<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, 1999
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.)
801 Cherry Street, Suite 3900, Fort Worth, Texas 76102
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(817) 302-7000
- --------------------------------------------------------------------------------
(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 74,842,084 shares of common stock, $.01 par value outstanding as of
January 31, 2000.
<PAGE>
AMERICREDIT CORP.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
----
<S> <C> <C>
Consolidated Balance Sheets -
December 31, 1999 and June 30, 1999 (unaudited)............... 3
Consolidated Statements of Income and Comprehensive
Income - Three Months and Six Months Ended
December 31, 1999 and 1998 (unaudited)........................ 4
Consolidated Statements of Cash Flows -
Six Months Ended December 31, 1999
and 1998 (unaudited).......................................... 5
Notes to Consolidated Financial
Statements.................................................... 6
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations................................. 18
Item 3. Quantitative and Qualitative Disclosures About
Market Risk............................................... 35
Part II. OTHER INFORMATION
Item 1. Legal Proceedings......................................... 36
Item 4. Submisssion of Matters to a
Vote of Security Holders.................................. 37
Item 6. Exhibits and Reports on Form 8-K.......................... 38
SIGNATURE .......................................................... 40
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMERICREDIT CORP.
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
December 31, June 30,
ASSETS 1999 1999
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 176,672 $ 21,189
Receivables held for sale, net 559,929 456,009
Interest-only receivables from Trusts 230,366 191,865
Investments in Trust receivables 270,827 195,598
Restricted cash 183,868 107,399
Property and equipment, net 48,125 41,145
Other assets 60,533 50,282
------------ ------------
Total assets $ 1,530,320 $ 1,063,487
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse credit facilities $ 356,217 $ 114,659
Credit enhancement facility 35,000
Senior notes 375,000 375,000
Other notes payable 23,092 17,874
Funding payable 18,014 43,042
Accrued taxes and expenses 51,805 39,187
Deferred income taxes 85,400 73,995
------------ ------------
Total liabilities 944,528 663,757
------------ ------------
Shareholders' equity
Preferred Stock, $.01 par value
per share; 20,000,000 shares
authorized, none issued
Common stock, $.01 par value
per share; 120,000,000 shares authorized;
81,994,867,and 71,498,474 shares issued 820 715
Additional paid-in capital 379,235 252,194
Accumulated other comprehensive income 35,013 21,410
Retained earnings 192,543 147,610
------------ ------------
607,611 421,929
Treasury stock, at cost
(7,229,903 and 7,357,030 shares) (21,819) (22,199)
------------ ------------
Total shareholders' equity 585,792 399,730
------------ ------------
Total liabilities and shareholders'
equity $ 1,530,320 $ 1,063,487
============ ============
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
3
<PAGE>
AMERICREDIT CORP.
Consolidated Statements of Income and Comprehensive Income
(Unaudited, Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Finance charge income $ 27,458 $ 16,260 $ 54,994 $ 33,177
Gain on sale of receivables 49,314 38,900 98,242 74,020
Servicing fee income 41,096 21,146 75,883 38,011
Other income 1,376 2,013 2,744 2,877
----------- ----------- ----------- -----------
119,244 78,319 231,863 148,085
----------- ----------- ----------- -----------
Costs and expenses:
Operating expenses 52,865 39,676 106,543 73,735
Provision for losses 3,756 2,115 7,243 4,303
Interest expense 16,129 8,274 30,405 16,619
Charge for closing
mortgage operations 10,500 10,500
----------- ----------- ----------- -----------
83,250 50,065 154,691 94,657
----------- ----------- ----------- -----------
Income before income taxes 35,994 28,254 77,172 53,428
Income tax provision 16,385 10,878 32,239 20,570
----------- ----------- ----------- -----------
Net income 19,609 17,376 44,933 32,858
----------- ----------- ----------- -----------
Other comprehensive income:
Unrealized gain on credit
enhancement assets 6,280 12,663 22,075 7,117
Less related income taxes (2,417) (4,875) (8,472) (2,740)
----------- ----------- ----------- -----------
3,863 7,788 13,603 4,377
----------- ----------- ----------- -----------
Comprehensive income $ 23,472 $ 25,164 $ 58,536 $ 37,235
=========== =========== =========== ===========
Earnings per share:
Basic $ .27 $ .28 $ .64 $ .52
=========== =========== =========== ===========
Diluted $ .25 $ .26 $ .60 $ .49
=========== =========== =========== ===========
Weighted average shares 73,988,228 62,857,131 70,745,962 62,657,929
=========== =========== =========== ===========
Weighted average shares and
assumed incremental
shares 78,958,413 66,750,045 75,318,456 66,918,992
=========== =========== =========== ===========
</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>
<CAPTION>
Six Months Ended
December 31,
---------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 44,933 $ 32,858
Adjustments to reconcile net income to
net cash provided by operating activities:
Non-cash charge for closing mortgage operations 6,566
Depreciation and amortization 9,357 4,134
Provision for losses 7,243 4,303
Deferred income taxes 7,414 20,841
Non-cash servicing fee (20,165) (6,543)
Non-cash gain on sale of auto receivables (92,670) (70,403)
Distributions from Trusts 36,711 24,921
Changes in assets and liabilities:
Other assets (11,264) (3,797)
Accrued taxes and expenses 12,618 19,150
----------- -----------
Net cash provided by operating activities 743 25,464
----------- -----------
Cash flows from investing activities:
Purchases of auto receivables (2,040,093) (1,229,509)
Originations of mortgage receivables (108,950) (124,446)
Principal collections and recoveries on
receivables 17,547 9,469
Net proceeds from sale of auto receivables 1,881,645 1,205,877
Net proceeds from sale of mortgage receivables 113,660 121,489
Initial deposits to restricted cash (92,000) (36,250)
Net change in credit enhancement facility 35,000
Purchases of property and equipment (5,279) (6,162)
Increase in other assets (5,653) (6,057)
----------- -----------
Net cash used by investing activities (204,123) (65,589)
----------- -----------
Cash flows from financing activities:
Net change in warehouse credit facilities 241,558 71,314
Payments on other notes payable (5,740) (1,425)
Proceeds from issuance of common stock 123,045 5,858
----------- -----------
Net cash provided by financing activities 358,863 75,747
----------- -----------
Net increase in cash and cash equivalents 155,483 35,622
Cash and cash equivalents at beginning of period 21,189 33,087
----------- -----------
Cash and cash equivalents at end of period $ 176,672 $ 68,709
=========== ===========
</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, 1999 and for the
periods ended December 31, 1999 and 1998 are unaudited, but in management's
opinion include all adjustments necessary for a fair presentation of the results
for such interim periods. Certain prior year amounts have been reclassified to
conform to the current period presentation. 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. These interim period financial statements should be read
in conjunction with the Company's consolidated financial statements which are
included in the Company's Annual Report on Form 10-K for the year ended June 30,
1999.
NOTE 2 - RECEIVABLES HELD FOR SALE
Receivables held for sale consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
----------- --------
<S> <C> <C>
Auto receivables $558,836 $444,128
Less allowance for losses (16,861) (11,841)
-------- --------
Auto receivables, net 541,975 432,287
Mortgage receivables 17,954 23,722
-------- --------
$559,929 $456,009
======== ========
</TABLE>
6
<PAGE>
A summary of the allowance for losses is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period $ 16,712 $ 10,657 $ 11,841 $ 12,756
Provision for losses 3,756 2,115 7,243 4,303
Acquisition fees 20,785 13,383 42,498 27,429
Allowance related to auto receivables
sold to Trusts (22,666) (16,213) (41,337) (32,688)
Net charge-offs (1,726) (1,565) (3,384) (3,423)
-------- -------- -------- --------
Balance at end of period $ 16,861 $ 8,377 $ 16,861 $ 8,377
======== ======== ======== ========
</TABLE>
NOTE 3 - CREDIT ENHANCEMENT ASSETS
As of December 31, 1999 and June 30, 1999, the Company was servicing $4,743.5
million and $3,661.3 million, respectively, of auto receivables which have been
sold to certain special purpose financing trusts (the "Trusts"). The Company has
retained an interest in these receivables in the form of credit enhancement
assets.
Credit enhancement assets consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
----------- --------
<S> <C> <C>
Interest-only receivables from Trusts $230,366 $191,865
Investments in Trust receivables 270,827 195,598
Restricted cash 183,868 107,399
-------- --------
$685,061 $494,862
======== ========
</TABLE>
A summary of activity in the credit enhancement assets is as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period $577,532 $315,702 $494,862 $286,309
Non-cash gain on sale of auto
receivables 47,342 42,089 92,670 70,403
Accretion of present value discount 11,388 7,798 20,165 14,943
Initial deposits to restricted cash 65,000 19,500 92,000 36,250
Change in unrealized gain 6,280 12,663 22,075 7,117
Distributions from Trusts (22,481) (12,451) (36,711) (24,921)
Permanent impairment write-down (3,600) (8,400)
-------- -------- -------- --------
Balance at end of period $685,061 $381,701 $685,061 $381,701
======== ======== ======== ========
</TABLE>
7
<PAGE>
A summary of the allowance for losses included as a component of the
interest-only receivables is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- -------------------
1999 1998 1999 1998
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period $ 400,738 $ 217,891 $354,338 $179,359
Assumptions for cumulative credit
losses 102,454 68,597 195,406 131,190
Permanent impairment write-down 3,600 8,400
Net charge-offs (50,971) (33,489) (97,523) (62,350)
--------- -------- -------- --------
Balance at end of period $ 452,221 $ 256,599 $452,221 $256,599
========= ========= ======== ========
</TABLE>
NOTE 4 - WAREHOUSE CREDIT FACILITIES
Warehouse credit facilities consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
------------ --------
<S> <C> <C>
Commercial paper facilities $342,861 $ 94,369
Credit agreements 2,688 1,306
Mortgage facility 10,668 18,984
-------- --------
$356,217 $114,659
======== ========
</TABLE>
The Company has three separate funding agreements with administrative agents on
behalf of institutionally managed commercial paper conduits and bank groups with
aggregate structured warehouse financing availability of $1.3 billion. The first
facility was renewed in September 1999, increasing the amount of available
structured warehouse financing to $675 million from $505 million, and matures in
September 2000. The second facility was established in September 1999 and
provides for available structured warehouse financing of $250 million through
September 2000. The third facility provides for available structured warehouse
financing of $375 million through March 2000.
Under these funding agreements, the Company transfers auto receivables to
special purpose finance subsidiaries of the Company, and these subsidiaries in
turn issue notes, collateralized by such auto receivables, to the agents. The
agents provide funding under the notes to the subsidiaries pursuant to an
advance formula and the subsidiaries forward the funds to the Company in
consideration for the transfer of auto receivables. While these subsidiaries are
included in the Company's consolidated financial statements, these subsidiaries
are separate legal entities and the auto receivables and other assets held by
the subsidiaries are legally owned by these subsidiaries and are not available
to creditors of AmeriCredit Corp. or its other subsidiaries.
8
<PAGE>
Advances under the funding agreements bear interest at commercial paper,
London Interbank Offered Rates ("LIBOR") or prime rates plus specified fees
depending upon the source of funds provided by the agents. The funding
agreements contain various covenants requiring certain minimum financial
ratios and results.
The Company has a revolving credit agreement with a group of banks under which
the Company may borrow up to $90 million, subject to a defined borrowing base.
Borrowings under the credit agreement are collateralized by certain auto
receivables and bear interest, based upon the Company's option, at either the
prime rate or LIBOR plus 1.25%. The Company is also required to pay an annual
commitment fee equal to 0.25% of the unused portion of the credit agreement. The
credit agreement, which expires in March 2000, contains various restrictive
covenants requiring certain minimum financial ratios and results and placing
certain limitations on the prepayment of senior notes, cash dividends and
repurchase of common stock.
The Company's Canadian subsidiary has a convertible revolving term credit
agreement with a bank under which the subsidiary may borrow up to $20 million
Cdn., subject to a defined borrowing base. Borrowings under the credit agreement
are collateralized by certain Canadian auto receivables and bear interest at the
Canadian prime rate. The credit agreement, which expires in March 2000, contains
various restrictive covenants requiring certain minimum financial ratios and
results and placing certain limitations on the prepayment of senior notes, cash
dividends and repurchase of common stock.
The Company has a mortgage warehouse facility with a bank under which the
Company may borrow up to $25 million, subject to a defined borrowing base.
Borrowings under the facility are collateralized by certain mortgage receivables
and bear interest, based upon the Company's option, at either the prime rate
plus 0.50% or LIBOR plus 1.5%. The Company is also required to pay an annual
commitment fee equal to 0.125% of the unused portion of the facility. Due to the
closing of the wholesale mortgage operations, as discussed further in Note 6,
this facility was terminated by the Company effective as of January 31, 2000.
NOTE 5 - CREDIT ENHANCEMENT FACILITY
In October 1999, the Company entered into a credit enhancement facility with
a financial institution under which the Company may borrow up to $225 million
to fund a portion of the initial restricted cash deposit required in its
securitization transactions. The Company had previously utilized reinsurance
arrangements to reduce the initial restricted cash deposit. These
arrangements were reinsurance agreements and not funded debt and therefore
were not recorded as such on the Company's consoldiated balance sheet.
Borrowings under the credit enhancement facility are available on a revolving
basis through October 2001 and are collateralized by the Company's credit
enhancement assets. The facility contains covenants requiring certain asset
performance ratios.
9
<PAGE>
NOTE 6 - CHARGE FOR CLOSING MORTGAGE OPERATIONS
As a result of declining premiums received for the sale of mortgage loans in
the secondary markets, during the second quarter ending December 31, 1999, the
Company ceased wholesale originations of mortgage loans and closed its
mortgage loan production and processing offices.
The Company recognized a pre-tax charge of $10.5 million during the three months
ended December 31, 1999 related to the closing of the mortgage operations. The
charge consists of a $6.6 million write-off of goodwill, $2.0 million of
reserves against mortgage receivables held for sale and $1.9 million of
severance, facility closing and other costs. Reserves and accrued costs
remaining at December 31, 1999 were $2.8 million. Since the goodwill write-off
is not deductible for income tax reporting purposes, the charge amounted to
approximately $9.0 million after related income tax benefits.
NOTE 7 - SUPPLEMENTAL INFORMATION
Cash payments(receipts)for interest costs and income taxes consist of the
following (in thousands):
<TABLE>
<CAPTION>
Six Months Ended
December 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Interest costs (none capitalized) $29,137 $15,728
Income taxes 16,799 (14,000)
</TABLE>
During the six months ended December 31, 1999 and 1998, the Company entered into
lease agreements for property and equipment of $10,958,000 and $6,037,000
respectively.
NOTE 8 - GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
The payment of principal, premium, if any, and interest on the Company's 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 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 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.
10
<PAGE>
The following supplementary information presents consolidating financial data
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 using the
equity method for purposes of this presentation. 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.
11
<PAGE>
AmeriCredit Corp.
Consolidating Balance Sheet
December 31, 1999
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ $ 178,208 $ (1,536) $ $ 176,672
Receivables held for sale, net 182,748 377,181 559,929
Interest-only receivables
from Trusts 2,676 227,690 230,366
Investments in Trust receivables 270,827 270,827
Restricted cash 183,868 183,868
Property and equipment, net 349 47,776 48,125
Other assets 11,904 30,659 17,970 60,533
Due (to) from affiliates 677,784 (691,381) 13,597
Investment in affiliates 257,727 189,039 1,759 (448,525)
------- -------- --------- -------- ---------
Total assets $950,440 $ (62,951) $1,091,356 $(448,525) $1,530,320
======= ======== ========= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse credit facilities $ $13,356 $ 342,861 $ $ 356,217
Credit enhancement facility 35,000 35,000
Senior notes 375,000 375,000
Other notes payable 23,092 23,092
Funding payable 17,967 47 18,014
Accrued taxes and expenses 25,521 24,276 2,008 51,805
Deferred income taxes (58,965) (47,783) 192,148 85,400
------- -------- --------- -------- ---------
Total liabilities 364,648 7,816 572,064 944,528
------- -------- --------- -------- ---------
Shareholders' equity
Common stock 820 203 1 (204) 820
Additional paid-in capital 379,235 110,160 189,885 (300,045) 379,235
Accumulated other
comprehensive income 35,013 35,013 (35,013) 35,013
Retained earnings 192,543 (181,130) 294,393 (113,263) 192,543
------- -------- --------- -------- ---------
607,611 (70,767) 519,292 (448,525) 607,611
Treasury stock (21,819) (21,819)
------- -------- --------- -------- ---------
Total shareholders' equity 585,792 (70,767) 519,292 (448,525) 585,792
------- -------- --------- -------- ---------
Total liabilities and
shareholders' equity $950,440 $(62,951) $1,091,356 $(448,525) $1,530,320
======= ======== ========= ======== =========
</TABLE>
12
<PAGE>
AmeriCredit Corp.
Consolidating Balance Sheet
June 30, 1999
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ $ 20,246 $ 943 $ $ 21,189
Receivables held for sale, net 256,771 199,238 456,009
Interest-only receivables 1,337 190,528 191,865
from Trusts
Investments in Trust receivables 195,598 195,598
Restricted cash 107,399 107,399
Property and equipment, net 349 40,796 41,145
Other assets 11,510 30,170 8,602 50,282
Due (to) from affiliates 567,368 (478,520) (88,848)
Investment in affiliates 198,339 118,024 1,050 (317,413)
-------- --------- -------- --------- ----------
Total assets $778,903 $ (12,513) $614,510 $(317,413) $1,063,487
======== ========= ======== ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse credit facilities $ $ 20,290 $ 94,369 $ $ 114,659
Senior notes 375,000 375,000
Other notes payable 17,874 17,874
Funding payable 43,042 43,042
Accrued taxes and expenses 16,062 22,860 265 39,187
Deferred income taxes (29,763) (42,016) 145,774 73,995
-------- --------- -------- --------- ----------
Total liabilities 379,173 44,176 240,408 663,757
-------- --------- -------- --------- ----------
Shareholders' equity
Common stock 715 203 3 (206) 715
Additional paid-in capital 252,194 108,475 118,840 (227,315) 252,194
Accumulated other
comprehensive income 21,410 21,410 (21,410) 21,410
Retained earnings 147,610 (165,367) 233,849 (68,482) 147,610
-------- --------- -------- --------- ----------
421,929 (56,689) 374,102 (317,413) 421,929
Treasury stock (22,199) (22,199)
-------- --------- -------- --------- ----------
Total shareholders'equity 399,730 (56,689) 374,102 (317,413) 399,730
-------- --------- -------- --------- ----------
Total liabilities and
shareholders' equity $778,903 $(12,513) $614,510 $(317,413) $1,063,487
======== ========= ======== ========= ==========
</TABLE>
13
<PAGE>
AmeriCredit Corp.
Consolidating Income Statement
Six Months Ended December 31, 1999
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Finance charge income $ $ 36,490 $ 18,504 $ $ 54,994
Gain on sale of receivables (126) 6,684 91,684 98,242
Servicing fee income 73,032 19,273 (16,422) 75,883
Other income 22,338 2,386 351 (22,331) 2,744
Equity in income of
affiliates 44,781 (44,781)
-------- -------- -------- -------- --------
66,993 118,592 129,812 (83,534) 231,863
-------- -------- -------- -------- --------
Costs and expenses:
Operating expenses 1,568 121,389 8 (16,422) 106,543
Provision for losses 4,087 3,156 7,243
Interest expense 20,397 4,137 28,202 (22,331) 30,405
Charge for closing
mortgage operations 10,500 10,500
-------- -------- -------- -------- --------
21,965 140,113 31,366 (38,753) 154,691
-------- -------- -------- -------- --------
Income before income taxes 45,028 (21,521) 98,446 (44,781) 77,172
Income tax provision 95 (5,758) 37,902 32,239
-------- -------- -------- -------- --------
Net income $ 44,933 $(15,763) $ 60,544 $(44,781) $ 44,933
======== ======== ======== ======== ========
</TABLE>
14
<PAGE>
AmeriCredit Corp.
Consolidating Income Statement
Six Months Ended December 31, 1998
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Finance charge income $ $ 18,890 $14,287 $ $ 33,177
Gain on sale of receivables (6,394) 4,762 75,652 74,020
Servicing fee income 59,497 5,190 (26,676) 38,011
Other income 14,736 2,124 693 (14,676) 2,877
Equity in income of
affiliates 37,035 (37,035)
------- -------- ------- -------- --------
45,377 85,273 95,822 (78,387) 148,085
------- -------- ------- ------- --------
Costs and expenses:
Operating expenses 7,687 92,599 125 (26,676) 73,735
Provision for losses 1,850 2,453 4,303
Interest expense 8,999 11,320 10,976 (14,676) 16,619
------- -------- ------- -------- --------
16,686 105,769 13,554 (41,352) 94,657
------- -------- ------- -------- --------
Income before income taxes 28,691 (20,496) 82,268 (37,035) 53,428
Income tax provision (4,167) (4,470) 29,207 20,570
------- -------- ------- -------- --------
Net income $32,858 $(16,026) $53,061 $(37,035) $32,858
======= ======== ======= ======== =======
</TABLE>
15
<PAGE>
AmeriCredit Corp.
Consolidating Statement of Cash Flow
Six Months Ended December 31, 1999
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flow from operating activities:
Net income $ 44,933 $ (15,763) $ 60,544 $ (44,781) $ 44,933
Adjustments to reconcile net income
to net cash provided by operating
activities:
Non-cash charge for closing
mortgage operations 6,566 6,566
Depreciation and amortization 9,357 9,357
Provision for losses 4,087 3,156 7,243
Deferred income taxes (24,721) (5,767) 37,902 7,414
Non-cash servicing fee income (20,165) (20.165)
Non-cash gain on sale of auto
receivables (92,670) (92,670)
Distributions from Trusts 36,711 36,711
Equity in income of affiliates (44,781) 44,781
Changes in assets and liabilities:
Other assets (394) (8,369) (2,501) (11,264)
Accrued taxes and expenses 9,459 1,415 1,744 12,618
--------- ----------- ----------- ----------- -----------
Net cash provided by operating
activities (15,504) (8,474) 24,721 743
--------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of auto receivables (2,040,093) (2,084,943) 2,084,943 (2,040,093)
Originations of mortgage receivables (108,950) (108,950)
Principal collections and recoveries on
receivables (4,698) 22,245 17,547
Net proceeds from sale of auto receivables 2,084,943 1,881,645 (2,084,943) 1,881,645
Net proceeds from sale of mortgage receivables 113,660 113,660
Initial deposits to restricted cash (92,000) (92,000)
Net change in credit enhancement facility 35,000 35,000
Purchases of property and equipment (5,279) (5,279)
Increase in other assets 1,214 (6,867) (5,653)
Net change in investment in affiliates (1,004) (71,015) (709) 72,728
--------- ----------- ----------- ----------- -----------
Net cash used by investing activities (1,004) (30,218) (245,629) 72,728 (204,123)
--------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Net change in warehouse credit facilities (6,934) 248,492 241,558
Payments on other notes payable (5,740) (5,740)
Proceeds from issuance of common stock 123,045 1,685 71,043 (72,728) 123,045
Net change in due (to) from affiliates (100,797) 201,903 (101,106)
--------- ----------- ----------- ----------- -----------
Net cash provided by financing
activities 16,508 196,654 218,429 (72,728) 358,863
--------- ----------- ----------- ----------- -----------
Net increase in cash and cash equivalents 157,962 (2,479) 155,483
Cash and cash equivalents at beginning of
period 20,246 943 21,189
--------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period $ $ 178,208 $ (1,536) $ $ 176,672
========= =========== =========== =========== ===========
</TABLE>
16
<PAGE>
AmeriCredit Corp.
Consolidating Statement of Cash Flow
Six Months Ended December 31, 1998
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
AmeriCredit
Corp. Guarantors Non-guarantors Eliminations Consolidated
----------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flow from operating activities:
Net income $ 32,858 $ (16,026) $ 53,061 $ (37,035) $ 32,858
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 42 4,091 1 4,134
Provision for losses 1,850 2,453 4,303
Deferred income taxes 2,202 (5,860) 24,499 20,841
Non-cash servicing fee income (6,543) (6,543)
Non-cash gain on sale of auto
receivables (70,403) (70,403)
Distributions from Trusts 24,921 24,921
Equity in income of affiliates (37,035) 37,035
Changes in assets and liabilities:
Other assets 470 (1,827) (2,440) (3,797)
Accrued taxes and expenses 14,072 (732) 5,810 19,150
-------- ----------- ----------- ----------- -----------
Net cash provided by operating
activities 12,609 (18,504) 31,359 25,464
-------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of auto receivables (1,229,509) (1,305,107) 1,305,107 (1,229,509)
Originations of mortgage receivables (124,446) (124,446)
Principal collections and recoveries on
receivables (4,385) 13,854 9,469
Net proceeds from sale of auto receivables 1,305,107 1,205,877 (1,305,107) 1,205,877
Net proceeds from sale of mortgage receivables 121,489 121,489
Initial deposits to restricted cash (2,402) (3,300) (30,548) (36,250)
Purchases of property and equipment (224) (5,887) (51) (6,162)
Increase in other assets (6,057) (6,057)
-------- ----------- ----------- ----------- -----------
Net cash used by investing activities (2,626) 59,069 (122,032) (65,589)
-------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Net change in warehouse credit facilities (2,563) 73,877 71,314
Payments on other notes payable (1,422) (3) (1,425)
Proceeds from issuance of common stock 5,514 275 69 5,858
Net change in due (to) from affiliates (14,075) 2,229 11,846
-------- ----------- ----------- ----------- -----------
Net cash provided by financing activities (9,983) (62) 85,792 75,747
-------- ----------- ----------- ----------- -----------
Net increase in cash and cash equivalents 40,503 (4,881) 35,622
Cash and cash equivalents at beginning of
period 30,157 2,930 33,087
-------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period $ $ 70,660 $ (1,951) $ $ 68,709
======== =========== =========== =========== ===========
</TABLE>
17
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company generates earnings and cash flow primarily from 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 ("receivables
held for sale") and pays interest expense on borrowings under its warehouse
credit facilities.
The Company sells receivables to securitization trusts ("Trusts") 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.
Excess cash flows from the Trusts are initially 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 flows are distributed to the Company. In addition to
excess cash flows, the Company earns monthly base servicing fee income of 2.25%
per annum on the outstanding principal balance of receivables securitized
("serviced receivables").
In November 1996, the Company acquired AmeriCredit Mortgage Services ("AMS"),
which originates and sells mortgage loans. 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.
The premiums received by AMS for the sale of mortgage loans in the secondary
markets have deteriorated since the Company's acquisition of AMS. The average
net premium received on sales decreased to a low of 1.9% for the three months
ended September 30, 1999 from 5.6% for the period from the date of acquisition
of AMS through June 30, 1997. As a result, during October 1999, Company
management assessed various options with respect to the operations of AMS and
decided to cease the operations of AMS. The AMS wholesale mortgage loan
18
<PAGE>
production and processing offices have been closed and the assets of AMS are
being liquidated.
The Company incurred a pre-tax charge of $10.5 million in the three months ended
December 31, 1999 related to the closing of its mortgage operations. The charge
consists of a $6.6 million write-off of goodwill, $2.0 million of reserves
against mortgage receivables held for sale and $1.9 million severance, facility
closing and other costs.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1999 AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1998
REVENUE:
The Company's average managed receivables outstanding consisted of the following
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Auto:
Held for sale $ 496,578 $ 279,693
Serviced 4,542,046 2,625,065
---------- ----------
5,038,624 2,904,758
Mortgage 29,949 27,560
---------- ----------
$5,068,573 $2,932,318
========== ==========
</TABLE>
Average managed receivables outstanding increased by 73% as a result of higher
loan purchase volume. The Company purchased $980.9 million of auto loans during
the three months ended December 31, 1999, compared to purchases of $599.1
million during the three months ended December 31, 1998. This growth resulted
from loan production at branches open during both periods as well as expansion
of the Company's branch network. Loan production at branch offices opened prior
to December 31, 1997 was 21% higher for the twelve months ended December 31,1999
versus the twelve months ended December 31, 1998. The Company operated 184 auto
lending branch offices as of December 31, 1999, compared to 165 as of December
31, 1998.
Finance charge income consisted of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
December 31,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
Auto $ 27,458 $ 15,652
Mortgage 608
-------- --------
$ 27,458 $ 16,260
======== ========
</TABLE>
19
<PAGE>
The increase in finance charge income is due primarily to an increase of 78% in
average auto receivables held for sale in the three months ended December 31,
1999 versus the three months ended December 31, 1998. The Company's effective
yield on its auto receivables held for sale decreased to 21.9% for the three
months ended December 31, 1999 from 22.2% for the three months ended December
31, 1998. The effective yield is higher than the contractual rates of the
Company's auto finance contracts as a result of finance charge income earned
between the date the auto finance contract is originated by the automobile
dealership and the date the auto finance contract is funded by the Company.
The gain on sale of receivables consisted of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------
1999 1998
------- -------
<S> <C> <C>
Auto $49,314 $37,168
Mortgage 1,732
------- -------
$49,314 $38,900
======= =======
</TABLE>
The increase in gain on sale of auto receivables resulted from the sale of
$1,000.0 million of receivables in the three months ended December 31, 1999 as
compared to $650.0 million of receivables sold in the three months ended
December 31, 1998. The gain as a percentage of the sales proceeds decreased to
4.9% for the three months ended December 31, 1999 from 5.7% for the three months
ended December 31,1998 as a result of an increase in US Treasury and other short
term interest rates.
Significant assumptions used in determining the gain on sale of auto receivables
were as follows:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Cumulative credit losses (including
deferred gains) 10.9% 11.1%
Discount rate used to estimate
present value:
Investment-only receivable from Trusts 12.0% 12.0%
Investments in Trust receivables 7.8% 7.8%
Restricted cash 7.8% 7.8%
</TABLE>
The discount rates used to estimate the present value of credit enhancement
assets are based on the relative risks of each asset type. Interest-only
receivables represent estimated future excess cash flows in the Trusts, which
involves a greater degree of risk than investments in Trust receivables and
20
<PAGE>
restricted cash. Investments in Trust receivables and restricted cash represent
assets currently held by the Trustee and are senior to the interest-only
receivables for credit enhancement purposes.
Servicing fee income increased to $41.1 million, or 3.6% of average serviced
auto receivables, for the three months ended December 31, 1999, as compared to
$21.1 million, or 3.2% of average serviced auto receivables, for the three
months ended December 31, 1998. 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. Servicing fee income for the three months ended
December 31, 1998 includes a charge of $3.6 million to increase credit loss
reserves related to certain of the Company's fiscal 1996 and 1997 securitization
transactions since the Company's reassessment of estimated cumulative credit
losses for these transactions exceeded the original estimates. The growth in
servicing fee income exclusive of the aforementioned charge is attributable to
the increase in average serviced auto receivables outstanding for the three
months ended December 31, 1999 compared to the three months ended December 31,
1998.
COSTS AND EXPENSES:
Operating expenses as an annualized percentage of average managed receivables
outstanding decreased to 4.2% (due to the closing of the mortgage business there
were no mortgage operating expenses incurred)for the three months ended December
31,1999, compared to 5.4% (5.1% excluding operating expenses of $2.5 million
related to the mortgage business) for the three months ended December 31,1998.
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 $13.2
million, or 33%, primarily due to the addition of auto lending branch offices
and management and auto loan processing and servicing staff.
The provision for losses increased to $3.8 million for the three months ended
December 31, 1999 from $2.1 million for the three months ended December 31,1998
due to higher average amounts of auto receivables held for sale. As a percentage
of average receivables held for sale, the provision for losses was 3.0% for the
three months ended December 31, 1999 and 1998.
Interest expense increased to $16.1 million for the three months ended December
31, 1999 from $8.3 million for the three months ended December 31, 1998 due to
higher debt levels. Average debt outstanding was $643.9 million and $374.7
million for the three months ended December 31, 1999 and 1998, respectively. The
Company's effective rate of interest paid on its debt increased to 9.9% from
8.8% as a result of increased average amounts of senior notes outstanding which
have a higher cost than the Company's other forms of balance sheet debt.
The Company's effective income tax rate was 45.5% and 38.5% for the three months
ended December 31, 1999 and 1998, respectively. The increase in the
21
<PAGE>
effective tax rate is due to the non-deductible write-off of goodwill from
the closing of the mortgage operations.
SIX MONTHS ENDED DECEMBER 31, 1999 AS COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 1998
REVENUE:
The Company's average managed receivables outstanding consisted of the following
(in thousands):
<TABLE>
<CAPTION>
Six Months Ended
December 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Auto:
Held for sale $ 478,566 $ 284,969
Serviced 4,245,948 2,419,905
---------- ----------
4,724,514 2,704,874
Mortgage 35,137 22,757
---------- ----------
$4,759,651 $2,727,631
========== ==========
</TABLE>
Average managed receivables outstanding increased by 74% as a result of higher
loan purchase volume. The Company purchased $2,012.7 million of auto loans
during the six months ended December 31, 1999, compared to purchases of $1,224.1
million during the six months ended December 31, 1998. This growth resulted from
loan production at branches open during both periods as well as expansion of the
Company's branch network. Loan production at branch offices opened prior to
December 31, 1997 was 21% higher for the twelve months ended December 31, 1999
versus the twelve months ended December 31, 1998. The Company operated 184 auto
lending branch offices as of December 31, 1999, compared to 165 as of December
31, 1998.
Finance charge income consisted of the following (in thousands):
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
Auto $ 53,937 $ 32,146
Mortgage 1,057 1,031
-------- --------
$ 54,994 $ 33,177
======== ========
</TABLE>
The increase in finance charge income is due primarily to an increase of 68% in
average auto receivables held for sale in the six months ended December 31, 1999
versus the six months ended December 31, 1998. The Company's effective yield on
its auto receivables held for sale remained constant at 22.4% for the six months
ended December 31, 1999 and 1998. The effective yield is higher than the
contractual rates of the Company's auto finance contracts as a result of finance
charge income earned between the date the auto finance contract is
22
<PAGE>
originated by the automobile dealership and the date the auto finance
contract is funded by the Company.
The gain on sale of receivables consisted of the following (in thousands):
<TABLE>
<CAPTION>
Six Months Ended
December 31,
---------------------
1999 1998
------- -------
<S> <C> <C>
Auto $96,731 $70,938
Mortgage 1,511 3,082
------- -------
$98,242 $74,020
======= =======
</TABLE>
The increase in gain on sale of auto receivables resulted from the sale of
$1,900.0 million of receivables in the six months ended December 31, 1999 as
compared to $1,220.0 million of receivables sold in the six months ended
December 31, 1998. The gain as a percentage of the sales proceeds decreased to
5.1% for the six months ended December 31, 1999 from 5.8% for the six months
ended December 31,1998 as a result of an increase in US Treasury and other short
term interest rates.
Significant assumptions used in determining the gain on sale of auto receivables
were as follows:
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------
1999 1998
---- ----
<S> <C> <C>
Cumulative credit losses (including
deferred gains) 10.9% 11.3%
Discount rate used to estimate
present value:
Investment-only receivable from Trusts 12.0% 12.0%
Investments in Trust receivables 7.8% 7.8%
Restricted cash 7.8% 7.8%
</TABLE>
The discount rates used to estimate the present value of credit enhancement
assets are based on the relative risks of each asset type. Interest-only
receivables represent estimated future excess cash flows in the Trusts, which
involves a greater degree of risk than investments in Trust receivables and
restricted cash. Investments in Trust receivables and restricted cash represent
assets currently held by the Trustee and are senior to the interest-only
receivables for credit enhancement purposes.
Servicing fee income increased to $75.9 million, or 3.5% of average serviced
auto receivables, for the six months ended December 31, 1999, as compared to
$38.0 million, or 3.1% of average serviced auto receivables, for the six months
ended December 31, 1998. 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. Servicing fee income for the six months
23
<PAGE>
ended December 31, 1998 includes a charge of $8.4 million to increase credit
loss reserves related to certain of the Company's fiscal 1996 and 1997
securitization transactions since the Company's reassessment of estimated
cumulative credit losses for these transactions exceeded the original
estimates. The growth in servicing fee income exclusive of the aforementioned
charge is attributable to the increase in average serviced auto receivables
outstanding for the six months ended December 31, 1999 compared to the six
months ended December 31, 1998.
COSTS AND EXPENSES:
Operating expenses as an annualized percentage of average managed receivables
outstanding decreased to 4.5% (4.4% excluding operating expenses of $2.1 million
related to the mortgage business) for the six months ended December 31, 1999,
compared to 5.4% (5.1% excluding operating expenses of $4.4 million related to
the mortgage business) for the six months ended December 31, 1998. 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 $32.8 million,
or 44%, primarily due to the addition of auto lending branch offices and
management and auto loan processing and servicing staff.
The provision for losses increased to $7.2 million for the six months ended
December 31, 1999 from $4.3 million for the six months ended December 31, 1998
due to higher average amounts of auto receivables held for sale. As a percentage
of average receivables held for sale, the provision for losses was 3.0% for the
six months ended December 31, 1999 and 1998.
Interest expense increased to $30.4 million for the six months ended December
31, 1999 from $16.6 million for the six months ended December 31, 1998 due to
higher debt levels. Average debt outstanding was $619.6 million and $370.7
million for the six months ended December 31, 1999 and 1998, respectively. The
Company's effective rate of interest paid on its debt increased to 9.7% from
8.9% as a result of increased average amounts of senior notes outstanding which
have a higher cost than the Company's other forms of balance sheet debt.
The Company's effective income tax rate was 41.8% and 38.5% for the six months
ended December 31, 1999 and 1998, respectively. The increase in the effective
tax rate is due to the non-deductible write-off of goodwill from the closing of
the mortgage operations.
PRO FORMA "PORTFOLIO-BASED" EARNINGS DATA
In addition to reporting results of operations in accordance with generally
accepted accounting principles ("GAAP"), the Company has elected to present pro
forma results of operations which treat securitization transactions as
financings rather than sales of receivables. The Company refers to this
presentation as pro forma "portfolio-based" earnings data.
24
<PAGE>
In its consolidated financial statements prepared in accordance with GAAP, the
Company records a gain on the sale of receivables in securitization transactions
primarily representing the present value of estimated future excess cash flows
related to the receivables sold. Future excess cash flows consist of finance
charges and fees to be collected on the receivables less interest payable on the
asset-backed securities, credit losses and expenses of the Trusts. The Company
also earns servicing fees for managing the receivables sold.
The pro forma "portfolio-based" earnings data presents the Company's operating
results under the assumption that securitization transactions are financings and
no gain on sale or servicing fee income is recognized. Instead, finance charges
and fees are recognized over the life of the securitized receivables as accrued
and interest and other costs related to the asset-backed securities are also
recognized as accrued. Credit losses are recorded as incurred.
While the pro forma "portfolio-based" earnings data does not purport to present
the Company's operating results in accordance with GAAP, the Company believes
such presentation provides another measure for assessing the Company's
performance.
The pro forma "portfolio-based" earnings data were as follows, excluding the
effect of the mortgage charge (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
1999 1998 1999 1998
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Finance charge, fee and
other income $246,745 $145,299 $ 465,070 $271,034
Funding costs (96,579) (52,261) (174,751) (96,655)
-------- -------- --------- --------
Net margin 150,166 93,038 290,319 174,379
Operating expenses (52,865) (39,676) (106,543) (73,735)
Credit losses (52,697) (35,054) (100,907) (65,773)
-------- -------- --------- --------
Pre-tax "portfolio-based"
income 44,604 18,308 82,869 34,871
Income taxes (17,173) (7,049) (31,905) (13,425)
-------- -------- --------- --------
Net "portfolio-based" income $ 27,431 $ 11,259 $50,964 $21,446
======== ======== ======== ========
Diluted "portfolio-based"
earnings per share $ 0.35 $ 0.17 $ 0.68 $ 0.32
======== ======== ======== ========
</TABLE>
25
<PAGE>
The pro-forma return on managed assets for the Company's auto business was as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Finance charge, fee and
other income 19.4% 19.5% 19.4% 19.6%
Funding costs (7.6) (7.0) (7.3) (7.0)
----- ----- ----- -----
Net margin 11.8 12.5 12.1 12.6
Operating expenses (4.2) (5.1) (4.4) (5.1)
Credit losses (4.1) (4.8) (4.2) (4.8)
----- ----- ----- -----
Pre-tax return on managed
assets 3.5 2.6 3.5 2.7
Income taxes (1.3) (1.0) (1.3) (1.1)
----- ----- ----- -----
Return on managed assets 2.2% 1.6% 2.2% 1.6%
==== ==== ==== ====
</TABLE>
CREDIT QUALITY
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 losses which may occur in the
receivables held for sale portfolio prior to the sale of such receivables in
securitization transactions. The Company typically purchases individual 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
cumulative credit losses expected over the life of the auto receivables sold.
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 assumptions for cumulative credit losses, provisions for
losses and allowance for losses. Although the Company uses many resources to
assess the adequacy of loss reserves, there is no precise method for estimating
the ultimate losses in the receivables portfolio.
26
<PAGE>
The following table presents certain data related to the receivables portfolio
(dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1999
------------------------------------------------------------
Held for Sale
------------------------------ Auto Managed Auto
Auto Mortgage Total Serviced Portfolio
-------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Principal amount of receivables $558,836 $ 17,954 $576,790 $4,743,526 $5,302,362
========== ==========
Allowance for losses (16,861) (16,861) $ (452,221)(a) $ (469,082)
-------- -------- -------- ========== ==========
Receivables, net $541,975 $17,954 $559,929
======== ======= ========
Number of outstanding contracts 40,642 228 420,552 461,194
======== ======= ========== ==========
Average principal amount of
outstanding contract (in dollars) $ 13,750 $78,746 $ 11,279 $ 11,497
======== ======= ========== ==========
Allowance for losses as a percentage
of receivables 3.0% 9.5% 8.9%
======== ========== ==========
</TABLE>
(a) The allowance for losses related to serviced auto receivables is factored
into the valuation of interest-only receivables from Trusts in the
Company's consolidated balance sheets.
The following is a summary of managed auto receivables which are (i) more than
30 days delinquent, but not in repossession, and (ii) in repossession (dollars
in thousands):
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
----------------- ---------------
Amount Percent Amount Percent
-------- ------- ------ -------
<S> <C> <C> <C> <C>
Delinquent contracts:
31 to 60 days $402,436 7.6% $236,083 7.7%
Greater than 60 days 131,486 2.5 87,443 2.8
-------- ---- -------- ----
533,922 10.1 323,526 10.5
In repossession 48,003 0.9 30,204 1.0
-------- ---- -------- ----
$581,925 11.0% $353,730 11.5%
======= ==== ======= ====
</TABLE>
In accordance with its policies and guidelines, the Company at times offers
payment deferrals to consumers, whereby the consumer 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 quarterly percentage of average managed auto receivables
outstanding were 4.5% for the three and six months ended December 31, 1999 and
1998. The Company believes that payment deferrals granted according to its
policies and guidelines are an effective portfolio management technique and
result in higher ultimate cash collections from the portfolio.
The following table presents charge-off data with respect to the Company's
managed auto receivables portfolio (dollars in thousands):
27
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
------- ------- -------- -------
<S> <C> <C> <C> <C>
Net charge-offs:
Held for sale $1,726 $ 1,565 $3,384 $3,423
Serviced 50,971 33,489 97,523 62,350
------- ------- -------- -------
$52,697 $35,054 $100,907 $65,773
======= ======= ======== =======
Net charge-offs as an
annualized percentage of
average managed auto
receivables outstanding 4.1% 4.8% 4.2% 4.8%
======= ======= ======== =======
Net recoveries as a percentage
of gross repossession charge-offs 51.7% 49.7% 53.1% 50.0%
======= ======= ======== =======
</TABLE>
Delinquency and charge-off ratios typically fluctuate over time as a portfolio
matures. Accordingly, the delinquency and charge-off data above is not
necessarily indicative of delinquency and charge-off experience that could be
expected for a portfolio with a different level of seasoning.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows are summarized as follows (in thousands):
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-----------------------
1999 1998
--------- ---------
<S> <C> <C>
Operating activities $ 743 $ 25,464
Investing activities (204,123) (65,589)
Financing activities 358,863 75,747
--------- ---------
Net change in
cash and cash equivalents $ 155,483 $ 35,622
========= =========
</TABLE>
The Company's primary sources of cash have been cash flows from operating
activities, including excess cash flow distributions from the Trusts, borrowings
under its warehouse credit facilities, sales of auto receivables to Trusts in
securitization transactions and proceeds from issuance of debt and equity. The
Company's primary uses of cash have been purchases and originations of
receivables and funding credit enhancement requirements for securitization
transactions.
The Company required cash of $2,040.1 million and $1,229.5 million for the
purchase of auto finance contracts during the six months ended December 31, 1999
and 1998, respectively. These purchases were funded initially utilizing
28
<PAGE>
warehouse credit facilities and subsequently through the sale of auto
receivables in securitization transactions.
In September 1999, the Company renewed its funding agreement with an
administrative agent on behalf of an institutionally managed commercial paper
conduit and a group of banks and increased the amount of structured warehouse
financing available under the agreement to $675 million from $505 million. The
Company utilizes this facility to fund auto receivables pending securitization.
The facility matures in September 2000. A total of $192.9 million was
outstanding under this facility as of December 31,1999.
Also, in September 1999, the Company entered into a funding agreement with an
administrative agent on behalf of an institutionally managed commercial paper
conduit and a bank under which up to $250 million of structured warehouse
financing is available. The Company utilizes this facility to fund auto
receivables pending securitization. The facility matures in September 2000. A
total of $110.0 million was outstanding under this facility as of December
31,1999.
The Company has a funding agreement with an administrative agent on behalf of an
institutionally managed commercial paper conduit and a bank under which up to
$375 million of structured warehouse financing is available. The Company
utilizes this facility to fund auto receivables pending securitization. The
facility matures in March 2000. A total of $40.0 million was outstanding under
this facility as of December 31, 1999.
The Company has a credit agreement with a group of banks that provides for
borrowings of up to $90 million, subject to a defined borrowing base. The
Company utilizes the facility to fund its auto lending activities and daily
operations. The facility matures in March 2000. There were no outstanding
balances under the credit agreement as of December 31, 1999.
The Company's Canadian subsidiary has a convertible revolving term credit
agreement with a bank that provides for borrowings of up to $20.0 million Cdn.,
subject to a defined borrowing base. The Company utilizes this facility to fund
Canadian auto lending activities. During November 1999, the maturity date of the
facility was extended to March 2000. A total of $2.7 million was outstanding
under the Canadian facility at December 31, 1999.
The Company has a mortgage warehouse facility with a bank under which the
Company may borrow up to $25 million, subject to a defined borrowing base, to
fund mortgage loan originations. Due to the closing of the wholesale mortgage
operations, this facility was terminated by the Company effective as of January
31, 2000. A total of $10.7 million was outstanding under the mortgage facility
as of December 31, 1999.
As is customary in the Company's industry, the above warehouse credit facilities
need to be renewed on an annual basis. The Company has historically been
successful in renewing and expanding these facilities on an annual basis. If the
Company was unable to renew these facilities on
29
<PAGE>
acceptable terms, there could be a material adverse effect on the Company's
financial position, results of operations and liquidity.
The Company has completed nineteen auto receivables securitization transactions
through December 31, 1999. The proceeds from the transactions were primarily
used to repay borrowings outstanding under the Company's warehouse credit
facilities.
A summary of these transactions is as follows:
<TABLE>
<CAPTION>
Original Balance at
Amount December 31,1999
Transaction Date (in millions) (in millions)
- ----------- ---- ------------- ----------------
<S> <C> <C> <C>
1994-A December 1994 $ 51.0 Paid in full
1995-A June 1995 99.2 Paid in full
1995-B December 1995 65.0 Paid in full
1996-A March 1996 89.4 Paid in full
1996-B May 1996 115.9 Paid in full
1996-C August 1996 175.0 $ 6.1
1996-D November 1996 200.0 29.7
1997-A March 1997 225.0 44.9
1997-B May 1997 250.0 60.3
1997-C August 1997 325.0 98.1
1997-D November 1997 400.0 143.4
1998-A February 1998 425.0 175.9
1998-B May 1998 525.0 250.3
1998-C August 1998 575.0 316.6
1998-D November 1998 625.0 394.1
1999-A February 1999 700.0 503.2
1999-B May 1999 1,000.0 814.3
1999-C August 1999 1,000.0 921.4
1999-D October 1999 900.0 870.8
-------- --------
$7,745.5 $4,629.1
======== ========
</TABLE>
In connection with securitization transactions, the Company is required to fund
certain credit enhancement levels set by the insurer of the asset-backed
securities issued by the Trusts. The Company typically makes an initial deposit
to a restricted cash account and subsequently uses excess cash flows generated
by the Trusts to either increase the restricted cash account or repay the
outstanding asset-backed securities on an accelerated basis, thus creating
additional credit enhancement through overcolleratization in the Trusts. When
the credit enhancement levels reach specified percentages of the Trust's pool of
receivables, excess cash flows are distributed to the Company.
Although the aggregate amount of excess cash flow does not change, the timing of
the Company's receipt of excess cash flow distributions is dependent on the type
of structure used. Historically, the Company has used a structure that involved
a higher initial cash deposit that resulted in receipt of excess cash
30
<PAGE>
flow distributions approximately seven to nine months after the receivables
were securitized. Beginning in November 1997, the Company began to employ a
structure that involved a lower initial cash deposit and the use of
reinsurance and other alternative credit enhancements. Under this structure
the Company expects to begin to receive excess cash flow distributions
approximately 16 to 18 months after receivables are securitized.
The reinsurance used to reduce the Company's initial cash deposit in the
structure described above has typically been arranged by the insurer of the
asset-backed securities. As of December 31, 1999, the Company had commitments
from the insurer for an additional $100.0 million of reinsurance to reduce
initial cash deposits in future securitization transactions. In addition, in
October 1999, the Company entered into a credit enhancement facility with a
financial institution under which the Company may borrow up to $225 million to
fund a portion of the initial cash deposit, similar to the amount covered by the
reinsurance described above, in future securitization transactions. Borrowings
under the credit enhancement facility, which matures in October 2001, are
collateralized by the Company's credit enhancement assets. A total of $35.0
million was outstanding under this facility at December 31,1999.
Initial deposits to restricted cash accounts were $92.0 million ($57.0 million
net of borrowings under the credit enhancement facility) and $36.3 million for
the six months ended December 31, 1999 and 1998, respectively. Excess cash flows
distributed to the Company were $36.7 million and $24.9 million for the six
months ended December 31, 1999 and 1998, respectively.
Certain agreements with the insurer provide that if delinquency, default and net
loss ratios in a Trust's pool of receivables exceed certain targets, the
specified credit enhancement levels would be increased. As of December 31, 1999,
none of the Company's securitizations had delinquency, default and net loss
ratios in excess of the targeted levels.
The Company issued 9,200,000 shares of its common stock in a public offering in
August and September 1999 for net proceeds of approximately $111.5 million.
The Company operated 184 auto lending branch offices as of December 31, 1999 and
plans to open an additional 11 branches through the remainder of fiscal 2000 and
expand loan production capacity at existing auto lending branch 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.
As of December 31, 1999, the Company had $176.7 million in cash and cash
equivalents. The Company also had available borrowing capacity of $122.1 million
under its warehouse credit facilities pursuant to the borrowing base
requirements of such agreements. The Company estimates that it will require
additional external capital for fiscal 2000 in addition to existing capital
resources in order to fund expansion of its lending activities.
31
<PAGE>
The Company anticipates that such funding will be in the form of additional
securitization transactions and renewal and expansion of its warehouse credit
facilities. There can be no assurance that funding will be available to the
Company through these sources or, if available, that it will be on terms
acceptable to the Company.
INTEREST RATE RISK
The Company's earnings are affected by changes in interest rates as a result
of its dependence upon the issuance of interest-bearing securities and the
incurrence of debt to fund its lending activities. Several factors can
influence the Company's ability to manage interest rate risk. First, auto
finance contracts are purchased at fixed interest rates, while the amounts
borrowed under warehouse credit facilities bear interest at variable rates
that are subject to frequent adjustment to reflect prevailing market interest
rates. Second, the interest rate demanded by investors in securitizations is a
function of prevailing market rates for comparable transactions and the
general interest rate environment. Because the auto finance contracts
originated by the Company have fixed interest rates, the Company bears the
risk of smaller gross interest rate spreads in the event interest rates
increase during the period between the date receivables are purchased and the
completion and pricing of securitization transactions.
The Company utilizes several strategies to minimize the risk of interest rate
fluctuations, including the use of derivative financial instruments, the
regular sale of auto receivables to the Trusts and pre-funding of
securitization transactions. Pre-funding securitizations is the practice of
issuing more asset-backed securities than the amount of receivables initially
sold to the Trust. The proceeds from the pre-funded portion are held in an
escrow account until additional receivables are sold to the Trust in amounts
up to the balance of the pre-funded escrow account. In pre-funded
securitizations, borrowing costs are locked in with respect to the loans
subsequently delivered to the Trust. However, the Company incurs an expense in
pre-funded securitizations equal to the difference between the money market
yields earned on the proceeds held in escrow prior to subsequent delivery of
receivables and the interest rate paid on the asset-backed securities
outstanding.
Derivative financial instruments are utilized to manage the gross interest
rate spread on the Company's securitization transactions. The Company sells
fixed rate auto receivables to Trusts that, in turn, sell either fixed rate or
floating rate securities to investors. The fixed rates on securities issued by
the Trusts are indexed to rates on U.S. Treasury Notes with similar average
maturities or various London Interbank Offered Rates ("LIBOR"). The Company
has periodically used Forward U.S. Treasury rate lock agreements to lock in
the indexed rate for specific anticipated securitization transactions. The
floating rates on securities issued by the Trusts are indexed to LIBOR. The
Company uses Interest Rate Swap agreements to convert the floating rate
exposures on these securities to a fixed rate. The Company utilizes these
32
<PAGE>
derivative financial instruments to modify its net interest sensitivity to
levels deemed appropriate based on the Company's risk tolerance. Management
monitors the Company's hedging activities to ensure that the value of hedges,
their correlation to the contracts being hedged and the amounts being hedged
continue to provide effective protection against interest rate risk. All
transactions are entered into for purposes other than trading.
The Company made cash payments of $0 and $5.8 million for the six months ended
December 31,1999 and 1998, respectively, to settle Forward U.S. Treasury rate
lock agreements. These amounts were included in the gain on sale of
receivables in securitization transactions and are recovered over time through
a higher gross interest rate spread on the related securitization transaction.
There were no outstanding Forward U.S. Treasury rate lock agreements as of
December 31, 1999.
There can be no assurance that the Company's 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.
FORWARD LOOKING STATEMENTS
The preceding Management's Discussion and Analysis of Financial Condition and
Results of Operations section contains several "forward-looking statements".
Forward-looking statements are those which use words such as "believe",
"expect", "anticipate", "intend", "plan", "may", "will", "should", "estimate",
"continue" or other comparable expressions. These words indicate future events
and trends. Forward-looking statements are the Company's current views with
respect to future events and financial performance. These forward-looking
statements are subject to many risks and uncertainties which could cause
actual results to differ significantly from historical results or from those
anticipated by the Company. The most significant risks are 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, 1999. It is advisable not to place undue reliance on the
Company's forward-looking statements. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events, or otherwise.
33
<PAGE>
YEAR 2000 ISSUE
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 fail.
The Company developed a comprehensive project plan for achieving year 2000
readiness. This project plan was composed of several phases:
- - AWARENESS AND INVENTORY - An inventory of critical hardware and software
was completed and information technology components were assessed. This
assessment included major suppliers and business partners and the Company
monitored their progress toward year 2000 compliance; however, the Company
does not rely on any single supplier or partner to conduct business.
- - ASSESSMENT - Using the results obtained from the inventory, a risk
assessment was made on all components and priority assigned to
mission-critical systems.
- - RENOVATION AND TESTING - During this phase all systems were identified
which had a risk to year 2000 readiness. The systems identified were
corrected using a secured development environment. Testing was also
performed during this phase.
- - IMPLEMENTATION - User-developed applications and macros were assessed and
remediated. Any non-compliant applications were replaced with a year
2000-ready version.
- - CONTINUED DUE DILIGENCE - The Company tested interfaces with financial
applications using year 2000 dates and scenarios. Testing was completed at
the end of October 1999 and the systems were then "frozen". No additional
development was implemented until the year 2000.
- - CONTINGENCY PLANNING - Contingency planning was a key component of the
Company's year 2000 readiness project. The Company developed contingency
plans, which documented the processes necessary to maintain critical
business functions should a significant third-party system or critical
internal system fail.
Through December 31, 1999, the Company incurred approximately $1 million for
incremental costs associated with the year 2000 project plan.
Conversion of the Company's systems to recognize the year 2000 occurred and no
material deficiencies were noted. The Company will continue to monitor its
systems and vendor readiness to ensure full system compliance.
34
<PAGE>
Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Because 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. Therefore, the Company
employs various hedging strategies to minimize the risk of interest rate
fluctuations. See "Management's Discussion and Analysis - Interest Rate Risk"
for additional information regarding such market risks.
35
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
As a consumer finance company, the Company is
subject to various consumer claims and
litigation seeking damages and statutory
penalties based upon, among other things,
usury, disclosure inaccuracies, wrongful
repossession, fraud and discriminatory
treatment of credit applicants, which could
take the form of a plaintiffs' class action
complaint. The Company, as the assignee of
finance contracts originated by dealers, may
also be named as a co-defendant in lawsuits
filed by consumers principally against
dealers. The damages and penalties claimed by
consumers in these types of matters can be
substantial. The relief requested by the
plaintiffs varies but includes requests for
compensatory, statutory and punitive damages.
One proceeding in which the Company is a
defendant has been brought as a putative class
action and is pending in the State of
California. A settlement has been reached in
this matter and preliminary court approval for
the settlement obtained; following notice to
class members, the Company believes that final
court approval will be obtained and the matter
concluded before June 30, 2000. The cost of
the settlement has been accrued in the
Company's consolidated financial statements as
of December 31, 1999.
Management believes that the Company has taken
prudent steps to address the litigation risks
associated with the Company's business
activities. However, there can be no assurance
that the Company will be able to successfully
defend against all such claims or that the
determination of any such claim in a manner
adverse to the Company would not have a
material adverse effect on the Company's
automobile finance business.
On April 8, 1999, a putative class action
complaint was filed against the Company and
certain of the Company's officers and
directors alleging violations of Section 10(b)
of the Securities Exchange Act of 1934 arising
from the Company's use of the cash-in method
of measuring and accounting for credit
enhancement assets in the financial statements
for the second, third and fourth quarters of
fiscal year 1997, fiscal year 1998 and the
first quarter of fiscal year 1999. The Company
believes that its previous use of the cash-in
method of measuring and accounting for credit
enhancement assets
36
<PAGE>
was consistent with then current generally
accepted accounting principles and accounting
practices of other finance companies. As
required by the Financial Accounting Standards
Board's Special Report, "A Guide to
Implementation of Statement 125 on Accounting
for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities,
Second Edition," dated December 1998 and
related statements made by the staff of the
Commission, the Company retroactively changed
the method of measuring and accounting for
credit enhancement assets to the cash-out
method and restated the Company's financial
statements for the three months ended
September 30, 1998 and the fiscal years ended
June 30, 1998, 1997 and 1996. The Company's
motion to dismiss this litigation was granted
on December 22, 1999. On February 1, 2000, the
plaintiffs filed an amended complaint; the
Company anticipates filing an additional
motion to dismiss with respect to this amended
complaint. In the opinion of management this
litigation is without merit and the Company
intends to vigorously defend against the
amended complaint.
In the opinion of management, the resolution of
the proceedings described in this section will
not have a material adverse effect on the
Company's consolidated financial position,
results of operations or liquidity.
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 3, 1999, the Company held its Annual
Meeting of Shareholders. The Shareholders voted
upon the election of eight directors 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-b of the Securities
Exchange Act of 1934, were elected at the
meeting to hold office for a specified one, two
or three-year term or until their successors are
duly elected and qualified. The Company's
selection of independent auditors was also
ratified.
37
<PAGE>
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 Security Agreement, dated as of
September 30, 1999, among Kitty Hawk
Funding Corporation, AmeriCredit BOA Trust,
AmeriCredit Financial Services, Inc.,
AmeriCredit Funding Corp. II and Bank of
America, N.A.
10.2 Note Purchase Agreement, dated as of
September 30, 1999, among AmeriCredit BOA
Trust, Kitty Hawk Funding Corporation and
Bank of America, N.A.
10.3 Amended and Restated Sale and Servicing
Agreement, dated as of September 21, 1999,
among CP Funding Corp., AmeriCredit
Financial Services, Inc., and The Chase
Manhattan Bank.
10.4 Amended and Restated Security Agreement,
dated as of September 21, 1999, among CP
Funding Corp., The Chase Manhattan Bank and
the several secured parties and funding
agents party thereto from time to time.
10.5 Credit Agreement, dated as of October 14,
1999, among AFS Funding Corp., AmeriCredit
Corp., AmeriCredit Financial Services,
Inc., AmeriCredit Management Company, the
Financial Institutions from time to time
party thereto as lenders, Bankers Trust
Company and Credit Suisse First Boston, New
York Branch.
10.6 Security and Collateral Agent Agreement,
dated as of October 14, 1999, among Credit
Suisse First Boston, New York Branch,
Bankers Trust Company, AmeriCredit
Financial Services, Inc. and AFS Funding
Corp.
10.7 Replacement Cash Collateral Account
Agreement, dated as of October 14, 1999,
among AFS Funding Corp., Financial Security
Assurance, Inc., Credit Suisse First
Boston, New York Branch, and Bank One, N.A.
38
<PAGE>
10.8 Subordination and Intercreditor Agreement,
dated as of October 14, 1999, among AFS
Funding Corp., AFS Funding Trust, the
AmeriCredit securitization trusts party
thereto as Issuers, AmeriCredit Financial
Services, Inc., AmeriCredit Management
Company, AmeriCredit Corp., Bankers Trust
Company, Bankers Trust (Delaware), Credit
Suisse First Boston, the Junior Lien
Holders party thereto, Financial Security
Assurance, Inc., Harris Trust and Savings
Bank, LaSalle Bank National Association and
Bank One, N.A.
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, 1999.
Certain subsidiaries and affiliates of
the Company filed reports on Form 8-K
during the quarterly period ended
December 31, 1999 reporting monthly
information related to securitization
trusts.
39
<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 14, 2000 By: /s/ Daniel E. Berce
-------------------------------------
(Signature)
Daniel E. Berce
Chief Financial Officer
40
<PAGE>
================================================================================
SECURITY AGREEMENT
among
KITTY HAWK FUNDING CORPORATION,
as Company,
AMERICREDIT BOA TRUST,
as Debtor
AMERICREDIT FINANCIAL SERVICES, INC.,
Individually and as Collection Agent
AMERICREDIT FUNDING CORP. II,
Individually
and
BANK OF AMERICA, N.A.,
as Collateral Agent and Bank Investor
Dated as of September 30, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.3. Computation of Time Periods. . . . . . . . . . . . . . . . . 17
ARTICLE II GRANT OF SECURITY INTEREST AND SETTLEMENTS. . . . . . . . . . . . . . . 18
SECTION 2.1. Grant of Security Interest.. . . . . . . . . . . . . . . . . 18
SECTION 2.2. Carrying Costs, Fees and Other Costs and Expenses. . . . . . 18
SECTION 2.3. Allocations of Collections; Reserve Account Advances;
Servicer Advances. . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.4. Liquidation Settlement Procedures. . . . . . . . . . . . . . 20
SECTION 2.5. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 20
SECTION 2.6. Protection of Interest of the Collateral Agent.. . . . . . . 20
SECTION 2.7. Deemed Collections; Application of Payments. . . . . . . . . 22
SECTION 2.8. Payments and Computations, Etc.. . . . . . . . . . . . . . . 22
SECTION 2.9. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.10. Collection Account.. . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.11. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 24
SECTION 2.12. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 24
SECTION 2.13. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 24
SECTION 2.14. Reserve Account; Withdrawals; Releases.. . . . . . . . . . . 24
SECTION 2.15. Optional Release.. . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.1. Representations and Warranties of the Debtor.. . . . . . . . 27
SECTION 3.2. Representations and Warranties of the Collection Agent.. . . 30
ARTICLE IV CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.1. Conditions to Effectiveness. . . . . . . . . . . . . . . . . 32
SECTION 4.2. Conditions to Initial Funding. . . . . . . . . . . . . . . . 33
ARTICLE V COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.1. Affirmative Covenants of the Debtor and AmeriCredit. . . . . 36
SECTION 5.2. Negative Covenants of Debtor and AmeriCredit.. . . . . . . . 41
SECTION 5.3. Hedging Arrangements.. . . . . . . . . . . . . . . . . . . . 43
SECTION 5.4. Financial Covenants. . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.5. Affirmative Covenants of the Collection Agent. . . . . . . . 44
SECTION 5.6. Negative Covenants of the Collection Agent.. . . . . . . . . 46
ARTICLE VI TERMINATION EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.1. Termination Events.. . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.2. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.3. Proceeds.. . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VII THE COLLATERAL AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.1. Duties of the Collateral Agent.. . . . . . . . . . . . . . . 50
SECTION 7.2. Compensation and Indemnification of Collateral Agent.. . . . 50
SECTION 7.3. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 51
SECTION 7.4. Liability of the Collateral Agent. . . . . . . . . . . . . . 51
SECTION 7.5. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . 53
SECTION 7.6. Limitation on Liability of the Collateral Agent and Others . 53
i
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ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.1. Term of Agreement. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.2. Waivers; Amendments. . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.4. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Integration; Appointment of Agent for Service of
Process. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.5. Counterparts; Severability.. . . . . . . . . . . . . . . . . 57
SECTION 8.6. Successors and Assigns.. . . . . . . . . . . . . . . . . . . 57
SECTION 8.7. Waiver of Confidentiality. . . . . . . . . . . . . . . . . . 58
SECTION 8.8. Confidentiality Agreement. . . . . . . . . . . . . . . . . . 58
SECTION 8.9. No Bankruptcy Petition Against the Company.. . . . . . . . . 58
SECTION 8.10. Further Assurances.. . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.11. Characterization of the Transactions Contemplated by the
Agreement; Tax Treatment.. . . . . . . . . . . . . . . . . . 58
SECTION 8.12. Responsibilities of the Debtor.. . . . . . . . . . . . . . . 59
SECTION 8.13. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
EXHIBITS
EXHIBIT A Credit and Collection Policy
EXHIBIT B List of Lock-Box Banks and Lock-Box Accounts
EXHIBIT C Form of Lock-Box Agreement
EXHIBIT D Form of Settlement Statement
EXHIBIT E [Intentionally Omitted]
EXHIBIT F List of Actions and Suits
EXHIBIT G Schedule of Locations of Records
EXHIBIT H List of Subsidiaries, Divisions and Tradenames
EXHIBIT I Form of Opinion of Counsel for the Debtor
EXHIBIT J Form of Secretary's Certificate
EXHIBIT K [Intentionally Omitted]
EXHIBIT L Form of Take-Out Notice
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SECURITY AGREEMENT
SECURITY AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this "AGREEMENT"), dated as of September 30, 1999, by and
among AMERICREDIT BOA TRUST, a Delaware business trust, as debtor (in such
capacity, the "DEBTOR"), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware
corporation ("AMERICREDIT"), individually and in its capacity as collection
agent (in such capacity, the "COLLECTION AGENT"), AMERICREDIT FUNDING CORP. II,
a Delaware corporation ("AFC II"), individually, KITTY HAWK FUNDING CORPORATION,
a Delaware corporation (the "COMPANY") and BANK OF AMERICA, N.A., a national
banking association ("BANK OF AMERICA"), individually and as collateral agent
for the Secured Parties (in such capacity, the "COLLATERAL AGENT").
PRELIMINARY STATEMENTS
WHEREAS, subject to the terms and conditions of this Agreement, the
Debtor desires to grant a security interest in and to the Receivables and
related property including the Debtor's interest in certain retail automotive
installment sales contracts and loans or promissory notes secured by
automobiles;
WHEREAS, pursuant to the Note Purchase Agreement, the Debtor has
issued the Note to the Company and will be obligated to the holder of the Note
to pay the principal of and interest on the Note in accordance with the terms
thereof; and
WHEREAS, the Debtor is granting a security interest in the Collateral
to the Collateral Agent, for the benefit of the Secured Parties, to secure the
payment and performance of the Debtor of its obligations under this Agreement,
the Note and the Note Purchase Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ABS" shall mean the assumed rate of prepayments on the Receivables
for each Collection Period based upon the "Absolute Prepayment Model", applied
in accordance with current market standards.
"ADMINISTRATIVE AGENT" shall mean Bank of America, as administrative
agent.
"ADMINISTRATIVE FEE" means the administrative fee payable by the
Debtor to the Administrative Agent, the terms of which are set forth in the Fee
Letter.
<PAGE>
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person (including any UCC financing statement
or any similar instrument filed against such Person's assets or properties).
"AFC II" shall mean AmeriCredit Funding Corp. II, a Delaware
corporation, and its successors and assigns.
"AFFECTED ASSETS" shall mean, collectively, the Receivables and the
Related Security, Collections and Proceeds relating thereto.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"AGENT" shall mean Bank of America, as agent for the Company and the
Bank Investors, and any successor thereto appointed pursuant to Article V of the
Note Purchase Agreement.
"AGGREGATE OUTSTANDING BALANCE" shall mean, with respect to any group
of Receivables as of any date, the sum of the Outstanding Balances of all such
Receivables as of the close of business on the immediately preceding date.
"AGGREGATE UNPAIDS" shall mean, at any time, an amount equal to the
sum of (i) the aggregate accrued and unpaid Carrying Costs at such time, (ii) an
amount equal to the Company's existing obligations which comprise Carrying Costs
thereafter, (iii) the Net Investment at such time, and (iv) all other amounts
owed (whether due or accrued) hereunder and under the other Transaction
Documents by the Debtor at such time.
"AMERICREDIT" shall mean AmeriCredit Financial Services, Inc., a
Delaware corporation, and its successors and assigns.
"AMERICREDIT CORP." shall mean AmeriCredit Corp., a Texas corporation,
and its successors and assigns.
"AMERICREDIT SCORE" shall mean, with respect to a Receivable, the
credit score for the related Obligor, determined in accordance with the Credit
and Collection Policy.
"AMOUNT FINANCED" shall mean, with respect to a Receivable, the
aggregate amount of credit extended under the Contract related to such
Receivable to pay, or to refinance, the purchase price of or outstanding balance
with respect to the Financed Vehicle and related costs, including amounts
advanced in respect of accessories, insurance premiums, service and warranty
contracts, other items customarily financed as part of retail automobile
installment sales contracts or promissory notes, and related costs.
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"ANNUAL PERCENTAGE RATE" or "APR" means, with respect to a Receivable,
the rate per annum of finance charges stated in the Contract related to such
Receivable as the "annual percentage rate" (within the meaning of the Federal
Truth-in-Lending Act). If, after the applicable Funding Date, the rate per
annum with respect to a Receivable as of such Funding Date is reduced as a
result of (a) an insolvency proceeding involving the related Obligor or (b)
pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940, "Annual
Percentage Rate" or "APR" shall refer to such reduced rate.
"ARRANGEMENT FEE" shall mean the arrangement fee payable by the Debtor
to the Administrative Agent, the terms of which are set forth in the Fee Letter.
"AVAILABLE FUNDS" shall have the meaning specified in Section 2.3
hereof.
"AVERAGE SERVICING PORTFOLIO" shall mean as of any date, the average
of the Servicing Portfolio for the six immediately preceding Settlement Periods.
"BANK OF AMERICA" shall have the meaning specified in the preamble
hereto.
"BANK INVESTORS" shall have the meaning specified in the Note Purchase
Agreement.
"BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978 (11
U.S.C.) Sections 101 et seq., as amended.
"BASE RATE" shall mean, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Liquidity Provider (or, if more than
one Liquidity Provider, then by Bank of America) from time to time, changing
when and as said prime rate changes (such rate not necessarily being the lowest
or best rate charged by the Liquidity Provider (or Bank of America, as
applicable)) and (ii) the sum of (a) 0.50% and (b) the rate equal 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 that is a Business Day, the average of the
quotations for such day for such transactions received by the Liquidity Provider
(or, if more than one Liquidity Provider, then by Bank of America) from three
Federal funds brokers of recognized standing selected by it.
"BENEFIT PLAN" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Debtor, AmeriCredit, AFC II or any ERISA
Affiliate of the Debtor, AmeriCredit or AFC II is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday and any
day on which banks in New York, New York, Charlotte, North Carolina or Fort
Worth, Texas are authorized or required by law to close, and, when used with
respect to the determination of any Eurodollar Rate or any notice with respect
thereto, any such day which is also a day for trading by and between banks in
United States dollar deposits in the London interbank market.
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"CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"CARRYING COSTS" means, on any date, the sum of Discount, Dealer Fees,
Program Fees, Facility Fees, Administrative Fees, Early Collection Fees, any
other fees set forth in the Fee Letter, Section 4.2 Costs and amounts due to the
Collateral Agent under Section 7.2 hereof which are due and payable on such
date.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CLOSING DATE" shall mean September 30, 1999.
"COLLATERAL" shall have the meaning specified in Section 2.1 hereof.
"COLLATERAL AGENT" shall mean Bank of America, as collateral agent for
the Secured Parties, and its successors and assigns.
"COLLECTIONS" shall mean, with respect to any Receivable, all cash
collections and other cash proceeds (including liquidation proceeds) of such
Receivable, including, without limitation, all Finance Charges, if any, and any
refunded portion of extended warranty protection plan costs or of insurance
costs (for example, physical damage, credit life or disability) included in the
original amount financed under such Receivable, and cash proceeds of Related
Security with respect to such Receivable.
"COLLECTION ACCOUNT" shall mean the account established by the
Collateral Agent, for the benefit of the Secured Parties, pursuant to Section
2.10.
"COLLECTION AGENT" shall mean at any time the Person then authorized
pursuant to Section 2.1 of the Servicing Agreement to service, administer and
collect Receivables.
"COLLECTION AGENT DEFAULT" shall mean a Servicer Termination Event as
defined in the Servicing Agreement.
"COMMERCIAL PAPER" shall mean the promissory notes of the Company
issued by the Company in the commercial paper market.
"COMMITMENT TERMINATION DATE" shall mean September 28, 2000, or such
later date to which the Commitment Termination Date may be extended by the
Debtor, the Agent and the Bank Investors not later than 30 days prior to the
then current Commitment Termination Date.
"COMPANY" shall have the meaning specified in the preamble hereto.
"CONTRACT" shall mean any and all retail installment sales contracts
or installment notes and security agreements relating to the sale or refinancing
of a new or used automobile, light duty truck, van or minivan and other writings
related thereto now existing and hereafter
4
<PAGE>
created or acquired by AmeriCredit or AFC II and assigned from time to time
to the Debtor pursuant to the Master Receivables Purchase Agreement.
"CRAM DOWN LOSS" shall have the meaning given such term in the
Servicing and Custodian Agreement.
"CREDIT AND COLLECTION POLICY" shall mean the Collection Agent's
credit and collection policy or policies and practices relating to automobile
installment sales contracts, existing on the date hereof and referred to in
Exhibit A attached hereto, as amended, supplemented or otherwise modified and in
effect from time to time in compliance with Section 5.2(d).
"CREDIT SUPPORT AGREEMENT" shall mean the agreement between the
Company and the Credit Support Provider evidencing the obligation of the Credit
Support Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"CREDIT SUPPORT PROVIDER" shall mean the Person or Persons who will
provide credit support to the Company in connection with the issuance by the
Company of Commercial Paper.
"DEALER FEE" shall mean the dealer fee payable by the Debtor to the
Collateral Agent, the terms of which are set forth in the Fee Letter.
"DEBTOR" shall mean AmeriCredit BOA Trust, a Delaware business trust,
and its successors and permitted assigns.
"DEFAULTED RECEIVABLE" shall mean, a Receivable with respect to which
(i) all or any portion in excess of 5% of a scheduled payment is more than 90
days past due, (ii) the Collection Agent has repossessed the related Financed
Vehicle (and any applicable redemption period has expired), (iii) the Obligor
has been identified in the records of the Collection Agent as being the subject
of a current bankruptcy proceeding or (iv) such Receivable is in default and the
Collection Agent has charged-off such Receivable in accordance with the Credit
and Collection Policy or otherwise has determined in good faith that payments
thereunder are not likely to be resumed.
"DELINQUENCY RATIO" means, as of any date, the ratio (expressed as a
percentage) computed by dividing:
(a) the sum of (i) the Aggregate Outstanding Balance of all
Receivables which were Defaulted Receivables as of the close of business on the
last day of the Settlement Period immediately preceding such date PLUS (ii)
without duplication of amounts included in (i), the Aggregate Outstanding
Balance of all Receivables which were Delinquent Receivables as of the close of
business on the last day of such immediately preceding Settlement Period
BY
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<PAGE>
(b) the sum of the Aggregate Outstanding Balance of all
Receivables as of the close of business on the last day of such immediately
preceding Settlement Period PLUS, without duplication, if a Take-Out has
occurred during such immediately preceding Collection Period, the Aggregate
Outstanding Balance of all Receivables which were included in such Take-Out.
The Delinquency Ratio shall be determined on each Determination Date and shall
remain in effect until recalculated on the next succeeding Determination Date;
provided that, on any date that the Net Investment is zero and all Carrying
Costs and other Aggregate Unpaids have been paid in full, the Delinquency Ratio
on such date shall be deemed to be zero.
"DELINQUENT RECEIVABLE" shall mean a Receivable with respect to which
more than 5% of a scheduled payment is more than thirty (30) days past due.
"DETERMINATION DATE" shall mean, with respect to each Remittance Date,
the second Business Day preceding such Remittance Date.
"DISCOUNT" means all amounts payable by the Debtor to the Company or
the Bank Investors in respect of interest on the Net Investment.
"DUFF & PHELPS" shall mean Duff & Phelps Credit Rating Company.
"ELIGIBLE INVESTMENTS" shall mean any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States; (ii) time deposits in, or bankers acceptances issued by, any depository
institution or trust company incorporated under the laws of the United States or
any state thereof and subject to supervision and examination by Federal or state
banking or depository institution authorities; PROVIDED, HOWEVER, that at the
time of investment or contractual commitment to invest therein, the certificates
of deposit or short-term deposits, if any, or long-term unsecured debt
obligations (other than such obligation whose rating is based on collateral or
on the credit of a Person other than such institution or trust company) of such
depository institution or trust company shall have a credit rating from Moody's
and S&P of at least "P-1" and "A-1", respectively, in the case of the
certificates of deposit or short-term deposits, or a rating not lower than one
of the two highest investment categories granted by Moody's and by S&P; (iii)
certificates of deposit having, at the time of investment or contractual
commitment to invest therein, a rating from Moody's and S&P of at least "P-1"
and "A-1", respectively; or (iv) investments in money market funds rated in the
highest investment category or otherwise approved in writing by the applicable
rating agencies; (b) demand deposits in any depository institution or trust
company referred to in (a)(ii) above; (c) commercial paper (having original or
remaining maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from Moody's and
S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits
having a credit rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof, so long as the
other party to the repurchase agreement has at the time of investment therein, a
rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
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<PAGE>
"ELIGIBLE RECEIVABLE" shall mean, at any time, any Receivable:
(i) (A) which shall have been originated by AmeriCredit directly
with an Obligor or through an automobile dealer approved in accordance with
AmeriCredit's standard operating procedures, which dealer shall be located in
the United States and which, together with the Contract related thereto, if
originated by a dealer, shall have been validly assigned by such dealer to
AmeriCredit or pursuant to the terms of such Contract, for the retail sale or
refinancing of the related Financed Vehicle in the ordinary course of its
business, shall have been fully and properly executed by the parties thereto,
and shall have been advanced directly to or for the benefit of the Obligor for
the purchase or refinancing of the related Financed Vehicle, (B) which shall
have been sold by AmeriCredit or AFC II to the Debtor pursuant to the Master
Receivables Purchase Agreement, and to which the Debtor has good title thereto,
free and clear of all Adverse Claims, and (C) the Contract related to which
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof shall be adequate for the realization against the
collateral of the benefits of the security provided thereby;
(ii) which (together with the Collections and Related
Security related thereto) has been the subject of the grant of a first priority
perfected security interest therein (and in the Collections and Related Security
related thereto) to the Collateral Agent for the benefit of the Secured Parties,
effective until the termination of this Agreement;
(iii) the Obligor of which (A) is a United States resident
and is recorded in the Collection Agent's records as having a United States
billing address or is a member of the U.S. military and is recorded in the
Collection Agent's records as having an overseas U.S. military base address, (B)
is a natural person, (C) is not an Affiliate of any of the parties hereto, and
(D) is not a government or a governmental subdivision or agency;
(iv) which is not a Defaulted Receivable at the time of
the initial creation of an interest therein hereunder;
(v) which is not a Delinquent Receivable at the time of
the initial creation of an interest therein hereunder;
(vi) the Contract related to which 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 such level payment) that
fully amortizes the amount financed over the original term;
(vii) the Contract related to which provides for an APR of
not less than 7.75% nor greater than 32%;
(viii) the Contract related to which provides for the
calculation of interest payable thereunder under either the "simple interest" or
"Rule of 78's" or the "sum of the periodic time balances" method;
(ix) the Contract related to which provides for (A) no
more than 72 monthly payments and (B) and a first scheduled payment within 50
days of the date the Receivable is originated;
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<PAGE>
(x) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(xi) which is "chattel paper" within the meaning of
Article 9 of the UCC of all applicable jurisdictions, and which is secured by a
first priority perfected lien on the related Financed Vehicle, free and clear of
any Adverse Claim or for which all necessary steps to result in such a first
priority perfected lien shall have been taken;
(xii) which is denominated and payable only in United
States dollars in the United States;
(xiii) which arises under a Contract that, together with
the Receivable related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms and is not subject to any litigation,
dispute, offset, counterclaim or other defense;
(xiv) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and regulations
relating to usury, truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy) and with
respect to which no part of the Contract related thereto is in violation of any
such law, rule or regulation in any material respect;
(xv) which (A) satisfies all applicable requirements of
the Credit and Collection Policy and is identified on the Collection Agent's
master servicing records as a automobile installment sales contract or
installment note, (B) arises under a Contract which is assignable without the
consent of, or notice to, the Obligor thereunder, and which does not contain a
confidentiality provision that purports to restrict the ability of the Company
to exercise its rights under this Agreement, including, without limitation, its
right to review the Contract, (C) arises under a Contract with respect to which
AmeriCredit, AFC II and the Debtor have each performed all obligations required
to be performed by them thereunder, and, in the event such Contract is an
installment sales contract, delivery of the Financed Vehicle to the related
Obligor has occurred, and (D) complies with such other criteria and requirements
as the Collateral Agent may from time to time reasonably specify to the Debtor
following sixty (60) days' notice; and
(xvi) which was generated in the ordinary course of
AmeriCredit's business;
(xvii) the assignment of which under the Master Receivables
Purchase Agreement by AmeriCredit or AFC II to the Debtor and the grant of a
security interest with respect thereto hereunder by the Debtor to the Collateral
Agent does not violate, conflict or contravene any applicable laws, rules,
regulations, orders or writs or any contractual or other restriction, limitation
or encumbrance;
(xviii) the outstanding principal balance of which is not
greater than $65,000;
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<PAGE>
(xix) with respect to which AmeriCredit or any Affiliate
thereof has not advanced any funds to or for the benefit of the related Obligor
in order to make such Receivable an "Eligible Receivable";
(xx) the Obligor of which has been directed to make all
payments to a specified account of the Collection Agent with respect to which
there shall be a Lock-Box Agreement in effect; and
(xxi) with respect to which there is only one original
Contract.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.
"ERISA AFFILIATE" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person; (ii) a trade
or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with such Person; or (iii) a member of
the same affiliated service group (within the meaning of Section 414(n) of the
Code) as such Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above.
"EVENT OF BANKRUPTCY" shall mean, with respect to any Person, (i) that
such Person (a) shall generally not pay its debts as such debts become due or
(b) shall admit in writing its inability to pay its debts generally or (c) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"FACILITY FEE" means the facility fee payable by the Debtor to the
Agent the terms of which are set forth in the Fee Letter.
"FACILITY LIMIT" shall mean $250,000,000; PROVIDED that such amount
may not at any time exceed the aggregate Commitments at any time in effect.
"FEE LETTER" shall mean the letter agreement dated the date hereof
among the Debtor, the Company and the Agent, as amended, modified or otherwise
supplemented from time to time.
"FINANCE CHARGES" shall mean, with respect to a Contract, any finance,
interest or similar charges owing by an Obligor or another Person pursuant to
such Contract.
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"FINANCED VEHICLE" shall mean, with respect to a Receivable, any new
or used automobile, light-duty truck, van or minivan, together with all
accessories thereto, securing the related Obligor's indebtedness thereunder.
"FITCH" shall mean Fitch IBCA, Inc.
"FUNDING" shall have the meaning specified in the Note Purchase
Agreement.
"FUNDING DATE" shall have the meaning specified in the Note Purchase
Agreement.
"GUARANTY" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"HEDGING ARRANGEMENT" shall mean any financial arrangement obtained by
the Debtor satisfying the requirements of Section 5.3 hereof and otherwise in
form and substance reasonably satisfactory to the Company and the Administrative
Agent, the benefits of which are, on and after the occurrence of a Termination
Event, in favor of the Debtor.
"INDEBTEDNESS" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or products of property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"INITIAL FUNDING" shall have the meaning specified in the Note
Purchase Agreement.
"INITIAL FUNDING DATE" shall have the meaning specified in the Note
Purchase Agreement.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement,
dated as of the date hereof, by and among the Agent, Wells Fargo Bank (Texas),
National Association, AmeriCredit, the Debtor, the Trustee and the Collateral
Agent, as such agreement may be amended, supplemented or otherwise modified from
time to time.
"INTEREST COMPONENT" shall mean, (i) with respect to any Commercial
Paper issued on an interest-bearing basis, the interest payable on such
Commercial Paper at its maturity (including any dealer commissions) and (ii)
with respect to any Commercial Paper issued on a
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discount basis, the portion of the face amount of such Commercial Paper
representing the discount incurred in respect thereof (including any dealer
commissions).
"INVESTMENT TERMINATION DATE" means the first Business Day after the
delivery by the Company to the Debtor of written notice that the Company elects,
in its sole discretion, to commence the amortization of its interest in the Net
Investment or to liquidate its interest in the Transferred Interest and the Net
Investment.
"LAW" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of
any financing statement under the UCC (other than any such financing statement
filed for informational purposes only) or comparable law of any jurisdiction to
evidence any of the foregoing.
"LIQUIDITY PROVIDER AGREEMENT" shall mean the agreement between the
Company and the Liquidity Provider evidencing the obligation of the Liquidity
Provider to provide liquidity support to the Company in connection with the
issuance by the Company of Commercial Paper.
"LIQUIDITY PROVIDER" shall mean the Person or Persons who provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"LOCK-BOX ACCOUNT" shall mean an account or accounts maintained by the
Collection Agent at a Lock-Box Bank for the purpose of receiving Collections
from Receivables.
"LOCK-BOX AGREEMENT" means an agreement between the Collection Agent
and a Lock-Box Bank in substantially the form of Exhibit C hereto.
"LOCK-BOX BANK" shall mean each of the banks set forth in Exhibit B
hereto and such banks as may be added thereto or deleted therefrom pursuant to
Section 2.6 hereof.
"LONDON BUSINESS DAY" shall mean any day which is a Business Day and
also is a day on which commercial banks are open for international business
(including dealings in U.S. Dollar deposits) in London.
"MAJORITY INVESTORS" shall have the meaning specified in the Note
Purchase Agreement.
"MASTER RECEIVABLES PURCHASE AGREEMENT" means the Master Receivables
Purchase Agreement, dated as of the date hereof, among the Debtor, AmeriCredit,
AFC II and the Collateral Agent, as such agreement may be amended, supplemented,
or otherwise modified from time to time.
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"MATERIAL ADVERSE EFFECT" means any event or condition which would
have a material adverse effect on (i) the collectibility of the Receivables,
(ii) the condition (financial or otherwise), businesses or properties of the
Debtor, the Collection Agent, AmeriCredit or AFC II, (iii) the ability of the
Debtor, the Collection Agent, AmeriCredit or AFC II to perform its respective
obligations under the Transaction Documents to which it is a party, or (iv) the
interests of the Agent, the Collateral Agent or the Secured Parties under the
Transaction Documents.
"MONTHLY EXTENSION RATE" shall mean, with respect to any Determination
Date, the fraction expressed as a percentage, the numerator of which is the
Aggregate Outstanding Balance of all receivables in the Servicing Portfolio
whose payments are extended during the related Settlement Period and the
denominator of which is the Aggregate Outstanding Balance of all receivables in
the Servicing Portfolio as of the close of business on the last day of the
Settlement Period immediately preceding such related Settlement Period.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by the Debtor,
AmeriCredit, AFC II or any ERISA Affiliate of the Debtor, AmeriCredit or AFC II
on behalf of its employees.
"NET INVESTMENT" shall mean the sum of (i) all amounts paid to the
Debtor for the Initial Funding and any Subsequent Funding minus (ii) the
aggregate amount of Collections received and applied by the Company to reduce
such Net Investment pursuant to Section 2.3 hereof, minus (iii) the aggregate
amount of funds received and applied to reduce such Net Investment pursuant to
Sections 2.7, 2.14 and 2.15 hereof; provided that the Net Investment shall be
restored in the amount of any Collections so received and applied if at any time
the distribution of such Collections is rescinded or must otherwise be returned
for any reason.
"NET RECEIVABLES BALANCE" means at any time the Outstanding Balance of
the Eligible Receivables (in the aggregate) at such time reduced by the
aggregate Outstanding Balance of all Eligible Receivables which are Defaulted
Receivables.
"NET YIELD" shall mean, as calculated on each Determination Date (A)
the weighted Annual Percentage Rate of the Receivables LESS (B) the sum of (i) a
fraction, the numerator of which is (x) Carrying Costs (exclusive of the
Administrative Fee and the Facility Fee) for the related Settlement Period, and
the denominator of which is (y) the average daily Net Investment for such
Settlement Period, (ii) 2.41% and (iii) the Delinquency Ratio for such
Determination Date, PLUS (C) a fraction, the numerator of which is (x) any
proceeds received under any Hedging Arrangement during the related Settlement
Period, and the denominator of which is (y) the average daily Net Investment for
such Settlement Period. The Net Yield shall be expressed as a percentage.
"NOTE" shall have the meaning specified in the Note Purchase
Agreement.
"NOTEHOLDER'S PERCENTAGE" shall, as of any date of determination,
equal to 91% less the product of (i) 7.0 and (ii) the amount, if any, by which
the highest cumulative net loss
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percentage of the three most recent static pools of AmeriCredit's monthly
originations with at least six months of seasoning exceeds 2.0%.
"NOTE PURCHASE AGREEMENT" shall mean that certain Note Purchase
Agreement, dated as of September 30, 1999, among the Debtor, the Company, the
Bank Investors and the Agent.
"OBLIGOR" shall mean a Person obligated to make payments pursuant to a
Contract.
"OFFICIAL BODY" shall mean any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"OFFICER'S CERTIFICATE" shall mean, with respect to any Person which
is not an individual, a certificate signed by the President, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer or any Vice President of such
Person.
"OUTSTANDING BALANCE" shall mean, with respect to any Receivable, as
of any date, the sum of the Amount Financed MINUS that portion of all amounts
received by the Collection Agent with respect to such Receivable on or prior to
such date and allocable to principal in accordance with the terms of the
Contract related to such Receivable MINUS any Cram Down Loss in respect of such
Receivable PLUS the accrued and unpaid interest on such Receivable; PROVIDED,
HOWEVER, that with respect to any Receivable which as of such date is a
Defaulted Receivable, the "Outstanding Balance" with respect to such Receivable
shall be zero.
"PERSON" shall mean any corporation, limited liability company,
natural person, firm, joint venture, partnership, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"POTENTIAL TERMINATION EVENT" shall mean an event which but for the
lapse of time or the giving of notice, or both, would constitute a Termination
Event.
"PROCEEDS" shall mean "proceeds" as defined in Section 9-306(1) of the
UCC of the states set forth in Section 2.6 hereof.
"PROGRAM FEE" means the program fee payable by the Debtor to the
Company, the terms of which are set forth in the Fee Letter.
"PURCHASE TERMINATION DATE" means the date upon which the Master
Receivables Purchase Agreement shall terminate for any reason whatsoever.
"RECEIVABLE" shall mean indebtedness owed to the Debtor by an Obligor
(without giving effect to any transfer hereunder) under a Contract, whether
constituting an account, chattel paper, instrument or general intangible,
arising out of or in connection with the sale, refinancing or loan made by
AmeriCredit with respect to new or used automobiles, light-duty trucks, vans or
minivans or the rendering of services by the originating dealer in connection
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therewith, and includes the right of payment of any Finance Charges and other
obligations of the Obligor with respect thereto. Notwithstanding the foregoing,
once the Collateral Agent has released its security interest in a Receivable and
the related Contract pursuant to Section 2.4, 2.7 or Section 2.15 hereof, it
shall no longer constitute a Receivable hereunder.
"RECEIVABLES SYSTEMS" shall mean, with respect to any Person, all
computer applications of such Person (including, but not limited to, those of
any suppliers, vendors, customers and any third party servicers of such Person),
which are related to or involved in the origination, collection, management or
servicing of the Receivables.
"RECORDS" shall mean all Contracts and other documents, books, records
and other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"RELATED COMMERCIAL PAPER" shall mean Commercial Paper issued by the
Company the proceeds of which were used to acquire, or refinance the acquisition
of, an interest in the Net Investment with respect to the Debtor.
"RELATED SECURITY" shall mean with respect to any Receivable:
(i) all of the Debtor's interest in the Financed Vehicles
(including repossessed vehicles) or in any document or writing evidencing any
security interest in any Financed Vehicle and all of the Debtor's interest in
all rights to payment under all insurance contracts with respect to a Financed
Vehicle, including, without limitation, any monies collected from whatever
source in connection with any default of an Obligor with respect to a Financed
Vehicle and any proceeds from claims or refunds of premiums on any physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies covering Financed Vehicles or Obligors;
(ii) all of the Debtor's interest in all other security
interests or liens and property subject thereto from time to time, if any,
purporting to secure payment of such Receivable, whether pursuant to the
Contract related thereto or otherwise, together with all financing statements
signed by an Obligor and security agreements describing any collateral securing
such Contract;
(iii) all of the Debtor's interest in all guaranties,
indemnities, warranties, insurance (and proceeds and premium refunds thereof)
and other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise;
(iv) all of the Debtor's interest in all rights to
payment under all service contracts and other contracts and agreements
associated with such Receivables and all of
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the Debtor's interest in all recourse rights against the dealers (excluding
any rights in any dealer reserve);
(v) all of the Debtor's interest in all Records,
documents and writings evidencing or related to such Receivables or the
Contracts;
(vi) all of the Debtor's interest in all rights and
remedies of the Debtor under the Master Receivables Purchase Agreement, together
with all financing statements filed by the Debtor against each of AmeriCredit
and AFC II in connection therewith;
(vii) all of the Debtor's interest in all Lock-Box
Accounts and Lock-Box Agreements; and
(viii) all Proceeds of the foregoing.
"REMITTANCE DATE" shall mean, for each Settlement Period, the tenth
(10th) day of the next succeeding calendar month; PROVIDED that if such day is
not a Business Day, then the Remittance Date shall be the next succeeding
Business Day.
"REQUIRED RESERVE ACCOUNT AMOUNT" shall mean, at any time of
determination, an amount equal to the greater of (a) the product of (i) 6.00%
and (ii) the Net Investment divided by the Noteholder's Percentage and (b) the
Reserve Account Floor.
"RESERVE ACCOUNT" shall have the meaning specified in Section 2.14
hereof.
"RESERVE ACCOUNT ADVANCE" shall mean any advance made pursuant to
Section 2.3(c) hereof from amounts on deposit in the Reserve Account.
"RESERVE ACCOUNT FLOOR" shall mean an amount equal to 1.00% of the
Facility Limit.
"S&P" shall mean Standard & Poor's Ratings Services, a Division of the
McGraw-Hill Companies.
"SECURED PARTIES" shall mean the Agent, the Company and the Bank
Investors.
"SERVICER ADVANCE" shall have the meaning specified in Section 2.3(c)
hereof.
"SERVICING AGREEMENT" shall mean the Servicing and Custodian
Agreement, dated as of the date hereof, among the Collection Agent the
Custodian, the Collateral Agent and the Agent, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"SERVICING FEE" shall mean, for any Settlement Period, the fee payable
to the Collection Agent from Collections pursuant to Section 2.3 hereof on the
related Remittance Date, in an amount equal to 2.0% per annum on the amount of
the aggregate Outstanding Balance of the Receivables as of the first day of such
Settlement Period, or in the case of any other Person acting as Collection
Agent, in the amount determined as set forth in Section 4.3(b)
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of the Servicing Agreement, plus any late fees, the penalty portion of
interest paid on any past due amounts and other administrative fees or
similar charges allowed by applicable law with respect to the Receivables.
"SERVICING PORTFOLIO" shall mean as of any date, the Aggregate
Outstanding Balance of all receivables (whether or not thereafter sold or
disposed of) relating to retail installment sales contracts or installment notes
and security agreements relating to the sale or refinancing of new or used
automobiles, light-duty trucks, vans, or minivans that are serviced by the
Collection Agent or any of its Affiliates as of such date, calculated in a
manner consistent with the components of Average Servicing Portfolio in the most
recent reports on Form 10-K or Form 10-Q filed by AmeriCredit Corp.
"SETTLEMENT PERIOD" shall mean any calendar month, provided that the
initial Settlement Period shall commence on the Initial Funding Date and end on
October 31, 1999.
"SETTLEMENT STATEMENT" shall mean a report, in substantially the form
of Exhibit D or in such other form as is mutually agreed to by the Debtor and
the Company, furnished by the Collection Agent to the Collateral Agent and the
Agent on each Determination Date pursuant to Section 2.9 hereof.
"SUBSIDIARY" of a Person shall mean any corporation more than 50% of
the outstanding voting securities of which, and any partnership more than 50% of
the partnership interests of which, shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"TAKE-OUT" shall mean the release, pursuant to Section 2.15 hereof, by
the Collateral Agent of Receivables and the Contracts related thereto. In order
to qualify as a "Take-Out", the Outstanding Balance of Receivables immediately
after the Take-Out shall be no more than $10,000,000.
"TAKE-OUT NOTICE" shall mean the notice, substantially in the form
attached hereto as Exhibit L, furnished by the Debtor to the Collateral Agent in
accordance with Section 2.15.
"TANGIBLE NET WORTH" shall mean, with respect to any Person, the net
worth of such Person calculated in accordance with GAAP, after subtracting
therefrom the aggregate amount of such Person's intangible assets, including,
without limitation, goodwill, franchises, licenses, patents, trademarks,
copyrights and service marks.
"TARGETED MONTHLY PRINCIPAL PAYMENT" with respect to any Determination
Date, shall mean an amount equal to (a) the Net Investment as of the last day of
the related Settlement Period less (b) the product of (i) the Noteholder's
Percentage and (ii) the Net Receivables Balance as of the last day of the
related Settlement Period, if positive.
"TERMINATION DATE" shall mean the earliest of (i) that Business Day
designated by the Debtor to the Agent as the Termination Date at any time
following 60 days' written notice to the Agent, (ii) the date of termination of
the liquidity commitment of the Liquidity Provider under the Liquidity Provider
Agreement, (iii) the date of termination of the commitment of the
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Credit Support Provider under the Credit Support Agreement, (iv) the date on
which the Termination Date is declared or automatically occurs pursuant to
Section 6.2 hereof, (v) two Business Days prior to the Commitment Termination
Date, (vi) the date on which an Investment Termination Date shall occur
(unless the Company's interest in the Net Investment has been assigned to the
Bank Investors) or (vii) the Purchase Termination Date.
"TERMINATION EVENT" shall mean an event described in Section 6.1
hereof.
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Note Purchase
Agreement, the Note, the Master Receivables Purchase Agreement, the Servicing
Agreement, the Trust Agreement, the Intercreditor Agreement, the Fee Letter,
each Hedging Arrangement and all other agreements, documents and instruments
delivered pursuant thereto or in connection therewith.
"TRANSFERRED INTEREST" shall mean, at any time of determination, an
undivided interest in the Note.
"TRUST AGREEMENT" shall mean the Amended and Restated Trust Agreement,
dated as of the date hereof, among AmeriCredit, AFC II and the Trustee, together
with all permitted amendments, modifications and supplements thereto.
"TRUSTEE" shall mean the Trustee under the Trust Agreement.
"UCC" shall mean, with respect to any state, the Uniform Commercial
Code as from time to time in effect in such state.
"U.S." or "UNITED STATES" shall mean the United States of America.
"YEAR 2000 COMPLIANT" shall mean, with respect to any Person, that all
computer applications (including those of such Person's and its Subsidiaries'
suppliers, vendors and customers) that are material to such Person's or any of
its Subsidiaries' business and operations are reasonably expected on a timely
basis to be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000.
"YEAR 2000 PROBLEM" shall mean, with respect to any Person, the risk
that computer applications used by such Person or any of its Subsidiaries (or
their respective suppliers, vendors or customers) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999.
SECTION 1.2. OTHER TERMS. Unless the context otherwise requires, all
capitalized terms used herein and not otherwise defined herein shall have the
meanings specified in the Note Purchase Agreement, and shall include in the
singular number the plural and in the plural number the singular. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
SECTION 1.3. COMPUTATION OF TIME PERIODS. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date,
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the word "from" means "from and including," the words "to" and "until" each
means "to but excluding," and the word "within" means "from and excluding a
specified date and to and including a later specified date."
ARTICLE II
GRANT OF SECURITY INTEREST AND SETTLEMENTS
SECTION 2.1. GRANT OF SECURITY INTEREST. As security for the prompt and
complete payment of the Note and the performance of all of the Debtor's
obligations under the Note, the Note Purchase Agreement, this Agreement and the
other Transaction Documents, the Debtor hereby grants to the Collateral Agent,
for the benefit of the Secured Parties, without recourse except as provided
herein, a security interest in and continuing Lien on all of the Debtor's
property, in existence on the Closing Date or thereafter acquired and wherever
located, including, without limitation, all of its right, title and interest in,
to and under all accounts, contract rights, general intangibles, chattel paper,
instruments, documents, money, cash, deposit accounts, certificates of deposit,
goods, letters of credit, securities, investment property, financial assets or
security entitlements (all of the foregoing, collectively, the "COLLATERAL");
PROVIDED, that once the Company has released its interest in a Receivable and
the related Contract pursuant to Section 2.7 or 2.15 hereof, such Receivable and
related Contract shall no longer be part of the Collateral.
In connection with such grant, the Debtor agrees to record and file,
at its own expense, financing statements with respect to the Collateral now
existing and hereafter created meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect the first
priority security interest of the Collateral Agent in the Collateral, and to
deliver a file-stamped copy of such financing statements or other evidence of
such filing (which may, for purposes of this Section 2.1, consist of telephone
confirmation of such filing) to the Collateral Agent on or prior to the Initial
Funding Date. In addition, the Debtor and the Collection Agent agree (i) to
clearly and unambiguously mark their respective general ledgers and all
accounting records and documents and all computer tapes and records and (ii) to
stamp all Contracts and related files with the legend set forth in Section 1(d)
of the Intercreditor Agreement, in each case to show that the Collateral,
including that portion of the Collateral consisting of the Receivables and the
related Contracts, have been pledged to the Collateral Agent hereunder.
SECTION 2.2. CARRYING COSTS, FEES AND OTHER COSTS AND EXPENSES.
Notwithstanding the limitation on recourse under Section 2.1 hereof, the Debtor
shall pay, as and when due in accordance with this Agreement, all fees
hereunder, Discount (including Discount due the Company or any Bank Investor),
Carrying Costs, all amounts payable pursuant to Article VII hereof, if any, all
fees specified in the Fee Letter, and the Servicing Fees. On each Remittance
Date, the Debtor shall pay to the Agent, on behalf of the Company or the Bank
Investors, as applicable, an amount equal to the accrued and unpaid Carrying
Costs for the related Settlement Period together with, in the event the
Transferred Interest is held on behalf of the Company, an amount equal to the
discount accrued on the Company's Commercial Paper to the extent such Commercial
Paper was issued in order to fund the Net Investment in an amount in excess of
the amount of the Initial Funding or any Subsequent Funding, as applicable. The
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Debtor shall pay to the Agent, for the account of the Company, on each day on
which Commercial Paper is issued by the Company, the Dealer Fee. Nothing in
this Agreement shall limit in any way the obligations of the Debtor to pay the
amounts set forth in this Section 2.2.
SECTION 2.3. ALLOCATIONS OF COLLECTIONS; RESERVE ACCOUNT ADVANCES;
SERVICER ADVANCES.
(a) On each Remittance Date, all Collections PLUS any payments
to the Debtor under any Hedging Arrangement PLUS all amounts to be applied
pursuant to Section 2.14(b)(ii)(y) and 2.14(b)(iii)(y) hereof PLUS any funds
retained in the Collection Account pursuant to Section 2.10 hereof (the
aggregate of such amounts in respect of any remittance date, the "AVAILABLE
FUNDS") shall be applied, without duplication, by the Collection Agent as
follows:
(i) FIRST, to pay any amounts due under any Hedging
Arrangement;
(ii) SECOND, (A) to pay the Collection Agent in an amount
equal to any Servicer Advances related to such Settlement Period and (B) to the
Reserve Account, in an amount equal to any Reserve Account Advances related to
such Settlement Period;
(iii) THIRD, to the extent of any remaining Available
Funds, to pay the Collection Agent, the Servicing Fee for such Settlement
Period;
(iv) FOURTH, to the extent of any remaining Available
Funds, to pay to the Collateral Agent all fees and expenses due pursuant to
Section 7.2 hereof;
(v) FIFTH, to the extent of any remaining Available
Funds, to pay the Agent, for the account of the Company and the Bank Investors,
as applicable, an amount equal to all accrued and unpaid Carrying Costs in
respect of such Settlement Period and with respect to any previous Settlement
Period to the extent not previously paid;
(vi) SIXTH, to the extent of any remaining Available
Funds, to pay the Agent, for the account of the Company and the Bank Investors,
as applicable, in an amount equal to the Targeted Monthly Principal Payment, to
be applied in reduction of the Net Investment;
(vii) SEVENTH, prior to the Termination Date, to the
extent of any remaining Available Funds, to the Reserve Account, to the extent
necessary to cause the amount on deposit therein to equal the Required Reserve
Account Amount;
(viii) EIGHTH, on or after the Termination Date or the
occurrence and continuance of a Termination Event or Potential Termination
Event, to the extent of any remaining Available Funds, such remaining Available
Funds shall be paid to the Agent, for the account of the Company and the Bank
Investors, as applicable, in reduction of the Net Investment until the Net
Investment has been reduced to zero;
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(ix) NINTH, to the extent of any remaining funds, to the
Agent, for the account of the Persons entitled thereto, an amount equal to all
other Aggregate Unpaids; and
(x) TENTH, to the extent any Available Funds remain
after application in accordance with CLAUSES (i) through (ix) above, such excess
amounts shall be paid to the Debtor.
(b) [Reserved.]
(c) In the event that, at any time, the Company does not have
sufficient funds at such time to pay Carrying Costs when due, then, in such
event, there shall be made a Reserve Account Advance equal to the amount of such
deficiency, which amount shall be applied to pay such costs and expenses of the
Company. In the event that any such Reserve Account Advance is not made by
11:00 a.m. (New York City time) on the day requested, the Collection Agent may,
at the request of the Agent, advance to the Company an amount equal to such
deficiency (each, a "SERVICER ADVANCE"); PROVIDED, that the Collection Agent
shall not be required to make any such Servicer Advance to the extent that the
Collection Agent reasonably believes that it will not be reimbursed for such
Servicer Advance pursuant to Section 2.3(a)(ii) hereof on any subsequent
Remittance Date.
SECTION 2.4. LIQUIDATION SETTLEMENT PROCEDURES.
Following any date after the Termination Date on which all accrued
Carrying Costs have been paid in full in cash and all other Aggregate Unpaids
have been paid in full in cash, (i) the Collateral Agent shall be considered to
have released its security interest in and continuing Lien on the Collateral,
including all of the Receivables and Related Security, (ii) the Collection Agent
shall pay to the Debtor any remaining Collections set aside and held by the
Collection Agent, and (iii) the Collateral Agent shall execute and deliver to
the Debtor, at the Debtor's expense, such documents or instruments as are
necessary to terminate the Collateral Agent's security interest in the
Collateral, including all of the Receivables and Related Security and
Collections with respect thereto. Any such documents shall be prepared by or on
behalf of the Debtor at the expense of the Debtor. After giving effect to any
such liquidation, any amounts remaining in the Reserve Account shall be paid to
the Debtor.
SECTION 2.5. [INTENTIONALLY OMITTED].
SECTION 2.6. PROTECTION OF INTEREST OF THE COLLATERAL AGENT.
(a) The Debtor agrees that it shall, and shall cause AmeriCredit
and AFC II to, from time to time, at its expense, promptly execute and deliver
all instruments and documents and take all actions as may be necessary or as the
Collateral Agent may reasonably request in order to perfect or protect the
Collateral or to enable the Collateral Agent or any Secured Party to exercise or
enforce any of its rights hereunder. Without limiting the foregoing, the Debtor
shall, and shall cause AmeriCredit to, in order to accurately reflect the
security interest of the Collateral Agent for the benefit of the Secured Parties
in the Collateral, (i) stamp (or cause to be stamped) all Contracts and related
files with the legend set forth in Section 1(d) of the Intercreditor Agreement
and (ii) upon the request of the Collateral Agent or any Secured
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Party, execute and file such financing or continuation statements or
amendments thereto or assignments thereof as may be requested by the
Collateral Agent and mark its master data processing records and other
documents (or to cause such records or other documents to be marked) so as to
indicate the Collateral Agent's security interest in the portion of the
Collateral consisting of Receivables, the related Contracts, the Collections
and the Related Security with respect thereto. The Debtor agrees that it
shall take all actions necessary to cause each of AmeriCredit and AFC II to
similarly mark its records to reflect the sale of the Receivables and the
Contracts to the Debtor and the Collateral Agent's security interest in the
Receivables, the related Contracts, the Collections and the Related Security
with respect thereto. The Debtor shall, and shall cause each of AmeriCredit
and AFC II to, at its own expense, upon request of the Collateral Agent,
obtain such additional search reports as the Collateral Agent or any Secured
Party shall request. To the fullest extent permitted by applicable law, the
Collateral Agent shall be permitted to sign and file continuation statements
and amendments thereto and assignments thereof in respect of security
interests created under this Security Agreement without the Debtor's,
AmeriCredit's or AFC II's signature. Carbon, photographic or other
reproduction of this Agreement or any financing statement shall be sufficient
as a financing statement. The Debtor shall not, and shall not permit
AmeriCredit or AFC II to, change its name, identity or corporate structure
(within the meaning of Section 9-402(7) of the UCC as in effect in the State
of New York, Delaware and Texas) or relocate its chief executive office or
any office where Records are kept unless it shall have: (i) given the
Collateral Agent at least thirty (30) days prior notice thereof and (ii)
prepared at the Debtor's expense and delivered to the Collateral Agent all
financing statements, instruments and other documents necessary to preserve
and protect the Collateral or requested by the Collateral Agent or any
Secured Party in connection with such change or relocation. Any filings
under the UCC or otherwise that are occasioned by such change in name or
location shall be made at the expense of the Debtor. On the Initial Funding
Date, the Debtor shall deliver to the Collateral Agent a listing by account
number of the Contracts as of the Initial Funding Date, which listing shall
constitute Schedule A hereto and is hereby incorporated herein by reference.
On each Remittance Date, the Debtor shall deliver to the Collateral Agent an
updated listing by account number of the Contracts as of the last day of such
Settlement Period (giving effect to any releases by the Company pursuant to
Section 2.15 hereof) and such updated list shall thereupon constitute
Schedule A hereto and is hereby incorporated by reference herein.
(b) The Collection Agent shall instruct all Obligors to cause
all Collections to be deposited directly with a Lock-Box Bank, acting as agent
for the Collateral Agent, on behalf of the Secured Parties, pursuant to a
Lock-Box Agreement. Amounts received by a Lock-Box Bank in respect of
Receivables may initially be deposited into a Lock-Box Account maintained by
the Lock-Box Bank as agent for the Collateral Agent, on behalf of the Secured
Parties, and for other owners of automobile receivables serviced by the
Collection Agent. The Collection Agent shall be permitted to give
instructions to the Lock-Box Banks for so long as neither a Potential
Termination Event nor any Termination Event has occurred hereunder. The
Collection Agent shall not add any bank as a Lock-Box Bank to those listed on
Exhibit B attached hereto unless such bank has entered into a Lock-Box
Agreement. The Collection Agent shall not terminate any bank as a Lock-Box
Bank unless the Collateral Agent shall have received fifteen (15) days' prior
notice of such termination. The Collection Agent shall use its best efforts
to cause the Lock-Box Bank, pursuant to the Lock-Box Agreement, to deposit
all payments on the Receivables in the Lock-Box Account not later than the
Business
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Day after receipt thereof and, within two (2) Business Days of receipt of
Collections into the Lock-Box Account, the Collection Agent shall cause such
Collections to be remitted into the Collection Account. If the Debtor,
AmeriCredit, AFC II or the Collection Agent receives any Collections, the
Debtor, AmeriCredit, AFC II or the Collection Agent, as applicable, shall
immediately, but in any event within two (2) Business Days of receipt, remit
(and shall cause AmeriCredit and AFC II to remit) such Collections to the
Collection Account.
SECTION 2.7. DEEMED COLLECTIONS; APPLICATION OF PAYMENTS.
(a) If on any day the outstanding balance of a Receivable is
either (x) reduced as a result of any defective, rejected or returned
merchandise or services, any discount, credit, rebate, dispute, warranty claim,
repossessed or returned goods, charge-back, allowance, any billing adjustment,
dilutive factor or other adjustment or (y) reduced or canceled as a result of a
setoff or offset in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated transaction),
the Debtor shall be deemed to have received on such day a Collection of such
Receivable in the amount of such reduction or cancellation and the Debtor shall
pay to the Collection Agent an amount equal to such reduction or cancellation
and such amount shall be deposited into the Collection Account and applied by
the Collection Agent as a Collection in accordance with Section 2.3 or 2.4
hereof, as applicable. The Net Investment shall be reduced by the amount of
such payment applied to the reduction of the Net Investment and actually
received by the Agent.
(b) If on any day any of the representations or warranties in
Article III was or becomes untrue with respect to a Receivable (whether on or
after the date of any transfer of an interest therein to the Collateral Agent,
for the benefit of the Secured Parties, as contemplated hereunder), the Debtor
shall be deemed to have received on such day a Collection of such Receivable in
full and the Debtor shall on such day pay to the Collection Agent an amount
equal to the outstanding balance of such Receivable and such amount shall be
deposited into the Collection Account and allocated and applied by the
Collection Agent as a Collection allocable to the Net Investment in accordance
with Section 2.3 or 2.4 hereof, as applicable. The Net Investment shall be
reduced by the amount of such payment applied to the reduction of the Net
Investment and actually received by the Agent.
(c) Any payment by an Obligor in respect of any indebtedness
owed by it to the Debtor, AmeriCredit or AFC II shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Agent, be applied as a Collection of any Receivable
of such Obligor included in the Net Investment (starting with the oldest such
Receivable) to the extent of any amounts then due and payable thereunder before
being applied to any other receivable or other indebtedness of such Obligor.
SECTION 2.8. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by the Debtor or the Collection Agent hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available funds; if such amounts
are payable to the Agent (whether on behalf of the Company or any Bank Investors
or otherwise), they shall be paid or deposited in the Agent's account indicated
in Section 8.3 hereof, until otherwise notified by the Agent, the Company or any
Bank Investor. The Debtor shall, to the extent permitted by law, pay to the
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applicable Secured Parties upon demand, interest on all amounts not paid or
deposited when due to the Secured Parties hereunder at a rate equal to 2% per
annum plus the Base Rate. All computations of Carrying Costs, interest and all
per annum fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the last day)
elapsed. Any computations by the Agent of amounts payable by the Debtor
hereunder shall be binding upon the Debtor absent manifest error.
SECTION 2.9. REPORTS. On or before each Determination Date, the
Collection Agent shall prepare and forward to the Collateral Agent and the
Administrative Agent, (i) a Settlement Statement as of the end of the preceding
Settlement Period, (ii) if requested by the Collateral Agent or the
Administrative Agent, a computer tape listing by Obligor all Receivables,
together with an aging of such Receivables, and (iii) such other information as
the Collateral Agent, the Administrative Agent or any Secured Party may
reasonably request. The Agent shall provide to the Debtor, two (2) days prior
to each Determination Date, a monthly settlement statement containing
information relating to the amount of each obligation of the Company which
comprises Carrying Costs for the most recent Collection Period and the amount of
interest earnings on all related accounts for such Collection Period.
SECTION 2.10. COLLECTION ACCOUNT.
(a) There shall be established on or prior to the Initial
Funding Date and maintained, for the benefit of the Secured Parties, with the
Collateral Agent, a segregated account (the "COLLECTION ACCOUNT"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Collateral Agent, on behalf of the Secured Parties. The
Collection Account shall be under the exclusive ownership and control of the
Collateral Agent, for the benefit of the Secured Parties. Subject to the terms
hereof, the Collateral Agent shall possess all right, title and interest in and
to all funds deposited from time to time in the Collection Account. The
Collection Agent shall remit daily from the Lock-Box Account, within two (2)
Business Days of receipt, to the Collection Account all Collections received
with respect to any Receivables. On each Remittance Date, all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be considered to be Collections and shall be
distributed hereunder as such. On the date on which the Net Investment is zero
and all Carrying Costs and other Aggregate Unpaids have been paid in full, any
funds remaining on deposit in the Collection Account shall be paid to the
Debtor.
(b) Funds on deposit in the Collection Account shall be invested
in Eligible Investments by the Collateral Agent at the written direction of the
Debtor, provided that if such Eligible Investments are not available or a
Termination Event shall have occurred, such investments shall be made as
directed by the Collateral Agent. Any such written directions shall specify the
particular investment to be made and shall certify that such investment is an
Eligible Investment and is permitted to be made under this Agreement.
(c) The Debtor shall provide the Collateral Agent on or prior to
the Initial Funding Date from time to time an incumbency certificate or the
substantial equivalent with respect to each officer of the Debtor that is
authorized to provide instructions relating to investments in Eligible
Investments in the Collection Account.
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(d) Funds on deposit in the Collection Account shall be invested
by the Collateral Agent, in the name of the Collateral Agent, in Eligible
Investments that will mature so that such funds will be available prior to the
last day of each successive funding period following such investment, and so as
to permit amounts in the Collection Account to be paid and applied on the
Remittance Date and otherwise in accordance with the provisions of Sections 2.3
and 2.4 hereof. On the last day of each funding period, all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be retained in the Collection Account and be available
to make any payments required to be made hereunder (including Carrying Costs) by
the Debtor. Realized losses, if any, on amounts invested in such Eligible
Investments shall be charged against investment earnings on amounts on deposit
in the Collection Account
SECTION 2.11. [INTENTIONALLY OMITTED].
SECTION 2.12. [INTENTIONALLY OMITTED].
SECTION 2.13. [INTENTIONALLY OMITTED].
SECTION 2.14. RESERVE ACCOUNT; WITHDRAWALS; RELEASES.
(a) (i) There shall be established on the Closing Date and
maintained, for the benefit of the Secured Parties, with the Collateral Agent, a
segregated account (the "RESERVE ACCOUNT"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Collateral Agent, on behalf of the Secured Parties. Subject to the terms
hereof, the Collateral Agent shall possess all right, title and interest in and
to all funds deposited from time to time in the Reserve Account. On each
Funding Date, the Debtor shall deposit (or cause to be withheld from the
proceeds of Related Commercial Paper) to the credit of the Reserve Account an
amount, if any, equal to the amount required to fund the Reserve Account to the
Reserve Account Floor.
(ii) Funds on deposit in the Reserve Account (other than
investment earnings) shall be invested by the Collateral Agent (in the name of
the Collateral Agent on behalf of the Secured Parties) in Eligible Investments
that will mature so that such funds will be available prior to the Remittance
Date following such investment. Investment earnings on amounts on deposit in
the Reserve Account shall be deposited into the Collection Account immediately
following receipt thereof.
(iii) Funds on deposit in the Reserve Account shall be
invested in Eligible Investments by or at the written direction of the Debtor,
provided that if such Eligible Investments are not available or a Termination
Event shall have occurred, such investments shall be made as directed by the
Collateral Agent. Any such written directions shall specify the particular
investment to be made and shall certify that such investment is an Eligible
Investment and is permitted to be made under this Agreement.
(iv) The Debtor shall provide the Collateral Agent on the
date hereof and from time to time an incumbency certificate or the substantial
equivalent with respect to each officer of the Debtor that is authorized to
provide instructions relating to investments in Eligible Investments in the
Reserve Account.
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(v) On the Termination Date, the Collateral Agent shall
withdraw all amounts on deposit in the Reserve Account and deposit such amounts
into the Collection Account. On the date on which the Aggregate Unpaids have
been paid in full, any funds remaining on deposit in the Reserve Account shall
be paid to the Debtor. Realized losses, if any, on amounts invested in such
Eligible Investments shall be charged against investment earnings on amounts on
deposit in the Reserve Account, as applicable.
(b) (i) In the event that Available Funds with respect to any
Remittance Date are insufficient to provide for the payment of the amounts
described in Section 2.3(a)(i) through (vi) hereof, the Collateral Agent shall
make a withdrawal from the Reserve Account in the amount of such deficiency and
the proceeds from such withdrawal shall be applied by the Collateral Agent to
the required distributions and payments. Funds may also be released from the
Reserve Account each month in accordance with Section 2.3(c).
(ii) In the event that on any day on which a Take-Out
occurs after giving effect to clause (b)(i) above, the amount on deposit in the
Reserve Account (calculated as of the date of the Take-Out) exceeds the Reserve
Account Floor, the Collateral Agent shall (x) if no Termination Event or
Potential Termination Event shall have occurred, release to the Debtor an amount
equal to the excess of the amount on deposit in the Reserve Account over the
Reserve Account Floor and (y) if a Termination Event shall have occurred, apply
as part of Available Funds pursuant to Section 2.3 hereof an amount equal to the
excess of the amount on deposit in the Reserve Account over the Reserve Account
Floor.
(iii) In the event that on any Remittance Date after
giving effect to the amounts required to be distributed pursuant to Section
2.3(a) and any amounts to be withdrawn pursuant to clause (b)(i) above, the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount, the Collateral Agent shall (x) if no Termination Event or Potential
Termination Event shall have occurred, release to the Debtor an amount equal to
the excess of the amount on deposit in the Reserve Account over the Required
Reserve Account Amount and (y) if a Termination Event shall have occurred, apply
as part of Available Funds pursuant to Section 2.3 hereof an amount equal to the
excess of the amount on deposit in the Reserve Account over the Reserve Account
Floor.
(iv) After the occurrence of the Termination Date upon
the day on which the Net Investment is zero and the Secured Parties shall have
received all Aggregate Unpaids, the Collateral Agent shall release to the Debtor
all amounts on deposit in the Reserve Account.
SECTION 2.15. OPTIONAL RELEASE.
On any Business Day (but no more frequently than once per week), the
Debtor shall have the right, upon delivery to the Collateral Agent of a Take-Out
Notice substantially in the form of Exhibit L hereto, to require the Collateral
Agent to release its security interest in and its Lien on all or part of the
Contracts and the related Receivables (excluding any Contracts and related
Receivables booked after the cut-off date applicable to the structured finance
transaction established by or on behalf of the Debtor or an affiliate, to which
the released Contracts and related Receivables will be subject) on the terms and
conditions set forth herein. It shall be a
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condition precedent to any such release that (i) the Debtor shall pay to the
Company and the Bank Investors, as applicable, an amount equal to the amount
necessary to reduce the Net Investment to an amount equal to the product of
the Noteholder's Percentage and the Net Receivables Balance (calculated after
giving effect to such proposed release of Receivables and by including in the
Net Receivables Balance only those Receivables that as of such date satisfy
(as if determined on such date) the definition of Eligible Receivable
provided that no Delinquent Receivable shall be classified as an Eligible
Receivable on such day) and (ii) the amount to be paid pursuant to clause (i)
above shall (x) not be greater than the principal component of the Company's
maturing Commercial Paper which was issued to fund such portion of the Net
Investment or the principal component subject to the funding period utilized
by the Bank Investors and the Liquidity Provider to fund such portion of the
Net Investment, as applicable and (y) be at least $5,000,000, (iii) the
Debtor shall deposit to the Collection Account an amount equal to the sum of
(x) all unreimbursed Servicer Advances and (y) Carrying Costs associated with
the Receivables to be released as determined by the Agent, (iv) the Debtor
shall have given the Agent and the Collateral Agent prior written notice of
(x) its intention to request a release with respect to such Contracts and
Receivables and (y) the proposed date of such release, which shall be no
earlier than the last day of the latest maturing funding period then
outstanding, (v) the Debtor shall provide to the Agent and the Collateral
Agent an Officer's Certificate certifying that as of the date of such release
all non-released Receivables satisfy the definition of Eligible Receivable
(and are not Delinquent Receivables) set forth herein, (vi) after giving
effect to such release the amount on deposit in the Reserve Account shall be
at least equal to the Reserve Account Floor (vii) in the case of a release of
the security interest with respect to all of the Contracts and related
Receivables, the Debtor shall deposit to the Collection Account all other
Aggregate Unpaids, (viii) the Debtor shall not have applied any adverse
selection criteria to the Contracts and the Receivables being released on
such date and (ix) AmeriCredit shall pay any breakage costs incurred in
connection with such release under any Hedging Arrangement. The Debtor shall
pay to the Agent, for the benefit of the Company and the Bank Investors, as
applicable, and the Collection Account, as applicable, such amounts as are
required under this Section on the date of such release.
The amount described in clause (i) above upon receipt by the Agent,
for the benefit of the Company and the Bank Investors, as applicable, shall be
applied in reduction of the Net Investment. From the amount described in clause
(iii) above an amount equal to unreimbursed Servicer Advances shall be
distributed to the Collection Agent and the remainder of such amounts shall be
remitted to the Agent, for the benefit of the Company and the Bank Investors, as
applicable, in accordance with Section 2.3(a) hereof.
Neither the Agent, the Collateral Agent, nor the Secured Parties shall
be obligated to pay any legal fees, expenses or other costs arising in
connection with any such assignment.
Upon the deposit to the Collection Account and the payment by the
Debtor of the amounts described in this Section, the Collateral Agent shall
execute and deliver to the Debtor, at the Debtor's expense, such documents or
instruments as are necessary to terminate the Collateral Agent's security
interest in the Receivables and the Contracts related thereto. Any such
documents shall be prepared by or on behalf of the Debtor.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE DEBTOR. On the
Closing Date and on each Determination Date, Remittance Date and Funding Date,
the Debtor represents and warrants to the Agent, the Collateral Agent and the
Secured Parties that:
(a) EXISTENCE AND POWER. The Debtor is a business trust duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all 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. The Debtor is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so qualified.
(b) AUTHORIZATION; CONTRAVENTION. The execution, delivery and
performance by the Debtor of this Agreement and the other Transaction Documents
are within the Debtor's trust powers, have been duly authorized by all necessary
trust action, require no action by or in respect of, or require the consent or
approval of, or the filing of any notice or other documentation with, any
Official Body or other Person (except as contemplated by Section 2.6 hereof),
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the Trust Agreement of the Debtor or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Debtor or result in the creation or imposition of any Adverse Claim on the
assets of the Debtor or any of its Subsidiaries (except as contemplated by
Section 2.6 hereof).
(c) BINDING EFFECT. Each of this Agreement and the other
Transaction Documents has been duly executed and delivered and constitutes the
legal, valid and binding obligation of the Debtor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally.
(d) PERFECTION. Immediately preceding each Funding, the Debtor
shall be the legal and beneficial owner of all of the Receivables, Related
Security and Collections, free and clear of all Adverse Claims. On or prior to
each Funding and each day on which a Receivable is sold to the Debtor by
AmeriCredit or AFC II, as the case may be, pursuant to the Master Receivables
Purchase Agreement, all financing statements and other documents required to be
recorded or filed in order to perfect and protect (i) the Debtor's interest in
the Receivables, the Contracts related thereto, the Related Security with
respect thereto and all Proceeds thereof against all creditors of and purchasers
from AmeriCredit or AFC II, as applicable and (ii) the interest of the
Collateral Agent on behalf of the Company and the Bank Investors in the
Collateral against all creditors of and purchasers from AmeriCredit, AFC II and
the Debtor will have been duly filed in each filing office necessary for such
purpose, and all filing fees and taxes, if any, payable in connection with such
filings shall have been paid in full.
(e) ACCURACY OF INFORMATION. All information heretofore
furnished by the Debtor (including without limitation, the Settlement
Statements, any reports delivered
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pursuant to Section 2.9 hereof and AmeriCredit Corp.'s financial statements)
to the Collateral Agent, the Secured Parties, the Administrative Agent or any
of the other Persons party hereto for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by the Debtor to any such Person will be, true and
accurate in every material respect, and the Debtor has not omitted to
disclose any information which is material to the transaction on the date
such information is furnished.
(f) TAX STATUS. All tax returns (federal, state and local)
required to be filed with respect to the Debtor have been filed (which filings
may be made by an Affiliate of the Debtor on a consolidated basis covering the
Debtor 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 Debtor (or in the event consolidated returns have been filed, with
respect to the Persons subject to such returns).
(g) ACTION, SUITS. There are no actions, suits or proceedings
pending, or to the knowledge of the Debtor threatened, against or affecting (x)
the Debtor or its properties and (y) except as set forth in Exhibit F hereto,
against any Affiliate of the Debtor or their respective properties, in or before
any court, arbitrator or other body which in the case of clause (y),
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect if determined adversely to such Affiliate. The Debtor
is not in violation of any order of any Official Body.
(h) USE OF PROCEEDS. The proceeds of any Funding will be used
by the Debtor to (a) acquire the Receivables, the Contracts related thereto and
the Related Security with respect thereto from AmeriCredit or AFC II, as the
case may be, pursuant to the Master Receivables Purchase Agreement, (b) to pay
down debt in connection with the purchase of the Receivables and Contracts
pursuant to the Master Receivables Purchase Agreement, or (c) to make
distributions constituting a return of capital. No proceeds of any Funding will
be used by the Debtor to acquire any security in any transaction which is
subject to Section 12 of the Securities Exchange Act of 1934, as amended or for
any purpose that violates any applicable law, rule or regulation, including
Regulation U of the Federal Reserve Board.
(i) PLACE OF BUSINESS. The principal place of business and
chief executive office (as such terms are defined in the UCC) of the Debtor are
located at the address of the Debtor indicated in Section 8.3 hereof and the
offices where the Debtor keeps all its Records, are located at the address(es)
described on Exhibit G or such other locations notified to the Company in
accordance with Section 2.6 hereof in jurisdictions where all action required by
Section 2.6 hereof has been taken and completed.
(j) GOOD TITLE. Upon each Funding and on each day on which a
Receivable and related Contract is sold to the Debtor by AmeriCredit or AFC II,
as the case may be, pursuant to the Master Receivables Purchase Agreement, the
Collateral Agent shall acquire a valid and perfected first priority security
interest in each Receivable and related Contract that exists on the date of such
Funding and sale and in the Related Security and Collections with respect
thereto free and clear of any Adverse Claim.
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(k) TRADENAMES, ETC. As of the date hereof: (i) the Debtor has
only the subsidiaries and divisions listed on Exhibit H hereto; and (ii) the
Debtor has not operated under any tradenames and has not changed its name,
merged with or into or consolidated with any other corporation or been the
subject of any proceeding under Title 11, United States Code (Bankruptcy).
(l) NATURE OF RECEIVABLES. Each Receivable (x) represented by
the Debtor or the Collection Agent to be an Eligible Receivable (including in
any report, document or instrument delivered hereunder or in connection with the
other Transaction Documents) or (y) included in the calculation of the Net
Receivables Balance, satisfies at the time of such representation or inclusion
the definition of "Eligible Receivable" set forth herein and, in the case of
clause (y) above is not a Defaulted Receivable.
(m) CREDIT AND COLLECTION POLICY. Since August 30, 1999, there
have been no material changes in the Credit and Collection Policy other than as
permitted hereunder. Since such date, no material adverse change has occurred
in the overall rate of collection of the Receivables.
(n) COLLECTION AND SERVICING; MATERIAL ADVERSE EFFECT. Since
August 30, 1999, there has not been any material adverse change in the ability
of the Collection Agent (to the extent it is AmeriCredit, the Debtor or any
Subsidiary or Affiliate of any of the foregoing) to service and collect the
Receivables or other Material Adverse Effect.
(o) NO TERMINATION EVENT. No event has occurred and is
continuing and no condition exists which constitutes a Termination Event or a
Potential Termination Event.
(p) NOT AN INVESTMENT COMPANY OR A HOLDING COMPANY. The Debtor
is not, and is not controlled by, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from all provisions
of such Act. The Debtor is not a "holding company," or a subsidiary or
affiliate of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(q) ERISA. Each of the Debtor and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
(r) LOCK-BOX ACCOUNTS. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at
such Lock-Box Banks, are specified in Exhibit B hereto (or at such other
Lock-Box Banks and/or with such other Lock-Box Accounts as have been notified
to the Collateral Agent and for which Lock-Box Agreements have been executed
in accordance with Section 2.6(b) hereof and delivered to the Collateral
Agent). All Obligors have been instructed (or will be instructed on their
next billing statement) to make payment to a Lock-Box Account.
(s) BULK SALES. No transaction contemplated hereby or by the
Note Purchase Agreement or the Master Receivables Purchase Agreement requires
compliance with any bulk sales act or similar law.
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(t) TRANSFERS UNDER MASTER RECEIVABLES PURCHASE AGREEMENT. Each
Receivable which has been transferred to the Debtor by AmeriCredit or AFC II has
been purchased by the Debtor from AmeriCredit or AFC II, as the case may be,
pursuant to, and in accordance with, the terms of the Master Receivables
Purchase Agreement.
(u) PREFERENCE; VOIDABILITY. With respect to each transfer of
Receivables and Related Security from AmeriCredit or AFC II, as the case may be,
to the Debtor, the Debtor has given reasonably equivalent value to AmeriCredit
or AFC II, as applicable, in consideration for such transfer of Receivables and
Related Security, and each such transfer has not been made for or on account of
an antecedent debt owed by AmeriCredit or AFC II to the Debtor and no such
transfer is or may be voidable under any Section of the Bankruptcy Code.
(v) INSURANCE POLICIES. At the time of the sale of each
Receivable and related Contract by AmeriCredit or AFC II to the Debtor pursuant
to the Master Receivables Purchase Agreement, each Financed Vehicle is required
to be covered by physical damage and liability insurance obtained by the related
Obligor at least in the amount required by the related Contract, and each such
required insurance policy is required to name AmeriCredit or AFC II, as loss
payee and is required to be in full force and effect.
(w) YEAR 2000. The Debtor relies exclusively on the Receivables
Systems of the Collection Agent, does not have any Receivables Systems or
computer applications of its own and does not have any Receivables Systems that
need to be Year 2000 Compliant.
(x) REPRESENTATIONS AND WARRANTIES OF AMERICREDIT AND AFC II.
Each of the representations and warranties of AmeriCredit and AFC II set forth
in Sections 3.1 and 3.3, respectively, of the Master Receivables Purchase
Agreement are true and correct in all material respects and each of AmeriCredit
and AFC II hereby remakes all such representations and warranties for the
benefit of the Agent, the Collateral Agent, the Company, the Bank Investors and
the Administrative Agent.
Any document, instrument, certificate or notice delivered hereunder by
the Debtor to the Administrative Agent, the Collateral Agent or the Secured
Parties shall be deemed a representation and warranty by the Debtor.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE COLLECTION AGENT. On
the Closing Date and on each Determination Date, Remittance Date and Funding
Date, the Collection Agent represents and warrants to the Agent, the
Administrative Agent, the Collateral Agent and the Secured Parties that:
(a) CORPORATE EXISTENCE AND POWER. The Collection Agent 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. The Collection Agent is duly qualified to do business in
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and is in good standing in every other jurisdiction in which the nature of
its business requires it to be so qualified.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION.
The execution, delivery and performance by the Collection Agent of this
Agreement and the other Transaction Documents are within the Collection Agent's
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or require the consent or approval of, or
the filing of any notice or other documentation with, any Official Body (except
as contemplated by Section 2.6 hereof), 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 Collection Agent or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Collection Agent or result in the creation or imposition of any Adverse
Claim on assets of the Collection Agent or any of its Subsidiaries (except as
contemplated by Section 2.6 hereof).
(c) BINDING EFFECT. This Agreement has been duly executed and
delivered and constitutes the legal, valid and binding obligation of the
Collection Agent, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally.
(d) ACCURACY OF INFORMATION. All information heretofore
furnished by the Collection Agent to the Collateral Agent, the Secured Parties,
the Administrative Agent or any of the other Persons party hereto for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Collection Agent to the
Collateral Agent, the Secured Parties or the Administrative Agent will be, true
and accurate in every material respect, and the Collection Agent has not omitted
to disclose any information which is material to the transactions contemplated
by this Agreement on the date such information is furnished.
(e) ACTION, SUITS. There are no actions, suits or proceedings
pending, or to the knowledge of the Collection Agent threatened, against or
affecting the Collection Agent or any Affiliate of the Collection Agent or their
respective properties, in or before any court, arbitrator or other body, which,
individually or in the aggregate, could reasonably be expected to cause a
Material Adverse Effect. The Collection Agent is not in violation of any order
of any Official Body.
(f) NATURE OF RECEIVABLES. Each Receivable included in the
calculation of the Net Receivables Balance satisfies at such time the definition
of "Eligible Receivable" and is not a Defaulted Receivable.
(g) CREDIT AND COLLECTION POLICY. Since August 30, 1999,
there have been no material changes in the Credit and Collection Policy other
than as permitted hereunder. Since such date, no material adverse change has
occurred in the overall rate of collection of the Receivables.
(h) COLLECTIONS AND SERVICING; MATERIAL ADVERSE EFFECT. Since
August 30, 1999, there has not been any material adverse change in the ability
of the Collection Agent to
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service and collect the Receivables or other Material Adverse Effect relating
to the Collection Agent.
(i) NOT AN INVESTMENT COMPANY OR A HOLDING COMPANY. The
Collection Agent is not, and is not controlled by, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or is
exempt from all provisions of such Act. The Collection Agent is not a "holding
company," or a subsidiary or affiliate of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(j) LOCK-BOX ACCOUNTS. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at
such Lock-Box Banks, are specified in Exhibit B (or at such other Lock-Box
Banks and/or with such other Lock-Box Accounts as have been notified to the
Debtor and the Collateral Agent and for which Lock-Box Agreements have been
executed in accordance with Section 2.6(b) hereof and delivered to the
Collateral Agent). All Obligors have been instructed (or will be instructed
on their next billing statement) to make payment to a Lock-Box Account.
(k) YEAR 2000 COMPLIANCE. The Collection Agent (i) has initiated
a review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the Year 2000 Problem, (ii) has
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) has implemented that plan in accordance with that timetable.
Based on the foregoing, the Collateral Agent believes that it is Year 2000
Compliant, except to the extent that a failure to be so could not be reasonably
expected to have a Material Adverse Effect or result in a Termination Event.
The Collateral Agent (i) has completed a review and assessment of its
Receivables Systems and (ii) has determined that such Receivables Systems are
and will continue to be Year 2000 Compliant.
The costs of all assessment, remediation, testing and integration, if
any, related to the Collection Agent continuing to be Year 2000 Compliant will
not have a Material Adverse Effect.
Any document, instrument, certificate or notice delivered hereunder by
the Collection Agent to the Administrative Agent, the Collateral Agent or the
Secured Parties shall be deemed a representation and warranty by the Collection
Agent.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. CONDITIONS TO EFFECTIVENESS. On or prior to the date of
execution hereof, the Debtor shall deliver to the Agent the following documents,
instruments and fees all of which shall be in a form and substance acceptable to
the Collateral Agent:
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(a) An executed copy of this Agreement, the Master Receivables
Purchase Agreement, the Fee Letter and each of the other Transaction Documents
(other than any Hedging Arrangement).
(b) The Arrangement Fee and any other fees or amounts due and
payable on the Closing Date in accordance with the Fee Letter.
(c) Such other documents, approvals, consents, instruments,
certificates or opinions as the Collateral Agent or the Secured Parties shall
reasonably request.
SECTION 4.2. CONDITIONS TO INITIAL FUNDING. The obligation of the
Company, or the Bank Investors, as the case may be, to make the Initial Funding
hereunder is subject to (i) satisfaction of the conditions precedent set forth
in Section 4.1 hereof and Section 2.1(d) of the Note Purchase Agreement and (ii)
receipt by the Agent of the following documents, instruments and fees, all of
which shall be in a form and substance acceptable to the Collateral Agent:
(a) A copy of the resolutions of the Board of Directors of
AmeriCredit, certified by its Secretary approving the execution, delivery and
performance by it (and the Debtor) of this Agreement, the Master Receivables
Purchase Agreement, the Trust Agreement and the other Transactions Documents to
be delivered by it (and the Debtor) hereunder or thereunder and all other
documents evidencing necessary corporate action (including shareholders
consents) and government approvals, if any.
(b) A copy of the resolutions of the Board of Directors of AFC
II, certified by its Secretary approving the execution, delivery and performance
by it of this Agreement, the Master Receivables Purchase Agreement, the Trust
Agreement and the other Transactions Documents to be delivered by it hereunder
or thereunder and all other documents evidencing necessary corporate action
(including shareholders consents, if any) and government approvals, if any.
(c) The certificate of trust of the Debtor certified by the
Secretary of State of the State of Delaware dated a date reasonably prior to the
Initial Funding Date.
(d) The certificate of incorporation of AmeriCredit certified by
the Secretary of State of the State of Delaware dated a date reasonably prior to
the Initial Funding Date.
(e) The certificate of incorporation of AFC II certified by the
Secretary of State of the State of Delaware dated a date reasonably prior to the
Initial Funding Date.
(f) (i) The certificate of incorporation of the Trustee
certified by the Secretary of State of the State of Delaware dated a date
reasonably prior to the Initial Funding Date and (ii) a power of attorney
granted by the Trust in favor of Bankers Trust (Delaware).
(g) A Good Standing Certificate for the Debtor issued by the
Secretary of State of the State of Delaware and certificates of qualification as
a foreign trust issued by the Secretary of State or other similar official of
each jurisdiction where such qualification is
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material to the transactions contemplated by this Agreement, the Master
Receivables Purchase Agreement and the other Transaction Documents, in each
case, dated a date reasonably prior to the Initial Funding Date.
(h) A Good Standing Certificate for AmeriCredit issued by the
Secretary of State of the State of Delaware and certificates of qualification as
a foreign corporation issued by the Secretary of State or other similar official
of Texas and California, in each case, dated a date reasonably prior to the
Initial Funding Date.
(i) A Good Standing Certificate for AFC II issued by the
Secretary of State of the State of Delaware and certificates of qualification as
a foreign corporation issued by the Secretary of State or other similar official
of each jurisdiction where such qualification is material to the transactions
contemplated by this Agreement, the Master Receivables Purchase Agreement and
the other Transaction Documents, in each case, dated a date reasonably prior to
the Initial Funding Date.
(j) A Good Standing Certificate for the Trustee issued by the
Secretary of State of the State of Delaware and certificates of qualification as
a foreign corporation issued by the Secretary of State or other similar official
of each jurisdiction where such qualification is material to the transactions
contemplated by this Agreement, the Master Receivables Purchase Agreement and
the other Transaction Documents, in each case, dated a date reasonably prior to
the Initial Funding Date.
(k) A Certificate of the Secretary of the Debtor substantially
in the form of Exhibit J hereto.
(l) A Certificate of the Secretary of AmeriCredit substantially
in the form of Exhibit J hereto.
(m) A Certificate of the Secretary of AFC II substantially in
the form of Exhibit J hereto.
(n) A Certificate of the Secretary of the Trustee substantially
in the form of Exhibit J hereto.
(o) Acknowledgement copies of proper financing statements (Form
UCC-1), naming AmeriCredit as the debtor/seller in favor of the Debtor as
secured party/purchaser and the Collateral Agent, for the benefit of the Secured
Parties, as assignee of the secured party/purchaser or other similar instruments
or documents as may be necessary or in the reasonable opinion of the Collateral
Agent desirable under the UCC of all appropriate jurisdictions or any comparable
law to perfect the Debtor's security interest in the Receivables, Related
Security and Collections, free and clear of any Adverse Claim.
(p) Acknowledgement copies of proper financing statements (Form
UCC-1), naming AFC II as the debtor/seller in favor of the Debtor as secured
party/purchaser and the Collateral Agent, for the benefit of the Secured
Parties, as assignee of the secured party/purchaser or other similar instruments
or documents as may be necessary or in the reasonable opinion of the Collateral
Agent desirable under the UCC of all appropriate
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jurisdictions or any comparable law to perfect the Debtor's security interest
in the Receivables, Related Security and Collections, free and clear of any
Adverse Claim.
(q) Acknowledgement copies of proper financing statements (Form
UCC-1), naming the Debtor as the debtor in favor of the Collateral Agent, for
the benefit of the Secured Parties, or other similar instruments or documents as
may be necessary or in the reasonable opinion of the Collateral Agent desirable
under the UCC of all appropriate jurisdictions or any comparable law to perfect
the Collateral Agent's security interest in the Collateral, including all
Receivables, Related Security and Collections, free and clear of any Adverse
Claim.
(r) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate all security interests and other rights of any person in
the Receivables, Related Security and Collections, previously granted by
AmeriCredit.
(s) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate all security interests and other rights of any person in
the Receivables, Related Security and Collections, previously granted by AFC II.
(t) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate all security interests and other rights of any person in
the Collateral, including the Receivables, Related Security and Collections,
previously granted by the Debtor.
(u) Certified copies of request for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Collateral Agent) dated a date reasonably near the date of the Initial Funding
listing all effective financing statements which name the Debtor, AmeriCredit or
AFC II (under its present name and any previous name) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to items (p), (q)
and (r) above together with copies of such financing statements with respect to
AFC II and the Debtor, and, with respect to AmeriCredit, as may be requested by
the Agent or its counsel (none of which shall cover any Receivables or
Contracts).
(v) Executed copies of the Lock-Box Agreements relating to each
of the Lock-Boxes and the Lock-Box Accounts.
(w) An opinion of Dewey Ballantine LLP, special counsel to the
Debtor, AmeriCredit and AFC II, covering the matters set forth in Exhibit I
hereto.
(x) An opinion of Dewey Ballantine LLP, special counsel to the
Debtor, AmeriCredit and AFC II, covering certain bankruptcy and insolvency
matters (i.e. "true sale" and non-consolidation) in form and substance
satisfactory to the Collateral Agent and Collateral Agent's counsel.
(y) The Note, duly executed by the Debtor and appropriately
completed.
(z) Evidence that Bank of America shall no longer be a party to
the Restated Revolving Credit Agreement, as amended, dated October 3, 1997 among
AmeriCredit
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Corp., AmeriCredit Financial Services, Inc., AmeriCredit Corporation of
California, ACF Investment Corp., AmeriCredit Management Company, Wells Fargo
Bank (Texas) National Association, as agent and banks party thereto.
(aa) Such other documents, approvals, consents, instruments,
certificates or opinions as the Collateral Agent or the Secured Parties shall
reasonably request.
ARTICLE V
COVENANTS
SECTION 5.1. AFFIRMATIVE COVENANTS OF THE DEBTOR AND AMERICREDIT. At all
times from the date hereof to the later to occur of (i) the Termination Date or
(ii) the date on which the Net Investment has been reduced to zero, all accrued
Carrying Costs shall have been paid in full in cash and all other Aggregate
Unpaids shall have been paid in full in cash, unless the Collateral Agent and
the Secured Parties shall otherwise consent in writing:
(a) FINANCIAL REPORTING AND OTHER INFORMATION. The Debtor
shall, and shall cause AmeriCredit, AFC II and each of the Debtor's,
AmeriCredit's and AFC II's Subsidiaries to, maintain, for itself and each of its
respective Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to the Administrative Agent and the Collateral
Agent:
(i) ANNUAL REPORTING. As soon as available and in any
event within 90 days (or the next succeeding Business Day if the last day of
such period is not a Business Day) after the end of each fiscal year, a copy
of the audited consolidated financial statements for such year for
AmeriCredit Corp. and its consolidated Subsidiaries prepared in accordance
with GAAP and any management letter (which letter shall be furnished as soon
as available) prepared by independent certified public accountants acceptable
to the Agent, certified, without qualification by such accountants and each
other report or statement sent to shareholders or publicly filed by
AmeriCredit Corp. or the Debtor.
(ii) QUARTERLY REPORTING. As soon as available and in
any event within 45 days (or the next succeeding Business Day if the last day of
such period is not a Business Day) after the end of each of the first three
quarters of each fiscal year of AmeriCredit Corp., a consolidated balance sheet
of AmeriCredit Corp. and its consolidated Subsidiaries as of the end of such
quarter and including the prior comparable period, and a consolidated statement
of income of AmeriCredit Corp. and its consolidated Subsidiaries for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial officer or
chief accounting officer of AmeriCredit Corp. identifying such documents as
being the documents described in this Section 5.1(a)(ii) and stating that the
information set forth therein fairly presents the financial condition of
AmeriCredit Corp. and its consolidated Subsidiaries as of and for the periods
then ended, subject to year-end adjustments consisting only of normal, recurring
accruals.
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(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate signed by the Debtor's
or AmeriCredit Corp.'s, as applicable, chief financial officer, treasurer or
authorized officer who shall hold the office of a Vice President or above,
stating that (x) the attached financial statements have been prepared in
accordance with GAAP and accurately reflect the financial condition of the
Debtor or AmeriCredit Corp. as applicable 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 and showing the computation of, and showing compliance with, each
of the financial ratios and restrictions set forth in Section 5.4 and Section
6.1(m), (q), (s), (t) and (u) hereof.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon
the furnishing thereof to the shareholders of AmeriCredit Corp., copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. FILINGS. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or other
regular reports which AmeriCredit Corp. or any Subsidiary files with the
Securities and Exchange Commission, other than any reports on Form 8-K filed
with respect to securitizations unrelated to this Agreement or the transactions
contemplated hereby.
(vi) NOTICE OF TERMINATION EVENTS OR POTENTIAL
TERMINATION EVENTS, ETC. (A) As soon as possible and in any event within two
(2) days after the occurrence of each Termination Event or each Potential
Termination Event, a statement of the chief financial officer, chief accounting
officer or treasurer of the Debtor setting forth details of such Termination
Event or Potential Termination Event and the action which the Debtor proposes to
take with respect thereto, which information shall be updated promptly from time
to time; (B) promptly after the Debtor obtains knowledge thereof, notice of any
litigation, investigation or proceeding that may exist at any time between the
Debtor and any Person that may result in a Material Adverse Effect or any
litigation or proceeding relating to any Transaction Document; and (C) promptly
after the occurrence thereof, notice of any Material Adverse Effect.
(vii) CHANGE IN CREDIT AND COLLECTION POLICY AND DEBT
RATINGS. Within ten (10) days after the date any material change in or
amendment to the Credit and Collection Policy is made, a copy of the Credit and
Collection Policy then in effect indicating such change or amendment. Within
five (5) days after the date of any change in AmeriCredit's or AmeriCredit
Corp.'s public or private debt ratings, if any, a written certification of
AmeriCredit's or AmeriCredit Corp.'s public and private debt ratings after
giving effect to any such change.
(viii) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any Reportable Event
(as defined in Article IV of ERISA) which the Debtor, AmeriCredit, AFC II or any
ERISA Affiliate of the Debtor, AmeriCredit or AFC II files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which the Debtor, AmeriCredit, AFC II or any ERISA
Affiliates of the Debtor, AmeriCredit or AFC II receives
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from the Internal Revenue Service, the Pension Benefit Guaranty Corporation
or the U.S. Department of Labor.
(ix) CHANGE IN ACCOUNTANTS OR ACCOUNTING POLICY.
Promptly, notice of any change in the accountants or material change in
accounting policy of either the Debtor, AmeriCredit Corp., AmeriCredit or AFC
II.
(x) OTHER INFORMATION. Such other information
(including non-financial information) with respect to the Debtor, AmeriCredit
Corp., AmeriCredit, AFC II or any of their respective Subsidiaries as the
Administrative Agent, the Collateral Agent or any Secured Party may from time to
time reasonably request.
(b) CONDUCT OF BUSINESS. The Debtor shall (i) and shall cause
AmeriCredit and AFC II and each of the Debtor's, AmeriCredit's and AFC II's
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly organized, validly existing
and in good standing as a domestic corporation in its jurisdiction of
organization and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and (ii) at all times be a
wholly-owned Subsidiary of AmeriCredit.
(c) COMPLIANCE WITH LAWS. The Debtor shall, and shall cause
AmeriCredit, AFC II and each of the Debtor's, AmeriCredit's and AFC II's
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(d) FURNISHING OF INFORMATION AND INSPECTION OF RECORDS. The
Debtor shall, and shall cause AmeriCredit and AFC II to, furnish to the Agent
from time to time such information with respect to the Receivables as the Agent
may reasonably request, including, without limitation, listings identifying the
Obligor and the outstanding balance for each Receivable. The Debtor shall, and
shall cause AmeriCredit and AFC II to, at any time and from time to time, during
regular business hours and, provided that a Termination Event or Potential
Termination Event shall not have occurred and be continuing, upon reasonable
prior notice, permit the Collateral Agent or any Secured Party, or their agents
or representatives, (i) to examine and make copies of and take abstracts from
all Records and (ii) to visit the offices and properties of the Debtor,
AmeriCredit or AFC II, as applicable, for the purpose of examining such Records,
and to discuss matters relating to Receivables or the Debtor's, AmeriCredit's or
AFC II's performance hereunder and under the other Transaction Documents to
which such Person is a party with any of the officers, directors, employees or
independent public accountants of the Debtor, AmeriCredit or AFC II, as
applicable, having knowledge of such matters.
(e) OFFICES, RECORDS AND BOOKS OF ACCOUNT. The Debtor (i) shall
keep its principal place of business and chief executive office (as such terms
or similar terms are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address of the Debtor set forth in Section 8.3
hereof or at any other locations in jurisdictions where all actions requested by
the Collateral Agent to protect and perfect the interest of the Collateral
Agent, for the benefit of the Secured Parties, in the Collateral have been taken
and completed
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and (ii) shall provide the Collateral Agent with at least 30 days' written
notice before making any change in the Debtor's name or making any other
change in the Debtor's identity or corporate structure that could render any
UCC financing statement filed in connection with this Agreement seriously
misleading as such term (or similar term) is used in the UCC. Each notice to
the Collateral Agent pursuant to the foregoing sentence shall set forth the
applicable change and the effective date thereof. The Debtor shall, and
shall cause AmeriCredit and AFC II to, maintain and implement administrative
and operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the destruction of
the originals thereof), and keep and maintain, all documents, books, records
and other information reasonably necessary or advisable for the collection of
all Receivables (including, without limitation, records adequate to permit
the daily identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Debtor shall, and shall cause
AmeriCredit and AFC II to, give the Agent notice of any material change in
the administrative and operating procedures of the Debtor, AmeriCredit or AFC
II, as applicable, referred to in the previous sentence.
(f) PERFORMANCE AND COMPLIANCE WITH CONTRACTS RELATED TO THE
RECEIVABLES. The Debtor, at its expense, shall, and shall cause AmeriCredit and
AFC II to, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by the Debtor, AmeriCredit
or AFC II under the Contracts related to the Receivables.
(g) CREDIT AND COLLECTION POLICIES. The Debtor shall, and shall
cause AmeriCredit to, comply in all material respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(h) COLLECTIONS. The Debtor shall, and shall cause AmeriCredit
and AFC II to, instruct all Obligors to cause all Collections to be deposited
directly to a Lock-Box Account.
(i) COLLECTIONS RECEIVED. The Debtor shall, and shall cause
each of AmeriCredit and AFC II to, hold in trust, and deposit, immediately, but
in any event not later than forty-eight (48) hours of its receipt thereof, to
the Collection Account all Collections received from time to time by the Debtor,
AmeriCredit or AFC II, as the case may be.
(j) CONTRIBUTION TREATMENT. The Debtor shall not, and shall not
permit AmeriCredit or AFC II to, account for (including for accounting and tax
purposes), or otherwise treat, the transactions contemplated by the Master
Receivables Purchase Agreement in any manner other than as a contribution of
Receivables by AmeriCredit or AFC II, as applicable, to the Debtor. In
addition, the Debtor shall, and shall cause each of AmeriCredit and AFC II to,
disclose (in a footnote or otherwise) in all of its respective financial
statements (including any such financial statements consolidated with any other
Persons' financial statements) the existence and nature of the transactions
contemplated by the Master Receivables Purchase Agreement and the interest of
the Debtor (in the case of AmeriCredit's or AFC II's financial statements) in
the Affected Assets.
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(k) SEPARATE BUSINESS. (a) The Debtor shall be a limited
purpose entity whose primary activities are restricted in the Trust Agreement to
(i) purchasing or otherwise acquiring from AmeriCredit or AFC II, owning,
holding, granting security interests or selling interests in Affected Assets,
(ii) entering into agreements for the selling, financing and servicing of the
Affected Assets, and (iii) conducting such other activities as it deems
necessary or appropriate to carry out its primary activities. The Debtor shall
not create any Subsidiaries or divisions. The Debtor shall not engage in any
business other than the transactions contemplated by the Transaction Documents.
The Debtor shall at all times (a) to the extent the Debtor's office is located
in the offices of AmeriCredit, AFC II or any Affiliate of AmeriCredit or AFC II,
pay fair market rent for its executive office space located in such offices, (b)
maintain the Debtor's books, financial statements, accounting records and other
trust documents and records separate from those of AmeriCredit, AFC II or any
other entity, (c) not commingle the Debtor's assets with those of AmeriCredit,
AFC II or any other entity, (d) act solely in its own name and through its own
authorized officers and agents, (e) make investments directly or by brokers
engaged and paid by the Debtor or its agents (PROVIDED that if any such agent is
an Affiliate of the Debtor it shall be compensated at a fair market rate for its
services), (f) separately manage its liabilities from those of AmeriCredit, AFC
II or any Affiliates of AmeriCredit or AFC II and pay its own liabilities,
including all administrative expenses, from its own separate assets, except that
AmeriCredit may pay the organizational expenses of the Debtor, and (g) pay from
the Debtor's assets all obligations and indebtedness of any kind incurred by the
Debtor. The Debtor shall abide by all trust formalities, and the Debtor shall
cause its financial statements to be prepared in accordance with GAAP in a
manner that indicates the separate existence of the Debtor and its assets and
liabilities. The Debtor shall (i) pay all its liabilities, (ii) not assume the
liabilities of AmeriCredit, AFC II or any Affiliate of AmeriCredit or AFC II,
(iii) not lend funds or extend credit to AmeriCredit, AFC II or any Affiliate of
AmeriCredit or AFC II and (iv) not guarantee the liabilities of AmeriCredit, AFC
II or any Affiliates of AmeriCredit or AFC II. The officers of the Debtor (as
appropriate) shall make decisions with respect to the business and daily
operations of the Debtor independent of and not dictated by any controlling
entity. The Debtor shall not engage in any business not permitted by the Trust
Agreement as in effect on the Closing Date.
(l) TRUST AGREEMENT. The Debtor shall only amend, alter, change
or repeal the Trust Agreement with the prior written consent of the Collateral
Agent.
(m) YEAR 2000. The Debtor shall promptly notify the Collateral
Agent in the event the Debtor acquires or begins operating Receivables Systems
or other computer applications.
(n) LOCAL COUNSEL LEGAL OPINIONS. At the end of each calendar
quarter, commencing on December 31, 1999, with respect to any state in which
Obligors are located with respect to Eligible Receivables that account for more
than 10% of the Net Receivables Balance and with respect to such state the
Debtor has not previously delivered a local counsel security interest opinion
relating to the Collateral Agent's interest in the Financed Vehicles securing
such Receivables, the Debtor shall deliver to the Collateral Agent, an opinion
of local counsel in form and substance satisfactory to the Collateral Agent and
the Collateral Agent's counsel. With respect to any Eligible Receivable the
Obligor of which is located in a state that accounts for more than 10% of the
Net Receivables Balance and with respect to such
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state the Debtor has failed to deliver the local counsel opinion described
above, to the extent the aggregate Outstanding Balance of such Eligible
Receivables exceeds 10% of the Net Receivables Balance, the Outstanding
Balance for each such Eligible Receivable that causes such aggregate
Outstanding Balance to exceed 10% of the Net Receivables Balance shall be
deemed to have been received and the Debtor shall pay to the Collection Agent
an amount equal to such Outstanding Balance and such amount shall be
deposited into the Collection Account and applied by the Collection Agent as
a Collection in accordance with Section 2.3 or 2.4 hereof, as applicable.
The Net Investment shall be reduced by the amount of such payment and applied
to the reduction of the Net Investment actually received by the Agent.
SECTION 5.2. NEGATIVE COVENANTS OF DEBTOR AND AMERICREDIT. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Carrying Costs shall have been paid in full in cash and all other Aggregate
Unpaids shall have been paid in full in cash, unless the Collateral Agent and
the Secured Parties shall otherwise consent in writing:
(a) NO SALES, LIENS, ETC. Except as otherwise provided herein
and in the Master Receivables Purchase Agreement, the Debtor shall not, and
shall not permit AmeriCredit or AFC II to, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim (or the filing of any financing statement) upon or with respect to any of
the Affected Assets, or any account which concentrates in a Lock-Box Bank to
which any Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as
otherwise permitted pursuant to the Servicing Agreement, the Debtor shall not,
and shall not permit AmeriCredit or AFC II to, extend, amend or otherwise modify
the terms of any Receivable, or amend, modify or waive any term or condition of
any Contract related thereto.
(c) NO AMENDMENT OF MASTER RECEIVABLES PURCHASE AGREEMENT. The
Debtor shall not, and shall not permit AmeriCredit or AFC II to, amend,
supplement or otherwise modify the Master Receivables Purchase Agreement or
waive any provision thereof, in each case except with the prior written consent
of the Collateral Agent and the Secured Parties; nor shall the Debtor take, or
permit AmeriCredit or AFC II to take, any other action under the Master
Receivables Purchase Agreement that could have a material adverse effect on the
Agent, the Company or any Bank Investor or which is inconsistent with the terms
of this Agreement.
(d) NO CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The
Debtor shall not, and shall not permit AmeriCredit or AFC II to, make any change
in the character of its business or in the Credit and Collection Policy, which
change would, in either case (i) impair the collectibility of any Receivable or
(ii) otherwise have a Material Adverse Effect.
(e) NO MERGERS, SALE OF ASSETS, ETC. The Debtor shall not, and
shall not permit AmeriCredit or AFC II to, (i) consolidate or merge with or into
any other Person, or (ii) sell, lease or transfer all or substantially all of
its assets to any other Person, provided, however, that no such sale shall be
deemed to occur solely as a result of a Take-Out or solely as
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a result of the sale of Contracts and related Receivables which are released
to the Debtor pursuant to Section 2.15(c) hereof.
(f) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Debtor
shall not, and shall not permit AmeriCredit, AFC II or the Collection Agent to,
add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account to or from those listed in Exhibit B hereto or make any change in its
instructions to Obligors regarding payments to be made to any Lock-Box Account,
unless (i) such instructions are to deposit such payments to another existing
Lock-Box Account or (ii) the Collateral Agent and the Administrative Agent shall
have received written notice of such addition, termination or change at least 30
days prior thereto and the Collateral Agent and the Administrative Agent shall
have received a Lock-Box Agreement executed by each new Lock-Box Bank or
existing Lock-Box Bank, as applicable, with respect to each new Lock-Box
Account.
(g) DEPOSITS TO LOCK-BOX ACCOUNTS. The Debtor shall not, and
shall not permit AmeriCredit or AFC II to, deposit or otherwise credit, or cause
or permit to be so deposited or credited, to any Lock-Box Account cash or cash
proceeds other than Collections of Receivables.
(h) CHANGE OF NAME, ETC. The Debtor shall not, and shall not
permit AmeriCredit or AFC II to, change its name, identity or structure or the
location of its chief executive office, unless at least 30 days prior to the
effective date of any such change the Debtor AmeriCredit or AFC II, as
applicable, delivers to the Collateral Agent (i) such documents, instruments or
agreements, executed by the Debtor or the Collateral Agent, as applicable, as
are necessary to reflect such change and to continue the perfection of the
Collateral Agent's security interest in the Collateral and (ii) new or revised
Lock-Box Agreements executed by the Lock-Box Banks which reflect such change and
enable the Agent to continue to exercise its rights contained in Section 2.6
hereof.
(i) CONTRIBUTION TREATMENT. The Debtor shall not, and shall not
permit AmeriCredit or AFC II to account for (including for accounting and tax
purposes), or otherwise treat, the transactions contemplated by the Master
Receivables Purchase Agreement in any manner other than as a contribution of
Receivables by AmeriCredit or AFC II, as applicable, to the Debtor.
(j) OTHER DEBT. Except as provided for herein, the Debtor shall
not create, incur, assume or suffer to exist any indebtedness whether current or
funded, or any other liability other than (i) indebtedness of the Debtor
representing fees, expenses and indemnities arising hereunder or under the
Master Receivables Purchase Agreement for the purchase price of the Receivables
under the Master Receivables Purchase Agreement, and (ii) other indebtedness
incurred in the ordinary course of its business in an amount not to exceed
$25,000 at any time outstanding.
(k) ERISA MATTERS. The Debtor shall not, and shall not permit
AmeriCredit or AFC II to, (i) engage or permit any of its respective ERISA
Affiliates to engage in any prohibited transaction (as defined in Section 4975
of the Code and Section 406 of ERISA) for which an exemption is not available or
has not previously been obtained from the U.S.
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Department of Labor; (ii) permit to exist any accumulated funding deficiency
(as defined in Section 302(a) of ERISA and Section 412(a) of the Code) or
funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail to make any payments to any Multiemployer Plan
that the Debtor, AmeriCredit, AFC II or any ERISA Affiliate of the Debtor,
AmeriCredit or AFC II is required to make under the agreement relating to
such Multiemployer Plan or any law pertaining thereto; (iv) terminate any
Benefit Plan so as to result in any liability; (v) permit to exist any
occurrence of any reportable event described in Title IV of ERISA which
represents a material risk of a liability to the Debtor, AmeriCredit, AFC II
or any ERISA Affiliate of the Debtor, AmeriCredit or AFC II under ERISA or
the Code; or (vi) take any action or fail to take any action which shall give
rise to a lien under Section 302(f) of ERISA or cause the Internal Revenue
Service to indicate its intention in writing or to file a notice of lien
asserting a claim or claims pursuant to the Code with regard to any assets of
the Debtor, AmeriCredit, AFC II or any ERISA Affiliate or cause the Pension
Benefit Guaranty Corporation to indicate its intention in writing to file a
notice of lien asserting a claim pursuant to ERISA with regard to any assets
of the Debtor, AmeriCredit, AFC II or any ERISA Affiliate or to terminate any
Benefit Plan, or to take any steps to terminate any Benefit Plan, if such
prohibited transactions, accumulated funding deficiencies, payments,
terminations, reportable events and actions or inactions occurring within any
fiscal year of the Debtor, AmeriCredit and AFC II, in the aggregate, involve
a payment of money or an incurrence of liability by the Debtor, AmeriCredit,
AFC II or any ERISA Affiliate of the Debtor, AmeriCredit or AFC II, in an
amount in excess of $10,000.
(l) PAYMENT TO AMERICREDIT AND AFC II. With respect to any
Receivable sold by AmeriCredit or AFC II to the Debtor, the Debtor shall, and
shall cause AmeriCredit or AFC II, as applicable, to, effect such sale under,
and pursuant to the terms of, the Master Receivables Purchase Agreement,
including, without limitation, the payment by the Debtor in cash to AmeriCredit
or AFC II, as the case may be, an amount equal to the purchase price for such
Receivable as required by the terms of the Master Receivables Purchase
Agreement.
SECTION 5.3. HEDGING ARRANGEMENTS. The Debtor shall (i) at or prior to
the time of any Funding, provide to the Administrative Agent and the Collateral
Agent an Officer's Certificate stating that the Collection Agent has Hedging
Arrangements in place satisfying the conditions of this Section 5.3 as set forth
below, and (ii) in connection with any Settlement Statement provided hereunder
and to the extent not previously provided, provide an executed copy of all
existing Hedging Arrangements, which Hedging Arrangements shall be satisfactory
to the Administrative Agent and the Collateral Agent, and with respect to which
the Debtor shall be the beneficiary, in respect of an aggregate notional amount
at least equal to the Net Investment, and if such Hedging Arrangement is a swap,
not greater than the Net Receivables Balance related to such swap. On each
Funding Date, the notional balance of any swap shall be an amount equal to the
Net Receivables Balance related to such swap (including any Receivables to be
added on such Funding Date). The form and structure and counterparty to each
Hedging Arrangement shall be acceptable to the Administrative Agent and the
Collateral Agent and must be in full force and effect at all times during which
the Net Investment is greater than zero (however such required amount may be
reduced for the period of time between the pricing and the funding of a
structured financing utilizing receivables released to the Debtor pursuant to
Section 2.15 hereof by the Aggregate Outstanding Balance of such Receivables).
With respect to
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each Funding, the related Hedging Arrangement shall provide that (a) the
strike rate, if such Hedging Arrangement is an interest rate cap agreement,
and (b) the fixed rate, if such Hedging Arrangement is a swap, is 11.50% less
than the weighted average Annual Percentage Rate on the Receivables related
to such Funding. With respect to any Hedging Arrangement that is an interest
rate cap, the related amortization schedule shall be calculated using an ABS
prepayment speed of no greater than 1.25%. With respect to any Hedging
Arrangement that is a swap, (i) on and after the Termination Date or the
occurrence of a Termination Event or Poential Termination Event, the
Collateral Agent shall have the right, in its sole discretion, to direct the
Debtor's actions with respect thereto and (ii) the related amortization
schedule shall be approved by the Agent.
SECTION 5.4. FINANCIAL COVENANTS. The Debtor shall maintain at all times
a positive Tangible Net Worth.
SECTION 5.5. AFFIRMATIVE COVENANTS OF THE COLLECTION AGENT. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Carrying Costs shall have been paid in full in cash and all other Aggregate
Unpaids shall have been paid in full in cash, unless the Collateral Agent and
the Secured Parties shall otherwise consent in writing:
(a) CONDUCT OF BUSINESS. The Collection Agent shall, and shall
cause each of its Subsidiaries to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
(b) COMPLIANCE WITH LAWS. The Collection Agent shall, and shall
cause each of its Subsidiaries to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it or its
respective properties may be subject.
(c) FURNISHING OF INFORMATION AND INSPECTION OF RECORDS. The
Collection Agent shall furnish to the Administrative Agent and the Collateral
Agent from time to time such information with respect to the Receivables as the
Administrative Agent or the Collateral Agent may reasonably request (at the
Collection Agent's expense), including, without limitation, listings identifying
the Obligor and the outstanding balance for each Receivable. The Collection
Agent shall, at any time and from time to time during regular business hours
and, provided that a Termination Event or Potential Termination Event shall not
have occurred and be continuing, upon reasonable prior notice, permit the
Collateral Agent or any Secured Party, or their agents or representatives, (i)
to examine and make copies of and take abstracts from all Records and (ii) to
visit the offices and properties of the Collection Agent for the purpose of
examining such Records, and to discuss matters relating to Receivables or its
performance hereunder and under the other Transaction Documents to which it is a
party with any of the officers, directors, employees or independent public
accountants of the Collection Agent having knowledge of such matters.
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(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Collection
Agent shall maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and keep
and maintain, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing Receivable).
The Collection Agent shall give the Agent notice of any material change in its
administrative and operating procedures referred to in the previous sentence.
(e) NOTICE OF COLLATERAL AGENT'S INTEREST. In the event that
the Debtor, AmeriCredit or AFC II shall sell or otherwise transfer any interest
in accounts receivable, the Collection Agent shall disclose on any computer
tapes or other documents or instruments provided by the Collection Agent in
connection with any such sale or transfer the Debtor's ownership of the
Receivables and the Collection Agent's interest therein.
(f) CREDIT AND COLLECTION POLICIES. The Collection Agent shall
comply in all material respects with the Credit and Collection Policy with
respect to each Receivable and the related Contract.
(g) COLLECTIONS. The Collection Agent shall instruct all
Obligors to cause all Collections to be deposited directly to a Lock-Box
Account.
(h) COLLECTIONS RECEIVED. The Collection Agent shall hold in
trust, and deposit, immediately, but in any event not later than forty-eight
(48) hours of its receipt thereof, to a Lock-Box Account all Collections
received by it from time to time.
(i) YEAR 2000 COMPLIANCE. The Collection Agent shall promptly
notify the Collateral Agent in the event the Collection Agent discovers or
determines that any computer application (including those of its suppliers,
vendors and customers) (i) that is necessary for the origination, collection,
management, or servicing of the Receivables is or will become not Year 2000
Compliant, or (ii) that is otherwise material to its or any of its Subsidiaries'
business and operations is or will become not Year 2000 Compliant, except to the
extent that, in the case of (ii) above, such failure could not reasonably be
expected to have a Material Adverse Effect on the Collection Agent or on the
transactions documented under this Agreement or result in a Termination Event or
Potential Termination Event. Further, the Collection Agent shall deliver
simultaneously with any quarterly or annual financial statements or reports to
be delivered under the Agreement, an Officer's Certificate certifying that no
material event, problems or conditions have occurred which in the opinion of
management would cause or be likely to cause the Collection Agent's
representations and warranties with respect to being Year 2000 Compliant made in
the Servicing Agreement to no longer be true.
(j) CHANGE IN ACCOUNTANTS OR ACCOUNTING POLICIES. The
Collection Agent shall promptly notify the Agent of any change in its
accountants or material change in its accounting policy.
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(k) REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS. On or before
sixty (60) days prior to the Termination Date, the Collection Agent shall cause
a firm of independent public accountants to furnish a report on applying agreed
upon procedures to the Collateral Agent to the effect that they have (i)
compared the information contained in the Settlement Statements delivered during
such fiscal year, based on a sample size of three Settlement Statements, with
the information contained in the Contracts and the Collection Agent's records
and computer systems for such period, (ii) verified the Net Receivables Balance
as of the end of each Settlement Period during such fiscal year and (iii)
verified that a sample of Receivables treated by the Collection Agent as
Eligible Receivables in fact satisfied the requirements of the definition
thereof contained herein except, in each case for (a) such exceptions as such
firm shall believe to be immaterial (which exceptions need not be enumerated)
and (b) such other exceptions as shall be set forth in such report.
SECTION 5.6. NEGATIVE COVENANTS OF THE COLLECTION AGENT. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Carrying Costs shall have been paid in full in cash and all other Aggregate
Unpaids shall have been paid in full in cash, unless the Collateral Agent and
the Secured Parties shall otherwise consent in writing:
(a) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as
otherwise permitted pursuant to the Servicing Agreement, the Collection Agent
shall not extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related thereto.
(b) NO CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The
Collection Agent shall not make any change in the character of its business or
in the Credit and Collection Policy, which change would, in either case, impair
the collectibility of any Receivable or otherwise have a Material Adverse
Effect.
(c) NO MERGERS, ETC. The Collection Agent shall not (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
transfer all or substantially all of its assets to any other Person.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Collection
Agent shall not add or terminate any bank as a Lock-Box Bank or any account as a
Lock-Box Account to or from those listed in Exhibit B hereto or make any change
in its instructions to Obligors regarding payments to be made to any Lock-Box
Account, unless (i) such instructions are to deposit such payments to another
existing Lock-Box Account or (ii) the Agent shall have received written notice
of such addition, termination or change at least 30 days prior thereto and the
Collateral Agent shall have received a Lock-Box Agreement executed by each new
Lock-Box Bank or existing Lock-Box Bank, as applicable, with respect to each new
Lock-Box Account.
(e) DEPOSITS TO LOCK-BOX ACCOUNTS. The Collection Agent shall
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than Collections
of Receivables.
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ARTICLE VI
TERMINATION EVENTS
SECTION 6.1. TERMINATION EVENTS. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) any representation, warranty, certification or statement
made by the Debtor, AmeriCredit or AFC II in this Agreement, the Master
Receivables Purchase Agreement or in any other Transaction Document shall prove
to have been incorrect in any material respect when made or deemed made;
(b) the Debtor, AmeriCredit or AFC II shall fail to make any
payment or deposit to be made by it hereunder or under the Master Receivables
Purchase Agreement or the Fee Letter when due hereunder or thereunder and such
failure shall continue for one (1) day; or
(c) the Debtor, AmeriCredit or AFC II shall default in the
performance of any payment or undertaking (other than those covered by clause
(b) above) (i) to be performed or observed under Sections 5.1(a)(vi),
5.1(a)(vii), 5.1(b), 5.1(f), 5.1(g), 5.1(h), 5.1(i), 5.1(k), 5.1(l), 5.2(a),
(d), (e), (f), (g), (h) or (j) hereof or (ii) to be performed or observed under
any other provision hereof (other than Section 5.3 hereof) or under any
provision of the Master Receivables Purchase Agreement and such default in the
case of this clause (ii) shall continue for five (5) days; or
(d) any Event of Bankruptcy shall occur with respect to the
Debtor, AmeriCredit, AFC II or the Collection Agent or any Subsidiary of them;
or
(e) a Collection Agent Default shall have occurred; or
(f) the Debtor shall at any time not be in compliance with the
requirements of Section 5.3 hereof and such noncompliance shall continue for
three (3) days; or
(g) the Collateral Agent, on behalf of the Secured Parties,
shall, for any reason, fail to have a valid and perfected first priority
security interest in the Collateral, including, without limitation, the
Receivables and Related Security and Collections with respect thereto, free and
clear of any Adverse Claim; or
(h) there shall have occurred any material adverse change in the
operations of the Debtor or the Collection Agent since the Closing Date, or any
other event shall have occurred which materially affects the Debtor's or the
Collection Agent's ability to either collect the Receivables or to perform under
this Agreement, the Master Receivables Purchase Agreement or any other
Transaction Document; or
(i) the Liquidity Provider or the Credit Support Provider shall
have given notice that an event of default has occurred and is continuing under
its agreements with the Company; or
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(j) the Commercial Paper issued by the Company shall not be
rated at least "A-1" by S&P and at least "P-1" by Moody's; or
(k) (i) the Net Investment shall at any time exceed the Net
Receivables Balance, (ii) the Net Investment shall exceed the product of (x) the
Noteholder's Percentage and (y) the sum of (a) the Net Receivables Balance and
(b) the amount of Collections in the Collection Account and such condition shall
continue to be in effect as of the commencement of the immediately succeeding
Settlement Period; or (iii) the Net Investment plus, in the case where the Net
Investment is held by the Company, the Interest Component of all outstanding
Related Commercial Paper, shall exceed the Facility Limit; or
(l) a Take-Out shall not occur at least once in any period of
six consecutive calendar months; or
(m) the Net Yield as of any Determination Date is less than
3.00%; or
(n) the amount on deposit in the Reserve Account is less than
the Reserve Account Floor and such deficiency is not cured on or prior to the
immediately succeeding Remittance Date; or
(o) failure of the Debtor, AmeriCredit, AFC II or any Subsidiary
of the Debtor, AmeriCredit or AFC II to pay when due any amounts due under any
agreement to which any such Person is a party and under which any Indebtedness
greater than $50,000, in the case of the Debtor, AFC II or any Subsidiary of the
Debtor or AFC II, or $5,000,000, in the case of AmeriCredit or any Subsidiary of
AmeriCredit (other than the Debtor), is governed; or the default by the Debtor,
AmeriCredit, AFC II or any Subsidiary of the Debtor or AmeriCredit in the
performance of any term, provision or condition contained in any agreement to
which any such Person is a party and under which any Indebtedness owing by the
Debtor, AmeriCredit, AFC II or any Subsidiary of the Debtor, AmeriCredit or AFC
II greater than such respective amounts was created or is governed, regardless
of whether such event is an "event of default" or "default" under any such
agreement; or any Indebtedness owing by the Debtor, AmeriCredit, AFC II or any
Subsidiary of the Debtor, AmeriCredit or AFC II greater than such respective
amounts shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the date of maturity thereof; or
(p) (i) the Debtor, AFC II or AmeriCredit shall, directly or
indirectly, contest in any manner the effectiveness, validly, binding nature or
enforceability of any Transaction Document to which it is a party or (ii) any
Transaction Document shall, in whole or in part, terminate, cease to be
effective or cease to be the legally binding and enforceable obligation of the
Debtor, AFC II or AmeriCredit, as the case may be; or
(q) the Delinquency Ratio averaged for any four consecutive
Determination Dates shall exceed 2.5%; or
(r) either of the Debtor or the Collection Agent shall
consolidate or merge with or into any other person, whereby it is not the
surviving entity;
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(s) the weighted average AmeriCredit Score for all Receivables
shall at any time be less than 215; or
(t) the average Monthly Extension Rates for any three
consecutive Determination Dates shall exceed 5.0%; or
(u) the Tangible Net Worth of AmeriCredit Corp. shall be less
than $400,000,000 for any period of twenty (20) consecutive days; or
(v) either (i) the long-term senior unsecured debt of
AmeriCredit Corp. is rated by either S&P or Moody's below B- or B1,
respectively, or (ii) if AmeriCredit Corp. is not so rated, the Agent acting at
the direction of the Majority Investors, deems the creditworthiness of
AmeriCredit Corp. to be equivalent to a rating below B-/B1; or
(w) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Code with regard to the assets of the Debtor or
any material portion of the assets of AmeriCredit Corp., AmeriCredit or AFC II
and such Lien shall not have been released within thirty (30) days, or the
Pension Benefit Guaranty Corporation shall file notice of a Lien pursuant to
Section 4068 of ERISA with regard to any of the assets of AmeriCredit Corp., the
Debtor, AmeriCredit or AFC II and such lien shall not have been released within
thirty (30) days; or
(x) AmeriCredit shall cease to be a direct or indirect
wholly-owned subsidiary of AmeriCredit Corp., or AFC II shall cease to be a
direct or indirect wholly-owned subsidiary of AmeriCredit, or AmeriCredit and
AFC II shall at any time own less than 100% of the certificates issued
pursuant to the Trust Agreement.
SECTION 6.2. TERMINATION. Upon the occurrence of any Termination Event
hereunder, the Collateral Agent, may or at the written direction of the Majority
Investors, in either case by notice to the Debtor and the Collection Agent
declare the Termination Date to have occurred; PROVIDED, HOWEVER, that in the
case of any event described in Section 6.1(d), (g) or (k)(iii) hereof, the
Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event. Upon any such declaration or occurrence, the
Collateral Agent may declare any date as the date upon which the Note shall
become due and payable, and, subject to the limitations on recourse set forth in
Section 2.1 hereof, the Collateral Agent shall have all of the rights and
remedies provided to a secured creditor or a purchaser of chattel paper under
the UCC by applicable law in respect thereto (including, but not limited to,
initiating foreclosure and/or liquidation proceedings with respect to all of the
Receivables and Contracts or any portion thereof). In addition, the Agent shall
have the right to designate the Base Rate plus 2%, to be applicable to the Net
Investment (except in the case of a Termination Event described under clauses
(i) and (j) above, in which case the Adjusted Eurodollar Rate or the Base Rate,
as applicable, shall be applicable), and the Company shall have the right to
cease issuing Commercial Paper in order to maintain the Net Investment and may
assign to the Bank Investors all of its right, title and interest hereunder.
The Debtor and the Collection Agent agree that they shall take all
actions (including reliening of the certificates of title or other title
documents in the name of the
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Collateral Agent on behalf of the Secured Parties) and execute all documents
as may be necessary or requested by the Collateral Agent to perfect its
interest in the Collateral, including, without limitation, to perfect the
Collateral Agent's security interest in the Financed Vehicles. Each of the
Debtor, AmeriCredit and AFC II hereby grant to the Collateral Agent, on
behalf of the Secured Parties, a power of attorney to act in its place and
stead to take all actions as may be necessary to perfect the Collateral
Agent's security interest in the Financed Vehicles. Each of AmeriCredit, AFC
II and the Debtor acknowledge that such power of attorney is irrevocable and
is coupled with an interest. In connection with any sale of the Receivables
by the Collateral Agent after the occurrence of a Termination Event, the
Debtor shall have, for a period of five (5) Business Days after notice of
such proposed sale from or on behalf of the Secured Parties, the right to
repurchase the Receivables and related Contracts for a price, payable in
immediately available funds, in an amount equal to the Aggregate Unpaids.
SECTION 6.3. PROCEEDS. The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to Section 6.2 hereof above shall be
treated as Collections on the Receivables and shall be allocated and deposited
in accordance with the provisions governing allocations set forth herein.
ARTICLE VII
THE COLLATERAL AGENT
SECTION 7.1. DUTIES OF THE COLLATERAL AGENT. The Secured Parties hereby
appoint Bank of America to act solely on their behalf as Collateral Agent
hereunder, and Bank of America hereby accepts such appointment. The Collateral
Agent, both prior to the occurrence of a Termination Event hereunder and after a
Termination Event shall have been cured or waived, shall undertake to perform
such duties and only such duties as are specifically set forth in this
Agreement. The Collateral Agent shall at all times after the occurrence of a
Termination Event which has not been cured or waived exercise such of the rights
and powers vested in it pursuant to this Agreement using the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or her
own affairs.
All Collections received by the Collateral Agent from the Collection
Agent or otherwise will, pending remittance to the Secured Party entitled
thereto, be held in trust by the Collateral Agent for the benefit of the Secured
Parties and together with all other payment obligations of the Debtor hereunder
owing to the Secured Parties shall be payable to the Secured Parties in
accordance with the provisions of Article II hereof.
SECTION 7.2. COMPENSATION AND INDEMNIFICATION OF COLLATERAL AGENT. The
Collateral Agent shall be compensated for its activities hereunder and
reimbursed for reasonable out-of-pocket expenses (including (i) securities
transaction charges not waived due to the Collateral Agent's receipt of a
payment from a financial institution with respect to certain Eligible
Investments, as specified by the Debtor and (ii) the compensation and expenses
of its counsel and agents) pursuant to a separate letter agreement between the
Collateral Agent and the Debtor. All such amounts shall be payable from funds
available therefor in accordance with Section 2.3(a)(iv) hereof. Subject to the
terms of such letter agreement, the Collateral Agent shall be required to pay
the expenses incurred by it in connection with its activities hereunder
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from its own account. Notwithstanding any other provisions in this
Agreement, the Collateral Agent shall not be liable for any liabilities,
costs or expenses of the Debtor arising under any tax law, including without
limitation any Federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with
respect thereto or from a failure to comply therewith).
(a) The Debtor shall indemnify the Collateral Agent, its
officers, directors, employees and agents for, and hold it harmless against any
loss, liability or expense incurred without willful misconduct, gross negligence
or bad faith on its part, arising out of or in connection with (i) the
acceptance or administration of this Agreement, including the costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties under this Agreement and
(ii) the negligence, willful misconduct or bad faith of the Debtor in the
performance of its duties hereunder. All such amounts shall be payable in
accordance with Section 2.3(a)(iv) hereof. The provisions of this Section 7.2
shall survive the termination of this Agreement.
SECTION 7.3. [INTENTIONALLY OMITTED].
SECTION 7.4. LIABILITY OF THE COLLATERAL AGENT.
(a) The Collateral Agent shall be liable in accordance herewith
only to the extent of the obligations specifically undertaken by the Collateral
Agent in such capacity herein. No implied covenants or obligations shall be
read into this Agreement against the Collateral Agent and, in the absence of bad
faith on the part of the Collateral Agent, the Collateral Agent may conclusively
rely on the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Collateral Agent and
conforming to the requirements of this Agreement.
(b) The Collateral Agent shall not be liable for an error of
judgment made in good faith by an authorized officer, unless it shall be proved
that the Collateral Agent shall have been negligent in ascertaining the
pertinent facts.
(c) The Collateral Agent shall not be liable with respect to any
action taken, suffered or omitted to be taken in good faith in accordance with
this Agreement or at the direction of a Secured Party relating to the exercise
of any power conferred upon the Collateral Agent under this Agreement.
(d) The Collateral Agent shall not be charged with knowledge of
any Termination Event unless an authorized officer obtains actual knowledge of
such event or the Collateral Agent receives written notice of such event from
the Debtor, the Company, any Bank Investor, any other Secured Party or the
Agent, as the case may be.
(e) Without limiting the generality of this Section 7.4, the
Collateral Agent shall have no duty (i) to see to any recording, filing or
depositing of this Agreement or any other Transaction Document or any financing
statement or continuation statement evidencing a security interest in the
Receivables or the Financed Vehicles, or to see to the maintenance of any such
recording or filing or depositing or to any recording, refiling or redepositing
of any thereof, (ii) to see to any insurance of the Financed Vehicles or
Obligors or to effect or maintain any such
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insurance, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Receivables, (iv) to
confirm or verify the contents of any reports or certificates of the Collection
Agent or the Debtor delivered to the Collateral Agent pursuant to this
Agreement believed by the Collateral Agent to be genuine and to have been
signed or presented by the proper party or parties or (v) to inspect the
Financed Vehicles at any time or ascertain or inquire as to the performance
or observance of any of the Debtor's or the Collection Agent's representations,
warranties or covenants or the Collection Agent's duties and obligations as
Collection Agent and as custodian of books, records, files and computer records
relating to the Receivables.
(f) The Collateral Agent shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
there shall be reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability shall not be reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Collateral Agent to perform, or be responsible for the
manner of performance of, any of the obligations of the Collection Agent under
this Agreement.
(g) The Collateral Agent may rely and shall be protected in
acting or refraining from acting upon any resolution, officer's certificate, any
Settlement Statement, certificate of auditors, or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.
(h) The Collateral Agent may consult with counsel and any
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it under this Agreement
in good faith and in accordance with such opinion of counsel.
(i) The Collateral Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation under this Agreement or in relation
to this Agreement, at the request, order or direction of the Agent pursuant to
the provisions of this Agreement, unless the Agent shall have offered to the
Collateral Agent reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby; nothing contained in
this Agreement, however, shall relieve the Collateral Agent of its obligations,
upon the occurrence of a Termination Event (that shall not have been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(j) The Collateral Agent shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement.
(k) Prior to the occurrence of a Termination Event and before
the Collateral Agent has received notice of such Termination Event and after the
waiver of any
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Termination Event that may have occurred, the Collateral Agent shall not be
bound to make any investigation into the facts of matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by a Secured Party; PROVIDED, HOWEVER, that if
the payment within a reasonable time to the Collateral Agent of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation shall be, in the opinion of the Collateral Agent, not
reasonably assured by the Debtor, the Collateral Agent may require reasonable
indemnity against such cost, expense or liability as a condition to so
proceeding. The reasonable expense of every such examination shall be paid
by the Debtor or, if paid by the Collateral Agent, shall be reimbursed by the
Debtor upon demand.
(l) The Collateral Agent may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or by or
through agents or attorneys or a custodian. The Collateral Agent shall not be
responsible for any misconduct or negligence of any such Agent or custodian
appointed with due care by it hereunder.
SECTION 7.5. [Intentionally Omitted].
SECTION 7.6. LIMITATION ON LIABILITY OF THE COLLATERAL AGENT AND OTHERS.
The directors, officers, employees or agents of the Collateral Agent shall not
be under any liability to the Agent, any Secured Party or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement;
PROVIDED, HOWEVER, that this provision shall not protect the directors,
officers, employees and agents of the Collateral Agent against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Except as provided in Section 7.4 hereof,
the Collateral Agent shall not be under any liability to any Secured Party or
any other Person for any action taken or for refraining from the taking of any
action in its capacity as Collateral Agent pursuant to this Agreement whether
arising from express or implied duties under this Agreement; PROVIDED, HOWEVER,
that this provision shall not protect the Collateral Agent against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Collateral Agent may rely in good
faith on any document of any kind PRIMA FACIE properly executed and submitted by
any Person respecting any matters arising hereunder. The Collateral Agent shall
not be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties to administer the Collections and the
Collection Account in accordance with this Agreement which in its reasonable
opinion may involve it in any expense or liability.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. TERM OF AGREEMENT. This Agreement shall terminate on the
date immediately following the Termination Date upon which the Net Investment
has been reduced to zero, all accrued Carrying Costs have been paid in full and
all other Aggregate Unpaids have
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been paid in full; PROVIDED, HOWEVER, that (i) the rights and remedies of the
Collateral Agent, the Administrative Agent, the Agent and the Secured Parties
with respect to any representation and warranty made or deemed to be made by
the Debtor, AmeriCredit, AFC II or the Collection Agent pursuant to this
Agreement, (ii) the indemnification and payment provisions of Article VII,
and (iii) the agreement set forth in Section 8.9 hereof, shall be continuing
and shall survive any termination of this Agreement.
SECTION 8.2. WAIVERS; AMENDMENTS.
(a) No failure or delay on the part of the Collateral Agent, the
Administrative Agent, the Agent or any of the Secured Parties in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative
and nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any of the Transaction
Documents may be amended or waived if, but only if, such amendment is in writing
and is signed by the Debtor, the Collection Agent, the Company and the Majority
Investors (and, if the Servicing Agreement or the rights or duties of the
Collateral Agent are affected thereby, by the Collateral Agent); PROVIDED, that
no such amendment or waiver shall, unless signed by each Bank Investor directly
affected thereby, (i) increase the Commitment of a Bank Investor, (ii) reduce
the Net Investment or rate of interest to accrue thereon or any fees or other
amounts payable hereunder, (iii) postpone any date fixed for the payment of any
scheduled distribution in respect of the Net Investment or interest with respect
thereto or any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments or the number of Bank
Investors, which shall be required for the Bank Investors or any of them to take
any action under this Section or any other provision of this Agreement, (v)
extend or permit the extension of the Commitment Termination Date, (vi) reduce
or impair Collections or the payment of fees payable hereunder to the Bank
Investors or delay the scheduled dates for payment of such amounts, (vii)
increase the Servicing Fee to a percentage greater than the then current market
rate for such Servicing Fees as determined by the Agent, (viii) modify any
provisions of this Agreement or the Master Receivables Purchase Agreement
relating to the timing of payments required to be made by the Debtor,
AmeriCredit or AFC II or the application of the proceeds of such payments, or
(ix) provide for the appointment of any Person (other than the Agent) as a
successor Collection Agent. In the event the Collateral Agent requests the
Company's or a Bank Investor's consent pursuant to the foregoing provisions and
the Collateral Agent does not receive a consent (either positive or negative)
from the Company or such Bank Investor within ten (10) Business Days of the
Company's or Bank Investor's receipt of such request, then the Company or such
Bank Investor (and its percentage interest hereunder) shall be disregarded in
determining whether the Collateral Agent shall have obtained sufficient consent
hereunder.
SECTION 8.3. NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including bank wire, telex,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other party at its address or telecopy number set forth below or at
such other address or telecopy number as such
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party may hereafter specify for the purposes of notice to such party. Each
such notice or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section 8.3 and confirmation is received, (ii) if given by mail three
(3) Business Days following such posting, if postage prepaid, or if sent via
U.S. certified or registered mail, (iii) if given by overnight courier, one
(1) Business Day after deposit thereof with a national overnight courier
service, or (iv) if given by any other means, when received at the address
specified in this Section 8.3. However, anything in this Section 8.3 to the
contrary notwithstanding, the Debtor hereby authorizes the Company to effect
Fundings, funding period and interest rate selections based on telephonic
notices made by any Person which the Company in good faith believes to be
acting on behalf of the Debtor. The Debtor agrees to deliver promptly to the
Company a written confirmation of each telephonic notice signed by an
authorized officer of the Debtor. However, the absence of such confirmation
shall not affect the validity of such notice. If the written confirmation
differs in any material respect from the action taken by the Company, the
records of the Company shall govern absent manifest error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities Corporation
2 Wall Street
New York, New York 10005
Attention: Richard Taiano
Telephone: (212) 346-9006
Telecopy: (212) 346-9012
(with a copy to the Administrative Agent)
If to the Debtor:
AmeriCredit BOA Trust
c/o Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
Montgomery Building
1011 Centre Road, Suite 200
Wilmington, Delaware 19805
Attention: Corporate Trust Administration
with a copy to:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Asset Backed Finance Unit
and a copy to:
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AmeriCredit Financial Services, Inc.
801 Cherry Street
Suite 3900
Fort Worth, Texas 76102
Telephone: (817) 302-7022
Telecopy: (817) 302-7942
If to AmeriCredit or the Collection Agent:
AmeriCredit Financial Services, Inc.
801 Cherry Street
Suite 3900
Fort Worth, Texas 76102
Telephone: (817) 302-7022
Telecopy: (817) 302-7942
If to AFC II:
AmeriCredit Funding Corp. II
801 Cherry Street
Suite 4000
Fort Worth, Texas 76102
Telephone: (817) 302-7082
Telecopy: (817) 302-7915
If to the Agent, the Collateral Agent or the Administrative Agent:
Bank of America, N.A.
Bank of America Corporate Center, 10th Floor
Charlotte, North Carolina 28255
Attention: Banc of America Securities LLC
Global Asset Backed Securitization Group - Portfolio Management
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
Payment Information:
Bank of America, N.A.
ABA 053-000-196
for the account of Bank of America Charlotte
Account No. 109360165000
Attn.: Camille Zerbinos
SECTION 8.4. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; INTEGRATION; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF
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THE DEBTOR, AMERICREDIT, AFC II AND THE COLLECTION AGENT HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each of
the Debtor, AmeriCredit, AFC II and the Collection Agent hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection which
it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Nothing in
this Section 8.4 shall affect the right of the Company to bring any action or
proceeding against the Debtor, AmeriCredit, AFC II or the Collection Agent or
their respective properties in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the 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 between the parties
hereto with respect to the subject matter hereof superseding all prior oral or
written understandings.
(d) The Debtor, AmeriCredit, AFC II and the Collection Agent
each hereby appoint Corporation Servicing Company, located at 80 State Street,
Albany, New York 12207-2543, as the authorized agent upon whom process may be
served in any action arising out of or based upon this Agreement, the other
Transaction Documents to which such Person is a party or the transactions
contemplated hereby or thereby that may be instituted in the United States
District Court for the Southern District of New York and of any New York State
court sitting in the City of New York by the Company, the Agent, any Bank
Investor, the Administrative Agent, the Collateral Agent or any assignee of any
of them.
SECTION 8.5. COUNTERPARTS; SEVERABILITY. 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.
SECTION 8.6. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding on the parties hereto and
their respective successors and assigns; PROVIDED, HOWEVER, that none of the
Debtor, AmeriCredit,
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AFC II or the Collection Agent may assign any of its rights or delegate any
of its duties hereunder or under the Master Receivables Purchase Agreement or
under any of the other Transaction Documents without the prior written
consent of the Collateral Agent. No provision of this Agreement shall in any
manner restrict the ability of the Collateral Agent to assign, participate,
grant security interests in, or otherwise transfer any portion of the
Collateral.
(b) Each of the Debtor, AmeriCredit and AFC II hereby agrees and
consents to the assignment by the Company from time to time of all or any part
of its rights under, interest in and title to this Agreement, the Note Purchase
Agreement and the Note to any Liquidity Provider. In addition, each of the
Debtor, AmeriCredit, AFC II and the Collection Agent hereby consents to and
acknowledges the assignment by the Company of all of its rights under, interest
in and title to this Agreement, the Transferred Interest and the Collateral to
the Collateral Agent.
SECTION 8.7. WAIVER OF CONFIDENTIALITY. Each of the Debtor, AmeriCredit,
AFC II and the Collection Agent hereby consents to the disclosure of any
non-public information with respect to it received by any Secured Party, the
Collateral Agent or the Administrative Agent to any of the Company, any
nationally recognized rating agency rating the Company's commercial paper,
the Administrative Agent, any Secured Party, the Liquidity Provider or the
Credit Support Provider in relation to this Agreement.
SECTION 8.8. CONFIDENTIALITY AGREEMENT. Each of the Debtor, AmeriCredit
and AFC II hereby agrees that it shall not disclose the contents of this
Agreement or any other proprietary or confidential information of any of the
Secured Parties, the Collateral Agent, the Administrative Agent, the Liquidity
Provider or the Credit Support Provider to any other Person except (i) its
auditors and attorneys, employees or financial advisors (other than any
commercial bank) and any nationally recognized rating agency, PROVIDED such
auditors, attorneys, employees, financial advisors or rating agencies are
informed of the highly confidential nature of such information or (ii) as
otherwise required (x) by applicable law, (y) under the Securities Exchange Act
of 1934, as amended, in connection with an offering of securities issued by the
Debtor or an Affiliate thereof, or (z) by order of a court of competent
jurisdiction (PROVIDED, HOWEVER, that in the case of this clause (ii) no such
disclosure shall occur without the prior review by the Administrative Agent of
the material to be disclosed).
SECTION 8.9. NO BANKRUPTCY PETITION AGAINST THE COMPANY. Each of the
Debtor, AmeriCredit, AFC II and the Collection Agent hereby covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all outstanding Commercial Paper or other indebtedness of the Company (or, if
the Net Investment (or any portion thereof) has been assigned to a Conduit
Assignee, one year and one day after the payment in full of all Commercial Paper
issued by such Conduit Assignee), it shall not institute against, or join any
other Person in instituting against, the Company or any Conduit Assignee any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
SECTION 8.10. FURTHER ASSURANCES. The Debtor agrees to do such further
acts and things and to execute and deliver to the Secured Parties, the
Administrative Agent or the Collateral Agent such additional assignments,
agreements, powers and instruments as are
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required by the Collateral Agent to carry into effect the purposes of this
Agreement or to better assure and confirm unto the Collateral Agent and the
Secured Parties their rights, powers and remedies hereunder.
SECTION 8.11. CHARACTERIZATION OF THE TRANSACTIONS CONTEMPLATED BY THE
AGREEMENT; TAX TREATMENT.
(a) The parties hereto agree that this Agreement shall
constitute a security agreement under applicable law. The Debtor hereby assigns
to the Collateral Agent, for the benefit of the Secured Parties, all of its
rights and remedies under (i) the Master Receivables Purchase Agreement with
respect to the Receivables and with respect to any obligations thereunder of
each of AmeriCredit and AFC II with respect to the Receivables and (ii) under or
in connection with any Hedging Arrangement. The Collateral Agent agrees that
upon any release of a Receivable or Contract to the Debtor, the Collateral Agent
shall be deemed to have released its security interest therein and reassigned to
the Debtor all of the Collateral Agent's rights under the Master Receivables
Purchase Agreement with respect to such Receivable or Contract. The Debtor
agrees that neither it nor the Collection Agent shall give any consent or waiver
required or permitted to be given under the Master Receivables Purchase
Agreement with respect to the Receivables or the Contracts without the prior
consent of either the Collateral Agent or the Administrative Agent.
(b) Each of the parties hereto agrees to treat the transactions
contemplated by this Agreement as a financing for federal income tax purposes
and further agree to file on a timely basis all federal and other income tax
returns consistent with such treatment.
SECTION 8.12. RESPONSIBILITIES OF THE DEBTOR. Anything herein to the
contrary notwithstanding, the Debtor shall (i) perform all of its obligations
under the Contracts related to the Receivables to the same extent as if
interests in such Receivables had not been pledged hereunder and the exercise by
the Collateral Agent or any Secured Party of their rights hereunder shall not
relieve the Debtor from such obligations and (ii) pay when due any taxes,
including without limitation, any sales taxes payable in connection with the
Receivables and their creation and satisfaction. Neither the Collateral Agent
nor any Secured Party shall have any obligation or liability with respect to any
Receivable or related Contracts, nor shall any of them be obligated to perform
any of the obligations of the Debtor thereunder.
SECTION 8.13. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 8.14. LIMITATION ON LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Bankers Trust (Delaware), not individually or personally but solely as
Trustee of the Debtor, in the exercise of the powers and authority conferred and
vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of the Debtor is made and intended not as a personal
representation, undertaking and agreement by Bankers Trust (Delaware) but is
made and intended for the purpose for binding only the Debtor, (c) nothing
herein contained shall be construed as creating any liability on Bankers Trust
(Delaware), individually or personally, to
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perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Bankers Trust (Delaware) be personally liable for the
payment of any indebtedness or expenses of the Debtor or be liable for the
breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Debtor under this Agreement or any other related
documents; PROVIDED, HOWEVER, that no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, its action in bad faith or its own willful
misconduct.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Security Agreement as of the date first written above.
KITTY HAWK FUNDING CORPORATION,
as Company
By:
---------------------------------------
Name:
Title:
AMERICREDIT BOA TRUST, as Debtor
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Trustee
By:
-----------------------------------
Name:
Title:
AMERICREDIT FINANCIAL SERVICES, INC.,
individually and as Collection Agent
By:
---------------------------------------
Name:
Title:
AMERICREDIT FUNDING CORP. II,
individually
By:
---------------------------------------
Name:
Title:
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BANK OF AMERICA, N.A.,
as Collateral Agent and Bank Investor
By:
---------------------------------------
Name:
Title:
62
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- --------------------------------------------------------------------------------
NOTE PURCHASE AGREEMENT
among
AMERICREDIT BOA TRUST
as Issuer,
KITTY HAWK FUNDING CORPORATION,
as Company,
and
BANK OF AMERICA, N.A.,
as Agent and Bank Investor
Dated as of September 30, 1999
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II FUNDINGS; THE NOTE.....................................................................................6
Section 2.1. Funding; The Note......................................................................6
Section 2.2. Sharing of Payments, Etc...............................................................9
Section 2.3. Right of Setoff.......................................................................10
Section 2.4. Fees..................................................................................10
Section 2.5. Selection of Funding Periods and Interest Rates.......................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE ISSUER..........................................................12
Section 3.1. Representations and Warranties of the Issuer..........................................12
ARTICLE IV INDEMNIFICATION.......................................................................................15
Section 4.1. Indemnity.............................................................................15
Section 4.2. Indemnity for Taxes, Reserves and Expenses............................................17
Section 4.3. Other Costs, Expenses and Related Matters.............................................19
Section 4.4. Taxes.................................................................................19
ARTICLE V THE AGENT; BANK COMMITMENT.............................................................................20
Section 5.1. Authorization and Action..............................................................20
Section 5.2. Agent's Reliance, Etc.................................................................21
Section 5.3. Termination Event or Potential Termination Event......................................21
Section 5.4. Rights as Bank Investor...............................................................21
Section 5.5. Indemnification of the Agent..........................................................22
Section 5.6. Non-Reliance..........................................................................22
Section 5.7. Resignation of Agent..................................................................22
Section 5.8. Payments by the Agent.................................................................23
Section 5.9. Bank Commitment; Assignment to Bank Investors.........................................23
ARTICLE VI MISCELLANEOUS.........................................................................................27
Section 6.1. Term of Agreement.....................................................................27
Section 6.2. Waivers; Amendments...................................................................27
Section 6.3. Notices...............................................................................27
Section 6.4. Governing Law; Submission to Jurisdiction; Integration................................29
Section 6.5. Counterparts..........................................................................30
Section 6.6. Successors and Assigns................................................................30
Section 6.7. Waiver of Confidentiality.............................................................31
Section 6.8. Confidentiality Agreement.............................................................32
Section 6.9. No Bankruptcy Petition Against the Company............................................32
Section 6.10. Further Assurances....................................................................32
Section 6.11. Headings..............................................................................32
Section 6.12. Limitation of Liability...............................................................32
</TABLE>
i
<PAGE>
<TABLE>
EXHIBITS
<S> <C> <C>
EXHIBIT A Form of Assignment and Assumption Agreement A-1
EXHIBIT B Form of Initial Funding Request B-1
EXHIBIT C Form of Subsequent Funding Notice C-1
EXHIBIT D Form of Note D-1
</TABLE>
ii
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NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
September 30, 1999, among KITTY HAWK FUNDING CORPORATION, a Delaware
corporation, as lender (together with its successors and assigns, the
"COMPANY"), AMERICREDIT BOA TRUST, a Delaware business trust, as borrower
(together with its successors and assigns, the "ISSUER") and BANK OF AMERICA,
N.A., a national banking association ("BANK OF AMERICA"), as agent for the
Company and the Bank Investors (in such capacity, together with its
successors, the "AGENT"), as administrative agent for the Company (the
"Administrative Agent") and as a Bank Investor.
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions of this
Agreement and the Security Agreement, the Issuer desires to obtain funds from
the Company or the Bank Investors, as applicable, and to evidence the
obligation to repay such amounts, together with interest thereon, through the
issuance of the Note;
WHEREAS, pursuant to the Security Agreement, the Issuer
will pledge to the Collateral Agent for the benefit of the Secured Parties
its interest in the Collateral, including the Issuer's security interest in
the Contracts;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. All capitalized terms used herein
and not otherwise defined herein shall have the meanings specified in
the Security Agreement. The following terms shall have the meanings
specified below, and shall include in the singular number the plural and in
the plural number the singular:
"ADMINISTRATIVE AGENT" shall mean Bank of America,
N.A., as administrative agent for the Company.
"AGENT" means Bank of America, N.A., in its capacity as
agent for the Company and the Bank Investors, and any successor thereto
appointed pursuant to Article V of this Agreement.
"AGREEMENT" shall mean this Note Purchase Agreement, as it
may from time to time be amended, supplemented or otherwise modified in
accordance with the terms hereof.
"AMERICREDIT" means AmeriCredit Financial Services, Inc., a
Delaware corporation.
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"ASSIGNMENT AMOUNT" with respect to a Bank Investor shall
mean at any time an amount equal to the lesser of (i) such Bank Investor's
Pro Rata Share of the Net Investment at such time, (ii) such Bank Investors
Pro Rata Share of the aggregate Outstanding Balance of Receivables (excluding
Defaulted Receivables) at such time and (iii) such Bank Investor's unused
Commitment.
"ASSIGNMENT AMOUNT DEFICIT" shall have the meaning given
such term in Section 5.9(a) hereof.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an Assignment
and Assumption Agreement substantially in the form of Exhibit A attached
hereto.
"BANK INVESTORS" shall mean Bank of America, N.A. and each
other financial institution identified as such on the signature pages hereof
and their respective successors and assigns.
"CLOSING DATE" shall mean September 30, 1999.
"COLLATERAL AGENT" shall mean Bank of America, N.A., or any
successor thereto, as Collateral Agent under the Security Agreement.
"COMMERCIAL PAPER" shall mean promissory notes of the
Company issued by the Company in the commercial paper market.
"COMMITMENT" means (i) with respect to each Bank Investor
party hereto, the commitment of such Bank Investor to make acquisitions from
the Issuer or the Company in accordance herewith in an amount not to exceed
the dollar amount set forth opposite such Bank Investor's signature on the
signature page hereto under the heading "COMMITMENT", MINUS the dollar amount
of any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement PLUS the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination and (ii) with respect to any assignee of a Bank Investor party
hereto pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make advances to the Issuer or acquire the Note and the Net
Investment from the Company, not to exceed the amount set forth in such
Assignment and Assumption Agreement MINUS the dollar amount of any Commitment
or portion thereof assigned pursuant to an Assignment and Assumption
Agreement prior to such time of determination PLUS the dollar amount of any
increase to such assignee's Commitment consented to by it prior to the time
of determination; PROVIDED, HOWEVER, that in the event that the Facility
Limit is reduced, in either case, the aggregate commitment of all the Bank
Investors shall be reduced in a like amount and the commitment of each Bank
Investor shall be reduced in proportion to such reduction.
"COMPANY" shall mean Kitty Hawk Funding Corporation, a
Delaware corporation, together with its successors and assigns, including any
Conduit Assignee.
"CONDUIT ASSIGNEE" shall mean any commercial paper conduit
administered by Bank of America and designated by Bank of America from time
to time to accept an assignment of the Company of all or a portion of the Net
Investment.
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"CP RATE" means, with respect to any funding period with
respect to which Discount is to be calculated by reference to the rate of
interest based on Commercial Paper, the rate equivalent to the rate (or if
more than one rate, the weighted average of the rates) at which Commercial
Paper having a term equal to such funding period may be sold by any placement
agent or commercial paper dealer selected by the Company, PROVIDED, HOWEVER,
that if the rate (or rates) as agreed between any such agent or dealer and
the Company is a discount rate, then the rate (or if more than one rate, the
weighted average of the rates) resulting from the Company's converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"DEFAULTING BANK INVESTOR" shall have the meaning set forth
in Section 2.1(g) hereof.
"EARLY COLLECTION FEE" means, for any funding period during
which the portion of the Net Investment that was allocated to such funding
period is reduced for any reason whatsoever, the amount payable in accordance
with Section 4.3(b) hereof, equal to the excess, if any, of (i) the
additional Discount that would have accrued during such funding period if
such reductions had not occurred, minus (ii) the income, if any, received by
the recipient of such reductions from investing the proceeds of such
reductions.
"EFFECTIVE DATE" shall have the meaning set forth in
Section 5.9(a) hereof.
"EURODOLLAR RATE" means, with respect to any funding period
with respect to which Discount is to be calculated by reference to the LIBOR
Rate, a rate which is 1.25% in excess of a rate per annum equal to the sum
(rounded upwards, if necessary, to the next higher 1/100 of 1%) of (A) the
rate obtained by dividing (i) the applicable LIBOR Rate by (ii) a percentage
equal to 100% minus the reserve percentage used for determining the maximum
reserve requirement as specified in Regulation D (including, without
limitation, any marginal, emergency, supplemental, special or other
reserves), that is applicable to the Agent during such funding period in
respect of eurocurrency or eurodollar funding, lending or liabilities (or, if
more than one percentage shall be so applicable, the daily average of such
percentage for those days in such funding period during which any such
percentage shall be applicable) plus (B) the then daily net annual assessment
rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) as estimated
by the Agent for determining the current annual assessment payable by the
Agent to the Federal Deposit Insurance Corporation in respect of eurocurrency
or eurodollar funding, lending or liabilities.
"FUNDING" shall mean the Initial Funding and any Subsequent
Funding.
"FUNDING DATE" shall mean the date upon which any Funding
occurs.
"GAAP" shall mean generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements of the Financial Accounting Standards Board or in such other
statements or pronouncements by such other entity as approved by a
significant segment of the accounting profession, which are in effect from
time to time.
"INDEMNIFIED AMOUNTS" shall have the meaning set forth in
Section 4.1 hereof.
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"INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 4.1 hereof.
"INITIAL FUNDING" shall have the meaning set forth in
Section 2.1(a) hereof.
"INITIAL FUNDING DATE" shall mean the date upon which the
Initial Funding occurs.
"INITIAL FUNDING REQUEST" shall have the meaning set forth
in 2.1(a) hereof.
"INTEREST COMPONENT" shall have the meaning specified in
the Security Agreement.
"INVESTMENT TERMINATION DATE" means the first Business Day
after the delivery by the Company to the Issuer of written notice that the
Company elects, in its sole discretion, to commence the amortization of its
interest in the Net Investment or to liquidate its interest in the Note and
the Net Investment.
"ISSUER" shall mean AmeriCredit BOA Trust, a Delaware
business trust, and its successors and permitted assigns.
"LAW" shall have the meaning specified in the Security
Agreement.
"LIBOR RATE" means, with respect to any funding period
(which shall be either one month or three months, as selected by the Issuer
or the Agent, as appropriate) with respect to which Discount is to be
calculated by reference to the LIBOR Rate, the rate at which deposits in U.S.
dollars are offered to the Agent, in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days before the first day
of such funding period in an amount approximately equal to the Net Investment
(or portion thereof) to be funded by reference to the LIBOR Rate and for a
period of time approximately equal to the applicable funding period.
"LIQUIDITY PROVIDER AGREEMENT" shall mean the agreement
between the Company and the Liquidity Provider evidencing the obligation of
the Liquidity Provider to provide liquidity support to the Company in
connection with the issuance of Commercial Paper.
"LIQUIDITY PROVIDER" shall mean the Person or Persons who
will provide liquidity support to the Company in connection with the issuance
by the Company of its Commercial Paper, and shall include any Person which
acquires a participation interest therein.
"MAJORITY INVESTORS" shall mean at any time, Bank Investors
which hold Commitments aggregating in excess of 51% of the Facility Limit as
of such date.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"NON-DEFAULTING BANK INVESTOR" shall have the meaning set
forth in Section 2.1(g) hereof.
"NOTE" shall mean the variable funding note issued to the
Agent for the benefit of the Company or the Bank Investors, as applicable,
pursuant to Section 2.1 hereof, in the form of Exhibit D hereto.
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"OTHER TRANSFEROR" shall mean any Person other than the
Issuer that has entered into a receivables purchase agreement, transfer and
administration agreement, note purchase agreement, security agreement or
other similar agreement with the Company.
"PRO RATA SHARE" means, for a Bank Investor, the Commitment
of such Bank Investor divided by the sum of the Commitments of all Bank
Investors.
"PURCHASED INTEREST" means the interest, if any, in the
Receivables acquired by the Liquidity Provider pursuant to the Liquidity
Provider Agreement.
"REQUIREMENTS OF LAW" for any Person means the certificate
of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).
"S&P" shall mean Standard & Poor's Ratings Services, a
Division of The McGraw-Hill Companies.
"SECTION 4.2 COSTS" shall have the meaning set forth in
Section 4.2(d) hereof.
"SECURITY AGREEMENT" shall mean the Security Agreement,
dated as of the date hereof, among AmeriCredit, AFC II, the Issuer, the
Collateral Agent and the Company, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"SUBSEQUENT FUNDING" shall mean any advance which is made
pursuant to Section 2.1(b) hereof.
"SUBSEQUENT FUNDING NOTICE" shall have the meaning set
forth in Section 2.1(b) hereof.
"SUBSIDIARY" shall mean any corporation more than 50% of
the outstanding voting securities of which shall at any time be owned or
controlled, directly or indirectly, by the Issuer or one or more
Subsidiaries, or any similar business organization which is so owned or
controlled.
"TRANSACTION COSTS" shall have the meaning set forth in
Section 4.3 hereof.
"TRANSFER PRICE" shall have the meaning set forth in
Section 2.1(f) hereof.
"TRANSFER PRICE DEFICIT" shall have the meaning set forth
in Section 2.1(g) hereof.
"UNIFORM COMMERCIAL CODE" OR "UCC" shall mean, with respect
to any state, the Uniform Commercial Code as from time to time in effect in
such state.
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"WELLS FARGO" shall mean Wells Fargo Bank (Texas), National
Association.
ARTICLE II
FUNDINGS; THE NOTE
Section 2.1. FUNDING; THE NOTE.
(a) INITIAL FUNDING. Upon the terms and subject to
the conditions herein set forth, provided that the Termination Date shall not
have occurred, the Company may, at its option, or the Bank Investors shall
(in accordance with Section 5.9 hereof), if so requested by the Company, make
an initial advance (the "INITIAL FUNDING") to the Issuer on or after the
Closing Date. In connection with the Initial Funding, the Issuer shall, by
notice in the form of Exhibit B hereto (the "INITIAL FUNDING REQUEST")
request such Funding at least one Business Day by 12:00 p.m. (New York time)
prior to the proposed date of such Initial Funding. Such notice shall specify
the proposed Funding Amount (which shall be at least $1,000,000) and the
proposed date of the Initial Funding.
(b) SUBSEQUENT FUNDINGS. Upon the terms and subject
to the conditions herein set forth, provided that the Termination Date shall
not have occurred, the Company may, at its option, or the Bank Investors
shall (in accordance with Section 5.9 hereof), if so requested by the
Company, make a subsequent advance from time to time (each, a "SUBSEQUENT
FUNDING") to the Issuer on or after the Initial Funding Date. In connection
with each Subsequent Funding, the Issuer shall, on the Business Day by 12:00
p.m. (New York time) prior to the related Subsequent Funding Date, provide
the Agent with a written notice in substantially the form of Exhibit C (a
"SUBSEQUENT FUNDING NOTICE") setting forth the amount of the proposed
Subsequent Funding, which shall be at least $1,000,000 and integral multiples
of $100,000 in excess thereof (or, to the extent that the then available
unused portion of the Facility Limit is less than such amount, such amount).
Subsequent Fundings shall not occur more than twice per week. The Agent will
promptly notify the Company or each of the Bank Investors, as the case may
be, of the Agent's receipt of any Subsequent Funding Notice to be made to the
Agent on behalf of such Person. To the extent that any such Subsequent
Funding is requested of the Agent on behalf of the Company, the Company shall
instruct the Agent to accept or reject such offer by notice given to the
Issuer and the Agent by telephone or telecopy by no later than the close of
its business on the Business Day following its receipt of any such request.
The parties hereto understand that in no event shall the Net Investment be
held by the Agent on behalf of the Company and the Bank Investors
simultaneously, except in the case of an assignment to a Bank Investor
pursuant to Section 5.9(f) hereof.
(c) By making any advance hereunder, neither the
Company, the Agent nor any Bank Investor assumes or shall have any
obligations or liability under any of the Receivables, all of which shall
remain the obligations and liabilities of the Issuer, AmeriCredit and AFC II.
(d) CONDITIONS TO FUNDING. Neither the Company nor
the Bank Investors shall, and shall have no obligation to, advance any funds
to the Issuer in connection
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with any Funding if on the date of the proposed Funding, (i) either (x) if
the Funding is to be made by the Company, the sum of the Net Investment after
giving effect to the Funding, plus the Interest Component of Commercial Paper
issued in connection with such Funding would exceed the Facility Limit, or
(y) if the Funding is to be made by the Bank Investors, the Net Investment,
after giving effect to the Funding, would exceed the aggregate Commitments;
(ii) the Issuer is not in compliance with Section 5.3 of the Security
Agreement; (iii) the Issuer shall not have deposited in the Reserve Account,
or shall not have given irrevocable instructions to the Agent to withhold
from proceeds of such Funding, an amount equal to the amount necessary to
cause the amount on deposit in the Reserve Account to equal the Reserve
Account Floor; (calculated as if such Funding shall have occurred); (iv) a
Potential Termination Event or Termination Event shall have occurred and be
continuing; (v) the conditions precedent set forth in Sections 4.1 and 4.2 of
the Security Agreement shall not be satisfied; (vi) the representations and
warranties in Section 3.1 hereof shall not be true and correct; (vii) after
giving effect to such Funding, the Net Investment shall be greater than the
product of (a) the Noteholder's Percentage and (b) the sum of the Net
Receivables Balance and Collections on deposit in the Collection Account; or
(viii) each of the Agent and the Issuer shall not 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 and, in the
case of the Initial Funding, a release on form UCC-3 with respect to the
related Receivables.
(e) INITIAL FUNDING REQUEST AND SUBSEQUENT FUNDING
NOTICES IRREVOCABLE. The Initial Funding Request and any Subsequent Funding
Notice shall be irrevocable and binding on the Issuer and the Issuer shall
indemnify the Agent, the Company and the Bank Investors against any loss or
expense incurred by the Company or the Bank Investors, either directly or
indirectly (including through the Liquidity Provider Agreement) as a result
of any failure by the Issuer to complete the requested Funding including,
without limitation, any loss (including loss of anticipated profits) or
expense incurred by the Agent, the Company or the Bank Investors, either
directly or indirectly (including pursuant to the Liquidity Provider
Agreement), by reason of the liquidation or reemployment of funds acquired by
the Company (or the Liquidity Provider) (including, without limitation, funds
obtained by issuing commercial paper or promissory notes or obtaining
deposits or loans from third parties) for the Company or the Bank Investors
to complete the requested Funding.
(f) PAYMENTS. By no later than 11:00 a.m. (New York
time) on the date of any Funding, the Company or each Bank Investor, as the
case may be, shall remit its share (which, in the case of a Subsequent
Funding to the Bank Investors, shall be equal to such Bank Investor's Pro
Rata Share) of the amount of such Funding to be advanced by the Company or
the Bank Investors to the Issuer as set forth in the Initial Funding Request
or the applicable Subsequent Funding Notice, as the case may be (the
"Transfer Price") to the account of the Agent specified therefor from time to
time by the Agent by notice to such Persons. The obligation of each Bank
Investor to remit its Pro Rata Share of any such Transfer Price shall be
several from that of each other Bank Investor, and the failure of any Bank
Investor to so make such amount available to the Agent shall not relieve any
other Bank Investor of its obligation hereunder. Following each Subsequent
Funding and the Agent's receipt of funds from the Company or the Bank
Investors as set forth above, the Agent shall remit such funds received in
respect of the Transfer Price to the Issuer's account at the location
indicated in Section 6.3 hereof, in immediately available funds. Unless the
Agent shall have received notice from the
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Company or any Bank Investor, as applicable, that such Person will not make
its share of any Transfer Price relating to any Subsequent Funding available
on the applicable Transfer Date therefor, the Agent may (but shall have no
obligation to) make the Company's or any such Bank Investor's share of any
such Transfer Price available to the Issuer in anticipation of the receipt by
the Agent of such amount from the Company or such Bank Investor. To the
extent the Company or any such Bank Investor fails to remit any such amount
to the Agent after any such advance by the Agent on such Transfer Date, the
Company or such Bank Investor, on the one hand, and the Issuer, on the other
hand, shall be required to pay such amount, together with interest thereon at
a per annum rate equal to the Federal funds rate (as determined in accordance
with clause (ii) of the definition of "Base Rate"), in the case of the
Company or any such Bank Investor, or the Base Rate, in the case of the
Issuer, to the Agent upon its demand therefor (PROVIDED that the Company
shall have no obligation to pay such interest amounts except to the extent
that it shall have sufficient funds to pay the face amount of its Commercial
Paper in full). Until such amount shall be repaid, such amount shall be
deemed to be Net Investment paid by the Agent and the Agent shall be deemed
to be the owner of an interest in the Note hereunder. Upon the payment of
such amount to the Agent (x) by the Issuer, the amount of the aggregate Net
Investment shall be reduced by such amount or (y) by the Company or such Bank
Investor, such payment shall constitute such Person's payment of its share of
the applicable Transfer Price for such Funding.
Notwithstanding anything contained in this Section 2.1(f) or
elsewhere in this Agreement to the contrary, no Bank Investor shall be
obligated to provide the Agent or the Issuer with funds in connection with
any Funding in an amount that would exceed such Bank Investor's unused
Commitment then in effect. The failure of any Bank Investor to make its Pro
Rata Share of the Transfer Price available to the Agent shall not relieve any
other Bank Investor of its obligations hereunder.
(g) DEFAULTING BANK INVESTOR. If by 2:00 P.M. (New
York time), whether or not the Agent has advanced the Transfer Price, one or
more Bank Investors (each, a "DEFAULTING BANK INVESTOR", and each Bank Investor
other than the Defaulting Bank Investor being referred to as a "NON-DEFAULTING
BANK INVESTOR") fails to make its Pro Rata Share of the Transfer Price available
to the Agent pursuant to Section 2.1(f) hereof (the aggregate amount not so made
available to the Agent being herein called the "TRANSFER PRICE DEFICIT"), then
the Agent shall, by no later than 2:30 P.M. (New York time on the Transfer
Date), instruct each Non-Defaulting Bank Investor to pay, by no later than 3:00
P.M. (New York time on the Transfer Date), in immediately available funds, to
the account designated by the Agent, an amount equal to the lesser of (x) such
Non-Defaulting Bank Investor's proportionate share (based upon the relative
Commitments of the Non-Defaulting Bank Investors) of the Transfer Price Deficit
and (y) its unused Commitment. A Defaulting Bank Investor shall forthwith, upon
demand, pay to the Agent for the ratable benefit of the Non-Defaulting Bank
Investors all amounts paid by each Non-Defaulting Bank Investor on behalf of
such Defaulting Bank Investor, together with interest thereon, for each day from
the date a payment was made by a Non-Defaulting Bank Investor until the date
such Non-Defaulting Bank Investor has been paid such amounts in full, at a rate
per annum equal to the sum of the Base Rate PLUS 2%.
(h) DISBURSEMENT OF FUNDS. No later than 3:00 p.m.
(New York City time) on the date on which a Funding is to be made, the Company
or the Bank Investors, as applicable, will make available to the Issuer in
immediately available funds, the amount of the
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Funding to be made on such day by remitting the required amount thereof to an
account of the Issuer as designated in the related notice requesting such
Funding.
(i) THE NOTE.
(i) The Issuer's obligation to pay the principal of
and interest on all amounts advanced by the Company or the Bank Investors
pursuant to any Funding shall be evidenced by a single note of the Issuer (the
"Note") 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 Agent for the account of the Company or the Bank
Investors, as applicable, and mature on the Remittance Date occurring in the
sixth calendar month following the calendar month in which the latest maturing
Receivable (determined as of the Termination Date) is scheduled to mature
(without regard to extensions subsequently granted on any Receivable by the
Issuer or the Collection Agent); (5) be entitled to the benefit of the Security
Agreement and (6) be substantially in the form of Exhibit D to this Agreement,
with blanks appropriately completed in conformity herewith. The Agent shall, and
is hereby authorized to, make a notation on the schedule attached to the Note 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 Note, the Agent shall
endorse the outstanding principal amount of the Note on the schedule attached
thereto; provided, however, that failure to make such notation shall not
adversely affect the Company's or any Bank Investor's rights with respect to the
Note.
(ii) Although the Note shall be dated the Closing
Date, interest in respect thereof shall be payable only for the periods during
which amounts are outstanding thereunder. In addition, although the stated
principal amount of the Note shall be equal to the Facility Limit, the Note
shall be enforceable with respect to the Issuer's obligation to pay the
principal thereof only to the extent of the unpaid principal amount of the
Fundings outstanding thereunder at the time such enforcement shall be sought.
Section 2.2. SHARING OF PAYMENTS, ETC. If the Company or any Bank
Investor (for purposes of this Section 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 Note owned by it in
excess of its ratable share of payments on account of any interest in the Note
obtained by the Company and/or the Bank Investors entitled thereto, such
Recipient shall forthwith purchase from the Company and/or the Bank Investors
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.
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Section 2.3 RIGHT OF SETOFF. Without in any way limiting the
provisions of Section 2.2 hereof, each of the Agent, the Company and the Bank
Investors 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 set-off, 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 the Agent, the Company
or such Bank Investor to, or for the account of, the Issuer against the
Aggregate Unpaids owing by the Issuer to such Person (even if contingent or
unmatured).
Section 2.4. FEES. The Issuer shall pay, in accordance with the Fee
Letter, such fees as are described therein, all of which shall be
non-refundable.
Section 2.5. SELECTION OF FUNDING PERIODS AND INTEREST RATES.
(a) PRIOR TO THE TERMINATION DATE; TRANSFERRED
INTEREST HELD ON BEHALF OF THE COMPANY. At all times hereafter, but prior to the
Termination Date and with respect to the Transferred Interest held by the Agent
on behalf of the Company, the Issuer may, subject to the Company's approval and
the limitations described below, request funding periods and allocate a portion
of the Net Investment to each selected funding period, so that the aggregate
amounts allocated to outstanding funding periods at all times shall equal the
Net Investment held on behalf of the Company. The Issuer shall give the Company
irrevocable notice by telephone of the requested funding period(s) at least one
(1) Business Day prior by 12:00 p.m. (New York time) to the requested Funding
Date or the expiration of any then existing funding period; PROVIDED, HOWEVER,
that the Company may select, in its sole discretion, any such funding period if
(i) the Issuer fails to provide such notice on a timely basis or (ii) the
Company determines, in its sole discretion, that the funding period requested by
the Issuer is unavailable or for any reason commercially undesirable to any
party. The Company confirms that it is its intention to allocate all or
substantially all of the Net Investment held on behalf of it to one or more
funding periods with respect to which the interest rate applicable thereto is
calculated by reference to the CP Rate; provided that the Company may determine,
from time to time, in its sole discretion, that funding such Net Investment by
means of the CP Rate is not possible or is not desirable for any reason. If the
Liquidity Provider acquires from the Company a Purchased Interest with respect
to the Receivables pursuant to the terms of the Liquidity Provider Agreement,
Bank of America, on behalf of the Liquidity Provider, may exercise the right of
selection granted to the Company hereby. The initial funding period applicable
to any such Purchased Interest shall be a period of not greater than 14 days and
Discount with respect thereto shall be calculated by reference to the Base Rate.
Thereafter, provided that the Termination Date caused by a Termination Event
shall not have occurred, Discount shall be calculated by reference to the
Eurodollar Rate and, if such rate is not available, the Base Rate. In the case
of any funding period outstanding upon the occurrence of the Termination Date,
such funding period shall end on the date of such occurrence.
(b) AFTER THE TERMINATION DATE; TRANSFERRED INTEREST
HELD ON BEHALF OF THE COMPANY. At all times on and after the Termination Date,
with respect to any portion of the Transferred Interest which shall be held by
the Agent on behalf of the Company, the Agent shall select all funding periods.
At all times after the Termination Date but prior to the occurrence of a
Termination Event, Discount shall be calculated by reference to the CP Rate;
after the
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occurrence of a Termination Event, Discount shall be determined as set forth
in Section 6.2 of the Security Agreement. If the Liquidity Provider acquires
from the Company a Purchased Interest with respect to the Receivables
pursuant to the terms of the Liquidity Provider Agreement, Bank of America,
on behalf of the Liquidity Provider, may exercise the right of selection
granted to the Company hereby. The initial funding period applicable to any
such Purchased Interest shall be a period of not greater than 14 days and
Discount with respect thereto shall be calculated by reference to the Base
Rate. Thereafter, PROVIDED that a Termination Event shall not have occurred,
Discount shall be calculated by reference to the Eurodollar Rate and, if such
rate is not available, the Base Rate.
(c) PRIOR TO THE TERMINATION DATE; TRANSFERRED
INTEREST HELD ON BEHALF OF BANK INVESTOR. At all times with respect to any
portion of the Transferred Interest held by the Agent on behalf of the Bank
Investors, but prior to the Termination Date, the initial funding period
applicable to such portion of the Net Investment allocable thereto shall be a
period of not greater than 14 days and Discount with respect thereto shall be
calculated by reference to the Base Rate. Thereafter, with respect to such
portion, and with respect to any other portion of the Transferred Interest held
on behalf of the Bank Investors (or any of them), PROVIDED that the Termination
Date caused by a Termination Event shall not have occurred, the funding period
applicable thereto shall be determined by the Issuer and Discount with respect
thereto shall be calculated by reference to the Eurodollar Rate and, if such
rate is not available, the Base Rate; PROVIDED, HOWEVER, that no funding period
shall be greater than 90 days. The Issuer shall give the Agent irrevocable
notice by telephone of the new requested funding period at least three (3)
Business Days prior to the expiration of any then existing funding period. In
the case of any funding period outstanding upon the occurrence of the
Termination Date, such funding period shall end on the date of such occurrence.
(d) AFTER THE TERMINATION DATE; TRANSFERRED INTEREST
HELD ON BEHALF OF BANK INVESTOR. At all times on and after the Termination Date,
with respect to any portion of the Transferred Interest held by the Agent on
behalf of the Bank Investors, the Agent shall select all funding periods
applicable thereto. At all times on and after the Termination Date but prior to
the occurrence of a Termination Event, Discount shall be calculated by reference
to the Eurodollar Rate or, if such rate is not available, to the Base Rate;
after the occurrence of a Termination Event, Discount shall be determined as set
forth in Section 6.2 of the Security Agreement.
(e) EURODOLLAR RATE PROTECTION; ILLEGALITY.
(i) If the Agent is unable to obtain on a timely
basis the information necessary to determine the Eurodollar Rate for any
proposed funding period, then
(1) the Agent shall forthwith notify the
Company or Bank Investors, as applicable and the Issuer that the Eurodollar
Rate cannot be determined for such funding period, and
(2) while such circumstances exist, neither
the Company, the Bank Investors nor the Agent shall allocate the Net
Investment of any additional advances during such period or reallocate the
Net Investment allocated to any then existing
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funding period ending during such period, to a funding period with respect to
which Discount is calculated by reference to the Eurodollar Rate.
(ii) If, with respect to any outstanding funding
period, the Company or any of the Bank Investors on behalf of which the Agent
holds any Transferred Interest therein notifies the Agent that it is unable to
obtain matching deposits in the London interbank market to fund any advance or
to maintain such Transferred Interest or that the Eurodollar Rate applicable to
such Transferred Interest will not adequately reflect the cost to the Person of
funding or maintaining its respective Transferred Interest for such funding
period then the Agent shall forthwith so notify the Issuer, whereupon neither
the Agent nor the Company or the Bank Investors, as applicable, shall, while
such circumstances exist, allocate any Net Investment of any additional
Transferred Interest purchased during such period or reallocate the Net
Investment allocated to any funding period ending during such period, to a
funding period with respect to which Discount is calculated by reference to the
Eurodollar Rate.
(iii) Notwithstanding any other provision of this
Agreement, if the Company or any of the Bank Investors, as applicable, shall
notify the Agent that such Person has determined (or has been notified by any
Liquidity Provider) that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful (either for the
Company, such Bank Investor, or such Liquidity Provider, as applicable), or any
central bank or other governmental authority asserts that it is unlawful, for
the Company, such Bank Investor or such Liquidity Provider, as applicable, to
fund any advance or to maintain the Transferred Interest the Discount with
respect to which is calculated by reference to the Eurodollar Rate, then (x) as
of the effective date of such notice from such Person to the Agent, the
obligation or ability of the Company or such Bank Investor, as applicable, to
fund its purchase or maintenance of the Transferred Interest at a Discount
calculated by reference to the Eurodollar Rate shall be suspended until such
Person notifies the Agent that the circumstances causing such suspension no
longer exist and (y) the Net Investment of each funding period in which such
Person owns an interest shall either (1) if such Person may lawfully continue to
maintain the Transferred Interest at a Discount calculated by reference to the
Eurodollar Rate until the last day of the applicable funding period, be
reallocated on the last day of such funding period to another funding period in
respect of which the Net Investment allocated thereto accrues Discount
determined other than with respect to the Eurodollar Rate or (2) if such Person
shall determine that it may not lawfully continue to maintain the Transferred
Interest at a Discount calculated by reference to the Eurodollar Rate until the
end of the applicable funding period, such Person's share of the Net Investment
allocated to such funding period shall be deemed to accrue Discount at the Base
Rate from the effective date of such notice until the end of such funding
period.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE ISSUER
Section 3.1. REPRESENTATIONS AND WARRANTIES OF THE ISSUER . The Issuer
represents and warrants to and covenants with the Agent, the Company and the
Bank Investors as of the Closing Date and, except as otherwise provided herein,
as of any Funding Date that:
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(a) CORPORATE EXISTENCE AND POWER. The Issuer is a business trust
duly organized, validly existing and in good standing under the laws of Delaware
and has all 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 Issuer of this Agreement and the
other Transaction Documents are within the Issuer's powers, have been duly
authorized by all necessary action, require no action by or in respect of, or
filing with, any governmental body, agency or official (except as contemplated
by Section 2.6 of the Security Agreement), and do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
Issuer's Trust Agreement or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Issuer or result in the creation or
imposition of any lien on assets of the Issuer (except as contemplated by
Section 2.6 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
Transaction Documents constitutes the legal, valid and binding obligation of the
Issuer, enforceable against the Issuer 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 Issuer (including without limitation, the Settlement Statement and
AmeriCredit Corp.'s financial statements) to the Company, the Bank Investors or
the Agent for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished
by the Issuer to the Company, the Bank Investors or the Agent will be, true and
accurate in every material respect, and the Issuer has not omitted to disclose
any information which is material to the transaction, 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 Issuer have been filed (which filings
may be made by an Affiliate of the Issuer on a consolidated basis covering the
Issuer 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 Issuer (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 to the knowledge of the Issuer threatened, against or affecting the
Issuer or any Affiliate of the Issuer or their respective properties, in or
before any court, arbitrator or other body.
(g) USE OF PROCEEDS. (i) The proceeds of any Funding will be used
by the Issuer to (a) acquire the Receivables, the Contracts related thereto and
the Related Security with respect thereto from each of AmeriCredit and AFC II,
as the case may be, pursuant to the Master Receivables Purchase Agreement, (b)
to pay down debt in connection with the purchase of the Receivables and
Contracts pursuant to the Master Receivables Purchase Agreement, or (c)
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to make distributions constituting a return of capital and (ii) no proceeds
of any Funding will be used by the Issuer to acquire any security in any
transaction which is subject to Section 12 of the Securities Exchange Act of
1934, as amended or for any purpose that violates any applicable law, rule or
regulation, including Regulation U of the Federal Reserve Board.
(h) PLACE OF BUSINESS. The chief place of business and chief
executive office of the Issuer are located at the address of the Issuer
indicated in Section 8.3 of the Security Agreement and the offices where the
Issuer keeps all its records, are located at the address indicated in Section
8.3 of the Security Agreement.
(i) MERGER AND CONSOLIDATION. As of the date hereof the Issuer has
not changed its name, merged with or into or been consolidated with any other
entity or been the subject of any proceeding under Title 11, United States Code
(Bankruptcy).
(j) SOLVENCY. The Issuer is not insolvent and will not be rendered
insolvent immediately following the consummation on the Closing Date of the
transactions contemplated by this Agreement and the Security Agreement,
including the pledge by the Issuer to the Collateral Agent of the Collateral.
(k) NO TERMINATION EVENT. After giving effect to each Funding, no
Potential Termination Event or Termination Event exists.
(l) COMPLIANCE. The Issuer has complied in all material respects
with all Requirements of Law in respect of the conduct of its business and
ownership of its property including the Receivables.
(m) NOT AN INVESTMENT COMPANY OR A HOLDING COMPANY. The Issuer is
not, and is not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all provisions of
such Act. The Issuer is not a "holding company", or a subsidiary or affiliate of
a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(n) ERISA. The Issuer is in compliance in all material respects
with ERISA and no lien in favor of the PBGC on any of the Receivables shall
exist.
(o) SUBSIDIARIES. The Issuer does not have any Subsidiaries.
(p) YEAR 2000. The Issuer relies exclusively on the Receivables
Systems of the Collection Agent, does not have any Receivables Systems or
computer applications of its own and does not have any Receivables Systems that
need to be Year 2000 Compliant.
Any document, instrument, certificate or notice delivered to the
Company, any Bank Investor or the Agent by the Issuer hereunder shall be
deemed a representation and warranty by the Issuer.
The representations and warranties set forth in this Section 3.1
shall survive the pledge and assignment of the Collateral to the Collateral
Agent for the benefit of the Secured
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Parties. Upon discovery by the Issuer, the Company, the Agent or a Bank
Investor of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
others.
ARTICLE IV
INDEMNIFICATION
Section 4.1. INDEMNITY. Without limiting any other rights which the Agent,
the Company or the Bank Investors may have hereunder or under applicable law,
the Issuer agrees to indemnify the Company, the Bank Investors, the Collateral
Agent, the Agent, the Administrative Agent, the Liquidity Provider, the Credit
Support Provider and any 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
the Company, the Bank Investors, the Agent, the Collateral Agent, the
Administrative Agent, the Liquidity Provider and the Credit Support Provider)
and disbursements (all of the foregoing being collectively referred to as
"INDEMNIFIED AMOUNTS") awarded against or incurred by any of them in any action
or proceeding between the Issuer, AmeriCredit (including in its capacity as
Collection Agent) or AFC II and any of the Indemnified Parties or between any of
the Indemnified Parties and any third party or otherwise arising out of or as a
result of this Agreement, the other Transaction Documents or the ownership or
maintenance, either directly or indirectly, by the Company, the Bank Investors,
the Agent, the Administrative Agent, the Liquidity Provider or the Credit
Support Provider of the Note, or any other transactions contemplated hereby or
thereby 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) for
uncollectible Receivables. Such Indemnified Amounts shall be paid in accordance
with Section 2.3(a)(ix) of the Security Agreement. Without limiting the
generality of the foregoing, the Issuer shall indemnify each Indemnified Party
for Indemnified Amounts relating to or resulting from:
(a) any representation or warranty made by the Issuer,
AmeriCredit, AFC II or the Collection Agent (or any officers of the Issuer or
the Collection Agent) under or in connection with this Agreement, the Security
Agreement, any other Transaction Document, the Initial Funding Request, any
Subsequent Funding Notice, any Settlement Statement or any other information or
report delivered by the Issuer, AmeriCredit, AFC II or the Collection Agent
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 Issuer, AmeriCredit, AFC II or the
Collection Agent to comply with any applicable law, rule or regulation with
respect to the Collateral, or the nonconformity of any portion of the Collateral
with any such applicable law, rule or regulation;
(c) the failure to vest and maintain vested in the Collateral
Agent a first priority perfected security interest in the Collateral, free and
clear of any Adverse Claim;
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(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 the Collateral which failure has an adverse effect
on the validity, perfected status or priority of the security interest granted
to the Collateral Agent under the Security Agreement;
(e) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the 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
services related to such Receivable or the furnishing or failure to furnish such
services;
(f) any failure of the Issuer or the Collection Agent to perform
its duties or obligations in accordance with the provisions of the Security
Agreement or any other Transaction Document to which it is a party;
(g) any products 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 related merchandise or services which are the
subject of any Receivable;
(h) the transfer of an ownership interest in any Receivable other
than an Eligible Receivable;
(i) the failure by the Issuer, AmeriCredit (individually or as
Collection Agent) or AFC II to comply with any term, provision or covenant
contained in this Agreement or any of the other Transaction Documents to which
it is a party or to perform any of its respective duties under the Receivables
or the Contracts;
(j) the failure of AmeriCredit or AFC II to pay when due any
taxes, including without limitation, sales, excise or personal property taxes
payable in connection with any of the Receivables or the Contracts;
(k) any repayment by any Indemnified Party of any amount
previously distributed in reduction of Net Investment which such Indemnified
Party believes in good faith is required to be made;
(l) the commingling by the Issuer, AmeriCredit, AFC II or the
Collection Agent of Collections in respect of Receivables at any time with other
funds;
(m) any investigation, litigation or proceeding related to this
Agreement, any of the other Transaction Documents, the use of proceeds of
Fundings by the Issuer, AmeriCredit or AFC II, the ownership of an interest in
the Note, or any Contract, Receivable or Related Security;
(n) the failure of any Lock-Box Bank to remit any amounts held in
any Lock-Box Account pursuant to the instructions of the Collection Agent, the
Issuer, AmeriCredit, AFC II or the Agent (to the extent such Person is entitled
to give such instructions in accordance
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with the terms hereof and of any applicable Lock-Box Agreement) whether by
reason of the exercise of set-off rights or otherwise;
(o) any inability to obtain any judgment in or utilize the court
or other adjudication system of, any state in which an Obligor may be located as
a result of the failure of the Issuer, AmeriCredit or AFC II to qualify to do
business or file any notice of business activity report or any similar report;
(p) any failure of the Issuer to give reasonably equivalent value
to AmeriCredit or AFC II, as applicable, in consideration of the purchase by the
Issuer from AmeriCredit or AFC II, as the case may be, of any Receivable, or any
attempt by any Person to void, rescind or set-aside any such transfer under
statutory provisions or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code;
(q) any action taken by the Issuer, AmeriCredit, AFC II or the
Collection Agent (if the Issuer, AmeriCredit or any Affiliate or designee of the
Issuer or AmeriCredit) in the enforcement or collection of any Receivable; or
(r) the use of the proceeds of any Funding;
PROVIDED, HOWEVER, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Transferors, the Company
shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement or the Credit Support Agreement to the Issuer and
each Other Transferor; and PROVIDED, FURTHER, that if such Indemnified Amounts
are attributable to the Issuer and not attributable to any Other Transferor, the
Issuer shall be solely liable for such Indemnified Amounts or if such
Indemnified Amounts are attributable to Other Transferors and not attributable
to the Issuer, such Other Transferors shall be solely liable for such
Indemnified Amounts.
Section 4.2. INDEMNITY FOR TAXES, 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 administration,
interpretation or application 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):
(1) shall subject any Indemnified Party (or its applicable
lending office) to any tax, duty or other charge (other than Excluded Taxes)
with respect to this Agreement, the Security Agreement, the Note, the Net
Investment, the Collateral or payments of amounts due hereunder, or shall change
the basis of taxation of payments to any Indemnified Party of amounts payable in
respect of this Agreement, the Net Investment, the Collateral, the maintenance
or financing of the Note or payments of amounts due hereunder or its obligation
to advance funds under the Liquidity Provider Agreement, the Credit Support
Agreement or otherwise in respect of this Agreement, the Security Agreement, the
Net Investment the Collateral or the maintenance or financing of the Note
(except for changes in the rate of federal, state or local general corporate,
franchise, net income or other income or similar
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tax imposed on such Indemnified Party by the jurisdiction in which such
Indemnified Party's principal executive office is located);
(2) 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 Security
Agreement, the Net Investment, the Collateral, the maintenance or financing
of the Note or payments of amounts due hereunder or its obligation to advance
funds under the Liquidity Provider Agreement, the Credit Support Agreement or
otherwise in respect of this Agreement, the Net Investment, the Collateral or
the maintenance or financing of the Note; or
(3) imposes upon any Indemnified Party any other expense
(including, without limitation, any loss of margin, reasonable attorneys'
fees and expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the Security
Agreement, the Net Investment, the Collateral, the maintenance or financing
of the Note or payments of amounts due hereunder or its obligation to advance
funds under the Liquidity Provider Agreement or the Credit Support Agreement
or otherwise in respect of this Agreement, the Net Investment, the Collateral
or the maintenance or financing of the Note; and the result of any of the
foregoing is to increase the cost to or to reduce the amount of any sum
received or receivable by such Indemnified Party with respect to this
Agreement, the Security Agreement, the Note, the Net Investment, the
Collateral, the obligations hereunder, the funding of any purchases
hereunder, the Liquidity Provider Agreement or the Credit Support Agreement,
by an amount reasonably deemed by such Indemnified Party to be material, then
within 10 days after demand by the Agent, the Issuer shall pay to the Agent
such additional amount or amounts as will compensate such Indemnified Party
for such increased cost or reduction.
(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 or administration thereof 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 10 days
after demand by the Agent, the Issuer shall pay to the Agent such additional
amount or amounts as will compensate such Indemnified Party (or its parent)
for such reduction.
(c) The Agent or the Company will promptly notify the Issuer of
any event of which it has knowledge, occurring after the date hereof, which
will entitle an Indemnified Party to compensation pursuant to this Section
4.2. A notice by the Agent claiming
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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. In determining such amount, the Agent may use any reasonable
averaging and attributing methods.
(d) Anything in this Section 4.2 to the contrary notwithstanding,
if the Company enters into agreements for the acquisition of interests in
receivables from one or more Other Transferors, the Company shall allocate the
liability for any amounts under this Section 4.2 ("SECTION 4.2 COSTS") ratably
to the Issuer and each Other Transferor; PROVIDED, HOWEVER, that if such Section
4.2 Costs are attributable to the Issuer and not attributable to any Other
Transferor, the Issuer 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 Issuer, such Other Transferors shall be solely liable for
such Section 4.2 Costs.
Section 4.3. OTHER COSTS, EXPENSES AND RELATED MATTERS.
(a) The Issuer agrees, upon receipt of a written invoice, to pay
or cause to be paid, and to save the Company, the Bank Investors, the Collateral
Agent, the Agent and the Administrative 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 the Company or any Bank Investor) incurred by or on behalf of the
Company, any Bank Investor, the Collateral Agent, the Agent or the
Administrative Agent (i) in connection with the negotiation, execution, delivery
and preparation of this Agreement, the Note and the Security Agreement and any
other Transaction Document and the transactions contemplated hereby and thereby;
PROVIDED, HOWEVER, that such attorney's fees shall be limited to an agreed upon
cap and (ii) from time to time (a) relating to any amendments, waivers or
consents under this Agreement, the Note, the Security Agreement and any other
Transaction Document, (b) arising in connection with the Agent's, the Company's,
any Bank Investor's or any of their agent's enforcement or preservation of
rights (including, without limitation, the perfection and protection of the
Collateral Agent's security interest in the Collateral), or (c) arising in
connection with any audit, dispute, disagreement, litigation or preparation for
litigation involving this Agreement or any other Transaction Document (all of
such amounts, collectively, "TRANSACTION COSTS").
(b) The Issuer shall pay to the Agent, for the account of the
Company or the Bank Investors, as applicable, on demand any Early Collection Fee
due on account of the Company's investment allocated to a funding period on a
day prior to the last day of its funding period.
Section 4.4. TAXES. All payments made hereunder by the Issuer (a
"payor") to the Company, any Bank Investor or the Agent (each, a "recipient")
shall be made free and clear of and without deduction for any present or
future income, excise, stamp or franchise taxes and any other taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority on any recipient (or any assignee of such parties) (such
non-excluded items being called "Taxes"), but excluding franchise taxes and
taxes imposed on or measured by the recipient's net income or gross receipts
("Excluded Taxes"). In the event that any withholding or deduction from any
payment made by the payor hereunder is required in respect of any Taxes, then
such payor shall:
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(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the recipient
will equal the full amount such recipient would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any
recipient with respect to any payment received by such recipient hereunder,
the recipient may pay such Taxes and the payor will promptly pay such
additional amounts (including any penalties, interest or expenses) as shall
be necessary in order that the net amount received by the recipient after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such recipient would have received had such Taxes not been
asserted.
If the payor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the recipient the required
receipts or other required documentary evidence, the payor shall indemnify
the recipient for any incremental Taxes, interest, or penalties that may
become payable by any recipient as a result of any such failure.
ARTICLE V
THE AGENT; BANK COMMITMENT
Section 5.1. AUTHORIZATION AND ACTION. The Company and each Bank
Investor hereby appoints and authorizes the Agent to act as its agent under
this Agreement and the other Transaction Documents with such powers and
discretion as are specifically delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. The
Agent (which term as used in this sentence and in Section 5.5 and the first
sentence of Section 5.6 hereof shall include its affiliates and its own and
its affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for the Company or any Bank
Investor; (b) shall not be responsible to the Company or any Bank Investor
for any recital, statement, representation, or warranty (whether written or
oral) made in or in connection with any Transaction Document or any
certificate or other document referred to or provided for in, or received by
any of them under, any Transaction Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Transaction
Document, or any other document referred to or provided for therein or for
any failure by any of the Issuer, AmeriCredit, AFC II or the Collection Agent
or any other Person to perform any of its obligations thereunder; (c) shall
not be responsible for or have any duty to ascertain, inquire into, or verify
the performance or observance of any covenants or agreements by any of the
Issuer, AmeriCredit, AFC II or the Collection Agent or the satisfaction of
any condition or to inspect the property (including the books and records) of
any of the Issuer, AmeriCredit, AFC II or the Collection Agent or any of
their Subsidiaries or affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Transaction
Document; and (e) shall
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not be responsible for any action taken or omitted to be taken by it under or
in connection with any Transaction Document, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
Section 5.2. AGENT'S RELIANCE, ETC. The Agent shall be entitled to
rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any of the Issuer,
AmeriCredit, AFC II or the Collection Agent), independent accountants, and
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement, the 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 the Majority Investors, and such
instructions shall be binding on the Company and all of the Bank Investors;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action
that exposes the Agent to personal liability or that is contrary to any
Transaction Document or applicable law or unless it shall first be
indemnified to its satisfaction by the Bank Investors against any and all
liability and expense which may be incurred by it by reason of taking any
such action.
Section 5.3. TERMINATION EVENT OR POTENTIAL TERMINATION EVENT. The
Agent shall not be deemed to have knowledge or notice of the occurrence of a
Potential Termination Event or a Termination Event unless the Agent has
received written notice from the Company, a Bank Investor or the Issuer
specifying such Potential Termination Event or Termination Event and stating
that such notice is a "Notice of Termination Event or Potential Termination
Event". In the event that the Agent receives such a notice of the occurrence
of a Potential Termination Event or Termination Event, the Agent shall give
prompt notice thereof to the Company and the Bank Investors. The Agent shall
(subject to Section 5.2 hereof) take such action with respect to such
Potential Termination Event or Termination Event as shall reasonably be
directed by the Majority Investors, PROVIDED that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Potential Termination Event or Termination Event as it shall
deem advisable in the best interest of the Company and the Bank Investors.
Section 5.4. RIGHTS AS BANK INVESTOR. With respect to its Commitment,
Bank of America (and any successor acting as Agent) in its capacity as a Bank
Investor hereunder shall have the same rights and powers hereunder as any
other Bank Investor and may exercise the same as though it were not acting as
the Agent, and the term "Bank Investor" or "Bank Investors" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
Bank of America (and any successor acting as Agent) and its affiliates may
(without having to account therefor to the Company or any Bank Investor)
accept deposits from, lend money to, make investments in, provide services
to, and generally engage in any kind of lending, trust, or other business
with any of the Issuer, AmeriCredit, AFC II and the Collection Agent or any
of their Subsidiaries or affiliates as if it were not acting as Agent, and
Bank of America (and any successor acting as Agent) and its affiliates may
accept fees and other consideration from any of the Issuer, AmeriCredit, AFC
II and the Collection Agent or any of their Subsidiaries or
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Affiliates for services in connection with this Agreement or otherwise
without having to account for the same to the Company or any Bank Investor.
Section 5.5. INDEMNIFICATION OF THE AGENT. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Issuer), ratably in
accordance with their Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees), or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent (including by the Company or any Bank Investor) in any way
relating to or arising out of this Agreement or any other Transaction
Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under this Agreement or any other Transaction Document,
PROVIDED that no Bank Investor shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person indemnified. Without limitation of the foregoing, the Bank Investors
agree to reimburse the Agent, ratably in accordance with their Pro Rata
Shares, promptly upon demand for any out-of-pocket expenses (including
attorneys' fees) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Transaction Documents,
to the extent that such expenses are incurred in the interests of or
otherwise in respect of the Bank Investors hereunder and/or thereunder and to
the extent that the Agent is not reimbursed for such expenses by the Issuer.
The agreements contained in this Section shall survive payment in full of the
Net Investment and all other amounts payable under this Agreement.
Section 5.6. NON-RELIANCE. Each of the Company and each Bank Investor
agrees that it has, independently and without reliance on the Agent or the
Company or any Bank Investor, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Receivables,
the Contracts, the Issuer, AmeriCredit, AFC II and the Collection Agent and
their respective Subsidiaries and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent, the Company
or any Bank Investor, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions
in taking or not taking action under the Transaction Documents. Except for
notices, reports, and other documents and information expressly required to
be furnished to the Company and the Bank Investors by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide the Company or
any Bank Investor with any credit or other information concerning the
affairs, financial condition, or business of any of the Issuer, AmeriCredit,
AFC II or the Collection Agent or any of their respective Subsidiaries or
affiliates that may come into the possession of the Agent or any of its
affiliates.
Section 5.7. RESIGNATION OF AGENT. The Agent may resign at any time by
giving notice thereof to the Company, the Bank Investors and the Issuer. Upon
any such resignation, the Majority Investors shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Majority Investors and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Company and the Bank Investors,
appoint a successor Agent which shall be a commercial bank organized under
the laws of the United States having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent
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hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, 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
hereunder as Agent, the provisions of this Article V shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent.
Section 5.8. PAYMENTS BY THE AGENT. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received
by the Agent on behalf of the Bank Investors shall be paid by the Agent to
the Bank Investors (at their respective accounts specified in their
respective Assignment and Assumption Agreements) in accordance with their
respective related pro rata interests in the Net Investment on the Business
Day received by the Agent, unless such amounts are received after 12:00 noon
on such Business Day, in which case the Agent shall use its reasonable
efforts to pay such amounts to the Bank Investors on such Business Day, but,
in any event, shall pay such amounts to the Bank Investors in accordance with
their respective related pro rata interests in the Net Investment not later
than the following Business Day.
Section 5.9. BANK COMMITMENT; ASSIGNMENT TO BANK INVESTORS.
(a) BANK COMMITMENT. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect the Initial
Funding or a Subsequent Funding as requested under Section 2.1, then at any
time, the Issuer shall have the right to require the Company to assign its
interest in the Note and the Net Investment in whole to the Bank Investors
pursuant to this Section 5.9(a). In addition, at any time on or prior to the
Commitment Termination Date (i) upon the occurrence of a Termination Event
that results in the Termination Date or (ii) in the event that the Company
elects to give notice to the Issuer of an Investment Termination Date, the
Issuer hereby requests and directs that the Company assign its interest in
the Note and the Net Investment in whole to the Bank Investors pursuant to
this Section 5.9(a) and the Issuer hereby agrees to pay the amounts described
in Section 5.9(c) below. No further documentation or action on the part of
the Company shall be required to exercise the rights set forth in the
immediately preceding sentence, other than, in the case of clause (i) of such
sentence, receipt of notice by the Bank Investors from the Agent that a
Termination Date has occurred or, in the case of clause (ii) of such
sentence, the giving of the notice set forth in such clause and the delivery
by the Agent of a copy of such notice to each Bank Investor (the date of the
receipt of a notice referred to in such clauses being the "EFFECTIVE DATE").
Each Bank Investor hereby agrees, unconditionally and irrevocably and under
all circumstances, without setoff, counterclaim or defense of any kind, to
pay the full amount of its Assignment Amount on such Effective Date to the
Company in immediately available funds to an account designated by the Agent.
Upon payment of its Assignment Amount, each Bank Investor shall acquire its
Pro Rata Share of its interest in the Note and the Net Investment and shall
assume its respective portion of the Company's obligations hereunder, and the
Company shall be released from such portion of such obligations. If, by 2:00
P.M. (New York time) on the Effective Date, one or more Bank Investors (each,
a "DEFAULTING BANK INVESTOR", and each Bank Investor other than any
Defaulting Bank Investor being referred to as a "NON-DEFAULTING BANK
INVESTOR") fails to pay its Assignment Amount (the aggregate amount not so
made available to the Company being herein called the "ASSIGNMENT AMOUNT
DEFICIT"), then the Agent shall, by no later than 2:30 P.M. (New York time)
on the Effective Date, instruct each Non-Defaulting Bank Investor to pay, by
no later
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than 3:00 P.M. (New York time) on the Effective Date, in immediately
available funds, to the account designated by the Company, an amount equal to
the lesser of (x) such Non-Defaulting Bank Investor's proportionate share
(based upon the relative Commitments of the Non-Defaulting Bank Investors) of
the Assignment Amount Deficit and (y) its unused Commitment. A Defaulting
Bank Investor shall forthwith, upon demand, pay to the Agent for the ratable
benefit of the Non-Defaulting Bank Investors all amounts paid by each
Non-Defaulting Bank Investor on behalf of such Defaulting Bank Investor,
together with interest thereon for each day from the date a payment was made
by a Non-Defaulting Bank Investor until the date such Non-Defaulting Bank
Investor has been paid such amounts in full at a rate per annum equal to the
rate determined in accordance with clause (i) of the definition of "Base
Rate" plus two percent (2%). In addition, if, after giving effect to the
provisions of the immediately preceding sentence, any Assignment Amount
Deficit continues to exist, each such Defaulting Bank Investor shall pay
interest to the Agent on such Defaulting Bank Investor's portion of such
remaining Assignment Amount Deficit, at a rate per annum equal to the rate
determined in accordance with clause (i) of the definition of "Base Rate"
plus two percent (2%), for each day from the Effective Date until the date
such Defaulting Bank Investor shall pay its portion of such remaining
Assignment Amount Deficit in full to the Company. Upon any assignment by the
Company to the Bank Investors contemplated hereunder, the Company shall cease
to make any additional advances to the Issuer hereunder.
(b) ASSIGNMENT BY A BANK INVESTOR.
(i) No Bank Investor may assign all or any portion of its
Commitment or interest in the Note and the Net Investment and its rights and
obligations hereunder to any Person unless approved in writing by the Issuer
(which approval shall not be unreasonably withheld), the Administrative
Agent, on behalf of the Company, and the Agent. In connection with any such
assignment by a Bank Investor to another Person, the assignor shall deliver
to the assignee an Assignment and Assumption Agreement, duly executed,
assigning to such assignee all or any portion of (A) such assignor's
Commitment and other obligations hereunder and (B) such assignor's pro rata
interest in the Note and Net Investment and other rights hereunder, and such
assignor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the assignee may reasonably
request, in order to protect, or more fully evidence the assignee's right,
title and interest in and to such interest and to enable the Agent, on behalf
of such assignee, to exercise or enforce any rights hereunder and under the
other Transaction Documents to which such assignor is or, immediately prior
to such assignment, was a party. Upon any such assignment, (i) the assignee
shall have all of the rights and obligations of the assignor hereunder and
under the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party with respect to such
assignor's Commitment and interest in the Note and Net Investment for all
purposes of this Agreement and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party and
(ii) the assignor shall have no further obligations with respect to the
portion of its Commitment hereunder which has been assigned and shall
relinquish its rights with respect to the portion of its interest in the Note
and the Net Investment which has been assigned for all purposes of this
Agreement and under the other Transaction Documents to which such assignor is
or, immediately prior to such assignment, was a party. No such assignment
shall be effective unless a fully executed copy of the related Assignment and
Assumption Agreement shall be delivered to the Agent and the Issuer. All
costs
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and expenses of the Agent incurred in connection with any assignment
hereunder shall be borne by the Issuer. No Bank Investor shall enter into any
Assignment and Assumption Agreement hereunder without also simultaneously
assigning an equal portion of its interest in the Liquidity Provider
Agreement.
(ii) By executing and delivering an Assignment and
Assumption Agreement, the assignor and 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 Assumption Agreement, the assignor 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, the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value or this
Agreement, the other Transaction Documents or any such other instrument or
document; (ii) the assignor makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Issuer,
AmeriCredit, AFC II or the Collection Agent or the performance or observance
by the Issuer, AmeriCredit, AFC II or the Collection Agent of any of their
respective obligations under this Agreement, the Master Receivables Purchase
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, the Master Receivables Purchase Agreement,
and such other instruments, documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Assumption Agreement and to purchase such interest; (iv) such
assignee will, independently and without reliance upon the Agent, or any of
its Affiliates, or the assignor and based on such agreements, 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 Agreement and
the other Transaction Documents; (v) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement, the other Transaction Documents and any other
instrument or document furnished pursuant hereto or thereto as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and
interests in and under this Agreement, the other Transaction Documents, the
Receivables, the Contracts and the Related Security; (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Transaction
Documents are required to be performed by it as the assignee of the assignor;
and (vii) such assignee agrees that it will not institute against the Company
or any Conduit Assignee any proceeding of the type referred to in Section 6.9
prior to the date which is one year and one day after the payment in full of
all Commercial Paper issued by the Company or any Conduit Assignee.
(c) ISSUER'S OBLIGATION TO PAY CERTAIN AMOUNTS; ADDITIONAL
ASSIGNMENT AMOUNT. The Issuer shall pay to the Agent, for the account of the
Company, in connection with any assignment by the Company to the Bank
Investors pursuant to Section 5.9(a), an aggregate amount equal to all
Discount to accrue through the end of each outstanding funding period plus
all other Aggregate Unpaids (other than the Net Investment). If the Issuer
fails to make payment of such amounts at or prior to the time of assignment
by the Company to the Bank Investors, such amount shall be paid by the Bank
Investors (in accordance with their respective Pro Rata Shares) to the
Company as additional consideration for the interests assigned
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<PAGE>
to the Bank Investors and the amount of the "Net Investment" hereunder held
by the Bank Investors shall be increased by an amount equal to the additional
amount so paid by the Bank Investors.
(d) ADMINISTRATION OF AGREEMENT AFTER ASSIGNMENT BY COMPANY TO
BANK INVESTORS. After any assignment by the Company to the Bank Investors
pursuant to Section 5.9(a) (and the payment of all amounts owing to the
Company in connection therewith), all rights of the Administrative Agent and
the Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(e) PAYMENTS AFTER ASSIGNMENT BY COMPANY TO BANK INVESTORS. After
any assignment by the Company to the Bank Investors pursuant to Section 5.9(a),
all payments to be made hereunder by the Issuer to the Company shall be made to
the Agent's account as such account shall have been notified to the Issuer. In
the event that the aggregate of the Assignment Amounts paid by the Bank
Investors pursuant to Section 5.9(a) is less than the Net Investment of the
Company on the date of such assignment, then to the extent payments made
hereunder in respect of the Net Investment exceed the aggregate of the
Assignment Amounts, such excess shall be remitted by the Agent to the Company.
(f) DOWNGRADE OF BANK INVESTOR. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated pursuant to
Section 5.9(a), the short term debt rating of any Bank Investor shall be
"A-2" or "P-2" from Standard & Poor's or Moody's, respectively, with negative
credit implications, such Bank Investor, upon request of the Agent, shall,
within 30 days of such request, assign its rights and obligations hereunder
to another financial institution (which institution's short term debt shall
be rated at least "A-2" and "P-2" from Standard & Poor's and Moody's,
respectively, and which shall not be so rated with negative credit
implications and which is acceptable to the Company and the Agent). If the
short term debt rating of a Bank Investor shall be "A-3" or "P-3", or lower,
from Standard & Poor's or Moody's, respectively (or such rating shall have
been withdrawn by Standard & Poor's or Moody's), such Bank Investor, upon
request of the Agent, shall, within five (5) Business Days of such request,
assign its rights and obligations hereunder to another financial institution
(which institution's short term debt shall be rated at least "A-2" and "P-2"
from Standard & Poor's and Moody's, respectively, and which shall not be so
rated with negative credit implications and which is acceptable to the
Company and the Agent). In either such case, if any such Bank Investor shall
not have assigned its rights and obligations under this Agreement within the
applicable time period described above, the Company shall have the right to
require such Bank Investor to pay to the Agent an amount equal to such Bank
Investor's Commitment for deposit by the Agent into an account, in the name
of the Agent, which shall be in satisfaction of such Bank Investor's
obligations to make Subsequent Fundings and to pay its Assignment Amount upon
an assignment from the Company in accordance with Section 5.9(a) hereof. The
amount on deposit in such account shall be invested by the Agent in Eligible
Investments and such Eligible Investments shall be selected by the Agent in
its sole discretion. The Agent shall remit to such Bank Investor, monthly,
the income thereon. Nothing in the three preceding sentences shall affect or
diminish in any way any such downgraded Bank Investor's Commitment to the
Issuer or the Company or such downgraded Bank Investor's other obligations
and liabilities hereunder and under the other Transaction Documents.
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ARTICLE VI
MISCELLANEOUS
Section 6.1. TERM OF AGREEMENT. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in
full and all other Aggregate Unpaids have been paid in full, in each case, in
cash; PROVIDED, HOWEVER, that (i) the rights and remedies of the Agent, the
Company, the Bank Investors and the Administrative Agent with respect to any
representation and warranty made or deemed to be made by the Issuer pursuant
to this Agreement, (ii) the indemnification and payment provisions of Article
IV, and (iii) the agreement set forth in Section 6.9 hereof, shall be
continuing and shall survive any termination of this Agreement.
Section 6.2. WAIVERS; AMENDMENTS.
(a) No failure or delay on the part of the Agent, the Company,
the Administrative Agent or any Bank Investor in exercising any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power, right
or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any other Transaction
Document may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Issuer, the Collection Agent, the Company
and the Majority Investors (and, if Article V or the rights or duties of the
Agent are affected thereby, by the Agent); PROVIDED that no such amendment or
waiver shall, unless signed by each Bank Investor directly affected thereby,
(i) increase the Commitment of a Bank Investor, (ii) reduce the Net
Investment or rate of interest to accrue thereon or any fees or other amounts
payable hereunder, (iii) postpone any date fixed for the payment of any
scheduled distribution in respect of the Net Investment or interest with
respect thereto or any fees or other amounts payable hereunder or for
termination of any Commitment, (iv) change the percentage of the Commitments
of Bank Investors which shall be required for the Bank Investors or any of
them to take any action under this section or any other provision of this
Agreement, (v) release all or substantially all of the property with respect
to which a security or ownership interest therein has been granted hereunder
to the Agent or the Bank Investors or (vi) extend or permit the extension of
the Commitment Termination Date. In the event the Agent requests the
Company's or a Bank Investor's consent pursuant to the foregoing provisions
and the Agent does not receive a consent (either positive or negative) from
the Company or such Bank Investor within 10 Business Days of the Company's or
Bank Investor's receipt of such request, then the Company or such Bank
Investor (and its percentage interest hereunder) shall be disregarded in
determining whether the Agent shall have obtained sufficient consent
hereunder.
Section 6.3. NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to
the other party at its address or telecopy
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number set forth below or at such other address or telecopy number as such
party may hereafter specify for the purposes of notice to such party. Each
such notice or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section 6.3 and confirmation is received, (ii) if given by mail,
three (3) Business Days following such posting, if postage prepaid, or if
sent via U.S. certified or registered mail, (iii) if given by overnight
courier, one (1) Business Day after deposit thereof with a national overnight
courier service, or (iv) if given by any other means, when received at the
address specified in this Section 6.3. However, anything in this Section 6.3
to the contrary notwithstanding, the Issuer hereby authorizes the Company to
effect Subsequent Fundings, funding period and interest rate selections based
on telephonic notices made by any Person which the Company in good faith
believes to be acting on behalf of the Issuer. The Issuer agrees to deliver
promptly to the Company a written confirmation of each telephonic notice
signed by an authorized officer of Issuer. However, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs in any material respect from the action taken by the
Company, the records of the Company shall govern absent manifest error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities Corporation
2 Wall Street
New York, New York 10005
Attention: Richard Taiano
Telephone: (212) 346-9006
Telecopy: (212) 346-9012
(with a copy to the Administrative Agent)
If to the Issuer:
AmeriCredit BOA TRUST
c/o Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
Montgomery Building
1011 Centre Road, Suite 200
Wilmington, Delaware 19805
Attention: Corporate Trust Administration
Telephone: (302) 636-3305
Telecopy: (302) 636-3222
Payment Information:
[BANK]
ABA
----------
Account
------------
Reference
---------------
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With a copy to:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Asset Backed Finance Unit
and a copy to:
AmeriCredit Financial Services, Inc.
801 Cherry Street
Suite 3900
Fort Worth, Texas 76102
Telephone: (817) 302-7022
Telecopy: (817) 302-7942
If to the Agent or the Administrative Agent:
Bank of America, N.A.
Bank of America Corporate Center, 10th Floor
Charlotte, North Carolina 28255
Attention: Banc of America Securities LLC
Global Asset Backed Securitization Group
Portfolio Management
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
Payment Information:
Bank of America, N.A.
ABA 053-000-196
for the account of Bank of America Charlotte
Account No. 109360165000
Attn.: Camille Zerbinos
Section 6.4. GOVERNING LAW; SUBMISSION TO JURISDICTION; INTEGRATION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF. THE ISSUER HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The
Issuer hereby irrevocably waives, to the fullest extent it may effectively do
so, any objection which it may now
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<PAGE>
or hereafter have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 6.4
shall affect the right of the Company to bring any action or proceeding
against the Issuer or its property in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING
TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the 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.
(d) The Issuer hereby appoints Corporation Service Company,
located at 80 State Street, Albany, New York 12207-2543 as the authorized
agent upon whom process may be served in any action arising out of or based
upon this Agreement, the other Transaction Documents to which the Issuer is a
party or the transactions contemplated hereby or thereby that may be
instituted in the United States District Court for the Southern District of
New York and of any New York State court sitting in The City of New York by
the Company, the Agent, any Bank Investor, the Administrative Agent, the
Collateral Agent or any assignee of any of them.
Section 6.5. COUNTERPARTS. 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.
Section 6.6. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding on the parties hereto and
their respective successors and assigns; PROVIDED, HOWEVER, that the Issuer
may not assign any of its rights or delegate any of its duties hereunder or
under the Master Receivables Purchase Agreement or under any of the other
Transaction Documents to which it is a party without the prior written
consent of the Agent except as may be otherwise expressly provided in the
Master Receivables Purchase Agreement or the other Transaction Documents. No
provision of this Agreement shall in any manner restrict the ability of the
Company or any Bank Investor to assign, participate, grant security interests
in, or otherwise transfer any portion of the Note.
(b) Without limiting the foregoing, the Company may, from time to
time, with prior or concurrent notice to the Issuer and the Collection Agent, in
one transaction or a series of transactions, assign all or a portion of the Note
and
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<PAGE>
the Net Investment and its rights and obligations under this Agreement and
any other Transaction Documents to which it is a party to a Conduit Assignee.
Upon and to the extent of such assignment by the Company to a Conduit
Assignee, (i) such Conduit Assignee shall be the owner of the assigned
portion of the Note and the Net Investment, (ii) the related administrative
agent for such Conduit Assignee will act as the Administrative Agent for such
Conduit Assignee, with all corresponding rights and powers, express or
implied, granted to the Administrative Agent hereunder or under the other
Transaction Documents, (iii) such Conduit Assignee and its liquidity support
provider(s) and credit support provider(s) and other related parties shall
have the benefit of all the rights and protections provided to the Company
and its Liquidity Provider(s) and Credit Support Provider(s), respectively,
herein and in the other Transaction Documents (including, without limitation,
any limitation on recourse against such Conduit Assignee or related parties,
any agreement not to file or join in the filing of a petition to commence an
insolvency proceeding against such Conduit Assignee, and the right to assign
to another Conduit Assignee as provided in this paragraph), (iv) such Conduit
Assignee shall assume all (or the assigned or assumed portion) of the
Company's obligations, if any, hereunder or any other Transaction Document,
and the Company shall be released from such obligations, in each case to the
extent of such assignment, and the obligations of the Company and such
Conduit Assignee shall be several and not joint, (v) all distributions in
respect of the Net Investment shall be made to the applicable agent or
administrative agent, as applicable, on behalf of the Company and such
Conduit Assignee on a pro rata basis according to their respective interests,
(vi) the definition of the term "CP Rate" with respect to the portion of the
Net Investment funded with commercial paper issued by the Company from time
to time shall be determined in the manner set forth in the definition of "CP
Rate" applicable to the Company on the basis of the interest rate or discount
applicable to commercial paper issued by such Conduit Assignee (rather than
the Company), (vii) the defined terms and other terms and provisions of this
Agreement and the other Transaction Documents shall be interpreted in
accordance with the foregoing, and (viii) if requested by the Agent or
administrative agent with respect to the Conduit Assignee, the parties will
execute and deliver such further agreements and documents and take such other
actions as the Agent or such administrative agent may reasonably request to
evidence and give effect to the foregoing. No assignment by the Company to a
Conduit Assignee of all or any portion of the Net Investment shall in any way
diminish the related Bank Investors' obligation under Section 5.9 to make any
Subsequent Funding not made by the Company or such Conduit Assignee or to
acquire from the Company or such Conduit Assignee all or any portion of the
Net Investment.
(c) In the event that the Company makes an assignment to a
Conduit Assignee in accordance with Section 6.6 (b) hereof, the Bank
Investors: (i) if requested by Bank of America, shall terminate their
participation in the Liquidity Provider Agreement to the extent of such
assignment, (ii) if requested by Bank of America, shall execute a
participation agreement with respect to the liquidity provider agreement
related to such Conduit Assignee, to the extent of such assignment, the terms
of which shall be substantially similar to those of the participation
agreement entered into by such Bank Investor with respect to the Liquidity
Provider Agreement (or which shall be otherwise reasonably satisfactory to
Bank of America and the Bank Investors), (iii) if requested by the Company,
shall enter into such agreements as requested by the Company pursuant to
which they shall be obligated to provide funding to the Conduit Assignee on
substantially the same terms and conditions as is provided for in this
Agreement in respect of the Company (or which agreements shall be otherwise
reasonably satisfactory to the Company and the Bank Investors), and (iv)
shall take such actions as the Agent shall reasonably request in connection
therewith.
31
<PAGE>
(d) The Issuer hereby agrees and consents to the assignment by
the Company from time to time of all or any part of its rights under,
interest in and title to this Agreement and the Note to any Liquidity
Provider. In addition, the Issuer hereby consents to and acknowledges the
assignment by the Company of all of its rights under, interest in and title
to this Agreement and the Note to the Collateral Agent.
Section 6.7. WAIVER OF CONFIDENTIALITY. The Issuer hereby consents to
the disclosure of any non-public information with respect to it received by
the Company, the Agent, any Bank Investor or the Administrative Agent to any
of the Company, the Agent, any nationally recognized rating agency rating the
Company's Commercial Paper, the Administrative Agent, the Collateral Agent,
any Bank Investor or potential Bank Investor, the Liquidity Provider or the
Credit Support Provider in relation to this Agreement.
Section 6.8. CONFIDENTIALITY AGREEMENT. The Issuer hereby agrees that
it will not disclose the contents of this Agreement or any other proprietary
or confidential information of the Company, the Agent, the Administrative
Agent, the Collateral Agent, any Liquidity Provider or any Bank Investor to
any other Person except (i) its auditors and attorneys, employees or
financial advisors (other than any commercial bank) and any nationally
recognized rating agency, provided such auditors, attorneys, employees,
financial advisors or rating agencies are informed of the highly confidential
nature of such information or (ii) as otherwise required (x) by applicable
law, (y) under the Securities Exchange Act of 1934, as amended, in connection
with an offering of securities issued by the Issuer or an Affiliate thereof,
or (z) by order of a court of competent jurisdiction (PROVIDED, HOWEVER, that
in the case of this clause (z) no such disclosure shall occur without the
prior review by the Administrative Agent of the material to be disclosed).
Section 6.9. NO BANKRUPTCY PETITION AGAINST THE COMPANY. The Issuer
and each Bank Investor hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all outstanding
Commercial Paper or other indebtedness of the Company or any Conduit
Assignee, it will not institute against, or join any other Person in
instituting against, the Company or any Conduit Assignee, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 6.10. FURTHER ASSURANCES. The Issuer agrees to do such further
acts and things and to execute and deliver to the Company or the Collateral
Agent such additional assignments, agreements, powers and instruments as are
required by the Company to carry into effect the purposes of this Agreement
or the Security Agreement or to better assure and confirm unto the Company or
the Collateral Agent its rights, powers and remedies hereunder or thereunder.
Section 6.11. HEADINGS. Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
Section 6.12. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and
delivered by Bankers Trust (Delaware), not individually or personally but
solely as Trustee of the Issuer, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as
a personal representation,
32
<PAGE>
undertaking and agreement by Bankers Trust (Delaware) but is made and
intended for the purpose for binding only the Issuer, (c) nothing herein
contained shall be construed as creating any liability on Bankers Trust
(Delaware), individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through
or under the parties hereto and (d) under no circumstances shall Bankers
Trust (Delaware) be personally liable for the payment of any indebtedness or
expenses of the Issuer or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any other related documents; PROVIDED,
HOWEVER, that no provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, its action in bad faith or its own willful misconduct.
Section 6.13. INTENDED TAX CHARACTERIZATION. The parties hereto agree
that it is their mutual intent that, for all applicable tax purposes, the
Note will constitute indebtedness and that for all applicable tax purposes,
accordingly, the Issuer will be treated as owner of the Collateral. Further,
each party hereto and the holder of the Note (or an interest therein) (by
receiving and holding the Note or an interest therein), hereby covenants to
every other party hereto to treat the Note as indebtedness for all applicable
tax purposes in all tax filings, reports and returns and otherwise, and
further covenants that neither it nor any of its affiliates will take, or
participate in the taking of or permit to be taken, any action that is
inconsistent with the treatment of the Note as indebtedness for tax purposes
unless otherwise directed by law, rule or regulation or order of any
governmental authority. All successors and assigns of the parties hereto
shall be bound by the provisions hereof.
33
<PAGE>
IN WITNESS WHEREOF, the Issuer, the Company and the Agent have
caused this Note Purchase Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above written.
AMERICREDIT BOA TRUST,
as Issuer
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Trustee
By:
----------------------------------------------
Name:
Title:
KITTY HAWK FUNDING CORPORATION,
as Company
By:
----------------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Agent
and as Bank Investor
$250,000,000 By:
- ------------ ----------------------------------------------
Commitment Name:
Title:
34
<PAGE>
-----------------------------------------------------------
AMENDED AND RESTATED
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,
Administrative Agent
Dated as of September 21, 1999
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I Definitions
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . .2
ARTICLE II Sale of Receivables
Section 2.1 Sale of Receivables . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 2.2 The Conveyed Property; Nature of Transaction. . . . . . . . . . . . .4
Section 2.3 Further Encumbrance of Conveyed Property; Additional Covenants of
the Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 2.4 Prepayment of Purchase Price of Receivables . . . . . . . . . . . . .6
ARTICLE III
Conditions Precedent
Section 3.1 Conditions Precedent to the Effectiveness of this Agreement . . . . .7
Section 3.2 Conditions Precedent to each Receivables Sale . . . . . . . . . . . .7
ARTICLE IV The Receivables
Section 4.1 Representations and Warranties of Seller. . . . . . . . . . . . . . 11
Section 4.2 Repurchase Upon Breach. . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.3 Custody of Receivables Files. . . . . . . . . . . . . . . . . . . . 12
Section 4.4 Duties of Servicer With Respect to Receivable Files . . . . . . . . 16
Section 4.5 Instructions; Authority to Act. . . . . . . . . . . . . . . . . . . 17
ARTICLE V Administration and Servicing of
Receivables
Section 5.1 Appointment; Standard of Care; Duties of the Servicer . . . . . . . 18
Section 5.2 Collection of Receivable Payments; Modifications of Receivables;
Lockbox Agreements. . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.3 Realization Upon Receivables. . . . . . . . . . . . . . . . . . . . 23
Section 5.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.5 Maintenance of Security Interests in Financed Vehicles. . . . . . . 25
Section 5.6 Covenants, Representations, and Warranties of Servicer. . . . . . . 29
Section 5.7 Purchase of Receivables Upon Breach of Covenant . . . . . . . . . . 30
Section 5.8 Total Servicing Fee; Payment of Certain Expenses by
Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.9 Certain Servicer's Certificates . . . . . . . . . . . . . . . . . . 31
Section 5.10 Annual Statement as to Compliance, Notice of Servicer Termination
Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.11 Annual Independent Accountants' Report; Quarterly Reviews . . . . . 33
Section 5.12 Access to Certain Documentation and Information Regarding the
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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<PAGE>
Section 5.13 Monthly Tape. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.14 Retention and Termination of Servicer . . . . . . . . . . . . . . . 35
Section 5.15 Fidelity Bond and Errors and Omissions Policy . . . . . . . . . . . 35
ARTICLE VI Collection Account; Distributions;
Statements to Secured Parties
Section 6.1 Establishment of Collection Account . . . . . . . . . . . . . . . . 36
Section 6.2 Collection Account Reserve. . . . . . . . . . . . . . . . . . . . . 39
Section 6.3 Certain Reimbursements to the Servicer. . . . . . . . . . . . . . . 41
Section 6.4 Application of Collections. . . . . . . . . . . . . . . . . . . . . 41
Section 6.5 Servicer Advances . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.6 Application of Funds from the Collection Account Reserve; Special
Withdrawals from the Collection Account . . . . . . . . . . . . . . 41
Section 6.7 Additional Deposits . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.8 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII The Seller
Section 7.1 Representations and Warranties of Seller. . . . . . . . . . . . . . 47
Section 7.2 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.3 Liability of Seller; Indemnities. . . . . . . . . . . . . . . . . . 50
Section 7.4 Merger or Consolidation of, or Assumption of the Obligations of,
Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.5 Limitation on Liability of Seller and Others. . . . . . . . . . . . 52
ARTICLE VIII The Servicer
Section 8.1 Representations and Warranties of AFS, in its capacity as
Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.2 Liability of Servicer; Indemnities. . . . . . . . . . . . . . . . . 56
Section 8.3 Merger or Consolidation of, or Assumption of the obligations of
the Servicer or Backup Servicer . . . . . . . . . . . . . . . . . . 57
Section 8.4 Limitation on Liability of the Servicer and the Backup
Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.5 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.6 Servicer and Backup Servicer Not to Resign. . . . . . . . . . . . . 60
ARTICLE IX Default
Section 9.1 Servicer Termination Event. . . . . . . . . . . . . . . . . . . . . 61
Section 9.2 Consequences of a Servicer Termination Event. . . . . . . . . . . . 62
Section 9.3 Appointment of Successor. . . . . . . . . . . . . . . . . . . . . . 63
Section 9.4 Notification to Secured Parties . . . . . . . . . . . . . . . . . . 64
Section 9.5 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X Administrative Duties of the
Servicer
Section 10.1 Administrative Duties . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.2 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.3 Additional Information to be Furnished to the Borrower. . . . . . . 66
ii
<PAGE>
ARTICLE XI Miscellaneous Provisions
Section 11.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.2 Protection of Title . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 11.4 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 11.5 Limitations on Rights of Others . . . . . . . . . . . . . . . . . . 69
Section 11.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.7 Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.8 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.9 Assignment to Administrative Agent. . . . . . . . . . . . . . . . . 70
Section 11.10 Chase Roles; Limitation of Liability. . . . . . . . . . . . . . . . 70
Section 11.11 Non-petition Covenants. . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.12 Independence of the Servicer. . . . . . . . . . . . . . . . . . . . 72
Section 11.13 No Joint Venture. . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.14 Consents to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . 72
Section 11.15 Trial by Jury Waived. . . . . . . . . . . . . . . . . . . . . . . . 73
Section 11.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
</TABLE>
ANNEXES
Annex A - Defined Terms
SCHEDULES
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
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
Exhibit F - Form of Servicer's Acknowledgment
Exhibit G - Form of Data Integrity Review
Exhibit H - Form of Data Integrity Review
iii
<PAGE>
AMENDED AND RESTATED SALE AND SERVICING AGREEMENT, dated as of
September 21, 1999 (as amended, supplemented or otherwise modified and in
effect from time to time, this "AGREEMENT"), 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
administrative agent (in such capacities, the "BACKUP SERVICER" and the
"ADMINISTRATIVE 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 to hold the Receivable Files on behalf of the
Administrative Agent;
WHEREAS, the Borrower desires to obtain financing for its purchase
of the contracts and receivables;
WHEREAS, the parties hereto have entered into a Sale and Servicing
Agreement, dated as of October 8, 1997 (as amended, the "ORIGINAL AGREEMENT");
WHEREAS, the parties hereto desire to amend and restate the
Original Agreement on the terms and conditions set forth herein;
WHEREAS, AFS, as Seller and Servicer, the Administrative Agent, and
the Borrower will, pursuant to this Agreement, enter into Receivables Sale
Agreements from time to time, whereby AFS will sell, transfer and assign to
the
<PAGE>
Borrower on the applicable Receivables Sale Date all of AFS's right, title
and interest in and to additional Receivables; and
WHEREAS, the Borrower and the Administrative Agent have entered
into an amended and restated Security Agreement, dated as of September 21,
1999 (as amended, supplemented or otherwise modified and in effect from time
to time, the "SECURITY AGREEMENT"), pursuant to which the Borrower will
pledge to the Administrative Agent for the benefit of the Secured Parties all
of its right, title and interest in the Collateral, including, but not
limited to, the Receivables and the Other Conveyed Property;
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 Amended and Restated
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.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(1) 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.
(2) The principles of construction set forth in Annex A shall
apply to this Agreement.
2
<PAGE>
ARTICLE II
SALE OF RECEIVABLES
Section 1.3 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, on each 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:
(1) 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;
(2) 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;
(3) 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;
(4) all rights of the Seller against Dealers pursuant to Dealer
Agreements and/or Dealer Assignments;
(5) all rights under any Service Contracts on the related Financed
Vehicles;
(6) the related Receivables Files; and
(7) all proceeds of any and all of the foregoing.
3
<PAGE>
Section 1.4 THE CONVEYED PROPERTY; NATURE OF TRANSACTION.
(1) Any and all of the property described in the foregoing Section
2.1 is referred to as the "Conveyed Property".
(2) 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 Administrative 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 Administrative Agent).
Section 1.5 FURTHER ENCUMBRANCE OF CONVEYED PROPERTY; ADDITIONAL
COVENANTS OF THE SELLER.
(1) 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.
(2) 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. The Borrower shall grant a
security interest in the Conveyed Property to secure the repayment of the
Secured Obligations pursuant to the Security Agreement.
(3) Without limiting the foregoing, the Seller covenants as
follows:
(1) 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
4
<PAGE>
Receivable or as otherwise contemplated herein and the Seller shall not take
or permit any action inconsistent with the foregoing;
(2) 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;
(3) 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
(4) 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
Administrative 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 Administrative
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).
(4) The Seller will furnish or cause to be furnished to the
Administrative Agent (and the Administrative Agent promptly after receipt
thereof shall forward to each of the Funding Agents):
(1) 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
PricewaterhouseCoopers, 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
5
<PAGE>
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;
(2) 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 consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(3) 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
(4) 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 Administrative Agent may reasonably request.
Section 1.6 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.
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ARTICLE III
CONDITIONS PRECEDENT
Section 1.7 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 clause (iii) below may be made out of the proceeds of
the Initial Funding):
(1) the Borrower and the Administrative 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;
(2) Chase 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
(3) the amount of $1,700,000 in immediately
available funds shall have been received by the Administrative Agent from the
Borrower for deposit to the Collection Account (which shall be an amount
sufficient to cause the total amount then on deposit therein to be equal to
1.00% of the Maximum Facility Limit).
Section 1.8 CONDITIONS PRECEDENT TO EACH RECEIVABLES SALE.
The initial sale and each subsequent sale of Receivables shall be
subject to the further conditions precedent that:
(1) the Seller shall have provided the Borrower and
the Administrative Agent with a Receivables Sale Notice not later than one
(1) Business Day prior to such Receivables Sale Date and shall have provided
any information reasonably requested by the Borrower and/or the
Administrative Agent and the Funding Agents with respect to the Receivables
to be sold to the Borrower on such Receivables Sale Date;
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(2) the Seller shall have caused the Servicer to
provide the Borrower and the Administrative Agent with a Servicer's
Receivables Sale Date Certificate not later than 12:30 P.M. (New York time)
one (1) Business Day 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, the Administrative Agent and/or the Funding Agents shall specify;
(3) the Seller and the Borrower shall have executed
and delivered to the Administrative Agent a duly executed Receivables Sale
Agreement which shall include a Schedule A listing the Receivables to be sold
on such Receivables Sale Date;
(4) 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;
(5) 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;
(6) the Termination Date shall not have occurred;
(7) after giving effect to the sale of Receivables
proposed to be made on any Receivables Sale Date, no Pool Limitation shall
have been exceeded;
(8) each of the representations and warranties made
by the Seller pursuant to Section 4.1 with respect to each of 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;
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(9) 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;
(10) 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;
(11) each of the Administrative 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;
(12) 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;
(13) 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;
(14) on each Receivables Sale Date, the Borrower
shall have transferred to the Administrative Agent for deposit in the
Collection Account for allocation to the Collection Account Reserve, the
amount of the Collection Account Reserve Shortfall Amount, if any, required
to be made in connection with such sale (PROVIDED that such payment may be
made by the Borrower out of the proceeds of the Funding made on such date);
(15) 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;
(16) 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
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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 Administrative Agent's security interest,
on behalf of the Secured Parties, for each such state, the Seller shall have
caused to be delivered to the Borrower and the Administrative Agent such an
Opinion of Counsel satisfactory in form and substance to the Borrower and the
Administrative Agent to be given by in-house counsel to the Seller with
respect to such jurisdiction;
(17) without limiting the foregoing, the
Administrative Agent shall have received and found satisfactory in form and
substance the Hedge Contracts to be effective as of the related Receivables
Sale Date and each of which shall, among other things, (A) be, along with any
other Hedge Contracts, in an aggregate notional amount equal to the Aggregate
Net Investment (including any Aggregate Net Investment to be made in
connection with such sale of Receivables); (B) be a 5.75% LIBOR cap with the
entire consideration payable by the Borrower thereunder to be paid in full on
the related Receivables Sale Date; (C) have an amortization schedule
satisfactory to the Administrative 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 directly into the Collection
Account;
(18) the Borrower shall have delivered to the
Administrative Agent an Officer's Certificate confirming the satisfaction of
each condition precedent specified in this Section 3.2.;
(19) the Servicer, acting as custodian pursuant to
Section 4.3 hereof or any successor custodian acting in such capacity
pursuant to Section 4.3, shall have received the Receivable File for each
Receivable sold on such Receivable Sale Date;
(20) the Seller and the Borrower shall have taken
all steps necessary under all applicable law in order to cause a valid,
subsisting and enforceable first priority perfected security interest to
exist in favor of the Borrower in the Financed Vehicle securing each
Receivable being sold (and the proceeds of such Financed Vehicle) (PROVIDED,
HOWEVER, that, prior to (X) the occurrence of a Servicer Termination Event, a
Potential Servicer Termination Event, a Termination Event or a Potential
Termination Event and the request by the Administrative Agent or, (Y) at any
time, the request by the Required Lending Groups, for the recordation
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of the Borrower's lien on such Financed Vehicle's certificate of title, no
such recordation shall be required) and such security interest is and shall
be prior to all other liens upon and security interests in such Financed
Vehicle (and the proceeds thereof) that now exist or may hereafter arise or
be created (except, as to priority, for any tax liens or mechanic's liens
that may arise after the applicable date of sale of such Receivable
hereunder); and
(21) the Seller and the Borrower shall have taken
all steps necessary under all applicable law in order to cause to exist in
favor of the Administrative Agent, on behalf of the Secured Parties, a valid,
subsisting and enforceable first priority perfected security interest in the
Borrower's first priority perfected security interest in the Financed Vehicle
securing each Receivable being sold (and the proceeds of such Financed
Vehicle) (PROVIDED, HOWEVER, that, prior to (X) the occurrence of a Servicer
Termination Event, a Potential Servicer Termination Event, a Termination
Event or a Potential Termination Event and the request by the Administrative
Agent or, (Y) at any time, the request by the Required Lending Groups, for
the recordation of the Borrower's and/or the Administrative Agent's lien on
such Financed Vehicle's certificate of title, no such recordation shall be
required), and such security interest is and shall be prior to all other
liens upon and security interests in such Financed Vehicle that now exist or
may hereafter arise or be created.
ARTICLE IV
THE RECEIVABLES
Section 1.9 REPRESENTATIONS AND WARRANTIES OF SELLER. The
Seller makes the representations and warranties, set forth on the Schedule of
Representations attached hereto as Schedule B, 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 Security 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
Administrative Agent pursuant to the Security Agreement.
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Section 1.10 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 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 Administrative 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 Administrative Agent, the Funding Agents 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 Administrative Agent, the
Funding Agents 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 1.11 CUSTODY OF RECEIVABLES FILES. (a) Subject to the
terms and conditions hereof, in connection with the sale, transfer and
assignment of the Receivables and the Other Conveyed Property to the Borrower
pursuant to this Agreement, the Administrative Agent (acting at the direction
of the Required Lending Groups) hereby revocably appoints the Servicer, and
the Servicer hereby
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accepts such appointment, as custodian and bailee on behalf of the
Administrative Agent (for the benefit of the Secured Parties) to maintain
exclusive custody of the Receivable Files relating to the Receivables from
time to time pledged to the Administrative Agent (for the benefit of the
Secured Parties); PROVIDED, HOWEVER, that none of the Administrative Agent,
the Funding Agents or any other Secured Party shall be responsible for the
acts or omissions of the Servicer in such capacity. In performing its duties
hereunder, the Servicer agrees to act with that degree of care, skill and
attention that a commercial bank acting in the capacity of a custodian would
exercise with respect to files relating to comparable automotive or other
receivables that it services or holds for itself or others, and, in any
event, to exercise at least that degree of care, skill and attention that it
exercises with respect to its own assets. The Servicer hereby and as of each
Receivables Sale Date with respect to the Receivables sold on such date,
acknowledges receipt of the Receivable File for each Receivable listed in the
Schedule of Receivables, subject to any exceptions noted on the Servicer's
Acknowledgment. As evidence of its acknowledgment of such receipt of such
Receivables, the Servicer shall execute and deliver on each Receivables Sale
Date with respect to the Receivables sold on such date, the Servicer's
Acknowledgment in the form attached hereto as Exhibit F.
In such capacity, the Servicer shall act as the agent of the
Administrative Agent as custodian of the following documents or instruments
in its possession which shall be delivered to the Servicer as agent of the
Administrative Agent on or before each Receivables Sale Date (with respect to
each Receivable):
(1) the fully executed original of the Receivable
(together with any agreements modifying the Receivable, including without
limitation any extension agreements);
(2) the original credit application (or, if no such
credit application has been completed, other evidence of application being
made or credit evaluation being conducted), 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;
(3) (1) for any Contract secured by a Financed Vehicle
registered in any state with the prior consent of the Administrative Agent
(acting in its reasonable discretion) for which the Paperless Title System is
used to evidence title to and any lien in such Financed Vehicle, a computer
printout or similar
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documentary evidence that there is an electronic record in the Paperless
Title System indicating that such Financed Vehicle is owned by the Obligor
and subject to the interest of the Seller as first lienholder or secured
party (when such electronic record becomes available through the Paperless
Title System), PROVIDED that a computer printout sheet listing multiple
Financed Vehicles registered through the Paperless Title System shall be
deemed included in a Receivable File for a Contract if such printout has been
made available to the Administrative Agent, or (2) for any Contract secured
by a Financed Vehicle registered in a state for which the Paperless Title
System is not available to evidence title to and any lien in the Financed
Vehicle, or for any Contract secured by a Financed Vehicle registered in any
state where the Paperless Title System was not used, 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;
(4) a true and complete copy of the duly executed
odometer statement with respect to the Financed Vehicle related to such
Receivable (if such Financed Vehicle is a used vehicle);
(5) a true and complete copy of the duly executed Dealer
Assignment; and
(6) a true and complete copy of the duly executed
Insurance Policy.
(2) The Administrative Agent may act as the custodian, in which
case the Administrative Agent shall be deemed to have assumed the obligations
of the Servicer in such capacity as custodian specified herein.
So long as the Servicer is acting as custodian hereunder, the
Servicer shall not resign from such obligations and duties as custodian
imposed on it by this Agreement, except upon a determination that by reason
of a change in legal requirements, the performance of such duties and
obligations 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
it and the Administrative Agent does not elect to waive the obligations of
the Servicer with respect to the performance of the duties
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which render it legally unable to act or to delegate those duties to another
Person. Any such determination permitting the resignation of the Servicer in
such capacity shall be evidenced by an Opinion of Counsel to such effect
delivered and acceptable to the Administrative Agent. Immediately after
receipt of notice of termination of the Servicer as custodian hereunder, the
Servicer shall deliver the Receivable Files to the Administrative Agent on
behalf of the Secured Parties, at such place or places as the Administrative
Agent may designate, and the Administrative Agent, or its agent, as the case
may be, shall act as custodian for such Receivables Files on behalf of the
Secured Parties until such time as a successor custodian has been appointed
by the Administrative Agent. (For the avoidance of doubt, during any such
period, the Administrative Agent shall be acting in its capacity as
Administrative Agent, including the standard of care and liability in such
capacity, and not as a successor "custodian" hereunder.) If, within
seventy-two (72) hours after the termination of the Servicer as custodian
hereunder, the Servicer has not delivered the Receivable Files in accordance
with the preceding sentence, the Administrative Agent may enter the premises
of the custodian and remove the Receivable Files from such premises.
(3) In the event that AFS no longer serves as custodian with
respect to the Receivable Files, upon payment in full of any Receivable, the
Servicer will notify such other party acting as 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 party
acting as custodian shall, upon written request of an officer of the Servicer
and delivery to such party of a receipt signed by such officer, cause the
original Receivable and the related Receivable File to be released to the
Servicer. The Servicer's receipt of a Receivable and/or Receivable File
shall obligate the Servicer to return the original Receivable and the related
Receivable File to the custodian when its need by the Servicer has ceased
unless the Receivable is repurchased as described in Section 4.2 or 5.7. The
Servicer, while in possession of the Receivable Files, shall hold such
Receivable Files as custodian and bailee for the Administrative Agent for the
benefit of the Secured Parties.
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(4) The Servicer agrees to maintain the Receivable Files at its
principal office or at such other office as shall from time to time be
identified to the Administrative Agent and the Funding Agents, and the
Servicer will hold the Receivable Files in such office on behalf of the
Administrative Agent, clearly identified on its records as being separate
from any other instruments and files, including other instruments and files
held by the Servicer, and in compliance with Section 4.4(b) hereof.
Section 1.12 DUTIES OF SERVICER WITH RESPECT TO RECEIVABLE FILES.
(1) SAFEKEEPING. The Servicer shall hold the Receivable Files on
behalf of the Administrative Agent, for the benefit of the Secured Parties,
clearly identified as being separate from all other files or records
maintained by the Servicer, whether at the same or any other location, and
shall maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as are required to comply with the
terms and conditions of this Agreement. Each Receivable shall be stamped on
both of the first page and the signature page (if different) in accordance
with the requirements of any Opinion of Counsel or as otherwise is deemed
necessary or desirable by the Secured Parties. Each Receivable shall be
identified on the books and records of the Servicer in a manner that (i) is
consistent with the practices of a commercial bank acting in the capacity of
custodian with respect to similar receivables, (ii) indicates that the
Receivables are held by the Servicer on behalf of the Administrative Agent
and (iii) is otherwise necessary, as reasonably determined by the Servicer,
to comply with the terms of this Agreement. The Servicer shall conduct, or
cause to be conducted, periodic physical inspections of the Receivable Files
held by it under this Agreement, and of the related accounts, records and
computer systems, in such a manner as shall enable the Administrative Agent
and the Servicer to verify the accuracy of the Servicer's inventory and
record keeping. Such inspections shall be conducted at such times, in such
manner and by such persons including, without limitation, independent
accountants, as the Administrative Agent may request and the cost of such
inspections shall be borne by the Servicer. The Servicer shall promptly
report to the Administrative Agent any failure on the Servicer's part to hold
the Receivable Files and maintain its accounts, records and computer systems
as herein provided and the Servicer shall promptly take appropriate action to
remedy any such failure. Notwithstanding the above if reasonably requested
by the Administrative Agent, the Servicer shall promptly make copies or other
electronic file records (e.g. diskettes, CD's, etc.) (the "COPIES") of the
Receivable Files related to any or all of the Receivables and shall deliver
such
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Copies to the Administrative Agent, and the Administrative Agent shall hold
such Copies on behalf of the Secured Parties. Subject to Section 4.4(b)
hereof, the Servicer shall at all times maintain the original of the fully
executed original retail installment sales contract or installment loan
contract and of the Lien Certificate or application therefore, if no such
Lien Certificate has yet been issued, relating to each Receivable in a fire
proof vault.
(2) ACCESS TO RECORDS. The Servicer shall, subject only to the
Servicer's security requirements applicable to its own employees having
access to similar records held by the Servicer, which requirements shall be
consistent with the practices of a commercial bank acting in the capacity of
custodian with respect to similar files or records, and at such times as may
be reasonably imposed by the Servicer, permit only the Secured Parties, the
Funding Agents and the Administrative Agent or their duly authorized
representatives, attorneys or auditors to inspect the Receivable Files and
the related accounts, records, and computer systems maintained by the
Servicer pursuant hereto at such times as the Secured Parties, the
Administrative Agent or the Funding Agents may reasonably request.
(3) RELEASE OF DOCUMENTS. In the event that AFS no longer serves
as custodian with respect to the Receivable Files, such party shall release
any Receivable in the Receivable Files to the Servicer either upon (1)
payment in full of any Receivable or (2) as required from time to time as
appropriate for servicing and enforcing any Receivable, subject to
satisfaction of the conditions set forth in Section 4.3(b) of this Agreement.
(4) ADMINISTRATION; REPORTS. The Servicer shall, in general,
attend to all ministerial matters in connection with maintaining custody of
the Receivable Files on behalf of the Administrative Agent. In addition, the
Servicer generally shall assist the Administrative Agent and each Funding
Agent in the preparation of any routine reports to Secured Parties or to
regulatory bodies, to the extent necessitated by the Servicer's custody of
the Receivable Files.
(5) REVIEW OF LIEN CERTIFICATES. On or before each Determination
Date, the Servicer shall deliver to the Administrative Agent a listing of
each Receivable with respect to which a Lien Certificate, showing AFS as
secured party, was not included in the related Receivable File as of the
sixtieth (60th) day following the date of origination of such Receivable.
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Section 1.13 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Responsible
Officer of the Administrative Agent. Such instructions may be general or
specific in terms.
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ARTICLE V
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 1.14 APPOINTMENT; STANDARD OF CARE; DUTIES OF THE SERVICER.
(1) 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 or installment
loan 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").
(2) 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 statements to the Borrower and the
Administrative 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
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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 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 Administrative 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.
(3) 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 Administrative
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
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the Administrative Agent (for transmittal to the Required Lending Groups and
the Rating Agencies) at least 20 days' prior written notice of such proposed
modification and the Required Lending Groups have not objected in writing
prior to the expiration of such 20 day period.
Section 1.15 COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS.
(1) 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.
(2) 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.
(3) 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:
(1) The aggregate period of all extensions on a
Receivable shall not exceed six months;
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(2) In no event may a Receivable be extended such that
the final payment scheduled to be made thereunder would be more than 78
months beyond the date of origination; and
(3) 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 Administrative Agent (acting at the direction of the Required
Lending Groups).
(4) 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 the
Lockbox Bank. 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
Administrative Agent, acting at the direction of the Required Lending Groups,
an Eligible Deposit Account.
On the first day on which a payment coupon is delivered to an
Obligor following the Relevant Cutoff Date, but not to exceed thirty-one (31)
days following such Relevant Cutoff 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 Administrative Agent, acting at the direction of the Required Lending
Groups, the Servicer shall request each Obligor that makes payment on the
Receivables by direct debit of such Obligor's bank account, to execute a new
authorization for automatic payment which in the judgment of the
Administrative Agent, acting at the direction of the Required Lending Groups,
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
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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 Administrative Agent, the Funding
Agents 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
Administrative Agent (acting at the direction of the Required Lending
Groups), 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 Administrative 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 Administrative Agent to the Administrative
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.
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(5) 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 (and in the case of a
check, one Business Day after such check has cleared, but in no event later
than the third Business Day after receipt thereof) .
Section 1.16 REALIZATION UPON RECEIVABLES.
(1) 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
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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 Administraive 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.
(2) 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
Administrative 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 Assignment, including bringing suit in
its name or the name of the Seller or of the Borrower and/or the
Administrative 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 1.17 INSURANCE.
(1) 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
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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 shall 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.
(2) 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 Administrative 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 Administrative Agent for the benefit of the
Secured Parties.
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Section 1.18 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
(1) 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 the security interest
granted by the Obligors under the respective Receivables. The Administrative
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.
(2) The Servicer shall take all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority perfected security interest to exist at all times in favor of the
Borrower in the Financed Vehicle securing each Receivable (and the proceeds
of such Financed Vehicle) (PROVIDED, HOWEVER, that, prior to (X) the
occurrence of a Servicer Termination Event, a Potential Servicer Termination
Event, a Termination Event or a Potential Termination Event and the request
by the Administrative Agent or, (Y) at any time, the request by the Required
Lending Groups, for the recordation of the Borrower's lien on such Financed
Vehicle's certificate of title, no such recordation shall be required) and to
cause such security interest to be prior to all other liens upon and security
interests in such Financed Vehicle (and the proceeds thereof) that now exist
or may hereafter arise or be created (except, as to priority, for any tax
liens or mechanic's liens that may arise after the applicable date of sale of
such Receivable hereunder);
(3) The Servicer and the Borrower shall take all steps necessary
under all applicable law in order to cause to exist at all times in favor of
the Administrative Agent, on behalf of the Secured Parties, a valid,
subsisting and enforceable first priority perfected security interest in the
Borrower's first priority perfected security interest in the Financed Vehicle
securing each Receivable being sold (and the proceeds of such Financed
Vehicle) (PROVIDED, HOWEVER, that, prior to (X) the occurrence of a Servicer
Termination Event, a Potential Servicer Termination Event, a Termination
Event or a Potential Termination Event and the request by the Administrative
Agent or, (Y) at any time, the request by the Required Lending
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Groups, for the recordation of the Borrower's and/or the Administrative
Agent's lien on such Financed Vehicle's certificate of title, no such
recordation shall be required) and to cause such security interest to be
prior to all other liens upon and security interests in such Financed Vehicle
that now exist or may hereafter arise or be created.
(4) At any time (X) after the occurrence of a Servicer Termination
Event, a Potential Servicer Termination Event, a Termination Event or a
Potential Termination Event and upon the request of the Administrative Agent
or, (Y) upon the request by the Required Lending Groups, the Servicer shall
at its own expense promptly take all such additional steps, if any, as are
necessary to create and maintain perfection of the security interest in the
Financed Vehicle related to each Receivable (and the proceeds of such
Financed Vehicle) on behalf of the Borrower and to create and maintain
perfection of the security interest in the Borrower's security interest in
the Financed Vehicle related to each Receivable (and the proceeds of such
Financed Vehicle) on behalf of the Administrative Agent, on behalf of the
Secured Parties, including, if required by applicable law, having a notation
of the Borrower's and/or the Administrative Agent's respective security
interest recorded on such Financed Vehicle's certificate of title.
(b (i) In the event that the assignment of a Receivable by the
Seller to the Borrower hereunder and/or the pledge of such Receivable by the
Borrower to the Administrative Agent, on behalf of the Secured Parties, under
the Security Agreement are 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 such
Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle (and the proceeds thereof) in favor of the Borrower or to
perfect a security interest in the Borrower's security interest in the
related Financed Vehicle (and the proceeds thereof) in favor of the
Administrative Agent, on behalf of the Secured Parties, the parties hereto
(including, without limitation, the Seller) hereby agree that the Seller's
designation as the secured party on the certificate of title with respect to
such Financed Vehicle is in the Seller's capacity as agent of the Borrower
and the Administrative Agent, on behalf of the Secured Parties, as their
interests may appear and the Seller further agrees to hold such certificate
of title or other evidence of such designation in the case of a Paperless
Title System as the agent and custodian of the Borrower and the
Administrative Agent, on behalf of the Secured Parties, as their interests
may appear. In furtherance of the foregoing, the Borrower and the
Administrative Agent hereby appoint the Seller as their nominee lienholder
with respect to the Financed Vehicles
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securing the Receivables and the Seller hereby agrees to serve in such
capacity as described herein. As stated lienholder on the certificates of
title to all of such Financed Vehicles, the Seller agrees to take any and all
actions as the Borrower (with the consent of the Administrative Agent) or the
Administrative Agent may request in writing including, without limitation,
all actions for which the Seller's consent, waiver, release, vote or
signature (or other action of similar nature) is necessary or advisable in
the judgment of the Borrower or the Administrative Agent in order to
maintain, preserve and protect the Borrower's security interest in such
Financed Vehicles and the Administrative Agent's security interest, on behalf
of the Secured Parties, in the Borrower's security interest in such Financed
Vehicles (PROVIDED, HOWEVER, that, prior to (X) the occurrence of a Servicer
Termination Event, a Potential Servicer Termination Event, a Termination
Event or a Potential Termination Event and the request by the Administrative
Agent or, (Y) at any time, the request by the Required Lending Groups, for
the recordation of the Borrower's and/or the Administrative Agent's lien on
such Financed Vehicle's certificate of title, no such recordation shall be
required) and if the Seller fails to take any or all such actions, the
Administrative Agent or any designee of the Administrative Agent, may take
such actions at the sole expense of the Seller, and the Seller hereby grants
to the Administrative Agent and any such designee an irrevocable power of
attorney and license to take any and all such actions in the Seller's name
and on behalf of the Seller. The obligations of the Seller under this
Section are in addition to and in no way limit the obligations of the Seller
in its capacity as Servicer hereunder.
(1) Notwithstanding the fact that the Seller will remain
noted as first lienholder on the certificates of title to the Financed
Vehicles securing the Receivables on and after the date hereof, the Seller,
the Borrower and the Administrative Agent each hereby agrees that, on and
after the date hereof:
(1) subject to the terms of the Security Agreement,
the Borrower is entitled to all incidents, benefits and risks of a holder of
a first priority perfected security interest in and lien on such Financed
Vehicles;
(2) the Administrative Agent, on behalf of the
Secured Parties, is entitled to all incidents, benefits and risks of a holder
of a first priority perfected security interest in and lien on the Borrower's
first priority perfected security interest in and lien on such Financed
Vehicles and has the right to exercise or cause the exercise of all remedies
with respect to such Financed Vehicles provided to it under the terms hereof
and of the Security Agreement;
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(3) the Seller has no direct (or indirect, other
than in connection with the Seller's ownership interest in the Borrower)
security interest or other interest in such Financed Vehicles after giving
effect to the assignment hereunder by the Seller to the Borrower of the
Receivables secured by such Financed Vehicles;
(4) except in its capacity as Servicer hereunder,
the Seller will take no action with respect to the Financed Vehicles securing
Receivables assigned to the Borrower hereunder and pledged to the
Administrative Agent under the Security Agreement unless such action is
consented to by the Administrative Agent; and
(5) the Seller shall not represent to any lender,
financing source or other Person, that it has, or in any other manner hold
itself out as having, a security interest or any other rights or interests in
the Financed Vehicles, except for any rights it may have as nominee
lienholder hereunder or as Servicer hereunder.
(5) Upon the occurrence of a Servicer Termination Event, the
Administrative 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
Lending Groups, 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 Lending Groups may
instruct the Administrative 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 Lending Groups, be necessary or prudent. The Servicer hereby
appoints the Administrative 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 Administrative
Agent hereby accepts such appointment.
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Section 1.19 COVENANTS, REPRESENTATIONS, AND WARRANTIES OF
SERVICER. By its execution and delivery of this Agreement, the Servicer makes
the following representations, warranties and covenants on which the 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 Security Agreement, as the case may be.
The Servicer covenants as follows:
(1) 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.
(2) 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.
(3) NO AMENDMENTS. The Servicer shall not extend or
otherwise amend the terms of any Receivable, except in accordance with
Section 5.2.
(4) 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
Administrative 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 Administrative
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).
(5) ADVERSE INTERESTS. As of the date of each
Servicer's Acknowledgment: (i) it holds no adverse interest, by way of
security or otherwise, in any Receivable; and (ii) the execution of this
Agreement and the creation of the
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servicing and custodial relationship hereunder does not create any interest,
by way of security or otherwise, of the Servicer in or to any Receivable,
other than the Servicer's rights as servicer and custodian hereunder.
(6) INSURANCE. The Servicer shall, at its own expense,
maintain at all times during the existence of this Agreement and keep in full
force and effect, a Fidelity Bond and Errors and Omissions Policy of a type
and in such amount as is customary for custodians engaged in the business of
acting as custodian of automobile receivables and shall maintain any other
similar insurance policies that are customarily maintained by custodians
engaged in the business of acting as custodian of automobile receivables. A
certificate of the respective insurer as to each such policy or a blanket
policy for such coverage shall be furnished to the Administrative Agent
containing the insurer's statement or endorsement that such insurance shall
not terminate prior to receipt by such party, by certified mail, of 10 days
advance notice thereof.
Section 1.20 PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT.
Upon discovery by any of the Seller, the Servicer, the Borrower, the
Administrative Agent or the Secured Parties of a breach of any of the
covenants set forth in Sections 5.5 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 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 by remitting such amount to the Collection
Account. 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
Administrative Agent; PROVIDED, HOWEVER, that the Servicer shall indemnify
the Borrower, the Backup Servicer, the Administrative 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
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by any of them as a result of third party claims arising out of the events or
facts giving rise to such breach.
Section 1.21 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
Parties). The Servicer shall be liable for the fees and expenses of 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 1.22 CERTAIN SERVICER'S CERTIFICATES.
(1) No later than 1:00 P.M. New York City time two Business Days
prior to a Distribution Date, the Servicer shall deliver to the
Administrative 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 Administrative Agent and the Funding
Agents may reasonably request with respect to the Managed Assets, including
newly originated Managed Assets.
(2) In addition, in connection with any Optional Prepayment
pursuant to the Security 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
Administrative 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 Administrative Agent in draft form by 1:00 p.m. two Business Days, and
in final form by 1:00 p.m. one Business Day, prior to the contemplated VFN
Prepayment Date.
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Section 1.23 ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF
SERVICER TERMINATION EVENT.
(1) The Servicer shall deliver to the Administrative Agent, the
Backup Servicer and each Rating Agency, on or before April 30 of each year,
beginning on April 30, 2000, 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 Effective 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.
(2) The Servicer shall deliver to the Administrative 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 1.24 ANNUAL INDEPENDENT ACCOUNTANTS' REPORT; QUARTERLY
REVIEWS.
(1) The Servicer shall cause a firm of nationally recognized
independent certified public accountants who shall be selected by the
Servicer and acceptable to the Administrative Agent and the Funding Agents
(the "INDEPENDENT ACCOUNTANTS"), who may also render other services to the
Servicer or to the Seller, to deliver to the Administrative 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, 2000, 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 Effective Date to the date of such
certificate), a statement (the "ACCOUNTANTS' REPORT") addressed to the Board
of Directors of the Servicer, to the Administrative 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. (such
consolidated financial statements delivered pursuant to Section 2.3(d)
hereof) 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, 1999, the Servicer shall deliver to the
Administrative Agent, the Backup Servicer and each Rating Agency, on or
before October 31, 1999, 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.
(2) Within 30 days following the Distribution Date following the
fourth and tenth months of each calendar year, the Independent Accountants
shall undertake a data integrity review substantially in the form of Exhibit
G hereto, as such Exhibit G may from time to time be amended by agreement of
the Borrower and the Administrative Agent, with the consent of the Required
Lending Groups.
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Additionally, the Independent Accountants shall undertake a data integrity
review substantially in the form of Exhibit H hereto, as such Exhibit H may
from time to time be amended by agreement of the Borrower and the
Administrative Agent, with the consent of the Required Lending Groups; the
report of the Independent Accountants on the results of each such data
integrity review shall be completed and delivered to the Administrative
Agent, the Borrower and the Servicer within 20 days following the first,
fourth, seventh and tenth months of each calendar year.
Section 1.25 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. The Servicer shall provide to representatives of
the Borrower, the Administrative Agent, the Funding Agents 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 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 1.26 MONTHLY TAPE. On or before the Determination Date,
but in no event later than the eighth (8th) 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 Administrative 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 Administrative 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
Administrative 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
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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 Deterination Date. In addition, upon the occurrence of a
Servicer Termination Event the Servicer shall, if so requested by the
Administrative 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 1.27 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 Security
Agreement, unless the Servicer is terminated pursuant to Article IX hereof,
or is permitted to resign pursuant to Section 8.6 hereof.
Section 1.28 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 ACCOUNT; DISTRIBUTIONS; STATEMENTS TO SECURED PARTIES
Section 1.29 ESTABLISHMENT OF COLLECTION ACCOUNT.
(1) The Administrative Agent, on behalf of the Secured Parties,
shall establish and maintain in its own name an account that is an Eligible
Deposit Account (the "COLLECTION ACCOUNT") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Administrative Agent on behalf of the Secured Parties. The Collection
Account shall initially be established with the Administrative Agent, and may
be on a sub-ledger of the Administrative Agent.
(2) Funds on deposit in the Collection Account and/or any other
account established pursuant to Section 6.1(f)(i) (each such account, a
"PLEDGED ACCOUNT"), in excess of $25,000 shall be invested by the
Administrative Agent in Eligible Investments selected by the Administrative
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 Administrative Agent. All such
Eligible Investments shall be held by the Administrative 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 Administrative Agent to be consistent with the cashflow
requirements of the CP Lenders (as notified to the Administrative Agent by
the Funding Agents), 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 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
Security Agreement.
(3) All investment earnings of moneys deposited in the Pledged
Accounts shall be deposited (or caused to be deposited) by the Administrative
Agent in the Collection Account, and any loss resulting from such investments
shall be
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charged to such account. The Borrower will not direct the Administrative
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
Administrative Agent to make any such investment, if requested by the
Administrative Agent, the Borrower shall deliver to the Administrative Agent
an Opinion of Counsel, acceptable to the Administrative Agent, to such effect.
(4) The Administrative 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 Administrative Agent's gross negligence or willful
misconduct (PROVIDED that the foregoing shall not be deemed to relieve the
Administrative Agent of any liability in its individual capacity as an issuer
of any Eligible Investment for failure to make payments thereon in accordance
with the terms thereof).
(5) It is expressly acknowledged and agreed that the
Administrative Agent is authorized hereby to direct the purchase of
investments constituting Eligible Investments (i) from any Affiliate of the
Administrative Agent, including securities that are underwritten, placed or
dealt in by any such Affiliate and/or from management investment companies of
which the Administrative Agent (in its individual capacity) or any Affiliate
is an investment advisor, administrator, shareholder, servicing agent and/or
custodian, or (ii) that involve the Administrative 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 Administrative
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
Administrative Agent under or in connection with any of the Basic Agreements.
(6)
(1) The Administrative 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
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the sole dominion and control of the Administrative 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 Administrative Agent (or the Servicer on
its behalf) shall within five Business Days (or such longer period as to
which each Rating Agency and the Administrative 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 Administrative Agent, the Servicer shall
notify the Administrative Agent in writing immediately upon any of such
Pledged Accounts ceasing to be an Eligible Deposit Account.
(2) With respect to the Conveyed Property, the
Administrative Agent agrees and Borrower agrees to cause that:
(1) 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 Administrative Agent, and the Administrative Agent shall have
sole signature authority with respect thereto;
(2) 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 UCC shall be delivered to the Administrative Agent
in accordance with the appropriate paragraph of the definition of "Delivery";
(3) with respect to all other Conveyed Property or
Collateral not listed in subparagraph (2) 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 Administrative 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
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Administrative 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;
(4) the Administrative Agent shall only invest in
Eligible Investments which the applicable Pledged Account Securities
Intermediary agrees to credit to the applicable Pledged Account;
(5) any Conveyed Property or Collateral may be
delivered: (i) upon the instruction of the Administrative Agent, by any
additional or alternative procedures as may hereafter become appropriate, in
the sole judgment of the Administrative 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 Administrative Agent on behalf of the Secured
Parties, or (ii) upon the request of the Borrower or the Servicer and the
consent of the Administrative 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 Administrative Agent on behalf of the Secured
Parties.
(7) The Servicer shall have the power, revocable by the
Administrative Agent, to instruct the Administrative Agent to make
withdrawals and payments from the Pledged Accounts for the purpose of
permitting each of the Servicer and the Administrative Agent to carry out its
respective duties hereunder.
(8) Notwithstanding anything else contained herein, the
Administrative 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 Administrative 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 Administrative 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
the New York UCC) the security interest of the Administrative Agent for the
benefit of the Secured Parties in such Pledged Account and property credited
thereto.
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Section 1.30 COLLECTION ACCOUNT RESERVE.
(1) At all times during the term of the Facility, the Borrower
shall maintain the Collection Account Reserve Minimum. In the event that the
Collection Account Reserve shall fall below the Collection Account Reserve
Minimum, 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 Security Agreement), the Borrower shall pay to
the Administrative Agent, for deposit in the Collection Account and
allocation to the Collection Account Reserve, the amount of any such
shortfall in immediately available funds (such amount, the "COLLECTION
ACCOUNT RESERVE SHORTFALL AMOUNT"; it being understood that the deposit of
any required Collection Account Reserve Shortfall Amount by the Borrower
shall be a condition precedent to the occurrence of any Funding on such
contemplated Funding Date).
(2) 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 Collection Account that are allocated to the
Collection Account Reserve and that are in excess of the higher of (i) the
Collection Account Reserve Minimum and (ii) 6.00% of the VFN Balance, shall
be available for distribution to the Borrower in accordance with Section
6.8(a) hereof. Further, in connection with an Optional Prepayment of the
VFN, and after payment of (i) all obligations to the CP Lenders 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 on deposit in the Collection Account that are
allocated to the Collection Account Reserve and that are in excess of the
Collection Account Reserve Minimum may be released to the Borrower in an
amount determined as follows: the product of (A) the Collection Account
Reserve and (B) 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 the Collection
Account Reserve shall be maintained in an amount at least equal to the
Collection Account Reserve Minimum after such distribution.
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Following the occurrence of a Termination Event, all amounts
allocated to the Collection Account Reserve shall be applied in accordance
with Section 6.8(a).
Section 1.31 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 Administrative Agent as may be necessary in the opinion of
the Administrative Agent to verify the accuracy of such certification. In
the event that the Administrative Agent has not received evidence
satisfactory to it of the Servicer's entitlement to reimbursement pursuant to
this Section, the Administrative Agent shall give notice to such effect.
Section 1.32 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 1.33 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.
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Section 1.34 APPLICATION OF FUNDS FROM THE COLLECTION ACCOUNT
RESERVE; SPECIAL WITHDRAWALS FROM THE COLLECTION ACCOUNT.
(1) 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) (such amount, an "AVAILABLE
FUNDS DEFICIENCY"), then, on the Business Day preceding the related
Distribution Date, the Administrative Agent shall allocate to the payment of
such amounts an amount equal to such Available Funds Deficiency, to the
extent that funds are available, from the Collection Account Reserve.
(2) Notwithstanding anything in this Agreement or any other Basic
Agreement to the contrary, to the extent that a CP Lender (or its related
Funding Agent on its behalf) notifies the Administrative Agent with respect
to any date other than a Distribution Date that such CP Lender has
insufficient funds on hand to pay any portion of the Carrying Costs
representing Accrued Discount payable on such date, then the Administrative
Agent may immediately withdraw the necessary amount from the Collection
Account, including, if necessary, from the Collection Account Reserve, and
make available such amounts for distribution to such CP Lender on such date.
The Administrative 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 1.35 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 1.36 DISTRIBUTIONS.
(1) No later than 11:00 a.m. New York time on each Distribution
Date, the Administrative 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
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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):
(1) to the Servicer, to repay any outstanding Servicer
Advances;
(2) on a PARI PASSU basis (A) to each of the Lockbox
Bank, the Servicer 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;
(3) 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 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 Servicer, the Independent
Accountants or the Backup Servicer pursuant to clauses (ii)(A) or (iv);
(4) 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);
(5) to the Administrative Agent for the benefit of the
Secured Parties, the following amounts in the following priority:
(1) Accrued Discount and Accrued Interest with
respect to such Collection Period not to exceed the Capped Amount (after
giving effect, in the case of Accrued Discount, to any portion thereof paid
since the previous Distribution Date, whether from the proceeds of newly
issued Commercial Paper, or as contemplated by Section 6.6(b) hereof);
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(2) all dealer fees due and owing with respect to
Commercial Paper issued by such CP Lenders to fund the Aggregate Net
Investment during such Collection Period;
(3) any past due Discount and any past due interest
due and owing to the APA Banks under the Security Agreement (in each case,
together with interest at the default rate specified therein) with respect to
prior Collection Periods not to exceed the Capped Amount; and
(4) in accordance with the terms of the Fee Letter,
the Utilization Fee and the Unused 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;
(6) to the Administrative Agent for the benefit of the
Secured Parties, the Targeted Monthly Principal Payment;
(7) 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;
(8) the costs of the Secured Parties with respect to the
operation of the Yield Protection Provision, on a PARI PASSU basis;
(9) 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;
(10) 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 allocated to the
Collection Account Reserve, until the Collection Account Reserve is equal to
the greater of (i) 6.00% of the VFN Balance and (ii) the Collection Account
Reserve Minimum;
(11) to the Administrative Agent for the benefit of the
Secured Parties, in the following order of priority, (A) all Accrued Discount
and
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Accrued Interest in excess of the Capped Amount and (B) any indemnity amounts
owing by the Borrower to the Secured Parties pursuant hereto (other than
those described in clause (viii) above) or pursuant to Section 3.4 of the
Security Agreement;
(12) without duplication, any other costs, expenses and
other amounts due and owing to the Secured Parties and the Administrative
Agent 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 the Secured Parties and the
Administrative Agent from prior Collection Periods; and
(13) 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.
If funds in the Collection Account are insufficient to pay in full
any of the amounts due and owing to the Secured Parties in clauses (i)
through (xii) of this Section 6.8(a), the Administrative Agent shall
distribute amounts then on deposit in the Collection Account on a PRO RATA
basis based upon the Net Investment of each Lending Group and the Aggregate
Net Investment of all Lending Groups.
(2) In the event that the Collection Account is maintained with an
institution other than the Administrative 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.
(3) on each Distribution Date, the Administrative Agent shall send
to each Funding Agent the statement provided to the Administrative Agent by
the Servicer pursuant to Section 5.9 hereof with respect to such Distribution
Date.
(4) 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 the Security Agreement. Without limiting the
obligations of the Borrower under the
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Security 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 to Article IV thereof, the Administrative 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 Administrative 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 Administrative 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 Administrative Agent shall reasonably cooperate with
such Secured Party in making such claim so long as such Secured Party agrees
to reimburse the Administrative Agent for any out-of-pocket expenses incurred.
(5) Distributions required to be made to Secured Parties on any
Distribution Date shall be made in immediately available funds, to the
account of the Administrative Agent for distribution to such Secured Party at
a bank or other entity having appropriate facilities therefor.
(6) Subject to Section 6.1 and this Section, monies received by
the Administrative 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 Administrative Agent shall
not be liable for any interest thereon.
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ARTICLE VII
THE SELLER
Section 1.37 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 Security 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 Administrative Agent on behalf of the Secured
Parties.
(1) 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.
(2) DUE QUALIFICATION. The Seller is duly qualified to do
business as a foreign corporation in good standing and has obtained all
necessary licenses and approvals in all jurisdictions where the failure to do
so would materially and adversely affect Seller's ability to 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.
(3) 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
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Basic Agreements to which the Seller is a party have been duly authorized by
the Seller by all necessary corporate action.
(4) 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.
(5) 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.
(6) 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.
(c) 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.
(7) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened, against the Seller, before
any court,
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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.
(8) CHIEF EXECUTIVE OFFICE. The chief executive office of the
Seller is at 801 Cherry Street, Suite 3900, Fort Worth, Texas.
(9) 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 1.38 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.
(1) 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:
(1) the Seller shall maintain corporate records and
books of account separate from those of its Affiliates;
(2) except as otherwise provided in this Agreement, the
Seller shall not commingle its assets and funds with those of its Affiliates;
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(3) 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);
(4) 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
(5) all transactions and dealings between the Seller and
its Affiliates will be conducted on an arm's length basis.
(2) 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 1.39 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.
(1) The Seller shall indemnify, defend and hold harmless the
Borrower, the Administrative 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.
(2) The Seller shall indemnify, defend and hold harmless the
Borrower, the Administrative 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
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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 Administrative 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 1.40 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 Lending Groups prior to entering into any such 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
Administrative 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 Administrative 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
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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 1.41 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.
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ARTICLE VIII
THE SERVICER
Section 1.42 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 Security 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
Administrative Agent on behalf of the Secured Parties.
(1) 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 had at all relevant
times, and now has, power, authority and legal right to enter into and
perform its obligations under this Agreement;
(2) 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;
(3) POWER AND AUTHORITY. AFS has the full power and
authority to hold each Receivable on behalf of the Administrative Agent and
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;
(4) BINDING OBLIGATION. This Agreement and the other
Basic Agreements to which AFS is a party shall constitute legal, valid and
binding
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obligations of AFS enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(5) 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;
(6) 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;
(7) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the other Basic Agreements to which AFS is
a party, the delivery of Receivables to AFS as Servicer 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,
administrative agency or other governmental instrumentality having
jurisdiction over AFS or any of its properties;
(8) 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
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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;
(9) 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;
(10) MAINTENANCE OF INTEREST IN RECEIVABLES. Upon
written request of the Administrative Agent, AFS shall take such steps as
requested by the Administrative Agent to protect or maintain any interest in
any Receivable;
(11) THIRD PARTY CLAIMS. AFS has not been notified by
any party that any third party claims an interest in the Receivables or is
requesting AFS to act as a bailee with respect to the Receivables, except
such interests are created under the Basic Agreements; and
(12) YEAR 2000 COMPLIANCE. The Servicer has (i)
initiated a review and assessment of all areas within its and each of its
subsidiaries' business and operations (including those affected by suppliers,
vendors and customers) that could be adversely affected by the "YEAR 2000
PROBLEM" (that is, the risk that computer applications used by the Servicer
or any of its subsidiaries (or suppliers, vendors and customers) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii) developed
a plan and timeline for addressing the Year 2000 Problem on a timely basis,
and (iii) to date, implemented that plan in accordance with that timetable.
Based on the foregoing, the Servicer believes that all computer applications
(including those of its suppliers, vendors and customers) that are material
to its or any of its subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be "YEAR
2000 COMPLIANT"), except to the extent that a failure to do so could not
reasonably be expected (a) to have a material adverse effect on the Servicer
or on the transaction documented under this Agreement, or (b) to result in a
Termination Event.
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The Servicer (i) has completed a review and assessment of all
computer applications (including, but not limited to those of its
suppliers, vendors, customers and any third party servicers), which are
related to or involved in the origination, collection, management or
servicing of the Receivables and (ii) has determined that such origination,
collection, management or servicing applications are Year 2000 Compliant.
The costs of all assessment, remediation, testing and integration
related to the Servicer's plan for becoming Year 2000 Compliant will not
have a material adverse effect on the financial condition or operations of
the Servicer.
Section 1.43 LIABILITY OF SERVICER; INDEMNITIES.
(1) 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.
(2) The Servicer agrees to indemnify and hold harmless the
Borrower, the Administrative Agent, the Secured Parties, the Backup Servicer,
their respective officers, directors, agents and employees for any and all
claims, liabilities, obligations, losses, damage, payments, costs or expenses
of any kind whatsoever (including the fees and expenses of counsel) that may
be imposed on, incurred or asserted against any of such parties as the result
of any act or omission in any way relating to
(1) the use, ownership or operation by the Servicer or
any Affiliate thereof of any Financed Vehicle or
(2) the maintenance and custody by the Servicer of the
Receivable Files; PROVIDED, HOWEVER, that the Servicer shall not be liable
for any portion of any such liabilities, obligations, losses, damages,
payments or costs or expenses as are due to the willful misfeasance, bad
faith or gross negligence of the Secured Parties or the Administrative Agent.
(3) The Servicer shall indemnify, defend and hold harmless the
Borrower, the Administrative Agent, the Secured Parties, the Backup Servicer,
their respective officers, directors, agents and employees from and against
any and all
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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 Administrative 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.
(4) 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 1.44 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF THE SERVICER OR BACKUP SERVICER.
(1) 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.
(2) 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
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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
Administrative Agent.
(3) 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 Administrative
Agent (acting at the direction of the Required Lending Groups) 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 Administrative 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 been satisfied
with respect to such transaction and (v) the Servicer shall have delivered to
the Administrative 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 Administrative
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 coditions to the consummation of the
transactions referred to in clauses (a) or (c) above.
(4) 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
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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 1.45 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 Administrative Agent, the
Secured Parties and the Borrower for costs, taxes, expenses, claims,
liabilities, losses or damages paid by the Administrative 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.
(1) 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 Administrative Agent, the Funding Agents, the
Borrower, the Seller, and the Secured Parties shall look only to the Servicer
to perform such obligations.
Section 1.46 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 Administrative Agent (acting at the
direction of the Required Lending Groups) 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
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case, without the consent of the Administrative 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 Administrative 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 Administrative Agent
(acting at the direction of the Required Lending Groups), the Borrower, and
the Backup Servicer.
Section 1.47 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 Lending Groups 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 Administrative Agent and the Borrower. No resignation of
the Servicer shall become effective until the Backup Servicer or an entity
acceptable to the Administrative Agent (at the direction of the Required
Lending Groups) 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 Administrative Agent (at
the direction of the Required Lending Groups) 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.
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ARTICLE IX
DEFAULT
Section 1.48 SERVICER TERMINATION EVENT. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(1) Any failure by the Servicer to deliver to the Administrative
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 respect
to payment of Repurchase Obligation Amounts) after written notice is received
by the Servicer from the Administrative Agent or a Funding Agent or after
discovery of such failure by a Responsible Officer of the Servicer;
(2) Failure by the Servicer (i) to deliver to the Administrative
Agent the Servicer's Determination Date Certificate in draft form three
Business Days, and in final form two Business Days, 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 Administrative 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);
(3) 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
Administrative Agent (acting at the direction of the Required Lending Groups)
or the Borrower;
(4) 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
Administrative Agent or the Borrower, the
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circumstances or condition in respect of which such representation, warranty
or statement was incorrect shall not have been eliminated or otherwise cured;
(5) The occurrence of an Insolvency Event with respect to the
Servicer; or
(6) Without duplication of any of the foregoing, a Termination
Event shall have occurred and be continuing.
Section 1.49 CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a
Servicer Termination Event shall occur and be continuing, the Administrative
Agent or the Required Lending Groups 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 Administrative Agent if given by
the Required Lending Groups), 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
Administrative Agent at the direction of the Required Lending Groups, or by
the Borrower with the consent of the Required Lending Groups); PROVIDED,
HOWEVER, that the successor Servicer shall have no liability with respect to
any obligation which was required to be performed by the terminated Servicer
prior to the date that the successor Servicer becomes the Servicer or any
claim of a third party based on any alleged action or inaction of the
terminated Servicer. The successor Servicer is authorized and empowered by
this Agreement to execute and deliver, on behalf of the terminated Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
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,
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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
Administrative Agent or by the Borrower with the consent of the
Administrative Agent (acting at the direction of the Required Lending
Groups), 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 Administrative Agent or by
the Borrower with the consent of the Administrative Agent, at the successor
Servicer's expense. The terminated Servicer shall grant the Administrative
Agent, the Borrower, the successor Servicer and the Required Lending Groups
reasonable access to the terminated Sericer's premises and to its equipment,
systems and personnel, at the terminated Servicer's expense.
Section 1.50 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 Administrative Agent, at the direction of the Required
Lending Groups or the Borrower with the consent of the Required Lending
Groups, 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 Administrative 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.
(1) The Administrative Agent, at the direction of the Required
Lending Groups, 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
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Backup Servicer, the Administrative Agent, acting at the direction of the
Required Lending Groups, or the Borrower with the consent of the Required
Lending Groups may petition a court of competent jurisdiction to appoint any
Eligible Servicer as the successor to the Servicer. Pending appointment
pursuant to the preceding sentence, the Backup Servicer shall act as
successor Servicer unless it is legally unable to do so, in which event the
outgoing Servicer shall continue to act as Servicer until a successor has
been appointed and accepted such appointment. Subject to Section 8.6, no
provision of this Agreement shall be construed as relieving the Backup
Servicer of its obligation to succeed as successor Servicer upon the
termination of the Servicer pursuant to Section 9.2 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 Administrative Agent, acting at the direction of the
Required Lending Groups, or the Borrower with the consent of the Required
Lending Groups appoints a successor Servicer other than the Backup Servicer,
the Backup Servicer shall not be relieved of its duties as Backup Servicer
hereunder.
(2) 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
Administrative 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 Administrative 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.
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Section 1.51 NOTIFICATION TO SECURED PARTIES. Upon any
termination of, or appointment of a successor to, the Servicer, the
Administrative Agent shall give prompt written notice thereof to each Secured
Party, to the Borrower, and to the Rating Agencies.
Section 1.52 WAIVER OF PAST DEFAULTS. The Required Lending
Groups, or the Borrower with the consent of the Required Lending Groups 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
Section 1.53 ADMINISTRATIVE DUTIES.
(1) DUTIES WITH RESPECT TO THE BORROWER.
(1) 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, the Administrative Agent and
the Funding Agents 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 Administrative Agent pursuant to such
provision.
(2) 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.
(3) 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)
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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 1.54 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 1.55 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 1.56 AMENDMENT. This Agreement may be amended from time
to time by the parties hereto, with the consent of the Administrative 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 amend 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
Administrative Agent, adversely affect in any material respect the interests
of any Secured Party.
This Agreement may also be amended from time to time by the parties
hereto, with the consent of the Administrative Agent (as directed by the
Required Lending Groups) 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,
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(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
Administrative 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 Administrative Agent may
prescribe.
Prior to the execution of any amendment to this Agreement, the
Administrative 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 Administrative
Agent, the Funding Agents, the Borrower, and the Backup Servicer may, but
shall not be obligated to, enter into any such amendment which affects the
Borrower's, the Administrative Agent's, the Funding Agents' or the Backup
Servicer's, as applicable, own rights, duties or immunities under this
Agreement or otherwise.
Section 1.57 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
Administrative 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
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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 Administrative 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
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 Administrative 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.
(1) Each of the Seller and the Servicer shall have an obligation
to give the Administrative 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.
(2) 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.
(3) 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 Administrative 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
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when, and only when, the related Receivable shall have been paid in full or
repurchased.
(4) 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 Administrative Agent for the benefit of the
Secured Parties.
(5) Upon request, the Servicer shall furnish to the Administrative
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.
Section 1.58 NOTICES. All demands, notices and communications
upon or to the Seller, the Servicer, the Borrower, the Administrative Agent,
the Funding Agents, 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 1.59 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 Administrative Agent (acting at the
direction of the Required Lending Groups), the Borrower, and the Backup
Servicer.
Section 1.60 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
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right of the Administrative Agent to direct, appoint, consent to, approve of,
or take any action under this Agreement, shall be a right exercised by the
Administrative Agent in its sole and absolute discretion. The Administrative
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 1.61 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 1.62 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 1.63 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 1.64 ASSIGNMENT TO ADMINISTRATIVE AGENT. The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and
grant of a security interest by the Borrower to the Administrative Agent for
the benefit of the Secured Parties of or in 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 Administrative Agent. All rights of the Borrower hereunder
may be exercised by the Administrative Agent for the benefit of the Secured
Parties or their assignees to the extent of their respective rights pursuant
to such assignments. Any assignee (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 1.65 CHASE ROLES; LIMITATION OF LIABILITY. The parties
expressly acknowledge and consent to The Chase Manhattan Bank acting in the
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capacities of Administrative Agent, Backup Servicer, PARCO Funding Agent and
PARCO APA Bank. The Chase Manhattan Bank may, in any such or other
capacities, discharge its separate functions fully, without hindrance or
regard to conflict of interest principles, duty of loyalty principles or
other breach of fiduciary duties to the extent that any such conflict or
breach arises from the performance by 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 1.66 NON-PETITION COVENANTS. (a) Notwithstanding any
prior termination of this Agreement, the Servicer, the Seller, the
Administrative Agent, the Funding Agents 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
Administrative Agent, the Funding Agents 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 by or 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.
(1) Notwithstanding any prior termination of this Agreement, the
Servicer, the Administrative Agent, the Funding Agents 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 by or 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
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Seller or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Seller.
(2) 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 Administrative
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 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 1.67 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 Administrative 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 1.68 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 1.69 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
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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 1.70 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 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 1.71 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.
75
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
CP FUNDING CORP., Borrower
By
----------------------------------
Name: Preston A. Miller
Title: Executive Vice President
and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
Seller
By
----------------------------------
Name: Preston A. Miller
Title: Executive Vice President
and Treasurer
AMERICREDIT FINANCIAL SERVICES, INC.,
Servicer
By
----------------------------------
Name: Preston A. Miller
Title: Executive Vice President
and Treasurer
<PAGE>
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Backup Servicer
By
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent on behalf of the
Secured Parties
By
----------------------------------
Name:
Title:
77
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
THIS SCHEDULE INTENTIONALLY OMITTED
78
<PAGE>
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
(a) GENERAL CHARACTERISTICS.
Each Receivable:
(i) has been originated in the United States by the Seller directly or by a
dealer for the retail sale or refinancing of a Financed Vehicle in the
ordinary course of its business and such Seller or dealer (as the case may
be) has all necessary licenses and permits to originate Receivables in the
state where either such dealer or the related consumer is located, has been
fully and properly executed by the parties thereto, and, if originated by a
dealer, has been purchased from such dealer by the Seller under an existing
Dealer Agreement or validly assigned by such dealer to the Seller or, with
respect to any Receivable sold to the Borrower by the Seller, was purchased
by the Seller (and, if originated by the Seller, is an eligible Receivable
under any term securitization documents of the Seller at the time of
purchase by the Borrower);
(ii) has created 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 validly assigned to the Borrower
and has been validly assigned by the Borrower to the Administrative 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
79
<PAGE>
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 the related 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 except in accordance with the Credit and Servicing
Procedures.
(b) COMPLIANCE WITH LAW. Each Receivable and the sale or refinancing 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 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 (i) a dealer and was sold
by the dealer to the Seller without any fraud or misrepresentation by the
dealer or (ii) the Seller in connection with a refinancing or direct loan.
(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.
80
<PAGE>
(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 72 months;
(ii) each Receivable has an original maturity of not more than 72 months;
(iii) each Receivable has a remaining Principal Balance as of the Relevant
Cutoff Date of not more than $60,000;
(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.
81
<PAGE>
(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, except in
accordance with the Credit and Servicing Procedures.
(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, except in accordance with the Credit
and Servicing Procedures.
(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) where applicable,
a fully executed original of the Contract, (2) the original executed credit
application (or, if no such credit application has been completed, other
evidence of application being made or credit evaluation being conducted),
or a copy thereof, together with all applicable amendments and addenda and
(3)
82
<PAGE>
the original Lien Certificate or application therefor or, for any Contract
secured by a Financed Vehicle registered in any state for which the
Paperless Title System is used to evidence title to and any lien in the
Financed Vehicle, a computer printout or similar documentary evidence that
there is an electronic record in the Paperless Title System indicating that
the Financed Vehicle is owned by the Obligor and subject to the interest of
the Seller as first lienholder or secured party (when such electronic
record becomes available through the Paperless Title System). 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 Servicer, as custodian.
(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 ADVERSE SELECTION. 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.
83
<PAGE>
Schedule 2.4 to
SALE AND SERVICING AGREEMENT
FORM OF PREPAID RECEIVABLES NOTICE
Reference is made to the Amended and Restated Sale and Servicing
Agreement, dated as of September 21, 1999 (as amended, the "Sale and
Servicing Agreement"), by and 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 Administrative 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.
<PAGE>
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 Administrative 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. 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
<PAGE>
Seller and the Servicer in connection with the transactions
contemplated thereby;
b. Certified Certificate of Incorporation; and
c. By-laws.
6. 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.
7. A Good Standing Certificate of AFS.
8. An Opinion of special counsel to the Borrower as to true sale and
nonconsolidation matters.
9. An Opinion of special counsel to the Borrower with respect to the validity
and enforceability of certain transaction documents.
10. 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.
11. 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.
12. Acknowledgment copy of amendment to financing statement naming AFSI, as
debtor, the Borrower, as secured party, and the Administrative Agent, as
assignee, filed with the Office of the Secretary of State of the State of
Texas.
13. Acknowledgment copy of amendment to financing statement naming the
Borrower, as debtor, and the Administrative Agent, as secured
3.1-2
<PAGE>
party, filed with the Secretaries of State of the States of Nevada and
Texas.
14. Letter(s) re: Wire Instructions.
15. Rating Letters:
a. Letters from Standard & Poor's and Moody's confirming PARCO's
A-1/P-1 commercial paper ratings;
b. Letters from Moody's and Fitch confirming Autobahn's [ / ]
commercial paper ratings;
c. Letters from Standard & Poor's and Fitch confirming HLS's [ / ]
commercial paper ratings; and
d. VFN rating letter from Moody's.
3.1-3
<PAGE>
Exhibit A to
SALE AND SERVICING AGREEMENT
RECEIVABLES SALE AGREEMENT
SALE No. [____] of Receivables made this ___ day of ____________, ______,
pursuant to the Amended and Restated Sale and Servicing Agreement, dated as
of September 21, 1999 (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 Administrative 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, ___________ ___, ______,.
"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.
<PAGE>
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;
(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
A-2
<PAGE>
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.
(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 Administrative Agent
by
------------------------------
Title:
<PAGE>
Exhibit B to
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S DETERMINATION DATE CERTIFICATE
<PAGE>
Exhibit B-1 to
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S VFN PREPAYMENT DATE CERTIFICATE
<PAGE>
Exhibit C to
SALE AND SERVICING AGREEMENT
FORM OF RECEIVABLES SALE NOTICE
<PAGE>
Exhibit D to
SALE AND SERVICING AGREEMENT
FORM OF SERVICER'S RECEIVABLES SALE DATE CERTIFICATE
<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.
September , 1999
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 Amended and Restated Sale and Servicing Agreement, dated as of September
21, 1999, among the AmeriCredit Financial Services Inc., as Seller, the
Obligor (as defined below), as Purchaser, The Chase Manhattan Bank, as
Administrative Agent, and the other parties thereto (as amended, 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
<PAGE>
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 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.
E-2
<PAGE>
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 Administrative 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 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.
E-3
<PAGE>
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.
IN WITNESS WHEREOF, the Obligor has caused this Note to be signed as of
the date above written.
FUNDING CORP.
- -----------------------
Name:
Title:
E-4
<PAGE>
EXHIBIT F
SERVICER'S ACKNOWLEDGMENT
AmeriCredit Financial Services, Inc. (the "Servicer"), acting as
Servicer under an Amended and Restated Sale and Servicing Agreement (as
amended, the "Sale and Servicing Agreement"), dated as of September 21, 1999,
among CP Funding Corp., AmeriCredit Financial Services, Inc., as Seller and
Servicer, and The Chase Manhattan Bank, as Administrative Agent and Backup
Servicer, pursuant to which, among other things, the Servicer holds on behalf
of the Secured Parties certain "Receivable Files," as described in such Sale
and Servicing Agreement, hereby acknowledges receipt of the Receivable File
for each Receivable listed in the Schedule of Receivables attached as Exhibit
A to the Receivables Sale Agreement, dated __________, between AmeriCredit
Financial Services, Inc. and CP Funding Corp., except as noted in the
Exception List attached as Schedule I hereto.
IN WITNESS WHEREOF, AmeriCredit Financial Services, Inc. has caused this
acknowledgment to be executed by its duly authorized officer as of this ___
day of ______, 1999.
AMERICREDIT FINANCIAL SERVICES, INC.
as Servicer
By:
---------------------------------
Name:
Title:
E-5
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Schedule I to
RECEIVABLES PURCHASE NOTE
RECEIVABLES PURCHASE ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Principal
Notation
DATE ADVANCES REPAID BALANCE
- ---- -------- ------ -------
MADE BY
-------
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Exhibit G to
SALE AND SERVICING AGREEMENT
FORM OF SEMI-ANNUAL DATA INTEGRITY REVIEW
<PAGE>
Exhibit H to
SALE AND SERVICING AGREEMENT
FORM OF QUARTERLY DATA INTEGRITY REVIEW
<PAGE>
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
SECURITY AGREEMENT
BY AND AMONG
CP FUNDING CORP., as Borrower,
THE CHASE MANHATTAN BANK,
as Administrative Agent on behalf
of the Secured Parties
AND
THE SEVERAL SECURED PARTIES AND FUNDING AGENTS
PARTY HERETO FROM TIME TO TIME
Dated as of September 21, 1999
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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PAGE
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<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II
THE COLLATERAL
Section 2.1 Grant of Security Interest by the Borrower. . . . . . . . . . . . . .3
Section 2.2 No Transfer of Duties . . . . . . . . . . . . . . . . . . . . . . . .4
Section 2.3 Termination and Release of Rights . . . . . . . . . . . . . . . . . .5
ARTICLE III
THE ADMINISTRATIVE AGENT
Section 3.1 Appointment and Powers. . . . . . . . . . . . . . . . . . . . . . . .7
Section 3.2 Performance of Duties . . . . . . . . . . . . . . . . . . . . . . . .7
Section 3.3 Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . .7
Section 3.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Section 3.5 Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . .8
Section 3.6 Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 3.7 Control by the Required Lending Groups. . . . . . . . . . . . . . . .9
Section 3.8 Successor Administrative Agent. . . . . . . . . . . . . . . . . . . .9
Section 3.9 Notices to Funding Agents . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER
Section 4.1 Representations and Warranties of the Borrower. . . . . . . . . . . 11
Section 4.2 Covenants of the Borrower . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
REQUIRED LENDING GROUPS; INTERCREDITOR PROVISIONS
Section 5.1 Authority of Required Lending Groups. . . . . . . . . . . . . . . . 20
Section 5.2 Rights of Secured Parties . . . . . . . . . . . . . . . . . . . . . 20
Section 5.3 Degree of Care. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
TERMINATION EVENTS; REMEDIES
Section 6.1 Termination Events; Remedies. . . . . . . . . . . . . . . . . . . . 22
Section 6.2 Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . 25
Section 6.3 No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
FUNDINGS; THE VFN
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Section 7.1 Loans to Borrower; Funding Procedures; the VFN. . . . . . . . . . . 26
Section 7.2 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . 38
Section 7.3 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.5 Payments Generally. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.6 Broken Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.7 Conversion and Continuation of Outstanding Advances Made
by the APA Banks. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.8 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.9 Inability to Determine Eurodollar Rate. . . . . . . . . . . . . . . 42
Section 7.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.2 Indemnity for Reserves and Expenses . . . . . . . . . . . . . . . . 45
Section 8.3 Indemnity for Taxes . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.4 Other Costs, Expenses and Related Matters . . . . . . . . . . . . . 49
ARTICLE IX
MISCELLANEOUS
Section 9.1 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.3 Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.4 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 9.5 Nonpetition Covenant. . . . . . . . . . . . . . . . . . . . . . . . 52
Section 9.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.7 Term of this Agreement. . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.8 Assignments; Third-Party Rights . . . . . . . . . . . . . . . . . . 53
Section 9.9 Consent of Required Lending Groups. . . . . . . . . . . . . . . . . 54
Section 9.10 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.12 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.13 No Recourse Against Certain Parties . . . . . . . . . . . . . . . . 54
Section 9.14 Respective Rights of the Borrower and the Secured Parties in the
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.15 Consents to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . 55
Section 9.16 Trial by Jury Waived. . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.17 Liabilities and Rights of Funding Agents. . . . . . . . . . . . . . 56
Section 9.18 CP Lenders Generally. . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.19 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of September 21,
1999 (as amended, supplemented or otherwise modified and in effect from time to
time, this "AGREEMENT"), by and among CP FUNDING CORP., a Nevada corporation
(the "BORROWER"), THE CHASE MANHATTAN BANK, a New York banking corporation, as
administrative agent on behalf of the Secured Parties (together with its
successors and assigns in such capacity, the "ADMINISTRATIVE AGENT") and THE
SEVERAL SECURED PARTIES AND FUNDING AGENTS PARTY HERETO FROM TIME TO TIME.
W I T N E S S E T H :
WHEREAS, certain parties hereto have entered into a Security
Agreement, dated as of October 8, 1997 (as amended to the date hereof, the
"ORIGINAL AGREEMENT");
WHEREAS, the parties hereto intend to amend and restate the Original
Agreement on the terms and conditions specified herein;
WHEREAS, pursuant to the Amended and Restated Sale and Servicing
Agreement, dated as of September 21, 1999 (as amended, supplemented or otherwise
modified and in effect from time to time, the "SALE AND SERVICING AGREEMENT"),
among the Seller, the Servicer, the Backup Servicer, the Borrower, and the
Administrative Agent, the Seller intends to sell to the Borrower from time to
time all of its right, title and interest in and to certain receivables and the
other property specified therein; and
WHEREAS, the Borrower desires to obtain financing for the purchase of
such receivables; and
WHEREAS, it is a condition, among others, to the Borrower's obtaining
advances hereunder that the Borrower grant to the Administrative Agent on behalf
of the Secured Parties a first priority security interest in all of the
Borrower's
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right, title and interest in and to the Receivables and the other property
specified herein;
NOW THEREFORE, for good and valuable consideration, the adequacy,
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS. Terms defined in Annex A to the Sale
and Servicing Agreement, unless otherwise defined herein, shall have such
defined meanings when used herein.
<PAGE>
ARTICLE II
THE COLLATERAL
Section 1.2 GRANT OF SECURITY INTEREST BY THE BORROWER.
(1) The Borrower hereby grants to the Administrative Agent, on
behalf of and for the benefit of the Secured Parties to secure the payment and
performance of the respective Secured Obligations, a security interest in all of
the Borrower's right, title and interest, whether now owned or hereafter
acquired and wherever located, in, to and under all accounts, contract rights,
general intangibles, chattel paper, instruments, documents, money, cash, deposit
accounts, certificates of deposit, goods, letters of credit, advices of credit
securities investment property, financial assets, security entitlements or
instruments consisting of, arising from or relating to any of the following
property: (i) the Receivables; (ii) the Other Conveyed Property related thereto;
(iii) the rights of the Borrower under the Sale and Servicing Agreement and each
Receivables Sale Agreement entered into between the Seller and the Borrower
pursuant to the Sale and Servicing Agreement, including, but not limited to, the
right to cause the Seller to repurchase Receivables from the Borrower under
certain circumstances; (iv) all amounts required to be deposited, or delivered
to the Administrative Agent for deposit, from time to time to the Collection
Account; (v) the Pledged Accounts and all funds on deposit from time to time in
Pledged Accounts and all property credited thereto, and in all investments and
proceeds thereof (including all income thereon); (vi) all funds on deposit from
time to time in the Lockbox Account and all property credited thereto and all
rights and benefits of the Borrower under the Lockbox Agreement; (vii) all
amounts owing to the Borrower and all other rights of the Borrower under any
Hedge Contract; and (viii) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in respect of any
and all of the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivables, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, investment property,
financial assets, security entitlements or instruments and other property which
at any time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "COLLATERAL").
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The Administrative Agent, for the benefit of the Secured Parties,
acknowledges such grant of a security interest.
(2) On and as of each Receivables Sale Date, the Borrower hereby
makes the representations and warranties set forth in Exhibit A hereto as to the
Receivables pledged to the Secured Parties on each such date, on which the
Secured Parties shall rely in advancing funds to the Borrower under this
Agreement.
(3) In order to effect the provisions and purposes of this
Agreement, including for the purpose of perfecting the security interests
granted hereunder, the Borrower represents and warrants that it has, prior to or
on the date of this Agreement, executed and filed or caused to be filed
appropriate UCC-1 financing statements in Nevada and Texas and has taken all
other action necessary to ensure that the Administrative Agent, as agent for the
Secured Parties, has a first priority perfected security interest in all of the
Collateral that can be perfected by the filing of a financing statement.
Furthermore, on and as of each Receivables Sale Date, the Borrower hereby
represents and warrants that the Borrower and the Seller have taken all other
steps necessary under all applicable law in order to cause to exist in favor of
the Administrative Agent, on behalf of the Secured Parties, a valid, subsisting
and enforceable first priority perfected security interest in the Borrower's
first priority perfected security interest in the Financed Vehicle securing each
Receivable pledged hereunder on such date (and the proceeds of such Financed
Vehicle) (PROVIDED, HOWEVER, that, prior to (X) the occurrence of a Servicer
Termination Event, a Potential Servicer Termination Event, a Termination Event
or a Potential Termination Event and the request by the Administrative Agent or,
(Y) at any time, the request by the Required Lending Groups, for the recordation
of the Borrower's and/or the Administrative Agent's lien on such Financed
Vehicle's certificate of title, no such recordation shall be required), and such
security interest is and shall be prior to all other liens upon and security
interests in such Financed Vehicle that now exist or may hereafter arise or be
created.
Section 1.3 NO TRANSFER OF DUTIES. The security interests granted
hereby are granted as security only and shall not (i) transfer or in any way
affect or modify, or relieve the Borrower from, any obligation to perform or
satisfy any term, covenant, condition or agreement to be performed or satisfied
by the
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Borrower under or in connection with this Agreement or any other Basic
Agreement to which it is a party or (ii) impose any obligation on any of the
Secured Parties or the Administrative Agent to perform or observe any such
term, covenant, condition or agreement or impose any liability on any of the
Secured Parties or the Administrative Agent for any act or omission on its
part relative thereto or for any breach of any representation or warranty on
its part contained therein or made in connection therewith except, in each
case, to the extent specifically provided herein and in the other Basic
Agreements.
Section 1.4 TERMINATION AND RELEASE OF RIGHTS.
(1) On each VFN Prepayment Date, the Administrative Agent shall, at
the expense of the Borrower: execute such instruments of release with respect to
the Prepayment Related Collateral, in recordable form if necessary, in favor of
the Borrower as the Borrower may reasonably request; deliver any Prepayment
Related Collateral in its possession to the Borrower; and otherwise take such
actions, and/or cause or permit the Servicer to take such actions, at the
Borrower's expense, as are necessary and appropriate to release the lien of this
Agreement and release and deliver to the Borrower the Prepayment Related
Collateral.
(2) On the Termination Date, except as otherwise provided herein,
the rights, remedies, powers, duties, authority and obligations conferred upon
the Administrative Agent and each Secured Party pursuant to this Agreement shall
terminate and be of no further force and effect and all rights, remedies,
powers, duties, authority and obligations of the Administrative Agent and each
Secured Party with respect to the Collateral shall be automatically released.
On the Termination Date, the Administrative Agent and each Secured Party agrees,
at the expense of the Borrower, to execute such instruments of release, in
recordable form if necessary, in favor of the Borrower as the Borrower may
reasonably request, to deliver any Collateral in its possession to the Borrower,
and otherwise to take such actions, and/or cause or permit the Servicer to take
such actions, as are necessary and appropriate to release the lien of this
Agreement and release and deliver to the Borrower the Collateral.
(3) To the extent, if any, otherwise required of the Borrower by
the terms of any Basic Agreement and permitted by the terms hereof and thereof,
the Administrative Agent may, and otherwise upon the prior written instructions
of
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a respective Authorized Officer of each Funding Agent that is a member of the
Required Lending Groups, the Administrative Agent shall, at the expense of
the Borrower take (in each case) such steps as may be necessary, or as the
Borrower, in a manner consistent with the Basic Agreements, may reasonably
request, to release the interests of the Secured Parties in any items of the
Collateral, including but not limited to redelivering and reassigning to the
Borrower any releases necessary to permit the Borrower to transfer its
interest in such items of the Collateral in accordance with the terms of the
Basic Agreements.
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ARTICLE III
THE ADMINISTRATIVE AGENT
Section 1.5 APPOINTMENT AND POWERS. The Secured Parties hereby
appoint The Chase Manhattan Bank as the Administrative Agent, and The Chase
Manhattan Bank has accepted such appointment and has agreed to act as
Administrative Agent with respect to the Collateral for the Secured Parties and
to perform the other duties of the Administrative Agent in accordance with the
provisions of this Agreement and the other Basic Agreements.
Section 1.6 PERFORMANCE OF DUTIES. The Administrative Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Basic Agreements to which the Administrative Agent is a
party or as directed by the Required Lending Groups in accordance with this
Agreement. The Administrative Agent shall not be required to take any
discretionary actions hereunder except at the written direction and with the
indemnification of the Required Lending Groups.
Section 1.7 LIMITATION ON LIABILITY. Neither the Administrative
Agent nor any of its directors, officers or employees, shall be liable for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Administrative Agent shall be liable for its gross
negligence, bad faith or willful misconduct; nor shall the Administrative Agent
be responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Seller, the Servicer or the Borrower of this
Agreement or any of the Collateral (or any part thereof). Notwithstanding any
term or provision of this Agreement, the Administrative Agent shall incur no
liability to the Seller, the Servicer, the Borrower, the Funding Agents or the
Secured Parties for any action taken or omitted by the Administrative Agent in
connection with the Collateral, except for the gross negligence, bad faith or
willful misconduct on the part of the Administrative Agent, and shall incur no
liability to the Seller, the Servicer, the Borrower, the Funding Agents or the
Secured Parties except for gross negligence, bad faith or willful misconduct in
carrying out its duties. Subject to Section 3.4, the Administrative Agent shall
be protected and shall incur no liability to any such party in relying upon the
genuineness of any notice, demand, certificate, signature, instrument or other
document reasonably believed by the Administrative Agent to be genuine and to
have been duly executed by the appropriate signatory, and
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(absent actual knowledge to the contrary) the Administrative Agent shall not
be required to make any independent investigation with respect thereto. The
Administrative Agent shall at all times be free independently to establish to
its reasonable satisfaction, but shall have no duty to independently verify,
the existence or nonexistence of facts that are a condition to the exercise
or enforcement of any right or remedy hereunder or under any of the other
Basic Agreements. The Administrative Agent may consult with counsel, and
shall not be liable for any action taken or omitted to be taken by it
hereunder in good faith and in accordance with the advice of such counsel.
The Administrative Agent shall not be under any obligation to exercise any of
the remedial rights or powers vested in it by this Agreement or to follow any
direction from the Required Lending Groups or any Secured Party, unless it
shall have received reasonable security or indemnity satisfactory to the
Administrative Agent against the costs, expenses and liabilities which might
be incurred by it.
Section 1.8 INDEMNIFICATION. The Borrower shall indemnify the
Administrative Agent, its directors, officers, employees and agents for, and
hold the Administrative Agent, its directors, officers, employees and agents
harmless against, any loss, liability or expense (including the costs and
expenses of defending against any claim of liability) arising out of or in
connection with the Administrative Agent's acting as Administrative Agent
hereunder, except such loss, liability or expense as shall result from the gross
negligence, bad faith or willful misconduct of the Administrative Agent or its
officers or agents. The obligation of the Borrower under this Section 3.4 shall
survive the termination of this Agreement and the resignation or removal of the
Administrative Agent.
Section 1.9 COMPENSATION AND REIMBURSEMENT. The Borrower agrees for
the benefit of the Secured Parties and as part of the Secured Obligations (a) to
pay to the Administrative Agent, from time to time, reasonable compensation for
all services rendered by it hereunder as set forth in the Fee Letter (which
compensation shall not be limited by any provision of law in regard to the
compensation of a collateral trustee); and (b) to reimburse the Administrative
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Administrative Agent in accordance with any provision
of, or carrying out its duties and obligations under, this Agreement (including
the reasonable compensation and fees and the expenses and disbursements of its
agents, any independent certified public accountants and independent counsel),
except any expense, disbursement or advances as may be attributable to gross
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negligence, bad faith or willful misconduct on the part of the Administrative
Agent.
Section 1.10 WAIVER OF SETOFFS. The Administrative Agent hereby
expressly waives any and all rights of setoff that the Administrative Agent may
otherwise at any time have under applicable law with respect to any Pledged
Account and agrees that amounts in the Pledged Accounts shall at all times be
held and applied solely in accordance with the provisions hereof and of the
other Basic Agreements.
Section 1.11 CONTROL BY THE REQUIRED LENDING GROUPS. To the extent
the Administrative Agent is entitled to consent to or withhold its consent to
any waiver or amendment of this Agreement or the other Basic Agreements in
accordance with the terms hereof or thereof or otherwise take or omit to take
action upon the occurrence of a Servicer Termination Event, a Potential Servicer
Termination Event, Termination Event or Potential Termination Event, the
Administrative Agent shall (a) give prompt notice to the Funding Agents of any
such waiver, amendment, Servicer Termination Event, Potential Servicer
Termination Event, Termination Event or Potential Termination Event of which it
is aware and (b) take such action with respect to such waiver, amendment,
Servicer Termination Event, Potential Servicer Termination Event, Termination
Event or Potential Termination Event as shall be directed by the Funding Agents
of all Lending Groups (unless the direction of the Required Lending Groups is
expressly required with respect to a particular provision).
Section 1.12 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may, upon 15 days' notice to each Funding Agent (with a copy to the
Seller), and the Administrative Agent will, at the direction of the Required
Lending Groups, resign as Administrative Agent; PROVIDED, in either case, that
such resignation shall not become effective until a successor Administrative
Agent has been appointed hereunder in accordance with the next sentence. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
then all Lending Groups shall appoint from among the APA Banks and Funding
Agents a successor agent, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent, effective upon its
acceptance of such appointment and its delivery of a duly executed counterpart
of this Agreement and an acknowledgment of such appointment to each Funding
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Agent, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. After the retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article III shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
The resigning Administrative Agent shall be entitled to compensation
accrued up to the date of resignation. The resigning Administrative Agent shall
be liable (under the terms hereof) for its actions or inaction prior to the
effective date of resignation.
Section 1.13 NOTICES TO FUNDING AGENTS. The Administrative Agent
shall promptly (and in any case no later than five (5) Business Days from
receipt) forward to the Funding Agents copies of any report, certificate or
other document delivered by the Borrower, the Servicer or the Seller to the
Administrative Agent under the Basic Agreements.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER
Section 1.14 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants to the Administrative Agent, the Funding Agents
and the Secured Parties as of the date hereof, the Effective Date and each
Funding Date that:
(1) 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.
(2) 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 this
Agreement), or require the consent or approval of, or the filing of any notice
or other documentation with, any governmental authority or other Person.
(3) 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.
(4) ACCURACY OF INFORMATION. All information heretofore furnished
by the Borrower to the Administrative Agent, the Funding Agents and the Secured
Parties for purposes of, or in connection with, this Agreement or any
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transaction contemplated hereby is, and all such information hereafter furnished
by the Borrower to the Administrative Agent and the Secured Parties will be,
true and accurate in every material respect, on the date such information is
stated or certified.
(5) 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).
(6) 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.
(7) 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.
(8) PLACE OF BUSINESS. The chief place of business and chief
executive office of the Borrower are located at 639 Isbell Road, Suite 390,
Reno, Nevada 89509, and the offices where the Borrower keeps all of its books
and records are located at 1325 Airmotive Way, Reno, Nevada.
(9) 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).
(10) SOLVENCY. The Borrower is not insolvent and will not be
rendered insolvent immediately following the consummation on the Effective Date
and on any Funding Date of the transactions contemplated by this Agreement and
the other Basic Agreements, including (but not limited to) the pledge by the
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Borrower to the Administrative Agent of the Collateral in accordance with this
Agreement.
(11) NO TERMINATION EVENT. After giving effect to each Funding, no
Potential Termination Event or Termination Event exists.
(12) 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.
(13) 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.
(14) 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.
(15) SUBSIDIARIES. The Borrower does not have any Subsidiaries.
(16) CAPITAL STOCK. The Borrower has neither sold nor pledged any
of its common stock to any entity other than the Seller.
(17) NO MATERIAL ADVERSE CHANGE. Since June 30, 1999, there has
been no material adverse change in the business, assets, operations, prospects
or conditions (financial or otherwise) of the Seller, the Borrower or the
Servicer, either individually or taken as a whole.
(18) CHARACTERISTICS OF RECEIVABLES. Each of the statements listed
on Exhibit A hereto is true and correct.
Any document, instrument, certificate or notice delivered to the
Administrative Agent or the Secured Parties by, or on behalf of, the Borrower or
its Affiliates hereunder or under the other Basic Agreements shall be deemed a
representation and warranty of the contents thereof by the Borrower.
The representations and warranties set forth in this Section 4.1 shall
survive the pledge and assignment of the Collateral to the Administrative Agent
for
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the benefit of the Secured Parties. Upon discovery by the Borrower, the
Secured Parties or the Administrative Agent of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
Section 1.15 COVENANTS OF THE BORROWER. The Borrower hereby
covenants with the Administrative Agent and the Secured Parties that, for so
long as this Agreement shall be in effect:
(1) PRESERVATION OF COLLATERAL. Subject to the rights, powers and
authorities granted to the Administrative Agent and the Secured Parties in this
Agreement, the Borrower shall take such action as is necessary and proper with
respect to the Collateral in order to preserve and maintain such Collateral and
to cause (subject to the rights of the Secured Parties) the Administrative Agent
to perform its obligations with respect to such Collateral as provided herein.
The Borrower will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such instruments of transfer or take such
other steps or actions as may be necessary, or required by the Required Lending
Groups, to perfect the security interests granted hereunder in the Collateral,
to ensure that such security interests rank prior to all other Liens and to
preserve the priority of such security interests and the validity and
enforceability thereof. Upon any delivery or substitution of Collateral, the
Borrower shall be obligated to execute such documents and perform such actions
as are necessary to create in the Administrative Agent for the benefit of the
Secured Parties a valid first Lien on, and valid and perfected first priority
security interest in, the Collateral so delivered and to deliver such Collateral
to the Administrative Agent, free and clear of any other Lien, together with
satisfactory assurances thereof, and to pay any reasonable costs incurred by any
of the Secured Parties or the Administrative Agent (including its agents) or
otherwise in connection with such delivery. The Borrower will not take any
action to cause the Collateral or any portion thereof to be an instrument (as
such term is defined in the Relevant UCC).
(2) NOTICES. In the event that the Borrower acquires knowledge of
the occurrence and continuance of any Termination Event or Potential Termination
Event under any of the Basic Agreements, the Borrower shall immediately give
notice thereof to the Administrative Agent and the Funding Agents. The Funding
Agents shall immediately forward such notices to the Secured Parties.
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(3) WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF ASSETS. To
the fullest extent permitted by applicable law, the Borrower will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any appraisement, valuation, stay, extension or redemption law
wherever enacted, now or at any time hereafter in force, in order to prevent or
hinder the enforcement of this Agreement or any absolute sale of the Collateral
or any part thereof, or the possession thereof by any purchaser at any sale
under Article VI of this Agreement; and the Borrower, to the fullest extent
permitted by applicable law, for itself and all who may claim under it, hereby
waives the benefit of all such laws, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Administrative
Agent, but will suffer and permit the execution of every such power as though no
such law had been enacted.
(4) NONINTERFERENCE, ETC. The Borrower shall not (i) except to the
extent expressly permitted or contemplated by Section 5.2 of the Sale and
Servicing Agreement, waive or alter, or permit to be waived or altered any of
its rights under the Collateral (or any agreement or instrument relating
thereto) without the prior written consent of the Administrative Agent (acting
at the direction of the Required Lending Groups); or (ii) fail to pay any tax,
assessment, charge or fee levied or assessed against the Collateral, or to
defend any action, if such failure to pay or defend may adversely affect the
priority or enforceability of the Borrower's right, title or interest in and to
the Collateral or the Administrative Agent's lien on, and security interest in,
the Collateral for the benefit of the Secured Parties; or (iii) take any action,
or fail to take any action, if such action or failure to take action will
interfere with the enforcement of any rights under the Basic Agreements.
(5) CHANGE IN NAME, STRUCTURE, ETC. The Borrower shall not change
its name, identity or corporate structure unless it shall have given the
Administrative Agent at least 30 days' prior written notice thereof, shall have
effected any necessary or appropriate filings of financing statements or
amendments thereto, and shall have delivered to the Administrative Agent an
Opinion of Counsel either (a) stating that, in the opinion of such counsel, such
action has been taken with respect to the execution and filing of any amendments
to previously recorded financing statements and continuation statements and
other actions as are necessary to perfect, maintain and protect the lien and
security
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interest of the Administrative Agent (and the priority thereof), on behalf of
the Secured Parties, with respect to such Collateral and reciting the details
of such action, or (b) stating that, in the opinion of such counsel, no such
action is necessary to maintain such perfected lien and security interest.
(6) RELOCATION OF THE BORROWER. The Borrower shall not change its
chief executive office unless it gives the Administrative Agent at least 30
days' prior written notice thereof. If the Borrower relocates its chief
executive office or principal place of business from 639 Isbel Road, Suite 390,
Reno, Nevada 89509, the Borrower shall effect whatever appropriate recordations
and filings are necessary and shall provide an Opinion of Counsel to the
Administrative Agent, on behalf of the Required Lending Groups, to the effect
that, upon the recording of any necessary assignments or amendments to
previously-recorded assignments and filing of any necessary amendments to the
previously filed financing or continuation statements or upon the filing of one
or more specified new financing statements, and the taking of such other actions
as may be specified in such opinion, the security interests in the Collateral
shall remain, after such relocation, valid and perfected.
(7) LIMITATIONS ON ACTIVITIES. The Borrower shall not, without the
prior written consent of the Administrative Agent (acting at the direction of
all Lending Groups):
(1) engage in any business or activity other than those
set forth in Article III of the Borrower's Articles of Incorporation;
(2) incur any indebtedness, assume or guaranty any
indebtedness of any other entity, other than any indebtedness to the
Seller thereof incurred in connection with the acquisition of
Receivables and Other Conveyed Property, which indebtedness shall be
subordinated as set forth in the Receivables Purchase Note, or engage
in any transactions with any Affiliates, except as contemplated under
this Agreement and the other Basic Agreements (PROVIDED that this
clause shall not be deemed to prohibit the sale of Receivables, on
arm's-length terms, to an Affiliate of the Borrower in connection with
an Optional Prepayment pursuant to this
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Agreement; PROVIDED FURTHER that no such sales shall be permitted to be
made to AmeriCredit Financial Services, Inc.);
(3) institute proceedings to be adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consent to
reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the corporation or a substantial part of its property, or
make any assignment for the benefit of creditors, or admit in writing
its inability to pay its debts generally as they become due, or take
corporate action in furtherance of any such action, in each case,
without the affirmative vote of 100% of the members of the Board of
Directors of the Borrower, which Board of Directors must have at least
one "independent" director;
(4) fail to (A) to the extent the Borrower's office is
located in the offices of the Seller or any Affiliate of the Seller,
pay fair market rent for its executive office space located in the
offices of the Seller or any Affiliate of Seller, (B) maintain the
Borrower's books, financial statements, accounting records and other
corporate documents and records separate from those of the Seller or
any other entity, (C) not commingle the Borrower's assets with those
of the Seller or any other entity, (D) act solely in its corporate
name and through its own authorized officers and agents, (E) make
investments directly or by brokers engaged and paid by the Borrower or
its agents (PROVIDED that if any such agent is an Affiliate of the
Borrower, it shall be compensated at a fair market rate for its
services), (F) separately manage the Borrower's liabilities from those
of the Seller or any Affiliates of the Seller and pay its own
liabilities, including all administrative expenses, from its own
separate assets, and (G) pay from the Borrower's own assets all
obligations and indebtedness of any kind incurred by the Borrower;
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(5) amend, alter, change or repeal Articles III, VIII,
XIII, XV or XVI of its Certificate of Incorporation as in effect on
the date hereof;
(6) make any payment, including without limitation, on
the Receivables Purchase Note, or otherwise make any distributions,
including by way of dividend, to its parent, AmeriCredit Financial
Services, Inc., if: (A) any Termination Event or Potential Termination
Event has then occurred and remains continuing or would result from
such payment or other distribution; or (B), after giving effect
thereto, the Borrower's net worth, determined in accordance with GAAP
(but exclusive of funds that constitute the Collection Account Reserve
and exclusive of the value of the Hedge Contract(s)), would be less
than the greater of (x) five percent (5%) of the VFN Balance and (y)
five percent (5%) of the largest VFN Balance that had at any time
during the Facility Term been outstanding;
(7) transfer any shares of its common stock, or issue
additional shares of its common stock or any other equity interests in
the Borrower to any Person other than the Seller or acquire any shares
of stock or equity interest in any other entity or have any
subsidiaries; and
(8) merge with or into or be consolidated with any
other corporation.
(8) FINANCIAL REPORTING. The Borrower will maintain for itself a
system of accounting established and administered in accordance with GAAP, and
will furnish to the Administrative Agent for the benefit of the Secured Parties:
(1) QUARTERLY REPORTING. Within forty-five (45) days
after the close of the first three quarterly periods of each of the
Borrower's fiscal years, for AmeriCredit Corp., consolidated and
consolidating unaudited balance sheets (which shall include those of
the Borrower and the Servicer) as at the close of such period and
consolidated and consolidating related statements of operations and
cash flows for the period from the beginning of such fiscal year to
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the end of such quarter, all certified by an Authorized Officer of
AmeriCredit Corp.
(2) ANNUAL REPORTING. Within ninety (90) days after
the close of the final quarterly period of each of the Borrower's
fiscal years, for AmeriCredit Corp., consolidated and consolidating
audited balance sheets reported on by the Independent Accountants
(which shall include those of the Borrower and the Servicer) as at the
close of each such fiscal year and consolidated and consolidating
related statements of operations and cash flows reported on by the
Independent Accountants for the period from the beginning of such
fiscal year to the end of such fiscal year, all certified by an
Authorized Officer of AmeriCredit Corp.
(3) 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 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, Potential Termination Event,
Servicer Termination Event or Potential Servicer Termination Event
exists, or if any Termination Event, Potential Termination Event,
Potential Servicer Termination Event or Servicer Termination Event
exists, stating the nature and status thereof.
(9) CORPORATE SEPARATENESS. The Borrower shall (1) abide by all
corporate formalities, including the maintenance of current minute books, (2)
cause its financial statements to be prepared in accordance with generally
accepted accounting principles in a manner that indicates the separate existence
of the Borrower and its assets and liabilities, (3) pay all its liabilities when
due, (4) not assume the liabilities of the Seller or any Affiliate of the
Seller, (5) not guarantee the liabilities of the Seller or any Affiliate of the
Seller and (6) comply with (and cause the Seller and the Servicer to comply
with) all assumptions upon which counsel to the Borrower is relying in rendering
its true sale and nonconsolidation opinions with respect to the Borrower and the
Seller.
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(10) The Borrower shall at all times maintain one independent
director or, if required by any Rating Agency, two independent directors.
(11) ACCESS TO RECORDS. The Borrower shall (but in any event, prior
to a Termination Event, Potential Termination Event, Servicer Termination Event
or Potential Servicer Termination Event on no more than four occasions per
year), permit only the Secured Parties and the Administrative Agent or their
duly authorized representatives, attorneys or auditors to inspect the books and
records maintained by the Borrower pursuant hereto at such times as the Secured
Parties or the Administrative Agent may reasonably request.
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ARTICLE V
REQUIRED LENDING GROUPS; INTERCREDITOR PROVISIONS
Section 1.16 AUTHORITY OF REQUIRED LENDING GROUPS. The Borrower
hereby irrevocably appoints the Administrative Agent for the benefit of the
Secured Parties its true and lawful attorney, with full power of
substitution, in the name of the Borrower, the Secured Parties or otherwise,
but at the expense of the Borrower, to the extent permitted by law to
exercise in its sole and absolute discretion, at any time and from time to
time while any Termination Event has occurred and is continuing, any or all
of the rights and powers with respect to all or any of the Collateral as are
specified or referred to in Article VI hereof.
Section 1.17 RIGHTS OF SECURED PARTIES. Each Secured Party that
from time to time is not a part of the Required Lending Groups expressly
agrees that it shall not assert any right that it may otherwise have, as a
Secured Party with respect to the Collateral, to direct the maintenance, sale
or other disposition of the Collateral or any portion thereof,
notwithstanding the occurrence and continuation of any Termination Event or
any non-performance by the Borrower of any obligation owed to such Secured
Party hereunder or under any other Basic Agreement, and each party hereto
agrees that the Required Lending Groups (or the Administrative Agent, as
directed by the Required Lending Groups) shall be the only Persons entitled
to assert and exercise such rights.
Section 1.18 DEGREE OF CARE. Notwithstanding any term or
provision of this Agreement, no Secured Party (including any Secured Party
that is a member of the Required Lending Groups) shall incur any liability to
AmeriCredit Corp., the Seller, the Servicer or the Borrower for any action
taken or omitted by any Secured Party (including any Secured Party that is a
member of the Required Lending Groups) in connection with the Collateral and,
further, shall incur no liability to any other Secured Party (including any
Secured Party that is part of the Required Lending Groups); PROVIDED,
HOWEVER, that the foregoing shall not be deemed to relieve any Secured Party
of liability for its own gross negligence, bad faith or willful misconduct.
Each Secured Party (including any Secured Party that is a member of the
Required Lending Groups) shall be protected and shall incur no liability to
any such party in relying upon the accuracy, acting in reliance upon the
contents and assuming the genuineness of any notice, demand, certificate,
signature, instrument or other document believed by such Secured Party to be
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genuine and to have been duly executed by the appropriate signatory, and
(absent manifest error or actual knowledge to the contrary), no such Secured
Party shall be required to make any independent investigation with respect
thereto. Each Secured Party shall, at all times, be free independently to
establish to its reasonable satisfaction the existence or nonexistence, as
the case may be, of any fact the existence or nonexistence of which shall be
a condition to the exercise or enforcement of any right or remedy under this
Agreement or any of the other Basic Agreements.
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ARTICLE VI
TERMINATION EVENTS; REMEDIES
Section 1.19 TERMINATION EVENTS; REMEDIES. (a) If a Termination
Event has occurred and is continuing, then, and in any such event, (A) if such
Termination Event is one, only with respect to the Borrower, specified in clause
(w) of the definition of Termination Event, the commitments of the APA Banks to
the Borrower shall automatically terminate and the VFN Balance (together with
accrued and unpaid interest thereon and all fees and other obligations of the
Borrower accrued under and in connection with the Basic Agreements) shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower, and
(B) in the case of any other Termination Event, the Administrative Agent shall,
at the direction of the Required Lending Groups, by notice to the Borrower, take
either or both of the following actions, at the same or different times: (i)
declare the commitments of the APA Banks to the Borrower to be terminated, and
thereupon the obligations of the APA Banks to make Fundings to the Borrower
shall terminate immediately, and (ii) declare the VFN Balance (together with
accrued and unpaid interest thereon and all fees and other obligations of the
Borrower accrued under and in connection with the Basic Agreements) to be due
and payable, and thereupon such amounts shall be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower. In any of such events, the Administrative
Agent shall, at the direction of the Required Lending Groups, take whatever
action at law or in equity as may appear necessary or desirable in the judgment
of the Required Lending Groups to collect and satisfy all Secured Obligations
(including, but not limited to, foreclosure upon the Collateral and sale or
securitization of the Collateral and all other rights available to secured
parties under applicable law) or to enforce performance and observance of any
obligation, agreement or covenant under any of the Basic Agreements. In
addition to all other rights and remedies granted to the Administrative Agent
for the benefit of the Secured Parties by this Agreement, the other Basic
Agreements, the UCC and other applicable law, rules, or regulations, the
Administrative Agent may with the consent of the Required Lending Groups, and
shall upon the request of the Required Lending Groups, upon the occurrence and
during the continuance of any such Termination Event, exercise any one or more
of the following rights and remedies: (i) foreclose upon or otherwise enforce
the security interests in any or all Collateral in any manner
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permitted by applicable law, rules, or regulations or in this Agreement; (ii)
notify any or all Obligors to make payments with respect to Receivables
directly to the Administrative Agent for the benefit of the Secured Parties;
(iii) sell or otherwise dispose of any or all Collateral at one or more
public or private sales, for cash or credit or future delivery, on such terms
and in such manner as the Required Lending Groups may determine; (iv) require
the Borrower to assemble the Collateral and make it available to the
Administrative Agent at a place to be designated by the Administrative Agent;
(v) enter onto any property where any Collateral is located and take
possession thereof with or without judicial process; and (vi) enforce any
rights of the Borrower under any Receivable or other agreement to the extent
the Required Lending Groups deems appropriate.
In furtherance of the Administrative Agent's rights hereunder, the
Borrower hereby grants to the Administrative Agent for the benefit of the
Secured Parties an irrevocable, non-exclusive license (exercisable without
royalty or other payment by the Administrative Agent) to use, license or
sublicense any patent, trademark, tradename, copyright or other intellectual
property in which the Borrower now or hereafter has any right, title or
interest, together with the right of access to all media in which any of the
foregoing may be recorded or stored. The Borrower hereby agrees that ten
(10) days' notice of any intended sale or disposition of any Collateral is
reasonable. Notwithstanding the foregoing, the Administrative Agent shall
not be entitled to take any action and the Required Lending Groups shall not
be entitled to give any direction with respect to the Collateral, except to
the extent provided herein and in the Sale and Servicing Agreement or the
other Basic Agreements.
(1) In the event of any sale, collection, conversion or other
disposition into cash of the Collateral, or any part thereof, after deducting
any actual costs and expenses incurred in connection with any such
disposition, the Administrative Agent shall deposit the proceeds thereof into
the Collection Account for distribution on the next succeeding Distribution
Date in accordance with the priorities set forth in Section 6.8 of the Sale
and Servicing Agreement.
(2) The Administrative Agent on behalf of the Secured Parties
shall be entitled to obtain from the Borrower all records and documentation
in the possession of the Borrower pertaining to any Collateral. Upon
consummation of any sale pursuant to this Section 6.1, the Required Lending
Groups, or the Administrative Agent acting on behalf of and at the direction
of the Required
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Lending Groups, shall have the right to assign, transfer, endorse and deliver
to the purchaser or purchasers thereof, free and clear of any Lien, the
Collateral, or any portion thereof or any interest therein, so sold. Each
purchaser at any such sale shall hold the property purchased by it absolutely
free and clear from any claim or right on the part of the Secured Parties or
the Borrower; and the Borrower hereby irrevocably waives all rights of
redemption, stay, marshalling of assets or appraisal that it now has or may
at any time in the future have under applicable law or statute now existing
or hereafter enacted.
(3) In addition to the remedies granted in this Agreement and
the other Basic Agreements, if a Termination Event has occurred and is
continuing, the Administrative Agent shall, at the direction of the Required
Lending Groups, take whatever action at law or in equity as may appear
necessary or desirable in the judgment of the Required Lending Groups to
collect the amounts then due and thereafter to become due under this
Agreement and any of the other Basic Agreements (including but not limited
to, all rights available to secured parties under applicable law) or to
enforce performance and observance of any obligation, agreement or covenant
under any of the Basic Agreements, including the exercise of the following
powers with respect to the Collateral: (i) to demand, sue for, collect,
receive and give acquittance for any and all monies due or to become due upon
or by virtue thereof, (ii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto, (iii) to sell,
securitize, transfer, assign or otherwise deal with the same or the proceeds
thereof as fully and effectively as if the Administrative Agent were the
absolute owner thereof, and (iv) to extend the time of payment of any or all
thereof and to make any allowance or other adjustment with respect thereto.
All proceeds of any portion of the Collateral liquidated pursuant to this
Section 6.1 shall be applied as set forth in subsection (b) above.
(4) The Administrative Agent and the Required Lending Groups, as
the case may be, may exercise the powers and rights granted by this Section
6.1, without notice or demand to the Borrower except as provided in (a) above.
(5) In addition to other remedies granted in this Agreement and
the other Basic Agreements, if a Termination Event has occurred and is
continuing, the Borrower, at the direction of the Administrative Agent
(acting at the direction of the Required Lending Groups) or the Required
Lending Groups, shall at its own expense (or shall cause the Servicer at its
own expense pursuant to
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section 5.5 of the Sale and Servicing Agreement) promptly take all additional
steps, if any, as are necessary to create and maintain perfection of the
security interest in the Financed Vehicle related to each Receivable (and the
proceeds of such Financed Vehicle) on behalf of the Borrower and to create
and maintain perfection of the security interest in the Borrower's security
interest in the Financed Vehicle related to each Receivable (and the proceeds
of such Financed Vehicle) on behalf of the Administrative Agent, for the
benefit of the Secured Parties, including, if required by applicable law,
having a notation of the Borrower's and/or the Administrative Agent's
respective security interests recorded on such Financed Vehicle's certificate
of title.
Section 1.20 RESTORATION OF RIGHTS AND REMEDIES. If the
Administrative Agent has instituted any proceeding to enforce any right or
remedy under this Agreement, and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the
Administrative Agent, then and in every such case the Borrower, the
Administrative Agent and each of the Secured Parties shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Secured Parties shall continue as though no such proceeding had been
instituted.
Section 1.21 NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Administrative Agent, the Required Lending
Groups or any of the Secured Parties is intended to be exclusive of any other
right or remedy, and every right or remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law, in equity or otherwise and
each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised by the Required Lending Groups, and the
exercise of or the beginning of the exercise of any right or power or remedy
shall not be construed to be a waiver of the right to exercise at the same
time or thereafter any other right, power or remedy.
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ARTICLE VII
FUNDINGS; THE VFN
Section 1.22 LOANS TO BORROWER; FUNDING PROCEDURES; THE VFN.
(1) 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 any CP Lender, no Potential Wind-Down Event
or 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, each of the CP Lenders may, in its sole
discretion, and the APA Banks shall (subject to the terms and conditions
specified herein), collectively make an advance under the terms and
conditions hereof (any such advance, a "FUNDING" and the first such advance,
the "INITIAL FUNDING") to the Borrower from time to time on or after the
Effective Date. Each Funding by a Lending Group shall be made on a PRO RATA
basis based on such Lending Group's Facility Limit as a percentage of the
aggregate Facility Limit of all Lending Groups; each Funding by an APA Bank
in a Lending Group shall be made on a PRO RATA basis based on such APA Bank's
Commitment as a percentage of the aggregate Commitment of all APA Banks in
such Lending Group. Amounts advanced by the Lending Groups on any day in
connection with a Funding may include CP Fundings, Eurodollar Fundings and
ABR Fundings or any combination thereof.
To request Fundings hereunder, the Borrower shall notify the
Administrative 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 12:30
P.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
Administrative Agent of a written funding request (each, a "FUNDING REQUEST")
in a form approved by the Administrative Agent and signed by the Borrower.
Each such telephonic and written Funding Request shall specify the following
information in compliance with Section 7.1(b):
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(1) the requested Advance Amount (calculated in
accordance with the definition thereof, and which shall be at least
$1,000,000 or integral multiples of $100,000 in excess thereof);
(2) the date of such Funding, which shall be a Business
Day;
(3) whether such Funding is to be a CP Funding, an ABR
Funding or a Eurodollar Funding (PROVIDED that with respect to each
Lending Group, prior to the occurrence of a Wind-Down Event applicable
to the related CP Lender (or upon the termination of such Wind-Down
Event, if applicable), all Fundings on behalf of such Lending Group
shall be CP Fundings);
(4) 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
(5) the location and number of the Borrower's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 7.1(e).
If no election as to the type of Funding is specified, then the requested
Funding shall be at the discretion of each Funding Agent (with the consent of
the related CP Lender if the related Funding Agent so selects a CP Funding).
Promptly following receipt of a Funding Request in accordance with this Section
7.1(a), each Funding Agent shall promptly advise each Secured Party in its
Lending Group 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). Notwithstanding
anything to the contrary in this Section 7.1(a), the Borrower shall be permitted
to request up to two (2) Fundings per calendar week, and up to nine (9) Fundings
per calendar month.
(2) CONDITIONS TO FUNDING. No Secured Party 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
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Aggregate Net Investment PLUS the Interest Component of all Commercial Paper
issued by the CP Lenders to fund the Aggregate Net Investment would not
exceed the Maximum Facility Limit (it being understood that, for purposes of
determining whether the Interest Component of Commercial Paper may be paid
from the proceeds of Commercial Paper issued on the maturity date of such
Commercial Paper, the amount of such capitalized Interest Component shall
constitute a "Funding"); (ii) with respect to each Lending Group, after
giving effect to such Funding, the related Net Investment of such Lending
Group PLUS the Interest Component of all Commercial Paper issued by the CP
Lenders in such Lending Group to fund such Net Investment would not exceed
the related Facility Limit (it being understood that, for purposes of
determining whether the Interest Component of Commercial Paper may be paid
from the proceeds of Commercial Paper issued on the maturity date of such
Commercial Paper, the amount of such capitalized Interest Component shall
constitute a "Funding"); (iii) each APA Bank's PRO RATA share of such Funding
would not exceed the amount of its unused Commitment (it being understood
that, for purposes of determining whether the Interest Component on
Commercial Paper may be paid from the proceeds of Commercial Paper issued on
the maturity date of such Commercial Paper, the amount of such capitalized
Interest Component shall constitute a "Funding"); (iv) the Borrower has
provided a Funding Request to the Administrative Agent and each Funding
Agent, which Funding Request shall include the calculations necessary to
satisfy the requirement set forth in clauses (i), (ii) and (iii) 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 that would have a material and adverse effect on the
Receivables, AmeriCredit Corp., the Seller, the Servicer or the Borrower; (v)
the Borrower shall have deposited in the Collection Account, or shall have
given irrevocable instructions to the Administrative Agent to withhold from
the proceeds of such Funding and to deposit in the Collection Account, as the
case may be, in each case for allocation to the Collection Account Reserve,
an amount equal to the Collection Account Reserve Shortfall Amount, if any;
(vi) the VFN is rated at least "A2" by Moody's and, in the case of HLS, the
VFN is rated at least "A" by S&P; (vii) one or more binding and enforceable
Hedge Contracts in an aggregate notional amount equal to the Aggregate Net
Investment (including any Aggregate Net Investment to be made in connection
with such Funding) are in full force and effect in accordance with the terms
of the Sale and Servicing Agreement; (viii) each representation and warranty
of the Borrower herein shall be true and correct with respect to the Borrower
and each Receivable as of the date of such Funding; (ix) a Potential
Wind-
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Down Event or a Wind-Down Event (each only in the case of a Funding to be
made by a CP Lender), or a Potential Termination Event or a Termination
Event, shall not have occurred and be continuing; (x) if the Funding is to be
made by a CP Lender through the issuance of Commercial Paper, such CP Lender
has advised the Administrative Agent that, in its sole discretion, it has
elected to make such Funding; (xi) the Administrative 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; (xii) in connection with the initial Funding following the
Effective Date, the conditions precedent set forth in Section 7.1(g) hereof
and Section 3.2 of the Sale and Servicing Agreement shall be satisfied; and
(xiii) after giving effect to such Funding, no Pool Limitation would be
exceeded.
Notwithstanding anything to the contrary set forth in this
Agreement, no APA Bank shall have any obligation to advance funds to the
Borrower on any Funding Date if, on such day, any Termination Event or
Potential Termination Event shall have occurred and be continuing. The
Administrative Agent shall notify each Funding Agent of the receipt and
content of any Funding Request by no later than 2:30 P.M. on the date on
which such Funding Request was received by the Administrative Agent and, in
connection therewith, shall advise such Funding Agent of the portion of such
Funding which its related Lending Group is required to make available to the
Borrower; if such notification is provided to the Funding Agents after 2:30
P.M. on such date, then the Funding Request shall be deemed to be received on
the following Business Day. Each Funding Agent shall promptly advise the APA
Banks in its related Lending Group (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 VII shall terminate on the Commitment Expiry
Date. Notwithstanding anything contained in this Section 7.1 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.
The obligations of the Lending Groups hereunder to provide Fundings shall be
several and not joint.
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(3) ADVANCE PERCENTAGE. 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" (such term meaning, for purposes
of this Section 7.1(c), (i) a "Trigger Event" as defined in any public
asset-backed transaction beginning with and including the AmeriCredit
Automobile Receivables Trust 1997-C transaction; or (ii) if
applicable, any comparable "spread capture event" in any automobile
receivables transaction conducted by any Securitization Trust
beginning with and including the AmeriCredit Automobile Receivables
Trust 1997-C transaction, whether or not defined in such transaction
as a "Trigger Event" and whether or not such transaction is a public
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
transaction documentation beginning with and including the AmeriCredit
Automobile Receivables Trust 1997-C transaction (and such Trigger
Event shall be deemed unwaived if there is no Person or Persons
entitled to so waive), 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
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(3) if there is an Excess Spread Deficiency (calculated as
of the close of business one (1) Business Day 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; 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.
(4) FUNDING REQUEST IRREVOCABLE. The notice of any proposed
Funding shall be irrevocable and binding on the Borrower, and the Borrower
shall indemnify the Secured Parties against any loss or expense incurred by
the Secured Parties as provided in Section 7.6 hereof.
(5) DISBURSEMENT OF FUNDS. No later than 3:00 P.M. (New York
City time) on the date on which a Funding is to be made, each Secured Party
will make available to the Borrower, in immediately available funds, the
amount of the Funding required to be made by it on such day by remitting the
required amount thereof to an account of the Borrower as designated in the
related Funding Request.
(6) THE VFN.
(1) The Borrower's obligation to pay the principal of,
and interest on, all amounts advanced by the Secured Parties 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 date hereof; (2) be in
the stated principal amount equal to the Maximum 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
Administrative Agent for the account of the Secured Parties (in
proportion to the pro rata shares of the Lending Groups based upon
their respective Net Investments) and mature on the Distribution Date
occurring in the calendar month seventy-eight (78) 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 and the other Basic
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Agreements; and (6) be substantially in the form of Exhibit B to this
Agreement, with blanks appropriately completed in conformity herewith.
In consultation with the Funding Agents, the Administrative 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 Administrative Agent, on behalf of the Secured Parties, shall
endorse the outstanding principal amount of the VFN on the schedule
attached thereto. The entries made by the Administrative 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 the Secured Parties with respect to the
payment obligations of the Borrower hereunder and under the VFN.
(2) The Borrower shall have the option to prepay all or
a portion of the VFN Balance on any Business Day selected by the
Borrower (each, an "OPTIONAL PREPAYMENT"), subject to the following
terms and conditions:
1. The Borrower shall have given the Administrative Agent at
least two (2) 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 Administrative 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 Administrative
Agent, the Funding Agents, the Backup Servicer and the Rating Agencies
(which evidence may consist solely of the Servicer's VFN Prepayment
Date Certificate) that the Borrower
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shall have sufficient funds on the contemplated VFN Prepayment Date to
effect the Optional Prepayment in accordance with this Agreement. Any
such Servicer's VFN Prepayment Date Certificate and related evidence shall
be delivered to the Administrative Agent no later than 1:00 P.M. (New York
time), in draft form at least two (2) Business Days prior to the
contemplated VFN Prepayment Date and in final form at least one Business
Day 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 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 each Funding Agent of the amounts referred
to in paragraph 5 below (and confirmation by each such Funding Agent
to the Administrative Agent), there shall be released from the Lien of
this 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 this
Agreement on any VFN Prepayment Date, (x) the remaining VFN Balance
MINUS Adjusted Collections, PLUS the amount of accrued and
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unpaid interest or discount, as applicable, on all outstanding Fundings,
together with all accrued and unpaid fees and other costs and expenses
due and owing to the Lending Groups, 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 Collections means
the product of (i) the effective Advance Percentage, and (ii) the
amount of Collections on deposit in the Collection Account as of the
close of business on the Business Day preceding the date of the
Servicer's VFN Prepayment Date Certificate (which Collections shall be
available for distribution in accordance with Article VI of the Sale
and Servicing Agreement).
5. On the related VFN Prepayment Date, the Administrative
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 Agents (and
notified to the Administrative Agent) to be attributable to that
portion of the Aggregate Net Investment to be prepaid PLUS (iii) an
aggregate amount equal to the sum of all other amounts due and owing
to the Administrative Agent, the Funding Agents 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 Agents (and notified to the Administrative
Agent) to be attributable to that portion of the Aggregate Net
Investment to be prepaid.
6. In connection with the Optional Prepayment of any Funding
made to the Borrower with the proceeds of Commercial Paper, the
Borrower shall, on the related Interest Payment Date, pay to the
related CP Lenders all interest or discount, as applicable, accrued
and unpaid and to accrue through the maturity date(s) related to such
Commercial Paper.
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The Borrower hereby agrees to pay the reasonable legal
fees and expenses of the Administrative Agent, the Funding Agents and
the Secured Parties in connection with any Optional Prepayment
(including, but not limited to, expenses incurred in connection with
the release of the Lien of the Administrative Agent over the
Receivables and related Other Conveyed Property in connection with
such Optional Prepayment) not to exceed $25,000 annually.
(3) Although the VFN shall be dated the date hereof,
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
Maximum 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.
(7) CONDITIONS PRECEDENT. The obligations of the Secured Parties
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"):
(1) The Administrative Agent shall have received such
opinions of counsel to the Seller, the Servicer and the Borrower, in
form and substance acceptable to the Administrative Agent and each
Funding Agent, addressing such matters as each Funding Agent and the
Administrative Agent, on behalf of the Secured Parties, shall request.
(2) The Administrative Agent shall have received a
certificate of the Borrower, dated the date hereof, stating that (1)
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its representations and warranties made herein and in the other Basic
Agreements are true and correct as of the date hereof, 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 date hereof.
(3) All conditions precedent to the authentication and
delivery of the VFN under this Agreement shall have been satisfied.
(4) 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.
(5) 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
Administrative Agent and the Secured Parties.
(6) The Administrative 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 date hereof, 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;
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(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 date hereof, 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 and the Back-Up
Servicer as the Administrative Agent and the Funding Agents 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.
(7) No fact or condition shall exist under applicable
law or applicable regulations thereunder or interpretations thereof by
any regulatory authority which, in the reasonable opinion of the
Administrative Agent and the Funding Agents, 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.
(8) The Seller and the Borrower shall have filed any
financing statements or amendments thereto, wherever necessary or
advisable in the judgment of the Administrative Agent and the Funding
Agents, in order to perfect the transfer and assignment of the
Receivables to the Borrower and the grant of the security interest
therein to the Administrative Agent and shall have delivered file-stamped
copies of such financing statements or other evidence of the filing
thereof to the Administrative Agent.
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(9) All taxes and fees due in connection with the
filing of the financing statements referred to in clause (viii) of
this Section 7.1(g) shall have been paid in full or duly provided for.
(10) 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.
(11) If applicable, each Funding Agent shall have
received written confirmation from each of the Rating Agencies that
the then-current ratings assigned by each of them to the Commercial
Paper issued by its related CP Lender will not be reduced or withdrawn
as a result of the execution and delivery of this Agreement by such CP
Lender.
(8) MATURITY OF COMMERCIAL PAPER. No CP Lender shall issue any
Commercial Paper related to the VFN with a maturity in excess of sixty (60) days
in connection with any financing or refinancing of an increase in the VFN.
Section 1.23 SHARING OF PAYMENTS, ETC. If any Secured Party (for
purposes of this Section 7.2 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 such
Secured Parties entitled thereto, such Recipient shall forthwith purchase from
such Secured Parties 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
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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 1.24 RIGHT OF SETOFF. Without in any way limiting the
provisions of Section 7.2, each of the Secured Parties 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 such Secured Party 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 1.25 INTEREST. (a) Any Funding (or portion thereof) funded
by a CP Lender through the issuance of Commercial Paper shall bear interest
calculated at such CP Lender's applicable CP Rate.
(1) At the option of the Borrower, following a Wind-Down Event for
a Lending Group, any Funding (or portion thereof) made by a CP Lender other than
through the issuance of Commercial Paper or by an APA Bank in such Lending Group
to the Borrower pursuant to Section 7.1 hereof shall bear interest at either (i)
if available from such APA Bank to the Borrower on the related Funding Date, the
related Eurodollar Rate for such APA Bank or (ii) in all other cases the related
Alternate Base Rate for such APA Bank.
(2) If any principal of, or interest on, any portion of 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 applicable Alternate Base Rate PLUS 2%.
(3) Accrued Interest on each Funding shall be payable in arrears on
each Interest Payment Date for such Funding and upon the Commitment Expiry Date
and, if applicable, upon each Interest Payment Date following the Commitment
Expiry Date; PROVIDED that (i) interest accrued pursuant to paragraph (c) of
this Section 7.4 shall be payable on demand, (ii) in the event of any repayment
of any Funding or prepayment (other than with respect to a CP
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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 7.7, accrued interest on such ABR Funding or Eurodollar
Funding shall be payable on the Distribution Date occurring immediately after
such conversion.
(4) All interest on Fundings hereunder shall be computed on the
basis of a year of 360 days, except that interest computed when an 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 each Funding Agent (with notice to the Administrative Agent), and such
determination shall be conclusive absent manifest error.
(5) If a Termination Event (other than a Termination Event
described in clause (q) of the definition thereof) has occurred and is
continuing, then interest thereafter accruing on all Fundings then existing or
thereafter made shall accrue at the Alternate Base Rate plus 2.00%.
Section 1.26 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 Administrative Agent, the Funding Agents 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
seventy-eight (78) months following the Commitment Expiry Date.
Section 1.27 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
attribut-
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able 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 7.6 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 1.28 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, (b) each Eurodollar Funding
hereunder 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,
(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 applicable 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 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 (with a copy to the Administrative Agent). If a
Conversion/Continuation Notice has not been timely
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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. Prior to the
occurrence of a Wind-Down Event with respect to the related CP Lender (or
upon the termination of such Wind-Down Event, if applicable), each CP Funding
shall be continued, subject to the terms and conditions hereof, for another
CP Funding Period of a duration to be agreed upon between the Borrower and
such CP Lender (or, if the Borrower does not specify the duration, for a
duration specified by such CP Lender).
Section 1.29 ILLEGALITY. (a) Notwithstanding any other provision
herein, if, after the Effective 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 7.6 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
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Bank knows of such change in circumstances, notify the Borrower, and the related
Funding Agent (with a copy to the Administrative Agent), and 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.
(1) Each APA Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 7.8(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 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 1.30 INABILITY TO DETERMINE EURODOLLAR RATE. If, prior to
the first day of any Eurodollar Period:
(1) the applicable 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 applicable Funding Agent shall have received
notice from one or more of the APA Banks in its Lending Group 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, such Funding Agent shall give telecopy or telephonic
notice thereof (confirmed in writing) to the Administrative Agent, the Borrower
and the APA Banks in its Lending Group as soon as practicable thereafter. Until
such notice has been withdrawn by such Funding Agent, no further Eurodollar
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Fundings shall be made with respect to such Lending Group. Each Funding Agent
agrees to withdraw any such notice as soon as reasonably practicable after it is
notified of a change in circumstances which makes such notice inapplicable.
Section 1.31 FEES. The Borrower hereby agrees to pay to each Funding
Agent, for the account of the Secured Parties in its Lending Group (and, if
applicable, itself), the fees specified in the Fee Letter. Such payments shall
be made to the Funding Agents on the dates and in the manner specified in the
Fee Letters.
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ARTICLE VIII
INDEMNIFICATION
Section 1.32 INDEMNITY. Without limiting any other rights which the
Secured Parties may have hereunder or under applicable law, the Borrower agrees
to indemnify the Secured Parties, the Administrative 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 the Secured Parties and the
Administrative 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:
(1) reliance on any representation or warranty made by the Borrower
(or any officers of the Borrower) under or in connection with this Agreement or
any of 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;
(2) 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;
(3) the failure to vest and maintain vested in the Administrative
Agent on behalf of the Secured Parties a first priority perfected security
interest in the Collateral (including, without limitation, all Financed Vehicles
securing Receivables), free and clear of any Lien (other than the Lien of this
Agreement);
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(4) 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 the Collateral or the failure to note the lien of
the Borrower and/or the Administrative Agent, on behalf of the Secured Parties,
on the certificate of title to any Financed Vehicle securing a Receivable, which
failure has an adverse effect on the validity, perfected status or priority of
the security interest granted to the Administrative Agent on behalf of the
Secured Parties under this Agreement;
(5) 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;
(6) any failure of the Borrower to perform its duties, covenants or
obligations in accordance with the provisions of this Agreement;
(7) 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; or
(8) the co-mingling of Collections with any other funds;
PROVIDED, HOWEVER, that if a CP Lender enters into agreements for the
purchase of interests in receivables from one or more Other Transferors, such CP
Lender 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.
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Section 1.33 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):
(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, any
Asset Purchase Agreement, any liquidity agreement between a CP Lender
and one or more financial institutions relating to this Agreement, 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, any Asset
Purchase Agreement, any liquidity agreement between a CP Lender and
one or more financial institutions relating to this Agreement, 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, any Asset Purchase Agreement, any liquidity
agreement between a CP Lender and one or more financial institutions
relating to this Agreement, 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, any Asset Purchase Agreement, any liquidity agreement
between a CP Lender and one
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or more financial institutions relating to this Agreement, 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,
any Asset Purchase Agreement, any liquidity agreement between a CP Lender and
one or more financial institutions relating to this Agreement, 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 a Funding Agent, the Borrower shall pay to such 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 such
Funding Agent first notifies the Borrower of its intention to demand
compensation therefor under this Section 8.2(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.
(1) 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 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 under any
of the Basic Agreements, any Asset Purchase Agreement, any liquidity agreement
between a CP Lender and one or more financial institutions relating to this
Agreement, or with respect hereto or thereto 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 a Funding Agent, the Borrower shall pay to such 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
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seventy (270) days prior to the date such Funding Agent first notifies the
Borrower of its intention to demand compensation under this Section 8.2(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.
(2) The Administrative Agent and each 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 VIII. A notice by the Administrative Agent or a Funding Agent
claiming compensation for the benefit of an Indemnified Party under this Article
VIII 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 Administrative Agent or such Funding Agent may use any
reasonable averaging and attributing methods.
Section 1.34 INDEMNITY FOR TAXES. (a) All payments made by the
Borrower under this Agreement and any other Basic Agreement shall be made 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 Administrative Agent, any 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 Administrative Agent, any
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 Administrative Agent, any such 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 Administrative
Agent, any Funding Agent or any Indemnified Party hereunder, the amounts so
payable to the
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Administrative Agent, any such Funding Agent or such Indemnified Party shall
be increased to the extent necessary to yield to such Person (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 Administrative Agent, any 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 such Person.
(1) 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:
(1) deliver to the Borrower and to the related 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;
(2) deliver to the Borrower and to the related 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
(3) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested
by the Borrower or such 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 related 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)
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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
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 8.3.
Section 1.35 OTHER COSTS, EXPENSES AND RELATED MATTERS. The Borrower
agrees, upon receipt of a written invoice, to pay or cause to be paid, and to
save the Secured Parties and the Administrative Agent harmless against liability
for the payment of, all reasonable out-of-pocket expenses (including, without
limitation, all reasonable attorneys', accountants' and other third parties'
fees and expenses, and any filing fees and expenses incurred by officers or
employees of the Secured Parties or the Administrative Agent) incurred by or on
behalf of any Secured Party or the Administrative 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 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 the
Administrative Agent's, the Secured Parties' or their respective agents'
enforcement or preservation of rights (including, without limitation, the
perfection and protection of the Administrative 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 IX
MISCELLANEOUS
Section 1.36 FURTHER ASSURANCES. Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Agreement or to confirm or perfect any transaction described or contemplated
herein.
Section 1.37 WAIVER. Any waiver by any party of any provision of
this Agreement or any right, remedy or option hereunder shall only prevent and
estop such party from thereafter enforcing such provision, right, remedy or
option if such waiver is given in writing and only as to the specific instance
and for the specific purpose for which such waiver was given. The failure or
refusal of any party hereto to insist in any one or more instances, or in a
course of dealing, upon the strict performance of any of the terms or provisions
of this Agreement by any party hereto or the partial exercise of any right,
remedy or option hereunder shall not be construed as a waiver or relinquishment
of any such term or provision, but the same shall continue in full force and
effect.
Section 1.38 AMENDMENTS; WAIVERS. (a) Subject to the next
succeeding provisos and Section 9.3(b), no amendment, waiver, supplement,
modification or discharge of any provision of this Agreement shall be effective
unless the Rating Agency Condition shall have been satisfied and such waiver or
modification shall be in writing and signed by the Borrower, the Administrative
Agent, and the Funding Agents in respect of the Required Lending Groups, and
then such amendment, waiver, supplement, modification or discharge shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED that no such action that (i) increases or decreases the Facility
Limit of any Lending Group hereunder, (ii) reduces amounts payable hereunder to
the Administrative Agent, any Secured Party or any Funding Agent, (iii) modifies
in any way the payment of interest and/or discount, fees, indemnities and other
amounts to any Secured Party hereunder (or to the Administrative Agent or to any
Funding Agent on its behalf), including any defined terms necessary to calculate
any such amounts, (iv) extends the Commitment Expiry Date or maturity of any
amount due hereunder or, except in the case of HLS, affects the ability of any
CP Lender to assign its interests to its related APA Banks under its Asset
Purchase
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Agreement, (v) amends, modifies or waives any definition used herein which
relates to or refers to a specific Secured Party, (vi) increases the
Commitment of any APA Bank, or (vii) modifies the provisions of Section 7.1
or this Section 9.3 or the definition of "Required Lending Group" 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; shall in any case be effective
without the prior written consent of such Person(s) affected thereby;
PROVIDED FURTHER that no such action that affects the rights, duties or
obligations of the Administrative Agent or of any Funding Agent shall be
effective without the prior written consent of the Person(s) affected thereby.
In the case of any waiver, each of the parties hereto shall be restored to its
former position and rights hereunder, and any Termination Event or Servicer
Termination Event waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Termination Event or
Servicer Termination Event, or impair any right consequent thereon.
(1) It is the intent of the parties hereto that the Borrower have
the right to amend this Agreement solely to add an additional lender or
additional lenders, subject to the approval of the Administrative Agent and each
Funding Agent party hereto, which shall not be unreasonably withheld or delayed.
Section 1.39 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Agreement, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of any other provision of this Agreement. The
parties hereto further agree that the holding by any court of competent
jurisdiction that any remedy pursued by the Administrative Agent or any of the
Secured Parties hereunder is unavailable or unenforceable shall not affect in
any way the ability of the Administrative Agent or any of the Secured Parties to
pursue any other remedy available to it or them (subject, however, to any
provisions of this Agreement that expressly limit the exercise of such
remedies).
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Section 1.40 NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, each of the parties hereto agrees that it shall
not, prior to one year and one day after the Termination Date, institute
against, or join with any other Person in instituting against, the Borrower any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other similar proceeding under the laws of any jurisdiction. The parties agree
that damages will be an inadequate remedy for breach of this covenant and that
this covenant may be specifically enforced.
Section 1.41 NOTICES. All notices, demands, certificates, requests
and communications hereunder ("notices") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient at its address set forth in
Annex A to the Sale and Servicing Agreement. A copy of each notice given
hereunder to any party hereto shall also be given to (without duplication) the
Borrower, the Funding Agents and the Administrative Agent. Each party hereto
may, by notice given in accordance herewith to each of the other parties hereto,
designate any further or different address to which subsequent notices shall be
sent.
Section 1.42 TERM OF THIS AGREEMENT. This Agreement shall continue
in effect until the Termination Date. On such Termination Date, this Agreement
shall terminate, all obligations of the parties hereunder shall cease and
terminate and the Collateral, if any, held hereunder and not to be used or
applied in discharge of any obligations of the Borrower in respect of the
Secured Obligations or otherwise under this Agreement or any of the other Basic
Agreements, shall be released to and in favor of the Borrower; PROVIDED that the
provisions of Sections 3.4, 3.5, 7.6, 9.5, and 9.13 and Article VIII shall
survive any termination of this Agreement and the release of any Collateral upon
such termination.
Section 1.43 ASSIGNMENTS; THIRD-PARTY RIGHTS. This Agreement shall
be a continuing obligation of the parties hereto and shall (i) be binding upon
the parties and their respective successors and assigns, and (ii) inure to the
benefit
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of and be enforceable by each Secured Party and the Administrative Agent for
the benefit of the Secured Parties, and by their respective successors,
transferees and assigns. The Borrower may not assign this Agreement, or
delegate any of its duties hereunder, without the prior written consent of
all of the Secured Parties.
Section 1.44 CONSENT OF REQUIRED LENDING GROUPS. In the event that
the consent of the Required Lending Groups is required under the terms hereof or
under the terms of any Basic Agreement, it is understood and agreed that, except
as otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by each Secured Party in its sole and
absolute discretion.
Section 1.45 LIMITATION OF LIABILITY. The Administrative Agent shall
not have any obligations under this Agreement or any other Basic Agreement other
than those specifically set forth herein or therein, and no implied obligations
of the Administrative Agent shall be read into this Agreement or any other Basic
Agreement. 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 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 1.46 COUNTERPARTS. This Agreement may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 1.47 HEADINGS. The headings of Sections and paragraphs and
the Table of Contents contained in this Agreement are provided for convenience
only. They form no part of this Agreement and shall not affect its construction
or interpretation.
Section 1.48 NO RECOURSE AGAINST CERTAIN PARTIES. No recourse under
or with respect to any obligation, covenant or agreement (including, without
limitation, any obligation or agreement to pay fees or any other amount) of the
Borrower contained in this Agreement or any other agreement, instrument or
document entered into by it pursuant hereto or in connection herewith shall be
had
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against any incorporator, Affiliate, stockholder, officer, employee, director
or agent of the Borrower solely by virtue of its acting in such capacity, by
the enforcement of any assessment, by any legal or equitable proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood
that the agreements of the Borrower contained in this Agreement and all of
the other agreements, instruments and documents entered into by it pursuant
thereto or in connection herewith are, in each case, solely the corporate
obligations of the Borrower, and that no personal liability whatsoever shall
attach to or be incurred by any incorporator, stockholder, Affiliate,
officer, employee, director or agent of the Borrower, or any of them, under
or by reason of any of the obligations, covenants or agreements of the
Borrower contained in this Agreement or in any other such instrument,
document or agreement, or which are implied therefrom, and that any and all
personal liability of every such incorporator, stockholder, affiliate,
officer, employee, director or agent of the Borrower for breaches by the
Borrower of any such obligations, covenants or agreements, which liability
may arise either at common law or at equity, by statute or constitution, or
otherwise, 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.
Section 1.49 RESPECTIVE RIGHTS OF THE BORROWER AND THE SECURED
PARTIES IN THE COLLATERAL. The Borrower hereby acknowledges and agrees that its
interest in the Collateral is subject and subordinate in all respects to its
pledge of the Collateral to the Secured Parties under this Agreement and that
the Administrative Agent holds the Collateral for the Secured Parties hereunder.
Section 1.50 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 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,
57
<PAGE>
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 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 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 Borrower or its property in the courts of any jurisdiction.
Section 1.51 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 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 Agreement and the other
Basic Agreements to which it is a party, by among other things, this waiver.
Section 1.52 LIABILITIES AND RIGHTS OF FUNDING AGENTS. (a)
Notwithstanding any provision of this Agreement or any other Basic Agreement:
(i) no Funding Agent shall have any obligations under this Agreement or any
other Basic Agreement other than those specifically set forth herein and
therein, and no implied obligations of any Funding Agent shall be read into this
Agreement or any other Basic Agreement; and (ii) in no event shall any Funding
Agent 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
58
<PAGE>
action by which such losses or damages may be claimed. Neither shall any
Funding Agent nor any of their respective directors, officers, agents or
employees be liable for any action taken or omitted to be taken in good faith
by it or them under or in connection with this Agreement or any other Basic
Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the foregoing, each Funding Agent (a) may
consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (b) shall not be responsible to the Secured Parties,
the Seller, the Servicer or the Borrower for any statements, warranties or
representations made in or in connection with this Agreement or the other
Basic Agreements (except for its own), (c) shall not be responsible to the
Secured Parties, the Seller, the Servicer or the Borrower for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Basic Agreements (except with respect to
itself), (d) shall incur no liability under or in respect of any of the
Commercial Paper or other obligations of the CP Lenders under this Agreement
or the other Basic Agreements and (e) shall incur no liability under or in
respect of this Agreement or the other Basic Agreements by acting upon any
notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile) believed by it to be
genuine and signed or sent by the proper party or parties. Notwithstanding
anything else herein or in the other Basic Agreements, it is agreed that
where a Funding Agent may be required under this Agreement or the other Basic
Agreements to give notice of any event or condition or to take any action as
a result of the occurrence of any event or the existence of any condition,
such Funding Agent agrees to give such notice or take such action only to the
extent that it has actual knowledge of the occurrence of such event or the
existence of such condition, and shall incur no liability for any failure to
give such notice or take such action in the absence of such knowledge.
(1) Each of the Funding Agents hereby represents and warrants to
the Seller and the Servicer that it is duly authorized to act on behalf of any
CP Lender and APA Bank in its related Lending Group.
(2) Each Funding Agent other than the HLS Funding Agent and the
Autobahn Funding Agent hereby confirms that the APA Banks in its related Lender
Group have executed and delivered the related Asset Purchase Agreement and, by
such execution and delivery, have assumed all of the rights and obligations
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<PAGE>
of the APA Banks hereunder and under the other Basic Agreements. Except with
respect to HLS, upon effectiveness of this Agreement and, with respect to
each APA Bank, upon effectiveness of its related Asset Purchase Agreement,
each APA Bank shall have all of the rights and benefits of an "APA Bank"
hereunder and under the other Basic Agreements, and each APA Bank shall
assume, and be bound by and liable for, all of the duties and obligations of
an "APA Bank" hereunder and thereunder to the extent specified herein and
therein, in each case as if such rights, benefits, duties, and obligations
were set forth in their entirety in the related Asset Purchase Agreement.
(3) All actions taken by the Secured Parties in a Lending Group
hereunder and under the Basic Agreements shall be taken by the related Funding
Agent on behalf of such Secured Party.
Section 1.53 CP LENDERS GENERALLY. (a) Each of the parties hereto
hereby agrees that it will not institute against, or join with any other Person
in instituting against, a CP Lender any bankruptcy, insolvency, reorganization
or similar proceeding so long as any Commercial Paper or other notes issued by
such Purchaser shall be outstanding or there shall not have elapsed one year
plus one day since the last day on which any such CP Lender's Commercial Paper
or other notes shall have been outstanding.
(1) Notwithstanding anything to the contrary contained herein, the
obligations of a CP Lender under this Agreement are solely the corporate
obligations of such CP Lender and (i) in the case of obligations of a CP Lender
other than Commercial Paper, shall be payable at such time as funds are actually
received by, or are available to, such CP Lender, in excess of funds necessary
to pay in full all of its 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 such CP Lender, but shall continue to accrue. Each
party hereto agrees that the payment of any claim (as defined in Section 101 of
Title 11, United States Code (Bankruptcy)) of any such party against a CP
Lender, shall be subordinated to the payment in full of all of such Lender's
outstanding Commercial Paper. Notwithstanding the preceding two sentences, HLS
and the HLS Liquidity Banks and Autobahn and the Autobahn Liquidity Banks may
reach any agreement among themselves as to the matters set forth in the
preceding two sentences, and such agreement shall supercede the preceding two
sentences with respect to the relationship between HLS or Autobahn, as
applicable, and the other parties hereto.
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No recourse under any obligation, covenant or agreement of a CP Lender
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, member, manager, employee or agent of such CP Lender 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 each CP Lender, and that no personal liability
whatever shall attach to or be incurred by any incorporator, stockholder,
officer, director, member, manager, employee or agent of such CP Lender or any
of its Affiliates (solely by virtue of such capacity) or any of them under or by
reason of any of the obligations, covenants or agreements of such CP Lender
contained in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by a CP Lender 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, member,
manager, 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 their willful misconduct or of fraudulent actions taken or
fraudulent omissions made by them.
(2) Each of the parties hereto hereby waives any right to setoff
which it may have or to it may be entitled against a CP Lender or its assets.
Section 1.54 GOVERNING LAW. This Agreement shall be governed by and
construed, and the obligations, rights and remedies of the parties hereunder
shall be determined, in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date set forth on the first page hereof.
CP FUNDING CORP., as Borrower
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent on behalf of
the Secured Parties
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as PARCO Funding Agent
By:
----------------------------------
Name:
Title:
PARK AVENUE RECEIVABLES
CORPORATION,
as a Secured Party
By:
----------------------------------
Name:
Title:
<PAGE>
ING BARING (U.S.) CAPITAL
MARKETS, LLC,
as HLS Funding Agent
By:
----------------------------------
Name:
Title:
HOLLAND LIMITED
SECURITIZATION, INC.,
as a Secured Party
By:
----------------------------------
Name:
Title:
<PAGE>
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG,
as Autobahn Funding Agent
By:
----------------------------------
Name:
Title:
AUTOBAHN FUNDING
COMPANY LLC,
as a Secured Party
By: DG Bank Genossenschaftsbank AG, as
its Attorney-in-Fact
By:
----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
(a) GENERAL CHARACTERISTICS. Each Receivable:
(i) has been originated in the United States by the Seller directly
or by a dealer for the retail sale or refinancing of a Financed Vehicle in
the ordinary course of its business and such Seller or dealer (as the case
may be) has all necessary licenses and permits to originate Receivables in
the state where either such dealer or the related consumer is located, has
been fully and properly executed by the parties thereto, and, if originated
by a dealer, has been purchased from such dealer by the Seller under an
existing Dealer Agreement or validly assigned by such dealer to the Seller
or, with respect to any Receivable sold to the Borrower by the Seller, was
purchased by the Seller (and, if originated by the Seller, is an eligible
Receivable under any term securitization documents of the Seller);
(ii) has created 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 validly assigned to the Borrower by
the Seller and has been validly assigned by the Borrower to the
Administrative 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 the related Contract is
prepaid, a prepayment that fully pays the principal balance and includes
accrued but unpaid
A-1
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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 except in accordance with the Credit and Servicing
Procedures.
(b) COMPLIANCE WITH LAW. Each Receivable and the sale or
refinancing of the related Financed Vehicle complied at the time it was
originated or made, and at the date such Receivable was sold by the Seller to
the Borrower and pledged by the Borrower under this Agreement, complies, in
all material respects, with all requirements of applicable Federal, state and
local laws and regulations thereunder, including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
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 (i) a dealer and
was sold by the dealer to the Seller without any fraud or misrepresentation
by the dealer or (ii) the Seller in connection with a refinancing or direct
loan.
(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.
A-2
<PAGE>
(g) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables was 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 Funding Date, of
the Receivables purchased by the Borrower and pledged to the Secured Parties
on such date; and the Borrower's books and records reflect the purchase of
such Receivables and the pledge thereof to the Secured Parties.
(h) CERTAIN CHARACTERISTICS OF RECEIVABLES. Each Receivable:
(i) had a remaining maturity, as of the Relevant Cutoff Date, of not more
than 72 months;
(ii) each Receivable has an original maturity of not more than 72 months;
(iii) each Receivable had a remaining Principal Balance as of the Relevant
Cutoff Date of not more than $60,000;
(iv) no Receivable was more than 30 days past due as of the Relevant
Cutoff Date; and
(v) no funds have been advanced by the Seller, any dealer, the Borrower
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,
except in accordance with the Credit and Servicing Procedures.
(k) NO DEFENSES. Except for the security interests in favor of
the Seller, the Borrower and the Administrative Agent, the Receivables are
free and clear of all security interests, liens, charges, and encumbrances
and to the best knowledge of the Borrower no right of rescission, setoff,
counterclaim or defense has been asserted or threatened with respect to any
Receivable.
A-3
<PAGE>
(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 none of the
Seller, the Servicer or the Borrower has waived any of the foregoing, except
in accordance with the Credit and Servicing Procedures.
(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) the Borrower has good and marketable title to
each Receivable free and clear of all liens, encumbrances, security interests
and rights of others, other than the lien of the Administrative Agent for the
benefit of the Secured Parties, 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) where
applicable, a fully executed original of the Contract, (2) the original
executed credit application (or, if no such credit application has been
completed, other evidence of application being made or credit evaluation
being conducted), or a copy thereof, together with all applicable amendments
and addenda and (3) the original Lien Certificate or application therefor
or, for any Contract secured by a Financed Vehicle registered in any state
for which the Paperless Title System is used to evidence title to and any
lien in the Financed Vehicle, a computer printout or similar documentary
evidence that there is an electronic record in the Paperless Title System
indicating that the Financed Vehicle is owned by the Obligor and subject to
the interest of the Seller as first lienholder or secured party (when such
electronic record becomes available through the Paperless Title System).
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 Servicer, as custodian.
A-4
<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 Administrative Agent
for the benefit of the Secured Parties 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 subject to a Lockbox Agreement.
(u) UCC CHARACTERIZATION. The contract evidencing such Receivable
constitutes "chattel paper" under the Relevant UCC.
(v) NO ADVERSE SELECTION. 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 Exhibit A.
A-5
<PAGE>
EXHIBIT B
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.
September 21, 1999
Reference is hereby made to that certain Amended and Restated
Security Agreement, dated as of September 21, 1999 (as amended, supplemented
or otherwise modified and in effect from time to time, the "SECURITY
AGREEMENT") by and among CP Funding Corp., a Nevada corporation, as borrower
(the "BORROWER"), The Chase Manhattan Bank, a New York banking corporation,
as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") and
the several funding agents, lenders and financial institutions party thereto
from time to time (collectively, the "SECURED PARTIES") Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in, or incorporated by reference into, the Security Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the
order of the Administrative Agent, for the account of and for the benefit of
the Secured Parties at the principal office of the Administrative Agent at
450 West 33rd Street, 15th Floor, New York, New York 10001, Attention:
Structured Finance Services, a principal sum equal to _____________ MILLION
DOLLARS ($____________), in lawful money of the United States of America and
in immediately available funds.
The date and amount of each Funding extended by the Secured Parties
to the Borrower under the Security Agreement, and each payment of principal
thereof, shall be recorded by the Administrative Agent, for the account of
the applicable Secured Parties, on its books and, prior to any transfer of
this Note (or, at the discretion of the Secured Parties, at any other time),
endorsed by the Administrative Agent, on behalf of the Secured Parties, on
the schedule attached
B-1
<PAGE>
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
Security 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 Security Agreement and payable to the Administrative 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
Security 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 a CP Lender to fund its 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
seventy-eight (78) months following the Commitment Expiry Date.
Following the occurrence of a Termination Event, the Administrative
Agent may, with the consent of the Required Lending Groups, or shall, at the
direction of the Required Lending Groups, 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 the extent of the Collateral. This Note does not
purport to summarize the
B-2
<PAGE>
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 Administrative 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 protection of, or
realization upon, Collateral, and all such costs shall be payable in
accordance with the terms of the Security 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.
B-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:
B-4
<PAGE>
- --------------------------------------------------------------------------------
$225,000,000
CREDIT AGREEMENT
Dated as of October 14, 1999
among
AFS FUNDING CORP.,
as the Borrower
AMERICREDIT CORP.,
AMERICREDIT FINANCIAL SERVICES INC.,
AMERICREDIT MANAGEMENT COMPANY,
each as a Contingent Obligor
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO AS LENDERS
as the Lenders
BANKERS TRUST COMPANY,
as Lender Collateral Agent
and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as the Administrative Agent
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . 2
SECTION 1.01 Certain Defined Terms . . . . . . . . . . . . . . . 2
SECTION 1.02 Computation of Time Periods.. . . . . . . . . . . . 2
SECTION 1.03 Accounting Terms. . . . . . . . . . . . . . . . . . 2
SECTION 1.04 Other Terms.. . . . . . . . . . . . . . . . . . . . 3
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . . . . . . . . 3
SECTION 2.01 The Line of Credit; Lender Notes. . . . . . . . . . 3
SECTION 2.02 Borrowings; Notices of Borrowing and Advances.. . . 4
SECTION 2.03 [RESERVED]. . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.04 Reductions of Commitments.. . . . . . . . . . . . . 7
SECTION 2.05 Prepayments of the Borrowings . . . . . . . . . . . 7
SECTION 2.06 Interest on the Advances. . . . . . . . . . . . . . 8
SECTION 2.07 Interest Rate Protection. . . . . . . . . . . . . .10
SECTION 2.08 Voluntary Conversion and Continuation of Advances..11
SECTION 2.09 Fees. . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 2.10 Extensions of Commitment Expiration Date. . . . . .13
SECTION 2.11 Increased Costs; Increased Capital. . . . . . . . .13
SECTION 2.12 Taxes.. . . . . . . . . . . . . . . . . . . . . . .15
SECTION 2.13 Payments and Computations.. . . . . . . . . . . . .16
SECTION 2.14 Indemnification for Loss. . . . . . . . . . . . . .17
SECTION 2.15 Illegality. . . . . . . . . . . . . . . . . . . . .18
SECTION 2.16 Option to Fund. . . . . . . . . . . . . . . . . . .19
SECTION 2.17 Sharing of Payments, Etc. . . . . . . . . . . . . .19
SECTION 2.18 Administrative Agent's Records. . . . . . . . . . .19
ARTICLE II AGUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2A.01 Guaranty of Payment and Performance. . . . . . . . . . .20
SECTION 2A.02 Contingent Obligor's Agreement to Pay. . . . . . . . . .20
SECTION 2A.03. Limited Guaranty . . . . . . . . . . . . . . . . . . . .21
ARTICLE III CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . .21
SECTION 3.01 Condition Precedent to the Effectiveness of this
Agreement.. . . . . . . . . . . . . . . . . . . . .21
SECTION 3.02 Conditions Precedent to Borrowings, Conversions and
Continuations.. . . . . . . . . . . . . . . . . . .25
SECTION 3.03 Special Conditions to Advances under Liquidity
Commitments.. . . . . . . . . . . . . . . . . . . .29
(i)
<PAGE>
ARTICLE IV REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . .29
SECTION 4.01 Representations and Warranties with respect to the
Borrower. . . . . . . . . . . . . . . . . . . . . .29
SECTION 4.02 Representations and Warranties with respect to the
Spread Account Depositor. . . . . . . . . . . . . .34
SECTION 4.03 Representations and Warranties with respect to each
Contingent Obligor. . . . . . . . . . . . . . . . .35
SECTION 4.04 Limited Remedies and Recourse for Breach. . . . . .36
ARTICLE V COVENANTS OF WITH RESPECT TO THE BORROWER. . . . . . . . . . . . .36
SECTION 5.01 Affirmative Covenants.. . . . . . . . . . . . . . .36
SECTION 5.02 Negative Covenants. . . . . . . . . . . . . . . . .44
SECTION 5.03 Limited Remedies and Recourse for Breach. . . . . .47
ARTICLE VA CONTINGENT OBLIGOR COVENANTS. . . . . . . . . . . . . . . . . . .47
SECTION 5A.01 Covenant of Each Contingent Obligor . . . . . . . .47
SECTION 5A.02 Covenants of ACFS . . . . . . . . . . . . . . . . .47
ARTICLE VI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 6.01 Events of Default.. . . . . . . . . . . . . . . . .49
SECTION 6.02 Remedies. . . . . . . . . . . . . . . . . . . . . .51
ARTICLE VIA EVENTS OF EARLY TERMINATION. . . . . . . . . . . . . . . . . . .52
SECTION 6A.01 Events of Early Termination.. . . . . . . . . . . .52
SECTION 6A.02 Consequences. . . . . . . . . . . . . . . . . . . .53
ARTICLE VIB EVENTS OF EARLY AMORTIZATION . . . . . . . . . . . . . . . . . .53
SECTION 6B.01 Events of Early Amortization. . . . . . . . . . . .53
SECTION 6B.02 Consequences. . . . . . . . . . . . . . . . . . .54
ARTICLE VII THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 7.01 Appointment.. . . . . . . . . . . . . . . . . . . .54
SECTION 7.02 Delegation of Duties. . . . . . . . . . . . . . . .54
SECTION 7.03 Exculpatory Provisions. . . . . . . . . . . . . . .55
SECTION 7.04 Reliance by Agent.. . . . . . . . . . . . . . . . .55
SECTION 7.05 Notices.. . . . . . . . . . . . . . . . . . . . . .55
SECTION 7.06 Non-Reliance on Agent and Other Lenders.. . . . . .56
SECTION 7.07 Indemnification.. . . . . . . . . . . . . . . . . .56
SECTION 7.08 Agent in its Individual Capacity. . . . . . . . . .57
SECTION 7.09 Successor Agent.. . . . . . . . . . . . . . . . . .57
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 8.01 Amendments, Etc.. . . . . . . . . . . . . . . . . .58
SECTION 8.02 Notices, Etc. . . . . . . . . . . . . . . . . . . .59
(ii)
<PAGE>
SECTION 8.03 No Waiver; Remedies.. . . . . . . . . . . . . . . .60
SECTION 8.04 Costs, Expenses and Indemnification.. . . . . . . .61
SECTION 8.05 Binding Effect; Termination.. . . . . . . . . . . .61
SECTION 8.06 Assignments and Participation.. . . . . . . . . . .61
SECTION 8.07 No Proceedings. . . . . . . . . . . . . . . . . . .65
SECTION 8.08 Submission to Jurisdiction; Waivers.. . . . . . . .66
SECTION 8.09 WAIVERS OF JURY TRIAL.. . . . . . . . . . . . . . .66
SECTION 8.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . .67
SECTION 8.11 Execution in Counterparts.. . . . . . . . . . . . .67
SECTION 8.12 Headings. . . . . . . . . . . . . . . . . . . . . .67
SECTION 8.13 Severability. . . . . . . . . . . . . . . . . . . .67
SECTION 8.14 Integration.. . . . . . . . . . . . . . . . . . . .67
SECTION 8.15 Right of Set-Off. . . . . . . . . . . . . . . . . .67
SECTION 8.16 Limitation of Liability.. . . . . . . . . . . . . .68
SECTION 8.17 No Recourse Against Certain Persons.. . . . . . . .68
SECTION 8.18 Treatment of Certain Information. . . . . . . . . .69
SECTION 8.19 Certain Payments. . . . . . . . . . . . . . . . . .69
SECTION 8.20 Unenforceability of Contingent Obligations Against
Borrower. . . . . . . . . . . . . . . . . . . . . .70
SECTION 8.21 Waiver of Subrogation . . . . . . . . . . . . . . .70
SECTION 8.22 Subordination . . . . . . . . . . . . . . . . . . .70
SECTION 8.23 Waivers by Contingent Obligors. . . . . . . . . . .71
SECTION 8.24 Non-Recourse; Subordination of Interest on Borrower
Collateral. . . . . . . . . . . . . . . . . . . . .71
SECTION 8.25 Third Party Beneficiary . . . . . . . . . . . . . .72
ARTICLE IX FURTHERANCE OF SUBORDINATION. . . . . . . . . . . . . . . . . . .73
SECTION 9.01 Remedies Limited. . . . . . . . . . . . . . . . . .73
SECTION 9.02 Obligations Limited.. . . . . . . . . . . . . . . .73
SECTION 9.03 Subordination Agreement Governs.. . . . . . . . . .73
SECTION 9.04 Survival. . . . . . . . . . . . . . . . . . . . . .73
(iii)
<PAGE>
LIST OF SCHEDULES
Schedule I List of Applicable Lending Offices
(iv)
<PAGE>
LIST OF EXHIBITS
Exhibit A Form of Lender Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Assignment and Assumption Agreement
Exhibit E Form of Confidentiality Agreement
Exhibit F List of Series Transaction Document
LIST OF APPENDICES
Appendix A Certain Definitions
LIST OF ANNEXES
Annex I Calculation of Maximum Net Cumulative Losses
Annex II Cumulative Gross Default/Cumulative Net Loss Triggers
Annex III Information on Underlying Transactions Documents
(v)
<PAGE>
CREDIT AGREEMENT, dated as of October 14, 1999, by and among AFS
FUNDING CORP., a Nevada corporation (the "BORROWER"), AMERICREDIT CORP., a Texas
corporation ("ACC"), AMERICREDIT FINANCIAL SERVICES INC., a Delaware corporation
("ACFS"), AMERICREDIT MANAGEMENT COMPANY, a Delaware corporation ("AMC",
together with ACC and ACFS, each a "CONTINGENT OBLIGOR" and collectively, the
"CONTINGENT OBLIGORS"), the LENDERS from time to time parties hereto (the
Conduit Lenders, the Liquidity Lenders and the Non-contingent Lenders,
collectively, the "LENDERS"), Bankers Trust Company, a New York banking
corporation ("BANKERS TRUST"), as collateral agent under the terms of the
Security Agreement (defined below) (in such capacity, the "LENDER COLLATERAL
AGENT"), and CREDIT SUISSE FIRST BOSTON, a Swiss banking corporation acting
through its New York Branch, as administrative agent for the Lenders (together
with its successors in such capacity, the "ADMINISTRATIVE AGENT").
RECITALS
1. The Borrower has sold and contemplates selling, from time to
time, pools of receivables to various trusts which have issued and may issue
various series of notes or certificates (each a "SERIES") which will be repaid
by the proceeds of, or represent an interest in, as the case may be, such pools
of receivables.
2. A spread account has been (with respect to existing Series),
and it is contemplated that in accordance with the terms of future Series, shall
be, established into which the Borrower and/or AFS Funding Trust, a Delaware
business trust which is owned by the Borrower (the "SPREAD ACCOUNT DEPOSITOR"),
has deposited, or shall be obligated to deposit, certain moneys on or about the
closing date for each Series (each an "INITIAL SPREAD ACCOUNT DEPOSIT", and
collectively, the "INITIAL SPREAD ACCOUNT DEPOSITS").
3. In order to reduce the amount which the Spread Account
Depositor is obligated to advance as an Initial Spread Account Deposit with
respect to future Series, the Borrower and/or the Spread Account Depositor
intends to deposit certain moneys on or about the closing date for each Series
(each a "RCCA DEPOSIT", and collectively, the "RCCA DEPOSITS") in a replacement
cash collateral account (each, an "RCCA", and collectively, the "RCCAS") to
provide credit support to FSA (as defined herein) in connection with the
insurance policies it has issued and will issue with respect to the Series.
4. In order to fund the RCCAs, the Borrower has requested that the
Lenders establish a revolving line of credit to the Borrower providing for
Borrowings (as defined herein) of up to $225,000,000 in the aggregate at any
time outstanding.
5. Upon the terms and conditions contained in this Agreement and
the other Transaction Agreements, the Lenders are willing to provide such a line
of credit to the Borrower.
<PAGE>
6. Pursuant to the RCCA Agreement (as defined herein), Bank One,
N.A., as collateral agent (the "RCCA AGENT"), shall hold a security interest in
the RCCAs for the benefit of FSA in the first instance and thereafter, the
Lenders.
7. The Borrower is a Subsidiary of ACC and AFCS and an Affiliate
of AMC and as such, each Contingent Obligor will benefit from the extensions of
credit to the Borrower under this Agreement.
8. Pursuant to the Security Agreement (as defined herein), the
Lender Collateral Agent, for the benefit of the Secured Parties (as such term is
defined in the Security Agreement), as security for certain obligations of the
Borrower (including its obligations under this Agreement), shall hold a
security interest in certain property of the Borrower.
9. The Borrower has assigned to the Spread Account Depositor all
its rights under the Spread Account Agreement and, upon issuance of each new
Series, will assign to the Spread Account Depositor all its ownership interests
in the issuer trust formed in connection with such Series.
AGREEMENTS
In consideration of the premises and of the agreements herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower, the Contingent
Obligors, the Lenders, the Lender Collateral Agent and the Administrative Agent
hereby agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 CERTAIN DEFINED TERMS. Certain capitalized terms used
in this Agreement and not otherwise defined herein shall have the respective
meanings set forth in APPENDIX A hereto or, if not defined therein, shall have
the respective meanings set forth in the Security Agreement.
SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding." Periods of days referred to in this Agreement shall
be counted in calendar days unless Business Days are expressly prescribed and
references in this Agreement to months and years shall be to calendar months and
calendar years unless otherwise specified.
SECTION 1.3 ACCOUNTING TERMS. All accounting terms not specifically
defined otherwise herein shall have the meaning customarily given in accordance
with GAAP, and all
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financial computations hereunder shall be computed, unless specifically
provided otherwise herein, in accordance with GAAP.
SECTION 1.4 OTHER TERMS. Any references herein to Exhibits,
Schedules, Appendices, Sections or Articles are references to Exhibits,
Schedules, Appendices, Sections or Articles of this Agreement, unless otherwise
specified. The words "including" and "include" are deemed to be followed by the
words "without limitation."
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.1 THE LINE OF CREDIT; LENDER NOTES.
(1) On and subject to the terms and conditions hereinafter set
forth, during the Commitment Period, the Borrower shall be entitled, from
time to time, to request Advances from the Lenders. The Advances made to
fund any RCCA Deposit shall not in the aggregate exceed the Maximum Borrowing
Percentage of the initial aggregate principal amount of the securities
constituting the relevant Designated Series. The Conduit Lenders may, and to
the extent a Conduit Lender has elected not to make an Advance, the Liquidity
Lenders for such Conduit Lender, in accordance with subsection 2.02(e),
shall, and the Non-contingent Lenders shall, make such Advances to the
Borrower as herein provided. The parties hereto agree that following the
Borrowings relating to the RCCA Deposit of any Designated Series (each such
Borrowing a "DESIGNATED SERIES BORROWING"), which Borrowings in the aggregate
shall not exceed the Maximum Borrowing Percentage of the initial aggregate
principal amount of the securities constituting the relevant Designated
Series, no additional Borrowing shall be requested by the Borrower nor made
by the Lenders with respect to such Designated Series. Each Lender's PRO
RATA share of any Borrowing hereunder shall be as set forth in SECTION 2.02.
The Borrower may not request Advances, and a Conduit Lender may elect not to
make, and no Liquidity Lender or Non-contingent Lender shall be required to
make, Advances, if after giving effect to such Advance the aggregate
outstanding principal amount of such Conduit Lender's Advances would exceed
its Available Maximum Advance Amount or if the aggregate outstanding
principal amount of such Liquidity Lender's Advances or such Non-contingent
Lender's Advances would exceed its Available Commitment Amount. Within the
limits set forth in this Agreement and within the limits of each Liquidity
Lender's or Non-contingent Lender's Available Commitment Amount or each
Conduit Lender's Available Maximum Advance Amount, as applicable, during the
Commitment Period the Borrower may borrow, repay pursuant to SECTION 2.05
(and subject to the provisions of the Subordination Agreement and Article IX
hereof) and reborrow (but only to fund the RCCA Deposits relating to new
Designated Series) under this SECTION 2.01 and SECTION 2.02. Subject to the
terms of SECTION 2.05, prior to the Facility Maturity Date and
notwithstanding the termination of the Commitment Period, any outstanding
Advances (other than any Advance which is a part of a Designated Series
Borrowing whose Designated Series Maturity Date has occurred) may, at the
option of the Borrower, be Converted or Continued pursuant to the terms of
SECTION 2.08.
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<PAGE>
(2) The Advances made by each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of EXHIBIT A,
bearing the legend set forth in Exhibit A regarding subordination, with
appropriate insertions therein as to date and principal amount (each, as
indorsed or modified from time to time, a "LENDER NOTE" and, collectively
with the Lender Notes of all other Lenders, the "LENDER NOTES"), payable to
the order of such Lender for the account of its Applicable Lending Office,
dated the Closing Date (or, if later, the date of the Assignment and
Assumption pursuant to which such Lender became a party to this Agreement)
and in the stated principal amount equal to in the case of a Non-contingent
Lender, its Non-contingent Lending Commitment Amount, or in the case of a
Liquidity Lender, its Liquidity Commitment Amount, or, in the case of a
Conduit Lender, its Maximum Advance Amount.
(3) With respect to each Designated Series Borrowing, the entire
outstanding principal amount of such Designated Series Borrowing shall mature
and be due and payable on the later of the applicable Designated Series
Maturity Date and the earliest date permitted under the provisions of the
Subordination Agreement and Article IX hereof, together with all accrued and
unpaid amounts due under this Agreement or other Transaction Documents with
respect to such Designated Series Borrowing. In the event the aggregate
amount of funds in any RCCA with respect to a Designated Series (including
the value of all investments made by the trustee of such Designated Series in
Cash Equivalents or other investments permitted under the related Series
Transaction Documents) is less than the aggregate outstanding principal
amount of the Designated Series Borrowings advanced to fund such RCCA, the
portion of such Designated Series Borrowings equal to such deficiency shall
be due and payable immediately, if permitted under the provisions of the
Subordination Agreement and Article IX hereof, or otherwise at the earliest
date permitted under the provisions of the Subordination Agreement and
Article IX hereof together with all accrued and unpaid amounts due under this
Agreement or other Transaction Documents with respect to that portion of such
Designated Series Borrowings, including without limitation any amounts which
may be due under SECTION 2.14. Without limiting the foregoing, the entire
outstanding principal amount of all Borrowings shall mature and be due and
payable on the later of the Facility Maturity Date and the earliest date
permitted under the provisions of the Subordination Agreement and Article IX
hereof, together with all accrued and unpaid interest thereon and all other
accrued and unpaid amounts due under this Agreement and the other Transaction
Documents.
SECTION 2.2 BORROWINGS; NOTICES OF BORROWING AND ADVANCES.
(1) The Borrower shall give the Administrative Agent written notice
(a "NOTICE OF BORROWING") not later than 4:00 p.m. (New York City time) on the
Business Day prior to a Borrowing hereunder proposed to consist of Base Rate
Advances or Commercial Paper Rate Advances, and not later than 4:00 p.m. (New
York City time) on the third Business Day prior to a Borrowing hereunder
proposed to consist of Eurodollar Rate Advances. If a Notice of Borrowing is
transmitted by telecopy, the Borrower shall promptly provide written
confirmation thereof to the Administrative Agent. A Notice of Borrowing shall
be substantially in the form of EXHIBIT B hereto and shall specify, subject to
the terms and conditions of this Agreement, (i) the date of the proposed
Borrowing (the "BORROWING DATE"), (ii) the amount of the proposed Borrowing, and
(iii) the Type or Types of the Advances to be made as part of such proposed
Borrowing. Each Notice of
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Borrowing shall be irrevocable. If the Administrative Agent receives a
Notice of Borrowing at or before 4:00 p.m. on a Business Day, it shall
provide each Lender with a copy thereof on such Business Day, and otherwise
it shall provide each Lender with a copy thereof on the following Business
Day.
(2) The Borrowing Date specified in any Notice of Borrowing
shall be a Business Day during the Commitment Period.
(3) Unless the Administrative Agent otherwise consents, the
amount of any proposed Borrowing shall be at least $3,000,000.
(4) All Advances in respect of a Borrowing specified in a Notice
of Borrowing shall be of the same Type, except that if on the applicable
Borrowing Date there are both Conduit Lenders and Non-contingent Lenders, a
Notice of Borrowing may specify that all Advances by Conduit Lenders are to
be Commercial Paper Rate Advances and all Advances to be made by such
Non-contingent Lenders are to be Base Rate Advances or Eurodollar Rate
Advances. The Borrower may request Commercial Paper Rate Advances only from
Conduit Lenders. If there are Conduit Lenders as of a Borrowing Date, the
Borrower must request that each Conduit Lender's Advance in respect of a
Borrowing on such Borrowing Date be a Commercial Paper Rate Advance, unless
such Conduit Lender otherwise consents or has advised the Borrower that it
has ceased or as of such Borrowing Date will cease for any reason to fund its
making or maintenance of its Advances with Commercial Paper Notes (including
by reason of its obtaining Support Advances). It is the intent of the
Borrower and the Conduit Lenders to fund Advances in the commercial paper
market to the extent practicable.
(5) On and subject to the terms and conditions of this
Agreement, following receipt by the Administrative Agent and the Lenders of a
proper Notice of Borrowing, (i) each Conduit Lender may elect to make an
Advance on the applicable Borrowing Date in an amount equal to its Lending
Percentage of the requested Borrowing, and (ii) each Non-contingent Lender
shall make an Advance on such Borrowing Date in an amount equal to its
Lending Percentage (as a Non-contingent Lender) of such Borrowing. Each
Conduit Lender shall notify the Administrative Agent and each of its related
Liquidity Lenders at or before 11:30 a.m. (New York City time) on the
applicable Borrowing Date whether it has elected to make its Advance pursuant
to this SECTION 2.02(e) in respect of the Borrowing to be made on such date
and, if not, shall in such notice specify the identity of each of its
Liquidity Lenders and their respective Liquidity Percentages on such
Borrowing Date. In the event that a Conduit Lender has elected not to make
such Advance or shall not have timely provided such notice (in which case it
shall be deemed to have elected not to make such Advance), each of such
Conduit Lender's Liquidity Lenders shall make an Advance on such Borrowing
Date in an amount equal to its Liquidity Percentage of such Conduit Lender's
Lending Percentage of the Borrowing to be made on such Borrowing Date.
(6) Each applicable Lender shall (subject to SECTION 2.02(g) in the
case of Conduit Lenders), before 11:30 p.m. (New York City time) on a Borrowing
Date, make available for the account of its Applicable Lending Office to the
Administrative Agent at its account referred
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<PAGE>
to in SECTION 2.13(a), by wire transfer of immediately available funds, such
Lender's PRO RATA share of such requested Borrowing. The Administrative
Agent shall promptly notify the Borrower in the event that any Lender either
fails to make such funds available to the Administrative Agent before such
time or notifies the Administrative Agent that it will not make such funds
available to the Administrative Agent before such time; PROVIDED, however,
that the Administrative Agent shall have no liability for failing to give any
notice as provided in this sentence. Subject to (x) the Administrative
Agent's receipt of such funds and (y) the fulfillment of the applicable
conditions set forth in ARTICLE III, as determined by the Administrative
Agent, the Administrative Agent will by no later than 12:00 noon (New York
City time) on such Borrowing Date make such funds available, in the same type
of funds received, by wire transfer thereof to the relevant RCCA (which shall
be designated by the Borrower in the Notice of Borrowing).
(7) In the event that a Conduit Lender elected to make an
Advance on a Borrowing Date but failed to do so by the time contemplated by
SECTION 2.02(f), such Lender shall be deemed to have rescinded its election
to make such Advance, and neither the Borrower nor any other party shall have
any claim against such Conduit Lender by reason for its failure to timely
make such Advance. In any such case, the Administrative Agent shall give
notice of such failure not later than 12:00 noon (New York City time) on the
Borrowing Date to each Liquidity Lender with respect to such Conduit Lender,
which notice shall specify the identity of such Conduit Lender, the amount of
the Advance which it had elected to make and the respective Liquidity
Percentages of such Liquidity Lenders on such Borrowing Date (as determined
by the Administrative Agent in good faith; for purposes of such
determination, the Administrative Agent shall be entitled to rely
conclusively on the most recent information provided by such Conduit Lender
or its agent or by the agent for its Support Parties). Subject to receiving
such notice, each of such Conduit Lender's Liquidity Lenders shall make an
Advance on such Borrowing Date in an amount equal to its Liquidity Percentage
of such Conduit Lender's Lending Percentage of the Borrowing to be made on
such Borrowing Date at or before 1:00 p.m. (New York City time) on such
Borrowing Date and otherwise in accordance with SECTION 2.02(f). Subject to
(x) the Administrative Agent's receipt of such funds and (y) the fulfillment
of the applicable conditions set forth in ARTICLE III, as determined by the
Administrative Agent, the Administrative Agent will by no later than 1:30
p.m. (New York City time) on such Borrowing Date make such funds available,
in the same type of funds received, by wire transfer thereof to the relevant
RCCA (which shall be designated by the Borrower in the Notice of Borrowing).
In the event that any Liquidity Lender made an Advance on a Borrowing Date in
lieu of a Conduit Lender, not later than the Business Day following such
Borrowing Date, the Administrative Agent shall give notice to the Borrower
specifying the amount of such Advance and identifying such Liquidity Lender.
(8) Advances made by Lenders in respect of a Notice of Borrowing
shall initially be of the Type or Types specified in such Notice of
Borrowing; PROVIDED that if a Notice of Borrowing requested Advances from
Conduit Lenders to be Commercial Paper Rate Advances and one or more
Liquidity Lenders made Advances in lieu of Conduit Lenders, the Advances made
by such Liquidity Lenders shall initially be Base Rate Advances (subject to
Conversion thereof pursuant to SECTION 2.08).
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<PAGE>
(9) The obligations of Lenders hereunder, including the
obligations of the Liquidity Lenders and the Non-contingent Lenders to make
Advances, shall be several and not joint obligations of such Lenders. The
failure of any Liquidity Lender or Non-contingent Lender to make the Advance
to be made by it as part of any Borrowing shall not relieve any other
Liquidity Lender or Non-contingent Lender of its obligation hereunder to make
its Advance on the date of such Borrowing, but except as provided in SECTION
2.02(g) with respect to Liquidity Lenders, no Lender shall be responsible for
the failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.
(10) Notwithstanding anything in this Section to the contrary,
the Administrative Agent may, in its sole discretion, accept and act without
liability upon the basis of a telephonic notice of borrowing (which notice
shall be irrevocable and shall be promptly confirmed by a written Notice of
Borrowing sent by facsimile) believed by the Administrative Agent in good
faith to be from an Authorized Officer of the Borrower. The Administrative
Agent's records regarding the terms of such telephone notice of borrowing
shall be presumptively correct absent manifest error. The fact that the
Administrative Agent may so act in any circumstance shall not be deemed a
waiver of compliance with the procedures of this SECTION 2.02 in any other
circumstance.
SECTION 2.3 [RESERVED]
SECTION 2.4 REDUCTIONS OF COMMITMENTS.
(1) The Borrower shall have the right, upon at least three
Business Day's prior written notice to the Administrative Agent, at any time
to permanently reduce the Total Commitment Amount to zero and terminate all
Commitments or from time to time to permanently reduce the Total Commitment
Amount in part; PROVIDED, HOWEVER, that each partial reduction shall be in
the amount of at least $20,000,000 or an integral multiple of $1,000,000 in
excess of that amount.
(2) The Total Commitment Amount shall automatically be permanently
reduced by the amount of any payments by the Contingent Obligors hereunder with
respect to (i) the Contingent Obligations with respect to the principal amount
of Advances, (ii) the amounts payable by the Contingent Obligors pursuant to
Section 2.05(e)(ii) and (iii) the amounts payable by the Contingent Obligors
pursuant to Section 6.02 with respect to the principal amount of Advances.
(3) Each reduction in the Total Commitment Amount shall be applied
PRO RATA to the Non-contingent Lending Commitment Amount of each Non-contingent
Lender and to the Maximum Advance Amount of each Conduit Lender according to
such Lender's Lending Percentage. Each reduction in the Maximum Advance Amount
of a Conduit Lender shall automatically result in a PRO RATA reduction of the
Liquidity Commitment Amount of each Liquidity Lender relating to such Conduit
Lender according to each such Liquidity Lender's Liquidity Commitment Amount.
The Total Commitment Amount shall not be reduced below an amount equal to the
outstanding principal amount of all Advances.
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SECTION 2.5 PREPAYMENTS OF THE BORROWINGS.
(1) The Borrowings shall not be prepaid except as expressly set
forth herein.
(2) [RESERVED]
(3) MANDATORY PREPAYMENT OF THE BORROWINGS ARISING FROM RCCA
DISTRIBUTIONS. Subject to the provisions of the Subordination Agreement and
Article IX hereof, until this Agreement has been terminated and all outstanding
Borrowings, all accrued and unpaid interest on such Borrowings, and all other
accrued and unpaid amounts due under this Agreement and other Transaction
Documents have been paid in full, the Borrower shall pay, from time to time,
immediately upon its receipt of the same, to the Lender Collateral Agent, all
RCCA Distributions. Subject to the provisions of the Subordination Agreement
and Article IX hereof, all RCCA Distributions paid to the Lender Collateral
Agent pursuant to this subsection shall be applied by the Lender Collateral
Agent in accordance with the terms of Section 6 of the Security Agreement.
(4) MANDATORY PREPAYMENT OF THE BORROWINGS FOLLOWING DESIGNATED
SERIES AMORTIZATION DATE. If the entire outstanding principal amount of any
Designated Series Borrowing has not been repaid in full on the related
Designated Series Amortization Date, the Borrower shall repay on such Designated
Series Amortization Date and on each of the four succeeding Distribution Dates,
an amount of the outstanding Borrowings equal to 20% of the outstanding
principal amount of such Designated Series Borrowings on the Designated Series
Amortization Date; provided that no such payment shall be made earlier than the
earliest date permitted under the provisions of the Subordination Agreement and
Article IX hereof.
(5) MANDATORY PREPAYMENT OF THE BORROWINGS FOLLOWING EVENT OF EARLY
AMORTIZATION. Following the occurrence and during the continuance of any Event
of Early Amortization, on each succeeding Distribution Date (i) the Borrower
shall repay an amount of the outstanding Borrowings equal to the Nonallocated
Amount Available (as defined in the Security Agreement) available on such
Distribution Date to be applied pursuant to Section 6(c)(iv) of the Security
Agreement; provided that no such payment shall be made earlier than the earliest
date permitted under the provisions of the Subordination Agreement and Article
IX hereof, and (ii) the Contingent Obligors shall repay an amount of the
Borrowings equal to $5,000,000.
(6) IN GENERAL. Any prepayments of Advances in full or in part to
any Lender shall be made together with accrued interest to the date of such
prepayment on the amount prepaid. All prepayments of Borrowings shall be
applied PRO RATA based on the outstanding principal amount of Advances owed to
each Lender. Each prepayment of Advances owed to a Lender shall be applied to
Base Rate Advances, Eurodollar Rate Advances and Commercial Paper Rate Advances
in any manner deemed appropriate by the Administrative Agent, after consultation
with the Borrower. If any prepayment is made in respect of any Eurodollar Rate
Advance, in whole or in part, prior to the last day of the applicable Interest
Period, or if any prepayment is made in respect of any Commercial Paper Rate
Advance, in whole or in part, prior to the last day of an applicable Fixed
Period, the Borrower agrees to indemnify the affected Lenders in accordance with
SECTION 2.14.
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SECTION 2.6 INTEREST ON THE ADVANCES.
(1) Subject to the provisions of the Subordination Agreement and
Article IX hereof, the Borrower shall pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Advance
made by such Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(1) for Commercial Paper Rate Advances owed to a Conduit
Lender, a rate per annum equal to the Commercial Paper Rate for such
Conduit Lender in effect from time to time;
(2) for Eurodollar Rate Advances, a rate per annum equal at
all times during the Interest Period for such Advance to the Adjusted
Eurodollar Rate for such Interest Period; and
(3) for Base Rate Advances, a rate per annum equal to the
Alternate Base Rate in effect from time to time.
(2) Subject to the provisions of the Subordination Agreement and
Article IX hereof, Interest on each Advance shall be payable on each Interest
Payment Date for such Advance and upon each payment (including prepayment) of
the Borrowings.
(3) Subject to the provisions of the Subordination Agreement and
Article IX hereof, any amount of principal of any Advance or any other amount
owing hereunder which (i) remains outstanding following the Facility Maturity
Date, (ii) is not paid when due (whether at stated maturity, by acceleration or
otherwise) or (iii) is prevented from coming due by operation of the provisions
of the Subordination Agreement and Article IX hereof shall bear interest, from
the date on which such amount is due or would have, but for operation of the
provisions of the Subordination Agreement and Article IX hereof, become due
until such amount is paid in full, payable on the later of the date of demand
and the earliest date permitted under the provisions of the Subordination
Agreement and Article IX hereof, at a rate per annum (the "DEFAULT RATE") equal
at all times (whether before or after the entry of a judgment thereon) to (x)
with respect to any amount of principal, 0.5% plus the rate which would
otherwise be applicable pursuant to SECTION 2.06(a) or (y) with respect to any
other amounts, 5% plus the Alternate Base Rate in effect from time to time.
(4) Interest on (i) Base Rate Advances shall be calculated on the
basis of a 365 or 366-day year (as the case may be), and (iii) other Advances
shall be calculated on the basis of a 360-day year, in each case, for the actual
number of days elapsed. Any change in the interest rate on the Borrowings
resulting from a change in any applicable rate shall become effective as of the
opening of business on the day on which such change in the applicable rate shall
become effective.
(5) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of SECTION 2.06(a), but any failure to so notify shall not in
any manner affect the obligation of the
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Borrower to pay interest on the Borrowings in the amounts and on the dates
required. If a Commercial Paper Rate is applicable to an Advance owed to a
Conduit Lender during any Interest Period, such Conduit Lender shall notify
the Administrative Agent of the Commercial Paper Rate for such Interest
Period not later than the Business Day preceding the end of such Interest
Period (a "COMMERCIAL PAPER RATE DETERMINATION DATE") for the purpose of
determining the applicable interest rate under SECTION 2.06(a)(i). Such
notification may be based on such Conduit Lender's estimate of the Commercial
Paper Rate, if the actual rate is not then known to such Conduit Lender, and
in such case, such Conduit Lender shall notify the Administrative Agent on or
before the following Commercial Paper Rate Determination Date of the amount
of any variation between interest payable to such Conduit Lender for the
applicable Interest Period based on such estimate and interest which should
have been payable to such Conduit Lender for such Interest Period based on
its final determination (based on the actual rates) of the applicable
Commercial Paper Rate. The amount of any shortfall in interest based on such
variation shall be due and payable to such Conduit Lender on the next
Interest Payment Date on which interest is payable to such Conduit Lender
hereunder, and the amount of any overpayment of interest to such Conduit
Lender based on such variation shall be credited, dollar for dollar, against
interest otherwise payable to such Conduit Lender on such Interest Payment
Date. Each determination of the applicable interest rate by the
Administrative Agent or a Conduit Lender pursuant to this Agreement shall be
conclusive and binding on all parties hereto absent manifest error.
(6) With respect to any Commercial Paper Rate Advance to be made by
any Conduit Lender, the Administrative Agent, in its sole discretion exercised
in good faith after consultation with such Conduit Lender and the Borrower,
shall select the duration of the initial and each subsequent Fixed Period
relating to such Commercial Paper Rate Advance, provided that any Fixed Period
selected by the Administrative Agent applicable to a Commercial Paper Rate
Advance owing to a Conduit Lender shall have been approved (in writing or by
telephone promptly confirmed in writing) by such Conduit Lender. In selecting
such Fixed Period, the Administrative Agent shall use reasonable efforts, taking
into consideration the market conditions, to accommodate the Borrower's
preferences; PROVIDED HOWEVER, that the Administrative Agent shall have the
ultimate authority to make all such selections. Unless consented to or directed
by the Administrative Agent, the aggregate number of Fixed Periods for all
Commercial Paper Rate Advances outstanding at any one time hereunder shall not
exceed 25, it being understood that if necessary to match the funding
requirements of a Conduit Lender, any Commercial Paper Rate Advance may be
divided into portions having different Fixed Periods.
SECTION 2.7 INTEREST RATE PROTECTION.
(1) If, with respect to any Eurodollar Rate Advances, the Liquidity
Lenders or Non-contingent Lenders collectively holding greater than 50% of the
outstanding principal amount of Eurodollar Rate Advances, or in the event that
no Eurodollar Rate Advances are then outstanding, then the Liquidity Lenders or
Non-contingent Lenders collectively holding greater than 50% of the Total
Commitment Amount notify the Administrative Agent that they have determined
(which determination shall be conclusive and binding upon the Borrower) that by
reasons of circumstances affecting the interbank Eurodollar market either
adequate and reasonable means do not exist for
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ascertaining the Adjusted Eurodollar Rate applicable pursuant to SECTION
2.06(a)(ii) or that the applicable Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to such Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances, the Administrative
Agent shall forthwith so notify the Borrower and the Lenders, whereupon
(1) each Eurodollar Rate Advance, to the extent not then
repaid, will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance, and
(2) the obligation of the Lenders to make or to Continue, or
to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
(2) On the date on which the aggregate unpaid principal amount of
Advances constituting any Borrowing shall be reduced, by payment or prepayment
or otherwise, to less than $5,000,000, such Advances shall, if they constitute
Eurodollar Rate Advances, automatically Convert into Base Rate Advances, and on
and after such date the right of the Borrower to Convert such Advances into
Advances of a Type other than Base Rate Advances shall terminate unless such
Advances are combined with the Advances constituting another Borrowing, as
contemplated by SECTION 2.08(a), with the result that the aggregate unpaid
principal balance of all the Advances so combined equals or exceeds $5,000,000.
(3) If and to the extent that, with respect to a Commercial Paper
Rate Advance from a Conduit Lender, such Conduit Lender shall for any reason
prior to the end of the Fixed Period applicable to such Commercial Paper Rate
Advance (i) assign such Advance or a portion thereof pursuant to a Support
Facility to a Liquidity Lender for such Conduit Lender, or (ii) cease for any
reason to fund its making or maintenance of such Advance or a portion thereof
with Commercial Paper Notes (including by reason of its obtaining Support
Advances), upon notice from such Conduit Lender to the Administrative Agent,
such Commercial Paper Rate Advance, or such portion thereof shall automatically
be Converted into a Base Rate Advance on the effective date of such notice.
SECTION 2.8 VOLUNTARY CONVERSION AND CONTINUATION OF ADVANCES.
(1) Prior to the Facility Maturity Date, the Borrower shall have
the option with respect to any outstanding Advance (other than any Advance which
is part of a Designated Series Borrowing whose Designated Series Maturity Date
has occurred), (i) to Convert all or any portion thereof which constitutes Base
Rate Advances to Eurodollar Rate Advances on any Interest Payment Date; (ii) to
Convert all or any portion of any outstanding Eurodollar Rate Advances to Base
Rate Advances upon the expiration date of the Interest Period applicable to such
Eurodollar Rate Advances; or (iii) to Continue all or any portion of such
Eurodollar Rate Advances as Eurodollar Rate Advances upon the expiration of the
Interest Periods applicable to any outstanding Eurodollar Rate Advances. In
addition, prior to the Facility Maturity Date the Borrower shall have the option
with respect any outstanding Advance (other than any Advance which is a part of
a Designated
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Series Borrowing whose Designated Series Maturity Date has occurred) owed to
a Conduit Lender (i) to Convert all or any portion thereof which constitutes
a Base Rate Advance to a Commercial Paper Rate Advance upon any Business Day;
or (ii) to Convert all or any portion thereof which constitutes a Eurodollar
Rate Advance to a Commercial Paper Rate Advance upon the expiration date of
the Interest Period applicable to such Eurodollar Rate Advance; PROVIDED that
no such Advance may be Converted to a Commercial Paper Rate Advance pursuant
to this sentence if such Conduit Lender shall have given the Administrative
Agent a notice (which has not been withdrawn by further notice to the
Administrative Agent) that it has ceased to (or will not) for any reason fund
its making or maintenance of such Advances or a portion thereof with
Commercial Paper Notes (including by reason of its obtaining Support
Advances). Notwithstanding the foregoing, (i) the Borrower shall in no event
Convert or Continue all or any portion of any Advance unless each other
Advance of the same Type comprised by the Borrowing that includes that
Advance is correspondingly Converted or Continued, as applicable; PROVIDED
that Advances owed to a Conduit Lender may be Converted to Commercial Paper
Rate Advances although other Advances of the same Type and comprising the
same Borrowing owed to Lenders which are not Conduit Lenders are not
correspondingly Converted, and (ii) an Advance which is required to be
converted pursuant to SECTION 2.07(c) may not later be Converted into or
Continued as a Eurodollar Rate Advance if the Interest Period applicable
thereto would end after the date on which such repayment is required to be
made. The Borrower's right to Convert or Continue Advances pursuant to this
SECTION 2.08 shall be understood to include the right (i) to divide any
Borrowing into two or more Borrowings having aggregate principal equal to the
principal of such Borrowing or (ii) to combine any two or more Borrowings
into a single Borrowing having principal equal to the aggregate principal of
such Borrowings. If, after giving effect to any combination or division of
Borrowings as contemplated by this SECTION 2.08(a), the aggregate unpaid
principal amount of the Advances constituting a Borrowing is less than
$5,000,000, those Advances may not be Converted into or Continued as
Eurodollar Rate Advances.
(2) To Convert or Continue any Advance under SECTION 2.08(a), the
Borrower shall deliver a Notice of Conversion/Continuation to the Administrative
Agent not later than 4:00 p.m. (New York City time) on (i) the third Business
Day prior to the date of the proposed Conversion/Continuation if such Advance is
to be Converted into or Continued as a Eurodollar Rate Advance or if the Advance
is to be Converted from a Eurodollar Advance into any other Type of Advance, and
(ii) the Business Day prior to the date of the proposed Conversion/Continuation
in any other case. If a Notice of Conversion/Continuation is transmitted by
telecopy, the Borrower shall promptly provide written confirmation thereof to
the Administrative Agent. If the Administrative Agent receives such a Notice of
Conversion/Continuation at or before 4:00 p.m. on a Business Day, it shall
provide each Lender with a copy thereof on such Business Day, and otherwise it
shall provide each Lender with a copy thereon on the following Business Day.
Each Notice of Conversion/Continuation shall be in the form attached hereto as
EXHIBIT C and shall specify (i) the date of such proposed
Conversion/Continuation (which shall be a Business Day), (ii) the Advances to be
Converted and/or Continued, (iii) the principal amount of the Advances to be
Converted and/or Continued, and (iv) whether such Advance is to be Converted or
Continued. Any Notice of Conversion/Continuation shall be irrevocable, and the
Borrower shall be bound to Convert or to Continue the Advances in accordance
therewith. If the Borrower shall fail to deliver a Notice of
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Conversion/Continuation to the Administrative Agent as aforesaid with respect to
any Type of Advance, such Advance shall automatically be Continued as the same
Type of Advance if otherwise permitted by this Agreement on the last day of the
then existing Interest Period therefor or if, not permitted to be so Continued,
shall automatically Convert to a Base Rate Advance on such date.
(3) Notwithstanding any provision of SECTION 2.08(b) to the
contrary, the Administrative Agent may, in its sole discretion, accept and act
without liability upon the basis of a telephonic notice of
Conversion/Continuation (which notice shall be irrevocable and shall be promptly
confirmed by a written Notice of Conversion/Continuation sent by facsimile)
believed by the Administrative Agent in good faith to be from an Authorized
Officer of the Borrower. The Administrative Agent's records regarding the terms
of such telephone notice of such borrowing shall be presumptively correct absent
manifest error. The fact that the Administrative Agent may so act in any
circumstance shall not be deemed a waiver of compliance with the procedures of
SECTION 2.08(b) in any other circumstance.
SECTION 2.9 FEES. The Borrower agrees to pay to the Administrative
Agent those fees set forth in the Fee Letter in accordance with the terms
thereof, subject to the provisions of the Subordination Agreement and Article IX
hereof.
SECTION 2.10 EXTENSIONS OF COMMITMENT EXPIRATION DATE. If the
Borrower desires the Commitment Expiration Date to be extended for an additional
year, the Borrower shall so notify the Administrative Agent in writing not more
than 60 days nor less than 30 days prior to the then effective Commitment
Expiration Date. The Administrative Agent shall promptly give a copy of such
request to each Committed Lender. If during the 30 days following receipt of
such request, each Committed Lender shall agree in writing to such requested
extension of the Commitment Expiration Date, then, unless the Borrower shall
have determined not to accept such extension prior to the then effective
Commitment Expiration Date, the Commitment Expiration Date shall be so extended.
If any Committed Lender shall not notify the Administrative Agent of its
decision with respect to any such request within 30 days of receipt of such
request, then such Lender shall be deemed to have declined to extend the
Commitment Expiration Date.
SECTION 2.11 INCREASED COSTS; INCREASED CAPITAL.
(1) In the event that any Lender shall have reasonably determined
that any Regulatory Change shall:
(1) subject such Lender to any Taxes of any kind whatsoever,
other than Excluded Taxes, with respect to this Agreement, its Commitment
or its Advances, or change the basis of taxation of payments in respect
thereof; or
(2) impose, modify or hold applicable any reserve, special
deposit, compulsory loan, assessment, increased cost or similar requirement
against assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, such Lender or any office of such Lender in
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respect of its Commitment or Advances and which, in the case of Eurodollar
Advances, is not otherwise included in the determination of the Adjusted
Eurodollar Rate,
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of maintaining its
Commitment or of making, renewing, Converting, Continuing or maintaining its
Advances or to reduce any amount receivable in respect thereof, THEN, in any
such case, after submission by such Lender to the Administrative Agent of a
written request therefor and the submission by the Administrative Agent to the
Borrower of such written request therefor, subject to the provisions of the
Subordination Agreement and Article IX hereof, the Borrower shall pay to the
Administrative Agent for the account of such Lender any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable.
(2) In the event that any Lender shall have determined that any
Regulatory Change regarding capital adequacy has the effect of reducing the rate
of return on such Lender's capital or on the capital of any Person directly or
indirectly owning or controlling such Lender as a consequence of its obligations
hereunder or its maintenance of its Commitment or its making, renewing,
Converting, Continuing or maintaining its Advances to a level below that which
such Lender or such Person could have achieved but for such Regulatory Change
(taking into consideration such Lender's or such Person's policies with respect
to capital adequacy) by an amount deemed by such Lender or such Person to be
material, THEN, from time to time, after submission by such Lender to the
Administrative Agent of a written request therefor and submission by the
Administrative Agent to the Borrower of such written request therefor, subject
to the provisions of the Subordination Agreement and Article IX hereof, the
Borrower shall pay to the Administrative Agent for the account of such Lender
such additional amount or amounts as will compensate such Lender or such Person,
as the case may be, for such reduction.
(3) Each Lender agrees that it shall use its reasonable efforts to
reduce or eliminate any claim for compensation pursuant to this SECTION 2.11,
including but not limited to designating a different Applicable Lending Office
for its Advances (or any interest therein) if such designation will avoid the
need for, or reduce the amount of, any increased amounts referred to in this
SECTION 2.11 and will not, in the opinion of such Lender, be unlawful or
otherwise disadvantageous to such Lender or inconsistent with its policies or
result in an unreimbursed cost or expense to such Lender or in an increase in
the aggregate amount payable under both this SECTION 2.11 or under SECTION 2.12.
(4) Each Lender claiming increased amounts described in this
SECTION 2.11 will furnish to the Administrative Agent (together with its request
for compensation) a certificate prepared in good faith setting forth the basis
and the amount of each request by such Lender for any such increased amounts
referred to in this SECTION 2.11. Any such certificate shall be conclusive
absent manifest error, and the Administrative Agent shall deliver a copy thereof
to the Borrower. Failure on the part of any Lender to demand compensation for
any amount pursuant to this SECTION 2.11 with respect to any period shall not
constitute a waiver of such Lender's right to demand compensation with respect
to such period. All such amounts shall be due and payable to the Administrative
Agent on behalf of such Lender or for its own account, as the case may be,
within
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five Business Days following receipt by the Borrower of such certificate (or,
if earlier, on the Designated Series Maturity Date or the Facility Maturity
Date or when earlier required to be paid as provided herein).
SECTION 2.12 TAXES.
(1) All payments made to the Lenders or the Administrative Agent
under this Agreement and the Lender Notes and the other Transaction Documents
shall, to the extent allowed by law, be made 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 Governmental Authority (collectively, "TAXES"), excluding income taxes,
franchise taxes imposed in lieu of income taxes or any other taxes based on or
measured by the overall net income of the Lender or its Applicable Lending
Office or the Administrative Agent (as the case may be) by the jurisdiction in
which such Lender or the Administrative Agent (as the case may be) is
incorporated or has its principal place of business or such Applicable Lending
Office (such excluded taxes being herein called "EXCLUDED TAXES"). If any
Taxes, other than Excluded Taxes, are required to be withheld from any amounts
payable to a Lender or the Administrative Agent hereunder or under any Lender
Note or other Transaction Document, THEN after submission by any Lender to the
Administrative Agent (in the case of an amount payable to a Lender) and by the
Administrative Agent to the Borrower of a written request therefor, the amounts
so payable to such Lender or the Administrative Agent, as applicable, shall be
increased, and, subject to the provisions of the Subordination Agreement and
Article IX hereof, the Borrower shall be liable to pay to the Administrative
Agent for the account of such Lender or for its own account, as applicable, the
amount of such increase, to the extent necessary to yield to such Lender or the
Administrative Agent, as applicable (after payment of all such Taxes) interest
or any such other amounts payable hereunder or thereunder at the rates or in the
amounts specified herein or therein; PROVIDED, HOWEVER, that the amounts so
payable to such Lender or the Administrative Agent shall not be increased
pursuant to this SECTION 2.12(a) to the extent such requirement to withhold
results from the failure of such Person to comply with SECTION 2.12(c).
Whenever any Taxes are payable on or with respect to amounts payable to a Lender
or the Administrative Agent, as promptly as possible thereafter the Borrower
shall send to the Administrative Agent, on behalf of such Lender (if
applicable), a certified copy of an original official receipt showing payment
thereof. If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, on behalf of
itself or such Lender (as applicable), the required receipts or other required
documentary evidence, the Borrower shall, subject to the provisions of the
Subordination Agreement and Article IX hereof, pay to the Administrative Agent
on behalf of such Lender or for its own account, as applicable, any incremental
taxes, interest or penalties that may become payable by such Lender or the
Administrative Agent, as applicable, as a result of any such failure.
(2) A Lender claiming increased amounts under SECTION 2.12(a) for
Taxes paid or payable by such Lender will furnish to the Administrative Agent a
certificate prepared in good faith setting forth the basis and amount of each
request by such Lender for such Taxes, and the Administrative Agent shall
deliver a copy thereof to the Borrower. The Administrative Agent
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claiming increased amounts under SECTION 2.12(a) for its own account for
Taxes paid or payable by the Administrative Agent will furnish to the
Borrower a certificate prepared in good faith setting forth the basis and
amount of each request by the Administrative Agent for such Taxes. Any such
certificate of a Lender or the Administrative Agent shall be conclusive
absent manifest error. Failure on the part of any Lender or the
Administrative Agent to demand additional amounts pursuant to SECTION 2.12(a)
with respect to any period shall not constitute a waiver of the right of such
Lender or the Administrative Agent, as the case may be, to demand
compensation with respect to such period. All such amounts shall be due and
payable to the Administrative Agent on behalf of such Lender or for its own
account, as the case may be, on the later of (i) the date five Business Days
following receipt by the Borrower of such certificate (or, if earlier, on the
Series Maturity Date or on the Facility Maturity Date or when earlier
required to be paid as provided herein) and (ii) the earliest date permitted
under the provisions of the Subordination Agreement and Article IX hereof.
(3) The Administrative Agent and each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes shall, to the extent that it may then do so under
applicable laws and regulations, deliver to the Borrower (with, in the case of
each Lender, a copy to the Administrative Agent) (i) within 15 days after the
date hereof, or, if later, the date on which such Lender becomes a Lender
pursuant to SECTION 8.06 hereof, two (or such other number as may from time to
time be prescribed by applicable laws or regulations) duly completed copies of
IRS Form 4224 or Form 1001 (or any successor forms or other certificates or
statements which may be required from time to time by the relevant United States
taxing authorities or applicable laws or regulations), as appropriate, to permit
the Borrower to make payments hereunder for the account of such Lender or the
Administrative Agent, as the case may be, without deduction or withholding of
United States federal income or similar taxes and (ii) upon the obsolescence of
or after the occurrence of any event requiring a change in, any form or
certificate previously delivered pursuant to this SECTION 2.12(c), copies (in
such numbers as may be from time to time be prescribed by applicable laws or
regulations) of such additional, amended or successor forms, certificates or
statements as may be required under applicable laws or regulations to permit the
Borrower and the Administrative Agent to make payments hereunder for the account
of such Lender or the Administrative Agent, as the case may be, without
deduction or withholding of United States federal income or similar taxes.
(4) In addition, subject to the provisions of the Subordination
Agreement and Article IX hereof, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any Lender Note or other Transaction Document.
SECTION 2.13 PAYMENTS AND COMPUTATIONS.
(1) The Borrower shall make each payment hereunder, not later than
1:30 p.m. (New York City time) on the day when due by wire transfer in Dollars
and in immediately available funds, without set-off or counterclaim, to the
Administrative Agent at its account maintained at the office of Bank of New
York, New York, New York, ABA No. 021-000-018, to Account No. 890-
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038-6673, Account Name: Greenwich ISS/RED, Attention: Aimee Sevilla,
Reference: AmeriCredit RCCA Facility, with telephone notice (including wire
number) to the Asset Finance Department of the Administrative Agent
(telephone number (212) 325-9075), or such other account as the Administrative
Agent shall designate in writing to the Borrower. Subject to the provisions
of the Subordination Agreement and Article IX hereof, promptly upon receipt
thereof by the Administrative Agent, each payment of principal on the
Borrowings shall be remitted by the Administrative Agent in like funds as
received to each Lender for the account of its Applicable Lending Office PRO
RATA in accordance with SECTION 2.05 or, in the case of payments received in
respect of the Facility Maturity Date or at any time thereafter, PRO RATA
according to the aggregate outstanding principal balance of the Advances owed
to the Lenders. Subject to the provisions of the Subordination Agreement and
Article IX hereof, promptly upon receipt thereof by the Administrative Agent,
each payment of interest on the Borrowings shall be remitted by the
Administrative Agent in like funds as received to each Lender for the account
of its Applicable Lending Office PRO RATA in accordance with the aggregate
amount of unpaid interest owed to each of the Lenders. Subject to the
provisions of the Subordination Agreement and Article IX hereof, promptly
upon receipt thereof by the Administrative Agent, each payment of Facility
Fees, Commitment Fees or other fees shall be remitted by the Administrative
Agent in like funds as received to each Lender entitled thereto for the
account of its Applicable Lending Office, PRO RATA according to the amount
thereof owed to each such Lender. Upon its acceptance of an Assignment and
Assumption from and after the "Transfer Effective Date" specified in such
Assignment and Assumption, the Administrative Agent shall make all payments
hereunder in respect of the interest assigned thereby to the Lender's
assignee thereunder, for the account of its Applicable Lending Office, and
the parties to such Assignment and Assumption shall make all appropriate
adjustments in such payments for periods prior to such effective date
directly between themselves.
(2) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or any fee payable hereunder, as the case may
be, PROVIDED, HOWEVER, that, if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances to be made in the next following
month, such payment shall be made on the immediately preceding Business Day.
(3) All computations of fees shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such fee is payable.
SECTION 2.14 INDEMNIFICATION FOR LOSS. Notwithstanding anything
contained herein to the contrary, (i) if the Borrower shall fail to borrow an
Advance after it has requested such Advance as a Eurodollar Rate Advance or a
Commercial Paper Rate Advance pursuant to SECTION 2.02 or shall fail to Convert
or Continue an Advance after it shall have given notice to do so in which it
shall have requested a Eurodollar Rate Advance or a Commercial Paper Rate
Advance pursuant to SECTION 2.08, (ii) if a Eurodollar Rate Advance shall be
terminated for any reason prior to the last day of the Interest Period
applicable thereto (including by reason of its Conversion), (iii) if a
Commercial Paper Rate Advance shall be terminated for any reason prior to the
last day of any Fixed
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Period applicable thereto (including by reason of the Conversion thereof
pursuant to SECTION 2.07(c)), (iv) if any repayment or prepayment of the
principal amount of a Eurodollar Rate Advance is made for any reason on a
date which is prior to the last day of the Interest Period applicable
thereto, or (v) if any repayment or prepayment of the principal amount of a
Commercial Paper Rate Advance is made for any reason on a date which is prior
to the last day of any Fixed Period applicable thereto, THEN, subject to the
provisions of the Subordination Agreement and Article IX hereof, in any such
case the Borrower agrees to indemnify each affected Lender against, and to
promptly pay, on the later of the date of demand and the earliest date
permitted under the provisions of the Subordination Agreement and Article IX
hereof, directly to such Lender the amount equal to any loss or reasonable
out-of-pocket expense suffered by such Lender as a result of such failure to
borrow, Convert or Continue, or such termination, repayment or prepayment,
including (A) in the case of a Eurodollar Rate Advance, any loss, cost or
expense suffered by such Lender in liquidating or employing deposits acquired
to fund or maintain the funding of such Eurodollar Rate Advance, or
redeploying funds prepaid or repaid, in amounts which correspond to its such
Eurodollar Rate Advance, (B) in the case of a Commercial Paper Rate Advance,
any loss, cost or expense suffered by such Lender by reason of its issuance
of Commercial Paper Notes or its incurrence of other obligations allocated by
such Lender to its funding or the maintenance of its funding of such
Commercial Paper Rate Advance, or redeploying funds prepaid or repaid, in
amounts which correspond to such Commercial Paper Rate Advance, and (C) in
either case any internal processing charge customarily charged by such Lender
in connection therewith. At the election of such Lender, and without
limiting the generality of the foregoing, but without duplication, such
compensation on account of losses may include an amount equal to (A) the
excess of (i) the interest that would have been received from the Borrower
under this Agreement on any amounts to be reemployed during an Interest
Period or Fixed Period, as applicable, or its remaining portion over (ii) in
the case of a Eurodollar Rate Advance, the interest component of the return
that such Lender determines it could have obtained had it placed such amount
on deposit in the interbank eurodollar market selected for a period equal to
the applicable Interest Period or its remaining portion or, (B) in the case
of a Commercial Paper Rate Advance, the aggregate interest cost incurred by
such Lender (inclusive of dealer fees) in respect of Commercial Paper Notes
or other obligations allocated by such Lender to its funding or the maintenance
of its funding of such Commercial Paper Rate Advance through the end of an
applicable Fixed Period. Astatement setting forth in reasonable detail the
calculations of any additional amounts payable pursuant to this Section
submitted by a Lender or the Administrative Agent, as the case may be, to the
Borrower shall be conclusive absent manifest error.
SECTION 2.15 ILLEGALITY. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that any
Regulatory Change makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Applicable Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, then (a) as of the
effective date of such notice the obligation of such Lender to make or to
Continue, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until such Lender shall notify the Administrative Agent, the Borrower
and the other Lenders that the circumstances causing such suspension no longer
exist and (b) each Eurodollar Rate Advance of such Lender shall be Converted
into a Base Rate Advance either (i) on the last day of such Interest Period if
such Lender may lawfully continue to maintain
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and fund such Advance to the last day of the Interest Period applicable to
such Eurodollar Rate Advance on the effective date of such notice, or (ii) on
the effective date of such notice, if such Lender shall determine that it may
not lawfully continue to maintain and fund such Advance to the end of the
then current Interest Period. Notwithstanding any provision herein to the
contrary, until such affected Lender shall give the rescinding notice
described in clause (a) above, any Advance made by such Lender, whether in
connection with a new Borrowing or the Conversion of an existing Borrowing,
shall be a Base Rate Advance, notwithstanding that each other Advance
comprised by such Borrowing may be a Eurodollar Rate Advance.
SECTION 2.16 OPTION TO FUND. Each Lender has indicated that, if the
Borrower requests a Eurodollar Rate Advance, such Lender may wish to purchase
one or more deposits in order to fund or maintain its funding of its Lending
Percentage of such Eurodollar Rate Advance during the Interest Period with
respect thereto; it being understood that the provisions of this Agreement
relating to each such funding, if any, are included only for the purpose of
determining the rate of interest to be paid on such Eurodollar Rate Advance and
any amounts owing under SECTIONS 2.11 and 2.14. Each Lender shall be entitled
to fund and maintain its funding of all or any part of each Eurodollar Advance
in any manner such Lender sees fit, but all such determination under SECTIONS
2.11 and 2.14 shall be made as if each Lender had actually funded and maintained
its funding of its Lending Percentage of such Eurodollar Advance during the
applicable Interest Period, in each case through the purchase of deposits in an
amount equal to the amount of its Lending Percentage of such Eurodollar Advance
and having a maturity corresponding to such Interest Period.
SECTION 2.17 SHARING OF PAYMENTS, ETC. Subject to the provisions of
the Subordination Agreement and Article IX hereof, if any Lender shall obtain
any payment (whether voluntary or involuntary) on account of the Advances made
by it (other than pursuant to Sections 2.11, 2.12 or 2.14) in excess of its
ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith (i) notify each of the other Lenders of
such receipt and (ii) purchase from the other Lenders for cash such
participation in the Advances made by them as shall be necessary to cause such
purchasing Lender 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 Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this SECTION 2.17 may, to the fullest extent permitted by law and
the provisions of the Subordination Agreement and Article IX hereof, exercise
all its rights of setoff with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.18 ADMINISTRATIVE AGENT'S RECORDS. The Administrative
Agent's records regarding the amount of each Borrowing, each payment by the
Borrower of principal and
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interest on the Borrowings and other information relating to the Borrowings
shall be presumptively correct absent manifest error.
ARTICLE IIA
GUARANTY
SECTION 2A.01 GUARANTY OF PAYMENT AND PERFORMANCE. Each Contingent
Obligor hereby, jointly and severally, guarantees to the Administrative Agent
(on behalf of the Lenders) the full and punctual payment when due (whether at
maturity, by acceleration or otherwise) of the Advances, and the performance, of
all liabilities, agreements and other obligations of the Borrower to the
Administrative Agent, the Lender Collateral Agent (on behalf of itself and the
Lenders) and to each of the Lenders under the Transaction Documents, whether
direct or indirect, absolute or contingent, due or to become due, secured or
unsecured, now existing or hereafter arising or acquired (collectively, the
"GUARANTEED OBLIGATIONS"). The guaranty provided hereunder is an absolute,
unconditional and irrevocable guaranty of the full and punctual payment and
performance of the Guaranteed Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that the Administrative Agent
or any Lender first attempt to collect any of the Guaranteed Obligations from
the Borrower or resort to any security or other means of obtaining their
payment. Should the Borrower default in the payment or performance of any of
the Guaranteed Obligations, the obligations with respect to the payment or
performance in default of each Contingent Obligor hereunder shall become
immediately due and payable to the Administrative Agent (on behalf of the
Lenders), without demand or notice of any nature, all of which are expressly
waived by each Contingent Obligor. Payments by the Contingent Obligors
hereunder may be required by the Administrative Agent (on behalf of the Lenders)
on any number of occasions.
SECTION 2A.02 CONTINGENT OBLIGOR'S AGREEMENT TO PAY. (a) Each
Contingent Obligor hereby, jointly and severally, as the principal obligor and
not as a guarantor, agrees to pay to the Administrative Agent (on behalf of the
Lenders) the full amount of any Advances and any other amount owing hereunder
that remains outstanding, and to perform all other liabilities, agreements and
other obligations of the Borrower to the Administrative Agent, the Lender
Collateral Agent (on behalf of itself and the Lenders) and to each of the
Lenders under the Transaction Documents, whether direct or indirect, absolute or
contingent, secured or unsecured, now existing or hereafter arising or acquired,
that does not become due hereunder solely pursuant to the operation of the
provisions of the Subordination Agreement and Article IX hereof (collectively,
the "DEFERRED OBLIGATIONS") and agrees to make such payment or render such
performance on the date such Deferred Obligation would have become due but for
the operation of the provisions of the Subordination Agreement and Article IX
hereof. (The Guaranteed Obligations and the Deferred Obligations are referred
to collectively herein as the "CONTINGENT OBLIGATIONS").
(b) Each Contingent Obligor agrees, jointly and severally, as the
principal obligor and not as a guarantor only, to pay to the Administrative
Agent, on demand, all reasonable costs and expenses (including court costs and
reasonable legal expenses) incurred or expended by the Administrative Agent in
connection with enforcement of the obligations of any of the Contingent
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Obligors under this Article IIA and under Sections 2.05(d) and 6.02, together
with interest on amounts recoverable under Sections 2.05(d) and 6.02 and
under the guaranty and primary obligation to pay provided pursuant to this
Article IIA from the time such amounts become due until payment, at the rate
per annum equal to 5% plus the Alternate Base Rate in effect from time to
time; PROVIDED that, if such interest exceeds the maximum amount permitted to
be paid under applicable law, then such interest shall be reduced to such
maximum permitted amount.
SECTION 2A.03. LIMITED GUARANTY. Notwithstanding any other provisions
under this Agreement, the aggregate liability of the Contingent Obligors
hereunder with respect to (a) the Contingent Obligations with respect to the
principal amount of Advances, interest on Advances (other than Negative Carry)
and Facility Fees, (b) the amounts payable by the Contingent Obligors pursuant
to Section 2.05(e)(ii) and (c) the amounts payable by the Contingent Obligors
pursuant to Section 6.02 with respect to the principal amount of Advances,
interest on Advances and Facility Fees shall be limited to (i) the Guaranty
Limit, plus (ii) without limitation as to the amounts thereof, all interest and
other costs and expenses payable by the Contingent Obligors pursuant to SECTION
2A.02(b). The Administrative Agent's, the Lender Collateral Agent's, the RCCA
Agent's or the Lenders' dealings with the Borrower need not be limited to any
particular sum notwithstanding any limitation herein upon the liability of the
Contingent Obligors.
ARTICLE 3
CONDITIONS PRECEDENT
SECTION 3.1 CONDITION PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT. The following constitute conditions precedent to the effectiveness
of the Commitments of the Lenders and the right of the Borrower to request, and
the obligations of the Lenders to make, Advances under this Agreement:
(1) REPRESENTATIONS AND WARRANTIES. On the Effective Date and
after giving effect to any Borrowings on such date, all representations and
warranties of the Contingent Obligors contained herein or in any Transaction
Document or otherwise made by it in writing pursuant to any of the provisions
hereof or thereof shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of such date.
(2) NO DEFAULTS. On the Effective Date and after giving effect to
any Borrowings on such date, no Event of Early Termination, Event of Early
Amortization, Default or Event of Default shall have occurred.
(3) NOTES. The Borrower shall have duly executed and delivered,
and each Lender shall have received, a Lender Note in accordance with SECTION
2.01(B).
(4) SECURITY AGREEMENT, RCCA AGREEMENT, ETC. The parties thereto
shall have duly entered into the Security Agreement, the Subordination Agreement
and the RCCA Agreement, each in form and substance satisfactory to the
Administrative Agent and each Lender; the
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Administrative Agent shall have received an executed copy thereof; and each
Lender shall have received a true and correct copy thereof.
(5) FINANCING STATEMENTS, ETC. The Administrative Agent shall have
received evidence reasonably satisfactory to it that proper financing statements
duly executed by the Borrower, describing the Borrower Collateral and naming the
Borrower as debtor and the Lender Collateral Agent, on behalf of the Secured
Parties, as secured party, or other similar instruments or documents, as may be
necessary or, in the opinion of the Administrative Agent, the Lender Collateral
Agent, or any Lender, desirable under the Uniform Commercial Code of all
appropriate jurisdictions or any comparable law to perfect the security interest
granted under the Security Agreement in the Borrower Collateral, have been
delivered and, if appropriate, have been duly filed or recorded and that all
filing fees, taxes or other amounts required to be paid in connection therewith
have been paid. The Administrative Agent shall have received evidence
reasonably satisfactory to it that proper financing statements duly executed by
the Borrower, describing the RCCA Collateral and naming the Borrower as debtor
and the RCCA Agent, as secured party, or other similar instruments or documents,
as may be necessary or, in the opinion of the Administrative Agent or any
Lender, desirable under the Uniform Commercial Code of all appropriate
jurisdictions or any comparable law to perfect the security interest granted
under the RCCA Agreement in the RCCA Collateral, have been delivered and, if
appropriate, have been duly filed or recorded and that all filing fees, taxes or
other amounts required to be paid in connection therewith have been paid. The
Certificate Pledge Agreement shall provide that Bank One is holding the
certificates of beneficial interest in the Spread Account Depositor as agent of
the Lender Collateral Agent in order to perfect by possession the security
interest therein granted to the Lender Collateral Agent pursuant to the Security
Agreement.
(6) LIEN SEARCH REPORTS. The Administrative Agent shall have
received certified copies of requests for information or copies (or a similar
search report certified by a party acceptable to the Administrative Agent),
dated a date reasonably near to the Effective Date, listing all effective
financing statements which name the Borrower or the Spread Account Depositor (in
either case, under its present name and any previous name) as debtor and which
are filed in the jurisdictions in which the statements referred to in SECTION
3.01(e) were or are to be filed, together with copies of such financing
statements (none of which, other than financing statements naming the collateral
agent specified in the Spread Account Agreement for the benefit of the
applicable Designated Series Insurers and the related secured parties or
evidencing Permitted Liens, shall cover any of the Borrower Collateral or the
RCCA Collateral).
(7) CREDIT SUPPORT AGREEMENT. Credit Suisse First Boston, New York
Branch, as agent, shall have entered into a Credit Support Agreement on behalf
of the Conduit Lenders, and the Liquidity Lenders with respect to the Advances
proposed to be made hereunder and each company providing credit support
thereunder (each a "CREDIT SUPPORT PROVIDER") shall have acknowledged that all
conditions precedent to its provision of credit support under such agreement
shall have been satisfied.
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(8) OTHER TRANSACTION DOCUMENTS. Each other Transaction Document
not otherwise referred to in this SECTION 3.01 shall have been duly executed and
delivered by the parties thereto; each Lender shall have received an executed
copy of the Fee Letter and the Administrative Agent shall have received a copy
of each such other Transaction Document.
(9) EXPENSES. The Borrower shall have paid all reasonable and
appropriately invoiced costs and expenses of the Administrative Agent, the RCCA
Agent, the Credit Support Providers and the Lender Collateral Agent payable by
the Borrower in connection with the transactions contemplated hereby including
without limitation all costs and expenses associated with the negotiation and
execution of the Credit Support Agreement; PROVIDED HOWEVER the aggregate amount
of fees of counsel to the Administrative Agent shall not exceed the amount set
forth in the Fee Letter.
(10) OTHER DOCUMENTS. The Administrative Agent and each Lender
shall have received the following, each dated as of the Effective Date or as
otherwise permitted below:
(1) A certificate of the Secretary of State of Nevada dated
on or within 20 Business Days prior to the Effective Date as to the legal
existence and good standing of the Borrower, together with a copy of the
Borrower's certificate of incorporation, certified as a true and correct
copy by the secretary of the Borrower, each;
(2) A certificate of the Secretary of State of the
applicable jurisdiction of incorporation of each Contingent Obligor as to
the legal existence and good standing of such Contingent Obligor, together
with a copy of such Contingent Obligor's certificate of incorporation,
certified as a true and correct copy by such Secretary of State, each dated
on or within 20 Business Days prior to the Effective Date;
(3) A certificate of the Secretary of State of Delaware as
to the legal existence and good standing of the Spread Account Depositor,
together with a copy of the Spread Account Depositor's trust certificate,
certified as a true and correct copy by such Secretary of State, each dated
on or within 10 Business Days prior to the Effective Date;
(4) A certificate of an Authorized Officer of the Borrower,
certifying (A) the names and true signatures of the Authorized Officers of
the Borrower, (B) that the copy of the Bylaws of the Borrower attached
thereto is a complete and correct copy and that such Bylaws have not been
amended, modified or supplemented and are in full force and effect, and (C)
that the copy of the resolutions of the Board of Directors of the Borrower
approving the transactions contemplated by the Transaction Documents is a
complete and correct copy and that such resolutions are in full force and
effect and are the only resolutions relating to the matters contemplated by
the Transaction Documents;
(5) A certificate of an Authorized Officer of the Borrower,
certifying that (i) the copies of the unaudited balance sheet of the
Borrower for its fiscal year ended June 30, 1999, and the related
statements of income, shareholders' equity and cash flows for such
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fiscal year attached to such certificate are complete, true and correct
and have been prepared in accordance with GAAP consistently applied and
present fairly the financial position of the Borrower as of such date
and the results of its operations for such period, and (ii) there have
been no changes since the end of the fiscal year ended June 30, 1999 in
the assets, liabilities, financial condition, operations, business or
prospects of the Borrower, other than changes in the ordinary course of
business the effect of which have not, in the aggregate, been materially
adverse to the Borrower;
(6) A certificate of an Authorized Officer of each
Contingent Obligor, certifying (A) the names and true signatures of the
Authorized Officers of such Contingent Obligor, (B) that the copy of the
Bylaws of such Contingent Obligor attached thereto is a complete and
correct copy and that such Bylaws have not been amended, modified or
supplemented and are in full force and effect, and (C) that the copy of the
resolutions of the Board of Directors of such Contingent Obligor approving
the transactions contemplated by the Transaction Documents is a complete
and correct copy and that such resolutions are in full force and effect and
are the only resolutions relating to the matters contemplated by the
Transaction Documents;
(7) A certificate of an Authorized Officer of the Spread
Account Depositor, certifying (A) the names and true signatures of the
Authorized Officers of the Spread Account Depositor and (B) that the copy
of the trust agreement of the Spread Account Depositor attached thereto is
a complete and correct copy and that such trust agreement has not been
amended, modified or supplemented and is in full force and effect;
(8) (A) A certificate from an Authorized Officer of ACC
certifying that (i) the copies of the audited consolidated balance sheet of
ACC for its fiscal year ended June 30, 1999, and the related consolidated
statements of income, shareholders' equity and cash flow for such fiscal
year attached to such certificate are complete, true and correct and have
been prepared in accordance with GAAP consistently applied and present
fairly, on a consolidated basis, the financial position of ACC and its
Subsidiaries (including the Borrower) as of such date and the results of
their operations for such period, and (ii) there have been no changes since
the end of the fiscal year ended on June 30, 1999 in the assets,
liabilities, financial condition, operations, business or prospects of ACC
or its Subsidiaries, other than changes in the ordinary course of business
the effect of which have not, in the aggregate, been materially adverse to
ACC and its Subsidiaries, together with (B) the Accountant's Report and
Procedures Report for the fiscal year ended June 30, 1999, each of which
shall be addressed to the Administrative Agent or accompanied by a letter
permitting the Administrative Agent to rely thereon;
(9) Certificates of the Secretary of State of Texas and,
except in the case of ACC, of the Secretary of State of its jurisdiction of
incorporation as to the qualification of the Borrower and each of the
Contingent Obligors to do business, and the good standing thereof, in such
jurisdiction and, except in the case of the Borrower, Texas, each dated on
or within 20 Business Days prior to the Closing Date;
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(10) Certificates of Authorized Officers of the Borrower and
the Contingent Obligors to the effect that the conditions set forth in
SECTIONS 3.01(a) and 3.01(b) have been satisfied;
(11) A certificate from each party (other than the Borrower
and the Lenders), in form and substance satisfactory to the Administrative
Agent, covering its due execution and delivery of the Transaction Documents
to which it is a party and the other documents executed by it in connection
herewith and therewith and the incumbency and specimen signatures of its
officers executing such documents;
(12) Opinions of Dewey Ballantine, Richards Layton & Finger
and Chris Choate, Esq., counsel for the Borrower, the Spread Account
Depositor and the Contingent Obligors, dated the Closing Date and addressed
to, and reasonably satisfactory in form and substance to, the
Administrative Agent, the Lender Collateral Agent, each Lender and each
Credit Support Provider;
(13) An irrevocable letter of direction from the Borrower and
Spread Account Depositor to each Senior Lien Holder (as defined in the
Subordination Agreement) instructing such Senior Lien Holder to pay all
amounts otherwise payable to the Borrower or Spread Account Depositor to
the Lender Collateral Agent, identifying the Lender Collateral Agent as a
third party beneficiary with the right to enforce such instructions, and
acknowledged and agreed to by such Senior Lien Holder; and
(14) Such other documents, instruments, opinions and
certificates and completion of such other matters, as the Administrative
Agent may reasonably deem necessary or desirable.
SECTION 3.2 CONDITIONS PRECEDENT TO BORROWINGS, CONVERSIONS AND
CONTINUATIONS.
(1) The obligation of each Lender to Convert and Advance or
Continue any Advance shall be subject to the condition precedent that on the
date of such Conversion or Continuation no Event of Default has occurred and is
continuing.
(2) The obligation of each Lender to make any Advance as a part of
any Borrowing (other than as a result of a Conversion or Continuation) shall be
subject to the further conditions precedent that:
(1) The Administrative Agent shall have timely received a
properly completed Notice of Borrowing, executed by an Authorized Officer
of the Borrower;
(2) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating that on the Borrowing Date
and after giving effect to the Borrowing on that date, all representations
and warranties of the Contingent Obligors
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contained herein or in any Transaction Document or otherwise made by
them in writing pursuant to any of the provisions hereof or thereof are
true and correct in all material respects with the same force and effect
as though such representations and warranties had been made on and as of
such date, except to the extent that such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties were true and correct on and as of such
date;
(3) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating that on the Borrowing Date
and after giving effect to the Borrowing on that date, no Event of Early
Termination, Event of Early Amortization, condition, event or act which
with notice or lapse of time or both will become an Event of Early
Termination, Event of Early Amortization, Default or Event of Default has
occurred and is continuing and that there has been no change to the
underwriting or servicing standards of ACFS which could cause the related
Series to perform materially more poorly (without giving effect to the
credit enhancement for such Series) or to have a materially longer term
than Series 1999-B;
(4) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating that the RCCA Deposit
proposed to be funded with the proceeds of such Borrowing relates to a
Designated Series.
(5) On or before the date of such Borrowing, the
Administrative Agent shall have received satisfactory evidence of the
establishment and continued existence of each of the Spread Account and the
RCCA relating to the relevant Designated Series and the Administrative
Agent shall have received an Officer's Certificate of the Borrower stating
that the aggregate amount the Borrower or the Spread Account Depositor has
deposited or will cause to be deposited in cash before 12:00 noon on such
date into such Spread Account is not less than an amount (the "REQUIRED
SPREAD ACCOUNT DEPOSIT") equal to the product of the initial aggregate
principal amount of the securities constituting the relevant Designated
Series times the greater of (i) the Minimum Spread Account Percentage and
(ii) the percentage necessary to cause the Loss Coverage Ratio, after
giving effect to the Initial Spread Account Deposit, to be equal to or
greater than the Required Loss Coverage Ratio.
(6) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating (a) that the Lender
Collateral Agent has a perfected security interest in the Borrower
Collateral, and there shall be no other security interests or Liens on the
Borrower Collateral other than Permitted Liens and (b) that the RCCA Agent
has a perfected security interest in the RCCA Collateral, including all
proceeds (to the extent payable to the Borrower) of the RCCA into which the
proceeds of such Borrowing shall be deposited, and there shall be no other
security interests or Liens on the RCCA Collateral, including such RCCA
proceeds, other than Permitted Liens;
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(7) The Designated Series shall be insured by FSA and FSA's
credit risk shall have been rated on a stand-alone basis at least Baa3/BBB-
by Moody's and S&P, respectively;
(8) The Administrative Agent shall have received an
Officer's Certificate of the Borrower stating that ACFS or another Person
approved in writing by the Administrative Agent is the servicer for the
Designated Series;
(9) ACFS shall have delivered a certificate to the
Administrative Agent certifying that as of the relevant Borrowing Date,
each of the relevant Series Transaction Documents is in full force and
effect, no party to any such document is in default of its obligations
thereunder, and all of the representations and warranties of the Borrower
set forth in such Series Transaction Documents are true and correct;
(10) No Credit Support Default or Credit Support Ratings
Event shall have occurred and no Credit Support Provider shall have
contested the Credit Support Agreement, unless, in any such case, the
related Credit Support Provider shall have been replaced;
(11) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating that there shall have been no
changes in the assets, liabilities, financial condition, operations,
business or prospects of the Borrower or any of the Contingent Obligors
which may have a Material Adverse Effect, including without limitation the
performance of the receivables owned or serviced by any such party;
(12) At least six Business Days prior to the date a Series
with respect to which an RCCA Deposit will be funded through Borrowings
under this Agreement is priced, ACFS and ACC shall provide to the
Administrative Agent an Officer's Certificate certifying each of the
following:
(A) The information with respect to such Series described
under "Collateral Characteristics" on Annex I; and
(B) the most recent copy of the rating agency presentation
relating to such Series.
(13) On the date a Series with respect to which an RCCA
Deposit will be funded through Borrowings under this Agreement is priced,
ACFS and ACC shall provide to the Administrative Agent an Officer's
Certificate certifying each of the following:
(A) The relevant Series Transaction Documents are
substantially in the form of those documents listed on Exhibit F
(except that (I) such Series Transaction Documents shall provide that
the Facility Fees with respect to the Borrowings used to fund the
related RCCA, up to an amount equal to the Facility Fee Rate per annum
on the outstanding related Borrowing, shall be payable pursuant
thereto with the
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same priority as the payment of the premiums due to the Designated
Series Insurer and (II) the "Accelerated Payment Termination Date"
may be as set forth in Section 5.02(k)(i)(C)), the differences
between the terms of such Series Transaction Document and the form
of those documents listed on Exhibit F hereto shall not result in a
Material Adverse Effect, and the copy of the preliminary offering
document attached to such Officer's Certificate was the preliminary
offering document used in connection with such pricing and is a
true, correct and complete copy of such document;
(B) The interest rate(s) on the Series, including any
interest rate cap rate included or effectively included in the Series
Transaction Documents;
(C) Attached to such Officer's Certificate are (i) a draft
of the supplement to the Spread Account Agreement to be included in
the Series Transaction Documents and (ii) the most recent copy of the
rating agency presentation relating to such Series; and
(D) The "Accelerated Payment Termination Date" (as defined
in the Spread Account Agreement) with respect to such Series shall not
occur later than 400 days from the date such Series shall have been
issued,
(14) At least two Business Days prior to the funding of an
RCCA Deposit of any Series through Borrowings under this Agreement, ACFS
and ACC shall provide to the Administrative Agent an Officer's Certificate
certifying each of the following:
(A) The relevant Series Transaction Documents are
substantially in the form of those documents listed on Exhibit F
(except that (I) such Series Transaction Documents shall provide that
the Facility Fees with respect to the Borrowings used to fund the
related RCCA, up to an amount equal to the Facility Fee Rate per annum
on the outstanding related Borrowing, shall be payable pursuant
thereto with the same priority as the payment of the premiums due to
the Designated Series Insurer and (II) the "Accelerated Payment
Termination Date" may be as set forth in Section 5.02(k)(i)(C)) and
the differences between the terms of such Series Transaction Document
and the form of those documents listed on Exhibit F hereto shall not
result in a Material Adverse Effect; and
(B) Attached to such Officer's Certificate is a draft of the
letter (which shall be so attached), addressed to the Administrative
Agent on behalf of the Lenders and Assignees, from a firm of
nationally recognized independent certified public accountants which
has performed diligence on the loan documentation relating to such
Series for the underwriters of such Series, stating with at least 95%
confidence that, based on their review of a representative sample of
the relevant loan files, such loan documentation contains all
necessary promissory notes and agreements evidencing such loans.
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(15) On the date an RCCA Deposit is funded through Borrowings
under this Agreement, ACFS and ACC shall provide to the Administrative
Agent an Officer's Certificate certifying each of the following:
(A) The relevant Series Transaction Documents are
substantially in the form of those documents listed on as Exhibit F
(except that (I) such Series Transaction Documents shall provide that
the Facility Fees with respect to the Borrowings used to fund the
related RCCA, up to an amount equal to the Facility Fee Rate per annum
on the outstanding related Borrowing, shall be payable pursuant
thereto with the same priority as the payment of the premiums due to
the Designated Series Insurer and (II) the "Accelerated Payment
Termination Date" may be as set forth in Section 5.02(k)(i)(C)), the
differences between the terms of such Series Transaction Document and
the form of those documents listed on Exhibit F hereto shall not
result in a Material Adverse Effect.
(B) Attached to such Officer's Certificate are (i) an
executed original of the letter (which shall be so attached) referred
to in paragraph (xiii)(B) above and (ii) copies of the legal opinions
delivered in connection with the closing of such Series together with
letters permitting the Administrative Agent on behalf of the Lenders
and Assignees to rely on such opinions.
(16) The Administrative Agent shall have received an
irrevocable letter of direction from the Borrower and the Spread Account
Depositor to the trustee party to the related supplement to the Spread
Account Agreement instructing such trustee to pay all amounts otherwise
payable to the Borrower or the Spread Account Depositor to the Lender
Collateral Agent and identifying the Lender Collateral Agent as a third
party beneficiary with the right to enforce such instructions, which letter
shall have been acknowledged and agreed to by such trustee.
(17) The Administrative Agent shall have received lien search
reports confirming the information set forth in the documents previously
delivered pursuant to Section 3.01(f).
(18) The supplements to the Spread Account Agreement with
respect to Series 1996-D, Series 1997-A and Series 1997-B shall have been
amended so that the Insurance Agreements Events of Default relating to
cumulative defaults and cumulative net losses are no more restrictive than
the related Trigger Events.
(19) The Administrative Agent shall have received such other
documents, instruments, opinions, certificates as the Administrative Agent
may reasonably deem necessary or desirable.
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SECTION 3.3 SPECIAL CONDITIONS TO ADVANCES UNDER LIQUIDITY
COMMITMENTS. In addition to the conditions set forth in SECTIONS 3.01 and 3.02
above, it shall be a condition precedent to the obligation of any Liquidity
Lender to make an Advance pursuant to SECTION 2.02(e) or 2.02(g) in respect of a
Conduit Lender that no Insolvency Event shall have occurred with respect to such
Conduit Lender.
SECTION 3.4 SPECIAL WAIVER OF CONDITIONS REGARDING INITIAL
BORROWING. In connection with the Borrowing to fund the RCCA for Series 1999-D,
the Lenders hereby waive the time periods for delivery of the documents required
to be delivered pursuant to Sections 3.02(b)(xii), (xiii), and (xiv).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
BORROWER. Each Contingent Obligor represents and warrants as follows on the
date of this Agreement, the Effective Date and the date that any Advance is
made, Continued or Converted, in each case, with reference to the facts and
circumstances then existing:
(1) ORGANIZATION AND GOOD STANDING. The Borrower has been duly
organized and is validly existing as a corporation under the laws of the State
of Nevada, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted.
(2) DUE QUALIFICATION. The Borrower is duly qualified to do
business as a foreign entity in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
its properties or the conduct of its business requires such qualification.
(1)
(3) POWER AND AUTHORITY. The Borrower has the power and authority
to execute and deliver this Agreement and the other Transaction Documents to
which it is a party and to carry out its terms and their terms, respectively;
the Borrower has full power and authority to grant to the Lender Collateral
Agent, for the benefit of the Secured Parties, a perfected security interest in
the Borrower Collateral and has duly authorized such grant by all necessary
corporate action; the Borrower has full power and authority to grant to the RCCA
Agent a perfected security interest in the RCCA Collateral and has duly
authorized such grant by all necessary corporate action; and the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party have been duly authorized by the Borrower by all
necessary corporate action.
(4) SECURITY INTEREST; BINDING OBLIGATIONS. This Agreement and the
Transaction Documents to which it is a party have been duly executed and
delivered and create a valid perfected security interest in the Borrower
Collateral in favor of the Lender Collateral Agent, on behalf of the Secured
Parties, enforceable against the Borrower and creditors of and purchasers from
the
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Borrower; the RCCA Agreement creates a valid perfected security interest in
the RCCA Collateral in favor of the RCCA Agent enforceable against the
Borrower and creditors of and purchasers from the Borrower; and this
Agreement and the other Transaction Documents to which it is a party
constitute legal, valid and binding obligations of the Borrower enforceable
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(5) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which
the Borrower is a party, and the fulfillment of the terms of this Agreement
and the other Transaction Documents to which the Borrower 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
any indenture, agreement, mortgage, deed of trust or other instrument to
which the Borrower is a party or by which the Borrower is bound or any of the
Borrower's properties are subject, or result in the creation or imposition of
any Lien upon any of the Borrower's 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 Borrower of any Governmental Authority having jurisdiction over the
Borrower or any of the Borrower's properties, or in any way adversely affect
the Borrower's ability to perform the Borrower's obligations under this
Agreement or the other Transaction Documents to which the Borrower is a party.
(6) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to such Contingent Obligor's knowledge, threatened against the
Borrower, before any court or other Governmental Authority having
jurisdiction over the Borrower or its properties (A) asserting the invalidity
of this Agreement or any of the other Transaction Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Transaction Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Borrower of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Transaction Documents,
(D) involving the Borrower, the Spread Account Depositor, the Spread Accounts
for Designated Series, other Borrower Collateral, the RCCAs or other RCCA
Collateral, or (E) that could have a Material Adverse Effect.
(7) NO CONSENTS. The Borrower is not required to obtain the
consent of any other Person which has not been obtained, or any consent,
license, approval or authorization of, or registration or declaration with,
any Governmental Authority in connection with the execution, delivery,
performance, validity or enforceability of this Agreement or the other
Transaction Documents to which it is a party.
(8) USE OF PROCEEDS. All proceeds of any Borrowing shall be
used to fund an RCCA. No part of the proceeds of the Borrowings will be
used, directly or indirectly, for a purpose which violates any law, rule or
regulation of any Governmental Authority, including the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve
System, as amended.
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(9) CHIEF EXECUTIVE OFFICE. The chief executive office of the
Borrower is located at 639 Isbell Road, Suite 390, Reno, Nevada 89509.
(10) SOLVENCY. The Borrower is solvent and will not become
insolvent after giving effect to the transactions contemplated by this
Agreement and the Transaction Documents. The Borrower, after giving effect
to the transactions contemplated by this Agreement and the other Transaction
Documents, will have adequate funds to conduct its business in the
foreseeable future.
(11) COMPLIANCE WITH LAWS. The Borrower has complied and will
comply in all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties, each Designated Series, each RCCA, all RCCA Collateral and all
Borrower Collateral.
(12) TAXES. The Borrower has filed on a timely basis all tax
returns (including, without limitation, foreign, federal, state, local and
otherwise) required to be filed, is not liable for taxes payable by any other
Person and has paid or made adequate provisions for the payment of all taxes,
assessments and other governmental charges due from the Borrower. No tax
lien or similar adverse claim has been filed, and no claim is being asserted,
with respect to any such tax, assessment or other governmental charge. Any
taxes, fees and other governmental charges payable by the Borrower in
connection with the execution and delivery of this Agreement and the other
Transaction Documents and the transactions contemplated hereby or thereby
have been paid or shall have been paid if and when due at or prior to the
Effective Date and each Borrowing Date.
(13) NO LIENS, ETC. The Borrower Collateral is and will be owned
by the Borrower free and clear of any Lien or restrictions on transferability
(other than Permitted Liens) and the Borrower has the full right, corporate
power and lawful authority to assign, transfer and pledge the same and
interests therein, and upon the making of each Advance, the RCCA Agent will
have acquired a perfected and valid security interest in the related RCCA
Collateral, free and clear of any Lien or restrictions on transferability.
No effective financing statement or other instrument similar in effect
covering all or any part of the Borrower Collateral or the RCCA Collateral is
on file in any recording office, except such as may have been filed in favor
of the Lender Collateral Agent pursuant to the Security Agreement, such as
may have been filed in favor of the RCCA Agent pursuant to the RCCA Agreement
or such as may have been filed in favor of the collateral agent specified in
the Spread Account for the benefit of the applicable Designated Series
Insurers and the related secured parties.
(14) INFORMATION TRUE AND CORRECT. All information heretofore or
hereafter furnished by or on behalf of the Borrower, the Spread Account
Depositor or any Contingent Obligor to any Lender or the Administrative Agent
in connection with this Agreement or any Transaction Document or any
transaction contemplated hereby or thereby is and will be true and complete
in all material respects and does not and will not omit to state a material
fact necessary to make the statements contained therein not misleading.
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(15) ERISA COMPLIANCE. The Borrower is in compliance with ERISA
and has not incurred and does not expect to incur any liabilities (except for
premium payments arising in the ordinary course of business) to the Pension
Benefit Guaranty Corporation (or any successor thereto) under ERISA.
(16) FINANCIAL OR OTHER CONDITION. There has been no event which
may have a Material Adverse Effect, including any event which may, currently
or with the passage of time, materially reduce the amount on deposit in the
Spread Accounts or RCCAs relating to Designated Series or adversely impact
the interest of the Borrower or the Spread Account Depositor in such Spread
Accounts or RCCAs.
(17) INVESTMENT COMPANY STATUS. 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
(18) NO TRADE NAMES. The Borrower has no trade names, fictitious
names, assumed names or "doing business as" names.
(19) SEPARATE EXISTENCE. The Borrower is operated as an entity
with assets and liabilities distinct from those of any of the Contingent
Obligors and any other Affiliates of the Borrower, and such Contingent
Obligor hereby acknowledges that the Administrative Agent and each of the
Lenders are entering into the transactions contemplated by this Agreement in
reliance upon the Borrower's identity as a separate legal entity from each of
the Contingent Obligors and each such Affiliate. There is not now, nor will
there be at any time in the future, any agreement or understanding between
the Borrower and any other Person providing for the allocation or sharing of
obligations to make payments or otherwise in respect of any taxes, fees,
assessments or other governmental charges other than the management services
agreement dated as of January 1, 1999 and the tax sharing agreement dated as
of December 22, 1994.
(20) BUSINESS OF THE BORROWER. The Borrower engages exclusively
in the business of acquiring pools of receivables and/or payment obligations
from its Affiliates and transferring such assets to various trusts which
issue various Series related to such pools of receivables and/or payment
obligations, and such other activities as may be incidental to or reasonably
necessary and appropriate in connection with the conduct of the foregoing.
(21) INVESTMENTS. The Borrower does not own or hold, directly or
indirectly, any capital stock or equity security of, or any equity interest
in, any Person other than an equity interest in the Spread Account Depositor.
(22) REPRESENTATION AND WARRANTIES TRUE AND CORRECT. Each of the
representations and warranties of the Borrower contained in the Transaction
Documents is true and correct in all material respects.
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(23) SERIES TRANSACTION DOCUMENTS RELATING TO DESIGNATED SERIES.
As of the relevant Borrowing Date, each of the Series Transaction Documents
relating to Designated Series (including Designated Series whose RCCAs were
funded by earlier Borrowings which Borrowings have not been repaid in full),
is in full force and effect, no party to any such document is in default of
its obligations thereunder, and all of the representations and warranties of
the Borrower set forth in such Series Transaction Documents are true and
correct (except to the extent such representations and warranties
specifically relate to an earlier date, then such representations and
warranties shall be true and correct as of such earlier date). ACFS shall
have furnished to the Administrative Agent true, correct and complete copies
of the Series Transaction Documents relating to each of the Designated
Series, each of which document shall be in full force and effect and shall
furnish to the Administrative Agent all amendments to such documents
permitted hereunder which may be entered into from time to time. The
information set forth on Annex II and Annex III is complete and correct as of
the date hereof. As of the Closing Date, the "Accelerated Payment
Termination Date" (as defined in the Spread Account Agreement) has occurred
with respect to all outstanding Series except Series 1998-B, Series 1998-C,
Series 1999-A, Series 1999-B and Series 1999-C. The "Accelerated Payment
Termination Date" with respect to Series 1999-A, Series 1999-B and Series
1999-C is currently anticipated to occur on the "Final Scheduled Distribution
Date" for the Class A-1 Notes of each such Series, which dates will occur in
March 2000, June 2000 and September 2000, respectively. The "Accelerated
Payment Termination Date" with respect to Series 1998-B and Series 1998-C
will occur when the OC Level (as defined in the related Underlying
Transactions Documents) reaches 10%. Each Underlying Trustee has a perfected
security interest in the property of the related Underlying Trust, subject to
no other security interests or Liens. Each Underlying Transactions Documents
is in full force and effect, no party to any such document is in default of
its obligations thereunder, and all of the representations and warranties of
the Borrower set forth in such Underlying Transactions Documents are true and
correct. Each letter from a firm of nationally recognized independent
certified public accountants which has performed diligence on the loan
documentation relating to Underlying Transactions for the underwriters of the
related Series has been delivered to the Agent and each copy so delivered is
true and correct.
(24) YEAR 2000 COMPLIANCE. All computer hardware and software
information systems owned by it or made available to it by the Designated
Series Servicer or any of its Affiliates ("INFORMATION SYSTEMS"), are Year
2000 Complaint. For purposes of this paragraph, "Year 2000 Compliant" means
that the Information Systems shall be able to operate and perform date
sensitive functions before, on, and after December 31, 1999.
(25) FINANCIAL STATEMENTS. (i) The copies of (a) the unaudited
balance sheets of the Borrower, ACFS and AMC for their respective fiscal year
ended June 30, 1999, and the related statements of income, shareholders'
equity and cash flows for such fiscal years, and (b) the audited consolidated
balance sheet of ACC for its fiscal year ended on June 30, 1999, and the
related consolidated statements of income, shareholders' equity and cash
flows for such fiscal year provided to the Lenders, are complete, true and
correct and have been prepared in accordance with GAAP consistently applied
and present fairly the financial position of such Persons as of such date and
the results of their operations for such periods, and (ii) the copies of the
Accountant's Report and Procedures Letter for the fiscal year ended on June
30, 1999 are true and correct.
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SECTION 4.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
SPREAD ACCOUNT DEPOSITOR. Each Contingent Obligor represents and warrants as
follows on the date of this Agreement, the Effective Date and the date that
any Advance is made, Continued or Converted, in each case, with reference to
the facts and circumstances then existing:
(1) ORGANIZATION AND GOOD STANDING. The Spread Account
Depositor has been duly organized and is validly existing as a business trust
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.
(2) DUE QUALIFICATION. The Spread Account Depositor is duly
qualified to do business as a foreign entity in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of its properties or the conduct of its business
requires such qualification.
(3) POWER AND AUTHORITY. The Spread Account Depositor has the
power and authority to execute and deliver the acknowledgment to the Security
Agreement to which it is a party and to carry out its terms.
(4) COMPLIANCE WITH LAWS. The Spread Account Depositor has
complied and will comply in all material respects with all applicable laws,
rules, regulations, judgments, agreements, decrees and orders with respect to
its business and properties, each Designated Series, and each Spread Account.
(5) TAXES. The Spread Account Depositor has filed on a timely
basis all tax returns (including, without limitation, foreign, federal,
state, local and otherwise) required to be filed, is not liable for taxes
payable by any other Person and has paid or made adequate provisions for the
payment of all taxes, assessments and other governmental charges due from the
Spread Account Depositor. No tax lien or similar adverse claim has been
filed, and no claim is being asserted, with respect to any such tax,
assessment or other governmental charge.
(6) NO LIENS, ETC. The Spread Accounts are and will be owned by
the Spread Account Depositor free and clear of any Lien or restrictions on
transferability (other than Liens in favor of the collateral agent specified
in the Spread Account Agreement for the benefit of the applicable Designated
Series Insurers and the related secured parties and restrictions on
transferability set forth in the Series Transaction Documents relating to
each Designated Series) and the Spread Account Depositor has the full right,
corporate power and lawful authority to assign, transfer and pledge the same
and interests therein. No effective financing statement or other instrument
similar in effect covering all or any part of the Spread Accounts is on file
in any recording office, except such as may have been filed in favor of the
collateral agent specified in the supplement to the Spread Account Agreement
for the benefit of the applicable Designated Series Insurers and the related
secured parties.
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(7) SEPARATE EXISTENCE. The Spread Account Depositor is
operated as an entity with assets and liabilities distinct from those of the
Borrower, any of the Contingent Obligors and any other Affiliates of the
Borrower, and the Borrower and the Contingent Obligors hereby acknowledge
that the Administrative Agent and each of the Lenders are entering into the
transactions contemplated by this Agreement in reliance upon the Spread
Account Depositor's identity as a separate legal entity from each of the
Borrower, the Contingent Obligors and each such Affiliate. There is not now,
nor will there be at any time in the future, any agreement or understanding
between the Spread Account Depositor and any other Person providing for the
allocation or sharing of obligations to make payments or otherwise in respect
of any taxes, fees, assessments or other governmental charges other than the
management services agreement dated as of January 1, 1999 and the tax sharing
agreement dated as of December 22, 1994.
(8) BUSINESS OF THE SPREAD ACCOUNT DEPOSITOR. The Spread
Account Depositor engages exclusively in the business of depositing funds in,
and holding the rights to, the Spread Accounts.
(9) INVESTMENTS. The Spread Account Depositor does not own or
hold, directly or indirectly, any capital stock or equity security of, or any
equity interest in, any Person other than equity interests in the Issuers of
the Series.
SECTION 4.3 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO EACH
CONTINGENT OBLIGOR. Each Contingent Obligor represents and warrants as
follows on the date of this Agreement, the Effective Date and the date that
any Advance is made, Continued or Converted, in each case, with reference to
the facts and circumstances then existing:
(1) ORGANIZATION AND GOOD STANDING. It has been duly organized
and is validly existing as a business trust under the laws of the
jurisdiction of its incorporation, 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.
(2) DUE QUALIFICATION. It is duly qualified to do business as a
foreign entity in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its
properties or the conduct of its business requires such qualification.
(3) POWER AND AUTHORITY. It has the power and authority to
execute and deliver the Transaction Documents to which it is a party and to
carry out their respective terms.
(4) COMPLIANCE WITH LAWS. It has complied and will comply in
all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties.
(5) TAXES. It has filed on a timely basis all tax returns
(including, without limitation, foreign, federal, state, local and otherwise)
required to be filed, is not liable for taxes
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payable by any other Person and has paid or made adequate provisions for the
payment of all taxes, assessments and other governmental charges due from it.
No tax lien or similar adverse claim has been filed, and no claim is being
asserted, with respect to any such tax, assessment or other governmental
charge.
SECTION 4.4 LIMITED REMEDIES AND RECOURSE FOR BREACH. The
Administrative Agent, the Lender Collateral Agent and each of the Lenders
acknowledges and agrees that the representations and warranties in this
Article IV are representations and warranties of the Contingent Obligors only
and that the only recourse available to the Administrative Agent, the Lender
Collateral Agent and the Lenders shall be to recover actual damages from the
Contingent Obligors. The Administrative Agent, the Lender Collateral Agent
and to each of the Lenders waives, to the fullest extent permitted by law,
any right to specific performance and other equitable remedies in respect of
any breach of the representations and warranties in this Article IV.
ARTICLE 5
COVENANTS OF WITH RESPECT TO THE BORROWER
SECTION 5.1 AFFIRMATIVE COVENANTS. Until this Agreement shall
have been terminated in accordance with its terms, all outstanding Advances
(including principal, interest and fees) shall have been repaid to the
Lenders and all Commitments of the Lenders shall have been terminated, ACFS
agrees that it will:
(1) REPORTING REQUIREMENTS. Furnish to the Administrative Agent
and each Lender and, with respect to each document delivered after December
31, 1999, each Credit Support Provider:
(1) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year of
the Borrower and ACC, balance sheets of the Borrower and ACC (which in the
case of ACC shall be consolidated), for the fiscal quarter of such Person
most recently ended, and the related statements of income, shareholders'
equity and cash flows for such fiscal quarter and for the period beginning
with the end of the fiscal year most recently ended and ending at the end
of such quarter, prepared in accordance with GAAP consistently applied and
certified by an Authorized Officer of the Borrower or ACC, as the case may
be; plus, with respect to ACC, a certificate from an Authorized Officer of
ACFS certifying the percentage of total delinquencies and repossessed
assets in ACFS's serviced portfolio as of the end of such quarter, together
with back-up financial information with respect thereto as reasonably
requested by the Administrative Agent;
(2) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower and ACC, copies of the
balance sheets of the Borrower and ACC, as applicable, for the fiscal year
most recently ended, and the related statements of income, shareholders'
equity and cash flows for such fiscal year, prepared in accordance with
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GAAP consistently applied and certified by an Authorized Officer of the
Borrower or ACC, as the case may be;
(3) as soon as available and in any event within 95 days
after the end of each fiscal year of ACC, copies of the consolidated
balance sheet of ACC for the fiscal year most recently ended, and the
related consolidated statements of income, shareholders' equity and cash
flows for such fiscal year, prepared in accordance with GAAP consistently
applied together with a letter (the "ACCOUNTANTS' REPORT") from a firm of
independent certified public accountants selected by ACC and acceptable to
the Administrative Agent (the "INDEPENDENT ACCOUNTANTS"), which letter
shall be addressed to the Administrative Agent, to the effect that such
firm has audited the books and records of ACC, in which the Borrower, ACFS
and AMC are included as consolidated Subsidiaries, and issued its report
thereon in connection with the audit report on the consolidated financial
statements of ACC for such fiscal year most recently completed, and that
(a) such audit was made in accordance with GAAP, and accordingly included
such test of the accounting records and such other auditing procedures as
such firm considered necessary in the circumstances; (b) based on such
audit, such consolidated financial statements for such fiscal year present
fairly, in all material respects, the consolidated financial position of
ACC and its Subsidiaries as the end of such fiscal year and the result of
its operations and its cash flows for such fiscal year in accordance with
GAAP; (c) during such audit, such firm did not note any events, facts,
circumstances, or procedures which would lead it to conclude that the
unaudited balance sheets of the Borrower, ACFS or AMC (together with the
related statements of income, shareholders' equity, cash flows) may not
accurately reflect the financial position of such Persons as of such dates
and periods; and (d) the firm is independent of ACC and each of its
Subsidiaries within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. In addition, as soon
as available and in any event within 120 days after the end of each fiscal
year of ACC, the Administrative Agent shall be provided with a report (the
"PROCEDURES REPORT") on the application of agreed upon procedures to three
randomly selected servicer certificates of ACFS as servicer delivered
during the fiscal year most recently completed in connection with the
outstanding Series for which it acts as servicer (which must be Designated
Series, to the extent possible, following the initial Borrowing Date),
including the delinquency, default and loss statistics required to be
specified therein and noting whether any exceptions or errors in such
servicer certificates were found.
(4) together with the financial statements and reports
described in (i), (ii) or (iii) above, a certificate of an Authorized
Officer of the applicable Person (in the case of information concerning the
Borrower, such certificate shall be provided by an Authorized Officer of
ACFS) confirming the absence of any Event of Early Termination, Event of
Early Amortization, Default or Event of Default as of such date and as of
the date of such certificate;
(5) promptly upon the same becoming available to the
Borrower or ACC, a copy of each material report, notice, certificate,
statement, letter or other communication relating to the Designated Series,
including, without limitation, each annual accountants'
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report relating to the servicer's certificates for any Designated Series
required to be delivered under the terms of the related Series
Transaction Documents (together with a letter permitting the
Administrative Agent on behalf of the Lenders and Assignees to rely on
such report), each monthly servicer report and any communication
required to be delivered to the holders of any of the Designated Series
or any Rating Agency (or any other similar entity) rating any of the
Designated Series;
(6) as soon as available and in any event within 10 days
after the end of each month, a collateral summary report with respect to
all Series then outstanding, in form and substance acceptable to the
Administrative Agent;
(7) as soon as available and in any event within 10 days
after the end of each month, a report on the compliance of the Borrower
with the trigger events and events of default set forth in the agreements
pursuant to which the Designated Series Insurers have insured the
Designated Series, and promptly (and in no event later than 3 days)
following the occurrence of any default under any such agreement, notice of
such default (with a copy to the Lender Collateral Agent); and
(8) any other financial information relating to the
Borrower, the Spread Account Depositor, any of the Contingent Obligors, any
of the Designated Series Servicers, any of the Designated Series or any
Spread Accounts or RCCAs relating to any Designated Series as shall be
reasonably requested by the Administrative Agent or any Lender.
(2) OTHER CERTIFICATES AND INFORMATION. Furnish to the
Administrative Agent and each Lender and, with respect to each certificate or
document delivered after December 31, 1999, each Credit Support Provider:
(1) Immediately after the Borrower knows of the occurrence
of any Event of Early Termination, Event of Early Amortization, Event of
Default or any event or condition which with the giving of notice or lapse
of time, or both, would constitute an Event of Early Termination, Event of
Early Amortization or Event of Default, a certificate of an Authorized
Officer of ACFS specifying the nature of such event or condition and the
action which the Borrower has taken and/or proposes to take with respect
thereto (with a copy to the Lender Collateral Agent);
(2) Prompt written notice of the occurrence of any default
or event of default under any of the Series Transaction Documents relating
to any of the Designated Series, including any amortization events,
facility termination events, servicer termination events, which notice
shall be given not later than the Business Day following the occurrence
thereof and which notice shall (A) specify the nature thereof, and (B) be
accompanied by copies of all notices delivered to any party to any of the
Series Transaction Documents relating to any Designated Series or holder of
any Designated Series with respect thereto to the extent not delivered
pursuant to any other provision of this Agreement;
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(3) Prompt written notice if (A) any Debt by the Borrower or
Spread Account Depositor in excess of $100,000 is declared or shall become
due and payable prior to its stated maturity, or is called and not paid
when due, (B) a payment or other default shall have occurred under or with
respect to any other Debt (other than the Lender Notes) in excess of
$100,000 or the holder of any such Debt has the right to declare any such
Debt due and payable prior to its stated maturity as a result of such
default, (C) any drawing has been made under any insurance policy issued by
any insurer of any Series which insurance policy relates to such Series; or
(D) any drawing has been made under any Spread Account relating to any
Series with respect to which the cumulative outstanding drawings from such
Spread Account exceed $250,000;
(4) Prompt written notice if (A) any citation, summons,
subpoena, order to show cause or other order naming the Borrower, or any
Designated Series Servicer or any Contingent Obligor a party to any
proceeding before any Governmental Authority which related in any way to
any Transaction Document, or any Designated Series, could reasonably be
expected to have a Material Adverse Effect or calls into question the
validity or enforceability of any of the Transaction Documents or any
Series Transaction Documents relating to any Designated Series, and include
with such notice a copy of such citation, summons, subpoena, order to show
cause or other order, (B) any lapse or other termination of any material
license, permit, franchise or other authorization issued to the Borrower,
or any Designated Series Servicer or any Contingent Obligor by any
Governmental Authority, the lapse or termination of which could reasonably
be expected to result in a Material Adverse Effect, (C) any refusal by any
Governmental Authority or any other Person to renew or extend any such
material license, permit, franchise or other authorization with respect to
which such refusal could reasonably be expected to result in a Material
Adverse Effect and (D) any dispute between the Borrower, or any Designated
Series Servicer or any Contingent Obligor and any Person, which dispute
could reasonably be expected to have a Material Adverse Effect;
(5) Prompt written notice of any change or publicly
announced consideration of any change by any Rating Agency in the rating of
the unsecured debt of any of the Contingent Obligors that would give rise
to an Event of Early Termination or Event of Early Amortization, or the
rating of any of the Designated Series; and
(6) Promptly furnish such other information and financial
data as the Administrative Agent or any Lender may reasonably request.
(3) PRESERVATION OF CORPORATE EXISTENCE AND SEPARATE EXISTENCE.
ACFS shall cause the Borrower to do or cause to be done, and cause the Spread
Account Depositor to do or cause to be done, all things necessary on its part to
preserve and keep in full force and effect its existence and good standing as a
corporation or business trust, as applicable, under the laws of the jurisdiction
of its incorporation or establishment, as applicable. ACFS will cause the
Borrower and the Spread Account Depositor to comply fully with the Underlying
Transaction Documents to which each of them is a party so as to maintain each of
the Borrower's identity and the Spread Account Depositor's
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identity as a separate legal entity from its Affiliates and to make it
manifest to third parties that each of the Borrower and the Spread Account
Depositor is an entity with assets and liabilities distinct from its
Affiliates.
(4) COMPLIANCE WITH LAWS. ACFS shall cause the Borrower and the
Spread Account Depositor to comply with all applicable laws, rules and
regulations and orders of any Governmental Authority, the noncompliance with
which could have a Material Adverse Effect and, without limiting the generality
of the foregoing, comply with all applicable laws, rules and regulations and
orders of any Governmental Authority regarding the use of the proceeds of the
Borrowings and the Designated Series, including the provisions of Regulations T,
U and X of the Board of Governors of the Federal Reserve System, as amended.
(5) PAYMENT OF TAXES. ACFS shall cause the Borrower and the Spread
Account Depositor to pay and discharge promptly or cause to be paid and
discharged promptly, all Taxes imposed upon each of them or upon their
respective income or profits or upon any of their respective assets; PROVIDED
that the payment of any such Tax shall not be required so long as the amount,
applicability or validity thereof shall be contested in good faith by
appropriate proceedings, the Borrower or the Spread Account Depositor, as the
case may be, shall have set aside adequate cash reserves in respect thereof, and
ACFS shall have given the Administrative Agent prompt notice of such contest.
(6) PAYMENT OF DEBT AND PERFORMANCE OF OBLIGATIONS. ACFS shall
cause the Borrower and the Spread Account Depositor to pay and discharge when
due all lawful Debt, obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to (i) have a Material
Adverse Effect or (ii) become a Lien upon any property of the Borrower or the
Spread Account Depositor, as the case may be, other than a Permitted Lien,
unless and to the extent only that the validity of such Debt, obligation or
claim shall be contested in good faith and by appropriate proceedings diligently
conducted by the Borrower or the Spread Account Depositor, as the case may be,
and that any such contested Debt, obligations or claims shall not constitute or
create a Lien upon property of the Borrower or the Spread Account Depositor, as
the case may be, and provided further that ACFS shall give the Administrative
Agent prompt notice of any such contest and shall have retained adequate cash
reserves in respect thereof.
(7) BOOKS AND RECORDS; VISITATION. ACFS shall cause the Borrower
and the Spread Account Depositor to keep proper books of record and account in
which complete, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all material dealings and transactions in
relation to its business and activities; upon reasonable notice, permit
representatives of the Administrative Agent and each Lender to visit the offices
of the Borrower or the Spread Account Depositor, as the case may be, or such
other place where such books of record and accounts are kept and to discuss the
operations and financial condition of the Borrower or the Spread Account
Depositor, as the case may be, with the Authorized Officers thereof.
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(8) YEAR 2000 COMPLIANCE. An authorized Officer of ACFS shall
certify that the Borrower has no Information Systems separate from the
Information Systems of ACFS, that could be materially adversely affected through
failure to be Year 2000 Compliant on a timely basis.
(9) SERIES TRANSACTION DOCUMENTS. ACFS shall cause the Borrower to
deliver 5 copies of all Series Transaction Documents relating to a Designated
Series to the Administrative Agent promptly after the closing of such Series
together with an Officer's Certificate of ACFS that such copies are true,
correct and complete.
(10) COMPLIANCE WITH TRANSACTION DOCUMENTS. ACFS shall cause the
Borrower and the Spread Account Depositor to comply, in all respects, with the
terms of the Transaction Documents to which each of them is a party, including
without limitation but subject to the provisions of the Subordination Agreement
and Article IX hereof, performing any and all additional actions reasonably
required by the Administrative Agent to perfect or continue the perfection of
the Lien on the Borrower Collateral or the RCCA Collateral.
(11) COMPLIANCE WITH SERIES TRANSACTION DOCUMENTS. ACFS shall cause
the Borrower and the Spread Account Depositor to comply in all respects, with
the terms of the Series Transaction Documents to which each of them is a party
relating to any Designated Series.
(12) CONFORMITY OF ISSUED DESIGNATED SERIES TO RELEVANT SERIES
TRANSACTION DOCUMENTS. ACFS shall cause the Borrower and the Spread Account
Depositor to cause the Designated Series issued to be in compliance in all
material respects with the terms of the Series Transaction Documents relating to
such Designated Series, including without limitation, the existence of the
credit enhancement and/or overcollateralization contemplated by such documents.
(13) ACCOUNTANT'S LETTERS; LEGAL OPINIONS. ACFS shall provide to
the Administrative Agent copies of all accountant's letters and accountant's
annual statements of compliance with respect to each Designated Series and
copies of all opinions of counsel rendered in connection with any Designated
Series and a reliance letter with each such document pursuant to which the
Administrative Agent (on behalf of the Lenders) may rely on all such documents.
(14) [RESERVED]
(15) APPOINTMENT OF SERVICER. If FSA is not the Controlling Party
with respect to any Designated Series, to the extent the Borrower has control
over the appointment of a successor servicer with respect to such Designated
Series under the related Series Transaction Documents, ACFS will cause the
Borrower to obtain the prior written consent of the Administrative Agent prior
to the appointment of any successor servicer.
(16) USE OF FACILITY. ACFS shall cause the Borrower to use
Borrowings to fund an RCCA with respect to Series 1999-D and with respect to one
Series in each period of two consecutive calendar quarters commencing on January
1, 2000. The aggregate principal amount of each such Series shall equal or
exceed $600 million, and the related RCCA shall be the only
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replacement cash collateral account, spread account replacement reinsurance
or other spread account replacement device employed in connection with such
Series; PROVIDED, however, if the Required Spread Account Deposit with
respect to such Series is greater than 3% of the aggregate principal amount
of the securities constituting such Series, then FSA may obtain Qualified
Subsequent Reinsurance for the difference between the Required Spread Account
Deposit and 3% of the aggregate principal amount of the securities
constituting such Series. If there is insufficient capacity under this
Agreement to fully fund an RCCA or, if the Borrower has satisfied the
requirements of the first sentence of this Section 5.01(p) and wishes to
borrow hereunder to fund another RCCA for another Series, then the Borrower
may combine the RCCA with Qualified Subsequent Reinsurance, provided that the
Spread Account Replacement Insurance is either pari passu or subordinated to
such RCCA, PROVIDED further that any portion of such Spread Account
Replacement Insurance obtained pursuant to this or the preceding sentence
which would cause the sum of the principal amount of such Spread Account
Replacement Insurance and the amount deposited in the RCCA to exceed the
Maximum Borrowing Percentage of the aggregate principal amount of the
securities constituting such Series must be subordinated to the RCCA.
(17) RATING. If requested by the Administrative Agent at any
time, pay the costs and expenses of having the Facility rated by any one
Rating Agency chosen by the Administrative Agent.
(18) SPREAD ACCOUNT DEPOSITOR LIENS. Cause the Spread Account
Depositor not to create, assume, or suffer to exist any Lien on any personal
property of the Spread Account Depositor whether now owned or hereafter
acquired by the Spread Account Depositor; PROVIDED, HOWEVER, that such
restriction shall not apply to: (i) any Lien for taxes, assessments or other
governmental charges or levies not yet subject to penalties for non-payment
or the validity, applicability or amount of which is being contested in good
faith by appropriate legal proceedings and with respect to which adequate
reserves in accordance with GAAP have been established by the Spread Account
Depositor; (ii) any Lien which is imposed by law (such as those of mechanics,
carriers and warehousemen), if payment of the obligation secured thereby is
not yet due or the validity, the applicability or amount of which is being
contested in good faith by appropriate legal proceedings and with respect to
which adequate reserves in accordance with GAAP have been established by the
Spread Account Depositor; (iii) judgment Liens in existence less than five
days after the entry thereof or with respect to which execution has been
stayed, so long as the aggregate amount of all such judgment Liens at any
time does not exceed $100,000, or judgment Liens the payment of which is
covered in full (subject to a customary deductible) by insurance; and (iv)
Liens in favor of the collateral agent specified in the Spread Account
Agreement for the benefit of the applicable Designated Series Insurers and
the related secured parties.
(19) SPREAD ACCOUNT DEPOSITOR PAYMENTS FROM SPREAD ACCOUNTS. Cause
the Spread Account Depositor not to make any payments from any Spread Account
other than those payments due under the terms of the related Series Transaction
Documents. Without limiting the foregoing, ACFS agrees to cause the Borrower to
cause the Spread Account Depositor not to make any voluntary, optional, or
accelerated payments with respect to any Series with funds from the relevant
Spread Account. Notwithstanding the foregoing, the Borrower or the Spread
Account
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Depositor shall not be prevented from replacing funds on deposit in any
Spread Account with spread account replacement reinsurance so long as such
reinsurance constitutes "Subsequent Reinsurance" under the terms of, and as
defined in, the RCCA Agreement. In addition, the foregoing is not intended
to limit the rights of FSA or the Underlying Trustees pursuant to the
Underlying Transaction Documents.
(20) SPREAD ACCOUNT DEPOSITOR MERGER, CONSOLIDATION, ETC.
Cause the Spread Account Depositor not to merge or consolidate with or into,
or sell, convey, transfer, exchange, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or substantially all
of its assets (whether now owned or hereafter acquired) to, acquire all or
substantially all of the assets of, any Person or division of any Person; or
sell, convey, transfer, exchange, lease or otherwise dispose of any of its
assets; PROVIDED HOWEVER, the foregoing shall not limit the ability of the
Spread Account Depositor to make any Initial Spread Account Deposits.
(21) SPREAD ACCOUNT DEPOSITOR CHANGE IN NAME. Cause the Spread
Account Depositor not to make any change to its name or use any trade names,
fictitious names, assumed names or "doing business as" names.
(22) SPREAD ACCOUNT DEPOSITOR PROTECTION OF COLLATERAL. Cause
the Spread Account Depositor not to sell, transfer, exchange or otherwise
dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit
such to occur or suffer such to exist), any part of its personal property, or
permit any Lien (other than the Lien of the collateral agent specified in the
Spread Account Agreement for the benefit of the insurer of the Designated
Series and the related secured parties) to be created on or extend to or
otherwise arise upon or burden such property or any part thereof, any
interest therein or the proceeds thereof other than a sale, transfer,
exchange, disposal, pledge, mortgage, hypothecation or encumbrance for the
benefit of FSA and/or the Underlying Trustees permitted under or pursuant to
the terms of any of the Underlying Transaction Documents.
(23) SPREAD ACCOUNT DEPOSITOR BUSINESS. Cause the Spread Account
Depositor not to engage in any business or activity other than the business
described in Trust Agreement of the Spread Account Depositor as in effect on
the date hereof.
(24) SPREAD ACCOUNT DEPOSITOR INDEBTEDNESS. Cause the Spread
Account Depositor not to incur, create, assume, suffer to exist or otherwise
become liable with respect to any Debt other than Debt in favor of FSA
and/or the Underlying Trustees created or permitted under or pursuant to the
terms of any of the Underlying Transaction Documents.
(25) SPREAD ACCOUNT RELEASES. (i) Pay to the Lender Collateral
Agent all amounts released from the RCCAs pursuant to the RCCA Agreement and
(ii) cause the Spread Account Depositor to pay to the Lender Collateral Agent
(A) all amounts paid to it pursuant to the Spread Account Agreement and (B) all
distributions in respect of the certificates of beneficial interest in the
Spread Account Depositor. ACFS will, and will cause the Borrower and the Spread
Account Depositor to, hold all amounts received by any of them (x) in respect of
the Residual Certificates,
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(y) pursuant to the RCCA Agreement or the Spread Account Agreement or (z) in
respect of the premiums payable to the Lenders pursuant to the Series
Transaction Documents in trust for the Lenders and promptly pay such amounts
to the Lender Collateral Agent. The Lender Collateral Agent shall deposit
all amounts received by it in respect of the Borrower Collateral into the
Collateral Account for distribution pursuant to Section 6 of the Security
Agreement.
SECTION 5.2 NEGATIVE COVENANTS. Until this Agreement shall have
terminated in accordance with its terms, all outstanding Advances (including
principal, interest and fees) have been repaid to the Lenders and all
Commitments of the Lenders shall have been terminated ACFS will cause the
Borrower not to, directly or indirectly:
(1) LIENS. Create, assume, or suffer to exist any Lien on any
Borrower Collateral or RCCA Collateral whether now owned or hereafter
acquired by the Borrower; PROVIDED, HOWEVER, that such restriction shall not
apply to: (i) any Liens in favor of the Lender Collateral Agent pursuant to
the Security Agreement, Liens in favor of Bank One as collateral agent under
the Certificate Pledge Agreement and Liens in favor of the RCCA Agent
pursuant to the RCCA Agreement; (ii) any Lien for taxes, assessments or other
governmental charges or levies not yet subject to penalties for non-payment
or the validity, applicability or amount of which is being contested in good
faith by appropriate legal proceedings and with respect to which adequate
reserves in accordance with GAAP have been established by the Borrower; (iii)
any Lien which is imposed by law (such as those of mechanics, carriers and
warehousemen), if payment of the obligation secured thereby is not yet due or
the validity, the applicability or amount of which is being contested in good
faith by appropriate legal proceedings and with respect to which adequate
reserves in accordance with GAAP have been established by the Borrower; (iv)
judgment Liens in existence less than five days after the entry thereof or
with respect to which execution has been stayed, so long as the aggregate
amount of all such judgment Liens at any time does not exceed $100,000, or
judgment Liens the payment of which is covered in full (subject to a
customary deductible) by insurance; and (v) in the case of the Borrower
Collateral other than the Borrower Collateral Account, the RCCA Collateral
and the Class A Certificate (each as defined in the Security Agreement), the
Liens in favor of the Senior Lien Holders (as defined in the Subordination
Agreement) under the Underlying Transactions Documents.
(2) PAYMENTS FROM SPREAD ACCOUNTS. Make any payments from any
Spread Account (including, without limitation, funds replaced with Spread
Account Replacement Reinsurance) or RCCA other than those payments due under
the terms of the related Series Transaction Documents and subject to the
provisions of the Subordination Agreement and Article IX hereof. Without
limiting the foregoing, ACFS agrees to cause the Borrower not to make any
voluntary, optional, or accelerated payments with respect to any Series with
funds from the relevant Spread Account. Notwithstanding the foregoing, once
the amount of the unused Commitments has been permanently reduced to zero,
the Borrower or the Spread Account Depositor shall not be prevented from
replacing funds on deposit in any Spread Account with Spread Account
Replacement Reinsurance. Any Spread Account Replacement Reinsurance obtained
in connection with a release of funds on deposit in any Spread Account must
constitute "Qualified Subsequent Reinsurance" under the terms of, and as
defined in, the RCCA Agreement.
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(3) LIMITATIONS ON MARGIN STOCK. Use any of the net proceeds
from the Borrowings, directly or indirectly, for the purpose of buying or
carrying any Margin Stock.
(4) STOCK, MERGER, CONSOLIDATION, ETC. Merge or consolidate
with or into, or sell, convey, transfer, exchange, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to,
acquire all or substantially all of the assets of, any Person or division of
any Person; or sell, convey, transfer, exchange, lease or otherwise dispose
of any of its assets; PROVIDED HOWEVER, the foregoing shall not limit the
ability of the Borrower to sell, convey or transfer, from time to time,
pools of receivables to other Persons in connection with the issuance of any
Series.
(5) CHANGE IN NAME. Make any change to its name or use any
trade names, fictitious names, assumed names or "doing business as" names.
(6) MODIFICATIONS OF SERIES TRANSACTION DOCUMENTS. Amend or
otherwise modify, without the consent of the Administrative Agent (which
consent may be given by the Administrative Agent at the direction of the
Required Lenders and which consent shall not unreasonably be withheld) any of
the Series Transaction Documents relating to any FSA Series to which it is a
party which amendment or modification would materially and adversely affect
any of the Lenders or the Administrative Agent, including, without
limitation, any amendment or modification, which (i) impairs or adversely
affects the value of the Borrower Collateral or RCCA Collateral, (ii) permits
the creation of any Lien ranking prior to or on a parity with the Lien of the
Security Agreement with respect to any of the Borrower Collateral, other than
as permitted by the Transaction Documents, (iii) permits the creation of any
Lien ranking prior to or on a parity with the Lien of the RCCA Agreement with
respect to any of the RCCA Collateral, other than as permitted by the
Transaction Documents, (iv) terminates the Lien of the Lender Collateral
Agent or the RCCA Agent on the Borrower Collateral or the RCCA Collateral,
respectively, or deprives the Lenders of the security afforded by the Liens
of the Security Agreement and the RCCA Agreement, or (v) increases the amount
of payments with respect to or accelerates the scheduled maturity date of any
FSA Series.
(7) PROTECTION OF COLLATERAL. Subject to the Subordination
Agreement and Article IX hereof, sell, transfer, exchange or otherwise dispose
of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to
occur or suffer such to exist), any part of the Borrower Collateral, except as
expressly permitted by the Security Agreement, or any part of the RCCA
Collateral, except as expressly permitted by the RCCA Agreement; subject to the
Subordination Agreement and Article IX hereof, permit the validity or
effectiveness of the Security Agreement or the RCCA Agreement or any grant under
either such agreement to be impaired; subject to the Subordination Agreement and
Article IX hereof, permit the Lien of the Security Agreement or the Lien of the
RCCA Agreement to be amended, hypothecated, subordinated, terminated or
discharged; subject to the Subordination Agreement and Article IX hereof, permit
any Person to be released from any covenants or obligations with respect to the
Security Agreement or the RCCA Agreement, except as may be expressly permitted
hereby or thereby; permit any Lien (other than the Lien of the Security
Agreement or Permitted Liens) to be created on or extend to or otherwise arise
upon or
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burden the Borrower Collateral or any part thereof, any interest therein or
the proceeds thereof; subject to the Subordination Agreement and Article IX
hereof, take any action that would permit the lien of the Security Agreement
not to constitute a valid security interest in the Borrower Collateral and
prior to all Liens other than the Permitted Liens; permit any Lien (other
than the Lien of the RCCA Agreement) to be created on or extend to or
otherwise arise upon or burden the RCCA Collateral or any part thereof, any
interest therein or the proceeds thereof; subject to the Subordination
Agreement and Article IX hereof, take any action that would permit the lien
of the RCCA Agreement not to constitute a valid security interest in the RCCA
Collateral and prior to all Liens other than the Permitted Liens; subject to
the Subordination Ageement and Article IX hereof, claim any credit on, or
make any deduction from, the principal or interest payable in respect of the
Advances or the Lender Notes (other than amounts withheld in accordance with
the Code) or assert any claim against any present or future Lender or the
Administrative Agent, by reason of the payment of any taxes levied or
assessed upon any part of the Borrower Collateral or the RCCA Collateral.
(8) OTHER BUSINESS. Engage in any business or activity other
than the business described in its certificate of incorporation as in effect
on the date hereof.
(9) INDEBTEDNESS. Subject to the Subordination Agreement and
Article IX hereof, incur, create, assume, suffer to exist or otherwise become
liable with respect to any Debt other than (i) hereunder, and (ii) any Debt
incurred, from time to time, in connection with the issuance of any Series.
(10) APPOINTMENT OF TRUSTEE. If FSA is not the Controlling
Person with respect to a Designated Series, to the extent the Borrower has
control over the appointment of the trustee of such Designated Series
(initial and any successor trustee), if such trustee is to be a Person other
than Bank One, N.A., appoint such trustee until the Borrower has received the
prior written consent of the Administrative Agent.
(11) ADDITIONAL SERIES. Issue any Series (other than Designated
Series) unless the following conditions shall have been satisfied on or
before the date of such issuance:
(1) The Administrative Agent shall have received an
Officer's Certificate of ACFS and ACC stating that (A) the sum of the
amount on deposit in the Spread Account with respect to such Series and the
Qualified Subsequent Reinsurance with respect to such Series is equal to
at least 5% of the initial aggregate principal amount of the securities
constituting such Series, (B) the aggregate amount of cash on deposit in
the Spread Account with respect to such Series is equal to at least 2% of
the initial aggregate principal amount of the securities constituting such
Series and (C) the "Accelerated Payment Termination Date" for such Series
shall be structured so as to allow the amount on deposit in the spread
account to be "shareable" pursuant to the Spread Account Agreement within
400 days of the closing date of such Series; and
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(2) The Administrative Agent shall have received evidence
satisfactory to it that the Series shall have been insured by FSA and such
FSA's credit risk on a stand-alone basis shall have been rated at least
Baa3/BBB- by Moody's and S&P, respectively.
SECTION 5.3 LIMITED REMEDIES AND RECOURSE FOR BREACH. The
Administrative Agent, the Lender Collateral Agent and each of the Lenders
acknowledges and agrees that the covenants in this Article V are covenants of
ACFS only and that the only recourse available to the Administrative Agent, the
Lender Collateral Agent and the Lenders shall be to recover actual damages from
ACFS. The Administrative Agent, the Lender Collateral Agent and each of the
Lenders waives, to the fullest extent permitted by law, any right to specific
performance and other equitable remedies in respect of any breach of the
representations and warranties in this Article V. In addition, nothing
contained in this Agreement shall be deemed to limit the ability of ACFS or the
Borrower to cooperate with FSA or any Underlying Trustee with respect to the
administration or transfer of servicing upon a Servicer Termination Event (as
defined in any Underlying Transaction Document), including, without limitation,
entering into amendments to the Underlying Transaction Documents with respect to
the obligations and compensation of a successor Servicer.
ARTICLE VA
CONTINGENT OBLIGOR COVENANTS
SECTION 5A.01 COVENANT OF EACH CONTINGENT OBLIGOR. Until this
Agreement shall have been terminated in accordance with its terms, all
outstanding Advances (including principal, interest and fees) have been repaid
to the Lenders and all Commitments of the Lenders shall have been terminated,
each Contingent Obligor will do or cause to be done all things necessary on its
part to preserve and keep in full force and effect its existence and good
standing as a corporation under the laws of its jurisdiction of incorporation.
SECTION 5A.02 COVENANTS OF ACFS. Until this Agreement shall have been
terminated in accordance with its terms, all outstanding Advances (including
principal, interest and fees) have been repaid to the Lenders and all
Commitments of the Lenders shall have been terminated, ACFS will:
(a) CONTINUING PERFORMANCE AS SERVICER. So long as ACFS is
qualified to act as Servicer and it is the Servicer under any Designated Series,
ACFS shall not resign as Servicer with respect to such Designated Series without
the prior written consent of the Administrative Agent. If FSA is not the
Controlling Party, to the extent ACFS is no longer the Servicer for any
Designated Series and ACFS has control over the appointment of a successor
servicer with respect to such Designated Series under the related Series
Transaction Documents, ACFS shall consult with the Administrative Agent prior to
the appointment of any successor servicer.
(b) MODIFICATION OF SERIES TRANSACTION DOCUMENTS. Not amend or
otherwise modify, without the consent of the Administrative Agent (which consent
may be given by the Administrative Agent at the direction of the Required
Lenders at their sole discretion), any of the
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Series Transaction Documents relating to any FSA Series to which it is a
party which amendment or modification could adversely affect any of the
Lenders or the Administrative Agent, including, without limitation, any
amendment or modification, which (i) impairs or adversely affects the value
of the Borrower Collateral or the RCCA Collateral, (ii) permits the creation
of any Lien ranking prior to or on a parity with the Lien of the Security
Agreement with respect to any of the Borrower Collateral or the Lien of the
RCCA Agreement with respect to any of the RCCA Collateral, other than as
permitted by the Transaction Documents, (iii) terminates the Lien of the
Lender Collateral Agent on the Borrower Collateral or the Lien of the RCCA
Agent on the RCCA Collateral or deprives the Lenders of the security afforded
by the Lien of the Security Agreement or the Lien of the RCCA Agreement, or
(iv) increases the amount of payments with respect to or accelerates the
scheduled maturity date of any FSA Series.
(c) APPOINTMENT OF TRUSTEE. If FSA is not the Controlling
Party, to the extent ACFS has control over the appointment of the trustee of
any Designated Series (initial and any successor trustee), if such trustee is
to be a Person other than Bank One, N.A., ACFS shall not appoint such trustee
until ACFS has received the prior written consent of the Administrative Agent.
(d) OPTIONAL REPURCHASE. ACFS shall not exercise any right (as
a servicer under any Designated Series) of optional repurchase or
reconveyance of the pool of receivables held by the trust which issued the
Designated Series without the consent of the Administrative Agent which
consent shall not unreasonably be withheld, if as a result of such repurchase
or reconveyance, there will be any amounts owing to the Lenders with respect
to such Designated Series under this Agreement or other Transaction Documents.
(e) NOTICE OF SELLER OR SERVICER REPURCHASE. ACFS shall provide
immediate written notice to the Administrative Agent of any mandatory
purchase by the seller or servicer or reconveyance to the seller or servicer
of the pool of receivables held by the trust which issued any Designated
Series. In addition, ACFS, in its capacity as servicer for a Designated
Series, shall, upon becoming aware of any event which would require the
seller or servicer of the pool of receivables to purchase such receivables,
give immediate notice of such event to the other parties to the relevant
Series Transaction Documents and the Administrative Agent and take all other
actions necessary for the seller or servicer to repurchase such receivables.
(f) NOMINATION OF LOCK-BOX BANK. Subject to FSA's rights as
Controlling Party under the Underlying Transaction Documents to direct the
Servicer and subject to the Subordination Agreement and Article IX hereof,
ACFS, as servicer for a Designated Series, shall not terminate any lock-box
relating thereto, and, in the event of resignation of a lock-box bank
relating to any Designated Series, ACFS, in its capacity as servicer for such
Designated Series, shall not nominate a new lock-box bank, in either case
without the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld.
(g) SERVICER FAILURE TO PERFORM. ACFS shall reimburse the trust
issuing any Designated Series for any decrease in excess cash flow or reduction
in the amount deposited in the relevant Designated Series Spread Account or
RCCA which results from the failure of ACFS to
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perform its obligations as the servicer under the Series Transaction
Documents relating to such Designated Series.
(h) SERVICING FEES. The Contingent Obligors will not amend
Section 4.08 of the Indenture, dated as of January 29, 1998, among ACC and
certain Affiliates and Bank One, N.A., as trustee, without the consent of the
Required Lenders.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. Each of the following events shall
constitute an "EVENT OF DEFAULT" hereunder:
(1) the Borrower shall fail to pay any principal of any Advance,
or shall fail to pay any interest, fees or other amount payable hereunder
within one (1) Business Day after the same becomes due and payable or any
Contingent Obligor shall fail to pay any amount payable by it hereunder
within one (1) Business Day after the same becomes due and payable; or
(2) any representation or warranty by any Contingent Obligor
herein or in any other Transaction Document to which such Contingent Obligor
is party shall prove to have been incorrect in any material respect when made
or deemed made; or
(3) ACFS shall fail to cause the Borrower in any material
respect to perform or observe any term, covenant or agreement contained in
SECTION 5.02(a) if the failure to perform or observe such term, covenant or
agreement shall remain unremedied for ten (10) Business Days (determined in
the case of a Lien described in clause (iv) of such Section, after giving
effect to the five Business Day cure period provided in such Section); or
(4) the Borrower or any Contingent Obligor shall fail in any
material respect to perform or observe any term, covenant or agreement
contained in this Agreement or any of the other Transaction Documents (other
than as described in SECTION 6.01(a), 6.01(b) or 6.01(c) above) to be
performed or observed by it if the failure to perform or observe such other
term, covenant or agreement shall remain unremedied for thirty (30) days
after written notice thereof shall have been given to the Borrower or the
Contingent Obligor, as applicable, by the Administrative Agent; or
(5) the Borrower or any Contingent Obligor shall fail to pay any
principal of or premium or interest on any Debt (other than its obligations
under this Agreement or the Lender Notes) having a principal sum of $100,000 or
more, with respect to the Borrower or $10,000,000 or more, with respect to any
Contingent Obligor, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt of the Borrower or any
Contingent Obligor or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument if
the effect of
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such default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case, prior to the stated maturity thereof; or
(6) any facility termination event, early amortization event,
servicer termination event, any drawdown under the insurance policy provided
by the Designated Series Insurer with respect to any Designated Series or
event of default or other similar event by any other name shall occur under
any of the Designated Series (whether or not declared, waived or consented to
by the relevant trustee, Designated Series Insurer, trust or the holders of
such Designated Series) and any grace period or cure period set forth in the
relevant Series Transaction Documents shall have expired;
(7) any event of default or other default shall occur under any
insurance and reimbursement agreement with any Designated Series Insurer and
any grace period or cure period set forth in the relevant insurance and
reimbursement agreement shall have expired;
(8) any Insolvency Event shall occur with respect to the
Borrower, the Spread Account Depositor, any Designated Series Servicer or any
of the Contingent Obligors;
(9) there shall remain undischarged for more than ten days any
final judgment or execution action against the Spread Account Depositor, the
Borrower or any Contingent Obligor that, together with other outstanding
final judgments and execution actions against the Spread Account Depositor,
the Borrower or such Contingent Obligor, as the case may be, exceeds $100,000
in the aggregate with respect to the Spread Account Depositor or the Borrower
or $10,000,000 in the aggregate with respect to any Contingent Obligor; or
(10) the Pension Benefit Guaranty Corporation or the Internal
Revenue Service shall have filed notice of one or more Liens against the
Spread Account Depositor, the Borrower or any Contingent Obligor or any of
their respective properties or assets and such Liens shall remain
undischarged for more than 30 Business Days after the date of such notice; or
(11) (i) the Security Agreement (or any Lien purported to be created
thereunder) shall, for any reason, cease to be in full force and effect or be
declared to be null and void, or the Lender Collateral Agent for any reason
shall not or shall cease to hold a valid and perfected Lien (second in priority
only to Permitted Liens) in all Borrower Collateral in favor of the Lenders and
the Administrative Agent, or the validity or enforceability of the Security
Agreement (or any Lien purported to be created thereunder) shall be contested by
the Borrower, or the Borrower shall deny that it has any or further liability or
obligation thereunder (or with respect thereto); or (ii) the RCCA Agreement (or
any Lien purported to be created thereunder) shall, for any reason, cease to be
in full force and effect or be declared to be null and void, or the RCCA Agent
for any reason shall not or shall cease to hold a valid and perfected Lien in
all RCCA Collateral, or the validity or enforceability of the RCCA Agreement (or
any Lien purported to be created thereunder) shall be contested by the
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Borrower, or the Borrower shall deny that it has any or further liability or
obligation thereunder (or with respect thereto); or
(12) The Contingent Obligors and their Affiliates shall not own
or shall cease for any reason to own 100% of the issued and outstanding
capital stock of the Borrower or the Borrower shall not own or shall cease
for any reason to own 100% of the beneficial interests in the Spread Account
Depositor; or
(13) any material representation or warranty made by any
Contingent Obligor or the servicer in any of the Series Transaction Documents
relating to any Designated Series or any information delivered to the
Borrower with respect to any Designated Series shall prove to have been
incorrect in any material respect when made or when delivered, which
continues to be incorrect for a period of ten (10) Business Days after
written notice thereof shall have been given to the Borrower by the
Administrative Agent; or
(14) any Transaction Document shall, for any reason (except in
accordance with its terms), cease to be in full force and effect, or cease to
be the legally valid, binding and enforceable obligations of the parties
thereto, or any party to any Transaction Document shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding
nature or enforceability; or
(15) (i) any Credit Support Default shall have occurred or (ii)
any Credit Support Provider shall have contested its obligations under the
Credit Support Agreement and, in either such case, such Credit Support
Provider shall not have been replaced by the Borrower with a Credit Support
Provider acceptable to the Administrative Agent within 30 days.
SECTION 6.2 REMEDIES.
(1) Upon the occurrence of any Event of Default or at any time
thereafter during the continuance thereof, (i) if such event is an Event of
Default specified in clause (h) of SECTION 6.01, the Commitments shall
immediately and automatically terminate and the Borrowings, all accrued and
unpaid interest thereon and all other amounts owing hereunder and under the
Lender Notes shall immediately become due and payable by the Contingent
Obligors (subject to the limit set forth in Section 2A.03) and due and
payable to the extent of funds available under the Security Agreement, and,
subject to the provisions of the Subordination Agreement and Article IX
hereof, the Administrative Agent may, and upon the direction of the Required
Lenders shall, exercise any and all remedies and other rights provided herein
or in the Transaction Documents, including its rights under Article IIA, with
respect to the Contingent Obligors, the Borrower Collateral and the RCCA
Collateral and (ii) if such event is any other Event of Default, any or all
of the following actions may be taken: (A) with the consent of the Required
Lenders, the Administrative Agent may, and upon the direction of the Required
Lenders shall, by notice to the Borrower, declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately terminate,
and (B) with the consent of the Required Lenders, the Administrative Agent
may, and upon the direction of the Required Lenders shall, by notice of
default to the Borrower, declare the
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Borrowings, all accrued and unpaid interest thereon, and all other amounts owing
hereunder to be forthwith due and payable by the Contingent Obligors (subject to
the limit set forth in Section 2A.03) and due and payable to the extent of funds
available under the Security Agreement, whereupon the same shall immediately
become due and payable by the Contingent Obligors (subject to the limit set
forth in Section 2A.03) and due and payable to the extent of funds available
under the Security Agreement, and, subject to the provisions of the
Subordination Agreement and Article IX hereof, the Administrative Agent may, and
upon the direction of the Required Lenders shall, exercise any and all remedies
and othe rights provided herein or in the Transaction Documents, including its
rights under Article IIA, with respect to the Contingent Obligors, the Borrower
Collateral and the RCCA Collateral. Except as otherwise provided in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived. The Borrower and each Contingent Obligor hereby
further expressly waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar laws, now or at any time
hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of any Transaction Document.
(2) In the event that the Commitments shall have been terminated or
the Borrowings shall have been declared, subject to the provisions of the
Subordination Agreement and Article IX hereof, due and payable pursuant to the
provisions of this Section, any funds received by the Administrative Agent and
the Lenders from or on behalf of the Borrower shall, subject to the provisions
of the Subordination Agreement and Article IX hereof, be applied by the
Administrative Agent and the Lenders in liquidation of the Borrowings and the
obligations of the Borrower hereunder and under the Lender Notes in the manner
and order set forth in the Security Agreement.
(3) All remedies against the Borrower and/or the Borrower
Collateral set forth in this Section 6.02 shall be subject to the provisions of
the Subordination Agreement and Article IX hereof.
ARTICLE VIA
EVENTS OF EARLY TERMINATION
SECTION 6A.01 EVENTS OF EARLY TERMINATION. Each of the following events
shall constitute an "EVENT OF EARLY TERMINATION" hereunder:
(a) the long term senior unsecured debt of ACC is rated by any of
Fitch or Moody's at or below B or B2 respectively; or
(b) a Credit Support Provider Ratings Event shall have occurred and
be continuing and such Credit Support Provider shall not have been replaced by
the Borrower with a Credit Support Provider acceptable to the Administrative
Agent within 45 days of such event.
SECTION 6A.02 CONSEQUENCES. Upon the occurrence of any Event of Early
Termination or at any time thereafter during the continuance thereof, the
Required Lenders may declare that the
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Commitments shall immediately and automatically be terminated and the
Borrower shall not be permitted to borrow and the Lenders shall not be
required to make any new Advances to the Borrower hereunder.
ARTICLE VIB
EVENTS OF EARLY AMORTIZATION
SECTION 6B.01 EVENTS OF EARLY AMORTIZATION. Each of the following events
shall constitute an "EVENT OF EARLY AMORTIZATION" hereunder:
(a) the long term senior unsecured debt of ACC is rated by any of
S&P, Fitch or Moody's at or below B-, B- or B3 respectively; or
(b) any trigger event, facility termination event, early
amortization event, servicer termination event or event of default or other
similar event by any other name shall occur under any of the Series insured by
any Designated Series Insurer or other insurer (whether or not declared, waived
or consented to by the relevant trustee, Designated Series Insurer, trust or the
holders of such Series) and any grace period or cure period set forth in the
relevant Series Transaction Documents shall have expired, PROVIDED that a
trigger event shall not constitute an Event of Early Amortization if (i) the
Pool Factor (as defined in the Series Transaction Documents with respect to
Series 1999-B) with respect to the related Series is 50% or less, (ii) FSA
waives such trigger event, (iii) the aggregate outstanding principal amount of
all such Series is less than or equal to 15% of the aggregate outstanding
principal amount of all the Series insured by the Designated Series Insurer
(including any outstanding Prefunded Amounts), (iv) the amount on deposit in the
Spread Account for such Series is not less than the amount required to be on
deposit therein pursuant to the terms of the related Series Transaction
Documents and (v) the amount of overcollateralization for such Series is not
less than the amount of overcollateralization required pursuant to the terms of
the related Series Transaction Documents; or
(c) total delinquencies of 60 days or more and repossessed assets
in ACFS's serviced portfolio exceeds 6.5% of such portfolio determined at the
end of any fiscal month of ACFS; or
(d) the ACC Portfolio Charge-Off Ratio as of the end of any of its
fiscal quarters exceeds 7.5%; or
(e) a Credit Support Default shall have occurred and be continuing
and, if such Credit Support Provider Default shall have resulted from an
Insolvency Event, such Credit Support Provider shall not have been replaced by
the Borrower with a Credit Support Provider acceptable to the Administrative
Agent within 30 days of such default.
SECTION 6B.02 CONSEQUENCES. Upon the occurrence of any Event of Early
Amortization or at any time thereafter during the continuance thereof, the
Required Lenders may declare that the
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Commitments shall immediately and automatically be terminated and the
Borrower shall not be permitted to borrow and the Lenders shall not be
required to make any new Advances to the Borrower hereunder. In addition,
subject to the provisions of the Subordination Agreement and Article IX
hereof, the outstanding principal amount of the Borrowings shall be repaid as
set forth in Section 2.05(e).
ARTICLE 7
THE AGENT
SECTION 7.1 APPOINTMENT.
(1) Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender hereunder and under the
Transaction Documents, and each such Lender irrevocably authorizes the
Administrative Agent, as the agent for such Lender, to take such action on its
behalf under the provisions hereof and of each Transaction Document and to
exercise such powers and perform such duties hereunder and thereunder as are
expressly granted to the Administrative Agent by the terms hereof or thereof,
subject to the terms and conditions of this Agreement and the Subordination
Agreement, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the Transaction Documents to which the
Administrative Agent is a party, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.
(2) Each Lender hereby appoints Bankers Trust Company as Lender
Collateral Agent under the Security Agreement and Bankers Trust Company hereby
accepts such appointment, subject, in each case, to the terms and conditions set
forth in the Security Agreement and the Subordination Agreement.
SECTION 7.2 DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties hereunder or under any of the Transaction Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
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 Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (a) liable to any of the Lenders for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
any of the other Transaction Documents (except for its or such Person's own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower, the Spread Account Depositor, any Contingent Obligor, the RCCA
Agent or the Lender Collateral Agent or any officer
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thereof contained in any of the other Transaction Documents or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, any
of the other Transaction Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any of the
other Transaction Documents or for any failure of the Borrower, the Spread
Account Depositor, any Contingent Obligor, the RCCA Agent or the Lender
Collateral Agent to perform its obligations thereunder. The Administrative
Agent shall be under no obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, any of the other Transaction Documents, or to inspect the
properties, books or records of the Borrower, the Spread Account Depositor,
any Contingent Obligor, any trustee for any Designated Series, the RCCA Agent
or the Lender Collateral Agent.
SECTION 7.4 RELIANCE BY AGENT. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, written 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 counsel to the Administrative Agent),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any of the Transaction Documents unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders or by the
Committed Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any of the Transaction Documents in accordance
with a request of the Required Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all present and future
Lenders.
SECTION 7.5 NOTICES. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any breach of this Agreement or
the occurrence of any Default, Event of Default, Event of Early Termination or
Event of Early Amortization unless the Administrative Agent has received notice
from the Borrower, the Lender Collateral Agent, the RCCA Agent or any Lender
referring to this Agreement, describing such event. In the event that the
Administrative Agent receives such a notice, the Administrative Agent promptly
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such event as shall be reasonably directed by the
Required Lenders; PROVIDED that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such event as it shall deem advisable in the best interests of the Lenders.
SECTION 7.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Administrative 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 Administrative
Agent or the Administrative Agent hereafter taken, including any review of
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the affairs of the Borrower, any Contingent Obligor, any trustee for any
Designated Series, the RCCA Agent or the Lender Collateral Agent shall be
deemed to constitute any representation or warranty by the Administrative
Agent to any Lender. Each Lender represents to the Administrative Agent that
it has, independently and without reliance upon the Administrative Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
value and creditworthiness of the Borrower Collateral, the RCCA Collateral,
the business, operations, property, financial and other condition and
creditworthiness of the Borrower, the Spread Account Depositor, each
Contingent Obligor, trustee of each Designated Series, the RCCA Agent or the
Lender Collateral Agent and made its own decision to enter into this
Agreement and its Commitment and make Advances hereunder. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own analysis, appraisals and decisions in taking or not taking action under
any of the Transaction Documents, and to make such investigation as it deems
necessary to inform itself as to the value and creditworthiness of the
Borrower Collateral, the RCCA Collateral, the business, operations, property,
financial and other condition and creditworthiness of the Borrower, the
Spread Account Depositor, each Contingent Obligor, trustee of each Designated
Series, the RCCA Agent or the Lender Collateral Agent. Except for notices,
reports and other documents received by the Administrative Agent under
SECTION 5.01(a) or 5.01(b) hereof, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower, the
Spread Account Depositor, any Contingent Obligor, any trustee of any
Designated Series, the RCCA Agent or the Lender Collateral Agent which may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION 7.7 INDEMNIFICATION. The Liquidity Lenders and the
Non-contingent Lenders agree to indemnify the Administrative Agent and the
Lender Collateral Agent in their respective capacities as such (without
limiting the obligation (if any) of the Borrower to reimburse the
Administrative Agent or the Lender Collateral Agent for any such amounts),
ratably according to their respective Lending Percentages (or, if the
Commitments have been terminated, Percentage Interests), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including at any time following the payment of the
obligations under this Agreement) be imposed on, incurred by or asserted
against the Administrative Agent or the Lender Collateral Agent, as the case
may be, in any way relating to or arising out of this Agreement, the Security
Agreement or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent or the Lender Collateral Agent, as the
case may be, under or in connection with any of the foregoing; PROVIDED that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of the Administrative Agent or the Lender
Collateral Agent, as the case may be, resulting from its own gross negligence
or willful misconduct. The agreements in this subsection shall survive the
payment of the obligations under this Agreement.
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SECTION 7.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower, the Spread Account Depositor,
any Contingent Obligor, any trustee of any Designated Series, the RCCA Agent or
the Lender Collateral Agent as though the Administrative Agent were not the
agent hereunder. Each Lender acknowledges that CSFB may act (i) as
administrator and agent for one or more Conduit Lenders and in such capacity
acts and may continue to act on behalf of each such Conduit Lender in connection
with its business, and (ii) as the agent for certain financial institutions
under the liquidity and credit enhancement agreements relating to this Agreement
to which any such Conduit Lender is party and in various other capacities
relating to the business of any such Conduit Lender under various agreements.
CSFB in its capacity as the Administrative Agent shall not, by virtue of its
acting in any such other capacities, be deemed to have duties or
responsibilities hereunder or be held to a standard of care in connection with
the performance of its duties as the Administrative Agent other than as
expressly provided in this Agreement. CSFB may act as the Administrative Agent
without regard to and without additional duties or liabilities arising from its
role as such administrator or agent or arising from its acting in any such other
capacity. Each Lender further acknowledges that CSFB in its capacity as
Administrative Agent may be the beneficiary of one or more policies issued by
the Credit Support Providers and that such policies may be held for the benefit
of only certain of the Lenders. The Lenders agree that the Administrative Agent
may disburse payments received under such policies only to the Lenders intended
to be beneficiaries thereof and may otherwise act as agent of only such Lenders
in connection with such policies.
SECTION 7.9 SUCCESSOR AGENT. The Administrative Agent may resign as
Administrative Agent upon ten days' notice to the Lenders, the Lender Collateral
Agent and the Borrower, with such resignation becoming effective upon a
successor agent succeeding to the rights, powers and duties of the
Administrative Agent pursuant to this SECTION 7.09. If the Administrative Agent
shall resign as Administrative Agent under this Agreement, then the Required
Lenders shall appoint from among the Liquidity Lenders and the Non-contingent
Lenders a successor agent for the Lenders with the written consent of the
Borrower which shall not be unreasonably withheld. The successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon its
appointment, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. After the retiring Administrative Agent's resignation as
Administrative 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
Administrative Agent under this Agreement.
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ARTICLE 8
MISCELLANEOUS
SECTION 8.1 AMENDMENTS, ETC. With the written consent of the
Required Lenders, the Administrative Agent, the Lender Collateral Agent, the
Contingent Obligors and the Borrower may, from time to time, enter into written
amendments, supplements or modifications of this Agreement and/or the Security
Agreement and, with the consent of the Required Lenders, the Administrative
Agent on behalf of the Lenders may execute and deliver to any such parties a
written instrument waiving or a consent to a departure from, on such terms and
conditions as the Administrative Agent may specify in such instrument, any of
the requirements of this Agreement or the Security Agreement or any Event of
Early Termination, Event of Early Amortization, Default or Event of Default and
its consequences; PROVIDED, HOWEVER, that:
(1) no such amendment, supplement, modification, waiver or consent
shall, increase the Commitment Amount of any Lender without its consent or,
without the consent of all Lenders, (i) increase the Total Commitment Amount,
(ii) extend the Stated Maturity Date, Commitment Expiration Date or any
Designated Series Maturity Date, (iii) decrease the rate, or extend the time of
payment, of interest on, or change, forgive or extend the time of payment of the
principal amount of, or change the pro rata allocation of payments under, any
Lender Note, (iv) reduce the rate of, or extend the date of payment for, any fee
payable to Lenders hereunder, (v) release all or any part of the Borrower
Collateral or the RCCA Collateral except to the extent that the sale or
disposition of such collateral is permitted under the terms of any Transaction
Document, (vi) change the provisions of SECTION 5.01(c), or SECTIONS 8.01 or
8.08, (vii) change the definitions of "Interest Period" or "Required Lenders,"
(viii) extend the date or decrease the amount of any mandatory prepayment of the
Borrowings pursuant to SECTION 2.05, (ix) change the sharing provisions among
the Lenders, or (x) change the several nature of the obligations of the Lenders;
(2) without the written consent of the Administrative Agent or the
Lender Collateral Agent, as the case may be, no such amendment, supplement,
modification or waiver shall amend, modify or waive any provision of Article VII
or otherwise change any of the rights or obligations of the Administrative Agent
or the Lender Collateral Agent, as the case may be, hereunder or under any
Transaction Documents or reduce the rate of, or extend the date of payment for,
any fee payable to the Administrative Agent hereunder;
(3) the consent of each affected Conduit Lender shall be required
for any change to the provisions of SECTION 8.07 or 8.17; and
(4) the consent of FSA, which shall not unreasonably be withheld,
shall be required for any amendment which would materially and adversely affect
FSA or the Underlying Trustees, PROVIDED that the consent of FSA shall not be
required in connection with (i) any change in the Commitment Amount of any
Lender or in the Total Commitment Amount, (ii) any extension of the Stated
Maturity Date, Commitment Expiration Date or any Designated Series Maturity
Date, (iii) subject to continued compliance with the Subordination Agreement and
Article IX hereof, any change in the rate, or the time of payment, of interest
on the principal amount of, or in the pro rata
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allocation of payments under, any Lender Note, (iv) subject to continued
compliance with the Subordination Agreement and Article IX hereof, any change
in the rate of, or the date of payment for, any fee payable to Lenders
hereunder (other than any portion of the Facility Fee payable pursuant to any
Series Transaction Document with the same priority as the payment of the
premiums to the Designated Series Insurer), (v) any release of all or any
part of the Borrower Collateral or the RCCA Collateral, (vi) any change in
the definitions of "Interest Period" or "Required Lenders," (vii) any waiver
of the conditions of Article III, (viii) subject to continued compliance with
the Subordination Agreement and Article IX hereof, any change in the date or
the amount of any mandatory prepayment of the Borrowings pursuant to SECTION
2.05, (ix) any change in the sharing provisions among the Lenders or (x) any
change in the several nature of the obligations of the Lenders.
Any Lender may specify that any such written consent executed by it
shall be effective only with respect to a portion of the Percentage Interests
and the Commitment Amounts, as the case may be, held by it (in which case it
shall specify, by dollar amount, the aggregate amount of Percentage Interests
and Commitment Amounts with respect to which such consent shall be effective)
and in the event of any such specifications, such Lender shall be deemed to have
executed such written consent only with respect to the portion of the Percentage
Interests and the Commitment Amounts so specified. Any such amendment,
supplement, modification or waiver shall apply equally to each of the Lenders
and shall be binding upon the parties to the applicable Transaction Document,
the Lenders, the Administrative Agent, the Lender Collateral Agent, the
Contingent Obligors and all future holders of the Lender Notes. In the case of
any waiver, the parties to the applicable Transaction Document, the Lenders, the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Lender Notes and other Lender Documents to
the extent provided for in such waiver, and any Default or Event of Default
waived shall not extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon. The Transaction Documents may not be
amended orally or by any course of conduct.
SECTION 8.2 NOTICES, ETC. The Contingent Obligors hereby appoint
ACC to act as agent for the Contingent Obligors with respect to the receiving
and giving of any notices or any other written instruction hereunder. The
Administrative Agent is hereby entitled to rely on any communication given or
transmitted by ACC as if such communication were given or transmitted by each
and every Contingent Obligor. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail or telecopy notice, when received, or, in the case of
telegraphic notice, when delivered to the telegraph company, or, in the case of
telex notice, when sent, answer back received, addressed as follows or, with
respect to a Lender other than an initial Lender, as set forth in its respective
Assignment and Assumption, or to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower AFS Funding Corp.
639 Isbell Road, Suite 390
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Reno, Nevada 89509
Attention: Chief Financial Officer
Telephone:
Telefax: 702-322-8808
with a copy to:
AmeriCredit Corp.
801 Cherry Street, Suite 3900
Fort Worth, Texas 76102
Attention: Treasurer
Telephone: 817-302-7022
Telefax: 817-302-7942
ACC as agent AmeriCredit Corp.
for the Contingent 801 Cherry Street, Suite 3900
Obligors Fort Worth, Texas 76102
Attention: Treasurer
Telephone: 817-302-7022
Telefax: 817-302-7942
The Adminis- Credit Suisse First Boston, New York Branch
trative Agent Eleven Madison Avenue
New York, New York 10010
Attention: Asset Finance
Telephone: 212-325-3003
Telefax: 212-325-6677
The Lender Bankers Trust Company
Collateral Agent Four Albany Street
New York, NY 10006
Attention: Corporate Trust and Agency Services --
Structured Finance
Telephone: 212-250-6137
Telefax: 212-250-6439
SECTION 8.3 NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
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SECTION 8.4 COSTS, EXPENSES AND INDEMNIFICATION. The Borrower
agrees, to pay all costs and expenses of the Administrative Agent and each
Credit Support Provider in connection with the preparation, execution, delivery,
modification and amendment of this Agreement, the other Transaction Documents
and the other documents to be delivered hereunder and thereunder, including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent and each Credit Support Provider with respect thereto and with respect to
advising such agents as to their respective rights and responsibilities under
this Agreement and such other Transaction Documents. Subject to the provisions
of the Subordination Agreement and Article IX hereof, the Borrower further
agrees to pay all costs and expenses, if any (including reasonable counsel fees
and expenses), of the Administrative Agent, each Credit Support Provider and
each Lender in connection with the enforcement of this Agreement, the other
Transaction Documents and the other documents to be delivered hereunder and
thereunder, including reasonable counsel fees and expenses in connection with
the enforcement of rights under this SECTION 8.04 and all costs and expenses
(including reasonable counsel fees and expenses) in connection with the
negotiation of any restructuring or "work-out" (whether or not consummated) of
the obligations of the Borrower hereunder or under any Transaction Document.
Subject to the provisions of the Subordination Agreement and Article IX hereof,
the Borrower further agrees to indemnify each Lender and each of its respective
affiliates, control persons, officers, directors, employees and agents (each an
"INDEMNIFIED PARTY"), from and against any and all claims, damages, losses,
liabilities and expenses (including reasonable fees and disbursements of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of them in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising out of, related to or in connection with the transactions
described herein whether or not any Indemnified Party or the Borrower is a party
thereto, including any transaction in which any proceeds of any Borrowing are or
are proposed to be applied; PROVIDED, HOWEVER, that the Borrower shall not be
liable for any portion of such claims, damages, losses, liabilities or expenses
resulting from an Indemnified Party's gross negligence or willful misconduct.
The provisions of this SECTION 8.04 shall survive the termination of this
Agreement.
SECTION 8.5 BINDING EFFECT; TERMINATION. This Agreement shall
become effective upon the Effective Date and shall thereafter be binding upon
and inure to the benefit of each of the parties hereto and each of their
respective successors and assigns, except that none of the Borrower or any of
the Contingent Obligors shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of all Lenders and the
Administrative Agent. This Agreement shall terminate on the date following the
Commitment Termination Date for all Lenders on which all Advances and other
obligations hereunder shall have been paid in full.
SECTION 8.6 ASSIGNMENTS AND PARTICIPATION.
(1) Each Lender may, but only in accordance with applicable law and
this Section 8.06, at any time grant participations in all or part of its
Commitment or its Advances, including the payments due to it under this
Agreement and its Lender Note (each, a "PARTICIPATION"), to any Lender or to any
other bank, commercial paper conduit or other institution which is consented to
by the Administrative Agent, which consents shall not be unreasonably withheld
(each, a
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"PARTICIPANT"). No Insurance and Reimbursement Agreement entered into with a
Credit Support Provider shall constitute a Participation. Each Lender hereby
acknowledges and agrees that (A) any such Participation will not alter or
affect such Lender's direct obligations hereunder, and (B) the Borrower shall
not have any obligation to have any communication or relationship with any
Participant. No Participant shall be entitled to sell, transfer, assign,
participate, subparticipate, pledge, hypothecate or otherwise dispose of
(each, a "TRANSFER") all or any portion of its Participation, without the
prior written consent of the Administrative Agent (which consents shall not
be unreasonably withheld), nor shall any such Transfer be permitted or made
except in accordance with Section 8.06(b). The Borrower shall, subject to
the Subordination Agreement and Article IX hereof, be obligated to indemnify
a Participant for all amounts owing to it under SECTIONS 2.11, 2.12, 2.14,
and 8.04 as if such Participant were a Lender hereunder; PROVIDED in the case
of SECTION 2.12 that such Participant has complied with the provisions of
SECTION 2.12(c) as if it were a Lender. Each Lender shall give the
Administrative Agent and the Borrower notice of the consummation of any sale
by it of a Participation. Nonsubrogated Reinsurance obtained by any of the
Credit Support Providers (or obtained by any provider of Nonsubrogated
Reinsurance) does not constitute a Participation. As used herein,
"Nonsubrogated Reinsurance" means a reinsurance contract which does not
provide for the reinsurer thereunder to be subrogated in any manner (by
contract or at law) to the rights of the beneficiary of such reinsurance or
to take an assignment, directly or indirectly, of any rights of such
beneficiary with respect to the Advances, the Lenders, the Borrower or the
Borrower Collateral in connection with any payment under such reinsurance.
(2) Each Lender may in accordance with applicable law and this
Section 8.06(b), sell or assign (each, an "ASSIGNMENT"), to any Person (each, an
"ASSIGNEE") which is a Lender or a Credit Support Provider or to any other bank,
commercial paper conduit or other institution which is consented to by the
Administrative Agent and the Borrower, which consents shall not be unreasonably
withheld, all or any part of its Commitment or Advances and its rights and
obligations under this Agreement and its Lender Note and other Transaction
Documents pursuant to an agreement substantially in the form attached hereto as
EXHIBIT E hereto (an "ASSIGNMENT AND ASSUMPTION"), executed by such Assignee and
the Lender and delivered to the Administrative Agent for its acceptance
accompanied by a processing and recording fee payable to the Administrative
Agent for its own account of $3,500; PROVIDED that in the case of an assignment
of less than all of a Lender's Commitment Amount or Maximum Advance Amount, as
applicable, to an Assignee which is not a Lender or a Credit Support Provider,
the portion thereof retained by the assignor Lender and the portion assigned to
the Assignee each shall be not less than $10,000,000 without the consent of the
Administrative Agent and the Borrower. The Borrower and Contingent Obligors
acknowledge (i) that the Lenders have received policies of insurance with
respect to the Advances from the Credit Support Providers and have agreed to
grant or withhold all amendments, approvals, waivers and consents sought
hereunder only with the permission of the Credit Support Providers and/or those
Persons providing reinsurance to the Credit Support Providers and (ii) that the
Credit Support Providers and/or those Persons providing reinsurance to the
Credit Support Providers shall be subrogated to the rights of the Lenders
hereunder with respect to payments made by the Credit Support Providers and/or
those Persons providing reinsurance to the Credit Support Providers to the
Lenders with respect to amounts due to the Lender hereunder.
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Each Participation, Transfer or Assignment (other than to a person who
is a Permitted Credit Support Provider) must strictly comply with the following
requirements:
(i) A Participation, Transfer or Assignment to a Permitted Transferee must
be at a cash price equal to or greater than ninety-five percent (95%) of the
par value of the Commitment, Advances, rights and obligations and Lender
Note participated, transferred or assigned, must be on notice to FSA and
shall only take effect if and when Participant or Assignee executes an
Assignment or Assumption or the Subordination Agreement. Agent shall
forward copies of all assignment and participation agreements, together
with, if an Assignment and Assumption is not executed, an original executed
Subordination Agreement, to FSA; or
(ii) Not more frequently than once during any month, Agent may submit up to
twenty-five (25) Permitted Transferees for approval to FSA, which approval
shall not be unreasonably withheld. On or before the tenth (10th) business
day following receipt of such submission from Agent, FSA shall notify Agent
of which of the identified Permitted Transferees, if any, may become
Participants or Assignees under this Agreement. Any proposed Participation,
Transfer or Assignment to a Permitted Transferee approved by FSA under this
Section 8.06(b)(ii) may be consummated within one hundred twenty (120) days
following such approval, must be on notice to FSA and shall only take effect
if and when Participant or Assignee executes an Assignment and Assumption or
the Subordination Agreement. Agent shall forward copies of all assignment
and participation agreements, together with, if an Assignment and Assumption
is not executed, an original executed Subordination Agreement, to FSA; or
(iii) Agent may present FSA with a copy of any proposed Participation,
Transfer or Assignment executed by a Permitted Transferee not previously
approved by FSA under Section 8.06(b)(ii) above, together with a copy of the
form of the Assignment and Assumption Subordination Agreement proposed to be
executed by such proposed Participant or Assignee and a written notice from
Agent (the "Initial Notice") describing the obligation to be sold or
otherwise transferred, the price, and the terms and conditions upon which
such proposed transfer is to occur. FSA shall have and hereby is granted a
right of first refusal exercisable for forty-five (45) days from receipt of
such Initial Notice in which to agree to purchase the obligations which are
the subject of the Initial Notice for the price and upon the terms and
conditions specified in the Initial Notice by giving written notice (the
"Acceptance Notice") to Agent. If FSA sends an Acceptance Notice to Agent,
FSA shall have an additional sixty (60) days in which to close the proposed
transfer. If FSA does not send an Acceptance Notice within forty-five (45)
days after receipt of the Initial Notice, then the Lender or Affected Party
shall have sixty (60) days in which to close the transaction described in
the Initial Notice at the price and upon the terms and conditions specified
therein and to deliver the original executed Assignment and Assumption or
Subordination Agreement to FSA.
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Any direct or indirect transfer or purported transfer of all or any
portion of the Commitment, the Advances, the rights and obligations under this
Agreement or the Lender Note shall be null and void in its entirety unless it
strictly complies with this Section 8.06(b).
From and after the effective date determined pursuant to such
Assignment and Assumption, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Assumption, have the rights
and obligations of a Lender hereunder as set forth therein and (y) the
transferor Lender shall, to the extent provided in such Assignment and
Assumption, be released from its Commitment (if any) and other obligations under
this Agreement; PROVIDED, HOWEVER, that after giving effect to each such
Assignment, the obligations released by any such Lender shall not exceed the
obligations assumed by an Assignee or Assignees. Such Assignment and Assumption
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Assignee and the resulting adjustment
of Lending Percentages, Liquidity Percentages and Percentage Interests arising
from the Assignment. Upon its receipt and acceptance of a duly executed
Assignment and Assumption, the Administrative Agent shall on the effective date
determined pursuant thereto give written notice of such acceptance to the
Borrower and the Lender Collateral Agent. The Borrower agrees upon written
request of the Administrative Agent and at the Borrower's expense to execute and
deliver (i) to such Assignee a Lender Note, dated the effective date of such
Assignment and Assumption, in an aggregate principal amount equal to the
Advances assigned to, and the Commitment Amount or Maximum Advance Amount, as
applicable, assumed by, such Assignee, and (ii) to such assignor (so long as
such assignor has not assigned its entire interest), a Lender Note, dated the
effective date of such Assignment and Assumption, in an aggregate principal
amount equal to the balance of such assignor Lender's Advances and Commitment
Amount, if any, and each assignor Lender shall cancel and return to the Borrower
its existing Lender Note.
(3) The Administrative Agent shall maintain at its address referred
to in SECTION 8.02 a copy of each Assignment and Assumption delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment Amount or Maximum Advance Amount, as applicable,
and principal amount of the Advances owing to, each Lender from time to time
(the "REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(4) Each Lender may pledge its Advances or any portion thereof or
interest therein to any Federal Reserve Bank as collateral in accordance with
applicable law without the consent of the Administrative Agent or the Borrower.
(5) Any Lender shall have the option to change its Applicable
Lending Office PROVIDED that prior to such change in office such Lender shall
have complied with the provisions of SECTION 2.12(c), and PROVIDED FURTHER that
such Lender shall not be entitled to any amounts otherwise payable under
SECTION 2.11, 2.12 or 2.14 resulting solely from such change in office unless
such
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change in office was mandated by applicable law or by such Lender's
compliance with the provisions of this Agreement.
(6) Subject to the Subordination Agreement and Article IX, each
Affected Party shall be entitled to receive additional payments pursuant to
SECTIONS 2.11, 2.12 and 2.14 hereof as though it were a Lender and such Section
applied to its Support Advances, its commitment to provide Support Advances or
to accept an assignment of an Advance or its obligation under an insurance
policy, surety, bond or similar instrument. Each Affected Party claiming
increased amounts described in SECTION 2.11 shall furnish, through its related
Conduit Lender, to the Administrative Agent the certificate described in SECTION
2.11(d) and shall be bound by the provisions of SECTION 2.11(c).
(7) In connection with any Assignment or Participation or proposed
Assignment or Participation by a Lender, such Lender shall be entitled to
distribute to any proposed Assignee or Participant any information furnished to
such Lender pursuant to SECTION 5.01 or otherwise pursuant to this Agreement or
in connection herewith, subject to the provisions of SECTION 8.18.
SECTION 8.7 NO PROCEEDINGS. (a) The Administrative Agent, the
Lender Collateral Agent and each Lender hereby agrees (which agreement shall,
pursuant to the terms of this Agreement, be binding upon its successors and
assigns and which agreement shall be in addition to, and not in any respect in
derogation of, the agreements under the Subordination Agreement and Article IX
hereof) that it shall not, for any reason:
(i) institute proceedings for the Borrower to be adjudicated a
bankrupt or insolvent;
(ii) consent to, join in or cooperate with the institution of
bankruptcy or insolvency proceedings against the Borrower;
(iii) file a petition with respect to the Borrower seeking or
consenting to reorganization or relief under any applicable Federal or
state law relating to bankruptcy;
(iv) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Borrower or a
substantial part of the property; or
(v) cause or permit the Borrower to make any assignment for the
benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium on
its debt or take any action in furtherance of any such action.
(b) The Borrower, the Contingent Obligors, the Administrative Agent,
the Lender Collateral Agent and each Lender hereby agrees (which agreement
shall, pursuant to the terms of this Agreement, be binding upon its successors
and assigns and which agreement shall be in addition to, and not in any respect
in derogation of, the agreements under the Subordination Agreement and
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Article IX hereof) that it shall not institute against, or join any other
Person in instituting against, any Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day after the latest maturing commercial paper note or other obligation
(whether or not issued to fund or maintain Advances) issued by such Conduit
Lender is paid. The provisions of this SECTION 8.07 shall survive the
termination of this Agreement.
SECTION 8.8 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT TO WHICH IT IS A
PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL), POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS
SET FORTH IN SECTION 8.02 OR AT SUCH OTHER ADDRESS OF WHICH
THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.
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SECTION 8.9 WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 8.11 EXECUTION IN COUNTERPARTS. 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 taken together shall constitute one and the same
agreement.
SECTION 8.12 HEADINGS. The headings contained in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of any provision of this Agreement.
SECTION 8.13 SEVERABILITY. 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 provisions in any other jurisdiction.
SECTION 8.14 INTEGRATION. All exhibits, schedules and appendices to
this Agreement shall be deemed to be part of this Agreement. Except in the case
of Liquidity Lenders and their related Conduit Lenders with respect to certain
Support Facilities and the Credit Support Agreement, this Agreement, together
with provisions of the Transaction Documents referred to herein, embodies the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
among such parties with respect to the subject matter hereof.
SECTION 8.15 RIGHT OF SET-OFF. In addition to any rights and
remedies of the Lenders provided by law, upon the occurrence of an Event of
Default and the acceleration of the obligations owing hereunder and under the
Lender Notes, or at any time upon the occurrence and during the continuance
of an Event of Default under SECTION 6.01(a), and only under such
circumstances, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of the Borrower to such Lender,
any amount owing from such Lender to the Borrower, at, or at any time after,
the happening of any of the above-mentioned events, PROVIDED, however, that
such rights shall be subject to the provisions of the Subordination Agreement
and Article IX hereof. To the extent not prohibited by
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applicable law, the aforesaid right of set-off may be exercised by such
Lender against the Borrower or against any trustee in bankruptcy, custodian,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor of the Borrower, or against anyone
else claiming through or against the Borrower or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender
prior to the making, filing or issuance, or service upon such Lender of, or
of notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of
execution, subpoena, order or warrant. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 8.16 LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Contingent Obligor, any Lender, the Lender Collateral Agent or
other Person against the Administrative Agent, the Lender Collateral Agent, any
Lender, or any directors, officers, employees or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated hereby or by any Transaction Document, or any act,
omission or event occurring in connection therewith, and each of the Borrower,
each Contingent Obligor, the Lender Collateral Agent and each Lender hereby
waives, releases and agrees (on behalf of itself and any Person claiming by or
through it) not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
SECTION 8.17 NO RECOURSE AGAINST CERTAIN PERSONS. No recourse
under or with respect to any obligation, covenant or agreement (including any
obligation or agreement to pay fees or any other amount) of the Borrower, any
Contingent Obligor, any Lender, the Lender Collateral Agent or the
Administrative Agent contained in this Agreement or any other agreement,
instrument or document entered into by it pursuant hereto or in connection
herewith shall be had (unless expressly assumed by such party) against any
incorporator, affiliate, stockholder, partner, officer, employee or director
of the Borrower, any Contingent Obligor, any Lender, the Lender Collateral
Agent or the Administrative Agent, as such, by the enforcement of any
assessment, by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that the agreements of
each party contained in this Agreement and all of the other agreements,
instruments and documents entered into by it pursuant hereto or in connection
herewith are, in each case, solely the partnership or corporate obligations
of such party, and that no personal liability whatsoever shall attach to or
be incurred by any incorporator, stockholder, partner, affiliate, officer,
employee or director of such party, as such, or any of them, under or by
reason of any of the obligations, covenants or agreements of the Borrower,
any Contingent Obligor, any Lender, the Lender Collateral Agent or the
Administrative Agent contained in this Agreement or in any other such
instrument, document or agreement, or which are implied therefrom, and that
any and all personal liability of every such incorporator, stockholder,
partner, affiliate, officer, employee or director of the Borrower, any
Contingent Obligor, any Lender, the Lender
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Collateral Agent or the Administrative Agent for breaches by the Borrower,
any Contingent Obligor, any Lender, the Lender Collateral Agent or the
Administrative Agent of any such obligations, covenants or agreements, which
liability may arise either at common law or at equity, by staute or
constitution, or otherwise, is hereby expressly waived as a condition of and
in consideration for the execution of this Agreement. The provisions of this
SECTION 8.17 shall survive the termination of this Agreement.
SECTION 8.18 TREATMENT OF CERTAIN INFORMATION. Each Lender, the
Lender Collateral Agent and the Administrative Agent agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of the same nature,
all non-public information supplied by the Borrower or any Contingent Obligor
pursuant to this Agreement which (a) is identified by such supplying party as
being confidential at the time the same is delivered to such Lender, Lender
Collateral Agent or the Administrative Agent, or (b) constitutes any financial
statement, financial projections or forecasts, budget, compliance certificate,
audit report, management letter or accountants' certification delivered
hereunder; PROVIDED, HOWEVER, that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) on a confidential basis, to counsel for any of the
Lenders, the Lender Collateral Agent or the Administrative Agent, (iii) to bank
examiners, internal and external auditors or accountants, and any analogous
counterpart thereof acting in any such capacity, (iv) to the Administrative
Agent, the Lender Collateral Agent or a Lender, (v) in connection with any
litigation to which any one or more of the Lenders, the Lender Collateral Agent
or the Administrative Agent is a party, (vi) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) agrees to keep such information
confidential on substantially the same basis as set forth in this Section (which
agreement may be in the form attached as EXHIBIT E to this Agreement), (vii) to
affiliates of the Administrative Agent, the Lender Collateral Agent or a Lender
or (viii) in the case of a Conduit Lender, to its administrator or other person
providing similar services to it. This confidentiality agreement shall not
apply to (i) any information which was in the possession of the Lender, the
Lender Collateral Agent or the Administrative Agent prior to the date of this
agreement (other than any information previously given to the Lender, the Lender
Collateral Agent or the Administrative Agent by the Borrower or any Contingent
Obligor), (ii) any information which was, is or hereafter becomes part of the
public domain without any violation of this agreement on the part of the Lender,
the Lender Collateral Agent or the Administrative Agent or any of their
respective affiliates, directors, officers, employees or representatives, (iii)
any information received by the of the Lender, the Lender Collateral Agent or
the Administrative Agent from a source not known by it to be under any
obligation of confidentiality to the Borrower or any Contingent Obligor or (iv)
any information which is independently created or developed by of the Lender,
the Lender Collateral Agent or the Administrative Agent, as the case may be,
from information or material not otherwise, covered by this confidentiality
agreement.
SECTION 8.19 CERTAIN PAYMENTS. Notwithstanding provisions to the
contrary contained in this Agreement, the Lender Notes or the Security
Agreement, the obligations of the Borrower or any Contingent Obligor to make
payments of interest or other amounts which constitute interest to a Lender
hereunder or under any Lender Note shall not be required to the extent that
receipt of such payment by such Lender would be contrary to the provisions of
law applicable to
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such Lender limiting the maximum rate of interest that may be charged or
collection by such Lender. Without limiting the generality of the foregoing,
all calculations of the rate of interest contracted for, charged or received
by a Lender under this Agreement and the Lender Notes which are made for the
purposes of determining whether such rate of interest exceeds the maximum
rate of interest permitted by applicable law for such Lender shall be made,
to the extent permitted by applicable law, by amortizing, prorating,
allocating and spreading in equal parts during the period of the full stated
term of this Agreement, all interest at any time contracted for, charged or
received by such Lender in connection with the indebtedness evidenced by this
Agreement or such Lender's Lender Note, and then to the extent that any such
excess remains, all such excess shall be automatically credited against and
in reduction of the principal balance owed to such Lender, and any portion of
said excess which exceeds the principal balance owed to such Lender shall be
paid by such Lender to the Borrower (subject to the provisions of Sections
8.07 and 8.17 and, in the case of a Conduit Lender, to the condition that
such Lender has excess funds available to it for the purpose of making such
payment and subject to the provisions of the Subordination Agreement and
Article IX hereof), it being the intent of parties hereto that under no
circumstances shall the Borrower be required to pay any interest in excess of
the highest rate permissible under applicable law.
SECTION 8.20 UNENFORCEABILITY OF CONTINGENT OBLIGATIONS AGAINST
BORROWER. If for any reason the Borrower has no legal existence or is under no
legal obligation to discharge any of the Contingent Obligations, or if any of
the Contingent Obligations have become irrecoverable from the Borrower by
operation of law or for any other reason, the guaranty and the primary payment
obligation provided under ARTICLE IIA shall nevertheless be binding on each
Contingent Obligor to the same extent as if such Contingent Obligor at all times
had been the principal obligor on all such Contingent Obligations. In the event
that acceleration of the time for payment of the Contingent Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement evidencing, securing or otherwise executed in connection
with any Contingent Obligation (including this Agreement) shall be immediately
due and payable by the Contingent Obligors.
SECTION 8.21 WAIVER OF SUBROGATION. Until the payment and
performance in full of all Contingent Obligations, no Contingent Obligor shall
exercise any rights against the Borrower arising as a result of payment by any
Contingent Obligor under the ARTICLE IIA, by way of subrogation or otherwise,
and will not prove any claim in competition with the Administrative Agent, the
Lender Collateral Agent or the Lenders in respect of any payment hereunder in
bankruptcy or insolvency proceedings of any nature; no Contingent Obligor will
claim any set-off or counterclaim against the Borrower in respect of any
liability of any Contingent Obligor to the Borrower; each Contingent Obligor
waives any benefit of and any right to participate in any collateral which may
be held by the Administrative Agent, the Lender Collateral Agent or the Lenders;
and notwithstanding any other provision to the contrary contained herein, each
Contingent Obligor hereby irrevocably waives any and all rights it may have at
any time (whether arising directly or indirectly, by operation of law or by
contract) to assert any claim against the Borrower on account of payments made
under ARTICLE IIA, including, without limitation, any and all rights of or claim
for subrogation, contribution, reimbursement, exoneration and indemnity.
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SECTION 8.22 SUBORDINATION. The payment of any amounts due with
respect to any Debt of the Borrower now or hereafter held by any Contingent
Obligor is hereby subordinated to the prior payment in full of the Contingent
Obligations, provided that so long as no default in the payment or performance
of the Contingent Obligations has occurred and is continuing, or no demand for
payment of any of the Contingent Obligations has been made that remains
unsatisfied, the Borrower may make, and the Contingent Obligors may demand and
accept, any payments of principal of and interest on such subordinated Debt in
the amounts, at the rates and on the dates agreed by the Borrower and any
Contingent Obligor, and, if applicable, as specified in such instruments,
securities or other writings as shall evidence such subordinated Debt. Each
Contingent Obligor agrees that after the occurrence of any default in the
payment or performance of the Contingent Obligations, such Contingent Obligor
will not demand, sue for or otherwise attempt to collect any such Debt of the
Borrower to such Contingent Obligor until the Contingent Obligations shall have
been paid in full. If, notwithstanding the foregoing sentence, any Contingent
Obligor shall collect, enforce or receive any amounts in respect of such Debt,
such amounts shall be collected, enforced and received by such Contingent
Obligor as trustee for the Lenders and be paid over to the Administrative Agent
(for the benefit of the Lenders) on account of the Contingent Obligations
without affecting in any manner the liability of such Contingent Obligor under
ARTICLE IIA.
SECTION 8.23 WAIVERS BY CONTINGENT OBLIGORS. Each Contingent Obligor
agrees that the Contingent Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Administrative Agent, the Lender Collateral Agent or the
Lenders with respect thereto. Each Contingent Obligor waives presentment,
demand, protest, notice of acceptance, notice of Contingent Obligations incurred
and all other notices of any kind, all defenses which may be available by virtue
of any valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshaling of assets of the Borrower, and all
suretyship defenses generally. Without limiting the generality of the foregoing,
each Contingent Obligor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any of the Borrowings or
Advances hereunder and agrees that the Contingent Obligations shall not be
released or discharged, in whole or in part, or otherwise affected by (i) the
failure of the Administrative Agent, the Lender Collateral Agent, the RCCA Agent
or any of the Lenders to assert any claim or demand or to enforce any right or
remedy against the Borrower; (ii) any extensions or renewals of any of the
Borrowings or Advances hereunder; (iii) any rescissions, waivers, amendments or
modifications of any of the terms or provisions of any agreement evidencing,
securing or otherwise executed in connection with the Borrowings, including,
without limitation, the Transaction Documents; (iv) the substitution or release
of any entity primarily or secondarily liable for any obligation of the Borrower
under the Credit Agreement or other Transaction Documents; (v) the adequacy of
any rights the Lenders, the Lender Collateral Agent, the RCCA Agent or the
Administrative Agent may have against any collateral or other means of obtaining
repayment of the Contingent Obligations; (vi) the impairmen of any collateral
securing the Contingent Obligations, including without limitation the failure to
perfect or preserve any rights the Administrative Agent, the Lender Collateral
Agent, the RCCA Agent or the Lenders might have in such collateral or the
substitution, exchange, surrender, release, loss or destruction of any such
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collateral; or (vii) any other act or omission which might in any manner or to
any extent vary the risk of any Contingent Obligor or otherwise operate as a
release or discharge of any Contingent Obligor, all of which may be done without
notice to any Contingent Obligor.
SECTION 8.24 NON-RECOURSE; SUBORDINATION OF INTEREST ON BORROWER
COLLATERAL.
(1) All obligations of, and claims against, the Borrower arising
under or in connection with this Agreement and the Transaction Documents (other
than the Subordination Agreement) and each other agreement, instrument, document
or certificate executed and delivered or issued by the Borrower in connection
herewith or therewith are payable only to the extent that funds are available
therefore pursuant to each of the Subordination Agreement, Article IX hereof
and Section 6 of the Security Agreement. No recourse shall be had for payment
of any amount of principal or interest or for payment of any fee or other
obligation or claim arising out of or relating to this Agreement or the
Transaction Documents or any other agreement, instrument, document or
certificate executed and delivered or issued by the Borrower in connection
herewith or therewith against Borrower except to the extent provided in the
Security Agreement.
(2) Each of the Lenders, the Administrative Agent and the Lender
Collateral Agent acknowledges and agrees that to the extent that it either (i)
asserts an interest in or claim to, or benefit from, the Borrower Collateral, or
(ii) is deemed to have any such interest, claim or benefit in or from the
Borrower Collateral, whether by operation of law, legal process, pursuant to
applicable provisions of Debtor Relief Laws or otherwise (including without
limitation by virtue of Section 1111(b) of the federal Bankruptcy Code or any
successor provision having similar effect under the Bankruptcy Code), then any
such interest, claim or benefit in or from the Borrower Collateral is and shall
be expressly subordinated to the indefeasible payment in full of all obligations
and liabilities of which are entitled to be paid from, entitled to the benefits
of, or otherwise secured by the Borrower Collateral (whether or not any such
entitlement or security interest is legally perfected or otherwise entitled to a
priority of distribution or application under applicable law, including Debtor
Relief Laws), including, without limitation, the payment of post-petition
interests on such other obligations and liabilities. This subordination
agreement shall be deemed a subordination agreement within the meaning of
Section 510(a) of the Bankruptcy Code. Each of the Lenders, the Administrative
Agent and the Lender Collateral Agent further acknowledges and agrees that no
adequate remedy at law exists for breach of this SECTION 8.24 and that the terms
and provisions of this SECTION 8.24 may be enforced by an action for specific
performance.
(3) The provisions of this Section 8.24 shall survive the
termination of this Agreement.
SECTION 8.25 THIRD PARTY BENEFICIARY. (a) The parties hereto hereby
acknowledge and agree that FSA shall be a third party beneficiary of this
Agreement; PROVIDED, that FSA shall not be entitled to enforce or obtain any
benefit under the provisions of Article IIA hereof.
(b) The parties hereto hereby acknowledge and agree that each Credit
Support Provider shall be a third party beneficiary of this Agreement.
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SECTION 8.26 LIMITED LIABILITY OF LENDER COLLATERAL AGENT. It is
expressly understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered by Bankers Trust Company, not individually or personally
but solely as Lender Collateral Agent, in the exercise of the powers and
authority conferred and vested in it, (b) the representations, undertakings and
agreements herein made on the part of the Lender Collateral Agent are made and
intended not as personal representations, undertakings and agreements by Bankers
Trust Company, but are made and intended for the purpose of binding only the
Lender Collateral Agent, and (c) under no circumstances shall Bankers Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Lender Collateral Agent or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Lender Collateral Agent under this Agreement.
ARTICLE 9
FURTHERANCE OF SUBORDINATION
SECTION 9.1 REMEDIES LIMITED. Notwithstanding anything in this
Agreement or in any other Transaction Document to the contrary, all rights and
remedies of the Lenders, the Lender Collateral Agent, the Administrative Agent,
the Secured Parties, the Affected Parties or any of them, with respect to the
Borrower and its property, whether hereunder, under any Transaction Document or
otherwise at law or in equity, are limited by and subject to the terms of the
Subordination Agreement.
SECTION 9.2 OBLIGATIONS LIMITED. Notwithstanding anything in this
Agreement or in any other Transaction Document to the contrary, neither Borrower
nor the Spread Account Depositor shall have any obligation or liability to the
Administrative Agent, any Secured Party, any Lender, or any Affected Party or
any of them, whether hereunder, under any Transaction Document or otherwise at
law or in equity, until the Final Insurance Termination Date if the effect of
such obligation or liability would be to cause Borrower or Spread Account
Depositor to not be Solvent and no Obligation shall be or become due or payable
until the date which is the later of (i) the date such obligation or liability
would not cause the Borrower or Spread Account Depositor to not be Solvent and
(ii) the Final Insurance Termination Date.
SECTION 9.3 SUBORDINATION AGREEMENT GOVERNS. Notwithstanding any
other provision of this Agreement or any other Transaction Document, in the
event of any contradiction or ambiguity between the Subordination Agreement and
any other Transaction Document, the terms of the Subordination Agreement shall
govern. All disputes with respect to matters addressed in the Subordination
Agreement shall be determined by reference to the Subordination Agreement
exclusively and no provision of this Agreement or any other Transaction Document
should be interpreted as altering, amending, explaining or clarifying any
provision of the Subordination Agreement.
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SECTION 9.4 SURVIVAL. The provisions of this Article IX are for the
benefit of FSA and other parties to the Subordination Agreement and,
accordingly, shall survive the termination of this Agreement. This Article IX
shall not be amended without the written consent of FSA.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AFS FUNDING CORP.
By:
---------------------------
Title:
AMERICREDIT CORP.
By:
---------------------------
AMERICREDIT FINANCIAL SERVICES, INC.
By:
---------------------------
AMERICREDIT MANAGEMENT COMPANY
By:
---------------------------
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Administrative Agent
By:
---------------------------
Title:
By:
---------------------------
Title:
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Lender Collateral Agent
By:
---------------------------
Name:
Title:
[Signature Page to Credit Agreement]
<PAGE>
THE LENDERS
GREENWICH FUNDING CORPORATION
By: Credit Suisse First Boston, New York
Branch, as attorney-in-fact
By:
---------------------------
Title:
By:
---------------------------
Title:
[Signature Page to Credit Agreement]
<PAGE>
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Base Rate Eurodollar Rate
Lender Lending Office Lending Office
- ------ -------------- --------------
Credit Suisse First Boston, Eleven Madison Avenue, Eleven Madison Avenue
New York Branch New York, NY 10010 New York, NY 10010
Greenwich Funding Eleven Madison Avenue, Eleven Madison Avenue
Corporation New York, NY 10010 New York, NY 10010
<PAGE>
EXHIBIT A
FORM OF LENDER NOTE
<PAGE>
EXHIBIT B
FORM OF NOTICE OF BORROWING
<PAGE>
EXHIBIT C
FORM OF NOTICE OF CONVERSION/CONTINUATION
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
<PAGE>
EXHIBIT E
FORM OF CONFIDENTIALITY AGREEMENT
<PAGE>
EXHIBIT F
LIST OF SERIES TRANSACTION DOCUMENTS
1. Sale and Servicing Agreement, dated as of May 12, 1999, among ACFS, the
Borrower, AmeriCredit Automobile Receivables Trust 1999-B (the "Trust") and
Bank One, N.A. ("Bank One").
2. Trust Agreement, dated as of May 12, 1999, between the Borrower and Bankers
Trust Company (Delaware), as Owner Trustee (the "Owner Trustee").
3. Amended and Restated Trust Agreement, dated as of May 12, 1999, between the
Borrower and Owner Trustee.
4. Indenture, dated as of May 12, 1999, between the Trust and Bank One.
5. Purchase Agreement, dated as of May 12, 1999, between ACFS, CP Funding and
the Borrower.
6. Custodian Agreement, dated as of May 12, 1999, among FSA, ACFS, the Trust
and Bank One.
7. Lockbox Agreement or Tri-Party Remittance Processing Agreement, dated as of
May 12, 1999, among ACFS, Bank One and Bank One with Bank One Officer's
Certificate.
8. Note Policy with Endorsements.
9. Premium Letter dated May 20, 1999.
10. Insurance and Indemnity Agreement, dated as of May 12, 1999, among FSA,
ACC, ACFS, the Borrower and the Trust.
11. Supplement to Spread Account Agreement, dated as of May 12, 1999, among
FSA, the Borrower and Bank One.
12. Indemnification Agreement, dated as of May 12, 1999 among FSA, First Boston
First Boston Corporation and the Borrower.
13. Underwriting Agreement, dated as of May 13, 1999, among Credit Suisse First
Boston Corporation, as the Representative, ACFS and the Borrower.
<PAGE>
14. Opinion of General Counsel to ACC, ACFS, the Borrower and the Issuer as to
certain matters relating to the corporations
15. Opinion of General Counsel to ACC, ACFS, the Borrower and the Issuer as to
certain matters relating to the Receivables
16. Opinion of Dewey Ballantine as to certain securities law matters
17. Opinion of Dewey Ballantine as to certain tax matters
18. Opinion of Dewey Ballantine as to certain bankruptcy matters
19. Opinion of Jenkins & Gilchrist as to certain security interest matters and
certain Texas law matters
20. Opinion of counsel to Bank One as to the Spread Account
21. Opinion of Richards Layton & Finger as to certain security matters
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APPENDIX A
CERTAIN DEFINITIONS
Capitalized terms used in this Agreement shall have the following
meanings:
"ACC": The meaning specified in the Preamble.
"ACC PORTFOLIO CHARGE-OFF RATIO": As of the end of any fiscal quarter
of ACC, the ratio, expressed as a percentage, of (a) the product of 4 and the
net amount of charge-offs in its serviced portfolio during such fiscal quarter
to (b) the daily average principal amount of receivables in its serviced
portfolio during such fiscal quarter.
"ACFS": The meaning specified in the Preamble.
"ACCOUNTANT'S REPORT": The meaning specified in SECTION 5.01(a).
"ADJUSTED AVAILABLE COMMITMENT AMOUNT": On any date with respect to a
Liquidity Lender and its related Conduit Lender, such Liquidity Lender's
Liquidity Commitment Amount with respect to such Conduit Lender, MINUS the
aggregate outstanding principal amount of such Liquidity Lender's Advances with
respect to such Conduit Lender, MINUS the aggregate outstanding principal amount
of such Liquidity Lender's Support Advances to such Conduit Lender.
"ADJUSTED EURODOLLAR RATE": For any Interest Period and for any
Lender, the sum of (a) the rate (rounded upwards if necessary to the nearest
whole multiple of 1/16th of one percent per annum) of interest per annum
("LIBOR") for deposits in United States dollars offered by the principal office
of Credit Suisse First Boston in London, England to prime banks in the London
interbank market in an amount of not less than $1,000,000 for a period equal to
such Interest Period, PLUS (b) the remainder obtained by subtracting (i) LIBOR
for such Interest Period from (ii) the rate obtained by dividing such LIBOR by
the percentage equal to 100% MINUS the "Eurodollar Reserve Percentage" (as
defined in the succeeding sentence) for such Interest Period. The "EURODOLLAR
RESERVE PERCENTAGE" for a Lender for any Interest Period shall mean the reserve
percentage applicable during such Interest Period (or, if more than one such
percentage shall be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including any marginal emergency, supplemental or any
reserve requirement) for such Lender in respect of liabilities or assets
consisting of or including Eurocurrency Liabilities (as that term is used in
Regulation D of the Board of Governors of the Federal Reserve System as in
effect from time to time) having a term equal to such Interest Period.
1
<PAGE>
"ADVANCE": An advance by a Lender to the Borrower as part of a
Borrowing made on or prior to the Commitment Termination Date consisting of (i)
in the case of Conduit Lenders, all Commercial Paper Rate Advances, or (ii) in
the case of other Lenders, either all Base Rate Advances or all Eurodollar Rate
Advances from each of the Lenders, in each case pursuant to SECTION 2.02, and
subject to Conversion or Continuation pursuant to SECTION 2.08.
"AFFECTED PARTY": With respect to any Conduit Lender, any Support
Party of such Conduit Lender, PROVIDED that each such Conduit Lender or Support
Party is a Permitted Transferee.
"AFFILIATE": With respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such former
Person. As used in this definition of "Affiliate," the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"AGREEMENT": This Credit Agreement, as it may be amended, modified,
restated or supplemented from time to time.
"ALTERNATE BASE RATE": For any day, the higher of (i) the base
commercial lending rate per annum announced from time to time by CSFB in New
York in effect on such day, or (ii) the interest rate per annum quoted by CSFB
at approximately 11:00 a.m., New York City time, on such day, to dealers in the
New York Federal funds market for the overnight offering of Dollars by CSFB plus
one-half of one percent (0.50%). (The Alternate Base Rate is not intended to
represent the lowest rate charged by CSFB for extensions of credit.)
"AMC": The meaning specified in the Preamble.
"APPLICABLE LENDING OFFICE": With respect to each Lender, the office
of such Lender specified as its lending office for the relevant Type of Advances
opposite its name on SCHEDULE I hereto or in the Assignment and Assumption
pursuant to which it became a Lender, or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the Administrative
Agent.
"ASSIGNEE": The meaning specified in SECTION 8.06(b).
"ASSIGNMENT": The meaning specified in SECTION 8.06(b).
"ASSIGNMENT AND ASSUMPTION": The meaning specified in SECTION
8.06(b).
"AUTHORIZED OFFICER": (i) With respect to any non-natural Person other
than the Lender Collateral Agent, any Officer of such Person who is authorized
to act for such Person with respect to the relevant matter in question and (ii)
with respect to the Lender Collateral Agent, any managing director, principal,
vice president, assistant vice president, assistant secretary, assistant
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treasurer, trust officer or any other officer of the Lender Collateral Agent
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"AVAILABLE COMMITMENT AMOUNT": On any date (i) with respect to a
Non-contingent Lender, an amount equal to such Lender's Lending Percentage of
the Total Commitment Amount , and (ii) with respect to a Liquidity Lender
relating to a Conduit Lender, such Liquidity Lender's Liquidity Commitment
Amount with respect to such Conduit Lender, MINUS such Liquidity Lender's
Liquidity Percentage of the outstanding principal amount of such Conduit
Lender's Advances with respect to such Conduit Lender.
"AVAILABLE MAXIMUM ADVANCE AMOUNT": On any date with respect to a
Conduit Lender, such Conduit Lender's Lending Percentage of the Total
Commitment Amount.
"BANKRUPTCY CODE": Title 11 of the United States Code (11 U.S.C.
Section 101, ET SEQ.), as amended from time to time, or any successor statute.
"BASE RATE ADVANCE": An advance which bears interest at a rate per
annum determined on the basis of the Alternate Base Rate, as provided in
SECTION 2.06(a).
"BORROWER COLLATERAL": The meaning specified in the Security
Agreement.
"BORROWING": A borrowing consisting of simultaneous Advances made
by Lenders pursuant to the same Notice of Borrowing as described in SECTION
2.02, subject to Conversion or Continuation pursuant to SECTION 2.08.
"BORROWINGS": Collectively, each Borrowing including each
Designated Series Borrowing.
"BORROWING DATE": The meaning specified in SECTION 2.02(a).
"BUSINESS DAY": Any day other than (i) a Saturday or Sunday, (ii)
any other day on which banks are authorized or required to close in New York
City, Texas or Ohio and (iii) if such term is used in connection with the
Adjusted Eurodollar Rate, a day on which dealings are not carried out in the
London interbank market.
"CAPITAL STOCK": With respect to a Person, any shares of corporate
stock, however designated, of such Person, and any and all other equity
interests and participations representing ownership interests (including
limited partnership interests and limited liability company interests),
however designated, in such Person.
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"CASH": Such coin or currency of the United States of America as
at the time shall be legal tender for payment of all public and private debts.
"CASH EQUIVALENTS": Mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
from which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof or the District of
Columbia (or any domestic branch of a foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities (including depository receipts issued by any such
institution or trust company as custodian with respect to any obligations
referred to in clause (a) above or portion of such obligations for the
benefit of the holders of such depository receipts); PROVIDED, HOWEVER,
that at the time of the investment or contractual commitment to invest
therein (which shall be deemed to be made again each time funds are
reinvested following each Distribution Date), the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations
the rating of which is based on the credit of a Person other than such
depository institution or trust company) of such depository institution or
trust company shall have a credit rating from Standard & Poor's of A-1 and
from Moody's of P-1;
(c) commercial paper and demand notes investing solely in
commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's A-1 and from
Moody's of P-1;
(d) investments in money market funds having a rating from Standard
& Poor's of AAA-m or AAAm-G and from Moody's of Aaa and having been
approved by the Agent (including, without limitation, such funds for which
the Lender Collateral Agent or any of its affiliates is investment manager
or advisor).
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof of obligations of which are backed
by the full faith and credit of the United States of America, in either
case entered into with a depository institution or trust company (acting as
principal) referred to in clause (b) above; and
(g) any other investment which has been approved by the
Administrative Agent and the Designated Series Insurer.
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"CERTIFICATE PLEDGE AGREEMENT": The Certificate Pledge and Collateral
Agency Agreement, dated as of October 14, 1999, among the Borrower, FSA, the
Spread Account Depositor and Bank One, as Collateral Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"CODE": The Internal Revenue Code of 1986, as amended.
"COMMERCIAL PAPER RATE DETERMINATION DATE": The meaning specified in
SECTION 2.06(e)
"COMMERCIAL PAPER NOTES": With respect to a Conduit Lender, the
short-term promissory notes issued by a Conduit Lender which are allocated by
such Conduit Lender as its funding for its making or maintaining Advances to the
Borrower hereunder.
"COMMERCIAL PAPER RATE": For Advances means, to the extent a Conduit
Lender funds such Advances by issuing commercial paper, the sum of (a) the
weighted average of the rates at which commercial paper notes of such Conduit
Lender issued to fund such Advances may be sold by any placement agent or
commercial paper dealer selected by such Conduit Lender, as agreed in good faith
between each such agent or dealer and such Conduit Lender; PROVIDED if the rate
(or rates) as agreed between any such agent or dealer and such Conduit Lender is
a discount rate (or rates), then such rate shall be the rate (or if more than
one rate, the weighted average of the rates) resulting from converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum PLUS
(b) any and all commissions of placement agents and commercial paper dealers in
respect of commercial paper issued to fund the making or maintenance of any
Advance PLUS (c) any and all reasonable costs and expenses of any issuing and
paying agent or other Person responsible for the administration of such Conduit
Lender's commercial paper program in connection with the preparation,
completion, issuance, delivery or payment of commercial paper issued to fund the
making or maintenance of any Advance. Each Conduit Lender shall notify the
Administrative Agent of its Commercial Paper Rate applicable to any Advance
promptly after the determination thereof.
"COMMERCIAL PAPER RATE ADVANCE": An Advance which bears interest at a
rate per annum determined on the basis of the Commercial Paper Rate, as provided
in SECTION 2.06(a).
"COMMITMENT": With respect to a Liquidity Lender, its Liquidity
Commitment, and with respect to a Non-contingent Lender, its Non-contingent
Lending Commitment.
"COMMITMENT AMOUNT": As of any date with respect to (i) a
Non-contingent Lender, the principal amount set forth beside such Lender's
name under the heading "Non-contingent Lending Commitment" and (ii) a
Liquidity Lender, the principal amount set forth beside such Lender's name
under the heading "Liquidity Commitment", on the signature pages of this
Agreement or on the signature page of the Assignment and Assumption pursuant
to which such Committed Lender became a Committed Lender hereunder in
accordance with the provisions of
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SECTION 8.06, as such Commitment Amount may be adjusted from time to time in
accordance with the provisions of SECTION 2.04 or 8.06.
"COMMITMENT EXPIRATION DATE": October 25, 2001, as such date may
be extended from time to time as agreed in writing by the Borrower, the
Administrative Agent and each Non-contingent Lender and Liquidity Lender
pursuant to Section 2.10.
"COMMITMENT FEES": The meaning specified in the Fee Letter.
"COMMITMENT PERIOD": The period commencing on the Effective Date
and ending on the earlier to occur of (a) the Facility Maturity Date, (b) the
Commitment Expiration Date or (c) the date of the termination in whole of the
Commitments pursuant to SECTION 2.04, 6.02(a), 6A.02 or 6B.02.
"COMMITMENT TERMINATION DATE": With respect to a Committed Lender,
the earliest to occur of (a) such Committed Lender's Scheduled Commitment
Termination Date, (b) the Commitment Expiration Date or (c) the date of the
termination in whole of the Commitments pursuant to SECTION 2.04, 6.02(a),
6A.02 or 6B.02.
"COMMITTED LENDER": A Lender which is a Liquidity Lender or a
Non-contingent Lender.
"CONDUIT LENDER": Any Lender whose principal business consists of
issuing commercial paper, medium term notes or other securities to fund its
acquisition and maintenance of receivables, accounts, instruments, chattel
paper, general intangibles and other similar assets or interests therein and
which is designated on the signature page hereto or in the Assignment and
Assumption by which it became a party hereto as a Conduit Lender.
"CONTINGENT OBLIGATIONS": The meaning specified in Section 2A.01.
"CONTINGENT OBLIGORS": The meaning specified in the Preamble.
"CONTINUE," "CONTINUATION" and "CONTINUED": each refers to a
continuation of Advances for additional Interest Periods pursuant to SECTION
2.08.
"CONVERT," "CONVERSION" and "CONVERTED" each refers to a conversion
of Advances of one Type into Advances of another Type pursuant to SECTION
2.08.
"CREDIT SUPPORT AGREEMENT": an agreement pursuant to which credit
enhancement or credit support is provided for Advances.
"CREDIT SUPPORT DEFAULT": With respect to a Credit Support
Provider, (i) such Credit Support Provider shall have failed to make a
payment required under the Credit Support Agreement
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in accordance with its terms or (ii) an Insolvency Event shall have occurred
with respect to such Credit Support Provider.
"CREDIT SUPPORT PROVIDER": The meaning specified in Section
3.01(g).
"CREDIT SUPPORT RATING EVENT": With respect to a Credit Support
Provider, the claims-paying ability of such Credit Support Provider is rated
less than "A-" by S&P or, if rated by Moody's at the request of such Credit
Support Provider, "A3" by Moody's.
"CSFB": Credit Suisse First Boston, New York Branch, and its
successors.
"DEBT": At any date with respect to any Person, without
duplication: (i) all obligations of such Person for borrowed money; (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments; (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising
in the ordinary course of business; (iv) all obligations of such Person as
lessee under capital leases; (v) all non-contingent obligations of such
Person to reimburse or prepay any bank or other Person in respect of amounts
paid under a letter of credit, banker's acceptance or similar instrument;
(vi) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person; and (vii) all Debt of
others Guaranteed by such Person.
"DEBTOR RELIEF LAWS": The Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments,
readjustment of debt, marshaling of assets or similar debtor relief laws of
the United States, any state or any foreign country from time to time in
effect, affecting the rights of creditors generally.
"DEFAULT": Any Event of Default or any occurrence that is, or with
notice or the lapse of time or both would become, an Event of Default.
"DEFAULT RATE": The meaning specified in SECTION 2.06(c).
"DESIGNATED SERIES": a Series as to which the conditions set forth
in Section 3.02 have been satisfied.
"DESIGNATED SERIES AMORTIZATION DATE": With respect to any
Designated Series Borrowing, the Distribution Date of the 26th consecutive
calendar month following the month during which such Designated Series
Borrowing took place.
"DESIGNATED SERIES BORROWING": The meaning specified in SECTION
2.01(a).
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"DESIGNATED SERIES INSURER": With respect to any Designated
Series, FSA in its capacity as the insurance company insuring the repayment
of such Designated Series, and each such Designated Series Insurer,
collectively, the "DESIGNATED SERIES INSURERS".
"DESIGNATED SERIES MATURITY DATE": With respect to any Designated
Series Borrowing, the Distribution Date of the 30th consecutive calendar
month following the month during which such Designated Series Borrowing took
place.
"DESIGNATED SERIES SERVICER" and "DESIGNATED SERIES SERVICERS":
The respective meanings specified in Section 5.01.
"DISTRIBUTION DATE": The fifth day of each calendar month, or, if
such day is not a Business Day, the immediately following Business Day;
PROVIDED, that such day shall in no event be earlier than the third Business
Day of such calendar month.
"DOLLAR" or "$": A dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for all
debts, public and private.
"DRAW LIMIT": The meaning specified in the RCCA Agreement.
"EFFECTIVE DATE": The date on which the conditions specified in
SECTION 3.01 shall have been satisfied.
"ERISA": The U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE": Any Person who for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414 of the IRC, and the
regulations promulgated and rulings issued thereunder.
"EURODOLLAR RATE ADVANCE": An Advance which bears interest at a
rate per annum determined on the basis of the Adjusted Eurodollar Rate, as
provided in SECTION 2.06(a).
"EVENT OF EARLY AMORTIZATION": The meaning specified in SECTION
6B.01.
"EVENT OF EARLY TERMINATION": The meaning specified in SECTION
6A.01.
"EVENT OF DEFAULT": The meaning specified in SECTION 6.01.
"EXCLUDED TAXES": The meaning specified in SECTION 2.12(a).
"EXPECTED CUMULATIVE NET LOSSES": On any date, the sum of (i) the
product of 6.5% and the outstanding principal amount of Preferred Receivables
in the FSA Portfolio and (ii) the
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product of 11% and the outstanding principal amount of Standard Receivables
in the FSA Portfolio, in each case after giving effect to the issuance of the
Series to be issued after such date, PROVIDED if either (i) the amount of
credit enhancement necessary to obtain an investment grade rating from any
Rating Agency on any Series on a stand-alone basis, i.e., without giving
effect to the credit enhancement provided by the Designated Series Insurer,
is increased by such Rating Agency beyond the level required with respect to
Series 1999-D or (ii) in the opinion of the Required Lenders, there has been
a material deterioration in the performance of the portfolio serviced by
ACFS, the percentages set forth in clauses (i) and (ii) of this definition
shall be such higher percentages as the Required Lenders shall select,
PROVIDED further if the amount of credit enhancement necessary to obtain an
investment grade rating from the Rating Agency on any Series on a stand-alone
basis, i.e., without giving effect to the credit enhancement provided by the
Designated Series Insurer, is decreased by the Rating Agencies beyond the
level required with respect to Series 1999-D, the Lenders will consider in
good faith a request by the Borrower to lower the percentages set forth in
clauses (i) and (ii) of this definition.
"FACILITY FEE": The meaning specified in the Fee Letter.
"FACILITY FEE RATE": (i) with respect to any Designated Series with
respect to which the aggregate amount deposited into the related Spread
Account on the date of issuance of such Designated Series and on the date the
prefunded amount, if any, of such Designated Series is released is less than
3% of the initial aggregate principal amount of the securities constituting
such Designated Series, 5.00% and (ii) with respect to any other Series,
4.50%.
"FACILITY MATURITY DATE": The earliest of (a) the Stated Maturity
Date, (b) the date of the acceleration of the Advances pursuant to SECTION
6.02(a), and (c) the occurrence of an Insolvency Event with respect to the
Borrower.
"FEDERAL FUNDS RATE": For any day, a fluctuating interest rate per
annum equal 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 for such transactions
received by CSFB from three Federal funds brokers of recognized standing
selected by it.
"FEE LETTER": The Fee Letter, dated as of October 14, 1999, among
the Borrower, the Contingent Obligors and the Administrative Agent, and the
Lenders named therein as such document may be amended, modified, restated or
supplemented from time to time.
"FEES": The Facility Fees and the Commitment Fees.
"FINAL INSURANCE TERMINATION DATE": the last to occur of the
Insurance Termination Dates.
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"FITCH": Fitch IBCA, Inc., and its successors.
"FIXED PERIOD": With respect to any Commercial Paper Rate Advance
or portion thereof owed to a Conduit Lender, the period from the date of
issuance to the maturity date of the Commercial Paper Note or Commercial
Paper Notes of such Lender which such Lender has allocated to the funding or
maintenance of such Commercial Paper Rate Advance or such portion.
"FSA": Financial Security Assurance Inc., a New York stock
insurance company.
"FSA PORTFOLIO": At any particular time, the receivables in all
Series with respect to which FSA has issued an insurance policy.
"FSA SERIES": At any particular time, all Series with respect to
which FSA has issued an insurance policy and with respect to which the spread
accounts are subject to the Spread Account Agreement.
"GAAP": At any particular time with respect to the Borrower, U.S.
generally accepted accounting principles as in effect at such time,
consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GRANT": To grant, bargain, sell, warrant, alienate, premise,
release, convey, assign, transfer, mortgage, pledge, create and grant a
security interest in and right of setoff against, deposit, set over and
confirm.
"GUARANTEE": By any Person, any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds, for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"GUARANTY LIMIT": (i) for the period from the Effective Date until
the date, if any, of the first Borrowing with respect to which the aggregate
amount deposited on the date of issuance of the related Designated Series and
on the date the prefunded amount, if any, of such Designated Series is
released in the related Spread Account is less than 3% of the initial
aggregate principal
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amount of the securities constituting such Designated Series, $50,000,000 and
(ii) thereafter, $100,000,000.
"INDEPENDENT": When used with respect to any specified Person
other than an accountant, such a Person who (i) is in fact independent, (ii)
does not have any direct financial interest or any material indirect
financial interest in the Borrower or in any Affiliate of the Borrower, and
(iii) is not connected with the Borrower or any Affiliate of the Borrower as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions. "Independent" when used with respect to
any accountant means an accountant, who may be the accountant who audits the
books of the Borrower, who is independent with respect to the Borrower within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be furnished to the
Administrative Agent or the Lenders, such Person shall be acceptable to the
Administrative Agent, and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.
"INFORMATION SYSTEMS" The meaning specified in Section 4.01(x).
"INITIAL SPREAD ACCOUNT DEPOSIT" and "INITIAL SPREAD ACCOUNT
DEPOSITS": The meaning specified in the Recitals.
"INSOLVENCY EVENT": With respect to a Person, such Person shall
fail generally to, or admit in writing its inability to, pay its debts as
they become due; or a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect
of such Person in an involuntary case under any Debtor Relief Law, or for the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs and, if instituted against such Person, any such proceeding shall
continue undismissed or unstayed and in effect for a period of 60 consecutive
days or any of the actions sought in such proceeding shall occur; or the
commencement by such Person of a voluntary case under any Debtor Relief Law,
or such Person's consent to the entry of any order for relief in an
involuntary case under any Debtor Relief Law, or consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of such Person
or for any substantial part of its property, or any general assignment for
the benefit of creditors; or such Person shall have taken any corporate,
partnership or similar action in furtherance of any of the foregoing actions.
"INSURANCE TERMINATION DATE": when used in the singular, any of,
and when used in the plural, all of, the termination date of the 1996-C
Insurance and Indemnity Agreement, the 1996-D Insurance and Indemnity
Agreement, the 1997-A Insurance and Indemnity Agreement, the 1997-B Insurance
and Indemnity Agreement, the 1997-C Insurance and Indemnity Agreement, the
1997-D Insurance and Indemnity Agreement, the 1998-A Insurance and Indemnity
Agreement, the 1998-B Insurance and Indemnity Agreement, the 1998-C Insurance
and Indemnity Agreement, the 1998-D
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Insurance and Indemnity Agreement, the 1999-A Insurance and Indemnity
Agreement, the 1999-B Insurance and Indemnity Agreement, the 1999-C Insurance
and Indemnity Agreement and the termination date of each other insurance and
indemnity agreement entered into in connection with a Series the spread
account of which is subject to the Spread Account Agreement.
"INTEREST PAYMENT DATE": (i) With respect to any Advance, each
Distribution Date, commencing the first of such days to occur after such
Advance is made, and (ii) as to all Advances, the earlier to occur of (a) the
Designated Series Maturity Date and (b) the Facility Maturity Date.
"INTEREST PERIOD": (i) For each Advance other than a Eurodollar
Advance, initially the period commencing on the date on which such Advance is
made, Continued or Converted from an Advance of a different Type, and ending
on the day preceding the next following Interest Payment Date, and thereafter
the period commencing on each Interest Payment Date and ending on the day
preceding the next following Interest Payment Date or, if earlier, the date on
which such Advance is repaid or Converted into another Type of Advance, and,
(ii) for each Eurodollar Advance, initially the period commencing on the date
on which such Advance is made, Continued or Converted from an Advance of a
different Type, and ending on the day preceding the next following Interest
Payment Date, and thereafter the period commencing on each Interest Payment
Date and ending on the day preceding the next following Interest Payment Date;
PROVIDED, HOWEVER, that (A) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business
Day, (B) in the case of any Interest Period for any Advance which commences
before the Facility Maturity Date and would otherwise end on a date occurring
after the Facility Maturity Date, such Interest Period shall end on the
Facility Maturity Date, and (C) the duration of any Interest Period commencing
on or after the Facility Maturity Date shall be selected by the Administrative
Agent.
"INVESTMENT COMPANY ACT": The United States Investment Company Act
of 1940, as amended.
"IRS": The U.S. Internal Revenue Service and any successor agency.
"LENDER COLLATERAL AGENT": The meaning specified in the Preamble.
"LENDER NOTES": The meaning specified in Section 2.01(b).
"LENDING PERCENTAGE": On and date the following:
(i) with respect to a Conduit Lender, such Conduit Lender's Maximum
Advance Amount as a percentage of the Total Commitment Amount;
(ii) with respect to a Liquidity Lender, such Liquidity Lender's Liquidity
Commitment Amount as a percentage of the Total Commitment Amount; and
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(iii) with respect to a Non-contingent Lender, such Non-contingent Lender's
Non-Contingent Lending Commitment Amount as a percentage of the Total
Commitment Amount.
"LIEN": With respect to any asset, any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other), preference, priority, security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale
or other title retention agreement relating to such asset).
"LIQUIDITY COMMITMENT": In respect of a Lender as to which an
amount of a "Liquidity Commitment" and the identity of one or more related
Conduit Lenders are set forth beside such Lender's name on the signature pages
of this Agreement or on the signature page of the Assignment and Assumption
pursuant to which such Lender became a Lender hereunder in accordance with the
provisions of SECTION 8.06, such Lender's undertaking during the Commitment
Period to make Advances in respect of Borrowings in lieu of such Conduit
Lenders in accordance with SECTION 2.02(g), subject to the terms and
conditions hereof, in the aggregate outstanding principal amount not exceeding
the Commitment Amount of such Lender.
"LIQUIDITY COMMITMENT AMOUNT": As of any date with respect to a
Liquidity Lender, the principal amount set forth beside such Lender's name
under the heading "Liquidity Commitment" on the signature page of this
Agreement or on the signature page of the Assignment and Assumption Agreement
pursuant to which such Liquidity Lender became a Committed Lender hereunder in
accordance with the provisions of SECTION 8.06, as such Liquidity Commitment
Amount may be adjusted from time to time in accordance with the provisions of
SECTION 2.04 or 8.06.
"LIQUIDITY LENDER": A Lender having a Liquidity Commitment with
respect to one or more Conduit Lenders.
"LIQUIDITY PERCENTAGE": With respect to a Liquidity Lender and its
related Conduit Lender, such Lender's Adjusted Available Commitment Amount
with respect to such Conduit Lender as a percentage of the aggregate Adjusted
Available Commitment Amounts of all of such Conduit Lender's related Liquidity
Lenders.
"LOSS COVERAGE RATIO": At any time, the ratio of the Maximum Net
Cumulative Losses at such time to the Expected Cumulative Losses at such time.
"MARGIN STOCK": "Margin Stock" as defined under Regulation U issued
by the Board of Governors of the Federal Reserve System.
"MATERIAL ADVERSE EFFECT": (i) A material adverse effect on the
financial condition, operations or business of the Borrower or any Contingent
Obligor, (ii) a material adverse effect on the ability or right of the
Borrower or any Contingent Obligor to perform its obligations under this
Agreement or any other Transaction Document, or (iii) any impairment of the
ability or right of the
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<PAGE>
Administrative Agent or any Lender to enforce this Agreement or any Lender
Note or of the Administrative Agent to enforce any other Transaction Document.
"MAXIMUM ADVANCE AMOUNT": With respect to a Conduit Lender, the
principal amount set forth beside such Lender's name under the heading
"Maximum Advance Amount" on the signature pages of this Agreement or on the
signature page of the Assignment and Assumption pursuant to which such
Conduit Lender became a Conduit Lender hereunder in accordance with the
provisions of SECTION 8.06, as such Maximum Advance Amount may be adjusted
from time to time in accordance with the provisions of SECTION 2.03 or 8.06.
"MAXIMUM BORROWING PERCENTAGE": For the period from the Effective
Date to the first anniversary of the Effective Date, 5% and thereafter, 6%.
"MAXIMUM NET CUMULATIVE LOSSES": At any time, the amount determined
by the Administrative Agent with respect to all FSA Series pursuant to the
cash flow model described in Annex I.
"MINIMUM SPREAD ACCOUNT PERCENTAGE": For the period from the
Effective Date to the first anniversary of the Effective Date, 3% and
thereafter, 2%.
"MOODY'S": Moody's Investors Service, Inc., and any successor
thereto.
"NEGATIVE CARRY": the meaning specified in the Security Agreement.
"NON-CONTINGENT LENDER": A Lender which has a Non-contingent
Lending Commitment.
"NON-CONTINGENT LENDING COMMITMENT": In respect of a Lender as to
which an amount of a "Non-contingent Lending Commitment" is set forth beside
such Lender's name on the signature pages of this Agreement or on the
signature page of the Assignment and Assumption pursuant to which such Lender
became a Lender hereunder in accordance with the provisions of SECTION 8.06,
such Lender's undertaking during the Commitment Period to make Advances in
respect of Borrowings, subject to the terms and conditions hereof, in the
aggregate outstanding principal amount not exceeding the Non-contingent
Lending Commitment Amount of such Lender.
"NON-CONTINGENT LENDING COMMITMENT AMOUNT": As of any date with
respect to a Non-contingent Lender, the principal amount set forth beside
such Lender's name under the heading "Non-contingent Lending Commitment" on
the signature page of this Agreement or on the signature page of the
Assignment and Assumption Agreement pursuant to which such Non-contingent
Lender became a Committed Lender hereunder in accordance with the provisions
of SECTION 8.06, as such Non-contingent Lending Commitment Amount may be
adjusted from time to time in accordance with the provisions of SECTION 2.04
or 8.06.
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<PAGE>
"NOTICE OF BORROWING": The meaning specified in SECTION 2.02(a).
"NOTICE OF CONVERSION/CONTINUATION": The meaning specified in
SECTION 2.08(b).
"NOTICE OF SUSPENSION": The meaning specified in Section 3.05 of
the Security Agreement.
"NYUCC": The Uniform Commercial Code as in effect from time to
time in the State of New York.
"OBLIGATIONS": The meaning specified in the Security Agreement.
"OFFICER": With respect to the Borrower, the Chairman of the Board
of Directors, any Vice Chairman, any Director, the President, any Vice
President, the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Borrower.
"OFFICER'S CERTIFICATE": With respect to any Person, a certificate
signed by an Authorized Officer of such Person.
"OPINION OF COUNSEL": A written opinion of counsel who, except as
otherwise expressly provided in this Agreement, may be counsel to the
Borrower, and who shall be acceptable to the Administrative Agent.
"PARTICIPANT": The meaning specified in SECTION 8.06(a).
"PARTICIPATION": The meaning specified in SECTION 8.06(a).
"PERCENTAGE INTEREST": For a Lender on any day, (a) the aggregate
outstanding principal amount of Advances owed to such Lender as a percentage
of the aggregate outstanding principal amount of all Advances on such day, or
(b) if no Advances are outstanding on such day, (i) 0% in the case of a
Conduit Lender, (ii) such Lender's Lending Percentage in the case of a
Non-contingent Lender, and (iii) such Lender's Liquidity Percentage times the
Lending Percentage of such Lenders related Conduit Lender in the case of a
Liquidity Lender.
"PERMITTED CREDIT SUPPORT PROVIDER": Either (i) a Person who, on
the Effective Date, (a) is a Credit Support Provider or who is a party to a
facultative reinsurance treaty with a Credit Support Provider, (b) is a
Permitted Transferee, and (c) has executed and delivered to the
Administrative Agent an Assignment and Assumption or (ii) a Person who is an
Affiliate of an existing Credit Support Provider, is an assignee of such
existing Credit Support Provider, is a Permitted Transferee and has executed
and delivered to the Administrative Agent an Assignment and Assumption. Upon
any assignment of any Advance or interest therein to a Permitted Credit
Support Provider, the Administrative Agent agrees to deliver to FSA a copy of
the Assignment and Assumption Agreement delivered by such Permitted Credit
Support Provider
15
<PAGE>
"PERMITTED LIEN": A Lien which is permitted by SECTION 5.02(a).
"PERMITTED TRANSFEREE": At any time, a bank, insurance company,
reinsurance company or commercial paper conduit having, in the case of an
entity that is subject to risk-based capital adequacy requirements,
risk-based capital of at least $100,000,000 or, in the case of an entity that
is not subject to risk-based capital adequacy requirements, combined capital,
surplus, contingency reserves and unearned premium reserves of at least
$100,000,000, PROVIDED that for purposes of determining whether a Person is a
Permitted Credit Support Provider for purposes of clause (i) of the
definition thereof, the number "$100,000,000" in this definition shall be
deemed to be $70,000,000, and PROVIDED, FURTHER that for purposes of
determining whether a Person is a Permitted Credit Support Provider for
purposes of clause (ii) of the definition thereof, the number "$100,000,000"
in this definition shall be deemed to be the greater of (x) $70,000,000 and
(y) the lesser of (1) $100,000,000 and (2) risk-based capital or combined
capital, surplus, contingency reserves and unearned premium reserves, as the
case may be, as of the Effective Date of the assignor Credit Support Provider
with respect to such Person.
"PERSON": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust (including
any beneficiary thereof) or any other entity, unincorporated organization or
government or any agency or political subdivision thereof.
"PLAN": Any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which the Borrower or any ERISA Affiliate is, or within
the immediately preceding six years was, an "employer" as defined in Section
3(5) of ERISA, and in respect of which the Borrower or an ERISA Affiliate
could have liability under Title IV of ERISA.
"PREFERRED RECEIVABLE": a receivable identified in the Borrower's
records as belonging to the preferred loan program based on the underwriting
and pricing criteria in place at the time of the origination of such
receivable.
"PROCEDURES REPORT": The meaning specified in SECTION 5.01(a).
"RATING AGENCY": Each of Fitch, Moody's and S&P.
"RCCA": The meaning specified in the recitals.
"RCCA AGENT": The meaning specified in the recitals.
"RCCA AGREEMENT": The Replacement Cash Collateral Account
Agreement, dated as of the date hereof, among the Borrower, FSA, the
Administrative Agent and the RCCA Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"RCCA COLLATERAL": The meaning assigned to "Collateral" in the RCCA
Agreement.
16
<PAGE>
"RCCA DEPOSIT": The meaning specified in the recitals.
"RCCA DISTRIBUTIONS": With respect to any Designated Series, the
moneys which are distributed, from time to time, to the Borrower from the
RCCA of such Designated Series.
"REGULATORY CHANGE": In the case of a Lender, any change occurring
after the date of such Lender's execution and delivery of this Agreement or,
if applicable of the Assignment and Assumption by which it became party to
this Agreement; in the case of a Participant, any change occurring after the
date on which its Participation became effective, or in the case of an
Affected Party, any change occurring after the date it became such an
Affected Party, in any (or the adoption after such date of any new):
(i) United States Federal or state law or foreign law applicable to
such Lender, Participant or Affected Party; or
(ii) regulation, interpretation, directive, guideline or request
(whether or not having the force of law) applicable to such Lender,
Participant or Affected Party of any court or other judicial authority or
any Governmental Authority charged with the interpretation or
administration of any law referred to in clause (i) or of any fiscal,
monetary or other authority or central bank having jurisdiction over such
Lender, Participant or Affected Party.
"REQUIRED LENDERS": At any time, (i) Lenders having Percentage
Interests aggregating greater than 50%, and (ii) Committed Lenders together
having Commitments aggregating to greater than 50% of the Total Commitment
Amount.
"REQUIRED LOSS COVERAGE RATIO": 1.96 to 1.
"REQUIRED SPREAD ACCOUNT DEPOSIT": The meaning specified in
SECTION 3.02(b)(v).
"RESTRICTED PAYMENT": The meaning specified in SECTION 5.02(c).
"S&P": Standard & Poor's Ratings Group, and any successor thereto.
"SCHEDULED COMMITMENT TERMINATION DATE": At any time with respect
to a Committed Lender, the date set forth beside such Lender's name under the
heading "Scheduled Commitment Termination Date" on the signature pages of
this Agreement or on the signature page of the Assignment and Assumption
pursuant to which such Committed Lender became a Committed Lender hereunder
in accordance with the provisions of SECTION 8.06, as such Commitment may be
extended from time to time in accordance with the provisions of SECTION 2.10.
"SECURED OBLIGATIONS": The meaning specified in the Security
Agreement.
"SECURED PARTY": The meaning specified in the Security Agreement.
17
<PAGE>
"SECURITY AGREEMENT": The Security and Collateral Agent Agreement,
dated as of the date hereof, among the Borrower, ACFS, the Administrative
Agent and the Lender Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"SECURITY INTEREST": Each security interest and Lien Granted
pursuant to Section 2.01 of the Security Agreement.
"SERIES": The meaning specified in the Recitals.
"SERIES TRANSACTION DOCUMENTS": With respect to any Series, the
pooling and servicing agreement (or equivalent document by any other name),
sale and servicing agreement, indenture, insurance and indemnity agreement,
and supplement to the Spread Account Agreement.
"SOLVENT": The meaning set forth in the Subordination Agreement.
"SPREAD ACCOUNT" and "SPREAD ACCOUNTS": The respective meanings
specified in the Recitals.
"SPREAD ACCOUNT REPLACEMENT REINSURANCE": The meaning specified in
the RCCA Agreement.
"SPREAD ACCOUNT AGREEMENT": That certain Spread Account Agreement,
dated as of December 1, 1994, as amended and restated as of May 11, 1998,
among the Borrower, FSA, Lasalle National Bank, Harris Trust and Savings Bank
and Bank One, N.A., as amended, restated, modified or supplemented from time
to time.
"SPREAD ACCOUNT DEPOSITOR": The meaning specified in the recitals.
"STANDARD RECEIVABLE": a receivable identified in the Borrower's
records as belonging to the standard loan program based on the underwriting
and pricing criteria in place at the time of the origination of such
receivable.
"STATED MATURITY DATE": April 25, 2004.
"SUBORDINATION AGREEMENT": The Subordination and Intercreditor
Agreement, dated as of the date hereof, among the Borrower, the Contingent
Obligors, FSA, certain Underlying Trustees, the Agent and the Lender
Collateral Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"SUBSIDIARY": As to a Person, another Person, a majority of the
outstanding voting stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person. For the purposes
of this definition, "voting stock" of a Person means shares, interests,
participations or other equivalents (however designated) of such Person's
equity having
18
<PAGE>
voting power for the election of directors, managers or other voting members
of the governing body of such Person.
"SUPPORT ADVANCES": With respect to a Liquidity Lender and its
related Conduit Lender, any participation held by such Liquidity Lender in
Advances owed to such Conduit Lender which were purchased from such Conduit
Lender pursuant to a Support Facility and any loans or other advances made by
such Liquidity Lender to such Conduit Lender pursuant to a Support Facility
to fund such Conduit Lender's making or maintaining its Advances hereunder
(but excluding any such loans or advances made to fund such Conduit Lender's
obligations to pay interest, fees or other similar amounts relating to the
funding of its making or maintaining its Advances hereunder).
"SUPPORT PARTY": Any bank or other financial institution extending
or having a commitment to extend funds to or for the account of a Conduit
Lender (including by agreement to purchase an assignment of or participation
in Advances owed to such Conduit Lender) under a Support Facility.
"SUPPORT FACILITY": Any liquidity or credit support agreement
(other than the Credit Support Agreement) with a Conduit Lender which relates
to this Agreement and the Advances made by such Conduit Lender hereunder
(including any agreement to purchase an assignment of or participation in
such Advances).
"SWAP TRANSACTION": (i) Any rate, basis, commodity, currency, debt
or equity swap; (ii) any cap, collar or floor agreement; (iii) any rate,
basis, commodity, currency, debt or equity futures or forward agreement; (iv)
any rate, basis, commodity, currency, debt or equity option representing an
obligation to buy or sell a security, commodity, currency, debt or equity;
and (v) any other similar agreement.
"TAXES": The meaning specified in SECTION 2.12(a).
"TOTAL COMMITMENT AMOUNT": On any date, the sum of (i) the
Liquidity Commitment Amounts of all Liquidity Lenders, and (ii) the
Non-contingent Lending Commitment Amounts of all Non-contingent Lenders,
which amount shall initially be $225,000,000.
"TOTAL SECURED DEBT": At any time, Senior Debt at the time
outstanding and the Senior Subordinated Notes then Outstanding.
"TRADE CLAIM": Claims of trade creditors and other general
unsecured current obligations of a debtor.
"TRANSACTION DOCUMENTS": This Agreement, the Lender Notes, the
Security Agreement, the RCCA Agreement, the Subordination Agreement and all
other notes, security agreements, instruments, documents and other agreements
(including UCC financing statements)
19
<PAGE>
heretofore, now or hereafter executed and/or delivered by or on behalf of the
Borrower in connection with any of the foregoing, in each case, as the same
may be amended, supplemented or otherwise modified.
"TRANSFER": The meaning specified in SECTION 8.06(a).
"TRUST AGREEMENT": The Amended and Restated Trust Agreement, dated
as of October 19, 1999, between the Borrower and Bankers Trust (Delaware), as
owner trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"TYPE": With reference to an Advance, whether such Advance
constitutes a Base Rate Advance, a Commercial Paper Rate Advance or a
Eurodollar Rate Advance.
"UNDERLYING TRANSACTIONS": when used in the singular, any of, and
when used in the plural, all of, the transactions contemplated by each of the
1996-C Insurance and Indemnity Agreement, the 1996-D Insurance and Indemnity
agreement, the 1997-A Insurance and Indemnity Agreement, the 1997-B Insurance
and Indemnity Agreement, the 1997-C Insurance and Indemnity agreement, the
1997-D Insurance and Indemnity Agreement, the 1998-A Insurance and Indemnity
agreement, the 1998-B Insurance and Indemnity Agreement, the 1998-C Insurance
and Indemnity Agreement, 1998-D Insurance and Indemnity Agreement, the 1999-A
Insurance and Indemnity Agreement, the 1999-B Insurance and Indemnity
Agreement, , the 1999-C Insurance and Indemnity Agreement, the 1996-C Sale
and Servicing Agreement, the 1996-D Sale and Servicing Agreement, the 1997-A
Sale and Servicing Agreement, the 1997-B Sale and Servicing Agreement, the
1997-C Sale and Servicing Agreement, the 1997-D Sale and Servicing Agreement,
the 1998-A Sale and Servicing Agreement, the 1998-B Sale and Servicing
Agreement, the 1998-C Sale and Servicing Agreement, the 1998-D Sale and
Servicing Agreement, the 1999-A Sale and Servicing Agreement, the 1999-B Sale
and Servicing Agreement, the 1999-C Sale and Servicing Agreement, each
insurance and indemnity agreement and each sale and servicing agreement
entered into in connection with a spread account which is subject to the
Spread Account Agreement and all other transactions anticipated by the
documents executed in connection with any of the foregoing.
"UNDERLYING TRANSACTIONS DOCUMENTS": the agreements, contracts,
documents, amendments, consents, instruments, certificates and other papers
executed in connection with each Underlying Transaction.
"UNDERLYING TRUST": in the singular any of the AmeriCredit 1996-C
Trust, the AmeriCredit 1996-D Trust, the AmeriCredit 1997-A Trust, the
AmeriCredit 1997-B Trust, the AmeriCredit 1997-C Trust, the AmeriCredit
1997-D Trust, the AmeriCredit 1998-A Trust, the AmeriCredit 1998-B Trust, the
AmeriCredit 1998-C Trust, AmeriCredit 1998-D Trust, the AmeriCredit 1999-A
Trust, the AmeriCredit 1999-B Trust, the AmeriCredit 1999-C Trust, and each
trust established in connection with a sale and servicing agreement entered
into in connection with a spread account which is subject to the Spread
Account Agreement and in the plural, all of such trusts.
20
<PAGE>
"UNDERLYING TRUSTEES": the trustees, trust collateral agents or
collateral agents, in the Underlying Transactions and any other trustee
designated with respect to the Underlying Transactions.
"UNIFORM COMMERCIAL CODE": The Uniform Commercial Code as in effect
in each relevant jurisdiction.
"UNITED STATES" and "U.S.": The United States of America.
"U.S. GOVERNMENT SECURITIES": Securities that are direct
obligations of, and obligations the timely payment of principal and interest
on which is fully Guaranteed by, the United States of America or any agency
or instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America and
in the form of conventional bills, bonds and notes. In no event shall U.S.
Government Securities include: (i) any security providing for the payment of
interest only; (ii) any Swap Transaction; or (iii) any obligation on which
all or any portion of the payments thereunder are based, directly or
indirectly, on any Swap Transaction.
21
<PAGE>
ANNEX I
CALCULATION OF MAXIMUM CUMULATIVE NET LOSSES
CSFB CASH FLOW MODEL
The model inputs will be based on (i) collateral and bond information as for
the last available month for all outstanding FSA Series and (i) the
collateral and bond information for a Designated Series after pricing.
The following lists details the inputs and modeling assumptions to be
included in the Maximum Cumulative Net Losses calculation:
COLLATERAL CHARACTERISTICS:
The weighted average coupon, weighted average original maturity, weighted
average remaining maturity, the total pool outstanding and the split between
the standard product and the preferred product will be provided by the
Borrower. (For a new Designated Series with a pre-funding account, the
collateral characteristics described in the offering documents for such
Series will be used with respect to the full face amount of such Series for
modeling purposes.)
SECURITIES CHARACTERISTICS
The Borrower will provide (a) the weighted average coupon on all outstanding
notes and certificates be calculated based on amounts outstanding as of (i)
for outstanding FSA Series, the last amount outstanding as of such
calculation date and (ii) for the new Designated Series, the amounts and
coupons to be in effect on the closing date of such Designated Series
(assuming the full face amount of such Securities for modeling purposes) and
(b) the outstanding face amount of all outstanding securities.
LOSSES:
50% of gross losses will occur in year one, 30% in year two and 20% in year
three (assuming gross losses begin in month 3). Recoveries will be 45% and
they will be added into the cash flows three months after the month the gross
losses occurred.
FEES:
A servicing fee of 2.25% and a surety premium of 0.25% p.a. (or such other
percentage as shall be applicable under the relevant Series Transaction
Documents) will be used, PROVIDED the surety
<PAGE>
premium will be increased by 0.50% if an insurance agreement event of default
occurs as a result of a breach of the Cumulative Default Rate test or the
Cumulative Net Loss Rate test.
The following Facility Fees with respect to RCCAs and premiums with respect
to Spread Account Replacement Reinsurance will be assumed:
(i) prior to an Event of Default, 4.50% on 100% of the RCCAs and
Spread Account Replacement Reinsurance;
(ii) after an Event of Default, (A) 4.50% on 100% of the Spread
Account Replacement Reinsurance and (B) [5.00% + (Alternate Base Rate (1)
one month LIBOR)] on 100% of the RCCAs;
(iii) if the amount on deposit in an RCCA is less than the related
Designated Series Borrowing, (10.00% + Alternate Base Rate) on 100% of the
"RCCA Draw Total", as labeled in the test cash flows distributed by the
Administrative Agent prior to the Effective Date;
All other fees provided for in the Fee Letter will be assumed.
PREPAYMENTS:
The combination of voluntary and involuntary principal repayments will occur
at a rate of 2.0 ABS.
SPREAD ACCOUNT/INSURANCE & INDEMNITY TRIGGERS
The cumulative gross default and the cumulative net loss triggers, and the
consequences thereof, with respect to existing Underlying Transactions will
be those set forth on Annex II relating to Series 1997-C through 1999-C.
- -------------------
(1) Assumption will be that RCCA will be repaid only after Spread Account
Replacement Reinsurance is fully repaid. It will also be assumed that an
Event of Default will occur only as a result of a breach of the Cumulative
Default Rate test or the Cumulative Net Loss Rate test.
(2) Alternate Base Rate and one month LIBOR will be those in effect on the
date the model is run.
-2-
<PAGE>
CREDIT ENHANCEMENT:
The amount of deposits in the Spread Accounts, the amount of
over-collateralization and the amount of re-insurance on each transaction
will be supplied by the Borrower.
The target spread account amount shall be the greater of (i) 3% of the
outstanding pool balance and (ii) 1.5% of the original pool balance. The
amount on deposit in an RCCA and any reinsurance policies will be calculated
as per the RCCA Agreement.
The target overcollateralization amount shall be 10% of the outstanding pool
balance.
The model will be run to produce a "breakeven" scenario for this Facility
such that the Lenders receive full principal and accrued interest and fees no
later than the distribution date for month 50.
-3-
<PAGE>
ANNEX II
CUMULATIVE GROSS DEFAULT/CUMULATIVE NET LOSS TRIGGERS
-4-
<PAGE>
ANNEX III
INFORMATION ON UNDERLYING TRANSACTIONS DOCUMENTS
-5-
<PAGE>
==============================================================================
SECURITY AND COLLATERAL AGENT AGREEMENT
AMONG
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
AS AGENT,
BANKERS TRUST COMPANY,
AS LENDER COLLATERAL AGENT
AMERICREDIT FINANCIAL SERVICES, INC.,
AND
AFS FUNDING CORP.,
AS BORROWER
-------------------------------------
Dated as of October 14, 1999
-------------------------------------
==============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1 DEFINITIONS............................................................................................1
SECTION 2 APPOINTMENT OF LENDER COLLATERAL AGENT.................................................................7
SECTION 3 BORROWER'S GRANT OF SECURITY INTEREST..................................................................8
SECTION 4 BORROWER REMAINS LIABLE................................................................................9
SECTION 5 COVENANTS OF ACFS REGARDING THE COLLATERAL.............................................................9
SECTION 6 DISTRIBUTIONS.........................................................................................12
SECTION 7 THE COLLATERAL ACCOUNT; INVESTMENTS...................................................................17
SECTION 8 FEES AND EXPENSES.....................................................................................19
SECTION 9 REPRESENTATIONS AND WARRANTIES OF THE LENDER COLLATERAL AGENT.........................................20
SECTION 10 RESIGNATION BY AND REMOVAL OF THE LENDER COLLATERAL AGENT; SUCCESSOR LENDER COLLATERAL AGENT.........20
SECTION 11 INDEMNITY............................................................................................21
SECTION 12 LIMITATIONS OF LIABILITY.............................................................................21
SECTION 13 TERM OF AGREEMENT....................................................................................23
SECTION 14 NOTICES..............................................................................................23
SECTION 15 GOVERNING LAW; VENUE; CONSENT TO JURISDICTION........................................................24
SECTION 16 ASSIGNMENT...........................................................................................24
SECTION 17 COUNTERPARTS.........................................................................................24
SECTION 18 HEADINGS.............................................................................................24
i
<PAGE>
TABLE OF CONTENTS
(continued)
SECTION 19 THIRD PARTY BENEFICIARIES............................................................................24
SECTION 20 CERTAIN REMEDIES.....................................................................................24
SECTION 21 LIMITED LIABILITY OF LENDER COLLATERAL AGENT.........................................................26
SECTION 22 SUBORDINATION........................................................................................26
SECTION 23 AMENDMENTS...........................................................................................27
</TABLE>
ii
<PAGE>
SECURITY AND COLLATERAL AGENT AGREEMENT
SECURITY AND COLLATERAL AGENT AGREEMENT dated as of October 14, 1999
among CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as administrative agent for
the Lenders (in such capacity, the "AGENT"), BANKERS TRUST COMPANY, a New York
banking corporation (including any successor thereto, the "LENDER COLLATERAL
AGENT"), AFS FUNDING CORP., a Nevada corporation (the "BORROWER"), and
AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation ("ACFS").
W I T N E S S E T H :
WHEREAS, the Borrower has sold and contemplates selling, from time to
time, pools of receivables to various trusts which have issued or may issue
various series of notes or certificates (each a "SERIES") which will be repaid
from the proceeds of, or represent an interest in, such pools of receivables;
WHEREAS, a spread account has been, and it is contemplated that in
accordance with the terms of each future Series, shall be, established into
which the Borrower and/or AFS Funding Trust, a Delaware business trust which is
owned by the Borrower (the "SPREAD ACCOUNT DEPOSITOR") has deposited, or shall
be obligated to deposit, certain moneys on or about the closing date for each
Series (each an "INITIAL SPREAD ACCOUNT DEPOSIT", and collectively, the "INITIAL
SPREAD ACCOUNT DEPOSITS");
WHEREAS, in order to reduce the amount which the Spread Account
Depositor is obligated to advance as an Initial Spread Account Deposit with
respect to certain future Series, the Borrower intends to deposit certain moneys
on or about the closing date for each such Series (each a "RCCA DEPOSIT", and
collectively, the "RCCA DEPOSITS") in a replacement cash collateral account
(each, an "RCCA", and collectively, the "RCCAS") to provide credit support to
FSA (as defined herein) in connection with the insurance policies it has issued
and will issue with respect to the Series;
WHEREAS, in order to fund the RCCAs, the Borrower has requested that
the Lenders establish a revolving line of credit to the Borrower providing for
Borrowings of up to $225,000,000 in the aggregate at any time outstanding;
WHEREAS, upon the terms and conditions contained in the Credit
Agreement (as hereinafter defined) and the other Transaction Agreements, the
Lenders are willing to provide such a line of credit to the Borrower; and
WHEREAS, ACFS will service each Series.
NOW, THEREFORE, ACFS, the Borrower, the Lender Collateral Agent and the
Agent, intending to be legally bound, hereby agree as follows:
Section 1 DEFINITIONS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below and the following
terms which are defined in the
<PAGE>
Uniform Commercial Code in effect in the State of New York from time to time
are used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments, Inventory and Proceeds.
Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Credit Agreement.
"ACCRUAL PERIOD" shall mean, with respect to any
Distribution Date, the period from and including the previous Distribution
Date (or, in the case of the first Distribution Date, from and including the
Closing Date) through and including the day preceding such Distribution Date.
"ACFS" has the meaning specified in the PREAMBLE.
"ADVERSE CLAIM" has the meaning set forth in Section
8-102(a)(1) of Revised Article 8.
"AGENT" has the meaning specified in the PREAMBLE.
"AGREEMENT" means this Security and Collateral Agent
Agreement, as it may be amended, supplemented or otherwise modified from time
to time.
"AVERAGE DAILY FUNDED PERCENTAGE" means, with respect to
any Distribution Date, the average of the Funded Percentages with respect to
each day in the Accrual Period ending on such Distribution Date.
"BORROWER" has the meaning specified in the PREAMBLE.
"BORROWER ACCOUNT COLLATERAL" has the meaning set forth in
Section 3.
"BORROWER AGREEMENTS" has the meaning set forth in Section 4.
"BORROWER COLLATERAL" has the meaning set forth in Section 3.
"CAPPED EXPENSES" means, at any time, costs and expenses
due at such time (if any) to the Lender Collateral Agent under the
Transaction Documents not in excess of $20,000 with respect to any
Distribution Date.
"CERTIFICATED SECURITY" has the meaning set forth in
Section 8-102(a)(4) of Revised Article 8.
"CLEARING CORPORATION" has the meaning set forth in Section
8-102(a)(5) of Revised Article 8.
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"CLEARING CORPORATION SECURITY" means a "Security" (as
defined in Section 8-102(a)(15) of Revised Article 8) that is in the physical
possession of, or registered in the name of, a Clearing Corporation or its
nominee.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 7.
"CONTROL": with respect to any Federal Book Entry Security,
the LENDER COLLATERAL AGENT shall have obtained control if:
(i) the Lender Collateral Agent is a participant in the book
entry system maintained by the Federal Reserve Bank that is acting as
fiscal agent for the issuer of such Federal Book Entry Security, and
such Federal Reserve Bank has indicated by book entry that such Federal
Book Entry Security has been credited to the Lender Collateral Agent's
securities account in such book entry system; or
(ii) the Lender Collateral Agent is registered solely in its
name on the records of a Securities Intermediary as the person having a
Security Entitlement in respect of such Federal Book Entry Security
against such Securities Intermediary; and (b) the Securities
Intermediary is a participant in the book entry system maintained by
the Federal Reserve Bank that is acting as fiscal agent for the issuer
of such Federal Book Entry Security; and (c) such Federal Reserve Bank
has indicated by book entry that such Federal Book Entry Security has
been credited to the Securities Intermediary's securities account in
such book entry system.
"CREDIT AGREEMENT" means the Credit Agreement, dated as of
October 14, 1999, among the Borrower, the Contingent Obligors, each
Noncommitted Lender and Committed Lender party thereto, the Lender Collateral
Agent and the Agent, as amended, extended or otherwise modified from time to
time.
"DELIVERY": when used with respect to Borrower Account
Collateral, "Delivery" means:
(i) with respect to Physical Property, transfer thereof to the
Lender Collateral Agent or its nominee or custodian by physical
delivery to the Lender Collateral Agent or its nominee or custodian
endorsed to, or registered in the name of, the Lender Collateral Agent
or its nominee or custodian or endorsed in blank;
(ii) with respect to a Certificated Security that will, upon
compliance with the following procedures, be held by a person located
in a Revised Article 8 Jurisdiction, transfer of such Certificated
Security to the Lender Collateral Agent or its nominee or custodian by
physical delivery to the Lender Collateral Agent or its nominee or
custodian, endorsed to, or registered in the name of, the Lender
Collateral Agent or its nominee or custodian or endorsed in blank; and
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(iii) with respect to any such Borrower Account Collateral
that constitutes an Uncertificated Security (including any investments
in money market mutual funds, but excluding any Federal Book Entry
Security) and where the issuer thereof is organized in a Revised
Article 8 Jurisdiction, (A) registration of the Lender Collateral Agent
as the registered owner by the issuer, or (B) satisfaction of the
requirements for obtaining "control" pursuant to Section 8-106(c)(2) of
Revised Article 8.
"DESIGNATED SERIES AMOUNT AVAILABLE" means, with respect to
any Distribution Date and any Designated Series, the sum of (a) the
Designated Series Investment Earnings for such Designated Series for such
Distribution Date, (b) the Designated Series Spread Account Principal Release
for such Designated Series for such Distribution Date and (c) the Designated
Series Premium Disbursement.
"DESIGNATED SERIES INVESTMENT EARNINGS" means, with respect
to any Distribution Date and any Designated Series, any investment income
earned on amounts on deposit in the related Designated Series RCCA since the
prior Distribution Date (or the Closing Date in the case of the first
Distribution Date).
"DESIGNATED SERIES PREMIUM DISBURSEMENT" means, with
respect to any Distribution Date and any Designated Series, any amount
distributed pursuant to the related Designated Series Transaction Documents
in respect of Facility Fees relating to the Borrowings used to fund the RCCA
for such Series.
"DESIGNATED SERIES SPREAD ACCOUNT PRINCIPAL RELEASE" means,
with respect to any Distribution Date and any Designated Series, any amounts
other than Designated Series Investment Earnings paid or payable to the
Borrower from amounts on deposit in the related Designated Series Spread
Account or RCCA since the prior Distribution Date (or the Closing Date in the
case of the first Distribution Date).
"ELIGIBLE ACCOUNT" means (i) a segregated trust account
maintained with the Lender Collateral Agent or (ii) a segregated direct
deposit account maintained with a depository institution or trust company
organized under the laws of the United States of America, or any of the
States thereof, or the District of Columbia, having a certificate of deposit,
short term deposit or commercial paper rating of at least A-1 by Standard &
Poor's and P-1 by Moody's. In either case, such depository institution or
trust company shall have been approved by the Agent, acting in its
discretion, by written notice to ACFS.
"ENTITLEMENT ORDER" has the meaning set forth in Section
8-102(a)(8) of Revised Article 8.
"FEDERAL BOOK ENTRY SECURITY" means an obligation (i)
issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or
the Federal National Mortgage Association, or any other direct obligation of,
or obligation fully guaranteed as to timely payment
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or principal and interest by, the United States of America, that is a
book-entry security held through the Federal Reserve System pursuant to
Federal book entry regulations, and (ii) the perfection of a security
interest in which is governed pursuant to federal regulations by Revised
Article 8.
"FINANCIAL ASSET" has the meaning set forth in Section
8-102(a)(9) of Revised Article 8.
"FUNDED PERCENTAGE" means, with respect to any day, the
percentage equivalent of a fraction, the numerator of which is the aggregate
outstanding principal amount on deposit in all RCCAs and the denominator of
which is the aggregate outstanding principal amount of all Advances on such
day.
"INCREASED COSTS" means collectively, any increased cost,
loss or liability owing to the Agent and/or any other Affected Party under
Sections 2.11, 2.12 and 2.14 of the Credit Agreement.
"INDEMNITY AMOUNTS" means, collectively, all indemnity
obligations and other amounts owing to the Agent, any Lender and/or any other
Indemnified Party under Section 8.04 of the Credit Agreement (to the extent
not paid by the Borrower).
"INITIAL SPREAD ACCOUNT DEPOSIT" has the meaning set forth
in the recitals.
"INSTRUMENTS" has the meaning set forth in Section
9-105(l)(i) of Revised Article 8.
"INVESTMENT PROPERTY" has the meaning set forth in Section
9-115(1)(f) of Revised Article 8.
"LENDER COLLATERAL AGENT" has the meaning specified in the
PREAMBLE.
"NEGATIVE CARRY" means, with respect to any Distribution
Date, the excess if any, of (i) the product of (A) the cost of funds with
respect to all Advances accrued during the Accrual Period ending on such
Distribution Date, i.e., (x) with respect to Base Rate Advances, the Federal
Funds Rate, (y) with respect to Eurodollar Advances, LIBOR and (z) with
respect to Commercial Paper Rate Advances, the cost of obtaining funds in the
commercial paper market to fund such advances, and (B) the Average Daily
Funded Percentage with respect to such Distribution Date over (ii) all
Designated Series Investment Earnings with respect to such Distribution Date
and with respect to all Designated Series.
"NONALLOCATED SERIES DISTRIBUTIONS" means, with respect to
any Distribution Date, (i) all amounts paid or payable to the Borrower since
the prior Distribution Date (or the Closing Date in the case of the first
Distribution Date) with respect to all Series other than Designated
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Series as to which any Designated Series Borrowing is outstanding, including,
without limitation, any investment income earned on amounts on deposit in the
related Spread Accounts and RCCAs during such period, amounts released from
such Spread Accounts and RCCAs during such period, fees or other remuneration
payable to the Borrower pursuant to the Borrower Agreements relating to such
Series, and all property and monies deliverable to the Borrower upon
termination of any such Series and (ii) all amounts (other than Designated
Series Amounts Available) paid or payable to the Borrower since the prior
Distribution Date (or the Closing Date in the case of the first Distribution
Date) with respect to Designated Series as to which any Designated Series
Borrowing is outstanding, including, without limitation, fees or other
remuneration payable to the Borrower pursuant to the Borrower Agreements
relating to such Series, and all property and monies deliverable to the
Borrower upon termination of any such Series.
"NONALLOCATED AMOUNT AVAILABLE" means, with respect to any
Distribution Date, the sum of (a) Nonallocated Series Distributions and (b) all
Designated Series Amounts Available to be treated as a part of Nonallocated
Amount Available pursuant to Section 6(a).
"OBLIGATIONS" means all obligations (monetary or otherwise)
of the Borrower to the Lenders, the Lender Collateral Agent, the Agent or any
other Affected Party arising under or in connection with this Agreement, the
Credit Agreement and each other Transaction Document.
"PHYSICAL PROPERTY" means personal property constituting
Instruments, including bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that are susceptible of
physical delivery.
"RCCA" has the meaning set forth in the recitals.
"RCCA ACCOUNT COLLATERAL" means all of the following:
(1) Each RCCA established pursuant to the
RCCA Agreement and all funds held in such RCCA and
all certificates and instruments, if any, from time
to time representing or evidencing such RCCA or such
funds,
(2) all investments from time to time of
amounts in each RCCA established pursuant to the RCCA
Agreement, and all certificates and instruments, if
any, from time to time representing or evidencing
such investments,
(3) all notes, certificates of deposit and
other instruments from time to time delivered to or
otherwise possessed by the RCCA Agent or any Secured
Party or any assignee or agent on behalf of the RCCA
Agent or any Secured Party in substitution for or in
addition to any of the then
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existing RCCA Account Collateral, and
(4) all interest, dividends, cash,
instruments and other property from time to time
received, receivable or otherwise distributed in
respect of or in exchange for any and all of the then
existing RCCA Account Collateral.
"RCCA DEPOSIT" has the meaning set forth in the recitals.
"REVISED ARTICLE 8" means UCC, Revised Article 8,
Investment Securities (with conforming and miscellaneous amendments to
Articles 1, 3, 4, 5, 9 and 10), 1994 Official Text, as adopted by the
American Law Institute and the National Conference of Commissioners on
Uniform State Laws. Unless the context requires otherwise, "Revised Article
8" means such version in the form in which it is adopted in the applicable
jurisdiction.
"REVISED ARTICLE 8 JURISDICTION" means a jurisdiction which
has adopted Revised Article 8.
"SECURED PARTIES" means, collectively, the Agent, each
Lender, the LENDER COLLATERAL AGENT, each other Affected Party and their
respective successors and assigns.
"SECURITIES ACCOUNT" has the meaning set forth in Section
8-501(a) of Revised Article 8.
"SECURITY ENTITLEMENT" has the meaning set forth in Section
8-102(a)(17) of Revised Article 8.
"SECURITIES INTERMEDIARY" has the meaning set forth in
Section 8-102(a)(14) of Revised Article 8.
"SERIES" has the meaning set forth in the recitals.
"UCC" means the Uniform Commercial Code as in effect in
each relevant jurisdiction.
"UNCERTIFICATED SECURITY" has the meaning set forth in
Section 8-102(a)(18) of Revised Article 8.
Section 2 APPOINTMENT OF LENDER COLLATERAL AGENT. Subject
to the terms and conditions hereof, the Agent, on behalf of the Lenders and
other Secured Parties, hereby appoints Bankers Trust Company, as Lender
Collateral Agent hereunder, and Bankers Trust Company hereby accepts such
appointment.
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Section 3 BORROWER'S GRANT OF SECURITY INTEREST. Subject
only to the security interest of the collateral agent specified in the Spread
Account Agreement for the benefit of the Designated Series Insurers and the
related security holders, as more specifically set forth in the Subordination
Agreement, as security for the prompt payment or performance in full when
due, whether at stated maturity, by acceleration or otherwise, of all
Obligations (including, without limitation, Advances, interest and other
amounts at any time owing under the Credit Agreement), the Borrower hereby
assigns and pledges to the Lender Collateral Agent, for the benefit of the
Secured Parties, and grants to the Lender Collateral Agent, for the benefit
of the Secured Parties, a perfected security interest in and lien upon, all
of the Borrower's right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Borrower now has or
hereafter acquires an interest and wherever the same may be located
(collectively, the "BORROWER COLLATERAL"):
(a) the beneficial interest in the Spread Account
Depositor represented by the Class A Certificate
issued pursuant to the Trust Agreement;
(b) all rights of the Borrower to profits, distributions
and proceeds from the beneficial interest described
in (a);
(c) all of the following (the "BORROWER ACCOUNT
COLLATERAL"):
(1) the Collateral Account and all funds
held in the Collateral Account and all certificates
and instruments, if any, from time to time
representing or evidencing the Collateral Account or
such funds,
(2) all investments from time to time of
amounts in the Collateral Account, and all
certificates and instruments, if any, from time to
time representing or evidencing such investments,
(3) all Clearing Corporation Securities,
Certificated Securities, Uncertificated Securities,
Federal Book-Entry Securities, Security Entitlements,
Investment Property, notes, certificates of deposit
and other instruments from time to time delivered to
or otherwise possessed by the Lender Collateral
Agent or any Secured Party or any assignee, agent or
Securities Intermediary on behalf of the Lender
Collateral Agent or any Secured Party in substitution
for or in addition to any of the then existing
Borrower Account Collateral, and
(4) all interest, dividends, cash,
instruments and other property from time to time
received, receivable or otherwise distributed in
respect of or in exchange for any and all of the then
existing Borrower Account Collateral;
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(d) all additional property that may from time to time
hereafter be granted and pledged by the Borrower or
by anyone on its behalf under this Agreement,
including the deposit with the Lender Collateral
Agent of additional moneys by the Borrower;
(e) all Security Accounts, Accounts, all Chattel Paper,
all Documents, all Equipment, all General
Intangibles, all Instruments and all Inventory of the
Borrower;
(f) the RCCA Account Collateral;
(g) all Proceeds, accessions, substitutions, rents and
profits of any and all of the foregoing Borrower
Collateral (including proceeds that constitute
property of the types described in PARAGRAPHS (a)
through (f) above) and, to the extent not otherwise
included, all payments under insurance (whether or
not the Lender Collateral Agent or a Secured Party or
any assignee or agent on behalf of the Lender
Collateral Agent or a Secured Party is the loss payee
thereof) or any indemnity, warranty or guaranty
payable by reason of loss or damage to or otherwise
with respect to any of the foregoing Borrower
Collateral.
Section 4 BORROWER REMAINS LIABLE. Notwithstanding anything
in this Agreement, (a) except to the extent of ACFS's duties under the Credit
Agreement and this Agreement, the Borrower shall remain liable under the RCCA
Agreement and the Series Transaction Documents (the "BORROWER AGREEMENTS") to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by a Secured Party or
the Lender Collateral Agent of any of its rights under this Agreement or the
Credit Agreement shall not release the Borrower or ACFS from any of their
respective duties or obligations under the Borrower Agreements or other
agreements included in the Borrower Collateral, (c) the Agent, the Secured
Parties and the Lender Collateral Agent shall not have any obligation or
liability under the Borrower Agreements or other agreements included in the
Borrower Collateral by reason of this Agreement or the Credit Agreement, and
(d) neither the Agent, the Lender Collateral Agent nor any of the Secured
Parties shall be obligated to perform any of the obligations or duties of the
Borrower or ACFS under the Borrower Agreements or other agreements included
in the Borrower Collateral or to take any action to collect or enforce any
claim for payment assigned under this Agreement.
Section 5 COVENANTS OF ACFS REGARDING THE COLLATERAL.
(a) OFFICES AND RECORDS. ACFS shall cause the Borrower to keep its
chief place of business and chief executive offices and the office where it
keeps its records at the location specified in SECTION 4.01 of the Credit
Agreement or, upon 30 days prior written notice to the Agent and the Lender
Collateral Agent, at such other location in a jurisdiction where all action
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required by SECTION 5(d) shall have been taken with respect to the Borrower
Collateral. ACFS will permit, and will cause the Borrower to permit,
representatives of the Agent and the Lender Collateral Agent at any time and
from time to time during normal business hours (i) to inspect and make copies
of and abstracts from such records, and (ii) to visit the properties of the
Borrower or ACFS utilized in connection with the servicing of the Series for
the purpose of examining such records, and to discuss matters relating to the
Series or the Borrower's or ACFS' performance under this Agreement and the
other Transaction Documents with any officer or employee of the Borrower or
ACFS having knowledge of such matters, PROVIDED that the Person seeking such
information has given the Borrower or ACFS prior written notice of its intent
to inspect or visit and PROVIDED, FURTHER that no such Person shall so
inspect or visit the Borrower or ACFS more frequently than once per quarter
unless a Facility Maturity Event has occurred and is continuing. ACFS agrees
to render, and to cause the Borrower to render, to the Agent and the Lender
Collateral Agent such clerical and other assistance as may be reasonably
requested with regard to the foregoing. ACFS shall cause the Borrower not to
change its name, identity or corporate structure to such an extent that any
financing statement filed by the Lender Collateral Agent in connection with
this Agreement would become seriously misleading, unless it shall have given
the Lender Collateral Agent and the Agent at least 30 days' prior written
notice of such change.
(b) PERFORMANCE OF BORROWER AGREEMENTS. ACFS shall cause the
Borrower to (i) perform and observe all the terms and provisions of the
Borrower Agreements to be performed or observed by it, maintain the Borrower
Agreements in full force and effect, enforce the Borrower Agreements in
accordance with their terms and take all such action to such end as may be
from time to time requested by the Agent and (ii) upon request of the Agent,
make to any other party to the BORROWER AGREEMENTS such demands and requests
for information and reports or for action as the Borrower is entitled to make
under the Borrower Agreements.
(c) NOTICE OF MATERIAL ADVERSE CLAIM. ACFS shall advise, and shall
cause the Borrower to advise, the Agent and the Lender Collateral Agent
promptly, in writing and in reasonable detail, (i) of any material Lien,
other than a Permitted Lien, known to it made or asserted against any of the
Borrower Collateral, and (ii) of the occurrence of any event which would have
a material adverse effect on the aggregate value of the Borrower Collateral
or on the assignments and security interests granted by the Borrower in this
Agreement.
(d) Further Assurances; Financing Statements.
(1) ACFS agrees that at any time and from
time to time, at its expense, it shall promptly
execute and deliver, or cause the Borrower to execute
and deliver, all further instruments and documents,
and take all reasonable further action, that may be
necessary or desirable or required by applicable law
or that the Lender Collateral Agent or the Agent may
request to perfect and protect the assignments and
security interests granted or purported to be granted
by this Agreement or to enable the
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Lender Collateral Agent or any of the Secured Parties
to exercise and enforce its rights and remedies under
this Agreement with respect to any Borrower
Collateral. Without limiting the generality of the
foregoing, ACFS shall cause the Borrower to execute
and file such financing or continuation statements,
or amendments thereto, and such other instruments or
notices as may be necessary or desirable or required
by applicable law or that the Lender Collateral Agent
or the Agent may reasonably request to protect and
preserve the assignments and security interests
granted by this Agreement. On the Closing Date, ACFS
will cause the Borrower to deliver to Bank One, N.A.
all certificates representing a beneficial interest
in the Spread Account Depositor together with stock
powers executed in blank.
(2) The Borrower and each Secured Party
hereby severally authorize the Lender Collateral
Agent, upon receipt of written direction from the
Agent, to execute for filing by the Agent one or more
financing or continuation statements, and amendments
thereto, relating to all or any part of the Borrower
Collateral without the signature of the Borrower or
the Secured Parties where permitted by law. A carbon,
photographic or other reproduction of this Agreement
or any financing statement covering the Borrower
Collateral or any part thereof shall be sufficient as
a financing statement where permitted by law. The
Agent will promptly send to the Borrower any
financing or continuation statements thereto which it
files without the signature of the Borrower and will
promptly send to each Secured Party and the Borrower,
as the case may be, any financing or continuation
statements thereto which it files without the
signature of the Secured Parties except, in the case
of filings of copies of this Agreement as financing
statements, the Agent will promptly send the Borrower
and each Secured Party, as the case may be, the
filing or recordation information with respect
thereto.
(3) ACFS shall furnish, and shall cause the
Borrower to furnish, to the Lender Collateral Agent
and the Agent from time to time such statements and
schedules further identifying and describing the
Borrower Collateral and such other reports in
connection with the Borrower Collateral as the Agent
may reasonably request, all in reasonable detail.
(e) OPINIONS AS TO COLLATERAL. Not more than 90 days nor less than
30 days prior to (i) each May 1, commencing May 1, 2000, during the term of
this Agreement and (ii) each date on which the Borrower proposes to take any
action contemplated by Section 6.05 of the RCCA Agreement the Borrower shall,
at its own cost and expense, furnish to the Agent and the Lender Collateral
Agent an opinion of counsel either (a) stating that, in the opinion of such
counsel, such
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action has been taken with respect to the execution and filing of any
financing statements and continuation statements and other actions as are
necessary to perfect, maintain and protect the lien and security interest of
the Lender Collateral Agent (and the priority thereof), with respect to the
Borrower Collateral against all creditors of and purchasers from the Borrower
and reciting the details of such action, or (b) stating that, in the opinion
of such counsel, no such action is necessary to maintain such perfected lien
and security interest. Such opinion of counsel shall further describe each
execution and filing of any financing statements and continuation statements
and such other actions as will, in the opinion of such counsel, be required
to perfect, maintain and protect the lien and security interest of the Lender
Collateral Agent with respect to the Borrower Collateral against all
creditors of and purchasers from the Borrower for a period, specified in such
opinion, continuing until a date not earlier than eighteen months from the
date of such opinion.
(f) NON-INTERFERENCE. The Borrower shall not (i) waive or alter any
of its rights under the Borrower Collateral (or any agreement or instrument
relating thereto) without the prior written consent of the Agent; or (ii)
fail to pay any tax, assessment, charge or fee levied or assessed against the
Borrower Collateral, or to defend any action, if such failure to pay or
defend may adversely affect the priority or enforceability of the Borrower's
right, title or interest in and to the Borrower Collateral or the Lender
Collateral Agent's lien on, and security interest in, the Borrower
Collateral; or (iii) take any action, or fail to take any action, if such
action or failure to take action, will interfere with the enforcement of any
rights hereunder.
Section 6 DISTRIBUTIONS.
(a) On each Distribution Date, the Lender Collateral Agent shall
distribute, in accordance with written instructions from ACFS delivered to
the Lender Collateral Agent at least one (1) Business Day prior to such
Distribution Date:
(i) from the Designated Series Premium Disbursement, if any,
for such Distribution Date for each Designated Series as to which any
Designated Series Borrowing remains outstanding, (A) FIRST, to the
Agent, on behalf of itself and the Liquidity Lenders and the Conduit
Lenders, the Liquidity/Conduit Lenders Facility Fees accrued with
respect to the related Designated Series Borrowing during the Accrual
Period with respect to such Distribution Date (and any
Liquidity/Conduit Lenders Facility Fees accrued with respect to the
related Designated Series Borrowing with respect to any prior Accrual
Period to the extent not paid pursuant to this Section 6(a)(i)(A) on a
prior Distribution Date), (B) SECOND, to the Agent, on behalf of itself
and the Lenders, the Credit Support Providers Facility Fees and the
Non-Contingent Lenders Facility Fees accrued with respect to the
related Designated Series Borrowing during the Accrual Period with
respect to such Distribution Date (and any Credit Support Providers
Facility Fees and Non-Contingent Lenders Facility Fees accrued with
respect to the related Designated Series Borrowing with respect to any
prior Accrual Period to the extent not paid pursuant to this Section
6(a)(i)(B) on a prior Distribution Date) and
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(C) THIRD, to the extent of any remaining Designated Series Premium
Disbursement, to be treated as part of the Nonallocated Amount
Available and applied pursuant to Section 6(b) or (c);
(ii) from the Designated Series Investment Earnings, if any,
for such Distribution Date for each Designated Series as to which any
Designated Series Borrowing remains outstanding, (A) FIRST, to the
Agent, on behalf of itself and the Lenders, the interest accrued with
respect to the related Designated Series Borrowing during the Accrual
Period with respect to such Distribution Date (and any interest accrued
with respect to the related Designated Series Borrowing with respect to
any prior Accrual Period to the extent not paid pursuant to this
Section 6(a)(ii) on a prior Distribution Date) and (B) SECOND, to the
extent of any remaining Designated Series Investment Earnings, to be
treated as part of the Nonallocated Amount Available and applied
pursuant to Section 6(b) or (c); and
(iii) from the Designated Series Spread Account Principal
Release, if any, for such Distribution Date for each Designated Series
as to which any Designated Series Borrowing remains outstanding, (A)
FIRST, to the Agent, on behalf of itself and the Lenders, to reduce
such Designated Series Borrowing by the amount of such Designated
Series Spread Account Principal Release with respect to such Designated
Series with respect to such Distribution Date and (B) SECOND, to the
extent of any remaining Designated Series Spread Account Principal
Release, to be treated as part of the Nonallocated Amount Available and
applied pursuant to Section 6(b) or (c).
(b) On each Distribution Date prior to the Facility Maturity Date or
an Event of Early Amortization, the Lender Collateral Agent shall distribute,
from the amounts available in the Collateral Account, in accordance with
written instructions from ACFS delivered to the Lender Collateral Agent at
least one (1) Business Day prior to such Distribution Date, the Nonallocated
Amount Available, if any, for such Distribution Date in the following order
of priority:
(i) FIRST, to the extent not previously paid by ACFS or
otherwise by or on behalf of the Borrower to the Lender Collateral
Agent, the Capped Expenses;
(ii) SECOND, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(i)(A), to the Agent, on behalf of itself and
the Liquidity Lender and the Conduit Lenders, the Liquidity/Conduit
Lenders Facility Fees (as defined in the Fee Letter) accrued with
respect to all Designated Series Borrowings during the Accrual Period
with respect to such Distribution Date (and any Liquidity/Conduit
Lenders Facility Fees accrued with respect to all Designated Series
Borrowings with respect to any prior Accrual Period to the extent not
paid pursuant to Section 6(a)(i)(A) or this Section 6(b)(ii) on a prior
Distribution Date);
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(iii) THIRD, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(ii), to the Agent, on behalf of itself and the
Liquidity Lenders and Conduit Lenders, the interest (other than
Negative Carry) accrued with respect to all Designated Series
Borrowings held by such Lenders during the Accrual Period with respect
to such Distribution Date (and any interest (other than Negative Carry)
accrued with respect to all Designated Series Borrowings held by such
Lenders with respect to any prior Accrual Period to the extent not paid
pursuant to Section 6(a)(ii) or this Section 6(b)(iii) on a prior
Distribution Date) , PROVIDED that for purposes of determining the
interest payable pursuant to this clause THIRD only, interest accrued
on Base Rate Advances shall be deemed to have accrued at the Federal
Funds Rate rather than the Alternate Base Rate and interest accrued on
Advances at the Default Rate shall be deemed to have accrued at (x)
with respect to Base Rate Advances, the Federal Funds Rate, (y) with
respect to Eurodollar Rate Advances, LIBOR, and (z) with respect to
Commercial Paper Rate Advances, the cost of obtaining funds in the
commercial paper market to fund such Advances;
(iv) FOURTH, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(i)(B), to the Agent, on behalf of itself and
the Lenders, the Credit Support Provider Facility Fees and
Non-Contingent Lenders Facility Fees (each as defined in the Fee
Letter) accrued with respect to all Designated Series Borrowings during
the Accrual Period with respect to such Distribution Date (and any
Credit Support Provider Facility Fees and Non-Contingent Lenders
Facility Fees accrued with respect to all Designated Series Borrowings
with respect to any prior Accrual Period to the extent not paid
pursuant to Section 6(a)(i)(B) or this Section 6(b)(iv) on a prior
Distribution Date);
(v) FIFTH, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(ii) or 6(b)(iii), to the Agent, on behalf of
itself and the Lenders, the interest (other than Negative Carry)
accrued with respect to all Designated Series Borrowings during the
Accrual Period with respect to such Distribution Date (and any interest
(other than Negative Carry) accrued with respect to all Designated
Series Borrowings with respect to any prior Accrual Period to the
extent not paid pursuant to Section 6(a)(ii), Section 6(b)(iii) or this
Section 6(b)(v) on a prior Distribution Date);
(vi) SIXTH, to the Agent, on behalf of itself and the Lenders,
the Commitment Fees accrued during the Accrual Period with respect to
such Distribution Date (and any Commitment Fees accrued with respect to
any prior Accrual Period to the extent not paid pursuant to Section
6(b)(vi) on a prior Distribution Date);
(vii) SEVENTH, to the Agent, on behalf of the Lenders, with
respect to each Designated Series as to which the aggregate amount of
funds in the RCCA Account with respect to such Series is less than the
outstanding principal amount of the Designated Series Borrowing to fund
such RCCA Account, to reduce the principal amount of such Designated
Series by the amount of such deficiency;
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(viii) EIGHTH, to the Agent, on behalf of the Lenders, with
respect to each Designated Series as to which the entire outstanding
principal amount of any Designated Series Borrowing has not been repaid
in full on the related Designated Series Amortization Date, the amount
due with respect thereto pursuant to Section 2.05(d) of the Credit
Agreement;
(ix) NINTH, to the Agent, on behalf of itself and the Lenders,
any Negative Carry accrued with respect to all Designated Series
Borrowings during the Accrual Period with respect to such Distribution
Date (and any Negative Carry accrued with respect to all Designated
Series Borrowings with respect to any prior Accrual Period to the
extent not paid pursuant to Section 6(b)(x) on a prior Distribution
Date);
(x) TENTH, to the Agent, for the benefit of the Affected
Parties, any Increased Costs then due and owing, and, to the extent not
previously paid by or on behalf of the Borrower, to each Indemnified
Party, any Indemnity Amounts then due and owing to each such
Indemnified Party;
(xi) ELEVENTH, to the extent not previously paid pursuant to
clause FIRST above, to the Lender Collateral Agent, any costs and
expenses due to the Lender Collateral Agent under the Transaction
Documents; and
(xii) TWELFTH, to the Borrower, the remaining portion of the
Nonallocated Amount Available.
(c) On each Distribution Date on or after the Facility Maturity Date
or an Event of Early Amortization, the Lender Collateral Agent shall
distribute, from the amounts available in the Collateral Account, in
accordance with written instructions from ACFS (or if ACFS is no longer the
Servicer with respect to any Series, the Administrative Agent) delivered to
the Lender Collateral Agent at least one (1) Business Day prior to such
Distribution Date, or, if not delivered, upon the Agent's written direction,
the Nonallocated Amount Available, if any, for such Distribution Date in the
following order of priority:
(i) FIRST, to the extent not previously paid by ACFS or
otherwise by or on behalf of the Borrower to the Lender Collateral
Agent, the Capped Expenses and, to the extent not previously paid by
ACFS or otherwise by or on behalf of the Borrower to the Lender
Collateral Agent, any costs and expenses incurred by the Lender
Collateral Agent in foreclosing on the Borrower Collateral at the
direction of the Agent;
(ii) SECOND, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(i)(A), to the Agent, on behalf of itself and
the Liquidity Lender and the Conduit Lenders, the Liquidity/Conduit
Lenders Facility Fees (as defined in the Fee Letter) accrued with
respect to all Designated Series Borrowings during the Accrual Period
with respect to such Distribution Date (and any Liquidity/Conduit
Lenders
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Facility Fees accrued with respect to all Designated Series Borrowings
with respect to any prior Accrual Period to the extent not paid
pursuant to Section 6(a)(i)(A), Section 6(b)(ii) or this Section
6(c)(ii) on a prior Distribution Date);
(iii) THIRD, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(ii), to the Agent, on behalf of itself and the
Liquidity Lenders and Conduit Lenders, the interest (other than
Negative Carry) accrued with respect to all Designated Series
Borrowings held by such Lenders during the Accrual Period with respect
to such Distribution Date (and any interest (other than Negative Carry)
accrued with respect to all Designated Series Borrowings held by such
Lenders with respect to any prior Accrual Period to the extent not paid
pursuant to Section 6(a)(ii), Section 6(b)(iii) or this Section
6(c)(iii) on a prior Distribution Date) , PROVIDED that for purposes of
determining the interest payable pursuant to this clause THIRD only,
interest accrued on Base Rate Advances shall be deemed to have accrued
at the Federal Funds Rate rather than the Alternate Base Rate and
interest accrued on Advances at the Default Rate shall be deemed to
have accrued at(x) with respect to Base Rate Advances, the Federal
Funds Rate, (y) with respect to Eurodollar Rate Advances, LIBOR, and
(z) with respect to Commercial Paper Rate Advances, the cost of
obtaining funds in the commercial paper market to fund such Advances;
(iv) FOURTH, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(i)(B), to the Agent, on behalf of itself and
the Lenders, the Credit Support Provider Facility Fees and
Non-Contingent Lenders Facility Fees (each as defined in the Fee
Letter) accrued with respect to all Designated Series Borrowings during
the Accrual Period with respect to such Distribution Date (and any
Credit Support Provider Facility Fees and Non-Contingent Lenders
Facility Fees accrued with respect to all Designated Series Borrowings
with respect to any prior Accrual Period to the extent not paid
pursuant to Section 6(a)(i)(B), Section 6(b)(iv) or this Section
6(b)(iv) on a prior Distribution Date);
(v) FIFTH, to the extent not paid on such Distribution Date
pursuant to Section 6(a)(ii) or 6(b)(iii), to the Agent, on behalf of
itself and the Lenders, the interest (other than Negative Carry)
accrued with respect to all Designated Series Borrowings during the
Accrual Period with respect to such Distribution Date (and any interest
(other than Negative Carry) accrued with respect to all Designated
Series Borrowings with respect to any prior Accrual Period to the
extent not paid pursuant to Section 6(a)(ii), Section 6(b)(v), Section
6(c)(iii) or this Section 6(c)(v) on a prior Distribution Date);
(vi) SIXTH, to the Agent, on behalf of itself and the Lenders,
the Commitment Fees accrued during the Accrual Period with respect to
such Distribution Date (and any Commitment Fees accrued with respect to
any prior Accrual Period to the extent not paid pursuant to Section
6(b)(vi) or this Section 6(c)(vi) on a prior Distribution Date);
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(vii) SEVENTH, to the Agent, on behalf of the Lenders, the
principal amount of all outstanding Borrowings;
(viii) EIGHTH, to the Agent, on behalf of itself and the
Lenders, any Negative CarrY accrued with respect to all Designated
Series Borrowings during the Accrual Period with respect to such
Distribution Date (and any Negative Carry) accrued with respect to all
Designated Series Borrowings with respect to any prior Accrual Period
to the extent not paid pursuant to Section 6(b)(ix) or this Section
6(c)(ix) on a prior Distribution Date);
(ix) NINTH, to the Agent, for the benefit of the Affected
Parties, any Increased Costs then due and owing, and, to the extent not
previously paid by or on behalf of the Borrower, to each Indemnified
Party, any Indemnity Amounts then due and owing to each such
Indemnified Party;
(x) TENTH, to the extent not previously paid pursuant to
clause FIRST above, to the Lender Collateral Agent, any costs and
expenses due to the Lender Collateral Agent under the Transaction
Documents; and
(xi) ELEVENTH, to the Borrower, the remaining portion of the
Nonallocated Amount Available.
Section 7 THE COLLATERAL ACCOUNT; INVESTMENTS.
(a) On or prior to the Closing Date, the Borrower shall establish an
account (the "COLLATERAL ACCOUNT") in the name of the Lender Collateral Agent
for the benefit of the Secured Parties. The Collateral Account shall be an
Eligible Account which is a segregated non-interest bearing trust account
initially established with the Lender Collateral Agent. If at any time the
Collateral Account ceases to be an Eligible Account, the Agent may direct the
Lender Collateral Agent in writing to transfer such account to another
institution such that such account shall meet the requirements of an Eligible
Account. ACFS shall cause amounts to be deposited into the Collateral Account
as set forth in Section 5.01(y) of the Credit Agreement.
(b) All amounts held in the Collateral Account shall, to the extent
permitted by applicable laws, rules and regulations, be invested by the
Lender Collateral Agent, as directed by ACFS in writing (or, if ACFS fails to
provide such direction, amounts in the Collateral Account shall be invested
in investments described in CLAUSE (d) of the definition of Cash
Equivalents), in Cash Equivalents that mature not later than one Business Day
prior to the next succeeding Distribution Date. The amounts held in the
Collateral Account on the Business Day prior to each Distribution Date shall
be invested by the Lender Collateral Agent in overnight or next-day funds in
such Cash Equivalents reasonably available to the Lender Collateral Agent as
may be acceptable to ACFS (which shall initially be the Lender Collateral
Agent's Institutional Treasury Money Market Fund and, from time to time,
shall include such other proprietary Cash
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Equivalents of the Lender Collateral Agent) for the period of time from the
Business Day prior to the Distribution Date until such Distribution Date. All
income or other gains from investment of moneys on deposit in any such
account shall be deposited by the Lender Collateral Agent in the applicable
account immediately upon receipt. The taxpayer identification number
associated with the Collateral Account shall be that of the Borrower and the
Borrower shall report for Federal, state and local income tax purposes, the
income, if any, represented by the Collateral Account. If any amounts are
needed for disbursement from the Collateral Account and sufficient uninvested
funds are not available therein to make such disbursement, the Lender
Collateral Agent shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in such account to make such
disbursement upon the written direction of ACFS or, if ACFS shall fail to
give such direction, upon the written direction of the Agent. Any such
written direction shall certify that any such investment is authorized by
this SECTION 7. Investments in Cash Equivalents shall be made in the name of
the Lender Collateral Agent on behalf of the Secured Parties, and, except as
specifically required above, such investments shall not be sold or disposed
of prior to their maturity. Each and every investment of funds in any of the
Collateral Account shall be made in Cash Equivalents held by a financial
institution that is a Securities Intermediary in an account pursuant to an
agreement with such financial institution, governed by the law of any
jurisdiction which has adopted Revised Article 8, that requires such
financial institution to (A) credit such Cash Equivalents to a Securities
Account exclusively in the name of the Lender Collateral Agent, (B) comply
with Entitlement Orders pertaining to such account originated by the Lender
Collateral Agent without further consent of the Borrower, (C) not enter into
any agreement which grants "control" (as defined in Section 8-106 of Revised
Article 8) of such account (or any interest or property therein) to any
Person other than the Lender Collateral Agent, (D) subordinate any security
interest, banker's lien, right of setoff or other similar right which such
financial institution may have in such account to the interest of the Lender
Collateral Agent and (E) expressly treat each item of property as a Financial
Asset and such account as a Securities Account.
Subject to the other provisions hereof, the Lender Collateral Agent
shall have sole control over each such investment and the income thereon, and
any certificate or other instrument evidencing any such investment, if any,
shall be delivered directly to the Lender Collateral Agent or its agent,
together with each document of transfer, if any, necessary to transfer title
and a Security Entitlement free from any Adverse Claim to such investment to
the Lender Collateral Agent in a manner that complies with this SECTION 7.
All interest, dividends, gains upon sale and other income from, or earnings
on, investments of funds in the Collateral Account shall be deposited in the
Collateral Account and distributed pursuant to SECTION 6 hereof. If the
Lender Collateral Agent is given written instructions to invest funds in the
Collateral Account in investments other than investments of the type
described in CLAUSE (d) of the definition of "Cash Equivalents", the Person
giving such instructions agrees to assist the Lender Collateral Agent in
complying with the requirements herein with respect to such investments.
(c) With respect to the Borrower Account Collateral:
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(i) any Borrower Account Collateral that is held in deposit
accounts shall be held solely in the name of the Lender Collateral
Agent in accounts which satisfy clause (ii) of the definition of
Eligible Account; each such deposit account shall be subject to the
exclusive custody, dominion and control of the Lender Collateral Agent,
and the Lender Collateral Agent shall have sole signature authority
with respect thereto;
(ii) any Borrower Account Collateral that constitutes Physical
Property shall be delivered to the Lender Collateral Agent in
accordance with paragraph (i) of the definition of "Delivery" and shall
be held, pending maturity or disposition, solely by the Lender
Collateral Agent;
(iii) any Borrower Account Collateral that constitutes a
Certificated Security that will, upon compliance with the procedures
set forth in paragraph (ii) of the definition of "Delivery," be held by
a Person located in a Revised Article 8 Jurisdiction shall be delivered
to the Lender Collateral Agent in accordance with paragraph (ii) of the
definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Lender Collateral Agent;
(iv) any such Borrower Account Collateral that constitutes an
Uncertificated Security (including any investments in money market
mutual funds, but excluding any Federal Book Entry Security) and where
the issuer thereof is organized in a Revised Article 8 Jurisdiction,
shall be delivered to the Lender Collateral Agent in accordance with
paragraph (iii) of the definition of "Delivery" and shall be
maintained, pending maturity or disposition, through continued
registration of the Lender Collateral Agent's (or its nominee's)
ownership of such security; and
(v) with respect to any Borrower Account Collateral that
constitutes a Federal Book Entry Security, the Lender Collateral Agent
shall maintain and obtain Control over such property.
Effective upon Delivery of any Borrower Account Collateral in the form of
Physical Property, book-entry securities or uncertificated securities, the
Lender Collateral Agent shall be deemed to have represented that it has
purchased such Borrower Account Collateral for value, in good faith and
without actual notice of any adverse claim thereto.
(d) The Borrower will cause all proceeds of Borrower Collateral to be
deposited in the Collateral Account and will promptly deposit any amounts it
receives in respect thereof in the Collateral Account.
Section 8 FEES AND EXPENSES. ACFS covenants and agrees to
pay to the Lender Collateral Agent from time to time, and the Lender
Collateral Agent shall be entitled to, the fees and expenses agreed in
writing between ACFS and the Lender Collateral Agent, and will further pay or
reimburse the Lender Collateral Agent upon its request for all reasonable
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expenses, disbursements and advances incurred or made by the Lender
Collateral Agent in accordance with any of the provisions hereof or any other
documents executed in connection herewith (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and
of all persons not regularly in its employ). The obligations of ACFS under
this Section 8 to compensate the Lender Collateral Agent and to pay or
reimburse the Lender Collateral Agent for reasonable expenses, disbursements
and advances shall survive the satisfaction and discharge of this Agreement
or the earlier resignation or removal of the Lender Collateral Agent. When
the Lender Collateral Agent incurs expenses or renders services in connection
with proceedings under the Bankruptcy Code or any other applicable federal or
state bankruptcy, insolvency or other similar law, or in case of any other
comparable judicial proceedings relative to the Borrower, such expenses
(including the fees and expenses of its counsel and agents) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors rights
generally.
Section 9 REPRESENTATIONS AND WARRANTIES OF THE LENDER
COLLATERAL AGENT. The Lender Collateral Agent Lender Collateral Agent
represents and warrants as of the date hereof that:
(a) It is a banking corporation, validly existing and in good
standing under the laws of the State of New York;
(b) It has full power, authority and legal right to execute, deliver
and perform this Agreement and the Credit Agreement and has taken all
necessary action to authorize the execution, delivery and performance by it
of this Agreement and the Credit Agreement;
(c) The execution, delivery and performance by it of this Agreement
and the Credit Agreement do not violate any provision of its corporate
charter or by-laws;
(d) This Agreement and the Credit Agreement have been duly
authorized, executed and delivered by it and each constitutes its legal,
valid and binding agreement, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity.
Section 10 RESIGNATION BY AND REMOVAL OF THE LENDER
COLLATERAL AGENT; SUCCESSOR LENDER COLLATERAL AGENT.
(a) The Lender Collateral Agent may at any time resign and terminate
its obligations under this Agreement upon at least 60 days prior written
notice to the Agent and the Borrower. No resignation shall be effective until
a successor Lender Collateral Agent shall have been appointed and accepted
its appointment. Promptly after receipt of notice of the Lender Collateral
Agent's proposed resignation, the Agent shall appoint, by written instrument,
a successor collateral agent and notify the Borrower thereof. If a successor
collateral agent is not appointed in accordance with the foregoing
procedures, the Lender Collateral Agent may petition a court of
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competent jurisdiction to appoint a successor collateral agent. One (1)
original counterpart of such instrument of appointment shall be delivered to
each of the Agent, the Lender Collateral Agent, the Borrower and the
successor collateral agent.
(b) The Agent, upon at least 60 days written notice to the Lender
Collateral Agent (or, if such removal is for cause, such 60 day period may be
decreased to no less than three Business Days by the Agent in its sole
discretion), may remove and discharge the Lender Collateral Agent (or any
successor collateral agent thereafter appointed) from the performance of its
obligations under this Agreement. A copy of such notice shall be delivered to
each other party hereto. Promptly after the giving of notice of removal of
the Lender Collateral Agent, the Agent shall appoint, by written instrument,
a successor collateral agent and notify the Borrower thereof. One (1)
original counterpart of such instrument of appointment shall be delivered to
each of the Agent, the Lender Collateral Agent, the Borrower and the
successor collateral agent. No such removal shall become effective until all
outstanding amounts due and owing to the Lender Collateral Agent are paid in
full.
(c) In the event of any such resignation or removal, the Lender
Collateral Agent shall promptly transfer to the successor collateral agent,
as directed in writing by the Agent, all accounts, funds and investments
being administered under this Agreement and shall cooperate with the Agent,
the Borrower and the successor collateral agent to facilitate the continued
perfection and priority of the Lien granted for the benefit of the Secured
Parties in the Borrower Collateral.
Section 11 INDEMNITY. ACFS agrees to indemnify and hold
harmless the Lender Collateral Agent and its directors, officers, agents and
employees against any and all claims, damages, losses, liabilities or
expenses (including, but not limited to, reasonable attorneys' fees, court
costs and costs of investigation) of any kind or nature whatsoever arising
out of or in connection with this Agreement and the Transaction Documents
that may be imposed upon, incurred by or asserted against the Lender
Collateral Agent; PROVIDED, however, that this SECTION 11 shall not relieve
the Lender Collateral Agent from liability for its willful misconduct or
gross negligence, as conclusively determined by a court of competent
jurisdiction beyond all applicable appeals. The provisions of this SECTION 11
shall survive the resignation or removal of the Lender Collateral Agent or
any successor Lender Collateral Agent and the termination of this Agreement.
Section 12 LIMITATIONS OF LIABILITY.
(a) The Lender Collateral Agent shall not be liable to the Borrower,
ACFS, the Agent, any Lender, any other Secured Party or any other Person with
respect to any action taken or not taken by it in good faith in the
performance of its obligations under this Agreement. The obligations of the
Lender Collateral Agent shall be determined solely by the express provisions
of this Agreement. No representation, warranty, covenant, agreement,
obligation or duty of the
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Lender Collateral Agent shall be implied with respect to this Agreement or
the Lender Collateral Agent's services hereunder.
(b) The Lender Collateral Agent may conclusively rely, and shall be
fully protected in acting or refraining from acting, upon and need not verify
the accuracy of (i) any oral instructions from any persons the Lender
Collateral Agent believes to be authorized to give such instructions, who
shall only be, with respect to ACFS, the Borrower and the Agent, persons the
Lender Collateral Agent believes in good faith to be duly authorized officers
thereof, and (ii) any written instruction, notice, order, request, direction,
certificate, opinion or other instrument or document believed by the Lender
Collateral Agent to be genuine and to have been signed and presented by the
proper party or parties.
(c) The Lender Collateral Agent may consult with counsel nationally
recognized in the area of commercial transactions with regard to legal
questions arising out of or in connection with this Agreement, and the advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by the Lender
Collateral Agent in reasonable reliance, in good faith, and in accordance
therewith; PROVIDED, HOWEVER, that if the Agent gives instructions to the
Lender Collateral Agent or provides an opinion of counsel selected by them,
which in either case conflicts with any such advice or opinion of counsel,
then the Lender Collateral Agent shall follow such instructions of the Agent
(unless such instructions violate the express terms of this Agreement or
violate applicable law) or such opinion of counsel selected by the Agent, and
shall be fully protected in acting or refraining to act thereon.
(d) No provision of this Agreement shall require the Lender
Collateral Agent to expend or risk its own funds or otherwise incur financial
liability in the performance of its duties under this Agreement if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it is not assured to it.
(e) The Lender Collateral Agent may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees appointed with due care,
and shall not be responsible for any willful misconduct or negligence on the
part of any agent, attorney, custodian or nominee so appointed.
(f) Whenever in the administration of the provisions of this
Agreement the Lender Collateral Agent shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering any
action to be taken hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of gross
negligence or bad faith on the part of the Lender Collateral Agent, be deemed
to be conclusively proved and established by a certificate signed by an
officer of any of ACFS, the Borrower and the Agent, as the case may be, and
delivered to the Lender Collateral Agent and such certificate, in the absence
of gross negligence or bad faith on the part of the Lender Collateral Agent,
shall be full warrant
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to the Lender Collateral Agent for any action taken, suffered or omitted by
it under the provisions of this Agreement upon the faith thereof.
(g) The Lender Collateral Agent shall have no obligation to invest
and reinvest any cash held in the Collateral Account in the absence of timely
and specific written investment direction from ACFS or the Agent. In no event
shall the Lender Collateral Agent be liable for the selection of investments
or for investment losses incurred thereon. The Lender Collateral Agent shall
have no liability in respect of losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure of
ACFS or the Agent to provide timely written investment direction.
(h) Any corporation into which the Lender Collateral Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Lender
Collateral Agent shall be a party, or any corporation succeeding to the
business of the Lender Collateral Agent shall be the successor of the Lender
Collateral Agent hereunder without the execution or filing of any paper with
any party hereto or any further act on the part of any of the parties hereto
except where an instrument of transfer or assignment is required by law to
effect such succession, anything herein to the contrary notwithstanding.
(i) Notwithstanding anything herein or in the Transaction Documents
to the contrary, in no event shall the Lender Collateral Agent have any
obligation or liability in respect of the monitoring or maintenance of the
perfection of any security interest evidenced hereby or for the filing or
refiling or recording or rerecording of any financing or continuation
statements in respect of any such security interest.
(j) The Lender Collateral Agent shall not be deemed to have notice
of any Event of Early Amortization, Event of Early Termination or Event of
Default unless an Authorized Officer of the Lender Collateral Agent is
specifically notified in writing of such event by the Agent.
Section 13 TERM OF AGREEMENT. This Agreement shall be
terminated upon the final payment of all Obligations of the Borrower under
the Transaction Documents and the termination of any commitment of the
Lenders under the Transaction Documents.
Section 14 NOTICES. All demands, notices and
communications relating to this Agreement shall be in writing and shall be
deemed to have been duly given when received by the other party or parties at
the address shown in the Credit Agreement, whether by personal delivery,
express delivery or facsimile, or such other address as may hereafter be
furnished to the other party or parties by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on
the date delivered to or received at the premises of the addressee.
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Section 15 GOVERNING LAW; VENUE; CONSENT TO JURISDICTION.
(A) THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(B) VENUE FOR ANY ACTION BROUGHT UNDER THIS
AGREEMENT MAY BE IN ANY NEW YORK STATE COURT OR FEDERAL DISTRICT COURT
SITTING IN NEW YORK, NEW YORK. EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS
TO THE JURISDICTION OF SUCH COURT.
Section 16 ASSIGNMENT. Except as expressly permitted
herein, no party to this Agreement may assign its rights or delegate its
obligations under this Agreement without the express written consent of the
other parties.
Section 17 COUNTERPARTS. For the purpose of facilitating
the execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which shall be
deemed to be an original, and together shall constitute and be one and the
same instrument.
Section 18 HEADINGS. The section headings are not part of
this Agreement and shall not be used in its interpretation.
Section 19 THIRD PARTY BENEFICIARIES. It is hereby agreed
by the parties hereto that, the Lenders and the other Secured Parties are,
and are intended to be, third party beneficiaries under this Agreement.
Section 20 CERTAIN REMEDIES.
(a) The Lender Collateral Agent shall, at the written direction of
the Agent, proceed to protect and enforce its rights and the rights of the
Secured Parties by such appropriate proceedings as the Agent shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in any Transaction Document or in
and of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Lender Collateral
Agent by any Transaction Document or by law.
(b) In case there shall be pending, relative to the Borrower or any
other obligor upon the Advances or any Person having or claiming an ownership
interest in the Borrower Collateral, proceedings under the Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Borrower or its property or such
other obligor or Person, or in case of any
-24-
<PAGE>
other comparable judicial proceedings relative to the Borrower or other
obligor upon the Advances, or to the creditors of property of the Borrower or
such other obligor, the Lender Collateral Agent, irrespective of whether the
principal of any Advances shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Lender
Collateral Agent shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(1) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Advances
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Lender Collateral Agent
(including any claim for reimbursement of all expenses and liabilities
incurred, and all advances, if any, made, by the Lender Collateral
Agent and each predecessor Lender Collateral Agent, except as a result
of gross negligence, bad faith or willful misconduct) and of each of
the other Secured Parties allowed in such proceedings;
(2) unless prohibited by applicable law and regulations, to
vote (with the consent of the Agent) on behalf of the holders of the
Advances in any election of a trustee, a standby trustee or person
performing similar functions in any such proceedings;
(3) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Secured Parties on their
behalf; and
(4) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Lender Collateral Agent or the Secured Parties allowed in any judicial
proceedings relative to the Borrower, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Secured Parties to
make payments to the Lender Collateral Agent, and, in the event that the
Lender Collateral Agent and the Agent shall consent, to the making of
payments directly to such Secured Parties, to pay to the Lender Collateral
Agent such amounts as shall be sufficient to cover all reasonable expenses
and liabilities incurred, and all advances made, by the Lender Collateral
Agent and each predecessor Lender Collateral Agent except as a result of
gross negligence, bad faith or willful misconduct.
(c) Nothing herein contained shall be deemed to authorize the Lender
Collateral Agent to authorize or consent to or vote for or accept or adopt on
behalf of any Lender or other Secured Party any plan of reorganization,
arrangement, adjustment or composition affecting the Advances or the rights
of any holder thereof or to authorize the Lender Collateral Agent to vote in
respect of the claim of any Secured Party in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
-25-
<PAGE>
(d) In any proceedings brought by the Lender Collateral Agent to
enforce the Liens under the Transaction Documents (and also any proceedings
involving the interpretation of any provision of any Transaction Document),
the Lender Collateral Agent shall be held to represent all the Secured
Parties, and it shall not be necessary to make any Secured Party a party to
any such proceedings.
(e) The Lender Collateral Agent shall, at the written direction of
the Agent, also do one or more of the following (subject to SECTION 12
HEREOF):
(i) institute proceedings in its own name and on behalf of the
Secured Parties as Lender Collateral Agent for the collection of all
amounts then payable on the Advances or under the Credit Agreement and
Fee Letter with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Borrower and any
other obligor upon such Advances moneys adjudged due;
(ii) institute proceedings from time to time for the complete
or partial foreclosure upon the Borrower Collateral;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the right
and remedies of the Lender Collateral Agent and the Secured Parties;
and
(iv) sell the Borrower Collateral or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law.
Section 21 LIMITED LIABILITY OF LENDER COLLATERAL AGENT.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Bankers Trust Company, not
individually or personally but solely as Lender Collateral Agent, in the
exercise of the powers and authority conferred and vested in it, (b) the
representations, undertakings and agreements herein made on the part of the
Lender Collateral Agent are made and intended not as personal
representations, undertakings and agreements by Bankers Trust Company, but
are made and intended for the purpose of binding only the Lender Collateral
Agent, and (c) under no circumstances shall Bankers Trust Company be
personally liable for the payment of any indebtedness or expenses of the
Lender Collateral Agent or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Lender Collateral Agent under this Agreement.
Section 22 SUBORDINATION.
(a) Notwithstanding anything in this Agreement or in any
other Transaction Document to the contrary, all
rights and remedies of the Lenders, the
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<PAGE>
Lender Collateral Agent, the Agent, the Secured
Parties, the Affected Parties or any of them, with
respect to the Borrower and its property, whether
hereunder, under any Transaction Document or
otherwise at law or in equity, are limited by and
subject to the terms of the Subordination Agreement.
(b) Notwithstanding anything in this Agreement or in any
other Transaction Document to the contrary, neither
Borrower nor the Spread Account Depositor shall have
any obligation or liability to the Agent, any Secured
Party, any Lender, or any Affected Party or any of
them, whether hereunder, under any Transaction
Document or otherwise at law or in equity, until the
Final Insurance Termination Date if the effect of
such obligation or liability would be to cause
Borrower or Spread Account Depositor to not be
Solvent and no Obligation shall be or become due or
payable until the later of (i) the Final Insurance
Termination Date or (ii) the date as such obligation
or liability would not cause the Borrower or the
Spread Account Depositor to not be Solvent.
(c) Notwithstanding any other provision of this Agreement
or any other Transaction Document, in the event of
any contradiction or ambiguity between the
Subordination Agreement and any other Transaction
Document, the terms of the Subordination Agreement
shall govern. All disputes with respect to matters
addressed in the Subordination Agreement shall be
determined by reference to the Subordination
Agreement exclusively and no provision of this
Agreement or any other Transaction Document should be
interpreted as altering, amending, explaining or
clarifying any provision of the Subordination
Agreement.
(d) The provisions of this Section 22 are for the benefit
of FSA and other parties to the Subordination
Agreement and, accordingly, shall survive the
termination of this Agreement. This Section 22 shall
not be amended without the written consent of FSA.
Section 23 AMENDMENTS. This Agreement may be amended in
accordance with the provisions of the Credit Agreement.
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their
duly authorized representatives to hereunto set their hand as of the day and
year first above written.
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Agent
By:
--------------------------------------------
Name:
Title:
AFS FUNDING CORP.
By:
--------------------------------------------
Name:
Title:
AMERICREDIT FINANCIAL SERVICES, INC.
By:
--------------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Lender Collateral
Agent
By:
--------------------------------------------
Name:
Title:
Signature Page to Security Agreement]
<PAGE>
- -------------------------------------------------------------------------------
REPLACEMENT CASH COLLATERAL ACCOUNT AGREEMENT,
dated as of October 14, 1999
among
AFS FUNDING CORP.,
FINANCIAL SECURITY ASSURANCE INC.,
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as Administrative Agent,
and
BANK ONE, N.A., as Collateral Agent
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
RECITALS 1
AGREEMENTS 1
ARTICLE I DEFINITIONS................................................................................2
Section 1.01. Definitions...........................................................................2
ARTICLE II REIMBURSEMENT AGREEMENT; DRAW LIMIT.......................................................10
Section 2.01. Agreement to Reimburse...............................................................10
Section 2.02. Priority of Other Loss Protection....................................................11
Section 2.03. RCCA Draw Limit......................................................................12
Section 2.04. Term of Reimbursement Obligation.....................................................12
Section 2.05. Recoveries...........................................................................13
ARTICLE III SECURITY INTERESTS; THE COLLATERAL........................................................14
Section 3.01. Grant of Security Interest by the Seller.............................................14
Section 3.02. Perfection...........................................................................14
Section 3.03. The Seller Remains Liable............................................................15
Section 3.04. Security Intermediary................................................................15
Section 3.05. Maintenance of Collateral............................................................16
Section 3.06. Termination and Release of Rights....................................................16
ARTICLE IV REPLACEMENT CASH COLLATERAL ACCOUNTS......................................................17
Section 4.01. Establishment of RCCAs, Initial Deposits into RCCAs..................................17
Section 4.02. Investments..........................................................................18
Section 4.03. Distributions; Priority of Payments..................................................19
Section 4.04. General Provisions Regarding RCCAs...................................................19
Section 4.05. Reports by the Collateral Agent......................................................20
Section 4.06. RCCA Supplements.....................................................................20
ARTICLE V THE COLLATERAL AGENT......................................................................20
Section 5.01. Appointment and Powers...............................................................21
Section 5.02. Performance of Duties................................................................21
Section 5.03. Limitation on Liability..............................................................21
Section 5.04. Reliance upon Documents..............................................................22
Section 5.05. Successor Collateral Agent...........................................................22
i
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.06. Indemnification......................................................................23
Section 5.07. Compensation and Reimbursement.......................................................24
Section 5.08. Representations and Warranties of Bank One...........................................24
Section 5.09. Waiver of Setoffs....................................................................24
Section 5.10. Control by Financial Security........................................................25
ARTICLE VI COVENANTS OF THE SELLER...................................................................25
Section 6.01. Preservation of Collateral...........................................................25
Section 6.02. Opinions as to Collateral............................................................25
Section 6.03. Waiver of Stay or Extension Laws; Marshaling of Assets...............................26
Section 6.04. Noninterference, etc.................................................................26
Section 6.05. Seller Changes.......................................................................26
ARTICLE VII REMEDIES UPON DEFAULT.....................................................................27
Section 7.01. Remedies upon a Foreclosure Event of Default.........................................27
Section 7.02. Waiver of Default....................................................................27
Section 7.03. Restoration of Rights and Remedies...................................................27
Section 7.04. No Remedy Exclusive..................................................................27
ARTICLE VIII MISCELLANEOUS.............................................................................28
Section 8.01. Further Assurances...................................................................28
Section 8.02. Waiver...............................................................................28
Section 8.03. Amendments, Waivers..................................................................28
Section 8.04. Severability.........................................................................28
Section 8.05. Notices..............................................................................28
Section 8.06. Term of this Agreement...............................................................30
Section 8.07. Assignments: Third-Party Rights; Reinsurance.........................................30
Section 8.08. Consent of Financial Security........................................................31
Section 8.09. Trial by Jury Waived.................................................................31
Section 8.10. Governing Law........................................................................31
Section 8.11. Consents to Jurisdiction.............................................................31
Section 8.12. Counterparts.........................................................................32
Section 8.13. Headings.............................................................................32
ii
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.14. Notices to Administrative Agent......................................................32
Section 8.15. Disclaimer of Fiduciary Duty.........................................................32
</TABLE>
iii
<PAGE>
REPLACEMENT CASH COLLATERAL ACCOUNT AGREEMENT, dated as of October 14,
1999 (the "AGREEMENT"), by and among FINANCIAL SECURITY ASSURANCE INC., a New
York stock insurance company ("FINANCIAL SECURITY"), AFS FUNDING CORP., a
Nevada corporation (the "SELLER"), CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, as agent for the Lenders party to the Credit Agreement referred to
below (in such capacity, the "ADMINISTRATIVE AGENT"), and BANK ONE, N.A., a
national banking association ("BANK ONE"), as Collateral Agent (together with
its successors in such capacity, the "COLLATERAL AGENT").
RECITALS
--------
1. The Seller has requested that Financial Security issue the Series
1999-D Policy to the related Trustee to guarantee payment of the Scheduled
Payments (as defined in such Policy) in respect of the Series 1999-D Notes.
2. It is contemplated that the Seller may sell additional pools of
receivables to issuers other than the Series 1999-D Issuer, and that any such
issuer may issue additional series of notes or certificates and that
Financial Security in its discretion may issue additional Policies with
respect to certain guaranteed distributions on the corresponding additional
Series of notes or certificates.
3. As a condition to issuing the Series 1999-D Policy, Financial
Security has required, and as a condition to issuing future Policies,
Financial Security may require, that the Seller deposit cash (each an
"INITIAL SPREAD ACCOUNT DEPOSIT", and collectively, the "INITIAL SPREAD
ACCOUNT DEPOSITS") in a spread account (each a "SPREAD ACCOUNT", and
collectively, the "SPREAD ACCOUNTS") maintained with the related Trustee.
4. In order to reduce the amount which the Seller is obligated to
advance as an Initial Spread Account Deposit with respect to the Series
1999-D Notes and certain future series of notes or certificates with respect
to which RCCAs (as hereinafter defined) are established, the Seller intends
to deposit certain moneys on or about the closing date for each such Series
(each a "RCCA DEPOSIT", and collectively, the "RCCA DEPOSITS") in a cash
collateral account (each, an "RCCA", and collectively, the "RCCAS")
established hereunder to provide credit support to Financial Security.
5. Pursuant to the Credit Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Seller, AmeriCredit Financial Services Inc., a
Delaware corporation, AmeriCredit Corp., a Texas corporation, AmeriCredit
Management Company, a Delaware corporation, Bankers Trust Company, as lender
collateral agent, the Lenders parties thereto, and the Administrative Agent,
the Lenders shall finance the Series 1999-D RCCA Deposit, and from time to
time hereafter shall finance future RCCA Deposits, by making advances to the
Seller.
AGREEMENTS
----------
In consideration of the premises, and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. (a) The term "RELATED" is used herein to
mean entities, documents, obligations, assets and other matters pertaining to
the same Series (as defined below) of AmeriCredit Notes (as defined below).
Any capitalized term used herein but not defined herein shall have the
meaning given to such term in the Subordination Agreement (as defined below)
or, if not defined therein shall have the meaning with respect to any
AmeriCredit Notes issued under an Indenture, a Pooling and Servicing
Agreement or other agreement, given to such term in such Indenture (and the
related Sale and Servicing Agreement), such Pooling and Servicing Agreement
or such other agreement, as applicable, or, if not defined in such issuing
agreement, shall have the meaning given to such term in the Spread Account
Agreement (as defined below) or the Series Supplement (as defined below). The
terms "HEREOF," "HEREIN" or "HEREUNDER," unless otherwise modified by more
specific reference, shall refer to this Agreement in its entirety. Unless
otherwise indicated in context, the terms "ARTICLE," "SECTION," "APPENDIX,"
"EXHIBIT" or "ANNEX" shall refer to an Article or Section of, or Appendix,
Exhibit or Annex to, this Agreement. The definition of a term shall include
the singular, the plural, the past, the present, the future, the active and
the passive forms of such term; PROVIDED that each term that is defined
differently with respect to one or more specific Series of AmeriCredit Notes,
shall have the separate meanings applicable with respect to each Series of
AmeriCredit Notes.
(b) The following terms shall have the following respective meanings:
"ADMINISTRATIVE AGENT" has the meaning specified in the preamble.
"AMERICREDIT NOTES" means the Notes and the Other AmeriCredit Notes,
collectively.
"AMERICREDIT POLICIES" means the Policies and the Other AmeriCredit
Policies, collectively.
"AMERICREDIT POLICY" means any of the Policies and the Other
AmeriCredit Policies.
"AUTHORIZED OFFICER" means, (i) with respect to Financial Security,
the Chairman of the Board, the President, the Executive Vice President, the
Chief Operating Officer, the Chief Executive Officer or any Managing Director
of Financial Security, (ii) with respect to the Collateral Agent and the
Administrative Agent, any Vice President, Authorized Signer or Trust Officer
thereof, and (iii) with respect to the Seller, the President, CFO, Treasurer
or any Vice President thereof.
"BANK ONE" means Bank One, NA, a national banking association and
its successors.
"CLAIM" means any amount payable by Financial Security under any of
the AmeriCredit Policies. "CLAIM" shall not include any amount expressly
excluded from the definition of "LOSS EXPENSES."
"COLLATERAL" means collectively all collateral pledged under Section
3.01 of this Agreement.
2
<PAGE>
"COLLATERAL AGENT" means Bank One (and any other Person designated
as "COLLATERAL AGENT" with respect to a Series pursuant to an RCCA
Supplement) in its capacity as collateral agent on behalf of Financial
Security and as agent for the Lender Collateral Agent pursuant to Section
8.15 until a successor Person shall have become a Collateral Agent pursuant
to Section 5.05(d) hereof, and thereafter "COLLATERAL AGENT" shall also mean
such successor Person.
"DISTRIBUTION DATE" means the fifth day of each calendar month, or,
if such day is not a Business Day, the immediately following Business Day;
PROVIDED, that such day shall in no event be earlier than the third Business
Day of such calendar month.
"DRAW LIMIT" has the meaning set forth in Section 2.03.
"EFFECTIVE DATE" means, with respect to any RCCA or any reinsurance,
the earliest date upon which such RCCA or such reinsurance could be drawn in
accordance with its terms, which shall be the earliest date upon which the
related Policy could be drawn in accordance with its terms, unless expressly
provided otherwise.
"ELIGIBLE ACCOUNT" means a segregated trust account that (i) is
either (x) maintained with a depository institution or trust company the
long-term unsecured debt obligations of which are rated "AA" or higher by
Standard & Poor's and "Aa2" or higher by Moody's, or (y) maintained with a
depository institution or trust company the commercial paper or other
short-term unsecured debt obligations of which are rated "A-1+" by Standard &
Poor's and "P-1" by Moody's and (ii) in either case, such depository
institution or trust company shall have been specifically approved by
Financial Security, acting in its discretion, by written notice to the
Collateral Agent.
"ELIGIBLE INVESTMENTS" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
from which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(b) demand deposits that are fully insured by the Federal
Deposit Insurance Corporation, time deposits (whether or not insured
by the Federal Deposit Insurance Corporation) or certificates of
deposit that are fully insured by the Federal Deposit Insurance
Corporation of any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof or the District of Columbia (or any domestic branch of
a foreign bank) and subject to supervision and examination by
federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or
trust company as custodian with respect to any obligations referred
to in clause (a) above or portion of such obligations for the
benefit of the holders of such depository receipts); PROVIDED,
however, that at the time of the investment or contractual commitment
to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Distribution Date), the commercial
paper or other short-term senior unsecured debt obligations (other
than such obligations the rating of which is based on the credit of
a Person other than such
3
<PAGE>
depository institution or trust company) of such depository
institution or trust company shall have a credit rating from
Standard & Poor's of A-1 and from Moody's of P-1;
(c) commercial paper and demand notes investing solely in
commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's A-1 and
from Moody's of P-1;
(d) investments in money market funds having a rating from
Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States
of America or any agency or instrumentality thereof of obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) referred to in clause (b) above;
and
(g) any other investment which has been approved by the
Administrative Agent (to the extent Borrowings are outstanding under
the Credit Agreement) and Financial Security.
"EXCESS" means, with respect to any Loss Protection and any other
Loss Protection, that such Loss Protection shall not be drawn upon, paid,
deducted from or otherwise applied to obligations, losses or potential
losses, until such other Loss Protection has been fully drawn, fully paid,
deducted in full or otherwise fully applied to obligations, losses or
potential losses and, with respect to any specified source of
Indemnification, that such Loss Protection shall be fully indemnified or
otherwise made whole under the terms of such Loss Protection from such source
of Indemnification before any reimbursement, indemnification, repayment or
recovery from such source of Indemnification is paid or applied to such other
Loss Protection.
"FINAL TERMINATION DATE" means, with respect to any Series, the date
that is the later of (i) the Insurer Termination Date with respect to such
Series and (ii) the Lender Termination Date with respect to such Series.
"FINANCIAL SECURITY" means Financial Security Assurance Inc., a New
York stock insurance company.
"FINANCIAL SECURITY DEFAULT" means, with respect to any Series, any
one of the following events shall have occurred and be continuing:
(a) Financial Security shall have failed to make a payment
required under a related Policy in accordance with its terms;
(b) Financial Security shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to
4
<PAGE>
insolvency, bankruptcy, rehabilitation, liquidation or reorganization,
(ii) made a general assignment for the benefit of its creditors, or
(iii) had an order for relief entered against it under the United
States Bankruptcy Code, the New York State Insurance Law, or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and
nonappealable; or
(c) a court of competent jurisdiction, the New York
Department of Insurance or other competent regulatory authority
shall have entered a final and nonappealable order, judgment or
decree (i) appointing a custodian, trustee, agent or receiver for
Financial Security or for all or any material portion of its property
or (ii) authorizing the taking of possession by a custodian, trustee,
agent or receiver of Financial Security (or the taking of possession
of all or any material portion of the property of Financial Security).
"FORECLOSURE EVENT OF DEFAULT" means, at any time, any default in
the satisfaction of Insurer Secured Obligations.
"INDEMNIFICATION" means, with respect to any Loss Protection,
indemnification, reimbursement, repayment, recovery or any other right of the
provider of such Loss Protection to be made whole and held harmless in
respect of its obligations under such Loss Protection.
"INDENTURE" means, with respect to Series 1999-D, the Series 1999-D
Indenture, and for each other Series, the Indenture related to such Series.
"INSURANCE AGREEMENT" means, with respect to any Series, the
Insurance and Indemnity Agreement among Financial Security, AFS, the Seller
and the related Issuer, if any, for such Series, pursuant to which Financial
Security issued a Policy.
"INSURANCE AGREEMENT EVENT OF DEFAULT" in respect of any AmeriCredit
Notes has the meaning provided in the Underlying Transaction Documents for
such AmeriCredit Notes.
"INSURER SECURED OBLIGATION" means the right of Financial Security
to withdraw funds from the RCCAs pursuant to Section 2.01.
"INSURER TERMINATION DATE" means, with respect to any Series, the
date, determined pursuant to Section 2.04, on which the related RCCA may no
longer be drawn on pursuant to Section 2.01.
"LENDER SECURED OBLIGATIONS" means all amounts and obligations which
the Seller may at any time owe to or on behalf of the Lenders or the
Administrative Agent under the Credit Agreement.
"LENDER SECURITY AGREEMENT" means the Security and Collateral Agent
Agreement, dated as of the date hereof, among the Seller, the Servicer, the
Administrative Agent, and the Lender Collateral Agent, as the same may from
time to time be amended, supplemented or otherwise modified.
"LENDER TERMINATION DATE" means, with respect to any Series, the
date on which the Lenders and the Administrative Agent shall have received
payment and performance in full
5
<PAGE>
(excluding any payment from Credit Support Providers (as defined in the
Credit Agreement)) of all Lender Secured Obligations with respect to monies
used to fund the RCCA with respect to such Series.
"LIEN" means, as applied to the property or assets (or the income,
proceeds, products, rents or profits therefrom) of any Person, in each case
whether the same is consensual or nonconsensual or arises by contract,
operation of law, legal process or otherwise: (a) any mortgage, lien, pledge,
attachment, charge, lease, conditional sale or other title retention
agreement, or other security interest or encumbrance of any kind; or (b) any
arrangement, express or implied, under which such property or assets (and/or
such income, proceeds, products, rents or profits) are transferred,
sequestered or otherwise identified for the purpose of subjecting or making
available the same for payment of debt or performance of any other obligation
in priority to the payment of the general, unsecured creditors of such Person.
"LOSS EXPENSES" means court costs, interest upon judgments, and
allocated investigation, adjustment and legal expenses, including expenses
related to the workout of a potential loss or the protection and perfection
of any subrogation or salvage rights or security interest under an
AmeriCredit Policy. "LOSS EXPENSES" shall not include (a) salaries paid to
employees of Financial Security, (b) awards or judgments against Financial
Security occasioned by failure of Financial Security to settle a claim or
make payment under an AmeriCredit Policy, when such failure arises from bad
faith, negligence or misconduct on the part of Financial Security or any
agent or employee of Financial Security or (c) liability of Financial
Security, arising by contract, operation of law or otherwise, from its
participation or membership, whether voluntary or involuntary, in any
insolvency fund, including any guaranty fund, association, pool, plan or
other facility that provides for the assessment of, payment by or assumption
by Financial Security of a part or the whole of any claim, debt, charge, fee
or other obligation of any insurer, or its successor or assigns, that has
been declared insolvent by any authority having jurisdiction, or which is
otherwise unable to meet any claim, debt, charge, fee or other obligation in
whole or in part. "LOSS EXPENSES" shall include reasonably incurred expenses
paid by Financial Security to Transaction Services Corporation, an affiliate
of Financial Security; PROVIDED that such expenses are allocated to the
related AmeriCredit Policy on a cost basis.
"LOSS PROTECTION" means any reinsurance, any source of reimbursement
or indemnity, any guaranty, surety bond, letter of credit, cash collateral
account, spread account or other pledged account, any subordinate security or
other subordinate interest, any other credit enhancement and any other
agreement or accommodation that has the effect, directly or indirectly, of
protecting Financial Security from incurring a loss with respect to Financial
Security's obligations under any Policy.
"NOTES" means the asset-backed notes and asset-backed certificates,
issued by AmeriCredit Automobile Receivables Trust 1999-D and any
asset-backed notes or certificates issued by any "AMERICREDIT AUTOMOBILE
RECEIVABLES TRUST" with a Series designation indicating issuance after Series
1999-D that are:
(i) insured by Financial Security;
6
<PAGE>
(ii) have Loss Protection in the form of an RCCA
established under this Agreement; and
(iii) have Loss Protection in the form of a Spread
Account that is subject to the cross-collateralization
provisions of the Spread Account Agreement.
"OC AMOUNT" means, with respect to any RCCA, the OC Level, if any, for
the related Notes times the sum of the Aggregate Principal Balance and the
Pre-Funded Amount, if any, for the related Notes.
"OTHER AMERICREDIT NOTES" means asset-backed notes and asset-backed
certificates whether issued before or after any Notes, issued by an
AmeriCredit Automobile Receivables Trust listed on Schedule I hereto or by
any other owner trust, business trust, grantor trust or any other
special-purpose entity formed by the Seller as the issuer in a securitization
sponsored by the Seller that are:
(i) insured by Financial Security;
(ii) do not have Loss Protection in the form of an
RCCA established under this Agreement; and
(iii) have Loss Protection in the form of a Spread
Account that is subject to the cross-collateralization
provisions of the Spread Account Agreement.
"OTHER AMERICREDIT POLICIES" means Financial Guaranty Insurance
Policies issued by Financial Security with respect to a Series of Other
AmeriCredit Notes for which no RCCA has been established.
"OPINION OF COUNSEL" means a written opinion of counsel, acceptable
as to form and substance, and reasonably acceptable as to issuing counsel, to
Financial Security.
"POLICY" means any Financial Guaranty Insurance Policy issued by
Financial Security with respect to a Series of Notes for which the Seller has
established an RCCA hereunder.
"POLICY PAYMENTS" shall mean Claims and Loss Expenses payments,
collectively.
"POOLING AND SERVICING AGREEMENT" means, for each Series created
pursuant to a Pooling and Servicing Agreement, the Pooling and Servicing
Agreement related to such Series.
"QUALIFIED SUBSEQUENT REINSURANCE" means (i) any Spread Account
Replacement Reinsurance, as defined in clause (i) of the definition thereof,
having a limit of liability, scope of coverage and other terms substantially
the same in all material respects as the corresponding terms of the RCCAs
under Article II of this Agreement and (ii) any Spread Account Replacement
Reinsurance, as defined in clause (ii) of the definition thereof, which
amortizes and terminates on the same basis as cash would have been released
from the related Spread Account had the cash not been replaced in such Spread
Account.
"RCCA" has the meaning set forth in the recitals.
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"RCCA AGENT" means Bank One, N.A.
"RCCA ACCOUNT COLLATERAL" means all of the following:
(i) Each RCCA established pursuant to the RCCA
Agreement and all funds held in such RCCA and all certificates
and instruments, if any, from time to time representing or
evidencing such RCCA or such funds;
(ii) all investments from time to time of amounts in
each RCCA established pursuant to the RCCA Agreement, and all
certificates and instruments, if any, from time to time
representing or evidencing such investments;
(iii) all notes, certificates of deposit and other
instruments from time to time delivered to or otherwise
possessed by the RCCA Agent or any Secured Party or any
assignee or agent on behalf of the RCCA Agent or any Secured
Party in substitution for or in addition to any of the then
existing RCCA Account Collateral, and
(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and
all of the then existing RCCA Account Collateral.
"RCCA DEPOSIT" has the meaning set forth in the recitals.
"RCCA ELIGIBLE INVESTMENTS" means Eligible Investments held by the
Collateral Agent in an RCCA and with respect to which the Collateral Agent
has taken Delivery. Any such RCCA Eligible Investment may be purchased by or
through the Collateral Agent or any of its affiliates.
"RCCA SUPPLEMENT" has the meaning set forth in Section 4.06.
"REQUISITE AMOUNT" shall mean, with respect to any Series, (i) on
the Closing Date, the amount of the Spread Account Initial Deposit, and with
respect to any Determination Date occurring during the Funding Period, the
sum of the amount of the Spread Account Initial Deposit and the amount of the
Subsequent Spread Account Deposits, if any, on such Determination Date
(taking into account any Subsequent Spread Account Deposit transferred to the
such Spread Account on or prior to the related Distribution Date); PROVIDED,
HOWEVER, that the Requisite Amount shall mean (A) if a Trigger Event shall
exist as of such Determination Date and no Insurance Agreement Event of
Default shall have occurred as of such Determination Date, 15% (or such lower
percentage as may be provided for in the related Series Supplement) of the
sum of the Aggregate Principal Balance and the Pre-Funded Amount, if any,
with respect to such Determination Date; or (B) if an Insurance Agreement
Event of Default shall have occurred as of such Determination Date, an
unlimited amount, and (ii) with respect to any Distribution Date thereafter,
the greater of (1) the Floor Amount; and (2)(A) if no Trigger Event shall
exist as of the related Determination Date, and no Insurance Agreement Event
of Default shall have occurred as of such Determination Date, (I) if the OC
Level is less than 10% (or such lower percentage as may be provided for in
the related Series Supplement), the Spread Account Initial Deposit with
respect to such Determination Date, and (II) if the OC Level is equal to or
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greater than 10% (or such lower percentage as may be provided for in the
related Series Supplement), the percentage equal to the excess of 13% (or
such lower percentage as may be provided for in the related Series
Supplement) over the OC Level for such Determination Date of the Aggregate
Principal Balance with respect to such Determination Date (B) if a Trigger
Event shall exist as of such Determination Date and no Insurance Agreement
Event of Default shall have occurred as of such Determination Date, 15% (or
such lower percentage as may be provided for in the related Series
Supplement) of the sum of the Aggregate Principal Balance and the Pre-Funded
Amount, if any, with respect to such Determination Date; or (C) if an
Insurance Agreement Event of Default shall have occurred as of such
Determination Date, an unlimited amount.
"SALE AND SERVICING AGREEMENT" means, with respect to Series 1999-D,
the Series 1999-D Sale and Servicing Agreement and, for each other Series
issued pursuant to an Indenture, the Sale and Servicing Agreement related to
such Series.
"SECURED OBLIGATIONS" means, with respect to each Series, the
Insurer Secured Obligations with respect to such Series.
"SECURITY ACCOUNT" has the meaning set forth in Section 8-501(a) of
Revised Article 8.
"SECURITY INTERESTS" means the security interests and Liens in the
Collateral granted pursuant to Section 3.01 hereof.
"SERIES" means any AmeriCredit Notes issued by the same issuer on
the same Closing Date and having the same series designation.
"SERIES 1999-D INDENTURE" means the Indenture dated as of October
25, 1999, between AmeriCredit Automobile Receivables Trust 1999-D and Bank
One, as Trustee and Trust Collateral Agent.
"SERIES 1999-D ISSUER" means AmeriCredit Automobile Receivable Trust
1999-D.
"SERIES 1999-D NOTES" means the Notes issued pursuant to the Series
1999-D Indenture.
"SERIES 1999-D POLICY" means the Policy issued by Financial Security
with respect to the Series 1999-D Notes.
"SERIES 1999-D RCCA" means the account established at the office of
Bank One, Columbus, Ohio, designated "AFS FUNDING SERIES 1999-D REPLACEMENT
CASH COLLATERAL ACCOUNT, ACCOUNT NUMBER 6800047200" or such other substitute
account as Financial Security may designate from time to time pursuant to
Article 4.
"SERIES SUPPLEMENT" means the supplement to the Spread Account
Agreement entered into with respect to a Series of AmeriCredit Notes.
"SPREAD ACCOUNT" means with respect to a Series, the account
established with respect to such Series in accordance with Section 3.01(a) of
the Spread Account Agreement.
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"SPREAD ACCOUNT AGREEMENT" means the Spread Account Agreement,
dated as of December 1, 1994, as amended and restated as of May 11, 1998, as
amended as of October 25, 1999, by and among Financial Security, the Seller,
La Salle National Bank, in its capacities as Trustee and Collateral Agent
with respect to certain Series of AmeriCredit Notes as specified therein,
Harris Trust and Savings Bank, in its capacities as Trustee and Collateral
Agent with respect to certain Series of AmeriCredit Notes as specified
therein, and Bank One, N.A. ("BANK ONE"), in its capacities as Trustee and
Collateral Agent with respect to certain Series of AmeriCredit Notes as
specified therein.
"SPREAD ACCOUNT CAP" shall mean, with respect to any RCCA, the
lesser of (a) the sum of the Requisite Amount and the OC Amount, if any, with
respect to the related Notes, or (b) 13% (25%, if a Trigger Event shall have
occurred and be continuing) of the sum of the Aggregate Principal Balance and
the Pre-Funded Amount, if any, with respect to the related Notes.
"SPREAD ACCOUNT REPLACEMENT REINSURANCE" means any policy of
reinsurance issued by a third party insurance company for the benefit of
Financial Security (i) which permits the amount of the initial deposit to a
Spread Account to be less than that which would have otherwise been required
by Financial Security in connection with the issuance of the related Series
in the absence of such policy (for example, in connection with AmeriCredit
Automobile Receivables Trust 1999-C in which Financial Security's requirement
for initial first loss protection was 8% of the sum of the Aggregate
Principal Balance and the Pre-Funded Amount, reinsurance obtained in the
amount of 5% of such sum reduced the initial deposit to the Spread Account
from 8% of such sum to 3% of such sum) or (ii) which is in the form of
recourse reduction reinsurance (I.E., substitution of reinsurance for cash
currently on deposit in one or more spread accounts for any Series of
AmeriCredit Notes) that has terms (other than pricing terms) substantially
the same as the recourse reduction reinsurance in force on the date of this
Agreement.
"STANDARD TERMINATION DATE" has the meaning specified in Section 2.04.
"SUBSEQUENT REINSURANCE" means with respect to any RCCA, any Spread
Account Replacement Reinsurance and any other RCCA for the AmeriCredit
Policies if such Spread Account Replacement Reinsurance or such other RCCA
has an Effective Date after the Effective Date of such RCCA without giving
effect to any termination, cancellation or reduction (except pursuant to the
last sentence of Section 2.04) by Financial Security of such Spread Account
Replacement Reinsurance or other RCCA or to any default by any insurer in
respect of its obligations with respect to any such Spread Account
Replacement Reinsurance.
"SUBORDINATION AGREEMENT" means the Subordination and Intercreditor
Agreement, dated as of October 19, 1999 among the Seller, AFS Funding Trust,
the AmeriCredit 1996-C Trust, the AmeriCredit 1996-D Trust, the AmeriCredit
1997-A Trust, the AmeriCredit 1997-B Trust, the AmeriCredit 1997-C Trust, the
AmeriCredit 1997-D Trust, the AmeriCredit 1998-A Trust, the AmeriCredit
1998-B Trust, the AmeriCredit 1998-C Trust, the AmeriCredit 1998-D Trust, the
AmeriCredit 1999-A Trust, the AmeriCredit 1999-B Trust, the AmeriCredit
1999-C Trust, AmeriCredit Financial Services, Inc., AmeriCredit Management
Company, AmeriCredit Corp., Bankers Trust Company, not in its individual
capacity, but solely in its capacity as Lender Collateral Agent, Bankers
Trust Company, not in its individual capacity, but solely in its capacity as
Owner Trustee, Credit Suisse First Boston, acting through its New York
branch, in its
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capacity as Administrative Agent, those Lenders from time to time party the
Credit Agreement, Financial Security, Harris Trust and Savings Bank, La Salle
National Bank, and Bank One N.A. (in their capacity as "COLLATERAL AGENT"
under that certain Spread Account Agreement dated as of December 1, 1994, as
amended and restated May 11, 1998, and such other entities as may be
designated as "COLLATERAL AGENTS" under the Underlying Transaction Documents
or the Spread Account Agreement, together with their respective successors or
assigns, if any.)
"TRUSTEE" means (A) with respect to any Series created pursuant to a
Pooling and Servicing Agreement, the Trustee named in such Pooling and
Servicing Agreement, or (B) with respect to any Series issued pursuant to an
Indenture, the Trust Collateral Agent named in such Indenture.
"UNDERLYING TRANSACTIONS" when used in the singular, any of, and
when used in the plural, all of, the transactions contemplated by each of the
1996-C Insurance and Indemnity Agreement, the 1996-D Insurance and Indemnity
Agreement, the 1997-A Insurance and Indemnity Agreement, the 1997-B Insurance
and Indemnity Agreement, the 1997-C Insurance and Indemnity Agreement, the
1997-D Insurance and Indemnity Agreement, the 1998-A Insurance and Indemnity
Agreement, the 1998-B Insurance and Indemnity Agreement, the 1998-C Insurance
and Indemnity Agreement, 1998-D Insurance and Indemnity Agreement, the 1999-A
Insurance and Indemnity Agreement, the 1999-B Insurance and Indemnity
Agreement, the 1999-C Insurance and Indemnity Agreement, the 1999-D Insurance
and Indemnity Agreement, the 1996-C Sale and Servicing Agreement, the 1996-D
Sale and Servicing Agreement, the 1997-A Sale and Servicing Agreement, the
1997-B Sale and Servicing Agreement, the 1997-C Sale and Servicing Agreement,
the 1997-D Sale and Servicing Agreement, 1998-A Sale and Servicing Agreement,
the 1998-B Sale and Servicing Agreement, the 1998-C Sale and Servicing
Agreement, 1998-D Sale and Servicing Agreement, the 1999-A Sale and Servicing
Agreement, the 1999-B Sale and Servicing Agreement, the 1999-C Sale and
Servicing Agreement, the 1999-D Sale and Servicing Agreement, each insurance
and indemnity agreement and each sale and servicing agreement entered into in
connection with a spread account which is subject to the Spread Account
Agreement and all other transactions anticipated by the documents executed in
connection with any of the foregoing.
"UNDERLYING TRANSACTION DOCUMENTS" the agreement, contracts,
documents, amendments, consents, instruments, certificates and other papers
executed in connection with each Underlying Transaction.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code
in effect in the relevant jurisdiction, as the same may be amended from time
to time.
ARTICLE II
REIMBURSEMENT AGREEMENT; DRAW LIMIT
Section 2.01. AGREEMENT TO REIMBURSE. (a) The Seller hereby agrees
with respect to each RCCA that if Financial Security will make a Policy
Payment under the related Policy on any Insured Distribution Date then, at
any time on or after the Business Day prior to the Distribution Date
preceding such Insured Distribution Date, Financial Security shall have the
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right to withdraw monies from such RCCA in an amount not exceeding the lesser
of the amount of such Policy Payment and the amount on deposit in such RCCA,
either for the purpose of making such Policy Payment or as reimbursement for
making such Policy Payment. Financial Security agrees that it shall first
apply amounts available (including, with respect to Subsequent Reinsurance,
amounts deemed available in accordance with the definition thereof), if any,
from the following sources to make such Policy Payment:
(i) to the extent available pursuant to the Spread
Account Agreement, the Spread Accounts for the related Notes
and the AmeriCredit Notes other than the related Notes; or
(ii) Subsequent Reinsurance.
(b) The Seller hereby further agrees with respect to each RCCA
that if Financial Security will make a Policy Payment under any
AmeriCredit Policy other than the related Policy on any Insured
Distribution Date then, at any time on or after the Business Day prior
to the Distribution Date preceding such Insured Distribution Date,
Financial Security shall have the right to withdraw monies from such
RCCA in an amount not exceeding the lesser of the amount of such Policy
Payment and the amount on deposit in such RCCA, either for the purpose
of making such Policy Payment or reimbursement for making such Policy
Payment. Financial Security agrees that it shall first apply amounts
available (including, with respect to Subsequent Reinsurance, amounts
deemed available in accordance with the definition thereof), if any,
from the following sources to make such Policy Payment:
(i) to the extent available pursuant to the Spread
Account Agreement, the Spread Accounts for the related Notes
and the AmeriCredit Notes other than the related Notes; or
(ii) Subsequent Reinsurance.
(c) Financial Security shall redeposit into an RCCA any amount
withdrawn therefrom pursuant to this Section 2.01 if such amount is not
applied to make the Policy Payment with respect to which it was drawn
or to reimburse Financial Security with respect thereto within five
Business Days after the date such Policy Payment was due together with
the investment earnings on such amount, if any.
Section 2.02. PRIORITY OF OTHER LOSS PROTECTION. With respect to any
RCCA, all reinsurance of the AmeriCredit Policies shall be Excess of
Financial Security's Loss Protection provided by such RCCA and shall be for
the benefit solely of Financial Security, except that the Loss Protection
provided by such RCCA shall be Excess of any reinsurance that constitutes
Subsequent Reinsurance (including, with respect to Subsequent Reinsurance,
amounts deemed available in accordance with the definition thereof). With
respect to any RCCA, all other RCCAs previously established shall be Excess
of Financial Security's Loss Protection provided by such RCCA and shall be
solely for the benefit of Financial Security and the Loss Protection provided
by such RCCA shall be Excess of any other RCCA that constitutes Subsequent
Reinsurance. Except as provided in the two preceding sentences or as
expressly otherwise
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provided with respect to any Series of Notes (with the written agreement of
the parties to the Transaction Documents), any RCCA shall be Excess of all
other Loss Protection for any Series of Notes, including subordinate tranches
of securities not insured by Financial Security. Financial Security covenants
and agrees that, before entering into any agreement for Spread Account
Replacement Reinsurance with respect to any AmeriCredit Policy, Financial
Security will provide written notice to the Administrative Agent as to
whether such Spread Account Replacement Reinsurance is or is not Qualified
Subsequent Reinsurance.
Section 2.03. RCCA DRAW LIMIT. (a) On the Effective Date of each
RCCA, the aggregate amount that may be withdrawn from such RCCA pursuant to
Section 2.01 (the "DRAW LIMIT") shall equal the amount on deposit in such
RCCA (or such lesser amount designated by Financial Security in its sole and
absolute discretion).
(b) The Draw Limit with respect to each RCCA shall, after the
Effective Date, be reduced dollar-for-dollar:
(i) on each Distribution Date with respect to the
related Notes (after the Funding Period, if any), so long as
no Insurance Agreement Event of Default exists with respect to
any of the AmeriCredit Notes, to the extent, if any, that (A)
the sum of (1) the amount in the Spread Account for such
related Notes, (2) the OC Amount, if any, and (3) the Draw
Limit for such RCCA on the preceding Distribution Date exceeds
(B) the Spread Account Cap, after giving effect to all
deposits to and withdrawals from the Spread Account for such
related Notes and payments of principal of such related Notes
in respect of such Distribution Date; PROVIDED that reduction
of the Draw Limit shall resume if and when no Insurance
Agreement Event of Default shall be continuing (due to waiver
or otherwise); and
(ii) for withdrawals under Section 2.01 hereof.
(c) The Draw Limit for any RCCA shall be reinstated
dollar-for-dollar to the extent of reimbursement of withdrawals from
such RCCA, but not in excess of the Draw Limit as reduced pursuant to
clause (i) of the preceding paragraph (b). Any reduction in a Draw
Limit shall be final and shall not be subject to reinstatement except
as provided in the preceding sentence, and the amount of reinstatement
shall be the amount of such reimbursement, net of any interest. For
purposes of such reinstatement, reimbursement of withdrawals from any
RCCA shall include only recoveries in respect of the Policy Payments
for which the withdrawals were made and the amount of interest deducted
shall include only interest actually paid to Financial Security as
provided in the related Insurance and Indemnity Agreement in respect of
such Policy Payments.
Section 2.04. TERM OF REIMBURSEMENT OBLIGATION. The amounts on
deposit in each RCCA shall be available to be drawn by Financial Security
pursuant to Section 2.01 until:
(i) if no Insurance Agreement Event of Default or
Trigger Event exists with respect to any of the AmeriCredit
Notes, the date (the "STANDARD TERMINATION DATE") of the
earliest to occur of (A) the expiration of Financial
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Security's liability under the related Policy and (B) the Draw
Limit with respect to such RCCA is equal to zero;
(ii) if an Insurance Agreement Event of Default or
Trigger Event exists with respect to any of the AmeriCredit
Notes and the Standard Termination Date has not yet occurred,
the later of (A) the Standard Termination Date and (B) the
earlier of (1) the date on which no Insurance Agreement Event
of Default or Trigger Event shall be continuing (due to
waiver, cure or otherwise) with respect to any of the
AmeriCredit Notes or (2) the expiration of all of the
AmeriCredit Policies outstanding at the date of the first to
occur of such Insurance Agreement Event of Default or Trigger
Event; PROVIDED that (a) the aggregate Draw Limit for all
RCCAs under this Agreement thereafter shall not exceed such
aggregate Draw Limit at the date of such Insurance Agreement
Event of Default or Trigger Event (except for increases
thereafter due to reimbursements of the RCCAs) and (b) at each
subsequent Standard Termination Date with respect to any RCCA,
the Draw Limit for each RCCA shall be reduced in order,
starting with the RCCA having the earliest Effective Date and
reducing the Draw Limit for such RCCA to zero before reducing
the Draw Limit of the RCCA having the next earliest Effective
Date, until the aggregate Draw Limit for all RCCAs under this
Agreement is equal to the sum of (I) the aggregate par amount
insured of Notes outstanding at such date and (II) the
aggregate of the Spread Account Shortfalls and warehousing
shortfalls (if any) with respect to the Other AmeriCredit
Notes that were outstanding at the date of such Insurance
Agreement Event of Default or Trigger Event, if such sum is
less than such aggregate Draw Limit at such date. In addition,
if an Insurance Agreement Event of Default or Trigger Event
shall have occurred and be continuing, Financial Security may
direct the Collateral Agent to release all or a portion of the
amounts on deposit in outstanding RCCAs (the proceeds of which
shall be distributed to the Lender Collateral Agent) and
cancel any outstanding Spread Account Replacement Reinsurance
(but only on a pro rata basis as between all outstanding RCCAs
and all outstanding Spread Account Replacement Reinsurance) to
the extent Financial Security determines in good faith that
Financial Security's remaining exposure under the AmeriCredit
Policies is investment grade based upon rating agency levels
of coverage for expected losses without the benefit of such
terminated RCCAs and Spread Account Replacement Reinsurance.
Section 2.05. RECOVERIES. Financial Security in respect of its
Policy Payments, all of Financial Security's quota share reinsurers of the
AmeriCredit Policies, all of Financial Security's reinsurers participating in
any loss layer with respect to the AmeriCredit Policies and all of Financial
Security's reinsurers providing Spread Account Replacement Reinsurance that
is not Subsequent Reinsurance shall first be reimbursed in full from
recoveries for all Policy Payments, in the case of Financial Security, and
all reinsurance policy payments, in the case of such reinsurers, before any
reimbursement of withdrawals from any RCCA to the extent that such Policy
Payments or reinsurance policy payments relate to coverage that is Excess of
the Loss Protection provided by such RCCA. Thereafter, Financial Security
shall deposit in such RCCA all recoveries received by Financial Security for
Policy Payments for which withdrawals were made from an RCCA. If any such
RCCA has been terminated, any such recoveries shall be
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distributed by the Collateral Agent to the Lender Collateral Agent. For
purposes of the foregoing, reimbursement of withdrawals from any RCCA shall
include interest only to the extent provided in the related Insurance and
Indemnity Agreement in respect of such Policy Payments for which the
withdrawals were made and only to the extent recoveries are sufficient
therefor. Financial Security shall retain full discretion in exercising
remedies in respect of the AmeriCredit Policies, including the right to
terminate the Servicer and to designate a replacement Servicer and the right
to amend or waive any provision of any Underlying Transaction Document, to
the extent Financial Security has such rights under the Underlying
Transaction Documents; provided that Financial Security shall act in good
faith in doing so.
ARTICLE III
SECURITY INTERESTS; THE COLLATERAL
Section 3.01. GRANT OF SECURITY INTEREST BY THE SELLER.
(a) The Seller hereby pledges, assigns, grants, transfers
and conveys to the Collateral Agent, on behalf of and for the benefit of
Financial Security to secure its rights with respect to each Series for which
such Person acting as Collateral Agent is designated as "COLLATERAL AGENT"
herein or pursuant to an RCCA Supplement, a Lien on and security interest in,
all of its right, title and interest in and to the following (all
constituting Collateral hereunder):
(i) the RCCA Account Collateral;
(ii) all Security Accounts, accounts, all collateral
paper, all documents, all general intangibles, all investments, and all
inventory of the Seller; and
(iii) all distributions, revenues, products,
substitutions, benefits, profits and proceeds, in whatever form of any
of the foregoing.
(b) In order to effectuate the provisions and purposes of
this Agreement, including for the purpose of perfecting the security
interests granted hereunder, the Seller represents and warrants that it has,
prior to the execution of this Agreement, executed and filed an appropriate
Uniform Commercial Code financing statement sufficient to assure that the
Collateral Agent, as agent for Financial Security, has a first priority
perfected security interest in all Collateral with respect to the Series for
which it is acting as Collateral Agent which can be perfected by the filing
of a financing statement or has delivered to Financial Security a legal
opinion acceptable to Financial Security to the effect that no filings are
required to perfect the security interests granted hereunder.
Section 3.02. PERFECTION. The Seller intends the security interests
in favor of Financial Security to be prior to all other Liens in respect of
the Collateral, and the Seller shall take all actions necessary to obtain and
maintain, in favor of the Collateral Agent, for the benefit of Financial
Security, a first lien on and a first priority, perfected security interest
in the Collateral granted to the Collateral Agent. Subject to the provisions
hereof specifying the rights and powers of Financial Security from time to
time to control certain specified matters relating to the Collateral,
Financial Security shall have all of the rights, remedies and recourse with
respect to the Collateral afforded a secured party under the Uniform
Commercial Code and all other applicable law in addition to, and not in
limitation of, the other rights, remedies and recourse
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granted to Financial Security by this Agreement or any other law relating to
the creation and perfection of liens on, and security interests in, the
Collateral.
Section 3.03. THE SELLER REMAINS LIABLE. The Security Interests are
granted as security only and shall not (i) transfer or in any way affect or
modify, or relieve the Seller from, any obligation to perform or satisfy, any
term, covenant, condition or agreement to be performed or satisfied by the
Seller under or in connection with this Agreement, the Insurance Agreement or
any other Transaction Document to which it is a party or (ii) impose any
obligation on any of Financial Security or a Collateral Agent to perform or
observe any such term, covenant, condition or agreement or impose any
liability on any of the Secured Parties or any Collateral Agent for any act
or omission on its part relative thereto or for any breach of any
representation or warranty on its part contained therein or made in
connection therewith, except, in each case, to the extent provided herein and
in the other Transaction Documents.
Section 3.04. SECURITY INTERMEDIARY.
The Collateral Agent hereby undertakes and agrees to act as
"SECURITY INTERMEDIARY" (as such term is defined in Section 8-501 of the
Uniform Commercial Code as in effect in the State of New York (the "NEW YORK
UCC")). In such capacity (the Collateral Agent in such capacity being herein
sometimes referred to as the "SECURITIES INTERMEDIARY") and in accordance
with Section 4.01(a) of this Agreement, the Securities Intermediary has
established account number 6800047200 in the name of Bank One, N.A., as
Trustee and Collateral Agent which account is the account referred to herein
as the "SERIES [ ] RCCA." The Security Intermediary represents, warrants,
acknowledges and agrees that:
(a) It shall not change the name or account number of the RCCA
without the prior written consent of the Collateral Agent;
(b) All securities or other property underlying any financial
assets deposited in or credited to the RCCA shall be registered in the
name of the Securities Intermediary or the Collateral Agent or in blank
or credited to another securities account or accounts maintained in the
name of the Securities Intermediary, and in no case shall any financial
asset deposited in or credited to the RCCA be registered in the name of
the Seller except to the extent the foregoing have been specially
indorsed to the Securities Intermediary in blank;
(c) All property delivered to the Securities Intermediary
pursuant to this Agreement for deposit in or credit to the RCCA shall
be promptly credited to the RCCA;
(d) The RCCA is a "SECURITIES ACCOUNT" as such term is defined
in Section 8-501(a) of the New York UCC, and the Securities
Intermediary agrees that each item of property (whether investment
property, financial asset, security, instrument or cash) deposited in
or credited to the RCCA shall be treated as a "FINANCIAL ASSET" within
the meaning of Section 8-102(a)(9) of the New York UCC and that,
subject to the terms of this Agreement, the Securities Intermediary
will treat the Collateral Agent as entitled to exercise the rights that
comprise any financial asset deposited in or credited to such RCCA; and
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(e) If at any time the Securities Intermediary shall receive
any order from the Collateral Agent directing transfer or redemption
of any financial asset relating to the RCCA, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Seller or any other person.
Without limiting the generality Section 8.10 of this Agreement, the
parties agree that the RCCA shall be governed by the laws of the State of New
York. Regardless of any provision in any other agreement, for purposes of the
New York UCC, New York shall be deemed to be the Securities Intermediary's
jurisdiction, and the RCCA (as well as all of the securities entitlements
related thereto) shall be governed by the laws of the State of New York.
Section 3.05. MAINTENANCE OF COLLATERAL.
(a) SAFEKEEPING. The Collateral Agent agrees to maintain the
Collateral received by it (or evidence thereof, in the case of
book-entry securities in the name of the Collateral Agent) and all
records and documents relating thereto at the office of the Collateral
Agent specified in Section 8.05 hereof or such other address (unless
all filings have been made to continue the perfection of the security
interest in the Collateral to the extent such security interest can be
perfected by filing a financing statement, as evidenced by an Opinion
of Counsel delivered to Financial Security and the Administrative
Agent), as may be approved by Financial Security. The Collateral Agent
shall keep all Collateral and related documentation in its possession
separate and apart from all other property that it is holding in its
possession and from its own general assets and shall maintain accurate
records pertaining to the RCCA Eligible Investments and each RCCA
included in the Collateral in such a manner as shall enable the
Collateral Agent and the Secured Parties to verify the accuracy of
such record-keeping. The Collateral Agent's books and records shall at
all times show that the Collateral is held by the Collateral Agent as
agent of the Secured Parties and is not the property of the Collateral
Agent. The Collateral Agent shall promptly report to Financial
Security, the Administrative Agent and the Seller any failure on its
part to hold the Collateral as provided in this Section 3.05(a) and
shall promptly take appropriate action to remedy any such failure.
(b) ACCESS. The Collateral Agent shall permit each of
Financial Security and the Administrative Agent, or their respective
duly authorized representatives, attorneys, auditors or designees, to
inspect the Collateral or the records relating to the Collateral in
the possession of or otherwise under the control of the Collateral
Agent pursuant hereto at such reasonable times during normal business
hours as Financial Security or the Administrative Agent may reasonably
request upon not less than one Business Day's prior written notice.
The costs and expenses associated with any such inspection will be
paid by the party making such inspection.
Section 3.06. TERMINATION AND RELEASE OF RIGHTS.
(a) On the date determined in accordance with Section 2.04 on
which the amounts on deposit in a RCCA relating to a Series are no
longer available to be drawn by Financial Security, the rights,
remedies, powers, duties, authority and obligations
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conferred upon Financial Security pursuant to this Agreement in
respect of the Collateral related to such Series shall terminate and
be of no further force and effect and all rights, remedies, powers,
duties, authority and obligations of Financial Security to the
extent granted by this Agreement with respect to such Collateral
shall be automatically released; PROVIDED that Section 5.06, Section
5.07 and any other provisions of this Agreement which by their terms
survive the termination of this Agreement and any indemnity provided
to Financial Security herein shall survive such Insurer Termination
Date.
(b) On the Final Termination Date with respect to a Series,
the rights, remedies, powers, duties, authority and obligations
conferred upon the Collateral Agent and Financial Security pursuant to
this Agreement with respect to such Series shall terminate and be of
no further force and effect and all rights, remedies, powers, duties,
authority and obligations of the Collateral Agent and Financial
Security with respect to the Collateral related to such Series shall
be released in accordance with the provisions of this Section 3.06(b).
On the Final Termination Date with respect to a Series, the Collateral
Agent agrees, and Financial Security agrees, at the expense of the
Seller or upon the arrangement of other means for payment of such
expense acceptable to Financial Security, to execute such instruments
of release, in recordable form if necessary, in favor of the Seller as
the Seller may reasonably request, to deliver the related Collateral,
if any, in its possession to the Seller, and to otherwise release the
lien of this Agreement.
ARTICLE IV
REPLACEMENT CASH COLLATERAL ACCOUNTS
Section 4.01. ESTABLISHMENT OF RCCAS, INITIAL DEPOSITS INTO RCCAS.
(a) If requested by the Seller in writing on or prior to the
second Business Day prior to the Closing Date relating to a Series,
the Collateral Agent shall establish on or prior to such Closing Date
with respect to such Series, at its office or at another depository
institution or trust company an Eligible Account, designated, "AFS
FUNDING CORP. REPLACEMENT CASH COLLATERAL ACCOUNT - [INSERT SERIES
DESIGNATION] - [INSERT BANK], AS COLLATERAL AGENT UNDER THE RCCA
AGREEMENT." If any RCCA ceases to be an Eligible Account, the
Collateral Agent shall, within five Business Days, establish a new
Eligible Account for such Series.
(b) No withdrawals may be made of funds in any RCCA except as
provided in Section 2.01, 4.01(c) and 4.03 of this Agreement. Except
as specifically provided in this Agreement, funds in an RCCA shall not
be commingled with funds in any other RCCA or with any other moneys.
All moneys deposited from time to time in an RCCA and all investments
made with such moneys shall be held by the Collateral Agent as part of
the Collateral.
(c) On the Closing Date with respect to a Series, the
Collateral Agent shall deposit the RCCA Deposit received from the
Administrative Agent with respect to such Series, if any, into the
related RCCA as directed in writing by the Seller. The Collateral
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Agent shall deposit all cash distributions with respect to the
Collateral into the related RCCA. On each Distribution Date, the
Collateral Agent shall pay all income (net of any investment losses)
on investments of funds in the RCCAs to, or at the direction of, the
Administrative Agent for application pursuant to the Lender Security
Agreement; PROVIDED, HOWEVER, that to the extent on any such
Distribution Date losses for the related period exceed gains for
such period, such net loss shall be carried forward and applied to
any future gains prior to the payment of any such proceeds to the
Administrative Agent hereunder.
(d) Except as specifically provided herein, each RCCA shall
be maintained by the Collateral Agent at all times separate and
apart from any other account of the Seller, the Servicer or the
Issuer. All income or loss on investments of funds in the RCCAs
shall be reported by the Seller as taxable income or loss of the
Seller.
Section 4.02. INVESTMENTS.
(a) Funds which may at any time be held in an RCCA shall be
invested and reinvested by the Collateral Agent for such Series, at
the written direction (which may include, subject to the provisions
hereof, general standing instructions) of the Administrative Agent
received by the Collateral Agent by 1:00 P.M., New York City time,
on the Business Day prior to the date on which such investment shall
be made, in one or more RCCA Eligible Investments in the manner
specified in Section 4.02(c), PROVIDED that following the Lender
Termination Date with respect to any Series, the Seller shall have
the right to direct the investment of funds in the RCCA relating to
such Series. If no written direction with respect to any portion of
such RCCA is received by the Collateral Agent, the Collateral Agent
shall invest such funds overnight in investments described in
paragraph (d) of Eligible Investments, provided that the Collateral
Agent shall not be liable for any loss or absence of income
resulting from such investments.
(b) Each investment made pursuant to this Section 4.02 on any
date shall mature not later than the Business Day immediately
preceding the Distribution Date next succeeding the day such
investment is made, except that (i) if Financial Security has given
notice of a draw from the related RCCA or the Servicer's certificate
provides notice thereof, then a portion of the amounts invested in
such RCCA shall be invested on an overnight basis until the date of
such draw and (ii) if the Draw Limit with respect to any RCCA is to
be reduced on such Distribution Date, then a portion of investments
in such RCCA equal to the amount of such reduction shall be invested
on an overnight basis until the amount to be released from such RCCA
in connection with such reduction is released.
(c) Subject to the other provisions hereof, the Collateral
Agent shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing
any such investment, if any, shall be delivered directly to the
Collateral Agent or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to
the Collateral Agent in a manner which complies
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with Section 3.04 and the requirements of the definition of "RCCA
ELIGIBLE INVESTMENTS."
(d) If amounts on deposit in any RCCA are at any time
invested in an RCCA Eligible Investment payable on demand, the
Collateral Agent shall (i) consistent with any notice required to be
given thereunder, demand that payment thereon be made on the last
day such RCCA Eligible Investment is permitted to mature under the
provisions hereof and (ii) demand payment of all amounts due
thereunder promptly upon receipt of written notice from Financial
Security to the effect that such investment does not constitute an
RCCA Eligible Investment.
(e) All moneys on deposit in an RCCA, together with any
deposits or securities in which such moneys may be invested or
reinvested shall constitute Collateral hereunder subject to the
Security Interest of Financial Security.
(f) Subject to Section 5.03 hereof, the Collateral Agent
shall not be liable by reason of any insufficiency in any RCCA
resulting from any loss on any Eligible Investment included therein.
Section 4.03. DISTRIBUTIONS; PRIORITY OF PAYMENTS.
(a) Prior to each Distribution Date, Financial Security will
direct the Collateral Agent if there are any amounts to be distributed
pursuant to Section 4.03(b) on such Distribution Date and the
Collateral Agent shall notify the Seller and the Administrative Agent
of such determination.
(b) On each Distribution Date, Financial Security shall be
entitled to withdraw amounts from the RCCAs pursuant to Article 2.
(c) On each Distribution Date, if the amount on deposit in
any RCCA exceeds the Draw Limit with respect thereto after giving
effect to all distributions on such Distribution Date, then the
Collateral Agent shall withdraw from such RCCA the amount of such
excess and pay such amount to, or at the direction of, the
Administrative Agent for application pursuant to the Lender Security
Agreement.
(d) On the Insurer Termination Date for any Series, the
Collateral Agent shall withdraw from the RCCA with respect to such
Series an amount up to the outstanding Lender Insured Obligations with
respect to such Series and pay it to, or at the direction of, the
Administrative Agent for application pursuant to the Lender Security
Agreement.
Section 4.04. GENERAL PROVISIONS REGARDING RCCAS.
(a) Promptly upon the establishment (initially or upon any
relocation) of an RCCA hereunder, the Collateral Agent shall advise
the Seller, the Administrative Agent and Financial Security in
writing of the name and address of the depository institution or
trust company where the RCCA has been established (if not Bank One
or any successor Collateral Agent in its commercial banking
capacity), the name of the officer of the depository institution who
is responsible for overseeing such RCCA, the account number
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and the individuals whose names appear on the signature cards for
such RCCA. The Seller shall cause each such depository institution
or trust company to execute a written agreement, in form and
substance satisfactory to Financial Security, waiving, and the
Collateral Agent by its execution of this Agreement hereby waives
(except to the extent expressly provided herein), in each case to
the extent permitted under applicable law, (i) any banker's or other
statutory or similar Lien, and (ii) any right of set-off or other
similar right under applicable law with respect to such RCCA and any
other RCCA and agreeing, and the Collateral Agent by its execution
of this Agreement hereby agrees, to notify the Seller, Financial
Security and the Administrative Agent of any charge or claim against
or with respect to such RCCA. The Collateral Agent shall give the
Seller, the Administrative Agent and Financial Security at least ten
Business Days' prior written notice of any change in the location of
such RCCA or in any related account information. If the Collateral
Agent changes the location of any RCCA held by it, it shall change
the location of the other RCCAs, so that all RCCAs held by it shall
at all times be located at the same depository institution. Anything
herein to the contrary notwithstanding, unless otherwise consented
to by Financial Security in writing, none of the Seller, the
Administrative Agent or the Collateral Agent shall have any right to
change the location of any RCCA.
(b) Upon the written request of Financial Security, the
Seller or Administrative Agent, the Collateral Agent shall cause, at
the expense of the Seller, the depository institution at which any
related RCCA is located to forward to the requesting party copies of
all monthly account statements for such RCCA.
(c) If at any time any RCCA ceases to be an Eligible Account,
the Collateral Agent with respect to such Series shall notify the
Seller, Financial Security and the Administrative Agent of such fact
and shall establish within 5 Business Days of such determination, in
accordance with paragraph (a) of this Section, a successor RCCA
thereto, which shall be an Eligible Account, at another depository
institution acceptable to Financial Security and shall establish
successor RCCAs with respect to all other RCCAs held by the Collateral
Agent, each of which shall be an Eligible Account at the same
depository institution.
(d) No passbook, certificate of deposit or other similar
instrument evidencing a RCCA shall be issued, and all contracts,
receipts and other papers, if any, governing or evidencing a RCCA
shall be held by the Collateral Agent.
(e) Upon execution of this Agreement, each depository
institution or trust company where the RCCA has been established and
the Collateral Agent hereby waives (except to the extent expressly
provided herein), in each case to the extent permitted under
applicable law, (i) any banker's or other statutory or similar Lien,
and (ii) any right of set-off or other similar right under applicable
law with respect to such RCCA and any other RCCA.
Section 4.05. REPORTS BY THE COLLATERAL AGENT. The Collateral Agent
shall report to the Administrative Agent, Financial Security and the Seller
on a monthly basis no later than each Determination Date with respect to the
amount on deposit in each RCCA, the earnings on such
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amount for the period and the identity of the investments included therein as
of the last day of the related Monthly Period.
Section 4.06. RCCA SUPPLEMENTS. The parties hereto intend to enter
into a Supplement substantially in the form of Exhibit A hereto (each, an
"RCCA SUPPLEMENT") with respect to each Series, the Secured Obligations with
respect to which are to be secured by Collateral held pursuant to the terms
of this Agreement. Such RCCA Supplement shall appoint a Collateral Agent for
the RCCA of such Series. Upon execution of an RCCA Supplement, each such RCCA
Supplement shall form a part of this Agreement for all purposes hereof with
respect to the related RCCA, all references to this Agreement shall mean this
Agreement as supplemented by each RCCA Supplement, and the Collateral Agent
designated in each RCCA Supplement shall be and become a party to this
Agreement for all purposes hereof with respect to the related RCCA..
ARTICLE V
THE COLLATERAL AGENT
Section 5.01. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, Financial Security hereby appoints Bank One as Collateral
Agent, and Bank One hereby accepts such appointment and agrees to act as
Collateral Agent with respect to the Collateral for Financial Security, to
maintain custody and possession of such Collateral (except as otherwise
provided hereunder) and to perform the other duties of the Collateral Agent
in accordance with the provisions of this Agreement. Financial Security
hereby authorizes the Collateral Agent to take such action on its behalf, and
to exercise such rights, remedies, powers and privileges hereunder, as
Financial Security may direct and as are specifically authorized to be
exercised by the Collateral Agent by the terms hereof, together with such
actions, rights, remedies, powers and privileges as are reasonably incidental
thereto. The Collateral Agent shall act upon and in compliance with the
written instructions of Financial Security delivered pursuant to this
Agreement promptly following receipt of such written instructions; provided
that the Collateral Agent shall not act in accordance with any instructions
(i) which are in violation of the provisions of this Agreement or (ii) for
which the Collateral Agent has not received reasonable indemnity. Receipt of
such instructions shall not be a condition to the exercise by the Collateral
Agent of its express duties hereunder, except where this Agreement provides
that the Collateral Agent is permitted to act only following and in
accordance with such instructions.
Section 5.02. PERFORMANCE OF DUTIES. The Collateral Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement or as directed by Financial Security in accordance with this
Agreement.
Section 5.03. LIMITATION ON LIABILITY. Neither the Collateral Agent
nor its directors, officers agents or employees, shall be liable for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Collateral Agent shall be liable for its gross
negligence, bad faith or willful misconduct; nor shall the Collateral Agent
be responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Seller of this Agreement or any of the Collateral
(or any part thereof) or perfection thereof. Notwithstanding any term or
provision of this Agreement, the Collateral Agent shall not incur any
liability to the Seller or Financial Security for any action taken or omitted
by the Collateral Agent in connection
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with the Collateral, except for gross negligence or willful misconduct on the
part of the Collateral Agent, and, further, the Collateral Agent shall not
incur any liability to Financial Security except for gross negligence or
willful misconduct in carrying out its duties to Financial Security. Subject
to Section 5.04, the Collateral Agent shall be protected and shall incur no
liability to any such party in relying upon the accuracy, acting in reliance
upon the contents, and assuming the genuineness of any notice, demand,
certificate, signature, instrument or other document reasonably believed by
the Collateral Agent to be genuine and to have been duly executed by the
appropriate signatory, and (absent actual knowledge to the contrary by a
Responsible Officer of the Collateral Agent) the Collateral Agent shall not
be required to make any independent investigation with respect thereto. The
Collateral Agent shall at all times be free independently to establish to its
reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder. The Collateral Agent may
consult with counsel, and shall not be liable for any action taken or omitted
to be taken by it hereunder in good faith and in accordance with the written
advice of such counsel. The Collateral Agent shall not be under any
obligation to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or to exercise
any of the remedial rights or powers vested in it by this Agreement or to
follow any direction from Financial Security unless it shall have received
reasonable security or indemnity satisfactory to the Collateral Agent against
the costs, expenses and liabilities which might be incurred by it in
connection therewith.
Section 5.04. RELIANCE UPON DOCUMENTS. In the absence of bad faith
or gross negligence on its part, the Collateral Agent shall be entitled to
rely on any communication, instrument, paper or other document reasonably
believed by it to be genuine and correct and to have been signed or sent by
the proper Person or Persons and shall have no liability in acting, or
omitting to act, where such action or omission to act is in reasonable
reliance upon any statement or opinion contained in any such document or
instrument.
Section 5.05. SUCCESSOR COLLATERAL AGENT.
(a) MERGER. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its trust business and assets as a
whole or substantially as a whole, or any Person resulting from any
such conversion, merger, consolidation, sale or transfer to which
the Collateral Agent is a party, shall (provided it is otherwise
qualified to serve as the Collateral Agent hereunder) be and become
a successor Collateral Agent hereunder and be vested with all of the
title to and interest in the Collateral and all of the trusts,
powers, discretions, immunities, privileges and other matters as was
its predecessor without the execution or filing of any instrument or
any further act, deed or conveyance on the part of any of the
parties hereto, anything herein to the contrary notwithstanding,
except to the extent, if any, that any such action is necessary to
perfect, or continue the perfection of, the security interest of
Financial Security in the Collateral.
(b) RESIGNATION. The Collateral Agent and any successor
Collateral Agent may resign only (i) 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 result in a material
adverse effect on the
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Collateral Agent, and Financial Security does not elect to waive the
Collateral Agent's obligation to perform those duties which render
it legally unable to act or elect to delegate those duties to
another Person, or (ii) with the prior written consent of Financial
Security, such consent not to be unreasonably withheld. The
Collateral Agent shall give not less than 60 days' prior written
notice of any such permitted resignation by registered or certified
mail to Financial Security and the Seller; PROVIDED, that such
resignation shall take effect only upon the date which is the latest
of (i) the effective date of the appointment of a successor
Collateral Agent and the acceptance in writing by such successor
Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions
hereof, (ii) delivery of the related Collateral to such successor to
be held in accordance with the procedures specified in Article III
hereof, and (iii) receipt by Financial Security of an Opinion of
Counsel to the effect described in Section 6.02. Notwithstanding the
preceding sentence, if by the contemplated date of resignation
specified in the written notice of resignation delivered as
described above no successor Collateral Agent or temporary successor
Collateral Agent has been appointed Collateral Agent or becomes the
Collateral Agent pursuant to subsection (d) hereof, the resigning
Collateral Agent may petition a court of competent jurisdiction in
New York, New York for the appointment of a successor.
(c) REMOVAL. The Collateral Agent may be removed by Financial
Security at any time, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Collateral Agent
and the Issuer. A temporary successor may be removed at any time to
allow a successor Collateral Agent to be appointed pursuant to
subsection (d) below. Any removal pursuant to the provisions of this
subsection (c) shall take effect only upon the date which is the
latest of (i) the effective date of the appointment of a successor
Collateral Agent and the acceptance in writing by such successor
Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions
hereof, (ii) delivery of the Collateral to such successor to be held
in accordance with the procedures specified in Article III and
Section 8.15 hereof and (iii) receipt by Financial Security and the
Administrative Agent of an Opinion of Counsel to the effect
described in Section 6.02.
(d) ACCEPTANCE BY SUCCESSOR. Financial Security shall have
the sole right to appoint each successor Collateral Agent. Every
temporary or permanent successor Collateral Agent appointed
hereunder shall execute, acknowledge and deliver to its predecessor
and to the Seller an instrument in writing accepting such
appointment hereunder and the relevant predecessor shall execute,
acknowledge and deliver such other documents and instruments as will
effectuate the delivery of all related Collateral to the successor
Collateral Agent to be held in accordance with the procedures
specified in Article III and Section 8.15 hereof, whereupon such
successor, without any further act, deed or conveyance, shall become
fully vested with all the estates, properties, rights, powers,
duties and obligations of its predecessor. Such predecessor shall,
nevertheless, on the written request of either Financial Security or
the Seller, execute and deliver an instrument transferring to such
successor all the estates, properties, rights and powers of such
predecessor hereunder. In the event that any instrument in writing
from the Seller or Financial Security is reasonably required by a
successor Collateral Agent to more fully and certainly vest in such
successor the estates, properties, rights, powers, duties and
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obligations vested or intended to be vested hereunder in the
Collateral Agent, any and all such written instruments shall, at the
request of the temporary or permanent successor Collateral Agent, be
forthwith executed, acknowledged and delivered by the Issuer. The
designation of any successor Collateral Agent and the instrument or
instruments removing the Collateral Agent and appointing a successor
hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the related
Collateral and, to the extent required by applicable law, filed or
recorded by the successor Collateral Agent in each place where such
filing or recording is necessary to effect the transfer of the
related Collateral to the successor Collateral Agent or to protect
or continue the perfection of the security interests granted
hereunder.
Section 5.06. INDEMNIFICATION. The Seller shall indemnify the
Collateral Agent, its directors, officers, employees and agents for, and hold
the Collateral Agent, its directors, officers, employees and agents harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) arising out of or in connection
with the Collateral Agent's acting as Collateral Agent hereunder, except such
loss, liability or expense as shall result from the gross negligence, bad
faith or willful misconduct of the Collateral Agent or its officers,
employees, directors or agents. The obligation of the Seller under this
Section shall survive the termination of this Agreement and the resignation
or removal of the Collateral Agent.
Section 5.07. COMPENSATION AND REIMBURSEMENT. The Seller agrees for
the benefit of Financial Security and as part of the Secured Obligations (a)
to pay to the Collateral Agent, from time to time, reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a collateral
trustee); and (b) to reimburse the Collateral Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with any provision of, or carrying out its
duties and obligations under, this Agreement (including the reasonable
compensation and fees and the expenses and disbursements of its agents, any
independent certified public accountants and independent counsel), except any
expense, disbursement or advances as may be attributable to gross negligence,
bad faith or willful misconduct on the part of the Collateral Agent.
Section 5.08. REPRESENTATIONS AND WARRANTIES OF BANK ONE. Bank One
represents and warrants to the Seller and to Financial Security as follows:
(a) DUE ORGANIZATION. Bank One is a national banking
association, duly organized, validly existing and in good standing
under the laws of the United States and is duly authorized and
licensed under applicable law to conduct its business as presently
conducted.
(b) CORPORATE POWER. Bank One has all requisite right, power
and authority to execute and deliver this Agreement and to perform all
of its duties as Collateral Agent hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by Bank One
of this Agreement, and the performance by Bank One of its duties
hereunder, have been duly
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authorized by all necessary corporate proceedings and no further
approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by Bank One, or the
performance by Bank One, of this Agreement.
(d) VALID AND BINDING AGREEMENT. Bank One has duly executed
and delivered this Agreement and each other Transaction Document to
which it is a party, and each of this Agreement and each such other
Transaction Document constitutes the legal, valid and binding
obligation of Bank One, enforceable against Bank One, in accordance
with its terms, except as (i) such enforceability may be limited by
bankruptcy, insolvency, reorganization and similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability.
Section 5.09. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any RCCA and
agrees that amounts in the RCCAs shall at all times be held and applied
without deduction for any counterclaims, defenses, recoupments or set-offs in
accordance with the provisions hereof.
Section 5.10. CONTROL BY FINANCIAL SECURITY. The Collateral Agent
shall comply with notices and instructions given by the Seller only if
accompanied by the written consent of Financial Security, except that if any
default under this Agreement shall have occurred and be continuing, the
Collateral Agent shall act upon and comply with notices and instructions
given by Financial Security alone in the place and stead of the Seller. After
the lien in favor of the Collateral Agent for the benefit of Financial
Security is terminated, the Collateral Agent shall act upon and comply with
the written instructions given by the Lender Collateral Agent.
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ARTICLE VI
COVENANTS OF THE SELLER
Section 6.01. PRESERVATION OF COLLATERAL. Subject to the rights,
powers and authorities granted to the Collateral Agent and Financial Security
in this Agreement, the Seller shall take such action as is necessary and
proper with respect to the Collateral in order to preserve and maintain such
Collateral and to cause (subject to the rights of Financial Security) the
Collateral Agent to perform its obligations with respect to such Collateral
as provided herein. The Seller will do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, such instruments of
transfer or take such other steps or actions as may be necessary, or required
by Financial Security, to perfect the Security Interests granted hereunder in
the Collateral, to ensure that such Security Interests rank prior to all
other Liens and to preserve the priority of such Security Interests and the
validity and enforceability thereof. Upon any delivery or substitution of
Collateral, the Seller shall be obligated to execute such documents and
perform such actions as are necessary to create in the Collateral Agent for
the benefit of Financial Security a valid first Lien on, and valid and
perfected, first priority security interest in, the Collateral so delivered
and to deliver such Collateral to the Collateral Agent, free and clear of any
other Lien together with satisfactory assurances thereof, and to pay any
reasonable costs incurred by either Financial Security or the Collateral
Agent (including its agents) or otherwise in connection with such delivery.
Section 6.02. OPINIONS AS TO COLLATERAL. Not more than 90 days nor
less than 30 days prior to (i) each May 1, commencing May 1, 2000, during the
term of this Agreement and (ii) each date on which the Seller proposes to
take any action contemplated by Section 6.05, the Seller shall, at its own
cost and expense, furnish to Financial Security, the Administrative Agent and
the Collateral Agent an Opinion of Counsel either (a) stating that, in the
opinion of such counsel, such action has been taken with respect to the
execution and filing of any financing statements and continuation statements
and other actions as are necessary to perfect, maintain and protect the lien
and security interest of the Collateral Agent (and the priority thereof) on
behalf of Financial Security, with respect to such Collateral against all
creditors of and purchasers from the Seller and reciting the details of such
action, or (b) stating that, in the opinion of such counsel, no such action
is necessary to maintain such perfected lien and security interest. Such
Opinion of Counsel shall further describe each execution and filing of any
financing statements and continuation statements and such other actions as
will, in the opinion of such counsel, be required to perfect, maintain and
protect the lien and security interest of the Collateral Agent, on behalf of
Financial Security, with respect to such Collateral against all creditors of
and purchasers from the Seller for a period, specified in such Opinion,
continuing until a date not earlier than eighteen months from the date of
such Opinion.
Section 6.03. WAIVER OF STAY OR EXTENSION LAWS; MARSHALING OF ASSETS.
The Seller covenants, to the fullest extent permitted by applicable law, that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any appraisement, valuation, stay, extension
or redemption law wherever enacted, now or at any time hereafter in force, in
order to prevent or hinder the enforcement of this Agreement or any absolute
sale of the Collateral or any part thereof, or the possession thereof by any
purchaser at any sale under Article VI of this Agreement; and the Seller, to the
fullest extent permitted by
27
<PAGE>
applicable law, for itself and all who may claim under it, hereby waives the
benefit of all such laws, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Collateral Agent, but
will suffer and permit the execution of every such power as though no such
law had been enacted. The Seller, for itself and all who may claim under it,
waives, to the fullest extent permitted by applicable law, all right to have
the Collateral marshaled upon any foreclosure or other disposition thereof.
Section 6.04. NONINTERFERENCE, ETC. The Seller shall not (i) waive or
alter any of its rights under the Collateral (or any agreement or instrument
relating thereto) without the prior written consent of Financial Security; or
(ii) fail to pay any tax, assessment, charge or fee levied or assessed against
the Collateral, or to defend any action, if such failure to pay or defend may
adversely affect the priority or enforceability of the Seller's right, title or
interest in and to the Collateral or the Collateral Agent's lien on, and
security interest in, the Collateral for the benefit of Financial Security; or
(iii) take any action, or fail to take any action, if such action or failure to
take action, will interfere with the enforcement of any rights hereunder.
Section 6.05. SELLER CHANGES.
(a) CHANGE IN NAME, STRUCTURE, ETC. The Seller shall not
change its name, identity or structure unless it shall have given each
Financial Security, the Collateral Agent and the Administrative Agent
at least 30 days' prior written notice thereof, shall have effected any
necessary or appropriate assignments or amendments thereto and filings
of financing statements or amendments thereto, and shall have delivered
to the Collateral Agent and Financial Security an Opinion of Counsel of
the type described in Section 6.02.
(b) RELOCATION OF THE SELLER. The Seller shall not change its
principal executive office unless it gives Financial Security and the
Collateral Agent at least 30 days' prior written notice of any
relocation of its principal office. If the Seller relocates its
principal office or principal place of business from Nevada, the Seller
shall give prior notice thereof to Financial Security and the
Collateral Agent and shall effect whatever appropriate recordations and
filings are necessary and shall provide to Financial Security and the
Collateral Agent an Opinion of Counsel, to the effect that, upon the
recording of any necessary assignments or amendments to
previously-recorded assignments and filing of any necessary amendments
to the previously filed financing or continuation statements or upon
the filing of one or more specified new financing statements, and the
taking of such other actions as may be specified in such opinion, the
security interests in the Collateral shall remain, after such
relocation, valid and perfected.
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. REMEDIES UPON A FORECLOSURE EVENT OF DEFAULT OR OTHER
DEFAULT. If a Foreclosure Event of Default with respect to this Agreement has
occurred and is continuing, the Collateral Agent shall, at the direction of
Financial Security, take whatever action at law or in equity as may appear
necessary or desirable in the judgment of Financial Security to collect and
satisfy all Insurer Secured Obligations (including, but not limited to,
foreclosure upon the related
28
<PAGE>
Collateral and all other rights available to secured parties under applicable
law) or to enforce performance and observance of any obligation, agreement or
covenant under this Agreement. If any default other than a Foreclosure Event
of Default has occurred and is continuing, then Financial Security shall have
all rights and remedies, other than set-off or foreclosure without judicial
action provided to secured creditors at law or in equity and may take or
instruct the Collateral Agent to take any legal action, other than set-off or
foreclosure without judicial action, as may be available to secured
creditors. Any default, breach of representation or breach of warranty under
the Subordination Agreement and the Underlying Transaction Documents shall
constitute a default hereunder. Upon a Foreclosure Event of Default, any
Eligible Investment disposed of prior to maturity shall be sold in a
recognized market for such Eligible Investment and for the best obtainable
price on such market; and cash may be applied to satisfy the Insurer Secured
Obligations.
Section 7.02. WAIVER OF DEFAULT. Financial Security shall have the
sole right, to be exercised in its complete discretion, to waive any default
hereunder (except a default under Section 8.15) until the lien in favor of
the Collateral Agent for the benefit of Financial Security is terminated by a
writing setting forth the terms, conditions and extent of such waiver signed
by Financial Security and delivered to the Collateral Agent, the
Administrative Agent and AFS. Any such waiver shall be binding upon the
Collateral Agent. Unless such writing expressly provides to the contrary, any
waiver so granted shall extend only to the specific event or occurrence which
gave rise to the default so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
Section 7.03. RESTORATION OF RIGHTS AND REMEDIES. If the Collateral
Agent has instituted any proceeding to enforce any right or remedy under this
Agreement, and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Collateral Agent, then and in
every such case the Seller, the Collateral Agent and Financial Security shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of Financial Security shall continue as though no such proceeding had
been instituted.
Section 7.04. NO REMEDY EXCLUSIVE. No right or remedy herein conferred
upon or reserved to the Collateral Agent or Financial Security is intended to be
exclusive of any other right or remedy, and every right or remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law, in equity or
otherwise (but, in each case, shall be subject to the provisions of this
Agreement limiting such remedies), and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often and in such order as may be deemed expedient by
Financial Security, and the exercise of or the beginning of the exercise of any
right or power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
ARTICLE VIII
MISCELLANEOUS
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<PAGE>
Section 8.01. FURTHER ASSURANCES. Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Agreement or to confirm or perfect any transaction described or contemplated
herein.
Section 8.02. WAIVER. Any waiver by any party of any provision of this
Agreement or any right, remedy or option hereunder shall only prevent and estop
such party from thereafter enforcing such provision, right, remedy or option if
such waiver is given in writing and only as to the specific instance and for the
specific purpose for which such waiver was given. The failure or refusal of any
party hereto to insist in any one or more instances, or in a course of dealing,
upon the strict performance of any of the terms or provisions of this Agreement
by any party hereto or the partial exercise of any right, remedy or option
hereunder shall not be construed as a waiver or relinquishment of any such term
or provision, but the same shall continue in full force and effect.
Section 8.03. AMENDMENTS, WAIVERS. No amendment, modification, waiver
or supplement to this Agreement or any provision of this Agreement shall in any
event be effective unless the same shall have been made or consented to in
writing by each of the parties hereto.
Section 8.04. SEVERABILITY. In the event that any provision of this
Agreement or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Agreement, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by the Collateral Agent, or Financial Security,
hereunder is unavailable or unenforceable shall not affect in any way the
ability of the Collateral Agent or any of Financial Security to pursue any other
remedy available to it or them (subject, however, to the provisions of this
Agreement limiting such remedies).
Section 8.05. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("NOTICES") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt
to be effective the date of delivery indicated on the return receipt, or (b)
one Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
(i) If to the Seller:
AFS Funding Corp.
639 Isbell Road, Suite 390
Reno, Nevada 89509
30
<PAGE>
Attention: Chief Financial Officer
Telecopier No.: (702) 322-8808
with a copy to
AmeriCredit Corp.
801 Cherry Street, Suite 3900
Fort Worth, Texas 76102
Attention: Treasurer
Telecopier No.: (817) 302-7492
(ii) If to Financial Security:
Financial Security Assurance Inc.
350 Park Avenue - 13th Floor
New York, New York 10022
Attention: Transaction Oversight Department
Telecopier No.: (212) 339-3518
(212) 339-3529
(in each case in which notice or other communication to
Financial Security refers to a Foreclosure Event of Default,
a claim on the Policy or in which failure on the part of
Financial Security to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of each of
the General Counsel and the Head-Financial Guaranty Group and
shall be marked to indicate "URGENT MATERIAL ENCLOSED.")
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<PAGE>
(iii) If to Bank One as Collateral Agent:
Bank One Trust Company
100 Broad Street, 8th Floor
Columbus, OH 43215
Attention: Corporate Trust Office
Telecopier No.: (614) 248-5195
(iv) If to Administrative Agent:
Credit Suisse First Boston, New York Branch
11 Madison Avenue
New York, New York 10010
Attention: Asset Finance
Telecopier No.: (212) 325-6677
A copy of each notice given hereunder to any party hereto shall also be given to
(without duplication) Financial Security, the Administrative Agent, the Seller
and the Collateral Agent. Each party hereto may, by notice given in accordance
herewith to each of the other parties hereto, designate any further or different
address to which subsequent notices shall be sent.
Section 8.06. TERM OF THIS AGREEMENT. This Agreement shall take effect
on the Closing Date of the Series 1999-D Notes and shall continue in effect
until all amounts on deposit in the RCCAs have been distributed pursuant to the
terms hereof. On such final distribution date, this Agreement shall terminate,
all obligations of the parties hereunder shall cease and terminate, PROVIDED
that the provisions of Sections 5.06 and 5.07 shall survive any termination of
this Agreement.
Section 8.07. ASSIGNMENTS: THIRD-PARTY RIGHTS; REINSURANCE.
(a) This Agreement shall be a continuing obligation of the
parties hereto and shall (i) be binding upon the parties and their
respective successors and assigns, and (ii) inure to the benefit of and
be enforceable by Financial Security and the Collateral Agent, and by
their respective successors, transferees and assigns. The Seller may
not assign this Agreement, or delegate any of its duties hereunder,
without the prior written consent of Financial Security.
(b) Financial Security shall have the right (unless a
Financial Security Default shall have occurred and be continuing) to
give participations in its rights under this Agreement and to enter
into contracts of reinsurance with respect to any Policy issued in
connection with a Series and each such participant or reinsurer shall
be entitled to the benefit of any representation, warranty, covenant
and obligation of each party (other than Financial Security) hereunder
as if such participant or reinsurer was a party hereto and,
32
<PAGE>
subject only to such agreement regarding such reinsurance or
participation, shall have the right to enforce the obligations of
each such other party directly hereunder; PROVIDED, HOWEVER, that no
such reinsurance or participation agreement or arrangement shall
relieve Financial Security of its obligations hereunder or under any
such Policy. In addition, nothing contained herein shall restrict
Financial Security from assigning to any Person pursuant to any
liquidity facility or credit facility any rights of Financial
Security under this Agreement or with respect to any real or
personal property or other interests pledged to Financial Security,
or in which Financial Security has a security interest, in
connection with the transactions contemplated hereby. The terms of
any such assignment or participation shall contain an express
acknowledgment by such Person of the condition of this Section and
the limitations of the rights of Financial Security hereunder.
(c) The Lender Collateral Agent shall be a third party
beneficiary of the agreements set forth in Section 8.15.
(d) The Administrative Agent shall be a third party
beneficiary of this Agreement.
Section 8.08. CONSENT OF FINANCIAL SECURITY. In the event that
Financial Security's consent is required under the terms hereof or under the
terms of any Transaction Document, it is understood and agreed that, except as
otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by Financial Security in its sole
discretion.
Section 8.09. 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 Agreement or any of the transactions contemplated
hereunder. 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 Agreement by among other things, this waiver.
Section 8.10. GOVERNING LAW. This Agreement shall be governed by and
construed, and the obligations, rights and remedies of the parties hereunder
shall be determined, in accordance with the law of the State of New York.
Section 8.11. 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 Agreement or the transactions contemplated hereunder 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,
33
<PAGE>
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 Agreement or
the subject matter hereof may not be litigated in or by such courts. The
Seller hereby irrevocably appoints and designates The Prentice-Hall
Corporation System, Inc., as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process. The Seller agrees that
service of such process upon such Person shall constitute personal service of
such process upon it.
Section 8.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 8.13. HEADINGS. The headings of sections and paragraphs and
the Table of Contents contained in this Agreement are provided for
convenience only. They form no part of this Agreement and shall not affect
its construction or interpretation.
Section 8.14. NOTICES TO ADMINISTRATIVE AGENT. Prior to the issuance
of any Series, Financial Security agrees to deliver to the Administrative
Agent, if the rating on Financial Security's credit risk with respect thereto
on a stand-alone basis is not rated at least Baa 3/BBB-, written notice of
the actual rating.
Section 8.15. DISCLAIMER OF FIDUCIARY DUTY. The Collateral Agent
agrees to act as agent for the Lender Collateral Agent to hold the Collateral
in order to perfect by possession the security interest granted by the Seller
to the Lender Collateral Agent in the Collateral pursuant to the Lender
Security Agreement. The Collateral Agent expressly disclaims any fiduciary
duty to the Lender Collateral Agent and any of the Lenders with respect to
the Collateral Agent's duties as the Collateral Agent for the Collateral.
Neither the Lender Collateral Agent nor any Lender shall have any ability or
power to direct the Collateral Agent in any manner whatsoever other than
pursuant to this Section 8.15, PROVIDED, that upon the termination of the
lien of the Collateral Agent for the benefit of Financial Security, the
Collateral Agent shall act upon the instruction of the Lender Collateral
Agent and shall deliver the Collateral in accordance with the written
instruction of the Lender Collateral Agent. Subject to the terms of this
Agreement and upon the instruction of Financial Security, the Collateral
Agent may foreclose on the Collateral. Following the completion of the
foreclosure, the Collateral Agent shall be released of all obligations in
favor of the Lender Collateral Agent and the Lenders, other than the
obligations to turn over possession of the remaining Collateral, if any, to
the Lender Collateral Agent. In the event that the Collateral Agent has not
foreclosed upon the Collateral, then upon the Final Insurance Termination
Date, the Collateral Agent's sole obligation shall be to turn over possession
of the remaining Collateral, if any, in accordance with the written
instruction of the Lender Collateral Agent.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
amended and restated, as of the date set forth on the first page hereof.
AFS FUNDING CORP.
By:
-------------------------------------
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
By:
-------------------------------------
Name: Authorized Officer
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Administrative Agent
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BANK ONE, N.A., as Collateral Agent
By:
-------------------------------------
Name:
Title:
35
<PAGE>
BANK ONE, N.A., as Securities Intermediary
By:
-------------------------------------
Name:
Title:
36
<PAGE>
SCHEDULE I
AmeriCredit Automobile Receivables Trust 1996-C
AmeriCredit Automobile Receivables Trust 1996-D
AmeriCredit Automobile Receivables Trust 1997-A
AmeriCredit Automobile Receivables Trust 1997-B
AmeriCredit Automobile Receivables Trust 1997-C
AmeriCredit Automobile Receivables Trust 1997-D
AmeriCredit Automobile Receivables Trust 1998-A
AmeriCredit Automobile Receivables Trust 1998-B
AmeriCredit Automobile Receivables Trust 1998-C
AmeriCredit Automobile Receivables Trust 1998-D
AmeriCredit Automobile Receivables Trust 1999-A
AmeriCredit Automobile Receivables Trust 1999-B
AmeriCredit Automobile Receivables Trust 1999-C
AmeriCredit Automobile Receivables Trust 1999-D
<PAGE>
Exhibit A
SERIES [ ] SUPPLEMENT
dated as of [ ]
among
AFS FUNDING CORP.
FINANCIAL SECURITY ASSURANCE INC.
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as Administrative Agent
and
[ ], as Collateral Agent
to
Replacement Cash Collateral Account Agreement
dated as of October 14, 1999
among
AFS Funding Corp.
Financial Security Assurance Inc.
Credit Suisse First Boston, New York Branch, as Administrative Agent
and
Bank One, N.A., as Collateral Agent
<PAGE>
SERIES [ ] SUPPLEMENT TO REPLACEMENT CASH COLLATERAL ACCOUNT AGREEMENT
This Series [ ] Supplement (this "Supplement"), dated as of [ ],
is by and among AFS FUNDING CORP., (the "Seller"), FINANCIAL SECURITY ASSURANCE
INC., ("Financial Security"), CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH (the
"Administrative Agent") and [ ], (the "Collateral Agent"), under the
Replacement Cash Collateral Account Agreement, dated as October 14, 1999,
among the parties thereto (the "RCCA Agreement"), as the same may be further
amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof. Capitalized terms used in this
Supplement and not otherwise specifically defined have the meanings given
such terms in the RCCA Agreement.
RECITALS
WHEREAS, the parties hereto have executed the RCCA Agreement, which
contemplates and provides for the execution and delivery of individual Series
Supplements with respect to each Series (each, a "RCCA SUPPLEMENT"), for the
purpose of identifying, describing and pledging Collateral related to a
particular Series of notes or certificates, naming the Collateral Agent and
stating the location of the RCCA;
WHEREAS, AmeriCredit Automobile Receivables Trust [ ] (the "Series
[ ] Trust") is being formed contemporaneously herewith pursuant to a Trust
Agreement dated as of [ ], as amended and restated as of [ ] between
AFS Funding Corp and Bankers Trust (Delaware), as Owner Trustee (the "Series
[ ] Trust Agreement") and the parties hereto have executed the Underlying
Transaction Documents relating to such Series;
WHEREAS, [ ] has been appointed Collateral Agent for the Series [ ]
RCCA;
WHEREAS, upon execution of this Supplement, such Supplement shall form
a part of the RCCA Agreement for all purposes thereof, all references to the
RCCA Agreement shall include this Supplement thereto, and the Collateral Agent
shall become a party to the RCCA Agreement for all purposes thereof with respect
to this RCCA.
NOW, THEREFORE, it is hereby agreed by and among the parties hereto as
follows:
ARTICLE I
AGREEMENTS
SECTION 1.1. DEFINITIONS. Each term used but not defined herein shall
have the meaning assigned to such term in the RCCA Agreement.
"COLLATERAL AGENT" means [ ], in its capacity as collateral agent
on behalf of Financial Security until a successor Person shall have become a
Collateral Agent pursuant to Section 5.05(d) of the RCCA Agreement.
2
<PAGE>
"UNDERLYING TRANSACTIONS" when used in the singular, any of, and when
used in the plural, all of, the transactions contemplated by each of the 1996-A
Insurance and Indemnity Agreement, 1996-B Insurance and Indemnity Agreement, the
1996-C Insurance and Indemnity Agreement, the 1996-D Insurance and Indemnity
Agreement, the 1997-A Insurance and Indemnity Agreement, the 1997-B Insurance
and Indemnity Agreement, the 1997-C Insurance and Indemnity Agreement, the
1997-D Insurance and Indemnity Agreement, the 1998-A Insurance and Indemnity
Agreement, the 1998-B Insurance and Indemnity Agreement, the 1998-C Insurance
and Indemnity Agreement, 1998-D Insurance and Indemnity Agreement, the 1999-A
Insurance and Indemnity Agreement, the 1999-B Insurance and Indemnity Agreement,
the 1999-C Insurance and Indemnity Agreement, the 1999-D Insurance and Indemnity
Agreement, the [ ] Insurance and Indemnity Agreement, the 1996-A Sale and
Servicing Agreement, the 1996-B Sale and Servicing Agreement, the 1996-C Sale
and Servicing Agreement, the 1996-D Sale and Servicing Agreement, the 1997-A
Sale and Servicing Agreement, the 1997-B Sale and Servicing Agreement, the
1997-C Sale and Servicing Agreement, the 1997-D Sale and Servicing Agreement,
1998-A Sale and Servicing Agreement, the 1998-B Sale and Servicing Agreement,
the 1998-C Sale and Servicing Agreement, 1998-D Sale and Servicing Agreement,
the 1999-A Sale and Servicing Agreement, the 1999-B Sale and Servicing
Agreement, the 1999-C Sale and Servicing Agreement, the 1999-D Sale and
Servicing Agreement, the [ ] Sale and Servicing Agreement, each insurance
and indemnity agreement and each sale and servicing agreement entered into in
connection with a spread account which is subject to the Spread Account
Agreement and all other transactions anticipated by the documents executed in
connection with any of the foregoing.
ARTICLE II
MISCELLANEOUS
SECTION 2.1. EXECUTION OF SUPPLEMENT. This Supplement may be executed
in multiple counterparts, each of which shall constitute an original and all of
which when taken together shall constitute one instrument.
SECTION 2.2. INCORPORATION BY REFERENCE. In accordance with Section
4.06 of the RCCA Agreement, the covenants, representations and agreements
provided for in the RCCA Agreement as set forth in their entirety are
incorporated herein and are hereby in all respects ratified, confirmed and
approved by the parties hereto and made applicable to this Supplement. The
Collateral Agent appointed herein hereby agrees to be bound by the RCCA
Agreement, as if it were a party thereto solely with respect to the Series
[ ] RCCA.
SECTION 2.3. FURTHER ASSURANCES. Each party hereto shall take such
action and deliver such instruments to any party hereto, in addition to the
actions and instruments specifically provided herein, as may be reasonably
requested or required to effectuate the purpose or provisions of this Supplement
or to conform or perfect any transaction described or contemplated herein.
SECTION 2.4. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW (INCLUDING, WITHOUT
3
<PAGE>
LIMITATION, THE UCC) OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PROVISIONS THEREOF REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAW.
[Remainder of Page Intentionally Left Blank]
4
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed this
Supplement by their respective duly authorized officers as of the day and year
first above written.
AFS FUNDING CORP., as Seller
By:
----------------------------------
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
By:
----------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, as Administrative Agent
By:
----------------------------------
Name:
Title:
[ ], as Collateral Agent
By:
----------------------------------
Name:
Title:
5
<PAGE>
SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this "SUBORDINATION
AGREEMENT"), dated as of October 14, 1999 is made by and among (a) AFS Funding
Corp., a Nevada Corporation ("BORROWER"); (b) AFS Funding Trust, a Delaware
Business Trust ("AFSFT"); (c) the AmeriCredit 1996-C Trust, the AmeriCredit
1996-D Trust, the AmeriCredit 1997-A Trust, the AmeriCredit 1997-B Trust, the
AmeriCredit 1997-C Trust, the AmeriCredit 1997-D Trust, the AmeriCredit 1998-A
Trust, the AmeriCredit 1998-B Trust, the AmeriCredit 1998-C Trust, the
AmeriCredit 1998-D Trust, the AmeriCredit 1999-A Trust, the AmeriCredit 1999-B
Trust, the AmeriCredit 1999-C Trust (collectively, the "ISSUERS"); (d)
AmeriCredit Financial Services, Inc., a Delaware corporation ("ACFS"), (e)
AmeriCredit Management Company, a Delaware corporation ("AMC"), (f) AmeriCredit
Corp., a Texas corporation ("ACC"); (g) Bankers Trust Company, a New York
banking Corporation, not in its individual capacity, but solely in its capacity
as Lender Collateral Agent under the Security Agreement (as defined below) (the
"LENDER COLLATERAL AGENT"), (h) Bankers Trust (Delaware), a Delaware banking
corporation ("BANKERS TRUST (DELAWARE)"), not in its individual capacity, but
solely in its capacity as Owner Trustee; (i) Credit Suisse First Boston, a Swiss
banking corporation acting through its New York branch ("CSFB"), in its capacity
as Administrative Agent under the Credit Agreement (defined below), (j) those
Lenders from time to time party to the Credit Agreement (defined below)(the
"Lenders" and collectively with the Lender Collateral Agent and CSFB, the
"JUNIOR LIEN HOLDERS"); (k) Financial Security Assurance Inc., a New York stock
insurance company ("FSA"), (l) Harris Trust and Savings Bank, an Illinois
banking corporation ("Harris Trust"), LaSalle Bank National Association formerly
known as LaSalle National Bank ("LaSalle"), and Bank One N.A., (each in its
capacity as "Collateral Agent" under that certain Spread Account Agreement dated
as of December 1, 1994, (as amended and restated May 11, 1998, and as amended
and or restated from time to time thereafter) and such other entities as may be
designated as "Collateral Agent" under the Underlying Transaction Documents or
the Spread Account Agreement, together with their respective successors or
assigns, if any (collectively the "SENIOR LIEN HOLDERS"). All capitalized terms
used but not otherwise defined herein shall have the respective meanings set
forth in Appendix A attached hereto.
R E C I T A L S
A. FSA is the "Controlling Party" as that term is defined in the
Underlying Transaction Documents.
B. FSA issued and will issue insurance policies to the Senior Lien
Holders in such Senior Lien Holders' capacity as the trustee or indenture
trustee, as applicable (in such capacity, the "UNDERLYING TRUSTEE"), to
guarantee certain scheduled payments to
1
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holders of notes or certificates, as applicable (the "NOTEHOLDERS" or
"CERTIFICATEHOLDERS") issued by the Issuers (the "INSURER OBLIGATIONS").
C. Pursuant to that certain Credit Agreement ("CREDIT AGREEMENT")
dated as of October 14, 1999 among Borrower, ACC, ACFS, AMC, the Lenders, the
Lender Collateral Agent, and CSFB (in its capacity as Administrative Agent), the
Lenders will extend certain financial accommodations to the Borrower of up to
$225,000,000.
D. Pursuant to that certain Security and Collateral Agent Agreement
("SECURITY AGREEMENT") dated as of October 14, 1999 among CSFB (in its capacity
as "Agent"), the Lender Collateral Agent, the Borrower granted a lien on the
Borrower's right, title and interest in and to the Borrower Collateral (as such
term is defined in Section 3 of the Security Agreement) to the Lender Collateral
Agent for the benefit of the Lenders (the "JUNIOR LIEN"). The obligations of
Borrower to the Junior Lien Holders, whether under the Credit Agreement or
otherwise, are referred to herein as the "JUNIOR LOAN."
E. It is a condition precedent to the Credit Agreement that FSA
consent to the Junior Lien on the Borrower Collateral and FSA is willing to
consent solely upon and in accordance with the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and in order to
induce FSA and Senior Lien Holders to consent, the Junior Lien Holders, the
Borrower, ACC, ACFS, AMC, AFSFT, the Issuers, the Senior Lien Holders and FSA
hereby agree as follows:
ARTICLE I.
THE SUBORDINATION
1.1 AGREEMENT TO SUBORDINATE. Each Junior Lien Holder, each Issuer
and Borrower agrees that any and every lien and security interest, whether now
existing or hereinafter granted, in the Borrower Collateral in favor of or held
for the benefit of Senior Lien Holders or FSA has and shall have priority over
any lien or security interest that any Junior Lien Holder now has or may
hereafter acquire in the Borrower Collateral notwithstanding (a) any statement
or provision to the contrary, whether or not contained in any agreement,
instrument or document; (b) irrespective of the time or order of filing or
recording of financing statements, deeds of trust, mortgages or other notices of
security interests, liens or assignments granted pursuant thereto; (c)
irrespective of anything contained in any filing or agreement to which any party
hereto or its respective successors and assigns may now or hereafter be a party;
and (d) irrespective of the ordinary rules for determining priorities under the
UCC or under any other law governing the relative priorities of secured
creditors. Subject to the provisions of Section 1.2(f) and (f), the Junior Loan
and all advances made under the Credit Agreement and the other
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Transaction Documents (without regard to the application of such advances) are
hereby, and shall continue to be, subject and subordinate in lien and in
payment to: (a) the Senior Lien Holders, FSA and the Certificateholders and
Noteholders; (b) the Underlying Transaction Documents and all sums due
thereunder; and (c) all interest, premiums and all other sums due to the
Senior Lien Holders, FSA or the Certificateholders and Noteholders. Subject
to the provisions of Section 1.2(f) and (f), all of the terms, covenants and
conditions of the Transaction Documents in connection with or relating to
Borrower or Borrower Collateral are hereby, and shall continue to be,
subordinate to all of the terms, covenants and conditions of the Underlying
Transaction Documents. For the avoidance of any doubt, nothing contained in
this Subordination Agreement shall afect the rights of the Junior Lien Holders
under the Credit Agreement and the Security Agreement with respect to the
obligations of ACC, AMC, and ACFS, respectively, under the Credit Agreement
and the Security Agreement.
1.2 SUSPENSION OF REMEDIES OF JUNIOR LIEN HOLDER. For purposes of
this Subordination Agreement, the "SENIOR SECURED OBLIGATIONS" shall mean all
indebtedness and other obligations of any kind of the Borrower or payable from
the Borrower Collateral owed to each of the Underlying Trustees, the Senior Lien
Holders, FSA and the Noteholders and Certificateholders in connection with the
Underlying Transactions. Until the Senior Secured Obligations have been fully
and indefeasibly paid in full in cash and the Final Insurance Termination Date
shall have occurred:
(a) No Junior Lien Holder shall have any right to receive any
payment, dividend or other distribution from Borrower, any Issuer or any
Underlying Trustee whether from or by way of the Borrower Collateral or
otherwise, or to enforce any security interest in, foreclose, levy or execute
upon, or collect or attach the Borrower Collateral or any other assets of
Borrower, any Issuer or any Underlying Trustee, whether by private or judicial
action or otherwise except to the extent set forth in this Section 1.2 below;
(b) Each Junior Lien Holder agrees that any payments, dividends
or other distribution received from Borrower, any Issuer or any Underlying
Trustee, directly or indirectly, in violation of this Subordination Agreement,
in cash or other property, by setoff or in any other manner, whether from or by
way of the Borrower Collateral or otherwise, shall be received in trust for the
benefit of the Senior Lien Holders, FSA and the Noteholders and
Certificateholders as their interests may appear pursuant to the Underlying
Transaction Documents, shall be held in the same form in which it is received
and shall be immediately turned over to the Senior Lien Holders, FSA or the
Noteholders and Certificateholders for the benefit of the Senior Secured
Obligations as their respective interests may appear;
(c) Each Junior Lien Holder agrees not to ask, demand, take or
receive from Borrower, any Issuer or any Underlying Trustee, directly or
indirectly, in cash or other property or by setoff or in any other manner,
whether from or by way of the
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Borrower Collateral or otherwise, any payment, dividend or other distribution
except to the extent expressly set forth in this Subordination Agreement; and
(d) Each Junior Lien Holder agrees that it will not take any
action, or cause any action to be taken, which would be prejudicial to or
inconsistent with the priority position of the Senior Lien Holders, FSA or the
Certificateholders or Noteholders under this Subordination Agreement or with the
Senior Lien Holders', FSA's or Certificateholders' or Noteholders' rights under
the Underlying Transaction Documents.
(e) Each Junior Lien Holder may receive and retain any and all
amounts released to or for the account of Borrower or AFSFT in accordance with
the terms and conditions of the Underlying Transaction Documents and paid over
to Junior Lien Holder in accordance with the Underlying Transaction Documents,
the RCCA Agreement or the Certificate Pledge Agreement.
(f) Each Junior Lien Holder (i) may receive payments from ACC,
AMC and ACFS, respectively in accordance with the provisions of Article II(A)
and/or Section 2.05(e) of the Credit Agreement, and (ii) may enforce its rights
against ACC, AMC, or ACFS respectively in accordance with Section 6.02 of the
Credit Agreement.
1.3 DEFINITION OF PROCEEDING. "Proceeding" as used herein means any
voluntary or involuntary bankruptcy, insolvency, arrangement, reorganization,
receivership, relief or similar proceedings or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
any Issuer or Borrower or any other distribution of all or any of the assets of
any Issuer or Borrower to creditors of any Issuer or Borrower upon the
dissolution, winding up, liquidation, arrangement, reorganization, adjustment,
protection, relief or composition of any Issuer or Borrower or its debts. Upon
the occurrence of any Proceeding, any payment or distribution of any kind
(whether in cash, property or securities) which otherwise would be payable or
deliverable upon or with respect to the Borrower Collateral to the Junior Lien
Holders shall be paid or delivered directly to the Senior Lien Holders for
application (in the case of cash) to or as collateral (in the case of noncash
property or securities) for the Senior Secured Obligations until the Senior
Secured Obligations shall have been fully and indefeasibly paid in full in cash.
1.4 NO COMMENCEMENT OF ANY PROCEEDING. Each Junior Lien Holder
agrees that, prior to the date which is one year and one day after the later of:
(a) the date on which all Senior Secured Obligations have been fully and
indefeasibly paid in full in cash and (b) the Final Insurance Termination Date,
such Junior Lien Holder will not commence, or join with any creditor in
commencing or maintaining, any Proceeding by or against Borrower, or any Issuer.
This Section 1.4 shall survive the termination of this Subordination Agreement.
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1.5 NONASSIGNABILITY OF JUNIOR LOAN AND LIENS CONSENTED TO. This
Subordination Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, participants, transferees
and assigns (collectively, "ASSIGNEES") including any Assignee who may be in
interest as a matter of applicable law such as a receiver or trustee or any
Assignee purporting to obtain an interest in violation of the provisions of this
Subordination Agreement. Each Junior Lien Holder hereby covenants and agrees
that none of its legal or beneficial right, title or interest in or to the
Borrower Collateral or under the Transaction Documents may be sold, assigned,
participated, syndicated, pledged, encumbered or transferred, in whole or in
part, absolutely or collaterally, other than in accordance with the provisions
of the Credit Agreement as in effect on the date hereof and with the provisions
of this Subordination Agreement. Any attempt to transfer, directly or
indirectly, all or any portion of the Junior Loan, the Junior Lien or any rights
under any other Transaction Document or to transfer any Junior Lien Holder's
interest in the Borrower Collateral in violation of this Subordination Agreement
shall be null and void, AB INITIO.
1.6 MARSHALING; PAYMENTS SET ASIDE. None of Senior Lien Holders,
FSA, the Noteholders or the Certificateholders shall be under any obligation to
marshal any assets in favor of any Junior Lien Holder, Borrower, any Issuer or
any other Person or against or in payment of any or all of the Senior Secured
Obligations. Each Junior Lien Holder, Borrower and each Issuer hereby waives
any and all rights each shall have at any time under any law pertaining to
marshaling of assets, the sale of property in the inverse order of alienation,
the administration of estates of decedents, appraisement, valuation, stay,
extension or redemption or any other similar laws or equitable principles as now
or hereafter in force to the fullest extent permitted by applicable law.
1.7 NO SET-OFFS BY JUNIOR LIEN HOLDER. Until the Final Insurance
Termination Date, each Junior Lien Holder hereby agrees that it may not exercise
any right of set off, recoupment, banker's lien, statutory lien or any similar
right under any applicable law or in equity against Borrower or any Issuer. If
any action is taken in violation of this provision or if the preceding sentence
should be inapplicable or unenforceable in any respect, each Junior Lien Holder
agrees that the exercise of any such right shall be for the benefit of the
Senior Lien Holders, FSA and the Certificateholders and Noteholders and agrees
to immediately turn over the proceeds of any such set off, recoupment or lien to
the Senior Lien Holders for application to the Senior Secured Obligations.
1.8 NO RIGHTS OF SUBROGATION. Each Junior Lien Holder agrees that no
payment or distribution to the Senior Lien Holders pursuant to the provisions of
this Subordination Agreement shall entitle any Junior Lien Holder to exercise
rights of subrogation, if any, until the Final Insurance Termination Date.
Nothing contained in this Subordination Agreement shall constitute an assignment
by any party to another. Nothing contained in this Subordination Agreement is
intended to or shall excuse or alter, as between Borrower and each Junior Lien
Holder, any of the obligations of Borrower to
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each Junior Lien Holder, or to affect the relative rights against Borrower of
each Junior Lien Holder and creditors of Borrower other than the rights of the
Senior Lien Holders and FSA and the Noteholders and Certificateholders and
each Junior Lien Holder as between them. Each Junior Lien Holder, each Issuer
and Borrower agrees to and hereby does expressly waive to the fullest extent
permitted under applicable law any and all rights, whether at law or in
equity, (a) except as expressly required of FSA pursuant to Section 8.14 of
the RCCA Agreement, to request or compel the Senior Lien Holders, FSA or the
Noteholders or Certificateholders to give notice to any Junior Lien Holder of
any action taken (or not taken) by the Senior Lien Holders, FSA or the
Noteholders or Certificateholders with respect to the Borrower Collateral, the
Senior Secured Obligations or otherwise under the Underlying Transaction
Documents the RCCA Agreement or this Subordination Agreement; (b) to request
or compel marshaling with respect to the Borrower Collateral held for the
Senior Secured Obligations; or (c) to challenge the validity, enforceability
or first priority of the Senior Lien Holders' and FSA's claims and liens or
the exercise of any rights or remedies by the Senior Lien Holders, FSA or the
Noteholders or Certificateholders pursuant to the Underlying Transaction
Documents, the RCCA Agreement or this Subordination Agreement.
1.9 FURTHER ASSURANCES. Each Junior Lien Holder, each Issuer and
Borrower will, at its expense and at any time and from time to time, promptly
execute and deliver all further instruments and documents, and take all further
action (other than any action to commence or maintain a Proceeding), that may be
necessary, or that any of the Senior Lien Holders, FSA or the Certificateholders
or Noteholders may reasonably request, in order to protect any right or interest
granted or purported to be granted hereby or to enable the Senior Lien Holders,
FSA or the Certificateholders or Noteholders to exercise and enforce its rights
and remedies under this Subordination Agreement or the Underlying Transaction
Documents.
Each Junior Lien Holder, each Issuer and Borrower agrees that the
Senior Lien Holders, FSA and the Certificateholders and Noteholders shall have
all of the rights, remedies, immunities, indemnities and discretion provided in
connection with the Underlying Transaction Documents, including, without
limitation, the right to extend, renew, modify, increase, waive or amend any of
the terms thereof, to sell, exchange, release or otherwise deal with any of the
Borrower Collateral, release Borrower, any Issuer or any other person liable in
any manner for any obligations owed to the Senior Lien Holders, FSA or the
Certificateholders or Noteholders, or exercise or refrain from exercising any
rights thereunder or at law as though specifically set forth herein. The
foregoing reservation of rights and remedies under the Underlying Transaction
Documents shall further include, without limitation, the right to charge a
default rate of interest on any amounts owed thereunder, to foreclose upon the
Borrower Collateral as provided therein, and to purchase in lieu of redemption
any Certificates and any Notes (as the terms "Certificates" and "Notes" are
defined in the Underlying Transaction Documents).
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Any and all such rights, remedies, actions or omissions in the Senior
Lien Holders' or FSA's discretion may be taken or not taken without incurring
any responsibility or liability to any Junior Lien Holder, without impairing or
releasing the obligations of Borrower, any Issuer or any Junior Lien Holder
under this Subordination Agreement, without otherwise affecting the rights of
the Senior Lien Holders or FSA under this Subordination Agreement or any
Underlying Transaction Document and without any notice to or consent of any
Junior Lien Holder.
The rights of the Senior Lien Holders, FSA and the Noteholders and
Certificateholders under this Subordination Agreement shall not be prejudiced or
impaired by any action or omission of the Senior Lien Holders, Borrower, any
Issuer, any Underlying Trustee, any Junior Lien Holder or any person in custody
of the Borrower Collateral or the assets, property or operations of Borrower or
any Issuer or by the failure of Borrower, any Issuer, or any Junior Lien Holder
to comply with any of the terms of this Subordination Agreement, the Transaction
Documents or the Underlying Transaction Documents.
Each Junior Lien Holder agrees not to directly or indirectly
challenge, contest, or participate in any effort to challenge, contest, set
aside, alter, amend or modify the rights and priorities set forth in the
Underlying Transaction Documents or this Subordination Agreement.
1.10 AGREEMENT BY BORROWER, JUNIOR LIEN HOLDERS, AND ISSUERS. Each of
Borrower, each Junior Lien Holder, and each Issuer agrees that it will not (a)
take any other action, in contravention of the provisions of this Subordination
Agreement, (b) challenge, directly or indirectly, the enforceability or validity
of this Subordination Agreement, any of the Underlying Transaction Documents or
any of the provisions hereof or thereof, or (c) challenge, directly or
indirectly, the true sale nature and absolute assignment of all or any Issuer's,
any Senior Lien Holder's or FSA's interest in the Trust Estate (as defined in
the Underlying Transaction Documents) or the Spread Account.
1.11 OBLIGATIONS HEREUNDER NOT AFFECTED. All rights and interests of
the Senior Lien Holders, FSA and the Noteholders and Certificateholders under
this Subordination Agreement, and all agreements and obligations of the Junior
Lien Holders, the Borrower and the Issuers under this Subordination Agreement,
shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Transaction
Document or Underlying Transaction Document or any other agreement or instrument
relating thereto;
(b) any change in any term of any Transaction Document or
Underlying Transaction Document, or any other amendment or waiver of or any
consent to departure from any Transaction Document or Underlying Transaction
Document;
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(c) any exchange, release or non-perfection of the Borrower
Collateral or other collateral, or any release or amendment or waiver of or
consent to departure from any of the terms of the Senior Secured Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Borrower, any Issuer, or any guarantor
or subordinated creditor.
Notwithstanding anything contained in this Subordination Agreement or any
Transaction Document, this Subordination Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment to
any of the Senior Lien Holders, FSA or any Noteholder or Certificateholder from
Borrower, any Issuer or any other person or by way of enforcement of any
remedies or otherwise from the Borrower Collateral, in each case to the extent
paid, is rescinded, avoided or must otherwise be returned or paid by any Senior
Lien Holder, FSA or any Noteholder or Certificateholder for any reason, whether
following the institution of a Proceeding or otherwise, under any bankruptcy
law, state or federal law, common law or equitable cause, all as though such
payment had not been made and, in that event, the obligations of the parties
hereunder shall be revived with respect to such amounts ("REVIVED CLAIMS"), all
of which shall constitute Senior Secured Obligations.
1.12 PAYMENTS AND DISTRIBUTIONS HELD IN TRUST. All payments,
dividends or other distributions from or by way of the Borrower Collateral,
which are received by a Junior Lien Holder contrary to the provisions of this
Subordination Agreement shall be received in trust for the benefit of the Senior
Lien Holders, FSA and the Noteholders and Certificateholders, shall be held in
the same form received, and shall be segregated from other funds and property
held by any Junior Lien Holder and shall immediately be paid over to the Senior
Lien Holders in the same form as received (with any necessary endorsement) to be
applied (in the case of cash) to or held as collateral (in the case of noncash
property or securities) for the Senior Secured Obligations in accordance with
the terms of the Underlying Transaction Documents until the Senior Secured
Obligations are fully and indefeasibly paid in full in cash.
1.13 FURTHERANCE OF SUBORDINATION.
(a) REMEDIES LIMITED. Notwithstanding anything in this
Subordination Agreement or in any other Transaction Document to the contrary,
all rights and remedies of Lenders, Collateral Agent, Administrative Agent,
Secured Parties, Affected Parties or any of them whether hereunder, under any
Transaction Document or otherwise at law or in equity are subject to the terms
of this Subordination Agreement.
(b) OBLIGATIONS LIMITED. Notwithstanding anything in this
Subordination Agreement or in any other Transaction Document to the contrary,
none of Borrower, any Issuer, or any Underlying Trustee shall have any
obligation or liability to the Administrative Agent, any Secured Party, any
Lender, or any Affected Party or any of
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them, whether hereunder, under any Transaction Document or otherwise at law or
in equity until the Final Insurance Termination Date if the effect of such
obligation or liability would be to cause any of Borrower, Issuer or
Underlying Trust to not be Solvent and no such obligation shall be or become
due or payable until such time.
(c) SUBORDINATION AGREEMENT GOVERNS. Notwithstanding any other
provision of this Subordination Agreement or any other Transaction Document, in
the event of any contradiction or ambiguity between this Subordination Agreement
and any other Transaction Document, the terms of this Subordination Agreement
shall govern. All disputes with respect to matters addressed in this
Subordination Agreement shall be determined by reference to this Subordination
Agreement exclusively and no provision of this Subordination Agreement or any
other Transaction Document should be interpreted as altering, amending,
explaining or clarifying any provision of this Subordination Agreement.
(d) NOTE LEGEND. Each Junior Lien Holder hereby covenants and
agrees to legend each Note issued pursuant to the Credit Agreement or other
Transaction Document with the Note Legend attached as Exhibit II hereto.
(e) SURVIVAL. The provisions of this Section 1.13 are for the
benefit of FSA and the Senior Lien Holders and, accordingly, shall survive the
termination of this Subordination Agreement.
1.14 RCCA ACCOUNT COLLATERAL. For the avoidance of any doubt, and
notwithstanding anything contained in this Subordination Agreement or the
Transaction Documents, the Senior Lien Holders are not entitled to any of the
RCCA Account Collateral other than in accordance with the terms and provisions
of the RCCA Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF JUNIOR LIEN HOLDER. (a) Each
Junior Lien Holder, other than the Lender Collateral Agent, represents and
warrants that it is a Lender under the Credit Agreement and that, as a Lender,
it holds the percentage set forth in Appendix B attached hereto of the legal and
beneficial interests, obligations and liens under the Credit Agreement and other
Transaction Documents. Each Junior Lien Holder, other than the Lender
Collateral Agent, covenants that it will not sell, transfer, syndicate,
participate, pledge, encumber or otherwise assign, in whole or in part, all or
any portion of its interests, obligations or liens in or under any of the
Transaction Documents except to a Permitted Transferee in accordance with the
provisions of paragraph 1.5 hereof.
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(b) Each of the Junior Lien Holders represents and warrants that
the execution and delivery of this Subordination Agreement has been duly
authorized by all necessary corporate action.
(c) Each of the Junior Lien Holders represents and warrants that
this Subordination Agreement has been duly executed and delivered by each person
and constitutes the legal, valid and binding obligation of each person,
enforceable against each person in accordance with its terms.
2.2 REPRESENTATIONS AND WARRANTIES OF LENDER COLLATERAL AGENT
(a) Lender Collateral Agent represents and warrants that the
execution and delivery of this Subordination Agreement has been duly authorized
by all necessary corporate action.
(b) Lender Collateral Agent represents and warrants that this
Subordination Agreement has been duly executed and delivered by each person and
constitutes the legal, valid and binding obligation of each person, enforceable
against each person in accordance with its terms.
(c) Lender Collateral Agent is a separate legal entity from
Bankers Trust (Delaware) and has not authority or ability to direct the actions
of Bankers Trust (Delaware) as Owner Trustee.
2.3 REPRESENTATIONS AND WARRANTIES OF OTHER PARTIES
(a) Each of FSA, ACC, ACFS, AMC and AFSFT represents and
warrants that the execution and delivery of this Subordination Agreement has
been duly authorized by all necessary corporate action.
(b) Each of FSA, ACC, ACFS, AMC and AFSFT represents and
warrants that this Subordination Agreement has been duly executed and delivered
by each person and constitutes the legal, valid and binding obligation of each
person, enforceable against each person in accordance with its terms.
ARTICLE III.
MISCELLANEOUS
3.1 AMENDMENTS. (a) No amendment or waiver of any provision of this
Subordination Agreement nor consent to any departure therefrom by any Junior
Lien Holder, Borrower, any Issuer, any Senior Lien Holder or FSA shall in any
event be effective unless the same shall be in writing and signed by the Senior
Lien Holders and FSA, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Senior Lien
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Holders or FSA to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. No notice to or demand on Borrower, any Issuer
or Junior Lien Holder in any case shall entitle Borrower, any Issuer or any
Junior Lien Holder to any other or further notice or demand in similar or
other circumstances. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
(b) Each Junior Lien Holder and each of ACC, ACFS, AFSFT, and
AMC hereby acknowledges and agrees that FSA may direct each of the Owner
Trustees or the Underlying Trustees to enter into amendments in accordance
with the terms of the relevant Underlying Transaction Documents, but without
the Junior Lien Holders' consent, to make changes to the Underlying
Transaction Documents that FSA believes in good faith are necessary,
appropriate, or incidental to engaging and retaining a satisfactory successor
servicer in the event of a servicer succession under the terms of the
Underlying Transaction Documents, including, without limitation, any
amendment entered into in accordance with the terms of the relevant
Underlying Transaction Documents that make changes to (a) the duties or
standard of care of the servicer or (b) the compensation paid to the servicer
even if the change in compensation paid to the servicer reduces or eliminates
the amount that would otherwise be released from the Spread Account or the
RCCA to Junior Lien Holders or to any other person.
(c) The parties hereto contemplate that FSA will issue
additional Policies in connection with future Transactions and that such
Transactions will be made subject to the Spread Account Agreement and the
RCCA Agreement by amendments thereto. In connection with each such
Transaction, the parties hereto shall execute an amendment to the
Subordination Agreement substantially in the form of amendment attached as
Exhibit I hereto.
(d) Notwithstanding the provisions of this Section 3.1, (i)
LaSalle's execution of any amendment will not be required only if any such
amendment does not materially adversely affect the interest of LaSalle acting
solely in its capacity as Trust Collateral Agent (as defined in the
Underlying Transaction Documents), Collateral Agent, Trustee or Backup
Servicer (as defined in the Underlying Transaction Documents), (ii) Harris
Trust's execution of any amendment will not be required only if any such
amendment does not materially adversely affect the interest of Harris Trust
acting solely in its capacity as Trust Collateral Agent, Collateral Agent,
Trustee or Backup Servicer, (iii) Bank One's execution of any amendment will
not be required only if any such amendment does not materially adversely
affect the interest of Bank One acting solely in its capacity as Trust
Collateral Agent, Collateral Agent, Trustee or Backup Servicer.
3.2 INDEMNIFICATION OF FSA AND SENIOR LIEN HOLDERS. Each of ACC,
ACFS and ACM hereby acknowledges and agrees that it shall upon demand,
indemnify, protect, save, defend and hold harmless FSA and each Senior Lien
Holder, as the case
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may be, from and against any and all obligations, fees, liabilities, losses,
damages, penalties, claims, demands, actions, suits, judgments, costs and
expenses, including reasonable legal expenses and attorneys fees, of every
kind and nature whatsoever (collectively, "INDEMNIFIABLE EXPENSES"), imposed
on, incurred by, or asserted against FSA or any Senior Lien Holder by any
Person in connection with any (i) Revived Claim and (ii) payments made by FSA
in connection with preference payments made to Noteholders and
Certificateholders, pursuant to any Policy (as defined in the RCCA Agreement).
3.3 ADDITIONAL WAIVERS. (a) Each Junior Lien Holder, each Issuer
and Borrower each hereby waives promptness, diligence, notice of acceptance
and any other notice with respect to any of the Senior Secured Obligations
and this Subordination Agreement and any requirement that the Senior Lien
Holders protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against
Borrower, any Issuer or any other person or entity or the Borrower Collateral.
(b) Each Junior Lien Holder hereby acknowledges and agrees
that, notwithstanding anything contained in the Credit Agreement or any other
Transaction Document to the contrary, neither the Borrower, nor any Issuer
nor any Underlying Trustee shall have any obligation or liability to such
Junior Lien Holder and no such obligation or liability shall become due or
payable under the Credit Agreement at any time before the Final Insurance
Termination Date if the effect of such obligation or liability would be to
cause the Borrower or any Issuer to not be Solvent. Subject to the terms
hereof, any amount that is prevented by operation of this restriction from
becoming due and payable may, at the option of the Junior Lien Holders,
become an arrearage that becomes due and payable no earlier than the first to
occur of the date upon which Borrower can satisfy such obligation or
liability in full in cash and remain Solvent and the day following the Final
Insurance Termination Date.
3.4 SURVIVAL. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of the
Transaction Documents and the making of the Borrowings.
3.5 NO WAIVER BY SENIOR LIEN HOLDERS OR FSA. No failure or delay
on the part of the Senior Lien Holders, FSA or the Underlying Trustees in the
exercise of any power, right or privilege under this Subordination Agreement
or any of the other Underlying Transaction Documents shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.
3.6 SEVERABILITY. Whenever possible, each provision of this
Subordination Agreement, the Transaction Documents and the Underlying
Transaction Documents shall be interpreted in such manner as to be valid,
legal and enforceable under
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the applicable law of any jurisdiction. Without limiting the generality of
the foregoing sentence, in case any provision of this Subordination
Agreement, the Transaction Documents or the Underlying Transaction Documents
shall be invalid, illegal or unenforceable under the applicable law of any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provision in any other jurisdiction, shall not in any
way be affected or impaired thereby.
3.7 IN FURTHERANCE OF SUBORDINATION. Notwithstanding the
prohibition against the initiation, commencement or maintenance of any
Proceeding with respect to Borrower or any Issuer, if any such Proceeding
with respect to Borrower or any Issuer is nevertheless pending and not
dismissed,
(a) The Senior Lien Holders and FSA are hereby irrevocably
authorized and empowered (in their own names or in the name of any Junior
Lien Holder or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to in Sections
1.2(a) through 1.2(d), inclusive, and give acquittance therefor and, in the
event any Junior Lien Holder has failed to file a claim or proof of claim
prior to the 30th day preceding any bar date or other date fixed as the last
day for the filing of such claims or proofs of claim, to file claims and
proofs of claim and take such other action. Each Junior Lien Holder hereby
irrevocably appoints the Senior Lien Holders and FSA, as such Junior Lien
Holder's attorney-in-fact, with full power in the place and stead of such
Junior Lien Holder and in the name of such Junior Lien Holder, the Senior
Lien Holders or FSA, or otherwise, from time to time, in the Senior Lien
Holders' or FSA's discretion to take any action, execute any instrument or
other document in connection with any Proceeding or enforce any security
interest or other lien on the Borrower Collateral securing payment to Junior
Lien Holder. Each Senior Lien Holder or FSA shall give the Administrative
Agent prior written notice of its use of such power of attorney in each
action of enforcement of any security interest or other lien on the Borrower
Collateral securing payment to Junior Lien Holder, PROVIDED that the failure
to deliver any such notice shall not affect the validity of such use of such
power of attorney;
(b) Each Junior Lien Holder shall duly and promptly take such
action (other than any action to commence or maintain a Proceeding) as any
Senior Lien Holders or FSA may reasonably request to collect and receive any
and all payments or distributions which may be payable or deliverable in a
proceeding or with respect to the Borrower Collateral; and
(c) Notwithstanding any other provision hereof, each Junior
Lien Holder hereby agrees that any credit extended by the Senior Lien Holders
or FSA to Borrower or any Issuer or any refinancing arrangement of the
Original Underlying Transactions consented to by FSA and the Senior Lien
Holders (whether or not in connection with such Proceeding) shall be entitled
to all the priorities, preferences and benefits of this Subordination
Agreement, provided that Subsequent Reinsurance (as
13
<PAGE>
defined in the RCCA Agreement) shall not constitute any such credit or
refinancing agreement.
3.8 ENTIRE AGREEMENT; CONSTRUCTION; AMENDMENTS AND WAIVERS.
(a) This Subordination Agreement, the RCCA Agreement, the
Transaction Documents and the Underlying Transaction Documents constitute and
contain the entire agreement among the parties and supersede any and all
prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof.
(b) This Subordination Agreement is the result of
negotiations between and has been reviewed by each of the parties and their
respective counsel; accordingly, this Subordination Agreement shall be deemed
to be the product of the parties hereto, and no ambiguity shall be construed
in favor of or against any party. The parties agree that they intend the
literal words of this Subordination Agreement and that no parol evidence
shall be necessary or appropriate to establish any party's actual intentions.
(c) The right of each Junior Lien Holder to exercise any
remedies under the Credit Agreement or any other Transaction Document is
subject to the terms of this Subordination Agreement. Notwithstanding
anything in the Credit Agreement or in any other Transaction Document, until
the Final Insurance Termination Date, all rights and remedies of each Junior
Lien Holder under the Credit Agreement, any other Transaction Document or
otherwise, whether at law or in equity, is subject to this Subordination
Agreement. In the event of any contradiction or ambiguity between any
Transaction Document and this Subordination Agreement, the terms of this
Subordination Agreement shall govern. All disputes with respect to the
matters addressed in this Subordination Agreement shall be determined by
reference to this Subordination Agreement exclusively and no provision of the
Credit Agreement or any other Transaction Document should be interpreted as
altering, amending, explaining or clarifying any provision of this
Subordination Agreement.
3.9 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing addressed to the
respective party as set forth below and may be personally served, telecopied
or sent by overnight courier or U.S. Mail and shall be deemed given: (a) if
served in person, when served; (b) if telecopied, on the date of transmission
if before 3:00 p.m. (Eastern time) on a business day; PROVIDED that a hard
copy of such notice is also sent pursuant to (c) or (d) below; (c) if by
overnight courier, on the first business day after delivery to the courier;
or (d) if by U.S. Mail, certified or registered mail, return receipt
requested on the fourth (4th) day after deposit in the mail postage prepaid.
Notices to Junior
Lien Holders: Credit Suisse First Boston, New York
Branch
14
<PAGE>
Eleven Madison Avenue
New York, NY 10010
Attn: Asset Finance
Frank Byrne
Telephone: (212) 325-3003
Facsimile: (212) 325-6677
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust and Agency
Services - Structure Finance.
Greenwich Funding Corporation
c/o Credit Suisse First Boston, New York
Branch
Eleven Madison Avenue
New York, NY 10010
Attn: Asset Finance
With copies to: Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attn: Duncan T. O'Brien
Notice to Owner Trustee
Bankers Trust (Delaware), a Delaware
banking corporation
E. A. Delle Donne Corporate Center
Montgomery Building
1011 Center Road
Wilmington, Delaware 19805-1266
Notices to Issuers: c/o AmeriCredit Corp.
801 Cherry Street, Suite 3900
Fort Worth, Texas 76102
Notices to Borrower: AFS Funding Corp.
639 Isbell Road, Suite 392
Reno, Nevada 89509
Notice to AFSFT AFS Funding Trust
c/o Owner Trustee
Notices to ACC, as agent for
ACFS and ACM: AmeriCredit Corp.
801 Cherry Street, Suite 3900
Fort Worth, Texas 76102
Notices to Senior
Lien Holder: Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
15
<PAGE>
Chicago, Illinois 60606
Attn: Indenture Trust Administration
Telephone No.: (312) 461-6030
Telecopy No.: (312) 461-3525
LaSalle Bank National Association
135 S. LaSalle Street
Suite 1625
Chicago, Illinois 60603
Attn: Asset-Backed
Trust Services Group
Administration
Bank One, N.A.
100 East Broad Street, 8th Floor
Columbus, Ohio 43215
Attn: John Rothrock
Telephone No.: (614) 248-5683
Facsimile No.: (614) 248-5195
Notices to FSA: Financial Security Assurance, Inc.
350 Park Avenue
New York, New York 10022-6022
Attn: Transaction Oversight
Telephone No.: (212) 826-0100
Facsimile No.: (212) 339-3518
With a copy to: Paul, Hastings, Janofsky & Walker LLP
555 South Flower, 23rd Floor
Los Angeles, California 90071
Attn: Hydee R. Feldstein
Telephone No.: (213) 683-6249
Facsimile No.: (213) 627-0705
3.10 CONTINUING AGREEMENT; TRANSFER OF NOTES. This Subordination
Agreement is a continuing agreement and shall (a) remain in full force and
effect until the Senior Secured Obligations shall have fully satisfied or
paid, (b) be binding upon each Junior Lien Holder, each Issuer and Borrower
and each of their respective successors and assigns, and (c) inure to the
benefit of and be enforceable by Senior Lien Holders and FSA and each of
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), to the extent Senior Lien Holders or
FSA assigns or otherwise transfers its rights or obligations under any
Underlying Transaction Document to any other person or entity, such other
person or entity shall thereupon become vested with all the rights in respect
thereof granted to Senior Lien Holders or FSA, as applicable, under this
Subordination Agreement, the RCCA Agreement or any Transaction Document.
This Subordination Agreement shall terminate upon the Final Insurance
Termination Date except with respect to Revived Claims and Sections 1.4,
1.12, 3.2 and 3.11.
16
<PAGE>
3.11 CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH
OF MANHATTAN, CITY OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN SUCH PARTIES PERTAINING TO THIS
SUBORDINATION AGREEMENT OR TO ANY DISPUTE BETWEEN FSA, SENIOR LIEN HOLDERS OR
THE NOTEHOLDERS OR CERTIFICATEHOLDERS, ON THE ONE HAND, AND LENDER COLLATERAL
AGENT, JUNIOR LIEN HOLDERS, OR CSFB, ON THE OTHER, UNDER ANY OF THE
TRANSACTION DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
SUBORDINATION AGREEMENT PROVIDED, THAT SUCH PARTY ACKNOWLEDGES THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
THE BOROUGH OF MANHATTAN, CITY OF NEW YORK AND, PROVIDED, FURTHER NOTHING IN
THIS SUBORDINATION AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE FSA OR
THE SENIOR LIEN HOLDERS FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON ITS COLLATERAL, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF FSA OR THE SENIOR LIEN HOLDERS. EACH OF THE
PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND SUCH PARTY HEREBY
WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY
SUCH COURT. BORROWER, EACH ISSUER AND EACH JUNIOR LIEN HOLDER EACH WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE IN THE MANNER SET FORTH FOR NOTICE IN SECTION 3.9
OF THIS SUBORDINATION AGREEMENT. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY MATTER ARISING FROM
OR RELATED TO THIS SUBORDINATION AGREEMENT.
3.12 GOVERNING LAW. This Subordination Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of New
York applicable to contracts made and performed in that state.
3.13 PAYMENT OF COUNSEL FEES AND EXPENSES. ACFS agrees to pay upon
demand, the reasonable fees and expenses of Paul, Hastings, Janofsky &
Walker, LLP, special counsel to FSA, in connection with the negotiation,
preparation, approval, execution and delivery of this Subordination Agreement
and the other related Transaction
17
<PAGE>
Documents. If any party hereto commences any action or proceeding against
another party hereto to interpret or enforce this Subordination Agreement the
prevailing party in such action or proceeding shall be entitled to recover
from the other party the actual attorney's fees, costs and expenses incurred
by such prevailing party in connection therewith and in connection with
enforcing any judgment or order thereby obtained.
3.14 NO DUTIES IMPOSED ON SENIOR LIEN HOLDERS. The rights granted
to the Senior Lien Holders, FSA, the Underlying Trustee, the Noteholders and
the Certificateholders hereunder are solely for their protection and nothing
herein contained shall impose on any of them any duties with respect to the
Borrower Collateral or any property of Borrower, any Issuer or any Junior
Lien Holder. None of the Senior Lien Holders and FSA shall have any duty to
preserve rights against third parties with respect to any instrument or
chattel paper received hereunder.
3.15 SPECIFIC PERFORMANCE. The Senior Lien Holders and FSA are
hereby authorized to demand specific performance of this Subordination
Agreement, whether or not Borrower, any Issuer or any Junior Lien Holder
shall have complied with any of the provisions hereof applicable to it, at
any time when Borrower, any Issuer or any Junior Lien Holder shall have
failed to comply with any of the provisions of this Subordination Agreement
applicable to it. Borrower, each Issuer and each Junior Lien Holder each
hereby irrevocably waives any defense based on the adequacy of a remedy at
law, which might be asserted as a bar to such remedy of specific performance.
3.16 AUTHORITY OF TRUSTEES. AFS Funding and FSA by their execution
of this Subordination Agreement and the Instruction Letters, hereby direct
Bankers Trust (Delaware), not in its individual capacity but solely as Owner
Trustee of the respective owner trusts, and Harris Trust, LaSalle, and the
Collateral Agent, to acknowledge, agree to, execute and deliver this
Subordination Agreement on behalf of each such party.
3.17 LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Subordination Agreement is
executed and delivered by each of Bankers Trust (Delaware), not individually
or personally, but solely as Owner Trustee of the respective Trusts, in the
exercise of the powers and authority conferred and vested in each under each
respective Trust Agreement, (b) each of the representations, undertakings and
agreements herein made on the part of the Borrower and the Issuers is made
and intended not as personal representations, undertakings and agreements by
Bankers Trust (Delaware) but is made and intended for the purpose of binding
only the Borrower and the Issuers, respectively, (c) nothing herein contained
shall be construed as creating any liability on Bankers Trust (Delaware),
individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived
by the parties hereto and by any Person claiming by, through or under the
parties hereto, (d) under no circumstances shall Bankers Trust (Delaware) be
personally liable for the payment of any indebtedness or expenses of Borrower
or the Issuers or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Borrower or
Issuers under this Subordination
18
<PAGE>
Agreement or any other related documents, and (e) each of the
representations, undertakings and agreements herein made on the part of the
Borrower or Issuers is made and intended not as representations, undertakings
and agreements by Bankers Trust (Delaware), in their respective capacity as
Owner Trustee or individually, but rather is made and intended for the
purpose for binding only the Borrower or Issuers respectively.
3.18 COUNTERPARTS. This Subordination Agreement may be executed in
any number of counterparts, all of which shall together constitute but one
agreement.
3.19 CONCERNING THE LENDER COLLATERAL AGENT. The Lender Collateral
Agent shall be afforded all of the rights, protections, immunities and
indemnities afforded to it under Section 8.26 of the Credit Agreement and
Section 12 of the Security Agreement as if the same were specifically set
forth herein. Each of the undersigned Junior Lien Holders (other than the
Lender Collateral Agent) hereby authorizes and directs the Lender Collateral
Agent to execute and deliver this Subordination Agreement.
3.20 ADDITIONAL TRANSACTIONS. The parties hereto agree that
additional Underlying Transactions shall become subject to this Subordination
Agreement by the execution of an amendment in accordance with Section 3.1(c)
above and substantially in the form of exhibit I hereto.
3.21 DISCLAIMER OF FIDUCIARY DUTY. Collateral Agent expressly
disclaims any, and each Junior Lien Holder and the Lender Collateral Agent
each expressly agrees and acknowledges that Collateral Agent shall have no
fiduciary duty to any Junior Lien Holder or Lender Collateral Agent with
respect to Collateral Agent's duties as Collateral Agent with respect to the
Borrower Collateral. Each Junior Lien Holder acknowledges and agrees that
(i) Collateral Agent is acting as agent for the Lender Collateral Agent for
the limited purpose of perfection by possession of the Lender Collateral
Agent's security interest in certain of the Borrower Collateral and (ii) the
Collateral Agent's fiduciary duties only run to the Senior Lien Holders and
FSA on behalf of whom Collateral Agent acts. No Junior Lien Holder shall
have any ability or power to direct Collateral Agent in any manner
whatsoever, except as set forth in Section 8.15 of the RCCA Agreement and
Section 8.12 of the Certificate Pledge Agreement, provided that upon the
termination of the liens of the Collateral Agent for the benefit of FSA, the
Collateral Agent shall act upon the written instruction of the Lender
Collateral Agent and shall deliver the Borrower Collateral in accordance with
the written instructions of the Lender Collateral Agent. Each Junior Lien
Holder and Lender Collateral Agent irrevocably instructs Collateral Agent to
follow only the directions of FSA without regard to the interests of any
Junior Lien Holder and upon the instruction of FSA, Collateral Agent may
foreclose on its collateral, including without limitation the Borrower
Collateral. Following the completion of the foreclosure, Collateral Agent
shall be released of all obligations in favor of the Junior Lien Holders,
other than the obligation to turn over possession of the remaining Borrower
Collateral, if any, in accordance with the written instructions of the Lender
Collateral Agent. In the event that Collateral Agent has not foreclosed upon
the Borrower Collateral, then upon the Final Insurance
19
<PAGE>
Termination Date, Collateral Agent's sole obligation shall be to turn over
possession of the Borrower Collateral, if any, in accordance with the written
instructions of the Lender Collateral Agent.
3.22 COMMERCIAL REASONABLENESS. Each of the parties hereto (other
than Harris Trust, LaSalle, or, in its capacity as "Collateral Agent" under
the Spread Account Agreement, Bank One, N.A.) expressly agrees that the
rights of the Collateral Agent and FSA as set forth in Article VII of the
RCCA Agreement and in Article 5 of the Certificate Pledge Agreement are
commercially reasonable methods of disposition of the Borrower Collateral
under the UCC, given the nature of the Borrower Collateral and the
circumstances of the transactions contemplated by the Transaction Documents
and the Underlying Transaction Documents.
3.23 EFFECTIVE DATE This Subordination Agreement is effective as
to all parties, other than AFSFT, as of October 14, 1999 and with respect to
AFSFT, this Subordination Agreement is effective as of October 19, 1999.
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE.]
20
<PAGE>
IN WITNESS WHEREOF, each Junior Lien Holder, Borrower, ACC, ACFS, ACM,
each Issuer, each Senior Lien Holder and FSA has caused this Subordination
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
JUNIOR LIEN HOLDERS
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
BANKERS TRUST COMPANY, not in its individual
capacity, but solely as Lender Collateral
Agent
By:
-----------------------------------------
Title:
--------------------------------------
GREENWICH FUNDING CORPORATION
By Credit Suisse First Boston, New York
Branch,
As Attorney in fact
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
21
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BORROWER
AFS FUNDING CORP.
By:
-----------------------------------------
Title:
--------------------------------------
22
<PAGE>
ISSUERS
AmeriCredit 1996-C
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1996-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-C Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
23
<PAGE>
AmeriCredit 1997-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-C Trust,
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
24
<PAGE>
AmeriCredit 1999-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1999-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1999-C Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
25
<PAGE>
ACC
AMERICREDIT CORP.
By:
-----------------------------------------
Title:
--------------------------------------
ACFS
AMERICREDIT FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Title:
--------------------------------------
ACM
AMERICREDIT MANAGEMENT COMPANY
By:
-----------------------------------------
Title:
--------------------------------------
26
<PAGE>
SENIOR LIEN HOLDERS
HARRIS TRUST AND SAVINGS BANK,
as Trustee, Trust Collateral Agent and
Collateral Agent for the AmeriCredit 1997-D
Trust, the AmeriCredit 1998-A Trust
By:
-----------------------------------------
Title:
--------------------------------------
LASALLE BANK NATIONAL ASSOCIATION, as
Trustee, Trust Collateral Agent and
Collateral Agent for the AmeriCredit 1996-C
Trust, the AmeriCredit 1996-D Trust, the
AmeriCredit 1997-A Trust, the AmeriCredit
1997-B Trust, the AmeriCredit 1997-C Trust
By:
-----------------------------------------
Title:
--------------------------------------
BANK ONE, N.A., as Trustee,
Trust Collateral Agent and Collateral Agent
for the AmeriCredit 1998-B Trust, the
AmeriCredit 1998-C Trust, the AmeriCredit
1998-D Trust, the AmeriCredit 1999-A Trust,
the AmeriCredit 1999-B Trust, the AmeriCredit
1999-C Trust
By:
-----------------------------------------
Title:
--------------------------------------
27
<PAGE>
FSA
FINANCIAL SECURITY ASSURANCE, INC.
By:
-----------------------------------------
Title:
--------------------------------------
28
<PAGE>
APPENDIX A
SCHEDULE OF DEFINITIONS
Capitalized terms used in this Subordination Agreement shall have the
following meanings:
"ACC" has the meaning set forth in the Preamble.
"ACFS" has the meaning set forth in the Preamble.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such former
Person. As used in this definition of "Affiliate," the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"AFSFT" has the meaning set forth in the Preamble.
"AMC" has the meaning set forth in the Preamble.
"ASSIGNEE" has the meaning set forth in Section 1.5 of this Subordination
Agreement.
"BANK ONE" means Bank One, NA, a national banking association and its
successors.
"BORROWER" has the meaning set forth in the Preamble.
"BORROWER COLLATERAL" means all of the property and interests described in
Section 3(a), 3(b), 3(d), 3(e), 3(f), and 3(g) of the Security Agreement.
"BORROWING" A borrowing consisting of simultaneous Advances made by Lenders
pursuant to the same Notice of Borrowing as described in Section 2.02 of the
Credit Agreement, subject to Conversion or Continuation pursuant to Section 2.08
of the Credit Agreement.
"BORROWINGS" Collectively, each Borrowing including each Designated Series
Borrowing.
"CERTIFICATE PLEDGE AGREEMENT" shall mean that certain Certificate Pledge
and Collateral Agency Agreement dated as of October 19, 1999 among Borrower,
AFSFT, FSA, and Bank One.
"CERTIFICATEHOLDERS" has the meaning set forth in the Recitals.
"COLLATERAL AGENT" has the meaning set forth in the Recitals of the RCCA
Agreement; as used herein "Collateral Agent" shall not include any of the Senior
Lien Holders in their capacities as "Collateral Agents" under the Spread Account
Agreement.
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<PAGE>
"CONTROLLING PARTY" has the meaning set forth in the Recitals.
"CREDIT AGREEMENT" has the meaning set forth in the Recitals.
"CSFB" has the meaning set forth in the Preamble.
"FINAL INSURANCE TERMINATION DATE" means the last to occur of the Insurance
Termination Dates.
"FSA" has the meaning set forth in the Preamble.
"INSTRUCTION LETTERS" means the letters of instruction from the Borrower
and AFSFT to the Underlying Trustees directing the Underlying Trustees to pay
monies released from the Spread Accounts to the Lender Collateral Agent.
"INSURANCE TERMINATION DATE" means, in the singular, the termination date
of the 1996-C Insurance and Indemnity Agreement, the 1996-D Insurance and
Indemnity agreement, the 1997-A Insurance and Indemnity Agreement, the 1997-B
Insurance and Indemnity Agreement, the 1997-C Insurance and Indemnity Agreement,
the 1997-D Insurance and Indemnity Agreement, the 1998-A Insurance and Indemnity
Agreement, the 1998-B Insurance and Indemnity Agreement, the 1998-C Insurance
and Indemnity Agreement, 1998-D Insurance and Indemnity Agreement, the 1999-A
Insurance and Indemnity Agreement, the 1999-B Insurance and Indemnity Agreement,
, the 1999-C Insurance and Indemnity Agreement, or any Insurance and Indemnity
Agreement or similar document which may hereafter be executed or in connection
with the issuance of any Policy with respect to a transaction or transactions
made subject to this Subordination Agreement.
"INSURER OBLIGATIONS" has the meaning set forth in the Recitals.
"ISSUERS" has the meaning set forth in the Preamble.
"JUNIOR LIEN" has the meaning set forth in the Recitals.
"JUNIOR LIEN HOLDERS" has the meaning set forth in the Preamble.
"JUNIOR LOAN" has the meaning set forth in the Recitals.
"NOTEHOLDERS" has the meaning set forth in the Recitals.
"ORIGINAL UNDERLYING TRANSACTIONS" means when used in the singular, any of,
and when used in the plural, all of, the transactions contemplated by the
AmeriCredit 1996-C Trust, the AmeriCredit 1996-D Trust, the AmeriCredit 1997-A
Trust, the AmeriCredit 1997-B Trust, the AmeriCredit 1997-C Trust, the
AmeriCredit 1997-D Trust, the AmeriCredit 1998-A Trust, the AmeriCredit 1998-B
Trust, the AmeriCredit 1998-C Trust, the AmeriCredit 1998-D Trust, the
AmeriCredit 1999-A Trust, the AmeriCredit 1999-B Trust, the AmeriCredit 1999-C
Trust and any other Series that may from time to time become either part of or
subject to this Subordination Agreement by executing an amendment in accordance
with Section 3.1 above and substantially in the form of exhibit I hereto.
2
<PAGE>
"OWNER TRUSTEE" means Bankers Trust Company, a Delaware banking
Corporation acting not in its individual capacity, but solely in its
fiduciary capacity as trustee under that certain Trust Agreement, dated as of
October 19, 1999, by and among Borrower, AFSFT, and Bankers Trust (Delaware)
(the "Trust Agreement"), and any banking corporation that shall have become
its successor under Section 7.04 of the Trust Agreement.
"PERMITTED TRANSFEREE" At any time, a bank, insurance company,
reinsurance company or commercial paper conduit having, in the case of an
entity that is subject to risk-based capital adequacy requirements, risk
based capital of at least $100,000,000 or, in the case of an entity that is
not subject to risk-based capital adequacy requirements, combined capital and
surplus of at least $100,000,000.
"PERSON" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust (including
any beneficiary thereof) or any other entity, unincorporated organization or
government or any agency or political subdivision thereof.
"POLICY" means any Financial Guaranty Insurance Policy issued by FSA
with respect to a Series of Notes for which the Seller has established an
RCCA under the RCCA Agreement.
"PROCEEDING" has the meaning set forth in Section 1.3 of this
Subordination Agreement.
"RCCA" has the meaning set forth in the Recitals of the RCCA Agreement.
"RCCA ACCOUNT COLLATERAL" has the meaning set forth in Section 1 of the
Security Agreement.
"RCCA AGREEMENT" means the Replacement Cash Collateral Account
Agreement, dated as of the date hereof, among the Borrower, FSA, the
Administrative Agent and the Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"REVIVED CLAIMS" has the meaning set forth in Section 1.11 of this
Subordination Agreement.
"SECURITY AGREEMENT" has the meaning set forth in the Recitals.
"SENIOR SECURED OBLIGATIONS" has the meaning set forth in Section 1.2 of
this Subordination Agreement.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(3) of the Bankruptcy Code; (b) the present fair saleable value of the
Property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is
able to
3
<PAGE>
realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the
normal course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature; and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's Property would constitute
unreasonably small capital.
"SPREAD ACCOUNT AGREEMENT" means that certain Spread Account Agreement,
dated as of December 1, 1994, as amended and restated as of May 11, 1998,
among the Borrower, FSA, LaSalle, Harris Trust and Collateral Agent, as
amended, restated, modified or supplemented from time to time.
"TRANSACTION DOCUMENTS" means the Credit Agreement, the Lender Notes (as
defined in the Credit Agreement), the Letters of Instruction, the Security
Agreement, this Subordination Agreement and all other notes, security
agreements, instruments, documents and other agreements (including UCC
financing statements) heretofore, now or hereafter executed and/or delivered
by or on behalf of the Borrower, any Issuer, guarantor or Co-obligor in
connection with any of the foregoing, in each case, as the same may be
amended, supplemented or otherwise modified.
"UCC" means the Uniform Commercial Code as in effect in each relevant
jurisdiction.
"UNDERLYING TRANSACTIONS" when used in the singular, any of, and when
used in the plural, all of, the transactions contemplated by the Original
Underlying Transactions and each of the 1996-C Insurance and Indemnity
Agreement, the 1996-D Insurance and Indemnity agreement, the 1997-A Insurance
and Indemnity Agreement, the 1997-B Insurance and Indemnity Agreement, the
1997-C Insurance and Indemnity Agreement, the 1997-D Insurance and Indemnity
Agreement, the 1998-A Insurance and Indemnity Agreement, the 1998-B Insurance
and Indemnity Agreement, the 1998-C Insurance and Indemnity Agreement, 1998-D
Insurance and Indemnity Agreement, the 1999-A Insurance and Indemnity
Agreement, the 1999-B Insurance and Indemnity Agreement, , the 1999-C
Insurance and Indemnity Agreement, the 1996-C Sale and Servicing Agreement,
the 1996-D Sale and Servicing Agreement, the 1997-A Sale and Servicing
Agreement, the 1997-B Sale and Servicing Agreement, the 1997-C Sale and
Servicing Agreement, the 1997-D Sale and Servicing Agreement, the 1998-A Sale
and Servicing Agreement, the 1998-B Sale and Servicing Agreement, the 1998-C
Sale and Servicing Agreement, the 1998-D Sale and Servicing Agreement, the
1999-A Sale and Servicing Agreement, the 1999-B Sale and Servicing Agreement,
the 1999-C Sale and Servicing Agreement, and each other insurance and
indemnity agreement and each other sale and servicing agreement entered into
in connection with a spread account which is or becomes subject to the Spread
Account Agreement and all other transactions that may from time to time
become subject to this Subordination Agreement by an amendment executed in
accordance with Section 3.1 above and substantially in the form of Exhibit I
hereto.
"UNDERLYING TRANSACTION DOCUMENTS" mean the agreements, contracts,
documents, amendments, consents, instruments, certificates and other papers
executed in connection with each Underlying Transaction.
4
<PAGE>
"UNDERLYING TRUST" means, in the singular any of, and in the plural, all
of, the Original Underlying Transactions, and any other trust that may from
time to time become party to this Subordination Agreement by executing an
amendment in accordance with Section 3.1 above and substantially in the form
of Exhibit I hereto.
"UNDERLYING TRUSTEES" means, in the singular, either of Harris Trust,
LaSalle or Collateral Agent, and in the plural, all of them, and their
respective successors and assigns, if any, in their capacities as trustees,
trust collateral agents or collateral agents, in the Underlying Transactions
and any other trustee designated with respect to any of the Underlying
Transactions.
5
<PAGE>
APPENDIX B
SCHEDULE OF LENDER'S INTERESTS
1
<PAGE>
EXHIBIT I
FORM OF AMENDMENT TO
SUBORDINATION AND INTERCREDITOR AGREEMENT
This FIRST AMENDMENT TO SUBORDINATION AND INTERCREDITOR
AGREEMENT, dated as of October __, 1999 (" First Amendment"), is hereby
entered into by and among [(a) AFS Funding Corp., a Nevada Corporation
("BORROWER"); (b) AFS Funding Trust, a Delaware Business Trust ("AFSFT"); (c)
the AmeriCredit 1996-C Trust, the AmeriCredit 1996-D Trust, the AmeriCredit
1997-A Trust, the AmeriCredit 1997-B Trust, the AmeriCredit 1997-C Trust, the
AmeriCredit 1997-D Trust, the AmeriCredit 1998-A Trust, the AmeriCredit
1998-B Trust, the AmeriCredit 1998-C Trust, the AmeriCredit 1998-D Trust, the
AmeriCredit 1999-A Trust, the AmeriCredit 1999-B Trust, the AmeriCredit
1999-C Trust (collectively, the "ISSUERS"); (d) AmeriCredit Financial
Services, Inc., a Delaware corporation ("ACFS"), (e) AmeriCredit Management
Company, a Delaware corporation ("AMC"), (f) AmeriCredit Corp., a Texas
corporation ("ACC"); (g) Bankers Trust Company, a New York banking
Corporation, not in its individual capacity, but solely in its capacity as
Lender Collateral Agent under the Security Agreement (as defined below) (the
"LENDER COLLATERAL AGENT"), (h) Bankers Trust (Delaware), a Delaware banking
corporation ("BANKERS TRUST (DELAWARE)"), not in its individual capacity, but
solely in its capacity as Owner Trustee; (i) Credit Suisse First Boston, a
Swiss banking corporation acting through its New York branch ("CSFB"), in its
capacity as Administrative Agent under the Credit Agreement (defined below),
(j) those Lenders from time to time party to the Credit Agreement (defined
below)(the "Lenders" and collectively with the Lender Collateral Agent and
CSFB, the "JUNIOR LIEN HOLDERS"); (k) Financial Security Assurance Inc., a
New York stock insurance company ("FSA"), (l) Harris Trust and Savings Bank,
an Illinois banking corporation ("Harris Trust"), LaSalle Bank National
Association formerly known as LaSalle National Bank ("LaSalle"), and Bank One
N.A., (each in its capacity as "Collateral Agent" under that certain Spread
Account Agreement dated as of December 1, 1994, (as amended and restated May
11, 1998, and as amended and or restated from time to time thereafter) and
such other entities as may be designated as "Collateral Agent" under the
Underlying Transaction Documents or the Spread Account Agreement, together
with their respective successors or assigns, if any (collectively the "SENIOR
LIEN HOLDERS"). All capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in Appendix A attached hereto.]
WHEREAS, FSA issued and will issue insurance policies to the Senior
Lien Holders in such Senior Lien Holders' capacity as the trustee or indenture
trustee, as applicable (in such capacity, the "Trustee") of the Underlying
Trusts, to guarantee certain scheduled payments to holders of notes or
certificates, as applicable (the "Noteholders" or "Certificateholders") issued
by the Issuers (the "Insurer Obligations");
1
<PAGE>
WHEREAS, Pursuant to that certain Credit Agreement ("Credit
Agreement") dated as of October 14, 1999 among Borrower, ACC, ACFS, AMC, the
Lenders, the Lender Collateral Agent, and CSFB (in its capacity as
Administrative Agent), the Lenders extended certain financial accommodations
to the Borrower of up to $225,000,000;
WHEREAS, as a condition precedent to the Credit Agreement, FSA
consented to the Junior Lien on the Borrower Collateral solely upon and in
accordance with the terms and conditions set forth in the Subordination and
Intercreditor Agreement, dated as of October 19, 1999 (the "Subordination
Agreement") by and among Borrower, AFSFT, Issuers, ACFS, AMC, ACC, the Lender
Collateral Agent, Bankers Trust (Delaware), CSFB, Junior Lien Holders, FSA,
Senior Lien Holders.
WHEREAS, the [Borrower] has requested that the Subordination
Agreement be amended as set forth herein;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, the parties agree as follows:
SECTION 1. RELATION TO SUBORDINATION AGREEMENT.
Section 1.1 RELATION TO SUBORDINATION AGREEMENT. This First
Amendment is an amendment to and is an integral part of the Subordination
Agreement.
Section 1.2 DEFINED TERMS. Unless otherwise amended by the terms of
this First Amendment, terms used in this First Amendment shall the meaning
assigned to them in the Credit Agreement.
SECTION 2. AMENDMENT TO SUBORDINATION AGREEMENT.
Section 2.1 AMENDMENT TO SUBORDINATION AGREEMENT. Effective upon the
execution and delivery of this First Amendment, the Subordination Agreement
shall read as follows:
(a) The definition of "Issuers" set forth in Preamble to the
Subordination Agreement shall be and is hereby amended to include
[insert other transaction series].
(b) Article II shall be amended as follows:
"2.1 REPRESENTATIONS AND WARRANTIES OF JUNIOR LIEN HOLDER.
2
<PAGE>
(a) Each Junior Lien Holder, other than the Lender Collateral
Agent, represents and warrants that it is a Lender under the Credit
Agreement and that, as a Lender, it holds the percentage set forth in
Appendix B attached hereto of the legal and beneficial interests,
obligations and liens under the Credit Agreement and other Transaction
Documents. Each Junior Lien Holder, other than the Lender Collateral
Agent, covenants that it will not sell, transfer, syndicate,
participate, pledge, encumber or otherwise assign, in whole or in
part, all or any portion of its interests, obligations or liens in or
under any of the Transaction Documents in accordance with the
provisions of paragraph 1.5 of the Subordination Agreement.
(b) Each of the Junior Lien Holders represents and warrants that
the execution and delivery of this First Amendment has been duly
authorized by all necessary corporate action.
(c) Each of the Junior Lien Holders represents and warrants that
this First Amendment has been duly executed and delivered by each
person and constitutes the legal, valid and binding obligation of each
person, enforceable against each person in accordance with its terms.
2.2 REPRESENTATIONS AND WARRANTIES OF LENDER COLLATERAL AGENT
(a) Lender Collateral Agent represents and warrants that the
execution and delivery of this First Amendment has been duly
authorized by all necessary corporate action.
(b) Lender Collateral Agent represents and warrants that this
First Amendment has been duly executed and delivered by each person
and constitutes the legal, valid and binding obligation of each
person, enforceable against each person in accordance with its terms.
(c) Lender Collateral Agent is a separate legal entity from
Bankers Trust (Delaware) and has not authority or ability to direct
the actions of Bankers Trust (Delaware) as Owner Trustee.
2.3 REPRESENTATIONS AND WARRANTIES OF OTHER PARTIES
(a) Each of FSA, ACC, ACFS, AMC, [insert new Trust] and AFSFT
represents and warrants that the execution and delivery of this First
Amendment has been duly authorized by all necessary corporate action.
(b) Each of FSA, ACC, ACFS, AMC, [insert new Trust] and AFSFT
represents and warrants that this First Amendment has been duly
3
<PAGE>
executed and delivered by each person and constitutes the legal, valid
and binding obligation of each person, enforceable against each person
in accordance with its terms."
Section 2.2 AMENDMENT TO SCHEDULE OF DEFINITIONS. Capitalized terms
used in this First Amendment shall have the following meanings:
(a) The definition of "Insurance Termination Date" set forth in the
Schedule of Definitions to the Subordination Agreement shall be and is
hereby amended to [insert termination date of Insurance and Indemnity
Agreement].
(b) The definition of "Original Underlying Transactions" set forth in
Schedule of Definitions to the Subordination Agreement shall be and is
hereby amended to include [insert other transaction series].
(c) The definition of "Underlying Transactions" set forth in Schedule
of Definitions to the Subordination Agreement shall be and is hereby
amended to include [insert other transaction series].
(d) The definition of "Underlying Trust" set forth in Schedule of
Definitions to the Subordination Agreement shall be and is hereby
amended to include [insert other transaction series].
(e) The definition of "Underlying Trustee" set forth in Schedule of
Definitions to the Subordination Agreement shall be and is hereby
amended to include [insert other transaction series].
(f) "Subordination Agreement" means that certain Subordination and
Intercreditor Agreement, dated as of October 19, 1999, by and among
Borrower, AFSFT, Issuers, ACFS, AMC, ACC, Bankers Trust, Bankers Trust
(Delaware), CSFB, Junior Lien Holders, FSA, Senior Lien Holders.
Section 2.3 AMENDMENT TO SCHEDULE OF LENDERS INTERESTS. Effective
upon the execution and delivery of this First Amendment, the Subordination
Agreement shall include:
SECTION 3. CONDITIONS TO EFFECTIVENESS.
Section 3.1 EFFECTIVENESS. This First Amendment shall take effect
immediately upon its execution by each party hereto.
4
<PAGE>
SECTION 4. MISCELLANEOUS.
Section 4.1 This First Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns.
Section 4.2 This First Amendment may be executed in any number of
several counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
Section 4.3 This First Amendment shall be construed in connection
with and as part of the Subordination Agreement, and except as modified and
expressly amended by this First Amendment, all terms, conditions and
covenants contained in the Subordination Agreement are hereby ratified and
shall remain in full force and effect.
Section 4.4 THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW
RULES.
[signature pages follow]
5
<PAGE>
IN WITNESS WHEREOF, each Junior Lien Holder, Borrower, ACC, ACFS,
ACM, each Issuer, each Senior Lien Holder and FSA has caused this
Subordination Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
JUNIOR LIEN HOLDERS
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
BANKERS TRUST COMPANY, not in its individual
capacity, but solely as Lender Collateral
Agent
By:
-----------------------------------------
Title:
--------------------------------------
GREENWICH FUNDING CORPORATION
By Credit Suisse First Boston, New York
Branch,
As Attorney in fact
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
6
<PAGE>
BORROWER
AFS FUNDING CORP.
By:
-----------------------------------------
Title:
--------------------------------------
7
<PAGE>
ISSUERS
AmeriCredit 1996-C
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1996-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1997-C Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
8
<PAGE>
AmeriCredit 1997-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-A Trust
AmeriCredit 1998-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-C Trust,
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1998-D Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
9
<PAGE>
AmeriCredit 1999-A Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1999-B Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
AmeriCredit 1999-C Trust
By: Bankers Trust (Delaware), solely in its
capacity as Owner Trustee
By:
-----------------------------------------
Title:
--------------------------------------
[insert new Trust]
By: [insert Owner Trustee]
By:
-----------------------------------------
Title:
--------------------------------------
10
<PAGE>
ACC
AMERICREDIT CORP.
By:
-----------------------------------------
Title:
--------------------------------------
ACFS
AMERICREDIT FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Title:
--------------------------------------
ACM
AMERICREDIT MANAGEMENT COMPANY
By:
-----------------------------------------
Title:
--------------------------------------
11
<PAGE>
SENIOR LIEN HOLDERS
HARRIS TRUST AND SAVINGS BANK,
as Trustee, Trust Collateral Agent and
Collateral Agent for the AmeriCredit 1997-D
Trust, the AmeriCredit 1998-A Trust
By:
-----------------------------------------
Title:
--------------------------------------
LASALLE BANK N.A., as Trustee
Trust Collateral Agent and Collateral Agent
for the AmeriCredit 1996-C Trust, the
AmeriCredit 1996-D Trust, the AmeriCredit
1997-A Trust, the AmeriCredit 1997-B Trust,
the AmeriCredit 1997-C Trust
By:
-----------------------------------------
Title:
--------------------------------------
BANK ONE, N.A. as Trustee,
Trust Collateral Agent and Collateral Agent
for the AmeriCredit 1998-B Trust, the
AmeriCredit 1998-C Trust, the AmeriCredit
1998-D Trust, the AmeriCredit 1999-A Trust,
the AmeriCredit 1999-B Trust, the AmeriCredit
1999-C Trust
By:
-----------------------------------------
Title:
--------------------------------------
12
<PAGE>
FSA
FINANCIAL SECURITY ASSURANCE, INC.
By:
-----------------------------------------
Title:
--------------------------------------
13
<PAGE>
EXHIBIT II
NOTE LEGEND
No Note or Other Instrument shall be sold, assigned or otherwise transferred by
any Noteholder or Certificateholder, respectively, unless there is conspicuously
endorsed on the first page of such Note or Other Instrument a legend reading as
follows:
THIS NOTE AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT, DATED AS OF OCTOBER 19, 1999 (AS IT MAY BE AMENDED FROM
TIME TO TIME, THE "SUBORDINATION AGREEMENT), AMONG THE BORROWER, AMERICREDIT
FINANCIAL SERVICES, INC., AMERICREDIT MANAGEMENT COMPANY, INC., AMERICREDIT
CORP., THE LENDERS, THE ADMINISTRATIVE AGENT, HARRIS TRUST AND SAVINGS, BANK,
LASALLE NATIONAL BANK, BANK ONE N.A., FINANCIAL SECURITY ASSURANCE INC. AND THE
LENDER COLLATERAL AGENT. EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF,
SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.1
AMERICREDIT CORP.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average shares
oustanding 73,988,228 62,857,131 70,745,962 62,657,929
Incremental shares
resulting from assumed
exercise of stock options 4,970,185 3,892,914 4,572,494 4,261,063
---------- ---------- ---------- ----------
Weighted average shares and
assumed incremental shares 78,958,413 66,750,045 75,318,456 66,918,992
========== ========== ========== ==========
NET INCOME $19,609 $17,376 $44,933 $32,858
======= ======= ======= =======
EARNINGS PER SHARE:
Basic $ .27 $ .28 $ .64 $ .52
======= ======= ======= =======
Diluted $ .25 $ .26 $ .60 $ .49
======= ======= ======= =======
</TABLE>
Basic earnings per share have been computed by dividing net income by weighted
average shares outstanding.
Diluted earnings per share have 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.
41
<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-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 176,672
<SECURITIES> 0
<RECEIVABLES> 576,790
<ALLOWANCES> (16,861)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 65,746
<DEPRECIATION> (17,621)
<TOTAL-ASSETS> 1,530,320
<CURRENT-LIABILITIES> 0
<BONDS> 789,309
0
0
<COMMON> 820
<OTHER-SE> 584,972
<TOTAL-LIABILITY-AND-EQUITY> 1,530,320
<SALES> 0
<TOTAL-REVENUES> 231,863
<CGS> 0
<TOTAL-COSTS> 117,043
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,243
<INTEREST-EXPENSE> 30,405
<INCOME-PRETAX> 77,172
<INCOME-TAX> 32,239
<INCOME-CONTINUING> 44,933
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,933
<EPS-BASIC> .64
<EPS-DILUTED> .60
</TABLE>
