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LETTER OF CREDIT REIMBURSEMENT AGREEMENT
Dated as of June 7, 2002
among
AMERICREDlT CORP.
and
AMERICREDIT FINANCIAL SERVICES INC.
as the Borrowers
and
DEUTSCHE BANK AG, NEW YORK BRANCH
as the Issuer
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TABLE OF CONTENTS
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ARTICLE I ...................................... DEFINITIONS AND ACCOUNTING TERMS 1
SECTION 1.01 ......................................... Certain Defined Terms 1
SECTION 1.02 ................................... Computation of Time Periods 1
SECTION 1.03 .............................................. Accounting Terms 2
SECTION 1.04 ................................................... Other Terms 2
ARTICLE II ........................................ ISSUANCE OF LETTERS OF CREDIT 2
SECTION 2.01 ......................................... The Letters of Credit 2
SECTION 2.02 ................................................. Disbursements 3
SECTION 2.03 ................................................. Reimbursement 6
SECTION 2.04 ...................................................... Interest 8
SECTION 2.05 .......................................................... Fees 8
SECTION 2.06 ............................ Increased Costs; Increased Capital 8
SECTION 2.07 ......................................................... Taxes 9
SECTION 2.08 ..................................... Payments and Computations 10
SECTION 2.09 .............................................. Issuer's Records 11
SECTION 2.10 ........................................ No Liability of Issuer 11
ARTICLE III ................................................ CONDITIONS PRECEDENT 11
SECTION 3.01 ... Conditions Precedent to the Effectiveness of this Agreement 11
ARTICLE IV ....................................... REPRESENTATIONS AND WARRANTIES 14
SECTION 4.01 ............... Representations and Warranties of the Borrowers 14
SECTION 4.02 .................. Representations and Warranties of the Issuer 17
ARTICLE V ............................................ COVENANTS OF THE BORROWERS 17
SECTION 5.01 ....................... Affirmative Covenants of the Borrowers 17
SECTION 5.02 .. Negative Covenants with respect to Activities of AFS Funding 24
SECTION 5.03 ......... Covenants with respect to Activities of the Borrowers 25
ARTICLE VI ........................ EVENTS OF DEFAULT CASH COLLATERAL PROVISIONS 26
SECTION 6.01 ............................................. Events of Default 26
SECTION 6.02 .................................... Cash Collateral Provisions 28
SECTION 6.03 .................................. Mandatory Pre-Reimbursements 29
ARTICLE VII ....................................................... MISCELLANEOUS 29
SECTION 7.01 ............................................... Amendments, Etc 29
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TABLE OF CONTENTS
(continued)
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SECTION 7.02................................................... Notices, Etc 30
SECTION 7.03............................................ No Waiver; Remedies 31
SECTION 7.04............................ Costs, Expenses and Indemnification 31
SECTION 7.05.................................... Binding Effect; Termination 32
SECTION 7.06......................................... Successors and Assigns 32
SECTION 7.07................................................. No Proceedings 33
SECTION 7.08............................ Submission to Jurisdiction; Waivers 33
SECTION 7.09.......................................... WAIVERS OF JURY TRIAL 34
SECTION 7.10.................................................. GOVERNING LAW 34
SECTION 7.11...................................... Execution in Counterparts 34
SECTION 7.12....................................................... Headings 34
SECTION 7.13................................................... Severability 34
SECTION 7.14.................................................... Integration 34
SECTION 7.15............................................... Right of Set-Off 34
SECTION 7.16........................................ Limitation of Liability 35
SECTION 7.17............................ No Recourse Against Certain Persons 35
SECTION 7.18............................... Treatment of Certain Information 36
SECTION 7.19............................................... Certain Payments 36
SECTION 7.20.................................... Joint and Several Liability 36
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LIST OF EXHIBITS
Exhibit A Form of Irrevocable Letter of Credit
Exhibit B List of Series Transaction Documents for the FSA Series
Exhibit C Collateral and Reinsurance
LIST OF APPENDICES
Appendix A Certain Definitions
<PAGE>
LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of June 7, 2002, by
and among AMERICREDIT CORP., a Texas corporation ("ACC"), AMERICREDIT FINANCIAL
SERVICES INC., a Delaware corporation ("ACFS"; together with ACC, each a
"Borrower" and collectively, the "Borrowers"), and DEUTSCHE BANK AG, a German
banking corporation acting through its New York Branch, as issuer (together with
its successors in such capacity, the "Issuer").
RECITALS
1. AFS Funding Corp. ("AFS Funding") has sold pools of receivables to
the Underlying Trusts (as defined herein), which have issued two series of
asset-backed notes or certificates designated Series 2001-B and Series 2001-D
(each a "Designated Series") which will be repaid by the proceeds of, or
represent an interest in, as the case may be, such pools of receivables.
2. FSA (as defined herein) has issued insurance policies with respect
to payments due under each Designated Series and has also issued, and may from
time to time issue, insurance policies with respect to other series in effect on
the date hereof and as may hereafter be in effect that are supported by the
Spread Account Agreement (as defined herein) (all such series, including the
Designated Series, "FSA Series").
3. The Borrowers have requested that the Issuer issue letters of credit
for the joint and several account of the Borrowers in an initial aggregate
stated amount of $130,029,229 to provide credit support to FSA under its
insurance policies for such FSA Series.
4. Upon the terms and conditions contained in this Agreement and the
other Transaction Documents, the Issuer is willing to provide such letters of
credit for the account of the Borrowers.
AGREEMENTS
In consideration of the premises and of the agreements herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrowers and the Issuer hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms. Certain capitalized terms used in
this Agreement and not otherwise defined herein shall have the respective
meanings set forth in Appendix A hereto.
SECTION 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding." Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed and
references in this Agreement to months and years shall be to calendar months and
calendar years unless otherwise specified.
<PAGE>
SECTION 1.03 Accounting Terms. All accounting terms not specifically
defined otherwise herein shall have the meaning customarily given in accordance
with GAAP, and all financial computations hereunder shall be computed, unless
specifically provided otherwise herein, in accordance with GAAP.
SECTION 1.04 Other Terms. Any references herein to Exhibits, Schedules,
Appendices, Sections or Articles are references to Exhibits, Schedules,
Appendices, Sections or Articles of this Agreement, unless otherwise specified.
The words "including" and "include" are deemed to be followed by the words
"without limitation."
ARTICLE II
ISSUANCE OF LETTERS OF CREDIT
SECTION 2.01 The Letters of Credit.
(a) On and subject to the terms and conditions hereinafter set forth,
the Issuer shall issue the following letters of credit (collectively, the
"Letters of Credit") on the date hereof (i) Letter of Credit No. S-14699 with a
Maximum Stated Amount initially equal to $52,581,286 for a term expiring on
January 5, 2004 (the "2OO1-B Scheduled Expiry Date") and (ii) Letter of
Credit No. S-14700 with a Maximum Stated Amount initially equal to $77,447,943
for a term expiring on April 5, 2004 (the "2001-D Scheduled Expiry Date";
together with the 2001-B Scheduled Expiry Date, each a "Scheduled Expire
Date"). Each Letter of Credit shall be substantially in the form of Exhibit A.
(b) The Available Stated Amount and Maximum Stated Amount for
any Letter of Credit shall be changed as follows:
(i) The Available Stated Amount for a Letter of Credit shall be
reduced dollar-for-dollar by the amount of any drawing thereunder
(including any drawing honored on a Distribution Date) on the date such
drawing is honored by the Issuer.
(ii) The Maximum Stated Amount for a Letter of Credit shall be
reduced dollar-for-dollar on each Distribution Date with respect to the
related Notes of a Designated Series, so long as no Insurance Agreement
Event of Default exists with respect to any FSA Series, to the extent,
if any, that the Available Enhancement Amount on the preceding
Distribution Date exceeds the Maximum Enhancement Amount, after giving
effect to all deposits to and withdrawals from the Spread Account for
such related Notes and payments of principal of such related Notes in
respect of such Distribution Date; provided that reduction of the
Maximum Stated Amount shall resume if and when no Insurance Agreement
Event of Default shall be continuing (due to waiver or otherwise). The
Borrowers shall deliver to the Issuer (with a copy to FSA) a
certificate in the form of Annex C to the applicable Letter of Credit
on each Distribution Date in connection with each such reduction.
(iii) The Available Stated Amount for a Letter of Credit shall be
reinstated dollar-for-dollar to the extent of reimbursement of drawings
under such Letter of Credit, but not in excess of the Maximum Stated
Amount. Any reduction of the Available Stated Amount shall be final and
shall not be subject to reinstatement except as provided in the
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previous sentence and except in the case of manifest error, and the
amount of reinstatement shall be the amount of such reimbursement, net
of any interest. For purposes of such reinstatement, reimbursement of
drawings under a Letter of Credit shall include only amounts delivered
to the Issuer by FSA pursuant to Section 2.03(b) or (c) and the amount
of interest deducted shall include only interest actually paid to FSA
as provided in the related Insurance and Indemnity Agreement in respect
of such Policy Payments. FSA shall deliver to the Issuer a certificate
in the form of Annex D to the applicable Letter of Credit in connection
with each such reinstatement, and any such reinstatement shall become
effective immediately upon receipt by the Issuer of such certificate;
provided that the Issuer may reverse any such reinstatement in the case
of manifest error so long as the Issuer sends written notice of such
reversal to FSA within 10 Business Days of the Issuer's receipt of such
certificate.
If an Insurance Agreement Event of Default or Trigger Event shall
have occurred and be continuing, FSA may, by delivering a certificate
in the form of Annex E to the applicable Letter of Credit, direct the
Issuer to reduce the Maximum Stated Amount under each Letter of Credit
and cancel any outstanding Spread Account Replacement Reinsurance (but
only on a pro rata basis as between all outstanding Letters of Credit
and all outstanding Spread Account Replacement Reinsurance) to the
extent FSA determines in good faith that FSA's remaining exposure under
the Policies is investment grade based upon rating agency levels of
coverage for expected losses without the benefit of the reduced amount
of the Letters of Credit and Spread Account Replacement Reinsurance.
SECTION 2.02 Disbursements
(a) The Borrowers agree with respect to each Letter of Credit that
if FSA will make a Policy Payment under the related Policy on any Insured
Distribution Date then, at anytime on or after the Business Day prior to the
Distribution Date preceding such Insured Distribution Date, FSA shall have the
right to draw under the applicable Letter of Credit (determined in accordance
with Section 2.02(c)) in an amount not exceeding the lesser of the amount of
such Policy Payment and the Available Stated Amount of such Letter of Credit,
either for the purpose of making such Policy Payment or as reimbursement for
making such Policy Payment.
(b) FSA agrees that it shall first apply amounts (including with
respect to Subsequent Reinsurance, amounts deemed available in accordance with
the definition thereof), if any, from the following sources to make such Policy
Payment:
(i) to the extent available pursuant to the Spread Account
Agreement, the Spread Accounts for the related Notes and the
asset-backed notes and certificates issued in connection with all other
FSA Series; or
(ii) Subsequent Reinsurance.
(c) With respect to any Letter of Credit, all reinsurance of the
Policies shall be Excess of FSA's Loss Protection provided by such Letter
of Credit and shall be for the benefit solely of FSA, except that the Loss
Protection provided by such Letter of Credit shall be Excess of any reinsurance
that constitutes Subsequent Reinsurance (including, with respect to Subsequent
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<PAGE>
Reinsurance, amounts deemed available in accordance with the definition
thereof). Except as provided in the preceding sentence or as expressly otherwise
provided with respect to any FSA Series (with the written agreement of the
parties to the applicable Series Transaction Documents), any Letter of Credit
shall be Excess of all other Loss Protection for any FSA Series, including
subordinate trenches of securities not insured by FSA. FSA covenants and agrees
that, before entering into any agreement for Spread Account Replacement
Reinsurance with respect to any Policy, FSA will provide written notice to the
Issuer as to whether such Spread Account Replacement Reinsurance is or is not
Qualified Subsequent Reinsurance. FSA and each Borrower agree that (i) the
Issuer shall be deemed to have provided Loss Protection with respect to an FSA
Series as of the effective date of such Series and (ii) any Loss Protection
provided subsequent to such effective date shall constitute Subsequent
Reinsurance.
(d) Upon presentation by FSA to the Issuer of a certificate in the form
of Annex A to the applicable Letter of Credit, and subject to the terms and
conditions set forth herein and in the applicable Letter of Credit, the Issuer
shall make a disbursement (such disbursement, a "LOC Disbursement") at the time,
in the manner and to the account specified in the applicable Letter of Credit.
(e) Upon presentation by FSA to the Issuer of a certificate in the
form of Annex B to the applicable Letter of Credit following the occurrence of
any of the events described in clause (f) below, and subject to the terms and
conditions set forth herein and in the applicable Letter of Credit, the Issuer
shall make a disbursement (such disbursement, a "LOC Termination Disbursement")
at the time, in the manner and to the account specified in the applicable Letter
of Credit.
(f) If on any day (i) the short-term debt or deposit rating of the
Issuer shall be withdrawn by S&P or Moody's or downgraded below A-l by S&P or
below P-l by Moody's or (ii) the long-term debt rating of the Issuer shall be
downgraded below A- by S&P or below A3 by Moody's or (iii) the Issuer has
notified FSA and the Borrowers (and has not retracted such notification) that
its compliance with any of its obligations hereunder would be unlawful or (iv)
such day is the second Business Day prior to the Scheduled Expiry Date for any
Letter of Credit, and
(A) there shall not have been appointed a successor institution to
act as Issuer which (x)(1) has a short-term debt or deposit rating of at
least A-1 by S&P and P-1 by Moody's, (2) has a long-term debt or deposit
rating of at least A- by S&P and A3 by Moody's and (3) has been consented to
by FSA (such consent not to be unreasonably withheld or delayed) or (y) is
otherwise approved in writing by FSA or, in the alternative,
(B) the Letter of Credit with respect to the Designated Series
shall not have otherwise been replaced or substituted with (1) the funding
of the Spread Account with cash, (2) other cash collateral accounts,
overcollateralization or subordinated securities or (3) a surety bond or
other similar arrangement, in each case in an amount equal to the aggregate
Available Stated Amount for all Letters of Credit (or the applicable Letter
of Credit in the case of the event specified in clause (f)(iv) above);
provided, however, that any form of substitute credit enhancement referred
to in the foregoing clauses (2) and (3) shall be approved by FSA and the
Rating Agencies;
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then
(x) in the case of the occurrence of the event specified in
clause (f)(iv) above, (1) FSA may request an LOC Termination
Disbursement for the applicable Letter of Credit in an amount equal to
the Available Stated Amount of the applicable Letter of Credit and
cause the amount of such LOC Termination Disbursement to be deposited
in a separate segregated collateral account for the applicable Letter
of Credit maintained with a Person acting as "Collateral Agent" under
the Spread Account Agreement, or such other Person otherwise approved
in writing by the Issuer and FSA, and invested in Cash Equivalents
(with all interest and/or gains with respect to such Cash Equivalents
being for the account of the Issuer and payable to the Issuer on each
Distribution Date) and shall use such funds on or prior to the
applicable Standard Termination Date in the same manner as drawings
under the applicable Letter of Credit hereunder in accordance with
Sections 2.02(a) and (b) and (2) the Issuer and/or the Borrowers will
cause to be executed and delivered to FSA such documentation as FSA
may reasonably request to grant FSA a security interest in such
account; provided that, concurrently with the making of an SPE Loan
(as defined in clause (y) below), all of such funds shall be delivered
to the Issuer; or
(y) in the case of the occurrence of an event specified in
clause (f)(i), (f)(ii) or (f)(iii) above, regardless of whether an
event specified in clause (f)(iv) has occurred and the deposit
referred to in clause (x) above has been made, within 30 days after
the occurrence of such event, at FSA's written request, the Issuer
shall make a loan (each, an "SPE Loan") in an amount equal to the
aggregate Available Stated Amount of all Letters of Credit to a
bankruptcy-remote special purpose Person (an "SPE") in which one or
both of the Borrowers shall hold the equity interest, and the
Borrowers and the Issuer shall effect such documentation as shall be
appropriate to effect such SPE Loan which is reasonably acceptable to
the Issuer and FSA (which documentation shall provide, among other
things, that the proceeds of such SPE Loan be deposited in a special
segregated collateral account for each Letter of Credit and used on or
prior to the applicable Standard Termination Date in the same manner
as drawings under the Letters of Credit in accordance with Sections
2.02(a) and (b) and reimbursed in the manner provided in Section 2.03
(in the case of an SPE Loan, as though such SPE Loan were a Letter of
Credit made on the date of issuance of having the Standard Termination
Date of and having an "Available Stated Amount" and a "Maximum Stated
Amount" equal to the Available Stated Amount and the Maximum Stated
Amount, respectively, of the corresponding Letter of Credit)). In the
event that the Issuer or the Borrowers shall breach their respective
obligations under this clause (y) such that the SPE Loan is not made,
FSA (without prejudice to other remedies it may have) may at its
option draw upon the Letters of Credit in the manner set forth in
clause (x) above, in which case such drawing will be applied as set
forth in such clause (x).
Upon the making of an LOC Termination Disbursement or an SPE Loan, the Available
Stated Amount and the Maximum Stated Amount of the applicable Letter of Credit
shall automatically be
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reduced to zero and such Letter of Credit shall terminate and be returned to the
Issuer, but all reimbursement, fee and other provisions regarding the operation
of each Letter of Credit thereafter shall apply to the corresponding cash
collateral.
(g) A Letter of Credit may be not drawn upon (whether pursuant to
Section 2.02(d) or (e)) after the earliest to occur of (i) the date on which
FSA's liability under the related Policy has expired, (ii) the date on which the
Available Stated Amount and Maximum Stated Amount with respect to such Letter of
Credit are reduced to zero (other than pursuant to Section 2.02(f) above) and
reinstatement thereof is no longer available under Section 2.Ol(b)(iii) (the
earlier of the dates specified in clause (i) and clause (ii) being referred to
as the "Standard Termination Date" for such Letter of Credit) and (iii) the
Scheduled Expiry Date for such Letter of Credit (such earliest date, the "Expiry
Date" for such Letter of Credit).
SECTION 2.03 Reimbursement.
(a) Except as set forth in Section 2.03(b) below, the amount of all
drawings under a Letter of Credit shall be payable by the Borrowers in full on
the Business Day immediately following the date such drawing is honored.
(b) (i) FSA shall repay any amount drawn on a Letter of Credit (other
than any LOC Termination Disbursement), if such amount is not applied to make
the Policy Payment with respect to which it was drawn or to reimburse FSA with
respect thereto, within five Business Days after the date such Policy Payment
was due, together with reinvestment earnings, if any, thereon.
(ii) On each Distribution Date with respect to the related Notes
of a Designated Series, so long as no Insurance Agreement Event of Default
exists with respect to any FSA Series, FSA shall cause to be released from
the collateral account referred to in Section 2.02(f) for such Letter of
Credit and delivered to the Issuer (or the SPE, if such cash collateral is
from the proceeds of an SPE Loan) an amount equal to the excess, if any, of
the Available Enhancement Amount on the preceding Distribution Date over the
Maximum Enhancement Amount, after giving effect to all deposits to and
withdrawals from the Spread Account for the related Notes and payments of
principal of the related Notes in respect of such Distribution Date;
provided that the release of cash collateral pursuant to this clause (ii)
shall resume if and when no Insurance Agreement Event of Default shall be
continuing (due to waiver or otherwise).
(iii) On the Standard Termination Date for a Letter of Credit, FSA
shall cause to be released from the collateral account referred to in
Section 2.02(Q for such Letter of Credit and delivered to the Issuer (or the
SPE, if such cash collateral is from the proceeds of an SPE Loan) any
remaining balance therein so long as no Insurance Agreement Event of Default
or Trigger Event exists with respect to any of the Notes in any FSA Series.
(iv) If an Insurance Agreement Event of Default or Trigger Event
exists with respect to any of the Notes in any FSA Series and the Standard
Termination Date has not yet occurred, FSA shall cause to be released from
the collateral account referred to in Section 2.02(f) for such Letter of
Credit and delivered to the Issuer (or the SPE, if such cash
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collateral is from the proceeds of an SPE Loan) any remaining balance
therein on the later of (A) the applicable Standard Termination Date and
(B) the earlier of (1) the date on which no Insurance Agreement Event
of Default or Trigger Event shall be continuing (due to waiver, cure or
otherwise) with respect to any of the Notes or (2) the expiration of all
of the Policies outstanding at the date of the first to occur of such
Insurance Agreement Event of Default or Trigger Event; provided that (a)
the aggregate amount of the cash collateral balances and the Available
Stated Amount for all Letters of Credit under this Agreement thereafter
shall not exceed such aggregate amount at the date of such Insurance
Agreement Event of Default or Trigger Event except for increases thereafter
due to reinstatements of the Available Stated Amounts under Section
2.0l(b)(iii) and (b) at each subsequent Standard Termination Date with
respect to any Letter of Credit (or SPE Loan, as applicable), the amount of
the cash collateral balances and Maximum Stated Amount for each Letter of
Credit (or SPE Loan as applicable) shall be reduced in order, starting with
the Letter of Credit (or SPE Loan, as applicable) having the earliest
Effective Date and reducing the cash collateral balance or Maximum Stated
Amount as applicable for such Letter of Credit (or SPE Loan, as applicable)
to zero before reducing the cash collateral balance or Maximum Stated
Amount as applicable of the Letter of Credit (or SPE Loan as applicable)
having the next earliest Effective Date, until the aggregate amount of the
cash collateral balances and Maximum Stated Amount of all Letters of Credit
(and SPE Loans) under this Agreement is equal to the sum of (I) the
aggregate par amount of Notes of any Designated Series outstanding at such
date and (II) the aggregate of the Spread Account Shortfalls and
warehousing shortfalls (if any) with respect to the Notes of other FSA
Series that were outstanding at the date of such Insurance Agreement Event
of Default or Trigger Event, if such sum is less than such aggregate amount
of the cash collateral balances and the Maximum Stated Amount of all
Letters of Credit (and SPE Loans) at such date.
(c) FSA in respect of its Policy Payments, all of FSA's quota share
reinsurers of the Policies, all of FSA's reinsurers participating in any loss
layer with respect to the Policies and all of FSA's reinsurers providing Spread
Account Replacement Reinsurance in effect on the effective date of the
applicable Designated Series shall first be reimbursed in full from recoveries
for all Policy Payments, in the case of FSA, and all reinsurance policy
payments, in the case of such reinsurers, before any reimbursement of drawings
under any Letter of Credit pursuant to this Section 2.03(c) to the extent that
such Policy Payments or reinsurance policy payments relate to coverage that is
Excess of the Loss Protection provided by such Letter of Credit. Thereafter, FSA
shall deliver to the Issuer all amounts that it receives in respect of policy
payment reimbursements pursuant to the Series Transaction Documents relating to
an FSA Series in order to reimburse drawings under the Letters of Credit and
other amounts owing to the Issuer hereunder, including all recoveries received
by FSA for Policy Payments for which drawings were made under a Letter of
Credit. If the Repayment Amount in respect of such Letter of Credit has been
paid in full, any such recoveries shall be applied to the remaining Letters of
Credit. For purposes of the foregoing, reimbursement by FSA of drawings under
any Letter of Credit shall include interest only to the extent provided in the
related Insurance and Indemnity Agreement in respect of such Policy Payments for
which the withdrawals were made and only to the extent recoveries are sufficient
therefor. FSA shall retain full discretion in exercising remedies in respect of
the Policies, including the right to terminate an FSA Series Servicer and to
designate a replacement FSA Series Servicer and the right to amend or waive any
provision of any
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Series Transaction Document relating to any FSA Series, to the extent FSA has
such rights under such Series Transaction Document; provided that FSA shall act
in good faith in doing so.
(d) The Borrowers shall pay or cause to be paid the principal portion
of the Repayment Amount with respect to each Letter of Credit as follows: (i) on
each Distribution Date, the Borrowers will cause to be paid to the Issuer an
amount equal to the Nonallocated Amount Available on such Distribution Date and
(ii) on the Scheduled Expiry Date for any Letter of Credit, the Borrowers shall
pay all remaining amounts with respect to unreimbursed drawings under such
Letter of credit (up to a pro rata portion of the Recourse Limit with respect to
such Letter of Credit). In addition, the Borrowers shall pay to the Issuer when
due all interest, costs and expenses incurred by the Issuer or any Indemnified
Party hereunder.
SECTION 2.04 Interest. Any drawing under a Letter of Credit shall
accrue interest from the date of such drawing to the date of payment thereof in
full (after as well as before judgment) at the rates specified in the Fee
Letter. Such interest shall be payable by the Borrowers on the dates specified
in the Fee Letter.
SECTION 2.05 Fees. The Borrowers shall pay to the Issuer the fees in
the amounts, at the times and in the manner described in the Fee Letter.
SECTION 2.06 Increased Costs; Increased Capital.
(a) In the event that the Issuer shall have reasonably determined that
any Regulatory Change shall:
(i) subject the Issuer to any Taxes of any kind whatsoever, other
than Excluded Taxes, with respect to this Agreement or the letters of
Credit, or change the basis of taxation of payments in respect thereof; or
(ii) impose, modify or hold applicable any reserve, special
deposit, compulsory loan, assessment, increased cost or similar requirement
against assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, the Issuer or any office of the Issuer in respect
of the Letters of Credit,
and the result of any of the foregoing is to increase the cost to the Issuer, by
an amount which the Issuer deems to be material, of maintaining the Letters of
Credit or to reduce any amount receivable in respect thereof, then, in any such
case, after submission by the Issuer to the Borrowers of written request
therefore, the Borrowers shall pay to the Issuer any additional amounts
necessary to compensate the Issuer for such increased cost or reduced amount
receivable.
(b) In the event that the Issuer shall have determined that any
Regulatory Change regarding capital adequacy has the effect of reducing the rate
of return on the Issuer's capital or on the capital of any Person directly or
indirectly owning or controlling the Issuer as a consequence of its obligations
hereunder or its maintenance of the Letters of Credit to a level below that
which the Issuer or such Person could have achieved but for such Regulatory
Change (taking into consideration the Issuer's or such Person's policies with
respect to capital adequacy) by an amount deemed by the
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Issuer or such Person to be material, then from time to time, after submission
by the Issuer to the Borrowers of written request therefor, the Borrowers shall
pay to the Issuer such additional amount or amounts as will compensate the
Issuer or such Person, as the case may be, for such reduction.
(c) The Issuer agrees that it shall use its reasonable efforts to
reduce or eliminate any claim for compensation pursuant to this Section 2.06.
(d) The Issuer will furnish to the Borrowers (together with its request
for compensation) a certificate prepared in good faith setting forth the basis
and the amount of each request by the Issuer for any such increased amounts
referred to in this Section 2.06. Any such certificate shall be conclusive
absent manifest error. Failure on the part of the Issuer to demand compensation
for any amount pursuant to this Section 2.06 with respect to any period shall
not constitute a waiver of the Issuer's right to demand compensation with
respect to such period. All such amounts shall be due and payable by the
Borrowers to the Issuer within five Business Days following receipt by the
Borrowers of such certificate (or, if earlier, on the Facility Maturity Date or
when earlier required to be paid as provided herein).
SECTION 2.07 Taxes.
(a) All payments made to the Issuer under this Agreement and the other
Transaction Documents shall, to the extent allowed by law, be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority (collectively, "Taxes"),
excluding income taxes, franchise taxes imposed in lieu of income taxes or any
other taxes based on or measured by the overall net income of the Issuer by the
jurisdiction in which the Issuer is incorporated or has its principal place of
business (such excluded taxes being herein called "Excluded Taxes"). If any
Taxes, other than Excluded Taxes, are required to be withheld from any amounts
payable to the Issuer hereunder or under any other Transaction Document, then
after submission by the Issuer to the Borrowers of a written request therefor,
the amounts so payable to the Issuer shall be increased, and the Borrowers shall
be liable to pay to the Issuer the amount of such increase, to the extent
necessary to yield to the Issuer (after payment of all such Taxes) interest or
any such other amounts payable hereunder or thereunder at the rates or in the
amounts specified herein or therein; provided, however that the amounts so
payable to the Issuer shall not be increased pursuant, to this Section 2.07(a)
to the extent such requirement to withhold results from the failure of such
Person to comply with Section 2.07(c). Whenever any Taxes are payable on or with
respect to amounts payable to the Issuer, as promptly as possible thereafter the
Borrowers shall send to the Issuer a certified copy of an original official
receipt showing payment thereof. If the Borrowers fai1 to pay any Taxes when due
to the appropriate taxing authority or fails to remit to the Issuer (as
applicable), the required receipts or other required documentary evidence, the
Borrowers shall pay to the Issuer any incremental taxes, interest or penalties
that may become payable by the Issuer as a result of any such failure.
(b) The Issuer will furnish to the Borrowers a certificate prepared in
good faith setting forth the basis and amount of each request by the Issuer for
such Taxes. Any such certificate of the Issuer shall be conclusive absent
manifest error. Failure on the part of the Issuer to demand additional amounts
pursuant to Section 2.07(a) with respect to any period shall not constitute a
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waiver of the right of the Issuer to demand compensation with respect to such
period. All such amounts shall be due and payable by the Borrowers to the Issuer
on the date five Business Days following receipt by the Borrowers of such
certificate (or, if earlier, on the Facility Maturity Date or when earlier
required to be paid as provided herein).
(c) The Issuer shall, to the extent that it may then do so under
applicable laws and regulations, deliver to the Borrowers (i) within 15 days
after the date hereof, two (or such other number as may from time to time be
prescribed by applicable laws or regulations) duly completed copies of IRS Form
W-8ECI or Form W-8BEN (or any successor forms or other certificates or
statements which may be required from time to time by the relevant United States
taxing authorities or applicable laws or regulations), as appropriate, to permit
the Borrowers to make payments hereunder for the account of the Issuer, without
deduction or withholding of United States federal income or similar taxes and
(ii) upon the obsolescence of or after the occurrence of any event requiring a
change in, any form or certificate previously delivered pursuant to this Section
2.07(c), copies (in such numbers as may be from time to time be prescribed by
applicable laws or regulations) of such additional, amended or successor forms,
certificates or statements as may be required under applicable laws or
regulations to permit the Borrowers to make payments hereunder for the account
of the Issuer, without deduction or withholding of United States federal income
or similar taxes.
(d) In addition, the Borrowers agree to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Transaction Document.
SECTION 2.08 Payments and Computations.
(a) The Borrowers shall make each payment hereunder, not later than
1:30 p.m. (New York City time) on the day when due by wire transfer in Dollars
and in immediately available funds, without set-off for counterclaim, to the
Issuer at its account number 602-001-19 (ABA number 021-00l-022; Reference:
AmeriCredit LOC) maintained at Deutsche Bank Trust Company Americas, or such
other account as the Issuer shall designate in writing to the Borrowers.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or any fee payable hereunder, as the case may
be.
(c) All computations of interest and fees shall be made by the Issuer
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fee is payable.
SECTION 2.09 Issuer's Records, The Issuer's records regarding the
amount of each drawing under a Letter of Credit, each payment by the Borrowers
of principal and interest on the drawings under a Letter of Credit and other
information relating to the Letters of Credit shall be presumptively correct
absent manifest error.
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SECTION 2.10 No Liability of Issuer. Each Borrower acknowledges that
the Issuer is not responsible for any risks of acts or omissions of FSA and any
other beneficiary or transferee of any Letter of Credit with respect to its use
of any Letter of Credit. In furtherance of, and in addition to, the foregoing,
neither the Issuer nor any of its employees, officers or directors shall be
liable or responsible for: (a) the use which may be made of any Letter of Credit
or any acts or omissions of FSA and any transferee in connection therewith; (b)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (c) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or the proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason; (d) failure of the beneficiary to comply fully with conditions
required in order to demand payment under any Letter of Credit (other than the
condition that it present a certificate in the form of Annex A to such Letter of
Credit complying with the terms and conditions of such Letter of Credit); (e)
errors, omissions, interruptions or delays in transmissions or delivery of any
messages, by mail, cable, telegraph, telex or otherwise; (f) any loss or delay
in the transmission or otherwise of any document or draft required in order to
make a LOC Disbursement; (g) payment by the Issuer against presentation of
documents which do not comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit; or (h) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit; provided, however, that the Issuer
shall be liable to the Borrowers, to the extent of any direct, as opposed to
consequential, damages suffered by the Borrowers which are determined in a final
and non-appealable decision of a court of competent jurisdiction to have been
caused by the Issuer's willful misconduct in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or the Issuer's willful failure to make lawful payment under a Letter of
Credit after the presentation to the Issuer by FSA of a certificate strictly
complying with the terms and conditions of such Letter of Credit. In furtherance
and not in limitation of the foregoing, the Issuer may accept documents that
appear on their face to be in order, without responsibility for further
investigation and shall not be liable or responsible for any other circumstances
so long as it shall have acted in good faith.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 Conditions Precedent to the Effectiveness of this
Agreement. The following constitute conditions precedent to effectiveness of
this Agreement and the obligation of the Issuer to issue any Letter of Credit
under this Agreement (provided that nonsatisfaction of any of the following
conditions shall be deemed waived, to the extent not expressly waived by the
Issuer, upon delivery to FSA of the Letters of Credit):
(a) Representations and Warranties. On the Effective Date and after
giving effect to the issuance of the Letters of Credit on such date, (i) all
representations and warranties of the Borrowers contained herein or in any
Transaction Document or otherwise made by any Borrower in writing pursuant to
any of the provisions hereof or thereof and (ii) all representations and
warranties of AFS Funding and the Spread Account Depositor contained in any
Series Transaction Document
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relating to any FSA Series shall be true and correct in all material respects
(except to the extent such representations and warranties specifically relate to
an earlier date, then such representations and warranties are true and correct
in all material respects as of such earlier date).
(b) No Defaults. On the Effective Date and after giving effect to the
issuance of the Letters of Credit on such date, no Event of Default shall have
occurred.
(c) Other Transaction Documents. Each other Transaction Document not
otherwise referred to in this Section 3.01 shall have been duly executed and
delivered by the parties thereto.
(d) Expenses. The Borrowers shall have paid all reasonable and
appropriately invoiced costs and expenses of the Issuer payable by the Borrowers
in connection with the transactions contemplated hereby.
(e) Termination of Credit Agreement. The Issuer shall have received
evidence that each of (i) the Credit Agreement dated as of October 14, 1999
among AFS Funding, the Borrowers, AmeriCredit Management Company, various
financial institutions, Bankers Trust Company, as Lender Collateral Agent, and
Credit Suisse First Boston, New York Branch, as Administrative Agent, as
amended, and (ii) the Replacement Cash Collateral Agreement dated as of October
14, 1999 among AFS Funding, FSA, Credit Suisse First Boston, New York Branch, as
Administrative Agent, and Bank One, N.A., as Collateral Agent, as amended, shall
have been terminated, and all amounts outstanding thereunder shall have been
paid in full.
(f) Other Documents. The Issuer shall have received the following, each
dated as of the Effective Date or as otherwise permitted below:
(i) A certificate of the Secretary of State of the applicable
jurisdiction of incorporation of each Borrower as to the legal existence
and good standing of such Borrower, together with a copy of such Borrower's
certificate of incorporation, certified as a true and correct copy by such
Secretary of State, each dated on or within 20 Business Days prior to the
Effective Date;
(ii) A certificate of an Authorized Officer of each Borrower,
certifying that (i) the copies of the unaudited (or audited, in the case of
ACC) balance sheet of such Borrower for the fiscal year ended June 30,
2001, and the related statements of income, shareholders' equity and cash
flows for such fiscal year attached to such certificate are complete, true
and correct and have been prepared in accordance with GAAP consistently
applied and present fairly the financial position of such Borrower as of
such date and the results of its operations for such period, and (ii) there
have been no changes since the end of the fiscal year ended June 30, 2001
in the assets, liabilities, financial condition, operations, business or
prospects of such Borrower, other than changes in the ordinary course
of business the effect of which have not, in the aggregate, been materially
adverse to such Borrower;
(iii) A certificate of an Authorized Officer of each Borrower,
certifying(A) the names and true signatures of the Authorized Officers of
such Borrower, (B) that the copy
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of the Bylaws of such Borrower attached thereto is a complete and correct
copy and that such Bylaws have not been amended, modified or supplemented
and are in full force and effect, and (C) that the copy of the resolutions
of the Board of Directors of such Borrower approving the transactions
contemplated by the Transaction Documents is a complete and correct copy
and that such resolutions are in full force and effect and are the only
resolutions relating to the matters contemplated by the Transaction
Documents;
(iv) Certificates of the Secretary of State of Texas and, except
in the case of ACC, of the Secretary of State of its jurisdiction of
incorporation as to the qualification of each Borrower to do business, and
the good standing thereof, in such jurisdiction and Texas, each dated on or
within 20 Business Days prior to the Effective Date;
(v) A certificate of an Authorized Officer of ACFS to the
effect that the conditions set forth in Sections 3.0l(a) and 3.0l(b)
have been satisfied;
(vi) Opinions (including bringdown opinions as to bankruptcy
matters) of Dewey Ballantine, LLP and Chris Choate, Esq., counsel for the
Borrowers, dated the Effective Date and addressed to, and reasonably
satisfactory in form and substance to, the Issuer;
(vii) an Officer's Certificate of ACFS stating that ACFS or
another Person approved in writing by the Issuer is the servicer for each
FSA Series;
(viii) an Officer's Certificate of ACFS certifying copies of the
Series Transaction Documents for each Designated Series and stating that,
as of the Effective Date, each of the Series Transaction Documents relating
to any FSA Series is in full force and effect, no party to any such
document is in default of its obligations thereunder, and all of the
representations and warranties of the Borrowers set forth in the Series
Transaction Documents relating to any FSA Series are true and correct
(except to the extent such representations and warranties specifically
relate to an earlier date, then such representations and warranties are
true and correct as of such earlier date);
(ix) an Officer's Certificate of each Borrower stating that
there shall have been no changes in the assets, liabilities, financial
condition, operations, business or prospects of any Borrower which may have
a Material Adverse Effect, including the performance of the receivables
owned or serviced by any such party; and
(x) such other documents, instruments, opinions, certificates
as the Issuer may reasonably deem necessary or desirable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as follows on the date of this Agreement and
the Effective Date, in each case, with reference to the facts and circumstances
then existing:
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(a) Organization and Good Standing. Such Borrower has been duly
organized and is validly existing as a corporation under the laws of the
jurisdiction of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted.
(b) Due Qualification. Such Borrower 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
its properties or the conduct of its business requires such qualification.
(c) Power and Authority. Such Borrower has the power and authority to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party and to carry out its terms and their terms, respectively; and the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party have been duly authorized by such Borrower by
all necessary corporate action.
(d) Binding Obligations. This Agreement and the Transaction Documents
to which such Borrower is a party have been duly executed and delivered, and
this Agreement and the other Transaction Documents to which such Borrower is a
party constitute legal, valid and binding obligations of such Borrower
enforceable in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding inequity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which such Borrower is a
party, and the fulfillment of the terms of this Agreement and the other
Transaction Documents to which such Borrower is a party, shall not conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under any indenture,
agreement, mortgage, deed of trust or other instrument to which such Borrower is
a party or by which such Borrower is bound or any of such Borrower's properties
are subject, or result in the creation or imposition of any Lien upon any of
such Borrower's properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, or violate any law, order, rule or regulation applicable to such
Borrower of any Governmental Authority having jurisdiction over such Borrower or
any of such Borrower's properties, or in any way adversely affect such
Borrower's ability to perform such Borrower's obligations under this Agreement
or the other Transaction Documents to which such Borrower is a party.
(f) No Proceedings. There are no proceedings or investigations pending
or, to such Borrower's knowledge, threatened against such Borrower, before any
court or other Governmental Authority having jurisdiction over such Borrower or
its properties (A) asserting the invalidity of this Agreement or any of the
other Transaction Documents, (B) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or any of the other Transaction
Documents, (C) seeking any determination or ruling that might materially and
adversely affect the performance by such Borrower of its obligations under, or
the validity or enforceability of,
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this Agreement or any of the other Transaction Documents, (D) involving any
Borrower, the Spread Account Depositor or the Spread Accounts for FSA Series or
(E) that could have a Material Adverse Effect.
(g) No Consents. Such Borrower is not required to obtain the consent of
any other Person which has not been obtained, or any consent, license, approval
or authorization of, or registration or declaration with, any Governmental
Authority in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or the other Transaction Documents to which it
is a party.
(h) Chief Executive Office. The chief executive office of ACC and ACFS
is located at 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102.
(i) Solvency. Such Borrower is solvent and will not become insolvent
after giving effect to the transactions contemplated by this Agreement and the
Transaction Documents. Such Borrower, after giving effect to the transactions
contemplated by this Agreement and the other Transaction Documents, will have
adequate funds to conduct its business in the foreseeable future.
(j) Compliance With Laws. Such Borrower has complied and will comply in
all material respects with all applicable laws, rules, regulations, judgments,
agreements, decrees and orders with respect to its business and properties.
(k) Taxes. Such Borrower has filed on a timely basis all tax returns
(including foreign, federal, state, local and otherwise) required to be filed,
is not liable for taxes payable by any other Person and has paid or made
adequate provisions for the payment of all taxes, assessments and other
governmental charges due from such Borrower. No tax lien or similar adverse
claim has been filed, and no claim is being asserted, with respect to any such
tax, assessment or other governmental charge. Any taxes, fees and other
governmental charges payable by such Borrower in connection with the execution
and delivery of this Agreement and the other Transaction Documents and the
transactions contemplated hereby or thereby have been paid or shall have been
paid if and when due at or prior to the Effective Date.
(l) Information True and Correct. All information heretofore or
hereafter furnished by or on behalf of such Borrower to the Issuer in connection
with this Agreement or any Transaction Document or any transaction contemplated
hereby or thereby is and will be true and complete in all material respects and
does not and will not omit to state a material fact necessary to make the
statements contained therein not misleading.
(m) ERISA Compliance. Such Borrower is in compliance with ERISA and has
not incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) to the Pension Benefit
Guaranty Corporation (or any successor thereto) under ERISA.
(n) Financial or Other Condition. There has been no event which may
have a Material Adverse Effect, including any event which may, currently or with
the passage of time,
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materially reduce the amount on deposit in the Spread Accounts or adversely
impact the interest of such Borrower or the Spread Account Depositor in such
Spread Accounts.
(o) Investment Company Status. Such Borrower is not an "investment
company" within the meaning of the Investment Company Act, or is exempt from all
provisions of such Act.
(p) No Trade Names. Such Borrower does not have any trade names,
fictitious names, assumed names or "doing business as" names.
(q) Representation and Warranties True and Correct. Each of the
representations and warranties of such Borrower contained in the Transaction
Documents is true and correct in all material respects.
(r) Series Transaction Documents Relating to FSA Series. Each of the
Series Transaction Documents relating to an FSA Series is in full force and
effect, no party to any such document is in default of its obligations
thereunder, and all of the representations and warranties of AFS Funding and the
Spread Account Depositor set forth in such Series Transaction Documents are true
and correct (except to the extent such representations and warranties
specifically relate to an earlier date, then such representations and warranties
shall be true and correct as of such earlier date). Exhibit B sets forth a
complete and correct list of the Series Transaction Documents for each FSA
Series as of the date hereof. Exhibit C sets forth for each FSA Series (i) the
original collateral balance for such Series, (ii) the provider and the amount of
all reinsurance issued with respect to such Series, (iii) the outstanding
balance of all replacement cash collateral accounts established in connection
with such Series and (iv) the priority of draws (with the requirement that the
newest transaction (Series 2002-A) be drawn before Series 2001-D, and Series
2001-D be drawn before Series 2001-C, etc.). Each Underlying Trustee has a
perfected security interest in the property of the related Underlying Trust,
subject to no other security interests or Liens. Each of the Series Transaction
Documents relating to an FSA Series is in full force and effect, no party to
any such document is in default of its obligations thereunder, and all of the
representations and warranties of any Borrower set forth in such Series
Transaction Documents are true and correct.
(s) Financial Statements. (i) The copies of (a) the unaudited balance
sheets of ACFS for its fiscal year ended June 30, 2001, and the related
statements of income, shareholders' equity and cash flows for such fiscal year,
and (b) the audited consolidated balance sheet of ACC for its fiscal year ended
on June 30, 2001, and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year provided to the Issuer,
are complete, true and correct and have been prepared in accordance with GAAP
consistently applied and present fairly the financial position of such Persons
as of such date and the results of their operations for such periods, and (ii)
the copies of the Accountant's Report and Procedures Letter for the fiscal year
ended on June 30, 200l are true and correct.
SECTION 4.02 Representations and Warranties of the Issuer. The Issuer
represents and warrants as follows on the date of this Agreement and the
Effective Date, in each case, with reference to the facts and circumstances
then existing:
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(a) Organization and Good Standing. It is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization.
(b) Power and Authority; No Contravention. The execution, delivery and
performance by it of this Agreement are within its corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene (A) its
charter, by-laws, or other organizational documents, (B) any law, rule or
regulation applicable to it (including any such law, rule or regulation
regarding per customer lending limits), or (C) except to the extent that any
such contravention would not materially and adversely affect the obligations of
the Issuer under this Agreement or any other Transaction Document, any other
agreement to which the Issuer is a party.
(c) No Consents. No consent, license, permit, approval or authorization
of, or registration filing or declaration with any governmental authority, is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by or against it.
(d) Binding Obligations. This Agreement and the Letters of credit have
been duly executed and delivered by it, and this Agreement constitutes its
legal, valid and binding obligation enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity (without, in
the case of a bankruptcy, insolvency or reorganization of any Borrower,
affecting any right of FSA as a beneficiary under the Letters of Credit).
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01 Affirmative Covenants of the Borrowers. Until this
Agreement and each Letter of Credit shall have been terminated in accordance
with its respective terms and the Repayment Amount with respect to each Letter
of Credit shall have been repaid, the Borrowers hereby agree that:
(a) Reporting Requirements. ACFS will furnish to the Issuer:
(i) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of ACC,
consolidated balance sheets of ACC, for the fiscal quarter most recently
ended, and the related statements of income, shareholders' equity and cash
flows for such fiscal quarter and for the period beginning with the end of
the fiscal year most recently ended and ending at the end of such quarter,
prepared in accordance with GAAP consistently applied and certified by an
Authorized Officer of ACC; plus a certificate from an Authorized Officer of
ACFS certifying the percentage of total delinquencies and repossessed
assets in ACFS's serviced portfolio as of the end of such quarter, together
with back-up financial information with respect thereto as reasonably
requested by the Issuer;
(ii) as soon as available and in any event within 90 days after the
end of each fiscal year of ACC, copies of the balance sheets of ACC, as
applicable, for the fiscal year
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most recently ended, and the related statements of income, shareholders'
equity and cash flows for such fiscal year, prepared in accordance with
GAAP consistently applied and certified by an Authorized Officer of ACC;
(iii) as soon as available and in any event within 95 days after
the end of each fiscal year of ACC, copies of the consolidated balance
sheet of ACC for the fiscal year most recently ended, and the related
consolidated statements of income, shareholders' equity and cash flows for
such fiscal year, prepared in accordance with GAAP consistently applied
together with a letter (the "Accountants' Report") from a firm of
independent certified public accountants selected by ACC and acceptable to
the Issuer (the "Independent Accountants"), which letter shall be addressed
to the Issuer, to the effect that such firm has audited the books and
records of ACC, in which ACFS is included as a consolidated Subsidiary, and
issued its report thereon in connection with the audit report on the
consolidated financial statements of ACC for such fiscal year most recently
completed, and that (a) such audit was made in accordance with GAAP, and
accordingly included such test of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances;
(b) based on such audit, such consolidated financial statements for such
fiscal year present fairly, in all material respects, the consolidated
financial position of ACC and its Subsidiaries as the end of such fiscal
year and the result of its operations and its cash flows for such fiscal
year in accordance with GAAP; (c) during such audit, such firm did not note
any events, facts, circumstances, or procedures which would lead it to
conclude that the unaudited balance sheets of ACC (together with the
related statements of income, shareholders' equity, cash flows) may not
accurately reflect the financial position of ACC as of such dates and
periods; and (d) the firm is independent of ACC and each of its
Subsidiaries within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. In addition, as soon as
available and in any event within 120 days after the end of each fiscal
year of ACC, the Issuer shall be provided with a report on the application
of agreed upon procedures to three randomly selected servicer certificates
of ACFS as servicer delivered during the fiscal year most recently
completed in connection with the outstanding FSA Series for which it acts
as servicer, including the delinquency, default and loss statistics
required to be specified therein and noting whether any exceptions or
errors in such servicer certificates were found.
(iv) together with the financial statements and reports described
in clause (i), (ii) or (iii) above, a certificate of an Authorized Officer
of ACC confirming the absence of any Default or Event of Default as of such
date and as of the date of such certificate;
(v) promptly upon the same becoming available to ACC, a copy of
each material report, notice, certificate, statement, letter or other
communication relating to any FSA Series, including each annual
accountants' report relating to the servicer's certificates for any FSA
Series required to be delivered under the terms of the related Series
Transaction Documents (together with a letter permitting the Issuer to rely
on such report), each monthly servicer report and any communication
required to be delivered to the holders of any of the FSA Series or any
Rating Agency (or any other similar entity) rating any of the FSA Series;
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(vi) as soon as available and in any event within 10 days after
the end of each month, a collateral summary report with respect to all FSA
Series then outstanding in form and substance acceptable to the Issuer;
(vii) as soon as available and in any event within 10 days after
the end of each month, a report on the compliance of AFS Funding with the
trigger events and events of default set forth in the agreements pursuant
to which the FSA Series Insurer has insured the FSA Series, and promptly
(and in no event later than 3 days) following the occurrence of any default
under any such agreement, notice of such default; and
(viii) any other financial information relating to AFS Funding, the
Spread Account Depositor, any of the servicers with respect to an FSA
Series (each a "FSA Series Servicer"), any of the FSA Series or any Spread
Accounts relating to any FSA Series as shall be reasonably requested by the
Issuer.
(b) Other Certificates and Information. ACFS will furnish to the
Issuer:
(i) Immediately after any Borrower knows of the occurrence of
any Default or Event of Default, a certificate of an Authorized Officer of
ACFS specifying the nature of such event or condition and the action which
the Borrowers or AFS Funding have taken and/or propose to take with respect
thereto;
(ii) Prompt written notice of the occurrence of any default or
event of default under any of the Series Transaction Documents relating to
any of the FSA Series, including any amortization events, facility
termination events, servicer termination events, which notice shall be
given not later than the Business Day following the occurrence thereof and
which notice shall (A) specify the nature thereof and (B) be accompanied by
copies of all notices delivered to any party to any of the Series
Transaction Documents relating to any FSA Series or holder of any FSA
Series with respect thereto to the extent not delivered pursuant to any
other provision of this Agreement;
(iii) Prompt written notice if (A) any Debt by AFS Funding or the
Spread Account Depositor in excess of $100,000 is declared or shall become
due and payable prior to its stated maturity, or is called and not paid
when due, (B) a payment or other default shall have occurred under or with
respect to any other Debt in excess of $100,000 or the holder of any such
Debt has the right to declare any such Debt due and payable prior to its
stated maturity as a result of such default, (C) any drawing has been made
under any insurance policy issued by any insurer of any FSA Series which
insurance policy relates to such FSA Series; or (D) any drawing has been
made under any Spread Account relating to any FSA Series with respect to
which the cumulative outstanding drawings from such Spread Account exceed
$250,000;
(iv) Prompt written notice if (A) any citation, summons,
subpoena, order to show cause or other order naming any Borrower, AFS
Funding, the Spread Account Depositor or any FSA Series Servicer a party to
any proceeding before any Governmental Authority which related in any way
to any Transaction Document, or any FSA Series, could
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reasonably be expected to have a Material Adverse Effect or calls into
question the validity or enforceability of any of the Transaction Documents
or any Series Transaction Documents relating to any FSA Series, and include
with such notice a copy of such citation, summons, subpoena, order to show
cause or other order, (B) any lapse or other termination of any material
license, permit, franchise or other authorization issued to any Borrower,
AFS Funding, the Spread Account Depositor or any FSA Series Servicer by any
Governmental Authority, the lapse or termination of which could reasonably
be expected to result in a Material Adverse Effect, (C) any refusal by any
Governmental Authority or any other Person to renew or extend any such
material license, permit, franchise or other authorization with respect to
which such refusal could reasonably be expected to result in a Material
Adverse Effect and (D) any dispute between any Borrower, AFS Funding, the
Spread Account Depositor or any FSA Series Servicer and any Person, which
dispute could reasonably be expected to have a Material Adverse Effect;
(v) Prompt written notice of any change or publicly announced
consideration of any change by any Rating Agency in the rating of the
unsecured debt of any Borrower that would give rise to an Event of Early
Amortization, or the rating of any of the FSA Series; and
(vi) Promptly furnish such other information and financial data
as the Issuer may reasonably request.
(c) Preservation of Corporate Existence and Separate Existence of AFS
Funding and the Spread Account Depositor. ACFS shall cause AFS Funding and the
Spread Account Depositor to do or cause to be done, all things necessary on its
part to preserve and keep in fill force and effect its existence and good
standing as a corporation or business trust, as applicable, under the laws of
the jurisdiction of its incorporation or establishment, as applicable, ACFS will
I cause AFS Funding and the Spread Account Depositor to comply fully with the
Series Transaction Documents relating to any FSA Series to which each of them is
a party so as to maintain each of AFS Funding's and the Spread Account
Depositor's identity as a separate legal entity from its Affiliates and to make
it manifest to third parties that each of AFS Funding and the Spread Account
Depositor is an entity with assets and liabilities distinct from its Affiliates.
(d) Compliance with Laws. The Borrowers shall cause AFS Funding and
the Spread Account Depositor to comply with all applicable laws, rules and
regulations and orders of any Governmental Authority (including all applicable
laws, rules and regulations and orders of any Governmental Authority regarding
the use of the proceeds of the Designated Series, including the provisions of
Regulations T, U and X of the Board of Governors of the Federal Reserve System,
as amended), the noncompliance with which could have a Material Adverse Effect.
(e) Payment of Taxes. The Borrowers shall cause AFS Funding and the
Spread Account Depositor to pay and discharge promptly or cause to be paid and
discharged promptly, all Taxes imposed upon each of them or upon their
respective income or profits or upon any of their respective assets; provided
that the payment of any such Tax shall not be required so long as the amount,
applicability or validity thereof shall be contested in good faith by
appropriate proceedings, AFS Funding or the Spread Account Depositor, as the
case may be, shall have set aside adequate cash
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reserves in respect thereof, and the Borrowers shall have given the Issuer
prompt notice of such contest.
(f) Payment of Debt and Performance of Obligations. The Borrowers shall
cause AFS Funding and the Spread Account Depositor to pay and discharge when due
all lawful Debt, obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to (i) have a Material
Adverse Effect or (ii) become a Lien upon any property of AFS Funding or the
Spread Account Depositor, as the case may be, other than a Permitted Lien,
unless and to the extent only that the validity of such Debt, obligation or
claim shall be contested in good faith and by appropriate proceedings diligently
conducted by AFS Funding or the Spread Account Depositor, as the case may be,
and that any such contested Debt, obligations or claims shall not constitute or
create a Lien upon property of AFS Funding or the Spread Account Depositor, as
the case may be, and provided that the Borrowers shall give the Issuer prompt
notice of any such contest and AFS Funding or the Spread Account Depositor, as
the case may be, shall have retained adequate cash reserves in respect thereof.
(g) Books and Records; Visitation. The Borrowers shall cause AFS
Funding and the Spread Account Depositor to keep proper books of record and
account in which complete, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all material dealings and transactions
in relation to its business and activities; upon reasonable notice, permit
representatives of the Issuer to visit the offices of AFS Funding or the Spread
Account Depositor, as the case may be, or such other place where such books of
record and accounts are kept and to discuss the operations and financial
condition of AFS Funding or the Spread Account Depositor, as the case may be,
with the Authorized Officers thereof.
(h) Series Transaction Documents. ACFS shall cause AFS Funding to
deliver copies of all Series Transaction Documents relating to an FSA Series to
the Issuer promptly after the closing of such Series together with an Officer's
Certificate of ACFS that such copies are true, correct and complete.
(i) Compliance with Documents. Each Borrower shall comply, in all
respects, with the terms of the Transaction Documents to which each of them is a
party, and the Borrowers shall cause AFS Funding and the Spread Account
Depositor to comply, in all respects, with the terms of the Series Transaction
Documents relating to any FSA Series to which each of them is a party.
(j) Conformity of Issued FSA Series to Relevant Series Transaction
Documents. ACFS shall cause AFS Funding and the Spread Account Depositor to
cause each FSA Series issued to be in compliance in all material respects with
the terms of the Series Transaction Documents relating to such FSA Series,
including the existence of the credit enhancement and/or overcollateralization
contemplated by such documents.
(k) Accountant's Letters; Legal Opinions. The Borrowers shall, and
shall cause AFS Funding to, provide to the Issuer copies of all accountant's
letters and accountant's annual statements of compliance with respect to each
FSA Series and copies of all opinions of counsel rendered in connection with any
FSA Series and a reliance letter with each such document pursuant to which the
Issuer may rely on all such documents.
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(l) Maintenance of Existence. Each Borrower will, and will cause AFS
Funding and the Spread Account Depositor to, do or cause to be done all things
necessary on its part to preserve and keep in full force and effect its
existence and good standing as a corporation or other entity under the laws of
its jurisdiction of formation.
(m) Appointment of Servicer. If FSA is not the Controlling Party with
respect to any FSA Series, to the extent AFS Funding has control over the
appointment of a successor servicer with respect to such FSA Series under the
related Series Transaction Documents, ACFS will cause AFS Funding to obtain the
prior written consent of the Issuer prior to the appointment of any successor
servicer.
(n) Use of Facility. The Borrowers shall use the Letters of Credit to
provide credit support for the Policies.
(o) Rating. If requested by the Issuer at any time, the Borrowers shall
pay the costs and expenses of having the letter of credit facility provided
hereunder rated by any one Rating Agency chosen by the Issuer.
(p) Spread Account Depositor Liens. ACFS will cause AFS Funding to
cause the Spread Account Depositor not to create, assume, or suffer to exist any
Lien on any personal property of the Spread Account Depositor whether now owned
or hereafter acquired by the Spread Account Depositor; provided, however, that
such restriction shall not apply to: (i) any Lien for taxes, assessments or
other governmental charges or levies not yet subject to penalties for
non-payment or the validity, applicability or amount of which is being contested
in good faith by appropriate legal proceedings and with respect to which
adequate reserves in accordance with GAAP have been established by the Spread
Account Depositor; (ii) any Lien which is imposed by law (such as those of
mechanics, carriers and warehousemen), if payment of the obligation secured
thereby is not yet due or the validity, the applicability or amount of which is
being contested in good faith by appropriate legal proceedings and with respect
to which adequate reserves in accordance with GAAP have been established by the
Spread Account Depositor; (iii) judgment Liens in existence less than five days
after the entry thereof or with respect to which execution has been stayed, so
long as the aggregate amount of all such judgment Liens at any time does not
exceed $100,000, or judgment Liens the payment of which is covered in full
(subject to a customary deductible) by insurance; and (iv) Liens in favor of the
collateral agent specified in the Spread Account Agreement for the benefit of
the FSA Series Insurer and the related secured parties,
(q) Spread Account Depositor Payments from Spread Accounts. ACFS will
cause AFS Funding to cause the Spread Account Depositor not to make any payments
from any Spread Account other than those payments due under the terms of the
related Series Transaction Documents for the FSA Series. Without limiting the
foregoing, ACFS agrees to cause AFS Funding to cause the Spread Account
Depositor not to make any voluntary, optional, or accelerated payments with
respect to any Series with funds from the relevant Spread Account.
Notwithstanding the foregoing, neither AFS Funding nor the Spread Account
Depositor shall be prevented from replacing funds on deposit in any Spread
Account with spread account replacement reinsurance so long as such reinsurance
constitutes Subsequent Reinsurance. In addition, the foregoing is not intended
to limit the rights of
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FSA or the Underlying Trustees pursuant to the Series Transaction Documents
relating to an FSA Series.
(r) Spread Account Depositor Merger, Consolidation, Etc. ACFS will
cause AFS Funding to cause the Spread Account Depositor not to merge or
consolidate with or into, or sell, convey, transfer, exchange, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
a11 or substantially all of its assets (whether now owned or hereafter acquired)
to, acquire all or substantially all of the assets of, any Person or division of
any Person; or sell, convey, transfer, exchange, lease or otherwise dispose of
any of its assets.
(s) Spread Account Depositor Protection of Collateral. ACFS will cause
AFS Funding to cause the Spread Account Depositor not to sell, transfer,
exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise
encumber (or permit such to occur or suffer such to exist), any part of its
personal property, or permit any Lien (other than the Lien of the collateral
agent specified in the Spread Account Agreement for the benefit of the
insurer of the FSA Series and the related secured parties) to be created on or
extend to or other-wise upon or burden such property or any part thereof any
interest therein or the proceeds thereof other than a sale, transfer, exchange,
disposal, pledge, mortgage, hypothecation or encumbrance for the benefit of FSA
and/or the Underlying Trustees permitted under or pursuant to the terms of any
of the Series Transaction Documents relating to an FSA Series.
(t) Spread Account Depositor Business. ACFS will cause AFS Funding to
cause the Spread Account Depositor not to engage in any business or activity
other than the business described in the Trust Agreement of the Spread Account
Depositor as in effect on the date hereof.
(u) Spread Account Depositor Indebtedness. ACFS will cause AFS Funding
to cause the Spread Account Depositor not to incur, create, assume, suffer to
exist otherwise become liable with respect to any Debt other than Debt in favor
of FSA and/or the Underlying Trustees created or permitted under or pursuant to
the terms of any of the Series Transaction Documents relating to an FSA Series.
(v) Notice of Seller or Servicer Repurchase. ACFS will provide
immediate written notice to the Issuer of any mandatory purchase by the seller
or servicer or reconveyance to the seller or servicer of the pool of receivables
held by the trust which issued any FSA Series. In addition, ACFS, in its
capacity as servicer for an FSA Series, shall, upon becoming aware of any event
which would require the seller or servicer of the pool of receivables to
purchase such receivables, give immediate notice of such event to the other
parties to the Series Transaction Documents for the related FSA Series and the
Issuer and take all other actions necessary for the seller or servicer to
repurchase such receivables.
(w) Servicer Failure to Perform. ACFS will reimburse the trust issuing
any FSA Series for any decrease in excess cash flow or reduction in the amount
deposited in the relevant Spread Account which results from the failure of ACFS
to perform its obligations as the servicer under the Series Transaction
Documents relating to such FSA Series.
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SECTION 5.02 Negative Covenants with respect to Activities of AFS
Funding. Until this Agreement shall have terminated in accordance with its terms
and the Repayment Amount with respect to each Letter of Credit has been repaid,
no Borrower will directly or indirectly:
(a) Payments from Spread Accounts. Permit AFS Funding to make any
payments from any Spread Account (including funds replaced with Spread Account
Replacement Reinsurance) other than those payments due under the terms of the
related Series Transaction Documents for the applicable FSA Series. Without
limiting the foregoing, the Borrowers shall not permit AFS Funding to make any
voluntary, optional, or accelerated payments with respect to any Series with
funds from the relevant Spread Account. Notwithstanding the foregoing, neither
of AFS Funding nor the Spread Account Depositor shall be prevented from
replacing funds on deposit in any Spread Account with Spread Account Replacement
Reinsurance. Any Spread Account Replacement Reinsurance obtained in connection
with a release of funds on deposit in any Spread Account must constitute
"Qualified Subsequent Reinsurance" under the terms hereof.
(b) Stock Merger, Consolidation, Etc. Permit AFS Funding to merge or
consolidate with or into, or sell, convey, transfer, exchange, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, acquire all or substantially all of the assets of, any Person or division of
any Person; or sell, convey, transfer, exchange, lease or otherwise dispose of
any of its assets; provided however, the foregoing shall not limit the ability
of AFS Funding to sell, convey or transfer, from time to time, pools of
receivables to other Persons in connection with the issuance of any Series.
(c) Modifications of Series Transaction Documents. Permit AFS Funding
to amend or otherwise modify, without the consent of the Issuer (which consent
shall not unreasonably be withheld) any of the Series Transaction Documents
relating to any FSA Series to which it is a party which amendment or
modification would materially and adversely affect the Issuer including any
amendment or modification which increases the amount of payments (including any
servicing fees) with respect to or accelerates the scheduled maturity date of
any FSA Series or reduces the amount of cash that would otherwise be available
to reduce the Maximum Stated Amount for any Letter of Credit pursuant to Section
2.0 1 (including any reduction to the amount of the Nonallocated Amount
Available); provided that the foregoing shall not prohibit AFS Funding from
amending any of the Series Transaction Documenents relating to an FSA Series to
delete or otherwise reduce or make less likely to occur the events that
constitute trigger events and events of default under the agreements pursuant to
which the FSA Series Insurer has insured the FSA Series.
(d) Appointment of Trustee. If FSA is not the Controlling Party with
respect to an FSA Series, to the extent AFS Funding has control over the
appointment of the trustee of such FSA Series (initial and any successor
trustee), if such trustee is to be a Person other than Bank One, N.A., permit
AFS Funding to appoint, or cause to be appointed, such trustee until AFS Funding
has received the prior written consent of the Issuer.
(e) Additional Series. Issue any FSA Series after the date hereof
unless the following conditions shall have been satisfied on or before the date
of such issuance:
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(i) The Issuer shall have received an Officer's Certificate
of ACFS stating that (A) the sum of the amount on deposit in the Spread
Account with respect to such Series and the Qualified Subsequent
Reinsurance with respect to such Series is equal to at least 5% of the
initial aggregate principal amount of the securities constituting such
Series, (B) the aggregate amount of cash on deposit in the Spread Account
with respect to such Series is equal to at least 2% of the initial
aggregate principal amount of the securities constituting such Series and
(C) the "Accelerated Payment Termination Date" for such Series shall be
structured so as to allow the amount on deposit in the spread account to be
"shareable" pursuant to the Spread Account Agreement within 400 days of the
closing date of such Series; and
(ii) The Issuer shall have received evidence satisfactory to it
that the Series shall have been insured by FSA and such FSA's credit risk
on a stand-alone basis shall have been rated at least Baa3/BBB- by Moody's
and S&P, respectively.
SECTION 5.03 Covenants with respect to Activities of the Borrowers.
Until this Agreement shall have terminated in accordance with its terms and the
Repayment Amount with respect to each Letter of Credit has been repaid:
(a) Continuing Performance as Servicer. So long as ACFS is qualified
to act as Servicer and it is the Servicer under any FSA Series, ACFS shall not
resign as Servicer with respect to such FSA Series without the prior written
consent of the Issuer. If FSA is not the Controlling Party, to the extent ACFS
is no longer the Servicer for any FSA Series and ACFS has control over the
appointment of a successor servicer with respect to such FSA Series under the
related Series Transaction Documents, ACFS shall consult with the Issuer prior
to the appointment of any successor servicer.
(b) Modifications of Series Transaction Documents. Amend or otherwise
modify, without the consent of the Issuer (which consent shall not unreasonably
be withheld) any of the Series Transaction Documents relating to any FSA Series
to which it is a party which amendment or modification would materially and
adversely affect the Issuer including any amendment or modification which
increases the amount of payments (including any servicing fees) with respect to
or accelerates the scheduled maturity date of any FSA Series or reduces the
amount of cash flows that will be applied to reduce the Maximum Stated Amount
for any Letter of Credit pursuant to Section 2.01 (including any reduction to
the amount of the Nonallocated Amount Available); provided that the foregoing
shall not prohibit any Borrower from amending any of the Series Transaction
Documents relating to an FSA Series to delete or otherwise reduce or make less
likely to occur the events constituting trigger events and events of default
under the agreements pursuant to which the FSA Series Insurer has insured the
FSA Series.
(c) Appointment of Trustee. If FSA is not the Controlling Person with
respect to an FSA Series, to the extent ACFS Funding has control over the
appointment of the trustee of such FSA Series (initial and any successor
trustee), if such trustee is to be a Person other than Bank One, N.A., appoint,
or cause to be appointed, such trustee until ACFS has received the prior written
consent of the Issuer.
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(d) Optional Repurchase. ACFS shall not exercise any right (as a
servicer under any FSA Series) of optional repurchase or reconveyance of the
pool of receivables held by the trust which issued the FSA Series without the
consent of the Issuer (which consent shall not unreasonably be withheld) if, as
a result of such repurchase or reconveyance, there will be any amounts owing to
the Issuer with respect to such FSA Series under this Agreement or any other
Transaction Document.
(e) Notice of Seller or Servicer Repurchase. ACFS shall provide
immediate written notice to the Issuer of any mandatory purchase by the seller
or servicer or reconveyance to the seller or servicer of the pool of receivables
held by the trust which issued any FSA Series. In addition, ACFS, in its
capacity as servicer for an FSA Series, shall, upon becoming aware of any event
which would require the seller or servicer of the pool of receivables to
purchase such receivables, give immediate notice of such event to the other
parties to the Series Transaction Documents relating to such FSA Series and the
Issuer and take all other actions necessary for the seller or servicer to
repurchase such receivables.
(f) Nomination of Lock-box Bank. Subject to FSA's rights as
Controlling Party under the Series Transaction Documents relating to an FSA
Series to direct the Servicer, ACFS, as servicer for an FSA Series, shall not
terminate any lock-box relating thereto, and, in the event of resignation of a
lock-box bank relating to any FSA Series, ACFS, in its capacity as servicer for
such FSA Series, shall not nominate a new lock-box bank, in either case without
the prior written consent of the Issuer, which consent shall not unreasonably be
withheld.
ARTICLE VI
EVENTS OF DEFAULT; CASH COLLATERAL PROVISIONS
SECTION 6.01 Events of Default. Each of the following events shall
constitute an "Event of Default" hereunder:
(a) any Borrower shall fail to pay (i) any principal portion of the
Repayment Amount for any Letter of Credit when due or (ii) any interest, fees or
other amount payable hereunder within one Business Day after the same becomes
due and payable; or
(b) any representation or warranty by any Borrower herein or in any
other Transaction Document to which such Borrower is party shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) any Borrower shall tail in any material respect to perform or
observe any term, covenant or agreement contained in Section 5.02 if the failure
to perform or observe such term covenant or agreement shall remain unremedied
for 10 Business Days (determined in the case of a Lien described in clause (a)
of such Section, after giving effect to the five Business Day cure period
provided in such Section); or
(d) any Borrower shall fail in any material respect to perform or
observe any term, covenant or agreement contained in this Agreement or any of
the other Transaction Documents (other than as described in Section 6.01(a),
6.01(b) or 6.01(c) above) to be performed or observed by it if
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the failure to perform or observe such other term covenant or agreement shall
remain unremedied for 30 days after written notice thereof shall have been given
to such Borrower by the Issuer; or
(e) AFS Funding or any Borrower shall fail to pay any principal of or
premium or interest on any Debt (other than, with respect to any Borrower, its
obligations under this Agreement) having a principal sum of $100,000 or more,
with respect to AFS Funding or $10,000,000 or more, with respect to any
Borrower, when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other default under any agreement or
instrument relating to any such Debt of any Borrower or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased
or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall
be required to be made, in each case, prior to the stated maturity thereof, or
(f) any facility termination event, early amortization event,
servicer termination event, any drawdown under the insurance policy provided by
the FSA Series Insurer with respect to any FSA Series or event of default or
other similar event by any other name shall occur under any of the FSA Series
(whether or not declared, waived or consented to by the relevant trustee, the
FSA Series Insurer, the relevant trust or the holders of such FSA Series) and
any grace period or cure period set forth in the Series Transaction Documents
for such FSA Series shall have expired;
(g) any event of default or other default shall occur under any
insurance and reimbursement agreement with the FSA Series Insurer and any grace
period or cure period set forth in the relevant insurance and reimbursement
agreement shall have expired;
(h) any Insolvency Event shall occur with respect to AFS Funding, the
Spread Account Depositor, any FSA Series Servicer or any of the Borrowers;
(i) there shall remain undischarged for more than ten days any final
judgment or execution action against AFS Funding, the Spread Account Depositor
or any Borrower that, together with other outstanding final judgments and
execution actions against AFS Funding the Spread Account Depositor or such
Borrower, as the case may be, exceeds $100,000 in the aggregate with respect to
AFS Funding or the Spread Account Depositor or $10,000,000 in the aggregate with
respect to any Borrower; or
(j) the Pension Benefit Guaranty Corporation or the Internal Revenue
Service shall have filed notice of one or more Liens against AFS Funding, the
Spread Account Depositor or any Borrower or any of their respective properties
or assets and such Liens shall remain undischarged for more than 30 Business
Days after the date of such notice; or
(k) The Borrowers and their Affiliates shall not own or shall cease
for any reason to own 100% of the issued and outstanding capital stock of AFS
Funding or AFS Funding shall not
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own or shall cease for any reason to own l00% of the beneficial interests in the
Spread Account Depositor; or
(l) any material representation or warranty made by any Borrower or
the servicer in any of the Series Transaction Documents relating to any FSA
Series or any information delivered to any Borrower with respect to any FSA
Series shall prove to have been incorrect in any material respect when made or
when delivered, which continues to be incorrect for a period of 10 Business Days
after written notice thereof shall have been given to the Borrowers by the
Issuer; or
(m) any Transaction Document shall, for any reason (except in
accordance with its terms), cease to be in full force and effect, or cease to be
the legally valid, binding and enforceable obligations of the parties thereto,
or any party to any Transaction Document shall, directly or indirectly, contest
in any manner such effectiveness, validity, binding nature or enforceability; or
(n) the long term senior unsecured debt of ACC is rated by any of
Fitch or Moody's at or below B or B2 respectively.
SECTION 6.02 Cash Collateral Provisions.
(a) Upon the occurrence of any Event of Default or at any time
thereafter during the continuance thereof, (i) if such event is an Event of
Default specified in Section 6.01(h), the Borrowers shall immediately deliver
cash collateral to the Issuer in an amount equal to the Recourse Limit plus all
accrued and unpaid interest thereon and all other amounts owing hereunder, and
the Issuer may exercise any and all remedies and other rights provided herein or
in the Transaction Documents and (ii) if such event is any other Event
of Default, the Issuer may, by notice of default to the Borrowers, direct the
Borrowers to deliver cash collateral to the Issuer in an amount equal to the
Recourse Limit plus all accrued and unpaid interest thereon and the Issuer may
exercise any and all remedies and other rights provided herein or in the
Transaction Documents. Except as otherwise provided in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. Each Borrower hereby further expressly waives and covenants
not to assert any appraisement, valuation, stay, extension, redemption or
similar laws, now or at any time hereafter in force which might delay, prevent
or otherwise impede the performance or enforcement of any Transaction Document.
(b) The Borrowers shall deliver cash collateral to the Issuer on any
Designated Series Amortization Date for a Designated Series, and on each of the
four succeeding Distribution Dates, in each case in an amount equal to 20% of
the Maximum Stated Amount of the applicable Letter of Credit on such Designated
Series Amortization Date.
(c) On each Distribution Date upon or following the occurrence of an
Event of Early Amortization, the Borrowers shall deliver cash collateral to the
Issuer in an amount equal to the Nonallocated Amount Available on such
Distribution Date plus $5,000,000.
(d) The Borrowers' obligation to deliver cash collateral hereunder
shall be limited to the Recourse Limit and the amount of the Nonallocated Amount
Available from and after the time such obligation arises (as if the obligation
to provide cash collateral were a Repayment Amount in
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accordance with Section 2.03(d)); provided that the delivery of cash collateral
shall not affect the obligations of the Borrowers described in Section 2.03(d).
(e) Any cash collateral delivered to the Issuer shall be held by the
Issuer and invested in Cash Equivalents (without liability for interest or
losses thereon) and applied to the Repayment Amount. After the expiration or
termination of all Letters of Credit, such cash collateral shall be applied by
the Issuer to any remaining obligations hereunder and any excess shall be
delivered to ACFS or as a court of competent jurisdiction may direct.
SECTION 6.03 Mandatory Pre-Reimbursements.
(a) If an LOC Termination Disbursement or an SPE Loan has been made,
the Borrowers shall pay the Issuer, in respect of the potential Repayment
Amounts (i) on any Designated Series Amortization Date for a Designated Series,
and on each of the four succeeding Distribution Dates, an amount equal to 20% of
the amount of cash collateral on deposit in the collateral account referred to
in Section 2.02(f) for the applicable Letter of Credit on such Designated Series
Amortization Date, and (ii) on each Distribution Date upon or following the
occurrence of an Event of Early Amortization, an amount equal to the
Nonallocated Amount Available on such Distribution Date plus $5,000,000.
(b) If at any time after the latest Standard Termination Date for all
Letters of Credit the Issuer has received payment in full of the aggregate
Repayment Amount, all amounts in respect of the principal balance of the cash
collateral accounts maintained pursuant to Section 2.02(f) which are thereafter
released to the Issuer shall be distributed to ACFS in repayment of any payments
made by the Borrowers under clause (a), without any interest or other income in
respect of such distribution.
(c) The Borrowers' obligation to make payments pursuant to clause (a)
shall be limited to the Recourse Limit and the amount of the Nonallocated Amount
Available from and after the time such obligation arises.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Amendments, Etc. The Issuer and the Borrowers may, from
time to time, enter into written amendments, supplements or modifications of
this Agreement, and the Issuer may execute and deliver to any such parties a
written instrument waiving or a consent to a departure from, on such terms and
conditions as the Issuer may specify in such instrument, any of the requirements
of this Agreement or any Default or Event of Default and its consequences;
provided, however, that (a) the consent of FSA shall be required for (i) any
amendment to Section 2.01, 2.02, 2.03(a) 2.03(b), 2.03(d), 7.01 or 7.06 (or any
defined term contained therein as used therein) and (ii) any other amendment
that would materially and adversely affect FSA (which FSA consent in the case of
this clause (a)(ii) shall not be unreasonably withheld) and (b) in any event,
the consent of FSA shall not be required in connection with (i) any extension of
the Scheduled Expiry Date for any Letter of Credit or any Designated Series
Maturity Date (as defined in the applicable Series Transaction Documents), (ii)
any change in the rate, or the time of payment, of interest on drawings under
the
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Letters of Credit, (iii) any change in the rate of, or the date of payment for,
any fee payable to the issuer hereunder or (iv) any change in the date or the
amount of (x) any cash collateral required to be delivered by the Borrowers
pursuant to Section 6.02 or (y) any mandatory payment required to be made by the
Borrowers pursuant to Section 6.03.
In the case of any waiver, the parties to the applicable Transaction
Document and the Issuer shall be restored to their former position and rights
hereunder and under the other Transaction Documents to the extent provided for
in such waiver, and any Default or Event of Default waived shall not extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereon. The Transaction Documents may not be amended orally or by
any course of conduct.
SECTION 7.02 Notices, Etc. The Borrowers hereby appoint ACC to act as
agent for the Borrowers with respect to the receiving and giving of any notices
or any other written instruction hereunder and, notwithstanding anything to the
contrary contained in this Agreement, any notice required to be delivered by the
Issuer to the Borrowers may be delivered by the Issuer to ACC only as agent for
the Borrowers. The Issuer is hereby entitled to rely on any communication given
or transmitted by ACC as if such communication were given or transmitted by each
Borrower. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile, telegraph or
telex), and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, or, in the case of mail or
facsimile notice, when received, or, in the case of telegraphic notice,
when delivered to the telegraph company, or, in the case of telex notice, when
sent, answer back received, addressed as follows or to such other address as may
be hereafter notified by the respective parties hereto:
ACC as agent for c/o AmeriCredit Corp.
the Borrowers 801 Cherry Street, Suite 3900
Fort Worth, Texas 76102
Attention: Treasurer
Telephone: 817-302-7022
Facsimile: 817-302-7942
FSA: Financial Security Assurance Inc.
35O Park Avenue
New York, NY 10022
Attention: Managing Director - Transaction Oversight
Telephone: (212) 826-0100
Facsimile: (212) 339-3518
The Issuer: Deutsche Bank AG, New York Branch
31 West 52/nd/ Street
New York, NY 10019
Attention: Eric Shea
Telephone: 212-469-8436
Facsimile: 212-469-5160
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with a copy to:
Deutsche Bank AG, New York Branch
Global Loan operations
Standby Letter of Credit Unit
60 Wall street
MS NYC 60-2708
New York, NY 10005
Attention: Marco Orlando
Telephone: 212-602-1132
Facsimile: 212-797-0403,
SECTION 7.03 No Waiver: Remedies. No failure on the part of the Issuer
to exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 7.04 Costs, Expenses and Indemnification. The Borrowers agree
to pay all costs and expenses of the Issuer in connection with the preparation,
execution, delivery, modification and amendment of this Agreement, the other
Transaction Documents and the other documents to be delivered hereunder and
thereunder, including the reasonable fees and out-of-pocket expenses of counsel
for the Issuer with respect thereto and with respect to advising such agents as
to their respective rights and responsibilities under this Agreement and such
other Transaction Documents. The Borrowers further agree to pay all costs and
expenses, if any (including reasonable counsel fees and expenses), of the Issuer
in connection with the enforcement of this Agreement, the other Transaction
Documents and the other documents to be delivered hereunder and thereunder,
including reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 7.04 and all costs and expenses
(including reasonable counsel fees and expenses) in connection with the
negotiation of any restructuring or "work-out" (whether or not consummated) of
the obligations of the Borrowers hereunder or under any Transaction Document.
The Borrowers further agree to indemnify the Issuer and each of its respective
affiliates, control persons, officers, directors, employees and agents (each an
"Indemnified Party"), from and against any and all claims, damages, losses,
liabilities and expenses (including reasonable fees and disbursements of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of them in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising out of, related to or in connection with the transactions
described herein whether or not any Indemnified Party or any Borrower is a party
thereto, including any transaction in which any proceeds of any Borrowing are or
are proposed to be applied; provided, however, that the Borrowers shall not be
liable for any portion of such claims, damages, losses, liabilities or expenses
resulting from an Indemnified Party's gross negligence or willful misconduct.
The provisions of this Section 7.04 shall survive the termination of this
Agreement.
SECTION 7.05 Binding Effect: Termination. This Agreement shall become
effective upon the Effective Date and shall thereafter be binding upon and inure
to the benefit of each of the parties hereto and each of their respective
successors and assigns, except that no Borrower may
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assign its rights hereunder or any interest herein without the prior written
consent of the Issuer. This Agreement shall terminate on the date after the
Expiry Date of each Letter of Credit on which the Repayment Amount with respect
to each Letter of Credit shall have been paid in full.
SECTION 7.06 Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns; provided,
however, that
(a) no Borrower may transfer or assign any of its obligations, rights,
or interests hereunder without the prior written consent of the Issuer; and
(b) the Issuer may at any time grant participations in the minimum
amounts of $5,000,000 to any other Person (each a "Participant"), in all or part
of its obligations under any Letter of Credit and its rights under this
Agreement (it being understood and agreed that no other party hereto shall have
any obligation to give notices to any such Participant, that such participation
will not in any way reduce the Issuer's commitment to make LOC Disbursements
hereunder, and that such participation shall not increase the obligations
(including with respect to costs and expenses (provided that the Borrowers may
be liable for any increase in costs and expenses resulting from any
participation consented to by the Borrowers)) of any other party hereunder);
provided that the Issuer shall be entitled to receive any increased costs or
indemnities payable hereunder incurred by the Issuer or such Participant to the
extent not in excess of such amounts calculated as if there were no
participation.
The Issuer hereby acknowledges and agrees that any such disposition will not
alter or affect the Issuer's direct obligations to the Borrowers or FSA, and
that neither Borrower or FSA shall have any obligation to have any communication
or relationship with any Participant in order to enforce such obligations of
the Issuer hereunder and under the applicable Letter of Credit. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement.
Any direct or indirect transfer or purported transfer of all or any portion
of the rights and obligations under this Agreement or any Letter of credit shall
be null and void in its entirety unless it strictly complies with this Section
7.06(b).
(c) The Issuer may pledge any portion of its reimbursement rights with
respect to the Letters of Credit thereof or interest therein to any Federal
Reserve Bank as collateral in accordance with applicable law without the consent
of any Borrower.
(d) In connection with any participation or proposed participation by
the Issuer pursuant to this Section 7.06, the Issuer shall be entitled to
distribute to any proposed Participant any information furnished to the Issuer
pursuant to Section 5.01 or otherwise pursuant to this Agreement or in
connection herewith, subject to the provisions of Section 7.18.
SECTION 7.07 No Proceedings. (a) The Issuer hereby agrees (which
agreement shall, pursuant to the terms of this Agreement, be binding upon its
successors and assigns) that it shall not, for any reason:
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(i) institute proceedings for AFS Funding to be adjudicated a
bankrupt or insolvent;
(ii) consent to, join in or cooperate with the institution
of bankruptcy or insolvency proceedings against AFS Funding;
(iii) file a petition with respect to AFS Funding seeking or
consenting to reorganization or relief under any applicable Federal or
state law relating to bankruptcy;
(iv) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of AFS Funding
or a substantial part of the property; or
(v) cause or permit AFS Funding to make any assignment for the
benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium on
its debt or take any action in furtherance of any such action.
(b) The provisions of this Section 7.07 shall survive the termination
of this Agreement.
SECTION 7.08 Submission to Jurisdiction; Waivers. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT TO WHICH IT IS A PARTY, OR FOR RECOGNITION
AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH PARTY AT ITS
ADDRESS SET FORTH IN SECTION 7.02 OR AT SUCH OTHER ADDRESS OF WHICH THE ISSUER
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
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SECTION 7.09 WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 7.11 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 7.12 Headings. The headings contained in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of any provision of this Agreement.
SECTION 7.13 Severability. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
SECTION 7.14 Integration. All exhibits, schedules and appendices to
this Agreement shall be deemed to be part of this Agreement. This Agreement,
together with provisions of the Transaction Documents referred to herein,
embodies the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings among such parties with respect to the subject matter hereof.
SECTION 7.15 Right of Set-Off. In addition to any rights and remedies
of the Issuer provided by law, upon the occurrence of an Event of Default and
the acceleration of the obligations owing hereunder, or at any time upon the
occurrence and during the continuance of an Event of Default under Section
6.01(a), and only under such circumstances, the Issuer shall have the right,
without prior notice to the Borrowers, any such notice being expressly waived by
the Borrowers to the extent not prohibited by applicable law, to set-off and
apply any and all deposits (general or special, time or demand, provisional