SALE AND SERVICING AGREEMENT
among
AMERICREDIT RECEIVABLES FINANCE CORP. 1995-A
Issuer
AMERICREDIT FINANCIAL SERVICES, INC.
In its individual capacity and as Servicer
AMERICREDIT RECEIVABLES CORP.
Seller
and
LASALLE NATIONAL BANK
Backup Servicer
dated as of
June 1, 1995
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.3. Calculations . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.4. Section References . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.5. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.6. Material Adverse Effect. . . . . . . . . . . . . . . . . . 16
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. . . . . . . . . . . . . . . . . 16
SECTION 2.2. Custody of Receivable Files. . . . . . . . . . . . . . . . 17
SECTION 2.3. Conditions to Issuance by Issuer . . . . . . . . . . . . . 18
SECTION 2.4. Representations and Warranties of Seller . . . . . . . . . 18
SECTION 2.5. Repurchase of Receivables Upon Breach of Warranty. . . . . 20
SECTION 2.6. Nonpetition Covenant . . . . . . . . . . . . . . . . . . . 21
SECTION 2.7. Collecting Lien Certificates Not Delivered on the
Closing Date . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.8. Issuer's Assignment of Administrative Receivables
and Warranty Receivables . . . . . . . . . . . . . . . . 21
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.1. Duties of the Servicer . . . . . . . . . . . . . . . . . . 23
SECTION 3.2. Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements. . . . . . . . . . . . . 24
SECTION 3.3. Realization Upon Receivables . . . . . . . . . . . . . . . 27
SECTION 3.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.5. Maintenance of Security Interests in Vehicles. . . . . . . 29
SECTION 3.6. Covenants, Representations, and Warranties of Servicer . . 30
SECTION 3.7. Purchase of Receivables Upon Breach of Covenant. . . . . . 32
i
SECTION 3.8. Total Servicing Fee; Payment of Certain Expenses
by Servicer. . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.9. Servicer's Certificate . . . . . . . . . . . . . . . . . . 33
SECTION 3.10. Annual Statement as to Compliance, Notice of
Servicer Termination Event . . . . . . . . . . . . . . . 34
SECTION 3.11. Annual Independent Accountants' Report . . . . . . . . . . 34
SECTION 3.12. Access to Certain Documentation and
Information Regarding Receivables. . . . . . . . . . . . 35
SECTION 3.13. Monthly Tape . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.14. Retention and Termination of Servicer. . . . . . . . . . . 36
SECTION 3.15. Duties of the Servicer under the Indenture . . . . . . . . 36
SECTION 3.16. Fidelity Bond and Errors and Omissions Policy. . . . . . . 37
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS
SECTION 4.1. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.2. Collections. . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.3. Application of Collections . . . . . . . . . . . . . . . . 39
SECTION 4.4. Net Deposits . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.5. Additional Deposits. . . . . . . . . . . . . . . . . . . . 40
SECTION 4.6. Distributions. . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.7. Trustee as Agent . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.8. Statements to Noteholders. . . . . . . . . . . . . . . . . 41
SECTION 4.9. Eligible Accounts. . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.10. Optional Deposits by the Security Insurer. . . . . . . . . 42
ARTICLE V
THE SPREAD ACCOUNT
SECTION 5.1. Withdrawals from Spread Account in
respect of Deficiency Claim Amount . . . . . . . . . . . 43
SECTION 5.2. Withdrawals from Spread Account in
respect of Noteholders' Excess Principal
Distributable Amount or following the occurrence
of an Insurer Default. . . . . . . . . . . . . . . . . . 43
ARTICLE VI
THE SELLER
SECTION 6.1. Liability of Seller. . . . . . . . . . . . . . . . . . . . 44
ii
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of Seller; Amendment of Certificate
of Incorporation . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.3. Limitation on Liability of Seller and Others . . . . . . . 45
SECTION 6.4. Seller May Own Notes . . . . . . . . . . . . . . . . . . . 45
ARTICLE VII
SERVICER
SECTION 7.1. Liability of Servicer; Indemnities . . . . . . . . . . . . 45
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer or Backup Servicer . . . . . 46
SECTION 7.3. Limitation on Liability of Servicer,
Backup Servicer and Others . . . . . . . . . . . . . . . 47
SECTION 7.4. Delegation of Duties . . . . . . . . . . . . . . . . . . . 48
SECTION 7.5. Servicer and Backup Servicer Not to Resign . . . . . . . . 48
ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event . . . . . . . . . . . . . . . . 49
SECTION 8.2. Consequences of a Servicer Termination Event . . . . . . . 50
SECTION 8.3. Appointment of Successor . . . . . . . . . . . . . . . . . 51
SECTION 8.4. Notification to Noteholders. . . . . . . . . . . . . . . . 52
SECTION 8.5. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . 52
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables . . . . . . . . . . . 53
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.2. Protection of Title to the Receivables and Other
Conveyed Property. . . . . . . . . . . . . . . . . . . . 54
SECTION 10.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.4. Severability of Provisions . . . . . . . . . . . . . . . . 56
SECTION 10.5. Assignment . . . . . . . . . . . . . . . . . . . . . . . . 56
iii
SECTION 10.6. Third-Party Beneficiaries. . . . . . . . . . . . . . . . . 56
SECTION 10.7. Disclaimer by Security Insurer . . . . . . . . . . . . . . 56
SECTION 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.9. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 57
Schedule A Schedule of Receivables
Schedule B Representations and Warranties of Seller and AFS
Schedule C Servicing Policies and Procedures
iv
THIS SALE AND SERVICING AGREEMENT, dated as of June 1, 1995,
is made among AmeriCredit Receivables Finance Corp. 1995-A, a
Delaware corporation, as Issuer (the "Issuer"), AmeriCredit
Receivables Corp., a Delaware corporation, as Seller (the
"Seller"), AmeriCredit Financial Services, Inc., a Delaware
corporation, in its individual capacity and as Servicer (in its
individual capacity, "AFS"; in its capacity as Servicer, the
"Servicer") and LaSalle National Bank, a national banking
association, as Backup Servicer (the "Backup Servicer").
In consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. All terms defined in the Spread
Account Agreement or the Indenture (each as defined below) shall
have the same meaning in this Agreement. Whenever capitalized
and used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
1994-A ISSUER STOCK PLEDGE AGREEMENT: The Stock Pledge
Agreement, dated as of June 1, 1995, among the Security Insurer,
the Seller and the Collateral Agent named therein, as the same
may be amended from time to time.
1995-A ISSUER STOCK PLEDGE AGREEMENT: The Stock Pledge
Agreement, dated as of June 1, 1995, among the Security Insurer,
the Seller and the Collateral Agent named therein, as the same
may be amended from time to time.
ACCOUNTANTS' REPORT: The report of a firm of nationally
recognized independent accountants described in Section 3.11.
ACCOUNTING DATE: With respect to a Distribution Date, the
last day of the Monthly Period immediately preceding such
Distribution Date.
ADMINISTRATIVE RECEIVABLE: With respect to any Monthly
Period, a Receivable which the Servicer is required to purchase
pursuant to Section 3.7 or which the Servicer has elected to
purchase pursuant to Section 3.4(c) on the Deposit Date with
respect to such Monthly Period.
ADMINISTRATIVE SERVICES AND FACILITIES AGREEMENTS: The
agreement by and between AFS and the Issuer dated June 1, 1995
and the agreement by and between AFS and the Seller dated as of
December 1, 1994.
AFFILIATE: With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under
direct or indirect common control with such specified Person.
For the purposes of this definition, "control" when used with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
AGGREGATE PRINCIPAL BALANCE: With respect to the Closing
Date, the Cutoff Date Principal Balance, and with respect to any
Determination Date, the sum of the Principal Balances (computed
as of the related Accounting Date) for all Receivables (other
than (i) any Receivable that became a Liquidated Receivable
during the related Monthly Period and (ii) any Receivable that
the Seller or the Servicer is required to repurchase prior to the
next Distribution Date).
AGREEMENT OR "THIS AGREEMENT": This Sale and Servicing
Agreement, all amendments and supplements thereto and all
exhibits and schedules to any of the foregoing.
AMOUNT FINANCED: With respect to a Receivable, the
aggregate amount initially advanced under such Receivable toward
the purchase price of 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 sale contracts
or promissory notes, and related costs. The term "Amount
Financed" shall not include any Insurance Add-On Amounts.
ANNUAL PERCENTAGE RATE OR APR. With respect to a
Receivable, the rate per annum of finance charges stated in such
Receivable as the "annual percentage rate" (within the meaning of
the Federal Truth-in-Lending Act). If after the Closing Date,
the rate per annum with respect to a Receivable as of the Closing
Date is
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reduced as a result of (i) an insolvency proceeding involving
the Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil
Relief Act of 1940, Annual Percentage Rate or APR shall refer to
such reduced rate.
AVAILABLE FUNDS: With respect to any Determination Date,
the sum of (i) the Collected Funds for such Determination Date,
(ii) all Purchase Amounts deposited in the Collection Account as
of the related Deposit Date, and (iii) all income from
investments of funds in the Trust Accounts during the prior
Monthly Period.
BACKUP SERVICER: LaSalle National Bank, or its successor in
interest pursuant to Section 8.2, or such Person as shall have
been appointed as Backup Servicer or successor Servicer pursuant
to Section 8.3.
BASIC SERVICING FEE: With respect to any Monthly Period,
the fee payable to the Servicer for services rendered during such
Monthly Period, which shall be equal to one-twelfth of the Basic
Servicing Fee Rate multiplied by the Aggregate Principal Balance
with respect to the Determination Date falling in such Monthly
Period.
BASIC SERVICING FEE RATE: 2.50% per annum, payable monthly
at one-twelfth of the annual rate.
BUSINESS DAY: Any day other than a Saturday, Sunday, legal
holiday or other day on which commercial banking institutions in
Fort Worth, Texas, New York, New York, Chicago, Illinois, or the
principal place of business of any successor Servicer, successor
Issuer, successor Trustee, successor Collateral Agent or
successor Indenture Collateral Agent, are authorized or obligated
by law, executive order or governmental decree to be closed.
CALENDAR QUARTER: In any given year, the three month period
beginning with the first day of the first month of such three
month period and ending on the last day of the last month of such
three month period, provided, that such three month period shall
be any of January through March, April through June, July through
September or October through December.
CLOSING DATE: June 21, 1995.
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COLLATERAL AGENT: The Collateral Agent named in the Spread
Account Agreement, and any successor thereto pursuant to the
terms of the Spread Account Agreement.
COLLATERAL INSURANCE: The meaning set forth in Section
3.4(a).
COLLECTED FUNDS: With respect to any Determination Date,
the amount of funds in the Collection Account representing
collections on the Receivables during the related Monthly Period,
including all Liquidation Proceeds collected during the related
Monthly Period (but excluding any Purchase Amounts).
COLLECTION ACCOUNT: The account designated as the
Collection Account in, and which is established and maintained
pursuant to, Section 4.1(a) hereof.
COLLECTION RECORDS: All manually prepared or computer
generated records relating to collection efforts or payment
histories with respect to the Receivables.
COMPUTER TAPE: The computer tape generated on behalf of the
Seller which provides information relating to the Receivables and
which was used by the Seller and AFS in selecting the Receivables
conveyed to the Issuer hereunder.
CORPORATE TRUST OFFICE: The principal office of the Trustee
at which at any particular time its corporate trust business
shall be administered, which office at the Closing Date is
located at 000 X. XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx
00000, Attention: Asset Backed Securities Trust Administration;
the telecopy number for the Corporate Trust Office of the Trustee
on the date of the execution of this Agreement is (000) 000-0000.
CRAM DOWN LOSS: With respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have
issued an order reducing the Principal Balance of such
Receivable, the amount of such reduction. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of such
order.
CREDIT ENHANCEMENT FEE: With respect to any Distribution
Date, the amount to be paid to the Seller pursuant to Section
4.6(vi).
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CUSTODIAN: AFS and any other Person named from time to time
as custodian in any Custodian Agreement acting as agent for the
Indenture Collateral Agent, which Person must be acceptable to
the Controlling Party (the Custodian as of the Closing Date is
acceptable to the Security Insurer as of the Closing Date).
CUSTODIAN AGREEMENT: Any Custodian Agreement from time to
time in effect between the Custodian named therein and the
Indenture Collateral Agent, substantially in the form of
Exhibit B hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms
thereof, which Custodian Agreement and any amendments,
supplements or modifications thereto shall be acceptable to the
Controlling Party (the Custodian Agreement which is effective on
the Closing Date is acceptable to the Controlling Party).
CUTOFF DATE: May 31, 1995.
CUTOFF DATE PRINCIPAL BALANCE: $107,793,984.35.
DEALER: A seller of new or used automobiles or light trucks
that originated one or more of the Receivables and sold the
respective Receivable, directly or indirectly, to AFS under a
Dealer Assignment.
DEALER AGREEMENT: An agreement between AFS and a Dealer
relating to the sale of retail installment sale contracts and
installment notes to AFS and all documents and instruments
relating thereto.
DEALER ASSIGNMENT: With respect to a Receivable, the
executed assignment executed by a Dealer conveying such
Receivable to AFS.
DEFICIENCY CLAIM AMOUNT: As defined in Section 5.1(a).
DEFICIENCY CLAIM DATE: With respect to any Distribution
Date, the fourth Business Day immediately preceding such
Distribution Date.
DEFICIENCY NOTICE: As defined in Section 5.1(a).
DEPOSIT DATE: With respect to any Monthly Period, the
Business Day immediately preceding the related Determination
Date.
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DETERMINATION DATE: With respect to any Monthly Period, the
earlier of (i) the fourth Business Day preceding the Distribution
Date in the next calendar month, and (ii) the 5th day of the next
calendar month, or if such 5th day is not a Business Day, the
next succeeding Business Day.
DISTRIBUTION AMOUNT: With respect to a Distribution Date,
the sum of (i) the Available Funds for such Distribution Date and
(ii) the Deficiency Claim Amount, if any, received by the Trustee
with respect to such Distribution Date.
DISTRIBUTION DATE: The 12th day of each calendar month, or
if such 12th day is not a Business Day, the next succeeding
Business Day, commencing July 12, 1995 and including the Final
Scheduled Distribution Date.
DRAW DATE: With respect to any Distribution Date, the third
Business Day immediately preceding such Distribution Date.
ELECTRONIC LEDGER: The electronic master record of the
retail installment sales contracts or installment loans of AFS.
ELIGIBLE ACCOUNT: (i) A segregated trust account that is
maintained with the corporate trust department of a depository
institution acceptable to the Controlling Party, or (ii) a
segregated direct deposit account maintained with a depository
institution or trust company organized under the laws of the
United States of America, or any of the States thereof, or the
District of Columbia, having a certificate of deposit, short term
deposit or commercial paper rating of at least "A-l+" by Standard
& Poor's and "P-1" by Moody's and acceptable to the Controlling
Party.
ELIGIBLE INVESTMENTS: Any one or more of the following
types of investments:
(a) (i) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States; and
(ii) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and
interest by, the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation, but only if, at the time
of investment, such
6
obligations are assigned the highest credit rating by each Rating Agency;
(b) demand or time deposits in, certificates of deposit of,
demand notes of, or bankers' acceptances issued by any depository
institution or trust company organized under the laws of the
United States or any State and subject to supervision and
examination by federal and/or State banking authorities
(including, if applicable, the Trustee, the Issuer or any agent
of either of them acting in their respective commercial
capacities); provided that the short-term unsecured debt
obligations of such depository institution or trust company at
the time of such investment, or contractual commitment providing
for such investment, are assigned the highest credit rating by
each Rating Agency;
(c) repurchase obligations pursuant to a written agreement
(i) with respect to any obligation described in clause (a) above,
where the Indenture Collateral Agent has taken actual or
constructive delivery of such obligation in accordance with
Section 4.1, and (ii) entered into with the corporate trust
department of a depository institution or trust company organized
under the laws of the United States or any State thereof, the
deposits of which are insured by the Federal Deposit Insurance
Corporation and the short-term unsecured debt obligations of
which are rated "A-l+" by Standard & Poor's and "P-1" by Moody's
(including, if applicable, the Trustee, or any agent of the
Trustee acting in its commercial capacity);
(d) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the
United States or any State whose long-term unsecured debt
obligations are assigned the highest credit rating by each Rating
Agency at the time of such investment or contractual commitment
providing for such investment; PROVIDED, HOWEVER, that securities
issued by any particular corporation will not be Eligible
Investments to the extent that an investment therein will cause
the then outstanding principal amount of securities issued by
such corporation and held in the Trust Accounts to exceed 10% of
the Eligible Investments held in the Trust Accounts (with
Eligible Investments held in the Trust Accounts valued at par);
(e) commercial paper that (i) is payable in United States
dollars and (ii) is rated in the highest credit rating category
by each Rating Agency;
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(f) units of money market funds rated in the highest credit
rating category by each Rating Agency; provided that all Eligible
Investments shall be held in the name of the Indenture Collateral
Agent; or
(g) any other demand or time deposit, obligation, security
or investment as may be acceptable to the Rating Agencies and the
Controlling Party, as evidenced by the prior written consent of
the Controlling Party and the Rating Agencies, as may from time
to time be confirmed in writing to the Trustee by the Controlling
Party; PROVIDED, HOWEVER, that securities issued by any entity
(except as provided in paragraph (a)) will not be Eligible
Investments to the extent that an investment therein will cause
the then outstanding principal amount of securities issued by
such entity and held in the Trust Accounts to exceed $10 million
(with Eligible Investments held in the Trust Accounts valued at
par).
Eligible Investments may be purchased by or through the Indenture
Collateral Agent or any of its Affiliates.
ELIGIBLE SERVICER: AFS, the Backup Servicer or another
Person which at the time of its appointment as Servicer (i) is
servicing a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle installment loans, (ii) is legally
qualified and has the capacity to service the Receivables, (iii)
has demonstrated the ability professionally and competently to
service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle installment loans similar to the
Receivables with reasonable skill and care, (iv) is qualified and
entitled to use, pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the
software which the Servicer uses in connection with performing
its duties and responsibilities under this Agreement or otherwise
has available software which is adequate to perform its duties
and responsibilities under this Agreement and (v) has a minimum
net worth of $50,000,000.
EXCESS AMOUNTS: As determined with respect to Series 1995-A
pursuant to the terms of the Spread Account Agreement.
FINAL SCHEDULED DISTRIBUTION DATE: September 12, 2000 (or,
if such day is not a Business Day, the next succeeding Business
Day thereafter).
FINAL SCHEDULED MATURITY DATE: April 30, 2000.
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FINANCED VEHICLE: A new or used automobile or light truck,
together with all accessories thereto, securing an Obligor's
indebtedness under a Receivable.
FORCE-PLACED INSURANCE: The meaning set forth in Section
3.4(b).
Indenture: The Indenture, dated as of June 1, 1995, between
the Issuer, the Trustee and the Indenture Collateral Agent, as
the same may be amended and supplemented from time to time.
INDENTURE COLLATERAL AGENT: The Person acting as Indenture
Collateral Agent under the Indenture, its successors in interest
and any successor Indenture Collateral Agent under the Indenture.
INDEPENDENT ACCOUNTANTS: As defined in Section 3.11(a).
INITIAL PURCHASE AGREEMENT: The Purchase Agreement, dated
as of June 9, 1995 between the Issuer and the Representative.
INITIAL PURCHASERS: The purchasers named in the Initial
Purchase Agreement.
INSOLVENCY EVENT: With respect to a specified Person, (a)
the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of such
Person's affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case
under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or
the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to
pay its debts as such debts
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become due, or the taking of action by such Person in furtherance
of any of the foregoing.
INSURANCE ADD-ON AMOUNT: The premium charged to the Obligor
in the event that the Servicer obtains Force-Placed Insurance
pursuant to Section 3.4.
INSURANCE AGREEMENT: The Insurance and Indemnity Agreement,
dated as of June 1, 1995, among the Security Insurer, the Issuer,
the Seller, AFS and AmeriCredit Corp.
INSURANCE AGREEMENT EVENT OF DEFAULT: An "Event of Default"
as defined in the Insurance Agreement.
INSURANCE POLICY: With respect to a Receivable, any
insurance policy benefiting the holder of the Receivable
providing loss or physical damage, credit life, credit
disability, theft, mechanical breakdown or similar coverage with
respect to the Financed Vehicle or the Obligor.
INSURER DEFAULT: The occurrence and continuance of any of
the following:
(a) the Security Insurer shall have failed to make a
payment required under the Policy;
(b) The Security Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter
of the United States Bankruptcy Code, the New York State
Insurance Law, or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit of
its creditors, or (iii) had an order for relief entered against
it under the United States Bankruptcy Code, the New York State
Insurance Law, or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York
Department of Insurance or other competent regulatory authority
shall have entered a final and nonappealable order, judgment or
decree (i) appointing a custodian, trustee, agent or receiver for
the Security Insurer or for all or any material portion of its
property or (ii) authorizing the taking of possession by a
custodian, trustee, agent or receiver of the Security Insurer (or
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the taking of possession of all or any material portion of the
property of the Security Insurer).
LIEN: Any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax
liens, mechanics' liens and any liens that attach by operation of
law.
LIEN CERTIFICATE: With respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other
notification issued by the Registrar of Titles of the applicable
state to a secured party which indicates that the lien of the
secured party on the Financed Vehicle is recorded on the original
certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the
term "Lien Certificate" shall mean only a certificate or
notification issued to a secured party.
LIQUIDATED RECEIVABLE: With respect to any Monthly Period,
a Receivable as to which (i) 90 days have elapsed since the
Servicer repossessed the Financed Vehicle, (ii) the Servicer has
determined in good faith that all amounts it expects to recover
have been received, or (ill) all or any portion of a Scheduled
Payment shall have become 120 days or more delinquent.
LIQUIDATION PROCEEDS: With respect to a Liquidated
Receivable, all amounts realized with respect to such Receivable
(other than amounts withdrawn from the Spread Account or drawn,
under the Policy) net of (i) reasonable expenses incurred by the
Servicer in connection with the collection of such Receivable and
the repossession and disposition of the Financed Vehicle and (ii)
amounts that are required to be refunded to the Obligor on such
Receivable; PROVIDED, HOWEVER, that the Liquidation Proceeds with
respect to any Receivable shall in no event be less than zero.
LOCKBOX ACCOUNT: The segregated account maintained on
behalf of the Issuer by the Lockbox Bank in accordance with
Section 3.2(d).
LOCKBOX AGREEMENT: The Tri-Party Remittance Processing
Agreement, dated as of June 1, 1995, by and among AFS, First
Interstate Bank of Texas, N.A., and the Indenture Collateral
Agent, as such agreement may be amended or supplemented from time
to time, unless the Trustee hereunder shall cease to be a party
thereunder, or such agreement shall be terminated in accordance
with its terms, in which event "Lockbox Agreement" shall mean
such other agreement,
11
in form and substance acceptable to the Controlling Party, among
the Servicer, the Issuer, the Trustee and the Lockbox Bank.
LOCKBOX BANK: A depository institution named by the
Servicer and acceptable to the Controlling Party.
MONTHLY PERIOD: With respect to a Distribution Date, the
calendar month preceding the month in which such Distribution
Date occurs (such calendar month being referred to as the
"related" Monthly Period with respect to such Distribution Date).
With respect to an Accounting Date, the calendar month in which
such Accounting Date occurs is referred to herein as the
"related" Monthly Period to such Accounting Date.
MONTHLY RECORDS: All records and data maintained by the
Servicer with respect to the Receivables, including the following
with respect to each Receivable: the account number; the
identity of the originating Dealer; Obligor name, Obligor
address; Obligor home phone number; Obligor business phone
number; original Principal Balance; original term; Annual
Percentage Rate; current Principal Balance; current remaining
term; origination date; first payment date; final scheduled
payment date, next payment due date, date of most recent payment,
new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date;
amount, if any, of Force-Placed Insurance payable monthly; amount
of the Scheduled Payment; current Insurance Policy expiration
date; and past due late charges, if any.
MOODY'S: Xxxxx'x Investors Service, Inc., or any successor
thereto.
NOTE BALANCE: As of any date of determination, the
aggregate outstanding principal balance of the Notes, unless
otherwise specified, after giving effect to any distribution in
respect of principal on the Notes on such date.
NOTE DISTRIBUTION ACCOUNT: The account designated as such,
established and maintained pursuant to Section 4.1(c).
NOTE INTEREST RATE: 6.55% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
NOTE MAJORITY: Noteholders representing 66 2/3% of the
outstanding principal balance of the Notes.
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NOTE POOL FACTOR: With respect to any Distribution Date, an
eight-digit decimal figure equal to the outstanding principal
balance of the Notes as of such Distribution Date (after giving
effect to all distributions on such date) divided by the original
outstanding principal balance of the Notes as of the Closing
Date.
NOTEHOLDERS: registered holder of Notes
NOTEHOLDERS' EXCESS PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to each Distribution Date (so long as an Insurer Default
shall not have occurred and be continuing) to the extent of
Excess Amounts with respect to such Distribution Date: (1) if
such Distribution Date is a Trigger Date but an Insurance
Agreement Event of Default has not occurred as of such
Distribution Date, the lesser of (i) the amount such that the
Aggregate Principal Balance as of the related Determination Date,
PLUS the amount on deposit in the Spread Account on such
Distribution Date after giving effect to deposits required to be
made to and distributions to be made from the Spread Account on
such Distribution Date in accordance with the terms of the Spread
Account Agreement MINUS the Note Balance (after giving effect to
distribution of the Noteholders' Principal Distributable Amount
with respect to such Distribution Date) IS EQUAL to 20% of the
Aggregate Principal Balance as of the related Determination Date
and (ii) the Note Balance (after giving effect to distribution of
the Noteholders' Principal Distributable Amount with respect to
such Distribution Date); (2) if an Insurance Agreement Event of
Default has occurred as of such Distribution Date, the Note
Balance (after giving effect to distribution of the Noteholders'
Principal Distributable Amount with respect to such Distribution
Date); and (3) if such Distribution Date is not a Trigger Date,
0.
NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL: With respect to
any Distribution Date, the excess of the Noteholders' Monthly
Interest Distributable Amount for the preceding Distribution Date
and any outstanding Noteholders' Interest Carryover Shortfall on
such preceding Distribution Date, over the amount in respect of
interest that is actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the
preceding Distribution Date, to the extent permitted by law, at
the Note Interest Rate from such preceding Distribution Date
through the current Distribution Date.
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NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date, the sum of the Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and the
Noteholders' Interest Carryover Shortfall for such Distribution
Date.
NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 30 days of interest (or, in the
case of the first Distribution Date, interest accrued from and
including the Closing Date to but excluding such Distribution
Date) at the Note Interest Rate on the outstanding principal
balance of the Notes on the immediately preceding Distribution
Date, after giving effect to all distributions of principal to
Noteholders on such Distribution Date (or, in the case of the
first Distribution Date, on the Closing Date).
NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the amount equal to 92% of the
sum of the following amounts with respect to the immediately
preceding Monthly Period, in each case computed in accordance
with the Simple Interest Method: (i) that portion of all
collections on Receivables (other than Liquidated Receivables and
Purchased Receivables) allocable to principal, including all full
and partial principal prepayments, (ii) the Principal Balance (as
of the related Accounting Date) of all Receivables that became
Liquidated Receivables during the related Monthly Period or
Monthly Periods (other than Purchased Receivables), (iii) the
portion of the Purchase Amount allocable to principal of all
Receivables that became Purchased Receivables as of the
immediately preceding Accounting Date, and, in the sole
discretion of the Security Insurer, provided no Insurer Default
shall have occurred and be continuing, the Principal Balance as
of the immediately preceding Accounting Date of all Receivables
that were required to be purchased as of the immediately
preceding Accounting Date but were not so purchased, and (iv) the
aggregate amount of Cram Down Losses that shall have occurred
during the related Monthly Period or Monthly Periods.
NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the
close of any Distribution Date, the excess of the sum of the
Noteholders' Monthly Principal Distributable Amount and any
outstanding Noteholders' Principal Carryover Shortfall from the
preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution
Account on such Distribution Date.
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NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect
to any Distribution Date (other than the Final Scheduled
Distribution Date and so long as an Insurer Default shall not
have occurred and be continuing), the sum of the Noteholders'
Monthly Principal Distributable Amount for such Distribution
Date, and any outstanding Noteholders' Principal Carryover
Shortfall as of the close of business on the preceding
Distribution Date; PROVIDED, HOWEVER, the Noteholders' Principal
Distributable Amount shall not exceed the Note Balance prior to
the distribution on such Distribution Date. The "Noteholders'
Principal Distributable Amount" on the Final Scheduled
Distribution Date will equal the Note Balance on the Final
Scheduled Distribution Date prior to the distribution on such
Distribution Date.
NOTEHOLDERS' SPECIAL PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date while an Insurer Default shall
have occurred and be continuing (other than the Final Scheduled
Distribution Date), the sum of 100% of the sum of the amounts
referred to in clauses (i) through (iv) of the definition of
Noteholders' Monthly Principal Distributable Amount, PLUS, any
outstanding Noteholders' Principal Carryover Shortfall as of the
close of business on the preceding Distribution Date; PROVIDED,
HOWEVER, the Noteholders' Special Principal Distributable Amount
shall not exceed the Note Balance prior to the distribution on
such Distribution Date. The "Noteholders' Special Principal
Distributable Amount" on the Final Scheduled Distribution Date
will equal the Note Balance on the Final Scheduled Distribution
Date prior to the distribution on such Distribution Date.
NOTES: 6.55% Automobile Receivables-Backed Notes issued
pursuant to the Indenture.
OBLIGOR: The purchaser or the co-purchasers of the Financed
Vehicle and any other Person or Persons who are primarily or
secondarily obligated to make payments under a Receivable.
OPINION OF COUNSEL: A written opinion of counsel (who may
be counsel to or an employee of the Servicer) acceptable in form
and substance and from counsel acceptable to the Issuer and, if
such opinion or a copy thereof is required to be delivered to the
Trustee or the Security Insurer, acceptable to the Trustee or the
Security Insurer, as applicable.
ORIGINAL POOL BALANCE: As of any date, the Cutoff Date
Principal Balance.
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OTHER CONVEYED PROPERTY: All property conveyed by the
Seller to the Issuer pursuant to this Agreement other than the
Receivables.
PERSON: Any legal person, including any individual,
corporation, partnership, limited liability company, joint
venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof, or any other entity.
POLICY: The financial guaranty insurance policy issued by
the Security Insurer to the Trustee on behalf of the Noteholders,
Policy No. 50376-N, including any endorsements thereto.
PRINCIPAL BALANCE: With respect to any Receivable, as of
any date, the Amount Financed minus (i) that portion of all
amounts received on or prior to such date and allocable to
principal in accordance with the Simple Interest Method, and (ii)
any Cram Down Loss in respect of such Receivable.
PURCHASE AGREEMENT: The Receivables Purchase Agreement and
Assignment, dated as of June 1, 1995 between AFS and the Seller.
PURCHASE AMOUNT: With respect to a Receivable, the
Principal Balance and all accrued and unpaid interest on the
Receivable as of the Accounting Date on which the obligation to
purchase such Receivable arises.
PURCHASED RECEIVABLE: As of any Accounting Date, any
Receivable (including any Liquidated Receivable) that became a
Warranty Receivable or Administrative Receivable as of such
Accounting Date (or which AFS or the Servicer has elected to
purchase as of an earlier Accounting Date, as permitted by
Section 2.5 or 3.7), and as to which the Purchase Amount has been
deposited in the Collection Account by the Seller, AFS or the
Servicer, as applicable, on or before the related Deposit Date.
RATING AGENCY: Each of Moody's and Standard & Poor's, so
long as such Persons maintain a rating on the Notes; and if
either Moody's or Standard & Poor's no longer maintains a rating
on the Notes, such other nationally recognized statistical rating
organization selected by the Seller, the Note Majority and (so
long as an Insurer Default shall not have occurred and be
continuing) acceptable to the Security Insurer.
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RECEIVABLE: A retail installment sale contract or
promissory note (and related security agreement) for a new or
used automobile or light truck (and all accessories thereto) that
is included in the Schedule of Receivables, and all rights and
obligations under such a contract or note, but not including (i)
any Liquidated Receivable (other than for purposes of calculating
Noteholders' Distributable Amounts hereunder and for the purpose
of determining the obligations pursuant to Section 2.5 and 3.7 to
purchase Receivables), or (ii) any Purchased Receivable on or
after the Accounting Date immediately preceding the Deposit Date
on which payment of the Purchase Amount is made in connection
therewith pursuant to Section 4.5.
RECEIVABLE FILE: The documents, electronic entries,
instruments and writings listed in Section 2.2 pertaining to a
particular Receivable.
REGISTRAR OF TITLES: With respect to any state, the
governmental agency or body responsible for the registration of,
and the issuance of certificates of title relating to, motor
vehicles and liens thereon.
RELATED DOCUMENTS: The Indenture, the Notes, the Purchase
Agreement, the Custodian Agreement, the Policy, the Spread
Account Agreement, the Insurance Agreement, the Lockbox
Agreement, the Stock Pledge Agreement, the 1994-A Issuer Stock
Pledge Agreement, the 1995-A Issuer Stock Pledge Agreement, the
Spread Account Agreement Supplement and the Initial Purchase
Agreement. The Related Documents executed by any party are
referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.
REPRESENTATIVE: CS First Boston Corporation, as
representative of the Initial Purchasers.
REPURCHASE EVENTS: The occurrence of a breach of any of
AFS', the Seller's or the Servicer's representations and
warranties in this Agreement or in the Purchase Agreement which
requires the repurchase of a Receivable by AFS or the Seller
pursuant to Section 2.5 or by the Servicer pursuant to Section
3.7.
REQUIRED DEPOSIT RATING: A rating on short-term unsecured
debt obligations of "P-1" by Moody's and at least "A-l+" by
Standard & Poor's (or such other rating as may be acceptable to
the Rating Agencies and the Controlling Party).
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RESPONSIBLE OFFICER: When used with respect to any Person
that is not an individual, the President, any Vice-President or
Assistant Vice-President or the Controller of such Person, or any
other officer or employee having similar functions.
SCHEDULE OF RECEIVABLES: The schedule of all retail
installment sales contracts and promissory notes sold and
transferred to the Issuer pursuant to this Agreement which is
attached hereto as Schedule A, as such schedule may be amended
from time to time, to reflect purchases and repurchases of
Receivables.
SCHEDULE OF REPRESENTATIONS: The Schedule of
Representations and Warranties attached hereto as Schedule B.
SCHEDULED PAYMENT: With respect to any Monthly Period for
any Receivable, the amount set forth in such Receivable as
required to be paid by the Obligor in such Monthly Period. If
after the Closing Date, the Obligor's obligation under a
Receivable with respect to a Monthly Period has been modified so
as to differ from the amount specified in such Receivable as a
result of (i) the order of a court in an insolvency proceeding
involving the Obligor, (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940 or (iii) modifications or
extensions of the Receivable permitted by Section 3.2(b), the
Scheduled Payment with respect to such Monthly Period shall refer
to the Obligor's payment obligation with respect to such Monthly
Period as so modified.
SECURITY INSURER: Financial Security Assurance Inc., a
monoline insurance company incorporated under the laws of the
State of New York, or any successor thereto, as issuer of the
Policy.
SELLER: AmeriCredit Receivables Corp., a Delaware
corporation, or its successor in interest pursuant to Section
6.2.
SERIES: Any series of securities issued by the purchaser of
additional pools of Receivables from the Seller.
SERVICER: AmeriCredit Financial Services, Inc., a Delaware
corporation, its successor in interest pursuant to Section 8.2
or, after any termination of the Servicer upon a Servicer
Termination Event, the Backup Servicer or any other successor
Servicer.
SERVICER EXTENSION NOTICE: The notice delivered pursuant to
Section 3.14.
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SERVICER TERMINATION EVENT: An event described in Section
8.1.
SERVICER'S CERTIFICATE: With respect to each Determination
Date, a certificate, completed by and executed on behalf of the
Servicer, in accordance with Section 3.9, substantially in the
form attached hereto as Exhibit E.
SIMPLE INTEREST METHOD: The method of allocating a fixed
level payment on an obligation between principal and interest,
pursuant to which the portion of such payment that is allocated
to interest is equal to the product of the fixed rate of interest
on such obligation multiplied by the period of time (expressed as
a fraction of a year, based on the actual number of days in the
calendar month and 365 days in the calendar year) elapsed since
the preceding payment under the obligation was made.
SIMPLE INTEREST RECEIVABLE: A Receivable under which the
portion of the payment allocable to interest and the portion
allocable to principal is determined in accordance with the
Simple Interest Method.
SPREAD ACCOUNT: The Series 1995-A Spread Account
established and maintained pursuant to the Spread Account
Agreement.
SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement,
dated as of December 1, 1994, among the Security Insurer, the
Seller, the Collateral Agent and the trustees specified therein,
as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
SPREAD ACCOUNT AGREEMENT SUPPLEMENT: The Spread Account
Agreement Supplement means the Series 1995-A Supplement to Spread
Account Agreement dated as of June 1, 1995, among Security
Insurer, the Seller and the Trustee.
STANDARD & POOR'S: Standard & Poor's Rating Group, or any
successor thereto.
STOCK PLEDGE AGREEMENT: The Stock Pledge Agreement, dated
as of December 1, 1994, among the Security Insurer, AFS and the
Collateral Agent named therein, as the same may be amended from
time to time.
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SUBCOLLECTION ACCOUNT: The account designated as the
Subcollection Account in, and which is established and maintained
pursuant to Section 4.2(a).
SUPPLEMENTAL SERVICING FEE: With respect to any Monthly
Period, all administrative fees, expenses and charges paid by or
on behalf of Obligors collected on the Receivables during such
Monthly Period, including late fees and other amounts deposited
into the Collection Account in respect of the prepayment in full
of a Receivable in excess of the sum of (i) the Principal Balance
of such Receivable plus (ii) any amounts required to be remitted
to Obligors in respect of such prepayment.
TOTAL SERVICING FEE: The sum of the Basic Servicing Fee and
the Supplemental Servicing Fee.
TRIGGER DATE: A Distribution Date which occurs (i) on or
after the date of occurrence of a Trigger Event and prior to the
date, if any, on which such Trigger Event is Deemed Cured or
(ii) on or after the date of occurrence of an Insurance Agreement
Event of Default.
TRIGGER NOTICE: As specified in Section 5.2.
TRUST ACCOUNTS: The meaning specified in 4.1(c).
TRUSTEE: The Person acting as Trustee under the Indenture,
its successors in interest and any successor Trustee under the
Indenture.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
WARRANTY RECEIVABLE: With respect to any Monthly Period, a
Receivable which AFS has become obligated to repurchase pursuant
to Section 2.5 on the Deposit Date with respect to such Monthly
Period.
Section 1.2. USAGE OF TERMS. With respect to all terms
used in this Agreement, the singular includes the plural and the
plural the singular, words importing any gender include the other
gender, references to "writing" include printing typing
lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein
entered into in accordance
20
with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns;
and the terms "include" or "including" mean "include without limitation"
or "including without limitation."
Section 1.3. CALCULATIONS. All calculations of the
amount of interest accrued on the Notes and all calculations of the
amount of the Basic Servicing Fee shall be made on the basis of a
360-day year consisting of twelve 30-day months. All references
to the Principal Balance of a Receivable as of an Accounting Date
shall refer to the close of business on such day.
Section 1.4. SECTION REFERENCES. All references to
Articles, Sections, paragraphs, subsections, exhibits and
schedules shall be to such portions of this Agreement unless
otherwise specified.
Section 1.5. NO RECOURSE. No recourse may be taken,
directly or indirectly, under this Agreement or any certificate
or other writing delivered in connection herewith or therewith,
against any stockholder, officer, or director, as such, of the
Seller, AFS, the Servicer, the Trustee, the Backup Servicer or
the Issuer or of any predecessor or successor of the Seller, AFS,
the Servicer, the Trustee, the Backup Servicer or the Issuer.
Section 1.6. MATERIAL ADVERSE EFFECT. Whenever a
determination is to be made under this Agreement as to whether a
given event, action, course of conduct or set of facts or
circumstances could or would have a material adverse effect on
the Issuer or the Noteholders (or any similar or analogous
determination), such determination shall be made without taking
into account the insurance provided by the Policy.
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.1. CONVEYANCE OF RECEIVABLES. Subject to the
terms and conditions of this Agreement, the Seller, pursuant to
the mutually agreed upon terms contained herein, hereby sells,
transfers, assigns, and otherwise conveys to the Issuer, without
recourse (but without limitation of its obligations in this
Agreement), all of the right, title and interest of the Seller in
and to the Receivables, all monies payable thereon or in respect
thereof after the Cutoff Date, the security interests of AFS in
the
21
related Financed Vehicles, the Insurance Policies and any
proceeds from any Insurance Policies relating to the Receivables,
the Obligors or the related Financed Vehicles, including rebates
of premiums, all Collateral Insurance and any Force-Placed
Insurance relating to the Receivables, rights of AFS or the
Seller against Dealers with respect to the Receivables under the
Dealer Agreements and the Dealer Assignments, all items contained
in the related Receivable Files, any and all other documents that
AFS keeps on file in accordance with its customary procedures
relating to the Receivables, the Obligors or the related Financed
Vehicles, the rights of the Seller under the Purchase Agreement,
property (including the right to receive future Liquidation
Proceeds) that secures a Receivable and that has been acquired by
or on behalf of the Seller or the Issuer pursuant to liquidation
of such Receivable, all funds on deposit from time to time in the
Trust Accounts (including all income thereon and all amounts
deposited in respect of Administrative Receivables and Warranty
Receivables) and all investments therein and proceeds thereof,
all proceeds and investments of any of the foregoing, all present
and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in
respect of any or in lieu of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any
of the foregoing. It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement shall
constitute a sale of the Receivables and Other Conveyed Property
from the Seller to the Issuer and the beneficial interest in and
title to the Receivables and the Other Conveyed Property shall
not be part of the Seller's estate in the event of the filing of
a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event that, notwithstanding the intent of
the Seller, the transfer and assignment contemplated hereby is
held not to be a sale, this Agreement shall constitute a grant of
a first priority security interest to the Issuer in the property
referred to in this Section 2.1 for the benefit of the
Noteholders.
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Section 2.2. CUSTODY OF RECEIVABLE FILES.
(a) In connection with the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to the Issuer pursuant to this
Agreement and simultaneously with the execution and delivery of this
Agreement, the Indenture Collateral Agent shall enter into the Custodian
Agreement with the Custodian, dated as of June 1, 1995, pursuant to which the
Indenture Collateral Agent shall revocably appoint the Custodian, and the
Custodian shall accept such appointment, to act as the agent of the Indenture
Collateral Agent as custodian of the following documents or instruments in
its possession which shall be delivered to the Custodian as agent of the
Indenture Collateral Agent on or before the Closing Date (with respect to
each Receivable):
(i) The fully executed original of the Receivable
(together with any agreements modifying the Receivable,
including without limitation any extension agreements);
(ii) The original credit application, or a copy
thereof, of each Obligor, fully executed by each such
Obligor on AFS's customary form, or on a form approved by
AFS, for such application, and
(iii) The original certificate of title (when
received) and otherwise such documents, if any, that AFS
keeps on file in accordance with its customary procedures
indicating that the Financed Vehicle is owned by the Obligor
and subject to the interest of AFS as first lienholder or
secured party (including any Lien Certificate received by
AFS), or, if such original certificate of title has not yet
been received, a copy of the application therefor, showing
AFS as secured party.
The Trustee may act as the Custodian, in which case the
Trustee shall be deemed to have assumed the obligations of the
Custodian specified in the Custodian Agreement, and the terms of
Exhibit B shall be deemed incorporated by reference herein.
(b) Upon payment in full of any Receivable, the Servicer will
notify the Custodian pursuant to a certificate of an officer of the Servicer
(which certificate shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited
in the Collection Account pursuant to Section 3.1 have been so deposited) and
shall request delivery of
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the Receivable and Receivable File to the Servicer. From time to time as
appropriate for servicing and enforcing any Receivable, the Custodian shall,
upon written request of an officer of the Servicer and delivery to the
Custodian of a receipt signed by such officer, cause the original Receivable
and the related Receivable File to be released to the Servicer. The
Servicer's receipt of a Receivable and/or Receivable File shall obligate the
Servicer to return the original Receivable and the related Receivable File to
the Custodian when its need by the Servicer has ceased unless the Receivable
is repurchased as described in Section 2.5 or 3.7.
Section 2.3. CONDITIONS TO ISSUANCE BY ISSUER. As conditions to
Issuer's execution and delivery of the Notes on the Closing Date, the Issuer
shall have received the following on or before the Closing Date:
(a) The Schedule of Receivables certified by the
President, Controller or Treasurer of the Seller;
(b) The acknowledgement of the Custodian that it holds
the Receivable File relating to each Receivable;
(c) Copies of resolutions of the Board of Directors of
the Seller approving the execution, delivery and performance
of this Agreement, the Related Documents and the
transactions contemplated hereby and thereby, certified by a
Secretary or an Assistant Secretary of the Seller;
(d) Copies of resolutions of the Board of Directors of
AFS approving the execution, delivery and performance of
this Agreement, the Related Documents and the transactions
contemplated hereby and thereby, certified by a Secretary or
an Assistant Secretary of AFS;
(e) Evidence that all filings (including, without
limitation, UCC filings) required to be made by any Person
and actions required to be taken or performed by any Person
in any jurisdiction to give the Indenture Collateral Agent a
first priority perfected lien on, or ownership interest in,
the Receivables and the Other Conveyed Property have been
made, taken or performed; and
(f) An executed copy of the Policy and Spread Account
Agreement.
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Section 2.4. REPRESENTATIONS AND WARRANTIES OF SELLER. By
its execution of this Agreement, the Seller makes the following
representations and warranties on which the Issuer relies in
accepting the Receivables and the Other Conveyed Property and in
issuing the Notes and upon which the Security Insurer relies in
issuing the Policy. Unless otherwise specified, such
representations and warranties speak as of the Closing Date, but
shall survive the sale, transfer, and assignment of the
Receivables to the Issuer.
(a) SCHEDULE OF REPRESENTATIONS. The representations and
warranties set forth on the Schedule of Representations attached
hereto as Schedule B are true and correct.
(b) ORGANIZATION AND GOOD STANDING. The Seller has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as
such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has,
power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property transferred to the
Issuer.
(c) DUE QUALIFICATION. The Seller is duly qualified to do
business as a foreign corporation in good standing and has
obtained all necessary licenses and approvals in all
jurisdictions where the failure to do so would materially and
adversely affect Seller's ability to transfer the Receivables and
the Other Conveyed Property to the Issuer pursuant to this
Agreement, or the validity or enforceability of the Receivables
and the Other Conveyed Property or to perform Seller's
obligations hereunder and under the Seller's Related Documents.
(d) POWER AND AUTHORITY. The Seller has the power and
authority to execute and deliver this Agreement and its Related
Documents and to carry out its terms and their terms,
respectively; the Seller has full power and authority to sell and
assign the Receivables and the Other Conveyed Property to be sold
and assigned to and deposited with the Issuer by it and has duly
authorized such sale and assignment to the Issuer by all
necessary corporate action; and the execution, delivery and
performance of this Agreement and the Seller's Related Documents
have been duly authorized by the Seller by all necessary
corporate action.
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(e) VALID SALE, BINDING OBLIGATIONS. This Agreement effects
a valid sale, transfer and assignment of the Receivables and the
Other Conveyed Property, enforceable against the Seller and
creditors of and purchasers from the Seller; and this Agreement
and the Seller's Related Documents, when duly executed and
delivered, shall constitute legal, valid and binding obligations
of the Seller enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless
of whether such enforceability is considered in a proceeding in
equity or at law.
(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related
Documents shall not conflict with, result in any breach of any of
the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the certificate of
incorporation or by-laws of the Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to which
the Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement, or
violate any law, order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.
(g) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened
against the Seller or AFS, before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its
properties (A) asserting the invalidity of this Agreement or any
of the Related Documents, (B) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents,
(C) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement or
any of the Related Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax
attributes of the Notes.
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(h) CHIEF EXECUTIVE OFFICE. The chief executive office of
the Seller is at 000 Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000-0000.
Section 2.5. REPURCHASE OF RECEIVABLES UPON BREACH OF
WARRANTY. Concurrently with the execution and delivery of this Agreement,
AFS and the Seller have entered into the Purchase Agreement the rights of the
Seller under which have been assigned by the Seller to the Issuer. Under the
Purchase Agreement AFS has made the same representations and warranties to
the Seller with respect to the Receivables as those made by Seller pursuant
to the Schedule of Representations, upon which the Issuer has relied in
accepting the Other Conveyed Property and executing the Notes and upon which
the Security Insurer has relied in issuing the Policy and upon which the
Trustee has relied in authenticating the Notes. Upon discovery by any of
AFS, the Seller, the Servicer, the Security Insurer, the Trustee or the
Issuer of a breach of any of the representations and warranties of the Seller
contained in Section 2.4 or of AFS in the Purchase Agreement, the Security
Insurer or the Issuer in any Receivable (including any Liquidated
Receivable), the party discovering such breach shall give prompt written
notice to the others; PROVIDED, HOWEVER, that the failure to give any such
notice shall not affect any obligation of AFS or the Seller. As of the
second Accounting Date (or, at AFS's election, the first Accounting Date)
following its discovery or its receipt of notice of any breach of the
representations and warranties set forth on the Schedule of Representations
which materially and adversely affects the interests of the Noteholders, the
Security Insurer or the Issuer in any Receivable (including any Liquidated
Receivable) AFS or the Seller shall, unless such breach shall have been cured
in all material respects, purchase such Receivable from the Issuer and, on or
before the related Deposit Date, AFS shall pay the Purchase Amount to the
Issuer pursuant to Section 4.5. It is understood and agreed that, except as
set forth in this Section 2.5, the obligation of AFS to repurchase any
Receivable as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against AFS or the Seller
for such breach available to the Security Insurer, the Trustee on behalf of
the Noteholders or the Issuer.
In addition to the foregoing and notwithstanding whether the
related Receivable shall have been purchased by the Seller or
AFS, AFS shall indemnify the Issuer, the Trustee, the Backup
Servicer, the Collateral Agent, the Security Insurer, the
Indenture Collateral Agent, the Issuer and the Noteholders
against all costs, expenses, losses, damages, claims and
liabilities, including
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reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
Section 2.6. NONPETITION COVENANT. None of the Seller, the
Servicer, the Issuer, the Backup Servicer nor AFS shall petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
Section 2.7. COLLECTING LIEN CERTIFICATES NOT DELIVERED ON THE
CLOSING DATE. In the case of any Receivable in respect of which written
evidence from the Dealer selling the related Financed Vehicle that the Lien
Certificate for such Financed Vehicle showing AFS as first lienholder has
been applied for from the Registrar of Titles was delivered to the Custodian
on the Closing Date in lieu of a Lien Certificate, the Servicer shall use its
best efforts to collect such Lien Certificate from the Registrar of Titles as
promptly as practicable. If such Lien Certificate showing AFS as first
lienholder is not received by the Custodian within 180 days after the Closing
Date then the representation and warranty in paragraph 5 of the Schedule of
Representations in respect of such Receivable shall be deemed to have been
incorrect in a manner that materially and adversely affects the Noteholders,
the Security Insurer and the Issuer.
Section 2.8. ISSUER'S ASSIGNMENT OF ADMINISTRATIVE RECEIVABLES
AND WARRANTY RECEIVABLES. With respect to all Administrative Receivables and
all Warranty Receivables purchased by the Servicer, the Seller or AFS, the
Issuer shall take any and all actions reasonably requested by the Seller, AFS
or Servicer, at the expense of the requesting party, to assign, without
recourse, representation or warranty, to the Seller, AFS or the Servicer, as
applicable, all the Issuer's right, title and interest in and to such
purchased Receivable, all monies due thereon, the security interests in the
related Financed Vehicles, proceeds from any Insurance Policies, proceeds
from recourse against Dealers on such Receivables and the interests of the
Issuer in certain rebates of premiums and other amounts relating to the
Insurance Policies and any documents relating thereto, such assignment being
an assignment
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outright and not for security; and the Seller, AFS or the Servicer, as
applicable, shall thereupon own such Receivable, and all such security and
documents, free of any further obligation to the Issuer, the Trustee, the
Security Insurer, the Indenture Collateral Agent, the Noteholders or the
Issuer with respect thereto.
Section 2.9. SPECIAL PURPOSE ENTITY.
(a) The Seller shall conduct its business solely in its own name
through its duly authorized officers or agents so as not to mislead others as
to the identity of the entity with which those others are concerned, and
particularly will use its best efforts to avoid the appearance of conducting
business on behalf of any affiliate thereof or that the assets of the Seller
are available to pay the creditors of AFS or AmeriCredit Corp. or any
affiliate thereof. Without limiting the generality of the foregoing, all
oral and written communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements and loan applications, will
be made solely in the name of the Seller.
(b) The Seller shall maintain corporate records and books of
account separate from those of AFS and AmeriCredit Corp., and the affiliates
thereof. The Seller's books and records shall clearly reflect the transfer
of the Receivables to the Issuer.
(c) The Seller shall obtain proper authorization from its Board
of Directors of all corporate action requiring such authorization, meetings
of the Board of Directors of the Seller shall be held not less frequently
than one time per annum.
(d) The Seller shall obtain proper authorization from its
shareholders of all corporate action requiring shareholder approval, meetings
of the shareholders of the Seller shall be held not less frequently than one
time per annum.
(e) Although the organizational expenses of the Seller have been
paid by AFS, the Seller shall pay its own operating expenses and liabilities
from its own funds.
(f) The annual financial statements of the Seller shall disclose
the effects of the Seller's transactions in accordance with generally
accepted accounting principles and shall disclose that the assets of the
Seller are not available to pay creditors of AmeriCredit Corp. or the AFS or
any affiliate thereof.
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(g) The resolutions, agreements and other instruments of the
Seller underlying the transactions described in the Insurance Agreement and
in the other Transaction Documents shall be continuously maintained by the
Seller as official records of the Seller, separately identified and held
apart from the records of AmeriCredit Corp. and AFS and each affiliate
thereof.
(h) The Seller shall maintain an arm's-length relationship with
AmeriCredit Corp. and AFS and the affiliates thereof, and will not hold
itself out as being liable for the debts of AmeriCredit Corp. or AFS or any
affiliate thereof.
(i) The Seller shall keep its assets and liabilities wholly
separate from those of all other entities, including, but not limited to
AmeriCredit Corp. and AFS and the affiliates thereof.
(j) The books and records of the Seller will be maintained at
the address designated herein for receipt of notices, unless the Seller shall
otherwise advise the parties hereto in writing.
Section 2.10. RESTRICTIONS ON LIENS. The Seller shall not (i)
create, incur or suffer to exist, or agree to create, incur or suffer to
exist, or consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any Lien
or restriction on transferability of the Receivables except for the Lien in
favor of the Trustee for the benefit of the Noteholders and Financial
Security, the Lien imposed by the Spread Account Agreement in favor of the
Indenture Collateral Agent for the benefit of the Trustee and Financial
Security, and the restrictions on transferability imposed by this Agreement
or (ii) sign or file under the Uniform Commercial Code of any jurisdiction
any financing statement which names AFS, the Seller or the Issuer as a
debtor, or sign any security agreement authorizing any secured party
thereunder to file such financing statement, with respect to the Receivables,
except in each case any such instrument solely securing the rights and
preserving the Lien of the Indenture Collateral Agent, for the benefit of the
Trustee for the Noteholders and Financial Security.
Section 2.11. CREATION OF INDEBTEDNESS; GUARANTEES. The Seller
shall not create, incur, assume or suffer to exist any indebtedness other
than indebtedness guaranteed or approved in writing by Financial Security
other than the Transaction Documents. Without the prior written consent in
writing of Financial Security, the Seller shall not assume guarantee, endorse
or otherwise be or
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become directly or contingently liable for the obligations of any Person by,
among other things, agreeing to purchase any obligation of another Person,
agreeing to advance funds to such Person or causing or assisting such Person
to maintain any amount of capital.
Section 2.12. OTHER ACTIVITIES. The Seller shall not:
(a) sell, transfer, exchange or otherwise dispose of any of its
assets except as permitted under the Transaction Documents; or
(b) engage in any business or activity other than in connection
with this Agreement, the Spread Account Agreement and as permitted by its
certificate of incorporation.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1. DUTIES OF THE SERVICER. The Servicer is hereby
authorized to act as agent for the Issuer and in such capacity shall manage,
service, administer and make collections on the Receivables, and perform the
other actions required by the Servicer under this Agreement. The Servicer
agrees that its servicing of the Receivables shall be carried out in
accordance with customary and usual procedures of institutions which service
motor vehicle retail installment sales contracts and, to the extent more
exacting, the degree of skill and attention that the Servicer exercises from
time to time with respect to all comparable motor vehicle receivables that it
services for itself or others. In performing such duties, so long as AFS is
the Servicer, it shall comply with the policies and procedures attached
hereto as Schedule C. The Servicer's duties shall include, without
limitation, collection and posting of all payments, responding to inquiries
of Obligors on the Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting any required tax information to Obligors,
monitoring the collateral, complying with the terms of the Lockbox Agreement,
accounting for collections and furnishing monthly and annual statements to
the Issuer, the Trustee and the Security Insurer with respect to
distributions, monitoring the status of Insurance Policies with respect to
the Financed Vehicles and performing the other duties specified herein. The
Servicer shall also administer and enforce all rights and responsibilities of
the holder of the Receivables provided for in the Dealer Agreements (and
shall maintain possession of the Dealer Agreements, to the extent it is
necessary to do so), the Dealer Assignments and
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the Insurance Policies, to the extent that such Dealer Agreements, Dealer
Assignments and Insurance Policies relate to the Receivables, the Financed
Vehicles or the Obligors. To the extent consistent with the standards,
policies and procedures otherwise required hereby, the Servicer shall follow
its customary standards, policies, and procedures and shall have full power
and authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary
or desirable. Without limiting the generality of the foregoing, the Servicer
is hereby authorized and empowered by the Issuer to execute and deliver, on
behalf of the Issuer, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and with respect to
the Financed Vehicles; PROVIDED, HOWEVER, that notwithstanding the foregoing,
the Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid balance of any Receivable
from the Obligor. The Servicer is hereby authorized to commence, in its own
name or in the name of the Issuer (provided the Servicer has obtained the
Issuer's consent, which consent shall not be unreasonably withheld), a legal
proceeding to enforce a Receivable pursuant to Section 3.3 or to commence or
participate in any other legal proceeding (including, without limitation, a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences or participates in such a legal
proceeding in its own name, the Issuer shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer solely for purposes of
commencing or participating in any such proceeding as a party or claimant,
and the Servicer is authorized and empowered by the Issuer to execute and
deliver in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with
any such proceeding. The Issuer shall furnish the Servicer with any powers
of attorney and other documents which the Servicer may reasonably request and
which the Servicer deems necessary or appropriate and take any other steps
which the Servicer may deem necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Agreement.
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Section 3.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS
OF RECEIVABLES; LOCKBOX AGREEMENTS.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of the
Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable automobile
receivables that it services for itself or others and otherwise act with
respect to the Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies and the Other Conveyed Property in such manner as
will, in the reasonable judgment of the Servicer, maximize the amount to be
received by the Issuer with respect thereto. The Servicer is authorized in
its discretion to waive any prepayment charge, late payment charge or any
other similar fees that may be collected in the ordinary course of servicing
any Receivable.
(b) The Servicer may at any time agree to a modification or
amendment of a Receivable in order to (i) change the Obligor's regular due
date to a date within the Monthly Period in which such due date occurs or
(ii) re-amortize the scheduled payments on the Receivable following a partial
prepayment of principal.
(c) The Servicer may grant payment extensions on, or other
modifications or amendments to, a Receivable (in addition to those
modifications permitted by Section 3.2(b)) in accordance with its customary
procedures if the Servicer believes in good faith that such extension,
modification or amendment is necessary to avoid a default on such Receivable,
will maximize the amount to be received by the Issuer with respect to such
Receivable, and is otherwise in the best interests of the Issuer; PROVIDED,
HOWEVER, that:
(i) The aggregate period of all extensions on a
Receivable shall not exceed four months;
(ii) In no event may a Receivable be extended beyond
the Monthly Period immediately preceding the Final Scheduled
Distribution Date;
(iii) So long as an Insurer Default shall not have
occurred and be continuing, the Servicer shall not amend or
modify a Receivable (except as provided in Section 3.2(b)
and this Section 3.2(c)) without the consent of the Security
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Insurer or a Note Majority (if an Insurer Default shall have
occurred and be continuing);
(iv) The aggregate Principal Balance of Receivables
which may be extended during any Calendar Quarter shall not
exceed 4.0% of the aggregate Principal Balance of
Receivables as of the Accounting Date immediately prior to
the first day of such Calendar Quarter; and
(v) No such extension, modification or amendment shall
be granted more than 90 days after the Closing Date if such
action would have the effect of causing such Receivable to
be deemed to have been exchanged for another Receivable
within the meaning of Section 1001 of the Internal Revenue
Code of 1986, as amended, or any proposed, temporary or
final Treasury Regulations issued thereunder.
(d) The Servicer shall use its best efforts to cause Obligors to
make all payments on the Receivables, whether by check or by direct debit of
the Obligor's bank account, to be made directly to one or more Lockbox Banks,
acting as agent for the Issuer pursuant to a Lockbox Agreement. The Servicer
shall use its best efforts to cause any Lockbox Bank to deposit all payments
on the Receivables in the Lockbox Account no later than the Business Day
after receipt, and to cause all amounts credited to the Lockbox Account on
account of such payments to be transferred to the Collection Account no later
than the second Business Day after receipt of such payments. The Lockbox
Account shall be a demand deposit account held by the Lockbox Bank, or at the
request of the Controlling Party, an Eligible Account satisfying clause (i)
of the definition thereof.
Prior to the Closing Date, the Servicer shall have notified each
Obligor that makes its payments on the Receivables by check to make such
payments thereafter directly to the Lockbox Bank (except in the case of
Obligors that have already been making such payments to the Lockbox Bank),
and shall have provided each such Obligor with remittance advices in order to
enable such Obligors to make such payments directly to the Lockbox Bank for
deposit into the Lockbox Account, and the Servicer will continue, not less
often than every three months, to so notify those Obligors who have failed to
make payments to the Lockbox Bank. If and to the extent requested by the
Controlling Party, the Servicer shall request each Obligor that makes payment
on the Receivables by direct debit of such Obligor's bank account, to execute
a new authorization for
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automatic payment which in the judgment of the Controlling Party is
sufficient to authorize direct debit by the Lockbox Bank on behalf of the
Issuer. If at any time, the Lockbox Bank is unable to directly debit an
Obligor's bank account that makes payment on the Receivables by direct debit
and if such inability is not cured within 15 days or cannot be cured by
execution by the Obligor of a new authorization for automatic payment, the
Servicer shall notify such Obligor that it cannot make payment by direct
debit and must thereafter make payment by check.
Notwithstanding any Lockbox Agreement, or any of the provisions of
this Agreement relating to the Lockbox Agreement, the Servicer shall remain
obligated and liable to the Issuer, Trustee and Noteholders for servicing and
administering the Receivables and the Other Conveyed Property in accordance
with the provisions of this Agreement without diminution of such obligation
or liability by virtue thereof, PROVIDED, HOWEVER, that the foregoing shall
not apply to any Backup Servicer for so long as a Lockbox Bank is performing
its obligations pursuant to the terms of a Lockbox Agreement.
In the event of a termination of the Servicer, the successor
Servicer shall assume all of the rights and obligations of the outgoing
Servicer under the Lockbox Agreement. In such event, the successor Servicer
shall be deemed to have assumed all of the outgoing Servicer's interest
therein and to have replaced the outgoing Servicer as a party to each such
Lockbox Agreement to the same extent as if such Lockbox Agreement had been
assigned to the successor Servicer, except that the outgoing Servicer shall
not thereby be relieved of any liability or obligations on the part of the
outgoing Servicer to the Lockbox Bank under such Lockbox Agreement. The
outgoing Servicer shall, upon request of the Issuer, but at the expense of
the outgoing Servicer, deliver to the successor Servicer all documents and
records relating to each such Lockbox Agreement and an accounting of amounts
collected and held by the Lockbox Bank and otherwise use its best efforts to
effect the orderly and efficient transfer of any Lockbox Agreement to the
successor Servicer. In the event that the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) or a Note Majority
(if an Insurer Default shall have occurred and be continuing) elects to
change the identity of the Lockbox Bank, the outgoing Servicer, at its
expense, shall cause the Lockbox Bank to deliver, at the direction of the
Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or a Note Majority (if an Insurer Default shall have
35
occurred and be continuing) to the Issuer or a successor Lockbox Bank, all
documents and records relating to the Receivables and all amounts held (or
thereafter received) by the Lockbox Bank (together with an accounting of such
amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of the lockbox arrangements and the Servicer shall notify
the Obligors to make payments to the Lockbox established by the successor.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Subcollection Account or to
the Lockbox Bank for deposit into the Collection Account, in either case,
without deposit into any intervening account and as soon as practicable, but
in no event later than the Business Day after receipt thereof.
Section 3.3. REALIZATION UPON RECEIVABLES.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall use its best efforts to
repossess (or otherwise comparably convert the ownership of) and liquidate
any Financed Vehicle securing a Receivable with respect to which the Servicer
has determined that payments thereunder are not likely to be resumed, as soon
as is practicable after default on such Receivable but in no event later than
the date on which all or any portion of a Scheduled Payment has become 91
days delinquent; provided, however, that the Servicer may elect not to
repossess a Financed Vehicle within such time period if in its good faith
judgment it determines that the proceeds ultimately recoverable with respect
to such Receivable would be increased by forbearance. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by
Section 3.1, which practices and procedures may include reasonable efforts to
realize upon any recourse to Dealers, the sale of the related Financed
Vehicle at public or private sale, the submission of claims under an
Insurance Policy and other actions by the Servicer in order to realize upon
such a Receivable. The foregoing is subject to the provision that, in any
case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession shall increase the proceeds
of liquidation of the related Receivable by an amount greater than the amount
of such expenses. All amounts received upon liquidation of a Financed
Vehicle shall be remitted directly by the Servicer to
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the Subcollection Account without deposit into any intervening account as
soon as practicable, but in no event later than the Business Day after
receipt thereof. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle, any deficiency obtained from the Obligor or any
amounts received from the related Dealer, which amounts in reimbursement may
be retained by the Servicer (and shall not be required to be deposited as
provided in Section 3.2(e)) to the extent of such expenses. The Servicer
shall pay on behalf of the Issuer any personal property taxes assessed on
repossessed Financed Vehicles. The Servicer shall be entitled to
reimbursement of any such tax from Liquidation Proceeds with respect to such
Receivable.
(b) If the Servicer elects to commence a legal proceeding to
enforce a Dealer Agreement or Dealer Assignment, the act of commencement
shall be deemed to be an automatic assignment from the Issuer to the Servicer
of the rights under such Dealer Agreement and Dealer Assignment for purposes
of collection only. If, however, in any enforcement suit or legal proceeding
it is held that the Servicer may not enforce a Dealer Agreement or Dealer
Assignment on the grounds that it is not a real party in interest or a Person
entitled to enforce the Dealer Agreement or Dealer Assignment, the Issuer, at
the Servicer's expense, or the Seller, at the Seller's expense, shall take
such steps as the Servicer deems necessary to enforce the Dealer Agreement or
Dealer Assignment, including bringing suit in its name or the name of the
Seller or of the Issuer and the Indenture Collateral Agent for the benefit of
the Issuer Secured Parties. All amounts recovered shall be remitted directly
by the Servicer as provided in Section 3.2(e).
Section 3.4. INSURANCE.
(a) The Servicer shall require, in accordance with its customary
servicing policies and procedures, that each Financed Vehicle be insured by
the related Obligor under the Insurance Policies referred to in Paragraph 24
of the Schedule of Representations and Warranties and shall monitor the
status of such physical loss and damage insurance coverage thereafter, in
accordance with its customary servicing procedures. Each Receivable requires
the Obligor to maintain such physical loss and damage insurance, naming AFS
and its successors and assigns as additional insureds, and permits the holder
of such Receivable to obtain physical loss and damage insurance at the
expense of the
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Obligor if the Obligor fails to maintain such insurance. If the Servicer
shall determine that an Obligor has failed to obtain or maintain a physical
loss and damage Insurance Policy covering the related Financed Vehicle which
satisfies the conditions set forth in clause (i)(a) of such Paragraph 24
(including, without limitation, during the repossession of such Financed
Vehicle) the Servicer may enforce the rights of the holder of the Receivable
under the Receivable to require the Obligor to obtain such physical loss and
damage insurance in accordance with its customary servicing policies and
procedures. The Servicer may maintain a vendor's single interest or other
collateral protection insurance policy with respect to all Financed Vehicles
("Collateral Insurance") which policy shall by its terms insure against
physical loss and damage in the event any Obligor fails to maintain physical
loss and damage insurance with respect to the related Financed Vehicle. All
policies of Collateral Insurance shall be endorsed with clauses providing for
loss payable to the Servicer. Costs incurred by the Servicer in maintaining
such Collateral Insurance shall be paid by the Servicer.
(b) The Servicer may, if an Obligor fails to obtain or maintain
a physical loss and damage Insurance Policy, obtain insurance with respect to
the related Financed Vehicle and advance on behalf of such Obligor, as
required under the terms of the insurance policy, the premiums for such
insurance (such insurance being referred to herein as "Force-Placed
Insurance"). All policies of Force-Placed Insurance shall be endorsed with
clauses providing for loss payable to the Servicer. Any cost incurred by the
Servicer in maintaining such Force-Placed Insurance shall only be recoverable
out of premiums paid by the Obligors or Liquidation Proceeds with respect to
the Receivable, as provided in Section 3.4(c).
(c) In connection with any Force-Placed Insurance obtained
hereunder, the Servicer may, in the manner and to the extent permitted by
applicable law, require the Obligors to repay the entire premium to the
Servicer. In no event shall the Servicer include the amount of the premium
in the Amount Financed under the Receivable. For all purposes of this
Agreement, the Insurance Add-On Amount with respect to any Receivable having
Force-Placed Insurance will be treated as a separate obligation of the
Obligor and will not be added to the Principal Balance of such Receivable,
and amounts allocable thereto will not be available for distribution on the
Notes. The Servicer shall retain and separately administer the right to
receive payments from Obligors
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with respect to Insurance Add-On Amounts or rebates of Forced-Placed
insurance premiums. If an Obligor makes a payment with respect to a
Receivable having Force-Placed Insurance, but the Servicer is unable to
determine whether the payment is allocable to the Receivable or to the
Insurance Add-On Amount, the payment shall be applied first to any unpaid
Scheduled Payments and then to the Insurance Add-On Amount. Liquidation
Proceeds on any Receivable will be used first to pay the Principal Balance
and accrued interest on such Receivable and then to pay the related Insurance
Add-On Amount. If an Obligor under a Receivable with respect to which the
Servicer has placed Force-Placed Insurance fails to make scheduled payments
of such Insurance Add-On Amount as due, and the Servicer has determined that
eventual payment of the Insurance Add-On Amount is unlikely, the Servicer
may, but shall not be required to, purchase such Receivable from the Issuer
for the Purchase Amount on any subsequent Deposit Date. Any such Receivable,
and any Receivable with respect to which the Servicer has placed Force-Placed
Insurance which has been paid in full (excluding any Insurance Add-On
Amounts) will be assigned to the Servicer.
(d) The Servicer may xxx to enforce or collect upon the
Insurance Policies, in its own name, if possible, or as agent of the Issuer.
If the Servicer elects to commence a legal proceeding to enforce an Insurance
Policy, the act of commencement shall be deemed to be an automatic assignment
of the rights of the Issuer under such Insurance Policy to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce an Insurance Policy
on the grounds that it is not a real party in interest or a holder entitled
to enforce the Insurance Policy, the Issuer, at the Servicer's expense, or
the Seller, at the Seller's expense, shall take such steps as the Servicer
deems necessary to enforce such Insurance Policy, including bringing suit in
its name or the name of the Issuer and the Indenture Collateral Agent for the
benefit of the Issuer Secured Parties.
(e) The Servicer will cause itself and may cause the Issuer to
be named as named insured under all policies of Collateral Insurance.
Section 3.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.
(a) Consistent with the policies and procedures required by
this Agreement, the Servicer shall take such steps on behalf of
the Issuer as are necessary to maintain perfection of the
security
39
interest created by each Receivable in the related Financed Vehicle,
including but not limited to obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-filing, and re-registering
of all security agreements, financing statements and continuation statements
as are necessary to maintain the security interest granted by the Obligors
under the respective Receivables. The Indenture Collateral Agent hereby
authorizes the Servicer, and the Servicer agrees, to take any and all steps
necessary to re-perfect such security interest on behalf of the Issuer as
necessary because of the relocation of a Financed Vehicle or for any other
reason. In the event that the assignment of a Receivable to the Issuer is
insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to perfect a security interest in the related Financed Vehicle in
favor of the Indenture Collateral Agent, the Servicer hereby agrees that
AFS's designation as the secured party on the certificate of title is in its
capacity as agent of the Indenture Collateral Agent.
(b) Upon the occurrence of an Insurance Agreement Event of
Default, the Security Insurer may (so long as an Insurer Default shall not
have occurred and be continuing) instruct the Trustee and the Servicer to
take or cause to be taken, or, if an Insurer Default shall have occurred,
upon the occurrence of a Servicer Termination Event, the Trustee and the
Servicer shall take or cause to be taken such action as may, in the opinion
of counsel to the Controlling Party, be necessary to perfect or re-perfect
the security interests in the Financed Vehicles securing the Receivables in
the name of the Issuer by amending the title documents of such Financed
Vehicles or by such other reasonable means as may, in the opinion of counsel
to the Controlling Party, be necessary or prudent. AFS hereby agrees to pay
all expenses related to such perfection or reperfection and to take all
action necessary therefor. In addition, prior to the occurrence of an
Insurance Agreement Event of Default, the Controlling Party may instruct the
Trustee and the Servicer to take or cause to be taken such action as may, in
the opinion of counsel to the Controlling Party, be necessary to perfect or
re-perfect the security interest in the Financed Vehicles underlying the
Receivables in the name of the Issuer, including by amending the title
documents of such Financed Vehicles or by such other reasonable means as may,
in the opinion of counsel to the Controlling Party, be necessary or prudent;
PROVIDED, HOWEVER, that if the Controlling Party requests
40
that the title documents be amended prior to the occurrence of an Insurance
Agreement Event of Default, the out-of-pocket expenses of the Servicer or the
Trustee in connection with such action shall be reimbursed to the Servicer or
the Trustee, as applicable, by the Controlling Party. AFS hereby appoints
the Trustee as its attorney-in-fact to take any and all steps required to be
performed by AFS pursuant to this Section 3.5(b), including execution of
certificates of title or any other documents in the name and stead of AFS,
and the Trustee hereby accepts such appointment.
Section 3.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF
SERVICER. By its execution and delivery of this Agreement, the
Servicer makes the following representations, warranties and
covenants on which the Issuer relies in accepting the Receivables
and issuing the Notes, on which the Trustee relies in
authenticating the Notes and on which the Security Insurer relies
in issuing the Policy.
(a) The Servicer covenants as follows:
(i) LIENS IN FORCE. The Financed Vehicle securing
each Receivable shall not be released in whole or in part
from the security interest granted by the Receivable, except
upon payment in full of the Receivable or as otherwise
contemplated herein;
(ii) NO IMPAIRMENT. The Servicer shall do nothing to
impair the rights of the Issuer or the Noteholders in the
Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies or the Other Conveyed Property; and
(iii) NO AMENDMENTS. The Servicer shall not extend
or otherwise amend the terms of any Receivable, except in
accordance with Section 3.2.
(iv) RESTRICTIONS ON LIENS. The Servicer shall not
(i) create, incur or suffer to exist, or agree to create,
incur or suffer to exist, or consent to cause or permit in
the future (upon the happening of a contingency or
otherwise) the creation, incurrence or existence of any Lien
or restriction on transferability of the Receivables except
for the Lien in favor of the Trustee for the benefit of the
Noteholders and Financial Security, the Lien imposed by the
Spread Account Agreement in favor of the Indenture
Collateral Agent for the benefit of the Trustee and
Financial Security, and the
41
restrictions on transferability imposed by this Agreement or (ii)
sign or file under the Uniform Commercial Code of any jurisdiction
any financing statement which names AFS, the Servicer or the Issuer
as a debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement,
with respect to the Receivables, except in each case any
such instrument solely securing the rights and preserving
the Lien of the Indenture Collateral Agent, for the benefit
of the Trustee for the Noteholders and Financial Security.
(b) The Servicer represents, warrants and covenants as of the
Closing Date as to itself:
(i) REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth on the Schedule of
Representations attached hereto as Schedule B are true and
correct, provided that such representations and warranties
contained therein and herein shall not apply to any entity
other than AFS;
(ii) ORGANIZATION AND GOOD STANDING. The Servicer has
been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of organization,
with power, authority and legal right to own its properties
and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at
all relevant times, and now has, power, authority and legal
right to enter into and perform its obligations under this
Agreement;
(iii) DUE QUALIFICATION. The Servicer is duly
qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including
the servicing of the Receivables as required by this
Agreement) requires or shall require such qualification;
(iv) POWER AND AUTHORITY. The Servicer has the power
and authority to execute and deliver this Agreement and its
Related Documents and to carry out its terms and their
terms, respectively, and the execution, delivery and
performance of this Agreement and the Servicer's Related
Documents have been duly authorized by the Servicer by all
necessary corporate action;
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(v) BINDING OBLIGATION. This Agreement and the
Servicer's Related Documents shall constitute legal, valid
and binding obligations of the Servicer enforceable in
accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(vi) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement and the
Servicer's Related Documents, and the fulfillment of the
terms of this Agreement and the Servicer's Related
Documents, shall not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Servicer, or any
indenture, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it
is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law,
order, rule or regulation applicable to the Servicer of any
court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or any of its
properties;
(vii) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Servicer's knowledge,
threatened against the Servicer, before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the
Servicer or its properties (A) asserting the invalidity of
this Agreement or any of the Related Documents, (B) seeking
to prevent the issuance of the Notes or the consummation of
any of the transactions contemplated by this Agreement or
any of the Related Documents, or (C) seeking any
determination or ruling that might materially and adversely
affect the performance by the Servicer of its obligations
under, or the validity or enforceability of, this Agreement
or any of the Related Documents or (D) seeking to adversely
affect the federal income tax or other federal, state or
local tax attributes of the Notes;
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(viii) NO CONSENTS. The Servicer is not required to
obtain the consent of any other party or any consent,
license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement
which has not already been obtained.
Section 3.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT.
Upon discovery by any of the Servicer, the Security Insurer, the Issuer or
the Trustee of a breach of any of the covenants set forth in Sections 3.5(a)
or 3.6(a), the party discovering such breach shall give prompt written notice
to the others; PROVIDED, HOWEVER, that the failure to give any such notice
shall not affect any obligation of AFS as Servicer under this Section 3.7.
As of the second Accounting Date following its discovery or receipt of notice
of any breach of any covenant set forth in Sections 3.5(a) or 3.6(a) which
materially and adversely affects the interests of the Noteholders, the Issuer
or the Security Insurer in any Receivable (including any Liquidated
Receivable) (or, at AFS's election, the first Accounting Date so following),
AFS shall, unless such breach shall have been cured in all material respects,
purchase from the Issuer the Receivable affected by such breach and, on the
related Deposit Date, AFS shall pay the related Purchase Amount. It is
understood and agreed that the obligation of AFS to purchase any Receivable
(including any Liquidated Receivable) with respect to which such a breach has
occurred and is continuing shall, if such obligation is fulfilled, constitute
the sole remedy against AFS for such breach available to the Security
Insurer, the Noteholders, the Issuer or the Trustee on behalf of Noteholders;
PROVIDED, HOWEVER, that AFS shall indemnify the Issuer, the Backup Servicer,
the Collateral Agent, the Security Insurer, the Trustee and the Noteholders
against all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel, which may be asserted
against or incurred by any of them as a result of third party claims arising
out of the events or facts giving rise to such breach.
Section 3.8. TOTAL SERVICING FEE; PAYMENT OF CERTAIN
EXPENSES BY SERVICER. On each Distribution Date, the Servicer
shall be entitled to receive out of the Collection Account the
Basic Servicing Fee and any Supplemental Servicing Fee for the
related Monthly Period pursuant to Section 4.6. The Servicer
shall be required to pay all expenses incurred by it in
connection with
44
its activities under this Agreement (including taxes imposed on the Servicer,
expenses incurred in connection with distributions and reports made by the
Servicer to Noteholders or the Security Insurer and all other fees and
expenses of the Issuer, except taxes levied or assessed against the Issuer,
and claims against the Issuer in respect of indemnification, which taxes and
claims in respect of indemnification against the Issuer are expressly stated
to be for the account of AFS). The Servicer shall be liable for the fees and
expenses of the Issuer, the Indenture Collateral Agent, the Trustee, the
Custodian, the Backup Servicer, the Collateral Agent, the Lockbox Bank (and
any fees under the Lockbox Agreement) and the Independent Accountants.
Notwithstanding the foregoing if the Servicer shall not be AFS, a successor
to AFS as Servicer permitted by Section 7.2 shall not be liable for taxes
levied or assessed against the Issuer or claims against the Issuer in respect
of indemnification.
Section 3.9. SERVICER'S CERTIFICATE. No later than 10:00 am.
New York City time on each Determination Date, the Servicer shall deliver to
the Issuer, the Trustee, the Backup Servicer, the Security Insurer, the
Collateral Agent and each Rating Agency a Servicer's Certificate executed by
a Responsible Officer of the Servicer containing among other things, (i) all
information necessary to enable the Trustee to make any withdrawal and
deposit required by Section 5.1, to give any notice required by Section
5.1(b), to make the distributions required by Sections 4.6, (ii) all
information necessary to enable the Trustee to send the statements to
Noteholders and the Security Insurer required by Section 4.8, (iii) a listing
of all Warranty Receivables and Administrative Receivables purchased as of
the related Deposit Date, identifying the Receivables so purchased and (iv)
all information necessary to enable the Trustee to reconcile all deposits to,
and withdrawals from, the Collection Account for the related Monthly Period
and Distribution Date, including the accounting required by Section 4.8.
Receivables purchased by the Servicer or by the Seller or AFS on the related
Deposit Date and each Receivable which became a Liquidated Receivable or
which was paid in full during the related Monthly Period shall be identified
by account number (as set forth in the Schedule of Receivables). A copy of
such certificate may be obtained by any Noteholder by a request in writing to
the Trustee addressed to the Corporate Trust Office. In addition to the
information set forth in the preceding sentence, the Servicer's Certificate
delivered to the Security Insurer, the Collateral Agent and the Trustee on
the Determination Date shall also contain the following information: (a) the
45
Delinquency Ratio, Average Delinquency Ratio, Default Ratio, Average Default
Ratio, Net Loss Ratio and Average Net Loss Ratio for such Determination Date;
(b) whether any Trigger Event has occurred as of such Determination Date; (c)
whether any Trigger Event that may have occurred as of a prior Determination
Date is Deemed Cured as of such Determination Date; and (d) whether to the
knowledge of the Servicer an Insurance Agreement Event of Default has
occurred.
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF
SERVICER TERMINATION EVENT.
(a) The Servicer shall deliver to the Issuer, the Trustee, the
Backup Servicer, the Security Insurer, the Noteholders and each Rating
Agency, on or before October 31 (or 120 days after the end of the Servicer's
fiscal year, if other than June 30) of each year, beginning on October 31,
1996, an officer's certificate signed by any Responsible Officer of the
Servicer, dated as of June 30 (or other applicable date) of such year,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or such other period as shall have elapsed from
the Closing Date to the date of the first such certificate) and of its
performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout
such period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Issuer, the Trustee, the
Backup Servicer, the Security Insurer, the Noteholders, the Collateral Agent,
and each Rating Agency, promptly after having obtained knowledge thereof, but
in no event later than two (2) Business Days thereafter, written notice in an
officer's certificate of any event which with the giving of notice or lapse
of time, or both, would become a Servicer Termination Event under Section
8.1(a). The Seller or the Servicer shall deliver to the Issuer, the Trustee,
the Backup Servicer, the Security Insurer, the Collateral Agent, the Servicer
or the Seller (as applicable) and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than two (2) Business Days
thereafter, written notice in an officer's certificate of any event which
with the giving of notice or lapse of time, or both, would become a Servicer
Termination Event under any other clause of Section 8.1.
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Section 3.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer or to the Seller, to deliver
to the Issuer, the Trustee, the Backup Servicer, the Security Insurer and
each Rating Agency, on or before October 31 (or 120 days after the end of the
Servicer's fiscal year, if other than June 30) of each year, beginning on
October 31, 1996, with respect to the twelve months ended the immediately
preceding June 30 (or other applicable date) (or such other period as shall
have elapsed from the Closing Date to the date of such certificate), a
statement (the "Accountants' Report") addressed to the Board of Directors of
the Servicer, to the Issuer, the Trustee, the Backup Servicer and to the
Security Insurer, to the effect that such firm has audited the books and
records of the Servicer and issued its report thereon in connection with the
audit report on the financial statements of AmeriCredit Corp. and that (1)
such audit was made in accordance with generally accepted auditing standards,
and accordingly included such tests of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances;
(2) the firm is independent of the Seller and the Servicer within the meaning
of the Code of Professional Ethics of the American Institute of Certified
Public Accountants, and (3) a review in accordance with agreed upon
procedures was made of three randomly selected Servicer's Certificates
including the delinquency, default and loss statistics required to be
specified therein and except as disclosed in the Accountants' Report, no
exceptions or errors in the Servicer's Certificates were found.
(b) A copy of the Accountants' Report may be obtained by any
Noteholder by a request in writing to the Trustee addressed to the Corporate
Trust Office.
Section 3.12. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES. The Servicer shall provide to
representatives of the Issuer, Trustee, the Backup Servicer, the
Noteholders and the Security Insurer reasonable access to the
documentation regarding the Receivables. In each case, such
access shall be afforded without charge but only upon reasonable
request and during normal business hours. Nothing in this
Section shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to
provide access as
47
provided in this Section as a result of such obligation shall not constitute
a breach of this Section.
Section 3.13. MONTHLY TAPE. On or before the third Business
Day, but in no event later than the fifth calendar day, of each month, the
Servicer will deliver to the Trustee and the Backup Servicer a computer tape
and a diskette (or any other electronic transmission acceptable to the
Trustee and the Backup Servicer) in a format acceptable to the Trustee and
the Backup Servicer containing the information with respect to the
Receivables as of the preceding Accounting Date necessary for preparation of
the Servicer's Certificate relating to the immediately succeeding
Determination Date and necessary to determine the application of collections
as provided in Section 4.3. The Backup Servicer shall use such tape or
diskette (or other electronic transmission acceptable to the Trustee and the
Backup Servicer) to verify the Servicer's Certificate delivered by the
Servicer, and the Backup Servicer shall certify to the Controlling Party that
it has verified the Servicer's Certificate in accordance with this Section
3.13 and shall notify the Servicer and the Controlling Party of any
discrepancies, in each case, on or before the second Business Day following
the Determination Date. In the event that the Backup Servicer reports any
discrepancies, the Servicer and the Backup Servicer shall attempt to
reconcile such discrepancies prior to the related Distribution Date, but in
the absence of a reconciliation, the Servicer's Certificate shall control for
the purpose of calculations and distributions with respect to the related
Distribution Date. In the event that the Backup Servicer and the Servicer
are unable to reconcile discrepancies with respect to a Servicer's
Certificate by the related Distribution Date, the Servicer shall cause the
Independent Accountants, at the Servicer's expense, to audit the Servicer's
Certificate and, prior to the third Business Day, but in no event later than
the fifth calendar day, of the following month, reconcile the discrepancies.
The effect, if any, of such reconciliation shall be reflected in the
Servicer's Certificate for such next succeeding Determination Date. In
addition, upon the occurrence of a Servicer Termination Event the Servicer
shall, if so requested by the Controlling Party deliver to the Backup
Servicer its Collection Records and its Monthly Records within 15 days after
demand therefor and a computer tape containing as of the close of business on
the date of demand all of the data maintained by the Servicer in computer
format in connection with servicing the Receivables. Other than the duties
specifically set forth in this Agreement, the Backup Servicer shall have no
obligations hereunder, including, without limitation, to
48
supervise, verify, monitor or administer the performance of the Servicer.
The Backup Servicer shall have no liability for any actions taken or omitted
by the Servicer.
Section 3.14. RETENTION AND TERMINATION OF SERVICER. The
Servicer hereby covenants and agrees to act as such under this Agreement for
an initial term, commencing on the Closing Date and ending on September 30,
1995, which term shall be extendible by the Controlling Party for successive
quarterly terms ending on each successive December 31, March 31, June 30 and
September 30 (or, pursuant to revocable written standing instructions from
time to time to the Servicer, the Trustee and the Issuer, for any specified
number of terms greater than one), until the Notes are paid in full. Each
such notice (including each notice pursuant to standing instructions, which
shall be deemed delivered at the end of successive quarterly terms for so
long as such instructions are in effect) (a "Servicer Extension Notice")
shall be delivered by the Security Insurer to the Issuer, the Trustee and the
Servicer. The Servicer hereby agrees that, as of the date hereof and upon
its receipt of any such Servicer Extension Notice, the Servicer shall become
bound, for the initial term beginning on the Closing Date and for the
duration of the term covered by such Servicer Extension Notice, to continue
as the Servicer subject to and in accordance with the other provisions of
this Agreement. Until such time as an Insurer Default shall have occurred
and be continuing the Trustee agrees that if as of the fifteenth day prior to
the last day of any term of the Servicer the Trustee shall not have received
any Servicer Extension Notice from the Security Insurer, the Trustee will,
within five days thereafter, give written notice of such non-receipt to the
Issuer, the Security Insurer and the Servicer.
Section 3.15. DUTIES OF THE SERVICER UNDER THE INDENTURE. The
Servicer (or AFS, as noted below if it is not the Servicer hereunder) shall,
and hereby agrees that it will, perform on behalf of the Issuer the following
duties of the Issuer under the Indenture (references are to the applicable
Sections in the Indenture):
(a) the direction to the Paying Agents, if any, to deposit
moneys with the Trustee (Section 3.3);
(b) the Servicer, or AFS if AFS is not the Servicer hereunder,
with respect to the obtaining and preservation of the Issuer's qualification
to do business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity
49
and enforceability of the Indenture, the Notes, the Indenture Collateral and
each other instrument and agreement included in the Trust Estate (Section
3.4);
(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.5 of the Indenture, necessary
to protect the Trust Estate (Section 3.5);
(d) the delivery of the Opinion of Counsel on the Closing Date
and the annual delivery of Opinions of Counsel, in accordance with Section
3.6 of the Indenture, as to the Trust Estate, and the annual delivery of the
Officers' Certificate and certain other statements, in accordance with
Section 3.9 of the Indenture, as to compliance with the Indenture (Sections
3.6 and 3.9);
(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.1);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee and
any written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.8 and 6.10);
(h) the preparation of Issuer Orders, Officers' Certificates and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections 8.2 and
8.3);
(i) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental indentures
(Sections 9.1, 9.2 and 9.3);
(j) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Trustee or the Indenture Collateral Agent to take any action
under the Indenture (Section 11.1(a));
50
(k) the preparation and delivery of Officers' Certificates and
the obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.1(b)); and
(l) the recording of the Indenture, if applicable (Section
11.15).
Section 3.16. FIDELITY BOND AND ERRORS AND OMISSIONS POLICY.
The Servicer has obtained, and shall continue to maintain in full force and
effect, a Fidelity Bond and Errors and Omissions Policy of a type and in such
amount as is customary for servicers engaged in the business of servicing
automobile receivables.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS
Section 4.1. TRUST ACCOUNTS.
(a) The Indenture Collateral Agent shall establish the
Collection Account in the name of the Indenture Collateral Agent for the
benefit of the Issuer Secured Parties (as defined in the Indenture). The
Collection Account shall be a segregated trust account established by the
Indenture Collateral Agent with a depository institution acceptable to the
Controlling Party, and initially maintained with the Indenture Collateral
Agent.
(b) The Indenture Collateral Agent shall establish the Note
Distribution Account in the name of the Indenture Collateral Agent for the
benefit of the Issuer Secured Parties. The Note Distribution Account shall
be a segregated trust account established by the Indenture Collateral Agent
with a depository institution acceptable to the Controlling Party, and
initially maintained with the Indenture Collateral Agent.
(c) All amounts held in the Collection Account and the Note
Distribution Account (collectively, the "Trust Accounts") shall,
to the extent permitted by applicable laws, rules and
regulations, be invested by the Indenture Collateral Agent, as
directed by the Servicer (or, if the Servicer fails to so direct,
as directed by the Controlling Party), in Eligible Investments
that, in the case of amounts held in the Collection Account and
the Note Distribution Account mature not later than one Business
Day prior to the Distribution Date for the Monthly Period to
which such amounts
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relate. Any such written direction shall certify that any such investment is
authorized by this Section 4.1. Investments in Eligible Investments shall be
made in the name of the Indenture Collateral Agent on behalf of the Issuer,
and such investments shall not be sold or disposed of prior to their
maturity. Any investment of funds in the Trust Accounts shall be made in
Eligible Investments held by a financial institution with respect to which
(a) such institution has noted the Indenture Collateral Agent's interest
therein by book entry or otherwise and (b) a confirmation of the Indenture
Collateral Agent's interest has been sent to the Indenture Collateral Agent
by such institution, provided that such Eligible Investments are (i) specific
certificated securities (as such term is used in the Texas UCC, and (ii)
either (A) in the possession of such institution or (B) in the possession of
a clearing corporation as such term is used in the New York UCC and the Texas
UCC, registered in the name of such clearing corporation, not endorsed for
collection or surrender or any other purpose not involving transfer, not
containing any evidence of a right or interest inconsistent with the
Indenture Collateral Agent's security interest therein, and held by such
clearing corporation in an account of such institution. Subject to the other
provisions hereof, the Indenture Collateral Agent shall have sole control
over each such investment and the income thereon, and any certificate or
other instrument evidencing any such investment, if any, shall be delivered
directly to the Indenture Collateral Agent or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment
to the Indenture Collateral Agent in a manner which complies with this
Section 4.1. All interest, dividends, gains upon sale and other income from,
or earnings on, investments of funds in the Trust Accounts shall be deposited
in the Collection Account and distributed on the next Distribution Date
pursuant to Section 4.6 hereof. The Servicer shall deposit in the applicable
Trust Account an amount equal to any net loss on such investments immediately
as realized.
(d) On the Closing Date, the Servicer shall deliver to the
Trustee for deposit in the Collection Account (i) all Scheduled Payments and
prepayments of Receivables received by the Servicer after the Cutoff Date and
on or prior to the Business Day immediately preceding the Closing Date or
received by the Lockbox Bank after the Cutoff Date and on or prior to the
second Business Day immediately preceding the Closing Date and (ii) all
Liquidation Proceeds and proceeds of Insurance Policies realized in respect
of a Financed Vehicle and applied by the Servicer after the Cutoff Date.
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Section 4.2. COLLECTIONS.
(a) The Servicer shall establish the Subcollection Account in
the name of the Indenture Collateral Agent for the benefit of the
Noteholders. The Subcollection Account shall be an Eligible Account
satisfying clause (i) of the definition of "Eligible Account," and shall
initially be established with First Interstate Bank, N.A. The Servicer shall
remit directly to the Subcollection Account without deposit into any
intervening account all payments by or on behalf of the Obligors on the
Receivables and all Liquidation Proceeds received by the Servicer, in each
case, as soon as practicable, but in no event later than the Business Day
after receipt thereof. Within two days of deposit of payments into the
Subcollection Account, the Servicer shall cause all amounts credited to the
Subcollection Account on account of such payments to be transferred to the
Collection Account. Amounts in the Subcollection Account shall not be
invested.
(b) Notwithstanding the provisions of subsection (a) hereof, the
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Monthly Period for amounts previously
deposited in the Collection Account but later determined by the Servicer or
the Lockbox Bank to have resulted from mistaken deposits or postings or
checks returned for insufficient funds. The amount to be reimbursed
hereunder shall be paid to the Servicer on the related Distribution Date
pursuant to Section 4.6(i) upon certification by the Servicer of such amounts
and the provision of such information to the Trustee and the Security Insurer
as may be necessary in the opinion of the Trustee and the Security Insurer to
verify the accuracy of such certification. In the event that the Security
Insurer has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section 4.2(b), the Security
Insurer shall (unless an Insurer Default shall have occurred and be
continuing) give the Trustee notice to such effect, following receipt of
which the Trustee shall not make a distribution to the Servicer in respect of
such amount pursuant to Section 4.6, or if the Servicer prior thereto has
been reimbursed pursuant to Section 4.6 or Section 4.8, the Trustee shall
withhold such amounts from amounts otherwise distributable to the Servicer on
the next succeeding Distribution Date.
Section 4.3. APPLICATION OF COLLECTIONS. For the purposes of
this Agreement, all collections for a Monthly Period shall be applied by the
Servicer as follows:
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(a) With respect to each Receivable, payments by or on behalf of
the Obligor thereof (other than of Supplemental Servicing Fees with respect
to such Receivable, to the extent collected) shall be applied to interest and
principal with respect to such Receivable in accordance with the Simple
Interest Method, whether or not such Receivable is a Simple Interest
Receivable. With respect to each Liquidated Receivable, Liquidation Proceeds
shall be applied to interest and principal with respect to such Receivable in
accordance with the Simple Interest Method. The Servicer shall not be
entitled to any Supplemental Servicing Fees with respect to a Liquidated
Receivable.
(b) With respect to each Receivable that has become a Purchased
Receivable on any Deposit Date, the Purchase Amount shall be applied, for
purposes of this Agreement only, to interest and principal on the Receivable
in accordance with the Simple Interest Method as if the Purchase Amount had
been paid by the Obligor on the Accounting Date. The Servicer shall not be
entitled to any Supplemental Servicing Fees with respect to a Purchased
Receivable. Nothing contained herein shall relieve any Obligor of any
obligation relating to any Receivable.
(c) All amounts collected that are payable to the Servicer as
Supplemental Servicing Fees hereunder shall be deposited in the Collection
Account and paid to the Servicer in accordance with Section 4.6(i).
(d) All payments by or on behalf of an Obligor received with
respect to any Purchased Receivable after the Accounting Date immediately
preceding the Deposit Date on which the Purchase Amount was paid by the
Seller, AFS or the Servicer shall be paid to the Seller, AFS or the Servicer,
respectively, and shall not be included in the Available Funds.
Section 4.4. NET DEPOSITS. Subject to payment by the
Servicer of amounts otherwise payable pursuant to Section 4.6(ii)
and provided that no Servicer Termination Event shall have
occurred and be continuing with respect to such Servicer, the
Servicer may make the remittances to be made by it pursuant to
Sections 4.2, 4.3 and 4.5 net of amounts (which amounts may be
netted prior to any such remittance for a Monthly Period) to be
distributed to it pursuant to Sections 3.8,4.2(b) and 4.6(i);
PROVIDED, HOWEVER, that the Servicer shall account for all of
such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately, and, PROVIDED,
FURTHER that if an error is
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made by the Servicer in calculating the amount to be deposited or retained by
it, with the result that an amount less than required is deposited in the
Collection Account, the Servicer shall make a payment of the deficiency to
the Collection Account, immediately upon becoming aware, or receiving notice
from the Trustee, of such error.
Section 4.5. ADDITIONAL DEPOSITS. On or before each Deposit
Date, the Servicer, the Seller or AFS shall deposit in the Collection Account
the aggregate Purchase Amounts with respect to Administrative Receivables and
Warranty Receivables, respectively. All such deposits of Purchase Amounts
shall be made in immediately available funds. On or before each Draw Date,
the Trustee shall deposit in the Collection Account any amounts delivered to
the Trustee by the Collateral Agent pursuant to Section 5.1.
Section 4.6. DISTRIBUTIONS. On each Distribution Date, the
Trustee shall (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date) distribute the
following amounts and in the following order of priority:
(i) first, from the Distribution Amount, to the
Servicer, the Basic Servicing Fee for the related Monthly
Period, any Supplemental Servicing Fees for the related
Monthly Period, and any amounts specified in Section 4.2(b);
(ii) second, from the Distribution Amount, to the
Trustee, any accrued and unpaid fees and expenses of the
Trustee in accordance with the Indenture; to any Lockbox
Bank, Custodian, Backup Servicer, Collateral Agent, or
Indenture Collateral Agent (including the Issuer or Trustee
if acting in any such additional capacity), any accrued and
unpaid fees and expenses (in each case, to the extent such
Person has not previously received such amount from the
Servicer or AFS);
(iii) third, from the Distribution Amount, to the
Note Distribution Account, an amount equal to the
Noteholders' Interest Distributable Amount for such
Distribution Date;
(iv) fourth, from the Distribution Amount, to the Note
Distribution Account, an amount equal to the Noteholders'
Principal Distributable Amount for such Distribution Date
or, when an Insurer Default shall have occurred and be
continuing the Noteholders' Special Principal Distributable
Amount for such Distribution Date;
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(v) fifth, from the Distribution Amount, to the
Security Insurer, to the extent of any amounts owing to the
Security Insurer under the Insurance Agreement and not paid,
whether or not AFS is also obligated to pay such amounts;
and
(vi) sixth, any remaining Available Funds to the
Collateral Agent for deposit in the Spread Account, such
amounts representing the Credit Enhancement Fee payable on a
subordinated basis to the Seller.
Section 4.7. TRUSTEE AS AGENT. The Trustee, in making
distributions as provided in this Agreement, shall act solely on behalf of
and as agent for the Noteholders.
SECTION 4.8. STATEMENTS TO NOTEHOLDERS. On each Distribution
Date, the Trustee shall include with each distribution to each Noteholder, a
statement (which statement shall also be provided to the Security Insurer and
to each Rating Agency) based on information in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9, setting
forth for the Monthly Period relating to such Distribution Date the following
information:
(i) the amount of such distribution allocable to
principal;
(ii) the amount of such distribution allocable to
interest;
(iii) the amount of such distribution payable out
of amounts withdrawn from the Spread Account or pursuant to
a claim on the Policy and the amount remaining in the Spread
Account;
(iv) the outstanding principal balance of the Notes
(after giving effect to distributions made on such Payment
Date);
(v) the amount of fees paid by the Trustee with
respect to such Monthly Period;
(vi) the Note Pool Factor (after giving effect to
distributions made on such Distribution Date);
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(vii) the Delinquency Ratio, Average Delinquency
Ratio, Default Ratio, Average Default Ratio, Net Loss Ratio
and Average Net Loss Ratio for such Determination Date;
(viii) whether any Trigger Event has occurred as of
such Determination Date;
(ix) whether any Trigger Event that may have occurred
as of a prior Determination Date is Deemed Cured as of such
Determination Date;
(x) whether to the knowledge of the Servicer an
Insurance Agreement Event of Default has occurred.
Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.
Section 4.9. ELIGIBLE ACCOUNTS. Any account which is required
to be established as an Eligible Account pursuant to this Agreement and which
ceases to be an Eligible Account shall within 5 Business Days (or such longer
period, not to exceed 30 days, as to which each Rating Agency and the
Security Insurer may consent) be established as a new account which shall be
an Eligible Account and any cash and/or any investments shall be transferred
to such new account.
Section 4.10. OPTIONAL DEPOSITS BY THE SECURITY INSURER. The
Security Insurer shall at any time, and from time to time, have the option
(but shall not be required) to deliver amounts to the Trustee for any of the
following purposes as specified to the Trustee: (1) to provide funds in
respect of the payment of fees or expenses of any Person referenced in
Section 4.6(ii), (2) as a component of Available Funds for distribution on a
Distribution Date in reduction of the Note Balance to the extent that but for
such distribution the Note Balance would exceed the Aggregate Principal
Balance as of the related Determination Date, and (3) as a component of
Available Funds for distribution on a Distribution Date in respect of the
Noteholders' Interest Distributable Amount or Noteholders' Principal
Distributable Amount for such Distribution Date, to the extent that without
such distribution a draw would be made on the Policy on such Distribution
Date.
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ARTICLE V
THE SPREAD ACCOUNT
Section 5.1. WITHDRAWALS FROM SPREAD ACCOUNT IN RESPECT OF
DEFICIENCY CLAIM AMOUNT.
(a) In the event that the Servicer's Certificate with respect to
any Determination Date shall state that the sum of the amount of the
Available Funds deposited in the Collection Account with respect to such
Determination Date is less than the sum of the amounts payable on the related
Distribution Date pursuant to clauses (i) through (v) of Section 4.6 for the
related Distribution Date (such deficiency being a "Deficiency Claim Amount")
then on the Deficiency Claim Date immediately preceding such Distribution
Date, the Trustee shall deliver to the Collateral Agent, the Security
Insurer, the Issuer and the Servicer, by hand delivery, telex or facsimile
transmission, a written notice (a "Deficiency Notice") specifying the
Deficiency Claim Amount for such Distribution Date.
(b) Any Deficiency Notice shall be delivered by 10:00 am., New
York City time, on the Deficiency Claim Date immediately preceding such
Distribution Date. The Deficiency Claim Amount (to the extent of the funds
available to be distributed pursuant to the Spread Account Agreement)
distributed by the Collateral Agent to the Trustee pursuant to a Deficiency
Notice shall be deposited by the Trustee into the Collection Account pursuant
to Section 4.5 on such Deficiency Claim Date.
Section 5.2. WITHDRAWALS FROM SPREAD ACCOUNT IN RESPECT OF
NOTEHOLDERS' EXCESS PRINCIPAL DISTRIBUTABLE AMOUNT OR FOLLOWING
THE OCCURRENCE OF AN INSURER DEFAULT.
(a) So long as an Insurer Default shall not have occurred and be
continuing, in the event that the Servicer's Certificate with respect to any
Determination Date shall state that the next succeeding Distribution Date is
a Trigger Date, or in the event that the Trustee has received notice from the
Security Insurer of the occurrence of an Insurance Agreement Event of
Default, no later than 10 a.m. New York City time on the Deficiency Claim
Date immediately preceding such Distribution Date, the Trustee shall deliver
to the Collateral Agent, the Security Insurer, the Issuer and the Servicer,
by hand delivery, telex or facsimile transmission, a written notice (a
"Trigger Notice"). Such Trigger
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Notice shall state that such Distribution Date is a Trigger Date, and for the
purpose of the Collateral Agent's calculation of the Noteholders' Excess
Principal Distributable Amount, shall state the Aggregate Principal Balance
as of the related Determination Date and the Note Balance (after giving
effect to distribution of the Noteholders' Principal Distributable Amount
with respect to such Distribution Date). Upon receipt of the Noteholders'
Excess Principal Distributable Amount, the Trustee shall deposit such amount
directly into the Note Distribution Account.
(b) So long as an Insurer Default shall have occurred and be
continuing, no later than 10 a.m. New York City time on each Deficiency Claim
Date, the Trustee shall deliver to the Collateral Agent, the Security
Insurer, the Issuer and the Servicer, by hand delivery, telex or facsimile
transmission, a notice requesting the Collateral Agent to deliver on the next
succeeding Distribution Date to the Trustee all amounts, if any, on deposit
in the Spread Account, including amounts, if any, deposited into the Spread
Account on such Distribution Date. Upon receipt of any such amounts, the
Trustee shall deposit such amounts directly into the Note Distribution
Account.
ARTICLE VI
THE SELLER
Section 6.1. LIABILITY OF SELLER.
(a) The Seller shall be liable hereunder only to the extent of
the obligations in this Agreement specifically undertaken by the Seller and
the representations made by the Seller.
Section 6.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF SELLER; AMENDMENT OF CERTIFICATE OF INCORPORATION.
(a) The Seller shall not merge or consolidate with any other
Person or permit any other Person to become the successor to the Seller's
business without the prior written consent of the Controlling Party. The
certificate of incorporation of any corporation (i) into which the Seller may
be merged or consolidated, (ii) resulting from any merger or consolidation to
which the Seller shall be a party, or (iii) succeeding to the business of
Seller, shall contain provisions relating to limitations on business and
other matters substantively identical
59
to those contained in the Seller's certificate of incorporation. Any such
successor corporation shall execute an agreement of assumption of every
obligation of the Seller under this Agreement and each Related Document and,
whether or not such assumption agreement is executed, shall be the successor
to the Seller under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties to this
Agreement. The Seller shall provide prompt notice of any merger,
consolidation or succession pursuant to this Section 6.2 to the Issuer, the
Trustee, the Security Insurer, the Noteholders and the Rating Agencies.
Notwithstanding the foregoing, the Seller shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Seller's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 2.4 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction) and no
event that, after notice or lapse of time, or both, would become a Servicer
Termination Event shall have occurred and be continuing, (y) the Seller shall
have delivered to the Issuer, the Trustee and the Security Insurer an
officer's certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section 6.2 and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, and
(z) the Seller shall have delivered to the Issuer, the Trustee and the
Security Insurer an Opinion of Counsel, stating, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Issuer in the Receivables and the
Other Conveyed Property and reciting the details of the filings or (B) no
such action shall be necessary to preserve and protect such interest.
(b) The Seller hereby agrees that it shall not (i) take any
action prohibited by Article XVI of its certificate of incorporation or (ii)
without the prior written consent of the Issuer and the Trustee and the
Controlling Party and without giving prior written notice to the Rating
Agencies, amend Article III, Article IX, Article XIV or Article XVI of its
certificate of incorporation.
Section 6.3. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The
Seller and any director or officer or employee or agent of the
60
Seller may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement. The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations as Seller of the Receivables under this
Agreement and that in its opinion may involve it in any expense or liability.
Section 6.4. SELLER MAY OWN NOTES. Each of the Seller and any
Affiliate of the Seller may in its individual or any other capacity become
the owner or pledgee of Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof except as otherwise specifically
provided herein or in the Related Documents. Notes so owned by or pledged to
the Seller or such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement or any Related Document, without
preference, priority, or distinction as among all of the Notes, PROVIDED THAT
any Notes owned by the Seller or any Affiliate thereof, during the time such
Notes are owned by them, shall be without voting rights for any purpose set
forth in this Agreement or any Related Document. The Seller shall notify the
Issuer, the Trustee and the Security Insurer promptly after it or any of its
Affiliates become the owner or pledgee of a Note.
ARTICLE VII
SERVICER
Section 7.1. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer (in its capacity as such and, in the case of
AFS, without limitation of its obligations under the Purchase Agreement)
shall be liable hereunder only to the extent of the obligations in this
Agreement specifically undertaken by the Servicer and the representations
made by the Servicer.
(b) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Trustee, the Indenture Collateral Agent, the Backup Servicer, the
Security Insurer, their respective officers, directors, agents and employees,
and the Noteholders from and against any and all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and expenses of litigation arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle;
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(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustee, the Indenture Collateral Agent, the Backup Servicer, the
Security Insurer, their respective officers, directors, agents and employees
and the Noteholders from and against any taxes that may at any time be
asserted against any of such parties with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales,
gross receipts, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes asserted with respect to, and as of the date of, the sale of
the Receivables and the Other Conveyed Property to the Issuer or the issuance
and original sale of the Notes) and costs and expenses in defending against
the same; and
(d) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustee, the Indenture Collateral Agent, the Backup Servicer,
the Security Insurer, their respective officers, directors, agents and
employees and the Noteholders from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon
the Issuer, the Trustee, the Backup Servicer, the Security Insurer or the
Noteholders by reason of the breach of this Agreement by the Servicer, the
negligence, misfeasance, or bad faith of the Servicer in the performance of
its duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
(e) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments pursuant to this
Article and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts collected to the
Servicer, without interest.
(f) AFS, in its individual capacity, hereby acknowledges that
the indemnification provisions in the Purchase Agreement benefiting the
Issuer, the Trustee and the Backup Servicer are enforceable by each hereunder.
Section 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF THE SERVICER OR BACKUP SERVICER.
(a) AFS shall not merge or consolidate with any other
person, convey, transfer or lease substantially all its assets as an
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entirety to another Person, or permit any other Person to become the
successor to AFS's business unless, after the merger, consolidation,
conveyance, transfer, lease or succession, the successor or surviving entity
shall be capable of fulfilling the duties of AFS contained in this Agreement
and shall be acceptable to the Controlling Party, and, if an Insurer Default
shall have occurred and be continuing, shall be an Eligible Servicer. Any
corporation into which AFS may be merged or consolidated, (ii) resulting from
any merger or consolidation to which AFS shall be a party, (iii) which
acquires by conveyance, transfer, or lease substantially all of the assets of
AFS, or (iv) succeeding to the business of AFS, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of AFS
under this Agreement and, whether or not such assumption agreement is
executed, shall be the successor to AFS under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; PROVIDED, HOWEVER, that nothing contained herein shall be
deemed to release AFS from any obligation. AFS shall provide notice of any
merger, consolidation or succession pursuant to this Section 7.2(a) to the
Issuer, the Trustee, the Noteholders, the Security Insurer and each Rating
Agency. Notwithstanding the foregoing, AFS shall not merge or consolidate
with any other Person or permit any other Person to become a successor to
AFS's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.6 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction) and no
event that, after notice or lapse of time, or both, would become an Insurance
Agreement Event of Default shall have occurred and be continuing, (y) AFS
shall have delivered to the Issuer, the Trustee and the Security Insurer an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section 7.2(a) and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with,
and (z) AFS shall have delivered to the Issuer, the Trustee and the Security
Insurer an Opinion of Counsel, stating in the opinion of such counsel, either
(A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and
protect the interest of the Issuer in the Receivables and the Other Conveyed
Property and reciting the details of the filings or (B) no such action shall
be necessary to preserve and protect such interest.
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(b) Any corporation (i) into which the Backup Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to
which the Backup Servicer shall be a party, (iii) which acquires by
conveyance, transfer or lease substantially all of the assets of the Backup
Servicer, or (iv) succeeding to the business of the Backup Servicer, in any
of the foregoing cases shall execute an agreement of assumption to perform
every obligation of the Backup Servicer under this Agreement and, whether or
not such assumption agreement is executed, shall be the successor to the
Backup Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this Agreement,
anything in this Agreement to the contrary notwithstanding; PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to release the Backup
Servicer from any obligation.
Section 7.3. LIMITATION ON LIABILITY OF SERVICER, BACKUP
SERVICER AND OTHERS.
(a) Neither AFS, the Backup Servicer nor any of the directors or
officers or employees or agents of AFS or Backup Servicer shall be under any
liability to the Issuer or the Noteholders, except as provided in this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement; PROVIDED, HOWEVER, that this provision
shall not protect AFS, the Backup Servicer or any such person against any
liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith or negligence (excluding errors
in judgment) in the performance of duties; PROVIDED FURTHER that this
provision shall not affect any liability to indemnify the Issuer and the
Trustee for costs, taxes, expenses, claims, liabilities, losses or damages
paid by the Issuer or the Trustee, each in its individual capacity. AFS, the
Backup Servicer and any director, officer, employee or agent of AFS or Backup
Servicer may rely in good faith on the written advice of counsel or on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
(b) The Backup Servicer shall not be liable for any obligation
of the Servicer contained in this Agreement, and the Issuer, the Trustee, the
Seller, the Security Insurer and the Noteholders shall look only to the
Servicer to perform such obligations.
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(c) The parties expressly acknowledge and consent to
LaSalle National Bank acting in the possible dual capacity of
Backup Servicer or successor Servicer and in the capacities as
Trustee and Indenture Collateral Agent. LaSalle National Bank
may, in such dual capacity, discharge its separate functions
fully, without hinderance or regard to conflict of interest
principles, duty of loyalty principles or other breach of
fiduciary duties to the extent that any such conflict or breach
arises from the performance by LaSalle of express duties set
forth in the this Agreement in any of such capacities, all of
which defenses, claims or assertions are hereby expressly waived
by the other parties hereto except in the case of gross
negligence and willful misconduct by LaSalle National Bank .
Section 7.4. DELEGATION OF DUTIES. The Servicer may
delegate duties under this Agreement to an Affiliate of AFS with
the prior written consent of the Security Insurer (unless an
Insurer Default shall have occurred and be continuing), the
Trustee, the Issuer and the Backup Servicer. The Servicer also
may at any time perform the specific duty of repossession of
Financed Vehicles through sub-contractors who are in the business
of servicing automotive receivables and the specific duty of
tracking Financed Vehicles' insurance through sub-contractors, in
each case, without the consent of the Security Insurer and may
perform other specific duties through such sub-contractors in
accordance with Servicer's customary servicing policies and
procedures, with the prior consent of the Security Insurer;
PROVIDED, HOWEVER, that no such delegation or sub-contracting
duties by the Servicer shall relieve the Servicer of its
responsibility with respect to such duties. So long as no
Insurer Default shall have occurred and be continuing neither AFS
or any party acting as Servicer hereunder shall appoint any
subservicer hereunder without the prior written consent of the
Security Insurer, the Trustee, the Issuer and the Backup
Servicer.
Section 7.5. SERVICER AND BACKUP SERVICER NOT TO RESIGN.
Subject to the provisions of Section 7.2, neither the Servicer
nor the Backup Servicer shall resign from the obligations and
duties imposed on it by this Agreement as Servicer or Backup
Servicer except upon a determination that by reason of a change
in legal requirements the performance of its duties under this
Agreement would cause it to be in violation of such legal
requirements in a manner which would have a material adverse
effect on the Servicer or the Backup Servicer, as the case may
be, and the Security Insurer (so long as an Insurer Default shall
not have occurred and
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be continuing) or a Note Majority (if an Insurer Default shall
have occurred and be continuing) does not elect to waive the
obligations of the Servicer or the Backup Servicer, as the case
may be, to perform the duties which render it legally unable to
act or to delegate those duties to another Person. Any such
determination permitting the resignation of the Servicer or Backup
Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered and acceptable to the Issuer, the Trustee and the Security
Insurer (unless an Insurer Default shall have occurred and be
continuing). No resignation of the Servicer shall become effective
until, so long as no Insurer Default shall have occurred and be
continuing the Backup Servicer or an entity acceptable to the
Security Insurer shall have assumed the responsibilities and
obligations of the Servicer or, if an Insurer Default shall have
occurred and be continuing, the Backup Servicer or a successor
Servicer that is an Eligible Servicer shall have assumed the
responsibilities and obligations of the Servicer. No resignation
of the Backup Servicer shall become effective until, so long as no
Insurer Default shall have occurred and be continuing, an entity
acceptable to the Security Insurer shall have assumed the
responsibilities and obligations of the Backup Servicer or, if an
Insurer Default shall have occurred and be continuing a Person that
is an Eligible Servicer shall have assumed the responsibilities and
obligations of the Backup Servicer; PROVIDED, HOWEVER, that in the
event a successor Backup Servicer is not appointed within 60 days
after the Backup Servicer has given notice of its resignation and
has provided the Opinion of Counsel required by this Section 7.5,
the Backup Servicer may petition a court for its removal.
ARTICLE VIII
SERVICER TERMINATION EVENTS
Section 8.1. SERVICER TERMINATION EVENT. For purposes of
this Agreement, each of the following shall constitute a
"Servicer Termination Event":
(a) Any failure by the Servicer to deliver to the Trustee
for distribution to Noteholders any proceeds or payment required
to be so delivered under the terms of this Agreement (or, if AFS
is the Servicer, the Purchase Agreement) that continues
unremedied for a period of two Business Days (one Business Day
with respect to payment of Purchase Amounts) after written notice
is received by the Servicer from the Trustee or (unless an
Insurer Default shall
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have occurred and be continuing) the Security Insurer or after
discovery of such failure by a Responsible Officer of the Servicer;
(b) Failure by the Servicer to deliver to the Trustee, the
Issuer and (so long as an Insurer Default shall not have occurred
and be continuing) the Security Insurer the Servicer's
Certificate by the fourth Business Day prior to the Distribution
Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 7.2(a);
(c) Failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer set
forth in this Agreement (or, if AFS is the Servicer, the Purchase
Agreement), which failure (i) materially and adversely affects
the rights of Noteholders (determined without regard to the
availability of funds under the Policy), or of the Security
Insurer (unless an Insurer Default shall have occurred and be
continuing), and (ii) continues unremedied for a period of 30
days after knowledge thereof by the Servicer or after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Issuer,
the Trustee or the Security Insurer (or, if an Insurer Default
shall have occurred and be continuing any Noteholder);
(d) The entry of a decree or order for relief by a
court or regulatory authority having jurisdiction in respect of the
Servicer in an involuntary case under the federal bankruptcy
laws, as now or hereafter in effect, or another present or
future, federal bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any
substantial part of its property or ordering the winding up or
liquidation of the affairs of the Servicer and the continuance of
any such decree or order unstayed and in effect for a period of
60 consecutive days or the commencement of an involuntary case
under the federal bankruptcy laws, as now or hereinafter in
effect, or another present or future federal or state bankruptcy,
insolvency or similar law and such case is not dismissed within
60 days; or
(e) The commencement by the Servicer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect,
or any other present or future, federal or state, bankruptcy,
insolvency or similar law, or the consent by the Servicer to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar
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official of the Servicer or of any substantial part of its
property or the making by the Servicer of an assignment for the
benefit of creditors or the failure by the Servicer generally to
pay its debts as such debts become due or the taking of corporate
action by the Servicer in furtherance of any of the foregoing; or
(f) Any representation, warranty or statement of the
Servicer made in this Agreement or any certificate, report or
other writing delivered pursuant hereto shall prove to be
incorrect in any material respect as of the time when the same
shall have been made (excluding, however, any representation or
warranty set forth in Section 2.4(a)), and the incorrectness of
such representation, warranty or statement has a material adverse
effect on the Issuer and, within 30 days after knowledge thereof
by the Servicer or after written notice thereof shall have been
given to the Servicer by the Issuer, the Trustee or the Security
Insurer (or, if an Insurer Default shall have occurred and be
continuing, a Noteholder), the circumstances or condition in
respect of which such representation, warranty or statement was
incorrect shall not have been eliminated or otherwise cured; or
(g) So long as an Insurer Default shall not have occurred
and be continuing, the Security Insurer shall not have delivered
a Servicer Extension Notice pursuant to Section 3.14; or
(h) So long as an Insurer Default shall not have occurred
and be continuing, an Insurance Agreement Event of Default or
under any other Insurance and Indemnity Agreement relating to any
Series an Event of Default thereunder shall have occurred; or
(i) A claim is made under the Policy.
Section 8.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT.
If a Servicer Termination Event shall occur and be continuing,
the Security Insurer (or, if an Insurer Default shall have
occurred and be continuing either the Trustee, (to the extent it
has knowledge thereof) the Issuer or a Note Majority), by notice
given in writing to the Servicer (and to the Trustee and the
Issuer if given by the Security Insurer or the Noteholders) or by
non-extension of the term of the Servicer as referred to in
Section 3.14 may terminate all of the rights and obligations of
the Servicer under this Agreement. On or after the receipt by
the Servicer of such written notice or upon termination of the
term of the Servicer, all authority, power, obligations and
responsibilities of the Servicer under this Agreement, whether
with respect to the Notes or the
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Other Conveyed Property or otherwise, automatically shall pass
to, be vested in and become obligations and responsibilities
of the Backup Servicer (or such other successor Servicer
appointed by the Controlling Party); PROVIDED, HOWEVER, that
the successor Servicer shall have no liability with respect to
any obligation which was required to be performed by the
terminated Servicer prior to the date that the successor
Servicer becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated
Servicer. The successor Servicer is authorized and empowered
by this Agreement to execute and deliver, on behalf of the
terminated Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and
the Other Conveyed Property and related documents to show the
Issuer as lienholder or secured party on the related Lien
Certificates, or otherwise. The terminated Servicer agrees to
cooperate with the successor Servicer in effecting the
termination of the responsibilities and rights of the
terminated Servicer under this Agreement, including, without
limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the
time be held by the terminated Servicer for deposit, or have
been deposited by the terminated Servicer, in the Collection
Account or thereafter received with respect to the Receivables
and the delivery to the successor Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer
tape in readable form as of the most recent Business Day
containing all information necessary to enable the successor
Servicer or a successor Servicer to service the Receivables
and the Other Conveyed Property. If requested by the
Controlling Party, the successor Servicer shall terminate the
Lockbox Agreement and direct the Obligors to make all payments
under the Receivables directly to the successor Servicer (in
which event the successor Servicer shall process such payments
in accordance with Section 3.2(e)), or to a lockbox
established by the successor Servicer at the direction of the
Controlling Party, at the successor Servicer's expense. The
terminated Servicer shall grant the Issuer, the Trustee, the
successor Servicer and the Controlling Party reasonable access
to the terminated Servicer's premises at the terminated
Servicer's expense.
Section 8.3. APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice
of termination pursuant to Section 8.2, upon non-extension of the
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servicing term as referred to in Section 3.14, or upon the
resignation of the Servicer pursuant to Section 7.5, the
Backup Servicer (unless the Security Insurer shall have
exercised its option pursuant to Section 8.3(b) to appoint an
alternate successor Servicer) shall be the successor in all
respects to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for
in this Agreement, and shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Servicer
by the terms and provisions of this Agreement except as
otherwise stated herein. The Issuer and such successor shall
take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. If a successor
Servicer is acting as Servicer hereunder, it shall be subject
to term-to-term servicing as referred to in Section 3.14 and
to termination under Section 8.2 upon the occurrence of any
Servicer Termination Event applicable to it as Servicer.
(b) The Controlling Party may exercise at any time its
right to appoint as Backup Servicer or as successor to the
Servicer a Person other than the Person serving as Backup
Servicer at the time, and (without limiting its obligations under
the Policies) shall have no liability to the Issuer, the Trustee,
AFS, the Seller, the Person then serving as Backup Servicer, any
Noteholders or any other Person if it does so. Notwithstanding
the above, if the Backup Servicer shall be legally unable or
unwilling to act as Servicer, and an Insurer Default shall have
occurred and be continuing, the Backup Servicer, the Trustee, a
Note Majority or the Issuer may petition a court of competent
jurisdiction to appoint any Eligible Servicer as the successor to
the Servicer. Pending appointment pursuant to the preceding
sentence, the Backup Servicer shall act as successor Servicer
unless it is legally unable to do so, in which event the outgoing
Servicer shall continue to act as Servicer until a successor has
been appointed and accepted such appointment. Subject to Section
7.5, no provision of this Agreement shall be construed as
relieving the Backup Servicer of its obligation to succeed as
successor Servicer upon the termination of the Servicer pursuant
to Section 8.2, the resignation of the Servicer pursuant to
Section 7.5 or the non-extension of the servicing term of the
Servicer, as referred to in Section 3.14. If upon the
termination of the Servicer pursuant to Section 8.2 or the
resignation of the Servicer pursuant to Section 7.5, the
Controlling Party appoints a successor Servicer other than the
Backup Servicer, the Backup Servicer shall not be relieved of its
duties as Backup Servicer hereunder.
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(c) Any successor Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or
otherwise) as the Servicer would have been entitled to under this
Agreement if the Servicer had not resigned or been terminated
hereunder. If any successor Servicer is appointed as a result of
the Backup Servicer's refusal (in breach of the terms of this
Agreement) to act as Servicer although it is legally able to do
so, the Security Insurer and such successor Servicer may agree on
reasonable additional compensation to be paid to such successor
Servicer by the Backup Servicer, which additional compensation
shall be paid by such breaching Backup Servicer in its individual
capacity and solely out of its own funds. If any successor
Servicer is appointed for any reason other than the Backup
Servicer's refusal to act as Servicer although legally able to do
so, the Security Insurer and such successor Servicer may agree on
additional compensation to be paid to such successor Servicer,
which additional compensation shall be payable as provided in the
Spread Account Agreement and shall in no event exceed $150,000.
In addition, any successor Servicer shall be entitled, as
provided in the Spread Account Agreement, to reasonable
transition expenses incurred in acting as successor Servicer.
Section 8.4. NOTIFICATION TO NOTEHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Issuer shall give prompt
written notice thereof to each Rating Agency, and the Trustee
shall give prompt written notice thereof to Noteholders at their
respective addresses appearing in the Note Register.
Section 8.5. WAIVER OF PAST DEFAULTS. The Security
Insurer or (if an Insurer Default shall have occurred and be
continuing) a Note Majority may, on behalf of all Holders of
Notes, waive any default by the Servicer in the performance of
its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and
any Servicer Termination Event arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
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ARTICLE IX
TERMINATION
Section 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES. On
each Determination Date as of which the outstanding principal
balance of the Notes is equal to or less than 10% of the original
principal amount of the Notes, the Servicer shall have the option
to purchase the Receivables (with the consent of the Security
Insurer, if a claim has previously been made under the Policy or
if such purchase would result in a claim on the Policy or if such
purchase would result in any amount owing and remaining unpaid
under the Transaction Documents to the Security Insurer or any
other Person). To exercise such option, the Servicer shall pay
the aggregate Purchase Amounts for the Receivables and shall
succeed to all interests in and to the Receivables; PROVIDED,
HOWEVER, that the amount to be paid for such purchase (as set
forth in the following sentence) shall be sufficient to pay the
full amount of principal and interest then due and payable on the
Notes. The party exercising such option to repurchase shall
deposit the aggregate Purchase Amounts for the Receivables into
the Collection Account, and the Trustee shall distribute the
amounts so deposited in accordance with Section 4.6.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. AMENDMENT.
(a) This Agreement may be amended by the Seller, the
Servicer and the Issuer, with the prior written consent of the
Trustee and the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) but without the
consent of any of the Noteholders, (i) to cure any ambiguity,
(ii) to correct or supplement any provisions in this Agreement or
(iii) for the purpose of adding any provision to or changing in
any manner or eliminating any provision of this Agreement or of
modifying in any manner the rights of the Noteholders; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the
interests of the Noteholders.
(b) This Agreement may also be amended from time
to time by the Seller, the Servicer and the Issuer with the
prior written consent of the Trustee and the Security Insurer
(so long as an Insurer Default shall not have occurred and be
continuing) and with
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the consent of a Note Majority (which consent of any Holder of
a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on
such Holder and on all future Holders of such Note and of any
Note issued upon the transfer thereof or in exchange thereof
or in lieu thereof whether or not notation of such consent is
made upon the Note) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner
the rights of the Holders of Notes; PROVIDED, HOWEVER, that,
subject to the express rights of the Security Insurer under
the Related Documents, including its rights to agree to
certain modifications of the Receivables pursuant to Section
3.2 and its rights to cause the Indenture Collateral Agent to
liquidate the Collateral under the circumstances and subject
to the provisions of Section 5.04 of the Indenture, no such
amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions required to be
made on any Note or the Note Interest Rate, (b) amend any
provisions of Section 4.6 in such a manner as to affect the
priority of payment of interest or principal to Noteholders,
or (c) reduce the aforesaid percentage required to consent to
any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then outstanding.
(c) Prior to the execution of any such amendment or
consent, the Issuer shall furnish written notification of the
substance of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Issuer shall furnish written notification of the
substance of such amendment or consent to the Trustee.
(e) Prior to the execution of any amendment to this
Agreement, the Issuer shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement, in
addition to the Opinion of Counsel referred to in Section
10.2(i). The Issuer may, but shall not be obligated to, enter
into any such amendment which affects the Issuer's own rights,
duties or immunities under this Agreement or otherwise.
Section 10.2. PROTECTION OF TITLE TO THE RECEIVABLES AND
OTHER CONVEYED PROPERTY.
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(a) The Servicer shall execute and file such financing
statements and cause to be executed and filed such continuation
and other statements, all in such manner and in such places as
may be required by law fully to preserve, maintain and protect
the interest of the Issuer and the Indenture Collateral Agent in
the Receivables and Other Conveyed Property and in the proceeds
thereof. The Servicer shall deliver (or cause to be delivered)
to the Issuer, the Indenture Collateral Agent and the Security
Insurer file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following
such filing.
(b) Neither the Seller, the Servicer nor the Issuer shall
change its name, identity or corporate structure in any manner
that would, could or might make any financing statement or
continuation statement filed by the Seller in accordance with
paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the
Issuer, the Trustee and the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) at
least 60 days prior written notice thereof, and shall promptly
file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Seller, the Servicer and the Issuer shall
give the Trustee and the Security Insurer at least 60 days' prior
written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of
any new financing statement. The Servicer shall at all times
maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable
and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the
Receivables to the Issuer, the Servicer's master computer records
(including any backup archives) that refer to any Receivable
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indicate clearly (with reference to the Issuer) that the
Receivable is owned by the Issuer. Indication of the Issuer's
ownership of a Receivable shall be deleted from or modified on
the Servicer's computer systems when, and only when, the
Receivable has been paid in full or repurchased by the Seller
or Servicer.
(f) If at any time the Seller or the Servicer
proposes to sell, grant a security interest in, or otherwise
transfer any interest in automotive receivables to any
prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts
(including any restored from backup archives) that, if they
refer in any manner whatsoever to any Receivable, indicate
clearly that such Receivable has been sold and is owned by the
Issuer unless such Receivable has been paid in full or
repurchased by the Seller or Servicer.
(g) The Servicer shall permit the Issuer, the
Trustee, the Backup Servicer, the Noteholders, the Security
Insurer and their respective agents, at any time to inspect,
audit and make copies of and abstracts from the Servicer's
records regarding any Receivables or any other portion of the
Other Conveyed Property.
(h) The Servicer shall furnish to the Issuer, the
Trustee, the Backup Servicer and the Security Insurer at any
time upon request a list of all Receivables then held by
Issuer, together with a reconciliation of such list to the
Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal
of Receivables from the Issuer. Upon request, the Servicer
shall furnish a copy of any list to the Seller. The Issuer
shall hold any such list and Schedule of Receivables for
examination by interested parties during normal business hours
at the offices of the Servicer upon reasonable notice by such
Persons of their desire to conduct an examination.
(i) The Seller and the Servicer shall deliver to the
Issuer, the Trustee and the Security Insurer simultaneously with
the execution and delivery of this Agreement and of each
amendment thereto and upon the occurrence of the events giving
rise to an obligation to give notice pursuant to Section 10.2(b)
or (c), an Opinion of Counsel either (a) stating that, in the
opinion of such Counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the
Issuer and the Indenture Collateral Agent in the Receivables and
the Other Conveyed Property, and
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reciting, the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b)
stating that, in the opinion of such counsel, no such action
is necessary to preserve and protect such interest.
(j) The Servicer shall deliver to the Issuer, the
Trustee and the Security Insurer, on or before July 1 of each
calendar year commencing in 1996, an Opinion of Counsel,
either (a) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Issuer and the Indenture
Collateral Agent in the Receivables and the Other Conveyed
Property, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details
are given, or (b) stating that, in the opinion of such
counsel, no action shall be necessary to preserve and protect
such interest.
Section 10.3. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York without regard to the principles of conflicts
of laws thereof and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance
with such laws.
Section 10.4. SEVERABILITY OF PROVISIONS. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Notes or the rights of the Holders thereof.
Section 10.5. ASSIGNMENT. Notwithstanding anything to the
contrary contained in this Agreement, except as provided in
Section 7.2 or Section 8.2 (and as provided in the provisions of
the Agreement concerning the resignation of the Servicer and the
Backup Servicer), this Agreement may not be assigned by the
Seller or the Servicer without the prior written consent of the
Issuer, the Trustee and the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, the Issuer, the
Trustee and a Note Majority).
Section 10.6. THIRD-PARTY BENEFICIARIES. This Agreement
shall inure to the benefit of and be binding upon the parties
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hereto and their respective successors and permitted assigns.
The Security Insurer and its successors and assigns shall be a
third-party beneficiary to the provisions of this Agreement, and
shall be entitled to rely upon and directly to enforce such
provisions of this Agreement so long as no Insurer Default shall
have occurred and be continuing. Nothing in this Agreement,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and permitted
assigns, any benefit or any legal or equitable right, remedy or
claim under this Agreement. Except as expressly stated otherwise
herein or in the Related Documents, any right of the Security
Insurer to direct, appoint, consent to, approve of, or take any
action under this Agreement, shall be a right exercised by the
Security Insurer in its sole and absolute discretion.
Section 10.7. DISCLAIMER BY SECURITY INSURER. The Security
Insurer may disclaim any of its rights and powers under this
Agreement (but not its duties and obligations under the Policy)
upon delivery of a written notice to the Issuer and the Trustee.
Section 10.8. COUNTERPARTS. For the purpose of
facilitating its execution and for other purposes, this Agreement
may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same
instrument.
Section 10.9. NOTICES. All demands, notices and
communications under this Agreement shall be in writing,
personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon
receipt (a) in the case of AFS, the Seller or the Servicer, at
the following address: AmeriCredit Receivables Finance Corp.
1995-A, 000 Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000-0000,
Attention: Chief Financial Officer, (b) in the case of the
Trustee and, for so long as the Trustee is the Backup Servicer or
the Collateral Agent, at LaSalle National Bank, 000 X. XxXxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention:
Asset-Backed Securities Trust Services Department, (c) in the
case of each Rating Agency, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: ABS Monitoring Department (for Xxxxx'x) and 00
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (for Standard & Poor's),
Attention: Asset-Backed Surveillance), and (d) in the case of the
Security Insurer, Financial Security Assurance Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Surveillance
Department, Telex No.: (000) 000-0000, Confirmation: (000) 000-0000,
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Telecopy Nos.: (000)000-0000, (000)000-0000, (in each case
in which notice or other communication to Financial Security
refers to an Event of Default, a claim on the Policy or with
respect to which failure on the part of Financial Security to
respond shall be deemed to constitute consent or acceptance, then
a copy of such notice or other communication should also be sent
to the attention of the General Counsel and the Head-Financial
Guaranty Group "URGENT MATERIAL ENCLOSED"), or at such other
address as shall be designated by any such party in a written
notice to the other parties. Any notice required or permitted to
be mailed to a Noteholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the
Note Register (as the case may be), and any notice so mailed
within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Noteholder receives such notice.
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IN WITNESS WHEREOF, the Issuer, the Seller, AFS, the
Servicer and the Backup Servicer have caused this Sale and
Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
ISSUER:
AMERICREDIT RECEIVABLES FINANCE
CORP. 1995-A
By _______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Controller
SELLER:
AMERICREDIT RECEIVABLES CORP.
By _______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Controller
AMERICREDIT FINANCIAL SERVICES, INC.
In its individual capacity and as
Servicer
By _______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Controller
BACKUP SERVICER:
LASALLE NATIONAL BANK
By _______________________________________
Name: ____________________________________
Title: Corporate Trust Officer
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Acknowledged and Accepted:
LASALLE NATIONAL BANK,
not in individual capacity but as Trustee,
By ___________________________________
Name:
Title: Corporate Trust Officer
FINANCIAL SECURITY ASSURANCE INC.
By ___________________________________
Name:
Title: Authorized Officer
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SCHEDULE A
SCHEDULE OF RECEIVABLES
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SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF SELLER AND AFS
1. CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) was
originated by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business in accordance with AFS's credit
policies and such Dealer had all necessary licenses and permits to originate
Receivables in the state where such Dealer was located, was fully and
properly executed by the parties thereto, was purchased by AFS from such
Dealer under an existing Dealer Agreement or pursuant to a Dealer Assignment
with AFS and was validly assigned by such Dealer to AFS pursuant to a Dealer
Assignment, (B) was purchased by the Seller from AFS and was validly assigned
by AFS to the Seller pursuant to the Purchase Agreement, (C) contains
customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for realization against the
collateral security, (D) is a Receivable which provides for level monthly
payments (provided that the period in the first Monthly Period and the
payment in the final Monthly Period of the Receivable may be minimally
different from the normal period and level payment) which, if made when due,
shall fully amortize the Amount Financed over the original term and (E) has
not been amended or collections with respect to which waived, other than as
evidenced in the Receivable File relating thereto.
2. NO FRAUD OR MISREPRESENTATION. Each Receivable was
originated by a Dealer and was sold by the Dealer to AFS without any fraud or
misrepresentation on the part of such Dealer in either case.
3. COMPLIANCE WITH LAW. All requirements of applicable
federal, state and local laws, and regulations thereunder (including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Xxxx-Xxxxxxxx Warranty Act, the Federal Reserve Board's Regulations "B" and
"Z", the Soldiers' and Sailors' Civil Relief Act of 1940, each applicable
state Motor Vehicle Retail Installment Sales Act, and state adaptations of
the National Consumer Act and of the Uniform Consumer Credit Code and other
consumer credit laws and equal credit opportunity and disclosure laws) in
respect of the Receivables and the Financed Vehicles, have been complied with
in all material respects, and each Receivable and the sale of the
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Financed Vehicle evidenced by each Receivable complied at the time it was
originated or made and now complies in all material respects with all
applicable legal requirements.
4. ORIGINATION. Each Receivable was originated in the United
States.
5. BINDING OBLIGATION. Each Receivable represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except (A) as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law
and (B) as such Receivable may be modified by the application after the
Cutoff Date of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended; and all parties to each Receivable had full legal capacity to
execute and deliver such Receivable and all other documents related thereto
and to grant the security interest purported to be granted thereby.
6. NO GOVERNMENT OBLIGOR. No Obligor is the United States of
America or any State or any agency, department, subdivision or
instrumentality thereof.
7. OBLIGOR BANKRUPTCY. At the Cutoff Date no Obligor had been
identified on the records of AFS as being the subject of a current bankruptcy
proceeding.
8. SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables has been produced from the Electronic Ledger and was
true and correct in all material respects as of the close of business on the
Cutoff Date.
9. MARKING RECORDS. By the Closing Date, AFS and the Seller
will have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that the
Receivables have been sold to Seller by AFS, resold by Seller to the Issuer
and pledged by the Issuer to the Indenture Collateral Agent in accordance
with the terms of the Indenture.
10. COMPUTER TAPE. The Computer Tape made available by AFS and
the Seller to the Issuer on the Closing Date was complete and
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accurate as of the Cutoff Date and includes a description of the same
Receivables that are described in the Schedule of Receivables.
11. ADVERSE SELECTION. No selection procedures adverse to the
Noteholders were utilized in selecting the Receivables from those receivables
owned by AFS which met the selection criteria contained in the Sale and
Servicing Agreement.
12. CHATTEL PAPER. The Receivables constitute chattel paper
within the meaning of the UCC as in effect in the States of Texas and New
York.
13. ONE ORIGINAL. There is only one original executed copy of
each Receivable.
14. RECEIVABLE FILES COMPLETE. There exists a Receivable File
pertaining to each Receivable and such Receivable File contains (a) a fully
executed original of the Receivable, (b) the original executed credit
application, or a copy thereof and (c) the original Lien Certificate or
application therefor. Each of such documents which is required to be signed
by the Obligor has been signed by the Obligor in the appropriate spaces. All
blanks on any form have been properly filled in and each form has otherwise
been correctly prepared. The complete Receivable File for each Receivable
currently is in the possession of the Custodian.
15. RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Vehicle securing each such
Receivable has not been released from the lien of the related Receivable in
whole or in part. No terms of any Receivable have been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the Receivable File. No Receivable has been modified
as a result of application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
16. LAWFUL ASSIGNMENT. No Receivable was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such
Receivable under this Agreement or pursuant to transfers of the Notes.
17. GOOD TITLE. Immediately prior to the conveyance of the
Receivables pursuant to the Purchase Agreement, AFS was the sole owner of and
had good and indefeasible title thereto, free and
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clear of any Lien; immediately prior to the conveyance of the Receivables to
the Issuer pursuant to this Agreement, the Seller was the sole owner thereof
and had good and indefeasible title thereto, free of any Lien and, upon
execution and delivery of this Agreement by the Seller, and the pledge of the
Receivables by the Issuer under the Indenture, the Indenture Collateral Agent
shall have good and indefeasible title to and will be the sole owner of such
Receivables, free of any Lien. No Dealer has a participation in, or other
right to receive, proceeds of any Receivable. Neither AFS nor the Seller has
taken any action to convey any right to any Person that would result in such
Person having a right to payments received under the related Insurance
Policies or the related Dealer Agreements or Dealer Assignments or to
payments due under such Receivables.
18. SECURITY INTEREST IN FINANCED VEHICLE. Each Receivable
created or shall create a valid, binding and enforceable first priority
security interest in favor of AFS in the Financed Vehicle. The Lien
Certificate and original certificate of title for each Financed Vehicle show,
or if a new or replacement Lien Certificate is being applied for with respect
to such Financed Vehicle the Lien Certificate will be received within 180
days of the Closing Date and will show AFS named as the original secured
party under each Receivable as the holder of a first priority security
interest in such Financed Vehicle. With respect to each Receivable for which
the Lien Certificate has not yet been returned from the Registrar of Titles,
AFS has received written evidence from the related Dealer that such Lien
Certificate showing AFS as first lienholder has been applied for. AFS's
security interest has been validly assigned by AFS to the Seller and by the
Seller to the Issuer pursuant to this Agreement. Immediately after the sale,
transfer and assignment thereof by the Seller to the Issuer and the
subsequent pledge thereof by the Issuer to the Indenture Collateral Agent,
each Receivable will be secured by an enforceable and perfected first
priority security interest in the Financed Vehicle in favor of the Indenture
Collateral Agent as secured party, which security interest is prior to all
other Liens upon and security interests in such Financed Vehicle which now
exist or may hereafter arise or be created (except, as to priority, for any
lien for taxes, labor or materials affecting a Financed Vehicle). As of the
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable.
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19. ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to give
the Indenture Collateral Agent a first priority perfected lien on, or
ownership interest in, the Receivables and the proceeds thereof and the Other
Conveyed Property have been made, taken or performed.
20. NO IMPAIRMENT. Neither AFS nor the Seller has done anything
to convey any right to any Person that would result in such Person having a
right to payments due under the Receivable or otherwise to impair the rights
of the Issuer, the Security Insurer, the Indenture Collateral Agent, the
Trustee and the Noteholders in any Receivable or the proceeds thereof.
21. RECEIVABLE NOT ASSUMABLE. No Receivable is assumable by
another Person in a manner which would release the Obligor thereof from such
Obligor's obligations to the Seller with respect to such Receivable.
22. NO DEFENSES. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense and no such right has been
asserted or threatened with respect to any Receivable.
23. NO DEFAULT. There has been no default, breach, violation or
event permitting acceleration under the terms of any Receivable (other than
payment delinquencies of not more than 30 days), and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable, and there has been no waiver
of any of the foregoing. As of the Cutoff Date no Financed Vehicle had been
repossessed.
24. INSURANCE. At the time of a purchase of a Receivable by AFS
from a Dealer, each Financed Vehicle is required to be covered by a
comprehensive and collision insurance policy (i) in an amount at least equal
to the lesser of (a) its maximum insurable value or (b) the principal amount
due from the Obligor under the related Receivable, (ii) naming AFS as loss
payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive
and collision coverage. Each Receivable requires the Obligor to maintain
physical loss and damage insurance, naming AFS and its successors and assigns
as additional insured parties, and each
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Receivable permits the holder thereof to obtain physical loss and damage
insurance at the expense of the Obligor if the Obligor fails to do so. No
Financed Vehicle is insured under a policy of Force-Placed Insurance on the
Cutoff Date.
25. PAST DUE. At the Cutoff Date no Receivable was more than 30
days past due.
26. REMAINING PRINCIPAL BALANCE. At the Cutoff Date each
Receivable had a remaining principal balance equal to or greater than $250.00
and the Principal Balance of each Receivable set forth in the Schedule of
Receivables is true and accurate in all material respects.
27. FINAL SCHEDULED PAYMENT DATE. No Receivable has a final
scheduled payment date after April 30, 2000.
28. CERTAIN CHARACTERISTICS. (A) Each Receivable had a
remaining maturity, as of the Cutoff Date, of not more than 59 months; (B)
each Receivable had an original maturity of not more than 60 months; (C) each
Receivable had a remaining Principal Balance as of the Cutoff Date of at
least $250.00 and not more than $28,000; (D) each Receivable has an Annual
Percentage Rate of at least 14.0% and not more than 33.0%; (E) no Receivable
was more than 30 days past due as of the Cutoff Date and (F) no funds have
been advanced by the Seller, AFS, any Dealer, or anyone acting on behalf of
any of them in order to cause any Receivable to qualify under clause (E)
above.
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SCHEDULE C
SERVICING POLICIES AND PROCEDURES
NOTE: APPLICABLE TIME PERIODS WILL VARY BY STATE
COMPLIANCE WITH STATE COLLECTION LAWS IS REQUIRED OF ALL AMERICREDIT
COLLECTION PERSONNEL. ADDITIONALLY, AMERICREDIT HAS CHOSEN TO FOLLOW THE
GUIDELINES OF THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT (FDCPA).
THE COLLECTION PROCESS
Customer is issued a monthly billing statement 16 to 20 days
before payment is due.
A. All accounts are issued to the Computer Assisted Collection
System (CACS) at 5 days delinquent or at such other dates of
delinquency as determined by historical payment patterns of
the account.
B. Accounts are then segregated into two groups, those less
than 30 days delinquent and those over 30 days delinquent.
C. Accounts less than 30 days delinquent are further segregated
into accounts that have good residential and business phone
numbers and those that do not.
D. For those that have good phone numbers, they are assigned to
the Melita Group.
E. For those without good phone numbers, they are assigned to
the front-end collector.
F. In both groups, all reasonable collection efforts are made
to avoid the account rolling over 30 days delinquent,
including the use of collection letters. Collection Letters
may be utilized between 15 and 25 days delinquent.
G. At the time the account reaches 31 days delinquent, it is
assigned to a mid-range collector. At this time the
collector identifies the necessity of any default
notification required by state law.
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H. Once the account exceeds 60 days in delinquency, it is
assigned to a hard-core collector. The hard-core collector
then continues the collection effort. If the account cannot
be resolved through normal collection efforts, i.e.
satisfactory payment arrangements, then the account may be
submitted for repossession approval, either voluntary or by
an approved outside contractor or if necessary for
sequestration approval. All repossessions and
sequestrations must be approved by the Director of
Collections or an Assistant Vice President.
I. CACS allows the individual collector to accurately document
and update each account pertaining to telephone calls and
correspondence created as a result of contact with the
customer.
REPOSSESSIONS
If repossession of the collateral occurs, whether voluntary or involuntary,
the following steps are taken:
A. Notification of repossession to proper authorities when
necessary.
B. Inventory of all personal property is taken and a condition
report is done on the vehicle. Pictures are also taken of
the vehicle.
C. Written notification, as required by state law, to
customer(s) concerning their rights of redemption or
reinstatement along with information on how to obtain any
personal property that was in the vehicle at the time of
repossession.
D. Written request to the originating dealer for all refunds
due for dealer adds.
E. Collateral disposition through public or private sale,
(dictated by state law), in a commercially reasonable
manner, whenever possible through a Manheim or Xxxxxx Auto
Auction.
F. After the collateral is liquidated, the debtor(s) is
notified in writing of the deficiency balance owed, if any.
USE OF DUE DATE CHANGES
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Due dates may be changed subject to the following conditions:
A. The account is contractually current or will be brought
current with the due date change.
B. Due date changes cannot exceed the total of 15 days over the
life of the contract.
C. The first installment payment has been paid in full.
D. Only one date change in a twelve month period.
E. Any exceptions to the above stated policy must be approved
by the Director of Collections or an Assistant Vice
President.
USE OF PAYMENT DEFERMENTS
A payment deferral is offered to customers who have encountered
TEMPORARY financial difficulties.
A. Minimum of six payments have been made on the account.
B. The account will be brought current with the deferment, but
not paid ahead.
C. A deferment fee is collected on all transactions.
D. Only one deferment transaction can be performed in a twelve
month period.
E. No more than two payments may be deferred in a twelve month
period, and no more than eight total payments may be
deferred over the life of the loan.
F. Any exceptions to the above stated policy must be approved
by the Director of Collections or Assistant Vice President.
CHARGE-OFFS
A. When a Post Repossession Notice is generated on an account,
the account is partially charged-off on the date that the
notice legally expires. The partial charge-off calculation
is based on the expected residual value of the vehicle at
time of sale. Adjustments to the account are made once
final liquidation of the vehicle occurs.
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B. It is AmeriCredit's policy that any account that is not
successfully recovered by 180 days delinquent is submitted
to the Director of Collections for approval and charge-off.
C. The current AmeriCredit policy on bankrupt accounts is to
carry the account until 365 days delinquent and then submit
to the Director of Collections for approval and charge-off.
We are currently modifying the bankruptcy policy to reflect
a partial charge-off of the unsecured portion in a Chapter
13 bankruptcy at the time of confirmation of the plan or
180 days delinquent, whichever comes first.
DEFICIENCY COLLECTIONS
A. Contact is made with the customer in an attempt to establish
acceptable payment arrangements or settlements on the
account.
B. If the customer is unwilling to do so, AmeriCredit may
invoke any legal collection remedy that the state allows,
i.e., judgements, garnishments, etc.
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