corporation duly incorporated
and validly existing and in good standing under the laws of its jurisdiction of
incorporation, with all requisite power and authority to own, lease, and operate
its properties and to conduct its business as described in the Offering
Memorandum; and all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and to the knowledge of such counsel, are wholly owned by the
Company directly, or indirectly through one of the other Subsidiaries, free and
clear of any security interest, lien, adverse claim, equity or other
encumbrance, except as specifically described in the Offering Memorandum under
the caption "Description Of Other Debt;"
(iii) The authorized capital stock of the Company is as set
forth under the caption "Capitalization" in the Offering Memorandum;
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(iv) The Company and each of the Guarantors have the corporate
power and authority to enter into this Agreement and the Registration Rights
Agreement and to issue, sell and deliver the Series A Notes to be sold to the
Initial Purchasers as provided herein, and this Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered by the Company and the Guarantors and constitute the valid and
binding agreements of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with their terms, except (A) as
enforcement of rights to indemnity and contribution hereunder and thereunder
may be limited by Federal or state securities laws or principles of public
policy and (B) subject to the qualification that the enforceability of the
Company's and the Guarantors' obligations hereunder and thereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
generally and by general equitable principles;
(v) The Indenture has been duly and validly authorized,
executed and delivered by the Company and the Guarantors and, assuming due
authorization, execution and delivery by the Trustee, constitutes the valid
and binding agreement of the Company and the Guarantors, enforceable against
the Company and the Guarantors in accordance with its terms, subject to the
qualification that the enforceability of the Company's and the Guarantors'
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable principles; no
qualification of the Indenture under the 1939 Act is required in connection
with the offer and sale of the Series A Notes contemplated hereby or in
connection with the Exempt Resales;
(vi) The Series A Notes have been duly and validly authorized
by the Company and when duly executed by the Company in accordance with the
terms of the Indenture and, assuming due authentication of the Series A Notes
by the Trustee, upon delivery to the Initial Purchasers against payment
therefor in accordance with the terms hereof, will have been validly issued
and delivered, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to the qualification that the
enforceability of the Company's obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium,
and other laws relating to or affecting creditors' rights generally and by
general equitable principles;
(vii) The Series B Notes have been duly and validly
authorized by the Company and if and when duly issued and authenticated in
accordance with the terms of the Indenture and delivered in accordance with
the Exchange Offer provided for in the Registration Rights Agreement, will
constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the Company in accordance with
their terms, subject to the qualification that the enforceability of the
Company's obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating
to or affecting creditors' rights generally and by general equitable
principles.
(viii) The Series A Subsidiary Guarantees have been duly
and validly authorized by the Guarantors and when duly executed and delivered
by the Guarantors in accordance with the terms of the Indenture and upon the
due execution, authentication and delivery of the Series A Notes in
accordance with the Indenture and the issuance of the Series A Notes in the
sale to the Initial Purchasers contemplated by this Agreement, will
constitute valid and binding obligations of the Guarantors, enforceable
against the Guarantors in accordance with their terms, subject to the
qualification that the enforceability of the Guarantors' obligations
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general
17
<PAGE>
equitable principles;
(ix) The Series B Subsidiary Guarantees have been duly and
validly authorized by the Guarantors and if and when duly executed and
delivered by the Guarantors in accordance with the terms of the Indenture and
upon the due execution, authentication and delivery of the Series B Notes in
accordance with the Indenture and the issuance and delivery of the Series B
Notes in the Exchange Offer contemplated by the Registration Rights
Agreement, will constitute valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms, subject to
the qualification that the enforceability of the Guarantors' obligations
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(x) None of the issuance, offer or sale of the Series A Notes
and Series A Subsidiary Guarantees, the execution, delivery or performance by
the Company and the Guarantors of this Agreement or the other Operative
Documents, compliance by the Company and the Guarantors with the provisions
hereof or thereof nor consummation by the Company and the Guarantors of the
transactions contemplated hereby or thereby conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under the
certificate or articles of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or the Credit Agreement,
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or the Subsidiaries
pursuant to the terms of the Credit Agreement nor will any such action result
in any violation of any existing law, or any regulation, ruling (assuming
compliance with all applicable state securities and Blue Sky laws and, in the
case of the Registration Rights Agreement, the Act, the Exchange Act and the
1939 Act), judgment, injunction, order or decree known to such counsel,
applicable to the Company or the Subsidiaries or any of their respective
properties;
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company or the Guarantors for the valid issuance and sale of the
Series A Notes to the Initial Purchasers and the issuance of the Series A
Subsidiary Guarantees in connection therewith as contemplated by this
Agreement (other than as may be required by applicable state securities and
Blue Sky laws, as to which counsel need express no opinions);
(xii) To the knowledge of such counsel, (A) other than as
described or contemplated in the Offering Memorandum, there are no legal or
governmental proceedings pending or threatened against the Company, the
Guarantors or any of the other Subsidiaries or to which the Company or any of
the Subsidiaries or any of their properties, are subject, which are not
disclosed in the Offering Memorandum and which, if adversely decided, are
reasonably likely to cause a Material Adverse Effect or materially affect the
issuance of the Notes or the consummation of the other transactions
contemplated by the Operative Documents and (B) there are no material
agreements, contracts, indentures, leases or other instruments, that are not
described in the Offering Memorandum;
(xiii) The statements under the captions "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," "Description of Other Debt," and "Certain Federal
Income Tax Consequences" in the Offering Memorandum, insofar as they are
descriptions of contracts, agreements or other legal documents, (excluding
contracts, agreements or other legal documents pertaining to
Company-sponsored securitizations) or refer to statements of law or legal
conclusions, are accurate in all material respects and present fairly the
information required to be shown;
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<PAGE>
(xiv) Such counsel does not know of any person who has the
right, contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, any of the Notes
or the right, as a result of the consummation of the transactions
contemplated by the Operative Documents, to require registration under the
Act of any shares of Common Stock or other securities of the Company;
(xv) When the Series A Notes are issued and delivered pursuant
to this Agreement, such Series A Notes will not be of the same class (within
the meaning of Rule 144A(d)(3) under the Act) as any security of the Company
that is listed on a national securities exchange registered under Section 6
of the Exchange Act or that is quoted in a United States automated
interdealer quotation system;
(xvi) No registration of the Series A Notes under the Act
is required for the sale of the Series A Notes to the Initial Purchasers as
contemplated in this Agreement or for the Exempt Resales (assuming (A) that
any Eligible Purchaser who buys the Series A Notes in the Exempt Resales is a
QIB or Accredited Institution, (B) the accuracy of the Initial Purchasers'
representations and those of the Company and the Guarantors in this Agreement
and (C) the accuracy of the representations made by each Accredited
Institution who purchases Series A Notes pursuant to an Exempt Resale as set
forth in the letter of representation executed by such Accredited Institution
in the form of Annex A to the Offering Memorandum) (it being understood that
no opinion is being expressed as to any resale subsequent to the Exempt
Resales or any resale of securities by any person other than the Initial
Purchasers);
(xvii) The Company and the Guarantors are not required to
deliver the information specified in Rule 144A(d)(4) in connection with the
offering and resale of the Series A Notes by the Initial Purchasers;
(xviii) The Company is not required to obtain stockholder
consent for the issuance or offering of the Notes; and
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of the
Company and the Guarantors, representatives of the independent public
accountants for the Company and the Guarantors and the Initial Purchasers at
which the contents of the Offering Memorandum and related matters were
discussed and, although such counsel is not passing upon and does not assume
any responsibility for and has not verified the accuracy, completeness or
fairness of the statements contained in the Offering Memorandum, and has not
made any independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to the extent such counsel deemed
appropriate upon facts provided by officers and other representatives of the
Company and the Guarantors), no facts have come to the attention of such
counsel that lead such counsel to believe that the Offering Memorandum, as of
its date or as of the Closing Date, contained or contains any untrue
statement of material fact or omitted or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need express no belief or opinion with respect to the financial statements
and other financial and statistical data included therein).
The opinion of such counsel may be limited to the laws of the state
of Texas, the laws of the states of New York and California, the General
Corporation Law of the State of Delaware and the federal laws of the United
States. Such counsel may rely as to matters of New York and California law,
as it relates to the authorization and enforceability of the Operative
Documents only, on the opinion of Latham & Watkins described below in Section
7(g).
19
<PAGE>
(e) The Initial Purchasers shall have received on the Closing Date
an opinion of Chris A. Choate, Esq., General Counsel of the Company, dated
the Closing Date and addressed to the Initial Purchasers to the effect that:
(i) The Company is duly registered and qualified to conduct
its business and is in good standing as a foreign corporation in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify or to be in good standing does not have a
Material Adverse Effect;
(ii) Each of the Guarantors is duly registered and qualified
to conduct its business and is in good standing as a foreign corporation in
each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify or to be in good standing does not have a
Material Adverse Effect;
(iii) Neither the Company nor any of the Subsidiaries is
in violation of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or to the best knowledge of such
counsel after reasonable inquiry, is in default in the performance of any
material obligation, agreement or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any material agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, except as disclosed in the Offering Memorandum and
except to the extent that any such violation or default would not have a
Material Adverse Effect;
(iv) None of the issuance, offer or sale of the Series A Notes
and Series A Subsidiary Guarantees, the execution, delivery or performance by
the Company and the Guarantors of this Agreement or the other Operative
Documents, compliance by the Company and the Guarantors with the provisions
hereof or thereof nor consummation by the Company and the Guarantors of the
transactions contemplated hereby or thereby conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under the
certificate or articles of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or any material
agreement, indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
respective properties is bound, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
or the Subsidiaries pursuant to the terms of any material agreement or
instrument to which any of them is a party or by which any of them may be
bound or to which any of the property or assets of them is subject, nor will
any such action result in any violation of any existing law, or any
regulation, ruling (assuming compliance with all applicable state securities
and Blue Sky laws and, in the case of the Registration Rights Agreement, the
Act, the Exchange Act and the 1939 Act), judgment, injunction, order or
decree known to such counsel, applicable to the Company or the Subsidiaries
or any of their respective properties;
(v) The statements under the caption "Management" in the
Offering Memorandum, insofar as they are descriptions of contracts,
agreements or other legal documents or refer to statements of law or legal
conclusions, are accurate in all material respects and present fairly the
information required to be shown;
(vi) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Subsidiaries is in violation of any
law, ordinance, administrative or governmental rule or regulation applicable to
the Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries, except to the
20
<PAGE>
extent that any such violation would not have a Material Adverse Effect; and
(vii) The Company and the Subsidiaries have all Permits that
are required under applicable law to own their respective properties and to
conduct their respective businesses as now being conducted as described in the
Offering Memorandum except where the failure to have any such Permits would not,
individually or in the aggregate, have a Material Adverse Effect.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion of Dewey Ballantine, special securitization counsel for the Company and
its Subsidiaries, dated the Closing Date, and addressed to the Initial
Purchasers to the effect that:
(i) The statements in the Offering Memorandum, insofar as they
are descriptions of contracts, agreements or other legal documents pertaining to
Company-sponsored securitizations, are accurate in all material respects and
present fairly the Company's and the Guarantors' rights, obligations and
liabilities in connection with such securitizations; and
(ii) None of the issuance, offer or sale of the Series A Notes,
the execution, delivery or performance by the Company and the Guarantors of this
Agreement or the other Operative Documents, compliance by the Company and the
Guarantors with the provisions hereof or thereof nor consummation by the Company
and the Guarantors of the transactions contemplated hereby or thereby conflicts
or will conflict with or constitutes or will constitute a breach of, or a
default under any material agreement, indenture, or other instrument pertaining
to a Company-sponsored securitization, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to the terms of any material
agreement or instrument pertaining to a Company-sponsored securitization.
The opinion of such counsel may exclude opinions with respect to the
$51 million Company-sponsored securitization effected in December 1994 through
AmeriCredit Receivables Finance Corp.
(g) The Initial Purchasers shall have received on the Closing date an
opinion, of Latham & Watkins, counsel for the Initial Purchasers, dated the
Closing date, and addressed to the Initial Purchasers, with respect to the
Offering Memorandum and such other related matters as the Initial Purchasers may
reasonably request, and such counsel shall have received such certificates,
documents and information as they may reasonably request to enable them to pass
upon such matters.
(h) The Initial Purchasers shall have received letters addressed to
the Initial Purchasers, and dated the date hereof and the Closing Date from
Coopers & Lybrand L.L.P., independent certified public accountants,
substantially in the forms heretofore approved by the Initial Purchasers.
(i)(i) There shall not have been any decrease in stockholders' equity
of the Company nor any material increase in the short-term or long-term debt of
the Company (other than in the ordinary course of business) from that set forth
or specifically contemplated in the Offering Memorandum; (ii) the Company and
the Subsidiaries shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries, taken as a whole, other than those
reflected in the Offering Memorandum; and (iii) all the representations and
warranties of the Company and the Guarantors contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and the
Initial Purchasers shall have received a certificate, dated the Closing Date and
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company (or such other officers as are acceptable
21
<PAGE>
to the Initial Purchasers), to the effect set forth in this Section 7(i) and
in Section 7(j) hereof.
(j) The Company and the Guarantors shall not have failed at or
prior to the Closing Date to have performed or complied in all material
respects with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing Date.
(k) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
436(g) under the Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company or any asset-backed securities of any
Company-sponsored Securitization Trust (as such term is defined in the
Indenture), or (ii) it is reviewing its ratings assigned to any class of
securities of the Company or any asset-backed security of any
Company-sponsored Securitization Trust with a view to possible downgrading,
or with negative implications, or direction not determined.
(l) The Series A Notes shall have been approved for trading in the
PORTAL Market.
(m) The Company and the Guarantors shall have obtained, in
writing, all consents and waivers required under the terms of the Credit
Agreement and existing Credit Enhancement Agreements necessary to ensure that
the transactions contemplated by this Agreement and the other Operative
Documents will not conflict with or constitute a breach of, or a default
under the Credit Agreement, or any Credit Enhancement Agreement. The Company
and the Guarantors shall have furnished photocopies of such waivers and
consents to the Initial Purchasers.
(n) The Company and the Guarantors shall have entered into the
Credit Agreement Amendment and shall have furnished photocopies of such
Credit Agreement Amendment to the Initial Purchasers.
(o) The Company and Guarantors shall have furnished or caused to
be furnished to the Initial Purchasers such further certificates and
documents as the Initial Purchasers or their counsel shall have requested.
All such opinions, certificates, letters, consents, waivers
amendments and other documents will be in compliance with the provisions
hereof only if they are reasonably satisfactory in form and substance to the
Initial Purchasers and counsel for the Initial Purchasers. Any certificate
or document signed by any officer of the Company or a Guarantor and delivered
to the Initial Purchasers, or to counsel for the Initial Purchasers, shall be
deemed a representation and warranty by the Company or Guarantor, as the case
may be, to the Initial Purchasers as to the statements made therein.
8. EXPENSES. The Company and the Guarantors jointly and
severally agree to pay the following costs, expenses and fees and all other
costs and expenses incident to the performance by any of them of any of their
obligations hereunder: (i) the preparation and reproduction of the
Preliminary Offering Memorandum and the Final Offering Memorandum (including,
without limitation, financial statements thereto), and each amendment or
supplement to any of them, this Agreement and the Indenture; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the Final
Offering Memorandum, the Preliminary Offering Memorandum, and all amendments
or supplements to any of them as may be reasonably requested for use in
connection with the offering and sale of the Series A Notes; (iii) the
preparation, printing, authentication, issuance and delivery of certificates
for the Notes, including any stamp taxes in connection with the original
issuance and sale of the Notes; (iv) the printing (or reproduction) and
delivery of this Agreement, the preliminary and
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<PAGE>
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Notes;
(v) the application for quotation of the Notes on the PORTAL Market; (vi) the
qualification of the Notes for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 4(f) hereof (including
the reasonable fees, expenses and disbursements of counsel for the Initial
Purchasers relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
qualification); (vii) the performance by the Company of its obligations under
the Registration Rights Agreement; (viii) fees and expenses of the Trustee
and its counsel; (ix) the transportation and other expenses incurred by or on
behalf of the Company representatives in connection with presentations to
prospective purchasers of the Series A Notes; and (x) the fees and expenses
of the Company's and the Guarantors' accountants and the fees and expenses of
counsel (including local and special counsel, if any) for the Company and the
Guarantors. The Company and each of the Guarantors hereby agree that they
will pay in full on the Closing Date the fees and expenses referred to in
clause (vi) of this Section 8 by delivering to counsel for the Initial
Purchasers on such date a check payable to such counsel in the requisite
amount.
9. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
10. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of any of the Initial Purchasers to the Company or any of
the Guarantors, by notice to the Company, if prior to the Closing Date, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York or Texas shall have been declared, or (iii) there shall have
occurred any outbreak or escalation of hostilities involving the United States
or other domestic, foreign or international calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Initial Purchasers, impracticable or inadvisable to commence or continue the
offering of the Series A Notes on the terms set forth on the cover page of the
Offering Memorandum or to enforce contracts for the resale of the Series A Notes
by the Initial Purchasers. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
11. INFORMATION FURNISHED BY THE INITIAL PURCHASERS. The statements
set forth in the stabilization legend on the inside front cover and the last
paragraph on the cover page of the Preliminary Offering Memorandum and Offering
Memorandum, constitute the only information furnished by or on behalf of the
Initial Purchasers as such information is referred to in Sections 5(b) and 6
hereof.
12. MISCELLANEOUS. Except as otherwise provided in Sections 4, 9 and
10 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or the Guarantors, at the
office of the Company at 200 Bailey Avenue, Fort Worth TX 76107, Attention:
Chief Financial Officer with a copy to Jenkens & Gilchrist, P.C., 1445 Ross
Avenue, Suite 3200, Dallas, TX 75202, Attention: L. Steven Leshin, or (ii) if to
the Initial Purchasers, care of Smith Barney Inc., 388 Greenwich Street, New
York, NY 10013, Attention: Manager, Investment Banking Division with a copy to
Latham & Watkins, 885 Third Avenue, New York, New York 10022, Attention: Kirk A.
Davenport.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Company, the Guarantors and their respective directors,
officers and the controlling persons referred to in Section 6 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor"
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<PAGE>
nor the term "successors and assigns" as used in this Agreement shall include
a purchaser from the Initial Purchasers of any of the Series A Notes in his
status as such purchaser.
13. APPLICABLE LAW; COUNTERPARTS This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York and without
regard to the conflicts of law principles thereof.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[signature page follows]
24
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
AMERICREDIT CORP. AMERICREDIT PREMIUM FINANCE, INC.
By By
------------------------------- -------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial President, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC. AMERICREDIT CORPORATION OF
CALIFORNIA (FORMERLY KNOWN AS
RANCHO VISTA MORTGAGE CORPORATION)
By By
------------------------------- -------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial Vice Chairman, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT OPERATING CO., INC. ACF INVESTMENT CORP.
By By
------------------------------- -------------------------------
Daniel E. Berce Daniel E. Berce
Executive Vice President, Vice President, Chief Financial
Chief Financial Officer and Officer and Treasurer
Treasurer
Confirmed as of the date first
above mentioned.
SMITH BARNEY INC.
MONTGOMERY SECURITIES
PIPER JAFFRAY INC.
WHEAT FIRST BUTCHER SINGER
BY: SMITH BARNEY INC.
By
---------------------------
Managing Director
<PAGE>
SCHEDULE I
AMERICREDIT CORP.
Principal Amount
Initial Purchaser of Notes
- ----------------- ----------------
Smith Barney Inc.. . . . . . . . . . . . . . . . . . . . . . . . $ 72,500,000
Montgomery Securities. . . . . . . . . . . . . . . . . . . . . . $ 22,500,000
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . . . . . . $ 17,500,000
Wheat First Butcher Singer . . . . . . . . . . . . . . . . . . . $ 12,500,000
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 125,000,000
-------------
-------------
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of February 4, 1997
relating to
$125,000,000 in Aggregate Principal Amount
of 9 1/4% Senior Notes due 2004
by and among
AmeriCredit Corp. and the Guarantors names herein
and
Smith Barney Inc., Montgomery Securities,
Piper Jaffray Inc. and Wheat First Butcher Singer
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of February 4, 1997 by and among AmeriCredit Corp., a Texas
corporation (the "Company"); AmeriCredit Financial Services, Inc., a Delaware
corporation, AmeriCredit Operating Co., Inc., a Delaware corporation, ACF
Investment Corp., a Delaware corporation, AmeriCredit Premium Finance, Inc., a
Delaware corporation, and Americredit Corporation of California (formerly known
as Rancho Vista Mortgage Corporation), a California corporation (collectively
the "Guarantors"); and Smith Barney Inc., Montgomery Securities, Piper Jaffray
Securities Inc. and Wheat First Butcher Singer (collectively the "Initial
Purchasers"), each of whom have agreed to purchase the Company's 9 1/4% Series
A Senior Notes due 2004 (the "Series A Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
January 30, 1997 (the "Purchase Agreement"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Series A Senior Notes, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: A registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Senior Notes to be issued in the Exchange Offer, (ii)
the maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Series B Senior Notes in the same
aggregate principal amount as the aggregate principal amount of Series A Senior
Notes that were tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Series A Senior Notes, each
Interest Payment Date.
EFFECTIVENESS TARGET DATE: As defined in Section 5.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
<PAGE>
EXCHANGE OFFER: The registration by the Company under the Act of the
Series B Senior Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Series B Senior Notes in an aggregate principal amount equal
to the aggregate principal amount of the Transfer Restricted Securities tendered
in such exchange offer by such Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
HOLDER: As defined in Section 2(b) hereof.
INDENTURE: The Indenture, dated as of February 4, 1997, among the
Company, Bank One, Columbus, NA, as trustee (the "Trustee"), and the Guarantors,
pursuant to which the Senior Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indenture and the Senior
Notes.
NASD: National Association of Securities Dealers, Inc.
PERSON: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date relating to
Senior Notes, each Person who is a Holder of Senior Notes on the record date
with respect to the Interest Payment Date on which such Damages Payment Date
shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
relating to (a) an offering of Series B Senior Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case, including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
SENIOR NOTES: The Series A Senior Notes and the Series B Senior
Notes, including the guarantees thereof by the Guarantors.
2
<PAGE>
SERIES B SENIOR NOTES: The Company's 9 1/4% Series B Senior Notes due
2004, including the guarantees thereof by the Guarantors, to be issued pursuant
to the Indenture in the Exchange Offer.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Senior Note, until the earliest
to occur of (a) the date on which such Senior Note is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Senior Note has been effectively registered under the Act and
disposed of in accordance with a Shelf Registration Statement and (c) the date
on which such Senior Note is distributed to the public pursuant to Rule 144
under the Act or by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein).
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 30 days after the Closing Date, a Registration
Statement under the Act relating to the Series B Senior Notes and the Exchange
Offer, (ii) use their best efforts to cause such Registration Statement to
become effective at the earliest possible time, but in no event later than 90
days after the Closing Date, (iii) in connection with the foregoing, file
(A) all pre-effective amendments to such Registration Statement as may be
necessary in order to cause such Registration Statement to become effective,
(B) if applicable, a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Act and (C) cause all necessary filings in
connection with
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the registration and qualification of the Series B Senior Notes to be made
under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer
shall be on the appropriate form permitting registration of the Series B
Senior Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Senior Notes held by Broker-Dealers as contemplated
by Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Senior Notes shall be included in the
Exchange Offer Registration Statement. The Company shall use its best efforts
to cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Series A Senior Notes that are
Transfer Restricted Securities and that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Series A Senior Notes pursuant to the Exchange Offer; however, such Broker-
Dealer may be deemed to be an "underwriter" within the meaning of the Act and
must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Senior Notes received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Senior Notes held by any such Broker-
Dealer except to the extent required by the Commission as a result of a change
in policy after the date of this Agreement.
The Company and the Guarantors shall use their best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Senior Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of one year from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
one-year period in order to facilitate such resales.
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SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company is not required to file
an Exchange Offer Registration Statement or to Consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Company within 20 business days following the Consummation of the Exchange Offer
(A) that such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) that such Holder may not resell the
Series B Senior Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (C) that such Holder is a Broker-Dealer and holds Series A Senior
Notes acquired directly from the Company or one of its affiliates, then the
Company and the Guarantors shall
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement") on or prior to the earliest to occur of (1)
the 30th day after the date on which the Company determines that it is
not required to file the Exchange Offer Registration Statement, (2)
the 30th day after the date on which the Company receives notice from
a Holder of Transfer Restricted Securities as contemplated by clause
(ii) above, and (3) the 60th day after the Closing Date (such earliest
date being the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted
Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the
60th day after the Shelf Filing Deadline.
The Company and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Senior Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least three years following the
Closing Date.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information.
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Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within two business days
by a post-effective amendment to such Registration Statement that cures such
failure and that is itself declared effective within two business days (each
such event referred to in clauses (i) through (iv), a "Registration Default"),
the Company and the Guarantors hereby jointly and severally agree to pay
liquidated damages to each Holder of Transfer Restricted Securities with respect
to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.50 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued liquidated damages shall
be paid to Record Holders by the Company by wire transfer of immediately
available funds or by federal funds check on each Damages Payment Date, as
provided in the Indenture. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
liquidated damages with respect to such Transfer Restricted Securities will
cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
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(i) If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action letter
or other favorable decision from the Commission allowing the Company and
the Guarantors to Consummate an Exchange Offer for such Series A Senior
Notes. The Company and the Guarantors each hereby agrees to pursue the
issuance of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission policy. The Company and the Guarantors each hereby agrees,
however, to (A) participate in telephonic conferences with the Commission,
(B) deliver to the Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any Person to participate in,
a distribution of the Series B Senior Notes to be issued in the Exchange
Offer and (C) it is acquiring the Series B Senior Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate
in a distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in MORGAN
STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction should be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K
if the resales are of Series B Senior Notes obtained by such Holder in
exchange for Series A Senior Notes acquired by such Holder directly from
the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither the Company nor the Guarantors
has entered into any arrangement or understanding with any Person to
distribute the Series B Senior Notes to be received in the Exchange Offer
and that, to
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<PAGE>
the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Series B Senior Notes
in its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Series B Senior
Notes received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all
the provisions of Section 6(c) below and shall use their best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will as expeditiously
as possible prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which
form shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales
of Senior Notes by Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4 of
this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its best efforts to cause such amendment to
be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
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(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, the Company and the Guarantors shall use their best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including
all documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review of
such Holders and underwriter(s), if any, for a period of at least three
business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer Restricted
Securities covered by such Registration Statement or the underwriter(s), if
any, shall reasonably object within three business days after the receipt
thereof;
(v) promptly after the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available (and
representatives of the Guarantors) for discussion of such document and
other customary due diligence matters, and include such information in such
document promptly after the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees
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to supply all information reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with such
Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) if requested by any selling Holders or the underwriter(s),
if any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate principal amount of
Senior Notes covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company and the
Guarantors hereby consent to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto;
(xi) enter into, and cause the Guarantors to enter into, such
agreements (including an underwriting agreement), and make, and cause the
Guarantors to make, such representations and warranties, and take all such
other actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement, all to such extent
as may be reasonably requested by any Initial Purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale
or resale pursuant to any Registration Statement contemplated by this
Agreement; and whether or not an underwriting agreement is entered into and
whether or not the registration is an Underwritten Registration, the
Company and the Guarantors shall:
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(A) furnish to each Initial Purchaser, each selling Holder and
each underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of the
Consummation of the Exchange Offer and, if applicable, the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial or
accounting officer of each of the Company and the Guarantors,
confirming, as of the date thereof, the matters set forth in
paragraphs (i) and (j) of Section 7 of the Purchase Agreement and
such other matters as such parties may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set forth in
paragraphs (d), (e) and (f) of Section 7 of the Purchase
Agreement and such other matter as such parties may reasonably
request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
independent public accountants for the Company, the Initial
Purchasers' representatives and the Initial Purchasers' counsel
in connection with the preparation of such Registration Statement
and the related Prospectus and have considered the matters
required to be stated therein and the statements contained
therein, and although such counsel has not independently verified
the accuracy, completeness or fairness of such statements, on the
basis of the foregoing (relying as to materiality to a large
extent upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, 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, or that the Prospectus
contained in such Registration Statement as of its date and, in
the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness or
fairness of the exhibits, financial statements, notes and
schedules and other financial or statistical data included in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and
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(3) a customary comfort letter, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters by underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 7(h) of the Purchase
Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the Company or the Guarantors become aware that
the representations and warranties of the Company and the Guarantors
contemplated in clause (A)(1) above cease to be true and correct, the
Company or the Guarantors shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with, and cause the Guarantors to cooperate with, the
selling Holders, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may reasonably
request and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement;
PROVIDED, HOWEVER, that neither the Company nor the Guarantors shall be
required to register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it to the service
of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of Series A
Senior Notes covered by the Shelf Registration Statement, Series B Senior
Notes, having an aggregate principal amount equal to the aggregate
principal amount of Series A Senior Notes surrendered to the Company by
such Holder in exchange therefor or being sold by such Holder; such Series
B Senior Notes to be registered in the name of such Holder or in the name
of the purchaser(s) of such Senior Notes, as the case may be; in return,
the Series A Senior Notes held by such Holder shall be surrendered to the
Company for cancellation;
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(xiv) cooperate with, and cause the Guarantors to cooperate
with, the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends;
and enable such Transfer Restricted Securities to be in such denominations
and registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if
any, to consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (viii) above;
(xvi) if any fact or event contemplated by clause (c)(iii)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement
and provide the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities which are in a form eligible for deposit
with the Depositary Trust Company;
(xviii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of
the Registration Statement;
(xx) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate, and cause the
Guarantors to cooperate, with the Trustee and the Holders
13
<PAGE>
of Senior Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute, and cause the Guarantors to execute, and
use its best efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner; and
(xxi) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the Company
or the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Initial Purchaser or Holder with
the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules
and regulations of the NASD)); (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses
of printing (including printing certificates for the Series B Senior Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel
for the Company, the Guarantors and, subject to Section 7(b) below, the
Holders of Transfer Restricted Securities; (v) all application and filing
fees in connection with listing Senior Notes on a national securities
exchange or automated quotation system pursuant to the requirements hereof;
and (vi) all fees and disbursements of independent certified public
accountants of the Company and the Guarantors (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
14
<PAGE>
The Company will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse
the Initial Purchasers and the Holders of Transfer Restricted Securities
being tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for
the reasonable fees and disbursements of not more than one counsel, who shall
be Latham & Watkins or such other counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and each Guarantor jointly and severally agree to
indemnify and hold harmless each Holder and each Person, if any, who controls
any Holder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Holders furnished in writing to the Company by the Holders expressly for use
in connection therewith. The foregoing indemnity agreement shall be in addition
to any liability which the Company and the Guarantors may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Holders or any Person controlling the Holders in respect of which indemnity may
be sought against the Company and the Guarantors, the Holders or such
controlling Person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Holders or any such
controlling Person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Holders or such
controlling Person unless (i) the indemnifying parties have agreed in writing to
pay such fees and expenses, (ii) the indemnifying parties have failed to assume
the defense and employ counsel, or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both the Holders or
such controlling Person and the indemnifying parties and the Holders or such
controlling Person shall have been advised in writing by its counsel that
representation of such indemnified party and any indemnifying party by the same
15
<PAGE>
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the
defense of such action, suit or proceeding on behalf of the Holders or such
controlling Person). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Holders and controlling Persons not having actual or potential differing
interests with the Holders or among themselves, which firm shall be
designated in writing by the Holders, and that all such fees and expenses
shall be reimbursed as they are incurred but only to the extent that such
losses, claims, damages, liabilities or expenses are required to be paid by
and indemnified party. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless the Holders, to the
extent provided in paragraph (a), and any such controlling Person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Holder, severally and not jointly, agrees to indemnify and
hold harmless the Company and the Guarantors, and their directors and officers,
and any Person who controls the Company or any Guarantor within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Company and the Guarantors to the Holders set forth in
paragraph (a) hereof, but only with respect to information relating to the
Holders furnished in writing by or on behalf of the Holders expressly for use in
the Registration Statement or Prospectus. If any action, suit or proceeding
shall be brought against the Company or the Guarantors, any of their directors
or officers, or any such controlling Person based on any Registration Statement
or Prospectus, and in respect of which indemnity may be sought against the
Holders pursuant to this paragraph (c), the Holders shall have the rights and
duties given to the Company and the Guarantors by paragraph (b) above (except
that if the Company and the Guarantors shall have assumed the defense thereof
the Holders shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the Holders' expense), and the Company and the
Guarantors, their directors and officers, and any such controlling Person shall
have the rights and duties given to the Holders by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Holders may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable (except if inapplicable according to its terms) to an indemnified
party under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Holders on the other hand from their sale of
Senior Notes (it being expressly understood and agreed that the relative
benefits received by the Company and the Guarantors from the sale of the Senior
Notes shall be equal to the amount of net proceeds received by the Company and
the Guarantors from the sale of the Series A Notes to the Initial Purchasers),
or (ii) if the allocation provided
16
<PAGE>
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 Company and the
Guarantors on the one hand and the Holders on the other in connection with
the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors on the
one hand and the Holders on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantors on the one
hand or by the Holders on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Guarantors and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 8
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 8, the Holders shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by them in connection
with the sale of the Senior Notes exceeds the amount of any damages which the
Holders have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Guarantors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Holders or any Person
controlling the Holders, the Company and the Guarantors, their directors or
officers or any Person controlling the Company or the Guarantors, (ii)
acceptance of any Series A Notes and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to the Holders or any Person
controlling the Holders, or to the Company and the Guarantors, their directors
or officers or any Person controlling the Company or the Guarantors, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
(g) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any 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 claims that are the subject matter
of such action, suit or proceeding.
17
<PAGE>
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; PROVIDED, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors agree that monetary
damages (including the liquidated damages contemplated hereby) would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not, and will cause
the Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither the Company nor the Guarantors has previously
entered into any agreement granting any registration rights with respect to its
securities to any Person which remains in effect as of the date hereof. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.
18
<PAGE>
(c) ADJUSTMENTS AFFECTING THE SENIOR NOTES. The Company will not
take any action, or permit any change to occur, with respect to the Senior Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or a Guarantor:
AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, TX 76107
Telecopier No.: (817) 882-7101
Attention: Chief Financial Officer
With a copy to:
Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, TX 75202
Telecopier No.: (214) 855-4300
Attention: L. Steven Leshin, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
19
<PAGE>
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) ENTIRE AGREEMENT. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[signature page follows]
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICREDIT CORP. AMERICREDIT PREMIUM FINANCE, INC.
By --------------------------------- By -------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial President, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC. AMERICREDIT CORPORATION OF CALIFORNIA
(FORMERLY KNOWN AS RANCHO VISTA
MORTGAGE CORPORATION)
By --------------------------------- By -------------------------------
Daniel E. Berce Daniel E. Berce
Vice Chairman, Chief Financial Vice Chairman, Chief Financial
Officer and Treasurer Officer and Treasurer
AMERICREDIT OPERATING CO., INC. ACF INVESTMENT CORP.
By --------------------------------- By -------------------------------
Daniel E. Berce Daniel E. Berce
Executive Vice President, Chief Vice President, Chief
Financial Officer and Treasurer Financial Officer and
Treasurer
SMITH BARNEY INC.
MONTGOMERY SECURITIES
PIPER JAFFRAY INC.
WHEAT FIRST BUTCHER SINGER
BY: SMITH BARNEY INC.
By --------------------------------
Daniel M. McNamara
Director
21
<PAGE>
EXHIBIT 11.1
AMERICREDIT CORP.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(dollars in thousands, except per share amounts)
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PRIMARY:
Average common shares
outstanding 28,653,775 28,452,045 28,513,145 28,565,583
Common share equivalents
resulting from assumed
exercise of stock options 2,024,414 2,668,416 1,907,531 2,564,840
---------- ---------- ---------- ----------
Average common shares and
share equivalents
outstanding 30,678,189 31,120,461 30,420,676 31,130,423
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
FULLY DILUTED:
Average common shares
outstanding 28,653,775 28,452,045 28,513,145 28,565,583
Common share equivalents
resulting from assumed
exercise of stock options 2,201,544 2,696,956 2,218,629 2,741,782
---------- ---------- ---------- ----------
Average common shares and stock
equivalents outstanding 30,855,319 31,149,001 30,731,774 31,307,365
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
NET INCOME $ 9,198 $ 5,586 $17,270 $ 8,106
------- ------- ------- -------
------- ------- ------- -------
EARNINGS PER SHARE:
Primary $ .30 $ .18 $ .57 $ .26
------- ------- ------- -------
------- ------- ------- -------
Fully diluted $ .30 $ .18 $ .57 $ .26
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
29
<PAGE>
Primary earnings per share has been computed by dividing net income by the
average common shares and share equivalents outstanding. Common share
equivalents were computed using the treasury stock method. The average common
stock market price for the period was used to determine the number of common
share equivalents.
Fully diluted earnings per share has been computed in the same manner as
primary earnings per share except that the higher of the average or end of
period common stock market price was used to determine the number of common
share equivalents.
30
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF AMERICREDIT CORP. INCLUDED IN ITS QUARTERLY
REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 51,418
<SECURITIES> 6,503
<RECEIVABLES> 239,973
<ALLOWANCES> (12,173)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 12,476
<DEPRECIATION> (2,658)
<TOTAL-ASSETS> 369,882
<CURRENT-LIABILITIES> 0
<BONDS> 160,536
0
0
<COMMON> 336
<OTHER-SE> 186,946
<TOTAL-LIABILITY-AND-EQUITY> 369,882
<SALES> 0
<TOTAL-REVENUES> 59,670
<CGS> 0
<TOTAL-COSTS> 21,747
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,231
<INTEREST-EXPENSE> 6,612
<INCOME-PRETAX> 28,080
<INCOME-TAX> 10,810
<INCOME-CONTINUING> 17,270
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,270
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
