<PAGE>
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, 1997
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
---------------------------
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
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(817) 332-7000
- -------------------------------------------------------------------------------
(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 29,993,188 shares of common stock, $.01 par value outstanding as of
January 31, 1998.
<PAGE>
AMERICREDIT CORP.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
----
Consolidated Balance Sheets -
December 31, 1997 and June 30, 1997. . . . . . . . . . . 3
Consolidated Statements of Income -
Three Months and Six Months Ended
December 31, 1997 and 1996 . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
Six Months Ended December 31, 1997 and 1996. . . . . . . 5
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . 17
Item 3. Quantitative and Qualitative Disclosures
About Market Risk . . . . . . . . . . . . . . . . . . 29
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . . . . 30
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . 30
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMERICREDIT CORP.
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
<TABLE>
December 31, June 30,
ASSETS 1997 1997
------------ --------
<S> <C> <C>
Cash and cash equivalents $ 2,267 $ 6,027
Investment securities 6,500 6,500
Finance receivables, net 257,791 266,657
Excess servicing receivable 179,788 114,376
Restricted cash 76,170 67,895
Property and equipment, net 17,232 13,884
Goodwill 7,112 7,260
Other assets 15,435 10,854
-------- --------
Total assets $562,295 $493,453
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Bank line of credit $ 2,100 $ 71,700
Commercial paper warehouse facility 95,989
Mortgage warehouse facility 7,281 345
Automobile receivables-backed notes 14,138 23,689
9 1/4% Senior Notes 125,000 125,000
Notes payable 4,458 3,517
Accrued taxes and expenses 38,619 39,362
Deferred income taxes 19,764 13,304
-------- --------
Total liabilities 307,349 276,917
-------- --------
Shareholders' equity:
Common stock, $.01 par value
per share; 120,000,000 shares
authorized; 33,841,815 and
33,255,173 shares issued 338 333
Additional paid-in capital 213,890 203,544
Unrealized gain on excess servicing
receivable, net of income taxes 3,410 2,954
Retained earnings 60,841 33,466
-------- --------
278,479 240,297
Treasury stock, at cost
(3,921,028 and 3,959,071 shares) (23,533) (23,761)
-------- --------
Total shareholders' equity 254,946 216,536
-------- --------
Total liabilities and shareholders'
equity $562,295 $493,453
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
3
<PAGE>
AMERICREDIT CORP.
Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Per Share Data)
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Finance charge income $13,129 $10,739 $ 26,190 $21,503
Gain on sale of receivables 27,733 15,561 53,775 28,151
Servicing fee income 10,478 4,599 19,191 8,242
Investment income 1,290 684 2,570 1,152
Other income 308 292 502 622
---------- ---------- ---------- ----------
52,938 31,875 102,228 59,670
---------- ---------- ---------- ----------
Costs and expenses:
Operating expenses 21,825 11,920 41,916 21,747
Provision for losses 1,849 1,614 3,755 3,231
Interest expense 6,206 3,386 12,045 6,612
---------- ---------- ---------- ----------
29,880 16,920 57,716 31,590
---------- ---------- ---------- ----------
Income before income taxes 23,058 14,955 44,512 28,080
Income tax provision 8,877 5,757 17,137 10,810
---------- ---------- ---------- ----------
Net income $14,181 $ 9,198 $ 27,375 $17,270
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share:
Basic $ .47 $ .32 $ .92 $ .61
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Diluted $ .44 $ .30 $ .85 $ .57
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average shares
outstanding 29,890,355 28,653,775 29,684,960 28,513,145
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average shares
and assumed incremental
shares 32,406,559 30,678,189 32,199,267 30,398,569
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
4
<PAGE>
AMERICREDIT CORP.
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
<TABLE>
Six Months Ended
December 31,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 27,375 $ 17,270
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,914 904
Provision for losses 3,755 3,231
Deferred income taxes 9,643 10,682
Gain on sale of auto receivables (51,531) (27,851)
Amortization of excess servicing receivable 23,118 12,117
Changes in assets and liabilities:
Other assets (4,581) (2,134)
Accrued taxes and expenses (743) 9,195
--------- ---------
Net cash provided by operating activities 8,950 23,414
--------- ---------
Cash flows from investing activities:
Purchases of auto receivables (686,543) (354,448)
Originations of mortgage receivables (51,572) (7,748)
Principal collections and recoveries on
receivables 14,862 36,147
Net proceeds from sale of auto receivables 644,022 332,982
Net proceeds from sale of mortgage receivables 48,129 4,839
Purchases of property and equipment (3,571) (1,624)
Proceeds from maturities of investment
securities 55
Increase in restricted cash (8,275) (31,023)
--------- ---------
Net cash used by investing activities (42,948) (20,820)
--------- ---------
Cash flows from financing activities:
Borrowings on bank line of credit 514,500 304,400
Payments on bank line of credit (584,100) (275,500)
Net increase in commercial paper warehouse
facility 95,989
Net increase in mortgage warehouse facility 6,936 264
Payments on automobile receivables-backed notes (9,551) (27,304)
Payments on notes payable (602) (221)
Proceeds from issuance of common stock 7,066 3,100
Purchase of treasury stock (4,387)
--------- ---------
Net cash provided by financing activities 30,238 352
--------- ---------
Net increase (decrease) in cash and cash
equivalents (3,760) 2,946
Cash and cash equivalents at beginning of period 6,027 2,145
--------- ---------
Cash and cash equivalents at end of period $ 2,267 $ 5,091
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
5
<PAGE>
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, 1997 and for the
periods ended December 31, 1997 and 1996 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 1997 Annual Report to Shareholders.
The Company adopted the requirements of Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("SFAS 128") effective for the
periods ended December 31, 1997. SFAS 128 establishes new standards for
computing and presenting earnings per share, replacing existing accounting
standards. All prior period earnings per share and related weighted average
share amounts have been restated to conform to the requirements of SFAS 128.
NOTE 2 - FINANCE RECEIVABLES
Finance receivables consist of the following (in thousands):
<TABLE>
December 31, June 30,
1997 1997
---- ----
<S> <C> <C>
Auto receivables $261,333 $275,249
Less allowance for losses (11,350) (12,946)
-------- --------
Auto receivables, net 249,983 262,303
Mortgage receivables 7,808 4,354
-------- --------
Finance receivables, net $257,791 $266,657
-------- --------
-------- --------
</TABLE>
6
<PAGE>
A summary of the allowance for losses is as follows (in thousands):
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ -------------------
1997 1996 1997 1996
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Balance at beginning of period $ 13,549 $12,598 $ 12,946 $13,602
Provision for losses 1,849 1,614 3,755 3,231
Acquisition fees 10,681 6,237 22,046 12,809
Allowance related to auto
receivables sold to Trusts (12,007) (3,962) (21,773) (8,404)
Net charge-offs (2,722) (4,314) (5,624) (9,065)
-------- ------- -------- -------
Balance at end of period $ 11,350 $12,173 $ 11,350 $12,173
-------- ------- -------- -------
-------- ------- -------- -------
</TABLE>
NOTE 3 - EXCESS SERVICING RECEIVABLE
As of December 31, 1997 and June 30, 1997, the Company was servicing $1,337.9
million and $863.0 million, respectively, of auto receivables which have been
sold to certain special purpose financing trusts (the "Trusts").
The components of excess servicing receivable are as follows(in thousands):
<TABLE>
December 31, June 30,
1997 1997
------------ --------
<S> <C> <C>
Interest-only strips $101,357 $ 59,933
Subordinated interests:
Retained asset-backed securities 10,424 12,589
Excess of auto receivables in Trusts
over asset-backed securities outstanding 68,007 41,854
-------- --------
$179,788 $114,376
-------- --------
-------- --------
</TABLE>
7
<PAGE>
Excess servicing receivable consists of the following (in thousands):
<TABLE>
December 31, June 30,
1997 1997
------------ --------
<S> <C> <C>
Estimated future excess cash flows before
allowance for credit losses $ 311,354 $200,869
Allowance for credit losses (112,294) (74,925)
--------- --------
Estimated future excess cash flows 199,060 125,944
Discount to present value (19,272) (11,568)
--------- --------
$ 179,788 $114,376
--------- --------
--------- --------
</TABLE>
A summary of excess servicing receivable is as follows (in thousands):
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
1997 1996 1997 1996
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period $148,009 $42,656 $114,376 $ 33,093
Additions 45,730 23,748 87,789 38,804
Net change in unrealized gain (488) 741
Amortization (13,463) (6,624) (23,118) (12,117)
-------- ------- -------- --------
Balance at end of period $179,788 $59,780 $179,788 $ 59,780
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
NOTE 4 - DEBT
In October 1997, the Company entered into a restated revolving credit
agreement with a group of banks under which the Company may borrow up to $310
million, subject to a defined borrowing base. Aggregate borrowings of $2.1
million and $71.7 million were outstanding as of December 31, 1997 and June
30, 1997, respectively. Borrowings under the credit agreement are
collateralized by certain auto receivables and bear interest at 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 1998, contains various restrictive covenants requiring certain
minimum financial ratios and results and placing certain limitations on
payment of cash dividends and repurchase of common stock.
In October 1997, the Company entered into a funding agreement with a funding
agent on behalf of an institutionally managed commercial paper conduit and a
group of banks under which up to $245 million of structured warehouse
financing is available to the Company. Aggregate borrowings of $96.0 million
were outstanding as of December 31, 1997. Under the funding agreement, the
Company transfers auto receivables to CP Funding Corp. ("CPFC"), a special
purpose
8
<PAGE>
finance subsidiary of the Company, and CPFC in turn issues a note,
collateralized by such auto receivables, to the funding agent. The funding
agent provides funding under the note to CPFC pursuant to an advance formula
and CPFC forwards the funds to the Company in consideration for the transfer
of auto receivables. While CPFC is a consolidated subsidiary of the Company,
CPFC is a separate legal entity and the auto receivables transferred to CPFC
and the other assets of CPFC are legally owned by CPFC and not available to
creditors of AmeriCredit Corp. or its other subsidiaries. Advances under the
note bear interest at commercial paper, LIBOR or prime rates plus specified
fees depending upon the source of funds provided by the funding agent to
CPFC. The funding agreement, which expires in October 1998, contains various
covenants requiring certain minimum financial ratios and results.
The Company also has a mortgage warehouse facility with a bank under which
the Company may borrow up to $75 million, subject to a defined borrowing
base. Aggregate borrowings of $7.3 million and $.3 million were outstanding
as of December 31, 1997 and June 30, 1997, respectively. Borrowings under
the facility are collateralized by certain mortgage receivables and bear
interest at LIBOR plus 1%. The Company is also required to pay an annual
commitment fee equal to 1/8% of the unused portion of the facility. In
February 1998, the Company extended the maturity of the facility to February
1999.
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest costs and income taxes consist of the following
(in thousands):
<TABLE>
Six Months Ended
December 31,
----------------------
1997 1996
------- -------
<S> <C> <C>
Interest costs (none capitalized) $12,661 $ 6,456
Income taxes 7,412 228
</TABLE>
During the six months ended December 31, 1997 and 1996, the Company entered
into capital lease obligations of $1,543,000 and $1,258,000 respectively, for
the purchase of certain equipment.
NOTE 6 - GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
The payment of principal, premium, if any, and interest on the Company's 9 1/4%
Senior Notes is guaranteed by certain of the Company's subsidiaries (the
"Subsidiary Guarantors"). The separate financial statements of the Subsidiary
Guarantors are not included herein because the Subsidiary Guarantors are
wholly-owned consolidated subsidiaries of the Company and are jointly,
severally and unconditionally liable for the obligations represented by the 9
1/4% Senior Notes. The Company believes that the condensed consolidating
financial information for the Company, the combined Subsidiary Guarantors and
the combined Non-Guarantor Subsidiaries provide information that is more
9
<PAGE>
meaningful in understanding the financial position of the Subsidiary
Guarantors than separate financial statements of the Subsidiary Guarantors.
Therefore, the separate financial statements of the Subsidiary Guarantors are
not deemed material.
The following supplemental schedules present consolidating financial
information for (i) AmeriCredit Corp. (on a parent only basis), (ii) the
combined Subsidiary Guarantors, (iii) the combined Non-Guarantor
Subsidiaries, (iv) an elimination column for adjustments to arrive at the
information for the Company and its subsidiaries on a consolidated basis and
(v) the Company and its subsidiaries on a consolidated basis.
Investments in subsidiaries are accounted for by the parent company on the
equity method for purposes of the presentation set forth below. Earnings of
subsidiaries are therefore reflected in the parent company's investment
accounts and earnings. The principal elimination entries set forth below
eliminate investments in subsidiaries and intercompany balances and
transactions.
10
<PAGE>
AmeriCredit Corp.
Consolidating Balance Sheet
December 31, 1997
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ $ (1,025) $ 3,292 $ $ 2,267
Investment securities 6,500 6,500
Finance receivables, net 125,421 132,370 257,791
Excess servicing receivable (1,560) 10,670 170,678 179,788
Restricted cash 76,170 76,170
Property and equipment, net 137 17,095 17,232
Goodwill 7,112 7,112
Other assets 5,409 6,915 3,111 15,435
Due (to) from affiliates 267,917 (161,635) (106,282)
Investment in affiliates 95,361 13,921 2 (109,284)
-------- --------- -------- --------- --------
Total assets $373,764 $ 18,474 $ 279,341 $(109,284) $562,295
-------- --------- -------- --------- --------
-------- --------- -------- --------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Bank line of credit $ $ 2,100 $ $ $ 2,100
Mortgage warehouse facility 7,281 7,281
Commercial paper warehouse facility 95,989 95,989
Automobile receivables-backed
notes 14,138 14,138
9 1/4% Senior Notes 125,000 125,000
Notes payable 4,429 29 4,458
Accrued taxes and expenses 9,341 27,398 1,880 38,619
Deferred income taxes (19,952) (11,034) 50,750 19,764
-------- --------- -------- --------- --------
Total liabilities 118,818 25,774 162,757 307,349
-------- --------- -------- --------- --------
Shareholders' equity:
Common stock 338 203 3 (206) 338
Additional paid-in capital 213,890 108,336 13,921 (122,257) 213,890
Unrealized gain on excess
servicing receivable 3,410 3,410 (3,410) 3,410
Retained earnings 60,841 (115,839) 99,250 16,589 60,841
-------- --------- -------- --------- --------
278,479 (7,300) 116,584 (109,284) 278,479
Treasury stock (23,533) (23,533)
-------- --------- -------- --------- --------
Total shareholders' equity 254,946 (7,300) 116,584 (109,284) 254,946
-------- --------- -------- --------- --------
Total liabilities and
shareholders' equity $373,764 $ 18,474 $279,341 $(109,284) $562,295
-------- --------- -------- --------- --------
-------- --------- -------- --------- --------
</TABLE>
11
<PAGE>
AmeriCredit Corp.
Consolidating Balance Sheet
June 30, 1997
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ $ 3,988 $ 2,039 $ $ 6,027
Investment securities 6,500 6,500
Finance receivables, net 240,912 25,745 266,657
Excess servicing receivable (777) 12,096 103,057 114,376
Restricted cash 67,895 67,895
Property and equipment, net 136 13,748 13,884
Goodwill 7,260 7,260
Other assets 4,447 5,304 1,103 10,854
Due (to) from affiliates 277,369 (197,656) (79,713)
Investment in affiliates 56,764 (56,764)
-------- --------- -------- --------- --------
Total assets $344,439 $ 85,652 $120,126 $ (56,764) $493,453
-------- --------- -------- --------- --------
-------- --------- -------- --------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Bank line of credit $ $ 71,700 $ $ $ 71,700
Mortgage warehouse facility 345 345
Automobile receivables-backed
notes 23,689 23,689
9 1/4% Senior Notes 125,000 125,000
Notes payable 3,484 33 3,517
Deferred income taxes (8,669) (5,547) 27,520 13,304
Accrued taxes and expenses 8,088 27,987 3,287 39,362
-------- --------- -------- --------- --------
Total liabilities 127,903 94,518 54,496 276,917
-------- --------- -------- --------- --------
Shareholders' equity:
Common stock 333 203 3 (206) 333
Additional paid-in capital 203,544 98,336 (98,336) 203,544
Unrealized gain on excess
servicing receivable 2,954 2,954 (2,954) 2,954
Retained earnings 33,466 (107,405) 62,673 44,732 33,466
-------- --------- -------- --------- --------
240,297 (8,866) 65,630 (56,764) 240,297
Treasury stock (23,761) (23,761)
-------- --------- -------- --------- --------
Total shareholders' equity 216,536 (8,866) 65,630 (56,764) 216,536
-------- --------- -------- --------- --------
Total liabilities and
shareholders' equity $344,439 $ 85,652 $120,126 $ (56,764) $493,453
-------- --------- -------- --------- --------
-------- --------- -------- --------- --------
</TABLE>
12
<PAGE>
AmeriCredit Corp.
Consolidating Income Statement
Six Months Ended December 31, 1997
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Finance charge income $ $ 20,213 $ 5,977 $ $ 26,190
Gain on sale of receivables (4,903) 3,321 55,357 53,775
Servicing fee income 42,256 3,721 (26,786) 19,191
Investment income 14,920 127 2,211 (14,688) 2,570
Other income 344 158 502
Equity in income of
affiliates 28,143 (28,143)
------- -------- ------- -------- --------
38,160 66,261 67,424 (69,617) 102,228
------- -------- ------- -------- --------
Costs and expenses:
Operating expenses 4,948 63,758 (4) (26,786) 41,916
Provision for losses 3,755 3,755
Interest expense 6,318 12,462 7,953 (14,688) 12,045
------- -------- ------- -------- --------
11,266 79,975 7,949 (41,474) 57,716
------- -------- ------- -------- --------
Income before income taxes 26,894 (13,714) 59,475 (28,143) 44,512
Provision for income taxes (481) (5,280) 22,898 17,137
------- -------- ------- -------- --------
Net income $27,375 $ (8,434) $36,577 $(28,143) $ 27,375
------- -------- ------- -------- --------
------- -------- ------- -------- --------
</TABLE>
13
<PAGE>
AmeriCredit Corp.
Consolidating Income Statement
Six Months Ended December 31, 1996
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Finance charge income $ $16,339 $ 5,164 $ $21,503
Gain on sale of receivables 300 27,851 28,151
Servicing fee income 24,032 1,625 (17,415) 8,242
Investment income 6,775 89 904 (6,616) 1,152
Other income 28 260 334 622
Equity in income of
affiliates 13,593 (13,593)
------- ------- ------- -------- -------
20,396 41,020 35,878 (37,624) 59,670
------- ------- ------- -------- -------
Costs and expenses:
Operating expenses 2,144 35,885 1,133 (17,415) 21,747
Provision for losses 3,231 3,231
Interest expense 26 7,839 5,363 (6,616) 6,612
------- ------- ------- -------- -------
2,170 46,955 6,496 (24,031) 31,590
------- ------- ------- -------- -------
Income before income taxes 18,226 (5,935) 29,382 (13,593) 28,080
Income tax provision 956 139 9,715 10,810
------- ------- ------- -------- -------
Net income $17,270 $(6,074) $19,667 $(13,593) $17,270
------- ------- ------- -------- -------
------- ------- ------- -------- -------
</TABLE>
14
<PAGE>
AmeriCredit Corp.
Consolidating Statement of Cash Flow
Six Months Ended December 31, 1997
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
---------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 27,375 $ (8,434) $ 36,577 $ (28,143) $ 27,375
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 22 1,892 1,914
Provision for losses 3,755 3,755
Deferred income taxes (7,771) (5,487) 22,901 9,643
Gain on sale of auto receivables 4,903 (1,077) (55,357) (51,531)
Amortization of excess servicing
receivable (4,120) 2,503 24,735 23,118
Equity in income of affiliates (28,143) 28,143
Changes in assets and liabilities:
Other assets (962) (1,611) (2,008) (4,581)
Accrued taxes and expenses 1,253 (589) (1,407) (743)
-------- --------- --------- --------- ---------
Net cash provided (used) by operating
activities (7,443) (9,048) 25,441 8,950
-------- --------- --------- --------- ---------
Cash flows from investing activities:
Purchases of auto receivables (686,543) (795,637) 795,637 (686,543)
Originations of mortgage receivables (51,572) (51,572)
Principal collections and recoveries on
receivables 6,085 8,777 14,862
Net proceeds from sale of auto receivables 795,637 644,022 (795,637) 644,022
Net proceeds from sale of mortgage receivables 48,129 48,129
Purchases of property and equipment (23) (3,548) (3,571)
Increase in restricted cash (8,275) (8,275)
Net change in investment in affiliates (9,998) (3,921) (2) 13,921
-------- --------- --------- --------- ---------
Net cash provided (used) by investing
activities (10,021) 104,267 (151,115) 13,921 (42,948)
-------- --------- --------- --------- ---------
Cash flows from financing activities:
Borrowings on bank line of credit 514,500 514,500
Payments on bank line of credit (584,100) (584,100)
Net increase in commercial paper warehouse
facility 95,989 95,989
Net increase in mortgage warehouse facility 6,936 6,936
Payments on automobile receivables-
backed notes (9,551) (9,551)
Payments on notes payable (598) (4) (602)
Net change in due (to) from affiliates 10,996 (37,564) 26,568
Proceeds from issuance of common stock 7,066 13,921 (13,921) 7,066
-------- --------- --------- --------- ---------
Net cash provided (used) by financing
activities 17,464 (100,232) 126,927 (13,921) 30,238
-------- --------- --------- --------- ---------
Net increase (decrease) in cash and
cash equivalents (5,013) 1,253 (3,760)
Cash and cash equivalents at beginning of
period 3,988 2,039 6,027
-------- --------- --------- --------- ---------
Cash and cash equivalents at end of period $ $ (1,025) $ 3,292 $ $ 2,267
-------- --------- --------- --------- ---------
-------- --------- --------- --------- ---------
</TABLE>
15
<PAGE>
AmeriCredit Corp.
Consolidating Statement of Cash Flow
Six Months Ended December 31, 1996
(Unaudited, Dollars in Thousands)
<TABLE>
AmeriCredit
Corp. Guarantors Non-Guarantors Eliminations Consolidated
---------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 17,270 $ (6,074) $ 19,667 $ (13,593) $ 17,270
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 16 888 904
Provision for losses 3,231 3,231
Deferred income taxes 3,718 (3,174) 10,138 10,682
Gain on sale of auto receivables (27,851) (27,851)
Amortization of excess servicing
receivable 2,943 9,174 12,117
Equity in income of affiliates (13,593) 13,593
Changes in assets and liabilities:
Other assets (487) (119) (1,528) (2,134)
Accrued taxes and expenses (1,974) 11,037 132 9,195
-------- --------- --------- --------- ---------
Net cash provided by operating
activities 4,950 8,732 9,732 23,414
-------- --------- --------- --------- ---------
Cash flows from investing activities:
Purchases of auto receivables (354,448) (343,935) 343,935 (354,448)
Originations of mortgage receivables (7,748) (7,748)
Principal collections and recoveries on
receivables 13,484 22,663 36,147
Net proceeds from sale of auto receivables 343,935 332,982 (343,935) 332,982
Net proceeds from sale of mortgage
receivables 4,839 4,839
Purchases of property and equipment 1,273 (2,897) (1,624)
Proceeds from maturities of investment
securities 55 55
Increase in restricted cash (31,023) (31,023)
Net change in investment in affiliates 942 (942)
-------- --------- --------- --------- ---------
Net cash provided (used) by investing
activities 2,270 (3,777) (19,313) (20,820)
-------- --------- --------- --------- ---------
Cash flows from financing activities:
Borrowings on bank line of credit 304,400 304,400
Payments on bank line of credit (275,500) (275,500)
Net increase in mortgage warehouse facility 264 264
Payments on automobile receivables-
backed notes (27,304) (27,304)
Payments on notes payable (221) (221)
Net change in due (to) from affiliates (9,178) (25,570) 34,748
Proceeds from issuance of common stock 3,100 3,100
Purchase of treasury stock (4,387) (4,387)
-------- --------- --------- --------- ---------
Net cash provided (used) by financing
activities (10,686) 3,594 7,444 352
-------- --------- --------- --------- ---------
Net increase (decrease) in cash and
cash equivalents (3,466) 8,549 (2,137) 2,946
Cash and cash equivalents at beginning of
period (4,913) (87) 7,145 2,145
-------- --------- --------- --------- ---------
Cash and cash equivalents at end of period $ (8,379) $ 8,462 $ 5,008 $ $ 5,091
-------- --------- --------- --------- ---------
-------- --------- --------- --------- ---------
</TABLE>
16
<PAGE>
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,
securitization and servicing of auto receivables. The Company purchases auto
finance contracts from franchised and select independent automobile dealerships.
To fund the acquisition of receivables prior to securitization, the Company
utilizes borrowings under its warehouse credit facilities. The Company generates
finance charge income on its receivables pending securitization ("owned
receivables") and pays interest expense on borrowings under its warehouse credit
facilities.
The Company sells receivables to securitization trusts ("Trusts") or special
purpose finance subsidiaries that, in turn, sell asset-backed securities to
investors. By securitizing its receivables, the Company is able to lock in the
gross interest rate spread between the yield on such receivables and the
interest rate payable on the asset-backed securities. The Company recognizes a
gain on the sale of 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. Excess cash flows result 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 credit losses and expenses.
The Company typically begins to receive excess cash flow distributions
approximately seven to nine 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 monthly servicing fee income of between
2.25% and 2.50% per annum of the outstanding principal balance of receivables
securitized ("serviced receivables").
In November 1996, the Company acquired AmeriCredit Mortgage Services ("AMS"),
which originates and sells home equity mortgage loans. The acquisition was
accounted for as a purchase, and the results of operations for AMS 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 for cash on a servicing
released, whole-loan basis. The Company recognizes a gain at the time of sale.
17
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1997 AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1996
REVENUE:
The Company's average managed receivables outstanding consisted of the following
(in thousands):
<TABLE>
Three Months Ended
December 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
Auto:
Owned $ 244,597 $215,644
Serviced 1,248,876 486,087
---------- --------
1,493,473 701,731
Mortgage 14,565 4,753
---------- --------
$1,508,038 $706,484
---------- --------
---------- --------
</TABLE>
Average managed receivables outstanding increased by 113% as a result of higher
loan purchase volume. The Company purchased $341.2 million of auto loans during
the three months ended December 31, 1997, compared to purchases of $183.5
million during the three months ended December 31, 1996. 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 108 auto
lending branch offices as of December 31, 1997, compared to 66 as of December
31, 1996.
The Company purchased $24.2 million of mortgage loans during the three months
ended December 31, 1997 as compared to $7.7 million from the date of acquisition
of AMS through December 31, 1996.
Finance charge income consisted of the following (in thousands):
<TABLE>
Three Months Ended
December 31,
-----------------------
1997 1996
---- ----
<S> <C> <C>
Auto $ 12,786 $ 10,708
Mortgage 343 31
-------- --------
$ 13,129 $ 10,739
-------- --------
-------- --------
</TABLE>
The increase in finance charge income is due primarily to a 13% increase in
average owned auto receivables outstanding for the three months ended
December 31, 1997 versus the three months ended December 31, 1996.
18
<PAGE>
The Company's effective yield on its owned auto receivables increased to 20.7%
for the three months ended December 31, 1997 from 19.7% for the three months
ended December 31, 1996.
The gain on sale of receivables consists of the following (in thousands):
<TABLE>
Three Months Ended
December 31,
---------------------
1997 1996
---- ----
<S> <C> <C>
Auto $26,679 $15,261
Mortgage 1,054 300
------- -------
$27,733 $15,561
------- -------
------- -------
</TABLE>
The increase in gain on sale of auto receivables resulted from the sale of
$350.0 million of receivables in the three months ended December 31, 1997 as
compared to $190.4 million of receivables sold in the three months ended
December 31, 1996. The gains amounted to 7.6% and 8.0% of the sales proceeds
for the three months ended December 31, 1997 and 1996, respectively.
The gain on sale of mortgage receivables resulted from the sale of $23.2 million
of mortgage receivables in the three months ended December 31, 1997 as compared
to $4.8 million of mortgage receivables sold from the date of acquisition of AMS
through December 31, 1996.
Servicing fee income increased to $10.5 million, or 3.3% of average serviced
auto receivables, for the three months ended December 31, 1997, as compared
to $4.6 million, or 3.8% of average serviced auto receivables, for the three
months ended December 31, 1996. Servicing fee income represents accretion of
the present value discount on estimated future excess cash flows from the
Trusts, 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
outstanding for the three months ended December 31, 1997 compared to the
three months ended December 31, 1996.
Investment income increased to $1.3 million for the three months ended
December 31, 1997 from $.7 million for the three months ended December 31,
1996 primarily as a result of higher restricted cash balances. Restricted
cash is used as credit enhancement for the Trusts and generally increases as
greater amounts of receivables are sold to the Trusts.
COSTS AND EXPENSES:
Operating expenses as an annualized percentage of average managed auto
receivables outstanding decreased to 5.8% (5.5% excluding operating expenses
of $1.3 million related to the mortgage business) for the three months ended
December 31, 1997 as compared to 6.7% (6.5% excluding operating expenses of
$.4
19
<PAGE>
million related to the mortgage business) for the three months ended December
31, 1996. 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 $9.9 million, or 83%, 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 increased to $1.8 million for the three months ended
December 31, 1997 as compared to $1.6 million for the three months ended
December 31, 1996 due to higher average owned auto receivables outstanding.
Interest expense increased to $6.2 million for the three months ended
December 31, 1997 from $3.4 million for the three months ended December 31,
1996 due to higher debt levels and effective interest rates. Average debt
outstanding was $271.7 million and $169.3 million for the three months ended
December 31, 1997 and 1996, respectively. The Company's effective rate of
interest paid on its debt increased to 9.1% from 7.9% as a result of the
issuance of the 9 1/4% Senior Notes in February 1997.
The Company's effective income tax rate was 38.5% for the three months ended
December 31, 1997 and 1996, respectively.
SIX MONTHS ENDED DECEMBER 31, 1997 AS COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 1996
REVENUE:
The Company's average managed receivables outstanding consisted of the following
(in thousands):
<TABLE>
Six Months Ended
December 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
Auto:
Owned $ 245,296 $217,156
Serviced 1,130,318 424,366
---------- ---------
1,375,614 641,522
Mortgage 11,534 4,753
---------- ---------
$1,387,148 $646,275
---------- ---------
---------- ---------
</TABLE>
Average managed receivables outstanding increased by 115% as a result of
higher loan purchase volume. The Company purchased $696.3 million of auto
loans during the six months ended December 31, 1997, compared to purchases of
$359.4 million during the six months ended December 31, 1996. 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
108 auto lending branch offices as of December 31, 1997, compared to 66 as of
December 31, 1996.
20
<PAGE>
The Company purchased $51.6 million of mortgage loans during the six months
ended December 31, 1997 as compared to $7.7 million from the date of acquisition
of AMS through December 31, 1996.
Finance charge income consisted of the following (in thousands):
<TABLE>
Six Months Ended
December 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
Auto $ 25,645 $ 21,472
Mortgage 545 31
-------- --------
$ 26,190 $ 21,503
-------- --------
-------- --------
</TABLE>
The increase in finance charge income is due primarily to an increase of 13% in
average owned auto receivables outstanding for the six months ended December 31,
1997 versus the six months ended December 31, 1996.
The Company's effective yield on its owned auto receivables increased to 20.7%
for the six months ended December 31, 1997 from 19.6% for the six months ended
December 31, 1996.
The gain on sale of receivables consists of the following (in thousands):
<TABLE>
Six Months Ended
December 31,
--------------------
1997 1996
----- ----
<S> <C> <C>
Auto $51,531 $27,851
Mortgage 2,244 300
------- -------
$53,775 $28,151
------- -------
------- -------
</TABLE>
The increase in gain on sale of auto receivables resulted from the sale of
$682.5 million of receivables in the six months ended December 31, 1997 as
compared to $345.6 million of receivables sold in the six months ended December
31, 1996. The gains amounted to 7.6% and 8.1% of the sales proceeds for the six
months ended December 31, 1997 and 1996, respectively.
The gain on sale of mortgage receivables resulted from the sale of $48.1 million
of mortgage receivables in the six months ended December 31, 1997 as compared to
$4.8 million of mortgage receivables sold from the date of acquisition of AMS
through December 31, 1996.
Servicing fee income increased to $19.2 million, or 3.4% of average serviced
auto receivables, for the six months ended December 31, 1997, as compared to
$8.2 million, or 3.9% of average serviced auto receivables, for the six months
21
<PAGE>
ended December 31, 1996. Servicing fee income represents accretion of the
present value discount on estimated future excess cash flows from the Trusts,
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 outstanding for the six
months ended December 31, 1997 compared to the six months ended December 31,
1996.
Investment income increased to $2.6 million for the six months ended December
31, 1997 from $1.2 million for the six months ended December 31, 1996 primarily
as a result of higher restricted cash balances. Restricted cash is used as
credit enhancement for the Trusts and generally increases as greater amounts of
receivables are sold to the Trusts.
COSTS AND EXPENSES:
Operating expenses as an annualized percentage of average managed receivables
outstanding decreased to 6.0% (5.7% excluding operating expenses of $2.6 million
related to the mortgage business) for the six months ended December 31, 1997 as
compared to 6.7% (6.6% excluding operating expenses of $.4 million related to
the mortgage business) for the six months ended December 31, 1996. 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 $20.2 million,
or 93%, 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 increased to $3.8 million for the six months ended
December 31, 1997 as compared to $3.2 million for the six months ended December
31, 1996 due to higher average owned auto receivables outstanding.
Interest expense increased to $12.0 million for the six months ended December
31, 1997 from $6.6 million for the six months ended December 31, 1996 due to
higher debt levels and effective interest rates. Average debt outstanding
was $257.6 million and $165.7 million for the six months ended December 31,
1997 and 1996, respectively. The Company's effective rate of interest paid
on its debt increased to 9.3% from 7.9% as a result of the issuance of the
9 1/4% Senior Notes in February 1997.
The Company's effective income tax rate was 38.5% for the six months ended
December 31, 1997 and 1996, respectively.
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
22
<PAGE>
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. When the Company sells auto receivables to the Trusts,
the calculation of the gain on sale of receivables is reduced by an estimate of
future credit losses expected over the life of the auto receivables sold.
The Company sells 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, collection data, 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 provisions 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.
23
<PAGE>
The following table presents certain data related to the receivables portfolio
(dollars in thousands):
<TABLE>
December 31,
1997
-------------------------------------------------------------
Balance
Auto Sheet Auto Managed
Owned Mortgage Total Serviced Portfolio
----- -------- ----- -------- ---------
<S> <C> <C> <C> <C> <C>
Principal amount of receivables $261,333 $ 7,808 $269,141 $1,337,940 $1,599,273 (2)
---------- ----------
---------- ----------
Allowance for losses (11,350) (11,350) $ (112,294) (1) $ (123,644)(2)
-------- ------- -------- ---------- ----------
---------- ----------
Finance receivables, net $249,983 $ 7,808 $257,791
-------- ------- --------
-------- ------- --------
Number of outstanding contracts 23,538 72 129,420 152,958 (2)
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Average amount of outstanding
contract (principal amount)
(in dollars) $ 11,103 $108,444 $ 10,338 $ 10,456 (2)
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Allowance for losses as a percentage
of receivables 4.3% 8.4% 7.7%(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.
The following is a summary of managed auto receivables which are (i) more than
60 days delinquent, but not in repossession, and (ii) in repossession (dollars
in thousands):
<TABLE>
December 31,
--------------------
1997 1996
---- ----
<S> <C> <C>
Delinquent contracts $57,186 $28,251
Delinquent contracts as a percentage
of managed auto receivables 3.6% 3.7%
Contracts in repossession $22,012 $12,149
Contracts in repossession as a percentage
of managed auto receivables 1.4% 1.6%
</TABLE>
In accordance with its policies and guidelines, the Company at times offers
payment deferrals to customers, whereby the customer is allowed to move a
delinquent payment to the end of the loan by paying a fee (approximately the
interest portion of the payment deferred). Contracts receiving a payment
deferral as a percentage of average managed auto receivables were 4.7% and 4.9%
for the three months ended December 31, 1997 and 1996, respectively, and 9.1%
and 8.9% for the six months ended December 31, 1997 and 1996, respectively.
24
<PAGE>
The following table presents charge-off data with respect to the Company's
managed auto receivables portfolio (dollars in thousands):
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
--------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net charge-offs:
Owned $ 2,722 $4,314 $ 5,624 $ 9,065
Serviced 17,907 5,397 32,449 8,684
------- ------ ------- -------
$20,629 $9,711 $38,073 $17,749
------- ------ ------- -------
------- ------ ------- -------
Net charge-offs as an
annualized percentage of
average managed auto
receivables outstanding 5.5% 5.5% 5.5% 5.5%
------- ------ ------- -------
------- ------ ------- -------
</TABLE>
The Company began its indirect automobile finance business in September 1992 and
has grown its managed auto receivables portfolio to $1.6 billion as of December
31, 1997. The Company expects that its delinquency and charge-offs will
increase over time as the portfolio matures and its portfolio 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.
25
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows are summarized as follows (in thousands):
<TABLE>
Six Months Ended
December 31,
--------------------------
1997 1996
---- ----
<S> <C> <C>
Operating activities $ 8,950 $ 23,414
Investing activities (42,948) (20,820)
Financing activities 30,238 352
-------- --------
Net(decrease)increase in
cash and cash equivalents $ (3,760) $ 2,946
-------- --------
-------- --------
</TABLE>
The Company's primary sources of cash have been collections and recoveries on
its receivables portfolio, borrowings under its warehouse credit facilities,
sales of auto receivables to Trusts in securitization transactions, excess cash
flow distributions from the Trusts and the issuance of its 9 1/4% Senior Notes.
The Company's line of credit arrangement with a group of banks provides for
borrowings up to $310 million, subject to a defined borrowing base. The Company
utilizes the line of credit to fund its auto lending activities and daily
operations. The facility matures in October 1998. A total of $2.1 million was
outstanding under the line of credit as of December 31, 1997.
In October 1997, the Company entered into a funding agreement with a funding
agent on behalf of an institutionally managed commercial paper conduit and a
group of banks under which up to $245 million of structured warehouse financing
is available to the Company. The Company utilizes this facility to fund auto
receivables pending securitization. The facility matures in October 1998. A
total of $96.0 million was outstanding under this facility as of December 31,
1997.
The Company also has a mortgage warehouse facility with a bank under which the
Company may borrow up to $75 million, subject to a defined borrowing base, to
fund mortgage loan originations. In February 1998, the Company extended the
maturity of this facility to February 1999. A total of $7.3 million was
outstanding under the mortgage warehouse facility as of December 31, 1997.
In November 1997, the Company completed its eleventh securitization transaction
with the issuance of $400 million of asset-backed securities through the
AmeriCredit Automobile Receivables Trust 1997-D. The proceeds from the
transaction were used to repay the borrowings then outstanding under the
Company's warehouse facilities.
In January 1998, the Company issued an additional $50 million of its 9 1/4%
Senior Notes which are due in February 2004. These additional notes have
substantially the same terms as the Company's original $125 million of 9 1/4%
Senior Notes issued in February 1997.
26
<PAGE>
The Company's primary use of cash has been purchases and originations of
receivables. The Company purchased $696.3 million of auto finance contracts
during the three months ended December 31, 1997 requiring cash of $686.5
million, net of acquisition fees and other items. The Company operated 108 auto
lending branch offices as of December 31, 1997 and plans to open 17 additional
branches in the remainder of fiscal 1998. The Company may also expand loan
production capacity at existing offices where appropriate. While the Company
has been able to establish and grow its auto 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, 1997, although no common stock has been repurchased
since September 1996. Certain restrictions contained in the Indenture pursuant
to which the 9 1/4% Senior Notes were issued limit the amount of common stock
which may be repurchased by the Company.
As of December 31, 1997, the Company had $8.8 million in cash and cash
equivalents and investment securities. The Company also had available borrowing
capacity of $77.5 million under its bank line of credit pursuant to the
borrowing base requirement of such credit agreement and issued an additional $50
million of its 9 1/4% Senior Notes in January 1998. The Company estimates that
it will require additional external capital for the remainder of fiscal 1998 in
addition to these existing capital resources and collections and recoveries on
its receivables portfolio and excess cash flow distributions from the Trusts in
order to fund expansion of its lending activities, capital expenditures, and
other costs and expenses.
The Company anticipates that such funding will be in the form of additional
securitization transactions. 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 debt, fluctuations in
interest rates impact the Company's profitability. The Company utilizes
several strategies to minimize the risk of interest rate fluctuations,
including the use of hedging instruments, the regular sale of auto
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 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
27
<PAGE>
subsequent delivery of receivables 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.
YEAR 2000 ISSUE
The Company is in the preliminary stages of investigating the impact of the year
2000 issue and developing a remediation plan. The year 2000 issue is whether the
Company's or its vendors' computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail.
The Company is in the process of conducting an initial assessment of applicable
computer systems to identify the systems that could be affected by the year 2000
issue and has determined that modification or replacement of portions of
existing software will be required. The Company is utilizing both internal and
external resources to identify, modify or replace and test systems for year 2000
compliance. The Company plans to complete application modifications and
upgrades by December 31, 1998, with testing to take place in the first quarter
of calendar year 1999. While the Company has not yet fully evaluated the cost
of year 2000 compliance, such costs are not expected to be material to the
Company's results of operations and liquidity.
The Company presently believes that with modifications to existing software and
conversion to new software, the year 2000 issue will not pose significant
operational problems for the Company's computer systems. However, if such
modifications and conversions are not made, or are not completed timely, the
year 2000 issue could have a material impact on the operations of the Company.
In addition, there can be no assurance that unforeseen problems in the Company's
computer systems, or the systems of third parties on which the Company's
computers rely, would not have an adverse effect on the Company's systems or
operations.
FORWARD LOOKING STATEMENTS
Except for the historical information contained herein, the matters discussed
above are forward looking statements that involve risks and uncertainties
including competitive factors, the management of growth, and other risks
detailed from time to time in the Company's filings and reports with the
Securities and Exchange Commission including the Company's Annual Report on Form
10-K for the year ended June 30, 1997. Such statements are only predictions and
actual events or results may differ materially.
28
<PAGE>
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The disclosures required pursuant to Item 305 of Regulation S-K are not yet
effective for the Company. Such disclosures will be included in the
Company's filings commencing with its Annual Report on Form 10-K for the year
ending June 30, 1998.
29
<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 5, 1997, the Company held its Annual Meeting of
Shareholders. The shareholders voted upon the election of eight
directors, an amendment to increase the number of shares reserved
under the 1995 Omnibus Stock and Incentive Plan for AmeriCredit
Corp. (the "1995 Plan") 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 the amendment to the 1995 Plan, with
12,362,669 shares voting in favor, 8,620,234 shares voting
against and 91,479 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:
10.1 Restated Revolving Credit Agreement, dated as of October
3,1997, between AmeriCredit Corp. and subsidiaries, Wells
Fargo Bank (Texas), National Association, Bank One Texas, N.A.
and other banks named therein.
10.2 Sale and Servicing Agreement, dated as of October 8, 1997,
between CP Funding Corp., AmeriCredit
30
<PAGE>
Financial Services, Inc., and The Chase Manhattan Bank.
10.3 Funding Agreement, dated as of October 8, 1997, between CP
Funding Corp., Park Avenue Receivables Corporation, The Chase
Manhattan Bank, and other financial institutions named
therein.
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, 1997.
Certain subsidiaries and affiliates of the Company filed
reports on Form 8-K during the quarterly period ended December
31, 1997 reporting monthly information related to
securitization trusts.
31
<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, 1998 By: /s/ Daniel E. Berce
-----------------------------------------
(Signature)
Daniel E. Berce
Chief Financial Officer
32
<PAGE>
RESTATED
REVOLVING CREDIT AGREEMENT
This 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., THE BANK OF NOVA SCOTIA, CIBC
INC., CREDIT LYONNAIS NEW YORK BRANCH, BANKBOSTON, N.A., and THE LONG-TERM
CREDIT BANK OF JAPAN, LIMITED, 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; and
WHEREAS, AmeriCredit Corp., AmeriCredit Financial Services, Inc.,
AmeriCredit Operating Co., Inc., Guarantors, Agent and certain of the Banks
entered into that one certain Second Restated Revolving Credit Agreement
dated October 7, 1996 (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:
"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.
<PAGE>
"ADJUSTED INDEBTEDNESS" shall mean the Indebtedness of the Company and
its Subsidiaries as reported on the balance sheet of Company, less
obligations related to Securitizations and obligations related to Additional
Warehouse Facilities, that are in each case nonrecourse to the Borrowers and
that are reported on the balance sheet of Company.
"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 and/or an Additional Warehouse
Facility.
"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 or at any time during an
Interest Period:
<TABLE>
<CAPTION>
Debt Rating Percentage
----------- ----------
<S> <C>
Unrated or less than
BBB-/Baa3 1.55%
BBB-/Baa3 1.40%
BBB/Baa2 or higher 1.25%
</TABLE>
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. BANK shall mean any one of Banks.
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<PAGE>
"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 mean, 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, 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 greater of (a) 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 or (b) one hundred dollars ($100) for each prepayment
of a Eurodollar Advance other than on the last day of the Interest Period
applicable thereto.
"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.
"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.
"CREDIT ENHANCEMENT ASSETS" shall mean any asset, reflected as such on
the Consolidated balance sheet of the Company and its Subsidiaries, created
or arising as a result of any arrangement wherein the Company (or one or more
of its Subsidiaries) or a third party provides credit support in connection
with a Securitization or Additional Warehouse Facility, including but not
limited to the following: (i) subordinated interests retained by the Company
or any Subsidiary in a special purpose financing entity or trust created for
a Securitization or Additional Warehouse Facility, (ii) restricted cash
accounts maintained by the Company, any
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<PAGE>
Subsidiary or any special purpose financing entity in connection with a
Securitization or Additional Warehouse Facility, and (iii) the excess
servicing receivable, as such asset is determined from time to time in
accordance with GAAP and reflected on the Consolidated balance sheet of
Company and its Subsidiaries.
"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 five percent
(5.0%) or more of 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, for any period, income of the Company for such period
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,
(ii) that represents a Domestic Finance Contract with 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),
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<PAGE>
(iv) that is not delinquent in the payment of any monthly
installment (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 a security interest 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 Lien created
in conjunction with a Securitization or an Additional Warehouse Facility;
(x) in respect of which the Dealer has received good funds from
Borrowers in payment of the Finance Contract; and
(xi) 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) 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.
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<PAGE>
"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.
"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).
-6-
<PAGE>
"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.
"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.
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"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 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 B 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;
(3) all obligations of such Person in respect of any Guaranty; and
(4) the undrawn face amount of all outstanding Letters of Credit and all
indebtedness and obligations resulting from draws under Letters of
Credit.
"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.
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"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 (except
in the case of a Swing Line Borrowing, the rate of interest shall not be
determined two (2) Eurodollar Business Days prior thereto).
"INTERCREDITOR AGREEMENT" shall mean that one certain Intercreditor
Agreement dated as of October 8, 1997 by and among The Chase Manhattan Bank,
Wells Fargo Bank (Texas), National Association, CP Funding Corp. and
AmeriCredit Financial Services, Inc.
"INTEREST COVERAGE RATIO" shall mean (a) the sum of EBIT and the
amortization of excess servicing receivable LESS the gain on sale of Finance
Contracts DIVIDED BY (b) total interest expense determined in accordance with
GAAP.
"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.
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"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 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.
"LETTER OF CREDIT" shall mean any outstanding standby letter of credit
or commercial letter of credit for the account of any of Borrowers.
"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, the Intercreditor 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, occurrence
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
properties, business, prospects or conditions (financial or otherwise) of any
of Borrowers or the Guarantors or their respective 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
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"highest nonusurious rate of interest permitted by applicable law" for
purposes of this Loan 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 (including, without limitation, interest accruing after bankruptcy
whether or not a claim for post-petition interest is allowed in such
proceeding), and 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
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).
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<PAGE>
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its chief executive officer, its president, its chief
financial officer, its treasurer or one of its vice presidents.
"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 Pro Rata
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 the positive difference between (a) twenty
million dollars ($20,000,000) and (b) the aggregate amount of Liens described
in (viii) below at any time; (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 connection with existing or proposed structures or land use;
(vii) Liens and encumbrances created and existing in connection with
Securitizations and any Additional Warehouse Facility; (viii) Liens on short
term investments pledged to Texas Commerce Bank in an aggregate amount not to
exceed two million dollars ($2,000,000) with respect to the Mortgage
Subsidiary; and (ix) Liens on Credit Enhancement Assets.
"PERSON" shall mean and include an individual, partnership, joint
venture, corporation, limited liability company, 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.
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"PRO RATA" and "PRO RATA PART" shall mean, when determined for any Bank,
the proportion, stated as a percentage, that such Bank's Commitment bears to
the Total Commitment.
"RATINGS" shall mean the rating assigned to the Indebtedness of
Borrowers to Banks by Standard & Poors, Moody's 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 Law or any rules, regulations and
other requirements of any Governmental Authority 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.
"REPOSSESSED LOANS" shall mean the aggregate amount of all Indirect
Loans with respect to which the motor vehicle securing the payment of the
Indirect Loan has been repossessed by Borrowers and all applicable time
periods for reinstatement of the Indirect Loan or redemption of the motor
vehicle have expired.
"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 five percent (5.0%), 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 five percent (5.0%).
"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 or other Additional Warehouse Facility are sold, pledged or
conveyed by AmeriCredit Financial Services, Inc., or an Affiliate thereof, to
a grantor trust or other special purpose financing entity as
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collateral security for the issuance by such grantor trust or other special
purpose financing entity of notes, certificates or other evidence of
indebtedness.
"SECURITY AGREEMENT" shall mean the Restated Security Agreement, dated
as of October 3, 1997, 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.
"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 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.
"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 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,
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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.
"SWING LINE BORROWING" shall mean a Borrowing made pursuant to Section
2.03.
"SWING LINE LOAN" shall mean a loan pursuant to Section 2.03.
"SWING LINE MATURITY DATE" shall mean October 2, 1998.
"SWING LINE NOTE" shall mean that one certain promissory note executed
by Borrowers and payable to the order of Wells Fargo Bank in the amount of
twenty million dollars ($20,000,000) and is one of the Notes.
"SWING LINE SUBFACILITY" shall mean the subfacility which shall never
exceed the aggregate of $20,000,000 as described in, and subject to the
limitation of, Section 2.03.
"SWING LINE DEBT" shall mean, on the date of determination, that portion
outstanding, under the Swing Line Subfacility.
"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 which would appear on a consolidated balance sheet of Company prepared
as of such date in accordance with Generally Accepted Accounting Principles
LESS intangible assets which should 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 2, 1998.
"TRIGGER EVENT" shall mean any trigger event as defined in any of the
agreements relating to a Securitization or the equivalent.
"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.
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"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 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"):
<TABLE>
<CAPTION>
Commitment
Percentage
Banks Commitment (Rounded)
----- ---------- -----------
<S> <C> <C>
Wells Fargo Bank (Texas), $45,000,000 14.516129035%
National Association
Bank One, Texas, N.A. $40,000,000 12.903225806%
LaSalle National Bank $30,000,000 9.677419355%
Texas Commerce Bank National $25,000,000 8.064516129%
Association
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The Sumitomo Bank, Limited $25,000,000 8.064516129%
Comerica Bank-Texas $25,000,000 8.064516129%
BankAmerica Business Credit, Inc $25,000,000 8.064516129%
Harris Trust and Savings Bank $20,000,000 6.451612903%
The Bank of Nova Scotia $15,000,000 4.838709677%
CIBC Inc. $15,000,000 4.838709677%
Credit Lyonnais New York Branch $15,000,000 4.838709677%
BankBoston, N.A. $15,000,000 4.838709677%
The Long Term Credit Bank of Japan, $15,000,000 4.838709677%
Limited ------------ --------------
$310,000,000 100.000000000%
------------ --------------
------------ --------------
</TABLE>
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, Section 2.02 and Section 2.03 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 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 three hundred ten million dollars ($310,000,000).
(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 and all Swing Line Borrowings 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
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Credit Loans and Swing Line Borrowings (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 twentieth percent (.05%) of each such
Bank's Revolving Commitment under the Prior Loan Agreement and (ii) one tenth
percent (.10%) 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,
1998 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. Outstanding Borrowings under the Swing Line
Subfacility shall not be treated as outstanding in determining the amount of
each such Bank's Commitment which is unused at any time for purposes of
calculating the loan commitment fee. 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 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
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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 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
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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 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, (2) the interest rate applicable
thereto under Section 2.04 hereof would exceed the Maximum Rate in effect on
the first day of the Interest Period applicable to such Eurodollar Borrowing,
or (3) either of the circumstances described in Section 4.01 exist.
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 SWING LINE SUBFACILITY.
(a) For the convenience of the parties and as an integral part of the
transactions contemplated by the Loan Documents, Wells Fargo Bank (Texas),
National Association ("Wells Fargo"), solely for its own account, may make
any requested Borrowing in the form of EXHIBIT "E" of $500,000 or a greater
integral multiple of $100,000, subject to those terms and conditions
applicable to Borrowings set forth in Section 6.02(c), (d), (e), and (f),
directly to Borrowers as a Swing Line Borrowing without requiring any other
Bank to fund its Pro Rata Part thereof unless and until Section 2.03(b) is
applicable; PROVIDED THAT: (i) each such Borrowing must occur on a Business
Day prior to, and not on or after, the Swing Line Maturity Date; (ii) the
aggregate Swing Line Debt outstanding on any date of determination shall not
exceed $20,000,000; (iii) on any date of determination, the total amount
outstanding under this Loan Agreement, after taking into account such
requested Swing Line Borrowing, shall never exceed the lesser of the Total
Commitment or the Revolving Credit Borrowing Base then in effect; (iv) at the
time of such Swing Line Borrowing, no Event of Default or event, which with
the giving of notice or the passage of time, or both, could constitute an
Event of Default, shall have occurred and be continuing; and (v) no
additional Swing Line Borrowing shall be made at any time after any Bank has
refused, notwithstanding the requirements of Section 2.03(b), to purchase a
participation in any Swing Line Borrowing as provided in Section 2.03(b), and
until such purchase shall occur or until the Swing Line Borrowing has been
repaid. Each Borrowing under the Swing Line Subfacility shall be available
and may be prepaid on same day by
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telephonic notice (to be followed immediately by written notice) from
Borrowers to Wells Fargo, SO LONG AS such notice is received by Wells Fargo
prior to 12:00 noon (Fort Worth, Texas time). Each Swing Line Borrowing shall
be due and payable by Borrowers on the earlier of (a) five (5) Business Days
after the date of such Swing Line Borrowing, (b) the occurrence of an Event
of Default or (c) the Swing Line Maturity Date.
(b) If Borrowers fail to repay any Swing Line Borrowing within five (5)
Business Days after the date of such Swing Line Borrowing (and in any event
upon the earlier to occur of an Event of Default, the Termination Date, or
the date on which the Commitment is canceled in full), Agent shall timely
notify each Bank of such failure and of the date and amount not paid. No
later than the close of business on the date such notice is given (if such
notice was given prior to 12:00 noon (Fort Worth time) on any Business Day,
or, if made at any other time, on the next Business Day following the date of
such notice), each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from Wells Fargo an undivided interest
and participation in such Swing Line Borrowing to the extent of such Bank's
Pro Rata Part, and each Bank shall make available to Wells Fargo in
immediately available funds such Bank's Pro Rata Part of such unpaid amount.
All such amounts payable by any Bank shall include interest thereon from the
date on which such payment is payable by such Bank to, but not including, the
date such amount is paid by such Bank to Agent, at the Federal Funds Rate.
If such Bank does not promptly pay such amount upon Agent's demand therefor,
and until such time as such Bank makes the required payment, Wells Fargo
shall be deemed to continue to have outstanding a Swing Line Borrowing in the
amount of such unpaid obligation. Each payment by Borrowers of all or any
part of any Swing Line Borrowing shall be paid to Agent for the ratable
benefit of Wells Fargo and those Banks who have funded their participations
in such Swing Line Debt under this Section 2.03(b); PROVIDED THAT, with
respect to any such participation, all interest accruing on the Swing Line
Debt to which such participation relates prior to the date of funding such
participation shall be payable solely to Wells Fargo for its own account.
2.04. INTEREST RATE. The unpaid principal of each Floating Base
Advance except Borrowings under the Swing Line Facility 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 except
Borrowings under the Swing Line Facility 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 in effect from time to time or (b) the
Maximum Rate. Borrowers shall notify Agent of any change in the Ratings and
the Applicable Margin within one (1) Business Day of any such change. The
unpaid principal of each Swing Line Borrowing shall bear interest at then
Adjusted Interbank Rate applicable to a one (1) month Interest Period as
determined by Wells Fargo on the date of the Swing Line Borrowing, plus the
Applicable Margin; PROVIDED THAT at any time after any Bank is deemed to have
purchased pursuant to Section 2.03(b) a participation in any Swing Line
Borrowing, such Swing Line Borrowing shall bear interest at the Past Due
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(c) hereof, upon the
occurrence of the circumstances described in such section.
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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 2.04 hereof, 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 NOTES. Subject to Article X, the unpaid
principal amount of each Note (other than the Swing Line Note), and all
accrued but unpaid interest thereon, shall be due and payable on the
Termination Date and the unpaid principal balance of the Swing Line Note
shall be due and payable on the Swing Line Maturity 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 (to 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,
1997, 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 on a Floating
Base Advance become due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day.
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(b) SWING LINE NOTE. The unpaid accrued interest on each advance
under the Swing Line Note shall be payable five (5) days from the date of
each such advance.
(c) 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 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 365/366 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 immediately available Federal funds or such
other immediately available funds at Agent's principal banking office in Fort
Worth, Texas or to Agent's office in San Francisco, California wired as
follows: ABA No. 12100248, Account No. 4518151378, Reference: AmeriCredit -
Syndicated Credit Agreement. 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 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.
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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 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
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<PAGE>
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 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 and with
respect to each Swing Line Borrowing made to a Borrower, and the Obligations
of a Borrower arising as a result of
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the joint and several liability of the Borrower hereunder, with respect to
Revolving Credit Loans or a Swing Line Borrowing 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 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 including a Swing Line Borrowing:
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(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,
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 received or receivable by such
Bank under this Agreement or the Note by an amount reasonably deemed
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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.
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 Warehouse Facility) and all promissory notes
payable to any of Borrowers.
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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) SWING LINE NOTE. The duly executed Swing Line Note drawn to the
order of Wells Fargo Bank (Texas), National Association in form satisfactory
to Wells Fargo.
(c) 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.
(d) 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.
(e) GUARANTY AGREEMENT. The Guaranty Agreement in the form of
EXHIBIT B executed by AmeriCredit Premium Finance, Inc. and ACF Investment
Corp.
(f) AGENT'S FEE AGREEMENT. Agent's fee agreement between Borrowers
and Agent and the agent's fee payable to Agent.
(g) BORROWING BASE. A borrowing base certificate satisfying the
requirements of Section 8.01.
(h) ARTICLES OF INCORPORATION OF BORROWERS. A copy of the Articles
of Incorporation of each of Borrowers and all amendments thereto.
(i) BYLAWS OF BORROWERS. A certified copy of the bylaws of each of
Borrowers.
(j) RESOLUTIONS OF BORROWERS. Resolutions of each of Borrowers
authorizing the execution of this Loan Agreement and each of the other Loan
Documents 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.
(k) INCUMBENCY CERTIFICATE OF BORROWERS. An incumbency certificate
with respect to each of Borrowers executed by the appropriate officers of
such Borrower.
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(l) 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.
(m) 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.
(n) ARTICLES OF INCORPORATION OF THE GUARANTORS. A copy of the
Articles of Incorporation of each of the Guarantors and all amendments
thereto.
(o) BYLAWS OF EACH GUARANTOR. A certified copy of the bylaws of
each of the Guarantors.
(p) 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.
(q) INCUMBENCY CERTIFICATES OF GUARANTORS. An incumbency
certificate with respect to each Guarantor executed by the appropriate
officers of each such Guarantor.
(r) CERTIFICATES OF EXISTENCE AND ACCOUNT STATUS FOR EACH GUARANTOR.
A current certificate of existence from the state of incorporation of each
Guarantor and a certificate of account status from the Comptroller of Public
Accounts of the State of Texas for each Guarantor.
(s) 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.
(t) OPINION OF COUNSEL. An executed opinion of counsel to Borrowers
and each of the Guarantors.
(u) LOAN ORIGINATION FEES. The loan origination fees described in
Section 2.01(d).
(v) FINANCIAL STATEMENT. Audited financial statement of Company for
its fiscal year ended June 30, 1997, together with an unqualified opinion
from a recognized accounting firm of national standing.
(w) FIELD EXAMINATION. Field examination of collateral conducted by
Agent which is satisfactory to Agent and Banks.
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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", EXHIBIT "D" or EXHIBIT "E" 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.
(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, 1997 which
has caused 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 and in each of the Loan
Documents shall be true and correct 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,
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.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
To induce Banks to make the Revolving Credit Loans and the Swing Line
Loan, 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 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.
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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 Borrowers and/or Guarantors parties
thereto, enforceable against such parties 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,
1997, and 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; 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, 1997.
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.
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 F 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 could
reasonably be expected to, 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
acquiring Finance Contracts 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
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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
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 9.09, 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 4100 International Plaza, Overton Center II,
Suite 600, Fort Worth, Texas 76109.
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 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 G, 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. Neither Company nor any Subsidiary has been notified
by any Governmental Authority that Company or any Subsidiary has failed to
comply
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with any such laws, rules, regulations, orders or decrees nor has Company or
any Subsidiary been notified of any Environmental Claim except as described
in EXHIBIT H.
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, 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 "H"
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 "H" 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 "H" attached hereto, there
are no underground storage tanks located on any of the properties presently
owned or
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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 all
Finance Contracts evidencing Indirect Loans in the manner specified in the
Security Agreement except Finance Contracts that are subject to a
Securitization.
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 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 and as provided on the Intercreditor
Agreement, Borrowers shall furnish to Agent a certificate in the form of EXHIBIT
"I" executed by the chief financial officer, treasurer or one of the vice
presidents 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 month, Borrowers shall deliver to Agent a certificate in the form of
EXHIBIT "J" executed by the chief financial officer, treasurer, or one of the
vice presidents 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
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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 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,
9.03, 9.04, 9.05 or 9.06, 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), including, but not limited to, Form 10-Q and Form 10-K.
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 one (1) copy 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.
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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.
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 or
could reasonably be expected to have, if adversely determined, 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, (vi) a
change in the executive officers of any of Borrowers, or (vii) the occurrence of
any default or Event of Default.
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.
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
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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.
8.23. PRINCIPAL DEPOSITORY. Borrowers shall use Agent as their
principal depository; Borrowers shall use the lockbox services of Agent and
Co-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 or an Additional
Warehouse Facility and (ii) the Mortgage Subsidiary.
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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 AND ANNUAL AUDIT. Borrowers shall from time to time
permit Banks to conduct field examinations at the expense of Banks. Borrowers
shall permit Agent to engage an independent third party (to be approved by
Majority Banks and Borrowers, which approval shall not be unreasonably withheld
or delayed by Borrowers) to conduct a collateral audit annually at the expense
of Borrowers (not to exceed $25,000 annually plus travel expenses unless an
Event of Default or extraordinary circumstances exist).
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.
8.30. SECURITIZATION. Borrowers shall consummate a Securitization at
least every 180 days resulting in the receipt of proceeds by Borrowers of not
less than $100,000,000 which shall be used to reduce any outstanding Swing Line
Borrowings, Revolving Credit Loans and/or outstanding advances or borrowings
under an Additional Warehouse Facility based upon the respective Finance
Contracts sold into the Securitization.
8.31. TRIGGER EVENT. Borrowers shall notify Agent of the occurrence of
a Trigger Event in connection with the delivery of the Compliance Certificate
required by Section 8.02.
8.32. 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
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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.
8.33. INTERCREDITOR AGREEMENT. Borrowers shall execute and deliver to
Agent the Intercreditor Agreement in form satisfactory to Agent prior to
entering into an Additional Warehouse Facility.
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 calendar quarter; or
9.04. 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, 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
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
9.05. 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
9.06. DELINQUENT AND REPOSSESSED LOANS TO NET INDIRECT LOANS. Permit
the ratio of the sum of Delinquent Loans and Repossessed Loans to Net Indirect
Loans to be greater than .075 to 1.0 at any time; or
9.07. 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
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9.08. 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
9.09. 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
9.10. 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
9.11. 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 Senior Notes; or
9.12. 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
9.13. 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.
9.14. RESTRICTION ON DEBT REPAYMENT. Prepay any of the Senior Notes.
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 (including a payment under
Section 2.01(c)) or under any of the Loan Documents; or
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(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 8.13, 8.20, 8.21, 8.24, 8.28 or 8.30 or in
Article IX of this Loan Agreement; or.
(d) 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, 8.12, or 8.31 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
(e) Failure or refusal of any of Borrowers to observe, keep and perform
any of the covenants, agreements and obligations in this Loan Agreement 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, 8.11, 8.12, 8.13, 8.20, 8.21, 8.24, 8.28,
8.30 and 8.31 and in Article IX of this Loan Agreement) 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
(f) 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
(g) 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
(h) Any final judgment(s) for the payment of money in excess of the sum of
seven hundred fifty thousand dollars ($750,000) 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
(i) 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
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(j) The occurrence of a default or an event of default under any
Indebtedness, including, without limitation, the Senior Notes, any
Securitization, any Additional Warehouse Facility or similar arrangement or any
other agreement, indenture or other instrument to which any of Borrowers or any
of their respective Subsidiaries is a party; or
(k) 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 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(f) or
Section 10.01(g), 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 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.
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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. ARBITRATION. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Article XI. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to (i) any of the Loan Documents, (ii)
any past, present or future extensions of credit and other activities,
transactions or obligations of any kind related directly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents or (iii) any contractual arrangement or
relationship between any of Borrowers and Agent. Any party may by summary
proceedings bring an action in court to compel arbitration of a Dispute;
provided, however, that the pendency of any Dispute or such proceedings shall
not preclude the Agent or any Bank from exercising its remedies as contemplated
by Section 11.03. Any party who fails or refuses to submit to arbitration
following a lawful demand by any other party shall bear all costs and expenses
incurred by such other party in compelling arbitration of any Dispute.
11.02 GOVERNING RULES. Arbitration proceedings shall be administered
by the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in Texas selected
by the AAA or other administrator. If there is any inconsistency between the
terms hereof and any such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute shall apply to
any arbitration proceeding. All discovery activities shall be expressly limited
to matters directly relevant to the dispute being arbitrated. Judgment upon any
award rendered in an arbitration 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 any similar applicable state law.
11.03 NO WAIVER, PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation, injunctive relief, sequestration, attachment,
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garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration hereunder.
11.04 ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must
be active members of the Texas State Bar with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of Texas, (ii) may grant any
remedy or relief that a court of the state of Texas could order or grant within
the scope hereof and such ancillary relief as is necessary to make effective any
award, and (iii) shall have the power to award recovery of all costs and fees,
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 or other applicable law. Any Dispute in which
the amount in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000 (including
damages, costs, fees and expenses). By submission to a single arbitrator, each
party expressly waives any right or claim to recover more than $5,000,000. Any
Dispute in which the amount in controversy exceeds $5,000,000 shall be decided
by majority vote of a panel of three arbitrators; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
11.05 JUDICIAL REVIEW. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported by
substantial evidence or which is based on legal error, (ii) an award shall not
be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of Texas, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for vacating,
modifying or correcting an award the right to judicial review of (A) whether the
findings of fact rendered by the arbitrators are supported by substantial
evidence, and (B) whether the conclusions of law are erroneous under the
substantive law of the state of Texas. Judgment confirming an award in such a
proceeding may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of Texas.
11.06 MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents.
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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.
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,
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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 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.
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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.
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:
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Borrowers: AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
FAX No. (817) 882-7101
AmeriCredit Financial Services, Inc.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
FAX No. (817) 882-7101
AmeriCredit Operating Co., Inc.
200 Bailey Avenue
Fort Worth, Texas 76107
Attn: Chief Financial Officer
FAX No. (817) 882-7101
Agent: Wells Fargo Bank (Texas), National Association
505 Main Street, Suite 300
Fort Worth, Texas 76102
Attn: Susan B. Sheffield
FAX No. (817) 347-0010
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Attn: Agency Department - Cecilia Go
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. Agent shall promptly notify Banks of any
notice given by Borrowers hereunder.
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,
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the Notes, and the other Loan Documents and any and all amendments,
modifications and supplements thereof or thereto.
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 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.
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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
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 K
(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
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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; (e) any other financial institution
approved by the Agent; and (f) a Federal Reserve Bank.
(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"). Except in the case of a
transfer to an Affiliate of all or a portion of a Bank's rights and obligations
under the Loan Documents, 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 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 K, 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
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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 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 K 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 K
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).
(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
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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 Borrowers 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 CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED effective as of the 3rd day of October 1997.
AMERICREDIT CORP., a Texas
corporation
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By:___________________________________________
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
AMERICREDIT FINANCIAL SERVICES, INC.,
a Delaware corporation
By:___________________________________________
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
AMERICREDIT OPERATING CO., INC.,
a Delaware corporation
By:___________________________________________
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
BORROWERS
AMERICREDIT PREMIUM FINANCE,
INC., a Delaware corporation
By:___________________________________________
Daniel E. Berce, President
ACF INVESTMENT CORP., a Delaware
corporation
By:___________________________________________
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
GUARANTORS
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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:___________________________________________
Kirk Stites, Vice President and
Manager
By:___________________________________________
Julie A. Schell, Vice President
HARRIS TRUST AND SAVINGS BANK
By:___________________________________________
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Michael A. Houlihan, Vice
President
COMERICA BANK-TEXAS
By:___________________________________________
Stephen Graham, Senior Vice
President
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:___________________________________________
Buddy Wurthrich, Vice President
BANKAMERICA BUSINESS CREDIT, INC.
By:___________________________________________
Name:______________________________________
Title:_____________________________________
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THE BANK OF NOVA SCOTIA
By:___________________________________________
Name: ________________________________________
Title:________________________________________
CIBC INC.
By:___________________________________________
Name: ________________________________________
Title:________________________________________
CREDIT LYONNAIS NEW YORK BRANCH
By:___________________________________________
Name: ________________________________________
Title:________________________________________
BANKBOSTON, N.A.
By:___________________________________________
Name: ________________________________________
Title:________________________________________
THE LONG-TERM CREDIT BANK
OF JAPAN, LIMITED
By:___________________________________________
Name: ________________________________________
Title:________________________________________
BANKS
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By:___________________________________________
Susan B. Sheffield, Vice President
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AGENT
BANK ONE, TEXAS, N.A.
By:___________________________________________
J. Michael Wilson, Vice President
CO-AGENT
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f-87578.WPD
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EXHIBIT "A"
REVOLVING CREDIT NOTE
---------------------
$__________________ October 3, 1997
FOR VALUE RECEIVED, the undersigned, AMERICREDIT CORP., a Texas
corporation, AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation,
and AMERICREDIT OPERATING CO., INC., a Delaware corporation (collectively,
the "Borrowers"), hereby jointly, severally and unconditionally promise to
pay to the order of _______________________ (the "Bank"), the principal sum
of __________________ MILLION DOLLARS ($___,000,000.00), or such lesser
aggregate amount of Advances as may be made pursuant to Bank's Commitment,
which principal shall be payable as provided in Sections 3.01, 3.02, 3.03,
3.06 and 3.07 of the Loan Agreement, together with the interest on the unpaid
principal balance of each Advance from the date made until maturity, which
interest shall be determined at the varying rates per annum, and shall be
payable as provided in Sections 2.04, 3.04, 3.05, 3.06 and 3.07 of the Loan
Agreement. Payments of both principal and interest herein shall be made to
Agent's account in lawful money of the United States of America and in
immediately available funds at 505 Main Street, Fort Worth, Texas or to
Agent's account in San Francisco, California wired as follows:
ABA No. 12100248
Account No. 4518151378
Reference: AmeriCredit Corp. --
Syndicated Credit Agreement
The Advances made by Bank to Borrowers pursuant to the Loan Agreement
and all payments of the principal thereof and interest thereon may be noted
by Bank on the Loan and Payment Transaction Schedule attached hereto, or on a
continuation of such Schedule attached hereto or similar computer generated
payment schedule; provided, however, that the failure of Bank to make any
such notation or any error in making such notation shall not limit or
otherwise affect the obligations of Borrowers hereunder or under the Loan
Agreement.
This Note has been executed and delivered pursuant to the terms of that
certain Restated Revolving Credit Agreement (the "Loan Agreement") by and
among Borrowers, the Guarantors (as defined in the Loan Agreement) and Wells
Fargo Bank (Texas), National Association, as Agent, and the Banks (as defined
in the Loan Agreement) dated as of October 3, 1997, and is a "Revolving
Credit Note" referred to therein. Reference is hereby made to the Loan
Agreement for a statement of the repayment rights and obligations of
Borrowers and for a statement of the events upon which the maturity of this
Note may be accelerated.
-1-
<PAGE>
Each capitalized term used herein shall have the same meaning assigned
to it in the Loan Agreement, unless the context hereof otherwise requires or
provides.
Borrowers agree to pay all costs and expenses of Banks incurred in the
collection of this Note, including but not limited to court costs and
reasonable attorneys' fees and all other costs and expenses described in
Section 13.03 of the Loan Agreement.
Borrowers and each surety, endorser, guarantor and any other party now
or hereafter liable for payment of any sums of money payable on this Note,
jointly and severally waive presentment and demand for payment, protest,
notice of protest and nonpayment, notice of intent to accelerate, notice of
acceleration and all other notices, filing of suit and diligence in
collecting this Note or enforcing any security with respect to same, and
agree that their liability under this Note shall not be affected by any
renewal or extension in the time of payment hereof, or in any indulgences, or
by any release, substitution or change in any security for the payment of
this Note, and hereby consent to any and all renewals, extensions,
indulgences, releases or changes, regardless of the number of such renewals,
extensions, indulgences, releases or changes.
Regardless of any provision contained in this Note, the Loan Agreement
or any other document executed or delivered in connection therewith, neither
Bank nor any holder hereof shall be deemed to have contracted for or be
entitled to receive, collect or apply as interest (including any fee, charge
or amount which is not denominated as "interest" but is legally deemed to be
interest under applicable law) on this Note, the Loan Agreement, the Loan
Documents or otherwise, any amount in excess of the Maximum Rate, and, in the
event that Bank or any holder hereof ever receives, collects or applies as
interest any such excess, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance of this Note,
and, if the principal balance of this Note 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, Bank and any other holder hereof shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment (other than payments which are expressly designated as
interest payments hereunder) as an expense or fee rather than as interest,
(ii) exclude voluntary prepayments and the effect thereof, and (iii)
amortize, prorate, allocate and spread the total amount of interest
throughout the entire contemplated term of this Note so that the interest
rate is uniform throughout the entire term; provided that, if this Note is
finally paid and performed in full prior to the end of the full contemplated
term hereof, and if the interest received for the actual period of existence
thereof exceeds the Maximum Rate, Bank or any holder hereof shall refund to
Borrowers the amount of such excess, or credit the amount of such excess
against the principal amount of this Note and, in such event, neither Bank
nor any other holder shall be subject to any penalties provided by any laws
for contracting for, charging, taking, reserving or receiving interest in
excess of the Maximum Rate.
-2-
<PAGE>
[This Note is executed in renewal and extension of that one certain
promissory note dated __________________, 199__ executed by AmeriCredit Corp.,
AmeriCredit
-3-
<PAGE>
Financial Services, Inc. and AmeriCredit Operating Co., Inc. in the amount of
$________________ payable to the order of Bank (the "Original Note"). The
indebtedness evidenced by the Original Note is continuing indebtedness and
nothing herein shall be deemed to constitute a payment, settlement or
novation of the Original Note or to release or otherwise adversely affect any
lien, mortgage or security interest securing such indebtedness or the rights
of Bank against any guarantor, surety or any other party primarily or
secondarily liable for such indebtedness.]
This Note is being executed and delivered, and is intended to be
performed in the State of Texas. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the
State of Texas shall govern the validity, construction, enforcement and
interpretation of this Note.
AMERICREDIT CORP., a Texas corporation
By:
-----------------------------------------
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
AMERICREDIT FINANCIAL SERVICES,
INC., a Delaware corporation
By:
-----------------------------------------
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
AMERICREDIT OPERATING CO., INC.,
a Delaware corporation
By:
-----------------------------------------
Daniel E. Berce, Vice Chairman and
Chief Financial Officer
-4-
<PAGE>
LOAN AND PAYMENT
TRANSACTION SCHEDULE
attached to and made a part of a Note
dated October 3, 1997, executed by AmeriCredit Corp.,
AmeriCredit Financial Services, Inc. and AmeriCredit Operating Co., Inc.
<TABLE>
<CAPTION>
Amount Unpaid Initials
Amount Amount of of Principal of Person
of Amount of Principal Interest Balance Making
Date Advance Principal Repaid Paid of Note Notation
- ---- ------- --------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
-5-
<PAGE>
EXHIBIT "B"
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT is dated as of the 3rd day of October 1997, by
AMERICREDIT PREMIUM FINANCE, INC., a Delaware corporation, and ACF INVESTMENT
CORP., a Delaware corporation (collectively, the "Guarantors"), in favor of
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as agent for the benefit of
the Banks (the "Agent").
WITNESSETH:
WHEREAS, pursuant to a Restated Revolving Credit Agreement (the "Loan
Agreement") of even date herewith among AmeriCredit Corp., a Texas
corporation, AmeriCredit Financial Services, Inc., a Delaware corporation and
AmeriCredit Operating Co., Inc., a Delaware corporation (individually, a
"Borrower," and collectively, the "Borrowers"), the Guarantors, Agent and
Banks, the Banks have agreed to make Revolving Credit Loans to the Borrowers;
and
WHEREAS, it is a condition precedent to the obligation of the Banks to
make any such Revolving Credit Loans that the Guarantors guaranty repayment
thereof upon the terms and conditions set forth herein; and
WHEREAS, Guarantors desire to induce the Banks to make such Revolving
Credit Loans, which may reasonably be expected to benefit, directly or
indirectly, each Guarantor.
NOW, THEREFORE, in consideration of the foregoing and for other valuable
consideration hereby acknowledged, Guarantors agree for the benefit of Agent
and the Banks as follows:
A. DEFINITIONS.
1. DEFINITIONS. Unless otherwise defined in this Guaranty, terms used
herein shall have the meanings set forth in the Loan Agreement.
2. ADDITIONAL DEFINITIONS. In addition to the definitions set forth in
the Loan Agreement, the following terms shall have the following meanings:
"ADJUSTED NET WORTH" shall mean, with respect to any Guarantor as of the
date of determination, (a) the value of the assets of such Guarantor as of
such date, minus (b) all liabilities of such Guarantor, contingent or
otherwise, as of such date (excluding such Guarantor's liability hereunder),
as such concepts are determined in
<PAGE>
accordance with applicable laws governing determinations of the insolvency of
debtors.
"GUARANTEED AMOUNT" shall mean, (a) the Obligations, and all renewals,
extensions, increases, modifications or rearrangements thereof, plus (b) all
costs incurred by the Agent and Banks to obtain, preserve, defend and enforce
this Guaranty and other Loan Documents, collect the Obligations, and
maintain, preserve, collect and enforce any security relating to this
Guaranty or any Guaranteed Amount, including without limitation taxes,
insurance premiums, attorneys' fees and legal expenses, and expenses of sale.
"MAXIMUM GUARANTEED AMOUNT" shall mean, with respect to any Guarantor as
of the date of determination, the greater of (a) the amount of any Guaranteed
Amount used to make a Valuable Transfer to such Guarantor, and (b) the
greater of 95% of the Guarantor's Adjusted Net Worth (i) at the date hereof
(if appropriate under applicable Law), (ii) at the time the Guaranteed Amount
was incurred, and (iii) on the date of enforcement hereof (which shall be
deemed to be the date of commencement of a proceeding described in Section
10.01(f) or Section 10.01(g) of the Loan Agreement, if applicable).
"VALUABLE TRANSFER" shall mean, with respect to any Guarantor, (a) all
loans, advances or capital contributions made to such Guarantor with proceeds
of any Guaranteed Amount, (b) the acquisition from such Guarantor or
retirement by such Guarantor with proceeds of any Guaranteed Amount of debt
securities or other obligations of such Guarantor, (c) the acquisition by
such Guarantor of all property acquired with proceeds of any Guaranteed
Amount, and transferred, absolutely and not as collateral, to such Guarantor,
to the extent of the fair market value thereof, and (d) the acquisition from
such Guarantor with proceeds of any Guaranteed Amount of equity securities of
such Guarantor.
B. GUARANTY
1. GUARANTY. Each Guarantor hereby jointly and severally guarantees
absolutely and unconditionally to Agent and the Banks the due performance of
all terms and conditions of the Loan Agreement and other Loan Documents, and
the prompt and full payment when due of the Guaranteed Amount.
Notwithstanding anything herein or in any other Loan Documents to the
contrary, the maximum liability of each Guarantor hereunder shall in no event
exceed such Guarantor's Maximum Guaranteed Amount. Each Guarantor agrees
that the Guaranteed Amount may at any time exceed the aggregate Maximum
Guaranteed Amount of all Guarantors combined, without affecting or impairing
the obligation of any Guarantor hereunder.
2. PAYMENT OBLIGATIONS. If an Event of Default shall occur, and
following any notices required under Section 10.01(a), Section 10.01(d) or
Section 10.01(e) of the Loan Agreement, each Guarantor shall, on demand, pay the
Guaranteed Amount to
-2-
<PAGE>
Agent at its address set forth in the Loan Agreement in immediately available
funds. It shall not be necessary for Agent or the Banks, in order to enforce
such payment by any Guarantor, to institute suit or exhaust its rights and
remedies against the Borrowers, any other Guarantor or any other Person,
including others liable to pay any Guaranteed Amount, or to enforce its
rights and remedies against any security ever given to secure payment thereof.
3. COMPLETE WAIVER OF SUBROGATION. (a) Notwithstanding any payment or
payments made by any Guarantor hereunder, or any set-off or application by
the Agent or Banks of any security or of any credits or claims, no Guarantor
will assert or exercise any rights of the Banks or of such Guarantor against
the Borrowers to recover the amount of any payment made by such Guarantor to
the Banks hereunder by way of subrogation, reimbursement, contribution,
indemnity, or otherwise arising by contract or operation of law, and no
Guarantor shall have any right of recourse to or any claim against assets or
property of any Borrower, whether or not the Obligations of the Borrowers
have been satisfied, all of such rights being herein expressly waived by all
Guarantors. Each Guarantor agrees not to seek contribution from any other
Guarantor until all of the Guaranteed Amount shall have been paid in full.
If any amount shall nevertheless be paid to a Guarantor by the Borrowers or
another Guarantor, such amount shall be held in trust for the benefit of the
Banks and shall forthwith be paid to the Banks to be credited and applied to
the Guaranteed Amount, whether matured or unmatured. The provisions of this
paragraph shall survive the termination of this Guaranty, and any
satisfaction and discharge of the Borrowers by virtue of any payment, court
order or any federal or state law. (b) Notwithstanding the provisions of the
preceding clause (a), each Guarantor shall have and be entitled to (i) all
rights of subrogation otherwise provided by Law in respect of any payment it
may make or be obligated to make under this Guaranty and (ii) all claims it
would have against the Borrowers or any other Guarantor in the absence of the
preceding clause (a), and to assert and enforce same, in each case on and
after, but at no time prior to, the date (the "Subrogation Trigger Date")
which is 400 days after the date on which the Obligations have been paid in
full and the Commitment terminated, if and only if (x) no Event of Default of
the type described in Section 10.01(f) or Section 10.01(g) of the Loan
Agreement with respect to the Borrowers or any other Guarantor has existed at
any time on and after the date of this Guaranty to and including the
Subrogation Trigger Date and (y) the existence of the Guarantor's rights
under this clause (b) would not make the Guarantor a creditor (as defined in
the Bankruptcy Code) of any of Borrowers or any other Guarantor in any
insolvency, bankruptcy, reorganization or similar proceeding commenced on or
prior to the Subrogation Trigger Date.
C. TERMS OF GUARANTY
1. CONTINUING GUARANTY. Each Guarantor agrees that the Guaranteed
Amount and Loan Documents may be extended or renewed, and the Revolving
Credit Loans repaid and reborrowed in whole or in part, without notice to or
assent by such
-3-
<PAGE>
Guarantor, and that it will remain bound upon this Guaranty notwithstanding any
extension, renewal or other alteration of any Guaranteed Amount or Loan
-4-
<PAGE>
Documents, or any repayment and reborrowing of the Revolving Credit Loans.
Each Guarantor waives notice of acceptance of this Guaranty, presentation,
demand, protest, notice of protest for nonpayment, diligence in bringing
suits against any Person liable on any Guaranteed Amount, and any other
notices or defenses of any kind. The obligations of each Guarantor under
this Guaranty shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including without limitation:
(a) any extension, renewal, modification, settlement, compromise,
waiver or release in respect of any Guaranteed Amount, including any
increase, reduction or termination of the Commitment;
(b) any extension, renewal, amendment, modification, rescission,
waiver or release in respect of any Loan Documents;
(c) any release, exchange, substitution, non-perfection or invalidity
of, or failure to exercise rights with respect to, any direct or indirect
security for any Guaranteed Amount, including the release of any Guarantor
or other Person liable on any Guaranteed Amount;
(d) any change in the corporate existence, structure or ownership of
any of Borrowers or any Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any of Borrowers or
any Guarantor or any of their assets;
(e) the existence of any claim, defense, set-off or other rights or
remedies which any of Borrowers or any Guarantor may have at any time
against any of Borrowers, any Bank, the Agent, any other Guarantor or any
other Person, whether in connection with this Guaranty, the Loan Documents,
the transactions contemplated thereby or any other transactions;
(f) any invalidity or unenforceability for any reason of the Loan
Agreement or other Loan Documents, or any provision of Law purporting to
prohibit the payment or performance by any of Borrowers or any Guarantor of
the Guaranteed Amount or Loan Documents, or of any other obligation to the
Banks; or
(g) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
2. PAYMENTS WITH RESPECT TO GUARANTEED AMOUNT. Each payment on the
Guaranteed Amount shall be deemed to have been made by the Company unless
express written notice is given to the Agent at the time of such payment that
such payment is made by a specific Guarantor.
-5-
<PAGE>
3. EFFECT OF DEBTOR RELIEF LAWS. If after receipt of any payment of,
or proceeds of any security applied (or intended to be applied) to the
payment of all or any part of the Guaranteed Amount, the Agent or any Bank is
for any reason compelled to surrender or voluntarily surrenders, such payment
or proceeds to any Person, (a) because such payment or application of
proceeds is or may be avoided, invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, fraudulent conveyance,
impermissible set-off or a diversion of trust funds; or (b) for any other
reason, including without limitation (i) any judgment, decree or order of any
court or administrative body having jurisdiction over the Agent or any Bank
or its properties, or (ii) any settlement or compromise of any such claim
effected by any Bank with any such claimant (including either of Borrowers),
then the Guaranteed Amount or part thereof intended to be satisfied shall be
reinstated and continue and this Guaranty shall continue in full force as if
such payment or proceeds had not been received, notwithstanding any
revocation thereof or the cancellation of any Note or any other instrument
evidencing any Guaranteed Amount or otherwise; and each Guarantor shall be
liable to pay such Bank, and hereby does indemnify, jointly and severally,
such Bank and hold it harmless for, the amount of such payment or proceeds so
surrendered and all expenses (including reasonable attorneys' fees, court
costs and expenses attributable thereto) incurred by the Bank in the defense
of any claim made against it that any payment or proceeds received by the
Bank in respect of all or part of the Guaranteed Amount must be surrendered.
The provisions of this paragraph shall survive the termination of this
Guaranty, and any satisfaction and discharge of the Company by virtue of any
payment, court order or any federal or state law.
D. REPRESENTATIONS AND COVENANTS
1. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents
and warrants that all representations and warranties set forth in Article VII
of the Loan Agreement with respect to it are true and correct as of the date
hereof, and are incorporated herein by reference.
2. COVENANTS. Each Guarantor hereby jointly and severally expressly
assumes, confirms and agrees to perform, observe and be bound by all
conditions and covenants set forth in the Loan Agreement, to the extent
applicable to it.
E. GENERAL
1. PARTIES BOUND. This Guaranty is for the benefit of the Agent and
Banks, their respective successors and assigns, and in the event of an
assignment by any Bank of a Guaranteed Amount, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Amount so assigned,
shall be automatically transferred therewith. This Guaranty is binding not
only on each Guarantor, but on each of their successors and assigns.
-6-
<PAGE>
2. MODIFICATION AND AMENDMENT. No modification, consent, amendment or
waiver of any provision of this Guaranty, nor consent to any departure by any
Guarantor therefrom, shall be effective unless the same shall be in writing
and signed by the Agent and Majority Banks, and then shall be effective only
in the specific instance and for the purpose for which given.
3. WAIVER. No delay or omission by the Agent or Banks in exercising
any right or remedy hereunder shall impair any such right or remedy or be
construed as a waiver thereof or any acquiescence therein, nor shall any
single or partial exercise of any such right or remedy preclude other or
further exercise thereof, or the exercise of any other right or remedy
hereunder.
4. CUMULATIVE RIGHTS. If any Guarantor is or becomes liable for any
indebtedness owing by any of Borrowers to any Bank by endorsement or
otherwise than under this Guaranty, such liability shall not be in any manner
impaired or affected hereby, and the rights or remedies of the Banks
hereunder shall be cumulative of all other rights or remedies that the Banks
may ever have against the Guarantors. The exercise by the Agent or the Banks
of any rights or remedies hereunder or under any other instrument, or at law
or in equity, shall not preclude the concurrent or subsequent exercise of any
other rights or remedies. Without limitation of the foregoing, it is
specifically understood and agreed that this Guaranty is given by each
Guarantor as an additional guaranty to any and all other guaranties
heretofore or hereafter executed and delivered to any of the Banks by any
Guarantor, and nothing herein shall ever be deemed to replace or be in lieu
of any other of such previous or subsequent guaranties.
5. INTEREST; LIMITATIONS OF LAW. All agreements between each
Guarantor and the Agent and Banks, whether now existing or hereafter arising
and whether written or oral, are expressly limited so that in no contingency
or event whatsoever, whether by reason of acceleration of payment of any of
the Guaranteed Amount or otherwise, shall the amount paid or agreed to be
paid to any Bank for the use, forbearance or detention of funds advanced
pursuant to any Loan Documents or for the performance or payment of any
covenant or obligation contained in any Loan Documents exceed the maximum
amount permitted by applicable law. If from any circumstance whatsoever,
fulfillment of any provision of any Loan Documents, at the time performance
of such provision shall be due, shall involve transcending the limit of
validity prescribed by applicable law, then, IPSO FACTO, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstance Bank shall ever receive anything of value deemed excess interest
by applicable law, an amount equal to any such excess interest shall be
applied to the reduction of the principal amount owing under the Loan
Documents, and not to the payment of interest, or if such excess interest
exceeds the unpaid principal balance, such excess interest shall be promptly
refunded to the Borrowers or Guarantor, as applicable. All sums paid or
agreed to be paid for the use, forbearance or detention of any funds advanced
pursuant to the Loan Documents shall, to the extent permitted by applicable
law, be amortized,
-7-
<PAGE>
prorated, allocated and spread throughout the full term of this Agreement
until payment in full, so that the rate of interest on account of the
Guaranteed Amount is uniform throughout the term hereof.
6. SUBORDINATION. Each Guarantor hereby expressly agrees that any
obligation of any Borrower to any Guarantor is expressly subordinate to the
right of the Banks to payment and performance by the Borrowers of the
Guaranteed Amount and Loan Documents, and that the Banks shall be entitled to
such full payment and performance prior to the exercise by any Guarantor of
any rights, including realization upon any security, to enforce the payment
or performance of any obligation that the Borrowers may owe to any Guarantor;
provided that, Guarantors shall be entitled to receive scheduled payments
from the Borrowers with respect to such obligations if at the time of such
payment no Event of Default exists or would exist immediately after giving
effect to any such payment.
7. COSTS AND EXPENSES. Each Guarantor agrees, jointly and severally,
to pay to the Agent all costs and expenses (including court costs and
attorneys' fees) incurred by the Banks in the enforcement of this Guaranty
and all other Loan Documents.
8. NOTICES. Unless otherwise provided herein, all notices, requests,
consents and demands shall be in writing and shall be personally delivered,
sent by telecopy of telex (answerback received), or mailed, by certified
mail, postage prepaid, to the following addresses:
(a) If to the Agent and Banks:
Wells Fargo Bank (Texas), National Association
505 Main Street, Suite 300
Fort Worth, Texas 76102
Attention: Susan B. Sheffield
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Attn: Agency Department - Cecilia Go
FAX No. (415) 512-9408
(b) If to any Guarantor:
[Name of Guarantor]
c/o AmeriCredit Corp.
200 Bailey Avenue
Fort Worth, Texas 76107
-8-
<PAGE>
Attention: Chief Financial Officer
or to such other address as any party may designate in written notice to the
other parties. All notices, requests, consents and demands hereunder will be
effective when so personally delivered or sent by telecopy of telex, or two
days after being so mailed.
9. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. In making proof of this Guaranty, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought.
10. GOVERNING LAW. This Guaranty shall be deemed a contract made in
Fort Worth, Texas, and shall be construed and governed by the laws of Texas
and the United States of America. Without excluding any other jurisdiction,
each Guarantor hereby agrees that the courts of Texas and federal courts
sitting in Texas will have jurisdiction over proceedings in connection
herewith.
11. ENTIRE AGREEMENT. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT
AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the
date first set forth above.
AMERICREDIT PREMIUM FINANCE, INC.,
a Delaware corporation
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
ACF INVESTMENT CORP., a Delaware
corporation
By:
--------------------------------
-9-
<PAGE>
Name:
--------------------------
Title:
-------------------------
EXHIBIT "C"
REQUEST FOR BORROWING -- FLOATING BASE BORROWING
------------------------------------------------
Date:
---------------
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Re: Request For Floating Base Borrowing
This Request for Borrowing has been prepared and is being delivered to
Agent pursuant to Section 2.02(a) of that certain Restated Revolving Credit
Agreement ("Agreement") dated as of October 3, 1997 by and among AmeriCredit
Corp., a Texas corporation ("Company"), AmeriCredit Financial Services, Inc.,
a Delaware corporation, AmeriCredit Operating Co., Inc., a Delaware
corporation, the Guarantors, Wells Fargo Bank (Texas), National Association,
as Agent, and "Banks." Capitalized terms shall have the meanings assigned to
them in the Agreement unless otherwise provided herein or the context hereof
otherwise requires.
/ / [For New Advances] On this date the undersigned does hereby request that
Banks make an Advance for a Floating Base Borrowing (i) in the aggregate
principal amount of $_____________ (such amount shall be in an integral
multiple of $100,000.00 unless such a Borrowing would exhaust the Total
Commitment in which case, such amount may be in an amount of the unused
portion of the Total Commitment) (ii) on ____________________, 199___.
/ / [For Rollover Notices] On this date the undersigned does hereby
request that Banks make an Advance for a Floating Base Borrowing (i) in the
aggregate principal amount of $_____________ (such amount shall be in an
integral multiple of $100,000.00 unless such a Borrowing would exhaust the
Total Commitment in which case, such amount may be in an amount of the unused
portion of the Total Commitment) (ii) on ____________________, 199___. This
Request for Borrowing shall serve as a Rollover Notice under Section 2.02(c)
of the Agreement, with respect to the Eurodollar Borrowing made on
____________, 199___ ("Prior Borrowing"). This Rollover Notice is
<PAGE>
being submitted at least three (3) Eurodollar Business Days prior to the
Conversion Date.
The undersigned (in his representative capacity and not in his
individual capacity) hereby represents and warrants to Agent and Banks that
all of the representations and warranties contained in Article VII of the
Agreement (except Section 7.07) are true and correct in all material respects
as of the date hereof, with the same force and effect as if made on the date
hereof, and that no Event of Default or condition, event or act which with
the giving of notice or lapse of time, or both, would constitute an Event of
Default exists and is continuing on this date, unless noted below (if such a
condition, event or act is so noted, there shall also be noted below the
nature, period of existence thereof and the action which the Company is
taking or proposes to take with respect thereto):
AMERICREDIT CORP.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
-2-
<PAGE>
EXHIBIT "D"
REQUEST FOR BORROWING -- EURODOLLAR BORROWING
Date:
---------------------------------
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Re: Request For Eurodollar Borrowing
This Request for Borrowing has been prepared and is being delivered to
Agent pursuant to Section 2.02(a) of that certain Restated Revolving Credit
Agreement ("Agreement") dated as of October 3, 1997, by and among AmeriCredit
Corp., a Texas corporation ("Company"), AmeriCredit Financial Services, Inc.,
a Delaware corporation, AmeriCredit Operating Co., Inc., a Delaware
corporation, the Guarantors, Wells Fargo Bank (Texas), National Association,
as Agent, and the "Banks." Capitalized terms shall have the meanings
assigned to them in the Agreement unless otherwise provided herein or the
context hereof otherwise requires. (Check applicable box below.)
/_/ [For New Advances] On this date the undersigned does hereby request that
Banks make Advances for a Eurodollar Borrowing (i) in the aggregate principal
amount of $___________ (such amount shall be in an integral multiple of
$1,000,000.00), (ii) for the following Interest Period ___________ (one (1),
two (2) or three (3) months), (iii) on ___________ , 199__ (which date shall
be at least three (3) Eurodollar Business Days after the date on which this
Request for Borrowing shall be submitted to Agent). After taking into
account the Borrowing requested hereby, the total number of unpaid Eurodollar
Borrowings under section 2.02(a) of the Agreement does not exceed five (5).
/_/ [For Rollover Notices] On this date the undersigned does hereby request
a Eurodollar Borrowing (i) in the aggregate principal amount of $____________
(such amount shall be in an integral multiple of $1,000,000.00), (ii) for the
following Interest Period ___________ (one (1), two (2) or three (3) months),
(iii) on ___________ , 199__ (which date shall be at least three (3)
Eurodollar Business Days after the date on which this Request for Borrowing
shall be submitted to Agent). After taking into account the Borrowing
requested hereby, the total number of unpaid Eurodollar Borrowings under
section 2.02(a) of the Agreement does not exceed five (5). This Request for
Borrowing shall serve as a Rollover Notice under Section 2.02(c) of the
Agreement, with respect to the Eurodollar Borrowing [Floating Base Borrowing]
made on _________________, 199__ ("Prior Borrowing"). This Rollover Notice is
being submitted at least three (3) Eurodollar Business Days (if the Prior
Borrowing was a Eurodollar Borrowing) prior to the termination of the
Interest Period for the Prior Advance.
<PAGE>
The undersigned (in his representative capacity and not in his
individual capacity) hereby represents and warrants to Agent and Banks that
all of the representations and warranties contained in Article VII of the
Agreement (except Section 7.07) are true and correct in all material respects
as of the date hereof, with the same force and effect as if made on the date
hereof, and that no Event of Default or condition, event or act which with
the giving of notice or lapse of time, or both, would constitute an Event of
Default, exists and is continuing on this date, unless noted below (if such a
condition, event or act is so noted, there shall also be noted below the
nature, period of existence thereof and the action which the Company is
taking, or proposes to take with respect thereto):
AMERICREDIT CORP.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
-2-
<PAGE>
EXHIBIT "E"
REQUEST FOR BORROWING -- SWING LINE BORROWING
Date:
-----------------------------------
Wells Fargo Bank, N.A.
201 Third Street
Eighth Floor
San Francisco, California 94103
Re: Request For Swing Line Borrowing
This Request For Swing Line Borrowing has been prepared and is being
delivered to Agent pursuant to Section 2.03(a) of that certain Restated
Revolving Credit Agreement ("Agreement") dated as of October 3, 1997, by and
among AmeriCredit Corp., a Texas corporation ("Company"), AmeriCredit
Financial Services, Inc., a Delaware corporation, AmeriCredit Operating Co.,
Inc., a Delaware corporation, the Guarantors, Wells Fargo Bank (Texas),
National Association, as Agent, and the "Banks." Capitalized terms shall
have the meanings assigned to them in the Agreement unless otherwise provided
herein or the context hereof otherwise requires.
On this date the undersigned does hereby request that Wells Fargo Bank make
an Advance for a Swing Line Borrowing (i) in the aggregate principal amount
of $__________ (such amount shall be at least $500,000 or an integral
multiple of $100,000.00), (ii) for an Interest Period of one (1) month, (iii)
on ___________ , 199__ (which shall be before 12:00 noon (Fort Worth, Texas
time) on the date on which this Request For Swing Line Borrowing shall be
submitted to Agent).
The undersigned (in his representative capacity and not in his
individual capacity) hereby represents and warrants to Agent and Banks that
all of the representations and warranties contained in Article VII of the
Agreement (except Section 7.07) are true and correct in all material respects
as of the date hereof, with the same force and effect as if made on the date
hereof, and that no Event of Default or condition, event or act which with
the giving of notice or lapse of time, or both, would constitute an Event of
Default, exists and is continuing on this date, unless noted below (if such a
condition, event or act is so noted, there shall also be noted below the
nature, period of existence thereof and the action which the Company is
taking, or proposes to take with respect thereto):
AMERICREDIT CORP.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE>
EXHIBIT "F"
TO RESTATED REVOLVING CREDIT AGREEMENT
AMONG AMERICREDIT CORP., ET AL, AND
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, ET AL.
LITIGATION
None
<PAGE>
EXHIBIT "G"
TO RESTATED REVOLVING CREDIT AGREEMENT
AMONG AMERICREDIT CORP., ET AL, AND
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, ET AL.
COMPLIANCE WITH LAW
None
<PAGE>
EXHIBIT "H"
TO RESTATED REVOLVING CREDIT AGREEMENT
AMONG AMERICREDIT CORP., ET AL, AND
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, ET AL.
ENVIRONMENTAL MATTERS
None
<PAGE>
EXHIBIT "I"
AMERICREDIT CORP., AMERICREDIT FINANCIAL SERVICES, INC.
AND AMERICREDIT OPERATING CO., INC.
BORROWING BASE CERTIFICATE
AS OF ____________________
This Borrowing Base Certificate has been prepared pursuant to Section 8.01 of
that certain Restated Revolving Credit Agreement dated as of October 3, 1997 by
and between AmeriCredit Corp., AmeriCredit Financial Services, Inc. and
AmeriCredit Operating Co., Inc. ("Borrowers"), AmeriCredit Premium Finance, Inc.
and ACF Investment Corp. ("Guarantors") and Wells Fargo Bank (Texas), National
Association, Bank One, Texas, N.A., LaSalle National Bank, Comerica Bank-Texas,
The Sumitomo Bank, Limited, Harris Trust and Savings Bank, Texas Commerce Bank
N.A., BankAmerica Business Credit, Inc., The Bank of Nova Scotia, CIBC Inc.,
Credit Lyonnais New York Branch, BankBoston, N.A., and The Long Term Credit Bank
of Japan, Limited ("Banks"). Defined terms shall have the meanings assigned to
them in the Restated Revolving Credit Agreement unless otherwise provided
herein. The undersigned does hereby certify that the following information is
true and correct, and has been prepared in accordance with the terms of the
Restated Revolving Credit Agreement.
<TABLE>
<S> <C> <C>
1. Net Amount of all Finance Contracts _______________
2. Net Amount of Finance Contracts not representing
Eligible Modified Finance Contracts (Finance Contracts
applicable to more than one category are included only
in the category listed first):
(i) Not secured by an Eligible Vehicle _______________
(ii) Not representing Domestic Finance Contracts _______________
(iii) Originated by a Dealer that is an Affiliate of
Borrowers
_______________
(iv) Contractually delinquent by more than 30 days _______________
(v) Rewritten, excluding Eligible Modified Finance
contracts _______________
(vi) The related motor vehicle has been repossessed _______________
(vii) Stayed Loans _______________
</TABLE>
-1-
<PAGE>
<TABLE>
<S> <C> <C>
(viii) Not constituting chattel paper _______________
(ix) Subject to a security interest in favor of a Person
other than Agent on behalf of Banks _______________
(x) Dealer has not received good funds from Borrowers
in respect of Finance Contract _______________
3. The sum of items i - x: _______________
4. Item 1 less item 3
= Principal outstanding on Eligible Finance Contracts _______________
5. a) Eligible Finance Contracts modified
in current month/Average principal
outstanding on Eligible Finance contracts
in current month. _____________
b) Eligible Finance Contracts modified
in prior month/Average principal
outstanding on Eligible Finance contracts
in prior month. _____________
c) Eligible Finance Contracts modified
in second prior month/Average
principal outstanding on Eligible Finance
contracts in second prior month. _____________
d) Sum of a, b and c _____________
e) (d) less 0.035 _____________
f) If (e) is positive, (e) times ending balance
of Eligible Finance Contracts in current
month; if (e) is negative, then zero (0). _____________
6. Item 4 less item 5(f)
= Net Amount of Eligible Finance Contracts _____________
7. a) Dealer Discount on Finance Contracts
originated in current month/Principal
amount of Finance Contracts originated
in current month. _____________
b) Dealer Discount on Finance Contracts
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C> <C>
originated in prior month/Principal
amount of Finance Contracts originated
in prior month. _____________
c) Dealer Discount on Finance Contracts
originated in second prior month/Principal
amount of Finance Contracts originated
in second prior month. _____________
d) Sum of a, b and c divided by three (3) _____________
8. Item 6 Times 80% (unless item 7(d) exceeds 0.05 (5%)) _____________
If item 7(d) exceeds 5%, then reduce the advance rate
percentage by 2% for every percentage point over 5%.
9. Total Aggregate Outstanding Balance on Revolving
Line of Credit and Swing Line Loan _____________
10. Item 8 less item 9 = Availability/(Deficiency) _____________
AmeriCredit Corp., AmeriCredit Financial Services, Inc. and AmeriCredit
Operating Co., Inc.
</TABLE>
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
-3-
<PAGE>
EXHIBIT "J"
AMERICREDIT CORP., AMERICREDIT FINANCIAL SERVICES, INC.
AND AMERICREDIT OPERATING CO., INC.
COMPLIANCE CERTIFICATE
AS OF ____________________
This Certificate of Compliance has been prepared pursuant to Section 8.02 of
that certain Restated Revolving Credit Agreement dated as of October 3, 1997
by and between AmeriCredit Corp., AmeriCredit Financial Services, Inc. and
AmeriCredit Operating Co., Inc. ("Borrowers"), AmeriCredit Premium Finance,
Inc. and ACF Investment Corp. ("Guarantors") and Wells Fargo Bank (Texas),
National Association, Bank One, Texas, N.A., LaSalle National Bank, Comerica
Bank-Texas, The Sumitomo Bank, Limited, Harris Trust and Savings Bank, Texas
Commerce Bank National Association, BankAmerica Business Credit, Inc., The
Bank of Nova Scotia, CIBC Inc., Credit Lyonnais New York Branch, BankBoston,
N.A., and The Long Term Credit Bank of Japan, Limited (collectively, the
"Banks"). Defined terms shall have the meanings assigned to them in the
Restated Revolving Credit Agreement unless otherwise provided herein.
The undersigned does hereby certify that on this date all representations and
warranties of Borrowers contained in the Restated Revolving Credit Agreement
are true and correct and that all other agreements, covenants and conditions
required by the second Restated Revolving Credit Agreement have been
performed or complied with. In particular, and without limiting the
generality of the foregoing, Borrowers hereby certify the following as set
forth in Article VIII and Article IX of the Restated Revolving Credit
Agreement.
<TABLE>
<S> <C> <C>
8.31 A Trigger Event has [not] occurred
9.01 Maximum Indebtedness to Net Worth Ratio _______________
N1. Indebtedness _______________
N2. Automobile Receivable Backed Notes _______________
N3. Additional Warehouse Facility _______________
N4. Net Worth _______________
Formula: (N1-N2-N3)/N4 _______________
Required: < =2.50
9.02 Minimum Interest Coverage Ratio (trailing 12 months)
N1. Net Income
N2. Interest expense _______________
N3. Income tax expense _______________
N4. Amortization of Excess Servicing Receivable _______________
</TABLE>
-1-
<PAGE>
<TABLE>
<S> <C> <C>
N5. Gain on Sale of Receivables _______________
Formula: ((+N1..N4)-N5)/(N2) _______________
Required: > =2.2
9.03 No Net Loss
N1. Net Income (calendar quarter) _______________
Required: > =$0
9.04 Restrictions on Dividends on Capital Stock
N1. Payments of dividends and/or
purchase of capital stock _______________
Required: < = $__________ at __/__/9
9.05 Maximum Losses to Net Indirect Loans
N1. Net Credit Losses (12 months) _______________
N2. Sum of month end balances of Net Indirect
Loans for prior 13 months/13 _______________
Formula: N1/N2 _______________
Required: < =10.0%
9.06 Maximum Delinquent and Repossessed Loans to
Net Indirect Loans
N1. Net Amount of Delinquent Loans _______________
N2. Net Amount of Repossessed Loans _______________
N3. Net Indirect Loans _______________
Formula: N1+N2/N3
Required: < =7.5%
</TABLE>
AmeriCredit Corp., AmeriCredit Financial Services, Inc. and AmeriCredit
Operating Co., Inc.
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
-2-
<PAGE>
EXHIBIT "K"
ASSIGNMENT AND ACCEPTANCE
Dated: ______________, 19_____
Reference is made to the Restated Revolving Credit Agreement dated as of
October 3, 1997 (as amended from time to time, the "LOAN AGREEMENT") among
AMERICREDIT CORP., a Texas corporation, and AMERICREDIT FINANCIAL SERVICES,
INC., a Delaware corporation, and AMERICREDIT OPERATING CO., INC., a Delaware
corporation (collectively the "Borrowers"), the Guarantors named therein, the
Banks named therein, and WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as
Agent. Capitalized terms not otherwise defined herein shall have the
meanings specified in the Loan Agreement.
________________________, acting as one of the Banks referred to in the
Loan Agreement (the "ASSIGNOR"), and _______________ (the "ASSIGNEE") agree
as follows:
1. The Assignor, without recourse, representation or warranty of any kind
except as expressly set out herein, hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, that interest
in and to a portion of the Assignor's rights and obligations as of the date
hereof under the Loan Agreement and the other Loan Documents sufficient to give
the Assignee the percentage interest specified in SECTION 1 of SCHEDULE 1 hereto
of all outstanding rights and obligations under the Loan Agreement and the other
Loan Documents. Such sale and assignment shall [include] [exclude] a
proportionate share of the loan origination fee previously paid to Assignor
pursuant to Section 2.01(d) of the Loan Agreement, [THE AMOUNTS OF SUCH
PROPORTIONATE SHARES BEING SPECIFIED IN SECTION 2 OF SCHEDULE 1 HERETO]. After
giving effect to such sale and assignment, the respective Commitments of and
amounts of the Loans owing to the Assignor and the Assignee will be as set forth
in SECTION 3 of SCHEDULE 1 hereto.
2. The Assignor (i) represents and warrants that it (a) is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (b) to its knowledge (1)
there exists no Event of Default, or event which with the giving of notice or
the passage of time or both, would constitute and Event of Default and (2) it
has not waived any material provision of any Loan Document; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made by another Person in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto or the value of any
collateral provided with respect thereto or the perfection of any security
interest provided in such collateral; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrowers, the Guarantors, or any other
<PAGE>
Person or the performance or observance by the Borrowers, the Guarantors, or
any other Person of any of its obligations under the Loan Documents or any
other instrument or document furnished pursuant thereto; and (iv) will
deliver the Note issued to it pursuant to the Credit Agreement to the Agent
concurrently with the presentation hereof to the Agent for acceptance and
requests that, upon receipt of such Note, the Agent shall exchange such Note
for a new Note [NEW NOTES] payable to the order of the Assignee in an amount
equal to the Commitment assumed by the Assignee pursuant hereto
[AND THE ASSIGNOR IN AN AMOUNT EQUAL TO THE COMMITMENT RETAINED BY THE
ASSIGNOR UNDER THE LOAN AGREEMENT, RESPECTIVELY] as specified in SECTION 4
of SCHEDULE 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Loan
Agreement and the other Loan Documents, together with copies of the financial
statements referred to in Section 7.07 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Assignor or any other of the Banks
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 the Loan Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action on its behalf and to
exercise such powers under the 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; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Agreement
and the other Loan Documents are required to be performed by it as a Bank; and
(vi) specifies as its domestic lending office (and address for notices) and
Eurodollar lending office the offices set forth in SECTION 5 of SCHEDULE 1
hereto; and (vii) represents that it is either (y) a corporation organized under
the laws of the United States, a state thereof or the District of Columbia or
(z) presently entitled to complete exemption from United States withholding tax
imposed on or with respect to any payments, including fees, to be made to it
pursuant to the Loan Agreement (A) under an applicable provision of a tax
convention or treaty to which the United States is a party or (B) because it is
acting through a branch, agency or office in the United States and any payment
to be received by it under the Loan Agreement is effectively connected with a
trade or business in the United States.
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for the approval of
[THE BORROWERS the Agent and acceptance by the Agent, and the effective date of
this Assignment and Acceptance (the "EFFECTIVE DATE") shall be the date on which
such approval and acceptance has occurred.
5. Upon the Effective Date, (i) the Assignee shall be a party to the Loan
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Bank thereunder and (ii) the Assignor shall, to
the extent
-2-
<PAGE>
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Agreement.
6. From and after the Effective Date, the Agent shall make all payments
under the Loan Agreement and the other Loan Documents in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments and
fundings under the Loan Agreement and the other Loan Documents for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Texas (without giving effect to the
conflict of law principles thereof) and applicable federal law. This Assignment
and Acceptance may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument. This Assignment and
Acceptance shall be binding upon and inure to the benefit of the Assignor and
the Assignee and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly authorized
effective as of the date first above written.
ATTACHMENTS: ASSIGNOR:
Schedule 1
--------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
ASSIGNEE:
--------------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-3-
<PAGE>
Approved this ____ day of _____________________, 199__.
AMERICREDIT CORP.
By:
-----------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
AMERICREDIT FINANCIAL SERVICES, INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
AMERICREDIT OPERATING CO., INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
------------------------------------
WELLS FARGO BANK (TEXAS), NATIONAL
ASSOCIATION as Agent
By:
----------------------------------------
Name:
-----------------------------------
Title:
------------------------------------
-4-
<PAGE>
SCHEDULE
TO
ASSIGNMENT AND ACCEPTANCE
DATED _____________, 199____.
SECTION 1.
Percentage Interest acquired by Assignee
relative to all Banks ---------------------
SECTION 2.
1. Assignee's proportionate share of loan
origination fee previously paid to Assignor
pursuant to Section 2.01(d) of the Loan Agreement: $
-------------
SECTION 3.
1. Assignee's Acquired Interest.
Assignee's Commitment: $
----------------------
Aggregate outstanding principal
amount of Loans owing to the Assignee: $
----------------------
2. Assignor's Retained Interest.
Assignor's Commitment: $
----------------------
Aggregate outstanding principal
amount of Loans owing to the Assignor: $
----------------------
SECTION 4.
1. A Note payable to the order of the Assignee in the principal amount of
$________.
2. A Note payable to the order of the Assignor in the principal amount of
$______.
-5-
<PAGE>
SECTION 5.
DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
----------------------------- --------------------------------------
----------------------------- --------------------------------------
----------------------------- --------------------------------------
----------------------------- --------------------------------------
----------------------------- --------------------------------------
-6-
<PAGE>
EXECUTION COPY
___________________________________________________________
SALE AND SERVICING
AGREEMENT
among
CP FUNDING CORP.,
Borrower,
AMERICREDIT FINANCIAL SERVICES, INC.,
Seller and Servicer
THE CHASE MANHATTAN BANK,
Backup Servicer, and
THE CHASE MANHATTAN BANK,
Funding Agent
Dated as of October 8, 1997
___________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
Definitions
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . 2
ARTICLE II
Sale of Receivables
SECTION 2.1 Sale of Receivables. . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.2 The Conveyed Property; Nature of Transaction . . . . . . . . 3
SECTION 2.3 Further Encumbrance of Conveyed Property; Additional
Covenants of the Seller . . . . . . . . . . . . . . . . . . 3
SECTION 2.4 Prepayment of Purchase Price of Receivables. . . . . . . . . 5
ARTICLE III
Conditions Precedent
SECTION 3.1 Conditions Precedent to the Effectiveness of this
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.2 Conditions Precedent to each Receivables Sale. . . . . . . . 6
ARTICLE IV
The Receivables
SECTION 4.1 Representations and Warranties of Seller . . . . . . . . . . 9
SECTION 4.2 Repurchase Upon Breach . . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Custody of Receivables Files . . . . . . . . . . . . . . . . 10
ARTICLE V
Administration and Servicing of Receivables
SECTION 5.1 Appointment; Standard of Care; Duties of the Servicer. . . . . 11
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 5.2 Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements. . . . . . . . . . . . . . . 12
SECTION 5.3 Realization Upon Receivables . . . . . . . . . . . . . . . . 14
SECTION 5.4 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Maintenance of Security Interests in Vehicles. . . . . . . . 16
SECTION 5.6 Covenants, Representations, and Warranties of Servicer . . . 17
SECTION 5.7 Purchase of Receivables Upon Breach of Covenant. . . . . . . 18
SECTION 5.8 Total Servicing Fee; Payment of Certain Expenses by
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.9 Certain Servicer's Certificates. . . . . . . . . . . . . . . 19
SECTION 5.10 Annual Statement as to Compliance, Notice of Servicer
Termination Event. . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.11 Annual Independent Accountants' Report; Quarterly
Reviews. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.12 Access to Certain Documentation and Information
Regarding the Receivables. . . . . . . . . . . . . . . . . . 20
SECTION 5.13 Monthly Tape . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.14 Retention and Termination of Servicer. . . . . . . . . . . . 21
SECTION 5.15 Fidelity Bond and Errors and Omissions Policy. . . . . . . . 21
ARTICLE VI
Collection and Reserve Accounts; Distributions; Statements to Secured Parties
SECTION 6.1 Establishment of Collection and Reserve Accounts . . . . . . 22
SECTION 6.2 Reserve Account. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.3 Certain Reimbursements to the Servicer . . . . . . . . . . . 25
SECTION 6.4 Application of Collections . . . . . . . . . . . . . . . . . 26
SECTION 6.5 Servicer Advances. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.6 Withdrawals from the Reserve Accounts; Special
Withdrawals from the Pledged Accounts. . . . . . . . . . . . 26
SECTION 6.7 Additional Deposits. . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.8 Distributions. . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
ARTICLE VII
The Seller
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 7.1 Representations and Warranties of Seller . . . . . . . . . . . 30
SECTION 7.2 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.3 Liability of Seller; Indemnities . . . . . . . . . . . . . . . 33
SECTION 7.4 Merger or Consolidation of, or Assumption of the
Obligations of, Seller . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.5 Limitation on Liability of Seller and Others . . . . . . . . . 34
</TABLE>
iii
<PAGE>
ARTICLE VIII
The Servicer
<TABLE>
<S> <C> <C>
SECTION 8.1 Representations and Warranties of AFS, in its capacity
as Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.2 Liability of Servicer; Indemnities . . . . . . . . . . . . . . 36
SECTION 8.3 Merger or Consolidation of, or Assumption of the
obligations of the Servicer or Backup Servicer . . . . . . . . 37
SECTION 8.4 Limitation on Liability of the Servicer and the Backup
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.5 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.6 Servicer and Backup Servicer Not to Resign . . . . . . . . . . 39
ARTICLE IX
Default
SECTION 9.1 Servicer Termination Event . . . . . . . . . . . . . . . . . . 39
SECTION 9.2 Consequences of a Servicer Termination Event . . . . . . . . . 40
SECTION 9.3 Appointment of Successor . . . . . . . . . . . . . . . . . . . 41
SECTION 9.4 Notification to Secured Parties. . . . . . . . . . . . . . . . 42
SECTION 9.5 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1 Administrative Duties. . . . . . . . . . . . . . . . . . . . . 42
SECTION 10.2 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.3 Additional Information to be Furnished to the Borrower . . . . 43
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.2 Protection of Title. . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.4 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 45
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 11.5 Limitations on Rights of Others. . . . . . . . . . . . . . . . 46
SECTION 11.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.7 Separate Counterparts. . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.9 Assignment to Funding Agent. . . . . . . . . . . . . . . . . . 46
SECTION 11.10 Chase Roles; Limitation of Liability . . . . . . . . . . . . . 46
SECTION 11.11 Non-petition Covenants . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.12 Independence of the Servicer . . . . . . . . . . . . . . . . . 47
SECTION 11.13 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.14 Consents to Jurisdiction . . . . . . . . . . . . . . . . . . . 48
SECTION 11.15 Trial by Jury Waived . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.16 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
ANNEXES
Annex A - Defined Terms
SCHEDULES
<TABLE>
<S> <C>
Schedule A - Intentionally Omitted
Schedule B - Schedule of Representations
Schedule 2.4 - Form of Prepaid Receivables Notice
Schedule 3.1 - Conditions to Effectiveness of Agreement
Schedule 5.11 - Procedures for Data Integrity Reviews
EXHIBITS
Exhibit A - Form of Receivables Sale Agreement
Exhibit B - Form of Servicer's Determination Date Certificate
Exhibit B-1 - Form of Servicer's VFN Prepayment Date Certificate
Exhibit C - Form of Receivables Sale Notice
Exhibit D - Form of Servicer's Receivables Sale Date Certificate
Exhibit E - Form of Receivables Purchase Note
</TABLE>
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SALE AND SERVICING AGREEMENT dated as of October 8, 1997, among CP
Funding Corp., a Nevada corporation (the "Borrower"), AMERICREDIT FINANCIAL
SERVICES, INC., a Delaware corporation ("AFS") as seller and as servicer (in
such capacities, the "Seller" and the "Servicer", respectively), and The
Chase Manhattan Bank, a New York banking corporation ("Chase") as backup
servicer and as funding agent (in such capacities, the "Backup Servicer" and
the "Funding Agent", respectively).
WHEREAS, AFS is engaged in the business of acquiring motor vehicle
retail installment sale contracts from motor vehicle dealers and of servicing
such contracts and the related receivables; and
WHEREAS, the Borrower desires to enter into an agreement with AFS, pursuant
to which the Borrower may, at its option, from time to time purchase from AFS
such contracts and the related receivables; and
WHEREAS, the Borrower desires to retain AFS as servicer of such purchased
contracts and receivables; and
WHEREAS, AFS is willing to sell and to service all such contracts and
receivables; and
WHEREAS, the Borrower desires to obtain financing for its purchase of the
contracts and receivables from Park Avenue Receivables Corporation and from a
syndicate of bank lenders;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
As used herein, "Agreement" shall mean this Sale and Servicing
Agreement, as it may from time to time be amended, supplemented or otherwise
modified in accordance with the terms hereof. Unless the context otherwise
requires, other capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in Annex A hereto, which Annex A is
incorporated by reference herein.
<PAGE>
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in Annex A shall have such defined meanings when
used in any instrument governed hereby and in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) The principles of construction set forth in Annex A shall apply to
this Agreement.
ARTICLE II
SALE OF RECEIVABLES
SECTION 2.1 SALE OF RECEIVABLES. Subject to the satisfaction of the
conditions precedent set forth in Article III hereof, in consideration of the
Borrower's delivery to or upon the order of the Seller of the Receivables
Purchase Price therefor, the Seller, as to the Receivables sold on the Initial
Receivables Sale Date and on each subsequent Receivables Sale Date, in each case
pursuant to a Receivables Sale Agreement, shall sell, transfer, assign, pledge,
set over and otherwise convey to the Borrower, without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller in,
to and under:
(a) the Receivables sold on each such date, as listed in Schedule A to the
relevant Receivables Sale Agreement, and all moneys received thereon
after the Relevant Cutoff Date;
(b) all security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables sold and any other interest of the Seller
in such Financed Vehicles;
(c) all proceeds and all rights to receive proceeds with respect to the
Receivables sold from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors
and any proceeds from the liquidation of such Receivables;
(d) all rights of the Seller against Dealers pursuant to Dealer Agreements
and/or Dealer Assignments;
(e) all rights under any Service Contracts on the related Financed
Vehicles;
(f) the related Receivables Files; and
(g) all proceeds of any and all of the foregoing.
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SECTION 2.2 THE CONVEYED PROPERTY; NATURE OF TRANSACTION.
(a) Any and all of the property described in the foregoing Section 2.1 is
referred to as the "Conveyed Property".
(b) It is the intention of the Seller that each sale and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other property from the Seller to the Borrower and the beneficial interest in
and title to the Receivables and the Other Conveyed Property shall not be part
of the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the sale and assignment contemplated hereby is held
not to be a sale, this Agreement and each Receivables Sale Agreement shall
constitute a security agreement, and the Seller hereby grants to the Borrower a
security interest in all of the Conveyed Property, whether now owned or
hereafter acquired and wherever located. At the request of the Borrower or the
Funding Agent, the Seller, at its expense, will take all action necessary or
advisable to perfect and protect such security interest, free and clear of all
Liens (other than the Lien of the Funding Agent).
SECTION 2.3 FURTHER ENCUMBRANCE OF CONVEYED PROPERTY; ADDITIONAL COVENANTS
OF THE SELLER.
(a) Immediately upon the conveyance to the Borrower by the Seller of any
item of the Conveyed Property, all right, title and interest of the Seller in
and to such item of Conveyed Property shall terminate, and all such right, title
and interest shall vest in the Borrower.
(b) Immediately upon the vesting of the Conveyed Property in the Borrower,
the Borrower shall have the sole right to transfer, sell, pledge or otherwise
encumber, such Conveyed Property. As required by the Funding Agreement, the
Borrower shall grant a security interest in the Conveyed Property to secure the
repayment of the Secured Obligations, pursuant to the Security Agreement.
(c) Without limiting the foregoing, the Seller covenants as follows:
(i) LIENS IN FORCE. The Financed Vehicle securing each Receivable
shall not be released by the Seller in whole or in part from the security
interest granted under the Receivable, except upon payment in full of the
Receivable or as otherwise contemplated herein and the Seller shall not
take or permit any action inconsistent with the foregoing;
(ii) NO IMPAIRMENT. The Seller shall do nothing to impair the rights
of the Borrower or the Secured Parties in the Receivables, the Dealer
Agreements, the Dealer Assignments, the Insurance Policies or any other
property or interest comprising the Other Conveyed Property;
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(iii) NO AMENDMENTS. The Seller shall not take or permit any
action to extend or otherwise amend the terms of any Receivable, except
in accordance with Section 5.2 hereof; and
(iv) RESTRICTIONS ON LIENS. The Seller shall not: (i) create or
incur or agree to create or incur, or consent to cause (upon the
happening of a contingency or otherwise) the creation, incurrence or
existence of any Lien or restriction on transferability of the
Receivables or of any Other Conveyed Property except for the Lien in
favor of the Funding Agent for the benefit of the Secured Parties, and
the restrictions on transferability imposed by this Agreement or (ii)
sign or file under the Uniform Commercial Code of any jurisdiction any
financing statement or sign any security agreement authorizing any
secured party thereunder to file such financing statement, with respect
to the Receivables or to any Other Conveyed Property, except in each
case any such instrument solely securing the rights and preserving the
Lien of the Funding Agent, for the benefit of the Secured Parties. The
Seller will take no action to cause any Receivable to be evidenced by an
instrument (as such term is defined in the Relevant UCC).
(d) The Seller will furnish or cause to be furnished to the Funding Agent
(and the Funding Agent promptly after receipt thereof shall forward to each of
the Secured Parties):
(i) within 90 days after the end of each fiscal year of AmeriCredit
Corp., the audited consolidated balance sheet and related statements of
operations, shareholders' equity and cash flows of AmeriCredit Corp. as of
the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Coopers &
Lybrand, LLC or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to
the effect that such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of
AmeriCredit Corp. and its consolidated subsidiaries on a consolidated basis
in accordance with GAAP;
(ii) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of AmeriCredit Corp., the consolidated balance
sheet and related statements of operations of AmeriCredit Corp. as of the
end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, and statements of cash flows for AmeriCredit Corp. for the
then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of the financial officers of AmeriCredit
Corp. as presenting fairly in all material respects the financial condition
and results of its operations and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consis-
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<PAGE>
tently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(iii) promptly after the same become publicly available, copies of
all periodic and other reports (excluding the monthly 8-K filed for the
securitization trusts for the securitizations of AmeriCredit Corp. and/or
its subsidiaries), proxy statements and other materials filed by
AmeriCredit Corp. or any subsidiary with the Securities and Exchange
Commission, or any governmental authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by AmeriCredit Corp. to its shareholders generally, as the case
may be; and
(iv) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
AmeriCredit Corp. or any subsidiary, or compliance with the terms of this
Agreement, as the Funding Agent may reasonably request.
SECTION 2.4 PREPAYMENT OF PURCHASE PRICE OF RECEIVABLES.
From time to time, the Borrower may make a cash payment to the Seller
out of funds available therefor, by way of prepayment for future sales of
Receivables hereunder, which payment shall be accompanied by a notice
substantially in the form of Schedule 2.4 hereto. The Seller's acceptance
of any such prepayment shall constitute its agreement to sell Receivables
satisfying the criteria set forth in Schedule B hereto and otherwise in
accordance with the terms and conditions of this Agreement.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Agreement is subject to the following conditions
precedent (provided, however, that payment by the Borrower of the amounts
referred to in clauses (ii) and (iv) below may be made out of the proceeds of
the Initial Funding):
(i) the Borrower and the Funding Agent shall have received, and
found satisfactory in form and substance, each of the Basic Agreements,
and each of the other documents, certificates and opinions set forth in
Schedule 3.1;
(ii) without limiting the foregoing, the Funding Agent shall have
received and found satisfactory in form and substance the Hedge Contract(s)
to be effective as of the Effective Date which shall, among other things,
(A) be in an aggregate notional amount equal to the Facility Limit; (B) be
a 6% LIBOR cap with the entire
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consideration payable by the Borrower thereunder to be paid in full on the
Effective Date; (C) provide for a term equal to the initial term of the
Facility, with an amortization schedule in the event of a Termination Event
or non-renewal of the Facility satisfactory to the Funding Agent and the
Rating Agencies; and (D) provide for any payments by the Hedge Counterparty
thereunder to be payable on the last Business Day of each calendar month;
(iii) the Funding Agent shall have entered into an intercreditor
agreement, satisfactory to it in form and substance (the "Intercreditor
Agreement"), with Wells Fargo in its capacity as agent bank under the
Restated Revolving Credit Agreement, dated as of October 3, 1997, to which
the Seller is a party; and
(iv) the amount of $2,450,000 in immediately available funds shall
have been received by the Funding Agent from the Borrower for deposit to
the Reserve Account.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH RECEIVABLES SALE.
(a) The initial sale and each subsequent sale of Receivables shall be
subject to the further conditions precedent that:
(i) the Seller shall have provided the Borrower and the Funding
Agent with a Receivables Sale Notice not later than three Business Days
prior to such Receivables Sale Date and shall have provided any
information reasonably requested by the Borrower and/or the Funding
Agent with respect to the Receivables to be sold to the Borrower on such
Receivables Sale Date, said Receivables Sale notice to including as an
exhibit thereto the form of UCC financing statement to be filed with
respect to such Receivables which shall include a schedule listing the
Receivables to be sold on such Receivables Sale Date substantially in
the form of the Schedule A to the related Receivables Sale Agreement;
(ii) the Seller shall have caused the Servicer to provide the
Borrower and the Funding Agent with a Servicer's Receivables Sale Date
Certificate not later than three Business Days prior to such Receivables
Sale Date, which Certificate shall set forth the Pool Balance as of the
Reference Date, the Principal Balance of the Receivables to be sold, and
such additional information as the Borrower and/or the Funding Agent
shall specify;
(iii) the Seller and the Borrower shall have executed and delivered
to the Funding Agent a duly executed Receivables Sale Agreement which
shall include a Schedule A listing the Receivables to be sold on such
Receivables Sale Date;
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(iv) the Seller shall, to the extent required by Section 5.2, have
deposited in the Collection Account all collections received after the
Relevant Cutoff Date with respect to the Receivables to be sold on such
Receivables Sale Date;
(v) as of each Receivables Sale Date, (A) the Seller shall not be
insolvent and shall not become insolvent as a result of the sale of
Receivables on such Receivables Sale Date, (B) the Seller shall not
intend to incur or believe that it shall incur debts that would be
beyond its ability to pay as such debts mature, (C) such sale shall not
have been made with actual intent to hinder, delay or defraud any Person
and (D) the assets of the Seller shall not constitute unreasonably small
capital to carry out its business as conducted;
(vi) the Termination Date shall not have occurred;
(vii) after giving effect to the sale of Receivables proposed to
be made on any Receivables Sale Date, no Pool Limitation shall have been
exceeded;
(viii) each of the representations and warranties made by the
Seller pursuant to Section 4.1 with respect to the Receivables to be sold
on such Receivables Sale Date shall be true and correct as of such
Receivables Sale Date, and the Seller shall have performed all obligations
to be performed by it hereunder on or prior to such Receivables Sale Date;
(ix) the Seller shall, at its own expense, on or prior to the
Receivables Sale Date indicate in its computer files that the Receivables
identified in the Receivables Sale Agreement have been sold to the Borrower
pursuant to this Agreement;
(x) the Seller shall have taken any action (including, but not
limited to, the filing of appropriate UCC financing statements) required to
maintain the ownership interest of the Borrower in the Receivables
(PROVIDED, HOWEVER, that after the Initial Receivables Sale Date the Seller
shall make such filings as promptly as possible and in no event later than
the third Business Day following the respective Receivables Sale Date and
shall promptly provide to each of the Borrower and the Funding Agent a copy
of a stamped acknowledgment copy thereof);
(xi) each of the Funding Agent and the Borrower shall have received,
duly executed and delivered by Wells Fargo, a lien release substantially in
the form specified in Section 1(b) of the Intercreditor Agreement;
(xii) no selection procedures adverse to the interests of the
Borrower and/or the Secured Parties shall have been utilized in selecting
the Receivables to be sold on such Receivables Sale Date;
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(xiii) without limiting any of the foregoing, no event shall have
occurred and remain continuing, nor would result from such sale of
Receivables, that constitutes a Termination Event or a Potential
Termination Event;
(xiv) on each Receivables Sale Date after the Initial Receivables
Sale Date, the Borrower shall transfer to the Funding Agent for deposit in
the Reserve Account, the amount of the Subsequent Reserve Account Deposit,
if any, required to be made in connection with such sale;
(xv) the Seller shall have received a cash payment in the amount of
the entire Receivables Purchase Price of the Receivables sold on such
Receivables Sale Date, except to the extent that the Seller, at its option,
elects to extend credit to the Borrower under the Receivables Purchase Note
or to make a capital contribution to the Borrower;
(xvi) to the extent that, after giving effect to the sale of
Receivables made on such date there would be one or more states of the
United States in which Financed Vehicles securing more than 10% of the Pool
Balance were titled and as to which states an Opinion of Counsel had not
been given on the Effective Date or on a prior Receivables Sale Date as to
the perfection, priority and enforceability of the Funding Agent's security
interest for each such state, the Seller shall have caused to be delivered
to the Borrower and the Funding Agent such an Opinion of Counsel together
with the related opinion of counsel, satisfactory in form and substance to
the Borrower and the Funding Agent to be given by in-house counsel to the
Seller with respect to such jurisdiction; and
(xvii) the Borrower shall have delivered to the Funding Agent an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this Section 3.2.
(b) Notwithstanding anything to the contrary contained in the foregoing
Section 3.2(a), in connection with any contemplated CP Funding, upon the request
of the Borrower, the Funding Agent, in its discretion, may accept a revised
Receivables Sale Notice and a revised Servicer's Receivables Sale Date
Certificate, up to 1 p.m. on the Business Day immediately preceding such
contemplated CP Funding, subject to the satisfaction of all other conditions set
forth above.
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ARTICLE IV
THE RECEIVABLES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller makes the following representations and warranties as to the
Receivables on which the Borrower is deemed to have relied in acquiring the
Receivables and upon which the Secured Parties shall be deemed to have relied in
making any Advance pursuant to the Funding Agreement, as the case may be. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of each Receivables Sale Date with respect to the Receivables
sold on such date, but shall survive the sale, transfer and assignment of the
Receivables to the Borrower and the pledge thereof to the Funding Agent pursuant
to the Security Agreement:
(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties
set forth on the Schedule of Representations attached hereto as Schedule B
are true and correct.
SECTION 4.2 REPURCHASE UPON BREACH.
The Seller, the Servicer or the Borrower, as the case may be, shall inform
the other parties to this Agreement promptly, in writing, (i) upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 4.1, and (ii) of any Receivable for which the related Lien Certificate
has not been received within 150 days following the Receivables Sale Date with
respect thereto (for purposes of this Section 4.2, each of the foregoing
referred to as a "breach"). As of the last day of the month in which the
Seller, the Servicer or the Borrower, as the case may be, discovers the breach,
or in which the Seller receives notice of such breach, unless such breach is
cured by such date, the Seller shall have an obligation to repurchase any
Receivable that is adversely affected and/or in which the interests of the
Borrower or the Secured Parties are adversely affected by any such breach. In
consideration of and simultaneously with the repurchase of the Receivable, the
Seller shall remit, or cause the Servicer to remit, to the Collection Account
the Repurchase Obligation Amount in the manner specified in Section 6.7 and the
Borrower shall execute such assignments and other documents reasonably requested
by such Person in order to effect such repurchase. The sole remedy of the
Borrower, the Funding Agent, or the Secured Parties with respect to a breach of
representations and warranties pursuant to Section 4.1 and the agreement
contained in this Section shall be the repurchase of Receivables and Seller
indemnity pursuant to this Section, subject to the conditions contained herein.
Neither the Funding Agent nor the Borrower shall have a duty to conduct any
affirmative investigation as to the occurrence of any conditions requiring the
repurchase of any Receivable pursuant to this Section.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by the Seller, the Seller shall indemnify
the Borrower, the Backup Servicer, the Funding Agent, and the Secured Parties
against all costs, expenses, losses, damages, claims and
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liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
SECTION 4.3 CUSTODY OF RECEIVABLES FILES.
(a) In connection with the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to the Borrower pursuant to this
Agreement and simultaneously with the execution and delivery of this Agreement,
the Funding Agent shall enter into the Custodian Agreement with the Custodian,
dated as of the date hereof, pursuant to which the Funding Agent shall revocably
appoint the Custodian, and the Custodian shall accept such appointment, to act
as the agent of the Funding Agent as custodian of the following documents or
instruments in its possession which shall be delivered to the Custodian as agent
of the Funding Agent on or before the Initial Receivables Sale Date and each
subsequent Receivables Sale Date (with respect to each Receivable):
(i) The fully executed original of the Receivable (together with any
agreements modifying the Receivable, including without limitation any
extension agreements);
(ii) The original credit application, or a copy thereof, of each
Obligor, fully executed by each such Obligor on the Servicer's customary
form, or on a form approved by the Servicer, for such application; and
(iii) The original certificate of title (when received) and
otherwise such documents, if any, that the Servicer keeps on file in
accordance with its customary procedures indicating that the Financed
Vehicle is owned by the Obligor and subject to the interest of the Seller
as first lienholder or secured party, or, if such original certificate of
title has not yet been received, a copy of the application therefor,
showing the Seller as secured party.
The Funding Agent may act as the Custodian, in which case the Funding Agent
shall be deemed to have assumed the obligations of the Custodian specified in
the Custodian Agreement.
(b) Upon payment in full of any Receivable, the Servicer will notify the
Custodian pursuant to a certificate of an officer of the Servicer (which
certificate shall include a statement to the effect that all amounts received in
connection with such payments which are required to be deposited in the
Collection Account pursuant to Section 5.1 have been so deposited) and shall
request delivery of the Receivable and Receivable File to the Servicer;
PROVIDED, HOWEVER, that so long as AFS acts in the capacities of Servicer and of
Custodian, such notice by the Servicer may be made in such other form and manner
as are consistent with the Servicer's customary operating procedures. From time
to time as appropriate for servicing and enforcing any Receivable, the Custodian
shall, upon written request of an officer of the Servicer and delivery to the
Custodian of a receipt signed by such officer, cause the original Receivable and
the related Receivable File to be released to the Servicer. The
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Servicer's receipt of a Receivable and/or Receivable File shall obligate the
Servicer to return the original Receivable and the related Receivable File to
the Custodian when its need by the Servicer has ceased unless the Receivable
is repurchased as described in Section 4.2 or 5.7.
ARTICLE V
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 5.1 APPOINTMENT; STANDARD OF CARE; DUTIES OF THE SERVICER.
(a) The Servicer is hereby authorized to act as agent for the Borrower and
in such capacity shall manage, service, administer and make collections on the
Receivables, and perform the other actions required by the Servicer under this
Agreement. So long as AFS is the Servicer, the Servicer agrees that its
servicing of the Receivables shall be carried out in accordance with the Credit
and Servicing Procedures and, with respect to any matters not expressly covered
by such Credit and Servicing Procedures, or, in the event the Servicer is not
AFS, in accordance with customary and usual procedures of institutions that are
primarily engaged in the business of servicing motor vehicle retail installment
sales contracts; PROVIDED, that in any event the Servicer shall exercise at
least the degree of skill and attention that the Servicer exercises from time to
time with respect to all comparable motor vehicle receivables that it services
for itself or others (the foregoing standard of care being referred to as the
"Servicing Standard").
(b) The Servicer's duties shall include, without limitation: collection and
posting of all payments; responding to inquiries of Obligors on the Receivables;
investigating delinquencies; sending payment coupons to Obligors; reporting any
required tax information to Obligors; monitoring the Collateral; complying with
the terms of the Lockbox Agreement; accounting for collections and furnishing
monthly and annual statements to the Borrower and the Funding Agent with respect
to collections and distributions, as well as the Servicer statements required in
connection with the each sale of Receivables; monitoring the status of Insurance
Policies with respect to the Financed Vehicles and performing the other duties
specified herein. The Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided for in the Dealer
Agreements (and shall maintain possession of the Dealer Agreements, to the
extent it is necessary to do so), the Dealer Assignments and the Insurance
Policies, to the extent that such Dealer Agreements, Dealer Assignments and
Insurance Policies relate to the Receivables, the Financed Vehicles or the
Obligors. To the extent consistent with the standards, policies and procedures
otherwise required hereby, the Servicer shall follow its customary standards,
policies, and procedures and shall have full power and authority, acting alone,
to do any and all things in connection with such managing, servicing,
administration and collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer is hereby authorized and
empowered by the Borrower to execute and deliver, on behalf of the Borrower, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables and with respect to the Financed Vehicles; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the
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Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid balance of any Receivable
from the Obligor. The Servicer is hereby authorized to commence, in its own
name or in the name of the Borrower, a legal proceeding to enforce a
Receivable pursuant to Section 5.3 or to commence or participate in any other
legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Receivable, an Obligor or a Financed Vehicle. If
the Servicer commences or participates in such a legal proceeding in its own
name, the Borrower shall thereupon be deemed to have automatically assigned
such Receivable to the Servicer solely for purposes of commencing or
participating in any such proceeding as a party or claimant, and the Servicer
is authorized and empowered by the Borrower to execute and deliver in the
Servicer's name any notices, demands, claims, complaints, responses,
affidavits or other documents or instruments in connection with any such
proceeding. The Funding Agent shall furnish the Servicer with any powers of
attorney and other documents which the Servicer may reasonably request and
which the Servicer deems necessary or appropriate and take any other steps
which the Servicer may deem necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Agreement.
(c) The provisions of this subsection (c) are applicable only so long as
AFS is the Servicer. On each Determination Date, together with the Servicer's
Determination Date Certificate to be delivered on such date, which Servicer's
Determination Date Certificate shall include a statement that no modification
has been made to the Credit and Servicing Procedures that could be reasonably
expected to have a material adverse effect on the Borrower and/or the Secured
Parties, the Servicer shall deliver to the Funding Agent a description of any
modification made to the Credit and Servicing Procedures since the last
Determination Date. The Servicer further agrees that it shall not make any
changes to the Credit and Servicing Procedures that could reasonably be expected
to have a material adverse effect on the Borrower and/or the Secured Parties
unless it has given the Funding Agent (for transmittal to the Required Banks and
the Rating Agencies) at least 20 days' prior written notice of such proposed
modification and the Required Banks have not objected in writing prior to the
expiration of such 20 day period.
SECTION 5.2 COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS.
(a) Consistent with the Servicing Standard, the Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and shall
follow such collection procedures as it follows with respect to all comparable
automobile receivables that it services for itself or others and otherwise act
with respect to the Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies and the Other Conveyed Property in such manner as will,
in the reasonable judgment of the Servicer, maximize the amount to be received
by the Borrower with respect thereto. The Servicer is authorized in its
discretion to waive any prepayment charge, late payment charge or any other
similar fees that may be collected in the ordinary course of servicing any
Receivable.
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(b) The Servicer may at any time agree to a modification or amendment of a
Receivable in order to (i) change the Obligor's regular due date to a date
within the Collection Period in which such due date occurs or (ii) reamortize
the Scheduled Payments on the Receivable following a partial prepayment of
principal.
(c) The Servicer may grant payment extensions on, or other modifications
or amendments to, a Receivable (in addition to those modifications permitted by
Section 5.2(b)) in accordance with the Credit and Servicing Procedures and the
Servicing Standard if the Servicer believes in good faith that such extension,
modification or amendment is necessary to avoid a default on such Receivable,
will maximize the amount to be received by the Borrower with respect to such
Receivable, and is otherwise in the best interests of the Borrower; PROVIDED,
HOWEVER, that:
(i) The aggregate period of all extensions on a Receivable shall not
exceed six months;
(ii) In no event may a Receivable be extended such that the final
payment scheduled to be made thereunder would be more than 66 months beyond
the Commitment Expiry Date; and
(iii) the Servicer shall not amend or modify a Receivable (except
as provided in Section 5.2(b) and this Section 5.2(c)) without the consent
of the Funding Agent (acting at the direction of the Required Banks).
(d) The Servicer shall use its best efforts to notify or direct Obligors
to make all payments on the Receivables, whether by check or by direct debit of
the Obligor's bank account, to be made directly to one or more Lockbox Banks,
acting as agent for the Borrower pursuant to a Lockbox Agreement. The Servicer
shall use its best efforts to notify or direct any Lockbox Bank to deposit all
payments on the Receivables in the Lockbox Account no later than the Business
Day after receipt, and to cause all amounts credited to the Lockbox Account on
account of such payments to be transferred to the Collection Account no later
than the second Business Day after receipt of such payments. The Lockbox
Account shall be a demand deposit account held by the Lockbox Bank, or at the
request of the Funding Agent, acting at the direction of the Required Banks, an
Eligible Deposit Account.
On each Receivables Sale Date, the Servicer shall have notified each
Obligor that makes its payments on the Receivables by check to make such
payments thereafter directly to the Lockbox Bank (except in the case of Obligors
that have already been making such payments to the Lockbox Bank), and shall have
provided each such Obligor with remittance invoices in order to enable such
Obligors to make such payments directly to the Lockbox Bank for deposit into the
Lockbox Account, and the Servicer will continue, not less often than every three
months, to so notify those Obligors who have failed to make payments to the
Lockbox Bank. If and to the extent requested by the Funding Agent, acting at
the direction of the Required Banks, the Servicer shall request each Obligor
that makes payment on the Receivables by direct debit of such Obligor's bank
account, to
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execute a new authorization for automatic payment which in the judgment of
the Funding Agent, acting at the direction of the Required Banks, is
sufficient to authorize direct debit by the Lockbox Bank on behalf of the
Borrower. If at any time, the Lockbox Bank is unable to directly debit an
Obligor's bank account that makes payment on the Receivables by direct debit
and if such inability is not cured within 15 days or cannot be cured by
execution by the Obligor of a new authorization for automatic payment, the
Servicer shall notify such Obligor that it cannot make payment by direct
debit and must thereafter make payment by check.
Notwithstanding any Lockbox Agreement, or any of the provisions of this
Agreement relating to the Lockbox Agreement, the Servicer shall remain obligated
and liable to the Borrower, the Funding Agent and Secured Parties for servicing
and administering the Receivables and the other Conveyed Property in accordance
with the provisions of this Agreement without diminution of such obligation or
liability by virtue thereof, PROVIDED, however, that the foregoing shall not
apply to any Backup Servicer for so long as a Lockbox Bank is performing its
obligations pursuant to the terms of a Lockbox Agreement.
In the event of a termination of the Servicer, the successor Servicer
shall assume all of the rights and obligations of the outgoing Servicer under
the Lockbox Agreement subject to the terms hereof. In such event, the
successor Servicer shall be deemed to have assumed all of the outgoing
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such Lockbox Agreement to the same extent as if such Lockbox
Agreement had been assigned to the successor Servicer, except that the
outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the Lockbox Bank under
such Lockbox Agreement. The outgoing Servicer shall, upon request of the
Funding Agent, but at the expense of the outgoing Servicer, deliver to the
successor Servicer all documents and records relating to each such Lockbox
Agreement and an accounting of amounts collected and held by the Lockbox Bank
and otherwise use its best efforts to effect the orderly and efficient
transfer of any Lockbox Agreement to the successor Servicer. In the event
that the Funding Agent elects to change the identity of the Lockbox Bank, the
outgoing Servicer, at its expense, shall cause the Lockbox Bank to deliver,
at the direction of the Funding Agent to the Funding Agent or a successor
Lockbox Bank, all documents and records relating to the Receivables and all
amounts held (or thereafter received) by the Lockbox Bank (together with an
accounting of such amounts) and shall otherwise use its best efforts to
effect the orderly and efficient transfer of the lockbox arrangements and the
Servicer shall notify the Obligors to make payments to the Lockbox
established by the successor.
(e) The Servicer shall remit all payments by or on behalf of the Obligors
received directly by the Servicer (including any such payments forwarded to the
Servicer for special handling pursuant to the Lockbox Agreement) into the
Collection Account as soon as practicable, but in no event later than the
Business Day after receipt thereof.
SECTION 5.3 REALIZATION UPON RECEIVABLES.
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(a) Consistent with the Servicing Standard, the Servicer shall use its
best efforts to repossess (or otherwise comparably convert the ownership of) and
liquidate any Financed Vehicle securing a Receivable with respect to which the
Servicer has determined that payments thereunder are not likely to be resumed,
as soon as is practicable after default on such Receivable but in no event later
than the date on which all or any portion of a Scheduled Payment has become 91
days delinquent; provided, however, that the Servicer may elect not to repossess
a Financed Vehicle within such time period if in its good faith judgment it
determines that the proceeds ultimately recoverable with respect to such
Receivable would be increased by forbearance. The Servicer is authorized to
follow such customary practices and procedures as it shall deem necessary or
advisable, consistent with the Servicing Standard, which practices and
procedures may include reasonable efforts to realize upon any recourse to
Dealers, the sale of the related Financed Vehicle at public or private sale, the
submission of claims under an Insurance Policy and other actions by the Servicer
in order to realize upon such a Receivable. The foregoing is subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with any repair or
towards the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession shall increase the proceeds
of liquidation of the related Receivable by an amount greater than the amount of
such expenses. All amounts received upon liquidation of a Financed Vehicle
shall be remitted directly by the Servicer to the Collection Account as soon as
practicable, but in no event later than the Business Day after receipt thereof.
The Servicer shall be entitled to recover all reasonable expenses incurred by it
in the course of repossessing and liquidating a Financed Vehicle into cash
proceeds (including, without limitation, any personal property taxes assessed on
such Financed Vehicles). Such expenses, at the option of the Servicer: (i)
shall be reimbursable as Servicer Advances on the Distribution Date next
following the liquidation of the Financed Vehicle (or, if consistent with the
Servicing Standard the Servicer shall have made a determination that the
Financed Vehicle cannot be repossessed and/or liquidated, on the Distribution
Date next following the delivery to the Borrower and the Funding Agent of an
Officer's Certificate of the Servicer to such effect); or (ii) shall be retained
by the Servicer as deductions from the cash proceeds of such Financed Vehicle,
any deficiency obtained from the Obligor or any amounts received from the
related Dealer, which proceeds and other such cash receipts shall not be
required to be deposited as required by Section 5.2(e) and the foregoing
provisions of this Section 5.3(a) to the extent of such Servicer disbursements.
Notwithstanding anything to the contrary in the foregoing, the Servicer shall
not pay any such reimbursable expense with respect to a Financed Vehicle to the
extent that it does not reasonably expect, after reasonable inquiry, to be
reimbursed for such expenses from the collections on the Receivable relating to
such Financed Vehicle.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Borrower to the Servicer of the rights
under such Dealer Agreement and Dealer Assignment for purposes of collection
only. If, however, in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce a Dealer Agreement or Dealer Assignment on the
grounds that it is not a real party in interest or a Person entitled to enforce
the Dealer Agreement or Dealer Assignment, the Funding Agent, at the Borrower's
expense, or the Seller, at the Borrower's expense, shall take such steps as the
Servicer deems necessary to enforce the Dealer Agreement or Dealer
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Assignment, including bringing suit in its name or the name of the Seller or
of the Borrower and/or the Funding Agent for the benefit of the Secured
Parties. All amounts recovered shall be remitted directly by the Servicer as
provided in Section 5.2(e).
SECTION 5.4 INSURANCE.
(a) The Servicer shall require, in accordance with the Servicing Standard,
that each Financed Vehicle be insured by the related Obligor under the Insurance
Policies referred to in Paragraph "n" of the Schedule of Representations and
Warranties and shall monitor the status of such physical loss and damage
insurance coverage thereafter, in accordance with the Servicing Standard. Each
Receivable requires the Obligor to maintain such physical loss and damage
insurance, naming the Seller and its successors and assigns as additional
insureds, and permits the holder of such Receivable to obtain physical loss and
damage insurance at the expense of the Obligor if the Obligor fails to maintain
such insurance. If the Servicer shall determine that an Obligor has failed to
obtain or maintain a physical loss and damage Insurance Policy covering the
related Financed Vehicle which satisfies the conditions set forth in such
Paragraph "n" (including, without limitation, during the repossession of such
Financed Vehicle) the Servicer may enforce the rights of the holder of the
Receivable under the Receivable to require the Obligor to obtain such physical
loss and damage insurance. At its sole option, the Servicer may maintain a
vendor's single interest or other collateral protection insurance policy with
respect to all Financed Vehicles ("Collateral Insurance") which policy shall by
its terms insure against physical loss and damage in the event any Obligor fails
to maintain physical loss and damage insurance with respect to the related
Financed Vehicle. Any such policy of Collateral Insurance shall be endorsed
with clauses providing for loss payable to the Borrower. Costs incurred by the
Servicer in maintaining such Collateral Insurance shall be paid by the Borrower.
(b) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Borrower and/or the
Secured Parties. If the Servicer elects to commence a legal proceeding to
enforce an Insurance Policy, the act of commencement shall be deemed to be an
automatic assignment of the rights of the Borrower under such Insurance Policy
to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce an Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Insurance Policy, the Borrower
and/or the Funding Agent, at the Borrower's expense, or the Seller, at the
Borrower's expense, shall take such steps as the Servicer deems necessary to
enforce such Insurance Policy, including bringing suit in its name or the name
of the Borrower and/or the Funding Agent for the benefit of the Secured Parties.
SECTION 5.5 MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.
(a) Consistent with the Servicing Standard, the Servicer shall take such
steps on behalf of the Borrower as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle,
including but not limited to obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-filing, and re-registering of
all security agreements, financing statements and continuation statements as are
necessary to maintain
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the security interest granted by the Obligors under the respective
Receivables. The Funding Agent hereby authorizes the Servicer, and the
Servicer agrees, to take any and all steps necessary to re-perfect such
security interest on behalf of the Borrower as necessary because of the
relocation of a Financed Vehicle or for any other reason. In the event that
the assignment of a Receivable to the Borrower is insufficient, without a
notation on the related Financed Vehicle's certificate of title, or without
fulfilling any additional administrative requirements under the laws of the
state in which the Financed Vehicle is located, to perfect a security
interest in the related Financed Vehicle in favor of the Borrower, the
Servicer hereby agrees that the Seller's designation as the secured party on
the certificate of title shall be deemed in its capacity as Servicer as agent
of the Secured Parties and further agrees to hold such certificate of title
as the agent and custodian of the Secured Parties.
(b) Upon the occurrence of a Servicer Termination Event, the Funding
Agent may instruct the Servicer to take or cause to be taken such action as
may be necessary to perfect or re-perfect the security interests in the
Financed Vehicles securing the Receivables in the name of the Borrower by
amending the title documents of such Financed Vehicles or by such other
reasonable means as may, in the opinion of counsel to the Required Banks, be
necessary or prudent. The Servicer hereby agrees to pay all expenses related
to such perfection or re-perfection and to take all action necessary
therefor. In addition, the Required Banks may instruct the Funding Agent and
the Servicer to take or cause to be taken such action as may be necessary to
perfect or re-perfect the security interest in the Financed Vehicles
underlying the Receivables in the name of the Borrower, including by amending
the title documents of such Financed Vehicles or by such other reasonable
means as may, in the opinion of counsel to the Required Banks, be necessary
or prudent. The Servicer hereby appoints the Funding Agent as its
attorney-in-fact to take any and all steps required to be performed by AFS
pursuant to this Section 5.5(b) including, but not limited to, execution of
certificates of title or any other documents in the name and stead of the
Servicer, and the Funding Agent hereby accepts such appointment.
SECTION 5.6 COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER. By
its execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which on which the Borrower is
deemed to have relied in acquiring the Receivables and upon which the Secured
Parties shall be deemed to have relied in making any Advance pursuant to the
Funding Agreement, as the case may be.
The Servicer covenants as follows:
(i) LIENS IN FORCE. The Financed Vehicle securing each Receivable
shall not be released by the Servicer in whole or in part from the security
interest granted under the Receivable, except upon payment in full of the
Receivable or as otherwise contemplated herein;
(ii) NO IMPAIRMENT. The Servicer shall do nothing to impair the
rights of the Borrower or the Secured Parties in the Receivables, the
Dealer Agreements, the Dealer Assignments, the Insurance Policies or the
Other Conveyed Property;
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(iii) NO AMENDMENTS. The Servicer shall not extend or otherwise
amend the terms of any Receivable, except in accordance with Section 5.2;
and
(iv) RESTRICTIONS ON LIENS. The Servicer shall not: (i) create or
incur or agree to create or incur, or consent to cause (upon the happening
of a contingency or otherwise) the creation, incurrence or existence of any
Lien or restriction on transferability of the Receivables or of any Other
Conveyed Property except for the Lien in favor of the Funding Agent for the
benefit of the Secured Parties, and the restrictions on transferability
imposed by this Agreement or (ii) sign or file under the Uniform Commercial
Code of any jurisdiction any financing statement or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, with respect to the Receivables or to any Other Conveyed
Property, except in each case any such instrument solely securing the
rights and preserving the Lien of the Funding Agent, for the benefit of the
Secured Parties. The Servicer will take no action to cause any Receivable
to be evidenced by an instrument (as such term is defined in the Relevant
UCC).
SECTION 5.7 PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
discovery by any of the Seller, the Custodian, the Servicer, the Borrower,
the Funding Agent or the Secured Parties of a breach of any of the covenants
set forth in Sections 5.5(a) or 5.6, the party discovering such breach shall
give prompt written notice to the others; PROVIDED, HOWEVER, that the failure
to give any such notice shall not affect any obligation of the Servicer under
this Section 5.7. As of the last day of the month following its discovery or
receipt of notice of any breach of any covenant set forth in Sections 5.5(a)
or 5.6 which adversely affects any Receivable(s) (or the related Financed
Vehicle) and/or the interests of the Borrower and/or the Secured Parties
therein (including any Defaulted or Delinquent Receivable), the Servicer
shall, unless such breach shall have been cured in all material respects,
purchase from the Borrower the Receivable affected by such breach and, on the
related Determination Date, the Servicer shall pay the related Repurchase
Obligation Amount. It is understood and agreed that the obligation of the
Servicer to purchase any Receivable (including any Delinquent or Defaulted
Receivable) with respect to which such a breach has occurred and is
continuing shall, if such obligation is fulfilled, constitute the sole remedy
against the Servicer for such breach available to the Borrower, the Secured
Parties or the Funding Agent; PROVIDED, HOWEVER, that the Servicer shall
indemnify the Borrower, the Backup Servicer, the Funding Agent and the
Secured Parties against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
SECTION 5.8 TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY SERVICER.
On each Distribution Date, the Servicer shall be entitled to receive out of the
Collection Account the Base Servicing Fee and any Supplemental Servicing Fee for
the related Collection Period pursuant to Section 6.8 (the "Servicing Fee"). The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer and
expenses incurred in connection with distributions and reports made by the
Servicer to the Secured
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Parties). The Servicer shall be liable for the fees and expenses of the
Custodian, the Backup Servicer, the Lockbox Bank and the Independent
Accountants; PROVIDED, HOWEVER that any successor to AFS as Servicer
(including the Backup Servicer) shall not be liable for such fees and
expenses which shall, in such event, be the responsibility of the Borrower.
SECTION 5.9 CERTAIN SERVICER'S CERTIFICATES.
(a) No later than 10:00 a.m. New York City time on each Determination
Date, the Servicer shall deliver to the Funding Agent, the Backup Servicer and
each Rating Agency a Servicer's Determination Date Certificate executed by a
Responsible Officer of the Servicer in substantially the form of Exhibit B
hereto and including such credit and other information as the Funding Agent may
reasonably request with respect to the Managed Assets, including newly
originated Managed Assets.
(b) In addition, in connection with any Optional Prepayment pursuant to
Section 2.1(f)(ii) of the Funding Agreement, unless such Optional Prepayment is
to be effected on a Distribution Date (in which case the relevant calculations
with respect to such Optional Prepayment shall be reflected in the applicable
Servicer's Determination Date Certificate), the Servicer shall deliver to the
Funding Agent, the Backup Servicer and each Rating Agency a Servicer's VFN
Prepayment Date Certificate in substantially the form of Exhibit B-1 hereto.
Such Servicer's VFN Prepayment Date Certificate shall be delivered to the
Funding Agent by 1:00 p.m., five (5) Business Days prior to the contemplated VFN
Prepayment Date.
SECTION 5.10 ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF SERVICER
TERMINATION EVENT.
(a) The Servicer shall deliver to the Funding Agent, the Backup Servicer
and each Rating Agency, on or before April 30 of each year, beginning on April
30, 1998, an Officer's Certificate, dated as of December 31 of the preceding
year, stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or such other period as shall have elapsed from the
Closing Date to the date of the first such certificate) and of its performance
under this Agreement has been made under such officer's supervision, and (ii) to
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such period, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Funding Agent, the Backup Servicer
and each Rating Agency, promptly after having obtained knowledge thereof, but in
no event later than two (2) Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section 9.1.
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SECTION 5.11 ANNUAL INDEPENDENT ACCOUNTANTS' REPORT; QUARTERLY REVIEWS.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants who shall be selected by the
Servicer and acceptable to the Funding Agent (the "Independent Accountants"),
who may also render other services to the Servicer or to the Seller, to
deliver to the Funding Agent, the Backup Servicer and each Rating Agency, on
or before October 31 (or 120 days after the end of the Servicer's fiscal
year, if other than June 30) of each year, beginning on October 31, 1998,
with respect to the twelve months ended the immediately preceding June 30 (or
other applicable date) (or such other period as shall have elapsed from the
Closing Date to the date of such certificate), a statement (the "Accountants'
Report") addressed to the Board of Directors of the Servicer, to the Funding
Agent and the Backup Servicer, to the effect that such firm has audited the
books and records of AmeriCredit Corp., in which the Servicer is included as
a consolidated subsidiary, and issued its report thereon in connection with
the audit report on the consolidated financial statements of AmeriCredit
Corp. and that (1) such audit was made in accordance with generally accepted
auditing standards, and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary
in the circumstances; and (2) the firm is independent of the Seller and the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. With respect to the
fiscal year ended June 30, 1997, the Servicer shall deliver to the Funding
Agent, the Backup Servicer and each Rating Agency, on or before October 31,
1997, a copy of each of the foregoing described reports, as well as a copy of
the report on the application of agreed upon procedures to three randomly
selected servicer certificates of AFS as servicer delivered in connection
with the outstanding AmeriCredit securitization transactions for which it
acts as servicer, including the delinquency, default and loss statistics
required to be specified therein and noting whether any exceptions or errors
in the such servicer certificates were found.
(b) On the first to occur of (i) 60 days after the Closing Date and (ii)
30 days following the date on which a cumulative aggregate of $50,000,000
Principal Balance of Receivables have been purchased by the Borrower, and
thereafter on a quarterly basis, the Independent Accountants shall undertake a
data integrity review in accordance with Schedule 5.11 hereof, as such Schedule
5.11 may from time to time be amended by agreement of the Borrower and the
Funding Agent, with the consent of the Required Banks. The report of the
Independent Accountants on the results of each such data integrity review shall
be completed and delivered to the Funding Agent, the Borrower and the Servicer
within 20 days following the first, fourth, seventh and tenth months of each
calendar year.
SECTION 5.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
RECEIVABLES. The Servicer shall provide to representatives of the Borrower, the
Funding Agent and the Backup Servicer reasonable access to the Receivable Files
and all other documentation regarding the Receivables. In each case, such
access shall be afforded without charge but only upon reasonable request and
during normal business hours. Nothing in this Section shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the
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Obligors, and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
SECTION 5.13 MONTHLY TAPE. On or before the Determination Date, but in no
event later than the seventh calendar day, of each month, the Servicer will
deliver to the Backup Servicer a computer tape and a diskette (or any other
electronic transmission acceptable to the Funding Agent and the Backup Servicer)
in a format acceptable to the Backup Servicer containing the information with
respect to the Receivables as of the preceding Accounting Date necessary for
preparation of the Servicer's Determination Date Certificate relating to the
immediately succeeding Determination Date and necessary to determine the
application of collections as provided in Section 6.4. The Backup Servicer shall
use such tape or diskette (or other electronic transmission acceptable to the
Backup Servicer) to verify the Servicer's Determination Date Certificate
delivered by the Servicer, and the Backup Servicer shall certify to the Funding
Agent that it has verified the Servicer's Determination Date Certificate in
accordance with this Section 5.13 and shall notify the Servicer and the Funding
Agent of any discrepancies, in each case, on or before the second Business Day
following the Determination Date. In the event that the Backup Servicer reports
any discrepancies, the Servicer and the Backup Servicer shall attempt to
reconcile such discrepancies prior to the related Distribution Date, but in the
absence of a reconciliation, the Servicer's Determination Date Certificate shall
control for the purpose of calculations and distributions with respect to the
related Distribution Date. In the event that the Backup Servicer and the
Servicer are unable to reconcile discrepancies with respect to a Servicer's
Determination Date Certificate by the related Distribution Date, the Servicer
shall cause the Independent Accountants, at the Servicer's expense, to audit the
Servicer's Determination Date Certificate and, prior to the next succeeding
Determination Date, reconcile the discrepancies. The effect, if any, of such
reconciliation shall be reflected in the Servicer's Determination Date
Certificate for such next succeeding Determination Date. In addition, upon the
occurrence of a Servicer Termination Event the Servicer shall, if so requested
by the Funding Agent deliver to the Backup Servicer its Collection Records and
its Monthly Records within 5 Business Days after demand therefor and a computer
tape, or other electronic transmission acceptable to the Backup Servicer,
containing as of the close of business on the date of demand all of the data
maintained by the Servicer in computer format in connection with servicing the
Receivables. Other than the duties specifically set forth in this Agreement,
the Backup Servicer shall have no obligations hereunder, including, without
limitation, to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer shall have no liability for any actions taken or
omitted by the Servicer.
SECTION 5.14 RETENTION AND TERMINATION OF SERVICER. The Servicer hereby
covenants and agrees to act as such under this Agreement during the term of the
Facility, as such term may be extended pursuant to the Funding Agreement, unless
the Servicer is terminated pursuant to Article IX hereof, or is permitted to
resign pursuant to Section 8.6 hereof.
SECTION 5.15 FIDELITY BOND AND ERRORS AND OMISSIONS POLICY. The
Servicer has obtained, and shall continue to maintain in full force and
effect, a Fidelity Bond and Errors and Omissions Policy of a type and in such
amount as is customary for servicers engaged in the business of servicing
automobile receivables.
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ARTICLE VI
COLLECTION AND RESERVE ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO SECURED PARTIES
SECTION 6.1 ESTABLISHMENT OF COLLECTION AND RESERVE ACCOUNTS.
(a) The Funding Agent, on behalf of the Secured Parties, shall establish
and maintain in its own name accounts that are Eligible Deposit Accounts, the
"COLLECTION ACCOUNT" and the "RESERVE ACCOUNT", bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Funding Agent on behalf of the Secured Parties. The Collection Account and the
Reserve Account shall initially be established with the Funding Agent, and may
be on a sub-ledger of the Funding Agent.
(b) Funds on deposit in the Collection Account and the Reserve Account
(collectively, the "PLEDGED ACCOUNTS") in excess of $25,000 shall be invested by
the Funding Agent in Eligible Investments selected by the Funding Agent in its
discretion among Eligible Investments specified in standing written instructions
of the Borrower, or, in the absence of such instructions, solely in the
discretion of the Funding Agent. All such Eligible Investments shall be held by
the Funding Agent for the benefit of the Secured Parties, and funds on deposit
in any Pledged Account shall be invested in Eligible Investments having
maturities that are determined by the Funding Agent to be consistent with
PARCO's cashflow requirements, including availability of funds for the payment
of maturing Commercial Paper, and that in any event will mature no later than
the close of business on the Business Day immediately preceding the following
Distribution Date. Funds deposited in a Pledged Account on the day immediately
preceding a Distribution Date are not required to be invested overnight. All
Eligible Investments made in accordance with this subsection will be held to
maturity, except to the extent otherwise required in connection with an
acceleration of indebtedness pursuant to the terms of the Funding Agreement.
(c) All investment earnings of moneys deposited in the Pledged Accounts
shall be deposited (or caused to be deposited) by the Funding Agent in the
Collection Account, and any loss resulting from such investments shall be
charged to such account. The Borrower will not direct the Funding Agent to make
any investment of any funds held in any of the Pledged Accounts unless the
security interest granted and perfected in such account will continue to be
perfected in such investment, in either case without any further action by
any Person, and, in connection with any direction to the Funding Agent to make
any such investment, if requested by the Funding Agent, the Borrower shall
deliver to the Funding Agent an Opinion of Counsel, acceptable to the Funding
Agent, to such effect.
(d) The Funding Agent shall not in any way be held liable by reason of any
insufficiency in any of the Pledged Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Funding Agent's gross negligence or willful misconduct (provided that the
foregoing shall not be deemed to relieve the Funding Agent of any
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liability in its individual capacity as an issuer of any Eligible Investment
for failure to make payments thereon in accordance with the terms thereof).
(e) It is expressly acknowledged and agreed that the Funding Agent is
authorized hereby to direct the purchase of investments constituting Eligible
Investments (i) from any Affiliate of the Funding Agent, including securities
that are underwritten, placed or dealt in by any such Affiliate and/or from
management investment companies of which the Funding Agent (in its individual
capacity) or any Affiliate is an investment advisor, administrator, shareholder,
servicing agent and/or custodian, or (ii) that involve the Funding Agent (in its
individual capacity) or an Affiliate of the Administrative Agent as a
participant or counterparty. It is further acknowledged and agreed that the
Funding Agent (in its individual capacity) and/or such Affiliates may receive
advisory fees, referral fees and other compensation in connection with such
services that are distinct from the fees, charges and expenses of the Funding
Agent under or in connection with any of the Basic Agreements.
(f)(i) The Funding Agent, on behalf of the Secured Parties, shall
possess all right, title and interest in and to all funds on deposit from
time to time in the Pledged Accounts and in and to all proceeds thereof and
all such funds, investments, proceeds and income shall be part of the
Conveyed Property. Except as otherwise provided herein, the Pledged Accounts
shall be under the sole dominion and control of the Funding Agent for the
benefit of the Secured Parties. If, at any time, any of the Pledged Accounts
ceases to be an Eligible Deposit Account, the Funding Agent (or the Servicer
on its behalf) shall within five Business Days (or such longer period as to
which each Rating Agency and the Funding Agent may consent) establish a new
Pledged Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Pledged Account. In connection with the
foregoing, the Servicer agrees that, in the event that any of the Pledged
Accounts are not accounts with the Funding Agent, the Servicer shall notify
the Funding Agent in writing immediately upon any of such Pledged Accounts
ceasing to be an Eligible Deposit Account.
(ii) With respect to the Conveyed Property, the Funding Agent agrees and
Borrower agrees to cause that:
(A) any Conveyed Property that is held in deposit accounts
(within the meaning of the New York UCC) shall be held solely in
Eligible Deposit Accounts; and, except as otherwise provided herein,
each such Eligible Deposit Account shall be subject to the exclusive
custody and control of the Funding Agent, and the Funding Agent shall
have sole signature authority with respect thereto;
(B) prior to "Uniform Commercial Code-Investment Securities,"
1997 N.Y. Laws ch. 566 ("New York Revised Article 8") becoming
effective, any Conveyed Property or Collateral invested in Eligible
Investments that constitutes "instruments" within the meaning of
Section 9-105(1)(i) of the New York UCC (other than Certificated
Securities), Certificated Securities, or "uncertificated securities"
within the meaning of Article 8 of the New York
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UCC shall be delivered to the Funding Agent in accordance with the
appropriate paragraph of the definition of "Delivery";
(C) with respect to all other Conveyed Property or Collateral not
listed in subparagraph (B) above, and with respect to all Conveyed
Property or Collateral after New York Revised Article 8 becomes
effective, any Conveyed Property or Collateral invested in Eligible
Investments shall be delivered to the Funding Agent by causing a
financial institution then maintaining a Pledged Account (such
institution being referred to as a "Pledged Accounts Securities
Intermediary") to create a Security Entitlement (or a United States
Securities Entitlement, when applicable) in such Pledged Account in
favor of the Funding Agent on behalf of the Secured Parties with
respect to such Eligible Investment by indicating by book-entry that
such Eligible Investment has been credited to such Pledged Account;
(D) the Funding Agent shall only invest in Eligible Investments
which the applicable Pledged Account Securities Intermediary agrees to
credit to the applicable Pledged Account;
(E) any Conveyed Property or Collateral may be delivered: (i)
upon the instruction of the Funding Agent, by any additional or
alternative procedures as may hereafter become appropriate, in the
sole judgment of the Funding Agent, under applicable law or
regulations or the interpretation thereof to obtain and maintain a
first priority perfected security interest in any such Conveyed
Property or Collateral in favor of the Funding Agent on behalf of the
Secured Parties, or (ii) upon the request of the Borrower or the
Servicer and the consent of the Funding Agent, by any additional or
alternative procedures that will, in the written opinion of counsel,
create and maintain a first priority perfected security interest in
any such Conveyed Property or Collateral in favor of the Funding Agent
on behalf of the Secured Parties.
(g) The Servicer shall have the power, revocable by the Funding Agent, to
instruct the Funding Agent to make withdrawals and payments from the Pledged
Accounts for the purpose of permitting each of the Servicer and the Funding
Agent to carry out its respective duties hereunder.
(h) Notwithstanding anything else contained herein, the Funding Agent
agrees that, with respect to each Pledged Account, it will cause each
Securities Intermediary establishing such Pledged Account to enter into an
agreement pursuant to which the Funding Agent, for the benefit of the Secured
Parties, shall have "control" (within the meaning of Section 8-106 of the New
York UCC) of such Pledged Account and all securities, investment property,
financial assets, investments and other property credited thereto from time
to time; PROVIDED that each such agreement entered into between the Funding
Agent and any Securities Intermediary shall, in the opinion of special
counsel to the Secured Parties, be effective to perfect by "control" (within
the meaning of Section 8-106 of
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the New York UCC) the security interest of the Funding Agent for the benefit
of the Secured Parties in such Pledged Account and property credited thereto.
SECTION 6.2 RESERVE ACCOUNT.
(a) The Servicer shall cause the Funding Agent to establish and maintain
an Eligible Deposit Account (the "RESERVE ACCOUNT") with the Funding Agent,
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Secured Parties. On or prior to the
Effective Date, the Borrower shall transfer to the Funding Agent for deposit
into the Reserve Account an amount equal to the Reserve Account Initial Deposit.
(b) At all times during the term of the Facility, the Borrower shall
maintain the Minimum Reserve Account Balance. In the event that the amount on
deposit in the Reserve Account shall fall below the Minimum Reserve Account
Balance then as promptly as possible and in no event later than five Business
Days following such event (or, if sooner, the next contemplated Funding Date
pursuant to the Funding Agreement), the Borrower shall pay to the Funding Agent,
for deposit in the Reserve Account, the amount of any such shortfall in
immediately available funds (it being understood that the payment of any such
amount, being referred to as a "Subsequent Reserve Account Deposit", shall be a
condition precedent to the occurrence of any Funding on such contemplated
Funding Date).
(c) Prior to the occurrence of a Termination Event or the Commitment
Expiry Date (or the occurrence and continuation of a Pool Seasoning Event), on
any Distribution Date after application of Available Funds as set forth in
clauses (i) through (xii) of Section 6.8(a) hereof, funds on deposit in the
Reserve Account in excess of the higher of (i) the Minimum Reserve Account
Balance and (ii) 6% of the VFN Balance, shall be available for distribution to
the Borrower in accordance with Section 6.8 hereof. Further, in connection with
an Optional Prepayment of the VFN as described in Section 2.1(f) of the Funding
Agreement, and after payment of (i) all obligations to PARCO required in
connection with such prepayment and (ii) all other costs and expenses related to
such prepayment (and provided that no Termination Event is then in existence,
that no Pool Seasoning Event is or would be in existence after giving effect to
such Optional Prepayment and that the Commitment Expiry Date has not occurred),
then, funds in the Reserve Account in excess of the Minimum Reserve Account
Balance may be released to the Borrower in an amount determined as follows: the
product of (i) funds on deposit in the Reserve Account and (ii) a fraction, the
numerator of which is the Principal Balance of Receivables released in
connection with the prepayment that had been included in the Pool Balance, and
the denominator of which is the Pool Balance before giving effect to the
prepayment; PROVIDED that an amount at least equal to the Minimum Reserve
Account Balance shall be retained after such distribution.
Notwithstanding anything to the contrary herein, following the occurrence
of a Termination Event, any amounts on deposit in the Reserve Account shall be
transferred to the Collection Account and applied in accordance with Section
6.8(a).
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SECTION 6.3 CERTAIN REIMBURSEMENTS TO THE SERVICER. The Servicer will be
entitled to be reimbursed from amounts on deposit in the Collection Account with
respect to a Collection Period for amounts previously deposited in the
Collection Account but later determined by the Servicer to have resulted from
mistaken deposits or postings or checks returned for insufficient funds. The
amount to be reimbursed hereunder shall be paid to the Servicer on the related
Distribution Date pursuant to Section 6.8 upon certification by the Servicer of
such amounts and the provision of such information to the Funding Agent as may
be necessary in the opinion of the Funding Agent to verify the accuracy of such
certification. In the event that the Funding Agent has not received evidence
satisfactory to it of the Servicer's entitlement to reimbursement pursuant to
this Section, the Funding Agent shall give notice to such effect.
SECTION 6.4 APPLICATION OF COLLECTIONS. All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Repurchased Receivable),
payments by or on behalf of the Obligor, (other than Supplemental Servicing Fees
with respect to such Receivable, to the extent collected) shall be applied to
interest and principal in accordance with the Simple Interest Method.
All amounts collected that are payable to the Servicer as Supplemental
Servicing Fees hereunder shall be deposited in the Collection Account and paid
to the Servicer in accordance with Section 5.8.
SECTION 6.5 SERVICER ADVANCES.
In the event that, on any date, there are not sufficient Available Funds to
pay the sum of the amounts described in Section 6.8(a), clauses (ii)(B), (iv)
and (v), due and payable on such date, the Servicer shall advance an amount
equal to such amounts due and payable on such date (each, a "Servicer Advance"),
PROVIDED that the Servicer shall not make such an advance to the extent that it
does not reasonably expect, after reasonable inquiry, to be reimbursed for such
advance from the collections on the Receivables.
SECTION 6.6 WITHDRAWALS FROM THE RESERVE ACCOUNTS; SPECIAL WITHDRAWALS
FROM THE PLEDGED ACCOUNTS.
(a) In the event that the Servicer's Determination Date Certificate with
respect to any Determination Date shall state that the amount of the Available
Funds with respect to such Determination Date is less than the sum of the
amounts payable on the related Distribution Date pursuant to clauses (i) through
(xii) of Section 6.8(a), then, on the Business Day preceding the related
Distribution Date, the Funding Agent shall withdraw the amount of such
deficiency (to the extent of the funds available in the Reserve Account) from
the Reserve Account and deposit the same in the Collection Account.
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(b) Notwithstanding anything in this Agreement or any other Basic
Agreement to the contrary, to the extent that PARCO (or the Administrative Agent
on its behalf) notifies the Funding Agent with respect to any date other than a
Distribution Date that PARCO has insufficient funds on hand to pay any portion
of the Carrying Costs representing Accrued Discount payable on such date, then
the Funding Agent may immediately withdraw the necessary amount from the
Collection Account, and, to the extent there are not sufficient Available Funds
in the Collection Account may immediately withdraw the necessary amount from the
Reserve Account (to the extent of the funds available in the Reserve Account)
and deposit the same in the Collection Account for distribution to PARCO on such
date. The Funding Agent shall give notice to the Borrower and the Servicer by
telephone as promptly as practicable and in any event no later than the Business
Day following such withdrawal, such notice to be promptly confirmed in writing.
SECTION 6.7 ADDITIONAL DEPOSITS. The Servicer or the Seller, as
applicable, shall deposit or cause to be deposited in the Collection Account, on
the Determination Date following the date on which such obligations are due, the
aggregate Repurchase Obligation Amount with respect to Repurchased Receivables.
SECTION 6.8 DISTRIBUTIONS.
(a) No later than 11:00 a.m. New York time on each Distribution Date, the
Funding Agent shall cause to be made the following transfers and distributions
from the Collection Account in accordance with the following priorities (such
transfers and distributions to be based solely on the information contained in
the Servicer's Determination Date Certificate delivered on the related
Determination Date, SUBJECT HOWEVER (A) in the case of clause (x) below to the
effect of any intervening Funding, in which case the relevant information shall
be as updated in the relevant Servicer's Receivables Sale Date Certificate, and
(B) to the occurrence of an intervening Termination Event):
(i) to the Servicer, to repay any outstanding Servicer Advances;
(ii) on a PARI PASSU basis (A) to each of the Lockbox Bank, the
Custodian and the Independent Accountants, its respective accrued
and unpaid fees and expenses (in each case, only to the extent
such fees and expenses have not been previously paid when due by
the Servicer and provided that, so long as the Servicer is also
the Custodian, such fees shall not exceed $200,000 in the
aggregate in any calendar year) and (B) any amounts owing to the
Lockbox Bank as reimbursement for checks that have been credited
to the Lockbox Account and are not collectible in accordance with
the procedures specified in the Lockbox Agreement;
(iii) to the Servicer, the Base Servicing Fee and any Supplemental
Servicing Fees for the related Collection Period (as well as
any amounts specified in Section 6.3, to the extent the
Servicer has not reimbursed itself in
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respect of such amounts pursuant to Section 6.3 and to the
extent not retained by the Servicer), but LESS the total of any
fees and expenses to be paid to the Lockbox Bank(s), the
Custodian, the Independent Accountants or the Backup
Servicer pursuant to clauses (ii)(A) or (iv);
(iv) to the Backup Servicer (or any successor Servicer) to pay
servicing fees (in the case of the Backup Servicer, only to the
extent such fees have not been previously paid when due by the
Servicer);
(v) to the Funding Agent for the benefit of the Secured Parties, the
following amounts in the following priority:
(A) On a PARI PASSU basis, Accrued Discount and Accrued Interest
with respect to such Collection Period (after giving effect,
in the case of Accrued Discount, to any portion thereof paid
since the previous Distribution Date as contemplated by
Section 6.6(b) hereof);
(B) without duplication, all dealer fees due and owing with
respect to Commercial Paper issued to fund the Net
Investment during such Collection Period;
(C) any past due Discount and any past due interest due and
owing to the APA Banks specified in Section 2.4 of the
Funding Agreement (in each case, together with interest at
the default rate specified therein) with respect to prior
Collection Periods, on a PARI PASSU basis; and
(D) the Utilization Fee and the Facility Fee accrued from the
first day through the last day of such Collection Period,
whether or not such amounts are payable during such
Collection Period;
(vi) to the Funding Agent for the benefit of the Secured Parties, the
Targeted Monthly Principal Payment;
(vii) following any replacement of the Servicer, to the Backup
Servicer to pay the reasonable costs of transition,
including any required re-liening of the Financed Vehicles,
to the extent such costs have not been paid by the
terminated Servicer;
(viii) the costs of PARCO and the costs of the APA Banks with
respect to the operation of the Yield Protection Provision,
on a PARI PASSU basis;
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(ix) after the occurrence of the first to occur of the Commitment
Expiry Date or a Termination Event, or the occurrence and
continuation of a Pool Seasoning Event, the remainder to reduce
the VFN Balance;
(x) prior to the occurrence of the Commitment Expiry Date, a
Termination Event, or the occurrence and continuation of a Pool
Seasoning Event, the balance, if any, will first be deposited
into the Reserve Account until the Reserve Account is equal to
the greater of 6% of the VFN Balance and $2,450,000;
(xi) to the Funding Agent for the benefit of the Secured Parties, any
indemnity amounts owing by the Borrower pursuant hereto (other
than those described in clause (vii) above), payable on a PARI
PASSU basis to the Secured Parties;
(xii) without duplication, on a PARI PASSU basis, any other costs
and expenses due and owing to PARCO, the Funding Agent and
the APA Banks pursuant to this Agreement and the other Basic
Agreements that are accrued and unpaid during such
Collection Period, together with any unpaid costs and
expenses due and owing to PARCO, the Funding Agent and the
APA Banks from prior Collection Periods; and
(xiii) any remaining funds will then be paid to the Borrower;
PROVIDED, HOWEVER, that following the occurrence of a
Termination Event no such distribution shall be made to the
Borrower until after payment of any and all other amounts
owed by the Borrower to the Secured Parties under or in
connection with any Basic Agreement, including, without
limitation, any costs and expenses incurred in connection
with such Termination Event.
(b) In the event that the Collection Account is maintained with an
institution other than the Funding Agent, the Servicer shall instruct and cause
such institution to make all deposits and distributions pursuant to Section
6.8(a) on the related Distribution Date.
(c) on each Distribution Date, the Funding Agent shall send to each
Secured Party the statement provided to the Funding Agent by the Servicer
pursuant to Section 5.9 hereof with respect to such Distribution Date.
(d) In the event that any withholding tax is imposed on the Borrower's
payment (or allocations of income) to a Secured Party, the Borrower shall be
obligated to indemnify such Secured Party (or Parties) for such taxes pursuant
to Article IV of the Funding Agreement. Without limiting the obligations of the
Borrower under the Funding Agreement, or the rights of the Secured Parties in
the event of the Borrower's failure to make full and timely payment of any
amounts owing pursuant
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to Article IV thereof, the Funding Agent is hereby authorized and directed to
retain from amounts otherwise distributable to the Secured Parties sufficient
funds for the payment of any tax that is legally owed by the Borrower. The
amount of any withholding tax imposed with respect to a Secured Party shall
be treated as cash distributed to such Secured Party at the time it is
withheld by the Borrower or the Funding Agent and remitted to the appropriate
taxing authority. If there is a possibility that withholding tax is payable
with respect to a distribution (such as a distribution to a non-US Secured
Party), the Funding Agent may in its sole discretion withhold such amounts in
accordance with this clause (d). In the event that a Secured Party wishes to
apply for a refund of any such withholding tax, the Funding Agent shall
reasonably cooperate with such Secured Party in making such claim so long as
such Secured Party agrees to reimburse the Funding Agent for any
out-of-pocket expenses incurred.
(e) Distributions required to be made to Secured Parties on any
Distribution Date shall be made in immediately available funds, to the account
of the Funding Agent for distribution to such Secured Party at a bank or other
entity having appropriate facilities therefor.
(f) Subject to Section 6.1 and this section, monies received by the
Funding Agent hereunder need not be segregated in any manner except to the
extent required by law and may be deposited under such general conditions as may
be prescribed by law, and the Funding Agent shall not be liable for any interest
thereon.
ARTICLE VII
THE SELLER
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller makes
the following representations on which the Borrower is deemed to have relied in
acquiring the Receivables and on which the Secured Parties have relied in
advancing funds to the Borrower under the Funding Agreement. The
representations speak as of the execution and delivery of this Agreement and as
of each Receivables Sale Date with respect to the Receivables sold on such date,
and shall survive the sale of the Receivables to the Borrower and the pledge
thereof to the Funding Agent on behalf of the Secured Parties.
(a) ORGANIZATION AND GOOD STANDING. The Seller has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property sold to the Borrower.
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions
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where the failure to do so would materially and adversely affect Seller's
ability to sell the Receivables and the Other Conveyed Property to the
Borrower pursuant to this Agreement, or the validity or enforceability of the
Receivables and the Other Conveyed Property or to perform Seller's
obligations hereunder and under the other Basic Agreements.
(c) POWER AND AUTHORITY. The Seller has the power and authority to
execute and deliver this Agreement and the other Basic Agreements to which it is
a party and to carry out its terms and their terms, respectively; the Seller has
full power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with the Borrower by
it and has duly authorized such sale and assignment to the Borrower by all
necessary corporate action; and the execution, delivery and performance of this
Agreement and the other Basic Agreements to which the Seller is a party have
been duly authorized by the Seller by all necessary corporate action.
(d) VALID SALE, BINDING OBLIGATIONS. This Agreement effects a valid sale,
transfer and assignment of the Receivables and the Other Conveyed Property,
enforceable against the Seller and creditors of and purchasers from the Seller;
and this Agreement and the other Basic Agreements to which the Seller is a
party, when duly executed and delivered, shall constitute legal, valid and
binding obligations of the Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) ERISA. The Seller is in compliance in all material respects with
ERISA and there is no lien of the Pension Benefit Guaranty Corporation on any of
the Receivables or Other Conveyed Property.
(f) NOT AN INVESTMENT COMPANY. The Seller is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or is
exempt from all provisions of such Act.
(g) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Basic Agreements to which the Seller is a party and
the fulfillment of the terms of this Agreement and the other Basic Agreements to
which the Seller is a party shall not conflict with, result in any breach of any
of the terms and provisions of or constitute (with or without notice, lapse of
time or both) a default under the certificate of incorporation or by-laws of the
Seller, or any indenture, agreement, mortgage, deed of trust or other instrument
to which the Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.
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(h) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Seller's knowledge, threatened, against the Seller, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of the other Basic Agreements,
(B) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any of the other Basic Agreements, (C) seeking any
determination or ruling that might materially and adversely affect the
Receivables or the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any of the other Basic
Agreements, (D) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the transactions contemplated by the
Basic Agreements, or (E) involving any Receivable.
(i) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller is
at 200 Bailey Avenue, Fort Worth, Texas.
(j) NO CONSENTS. The Seller is not required to obtain the consent of any
other party or any consent, license, approval or authorization, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement which has not already been obtained.
SECTION 7.2 CORPORATE EXISTENCE. (a) During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, any Receivables Sale
Agreement, the other Basic Agreements and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain corporate records and books of account
separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the Seller shall
not commingle its assets and funds with those of its Affiliates;
(iii) the Seller shall hold such appropriate meetings of its Board
of Directors as are necessary to authorize all the Seller's corporate
actions required by law to be authorized by the Board of Directors, shall
keep minutes of such meetings and of meetings of its stockholders) and
observe all other customary corporate formalities (and any successor Seller
not a corporation shall observe similar procedures in accordance with its
governing documents and applicable law);
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(iv) the Seller shall at all times hold itself out to the public under
the Seller's own name as a legal entity separate and distinct from its
Affiliates; and
(v) all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's length basis.
(c) During the term of this Agreement, the Seller shall take no action
that would cause the Borrower to violate any of its covenants under the Basic
Agreements or that otherwise would be likely to have a material adverse effect
on the Borrower and/or the Secured Parties.
SECTION 7.3 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Borrower, the
Funding Agent, the Secured Parties, the Backup Servicer and the Servicer (if
other than the Seller) from and against any taxes that may at any time be
asserted against any such Person with respect to, and as of the date of, each
sale of Receivables to the Borrower including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege or license
taxes (but not including any taxes asserted with respect to ownership of the
Receivables or federal or other income taxes, including franchise taxes measured
by net income) and all costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Borrower, the
Funding Agent, the Secured Parties, the Backup Servicer and the Servicer (if
other than the Seller) from and against any loss, liability or expense incurred
by reason of the Seller's willful malfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
Indemnification under this Section shall survive the resignation or removal
of the Funding Agent and the termination of this Agreement and shall include all
reasonable fees and expenses of counsel and other expenses of litigation. If
the Seller shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Seller, without interest.
SECTION 7.4 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; PROVIDED, HOWEVER, that (i) the Seller shall have received the
written consent of the Borrower and the Required Banks prior to entering into
any such
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transaction, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 4.1 shall have been
breached and (if AFS is the Servicer) no Servicer Termination Event, and no
event which, after notice or lapse of time, or both, would become a Servicer
Termination Event shall have happened and be continuing, (iii) the Seller
shall have delivered to the Funding Agent and the Rating Agencies an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Funding Agent an
Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
relating to the sale of the Receivables from the Seller to the Borrower have
been executed and filed that are necessary fully to preserve and protect the
interest of the Borrower in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. For the avoidance of doubt, it is understood that the execution of
the foregoing agreement of assumption and compliance with clauses (i) through
(v) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 7.5 LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller and
any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Agreement. The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
ARTICLE VIII
THE SERVICER
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF AFS, IN ITS CAPACITY AS
SERVICER. AFS makes the following representations and warranties on which the
Borrower is deemed to have relied in acquiring the Receivables and on which the
Secured Parties have relied in advancing funds to the Borrower under the Funding
Agreement. The representations speak as of the execution and delivery of this
Agreement and as of each Receivables Sale Date with respect to the Receivables
sold on such date, and shall survive the sale of the Receivables to the Borrower
and the pledge thereof to the Funding Agent on behalf of the Secured Parties.
(i) ORGANIZATION AND GOOD STANDING. AFS has been duly organized and
is validly existing and in good standing under the laws of its jurisdiction
of organization, with power, authority and legal right to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and
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had at all relevant times, and now has, power, authority and legal right to
enter into and perform its obligations under this Agreement;
(ii) DUE QUALIFICATION. AFS is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing
of the Receivables as required by this Agreement) requires or shall require
such qualification;
(iii) POWER AND AUTHORITY. AFS has the power and authority to
execute and deliver this Agreement and the other Basic Agreements to which
it is a party and to carry out its terms and their terms, respectively, and
the execution, delivery and performance of this Agreement and the other
Basic Agreements to which it is a party have been duly authorized by the
Servicer by all necessary corporate action;
(iv) BINDING OBLIGATION. This Agreement and the other Basic
Agreements to which AFS is a party shall constitute legal, valid and
binding obligations of AFS enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(v) ERISA. AFS is in compliance in all material respects with ERISA
and there is no lien of the Pension Benefit Guaranty Corporation on any of
the Receivables or Other Conveyed Property;
(vi) NOT AN INVESTMENT COMPANY. AFS is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or is
exempt from all provisions of such Act;
(vii) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the other Basic Agreements to which AFS is a party,
and the fulfillment of the terms of this Agreement and the other Basic
Agreements to which AFS is a party, shall not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
incorporation or bylaws of AFS, or any indenture, agreement, mortgage, deed
of trust or other instrument to which AFS is a party or by which it is
bound, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement, or
violate any law, order, rule or regulation applicable to AFS of any court
or of any federal or state regulatory body,
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administrative agency or other governmental instrumentality having
jurisdiction over AFS or any of its properties;
(viii) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the knowledge of AFS threatened, against AFS, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over AFS or its properties
(A) asserting the invalidity of this Agreement or any of the other Basic
Agreements, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
Agreements, (C) seeking any determination or ruling that might materially
and adversely affect the performance by AFS of its obligations under, or
the validity or enforceability of, this Agreement or any of the Basic
Agreements or (D) seeking to adversely affect the federal income tax or
other federal, state or local tax attributes of the transactions
contemplated by the Basic Agreements;
(ix) NO CONSENTS. AFS is not required to obtain the consent of any
other party or any consent, license, approval or authorization, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement which has not already been obtained.
SECTION 8.2 LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer (in its capacity as such) shall be liable hereunder only
to the extent of the obligations in this Agreement specifically undertaken by
the Servicer and the representations made by the Servicer.
(b) The Servicer shall defend, indemnify and hold harmless the Borrower,
the Funding Agent, the Secured Parties, the Backup Servicer, their respective
officers, directors, agents and employees, from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation arising out of or resulting from
the use, ownership or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle.
(c) The Servicer shall indemnify, defend and hold harmless the Borrower,
the Funding Agent, the Secured Parties, the Backup Servicer, their respective
officers, directors, agents and employees from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon the
Borrower, the Funding Agent, the Backup Servicer or the Secured Parties by
reason of the breach of this Agreement by the Servicer, the negligence,
misfeasance, or bad faith of the Servicer in the performance of its duties under
this Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement.
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(d) Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
The indemnification obligations of the Servicer set forth in this Section 8.2
shall survive the termination of this Agreement and, with respect to any
Servicer, shall survive the termination of such Servicer with respect to any act
or omission that occurs prior to such Servicer's termination.
SECTION 8.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF THE SERVICER OR BACKUP SERVICER.
(a) For so long as AFS is the Seller and the Servicer, in the event of any
conflict between this Section 8.3 and Section 7.4, this Section 8.3 shall
control. Any Person (A) into which the Servicer may be merged or consolidated,
(B) which may result from any merger or consolidation to which the Servicer
shall be a party or (C) which may succeed to the properties and assets of the
Servicer substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Servicer
under this Agreement, shall be the successor to the Servicer hereunder without
the execution or filing of any document or any further act by any of the parties
to this Agreement; PROVIDED, HOWEVER, that the Servicer shall not merge or
consolidate with any other person, convey, transfer or lease substantially all
its assets as an entirety to another Person, or permit any other Person to
become the successor to the Servicer's business except as expressly provided in
this Section 8.3.
(b) The Servicer shall be permitted to merge or consolidate with any other
person, convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit another Person to become the successor to the
Servicer's business; provided (i) that such Person is a direct or indirect
wholly-owned subsidiary of AmeriCredit Corp.; and (ii) that, after giving effect
to such merger, consolidation, conveyance, transfer, lease or succession, the
successor or surviving entity shall be capable of fulfilling the duties of the
Servicer contained in this Agreement in the reasonable judgment of the Funding
Agent.
(c) Except as described in clause (b) above, the Servicer shall not merge
or consolidate with any other person, convey, transfer or lease substantially
all its assets as an entirety to another Person, or permit any other Person to
become the successor to the Servicer's business unless: (i) the Servicer shall
have received the written consent of the Funding Agent and the Borrower prior to
entering into any such transaction, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 5.6 shall
have been breached and no Servicer Termination Event, and no event which, after
notice or lapse of time, or both, would become a Servicer Termination Event
shall have happened and be continuing, (iii) the Servicer shall have delivered
to the Funding Agent and the Rating Agencies an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iv) the Rating Agency Condition shall have
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been satisfied with respect to such transaction and (v) the Servicer shall
have delivered to the Funding Agent an Opinion of Counsel stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto that are otherwise required
hereunder to be filed by the Servicer have been executed and filed that are
necessary fully to preserve and protect the interest of the Borrower and the
Funding Agent, respectively, in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. Notwithstanding anything herein to the contrary, the execution
of the foregoing agreement of assumption and compliance with clauses (i),
(ii), (iii), (iv) and (v) above shall be conditions to the consummation of
the transactions referred to in clauses (a) or (c) above.
(d) Any corporation (i) into which the Backup Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer, or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Backup Servicer under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding; PROVIDED, HOWEVER, that nothing contained herein shall
be deemed to release the Backup Servicer from any obligation.
SECTION 8.4 LIMITATION ON LIABILITY OF THE SERVICER AND THE BACKUP
SERVICER. (a) Neither the Servicer, the Backup Servicer nor any of the
directors or officers or employees or agents of the Servicer or Backup Servicer
shall be under any liability to the Borrower or the Secured Parties, except as
provided in this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement; PROVIDED, HOWEVER, that this
provision shall not protect the Servicer, the Backup Servicer or any such person
against any liability that would otherwise be imposed by reason of a breach of
this Agreement or willful misfeasance, bad faith or negligence in the
performance of duties; PROVIDED FURTHER that this provision shall not affect any
liability to indemnify the Funding Agent, the Secured Parties and the Borrower
for costs, taxes, expenses, claims, liabilities, losses or damages paid by the
Funding Agent, the Secured Parties and the Borrower. The Servicer, the Backup
Servicer and any director, officer, employee or agent of the Servicer or Backup
Servicer may rely in good faith on the written advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
(b) Notwithstanding anything herein to the contrary, the Backup Servicer
shall not be liable for any obligation of the Servicer contained in this
Agreement, and the Funding Agent, the Borrower, the Seller, and the Secured
Parties shall look only to the Servicer to perform such obligations.
SECTION 8.5 DELEGATION OF DUTIES. The Servicer may delegate duties
under this Agreement to an Affiliate of the Servicer with the prior written
consent of the Borrower, the Funding
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Agent (acting at the direction of the Required Banks) and the Backup
Servicer. The Servicer also may at any time perform through sub-contractors
the specific duties of (i) repossession of Financed Vehicles, (ii) tracking
Financed Vehicles' insurance and (iii) pursuing the collection of deficiency
balances on certain Delinquent and Defaulted Receivables, in each case,
without the consent of the Funding Agent or the Borrower and may perform
other specific duties through such sub-contractors in accordance with
Servicer's customary servicing policies and procedures, with the prior
consent of the Funding Agent and the Borrower; PROVIDED, HOWEVER, that no
such delegation or sub-contracting duties by the Servicer shall relieve the
Servicer of its responsibility with respect to such duties. Neither AFS or
any party acting as Servicer hereunder shall appoint any subservicer
hereunder without the prior written consent of the Funding Agent (acting at
the direction of the Required Banks), the Borrower, and the Backup Servicer.
SECTION 8.6 SERVICER AND BACKUP SERVICER NOT TO RESIGN. Subject to the
provisions of Section 8.3, neither the Servicer nor the Backup Servicer shall
resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except upon a determination that by reason of a
change in legal requirements the performance of its duties under this
Agreement would cause it to be in violation of such legal requirements in a
manner which would have a material adverse effect on the Servicer or the
Backup Servicer, as the case may be, and the Required Banks and the Borrower
do not elect to waive the obligations of the Servicer or the Backup Servicer,
as the case may be, to perform the duties which render it legally unable to
act or to delegate those duties to another Person. Any such determination
permitting the resignation of the Servicer or Backup Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered and acceptable to
the Funding Agent and the Borrower. No resignation of the Servicer shall
become effective until the Backup Servicer or an entity acceptable to the
Funding Agent (at the direction of the Required Banks) and the Borrower shall
have assumed the responsibilities and obligations of the Servicer. No
resignation of the Backup Servicer shall become effective until an entity
acceptable to the Funding Agent (at the direction of the Required Banks) and
the Borrower shall have assumed the responsibilities and obligations of the
Backup Servicer; PROVIDED, HOWEVER, that in the event a successor Backup
Servicer is not appointed within 60 days after the Backup Servicer has given
notice of its resignation and has provided the Opinion of Counsel required by
this Section 8.6, the Backup Servicer may petition a court for its removal.
ARTICLE IX
DEFAULT
SECTION 9.1 SERVICER TERMINATION EVENT. For purposes of this Agreement,
each of the following shall constitute a "Servicer Termination Event":
(a) Any failure by the Servicer to deliver to the Funding Agent for
distribution to the Secured Parties any proceeds or payment required to be so
delivered under the terms of this Agreement that continues unremedied for a
period of two Business Days (one Business Day with
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respect to payment of Repurchase Obligation Amounts) after written notice is
received by the Servicer from the Funding Agent or after discovery of such
failure by a Responsible Officer of the Servicer;
(b) Failure by the Servicer (i) to deliver to the Funding Agent the
Servicer's Determination Date Certificate by the fourth Business Day prior to
the Distribution Date, which failure continues unremedied as of the close of
business on the first to occur of the next Business Day after written notice is
received by the Servicer from the Funding Agent or the second Business Day prior
to the Distribution Date, or (ii) to observe its covenants and agreements set
forth in Section 8.3(a), (b) or (c);
(c) Failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement or any
other Basic Agreement, which failure continues unremedied for a period of 30
days after knowledge thereof by the Servicer or after the date on which written
notice of such failure shall have been given to the Servicer by the Funding
Agent (acting at the direction of the Required Banks) or the Borrower;
(d) Any representation, warranty or statement of the Servicer made in this
Agreement or any other Basic Agreement or in any certificate, report or other
writing delivered pursuant hereto or thereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made, and, within
30 days after knowledge thereof by the Servicer or after written notice thereof
shall have been given to the Servicer by the Funding Agent or the Borrower, the
circumstances or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured;
(e) The occurrence of an Insolvency Event with respect to the Servicer; or
(f) Without duplication of any of the foregoing, a Termination Event shall
have occurred and be continuing.
SECTION 9.2 CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a Servicer
Termination Event shall occur and be continuing, the Funding Agent or the
Required Banks or the Borrower (so long as no other Termination Event shall have
then occurred and remain continuing), by notice given in writing to the Servicer
(and to the Funding Agent if given by the Required Banks), may terminate all of
the rights and obligations of the Servicer under this Agreement. On or after
the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement
automatically shall pass to, be vested in and become obligations and
responsibilities of the Backup Servicer (or such other successor Servicer
appointed by the Funding Agent at the direction of the Required Banks, or by the
Borrower with the consent of the Required Banks); PROVIDED, HOWEVER, that the
successor Servicer shall have no liability with respect to any obligation which
was required to be performed by the terminated Servicer prior to the date that
the successor Servicer becomes the Servicer or any claim of a third party based
on any alleged action or inaction of the terminated Servicer. The successor
Servicer is authorized and empowered by this Agreement to execute and deliver,
on behalf of the terminated Servicer, as attorney-in-fact or
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otherwise, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the sale and
endorsement of the Receivables and the Other Conveyed Property and related
documents to show the Borrower as lienholder or secured party on the related
Lien Certificates, or otherwise. The terminated Servicer agrees to cooperate
with the successor Servicer in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in the Collection Account or thereafter received with respect to
the Receivables and the delivery to the successor Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer tape in readable
form as of the most recent Business Day containing all information necessary
to enable the successor Servicer or a successor Servicer to service the
Receivables and the Other Conveyed Property. If requested by the Funding
Agent or by the Borrower with the consent of the Funding Agent, the successor
Servicer shall terminate the Lockbox Agreement and direct the Obligors to
make all payments under the Receivables directly to the successor Servicer
(in which event the successor Servicer shall process such payments in
accordance with Section 4.2(e)), or to a lockbox established by the successor
Servicer at the direction of the Funding Agent or by the Borrower with the
consent of the Funding Agent, at the successor Servicer's expense. The
terminated Servicer shall grant the Funding Agent, the Borrower, the
successor Servicer and the Required Banks reasonable access to the terminated
Servicer's premises and to its equipment, systems and personnel, at the
terminated Servicer's expense.
SECTION 9.3 APPOINTMENT OF SUCCESSOR. (a) On and after the time the
Servicer receives a notice of termination pursuant to Section 9.2, or upon
the resignation of the Servicer pursuant to Section 8.6, the Backup Servicer
(unless the Funding Agent, at the direction of the Required Banks or the
Borrower with the consent of the Required Banks, shall have exercised its
option pursuant to Section 9.3 (b) to appoint an alternate successor
Servicer) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for in this Agreement, and shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and termination
provisions relating thereto placed on the Servicer by the terms and
provisions of this Agreement except as otherwise stated herein. The Funding
Agent and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effect any such succession. If a
successor Servicer is acting as Servicer hereunder, it shall be subject to
termination under Section 9.2 upon the occurrence of any Servicer Termination
Event applicable to it as Servicer.
(b) The Funding Agent, at the direction of the Required Banks, may
exercise at any time its right to appoint as successor to the Servicer a Person
other than the Person serving as Backup Servicer at the time, and shall have no
liability to AFS, the Seller, the Person then serving as Backup Servicer, any
Secured Party or any other Person if it does so. Notwithstanding the above, if
the Backup Servicer shall be legally unable or unwilling to act as Servicer, the
Backup Servicer, the Funding Agent, acting at the direction of the Required
Banks, or the Borrower with the consent of the Required Banks may petition a
court of competent jurisdiction to appoint any Eligible Servicer
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as the successor to the Servicer. Pending appointment pursuant to the
preceding sentence, the Backup Servicer shall act as successor Servicer
unless it is legally unable to do so, in which event the outgoing Servicer
shall continue to act as Servicer until a successor has been appointed and
accepted such appointment. Subject to Section 8.6, no provision of this
Agreement shall be construed as relieving the Backup Servicer of its
obligation to succeed as successor Servicer upon the termination of the
Servicer pursuant to Section 9.2 or the resignation of the Servicer pursuant
to Section 8.6. If upon the termination of the Servicer pursuant to Section
9.2 or the resignation of the Servicer pursuant to Section 8.6, the Funding
Agent, acting at the direction of the Required Banks, or the Borrower with
the consent of the Required Banks appoints a successor Servicer other than
the Backup Servicer, the Backup Servicer shall not be relieved of its duties
as Backup Servicer hereunder.
(c) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise, including,
without limitation, any Supplemental Servicing Fee) as the Servicer would
have been entitled to under this Agreement if the Servicer had not resigned
or been terminated hereunder. If any successor Servicer is appointed as a
result of the Backup Servicer's refusal (in breach of the terms of this
Agreement) to act as Servicer although it is legally able to do so, the
Funding Agent, the Borrower, and such successor Servicer may agree on
reasonable additional compensation to be paid to such successor Servicer by
the Backup Servicer, which additional compensation shall be paid by such
breaching Backup Servicer in its individual capacity and solely out of its
own funds. If any successor Servicer is appointed for any reason other than
the Backup Servicer's refusal to act as Servicer although legally able to do
so, the Funding Agent, the Borrower (so long as no Termination Event other
than a Servicer Termination Event shall have then occurred and remain
continuing), and such successor Servicer may agree on additional compensation
to be paid to such successor Servicer, subject to satisfaction of the Rating
Agency Condition, which additional compensation shall be payable as provided
in the Section 6.8 hereof. In addition, any successor Servicer shall be
entitled to reasonable transition expenses incurred in acting as successor
Servicer.
SECTION 9.4 NOTIFICATION TO SECURED PARTIES. Upon any termination of, or
appointment of a successor to, the Servicer, the Funding Agent shall give prompt
written notice thereof to each Secured Party, to the Borrower, and to the Rating
Agencies.
SECTION 9.5 WAIVER OF PAST DEFAULTS. The Required Banks, or the Borrower
with the consent of the Required Banks may waive any default by the Servicer in
the performance of its obligations hereunder and its consequences. Upon any
such waiver of a past default, such default shall cease to exist, and any
Servicer Termination Event arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement; PROVIDED, HOWEVER, that no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE X
ADMINISTRATIVE DUTIES OF THE SERVICER
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SECTION 10.1 ADMINISTRATIVE DUTIES.
(a) DUTIES WITH RESPECT TO THE BORROWER.
(i) Notwithstanding anything in this Agreement or any of the Basic
Agreements to the contrary, the Servicer shall be responsible for promptly
notifying, in writing, the Borrower and the Funding Agent in the event that any
withholding tax is imposed on the Borrower's payments (or allocations of income)
to any Secured Party. Any such notice shall be in writing and specify the
amount of any withholding tax required to be withheld by the Funding Agent
pursuant to such provision.
(ii) The Servicer shall perform the duties of the Servicer specified herein
and any other duties expressly required to be performed by the Servicer under
any other Basic Agreement.
(iii) Notwithstanding anything to the contrary in this Agreement, except
as expressly provided herein or in the other Basic Agreements, the Servicer,
in its capacity hereunder, shall not be obligated to, and shall not, (1) take
any action that the Borrower directs the Servicer not to take on its behalf
or (2) in connection with its duties hereunder assume any indemnification
obligation of any other Person.
SECTION 10.2 RECORDS. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Borrower
at any time during normal business hours.
SECTION 10.3 ADDITIONAL INFORMATION TO BE FURNISHED TO THE BORROWER The
Servicer shall furnish to the Borrower from time to time such additional
information regarding the Collateral as the Borrower shall reasonably request.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 AMENDMENT. This Agreement may be amended from time to time
by the parties hereto, with the consent of the Funding Agent (such consent not
to be unreasonably withheld), but without the consent of any of the Secured
Parties, to cure any ambiguity, to correct or supplement any provisions in this
Agreement, to comply with any changes in the Uniform Commercial Code, or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement
or the other Basic Agreements or the transactions contemplated hereby or
thereby; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Funding Agent, adversely affect in any
material respect the interests of any Secured Party.
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This Agreement may also be amended from time to time by the parties
hereto, with the consent of the Funding Agent (as directed by the Required
Banks) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Secured Parties; PROVIDED, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Secured Parties, (b) reduce the aforesaid percentage of the outstanding
principal amount of the VFN, the Holders of which are required to consent to
any such amendment, (c) amend this Section, or (d) increase the funding
amount of the VFN, without the consent of all the Secured Parties.
Promptly after the execution of any such amendment or consent, the Funding
Agent shall furnish written notification of the substance of such amendment or
consent to each Secured Party and the Rating Agencies.
It shall not be necessary for the consent of Secured Parties pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Secured Parties provided for in this Agreement) and of evidencing the
authorization of any action by Secured Parties shall be subject to such
reasonable requirements as the Funding Agent may prescribe.
Prior to the execution of any amendment to this Agreement, the Funding
Agent shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and the Opinion of Counsel referred to in the first paragraph of this
Section 11.1 has been delivered. The Funding Agent, the Borrower, and the
Backup Servicer may, but shall not be obligated to, enter into any such
amendment which affects the Borrower's, the Funding Agent's or the Backup
Servicer's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 11.2 PROTECTION OF TITLE. (a) The Seller shall execute and file
such financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Borrower in the
Conveyed Property and in the proceeds thereof. The Seller shall deliver (or
cause to be delivered) to the Borrower and the Funding Agent file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Without limiting any other provision of this Agreement, neither the
Seller nor the Servicer shall change its name, identity or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402 (7) of the Relevant UCC, unless
it shall have given the Funding Agent and the Borrower at least 15 days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or
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<PAGE>
continuation statements. Promptly upon such filing, the Seller or the
Servicer, as the case may be, shall deliver an Opinion of Counsel in form and
substance reasonably satisfactory to the Funding Agent, stating either (A)
all financing statements and continuation statements have been executed and
filed that are otherwise required hereunder to be filed by the Seller or the
Servicer, as applicable, that are necessary fully to preserve and protect the
interest of the Borrower in the Receivables, and reciting the details of such
filings or referring to prior opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest.
(c) Each of the Seller and the Servicer shall have an obligation to give
the Funding Agent and the Borrower at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the Relevant UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. The
Servicer shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States of
America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Borrower,
the Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly that the Borrower owns such
Receivable and that such Receivable has been pledged by the Borrower to the
Funding Agent for the benefit of the Secured Parties. Indication of the
Borrower's ownership of a Receivable shall be deleted from or modified on the
Servicer's computer systems when, and only when, the related Receivable shall
have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the Seller
or the Servicer, as applicable, shall give to such prospective purchaser, lender
or other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Borrower and has been pledged by the Borrower to the Funding Agent
for the benefit of the Secured Parties.
(g) Upon request, the Servicer shall furnish to the Funding Agent, within
five Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Conveyed Property, together with a
reconciliation of such list to the Schedule of Receivables and to each of the
Servicer's Determination Date Certificates furnished before such request.
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SECTION 11.3 NOTICES. All demands, notices and communications upon or
to the Seller, the Servicer, the Borrower, the Funding Agent, the Secured
Parties or the Rating Agencies under this Agreement shall be in writing,
personally delivered, or mailed by overnight courier, express mail or
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt by such Person at its address specified in Annex A
hereto.
SECTION 11.4 ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns. Notwithstanding anything to the contrary contained herein, except as
provided in Sections 7.4 and 8.3 and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement may not be
assigned by the Seller or the Servicer without the prior written consent of the
Funding Agent, the Borrower, and the Backup Servicer.
SECTION 11.5 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the parties hereto and their respective
successors and permitted assigns. Except as expressly stated otherwise herein,
any right of the Funding Agent to direct, appoint, consent to, approve of, or
take any action under this Agreement, shall be a right exercised by the Funding
Agent in its sole and absolute discretion. The Funding Agent may disclaim any
of its rights and powers under this Agreement. Nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.6 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7 SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8 HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.9 ASSIGNMENT TO FUNDING AGENT. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Borrower to the Funding Agent for the benefit of the Secured
Parties of all right, title and interest of the Borrower in, to and under the
Receivables and Other Conveyed Property, and/or the assignment of any or all of
the Borrower's rights and obligations hereunder to the Funding Agent. All
rights of the Borrower hereunder may be exercised by the Funding Agent for the
benefit of the Secured Parties or their assignees to the extent of their
respective rights pursuant to such assignments. Any assignee
46
<PAGE>
(including, but not limited to, any Secured Party) is hereby intended by the
parties hereto to be a third-party beneficiary of this Agreement.
SECTION 11.10 CHASE ROLES; LIMITATION OF LIABILITY. The parties expressly
acknowledge and consent to The Chase Manhattan Bank acting in the capacities of
Funding Agent, Backup Servicer, Administrative Agent and APA Bank. The Chase
Manhattan Bank may, in any such or other capacities, discharge its separate
functions fully, without hinderance or regard to conflict of interest
principles, duty of loyalty principles or other breach of fiduciary duties to
the extent that any such conflict or breach arises from the performance by The
Chase Manhattan Bank of express duties set forth in this Agreement or in any
other Basic Agreement in any of such capacities, all of which defenses, claims
or assertions are hereby expressly waived by the other parties hereto and the
Secured Parties except in the case of gross negligence and willful misconduct by
The Chase Manhattan Bank. Without limiting any other provision hereof, the
parties further expressly acknowledge and agree that in no event shall The Chase
Manhattan Bank be liable under or in connection with this Agreement or any other
Basic Agreement for indirect, special or consequential losses or damages of any
kind, including lost profits, even if advised of the possibility thereof and
regardless of the form of action by which such losses or damages may be claimed.
SECTION 11.11 NON-PETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the Servicer, the Seller, the Funding Agent, and
each Secured Party shall not, prior to the date which is one year and one day
after the later of (i) termination of this Agreement with respect to the
Borrower and (ii) the payment in full of all obligation due and owing by the
Borrower to the Funding Agent and the Secured Parties under the Basic
Agreements, acquiesce, petition or otherwise invoke or cause the Borrower to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Borrower under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Borrower or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Borrower.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Funding Agent, and each Secured Party shall not, prior to the date that is
one year and one day after the termination of this Agreement with respect to the
Seller, acquiesce to, petition or otherwise invoke or cause the Seller to invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Seller under any federal or state bankruptcy,
insolvency or similar law, appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
(c) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by The Chase Manhattan Bank, not in
its individual capacity but solely in its capacities as Funding Agent and as
Backup Servicer and in no event shall The Chase Manhattan Bank have any
liability for the representations, warranties, covenants, agreements or other
obligations
47
<PAGE>
of the Borrower hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Borrower.
SECTION 11.12 INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Borrower, the Funding Agent or the Backup
Servicer with respect to the manner in which it accomplishes the performance of
its obligations hereunder. Unless expressly authorized by this Agreement, the
Servicer shall have no authority to act for or represent the Borrower in any way
and shall not otherwise be deemed an agent of the Borrower.
SECTION 11.13 NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Servicer or the Borrower as members of any partnership,
joint venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them and express, implied or
apparent authority to incur any obligation or liability on behalf of the others.
SECTION 11.14 CONSENTS TO JURISDICTION. Each of the parties hereto
irrevocably submits to the jurisdiction of the United States District Court for
the Southern District of New York, any court in the State of New York located in
the city and county of New York, and any appellate court from any thereof, in
any action, suit or proceeding brought against it and related to or in
connection with this Security Agreement, the other Basic Agreements or the
transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. To the extent permitted by applicable law,
each of the parties hereby waives and agrees not to assert by way of motion, as
a defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Security Agreement or any of
the other Basic Agreements or the subject matter hereof or thereof may not be
litigated in or by such courts. The Borrower hereby irrevocably appoints and
designates The Prentice-Hall Corporation System, 500 Central Avenue, Albany, New
York 12206-2290 as its true and lawful attorney and duly authorized agent for
acceptance of service of legal process. The Borrower agrees that service of
such process upon such Person shall constitute personal service of such process
upon it. Nothing contained in this Security Agreement shall limit or affect the
rights of any party hereto to serve process in any other manner permitted by law
or to start legal proceedings relating to any of the Basic Agreements against
the Seller, the Servicer, the Borrower or their respective property in the
courts of any jurisdiction.
SECTION 11.15 TRIAL BY JURY WAIVED. EACH OF THE PARTIES HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH THIS SECURITY
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AGREEMENT, ANY OF THE OTHER BASIC AGREEMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER OR THEREUNDER. EACH OF THE PARTIES HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT
AND THE OTHER BASIC AGREEMENTS TO WHICH IT IS A PARTY, BY AMONG OTHER THINGS,
THIS WAIVER.
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and the year first above written.
CP FUNDING CORP., Borrower
by______________________________
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
Seller
by______________________________
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer
by______________________________
Name: Preston A. Miller
Title: Senior Vice President
and Treasurer
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely
as Backup Servicer
by______________________________
Name:
<PAGE>
Title:
THE CHASE MANHATTAN BANK, as Funding
Agent on behalf of the Secured Parties,
by______________________________
Name:
Title
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
THIS SCHEDULE INTENTIONALLY OMITTED
<PAGE>
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
(a) GENERAL CHARACTERISTICS.
Each Receivable:
(i) has been originated in the United States by a dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
dealer's business, which dealer has all necessary licenses and permits
to originate Receivables in the state where such dealer is located, has
been fully and properly executed by the parties thereto, and has been
purchased from the dealer by the Seller under an existing Dealer
Agreement or validly assigned by a dealer to the Seller;
(ii) has created or shall create a valid, subsisting and enforceable
first priority perfected security interest in favor of the Seller in the
related Financed Vehicle (which security interest has been assigned to
the Borrower and shall be validly assignable by the Borrower to the
Funding Agent on behalf of the Secured Parties), except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights generally;
(iii) contains customary and enforceable provisions (except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights
generally) such that the rights and remedies of the holder thereof shall
be adequate for realization against the collateral of the benefits of
the security;
(iv) provides for level monthly payments (PROVIDED that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the amount
financed over the original contractual term and yield interest at the
annual percentage rate;
(v) provides for, in the event that such contract is prepaid, a
prepayment that fully pays the principal balance and includes accrued
but unpaid interest through the date of prepayment in an amount at least
equal to the annual percentage rate; and
(vi) has not been amended, or rewritten or collections with respect
thereto deferred or waived.
(b) COMPLIANCE WITH LAW. Each Receivable and the sale of the related
Financed Vehicle complied at the time it was originated or made, and at
the date such Receivable is sold by the Seller to the Borrower,
complies, in all material respects, with all requirements of applicable
<PAGE>
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 Federal Trade Commission Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and Z, the Federal Trade Commission Credit
Practices Rule, state unfair and deceptive trade practice laws, and state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other applicable consumer credit, equal credit
opportunity and disclosure laws.
(c) NO FRAUD. Each Receivable was originated by a dealer and was sold by
the dealer to the Seller without any fraud or misrepresentation by the
dealer.
(d) BINDING OBLIGATION. Each Receivable represents the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable
by the holder thereof in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally) and
all parties to each Receivable had full legal capacity to execute and
deliver such Receivable and all other documents related thereto and to
grant the security interest purported to be granted thereby.
(e) NO GOVERNMENT OBLIGOR. No Receivable is due from the United States of
America or any state or local government or from any agency, department or
instrumentality of the United States of America, any state or local
government.
(f) NO OBLIGOR BANKRUPTCY. At the Relevant Cutoff Date no Obligor had been
identified on the records of the Seller as being the subject of a current
bankruptcy proceeding.
(g) SCHEDULE OF RECEIVABLES. The information set forth in the Schedule of
Receivables has been produced from the Seller's electronic ledger and was
true and correct in all material respects on the Relevant Cutoff Date, and
is a complete and accurate description, on the relevant Receivables Sale
Date, of the Receivables sold to the Borrower on such date; and on or prior
to the relevant Receivables Sale Date, the Seller has appropriately marked
its computer records to indicate the sale to the Borrower of the
Receivables sold on such date.
(h) CERTAIN CHARACTERISTICS OF RECEIVABLES.
Each Receivable:
(i) has a remaining maturity, as of the Relevant Cutoff Date, of not more
than 60 months;
(ii) each Receivable has an original maturity of not more than 60 months;
B-2
<PAGE>
(iii) each Receivable has a remaining Principal Balance as of the
Relevant Cutoff Date of not more than $30,000;
(iv) no Receivable is more than 30 days past due as of the Relevant Cutoff
Date; and
(v) no funds have been advanced by the Seller, any dealer, or anyone
acting on behalf of any of them in order to cause any Receivable to
qualify under clause (iv) above.
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied, subordinated
or rescinded, nor shall any Financed Vehicle have been released from the
security interests granted by the related Contract in whole or in part.
(j) NO WAIVER. No provision of any Receivable has been waived.
(k) NO DEFENSES. Except for the security interests in favor of the Seller
and the Borrower, the Receivables are free and clear of all security
interests, liens, charges, and encumbrances and to the best knowledge of
the Seller no right of rescission, setoff, counterclaim or defense has been
asserted or threatened with respect to any Receivable.
(l) NO LIENS. No liens or claims have been filed for work, labor or
materials relating to a Financed Vehicle that are liens prior to or equal
or coordinate with, the security interest in the Financed Vehicle granted
by the Receivable.
(m) NO DEFAULT. No default, breach, violation or event permitting
acceleration under the terms of any Receivable has occurred, and the Seller
has not waived any of the foregoing.
(n) INSURANCE. The Obligor under each Receivable has obtained physical
damage and theft insurance covering the Financed Vehicle, and is required
under the terms of the Receivable to maintain such insurance.
(o) TITLE. (i) Immediately prior to the sale of the subject Receivables,
the Seller had, and has conveyed to the Borrower, good and marketable title
to each Receivable free and clear of all liens, encumbrances, security
interests and rights of others, and (ii) the sale and assignment of the
Receivables to the Borrower has been perfected under the Relevant UCC.
(p) RECEIVABLE FILES COMPLETE. There exists a Receivable File pertaining
to each Receivable and such Receivable File contains (1) a fully executed
original of the Receivable, (2) the original executed credit application,
or a copy thereof and (3) the original Lien Certificate or application
therefor. Each of such documents which is required to be signed by the
Obligor has been signed by the Obligor in the appropriate spaces. All
blanks on any form have been properly filled in and each form has otherwise
been correctly prepared. The complete Receivable File for each Receivable
currently is in the possession of the Custodian.
B-3
<PAGE>
(q) LAWFUL ASSIGNMENT. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer and
assignment of such Receivable shall be unlawful, void or voidable.
(r) ALL FILINGS MADE. All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Borrower a first
priority perfected security interest in the Receivables have been made.
(s) ONE ORIGINAL. There is in existence one, and only one, original
executed copy of each Receivable.
(t) LOCKBOX. The Obligor of each Receivable is required to make payments
to a lockbox that is subject to a Lockbox Agreement.
(u) UCC CHARACTERIZATION. The contract evidencing such Receivable
constitutes "chattel paper" under the Relevant UCC.
(v) No selection procedures adverse to the Secured Parties or the Borrower
were used in selecting the Receivables from the receivables owned by the
Seller and/or otherwise constituting Managed Assets, that met the selection
criteria contained in the Sale and Servicing Agreement and set forth above
in this Schedule B.
B-4
<PAGE>
SCHEDULE 2.4 TO
SALE AND SERVICING AGREEMENT
FORM OF PREPAID RECEIVABLES NOTICE
Reference is made to the Sale and Servicing Agreement, dated as of
October 8, 1997 (the "Sale and Servicing Agreement"), among CP FUNDING CORP.,
a Nevada corporation ("CP Funding"), AMERICREDIT FINANCIAL SERVICES, INC., a
Delaware corporation, as Seller and as Servicer (the "Seller"), and The Chase
Manhattan Bank, a New York banking corporation, as Backup Servicer and as
Funding Agent. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned in the Sale and Servicing Agreement.
CP Funding has, on the date hereof, made a payment to the Seller in the
amount of $[___________________] (the "Prepaid Amount") representing
prepayment for Receivables that, in the aggregate, will have a fair market
value (determined to be the price that would be obtained in an arm's-length
transaction between a seller under no compulsion to sell and a buyer under no
compulsion to buy, and taking into account such relevant factors as the
prepayment of such purchase price and the anticipated sale date(s) of such
Receivables) equal to the Prepaid Amount and meeting all of the necessary
conditions for a sale and purchase pursuant to the Sale and Servicing
Agreement. CP Funding understands that the Seller's acceptance of such amount
constitutes its agreement: (i) to sell Receivables meeting such requirements
on one or more Receivables Sale Dates occurring within [____] days following
the date hereof; (ii) that the aggregate Principal Balance of the Receivables
to be sold pursuant to this Prepaid Receivables Notice shall be not less than
$[____________________]; and (iii) that the application of amounts paid
hereunder toward the Receivables Purchase Price on such Receivables Sale
Date(s) shall be reflected in the Seller's Receivables Sale Notice for each
such date.
CP FUNDING CORP.
By:
------------------------------
Name:
---------------------------
Title:
---------------------------
<PAGE>
SCHEDULE 3.1 TO
SALE AND SERVICING AGREEMENT
CONDITIONS PRECEDENT
In addition to the receipt of documents and satisfaction of other
conditions set forth in Section 3.1 of the Sale and Servicing Agreement, the
following shall have been delivered, and shall be satisfactory in form and
substance, to the Funding Agent and the Borrower:
1. Certified copy of the Credit and Servicing Procedures.
2. A Borrower Officer's Certificate, including as attachments thereto:
a. Resolutions of the Board of Directors of the Borrower duly authorizing
the execution, delivery and performance by the Borrower of each of the
Basic Agreements to which it is a party and any other documents executed by
or on behalf of the Borrower in connection with the transactions
contemplated thereby;
b. Certified Certificate of Incorporation of the Borrower; and
c. By-laws of the Borrower.
3. An Incumbency Certificate of the Borrower setting forth the names, titles
and signatures of the officers of the Borrower who are authorized to
execute documents, give instructions and otherwise to take actions in
connection with the contemplated transactions.
4. A Borrower Good Standing Certificate.
5. A Borrower Officer's Certificate re: liens, location of records of
Receivables and certain corporate matters.
6. A Borrower's Certificate regarding establishment of Reserve Account.
7. Servicer Certificate regarding establishment of Collection Account.
8. AFS Officer's Certificate, including as attachments thereto:
a. Resolutions of the Board of Directors duly authorizing the
execution, delivery and performance by the Seller and the Servicer of
each of the Basic Agreements to which each is a party and any other
documents executed by or on behalf of the Seller and the Servicer in
connection with the transactions contemplated thereby;
<PAGE>
b. Certified Certificate of Incorporation; and
c. By-laws.
9. An Incumbency Certificate of AFS setting forth the names, titles and
signatures of the officers of AFS who are authorized to execute documents,
give instructions and otherwise take actions on behalf of AFS in connection
with the contemplated transactions, in its roles as Seller and as Servicer.
10. A Good Standing Certificate of AFS.
11. Seller Officer's Certificate re: liens, location of records of Receivables
and certain corporate matters.
12. Certificate of the Lockbox Bank as to due execution of the Lockbox
Agreement.
13. An Opinion of special counsel to Chase Securities Inc. as to true sale and
nonconsolidation matters.
14. An Opinion of special counsel to Chase Securities Inc. with respect to the
validity and enforceability of certain transaction documents.
15. Opinion of counsel to the APA Banks addressed to the Rating Agencies.
16. Opinions of local counsel to the Seller with respect to perfection and
priority of the security interests in the
Collateral.(1)
17. Opinion of local counsel to the Borrower, as to the formation of and other
corporate matters relating to the Borrower, as to the enforceability of
certain transaction documents and as to the enforceability, perfection and
priority of the security interests in the Collateral.
18. The Opinion of Chris A. Choate, General Counsel of AmeriCredit Corp. as to
pending and threatened litigation.
19. The Opinion of Chris A. Choate, General Counsel of AmeriCredit Corp. as to
certain matters relating to the Receivables.
- --------------------------
(1) Jurisdictions where such an opinion is required to include California, Texas
and any other jurisdiction where financed vehicles securing more than 10% of the
Receivables from time to time are titled.
3.1-2
<PAGE>
20. The Opinion of Chris A. Choate, General Counsel to AmeriCredit Corp., AFSI,
and Borrower, with respect to corporate matters for each of the Seller, the
Servicer and the Borrower.
21. Acknowledgment copy of financing statement on Form UCC-1 naming AFSI, as
debtor, the Borrower, as secured party, and the Funding Agent, as assignee,
filed with the Office of the Secretary of State of the State of Texas.
22. Acknowledgment copy of financing statement on Form UCC-1 naming the
Borrower, as debtor, and the Funding Agent, as secured party, filed with
the Secretaries of State of the States of Nevada and Texas.
23. Letter(s) re: Wire Instructions.
24. Rating Letters:
a. Letters from Standard & Poor's and Moody's confirming PARCO's A-1/P-1
commercial paper ratings; and
b. VFN rating letter from Moody's.
3.1-3
<PAGE>
SCHEDULE 5.11 TO
SALE AND SERVICING AGREEMENT
PROCEDURES FOR DATA INTEGRITY REVIEWS
Capitalized terms are used as defined in Annex A to the Sale and Servicing
Agreement.
SERVICER'S DETERMINATION DATE CERTIFICATES; Servicer's Receivables Sale Date
Certificates
On the quarterly basis specified in Section 5.11 of the Sale and Servicing
Agreement, the latest monthly Servicer's Determination Date Certificate should
be selected as well as the most current Servicer's Receivables Sale Date
Certificate. The line items should be reconciled including the raw data lines
and the calculation of formulas within the statement.
FILE INTEGRITY
On a quarterly basis, a file integrity check will be conducted. This process
will include pulling 100 files, chosen randomly, from the Receivables
constituting Collateral during the specified three-month period. A completeness
check should be performed to see that each of the following items is present in
each selected Obligor file:
- fully executed original of the Contract evidencing the Receivable
- evidence of credit approval by an authorized AmeriCredit employee is
present on contract
- original executed credit application or copy of credit application
- original lien certificate showing the security interest of AmeriCredit
or the application therefor
- credit bureau report
- agreement to provide insurance or a completed credit application
showing evidence of insurance
- truth in lending disclosure statement
- contract is stamped with legend indicating assignment
DATA INTEGRITY
Additionally, for the selected files, the following fields should be checked to
see that they appear accurately on the electronic installment loan database with
respect to the security agreement, installment sale contract, title or
application for title present in each obligor loan file:
- name of the obligor
- original amount financed (rounded to the nearest dollar)
<PAGE>
- original term
- monthly payment amount
- the new or used status of the related Financed Vehicle
- VIN number
- annual percentage rate
- APR should be recalculated using the APR recalculation program
distributed by the Office of the Comptroller of the Currency and the
accuracy rated to within 1/8 of one percent tolerance
- coding indicates assignment to the Funding Agent (Chase)
Within the installment loan database, the following items should be checked:
- the Receivable is not more than 30 days delinquent
- as of the date of sale to the Borrower, the remaining maturity of the
Receivable did not exceed 60 months
- the original maturity of the Receivable does not exceed 60 months
- as of the date of sale to the Borrower, the receivable had remaining
principal of no more than $30,000
5.11-2
<PAGE>
EXHIBIT A TO
SALE AND SERVICING AGREEMENT
RECEIVABLES SALE AGREEMENT
SALE No. [____] of Receivables made this ___ day of ____________, 199_, pursuant
to the Sale and Servicing Agreement, dated as of October 8, 1997 (the "Sale and
Servicing Agreement"), among CP FUNDING CORP., a Nevada corporation ("CP
Funding"), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation as
Seller and as Servicer (the "Seller"), and The Chase Manhattan Bank, a New York
banking corporation, as Backup Servicer and as Funding Agent.
W I T N E S S E T H:
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller wishes to
sell Receivables to CP Funding; and
WHEREAS, CP Funding is willing to purchase such Receivables subject to the
terms and conditions hereof.
NOW, THEREFORE, CP Funding and the Seller hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein shall have the meanings
ascribed to them in Annex A to the Sale and Servicing Agreement, unless
otherwise defined herein.
"Relevant Cutoff Date" shall mean, with respect to the Receivables sold
hereby, ___________ ___, 199_.
"Receivables Sale Date" shall mean, with respect to the Receivables sold
hereby, the date hereof.
2. SCHEDULE OF RECEIVABLES. Annexed hereto is a Schedule A listing the
Receivables sold pursuant to this Receivables Sale Agreement on the Receivables
Sale Date.
3. SALE OF RECEIVABLES. In consideration of CP Funding's delivery to or
upon the order of the Seller of $________, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to CP Funding, without recourse
(except as expressly provided in the Sale and Servicing Agreement), all right,
title and interest of the Seller in and to:
(a) the Receivables listed in Schedule A and all moneys received
thereon, on and after the Relevant Cutoff Date;
<PAGE>
(b) all security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller
in such Financed Vehicles;
(c) all proceeds and all rights to receive proceeds with respect to
the Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(d) all rights of the Seller against Dealers pursuant to Dealer
Agreements and/or Dealer Assignments;
(e) all rights under any Service Contracts on the related Financed
Vehicles;
(f) the related Receivables Files;
(g) all proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to CP Funding as of the Receivables Sale Date that:
(a) SALE AND SERVICING AGREEMENT. The representations and warranties set
forth in Sections 4.1 and 7.1 of the Sale and Servicing Agreement are true and
correct with respect to the property sold pursuant to Section 3 hereof.
(b) PRINCIPAL BALANCE. As of the Relevant Cutoff Date, the aggregate
Principal Balance of the Receivables listed on Schedule A annexed hereto and
sold to CP Funding pursuant to this Receivables Sale Agreement is
$_______________.
5. CONDITIONS PRECEDENT. The obligation of CP Funding to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Receivables Sale Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Seller in Section 4 of this Receivables Sale Agreement
and in Sections 4.1 and 7.1 of the Sale and Servicing Agreement shall be true
and correct with respect to the property sold pursuant to Section 3 hereof as of
the Receivables Sale Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions set
forth in Section 3.2 of the Sale and Servicing Agreement shall have been
satisfied with respect to the property sold pursuant to Section 3 hereof.
<PAGE>
(c) ADDITIONAL INFORMATION. The Seller shall have delivered to CP Funding
such information as was reasonably requested by CP Funding to satisfy itself as
to the satisfaction of the conditions set forth in this Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this Receivables Sale
Agreement, the Sale and Servicing Agreement, including without limitation
Section 2.2(b) thereof, is in all respects ratified and confirmed and the Sale
and Servicing Agreement as so supplemented by this Receivables Sale Agreement
shall be read, taken and construed as one and the same instrument.
7. COUNTERPARTS. This Receivables Sale Agreement may be executed in two
or more counterparts (and by different parties in separate counterparts), each
of which shall be an original but all of which together shall constitute one and
the same instrument.
8. GOVERNING LAW. THIS RECEIVABLES SALE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
<PAGE>
IN WITNESS WHEREOF, CP Funding and the Seller have caused this Receivables
Sale Agreement to be duly executed and delivered by their respective duly
authorized officers as of the day and the year first above written.
CP FUNDING CORP.
by__________________________
Title:
AMERICREDIT FINANCIAL SERVICES, INC.,
Seller
by___________________________
Title:
Acknowledged:
THE CHASE MANHATTAN BANK,
as Funding Agent
by______________________________
Title:
<PAGE>
EXHIBIT B TO
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S DETERMINATION DATE CERTIFICATE
[To Follow]
<PAGE>
EXHIBIT B-1 TO
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S VFN PREPAYMENT DATE CERTIFICATE
[To Follow]
<PAGE>
EXHIBIT C TO
SALE AND SERVICING AGREEMENT
FORM OF RECEIVABLES SALE NOTICE
[To Follow]
<PAGE>
EXHIBIT D TO
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S RECEIVABLES SALE DATE CERTIFICATE
[To Follow]
<PAGE>
EXHIBIT E TO
SALE AND SERVICING AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR
UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED
EXCEPT IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.
October ______, 1997
RECEIVABLES PURCHASE NOTE
Capitalized terms used and not otherwise defined in this Receivables
Purchase Note (this "Note") shall have the respective meanings assigned in the
Sale and Servicing Agreement, dated as of October 8, 1997, among the AmeriCredit
Financial Services Inc., as Seller, the Obligor (as defined below), as
Purchaser, The Chase Manhattan Bank, as Funding Agent, and the other parties
thereto (the "Sale and Servicing Agreement"). This Note is the Receivables
Purchase Note referred to in the Sale and Servicing Agreement.
CP FUNDING CORP., a Nevada corporation (the "Obligor"), for value received,
hereby promises to pay to AMERICREDIT FINANCIAL SERVICES, INC., a Delaware
corporation (together with any other permitted holder hereof the "Holder"), the
principal amount hereof as set forth in Schedule I attached hereto together with
any and all accrued and unpaid interest thereon in accordance with the terms set
forth herein. Subject to the terms and conditions hereof, the principal amount
then outstanding on this Note, together with any accrued and unpaid interest
thereon, shall be due and payable on the Termination Date. Interest on the
unpaid principal balance hereof from time to time outstanding shall accrue at a
rate per annum equal to the Applicable Rate in effect during the relevant
Collection Period, plus 2.5%, but not to exceed a rate per annum of 8.5%,
computed on the basis of a 360-day year consisting of 30-day months and shall be
payable on each Distribution Date.
Principal and interest shall be payable in lawful money of the United
States of America at the principal office of the Holder.
The Obligor also shall pay interest at the rate referred to above on any
overdue principal and (to the extent permitted by applicable law) on any overdue
interest, from the date on
<PAGE>
which payment thereof is due until the obligation of the Obligor with respect
to the payment thereof shall be discharged.
The principal amount hereof shall be increased from time to time by the
amount of advances made to the Obligor by AmeriCredit Financial Services Inc. in
its discretion pursuant to the Sale and Servicing Agreement; PROVIDED, HOWEVER,
that the principal amount hereof after giving effect to any particular sale of
Receivables and any related advance hereunder, shall not exceed 7% of the Pool
Balance.
Subject to the restrictions set forth below, this Note may be prepaid in
whole or in part, at any time or from time to time, without premium or penalty.
The rights of the Holder to receive payment with respect to this Note shall
not be subject to any offset by Obligor.
No delay or omission on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of such right or any other right of such
Holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion.
The Obligor hereby waives presentment, demand, protest and notice of every
kind, and the Obligor assents to any extension or postponement of the time of
payment or any other indulgence, to the addition of any collateral that at any
time may be security for payment of this Note and to the substitution, release,
or addition of any party that may, from time to time, be primarily or
secondarily obligated for the payment of this Note.
The Obligor shall pay on demand all costs, including court costs and
reasonable attorneys' fees paid or incurred by the holder hereof in enforcing
this Note upon default.
If any payment or distribution of any kind is collected or received by the
Holder under this Note when pursuant hereto such payment should not have been
made to or received by the Holder, the Holder forthwith shall deliver the same
to the Funding Agent for the benefit of the Secured Parties. Until so
delivered, such payment or distribution shall be held in trust by the Holder as
the property of the Secured Parties, segregated from other funds and property
held by the Holder.
PAYMENT OF PRINCIPAL AND INTEREST ON THIS NOTE IS SUBJECT TO THE FOLLOWING
TERMS, CONDITIONS AND RESTRICTIONS, TO WHICH EACH HOLDER OF THIS NOTE SHALL BE
DEEMED TO HAVE AGREED BY ITS ACCEPTANCE HEREOF:
(1) PAYMENT OF ANY AMOUNTS DUE HEREUNDER SHALL BE SUBJECT AND SUBORDINATE
TO THE PAYMENT OF THE VFN AND OTHER SECURED OBLIGATIONS PURSUANT TO THE
SECURITY AGREEMENT, AND SHALL BE MADE ONLY OUT OF AVAILABLE FUNDS OF THE
OBLIGOR
<PAGE>
THAT ARE NOT REQUIRED TO BE USED TO MAKE ANY PAYMENTS THEN DUE AND OWING TO
THE SECURED PARTIES;
(2) IN NO EVENT SHALL ANY PAYMENT BE MADE (OR BE CLAIMED) ON ANY DATE IF A
TERMINATION EVENT OR POTENTIAL TERMINATION EVENT HAS OCCURRED AND IS
CONTINUING ON SUCH DATE (OR WOULD OCCUR AS A RESULT OF SUCH PAYMENT); AND
(3) PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE DATE OF
TERMINATION OF THE SECURITY AGREEMENT PURSUANT TO SECTION 4.5 THEREOF, IT
WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST
THE OBLIGOR, ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY, OR
LIQUIDATION PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY FEDERAL OR STATE
BANKRUPTCY OR SIMILAR LAW.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THE OBLIGOR AGREES THAT ANY ACTION ON THIS NOTE MAY BE
BROUGHT IN THE FEDERAL OR STATE COURTS IN THE STATE OF NEW YORK.
E-3
<PAGE>
IN WITNESS WHEREOF, the Obligor has caused this Note to be signed as of the
date above written.
CP FUNDING CORP.
By:____________________________
Name:_________________________
Title:__________________________
<PAGE>
Schedule I to
RECEIVABLES PURCHASE NOTE
RECEIVABLES PURCHASE ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Amount of Unpaid
Amount of Principal Principal
Notation
Date Advances Repaid Balance
- ----- --------- -------- --------
Made By
--------
<S> <C> <C> <C>
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FUNDING AGREEMENT
BY AND AMONG
CP FUNDING CORP.,
as Borrower,
PARK AVENUE RECEIVABLES CORPORATION,
THE CHASE MANHATTAN BANK,
as Funding Agent, APA Bank
and Syndication Agent
AND
THE SEVERAL FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME,
as APA Banks
Dated as of October 8, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
FUNDINGS; THE VFN
SECTION 2.1 Loans to Borrower; Funding Procedures; the VFN. . . . . . . . . . 2
SECTION 2.2 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.5 Payments Generally. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.6 Broken Funding. . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.7 Conversion and Continuation of Outstanding
Advances Made by the APA Banks. . . . . . . . . . . . . . . . . . 15
SECTION 2.8 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.9 Inability to Determine Eurodollar Rate. . . . . . . . . . . . . . 17
SECTION 2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER
SECTION 3.1 Representations, Warranties and Covenants of the Borrower . . . . 19
ARTICLE IV
INDEMNIFICATION
SECTION 4.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.2 Indemnity for Reserves and Expenses . . . . . . . . . . . . . . . 24
SECTION 4.3 Indemnity for Taxes . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.4 Other Costs, Expenses and Related Matters . . . . . . . . . . . . 28
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
LIQUIDITY COMMITMENT
SECTION 5.1 Liquidity Purchases . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.2 Several Purchase Commitments of the APA Banks . . . . . . . . . . 30
SECTION 5.3 Nonrecourse Nature of Transactions. . . . . . . . . . . . . . . . 31
SECTION 5.4 Payments; Indemnity . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.5 Reduction of Commitments. . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
REPRESENTATIONS AND WARRANTIESOF THE APA BANKS
SECTION 6.1 Representations and Warranties of the APA
Banks
to PARCO and the Funding Agent. . . . . . . . . . . . . . . . . . 33
SECTION 6.2 PARCO Disclaimer of Representations
and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
THE FUNDING AGENT
SECTION 7.1 Appointment.. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.4 Reliance by Funding Agent . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.5 Notice of Termination Event and Other Events;
Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6 Non-Reliance by APA Banks on Funding Agent
and Other APA Banks . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.8 Funding Agent in its Individual Capacity. . . . . . . . . . . . . 38
SECTION 7.9 Successor Funding Agent . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.10 Chase Conflict Waiver . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Waivers; Amendments, Etc. . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.3 Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.4 Severability; Counterparts; Waiver of Setoff. . . . . . . . . . . 42
SECTION 8.5 Successors and Assigns; Participations;
Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.6 No Petition.. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.7 Limited Recourse. . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.8 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.9 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
EXHIBITS
ANNEX I Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXHIBIT A Form of Variable Funding Note . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Transfer Supplement . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Opinion of Counsel. . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D Notice Addresses. . . . . . . . . . . . . . . . . . . . . . . . . D-1
</TABLE>
iii
<PAGE>
FUNDING AGREEMENT
FUNDING AGREEMENT (as amended, supplemented or otherwise modified
and in effect from time to time, this "AGREEMENT"), dated as of October 8,
1997, by and among PARK AVENUE RECEIVABLES CORPORATION, a Delaware
corporation, as lender (together with its successors and assigns, "PARCO"),
CP FUNDING CORP., a Nevada corporation, as borrower (together with its
successors and assigns, the "BORROWER"), THE CHASE MANHATTAN BANK, a New York
banking corporation ("CHASE"), as funding agent for PARCO and the several APA
Banks (in such capacity, the "FUNDING AGENT") and THE SEVERAL FINANCIAL
INSTITUTIONS PARTY HERETO FROM TIME TO TIME.
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions of this Agreement and
the other Basic Agreements, the Borrower desires to obtain, and PARCO desires
to lend, funds from time to time on an uncommitted basis;
WHEREAS, subject to the terms and conditions of this Agreement and
the other Basic Agreements, the Borrower desires to obtain, and the APA Banks
have agreed to lend, funds from time to time on a committed basis;
WHEREAS, in order to evidence its obligation to repay amounts
borrowed by it from PARCO and/or the APA Banks, as applicable, together with
interest thereon, the Borrower has agreed to execute and deliver the VFN to
the Funding Agent for the benefit of PARCO and the APA Banks;
WHEREAS, in order to obtain ratings for its Commercial Paper issued
to fund its interest in the VFN from time to time, PARCO desires that the APA
Banks to commit to purchase from PARCO, without recourse, representation or
warranty, all or a portion, as applicable, of PARCO's right, title and
interest in its loans made to the Borrower hereunder, subject to the terms
and conditions of this Agreement and the other Basic Agreements; and
WHEREAS, pursuant to the Security Agreement, the Borrower will pledge
to the Funding Agent for the benefit of the Secured Parties its interest in the
<PAGE>
Collateral, including, but not limited to, the Borrower's security interest
in the Receivables and the Other Conveyed Property;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the meanings specified in, or incorporated by
reference into, Annex A to that certain Sale and Servicing Agreement, dated
as of October 8, 1997 (as amended, supplemented or otherwise modified and in
effect from time to time, the "SALE AND SERVICING AGREEMENT"), by and among
AmeriCredit Financial Services, Inc., as Seller and Servicer thereunder, CP
Funding Corp., as Borrower, The Chase Manhattan Bank, as Funding Agent and
The Chase Manhattan Bank, as Back-Up Servicer, which Annex A is incorporated
herein by reference.
ARTICLE II
FUNDINGS; THE VFN
SECTION 2.1 LOANS TO BORROWER; FUNDING PROCEDURES; THE VFN. (a)
FUNDING GENERALLY. Upon the terms and subject to the conditions set forth
herein, prior to the Commitment Expiry Date, and PROVIDED that (i) in the
case of PARCO, no Potential PARCO Wind-Down Event or PARCO Wind-Down Event
shall have occurred and be continuing and (ii) in the case of the APA Banks,
no Termination Event or Potential Termination Event shall have occurred and
be continuing, PARCO may, in its sole discretion, and the APA Banks shall
(subject to the terms and conditions specified herein), make an advance (any
such advance, a "FUNDING," the first such advance, the "INITIAL FUNDING," and
each such additional funding, a "SUBSEQUENT FUNDING") to the Borrower from
time to time on or after the Effective Date.
2
<PAGE>
To request a Funding hereunder, the Borrower shall notify the
Funding Agent of such request by telephone (a) in the case of a Eurodollar
Funding, not later than 11:00 A.M. (New York time) three (3) Business Days
before the date of the proposed Funding, (b) in the case of an ABR Funding,
not later than 12:30 P.M. (New York Time) on the proposed date of such
Funding and (c) in the case of a CP Funding, not later than 11:00 A.M. (New
York time), one (1) Business Day before the date of the proposed Funding.
Each day on which a Funding is made hereunder shall be a Business Day. Each
such telephonic request for a Funding shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Funding Agent of a
written funding request (each, a "FUNDING REQUEST") in a form approved by the
Funding Agent and signed by the Borrower. Each such telephonic and written
Funding Request shall specify the following information in compliance with
Section 2.1(b):
(i) the requested Advance Amount (calculated in accordance with
the definition thereof, and which shall be at least $1,000,000 or
integral multiples of $1,000 in excess thereof);
(ii) the date of such Funding, which shall be a Business Day;
(iii) whether such Funding is to be an ABR Funding, a CP Funding or
a Eurodollar Funding;
(iv) in the case of a CP Funding or a Eurodollar Funding, the CP
Funding Period or Eurodollar Funding Period to be applicable thereto,
which shall be a period contemplated by the definition of the term "CP
Funding Period" and "Eurodollar Funding Period", respectively; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.1(e).
If no election as to the type of Funding is specified, then the requested
Funding shall be at the discretion of the Funding Agent (with the consent of
PARCO if the Funding Agent so selects a CP Funding). Promptly following
receipt of a Funding Request in accordance with this Section 2.1(a), the
Funding Agent shall promptly advise each Secured Party of the details thereof
and of the amount of such Secured Party's loan to be made as part of the
requested Funding (if any). No more than five (5) Subsequent Fundings shall
be permitted each calendar month, unless the Funding
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Agent, at the direction of the Required Banks, shall have agreed to more
frequent Fundings.
(b) CONDITIONS TO FUNDING. Neither PARCO nor the APA Banks shall
have any obligation to advance any funds to the Borrower in connection with
any Funding unless, on the date of such Funding, (i) after giving effect to
such Funding, the Total Investment PLUS the Interest Component of all
Commercial Paper issued by PARCO to fund the Total Investment would not
exceed the Facility Limit; (ii) each APA Bank's Pro Rata Share of such
Funding would not exceed the amount of its unused Commitment; (iii) the
Borrower has provided a Funding Request to the Funding Agent, which Funding
Request shall include the calculations necessary to satisfy the requirement
set forth in clauses (i) and (ii) above and shall also include a
certification by an authorized officer of the Borrower that, to the best of
such officer's knowledge, no event has occurred since the most recent Funding
(or the Effective Date, in the case of the Initial Funding) that would have a
material and adverse effect on the Receivables, the Seller, the Servicer or
the Borrower; (iv) the Borrower shall have deposited in the Reserve Account,
or shall have given irrevocable instructions to the Funding Agent to withhold
from the proceeds of such Funding and to deposit in the Reserve Account, an
amount equal to (x) in the case of the Initial Funding, the Reserve Account
Initial Deposit and (y) in the case of any Subsequent Funding, the Subsequent
Reserve Account Deposit; (v) the VFN is rated at least A2 by Moody's;
(vi) one or more binding and enforceable Hedge Contracts in an aggregate
notional amount equal to the Facility Limit are in full force and effect in
accordance with the terms of the Sale and Servicing Agreement; (vii) each
representation and warranty of the Borrower herein or in the Security
Agreement shall be true and correct with respect to the Borrower and each
Receivable as of the date of such Funding; (viii) a Potential PARCO Wind-Down
Event or a PARCO Wind-Down Event (each only in the case of a Funding to be
made by PARCO), or a Potential Termination Event or a Termination Event (in
the case of a Funding to be made by the APA Banks or PARCO), shall not have
occurred and be continuing; (ix) PARCO is able to obtain funds for the making
of such Funding (only in the case of a Funding to be made by PARCO); (x) the
Funding Agent shall have received, duly executed and delivered by Wells Fargo
Bank, a lien release in substantially the form specified in Section 1(b) of
the Intercreditor Agreement; and (ix) in connection with the Initial Funding,
the conditions precedent set forth in Section 2.1(g) hereof and Section 3.2
of the Sale and Servicing Agreement shall be satisfied.
Notwithstanding anything to the contrary set forth in this
Agreement, no APA Bank shall have any obligation to advance funds to the
Borrower on the
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Initial Funding Date or any Subsequent Funding Date if, on such day, any
Termination Event or Potential Termination Event shall have occurred and be
continuing. The Funding Agent shall promptly advise each APA Bank (by
telecopy or by telephone call promptly confirmed in writing by telecopy) of
the receipt and content of any Funding Request.
The APA Banks' several obligations to provide the Borrower with
funds pursuant to this Article II shall terminate on the Commitment Expiry
Date. Notwithstanding anything contained in this Section 2.1 or elsewhere in
this Agreement to the contrary, no APA Bank shall be obligated to provide the
Borrower with aggregate funds in connection with a Funding Request in an
amount that would exceed such APA Bank's unused Commitment then in effect,
and the failure of any APA Bank to make its Pro Rata Share of the Funding
available to the Borrower (subject to the terms and conditions set forth
herein) shall not relieve any other APA Bank of its obligations hereunder.
(c) ADVANCE PERCENTAGE; FUNDING REQUEST IRREVOCABLE. With respect
to any Funding Date, the advance percentage (the "ADVANCE PERCENTAGE") to
determine the Advance Amount shall be 88%, subject to downward adjustment on
such Funding Date as described below:
(1) if a "Trigger Event" (as defined in any public
asset-backed transaction beginning with, and including, the AmeriCredit
Automobile Receivables Trust 1996-D transaction) occurs which continues
unremedied for two (2) monthly reporting periods and is waived by the
party or parties entitled to exercise such waiver under the related
transaction documentation, then the Advance Percentage in effect at the
opening of business on such Funding Date shall be reduced by 2%;
PROVIDED that if the Trigger Event relates to a delinquency test failure
and occurs after the Pool Factor (as defined in the related transaction
documentation) is below 25%, the Advance Percentage shall not be so
reduced; PROVIDED FURTHER that if the Advance Percentage has been
reduced as a result of the application of this clause (1), the Advance
Percentage shall remain at such reduced percentage until such time as
the related Trigger Event has been cured for a period of three (3)
consecutive months;
(2) if a Trigger Event occurs and is not waived by the Person
or Persons entitled to exercise such waiver under the related
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transaction documentation, then the Advance Percentage in effect at the
opening of business on such Funding Date shall be reduced by 6% (without
duplication of any reduction pursuant to clause (1) above); and
(3) if there is an Excess Spread Deficiency (calculated as of
the close of business three (3) Business Days prior to such Funding
Date), then the Advance Percentage shall be reduced by the product of
(i) the amount of such Excess Spread Deficiency (stated as a percentage)
MULTIPLIED BY (ii) 1.7 (rounded to the nearest 1%); PROVIDED that if the
Advance Percentage has been reduced as a result of the application of
this clause (3), the Advance Percentage shall remain at such reduced
percentage until such time as the Excess Spread Deficiency has been
cured.
(d) FUNDING REQUEST IRREVOCABLE. The notice of the proposed Initial
Funding and any Subsequent Funding shall be irrevocable and binding on the
Borrower, and the Borrower shall indemnify PARCO and the APA Banks against any
loss or expense incurred by PARCO or the APA Banks as provided in Section 2.6
hereof.
(e) DISBURSEMENT OF FUNDS. No later than 4:30 P.M. (New York City
time) on the date on which a Funding is to be made, PARCO and/or the APA Banks,
as applicable, will make available to the Borrower, in immediately available
funds, the amount of the Funding to be made on such day by remitting the
required amount thereof to an account of the Borrower as designated in the
related Funding Request.
(f) THE VFN.
(i) The Borrower's obligation to pay the principal of, and
interest on, all amounts advanced by PARCO or the APA Banks pursuant
to any Funding shall be evidenced by a single note of the Borrower (as
amended, supplemented or otherwise modified and in effect from time to
time, the "VFN") which shall (1) be dated the Closing Date; (2) be in
the stated principal amount equal to the Facility Limit (as reflected
from time to time on the grid attached thereto); (3) bear interest as
provided therein; (4) be payable to the order of the Funding Agent for
the account of PARCO and the APA Banks and mature on the Distribution
Date occurring in the calendar month
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sixty-six (66) months following the Commitment Expiry Date (unless
otherwise accelerated pursuant to the terms of the Basic
Agreements); (5) be entitled to the benefits of this Agreement, the
Security Agreement and the other Basic Agreements; and (6) be
substantially in the form of Exhibit A to this Agreement, with
blanks appropriately completed in conformity herewith. The Funding
Agent shall, and is hereby authorized to, make a notation on the
schedule attached to the VFN of the date and the amount of each
Funding and the date and amount of the payment of principal
thereon, and prior to any transfer of the VFN, the Funding Agent,
on behalf of PARCO and the APA Banks, shall endorse the outstanding
principal amount of the VFN on the schedule attached thereto. The
entries made by the Funding Agent pursuant to the preceding
sentence shall be PRIMA FACIE evidence of the existence and amounts
of the obligations recorded therein; PROVIDED, HOWEVER, that
failure to make such notation shall not adversely affect the rights
of PARCO and the APA Banks with respect to the payment obligations
of the Borrower hereunder and under the VFN.
(ii) On any VFN Prepayment Date, the Borrower shall have
the option to prepay all or a portion of the VFN Balance (each, an
"OPTIONAL PREPAYMENT"), subject to the following terms and
conditions:
1. The Borrower shall have given the Funding Agent at least five
(5) Business Days' prior written notice of its intent to effect an
Optional Prepayment;
2. Unless such Optional Prepayment is to be effected on a
Distribution Date (in which case the relevant calculations with
respect to such Optional Prepayment shall be reflected on the
applicable Servicer's Determination Date Certificate), the Borrower
shall cause the Servicer to deliver to the Funding Agent, the Backup
Servicer and the Rating Agencies a Servicer's VFN Prepayment Date
Certificate substantially in the form of Exhibit B-1 to the Sale and
Servicing Agreement, together with evidence to the Funding Agent, the
Backup Servicer and the Rating Agencies (which evidence may consist
solely of the Servicer's VFN Prepayment Date Certificate) that the
Borrower shall have sufficient funds on the contemplated VFN
Prepayment Date to effect the Optional Prepayment in accordance with
this Agree-
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ment. Any such Servicer's VFN Prepayment Date Certificate and
related evidence shall be delivered to the Funding Agent no later
than 1 P.M. (New York time), five (5) Business Days prior to the
contemplated VFN Prepayment Date. In effecting an Optional
Prepayment, the Borrower may (i) use the proceeds of sales of the
Receivables (which sales must be made in arm's-length transactions
to Persons other than AFS), and (ii) give effect to Principal
Collections on deposit in the Collection Account at such time to
the extent consistent with the requirements of paragraph 4 below
(as evidenced by the Servicer's VFN Prepayment Date Certificate).
3. In connection with any such Optional Prepayment that does
not constitute a prepayment in full of the outstanding VFN Balance,
then, following receipt by the Funding Agent of the amounts
referred to in paragraph 5 below, there shall be released from the
Lien of the Security Agreement (subject to the requirements of
paragraph 4 below): (i) a portion of the Receivables comprising the
Pool Balance selected by the Borrower in accordance with the FIFO
method; and (ii) such other Receivables not then constituting part
of the Pool Balance, excluding, however, any Receivable subject to
a Repurchase Obligation ("Other Designated Receivables") as the
Borrower has agreed to sell in an arm's length transaction
permitted hereby and as are designated by the Borrower and
specified in the Servicer's VFN Prepayment Date Certificate (such
Receivables and such Other Designated Receivables, together, in
each case, with the related Other Conveyed Property, being
collectively referred to as the "Prepayment Related Collateral").
4. After giving effect to the Optional Prepayment and the
release of Prepayment Related Collateral from the Lien of the
Security Agreement on any VFN Prepayment Date, (x) the remaining
VFN Balance MINUS Adjusted Principal Collections shall be less than
or equal to the amount resulting when the effective Advance
Percentage is multiplied by the remaining Pool Balance, (y) none of
the Pool Limitations shall be exceeded and (z) a Termination Event
or Potential Termination Event shall not have resulted;
For purposes of the foregoing, Adjusted Principal Collections means
the product of (i) the effective Advance Percentage, and (ii) the
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amount of Principal Collections on deposit in the Collection
Account as of the close of business on the day preceding the date
of the Servicer's VFN Prepayment Date Certificate.
5. On the related VFN Prepayment Date, the Funding Agent shall
have received, for the benefit of the Secured Parties, in
immediately available funds, an amount equal to the sum of (i) the
portion of the VFN Balance to be prepaid PLUS (ii) an amount equal
to all unpaid Carrying Costs (including Carrying Costs not yet
accrued) to the extent reasonably determined by the Funding Agent
to be attributable to that portion of the Total Investment to be
prepaid PLUS (iii) an aggregate amount equal to the sum of all
other amounts due and owing to the Funding Agent and the Secured
Parties under this Agreement and the other Basic Agreements, to the
extent accrued to such date and to accrue thereafter, as reasonably
determined by the Funding Agent to be attributable to that portion
of the Total Investment to be prepaid.
The Borrower hereby agrees to pay the reasonable legal
fees and expenses of the Funding Agent, PARCO and each APA Bank in
connection with any Optional Prepayment (including, but not limited
to, expenses incurred in connection with the release of the Lien of
the Funding Agent over the Receivables and related Other Conveyed
Property in connection with such Optional Prepayment).
(iii) Although the VFN shall be dated the Closing Date,
Carrying Costs in respect thereof shall be payable in the manner
specified therein and in the other Basic Agreements only for the
periods during which amounts are outstanding thereunder. In
addition, although the stated principal amount of the VFN shall be
equal to the Facility Limit, the VFN shall be enforceable with
respect to the Borrower's obligation to pay the principal thereof
only to the extent of the unpaid principal amount outstanding
thereunder at the time such enforcement shall be sought. Principal
on the VFN shall be payable by the Borrower in the manner and on
the dates specified in the VFN and in the other Basic Agreements.
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(g) CONDITIONS PRECEDENT. The obligations of PARCO and the APA Banks
under this Agreement on any Funding Date are subject to the accuracy of the
representations and warranties on the part of the Borrower made herein and in
the other Basic Agreements as of such Funding Date. This Agreement shall become
effective on the first day on which all of the following conditions precedent
have been satisfied (the "Effective Date"):
(i) The Funding Agent shall have received such opinions of
counsel to the Seller, the Servicer and the Borrower, in form and
substance acceptable to the Funding Agent, addressing such matters as
the Funding Agent, on behalf of the Secured Parties, shall request.
(ii) The Funding Agent shall have received a certificate of
the Borrower, dated the Closing Date, stating that (1) its
representations and warranties made herein and in the other Basic
Agreements are true and correct as of the Closing Date, and (2) the
Borrower has complied with all agreements and satisfied all conditions
to be satisfied on its part pursuant to this Agreement and the other
Basic Agreements on or prior to the Closing Date.
(iii) All conditions precedent to the authentication and
delivery of the VFN under this Agreement shall have been satisfied.
(iv) Each party to a Basic Agreement shall have performed
and complied with all agreements and conditions contained in such
Basic Agreement and all other documents delivered in connection
herewith or therewith which are required to be performed or complied
with by such party.
(v) This Agreement, the other Basic Agreements, the Fee
Letters, the Intercreditor Agreement and all agreements, certificates,
instruments and other documents required to be delivered in connection
herewith and therewith shall have been duly authorized, executed and
delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the
Funding Agent, PARCO and the APA Banks.
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(vi) The Funding Agent shall have received the following, in
each case in form and substance satisfactory to it:
(1) copy of the resolutions of the Board of Directors
of the Borrower, certified by the Secretary or an Assistant Secretary
as of the Closing Date, duly authorizing the execution, delivery and
performance by the Borrower of the documents executed by or on behalf
of the Borrower in connection with the transactions contemplated by
this Agreement and the other Basic Agreements to which it is a party;
and attesting to the names and true signatures of the person or
persons executing and delivering each such document;
(2) a copy of the resolutions of the Board of Directors
of the Seller and the Servicer, certified by the Secretary or an
Assistant Secretary of the Seller and the Servicer as of the Closing
Date, duly authorizing the execution, delivery and performance by the
Seller and the Servicer of each of the Basic Agreements to which each
of them is a party and any other documents executed by or on behalf of
the Seller and the Servicer in connection with the transactions
contemplated thereby; and an incumbency certificate of the Seller and
the Servicer as to the person or persons executing and delivering each
such document; and
(3) such other documents and evidence with respect to
the Borrower, the Seller, the Servicer, the Back-Up Servicer and the
Custodian as the Funding Agent may reasonably request in order to
establish the corporate existence and good standing of each thereof,
the proper taking of all appropriate corporate proceedings in
connection with the transactions contemplated by this Agreement and
the other Basic Agreements and the compliance with the conditions set
forth herein and therein.
(vii) No fact or condition shall exist under applicable law
or applicable regulations thereunder or interpretations thereof by any
regulatory authority which, in the Funding Agent's reasonable opinion,
would make it unlawful to issue the VFN or for the Borrower or any of
the other parties thereto to perform their respective obligations
under this Agreement and the other Basic Agreements.
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(viii) The Seller and the Borrower shall have filed any
financing statements or amendments thereto, wherever necessary or
advisable in the judgment of the Funding Agent, in order to perfect
the transfer and assignment of the Receivables to the Borrower and the
grant of the security interest therein to the Funding Agent and shall
have delivered file-stamped copies of such financing statements or
other evidence of the filing thereof to the Funding Agent.
(ix) All taxes and fees due in connection with the filing of
the financing statements referred to in clause (viii) of this Section
2.1(g) shall have been paid in full or duly provided for.
(x) No action or proceeding shall have been instituted nor
shall any governmental action be threatened before any court or
governmental agency nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency to
set aside, restrain, enjoin or prevent the performance of this
Agreement or any of the other Basic Agreements or the transactions
contemplated hereby or thereby.
(xi) The Funding Agent shall have received written
confirmation from each of the Rating Agencies that the then-current
ratings assigned by each of them to PARCO's Commercial Paper will not
be reduced or withdrawn as a result of the execution and delivery of
this Agreement by PARCO.
(xii) The Reserve Account shall have been established
pursuant to the Sale and Servicing Agreement.
(h) MATURITY OF COMMERCIAL PAPER. PARCO shall not issue any
Commercial Paper related to the VFN with a maturity in excess of forty-five (45)
days in connection with any financing or refinancing of an increase in the VFN.
SECTION 2.2 SHARING OF PAYMENTS, ETC. If PARCO or any APA Bank (for
purposes of this Section 2.2 only, being a "RECIPIENT") shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any interest in the VFN owned by it in excess of its
ratable share of payments on account of any interest in the VFN obtained by
PARCO and/or the APA Banks entitled thereto, such Recipient shall forthwith
purchase from
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PARCO and/or the APA Banks entitled to a share of such amount participations
in the percentage interests owned by such Persons as shall be necessary to
cause such Recipient to share the excess payment ratably with each such other
Person entitled thereto; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from such Recipient, such
purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient
for such participation to the extent of such recovery, together with an
amount equal to such other Person's ratable share (according to the
proportion of (a) the amount of such other Person's required payment to (b)
the total amount so recovered from the Recipient) of any interest or other
amount paid or payable by the Recipient in respect of the total amount so
recovered.
SECTION 2.3 RIGHT OF SETOFF. Without in any way limiting the
provisions of Section 2.2, each of PARCO and the APA Banks is hereby authorized
(in addition to any other rights it may have) at any time after the occurrence
of a Termination Event or during the continuance of a Potential Termination
Event to setoff, appropriate and apply (without presentment, demand, protest or
other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by PARCO or such APA Bank to, or for the account of,
the Borrower against the amount owing by the Borrower hereunder to such Person
(even if contingent or unmatured).
SECTION 2.4 INTEREST. (a) Any Funding (or portion thereof) funded by
PARCO shall have Discount calculated at the CP Rate.
(b) At the option of the Borrower, any Funding (or portion thereof)
made by the APA Banks to the Borrower pursuant to Section 2.1 hereof shall bear
interest at either (i) if available to the Borrower on the related Funding Date,
the Eurodollar Rate plus 1.25% or (ii) the Alternate Base Rate.
(c) If, on any Purchase Date specified in Article V below, no
Termination Event or Potential Termination Event has occurred and is continuing,
then the portion of the Banks' Aggregate Investment related to a Purchase by the
APA Banks on such Purchase Date shall, at the option of the Borrower, bear
interest at either (i) if available to the Borrower on the related Purchase
Date, the Eurodollar Rate plus 1.25% or (ii) the Alternate Base Rate.
(d) If, on any Purchase Date specified in Article V below, a
Termination Event or Potential Termination Event has occurred and is continuing,
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then the portion of the Banks' Aggregate Investment related to a Purchase by the
APA Banks on such Purchase Date shall bear interest at the Alternate Base Rate
plus 2%.
(e) If any principal of, or interest on, any Funding or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to the
Alternate Base Rate PLUS 2%.
(f) Accrued Interest on each Funding shall be payable in arrears on
each Interest Payment Date for such Funding and upon the Commitment Expiry Date;
PROVIDED that (i) interest accrued pursuant to paragraph (e) of this Section 2.4
shall be payable on demand, (ii) in the event of any repayment of any Funding or
prepayment (other than with respect to a CP Funding) of any Funding, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
ABR Funding or Eurodollar Funding pursuant to Section 2.7, accrued interest on
such ABR Funding or Eurodollar Funding shall be payable on the Distribution Date
occurring immediately after of such conversion.
(g) All interest on Fundings hereunder (other than CP Fundings) shall
be computed on the basis of a year of 360 days, except that interest computed
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate or Eurodollar Rate
shall be determined by the Funding Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.5 PAYMENTS GENERALLY. All payments by the Borrower
hereunder shall be at the times, and in the manner, specified in Section 6.8 of
the Sale and Servicing Agreement. Notwithstanding any provision of this
Agreement or the other Basic Agreements to the contrary, all amounts due and
owing to the Funding Agent and the Secured Parties by the Borrower hereunder and
under the other Basic Agreements (if not due on an earlier date in accordance
with the terms hereof or the other Basic Agreements) will be due and payable on
the Distribution Date occurring in the month sixty-six (66) months following the
Commitment Expiry Date.
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SECTION 2.6 BROKEN FUNDING. In the event of (a) the payment of any
principal of any Eurodollar Funding other than on the last day of a Eurodollar
Funding Period applicable thereto (including as a result of a Termination Event,
Potential Termination Event or Optional Prepayment), (b) the conversion of any
Eurodollar Funding other than on the applicable Interest Payment Date or (c) any
failure to borrow, convert, continue or prepay any Eurodollar Funding on the
date specified in any notice delivered pursuant hereto, then, in any such event,
the Borrower shall compensate the APA Banks for the loss, cost and expense
attributable to such event . Such loss, cost or expense to any APA Bank shall
be deemed to include an amount determined by such APA Bank to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal
amount of such Eurodollar Funding had such event not occurred, at the Eurodollar
Rate that would have been applicable to such Eurodollar Funding, for the period
from the date of such event to the Interest Payment Date therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the related Eurodollar Funding Period), over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate
which such APA Bank would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks
in the interbank eurodollar market. A certificate of any APA Bank setting forth
any amount or amounts that such APA Bank is entitled to receive pursuant to this
Section 2.6 shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay each such APA Bank the amount shown as
due on any such certificate on the next succeeding Distribution Date after
receipt thereof.
SECTION 2.7 CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES MADE
BY THE APA BANKS. Prior to the occurrence of a Termination Event or a Potential
Termination Event, (a) each ABR Funding hereunder may, at the option of the
Borrower, be converted to a Eurodollar Funding and (b) each Eurodollar Funding
may, at the option of the Borrower, be continued as a Eurodollar Funding or
converted to an ABR Funding. If a Termination Event or Potential Termination
Event has occurred and is continuing, then, for so long as any such Termination
Event or Potential Termination Event is continuing, (i) no outstanding Funding
may be converted to, or continued as, a Eurodollar Funding and (ii) unless
repaid, each Eurodollar Funding shall be converted to an ABR Funding on the next
succeeding Interest Payment Date related thereto. For any such conversion or
continuation, the Borrower shall give the Funding Agent irrevocable notice
(each, a "CONVERSION/CONTINUATION NOTICE") of such request not later than
12:30 P.M. (New York time) (i) in the case of a conversion of an ABR Funding
into a Eurodollar
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Funding, or a continuation of a Eurodollar Funding as a Eurodollar Funding,
three (3) Business Days before the date of such conversion or continuation,
as applicable, and (ii) following the occurrence and continuation of a
Termination Event or a Potential Termination Event, in the case of a
conversion of a Eurodollar Funding into an ABR Funding or a continuation of
an ABR Funding as an ABR Funding, on the Business Day of such conversion. If
a Conversion/Continuation Notice has not been timely delivered with respect
to any ABR Funding or Eurodollar Funding, such Funding shall be automatically
continued as, or converted to, an ABR Funding. Each Conversion/Continuation
Notice shall specify (a) the requested date (which shall be a Business Day)
of such conversion or continuation, (b) the aggregate amount and rate option
applicable to the Funding which is to be converted or continued and (c) the
amount and rate option(s) of Funding(s) into which such Funding is to be
converted or continued.
SECTION 2.8 ILLEGALITY. (a) Notwithstanding any other provision
herein, if, after the Closing Date, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation of any
existing or future Law or bank regulatory guideline by any Official Body
charged with the administration, interpretation or application thereof, or
the compliance with any directive of any Official Body (in the case of any
bank regulatory guideline, whether or not having the force of Law), shall
make it unlawful for any APA Bank to acquire or maintain a Eurodollar Funding
as contemplated by this Agreement, (i) such APA Bank shall promptly, after
becoming aware thereof, notify the Funding Agent and the Borrower thereof,
(ii) the commitment of such APA Bank hereunder to make a portion of a
Eurodollar Funding, continue any portion of a Eurodollar Funding as such and
convert an ABR Funding to a Eurodollar Funding shall forthwith be cancelled,
and such cancellation shall remain in effect so long as the circumstance
described above exists, and (iii) such APA Bank's portion of any Eurodollar
Funding then outstanding shall be converted automatically to an ABR Funding
on the last day of the related Eurodollar Funding Period, or within such
earlier period as required by law.
If any such conversion of a portion of a Eurodollar Funding occurs
on a day which is not the last day of the related Eurodollar Funding Period,
the Borrower shall pay to such APA Bank such amounts, if any, as may be
required to compensate such APA Bank pursuant to Section 2.6 hereof. If
circumstances subsequently change so that it is no longer unlawful for an
affected APA Bank to acquire or to maintain a portion of a Eurodollar Funding
as contemplated hereunder, such APA Bank will, as soon as reasonably
practicable after such APA Bank knows of such change in circumstances, notify
the Borrower, and the Funding Agent, and
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upon receipt of such notice, the obligations of such APA Bank to acquire or
maintain its acquisition of portions of Eurodollar Fundings or to convert its
portion of an ABR Funding into portions of Eurodollar Fundings shall be
reinstated.
(b) Each APA Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.8(a) with respect to such APA Bank, it
will, if requested by the Borrower and to the extent permitted by law or by the
relevant Official Body, endeavor in good faith to change the office at which it
books its portions of Eurodollar Fundings hereunder if such change would make it
lawful for such APA Bank to continue to acquire or to maintain its acquisition
of portions of Eurodollar Fundings hereunder; PROVIDED, HOWEVER, that such
change may be made in such manner that such APA Bank, in its sole determination,
suffers no unreimbursed cost or expense or any other disadvantage whatsoever.
SECTION 2.9 INABILITY TO DETERMINE EURODOLLAR RATE. If, prior to the
first day of any Eurodollar Period:
(1) the Funding Agent shall have determined (which determination in
the absence of manifest error shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Eurodollar Funding Period; or
(2) the Funding Agent shall have received notice from the Required
Banks that the Eurodollar Rate determined or to be determined for such
Eurodollar Funding Period will not adequately and fairly reflect the cost
to such APA Banks (as conclusively certified by such APA Banks) of
purchasing or maintaining their affected portions of Eurodollar Fundings
during such Eurodollar Funding Period;
then, in either such event, the Funding Agent shall give telecopy or telephonic
notice thereof (confirmed in writing) to the Borrower and the APA Banks as soon
as practicable thereafter. Until such notice has been withdrawn by the Funding
Agent, no further Eurodollar Fundings shall be made. The Funding Agent agrees
to withdraw any such notice as soon as reasonably practicable after the Funding
Agent is notified of a change in circumstances which makes such notice
inapplicable.
SECTION 2.10 FEES. The Borrower hereby agrees to pay to the Funding
Agent, for the account of the Secured Parties (and, if applicable, itself), the
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Utilization Fee, the Facility Fee and any other fees specified in the Fee
Letters. Such payments shall be made to the Funding Agent on the dates and in
the manner specified in the Fee Letters.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER
SECTION 3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
BORROWER. The Borrower represents and warrants to and covenants with PARCO and
the APA Banks as of the Closing Date and the Initial Funding Date and, except as
otherwise provided herein, as of each Subsequent Funding Date that:
(a) CORPORATE EXISTENCE AND POWER. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The
execution, delivery and performance by the Borrower of this Agreement and the
other Basic Agreements to which it is a party are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official, and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the Certificate of Incorporation
or Bylaws of the Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or result in the creation
or imposition of any Lien on assets of the Borrower (other than the Lien of the
Security Agreement), or require the consent or approval of, or the filing of any
notice or other documentation with, any governmental authority or other Person.
(c) BINDING EFFECT. Each of this Agreement and the other Basic
Agreements to which it is a party constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors.
(d) ACCURACY OF INFORMATION. All information heretofore furnished
by the Borrower to PARCO, the APA Banks or the Funding Agent for purposes of,
or in connection with, this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to PARCO,
the APA Banks or
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the Funding Agent will be, true and accurate in every material respect, on
the date such information is stated or certified.
(e) TAX STATUS. All tax returns (Federal, state and local)
required to be filed with respect to the Borrower have been filed (which
filings may be made by an Affiliate of the Borrower on a consolidated basis
covering the Borrower and other Persons), and there has been paid or adequate
provision made for the payment of all taxes, assessments and other
governmental charges in respect of the Borrower (or in the event consolidated
returns have been filed, with respect to the Persons subject to such returns).
(f) ACTION, SUITS. There are no actions, suits or proceedings
pending or threatened against or affecting the Borrower or any Affiliate of
the Borrower or their respective properties, in or before any court,
arbitrator or other body, which may have a material adverse effect on the
Borrower's ability to perform its obligations hereunder or under the other
Basic Agreements.
(g) USE OF PROCEEDS. The proceeds of any Funding will be used by
the Borrower to acquire the Receivables and related Other Conveyed Property
with respect thereto from the Seller pursuant to the Sale and Servicing
Agreement.
(h) PLACE OF BUSINESS. The chief place of business and chief
executive office of the Borrower are located at 1325 Airmotive Way, Suite
130, Reno, Nevada, and the offices where the Borrower keeps all of its books
and records are located at 1325 Airmotive Way, Reno, Nevada.
(i) MERGER AND CONSOLIDATION. The Borrower has not changed its
name, merged with or into or been consolidated with any other corporation or
been the subject of any proceeding under Title 11, United States Code
(Bankruptcy).
(j) SOLVENCY. The Borrower is not insolvent and will not be
rendered insolvent immediately following the consummation on the Closing
Date, the Initial Funding Date and any Subsequent Funding Date of the
transactions contemplated by this Agreement and the other Basic Agreements,
including (but not limited to) the pledge by the Borrower to the Funding
Agent of the Collateral in accordance with the Security Agreement.
(k) NO TERMINATION EVENT. After giving effect to the Funding, no
Potential Termination Event or Termination Event exists.
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(l) COMPLIANCE. The Borrower has complied in all material respects
with all Requirements of Law in respect of the conduct of its business and
ownership of its property.
(m) NOT AN INVESTMENT COMPANY. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, or is exempt from all provisions of such Act.
(n) ERISA. The Borrower is in compliance in all material respects
with ERISA, and no lien in favor of the Pension Benefit Guaranty Corporation
on any of the Receivables or Other Conveyed Property shall exist.
(o) SUBSIDIARIES. The Borrower does not have any Subsidiaries.
(p) CAPITAL STOCK. The Borrower has neither sold nor pledged any
of its common stock to any entity other than the Seller.
(q) NO MATERIAL ADVERSE CHANGE. Since June 30, 1997, there has
been no material adverse change in the business, assets, operations,
prospects or conditions (financial or otherwise) of the Seller or the
Servicer, either individually or taken as a whole. Since September 25, 1997,
there has been no material adverse change in the business, assets,
operations, prospects or conditions (financial or otherwise) of the Borrower.
(r) FINANCIAL REPORTING. The Borrower will maintain for itself a
system of accounting established and administered in accordance with GAAP,
and will furnish to the Funding Agent for the benefit of the Secured Parties:
(i) QUARTERLY REPORTING. Within forty-five (45) days after
the close of each quarterly period of each of the Borrower's fiscal
years, for the Borrower, consolidated and consolidating unaudited
balance sheets as at the close of each such period and consolidated
and consolidating related statements of operations and cash flows for
the period from the beginning of such fiscal year to the end of such
quarter, all certified by an Authorized Officer of the Borrower.
(ii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate signed by an
Authorized Officer of the Borrower stating that (x) the attached
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financial statements have been prepared in accordance with generally
accepted accounting principles and accurately reflect the financial
condition of the Borrower and (y) to the best of such Person's
knowledge, no Termination Event or Potential Termination Event exists,
or if any Termination Event or Potential Termination Event exists,
stating the nature and status thereof.
(s) CHARACTERISTICS OF RECEIVABLES. Each of the statements listed on
Schedule A to the Security Agreement is true and correct on the Initial Funding
Date and any Subsequent Funding Date with respect to each Receivable to be
purchased on such date.
Any document, instrument, certificate or notice delivered to PARCO,
the Funding Agent or the APA Banks by, or on behalf of, the Borrower or its
Affiliates hereunder or under the other Basic Agreements shall be deemed a
representation and warranty by the Borrower.
The representations and warranties set forth in this Section 3.1 shall
survive the pledge and assignment of the Collateral to the Funding Agent for the
benefit of the Secured Parties. Upon discovery by the Borrower, PARCO, the
Funding Agent or an APA Bank of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others.
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ARTICLE IV
INDEMNIFICATION
SECTION 4.1 INDEMNITY. Without limiting any other rights which
PARCO or the APA Banks may have hereunder or under applicable law, the
Borrower agrees to indemnify PARCO, the APA Banks and the Funding Agent and
any of their permitted assigns and their respective agents, officers,
directors and employees (collectively, "INDEMNIFIED PARTIES") from and
against any and all damages, losses, claims, liabilities, costs and expenses,
including reasonable attorneys' fees (which such attorneys may be employees
of PARCO, the APA Banks and the Funding Agent) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement and the other Basic Agreements, excluding, however, (i) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct
on the part of an Indemnified Party or (ii) recourse (except as otherwise
specifically provided in this Agreement and the other Basic Agreements) for
uncollectible Receivables and Other Conveyed Property. Such Indemnified
Amounts shall be paid in accordance with the terms of the other Basic
Agreements. Without limiting the generality of the foregoing, the Borrower
shall indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(a) reliance on any representation or warranty made by the Borrower
(or any officers of the Borrower) under or in connection with this Agreement
and the other Basic Agreements, any Funding Request or any other information
or report delivered by the Borrower pursuant hereto or thereto, which shall
have been false or incorrect in any material respect when made or deemed made;
(b) the failure by the Borrower to comply with any applicable law,
rule or regulation with respect to the Collateral, or the nonconformity of
the Collateral with any such applicable law, rule or regulation;
(c) the failure to vest and maintain vested in the Funding Agent a
first priority perfected security interest in the Collateral, free and clear
of any Lien (other than the Lien of the Security Agreement);
(d) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under the UCC
of any applicable jurisdiction or other applicable laws with respect to all or
any part of
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the Collateral, which failure has an adverse effect on the validity,
perfected status or priority of the security interest granted to the Funding
Agent under the Security Agreement;
(e) any valid dispute, claim, offset or defense (other than
discharge in bankruptcy of the related Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on such
Receivable not being legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of a Financed Vehicle or services related to such
Receivable or the furnishing or failure to furnish such Financed Vehicle or
services;
(f) any failure of the Borrower to perform its duties, covenants or
obligations in accordance with the provisions of Articles II and IV of the
Security Agreement; or
(g) any product liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with the related Financed Vehicle or related
merchandise or services which are the subject of any Receivable;
PROVIDED, HOWEVER, that if PARCO enters into agreements for the purchase of
interests in receivables from one or more Other Transferors, PARCO shall
allocate such Indemnified Amounts which are in connection with its activities
to the Borrower and each Other Transferor; and PROVIDED, FURTHER, that if
such Indemnified Amounts are attributable to the Borrower and not
attributable to any Other Transferor, the Borrower shall be solely liable for
such Indemnified Amounts or, if such Indemnified Amounts are attributable to
Other Transferors and not attributable to the Borrower, such Other
Transferors shall be solely liable for such Indemnified Amounts.
SECTION 4.2 INDEMNITY FOR RESERVES AND EXPENSES. (a) If after the
date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or
bank regulatory guideline by any Official Body charged with the
administration, interpretation or application thereof, or the compliance with
any directive of any Official Body (in the case of any bank regulatory
guideline, whether or not having the force of Law):
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(1) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Indemnified Party or shall
impose on any Indemnified Party or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting this Agreement, the other Basic Agreements, the
Collateral or payments of amounts due hereunder or thereunder or its
obligation to advance funds under any agreement or otherwise in
respect of this Agreement, the other Basic Agreements or the
Collateral; or
(2) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
other Basic Agreements, the Collateral or payments of amounts due
hereunder or thereunder or its obligation to advance funds under any
agreement or otherwise in respect of this Agreement, the other Basic
Agreements or the Collateral;
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Basic Agreements,
the Collateral and the obligations hereunder and thereunder, by an amount
reasonably deemed by such Indemnified Party to be material, then, on the next
succeeding Distribution Date after demand by the Funding Agent, the Borrower
shall pay to the Funding Agent, for the benefit of such Indemnified Party,
such additional amount or amounts as will compensate such Indemnified Party
for such increased cost; PROVIDED that no such amount shall be payable with
respect to any period commencing more than two hundred seventy (270) days
prior to the date the Funding Agent first notifies the Borrower of its
intention to demand compensation therefor under this Section 4.2(a); PROVIDED
FURTHER that if such change in Law, rule or regulation giving rise to such
increased costs or reductions is retroactive, then such 270-day period shall
be extended to include the period of retroactive effect thereof.
(b) If any Indemnified Party shall have determined that after the date
hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof
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by any Official Body, or any directive regarding capital adequacy (in the
case of any bank regulatory guideline, whether or not having the force of
law) of any such Official Body, has or would have the effect of reducing the
rate of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with respect
hereto to a level below that which such Indemnified Party (or its parent)
could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by
an amount reasonably deemed by such Indemnified Party to be material, then
from time to time, within ten (10) days after demand by the Funding Agent,
the Borrower shall pay to the Funding Agent, for the benefit of such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction; PROVIDED that no such
amount shall be payable with respect to any period commencing two hundred
seventy (270) days prior to the date the Funding Agent first notifies the
Borrower of its intention to demand compensation under this Section 4.2(b);
PROVIDED FURTHER that if such change in Law, rule or regulation giving rise
to such increased costs or reductions is retroactive, then such 270-day
period shall be extended to include the period of retroactive effect thereof.
(c) The Funding Agent will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Article IV. A
notice by the Funding Agent claiming compensation for the benefit of an
Indemnified Party under this Article IV and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, the Funding Agent may
use any reasonable averaging and attributing methods.
(d) Anything in this Section 4.2 to the contrary notwithstanding,
if PARCO enters into agreements for the acquisition of interests in
receivables from one or more Other Transferors, PARCO shall allocate the
liability for any amounts under this Section 4.2 ("SECTION 4.2 COSTS")
ratably to the Borrower and each Other Transferor; and PROVIDED, FURTHER,
that if such Section 4.2 Costs are attributable to the Borrower and not
attributable to any Other Transferor, the Borrower shall be solely liable for
such Section 4.2 Costs or if such Section 4.2 Costs are attributable to Other
Transferors and not attributable to the Borrower, such Other Transferors
shall be solely liable for such Section 4.2 Costs.
SECTION 4.3 INDEMNITY FOR TAXES. (a) All payments made by the
Borrower under this Agreement and any other Transaction Document shall be made
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free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Official Body, EXCLUDING (i) taxes
imposed on the net income of the Funding Agent or any other Indemnified
Party, however denominated, and (ii) franchise taxes imposed on any of them
in lieu of income taxes, in each case imposed: (1) by the United States or
any political subdivision or taxing authority thereof or therein; (2) by any
jurisdiction under the laws of which the Funding Agent or such Indemnified
Party or lending office is organized or in which its lending office is
located, managed or controlled or in which its principal office is located or
any political subdivision or taxing authority thereof or therein; or (3) by
reason of any connection between the jurisdiction imposing such tax and the
Funding Agent, such Indemnified Party or such lending office other than a
connection arising solely from this Agreement or any other Basic Agreement or
any transaction hereunder or thereunder (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, collectively or
individually, "TAXES"). If any such Taxes are required to be withheld from
any amounts payable to the Funding Agent or any Indemnified Party hereunder,
the amounts so payable to the Funding Agent or such Indemnified Party shall
be increased to the extent necessary to yield to the Funding Agent or such
Indemnified Party (after payment of all Taxes) all amounts payable hereunder
at the rates or in the amounts specified in this Agreement and the other
Basic Agreements. The Borrower shall indemnify the Funding Agent or any such
Indemnified Party for the full amount of any such Taxes on the Distribution
Date immediately succeeding the date of written demand therefor by the
Funding Agent or any Indemnified Party.
(b) Each Indemnified Party that is not incorporated under the laws
of the United States of America or a state thereof or the District of
Columbia shall:
(i) deliver to the Borrower and the Funding Agent (A) two duly
completed copies of IRS Form 1001 or Form 4224, or successor applicable
form, as the case may be, and (B) if applicable, an IRS Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Funding Agent two (2)
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
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(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrower
or the Funding Agent;
unless, in any such case, an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Indemnified Party from duly
completing and delivering any such form with respect to it, and such
Indemnified Party so advises the Borrower and the Funding Agent. Each such
Indemnified Party so organized shall certify (i) in the case of an IRS Form
1001 or IRS Form 4224, that it is entitled to receive payments under the this
Agreement and the other Basic Agreements without deduction or withholding of
any United States federal income taxes and (ii) in the case of an IRS Form
W-8 or IRS Form W-9, that it is entitled to an exemption from United States
backup withholding tax. Each Person that is a Purchaser or Participant
hereunder, or which otherwise becomes a party to this Agreement as an APA
Bank, shall, prior to the effectiveness of such assignment, participation or
addition, as applicable, be required to provide all of the forms and
statements required pursuant to this Section 4.3.
SECTION 4.4 OTHER COSTS, EXPENSES AND RELATED MATTERS. (a) The
Borrower agrees, upon receipt of a written invoice, to pay or cause to be
paid, and to save PARCO and the Funding Agent harmless against liability for
the payment of, all reasonable out-of-pocket expenses (including, without
limitation, all reasonable attorneys', accountant's and other third parties'
fees and expenses, any filing fees and expenses incurred by officers or
employees of PARCO or the Funding Agent) incurred by or on behalf of PARCO,
any APA Bank or the Funding Agent (i) in connection with the negotiation,
execution, delivery and preparation of this Agreement and the other Basic
Agreements and any documents or instruments delivered pursuant hereto or
thereto and the transactions contemplated hereby and thereby (subject to the
terms of that certain engagement letter, dated as of June 24, 1997, between
the Seller and The Chase Manhattan Bank) and (ii) from time to time (a)
relating to any amendments, waivers or consents under this Agreement and the
other Basic Agreements, (b) arising in connection with PARCO's, the APA
Banks' or their respective agents' enforcement or preservation of rights
(including, without limitation, the perfection and protection of the Funding
Agent's first priority security interest in the Collateral), or (c) arising
in connection with any audit, dispute, disagreement, litigation or
preparation for litigation involving this Agreement.
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ARTICLE V
LIQUIDITY COMMITMENT
SECTION 5.1 LIQUIDITY PURCHASES. (a) SALES BY PARCO. From time
to time prior to the Commitment Expiry Date, PARCO, in its sole discretion,
may elect to deliver a Sale Notice to the Funding Agent or, following a PARCO
Wind-Down Event, shall be obligated to deliver a Sale Notice to the Funding
Agent. Each Sale Notice shall constitute an irrevocable offer by PARCO to
sell all or a portion of the PARCO Interest at the Purchase Price; PROVIDED
that, following a PARCO Wind-Down Event, the Assigned Percentage specified in
any such Sale Notice shall be 100%. Each Sale Notice shall be deemed to be a
representation and warranty by PARCO that no PARCO Insolvency Event shall
have occurred and be continuing. Each APA Bank hereby agrees to purchase
from PARCO such APA Bank's Pro Rata Share of the Assigned Percentage of PARCO
Interest for a purchase price equal to such APA Bank's Pro Rata Share of the
Purchase Price on the Purchase Date (which date, subject to Section 5.1(b)
below, may be the same as the date of the Sale Notice); PROVIDED that no such
purchase shall be made on a Purchase Date if a PARCO Insolvency Event shall
have occurred and be continuing. The Funding Agent shall promptly advise
each APA Bank (by telecopy or by telephone call promptly confirmed in writing
by telecopy) of the receipt and content of the Sale Notice and shall promptly
advise PARCO of each APA Bank's Pro Rata Share of the Purchase Price
thereunder. The Purchase Price shall be deposited in immediately available
funds into the account(s) specified by PARCO in the Sale Notice.
(b) TIMING OF SALE NOTICE AND PURCHASE DATE. If, at or prior to
12:30 P.M. (New York time) on any Business Day, PARCO delivers the Sale
Notice to the Funding Agent specifying that the Purchase Date shall be the
same date as the date of the Sale Notice, the Funding Agent shall, by no
later than 1:00 P.M. (New York time), notify each APA Bank of such Sale
Notice. Each APA Bank shall make a purchase of the PARCO Interest by
advancing immediately available funds on such date to PARCO's account at the
principal office of the Funding Agent no later than 2:00 P.M. (New York
time). Notwithstanding the fact that the Purchase Date may occur on a date
which is later than the date on which the Sale Notice is delivered to the
Funding Agent, the several obligations of each APA Bank to accept such
transfer and to make payment of the amounts required to be paid by it
pursuant to Section 5.2 shall arise immediately upon receipt by the Funding
Agent of the Sale Notice. Regardless of when the Sale Notice is received,
any APA Bank may designate any one or more of its domestic or foreign
branches, offices or affiliates through which it
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will fund its Pro Rata Share of the Purchase Price for a Purchase, and the
term "APA Bank" shall include any such branch, office or affiliate for such
purpose.
SECTION 5.2 SEVERAL PURCHASE COMMITMENTS OF THE APA BANKS.
(a) FUNDING UPON RECEIPT OF A SALE NOTICE FROM PARCO. Subject to
Section 5.1, each APA Bank hereby absolutely and unconditionally severally
commits to PARCO and to the Funding Agent to provide the Funding Agent, on
the Purchase Date (if notice has been given in accordance with Section 5.1
(b)) at the principal office of the Funding Agent in The City of New York for
delivery to PARCO, with immediately available funds in an amount equal to
such APA Bank's Pro Rata Share of the Purchase Price, whereupon such APA Bank
shall become an assignee of PARCO under this Agreement and the other Basic
Agreements with an undivided interest in the Collateral equal to its Pro Rata
Share of the Assigned Percentage of the PARCO Interest. The APA Banks'
several obligations under this Section 5.2(a) to provide the Funding Agent
with funds pursuant to this Article V shall terminate on the Commitment
Expiry Date. Notwithstanding anything contained in this Section 5.2(a) or
elsewhere in this Agreement to the contrary, no APA Bank shall be obligated
to provide the Funding Agent with aggregate funds in connection with a
Purchase in an amount that would exceed such APA Bank's unused Commitment
then in effect, and the failure of any APA Bank to make its Pro Rata Share of
the Purchase Price available to the Funding Agent shall not relieve any other
APA Bank of its obligations hereunder.
(b) DEFAULTING APA BANKS. If, by 2:00 P.M. (New York time), one or
more APA Banks (each, a "DEFAULTING APA BANK", and each APA Bank other than
the Defaulting APA Bank being referred to as a "NON-DEFAULTING APA BANK")
fails to make its Pro Rata Share of the Purchase Price available to the
Funding Agent pursuant to Section 2.1(a) (the aggregate amount not so made
available to the Funding Agent being herein called the "PURCHASE PRICE
DEFICIT"), then the Funding Agent shall, by no later than 2:30 P.M. (New York
time), instruct each Non-Defaulting APA Bank to pay, by no later than 3:00
P.M. (New York time), in immediately available funds, to the account
designated by the Funding Agent, an amount equal to the lesser of (x) such
Non-Defaulting APA Bank's proportionate share (based upon the relative
Commitments of the Non-Defaulting APA Banks) of the Purchase Price Deficit
and (y) its unused Commitment. A Defaulting APA Bank shall forthwith, upon
demand, pay to the Funding Agent, for the ratable benefit of the
Non-Defaulting APA Banks, all amounts paid by each Non-Defaulting APA Bank on
behalf of such Defaulting APA Bank, together with interest thereon, for each
day
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from the date a payment was made by a Non-Defaulting APA Bank until the date
such Non-Defaulting APA Bank has been paid such amounts in full, at a rate
per annum equal to the sum of the Federal Funds Effective Rate plus 2% (or
such higher rate as is applicable through interbank compensation rules). In
addition, without prejudice to any other rights that PARCO may have under
applicable law, each Defaulting APA Bank shall pay to PARCO forthwith upon
demand, the difference between the Defaulting APA Bank's unpaid Pro Rata
Share of the Purchase Price and the amount paid with respect thereto by the
Non-Defaulting APA Banks, together with interest thereon, for each day from
the date of the Funding Agent's request for such Defaulting APA Bank's Pro
Rata Share of the Purchase Price pursuant to Section 5.1(b) until the date
the requisite amount is paid to PARCO in full, at a rate per annum equal to
the sum of the Federal Funds Effective Rate plus 2% (or such higher rate as
is applicable through interbank compensation rules).
SECTION 5.3 NONRECOURSE NATURE OF TRANSACTIONS. Each of the
Funding Agent and the APA Banks hereby agrees that all Purchases under this
Article V shall be without recourse, representation or warranty of any kind
to PARCO or the Funding Agent.
SECTION 5.4 PAYMENTS; INDEMNITY. (a) PAYMENTS GENERALLY. On or
prior to the Closing Date, the Funding Agent shall establish a demand deposit
account with Chase for the benefit of PARCO and the APA Banks (the "FUNDING
ACCOUNT"), into which all payments received in respect of this Agreement and
the other Basic Agreements shall be deposited. The Funding Agent, on behalf
of PARCO and the APA Banks, shall have the sole right of withdrawal from the
Funding Account. For so long as any amounts remain due and owing to PARCO or
the APA Banks hereunder or under the other Basic Agreements, the Funding
Agent shall distribute all payments received by it in respect of the Basic
Agreements immediately after receipt thereof by (i) transferring PARCO's Pro
Rata Share of any such payments to PARCO and (ii) immediately after giving
effect to the payment in clause (a)(i), if any, transferring the remainder of
any such payments to the APA Banks ratably in accordance with their Pro Rata
Shares (calculated without regard to that portion of the Commitment of a
Defaulting APA Bank which such Defaulting APA Bank failed to fund pursuant to
this Agreement). Such transfers shall be made by the Funding Agent by
withdrawing funds on deposit in the Funding Account and by remitting such
funds to the accounts of PARCO and the several APA Banks specified by each of
them from time to time.
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(b) REQUESTS FOR INDEMNITY UNDER THE BASIC AGREEMENTS. The Funding
Agent shall, at the written request of any APA Bank, make demand of PARCO for
payment of any amounts held by PARCO from time to time claimed by such APA
Bank pursuant to this Agreement and the other Basic Agreements, and the
Funding Agent shall, upon its receipt of such amounts, distribute them to
each such APA Bank ratably in accordance with their respective Pro Rata
Shares (calculated, in the case of each Defaulting APA Bank, without regard
to that portion of its Commitment related to which such Defaulting APA Bank
failed to fund pursuant to this Agreement).
(c) PAYMENTS CONDITIONAL UPON RECEIPT FROM PARCO, THE BORROWER, THE
SELLER OR THE SERVICER. Anything in this Agreement to the contrary
notwithstanding, the Funding Agent (i) shall have no obligation to make any
payments to the APA Banks unless and until it has received such amounts from
PARCO, the Borrower, the Seller or the Servicer pursuant to this Agreement or
the other Basic Agreements and (ii) shall be entitled to assume that such
amounts have been paid by PARCO, the Borrower, the Seller or the Servicer
absent notice to the contrary.
SECTION 5.5 REDUCTION OF COMMITMENTS. The Aggregate Commitment
shall be automatically reduced, ratably among the APA Banks, by the amount of
any permanent reduction of the Facility Limit. The Funding Agent shall
notify the APA Banks and each Rating Agency of the occurrence of any such
reduction specified in the immediately preceding sentence promptly after the
Funding Agent (individually or in its capacity as Funding Agent) becomes
aware of the same. In addition to the foregoing, the Commitment of each APA
Bank and the Aggregate Commitment shall be reduced to zero on the Commitment
Expiry Date.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE APA BANKS
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE APA BANKS TO
PARCO AND THE FUNDING AGENT. Each of the APA Banks (a) confirms that it has
received copies of the Basic Agreements; (b) represents and warrants to the
Funding Agent and PARCO that it has, independently and without reliance upon
the Funding Agent, PARCO or any other APA Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, the Servicer, the
Borrower, the Custodian, any Hedge Counterparty, the Back-Up Servicer and
the Obligors, and made its own decision to enter into this Agreement; (c)
represents that it will, independently and without reliance upon the Funding
Agent, PARCO or any other APA Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Basic Agreements, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, prospects, financial and other condition and
creditworthiness of the Seller, the Servicer, the Borrower, the Custodian,
any Hedge Counterparty, the Back-Up Servicer and the Obligors; (d) represents
and warrants that it is a corporation or a banking association duly organized
and validly existing under the laws of its jurisdiction of incorporation or
organization and has all corporate power to perform its obligations
hereunder; (e) represents and warrants that no authorization or approval or
other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery and
performance by it of this Agreement, which has not otherwise been obtained;
(f) represents and warrants that the execution, delivery and performance of
this Agreement are within its corporate powers, have been duly authorized by
all necessary corporate action, do not contravene or violate (i) its
certificate or articles of incorporation or association or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any adverse claim on its assets, which
contravention or violation in any of the foregoing cases could have a
material adverse effect on its financial condition or its ability to perform
its obligations hereunder; (g) represents
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and warrants that this Agreement constitutes its legal, valid and binding
obligations enforceable against it in accordance with their terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to limiting creditors' rights
generally and by equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and (h)
represents and warrants that this Agreement has been duly authorized,
executed and delivered by it.
SECTION 6.2 PARCO DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.
By executing and delivering any Sale Notice pursuant to Section 5.2(a), (a)
PARCO makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement and the other Basic Agreements or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement and the other Basic Agreements, or any other
instrument or document furnished pursuant hereto or thereto or in connection
herewith or therewith, and (b) PARCO makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Seller, the Servicer, the Borrower, the Custodian, any Hedge Counterparty,
the Back-Up Servicer or any Obligor or the performance or observance by such
Persons of any of their respective obligations under this Agreement, the
other Basic Agreements or any other instrument or document furnished pursuant
hereto or thereto or in connection herewith or therewith.
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ARTICLE VII
THE FUNDING AGENT
SECTION 7.1 APPOINTMENT. Each Secured Party hereby irrevocably
designates and appoints Chase as Funding Agent hereunder, and authorizes the
Funding Agent to take such action on its behalf under the provisions of this
Agreement and the other Basic Agreements and to exercise such powers and
perform such duties as are expressly delegated to the Funding Agent by the
terms of this Agreement and the other Basic Agreements, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Funding Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Secured Party, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Funding Agent shall be read into this
Agreement or the other Basic Agreements or otherwise exist against the
Funding Agent. The provisions of this Article VII are solely for the benefit
of the Funding Agent and the Secured Parties, and neither the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty nor the Back-Up
Servicer shall have any rights as a third party beneficiary or otherwise
under any of the provisions hereof. In performing its functions and duties
hereunder, the Funding Agent shall act solely as the funding agent of the
Secured Parties and does not assume, nor shall be deemed to have assumed, any
obligation or relationship of trust or agency with or for the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty or the Back-Up
Servicer.
SECTION 7.2 DELEGATION OF DUTIES. The Funding Agent may execute
any of its duties under this Agreement and the other Basic Agreements by or
through its subsidiaries, affiliates, agents or attorneys-in-fact, and the
Funding Agent shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Funding Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
SECTION 7.3 EXCULPATORY PROVISIONS. Neither the Funding Agent nor
any of its directors, officers, agents or employees shall be (a) liable for
any action lawfully taken or omitted to be taken by it or them or any Person
described in Section 7.2 under or in connection with this Agreement, the
Receivables, the other Conveyed Property or the other Basic Agreements
(except for its, their or such Person's own gross negligence or willful
misconduct), or (b) responsible in any
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manner to any of the Secured Parties, the Borrower, the Seller, the Servicer,
the Custodian, any Hedge Counterparty or the Back-Up Servicer for any
recitals, statements, representations or warranties contained in the Basic
Agreements or in any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, such
agreements or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Receivables, the Other Conveyed Property
or the Basic Agreements, or any other document furnished in connection
therewith or herewith, or for any failure of any Person (other than itself
and the Persons specified in Section 7.2) to perform its obligations under
any Basic Agreement or for the satisfaction of any condition specified in any
Basic Agreement. Except as expressly set forth in the Basic Agreements, the
Funding Agent shall not be under any obligation to any Secured Party to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, the Receivables, the
Other Conveyed Property or the Basic Agreements, or to inspect the
properties, books or records of the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty or the Back-Up Servicer.
SECTION 7.4 RELIANCE BY FUNDING AGENT. The Funding Agent shall,
in all cases, be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without
limitation, counsel to each of the Secured Parties and the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty and the Back-Up
Servicer), independent accountants and other experts selected by the Funding
Agent. The Funding Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement, the other Basic Agreements,
the Receivables or the Other Conveyed Property or any other document
furnished in connection herewith or therewith unless it shall first receive
such advice or concurrence of the Required Banks or all of the APA Banks, as
the case may be, as it deems appropriate, or it shall first be indemnified to
its satisfaction by all of the APA Banks against any and all liability, cost
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Funding Agent shall, in all cases, be fully
protected in acting, or in refraining from acting, under this Agreement, the
other Basic Agreements, the Receivables or the Other Conveyed Property or any
other document furnished in connection herewith or therewith in accordance
with a request of the Required Banks or all of the APA Banks, as applica-
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ble, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Secured Parties.
SECTION 7.5 NOTICE OF TERMINATION EVENT AND OTHER EVENTS; VOTING.
The Funding Agent shall not be deemed to have knowledge or notice of the
occurrence of any Termination Event, Potential Termination Event, PARCO
Wind-Down Event or Potential PARCO Wind-Down Event unless the Funding Agent
has received notice from the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty, the Back-Up Servicer or any Secured Party
referring to any Basic Agreement stating that such an event has occurred and
describing such event. If the Funding Agent receives such a notice, the
Funding Agent shall promptly give notice thereof to each Secured Party and
each Rating Agency. Subject to the provisions of Section 8.l(b), to the
extent the Funding Agent is entitled to consent to or withhold its consent of
any waiver or amendment of any Basic Agreement in accordance with the terms
thereof, the Funding Agent shall (a) give prompt notice to the Secured
Parties and Rating Agencies of any such waiver or amendment of which it is
aware, and (b) take such action with respect to such waiver, amendment,
Termination Event, Potential Termination Event, PARCO Wind-Down Event or
Potential PARCO Wind-Down Event as shall be directed by the Required Banks;
PROVIDED, HOWEVER, that unless and until the Funding Agent shall have
received such directions, the Funding Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Termination Event, Potential Termination Event, PARCO Wind-Down Event or
Potential PARCO Wind-Down Event as the Funding Agent shall deem advisable and
in the best interests of the APA Banks.
SECTION 7.6 NON-RELIANCE BY APA BANKS ON FUNDING AGENT AND OTHER
APA BANKS. Each APA Bank expressly acknowledges that neither the Funding
Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Funding Agent hereafter taken, including, without
limitation, any review of the affairs of PARCO, the Borrower, the Seller, the
Servicer, the Custodian, any Hedge Counterparty or the Back-Up Servicer,
shall be deemed to constitute any representation or warranty by the Funding
Agent. The Funding Agent shall not have any duty or responsibility to
provide any APA Bank with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of PARCO, the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty or the Back-Up Servicer which may come into
the possession of the Funding Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
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SECTION 7.7 INDEMNIFICATION. The APA Banks agree to indemnify the
Funding Agent and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Borrower or any other Person
pursuant to a Basic Agreement, and without limiting the obligation of any
such Person to do so in accordance with the terms of the Basic Agreements),
ratably according to their Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for the Funding Agent or the affected Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Funding Agent or such affected Person shall be designated
a party thereto) that may at any time be imposed on, incurred by or asserted
against the Funding Agent or such affected Person as a result of, or arising
out of, or in any way related to or by reason of, any of the transactions
contemplated hereunder or under the Agreement or the execution, delivery or
performance of this Agreement, the Receivables, the Other Conveyed Property,
any other Basic Agreement or any other document furnished in connection
herewith or therewith (but excluding any such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful
misconduct of the Funding Agent or such affected Person).
SECTION 7.8 FUNDING AGENT IN ITS INDIVIDUAL CAPACITY. The Funding
Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with PARCO, the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty or the Back-Up
Servicer or any Affiliate of such Persons as though the Funding Agent were
not the Funding Agent hereunder. With respect to the acquisition of its
Assigned Percentage of a Purchase Price pursuant to this Agreement, the
Funding Agent shall have the same rights and powers under this Agreement and
the other Basic Agreements as any APA Bank and may exercise the same as
though it were not the Funding Agent, and the terms "APA Bank" and "APA
Banks" shall include the Funding Agent in its individual capacity as an APA
Bank.
SECTION 7.9 SUCCESSOR FUNDING AGENT. Subject to the appointment
and acceptance of a successor Funding Agent as provided in this Section 7.9,
the Funding Agent may, upon five (5) days' notice to PARCO, the APA Banks and
the Rating Agencies, and the Funding Agent will, upon the direction of the
Required Banks (calculated without regard to the Pro Rata Share of Chase or
any Affiliate of Chase), resign as Funding Agent; PROVIDED, in either case,
that an APA Bank agrees
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to become the successor Funding Agent hereunder in accordance with the next
sentence. If the Funding Agent shall resign as Funding Agent under this
Agreement, then the Required Banks during such period shall appoint, from
among the APA Banks, a successor agent, whereupon such successor agent shall
succeed to the rights, powers and duties of the Funding Agent, and the term
"Funding Agent" shall mean such successor agent, effective upon its
acceptance of such appointment, and the former Funding Agent's rights, powers
and duties as Funding Agent shall be terminated, without any other or further
act or deed on the part of such former Funding Agent or any of the parties to
this Agreement. After the retiring Funding Agent's resignation hereunder as
Funding Agent, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Funding
Agent under this Agreement.
SECTION 7.10 CHASE CONFLICT WAIVER. Chase acts as PARCO's
administrative agent, as issuing and paying agent for PARCO's Commercial
Paper, as provider of other backup facilities for PARCO, and may provide
other services or facilities from time to time (the "CHASE ROLES"). Without
limiting the generality of Section 7.8, each party hereto hereby acknowledges
and consents to any and all Chase Roles, waives any objections it may have to
any actual or potential conflict of interest caused by Chase's acting as the
Funding Agent or as an APA Bank hereunder and acting as or maintaining any of
the Chase Roles, and agrees that in connection with any Chase Role, Chase may
take, or refrain from taking, any action which it in its discretion deems
appropriate. The APA Banks are hereby notified that PARCO may delegate
responsibility for signing and/or sending Sale Notices to Chase as PARCO's
administrative agent.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 WAIVERS; AMENDMENTS, ETC.
(a) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay by the
Funding Agent or any Secured Party in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Funding Agent and the Secured Parties hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 8.1(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Funding or
a Purchase hereunder shall not be construed as a waiver of any Termination
Event or Potential Termination Event, regardless of whether the Funding Agent
or any Secured Party may have had notice or knowledge of such Termination
Event or Potential Termination Event at the time.
(b) AMENDMENTS, ETC. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower, PARCO and the Required
Banks or by the Borrower, PARCO and the Funding Agent with the consent of the
Required Banks; PROVIDED that no such waiver, amendment or modification shall
become effective without prior written notice to the Rating Agencies;
PROVIDED FURTHER that no such agreement shall (i) increase the Commitment of
any APA Bank without the written consent of such APA Bank, (ii) reduce the
amount of any payments due and owing to PARCO or any APA Bank hereunder and
under the other Basic Agreements without the prior written consent of PARCO
and each APA Bank affected thereby, as applicable, (iii) postpone the
scheduled date of payment of the any amount payable hereunder or under the
other Basic Agreements, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of PARCO and each APA Bank affected thereby, (iv)
change Section 2.1 or Article V in a manner that would alter the PRO RATA
sharing of payments required thereby, without the written
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consent of each APA Bank and, if there is a Net Investment, of PARCO, or (v)
change any of the provisions of this Section 8.1(b) or the definition of
"Required Banks" or any other provision hereof specifying the number or
percentage of APA Banks required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without
the prior written consent of each APA Bank; PROVIDED FURTHER that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Funding Agent hereunder without the prior written consent of the Funding
Agent.
(c) INTEGRATION. This Agreement and the other Basic Agreements
contain a final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof, superseding all prior oral or written understandings.
SECTION 8.2 NOTICES. Except as otherwise expressly provided
herein, all communications and notices provided for hereunder shall be in
writing and shall be (a) hand-delivered by messenger, (b) sent by reputable
overnight or second business day courier, or (c) sent by telecopy or similar
electronic transmission directed to the applicable address or telecopy
number, as the case may be, set forth on Exhibit D hereto (as amended from
time to time) or at such other address or telecopy number as any party may
hereafter specify in writing to the Funding Agent for the purpose of
receiving notices. Each such notice or other communication shall be
effective only upon receipt thereof.
SECTION 8.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL. (a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) For any action related to the judicial enforcement or
interpretation of this Agreement, each of the parties hereto expressly
submits to the nonexclusive jurisdiction of the state or federal courts
located in the County of New York in the State of New York. Each of the
parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to such party at its address for notice under this Agreement, such service to
become effective five (5) days after such mailing. Each of the parties
hereto hereby stipulates that the venues referenced in this Section 8.3(b)
are convenient, and each
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waives any objection that it may now or hereafter have relating to the venue
or convenience of such courts.
(c) The parties hereto hereby agree that no party shall request a
trial by jury in the event of litigation between them concerning this
Agreement or any claims or transactions in connection herewith, and any right
to trial by jury is expressly waived. Each of the parties hereto hereby
acknowledges that such waiver is made with full understanding and knowledge
of the nature of the rights and benefits waived hereby.
SECTION 8.4 SEVERABILITY; COUNTERPARTS; WAIVER OF SETOFF. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Each of the parties hereto (other than PARCO) hereby waives any right of
setoff it may have or to which it may be entitled under this Agreement or the
other Basic Agreements from time to time against PARCO or its assets.
SECTION 8.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the parties hereto and their respective successors and permitted assigns;
PROVIDED that the Borrower shall not assign any of its rights or obligations
hereunder to any Person without the prior written consent of the Secured
Parties. No APA Bank may participate, assign or sell any portion of its
rights hereunder except as required by operation of law, in connection with
the merger, consolidation or dissolution of any APA Bank or as otherwise
provided in this Section 8.5. No assignment hereunder shall become effective
without a Rating Confirmation.
(b) PARTICIPATIONS BY APA BANKS. Any APA Bank may, without the
consent of the Borrower, the Funding Agent or PARCO, sell participations to
one or more banks or other entities (each, a "PARTICIPANT") in all or a
portion of such APA Bank's rights and obligations hereunder and under the
other Basic Agreements (including all or a portion of its Commitment, Funding
Balance and amounts due and
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owing to it); PROVIDED that (i) such APA Bank's obligations under this
Agreement shall remain unchanged, (ii) such APA Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, PARCO, the Funding Agent and the other
APA Banks shall continue to deal solely and directly with such APA Bank in
connection with such APA Bank's rights and obligations under this Agreement
and the other Basic Agreements. Any agreement or instrument pursuant to
which an APA Bank sells such a participation shall provide that such APA Bank
shall retain the sole right to enforce this Agreement and the other Basic
Agreements and to approve any amendment, modification or waiver of any
provision of this Agreement and the other Basic Agreements (as provided by
the terms hereof and thereof); PROVIDED that such agreement or instrument may
provide that such APA Bank will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso
of Section 8.1(b) that affects such Participant. The Borrower agrees that
each Participant shall be entitled to the benefits of Article IV to the same
extent as if it were an APA Bank and had acquired its interest by assignment
pursuant to Section 8.5(c); PROVIDED that no Participant shall be entitled to
receive any greater payment under Article IV than the applicable APA Bank
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent.
(c) ASSIGNMENTS BY APA BANKS.
(i) Any APA Bank may at any time and from time to time,
upon the prior written consent of PARCO and the Funding Agent,
(which consent shall not be unreasonably withheld) assign to one or
more accredited investors or other Persons (each, a "PURCHASER")
all or any part of its rights and obligations under this Agreement
and any other Basic Agreement pursuant to a supplement to this
Agreement, substantially in the form of Exhibit B hereto (each, a
"TRANSFER SUPPLEMENT"), executed by the Purchaser, such selling APA
Bank and, as applicable, the Funding Agent; and PROVIDED, HOWEVER,
that (A) each Purchaser shall purchase an identical percentage in
such selling APA Bank's Commitment, unused Commitment and Funding
Balance, (B) any such assignment cannot be for an amount less than
the lesser of (1) $10,000,000 and (2) such selling APA Bank's
Commitment or Funding Balance (calculated at the time of such
assignment), (C) each Purchaser must be a financial institution
rated at least A-1/P-1 (or the equivalent short-term rating)
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by the Rating Agencies and incorporated in an OECD Country and (D)
each Purchaser shall deliver to the Funding Agent and PARCO an
opinion of such Purchaser's counsel in substantially the form of
Exhibit C hereto. Such assignment shall also be subject to the
other limitations set forth in this Agreement and the other Basic
Agreements, as the case may be.
(ii) Each of the APA Banks agrees that in the event that
it shall cease to have short-term debt ratings of at least A-1 by
S&P and at least P-1 by Moody's, or, if such APA Bank does not have
short-term debt which is rated by S&P's and Moody's, in the event
that the parent corporation of such APA Bank has rated short-term
debt, such parent corporation ceases to have short-term debt
ratings of at least A-1 by S&P and at least P-1 by Moody's (each,
an "AFFECTED APA BANK"), such Affected APA Bank shall be obligated,
at the request of PARCO and the Funding Agent, to assign all of its
rights and obligations hereunder to (x) one or more other APA Banks
selected by PARCO and the Funding Agent which are willing to accept
such assignment, or (y) another financial institution rated at
least A-1/P-1 (or the equivalent short-term rating) by the Rating
Agencies) nominated by the Funding Agent and agreed to by PARCO and
the Funding Agent, and willing to participate in this facility
through the Commitment Expiry Date in the place of such Affected
APA Bank; PROVIDED that (i) the Affected APA Bank receives payment
in full, pursuant to a Transfer Supplement and/or, as applicable,
an assignment, of an amount equal to the Affected APA Bank's
Funding Balance and any other amounts due and owing under this
Agreement and the other Basic Agreements in respect of such
Affected APA Bank's Funding Balance and (ii) such nominated
financial institution, if not an existing APA Bank, satisfies all
the requirements of this Agreement and provides the Funding Agent
with an opinion of counsel in substantially the form of Exhibit C
hereto.
(iii) Upon (A) execution of a Transfer Supplement, (B)
delivery of an executed copy thereof to PARCO and the Funding Agent
and delivery to the Funding Agent and PARCO of an opinion of such
Purchaser's counsel in substantially the form of Exhibit C hereto,
(C) payment, if applicable, by the Purchaser to such selling APA
Bank of an amount equal to the purchase price agreed between
44
<PAGE>
such selling APA Bank and the Purchaser and (D) receipt by PARCO of
a Rating Confirmation, such selling APA Bank shall be released from
its obligations hereunder and under the other Basic Agreements to
the extent of such assignment and the Purchaser shall, for all
purposes, be an APA Bank party to this Agreement and, if and when
applicable, and assignee of PARCO's interest under this Agreement
and the other Basic Agreements and shall have all the rights and
obligations of an APA Bank under this Agreement to the same extent
as if it were an original party hereto or thereto, and no further
consent or action by PARCO, the APA Banks or the Funding Agent
shall be required. The amount of the assigned portion of the
selling APA Bank's Funding Balance allocable to the Purchaser shall
be equal to the Transferred Percentage (as defined in the Transfer
Supplement) of such selling APA Bank's Funding Balance which is
transferred thereunder regardless of the purchase price paid
therefor. Such Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to
reflect the addition of the Purchaser as an APA Bank and the
resulting adjustment of the selling APA Bank's Commitment arising
from the purchase by the Purchaser of all or a portion of the
selling APA Bank's rights, obligations, and interest hereunder and
under the other Basic Agreements.
(d) An APA Bank may, at any time, pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Basic
Agreements to a Federal Reserve Bank or similar central banking authority to
secure obligations of such APA Bank, and this Section 8.5 shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such pledge
or assignment of a security interest shall release an APA Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such APA
Bank as a party hereto.
SECTION 8.6 NO PETITION. Each of the parties hereto hereby covenant
and agree that, prior to the date which is one year and one day after the
payment in full of all outstanding Commercial Paper of PARCO or all outstanding
indebtedness of the Borrower (other than the Subordinated Note), as the case may
be, such party will not institute against, or join any other Person in
instituting against, PARCO or the Borrower, as applicable, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the
45
<PAGE>
laws of any jurisdiction. The provisions of this Section 8.6 shall survive
termination of this Agreement.
SECTION 8.7 LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of PARCO under this Agreement are
solely the corporate obligations of PARCO and, in the case of obligations of
PARCO other than Commercial Paper, shall be payable at such time as funds are
received by or are available to PARCO in excess of funds necessary to pay in
full all outstanding Commercial Paper and, to the extent funds are not available
to pay such obligations, the claims relating thereto shall not constitute a
claim against PARCO but shall continue to accrue. Each party hereto agrees that
the payment of any claim (as defined in Section 101 of Title 11 of the
Bankruptcy Code) of any such party shall be subordinated to the payment in full
of all Commercial Paper.
No recourse under any obligation, covenant or agreement of PARCO
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, employee or agent of PARCO, the Funding Agent or any of their
Affiliates (solely by virtue of such capacity) by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of PARCO, and that no personal liability whatever
shall attach to or be incurred by any incorporator, stockholder, officer,
director, employee or agent of PARCO, the Funding Agent or any of their
Affiliates (solely by virtue of such capacity) or any of them under or by reason
of any of the obligations, covenants or agreements of PARCO contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by PARCO of any of such obligations, covenants or agreements, either at
common law or at equity, or by statute, rule or regulation, of every such
incorporator, stockholder, officer, director, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; PROVIDED that the foregoing shall not relieve any such Person
from any liability it might otherwise have as a result of its fraudulent actions
or omissions. The provisions of this Section 8.7 shall survive termination of
this Agreement.
SECTION 8.8 FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Funding Agent such
additional assignments, agreements, powers and instruments as are required by
the Funding Agent, on behalf of the Secured Parties, to carry into effect the
purposes of this Agreement or the other Basic Agreements or to better assure and
confer unto the Funding Agent its rights, powers and remedies hereunder or
thereunder.
46
<PAGE>
SECTION 8.9 HEADINGS. Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
47
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Funding
Agreement to be executed and delivered by their duly authorized officers or
signatories as of the date hereof.
CP FUNDING CORP., as Borrower
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
Individually as an APA Bank and as
Funding Agent
By:
--------------------------------------
Name:
Title:
PARK AVENUE RECEIVABLES
CORPORATION
By:
--------------------------------------
Name:
Title:
48
<PAGE>
ANNEX 1
COMMITMENTS
<TABLE>
<S> <C>
The Chase Manhattan Bank $ 50,000,000
The Bank of Tokyo-Mitsubishi,
Houston Agency $ 20,000,000
The Industrial Bank of
Japan, Limited, New York Branch $ 30,000,000
The Bank of Nova Scotia, Atlanta Agency $ 20,000,000
Credit Suisse First Boston,
New York Branch $ 50,000,000
ING (U.S.) Capital Corporation $ 75,000,000
------------
Aggregate Commitment $245,000,000
</TABLE>
Date: October 8, 1997
54
<PAGE>
EXHIBIT A
FORM OF
VARIABLE FUNDING NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OF TRANSFER OF THIS NOTE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
Reference is hereby made to (i) that certain Funding Agreement,
dated as of October 8, 1997 (as amended, supplemented or otherwise modified
and in effect from time to time, the "FUNDING AGREEMENT") by and among CP
Funding Corp., a Nevada corporation, as borrower (the "BORROWER"), Park
Avenue Receivables Corporation, a Delaware corporation ("PARCO"), The Chase
Manhattan Bank, a New York banking corporation, as funding agent (in such
capacity, the "FUNDING AGENT") and the several financial institutions party
thereto from time to time (the "APA BANKS" and, together with PARCO, the
"SECURED PARTIES") and (ii) that certain Security Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time, the "SECURITY AGREEMENT"), between the Borrower and the
Funding Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in, or incorporated by
reference into, the Funding Agreement and the Security Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the
order of the Funding Agent, for the account of and for the benefit of PARCO
and the APA Banks at the principal office of the Funding Agent at 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Structured
Finance Services, a principal sum equal to TWO HUNDRED FORTY-FIVE MILLION
DOLLARS ($245,000,000.00), in lawful money of the United States of America
and in immediately available funds.
The date and amount of each Funding extended by PARCO and the APA
Banks, as the case may be, to the Borrower under the Funding Agreement, and each
payment of principal thereof, shall be recorded by the Funding Agent, for the
account of PARCO and the APA Banks, as appropriate, on its books and, prior to
A-1
<PAGE>
any transfer of this Note (or, at the discretion of PARCO and the APA Banks,
at any other time), endorsed by the Funding Agent, on behalf of PARCO and the
APA Banks, on the schedule attached hereto or on any continuation thereof.
Although the stated principal amount of this Note is as stated above, this
Note shall be enforceable only with respect to the Borrower's obligation to
pay the principal hereof to the extent of the unpaid principal amount of the
Fundings outstanding under the Funding Agreement at the time such enforcement
shall be sought.
Carrying Costs in respect of the outstanding principal amount of
this Note shall accrue at the rate or rates from time to time in effect
pursuant to the Funding Agreement and payable to the Funding Agent for the
benefit of the Secured Parties of such Carrying Costs on the dates and in the
manner provided for in the Sale and Servicing Agreement and the Funding
Agreement; PROVIDED that, in all events, Carrying Costs constituting Accrued
Discount shall be payable by the Borrower on any day on which outstanding
Commercial Paper issued by PARCO to fund the Net Investment matures.
Carrying Costs due and payable hereunder shall be payable in accordance with
the priorities set forth in Section 6.8 of the Sale and Servicing Agreement.
Principal in an amount equal to the Targeted Monthly Principal
Payment, if any, will be due and payable on each Distribution Date in
accordance with the priorities set forth in Section 6.8 of the Sale and
Servicing Agreement. Unless otherwise due and payable on an earlier date in
accordance with the terms of the Basic Agreements, the entire outstanding
principal amount of this Note and accrued interest thereon will be due and
payable on the Distribution Date occurring in the calendar month sixty-six
(66) months following the Commitment Expiry Date.
Following the occurrence of a Termination Event, the Funding Agent
may, with the consent of the Required Banks, or shall, at the direction of
the Required Banks, declare all amounts due hereunder to be immediately due
and payable and exercise all remedies available to it pursuant to the Basic
Agreements and applicable law; PROVIDED that, upon the occurrence of an
Insolvency Event with respect to the Borrower, all such amounts immediately
shall become due and owing automatically without the need for presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
The Borrower's obligation to make payments hereunder shall be a
limited recourse obligation of the Borrower, payable solely from the
Collateral, and no recourse shall be had hereunder to the Borrower for
payment hereunder except to
A-2
<PAGE>
the extent of the Collateral. This Note does not purport to summarize the
Funding Agreement, the Security Agreement or the other Basic Agreements, and
reference is hereby made to such agreements for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby.
The Borrower shall pay all costs of collection of any amount due
hereunder when incurred including, without limitation, reasonable attorney's
fees and expenses, and including all costs and expenses actually incurred in
connection with the pursuit by the Funding Agent, on behalf of and at the
direction of the Secured Parties, of any of their rights or remedies referred
to herein or in the Security Agreement or the Funding Agreement, or the
protection of, or realization upon, Collateral, and all such costs shall be
payable in accordance with the terms of the Security Agreement and the
Funding Agreement.
The Borrower hereby waives presentment, notice of dishonor, protest
and other notice or formality with respect to this Note.
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York.
A-3
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Variable Funding Note as of the date and year first above written.
CP FUNDING CORP.
By:
--------------------------
Name:
Title:
A-4
<PAGE>
FUNDING AND REPAYMENT SCHEDULE
Amount of Amount of Principal Notation
Date of Funding Repayment Outstanding By
---- ---------- --------- ----------- ---------
A-5
<PAGE>
EXHIBIT B
[FORM OF TRANSFER SUPPLEMENT]
THIS TRANSFER SUPPLEMENT is entered into as of the ____ day of _________,
19__, by and between ______________________ ("TRANSFEROR") and _______________
("TRANSFEREE").
PRELIMINARY STATEMENTS
A. This Transfer Supplement is being executed and delivered in
accordance with Section 8.5(c) of that certain Funding Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time, the "AGREEMENT"), by and among CP Funding Corp., a Nevada
corporation, Park Avenue Receivables Corporation, a Delaware corporation, the
several APA Banks party thereto from time to time, and The Chase Manhattan
Bank, a New York banking corporation, individually and as Funding Agent.
Capitalized terms used herein and not otherwise defined herein are used with
the meanings set forth in, or incorporated by reference into, the Agreement.
B. The Transferor is an APA Bank party to the Agreement, and the
Purchaser wishes to become an APA Bank thereunder.
C. The Transferor is selling and assigning to the Purchaser an
undivided _______% (the "TRANSFERRED PERCENTAGE") interest in all of
Transferor's rights and obligations under the Agreement and the other Basic
Agreements, including, without limitation, the Transferor's Commitment and
(if applicable) the Transferor's Funding Balance as set forth herein.
The parties hereto hereby agree as follows:
1. The transfer effected by this Transfer Supplement shall become
effective (the "TRANSFER EFFECTIVE DATE") two (2) Business Days (or such other
date selected by the Funding Agent in its sole discretion) following the date on
which a transfer effective notice substantially in the form of Schedule II to
this Transfer Supplement ("TRANSFER EFFECTIVE NOTICE") is delivered by the
Funding Agent to PARCO, the Transferor and the Transferee. From and after the
Transfer Effective Date, the Transferee shall be an APA Bank party to the
Agreement for all purposes
B-1
<PAGE>
thereof as if the Transferee were an original party thereto and the
Transferee agrees to be bound by all of the terms and provisions contained
therein.
2. If there is no Net Investment or Banks' Aggregate Investment
on the Transfer Effective Date, Transferor shall be deemed to have hereby
transferred and assigned to the Transferee, without recourse, representation
or warranty (except as provided in paragraph 6 below), and the Transferee
shall be deemed to have hereby irrevocably taken, received and assumed from
the Transferor, the Transferred Percentage of the Transferor's Commitment and
all rights and obligations associated therewith under the terms of the
Agreement, including, without limitation, the Transferred Percentage of the
Transferor's future funding obligations under Section 5.2(a) of the Agreement.
3. If there is a Net Investment or Banks' Aggregate Investment,
at or before 12:00 noon, local time of the Transferor, on the Transfer
Effective Date, the Transferee shall pay to the Transferor, in immediately
available funds, an amount equal to the sum of (i) the Transferred Percentage
of an amount equal to the Transferor's Funding Balance (such amount, being
hereinafter referred to as the "TRANSFEREE'S FUNDING BALANCE"); (ii) all
accrued but unpaid (whether or not then due) interest attributable to the
Transferee's Funding Balance; and (iii) accrued but unpaid fees and other
costs and expenses payable in respect of the Transferee's Funding Balance for
the period commencing upon each date such unpaid amounts commence accruing,
to and including the Transfer Effective Date (the "TRANSFEREE'S ACQUISITION
COST"), whereupon, the Transferor shall be deemed to have transferred and
assigned to the Transferee, without recourse, representation or warranty
(except as provided in paragraph 6 below), and the Transferee shall be deemed
to have hereby irrevocably taken, received and assumed from the Transferor,
the Transferred Percentage of the Transferor's Commitment and Funding Balance
and all related rights and obligations under the Agreement and the other
Basic Agreements, including, without limitation, the Transferred Percentage
of the Transferor's future funding obligations under Section 5.2(a) of the
Agreement.
4. Concurrently with the execution and delivery hereof, the
Transferor will provide to the Transferee copies of all documents requested
by the Transferee which were delivered to such Transferor pursuant to the
Agreement.
5. Each of the parties to this Transfer Supplement agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as
B-2
<PAGE>
such other party may reasonably request in order to effect the purposes of
this Transfer Supplement.
6. By executing and delivering this Transfer Supplement, the
Transferor and the Transferee confirm to and agree with each other, the
Funding Agent and the APA Banks as follows: (a) other than the representation
and warranty that it has not created any Lien (other than the Lien of the
Funding Agent for the benefit of the Secured Parties) upon any interest being
transferred hereunder, the Transferor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made by any other Person in or in connection with the
Agreement or the other Basic Agreements or the execution, legality, validity,
enforceability, genuineness, sufficiency or value thereof or any other
instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any Collateral; (b) the
Transferor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of PARCO, the Seller, the Servicer,
the Borrower, the Custodian, any Hedge Counterparty, the Back-Up Servicer,
any Obligor, any surety or any guarantor or the performance or observance by
any of such Persons of any of their respective obligations under the
Agreement or the other Basic Agreements or any other instrument or document
furnished pursuant thereto or in connection therewith; (c) the Purchaser
confirms that it has received a copy of the Agreement and the other Basic
Agreements, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Transfer Supplement; (d) the Transferee will, independently and without
reliance upon the Funding Agent, PARCO or any other APA 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 the Agreement or the other Basic Agreements; (e) the Transferee
appoints and authorizes the Funding Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement as are delegated to
the Funding Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (f) the Transferee was not formed for the
purpose of acquiring the interest being acquired hereunder; and (h) the
Transferee agrees that it will perform in accordance with their terms all of
the obligations which, by the terms of the Agreement and the other Basic
Agreements, are required to be performed by it as an APA Bank or as the
holder of PARCO's interest thereunder.
7. Each party hereto represents and warrants to and agrees with
the Funding Agent that it is aware of and will comply with the provisions of
the Agreement, including, without limitation, Sections 5.2, 8.5(c), 8.6 and
8.7 thereof.
B-3
<PAGE>
8. Schedule I hereto sets forth the revised Commitment of the
Transferor and the Commitment of the Transferee, as well as administrative
information with respect to the Transferee.
9. This Transfer Supplement shall be governed by, and construed
in accordance with, the laws of the State of New York.
B-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Supplement to be executed by their respective duly authorized officers as of
the date hereof.
[TRANSFEROR]
By:
------------------------------
Name:
Title:
[TRANSFEREE]
By:
------------------------------
Name:
Title:
B-5
<PAGE>
SCHEDULE I TO TRANSFER SUPPLEMENT
LIST OF PURCHASING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: ___________________, 19__
TRANSFERRED PERCENTAGE: _____ %
<TABLE>
<CAPTION>
Commitment Commitment Outstanding Pro Rata
Transferor [existing] [revised] Funding Balance Share
- ---------- ---------- ---------- --------------- --------
<S> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Commitment Outstanding Pro Rata
Transferee [initial] Funding Balance Share
- ---------- ---------- --------------- -----
<S> <C> <C> <C>
</TABLE>
ADDRESS FOR NOTICES:
- --------------------
____________________
____________________
____________________
Attention:
Telephone:
Telecopy:
B-6
<PAGE>
SCHEDULE II TO TRANSFER SUPPLEMENT
TRANSFER EFFECTIVE NOTICE
TO:_________________, Transferor
_________________
_________________
TO:_________________, Transferee
_________________
_________________
The undersigned, as Funding Agent under the Funding Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time), by and among CP Funding Corp., a Nevada corporation, Park
Avenue Receivables Corporation, a Delaware corporation, the several APA Banks
party thereto from time to time, and The Chase Manhattan Bank, a New York
banking corporation, individually and as Funding Agent, hereby acknowledges
receipt of executed counterparts of a completed Transfer Supplement dated as of
______________, 19__ between ______________, as Transferor, and ______________,
as Transferee. Capitalized terms defined in such Transfer Supplement are used
herein as therein defined or incorporated by reference therein.
1. Pursuant to such Transfer Supplement, you are advised that the
Transfer Effective Date will be _____________, 19__.
2. PARCO and the Funding Agent each hereby consents to the Transfer
Supplement as required by Section 8.5(c) of the Agreement.
[3. Pursuant to such Transfer Supplement, the Transferee is required
to pay $_________ to the Transferor at or before 12:00 noon (local time of the
Transferor) on the Transfer Effective Date in immediately available funds.]
Very truly yours,
THE CHASE MANHATTAN BANK,
as Funding Agent
By:_____________________________________
Authorized Signatory
B-7
<PAGE>
PARK AVENUE RECEIVABLES
CORPORATION
By:_____________________________________
Authorized Signatory
B-8
<PAGE>
EXHIBIT C
FORM OF OPINION OF COUNSEL
Park Avenue Receivables Corporation Standard & Poor's Ratings Services
c/o Global Securitization Services, LLC 25 Broadway
25 West 43rd Street, Suite 704 New York, New York 10004
New York, New York 10036
The Chase Manhattan Bank, as Moody's Investors Service, Inc.
Administrative Agent, Depositary, 99 Church Street
Liquidity Agent, Liquidity Bank, New York, New York 10007
L/C Agent and L/C Bank
270 Park Avenue
New York, New York 10017
Re: Transfer Supplement dated as of _____________ with [Name of Bank]
Ladies and Gentlemen:
We have acted as counsel for [Name of Bank] (the "Bank") in connection
with (i) the Funding Agreement, dated as of October 8, 1997 (as amended,
supplemented or otherwise modified to the date hereof, the "AGREEMENT"; terms
defined therein and not otherwise defined in this letter shall have the
respective meanings ascribed therein), by and among CP Funding Corp., Park
Avenue Receivables Corporation, a Delaware corporation, the several APA Banks
party thereto from time to time, and The Chase Manhattan Bank, a New York
banking corporation, individually and as Funding Agent, and (ii) the Transfer
Supplement (the "Transfer Supplement") dated as of ______________, 199__ between
[Name of Transferor] as "Transferor" (as defined therein) and the Bank as
"Transferee" (as defined therein), consented to by PARCO and the Funding Agent.
1. The Bank is a _________________ organized, validly existing and
in good standing under the laws of _______________. The Bank has the corporate
power and authority to execute and deliver the Transfer Supplement and to
perform its obligations under the Funding Agreement.
C-1
<PAGE>
2. No governmental approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize, or is required in
connection with, the execution or delivery by the Bank of the Transfer
Supplement or the performance by the Bank of its obligations thereunder and
under the Funding Agreement.
3. Neither the execution and delivery of the Transfer Supplement by
the Bank, nor the consummation of the transactions contemplated thereby and by
the Funding Agreement, will contravene, or result in a violation of, any law
applicable to the Bank.
4. The Transfer Supplement has been duly authorized, executed and
delivered by the Bank, and the Funding Agreement, as amended by the Transfer
Supplement, constitutes the legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, except such
enforceability may be limited by bankruptcy, insolvency, receivership,
conservatorship or other similar laws, regulations and administrative orders of
general application relating to or affecting the enforcement of creditors'
rights in general and the rights of creditors of banks as the same may be
applied in the event of the bankruptcy, insolvency, receivership,
conservatorship or other similar event in respect of the Bank or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5. With the exception of obligations being given priority by statute
or regulation, the obligations of the Bank under the Funding Agreement, as
amended by the Transfer Supplement, will rank PARI PASSU with all obligations of
the Bank which are not contractually subordinated to payment of such
obligations.
Very truly yours,
[NOTE THAT ADDITIONAL OPINIONS MAY BE REQUIRED
FROM FOREIGN APA BANKS]
C-2
<PAGE>
EXHIBIT D
NOTICE ADDRESSES
IF TO THE BORROWER:
CP Funding Corp.
1325 Airmotive Way, Suite 130
Reno, Nevada 8950
Attention: President
Telephone: (702) 322-2221
Telecopy: (702) 322-8808
IF TO PARCO:
Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
25 West 43rd Street, Suite 704
New York, New York 10036
Attention: President
Telephone: (212) 302-5151
Telecopy: (212) 302-8767
IF TO THE FUNDING AGENT OR THE APA BANKS:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Services
Telephone: (212) 946-7861
Telecopy: (212) 946-7776
D-1
<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,
------------------- ------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average
shares outstanding 29,890,355 28,653,775 29,684,960 28,513,145
Incremental shares
resulting from assumed
exercise of stock options 2,516,204 2,024,414 2,514,307 1,885,424
---------- ---------- ---------- ----------
Weighted average shares
and assumed incremental
shares 32,406,559 30,678,189 32,199,267 30,398,569
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
NET INCOME $14,181 $9,198 $27,375 $17,270
------- ------ ------- -------
------- ------ ------- -------
EARNINGS PER SHARE:
Basic $ .47 $ .32 $ .92 $ .61
------- ------ ------- -------
------- ------ ------- -------
Diluted $ .44 $ .30 $ .85 $ .57
------- ------ ------- -------
------- ------ ------- -------
</TABLE>
Basic earnings per share has been computed by dividing net income by the
weighted average shares outstanding.
Diluted earnings per share has been computed by dividing net income by the
weighted average shares and assumed incremental shares. Assumed incremental
shares were computed using the treasury stock method. The average common
stock market price for the period was used to determine the number of
incremental shares.
<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> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 78,437
<SECURITIES> 6,500
<RECEIVABLES> 269,141
<ALLOWANCES> (11,350)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 22,824
<DEPRECIATION> 5,592
<TOTAL-ASSETS> 562,295
<CURRENT-LIABILITIES> 0
<BONDS> 248,966
0
0
<COMMON> 338
<OTHER-SE> 254,608
<TOTAL-LIABILITY-AND-EQUITY> 562,295
<SALES> 0
<TOTAL-REVENUES> 102,228
<CGS> 0
<TOTAL-COSTS> 41,916
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,755
<INTEREST-EXPENSE> 12,045
<INCOME-PRETAX> 44,512
<INCOME-TAX> 17,137
<INCOME-CONTINUING> 27,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,375
<EPS-PRIMARY> .92
<EPS-DILUTED> .85
</TABLE>
