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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
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TABLE OF CONTENTS
Page
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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
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
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
ii
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.
"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.
3
"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
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
5
(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 & XXXXXX" shall mean Duff & Xxxxxx 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 Xxxxx'x
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 Xxxxx'x and by S&P; (iii)
certificates of deposit having, at the time of investment or contractual
commitment to invest therein, a rating from Xxxxx'x 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 Xxxxx'x and
S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits
having a credit rating from Xxxxx'x 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 Xxxxx'x and S&P of at least "P-1" and "A-1", respectively.
6
"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;
7
(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;
8
(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.
9
"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, Xxxxx 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
10
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 Xxxxx'x 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
12
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
13
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
14
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
XxXxxx-Xxxx 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)
15
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
16
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,
17
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 xxxx 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
18
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;
19
(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
20
Party, execute and file such financing or continuation statements or
amendments thereto or assignments thereof as may be requested by the
Collateral Agent and xxxx 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 xxxx 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
21
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
22
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.
23
(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.
24
(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
25
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.
26
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
27
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.
28
(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 Xxxxx 00, Xxxxxx Xxxxxx 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
31
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
33
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
34
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 Xxxxx Xxxxxxxxxx LLP, special counsel to the
Debtor, AmeriCredit and AFC II, covering the matters set forth in Exhibit I
hereto.
(x) An opinion of Xxxxx Xxxxxxxxxx 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
35
Corp., AmeriCredit Financial Services, Inc., AmeriCredit Corporation of
California, ACF Investment Corp., AmeriCredit Management Company, Xxxxx 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.
36
(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
37
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
38
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.
39
(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
41
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.
42
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
43
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.
44
(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.
45
(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
47
(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 Xxxxx'x; 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;
48
(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 Xxxxx'x 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
49
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
50
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
51
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
52
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
53
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
54
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
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(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
Xxxxxxxxxx Building
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
with a copy to:
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Finance Unit
and a copy to:
55
AmeriCredit Financial Services, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to AmeriCredit or the Collection Agent:
AmeriCredit Financial Services, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to AFC II:
AmeriCredit Funding Corp. II
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent, the Collateral Agent or the Administrative Agent:
Bank of America, N.A.
Bank of America Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Banc of America Securities LLC
Global Asset Backed Securitization Group - Portfolio Management
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Information:
Bank of America, N.A.
ABA 000-000-000
for the account of Bank of America Charlotte
Account No. 109360165000
Attn.: Xxxxxxx Xxxxxxxx
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
56
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 00 Xxxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000-0000, 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,
57
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
58
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
59
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.
60
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:
61
BANK OF AMERICA, N.A.,
as Collateral Agent and Bank Investor
By:
---------------------------------------
Name:
Title:
62