-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P41OAhf958/uQnEPoGou2fqJGdmQAEgXyWpaK3t6Kd1s1jNgbxB6yxzwWlZGj5px /5ygqCDvrts/kOOexzUwlg== 0000930661-02-001778.txt : 20020515 0000930661-02-001778.hdr.sgml : 20020515 20020515171449 ACCESSION NUMBER: 0000930661-02-001778 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICREDIT CORP CENTRAL INDEX KEY: 0000804269 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 752291093 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10667 FILM NUMBER: 02653729 BUSINESS ADDRESS: STREET 1: 801 CHERRY STREET STREET 2: SUITE 3900 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173027000 MAIL ADDRESS: STREET 1: 801 CHERRY ST STREET 2: SUITE 3900 CITY: FORT WORTH STATE: TX ZIP: 76102 FORMER COMPANY: FORMER CONFORMED NAME: URCARCO INC DATE OF NAME CHANGE: 19920703 10-Q 1 d10q.txt FORM 10-Q (Q.E. 03/31/2002) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ---------- Commission file number 1-10667 AmeriCredit Corp. (Exact name of registrant as specified in its charter) Texas 75-2291093 ------------------------------------ ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102 ------------------------------------------------------ (Address of principal executive offices, including Zip Code) (817) 302-7000 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] There were 85,534,477 shares of common stock, $0.01 par value outstanding as of April 30, 2002.
AMERICREDIT CORP. INDEX TO FORM 10-Q Part I. FINANCIAL INFORMATION Page ---- Item 1. Financial Statements (unaudited) Consolidated Balance Sheets - March 31, 2002 and June 30, 2001 ............................................. 3 Consolidated Statements of Income and Comprehensive Income - Three Months and Nine Months Ended March 31, 2002 and 2001 ............................................. 4 Consolidated Statements of Cash Flows - Nine Months Ended March 31, 2002 and 2001 ................................. 5 Notes to Consolidated Financial Statements .................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......................... 21 Item 3. Quantitative and Qualitative Disclosures About Market Risk ................................................. 43 Part II. OTHER INFORMATION Item 1. Legal Proceedings ........................................... 44 Item 2. Changes in Securities ....................................... 44 Item 3. Defaults upon Senior Securities ............................. 44 Item 4. Submission of Matters to a Vote of Security Holders ......... 44 Item 5. Other Information ........................................... 44 Item 6. Exhibits and Reports on Form 8-K ............................ 45 SIGNATURE .......................................................................... 46
2 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS AMERICREDIT CORP. Consolidated Balance Sheets (Unaudited, Dollars in Thousands)
March 31, 2002 June 30, 2001 -------------- ------------- ASSETS Cash and cash equivalents $ 118,641 $ 77,053 Receivables held for sale, net 2,324,087 1,921,465 Interest-only receivables from Trusts 515,005 387,895 Investments in Trust receivables 603,340 493,022 Restricted cash 486,301 270,358 Property and equipment, net 112,675 67,828 Other assets 226,931 167,286 ---------- ---------- Total assets $4,386,980 $3,384,907 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $1,889,188 $1,502,879 Credit enhancement facility 166,976 36,319 Senior notes 375,000 375,000 Other notes payable 58,475 23,077 Funding payable 115,935 60,460 Accrued taxes and expenses 210,959 114,041 Derivative financial instruments 82,595 82,796 Deferred income taxes 137,635 130,139 ---------- ---------- Total liabilities 3,036,763 2,324,711 ---------- ---------- Shareholders' equity: Preferred stock, $0.01 par value per share; 20,000,000 shares authorized, none issued Common stock, $0.01 par value per share; 230,000,000 and 120,000,000 shares authorized; 91,345,326 and 89,853,792 shares issued 913 899 Additional paid-in capital 559,068 520,077 Accumulated other comprehensive income 72,607 73,689 Retained earnings 735,920 484,963 ---------- ---------- 1,368,508 1,079,628 Treasury stock, at cost (6,061,959 and 6,439,737 shares) (18,291) (19,432) ---------- ---------- Total shareholders' equity 1,350,217 1,060,196 ---------- ---------- Total liabilities and shareholders' equity $4,386,980 $3,384,907 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements 3 AMERICREDIT CORP. Consolidated Statements of Income and Comprehensive Income (Unaudited, Dollars in Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended March 31, March 31, -------------------------- -------------------------- 2002 2001 2002 2001 -------------------------------------------------------- Revenue Finance charge income $ 82,188 $ 61,017 $ 259,012 $ 158,512 Gain on sale of receivables 124,112 79,674 325,732 212,433 Servicing fee income 97,362 74,423 277,168 197,128 Other income 3,067 2,038 9,317 7,029 -------------------------------------------------------- 306,729 217,152 871,229 575,102 -------------------------------------------------------- Costs and expenses Operating expenses 107,885 79,342 315,651 219,837 Provision for loan losses 16,739 8,635 48,248 21,960 Interest expense 33,123 30,915 99,270 87,541 -------------------------------------------------------- 157,747 118,892 463,169 329,338 -------------------------------------------------------- Income before income taxes 148,982 98,260 408,060 245,764 Income tax provision 57,358 37,830 157,103 94,619 -------------------------------------------------------- Net income 91,624 60,430 250,957 151,145 -------------------------------------------------------- Other comprehensive income Unrealized (losses) gains on credit enhancement assets (6,807) 18,583 (5,829) 102,100 Unrealized gains (losses) on cash flow hedges 27,611 (30,189) 4,068 (76,473) Income tax (provision) benefit (8,009) 4,469 679 (9,865) -------------------------------------------------------- Comprehensive income $ 104,419 $ 53,293 $ 249,875 $ 166,907 ======================================================== Earnings per share Basic $ 1.08 $ 0.75 $ 2.97 $ 1.92 ======================================================== Diluted $ 1.02 $ 0.70 $ 2.81 $ 1.78 ======================================================== Weighted average shares outstanding 84,988,165 80,079,906 84,470,535 78,520,489 ======================================================== Weighted average shares and assumed incremental shares 89,509,209 86,709,986 89,334,924 84,817,718 ========================================================
The accompanying notes are an integral part of these consolidated financial statements 4 AMERICREDIT CORP. Consolidated Statements of Cash Flows (Unaudited, Dollars in Thousands)
Nine Months Ended March 31, --------------------------- 2002 2001 ----------- ----------- Cash flows from operating activities Net income $ 250,957 $ 151,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,557 14,893 Provision for loan losses 48,248 21,960 Deferred income taxes 26,573 36,706 Accretion of present value discount and other (82,617) (64,775) Non-cash gain on sale of receivables (307,752) (169,725) Distributions from Trusts 182,826 158,552 Changes in assets and liabilities: Other assets (45,872) (7,615) Accrued taxes and expenses 109,376 23,847 Purchases of receivables (6,490,011) (4,435,454) Principal collections and recoveries on receivables 175,099 72,563 Net proceeds from sale of receivables 5,919,517 3,725,900 ----------- ----------- Net cash used by operating activities (195,099) (472,003) ----------- ----------- Cash flows from investing activities Initial deposits to credit enhancement assets (303,500) (149,999) Purchases of property and equipment (14,724) (11,283) Change in other assets (14,890) (53,481) ----------- ----------- Net cash used by investing activities (333,114) (214,763) ----------- ----------- Cash flows from financing activities Net change in warehouse credit facilities 386,309 660,645 Borrowings under credit enhancement facility 182,500 56,998 Net change in notes payable (12,357) (9,049) Proceeds from issuance of common stock 13,349 36,767 ----------- ----------- Net cash provided by financing activities 569,801 745,361 ----------- ----------- Net increase in cash and cash equivalents 41,588 58,595 Cash and cash equivalents at beginning of period 77,053 42,916 ----------- ----------- Cash and cash equivalents at end of period $ 118,641 $ 101,511 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements 5 AMERICREDIT CORP. Notes to Consolidated Financial Statements (Unaudited) NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements include the accounts of AmeriCredit Corp. and its wholly-owned subsidiaries (the "Company"). All significant intercompany transactions and accounts have been eliminated in consolidation. The consolidated financial statements as of March 31, 2002, and for the nine months ended March 31, 2002 and 2001, are unaudited, but in management's opinion include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for such interim periods. Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on net income or shareholders' equity as previously reported. The results for interim periods are not necessarily indicative of results for a full year. The interim period financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles. These interim period financial statements should be read in conjunction with the Company's consolidated financial statements which are included in the Company's Annual Report on Form 10-K for the year ended June 30, 2001. NOTE 2 - RECEIVABLES HELD FOR SALE Receivables held for sale consist of the following (in thousands): March 31, 2002 June 30, 2001 -------------- ------------- Auto receivables $2,390,298 $1,973,828 Less nonaccretable acquisition fees (30,488) (27,839) Less allowance for loan losses (35,723) (24,524) ---------- ---------- $2,324,087 $1,921,465 ========== ========== Receivables held for sale are carried at the lower of cost or fair value. Fair value is measured on an aggregate basis since the receivables have relatively homogenous obligor, collateral and loan size and structure characteristics and are subject to similar risks. Finance charge income related to receivables held for sale is recognized using the interest method. Accrual of finance charge income is suspended on accounts which are more than 60 days delinquent. Fees and commissions received (other than acquisition fees described below) and direct costs of originating loans are deferred and amortized over the term of the related receivables using the interest method. Finance contracts are generally purchased by the Company from auto dealers without recourse, and accordingly, the dealer usually has no liability to the Company if the consumer defaults on the contract. To mitigate the risk from 6 potential credit losses, the Company may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. The Company records such acquisition fees as a nonaccretable reduction in the carrying value of the related finance contract. Nonaccretable acquisition fees are removed from the accounts when the related finance contract is sold, charged-off or paid in full. A summary of the nonaccretable acquisition fees is as follows (in thousands): Three Months Ended Nine Months Ended March 31, March 31, -------------------- ------------------ 2002 2001 2002 2001 ------------------------------------------ Balance at beginning of period $ 30,772 $ 16,205 $ 27,839 $ 14,567 Purchases of receivables 46,386 37,962 126,334 102,178 Nonaccretable acquisition fees related to receivables removed (46,105) (31,999) (122,347) (94,341) Net charge-offs (565) (179) (1,338) (415) ------------------------------------------ Balance at end of period $ 30,488 $ 21,989 $ 30,488 $ 21,989 ========================================== Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at a level considered adequate to cover probable credit losses on receivables that are either currently ineligible for sale or may in the future become ineligible for sale and thus may be held indefinitely by the Company. Receivables are ineligible for sale if they do not meet certain criteria established in connection with securitization transactions, the most significant of which is that receivables must be less than 31 days delinquent at the time of sale. As of March 31, 2002, $108.9 million of receivables held for sale were ineligible for sale. The Company reviews charge-off experience factors, delinquency reports, historical collection rates, estimates of the value of the underlying collateral, economic trends and other information in order to make the necessary judgments as to probable credit losses on receivables that may be held indefinitely by the Company and the appropriateness of the related provision for loan losses and the allowance for loan losses. Receivables are charged-off to the allowance for loan losses when the Company repossesses and disposes of the collateral or the account is otherwise deemed uncollectable. A summary of the allowance for loan losses is as follows (in thousands): Three Months Ended Nine Months Ended March 31, March 31, ------------------ ------------------- 2002 2001 2002 2001 ---------------------------------------- Balance at beginning of period $ 34,998 $17,145 $ 24,524 $ 9,807 Provision for loan losses 16,739 8,635 48,248 21,960 Net charge-offs (16,014) (4,386) (37,049) (10,373) ---------------------------------------- Balance at end of period $ 35,723 $21,394 $ 35,723 $ 21,394 ======================================== 7 NOTE 3 - SECURITIZATIONS A summary of the Company's securitization activity and cash inflows and outflows from special purpose entities used for securitizations (the "Trusts") is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, ----------------------- ----------------------- 2002 2001 2002 2001 ------------------------------------------------- Receivables sold $2,400,000 $1,300,005 $6,049,997 $3,800,002 Net proceeds from sale of receivables 2,340,923 1,259,377 5,919,517 3,725,900 Gain on sale of receivables 124,112 79,674 325,732 212,433 Servicing fees 75,995 49,180 199,535 132,353 Distributions from Trusts 54,963 51,483 182,826 158,552
The Company retains servicing responsibilities and interests in the receivables sold in the form of credit enhancement assets. As of March 31, 2002, and June 30, 2001, the Company was servicing $11,237.5 million and $8,229.9 million, respectively, of auto receivables which have been sold to the Trusts. The Company earns a monthly base servicing fee of 2.25% per annum on the outstanding principal balance of serviced receivables and any supplemental fee collections (such as late charges) for servicing the receivables sold. The Company believes that its servicing fees would fairly compensate a substitute servicer should one be required, and, accordingly, the Company records neither a servicing asset or a servicing liability. The Trusts and the investors in the asset-backed securities sold by the Trusts have no recourse to the Company's assets other than the credit enhancement assets. The credit enhancement assets are subordinate to the interests of the investors in the Trusts and the value of such assets is subject to the credit risks related to the receivables sold to the Trusts. Credit enhancement assets consist of the following (in thousands): March 31, 2002 June 30, 2001 -------------- ------------- Interest-only receivables from Trusts $ 515,005 $ 387,895 Investments in Trust receivables 603,340 493,022 Restricted cash 486,301 270,358 ---------- ---------- $1,604,646 $1,151,275 ========== ========== 8 A summary of activity in the credit enhancement assets is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, ----------------------- ----------------------- 2002 2001 2002 2001 ------------------------------------------------- Balance at beginning of period $1,500,674 $1,019,378 $1,151,275 $ 824,618 Initial deposits to credit enhancement assets 48,000 43,999 303,500 149,999 Non-cash gain on sale of auto receivables 118,215 66,179 307,752 169,725 Payments on credit enhancement facility (26,824) (32,082) (51,843) (62,848) Distributions from Trusts (54,963) (51,483) (182,826) (158,552) Accretion of present value discount and other 26,351 25,243 82,617 64,775 Change in unrealized gain (6,807) 18,583 (5,829) 102,100 ------------------------------------------------- Balance at end of period $1,604,646 $1,089,817 $1,604,646 $1,089,817 =================================================
Credit enhancement assets consist of interest-only receivables from Trusts, investments in Trust receivables and restricted cash. At the time of sale of receivables, the Company is required to pledge assets equal to a specified percentage of the securitization pool to support the securitization transaction. Typically, the assets pledged are cash deposited to a restricted account and/or additional receivables delivered to the Trust creating overcollateralization. These assets represent initial deposits to credit enhancement assets. Also at the time of sale of receivables, a non-cash gain on sale of receivables is recognized consisting of interest-only receivables from Trust and a present value discount related to the assets pledged as initial deposits to credit enhancement assets. The interest-only receivables from Trust represent the present value of the estimated future excess cash flows to be received by the Company over the life of the securitization. The securitization transactions require the percentage of assets pledged to support the transaction to increase thereafter until a specified level is attained. Excess cash flows generated by the securitization trusts are added to the restricted cash account or used to pay down outstanding debt in the securitization trusts creating overcollateralization until the required percentage level of assets has been reached. Collections of excess cash flows reduce the interest-only receivables from Trusts and the additional assets pledged represent increases in restricted cash and investments in Trust receivables. Once the targeted percentage of assets is reached, additional excess cash flows generated by the securitization trusts are released to the Company as distributions from Trusts. Additionally, as the balance of the securitization pool declines, the amount of pledged assets needed to maintain the required percentage level becomes smaller. Assets in excess of the required percentage are released to the Company as distributions from Trusts. 9 Accretion of present value discount represents accretion of the discount used to estimate the present value of future distributions from Trusts using the interest method over the expected life of the securitization. Unrealized gains (losses) generally represent changes in the fair value of credit enhancement assets as a result of differences between actual securitization pool performance and the original assumptions for such performance or changes in the assumptions as to future securitization pool performance. A summary of the allowance for loan losses included as a component of the interest-only receivables is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, --------------------- --------------------- 2002 2001 2002 2001 --------------------------------------------- Balance at beginning of period $1,093,244 $695,854 $ 868,184 $563,102 Assumptions for cumulative credit losses 291,074 150,614 728,451 413,916 Net charge-offs (138,356) (72,477) (350,673) (203,027) --------------------------------------------- Balance at end of period $1,245,962 $773,991 $1,245,962 $773,991 =============================================
Significant assumptions used in determining the gain on sale of auto receivables were as follows:
Three Months Ended Nine Months Ended March 31, March 31, ------------------ ----------------- 2002 2001 2002 2001 -------------------------------------- Cumulative credit losses (including unrealized gains at time of sale) 12.5% 11.7% 12.5% 11.2% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 14.0% 14.0% 14.0% Investment in Trust receivables 9.8% 9.8% 9.8% 9.8% Restricted cash 9.8% 9.8% 9.8% 9.8%
Significant assumptions used in measuring the fair value of credit enhancement assets at the balance sheet dates were as follows: March 31, 2002 June 30, 2001 -------------- ------------- Cumulative credit losses (including remaining unrealized gains at time of sale) 9.9%-12.5% 8.7%-11.7% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 14.0% Investment in Trust receivables 9.8% 9.8% Restricted cash 9.8% 9.8% 10 The Company has not presented the expected weighted average life and prepayment assumptions used in determining the gain on sale and in measuring the fair value of credit enhancement assets since a significant portion of the Company's prepayment experience relates to defaults. Defaults are considered in the cumulative credit loss assumption. The Company's voluntary prepayment experience on its receivables portfolio typically would not fluctuate with changes in market interest rates and has historically been stable. NOTE 4 - WAREHOUSE CREDIT FACILITIES Warehouse credit facilities consist of the following (in thousands): March 31, 2002 June 30, 2001 -------------- ------------- Commercial paper facilities $ 54,999 $ 228,794 Medium term notes 1,750,000 1,250,000 Canadian credit agreement 84,189 24,085 ---------- ---------- $1,889,188 $1,502,879 ========== ========== The Company has five separate funding agreements with administrative agents on behalf of institutionally managed commercial paper conduits and bank groups with aggregate structured warehouse financing availability of approximately $4,000.0 million. Certain of the commercial paper facilities are renewable annually and provide for available structured warehouse financing of $550.0 million and $250.0 million, respectively, through September 2002 and $200.0 million through May 2002. Another facility provides for multi-year structured warehouse financing with availability of $500.0 million through November 2003. In March 2002, the Company entered into a fifth facility that provides for available structured warehouse financing of $2,500.0 million, of which $370.0 million matures in March 2003 and the remaining $2,130.0 million matures in March 2005. Under these funding agreements, the Company transfers auto receivables to special purpose finance subsidiaries of the Company, and these subsidiaries in turn issue notes, collateralized by such auto receivables, to the agents. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula and the subsidiaries forward the funds to the Company in consideration for the transfer of auto receivables. While these subsidiaries are included in the Company's consolidated financial statements, these subsidiaries are separate legal entities and the auto receivables and other assets held by the subsidiaries are legally owned by these subsidiaries and are not available to creditors of AmeriCredit Corp. or its other subsidiaries. Advances under the funding agreements bear interest at commercial paper, LIBOR or prime rates plus specified fees depending upon the source of funds provided by the agents. The funding agreements contain various covenants requiring certain minimum financial ratios and results. The funding agreements also require certain funds to be held in restricted cash accounts to provide additional collateral for borrowings under the facilities. As of March 31, 2002, and June 30, 2001, these restricted cash accounts totaled $4.8 million and $6.0 million, respectively, and are included in other assets in the consolidated balance sheets. As of March 31, 11 2002, and June 30, 2001, $59.4 million and $254.7 million, respectively, of auto receivables held for sale were pledged under these funding agreements. The Company also has three funding agreements with administrative agents on behalf of institutionally managed medium term note conduits under which $500.0 million, $750.0 million and $500.0 million, respectively, of proceeds are available through the terms of the agreements. Under these arrangements, the conduits sold medium term notes and delivered the proceeds to special purpose finance subsidiaries of the Company. These subsidiaries in turn issued notes, collateralized by auto receivables and cash, to the agents. The funding agreements allow for the substitution of auto receivables (subject to an overcollateralization formula) for cash, and vice versa, during the term of the agreements, thus allowing the Company to use the medium term note proceeds to finance auto receivables on a revolving basis. The agreements mature in December 2003, June 2004 and February 2005, respectively. While the special purpose finance subsidiaries are included in the Company's consolidated financial statements, the subsidiaries are separate legal entities and the auto receivables and other assets held by the subsidiaries are legally owned by the subsidiaries and are not available to creditors of AmeriCredit Corp. or its other subsidiaries. The notes issued by the subsidiaries under the funding agreements bear interest at LIBOR plus specified fees. The funding agreements contain various covenants requiring certain minimum financial ratios and results. The funding agreements also require certain funds to be held in restricted cash accounts to provide additional collateral under the notes. As of March 31, 2002, and June 30, 2001, these restricted cash accounts totaled $28.4 million and $28.3 million, respectively, and are included in other assets in the consolidated balance sheets. As of March 31, 2002, and June 30, 2001, $1,833.2 million and $1,293.8 million, respectively, of auto receivables held for sale were pledged under these funding agreements. The Company's Canadian subsidiary has a revolving credit agreement, under which the subsidiary may borrow up to $200.0 million Cdn., subject to a defined borrowing base. Borrowings under the credit agreement are collateralized by certain Canadian auto receivables and bear interest at the Canadian Bankers Acceptance Rate plus specified fees. The credit agreement, which expires in August 2002, contains various covenants requiring certain minimum financial ratios and results. As of March 31, 2002, $181.0 million Cdn. of auto receivables held for sale were pledged under this agreement. NOTE 5 - CREDIT ENHANCEMENT FACILITY The Company has a credit enhancement facility with a financial institution which the Company used to fund a portion of the initial restricted cash deposit required in certain of its securitization transactions. Borrowings under the credit enhancement facility were available on a revolving basis through October 2001 after which time outstanding borrowings are payable over time based on future excess cash flows from certain of the Trusts. The facility contains 12 covenants requiring certain asset performance ratios. The Company has alternatively utilized reinsurance arrangements to reduce the initial restricted cash deposit on other of its securitization transactions. These reinsurance arrangements do not represent funded debt, and therefore are not recorded as such on the Company's consolidated balance sheets. NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION Cash payments for interest costs and income taxes consist of the following (in thousands): Nine Months Ended March 31, ------------------ 2002 2001 ------------------ Interest costs (none capitalized) $105,187 $84,062 Income taxes 75,197 60,334 During the nine months ended March 31, 2002 and 2001, the Company entered into capital lease agreements for property and equipment of $47.8 million and $7.7 million, respectively. NOTE 7 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES As of March 31, 2002, and June 30, 2001, the Company had interest rate swap agreements with underlying notional amounts of $5,245.7 million and $1,719.2 million, respectively. These agreements had unrealized losses of approximately $60.1 million and $64.2 million as of March 31, 2002, and June 30, 2001, respectively. As of March 31, 2002, the ineffectiveness related to the interest rate swap agreements was not material. The Company estimates that unrealized losses included in other comprehensive income that will be reclassified into earnings within the next twelve months will not be significant. Under the terms of the interest rate swap agreements, the Company is required to pledge certain funds to be held in restricted cash accounts if the market value of the interest rate swap agreements exceed an agreed upon amount. As of March 31, 2002, and June 30, 2001, these restricted cash accounts totaled $52.3 million and $41.9 million, respectively, and are included in other assets in the consolidated balance sheets. NOTE 8 - GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS The payment of principal, premium, if any, and interest on the Company's senior notes is guaranteed by certain of the Company's subsidiaries (the "Subsidiary Guarantors"). The following consolidating financial statement schedules present consolidating financial data for (i) AmeriCredit Corp. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the Company and its subsidiaries on a consolidated basis and (v) the Company and its subsidiaries on a consolidated basis. 13 Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Earnings of subsidiaries are therefore reflected in the parent company's investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions. 14 AmeriCredit Corp. Consolidating Balance Sheet March 31, 2002 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ---------- ------------ ------------ ASSETS Cash and cash equivalents $ 134,257 $ (15,616) $ 118,641 Receivables held for sale, net 499,196 1,824,891 2,324,087 Interest-only receivables from Trusts 515,005 515,005 Investments in Trust receivables 603,340 603,340 Restricted cash 486,301 486,301 Property and equipment, net $ 349 112,326 112,675 Other assets 7,348 166,864 52,719 226,931 Due (to) from affiliates 800,784 (2,660,598) 1,859,814 Investment in affiliates 899,394 2,975,633 21,270 $(3,896,297) ---------- ----------- ---------- ----------- ---------- Total assets $1,707,875 $ 1,227,678 $5,347,724 $(3,896,297) $4,386,980 ========== =========== ========== =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $ 84,189 $1,804,999 $1,889,188 Credit enhancement facility 166,976 166,976 Senior notes $ 375,000 375,000 Other notes payable 55,232 3,243 58,475 Funding payable 115,050 885 115,935 Accrued taxes and expenses 69,725 133,702 7,532 210,959 Derivative financial instruments 82,595 82,595 Deferred income taxes (142,299) (2,844) 282,778 137,635 ---------- ----------- ---------- ----------- ---------- Total liabilities 357,658 415,935 2,263,170 3,036,763 ---------- ----------- ---------- ----------- ---------- Shareholders' equity: Common stock 913 44,054 $ (44,054) 913 Additional paid-in capital 559,068 51,570 2,127,094 (2,178,664) 559,068 Accumulated other comprehensive income 72,607 (36,954) 109,561 (72,607) 72,607 Retained earnings 735,920 753,073 847,899 (1,600,972) 735,920 ---------- ----------- ---------- ----------- ---------- 1,368,508 811,743 3,084,554 (3,896,297) 1,368,508 Treasury stock (18,291) (18,291) ---------- ----------- ---------- ----------- ---------- Total shareholders' equity 1,350,217 811,743 3,084,554 (3,896,297) 1,350,217 ---------- ----------- ---------- ----------- ---------- Total liabilities and shareholders' equity $1,707,875 $ 1,227,678 $5,347,724 $(3,896,297) $4,386,980 ========== =========== ========== =========== ==========
15 AmeriCredit Corp. Consolidating Balance Sheet June 30, 2001 (Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated --------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 58,954 $ 18,099 $ 77,053 Receivables held for sale, net 390,264 1,531,201 1,921,465 Interest-only receivables from Trusts 13,686 374,209 387,895 Investments in Trust receivables 493,022 493,022 Restricted cash 270,358 270,358 Property and equipment, net $ 349 67,479 67,828 Other assets 9,606 117,058 40,622 167,286 Due (to) from affiliates 867,418 (2,171,157) 1,303,739 Investment in affiliates 605,397 2,286,788 16,995 $(2,909,180) -------------------------------------------------------------------- Total assets $1,482,770 $ 763,072 $4,048,245 $(2,909,180) $3,384,907 ==================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $ 24,085 $1,478,794 $1,502,879 Credit enhancement facility 36,319 36,319 Senior notes $ 375,000 375,000 Other notes payable 23,077 23,077 Funding payable 60,018 442 60,460 Accrued taxes and expenses 15,316 90,271 8,454 114,041 Derivative financial instruments 82,796 82,796 Deferred income taxes 9,181 (8,209) 129,167 130,139 -------------------------------------------------------------------- Total liabilities 422,574 248,961 1,653,176 2,324,711 -------------------------------------------------------------------- Shareholders' equity: Common stock 899 899 Additional paid-in capital 520,077 51,768 1,699,642 $(1,751,410) 520,077 Accumulated other comprehensive income 73,689 (39,456) 113,145 (73,689) 73,689 Retained earnings 484,963 501,799 582,282 (1,084,081) 484,963 -------------------------------------------------------------------- 1,079,628 514,111 2,395,069 (2,909,180) 1,079,628 Treasury stock (19,432) (19,432) -------------------------------------------------------------------- Total shareholders' equity 1,060,196 514,111 2,395,069 (2,909,180) 1,060,196 -------------------------------------------------------------------- Total liabilities and shareholders' equity $1,482,770 $ 763,072 $4,048,245 $(2,909,180) $3,384,907 ====================================================================
16 AmeriCredit Corp. Consolidating Income Statement Nine Months Ended March 31, 2002 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ Revenue Finance charge income $ 74,858 $184,154 $259,012 Gain on sale of receivables 22,474 303,258 325,732 Servicing fee income 214,622 62,546 277,168 Other income $ 33,789 399,606 238,404 $ (662,482) 9,317 Equity in income of affiliates 254,828 265,617 (520,445) -------- -------- -------- ----------- -------- 288,617 977,177 788,362 (1,182,927) 871,229 -------- -------- -------- ----------- -------- Costs and expenses Operating expenses 7,530 290,503 17,618 315,651 Provision for loan losses 9,504 38,744 48,248 Interest expense 32,554 429,094 300,104 (662,482) 99,270 -------- -------- -------- ----------- -------- 40,084 729,101 356,466 (662,482) 463,169 -------- -------- -------- ----------- -------- Income before income taxes 248,533 248,076 431,896 (520,445) 408,060 Income tax (benefit) provision (2,424) (6,752) 166,279 157,103 -------- -------- -------- ----------- -------- Net income $250,957 $254,828 $265,617 $ (520,445) $250,957 ======== ======== ======== =========== ========
17 AmeriCredit Corp. Consolidating Income Statement Nine Months Ended March 31, 2001 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ Revenue Finance charge income $ 63,293 $ 95,219 $158,512 Gain on sale of receivables $ (263) 31,977 180,719 212,433 Servicing fee income 138,171 58,957 197,128 Other income 33,789 229,402 406,535 $(662,697) 7,029 Equity in income of affiliates 153,222 145,968 (299,190) -------- -------- -------- --------- -------- 186,748 608,811 741,430 (961,887) 575,102 -------- -------- -------- --------- -------- Costs and expenses Operating expenses 7,265 186,603 25,969 219,837 Provision for loan losses 6,260 15,700 21,960 Interest expense 29,636 258,186 462,416 (662,697) 87,541 -------- -------- -------- --------- -------- 36,901 451,049 504,085 (662,697) 329,338 -------- -------- -------- --------- -------- Income before income taxes 149,847 157,762 237,345 (299,190) 245,764 Income tax (benefit) provision (1,298) 4,540 91,377 94,619 -------- -------- -------- --------- -------- Net income $151,145 $153,222 $145,968 $(299,190) $151,145 ======== ======== ======== ========= ========
18 AmeriCredit Corp. Consolidating Statement of Cash Flow Nine Months Ended March 31, 2002 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ----------- ------------ ------------ Cash flow from operating activities: Net income $ 250,957 $ 254,828 $ 265,617 $ (520,445) $ 250,957 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,557 18,557 Provision for loan losses 9,504 38,744 48,248 Deferred income taxes (133,082) 3,799 155,856 26,573 Accretion of present value discount and other (82,617) (82,617) Non-cash gain on sale of receivables (307,752) (307,752) Distributions from Trusts 182,826 182,826 Equity in income of affiliates (254,828) (265,617) 520,445 Changes in assets and liabilities: Other assets 2,258 (35,766) (12,364) (45,872) Accrued taxes and expenses 54,409 55,889 (922) 109,376 Purchase of receivables (6,490,011) (6,412,262) 6,412,262 (6,490,011) Principal collections and recoveries on receivables 14,345 160,754 175,099 Net proceeds from sale of receivables 6,412,262 5,919,517 (6,412,262) 5,919,517 --------- ----------- ----------- ----------- ----------- Net cash used by operating activities (80,286) (22,210) (92,603) (195,099) --------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Initial deposits to credit enhancement assets (303,500) (303,500) Purchases of property and equipment (14,724) (14,724) Change in other assets (15,157) 267 (14,890) Net change in investment in affiliates (32,777) (426,782) (4,275) 463,834 --------- ----------- ----------- ----------- ----------- Net cash used by investing activities (32,777) (456,663) (307,508) 463,834 (333,114) --------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Net change in warehouse credit facilities 60,104 326,205 386,309 Borrowings under credit enhancement facility 182,500 182,500 Net change in notes payable (12,357) (12,357) Proceeds from issuance of common stock 13,349 36,382 427,452 (463,834) 13,349 Net change in due (to) from affiliates 112,071 457,690 (569,761) --------- ----------- ----------- ----------- ----------- Net cash provided by financing activities 113,063 554,176 366,396 (463,834) 569,801 --------- ----------- ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents 75,303 (33,715) 41,588 Cash and cash equivalents at beginning of period 58,954 18,099 77,053 --------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of period $ $ 134,257 $ (15,616) $ $ 118,641 ========= =========== =========== =========== ===========
19 AmeriCredit Corp. Consolidating Statement of Cash Flows Nine Months Ended March 31, 2001 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ----------- ------------ ------------ Cash flow from operating activities: Net income $ 151,145 $ 153,222 $ 145,968 $ (299,190) $ 151,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,893 14,893 Provision for loan losses 6,260 15,700 21,960 Deferred income taxes (59,284) 4,611 91,379 36,706 Accretion of present value discount (64,775) (64,775) Non-cash gain on sale of auto receivables (169,725) (169,725) Distributions from Trusts 158,552 158,552 Equity in income of affiliates (153,222) (145,968) 299,190 Changes in assets and liabilities: Other assets 1,053 (11,228) 2,560 (7,615) Accrued taxes and expenses 543 22,875 429 23,847 Purchase of receivables (4,435,454) (4,444,511) 4,444,511 (4,435,454) Principal collections and recoveries on receivables (11,394) 83,957 72,563 Net proceeds from sale of receivables 4,444,958 3,725,453 (4,444,511) 3,725,900 --------- ----------- ----------- ----------- ----------- Net cash (used) provided by operating activities (59,765) 42,775 (455,013) (472,003) --------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Initial deposits to credit enhancement assets (149,999) (149,999) Purchases of property and equipment (11,283) (11,283) Change in other assets (44,126) (9,355) (53,481) Net change in investment in affiliates (7,318) (1,067,754) (10,680) 1,085,752 --------- ----------- ----------- ----------- ----------- Net cash used by investing activities (7,318) (1,123,163) (170,034) 1,085,752 (214,763) --------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Net change in warehouse credit facilities 13,959 646,686 660,645 Borrowings under credit enhancement facility 56,998 56,998 Net change in notes payable (9,049) (9,049) Proceeds from issuance of common stock 36,767 7,301 1,078,451 (1,085,752) 36,767 Net change in due (to) from affiliates 39,365 1,101,541 (1,140,906) --------- ----------- ----------- ----------- ----------- Net cash provided by financing activities 67,083 1,122,801 641,229 (1,085,752) 745,361 --------- ----------- ----------- ----------- ----------- Net increase in cash and cash equivalents 42,413 16,182 58,595 Cash and cash equivalents at beginning of period 30,705 12,211 42,916 --------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of period $ $ 73,118 $ 28,393 $ $ 101,511 ========= =========== =========== =========== ===========
20 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS GENERAL The Company generates earnings and cash flow primarily from the purchase, securitization and servicing of auto receivables. The Company purchases auto finance contracts from franchised and select independent automobile dealerships and, to a lesser extent, makes auto loans directly to consumers. To fund the acquisition of receivables prior to securitization, the Company utilizes borrowings under its warehouse credit facilities. The Company earns finance charge income on its receivables pending securitization ("receivables held for sale") and pays interest expense on borrowings under its warehouse credit facilities. The Company periodically sells receivables to securitization trusts ("Trusts") that, in turn, sell asset-backed securities to investors. The Company recognizes a gain on the sale of receivables to the Trusts, which represents the difference between the sale proceeds to the Company, net of transaction costs, and the Company's net carrying value of the receivables, plus the present value of the estimated future excess cash flows to be received by the Company over the life of the securitization. Excess cash flows result from the difference between the interest received from the obligors on the receivables and the interest paid to investors in the asset-backed securities, net of credit losses and expenses. Excess cash flows from the Trusts are initially utilized to fund credit enhancement requirements in order to attain specific credit ratings for the asset-backed securities issued by the Trusts. Once predetermined credit enhancement requirements are reached and maintained, excess cash flows are distributed to the Company. In addition to excess cash flows, the Company earns monthly base servicing fee income of 2.25% per annum on the outstanding principal balance of receivables securitized ("serviced receivables") and collects other fees such as late charges as servicer for the Trusts. Since the Company is required to account for the securitization of its receivables as a sale, a substantial portion of the Company's net earnings on it receivables are recognized at the time of sale in a securitization transaction. If the Company did not securitize its receivables or changed the structure of its securitization transactions such that it would not be required to account for securitizations as a sale in accordance with generally accepted accounting principles in the United States of America ("GAAP"), net earnings on its receivables would generally be recognized over the life of the receivables as finance charge and fee income, less related funding costs and a provision for loan losses. 21 SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the amount of revenue and costs and expenses during the reporting periods. Actual results could differ from those estimates. The significant accounting policies which the Company believes are the most critical to aid in fully understanding and evaluating the Company's reported financial results include the following: Gain on sale of receivables The Company periodically sells receivables to Trusts that, in turn, sell asset-backed securities to investors. The Company recognizes a gain on the sale of receivables to the Trusts, which represents the difference between the sale proceeds to the Company, net of transaction costs, and the Company's net carrying value of the receivables, plus the present value of the estimated future excess cash flows to be received by the Company over the life of the securitization. The Company makes assumptions in order to determine the present value of the estimated future excess cash flows to be generated by the pool of receivables sold. The most significant assumptions made are the cumulative credit losses to be incurred on the pool of receivables sold and the rate at which the estimated future excess cash flows are discounted. The assumptions used represent the Company's best estimates, and the use of different assumptions could produce different financial results. Fair value measurements Certain of the Company's assets, including the Company's credit enhancement assets and derivative financial instruments are recorded at fair value. Fair values for derivative financial instruments are based on third party quoted market prices, where possible. However, market prices are not readily available for the Company's credit enhancement assets and, accordingly, fair value is determined using discounted cash flow models. The most significant assumptions made are the cumulative credit losses to be incurred on the pool of receivables sold and the rate at which cash flows are discounted. The assumptions used represent the Company's best estimates, and the use of different assumptions could produce different financial results. Allowance for Loan Losses The Company reviews historical origination and charge-off relationships, charge-off experience factors, collection data, delinquency reports, estimates of the value of the underlying collateral, economic conditions and trends and other information in order to make the necessary judgments as to the appropriateness of the provision for loan losses and the allowance for loan losses. Receivables are charged-off to the allowance for loan losses when the Company repossesses and disposes of the collateral or the account is otherwise deemed uncollectable. The Company believes that the allowance for loan losses is adequate to cover future charge-offs; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates. 22 RESULTS OF OPERATIONS Three Months Ended March 31, 2002 as compared to - ------------------------------------------------ Three Months Ended March 31, 2001 --------------------------------- Revenue: The Company's average managed receivables outstanding consisted of the following (in thousands): Three Months Ended March 31, ------------------------ 2002 2001 ----------- ---------- Auto: Held for sale $ 1,697,140 $1,167,508 Serviced 11,293,534 7,451,125 ----------- ---------- 12,990,674 8,618,633 Other 2,619 ----------- ---------- $12,990,674 $8,621,252 =========== ========== Average managed receivables outstanding increased by 51% as a result of higher loan purchase volume. The Company purchased $2,432.4 million of auto loans during the three months ended March 31, 2002, compared to purchases of $1,653.2 million during the three months ended March 31, 2001. This growth resulted from increased loan production at branches open during both periods as well as expansion of the Company's branch network. Loan purchases at branch offices opened prior to March 31, 2000, were 12% higher for the twelve months ended March 31, 2002, versus the twelve months ended March 31, 2001. The Company operated 252 auto lending branch offices as of March 31, 2002, compared to 217 as of March 31, 2001. The average new loan size was $16,418 for the three months ended March 31, 2002, compared to $15,321 for the three months ended March 31, 2001. The average annual percentage rate for loans purchased during the three months ended March 31, 2002, was 17.6%, compared to 19.1% during the three months ended March 31, 2001. Decreasing short-term market interest rates have lowered the Company's cost of funds, allowing the Company to pass along some of this benefit to consumers in the form of lower loan pricing. Finance charge income increased by 35% to $82.2 million for the three months ended March 31, 2002, from $61.0 million for the three months ended March 31, 2001. Finance charge income was higher due primarily to an increase of 45% in average auto receivables held for sale in the three months ended March 31, 2002, versus the three months ended March 31, 2001. The Company's effective yield on its auto receivables held for sale decreased to 19.6% for the three months ended March 31, 2002, from 21.2% for the three months ended March 31, 2001. The effective yield is higher than the contractual rates of the 23 Company's auto finance contracts as a result of finance charge income earned between the date the auto finance contract is originated by the automobile dealership and the date the auto finance contract is funded by the Company. The effective yield decreased for the three months ended March 31, 2002, due to lower loan pricing. The gain on sale of receivables increased by 56% to $124.1 million for the three months ended March 31, 2002, from $79.7 million for the three months ended March 31, 2001. The increase in gain on sale of auto receivables resulted from the sale of $2,400.0 million of receivables in the three months ended March 31, 2002, as compared to $1,300.0 million of receivables sold in the three months ended March 31, 2001. The gain as a percentage of the sales proceeds decreased to 5.2% for the three months ended March 31, 2002, from 6.1% for the three months ended March 31, 2001, primarily as a result of utilizing a higher assumption for cumulative credit losses for the three months ended March 31, 2002. Significant assumptions used in determining the gain on sale of auto receivables were as follows: Three Months Ended March 31, ------------------ 2002 2001 ---- ---- Cumulative credit losses (including unrealized gains at time of sale) 12.5% 11.7% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 14.0% Investment in Trust receivables 9.8% 9.8% Restricted cash 9.8% 9.8% The cumulative credit loss assumptions utilized at the time of sale of receivables were determined using a range of possible outcomes based on historical experience, credit attributes for the specific pool of receivables and general economic factors. The Company increased the assumption for cumulative credit losses used in determining the gain on sale of receivables during the three months ended March 31, 2002, to incorporate an expected increase in credit losses resulting from the general decline in the economy, including higher unemployment rates. The unrealized gains at time of sale represent the excess of the fair value of credit enhancement assets over the Company's carrying value related to such interests when receivables are sold. The cumulative credit loss assumption, including unrealized gains at time of sale, reflects the approximate level that cumulative credit losses could reach (not withstanding other assumptions) in a securitization before the fair value of the related credit enhancement assets would be permanently impaired. 24 The discount rates used to estimate the present value of credit enhancement assets are based on the relative risks of each asset type. Interest-only receivables represent estimated future excess cash flows in Trusts and have a first loss position to absorb any shortfall in Trust cash flows due to adverse credit loss development or other adverse changes in Trust performance relative to other assumptions. While the Company earns a higher yield on its securitized receivables, the Company utilizes a 14% discount rate for interest-only receivables since undiscounted estimated future excess cash flows already incorporate a default assumption and the receivables underlying the securitization represent a diverse pool of assets. Restricted cash and investment in Trust receivables are backed by cash and receivables and are senior to interest-only receivables for credit enhancement purposes. Accordingly, restricted cash and investment in Trust receivables are assigned a lower discount rate than the interest-only receivables from Trusts. Servicing fee income increased to $97.4 million, or 3.5% of average serviced auto receivables, for the three months ended March 31, 2002, compared to $74.4 million, or 4.1% of average serviced auto receivables, for the three months ended March 31, 2001. Servicing fee income represents accretion of the present value discount on estimated future excess cash flows from the Trusts, base servicing fees and other fees earned by the Company as servicer of the auto receivables sold to the Trusts. The growth in servicing fee income is attributable to the increase in average serviced auto receivables outstanding for the three months ended March 31, 2002, compared to the three months ended March 31, 2001. Costs and Expenses: Operating expenses as an annualized percentage of average managed receivables outstanding decreased to 3.4% for the three months ended March 31, 2002, compared to 3.7% for the three months ended March 31, 2001. The ratio improved as a result of economies of scale realized from a growing receivables portfolio and automation of loan origination, processing and servicing functions. The dollar amount of operating expenses increased by $28.5 million, or 36%, primarily due to the addition of branch offices and loan processing and servicing staff. The provision for loan losses increased to $16.7 million for the three months ended March 31, 2002, from $8.6 million for the three months ended March 31, 2001, primarily due to higher average amounts of receivables held for sale. As a percentage of average receivables held for sale, the provision for loan losses was 4.0% and 3.0% for the three months ended March 31, 2002 and 2001, respectively. The increase in the rate of provision for loan losses reflects the general expectation that continuing weakness in the economy, including higher unemployment rates, will cause a higher number of delinquent accounts. Since delinquent accounts are ineligible for securitization, receivables held indefinitely by the Company may increase resulting in higher losses on receivables prior to securitization. 25 Interest expense increased to $33.1 million for the three months ended March 31, 2002, from $30.9 million for the three months ended March 31, 2001, due to higher debt levels. Average debt outstanding was $2,430.9 million and $1,377.1 million for the three months ended March 31, 2002 and 2001, respectively. The Company's effective rate of interest paid on its debt decreased to 5.5% for the three months ended March 31, 2002, from 9.1% for the three months ended March 31, 2001, as a result of lower short-term market interest rates. The Company's effective income tax rate was 38.5% for the three months ended March 31, 2002 and 2001. Other Comprehensive Income: The unrealized (losses) gains on credit enhancement assets consisted of the following (in thousands): Three Months Ended March 31, ------------------- 2002 2001 -------- ------- Unrealized gains at time of sale $ 12,186 $ 7,505 Unrealized holding (losses) gains (18,993) 11,078 -------- ------- $ (6,807) $18,583 ======== ======= The unrealized gains at time of sale represent the excess of the fair value of credit enhancement assets over the Company's carrying value related to such interests when receivables are sold. Unrealized gains were higher for the three months ended March 31, 2002, as compared to the three months ended March 31, 2001, due to a greater amount of receivables sold in the current period. The Company recognized unrealized holding losses for the three months ended March 31, 2002, compared to holding gains for the three months ended March 31, 2001. The credit loss assumptions used to measure the fair value of credit enhancement assets were higher as of March 31, 2002, compared to March 31, 2001, reflecting actual credit loss experience and expectations for adverse future credit loss development as a result of continued weakness in the economy, including higher unemployment rates. In addition, short-term market interest rates increased during the three months ended March 31, 2002, which decreased the fair value of credit enhancement assets due to the expectation that interest rates on the floating rate securities issued by the Trusts would rise. Short-term market interest rates decreased during the three months ended March 31, 2001, increasing the fair value of credit enhancement assets due to the expectation that interest rates on the floating rate securities issued by the Trusts would drop. The effect of interest rate fluctuations on the fair value of credit enhancement assets for each period is substantially offset by unrealized gains or losses on cash flow hedges as described below. 26 Unrealized gains on cash flow hedges were $27.6 million for the three months ended March 31, 2002, compared to unrealized losses of $30.2 million for the three months ended March 31, 2001. Short-term market interest rates increased during the three months ended March 31, 2002, increasing the value of the Company's interest rate swaps, while short-term market interest rates decreased during the three months ended March 31, 2001, decreasing the value of the Company's interest rate swaps. Net Margin: A key measure of the Company's performance is net margin. Net margin is the difference between finance charge, fee and other income earned on the Company's receivables and the cost to fund the receivables. Interest expense reflected on the Company's income statement includes the cost of debt used to fund receivables held for sale as well as the cost of debt incurred for general corporate purposes. An analysis of the Company's net margin as reflected on the income statement is as follows (in thousands): Three Months Ended March 31, ----------------------------- 2002 2001 ---------- ---------- Finance charge, fee and other income $ 85,255 $ 63,055 Funding costs - receivables held for sale (12,575) (15,593) Funding costs - other (20,548) (15,322) ---------- ---------- Net margin $ 52,132 $ 32,140 ========== ========== The Company evaluates the profitability of its lending activities based upon the net margin related to its managed auto loan portfolio, including receivables held for sale and serviced receivables. The Company routinely securitizes its receivables held for sale and records a gain on the sale of such receivables in the income statement. The net margin on a managed basis presented below assumes that securitized receivables have not been sold and are still on the Company's consolidated balance sheet. Accordingly, no gain on sale or servicing fee income would have been recognized. Instead, finance charges and fees would be recognized over the life of the securitized receivables as accrued and interest and other costs related to the asset-backed securities also would be recognized as incurred. Net margin for the Company's managed auto loan portfolio is as follows (in thousands): Three Months Ended March 31, ------------------------------- 2002 2001 ----------- ----------- Finance charge, fee and other income $ 589,677 $ 420,673 Funding costs - managed receivables (172,086) (149,697) Funding costs - other (20,548) (15,322) ----------- ----------- Net margin $ 397,043 $ 255,654 =========== =========== 27 Net margin as a percentage of average managed receivables outstanding was as follows ($ in thousands): Three months ended March 31, 2002 2001 --------------------------- Finance charge, fee and other income 18.4% 19.8% Funding costs (6.0) (7.8) --------------------------- Net margin as a percentage of average managed assets 12.4% 12.0% =========================== Average managed auto receivables $12,990,674 $8,618,633 =========================== 28 Nine Months Ended March 31, 2002 as compared to Nine Months Ended March 31, 2001 -------------------------------- Revenue: The Company's average managed receivables outstanding consisted of the following (in thousands): Nine Months Ended March 31, ------------------------ 2002 2001 ----------- ---------- Auto: Held for sale $ 1,771,980 $ 975,265 Serviced 10,098,419 6,857,243 ----------- ---------- 11,870,399 7,832,508 Other 3,379 ----------- ---------- $11,870,399 $7,835,887 =========== ========== Average managed receivables outstanding increased by 51% as a result of higher loan purchase volume. The Company purchased $6,503.3 million of auto loans during the nine months ended March 31, 2002, compared to purchases of $4,440.9 million during the nine months ended March 31, 2001. This growth resulted from increased loan production at branches open during both periods as well as expansion of the Company's branch network. Loan purchases at branch offices opened prior to March 31, 2000, were 12% higher for the twelve months ended March 31, 2002, versus the twelve months ended March 31, 2001. The Company operated 252 auto lending branch offices as of March 31, 2002, compared to 217 as of March 31, 2001. The average new loan size was $16,349 for the nine months ended March 31, 2002, compared to $15,219 for the nine months ended March 31, 2001. The average annual percentage rate for loans purchased during the nine months ended March 31, 2002, was 17.8%, compared to 19.2% during the nine months ended March 31, 2001. Decreasing short-term market interest rates have lowered the Company's cost of funds, allowing the Company to pass along some of this benefit to consumers in the form of lower loan pricing. Finance charge income increased by 63% to $259.0 million for the nine months ended March 31, 2002, from $158.5 million for the nine months ended March 31, 2001. Finance charge income was higher due primarily to an increase of 82% in average auto receivables held for sale in the nine months ended March 31, 2002, versus the nine months ended March 31, 2001. The Company's effective yield on its auto receivables held for sale decreased to 19.5% for the nine months ended March 31, 2002, from 21.7% for the nine months ended March 31, 2001. The effective yield is higher than the contractual rates of the Company's auto finance contracts as a result of finance charge income earned between the date the auto finance contract is originated by the automobile dealership and the 29 date the auto finance contract is funded by the Company. The effective yield decreased for the nine months ended March 31, 2002, due to lower loan pricing. The gain on sale of receivables increased by 53% to $325.7 million for the nine months ended March 31, 2002, from $212.4 million for the nine months ended March 31, 2001. The increase in gain on sale of auto receivables resulted from the sale of $6,050.0 million of receivables in the nine months ended March 31, 2002, as compared to $3,800.0 million of receivables sold in the nine months ended March 31, 2001. The gain as a percentage of the sales proceeds decreased to 5.4% for the nine months ended March 31, 2002, from 5.6% for the nine months ended March 31, 2001, primarily as a result of utilizing a higher assumption for cumulative credit losses for the nine months ended March 31, 2002. Significant assumptions used in determining the gain on sale of auto receivables were as follows: Nine Months Ended March 31, ----------------- 2002 2001 ------- ------- Cumulative credit losses (including unrealized gains at time of sale) 12.5% 11.2% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 14.0% Investment in Trust receivables 9.8% 9.8% Restricted cash 9.8% 9.8% The cumulative credit loss assumptions utilized at the time of sale of receivables were determined using a range of possible outcomes based on historical experience, credit attributes for the specific pool of receivables and general economic factors. The Company increased the assumption for cumulative credit losses used in determining the gain on sale of receivables during the nine months ended March 31, 2002, to incorporate an expected increase in credit losses resulting from the general decline in the economy, including higher unemployment rates. The unrealized gains at time of sale represent the excess of the fair value of credit enhancement assets over the Company's carrying value related to such interests when receivables are sold. The cumulative credit loss assumption, including unrealized gains at time of sale, reflects the approximate level that cumulative credit losses could reach (not withstanding other assumptions) in a securitization before the fair value of the related credit enhancement assets would be permanently impaired. The discount rates used to estimate the present value of credit enhancement assets are based on the relative risks of each asset type. Interest-only receivables represent estimated future excess cash flows in Trusts and have a first loss position to absorb any shortfall in Trust cash flows due to adverse 30 credit loss development or other adverse changes in Trust performance relative to other assumptions. While the Company earns a higher yield on its securitized receivables, the Company utilizes a 14% discount rate for interest-only receivables since undiscounted estimated future excess cash flows already incorporate a default assumption and the receivables underlying the securitization represent a diverse pool of assets. Restricted cash and investment in Trust receivables are backed by cash and receivables and are senior to interest-only receivables for credit enhancement purposes. Accordingly, restricted cash and investment in Trust receivables are assigned a lower discount rate than the interest-only receivables from Trusts. Servicing fee income increased to $277.2 million, or 3.7% of average serviced auto receivables, for the nine months ended March 31, 2002, as compared to $197.1 million, or 3.8% of average serviced auto receivables, for the nine months ended March 31, 2001. Servicing fee income represents accretion of the present value discount on estimated future excess cash flows from the Trusts, base servicing fees and other fees earned by the Company as servicer of the auto receivables sold to the Trusts. The growth in servicing fee income is attributable to the increase in average serviced auto receivables outstanding for the nine months ended March 31, 2002, compared to the nine months ended March 31, 2001. Costs and Expenses: Operating expenses as an annualized percentage of average managed receivables outstanding decreased to 3.5% for the nine months ended March 31, 2002, compared to 3.7% for the nine months ended March 31, 2001. The ratio improved as a result of economies of scale realized from a growing receivables portfolio and automation of loan origination, processing and servicing functions. The dollar amount of operating expenses increased by $95.8 million, or 44%, primarily due to the addition of branch offices and loan processing and servicing staff. The provision for loan losses increased to $48.2 million for the nine months ended March 31, 2002, from $22.0 million for the nine months ended March 31, 2001, primarily due to higher average amounts of receivables held for sale. As a percentage of average receivables held for sale, the provision for loan losses was 3.6% and 3.0% for the nine months ended March 31, 2002 and 2001, respectively. The increase in the rate of provision for loan losses reflects the expectation that continuing weakness in the economy, including higher unemployment rates, will cause a higher number of delinquent accounts. Since delinquent accounts are ineligible for securitization, receivables held indefinitely by the Company may increase resulting in higher losses on receivables prior to securitization. Interest expense increased to $99.3 million for the nine months ended March 31, 2002, from $87.5 million for the nine months ended March 31, 2001, due to higher debt levels. Average debt outstanding was $2,314.2 million and $1,191.4 million for the nine months ended March 31, 2002 and 2001, respectively. The 31 Company's effective rate of interest paid on its debt decreased to 5.7% for the nine months ended March 31, 2002, from 9.8% for the nine months ended March 31, 2001, as a result of lower short-term market interest rates. The Company's effective income tax rate was 38.5% for the nine months ended March 31, 2002 and 2001. Other Comprehensive Income: The unrealized (losses) gains on credit enhancement assets consisted of the following (in thousands): Nine Months Ended March 31, -------------------- 2002 2001 -------- -------- Unrealized gains at time of sale $ 37,291 $ 20,140 Unrealized holding (losses) gains (43,120) 81,960 -------- -------- $ (5,829) $102,100 ======== ======== The unrealized gains at time of sale represent the excess of the fair value of credit enhancement assets over the Company's carrying value related to such interests when receivables are sold. Unrealized gains were higher for the nine months ended March 31, 2002, as compared to the nine months ended March 31, 2001, due to a greater amount of receivables sold in the current period. The Company recognized unrealized holding losses for the nine months ended March 31, 2002, compared to holding gains for the nine months ended March 31, 2001. The credit loss assumptions used to measure the fair value of credit enhancement assets were higher as of March 31, 2002, compared to March 31, 2001, reflecting actual credit loss experience and expectations for adverse future credit loss development as a result of continued weakness in the economy, including higher unemployment rates. In addition, short-term market interest rates increased during the nine months ended March 31, 2002, which decreased the fair value of credit enhancement assets due to the expectation that interest rates on the floating rate securities issued by the Trusts would rise. Short-term market interest rates decreased during the nine months ended March 31, 2001, increasing the fair value of credit enhancement assets due to the expectation that interest rates on the floating rate securities issued by the Trusts would drop. The effect of interest rate fluctuations on the fair value of credit enhancement assets for each period is substantially offset by unrealized gains or losses on cash flow hedges as described below. Unrealized gains on cash flow hedges were $4.1 million for the nine months ended March 31, 2002, compared to unrealized losses of $76.5 million for the nine months ended March 31, 2001. Short-term market interest rates increased during the nine months ended March 31, 2002, increasing the value of the 32 Company's interest rate swaps, while short-term market interest rates decreased during the nine months ended March 31, 2001, decreasing the value of the Company's interest rate swaps. Net Margin: A key measure of the Company's performance is net margin. Net margin is the difference between finance charge, fee and other income earned on the Company's receivables and the cost to fund the receivables. Interest expense reflected on the Company's income statement includes the cost of debt used to fund receivables held for sale as well as the cost of debt incurred for general corporate purposes. An analysis of the Company's net margin as reflected on the income statement is as follows (in thousands): Nine Months Ended March 31, ------------------------------ 2002 2001 ----------- ---------- Finance charge, fee and other income $ 268,329 $165,541 Funding costs - receivables held for sale (45,746) (39,786) Funding costs - other (53,524) (47,755) ----------- ---------- Net margin $ 169,059 $ 78,000 =========== ========== The Company evaluates the profitability of its lending activities based upon the net margin related to its managed auto loan portfolio, including receivables held for sale and serviced receivables. The Company routinely securitizes its receivables held for sale and records a gain on the sale of such receivables in the income statement. The net margin on a managed basis presented below assumes that securitized receivables have not been sold and are still on the Company's consolidated balance sheet. Accordingly, no gain on sale or servicing fee income would have been recognized. Instead, finance charges and fees would be recognized over the life of the securitized receivables as accrued and interest and other costs related to the asset-backed securities also would be recognized as incurred. Net margin for the Company's managed auto loan portfolio is as follows (in thousands): Nine Months Ended March 31, --------------------------------- 2002 2001 ------------ ------------ Finance charge, fee and other income $1,655,182 $1,163,248 Funding costs - managed receivables (506,911) (413,362) Funding costs - other (53,524) (47,755) ------------ ------------ Net margin $1,094,747 $702,131 ============ ============ 33 Net margin as a percentage of average managed receivables outstanding was as follows ($ in thousands): Nine months ended March 31, 2002 2001 --------------------------- Finance charge, fee and other income 18.6% 19.8% Funding costs (6.3) (7.9) --------------------------- Net margin as a percentage of average managed assets 12.3% 11.9% =========================== Average managed auto receivables $11,870,399 $7,832,508 =========================== CREDIT QUALITY The Company provides financing in relatively high-risk markets, and, therefore, anticipates a corresponding high level of delinquencies and charge-offs. Receivables purchased by the Company are held on the Company's balance sheet until such loans are sold in a securitization transaction. However, receivables may be ineligible for sale if they do not meet certain criteria established in connection with securitization transactions, the most significant of which is that receivables must be less than 31 days delinquent at the time of sale. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses on the balance sheet at a level considered adequate to cover probable credit losses on receivables that are either currently ineligible for sale or may in the future become ineligible for sale and thus may be held indefinitely by the Company. Receivables held for sale are charged-off to the allowance for loan losses when the Company repossesses and disposes of the collateral or the account is otherwise deemed uncollectable. The Company periodically sells receivables in securitization transactions to Trusts and retains an interest in the receivables sold in the form of credit enhancement assets. Credit enhancement assets are reflected on the Company's balance sheet at fair value, calculated based upon the present value of estimated excess future cash flows from the Trusts using, among other assumptions, estimates of future cumulative credit losses on the receivables sold. Charge-offs of receivables which have been sold to Trusts decrease the amount of excess future cash flows from the Trusts. If such charge-offs are expected to exceed the Company's estimates of cumulative credit losses utilized to measure the fair value of credit enhancement assets, the fair value of credit enhancement assets could result in a write-down through an impairment charge. 34 The following table presents certain data related to the Company's managed receivables portfolio (dollars in thousands): March 31, 2002 ----------------------------------------- Held for Total Sale Serviced Managed ---------- ----------- ----------- Principal amount of receivables $2,390,298 $11,237,512 $13,627,810 =========== =========== Nonaccretable acquisition fees (30,488) Allowance for loan losses (35,723) $(1,245,962)(a) $(1,312,173) ---------- =========== =========== Receivables, net $2,324,087 ========== Number of outstanding contracts 165,498 887,122 1,052,620 ========== =========== =========== Average principal amount of outstanding contract (in dollars) $ 14,443 $ 12,667 $ 12,947 ========== =========== =========== Allowance for loan losses and nonaccretable acquisition fees as a percentage of receivables 2.8% 11.1% 9.6% ========== =========== =========== (a) The allowance for loan losses related to serviced auto receivables is factored into the valuation of interest-only receivables from Trusts in the Company's consolidated balance sheets. Assumptions for cumulative credit losses are added and charge-offs of receivables which have been sold to Trusts reduce the allowance for loan losses. The following is a summary of auto receivables which are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession (dollars in thousands):
March 31, 2002 --------------------------------------------------------------- Held for Sale Serviced Total Managed --------------------------------------------------------------- Amount Percent Amount Percent Amount Percent ------- ------- ---------- ------- ---------- ------- Delinquent contracts: 31 to 60 days $46,967 2.0% $ 869,307 7.7% $ 916,274 6.7% Greater than 60 days 35,783 1.5 388,990 3.5 424,773 3.1 ------- --- ---------- ---- ---------- ---- 82,750 3.5 1,258,297 11.2 1,341,047 9.8 In repossession 15,877 0.6 137,030 1.2 152,907 1.1 ------- --- ---------- ---- ---------- ---- $98,627 4.1% $1,395,327 12.4% $1,493,954 10.9% ======= === ========== ==== ========== ==== March 31, 2001 --------------------------------------------------------------- Held for Sale Serviced Total Managed --------------------------------------------------------------- Amount Percent Amount Percent Amount Percent ------- ------- -------- ------- --------- ------- Delinquent contracts: 31 to 60 days $21,252 1.4% $ 575,357 7.6% $ 596,609 6.6% Greater than 60 days 15,245 1.0 193,366 2.6 208,611 2.3 ------- --- ---------- ---- ---------- ---- 36,497 2.4 768,723 10.2 805,220 8.9 In repossession 8,127 0.5 85,166 1.1 93,293 1.0 ------- --- ---------- ---- ---------- ---- $44,624 2.9% $ 853,889 11.3% $ 898,513 9.9% ======= === ========== ==== ========== ====
Delinquencies in the Company's managed receivables portfolio may vary from period to period based upon the average age or seasoning of the portfolio, 35 seasonality within the calendar year and economic factors. Due to the Company's target customer base, a relatively high percentage of accounts become delinquent at some point in the life of a loan and there is a fairly high rate of account movement between current and delinquent status in the portfolio. Delinquencies were higher as of March 31, 2002, compared to March 31, 2001, due to continued weakness in the economy, including higher unemployment rates, and, to a lesser extent, an increase in the average age of the Company's managed receivables portfolio. In accordance with its policies and guidelines, the Company at times offers payment deferrals to consumers, whereby the consumer is allowed to move a delinquent payment to the end of the loan typically by paying a fee (approximately the interest portion of the payment deferred). An account for which all delinquent payments are deferred is classified as current at the time the deferment is granted. Thereafter, such account is aged based on the timely payment of future installments in the same manner as any other account. Contracts receiving a payment deferral as an average quarterly percentage of average managed auto receivables outstanding were 4.9% for the three and nine months ended March 31, 2002, and 4.6% and 4.8% for the three and nine months ended March 31, 2001, respectively. Receivables held for sale receiving a payment deferral were less than 3.0% and less than 1.0% of total deferrals for the three and nine months ended March 31, 2002 and 2001, respectively. The Company evaluates the results of its deferment strategies based upon the amount of cash installments that are collected on accounts which have been deferred versus the extent to which the collateral underlying deferred accounts has depreciated over the same period of time. The Company believes that payment deferrals granted according to its policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio. 36 The following table presents charge-off data with respect to the Company's managed receivables portfolio (dollars in thousands):
Three Months Ended Nine Months Ended March 31, March 31, --------------------- --------------------- 2002 2001 2002 2001 --------------------------------------------- Held for sale: Repossession charge-offs $ 25,546 $ 7,061 $ 54,615 $ 16,630 Less: Recoveries (12,877) (3,908) (27,648) (8,746) Mandatory charge-offs (1) 3,910 1,412 11,420 2,904 --------------------------------------------- Net charge-offs $ 16,579 $ 4,565 $ 38,387 $ 10,788 ============================================= Serviced: Repossession charge-offs $ 200,149 $ 107,400 $ 493,482 $ 297,880 Less: Recoveries (98,720) (54,850) (235,485) (153,226) Mandatory charge-offs (1) 36,927 19,927 92,676 58,373 --------------------------------------------- Net charge-offs $ 138,356 $ 72,477 $ 350,673 $ 203,027 ============================================= Total managed: Repossession charge-offs $ 225,695 $ 114,461 $ 548,097 $ 314,510 Less: Recoveries (111,597) (58,758) (263,133) (161,972) Mandatory charge-offs (1) 40,837 21,339 104,096 61,277 --------------------------------------------- Net charge-offs $ 154,935 $ 77,042 $ 389,060 $ 213,815 ============================================= Net charge-offs as an annualized percentage of average managed receivables outstanding 4.8% 3.6% 4.4% 3.6% ============================================= Net recoveries as a percentage percentage of gross repossession charge-offs 49.4% 51.3% 48.0% 51.5% =============================================
(1) Mandatory charge-offs represent accounts charged off in full with no recovery amounts realized at time of charge off. Net charge-offs as an annualized percentage of average managed receivables outstanding may vary from period to period based upon the average age or seasoning of the portfolio and economic factors. Net charge-offs increased for the periods ended March 31, 2002, compared to the corresponding periods ended March 31, 2001, due to continued weakness in the economy, including higher unemployment rates. In addition, net recoveries as a percentage of gross repossession charge-offs decreased due to a general decline in used car auction values. 37 LIQUIDITY AND CAPITAL RESOURCES The Company's cash flows are summarized as follows (in thousands): Nine Months Ended March 31, --------------------- 2002 2001 --------- --------- Operating activities $(195,099) $(472,003) Investing activities (333,114) (214,763) Financing activities 569,801 745,361 --------- --------- Net increase in cash and cash equivalents $ 41,588 $ 58,595 ========= ========= The Company's primary sources of cash have been borrowings under its warehouse credit facilities and sales of auto receivables to Trusts in securitization transactions. The Company's primary uses of cash have been purchases of receivables and funding credit enhancement requirements for securitization transactions. The Company required cash of $6,490.0 million and $4,435.5 million for the purchase of auto finance contracts during the nine months ended March 31, 2002 and 2001, respectively. These purchases were funded initially utilizing warehouse credit facilities and subsequently through the sale of auto receivables in securitization transactions. The Company has five separate funding agreements with administrative agents on behalf of institutionally managed commercial paper conduits and bank groups with aggregate structured warehouse financing availability of approximately $4,000.0 million. Certain of the commercial paper facilities are annually renewable and provide for available structured warehouse financing of $550.0 million and $250.0 million, respectively, through September 2002 and $200.0 million through May 2002. Another facility provides for multi-year structured warehouse financing with availability of $500.0 million through November 2003. In March 2002, the Company entered into a fifth facility that provides for available structured warehouse financing of $2,500.0 million, of which $370.0 million matures in March 2003 and the remaining $2,130.0 million matures in March 2005. A total of $55.0 million was outstanding under these facilities as of March 31, 2002. The Company also has three funding agreements with administrative agents on behalf of institutionally managed medium term note conduits under which $500.0 million, $750.0 million and $500.0 million, respectively, of proceeds are available through the terms of the agreements. The funding agreements allow for the substitution of auto receivables (subject to an overcollateralization formula) for cash, and vice versa, thus allowing the Company to use the medium term note proceeds to finance auto receivables on a revolving basis. The agreements mature in December 2003, June 2004 and February 2005. A total of $1,750.0 million was outstanding under these facilities as of March 31, 2002. 38 The Company's Canadian subsidiary has a revolving credit agreement, under which the subsidiary may borrow up to $200.0 million Cdn., subject to a defined borrowing base. The credit agreement expires in August 2002. A total of $84.2 million was outstanding under the Canadian facility as of March 31, 2002. As is customary in the Company's industry, certain of the Company's warehouse credit facilities need to be renewed on an annual basis. The Company has historically been successful in renewing and expanding these facilities on an annual basis. If the Company was unable to renew these facilities on acceptable terms, there could be a material adverse effect on the Company's financial position, results of operations and liquidity. The Company has completed thirty auto receivable securitization transactions through March 31, 2002. The proceeds from the transactions were primarily used to repay borrowings outstanding under the Company's warehouse credit facilities. A summary of these transactions is as follows (dollars in millions): Original Balance at Transaction (a) Date Amount March 31, 2002 - --------------- -------------- --------- -------------- 1998-C August 1998 $ 575.0 $ 67.6 1998-D November 1998 625.0 93.8 1999-A February 1999 700.0 128.3 1999-B May 1999 1,000.0 237.6 1999-C August 1999 1,000.0 304.6 1999-D October 1999 900.0 304.9 2000-A February 2000 1,300.0 506.6 2000-B May 2000 1,200.0 557.3 2000-C August 2000 1,100.0 575.1 2000-1 November 2000 495.0 270.0 2000-D November 2000 600.0 363.8 2001-A February 2001 1,400.0 905.6 2001-1 April 2001 1,089.0 754.5 2001-B July 2001 1,850.0 1,507.1 2001-C September 2001 1,600.0 1,411.0 2001-D October 2001 1,800.0 1,626.1 2002-A February 2002 1,600.0 1,584.1 --------- --------- $18,834.0 $11,198.0 ========= ========= (a) Transactions 1994-A, 1995-A and B, 1996-A, B, C and D, 1997-A, B, C and D, and 1998-A and B originally totaling $2,945.5 million have been paid off as of March 31, 2002. In connection with securitization transactions, the Company is required to provide credit enhancement in order to attain specific credit ratings for the 39 asset-backed securities issued by the Trusts. The Company typically makes an initial deposit to a restricted cash account and subsequently uses excess cash flows generated by the Trusts to either increase the restricted cash account or repay the outstanding asset-backed securities on an accelerated basis, thus creating additional credit enhancement through overcollateralization in the Trusts. When the credit enhancement levels reach specified percentages of the Trust's pool of receivables, excess cash flows are distributed to the Company. The Company expects to begin to receive excess cash flow distributions approximately 14 to 16 months after receivables are securitized. The reinsurance used to reduce the Company's initial cash deposit has typically been arranged by the insurer of the asset-backed securities. As of March 31, 2002, the Company had commitments from the insurer for an additional $195.5 million of reinsurance. These commitments expire in December 2002. In addition, the Company has a credit enhancement facility with a financial institution which the Company used to fund a portion of the initial cash deposit in securitization transactions through October 2001, similar to the amount covered by the reinsurance described above. Borrowings under the credit enhancement facility are collateralized by the Company's credit enhancement assets. A total of $167.0 million was outstanding under this facility at March 31, 2002. During fiscal 2001, the Company completed two securitization transactions (2000-1 and 2001-1) involving the sale of subordinate asset-backed securities in order to provide credit enhancement for the senior asset-backed securities. The Company's other securitization transactions have included the sale of senior asset-backed securities only and the purchase of a financial guaranty insurance policy for the benefit of investors. The subordinate asset-backed securities replace a portion of the Company's initial credit enhancement deposit otherwise required in a securitization transaction in a manner similar to the utilization of reinsurance or other alternative credit enhancements described in the preceding paragraph. Initial deposits for credit enhancement purposes were $303.5 million and $150.0 million for the nine months ended March 31, 2002 and 2001, respectively. Borrowings under the credit enhancement facility were $182.5 million and $57.0 million for the nine months ended March 31, 2002 and 2001, respectively. Excess cash flows distributed to the Company were $182.8 million and $158.6 million for the nine months ended March 31, 2002 and 2001, respectively. With respect to the Company's securitization transactions covered by a financial guaranty policy, certain agreements with the insurer provide that if delinquency, default and net loss ratios in a Trust's pool of receivables exceed certain targets, the specified credit enhancement levels would be increased. As of March 31, 2002, none of the Company's securitizations had delinquency, default or net loss ratios in excess of the targeted levels. In addition, the Company believes that it is unlikely that the targeted delinquency, default or net loss ratios will be exceeded in any securitizations 40 during the next twelve months. However, if the targeted ratios were exceeded in any securitization and a waiver was not granted by the insurer, excess cash flows from all of the Company's insured securitizations would be used to increase credit enhancement for the securitizations in which a ratio was exceeded to higher specified levels rather than being distributed to the Company. If a targeted ratio were exceeded for an extended period of time in larger securitizations requiring a greater amount of additional credit enhancement, there could be a material adverse effect on the Company's liquidity. The Company operated 252 branch offices as of March 31, 2002, and plans to expand loan production capacity at existing branch offices where appropriate. While the Company has been able to establish and grow its auto finance business thus far, there can be no assurance that future expansion will be successful due to competitive, regulatory, market, economic or other factors. As of March 31, 2002, the Company had $118.6 million in cash and cash equivalents. The Company also had available borrowing capacity of $219.2 million under its warehouse credit facilities pursuant to the borrowing base requirements of such agreements. The Company believes that its existing capital resources along with expected cash flows from operating activities will be sufficient to fund the Company's liquidity needs, exclusive of the purchase of auto finance contracts, for the next twelve months. However, the Company anticipates that it will require additional external capital in the form of securitization transactions and renewal of its existing warehouse credit facilities in order to fund auto loan purchases for the next twelve months. There can be no assurance that funding will be available to the Company through these sources or, if available, that it will be on terms acceptable to the Company. INTEREST RATE RISK The Company's earnings are affected by changes in interest rates as a result of its dependence upon the issuance of interest-bearing securities and the incurrence of debt to fund its lending activities. Several factors can influence the Company's ability to manage interest rate risk. First, auto finance contracts are purchased at fixed interest rates, while the amounts borrowed under warehouse credit facilities bear interest at variable rates that are subject to frequent adjustment to reflect prevailing market interest rates. Second, the interest rate demanded by investors in securitizations is a function of prevailing market rates for comparable transactions and the general interest rate environment. Because the auto finance contracts purchased by the Company have fixed interest rates, the Company bears the risk of smaller gross interest rate spreads in the event interest rates increase during the period between the date receivables are purchased and the completion and pricing of securitization transactions. In addition, the securities issued by the Trusts in the Company's securitization transactions 41 may bear interest at floating rates that are subject to monthly adjustment to reflect prevailing market interest rates. The Company utilizes several strategies to minimize the risk of interest rate fluctuations, including the use of derivative financial instruments, the regular sale of auto receivables to the Trusts and pre-funding of securitization transactions. Pre-funding securitizations is the practice of issuing more asset-backed securities than the amount of receivables initially sold to the Trust. The proceeds from the pre-funded portion are held in an escrow account until additional receivables are sold to the Trust in amounts up to the balance of the pre-funded escrow account. In pre-funded securitizations, borrowing costs are locked in with respect to the loans subsequently delivered to the Trust. However, the Company incurs an expense in pre-funded securitizations equal to the difference between the money market yields earned on the proceeds held in escrow prior to subsequent delivery of receivables and the interest rate paid on the asset-backed securities outstanding. Derivative financial instruments are utilized to manage the gross interest rate spread on the Company's securitization transactions. The Company sells fixed rate auto receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The fixed rates on securities issued by the Trusts are indexed to market interest rate swap spreads for transactions of similar duration or various London Interbank Offered Rates ("LIBOR"). The floating rates on securities issued by the Trusts are indexed to LIBOR. The Company uses interest rate swap agreements to convert the floating rate exposures on these securities to a fixed rate. The Company utilizes these derivative financial instruments to modify its net interest sensitivity to levels deemed appropriate based on the Company's risk tolerance. The Company also utilizes interest rate cap agreements as part of its interest rate risk management strategy for securitization transactions as well as for warehouse credit facilities. The purchaser of the interest rate cap agreement pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated "cap" rate. The interest rate cap agreement purchaser bears no obligation or liability if interest rates fall below the "cap" rate. The Company's special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements as credit enhancement in connection with securitization transactions and warehouse credit facilities. The Company simultaneously sells a corresponding interest rate cap agreement in order to offset the purchased interest rate cap agreement. Management monitors the Company's hedging activities to ensure that the value of hedges, their correlation to the contracts being hedged and the amounts being hedged continue to provide effective protection against interest rate risk. All transactions are entered into for purposes other than trading. 42 There can be no assurance that the Company's strategies will be effective in minimizing interest rate risk or that increases in interest rates will not have an adverse effect on the Company's profitability. FORWARD LOOKING STATEMENTS The preceding Management's Discussion and Analysis of Financial Condition and Results of Operations section contains several "forward-looking statements". Forward-looking statements are those which use words such as "believe", "expect", "anticipate", "intend", "plan", "may", "will", "should", "estimate", "continue" or other comparable expressions. These words indicate future events and trends. Forward-looking statements are the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to many risks and uncertainties which could cause actual results to differ significantly from historical results or from those anticipated by the Company. The most significant risks are detailed from time to time in the Company's filings and reports with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended June 30, 2001. It is advisable not to place undue reliance on the Company's forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because the Company's funding strategy is dependent upon the issuance of interest-bearing securities and the incurrence of debt, fluctuations in interest rates impact the Company's profitability. Therefore, the Company employs various hedging strategies to minimize the risk of interest rate fluctuations. See "Management's Discussion and Analysis - Interest Rate Risk" for additional information regarding such market risks. 43 Part II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS As a consumer finance company, the Company is subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud and breach of contract. Some litigation against the Company may take the form of class action complaints by consumers. The Company, as the assignee of finance contracts originated by dealers, may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but includes requests for compensatory, statutory and punitive damages. Management believes that the Company has taken prudent steps to address the litigation risks associated with the Company's business activities. However, there can be no assurance that the Company will be able to successfully defend against all such claims or that the determination of any such claim in a manner adverse to the Company would not have a material adverse effect on the Company's automobile finance business. Item 2. CHANGES IN SECURITIES Not Applicable Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable Item 5. OTHER INFORMATION Not Applicable 44 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10.1 Amendment No. 2, dated as of February 1, 2002, to the Credit Agreement, dated as of August 23, 2001, between AmeriCredit Financial Services of Canada Ltd., AmeriCredit Financial Services, Inc., and Merrill Lynch Capital Canada Inc. 10.2 Amended and Restated Sale and Servicing Agreement, dated as of February 22, 2002, among AmeriCredit Master Trust, AmeriCredit Funding Corp. VII, AmeriCredit Financial Services, Inc., and Bank One, NA 10.3 Annex A to the Amended and Restated Sale and Servicing Agreement, dated as of February 22, 2002, among AmeriCredit Master Trust, AmeriCredit Funding Corp. VII, AmeriCredit Financial Services, Inc., and Bank One, NA 10.4 Amended and Restated Indenture, dated as of February 22, 2002, among AmeriCredit Master Trust, Bank One, NA, and Bankers Trust Company 10.5 Master Receivables Purchase Agreement, dated as of February 25, 2002, among AmeriCredit MTN Receivables Trust III, JPMorgan Chase Bank, AmeriCredit MTN Corp. III, and AmeriCredit Financial Services, Inc. 10.6 Servicing and Custodian Agreement, dated as of February 25, 2002, between AmeriCredit Financial Services, Inc., AmeriCredit MTN Receivables Trust III, and JPMorgan Chase Bank 10.7 Security Agreement, dated as of February 25, 2002, by and among AmeriCredit MTN Receivables Trust III, AmeriCredit Financial Services, Inc., AmeriCredit MTN Corp. III, and JPMorgan Chase Bank 10.8 Amendment No. 3, dated as of March 8, 2002, to the Amended and Restated Security Agreement, dated as of August 31, 2000, by and among AmeriCredit Barclays Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. III, Sheffield Receivables Corporation, and Bank One, NA 11.1 Statement Re: Computation of Per Share Earnings (b) Report on Form 8-K The Company did not file any reports on Form 8-K during the quarterly period ended March 31, 2002. Certain subsidiaries and affiliates of the Company filed reports on Form 8-K during the quarterly period ended March 31, 2002, reporting monthly information related to securitization trusts. 45 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AmeriCredit Corp. ------------------------------- (Registrant) Date: May 15, 2002 By: /s/ Daniel E. Berce ------------------------------- (Signature) Daniel E. Berce Vice Chairman and Chief Financial Officer 46 EX-10.1 3 dex101.txt AMENDMENT NO. 2 Exhibit 10.1 AMENDMENT NO. 2 to CREDIT AGREEMENT between AMERICREDIT FINANCIAL SERVICES OF CANADA LTD. and AMERICREDIT FINANCIAL SERVICES, INC. and MERRILL LYNCH CAPITAL CANADA INC. DATED AS OF FEBRUARY 1, 2002 THIS AMENDMENT NO. 2 to the CREDIT AGREEMENT (this "Amendment") is made as of the 1st day of February, 2002. B E T W E E N: AMERICREDIT FINANCIAL SERVICES OF CANADA LTD., a corporation incorporated pursuant to the laws of the Province of Ontario (the "Borrower") - and - AMERICREDIT FINANCIAL SERVICES, INC., a corporation incorporated pursuant to the laws of the State of Delaware (the "Custodian") - and - MERRILL LYNCH CAPITAL CANADA INC., a corporation incorporated pursuant to the laws of the Province of Ontario (the "Lender") RECITALS: WHEREAS, the Borrower, the Custodian and the Lender entered into a Credit Agreement dated as of August 23, 2001, as amended by Amendment No. 1 made as of November 12, 2001 (collectively, the "Credit Agreement"); and WHEREAS, the parties desire to amend the Credit Agreement as provided herein; NOW, THEREFORE, for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto), the parties hereto hereby agree as follows: 1. Defined Terms. In this Amendment, unless something in the subject matter or the context is inconsistent therewith, capitalized terms used and not otherwise defined herein shall have the respective meanings attributed to such terms in Schedule A to the Credit Agreement. 2. Amendments to Credit Agreement. (a) Section 2.4.2(b)(iii) of the Credit Agreement is hereby deleted in its entirety, and the following language is inserted in lieu thereof: -2- (iii) results in there being no Excess Advances (based on a Receivables Borrowing Base taking into account such Receivables). (b) Section 3.1.1 of the credit Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 3.1.1 Each Advance shall bear interest in Canadian Dollars during each Interest Period applicable thereto, on the outstanding amount of such Advance, at a rate per annual equal to the CDOR for such Interest Period plus 1.25% per annum; provided that in the case of an Advance or a portion thereof which when added to all outstanding Advances made on a date prior to such Advance results in the aggregate of all Advances exceeding $150,000,000, the rate per annum applicable to such Advance or such portion thereof, as the case may be, shall be the CDOR for such Interest Period plus 1.50% per annum. (c) Article 3 of the Credit Agreement is hereby amended by adding the following thereto: 3.7 Non-Utilization Fee The Borrower shall pay in respect of each Interest Period a fee (the "Non-Utilization Fee") equal to 20 basis points multiplied by the number of days in the Interest Period divided by 365 on the positive difference, if any, between (i) the Credit Facility Limit and (ii) the average daily (as calculated at the close of business on each day) sum of the aggregate outstanding Advances during such Interest Period. The Non-Utilization Fee for an Interest Period shall be paid on the Payment Date immediately following such Interest Period. 3.8 Maturity Date Extension 3.8.1 The Lender may extend the existing Maturity Date to August 22, 2003 by giving written notice to that effect to the Borrower on or prior to July 22, 2002. 3.8.2 If the Lender is willing to extend the existing Maturity Date pursuant to Section 3.8.1, the Borrower shall pay to the Lender on August 22, 2002 an extension fee (an "Extension Fee") of $250,000. 3.8.3 If the Lender is willing to extend the existing Maturity Date pursuant to Section 3.8.1 and the Borrower is not, the Borrower shall pay to the Lender on August 22, 2002, the Extension Fee of $250,000 and the facility will terminate on the existing Maturity Date. 3.8.4 The Borrower agrees with the Lender that (i) an Extension Fee shall be conclusively deemed to have been fully earned on the date on which the Lender offers to extend the existing Maturity Date and, once paid, shall -3- not be refundable in whole or in part in any circumstances, and (ii) payment of an Extension Fee shall not constitute or give rise to any obligation on the part of the Lender to make any Advance under this Agreement, other than in accordance with the terms of this Agreement. (d) The definition of "Advance Rate" in Schedule A to the Credit Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: "Advance Rate" means (i) prior to the occurrence of a Step-Up Trigger Event, (A) 70%, in the case of Eligible Receivables which Contracts form part of the Collateral (including those to be added to the Collateral pursuant to a Drawdown Notice), provide for more than 60 monthly payments and result in the number of such Contracts exceeding 25% (in terms of outstanding balance) of all Contracts forming part of the Collateral; and (B) otherwise, 75%; or (ii) 70% from and after the occurrence of a Step-Up Trigger Event. (e) The definition of "Credit Facility Limit" in Schedule A to the Credit Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: "Credit Facility Limit" means, (i) on any day during the period from February 1, 2002 to and including August 22, 2002, the lesser of (A) $200,000,000, and (B) the Borrowing Base on such day and (ii) at any other time, the lesser of (A) $150,000,000, and (B) the Borrowing Base at such time. (f) The definition of "Maturity Date" in Schedule A to the Credit Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: "Maturity Date" means, subject to an extension pursuant to Section 3.8, August 22, 2002. (g) Clause (a) of the definition of "Receivables Borrowing Base" in Schedule A to the Credit Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: (a) the sum of the product of (i) the Outstanding Balance of each Eligible Receivable forming part of the Collateral at the close of business on the Borrowing Base Determination Date, and (ii) the Advance Rate for such Eligible Receivable, (h) Schedule B to the Credit Agreement is hereby amended in the following manner: (i) Section 2(b) is deleted and Section 2(c) becomes Section 2(b); and (ii) Section 4 is deleted in its entirety, and the following language is inserted in lieu thereof: 4. The Aggregate Outstanding Balance of the Eligible Receivables identified in the attached Schedule of Contracts is Cdn. $___________. The Aggregate Outstanding Balance of the -4- Eligible Receivables identified in the attached Schedule of Contracts to which an Advance Rate of 70% is applicable is Cdn. $___________. (i) Section 5 of Schedule D to the Credit Agreement is hereby deleted in its entirety, and the following language is inserted in lieu thereof: 5. The aggregate outstanding Advances made by the Lender to the Borrower following the repayment referred to herein will not exceed the Credit Facility Limit on the date of such repayment (which Credit Facility Limit will take into account the reduction of the Borrowing Base as a result of the removal of those Receivables referred to in Section 3 immediately above from the Eligible Receivables forming part of the Collateral). (j) Section 2(d) of Schedule I to the Credit Agreement is hereby deleted in its entirety, and the following language is inserted in lieu thereof: (d) the Aggregate Outstanding Balance of the Eligible Receivables forming part of the Collateral to which an Advance Rate of 70% is applicable is Cdn. $___________. (k) Paragraph (h) of Schedule J to the Credit Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: (h) the addition of the related Contract to the Contracts forming part of the Collateral does not cause the aggregate number of all Contracts forming part of the Collateral which provide for more than 60 monthly payments to exceed (i) 40% (in terms of outstanding balance) prior to the occurrence of a Step-Up Trigger Event, or (ii) 25% (in terms of outstanding balance) from and after the occurrence of a Step-Up Trigger Event, of all Contracts forming part of the Collateral; 3. Representations and Warranties. To induce the Lender to enter into this Amendment, each of the Borrower and the Custodian hereby represents and warrants (each as to itself) as of the date hereof that: (a) It has the power, authority and legal right to make and deliver this Amendment and to perform its obligations under the Credit Agreement, as amended by this Amendment, as applicable, without any notice, consent, approval or authorization not already obtained, and it has taken all necessary action to authorize the same. (b) The making and delivery of this Amendment and the performance of the Credit Agreement, as amended by this Amendment, do not violate any provision of law or any regulation, or its charter or by-laws, or result in the breach of or constitute a default under or require any consent under any indenture or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or affected. The Credit Agreement, as amended by this Amendment, as applicable, constitutes its legal, valid and binding obligation, -5- enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally. (c) The representations and warranties made by it contained in the Credit Agreement are true and correct in all material respects on and as of the date of this Amendment and after giving effect hereto, except for those representations and warranties that address matters only as of a particular prior date. (d) No Event of Default or Pending Event of Default has occurred and is continuing under the Credit Agreement on and as of the date of this Amendment and after giving effect to hereto. 4. Reference to and Effect on the Credit Agreement. (a) On and after the date of this Amendment, each reference in the Credit Agreement, to "this Agreement," "hereunder," "hereof' or words of like import, and each reference in any other Credit Document to "the Credit Agreement," "thereunder," "thereof' or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. (b) Except as specifically amended hereby, the Credit Agreement and the Credit Documents shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under any of the Credit Documents. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original and all of which taken together shall constitute a single instrument with the same effect as if the signatures thereto and hereto were upon the same instrument. -6- 6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in Ontario. IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first written above. AMERICREDIT FINANCIAL SERVICES OF CANADA LTD. By: ______________________________________________ Name: Connie Coffey Title: Vice President, Non-Public Financings and Reporting AMERICREDIT FINANCIAL SERVICES, INC. By: ______________________________________________ Name: Kate Harlow Title: Vice President, Finance MERRILL LYNCH CAPITAL CANADA INC. By: ______________________________________________ Name: Title: CONSENT OF GUARANTOR The Guarantor hereby consents to the making, execution and delivery of Amendment No. 2, dated as of February 1, 2002, to the Credit Agreement dated as of August 23, 2001 by and among AmeriCredit Financial Services of Canada Ltd., as Borrower, AmeriCredit Financial Services, Inc., as Custodian, and Merrill Lynch Capital Canada Inc., as Lender, as amended by Amendment No. 1 made as of November 12, 2001. Dated as of February 1, 2002. AMERICREDIT CORP. By: ______________________________________ Preston A. Miller Executive Vice President and Treasurer EX-10.2 4 dex102.txt AMENDED SALE AND SERVICING AGREEMENT Exhibit 10.2 EXECUTION COPY AMENDED AND RESTATED SALE AND SERVICING AGREEMENT among AMERICREDIT MASTER TRUST, as Issuer, AMERICREDIT FUNDING CORP. VII, as a Seller, AMERICREDIT FINANCIAL SERVICES, INC., as a Seller and as Servicer and BANK ONE, NA, as Backup Servicer and as Trust Collateral Agent Dated as of February 22, 2002 - -------------------------------------------------------------------------------- AMENDED AND RESTATED SALE AND SERVICING AGREEMENT, dated as of February 22, 2002, among AMERICREDIT MASTER TRUST, a Delaware business trust (the "Issuer"), AMERICREDIT FUNDING CORP. VII, a Delaware corporation ("AFC"), ------ --- in its capacity as a Seller ("AFC" or a "Seller"), and AMERICREDIT FINANCIAL --- ------ SERVICES, INC., a Delaware corporation ("AmeriCredit"), in its capacity as a ----------- Seller (a "Seller", and together with AFC in its capacity as a Seller, the ------ "Sellers"), and in its capacity as Servicer (the "Servicer"), and BANK ONE, NA, ------- -------- a national banking association, in its capacity as Backup Servicer and Trust Collateral Agent. WHEREAS, the Issuer, AFC, as a Seller, AmeriCredit, as a Seller and Servicer, and Bank One, NA, are parties to a certain Sale and Servicing Agreement dated as of December 13, 2001; and WHEREAS, the parties hereto desire to amend and restate the Sale and Servicing Agreement in the manner, and on the terms and conditions herein provided; WHEREAS the Issuer desires from time to time to purchase receivables arising in connection with motor vehicle retail installment sale contracts made by or acquired by the Sellers through motor vehicle dealers and third party lenders; WHEREAS AFC has purchased and will purchase certain of such receivables from AmeriCredit pursuant to a Master Sale and Contribution Agreement (and "Sale and Contribution Agreement Supplements" entered into pursuant thereto); WHEREAS, the Sellers are willing to sell the receivables to the Issuer; WHEREAS the Issuer desires to purchase additional receivables arising in connection with motor vehicle retail installment sale contracts to be originated or acquired by the Sellers; WHEREAS the Servicer is willing to service all such receivables; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree to amend and restate the Sale and Servicing Agreement in its entirety as follows: ARTICLE I Definitions ----------- SECTION 1.1. [Reserved]. ---------- SECTION 1.2. Definitional Provisions. ----------------------- (a) Capitalized terms used herein and not otherwise defined herein have meanings assigned to them in Annex A hereto, or, if not defined therein, in the Trust Agreement. (b) All terms defined in this Agreement shall have the defined meanings when used in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (c) As used in this Agreement, in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such instrument, certificate or other document, and accounting terms partly defined in this Agreement or in any such instrument, certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of this Agreement or any such instrument, certificate or other document, as applicable. To the extent that the definitions of accounting terms in this Agreement or in any such instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such instrument, certificate or other document shall control. (d) The words "hereof," "herein," "hereunder" and words of similar ------ ------ --------- import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation." (e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. ARTICLE II Conveyance of Receivables ------------------------- SECTION 2.1. Conveyance of Receivables. ------------------------- (a) Subject to the conditions set forth in paragraph (b) below, on each Transfer Date the Sellers do hereby sell, transfer, assign, set over and otherwise convey to the Issuer without recourse (subject to the obligations set forth herein), all right, title and interest of the Sellers in and to: (i) all Receivables originated or acquired by the Sellers and listed on Schedule A and Schedule B to the related Supplement; -2- (ii) the security interests in the Financed Vehicles granted by Obligors pursuant to such Receivables and any other interest of the Sellers in such Financed Vehicles; (iii) any proceeds and the right to receive proceeds with respect to such Receivables from claims on any physical damage, credit life or disability insurance policies covering the related Financed Vehicles or Obligors and any proceeds from the liquidation of such Receivables; (iv) any proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer Agreement or a Third-Party Lender pursuant to an Auto Loan Purchase and Sale Agreement as a result of a breach of representation or warranty in the related Dealer Agreement or Auto Loan Purchase and Sale Agreement; (v) all rights under any Service Contracts on the related Financed Vehicles: (vi) the related Receivables Files; (vii) all of AFC's right, title and interest in its rights and benefits, but none of its obligations or burdens, under the Master Sale and Contribution Agreement (including all "Sale and Contribution Agreement Supplements" entered into pursuant thereto), including AFC's rights under the Master Sale and Contribution Agreement, and the delivery requirements, representations and warranties and the cure and repurchase obligations of AmeriCredit under the Master Sale and Contribution Agreement (and all "Sale and Contribution Agreement Supplements" entered into pursuant thereto), on or after the related Cutoff Date; and (viii) the proceeds of any and all of the foregoing. In consideration of such transfers, the Issuer will pay to each Seller a purchase price equal to the fair market value of each Receivable transferred by such Seller. Such purchase price shall be payable in cash or by an increase in the principal amount of any Notes or Certificates held by the related Seller or by a combination thereof, as the Issuer and the related Seller mutually agree. The purchase price due with respect to Receivables will be payable as and when agreed by the Issuer and the related Seller, but not later than the related Transfer Date. It is the intention of the Sellers that the transfers and assignments contemplated by this Agreement shall constitute sales of the Receivables and other Trust Property from the Sellers to the Issuer and the beneficial interest in and title to the Receivables and the other Trust Property shall not be part of the Sellers' estates in the event of the filing of a bankruptcy petition by or against the Sellers under any bankruptcy law. In the event that, notwithstanding the intent of the Sellers, the transfer and assignment contemplated hereby is held by a court of competent jurisdiction not to be a sale, this Agreement shall constitute a grant of a security interest in the property referred to in this Section to the Issuer. (b) The Sellers shall transfer to the Issuer the Receivables and the other property and rights related thereto described in paragraph above subject to the satisfaction of each of the following conditions: -3- (i) AmeriCredit shall deliver to the Administrative Agent, the Owner Trustee and the Trust Collateral Agent on or prior to the Business Day immediately preceding each Transfer Date and each date a Servicer's Report is delivered, an amended and restated Schedule of Receivables (the "Schedule of Receivables"); ----------------------- (ii) as of each Transfer Date, (A) the Sellers shall not be insolvent and shall not become insolvent as a result of the transfer of Receivables on such Transfer Date, (B) the Sellers shall not intend to incur or believe that they shall incur debts that would be beyond their ability to pay as such debts mature, (C) such transfer shall not have been made with actual intent to hinder, delay or defraud any Person and (D) the assets of the Sellers shall not constitute unreasonably small capital to carry out their businesses as conducted; (iii) each of the representations and warranties made by the Sellers pursuant to Section 3.1 with respect to the Receivables to be transferred on such Transfer Date shall be true and correct as of the related Transfer Date, and the Sellers shall have performed all obligations to be performed by them hereunder on or prior to such Transfer Date; (iv) the Sellers shall, at their own expense, on or prior to the Transfer Date indicate in their computer files that the Receivables identified in the related Supplement have been sold to the Trust; (v) the Sellers shall have taken any action required to maintain the first priority perfected ownership interest of the Trust in the Owner Trust Estate and the first perfected security interest of the Trust Collateral Agent in the Collateral; (vi) no selection procedures adverse to the interests of the Noteholders or the Agents shall have been utilized in selecting the related Receivables; and (vii) the addition of any such Receivables shall not result in a material adverse tax consequence to the Trust or the Noteholders. The Sellers covenant that in the event any of the foregoing conditions precedent are not satisfied with respect to any Receivable on the date required as specified above, the related Seller will repurchase such Receivable from the Trust in the manner specified in Section 4.7, at a price equal to (x) if any Borrowing Base Deficiency shall exist, the Purchase Amount thereof or (y) otherwise, zero. The Issuer and the Sellers may from time to time agree that the Sellers will purchase Receivables from the Issuer so long as the conditions set forth in Section 2.9 of the Indenture are satisfied with respect to each such sale. SECTION 2.2. Further Encumbrance of Trust Property. (a) Immediately upon ------------------------------------- the conveyance to the Trust by the Sellers of any item of the Trust Property pursuant to Section 2.1, all right, title and interest of the Sellers in and to such item of Trust Property shall terminate, and all such right, title and interest shall vest in the Trust, in accordance with the Trust Agreement and Sections 3802 and 3805 of the Business Trust Statute (as defined in the Trust Agreement). -4- (b) Immediately upon the vesting of the Trust Property in the Trust, the Trust shall have the sole right to pledge or otherwise encumber, such Trust Property. Pursuant to the Indenture, the Trust shall grant a security interest in the Trust Property to the Trust Collateral Agent securing the repayment of the Notes. The Certificates shall represent the beneficial ownership interest in the Trust Property, and the Certificateholders shall be entitled to receive distributions with respect thereto as set forth herein. (c) Following the payment in full of the Notes and the release and discharge of the Indenture, all covenants of the Issuer under Article III of the Indenture shall, until payment in full of the Certificates, remain as covenants of the Issuer for the benefit of the Certificateholders, enforceable by the Certificateholders to the same extent as such covenants were enforceable by the Noteholders prior to the discharge of the Indenture. Any rights of the Trustee under Article III of the Indenture, following the discharge of the Indenture, shall vest in Certificateholders. (d) The Trust Collateral Agent shall, at such time as there are no Securities outstanding and all sums due to (i) the Trustee pursuant to the Indenture and (ii) the Trust Collateral Agent pursuant to this Agreement, have been paid, release any remaining portion of the Trust Property to the Sellers. ARTICLE III The Receivables --------------- SECTION 3.1. Representations and Warranties of Sellers. The ----------------------------------------- Sellers hereby represent and warrant that each of the representations and warranties set forth on the Schedule of Representations attached hereto as Schedule B is true and correct with respect to the Receivables it transferred to the Issuer and the Sellers acknowledge that the Issuer shall be deemed to have relied on such representations and warranties in acquiring the Receivables and upon which the Noteholders shall be deemed to rely in purchasing and making advances under the Notes. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the related Transfer Date, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture. The Sellers hereby represent and warrant, on the date hereof and each Transfer Date, that the information set forth in the Schedule of Receivables is true and correct and that the Schedule of Receivables lists each Receivable transferred to the Issuer. SECTION 3.2. Repurchase upon Breach. ---------------------- (a) Each of the Sellers, the Servicer, the Trust Collateral Agent or the Owner Trustee, as the case may be, shall inform the Administrative Agent and the other parties to this Agreement and the Agents promptly, which notice shall be in writing, upon the discovery by any such party of any breach of either Seller's representations and warranties made pursuant to Section 3.1. As of the fifth Business Day following the discovery by the related Seller or receipt by the related Seller from the Servicer, the Trust Collateral Agent, the Owner Trustee, the Administrative Agent, any Agent or any Noteholder of notice of such breach, unless such breach is cured by such date, the related Seller shall have an obligation to repurchase any Receivable in -5- which the interests of the Noteholders are materially and adversely affected by any such breach as of such date. In consideration of and simultaneously with the repurchase of the Receivable, the related Seller shall remit to the Collection Account in the manner specified in Section 5.4 (x) if there shall exist any Borrowing Base Deficiency, the Purchase Price or (y) otherwise, zero, and the Issuer shall execute such assignments and other documents reasonably requested by such person in order to effect such repurchase. The sole remedy of the Issuer, the Owner Trustee, the Trust Collateral Agent, the Trustee or the Noteholders with respect to a breach of representations and warranties pursuant to Section 3.1 and the agreement contained in this Section shall be the repurchase of Receivables pursuant to this Section, subject to the conditions contained herein or to enforce the obligation of AmeriCredit to AFC to repurchase such Receivables pursuant to the Master Sale and Contribution Agreement (and all "Sale and Contribution Agreement Supplements" entered into pursuant thereto). Neither the Owner Trustee, the Trust Collateral Agent nor the Trustee shall have a duty to conduct any affirmative investigation as to the occurrence of any conditions requiring the repurchase of any Receivable pursuant to this Section. In addition to the foregoing and notwithstanding whether the related Receivable shall have been purchased by the related Seller, the related Seller shall indemnify the Trust, the Trustee, the Backup Servicer, the Trust Collateral Agent, the Administrative Agent, the Agents and the officers, directors, agents and employees thereof, and the Noteholders against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to such breach. (b) Pursuant to Section 2.1 of this Agreement, AFC conveyed to the Trust all of AFC's right, title and interest in its rights and benefits, but none of its obligations or burdens, under the Master Sale and Contribution Agreement (including all "Sale and Contribution Agreement Supplements" entered into pursuant thereto) including AFC's rights under the Master Sale and Contribution Agreement and the delivery requirements, representations and warranties and the cure or repurchase obligations of AmeriCredit thereunder. AFC hereby represents and warrants to the Trust that such assignment is valid, enforceable and effective to permit the Trust to enforce such obligations of AmeriCredit under the Master Sale and Contribution Agreement (and all "Sale and Contribution Agreement Supplements" entered into pursuant thereto). SECTION 3.3. Custody of Receivables Files. ---------------------------- (a) In connection with the sale, transfer and assignment of the Receivables and the Other Conveyed Property to the Trust pursuant to this Agreement and simultaneously with the execution and delivery of this Agreement, the Trust Collateral Agent shall enter into the Custodian Agreement with the Custodian and the Administrative Agent, dated as of December 13, 2001, pursuant to which the Trust Collateral Agent shall revocably appoint the Custodian, and the Custodian shall accept such appointment, to act as the agent of the Trust Collateral Agent as custodian of the following documents or instruments in its possession which shall be delivered to the Custodian as agent of the Trust Collateral Agent on or before the Closing Date (with respect to each Receivable): -6- (i) The fully executed original of the Receivable (together with any agreements modifying the Receivable, including, without limitation, any extension agreements); (ii) The original credit application, or a copy thereof, of each Obligor, fully executed by each such Obligor on AmeriCredit's customary form, or on a form approved by AmeriCredit, for such application; and (iii) The original certificate of title (when received) and otherwise such documents, if any, that AmeriCredit keeps on file in accordance with its customary procedures indicating that the Financed Vehicle is owned by the Obligor and subject to the interest of AmeriCredit (or a Titled Third-Party Lender) as first lienholder or secured party (including any Lien Certificate received by AmeriCredit), or, if such original certificate of title has not yet been received, a copy of the application therefor, showing AmeriCredit (or a Titled Third-Party Lender) as secured party. (b) Upon termination of AmeriCredit as Custodian, the Trust Collateral Agent shall act as the Custodian, in which case the Trust Collateral Agent shall be deemed to have assumed the obligations of the Custodian specified in the Custodian Agreement. Upon payment in full of any Receivable, the Servicer will notify the Custodian pursuant to a certificate of an officer of the Servicer (which certificate shall include a statement to the effect that all amounts received in connection with such payments which are required to be deposited in the Collection Account pursuant to Section 4.1 have been so deposited) and shall request delivery of the Receivable and Receivable File to the Servicer. From time to time as appropriate for servicing and enforcing any Receivable, the Custodian shall, upon written request of an officer of the Servicer and delivery to the Custodian of a receipt signed by such officer, cause the original Receivable and the related Receivable File to be released to the Servicer. The Servicer's receipt of a Receivable and/or Receivable File shall obligate the Servicer to return the original Receivable and the related Receivable File to the Custodian when its need by the Servicer has ceased unless the Receivable is repurchased as described in Section 3.2 or 4.7. SECTION 3.4. Credit Scoring Methodology. AmeriCredit covenants that it will -------------------------- not amend the credit score model it uses to establish AmeriCredit Scores unless it recalibrates the AmeriCredit Scores if necessary to materially match the methodology it uses on the Closing Date. ARTICLE IV Administration and Servicing of Receivables ------------------------------------------- SECTION 4.1. Duties of the Servicer. The Servicer is hereby authorized to ---------------------- act as agent for the Trust and in such capacity shall manage, service, administer and make collections on the Receivables, and perform the other actions required by the Servicer under this Agreement. The Servicer agrees that its servicing of the Receivables shall be carried out in accordance with customary and usual procedures of institutions which service motor vehicle retail installment sales contracts and, to the extent more exacting, the degree of skill and attention that the Servicer -7- exercises from time to time with respect to all comparable motor vehicle receivables that it services for itself or others. In performing such duties, so long as AmeriCredit is the Servicer, it shall substantially comply with the policies and procedures described on Schedule C, as such policies and procedures may be updated from time to time. The Servicer's duties shall include, without limitation, collection and posting of all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, sending payment coupons to Obligors, reporting any required tax information to Obligors, monitoring the collateral, complying with the terms of the Lockbox Agreement, accounting for collections and furnishing monthly and annual statements to the Trust Collateral Agent, the Trustee and the Administrative Agent with respect to distributions, monitoring the status of Insurance Policies with respect to the Financed Vehicles and performing the other duties specified herein. The Servicer shall also administer and enforce all rights and responsibilities of the holder of the Receivables provided for in the Dealer Agreements and Auto Loan Purchase and Sale Agreements (and shall maintain possession of the Dealer Agreements and Auto Loan Purchase and Sale Agreements, to the extent it is necessary to do so), the Dealer Assignments, the Third-Party Lender Assignments and the Insurance Policies, to the extent that such Dealer Agreements, Auto Loan Purchase and Sale Agreements, Dealer Assignments, Third-Party Lender Assignments and Insurance Policies relate to the Receivables, the Financed Vehicles or the Obligors. To the extent consistent with the standards, policies and procedures otherwise required hereby, the Servicer shall follow its customary standards, policies, and procedures and shall have full power and authority, acting alone, to do any and all things in connection with such managing, servicing, administration and collection that it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered by the Trust to execute and deliver, on behalf of the Trust, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and with respect to the Financed Vehicles; provided, however, that notwithstanding the foregoing, the Servicer -------- ------- shall not, except pursuant to an order from a court of competent jurisdiction, release an Obligor from payment of any unpaid amount under any Receivable or waive the right to collect the unpaid balance of any Receivable from the Obligor except in accordance with the Servicer's customary practices. The Servicer is hereby authorized to commence, in its own name or in the name of the Trust, a legal proceeding to enforce a Receivable pursuant to Section 4.3 or to commence or participate in any other legal proceeding (including, without limitation, a bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or participates in such a legal proceeding in its own name, the Trust shall thereupon be deemed to have automatically assigned such Receivable to the Servicer solely for purposes of commencing or participating in any such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Trust to execute and deliver in the Servicer's name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. The Trust Collateral Agent and the Owner Trustee shall furnish the Servicer with any limited powers of attorney and other documents which the Servicer may reasonably request and which the Servicer deems necessary or appropriate and take any other steps which the Servicer may deem necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement. -8- SECTION 4.2. Collection of Receivable Payments; Modifications of --------------------------------------------------- Receivables; Lockbox Agreements. - ------------------------------- (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable automobile receivables that it services for itself or others and otherwise act with respect to the Receivables, the Dealer Agreements, the Dealer Assignments, the Auto Loan Purchase and Sale Agreements, the Third-Party Lender Assignments, the Insurance Policies and the Other Conveyed Property in such manner as will, in the reasonable judgment of the Servicer, maximize the amount to be received by the Trust with respect thereto. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable. (b) The Servicer may at any time agree to a modification or amendment of a Receivable in order to (i) change the Obligor's regular due date to a date within the Collection Period in which such due date occurs or (ii) re-amortize the Scheduled Receivable Payments on the Receivable following a partial prepayment of principal, in accordance with its customary procedures if the Servicer believes in good faith that such extension, modification or amendment is necessary to avoid a default on such Receivable, will maximize the amount to be received by the Trust with respect to such Receivable, and is otherwise in the best interests of the Trust. (c) The Servicer may grant payment extensions on, or other modifications or amendments to, a receivable (in addition to those modifications permitted by Section 4.2(b)) in accordance with its customary procedures if the Servicer believes in good faith that such extension, modification or amendment is necessary to avoid a default on such Receivable, will maximize the amount to be received by the Trust with respect to such Receivable, and is otherwise in the best interests of the Trust; provided, however, that: -------- ------- (i) In no event may a Receivable be extended more than twice during any twelve month period or more than eight times during the full term of such Receivable; (ii) In no event may a Receivable be extended beyond the date 88 months after the date on which such Receivable was originated; (iii) the Servicer shall not amend or modify a Receivable (except as provided in Section 4.2(b) and clause (i) and (ii) of this Section 4.2(c)) -------------- -------------- if a Borrowing Base Deficiency would result therefrom. (d) The Servicer shall use its best efforts to notify or direct Obligors to make all payments on the Receivables, whether by check or by direct debit of the Obligor's bank account, to be made directly to one or more Lockbox Banks, acting as agent for the Trust pursuant to a Lockbox Agreement. The Servicer shall use its best efforts to notify or direct any Lockbox Bank to deposit all payments on the Receivables in the Lockbox Account no later than the Business Day after receipt, and to cause all amounts credited to the Lockbox Account on account of such payments to be transferred to the Collection Account no later than the second Business Day after -9- receipt of such payments. The Lockbox Account shall be a demand deposit account held by the Lockbox Bank, or at the request of any Agent, an Eligible Deposit Account. No later than one month after the related Transfer Date, the Servicer shall have notified each Obligor that makes its payments on the Receivables by check to make such payments thereafter directly to the Lockbox Bank (except in the case of Obligors that have already been making such payments to the Lockbox Bank), and shall have provided each such Obligor with remittance invoices in order to enable such Obligors to make such payments directly to the Lockbox Bank for deposit into the Lockbox Account, and the Servicer will continue, not less often than every three months, to so notify those Obligors who have failed to make payments to the Lockbox Bank. The Servicer will prohibit payments on receivables other than the Receivables from being made to the Lockbox Account. If and to the extent requested by the Administrative Agent or any Agent, the Servicer shall request each Obligor that makes payment on the Receivables by direct debit of such Obligor's bank account, to execute a new authorization for automatic payment which in the judgment of the Administrative Agent or any Agent is sufficient to authorize direct debit by the Lockbox Bank on behalf of the Trust. If at any time, the Lockbox Bank is unable to directly debit an Obligor's bank account that makes payment on the Receivables by direct debit and if such inability is not cured within 15 days or cannot be cured by execution by the Obligor of a new authorization for automatic payment, the Servicer shall notify such Obligor that it cannot make payment by direct debit and must thereafter make payment by check. Notwithstanding any Lockbox Agreement, or any of the provisions of this Agreement relating to the Lockbox Agreement, the Servicer shall remain obligated and liable to the Trust, the Trust Collateral Agent and Noteholders for servicing and administering the Receivables and the Other Conveyed Property in accordance with the provisions of this Agreement without diminution of such obligation or liability by virtue thereof; provided, however, -------- ------- that the foregoing shall not apply to any Backup Servicer for so long as a Lockbox Bank is performing its obligations pursuant to the terms of a Lockbox Agreement. In the event of a termination of the Servicer, the successor Servicer shall assume all of the rights and obligations of the outgoing Servicer under the Lockbox Agreement subject to the terms hereof. In such event, the successor Servicer shall be deemed to have assumed all of the outgoing Servicer's interest therein and to have replaced the outgoing Servicer as a party to each such Lockbox Agreement to the same extent as if such Lockbox Agreement had been assigned to the successor Servicer, except that the outgoing Servicer shall not thereby be relieved of any liability or obligations on the part of the outgoing Servicer to the Lockbox Bank under such Lockbox Agreement. The outgoing Servicer shall, upon request of the Trust Collateral Agent, but at the expense of the outgoing Servicer, deliver to the successor Servicer all documents and records relating to each such Lockbox Agreement and an accounting of amounts collected and held by the Lockbox Bank and otherwise use its best efforts to effect the orderly and efficient transfer of any Lockbox Agreement to the successor Servicer. In the event that the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together, elect to change the identity of the Lockbox Bank, the outgoing Servicer, at its expense, shall cause the Lockbox Bank to deliver, at the direction of the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together, to the Trust Collateral Agent or a successor Lockbox Bank, all documents and records relating to the Receivables and -10- all amounts held (or thereafter received) by the Lockbox Bank (together with an accounting of such amounts) and shall otherwise use its best efforts to effect the orderly and efficient transfer of the lockbox arrangements and the Servicer shall notify the Obligors to make payments to the Lockbox Account established by the successor. (e) The Servicer shall remit all payments by or on behalf of the Obligors received directly by the Servicer to the Lockbox Bank for deposit into the Collection Account, in either case, and as soon as practicable, but in no event later than the Business Day after receipt thereof. SECTION 4.3. Realization upon Receivables. ---------------------------- (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall use its best efforts to repossess (or otherwise comparably convert the ownership of) and liquidate any Financed Vehicle securing a Receivable with respect to which the Servicer has determined that payments thereunder are not likely to be resumed, as soon as is practicable after default on such Receivable but in no event later than the date on which all or any portion of a Scheduled Receivable Payment has become 91 days delinquent; provided, however, that the Servicer may elect not to repossess a Financed - -------- ------- Vehicle within such time period if in its good faith judgment it determines that the proceeds ultimately recoverable with respect to such Receivable would be increased by forbearance. The Servicer is authorized to follow such customary practices and procedures as it shall deem necessary or advisable, consistent with the standard of care required by Section 4.1, which practices and procedures may include reasonable efforts to realize upon any recourse to Dealers and Third-Party Lenders, the sale of the related Financed Vehicle at public or private sale, the submission of claims under an Insurance Policy and other actions by the Servicer in order to realize upon such a Receivable. The foregoing is subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its discretion that such repair and/or repossession shall increase the proceeds of liquidation of the related Receivable by an amount greater than the amount of such expenses. All amounts received upon liquidation of a Financed Vehicle shall be remitted directly by the Servicer to the Collection Account without deposit into any intervening account as soon as practicable, but in no event later than the Business Day after receipt thereof. The Servicer shall be entitled to recover all reasonable expenses incurred by it in the course of repossessing and liquidating a Financed Vehicle into cash proceeds, but only out of the cash proceeds of such Financed Vehicle, any deficiency obtained from the Obligor or any amounts received from the related Dealer or Third-Party Lender, which amounts in reimbursement may be retained by the Servicer (and shall not be required to be deposited as provided in Section 4.2(e)) to the extent of such expenses. The Servicer shall pay on behalf of the Trust any personal property taxes assessed on repossessed Financed Vehicles. The Servicer shall be entitled to reimbursement of any such tax from Net Liquidation Proceeds with respect to such Receivable. (b) If the Servicer elects to commence a legal proceeding to enforce a Dealer Agreement, Auto Loan Purchase and Sale Agreement, Dealer Assignment or Third-Party Lender Assignment, the act of commencement shall be deemed to be an automatic assignment from the Trust to the Servicer of the rights under such Dealer Agreement, Auto Loan Purchase and Sale Agreement, Dealer Assignment or Third-Party Lender Assignment for purposes of collection -11- only. If, however, in any enforcement suit or legal proceeding it is held that the Servicer may not enforce a Dealer Agreement, Auto Loan Purchase and Sale Agreement, Dealer Assignment or Third-Party Lender Assignment on the grounds that it is not a real party in interest or a Person entitled to enforce the Dealer Agreement, Auto Loan Purchase and Sale Agreement, Dealer Assignment or Third-Party Lender Assignment, the Owner Trustee and/or the Trust Collateral Agent, at the Servicer's expense, or the Seller, at the Seller's expense, shall take such steps as the Servicer deems reasonably necessary to enforce the Dealer Agreement, Auto Loan Purchase and Sale Agreement, Dealer Assignment or Third-Party Lender Assignment, including bringing suit in its name or the name of the Seller or of the Trust and the Owner Trustee and/or the Trust Collateral Agent for the benefit of the Noteholders. All amounts recovered shall be remitted directly by the Servicer as provided in Section 4.2(e). SECTION 4.4. Insurance. --------- (a) The Servicer shall require, in accordance with its customary servicing policies and procedures, that each Financed Vehicle be insured by the related Obligor under the Insurance Policies referred to in Paragraph 24 of the Schedule of Representations and Warranties and shall monitor the status of such physical loss and damage insurance coverage thereafter, in accordance with its customary servicing procedures. Each Receivable requires the Obligor to maintain such physical loss and damage insurance, naming AmeriCredit and its successors and assigns as additional insureds, and permits the holder of such Receivable to obtain physical loss and damage insurance at the expense of the Obligor if the Obligor fails to maintain such insurance. If the Servicer shall determine that an Obligor has failed to obtain or maintain a physical loss and damage Insurance Policy covering the related Financed Vehicle which satisfies the conditions set forth in clause (i)(a) of such Paragraph 24 (including, without limitation, during the repossession of such Financed Vehicle) the Servicer may enforce the rights of the holder of the Receivable under the Receivable to require the Obligor to obtain such physical loss and damage insurance in accordance with its customary servicing policies and procedures. The Servicer may maintain a vendor's single interest or other collateral protection insurance policy with respect to all Financed Vehicles ("Collateral Insurance") which policy shall by -------------------- its terms insure against physical loss and damage in the event any Obligor fails to maintain physical loss and damage insurance with respect to the related Financed Vehicle. All policies of Collateral Insurance shall be endorsed with clauses providing for loss payable to the Servicer. Costs incurred by the Servicer in maintaining such Collateral Insurance shall be paid by the Servicer. (b) The Servicer may, if an Obligor fails to obtain or maintain a physical loss and damage Insurance Policy, obtain insurance with respect to the related Financed Vehicle and advance on behalf of such Obligor, as required under the terms of the insurance policy, the premiums for such insurance (such insurance being referred to herein as "Force-Placed Insurance"). All policies of ---------------------- Force-Placed Insurance shall be endorsed with clauses providing for loss payable to the Servicer. Any cost incurred by the Servicer in maintaining such Force-Placed Insurance shall only be recoverable out of premiums paid by the Obligors or Net Liquidation Proceeds with respect to the Receivable, as provided in Section 4.4(c). (c) In connection with any Force-Placed Insurance obtained hereunder, the Servicer may, in the manner and to the extent permitted by applicable law, require the Obligors to repay the entire premium to the Servicer. In no event shall the Servicer include the amount of the -12- premium in the Amount Financed under the Receivable. For all purposes of this Agreement, the Insurance Add-On Amount with respect to any Receivable having Force-Placed Insurance will be treated as a separate obligation of the Obligor and will not be added to the Principal Balance of such Receivable, and amounts allocable thereto will not be available for distribution on the Notes and the Certificates. The Servicer shall retain and separately administer the right to receive payments from Obligors with respect to Insurance Add-On Amounts or rebates of Forced-Placed Insurance premiums. If an Obligor makes a payment with respect to a Receivable having Force-Placed Insurance, but the Servicer is unable to determine whether the payment is allocable to the Receivable or to the Insurance Add-On Amount, the payment shall be applied first to any unpaid Scheduled Receivable Payments and then to the Insurance Add-On Amount. Net Liquidation Proceeds on any Receivable will be used first to pay the Principal Balance and accrued interest on such Receivable and then to pay the related Insurance Add-On Amount. If an Obligor under a Receivable with respect to which the Servicer has placed Force-Placed Insurance fails to make scheduled payments of such Insurance Add-On Amount as due, and the Servicer has determined that eventual payment of the Insurance Add-On Amount is unlikely, the Servicer may, but shall not be required to, purchase such Receivable from the Trust for the Purchase Amount on any subsequent Determination Date. Any such Receivable, and any Receivable with respect to which the Servicer has placed Force-Placed Insurance which has been paid in full (excluding any Insurance Add-On Amounts) will be assigned to the Servicer. (d) The Servicer may sue to enforce or collect upon the Insurance Policies, in its own name, if possible, or as agent of the Trust. If the Servicer elects to commence a legal proceeding to enforce an Insurance Policy, the act of commencement shall be deemed to be an automatic assignment of the rights of the Trust under such Insurance Policy to the Servicer for purposes of collection only. If, however, in any enforcement suit or legal proceeding it is held that the Servicer may not enforce an Insurance Policy on the grounds that it is not a real party in interest or a holder entitled to enforce the Insurance Policy, the Owner Trustee and/or the Trust Collateral Agent, at the Servicer's expense, or the Seller, at the Seller's expense, shall take such steps as the Servicer deems necessary to enforce such Insurance Policy, including bringing suit in its name or the name of the Trust and the Owner Trustee and/or the Trust Collateral Agent for the benefit of the Noteholders. (e) The Servicer will cause itself and may cause the Trust Collateral Agent to be named as named insured under all policies of Collateral Insurance. SECTION 4.5. Maintenance of Security Interests in Vehicles. --------------------------------------------- (a) Consistent with the policies and procedures required by this Agreement, the Servicer shall take such steps on behalf of the Trust as are necessary to maintain perfection of the security interest created by each Receivable in the related Financed Vehicle, including, but not limited to, obtaining the execution by the Obligors and the recording, registering, filing, re-recording, re-filing, and re-registering of all security agreements, financing statements and continuation statements as are necessary to maintain the security interest granted by the Obligors under the respective Receivables. The Trust Collateral Agent hereby authorizes the Servicer, and the Servicer agrees, to take any and all steps necessary to re-perfect such security interest on behalf of the Trust as necessary because of the relocation of a Financed Vehicle or for any other reason. In the event that the assignment of a Receivable to the Trust is insufficient, without a -13- notation on the related Financed Vehicle's certificate of title, or without fulfilling any additional administrative requirements under the laws of the state in which the Financed Vehicle is located, to perfect a security interest in the related Financed Vehicle in favor of the Trust, the Servicer hereby agrees that the designation of AmeriCredit (or a Titled Third-Party Lender) as the secured party on the certificate of title is in its capacity as Servicer as agent of the Trust. (b) Upon the occurrence of a Servicer Termination Event, the Trust Collateral Agent and the Servicer shall take or cause to be taken such action as may, in the opinion of counsel to the Trust Collateral Agent, be necessary to perfect or re-perfect the security interests in the Financed Vehicles securing the Receivables in the name of the Trust by amending the title documents of such Financed Vehicles or by such other reasonable means as may, in the opinion of counsel to the Trust Collateral Agent, be necessary or prudent. AmeriCredit hereby agrees to pay all expenses related to such perfection or reperfection and to take all action necessary therefor. In addition, prior to the occurrence of an Event of Default or Servicer Termination Event, the Class A Majority, the Class B Majority and the Class C Majority, acting together, may instruct the Trust Collateral Agent and the Servicer to take or cause to be taken such action as may, in the opinion of counsel to the Class A Majority, the Class B Majority and the Class C Majority, acting together, be necessary to perfect or re-perfect the security interest in the Financed Vehicles underlying the Receivables in the name of the Trust, including by amending the title documents of such Financed Vehicles or by such other reasonable means as may, in the opinion of counsel to the Class A Majority, the Class B Majority and the Class C Majority, acting together, as the case may be, be necessary or prudent. AmeriCredit hereby appoints the Trust Collateral Agent as its attorney-in-fact to take any and all steps required to be performed by AmeriCredit pursuant to this Section 4.5(b) (it being understood that and agreed that the Trust Collateral Agent shall have no obligation to take such steps with respect to all perfection or reperfection, except as pursuant to the Basic Documents to which it is a party and to which AmeriCredit has paid all expenses), including execution of certificates of title or any other documents in the name and stead of AmeriCredit and the Trust Collateral Agent hereby accepts such appointment. SECTION 4.6. Covenants, Representations, and Warranties of Servicer. By its ------------------------------------------------------ execution and delivery of this Agreement, the Servicer makes the following representations, warranties and covenants on which the Trust Collateral Agent relies in accepting the Receivables, on which the Trustee relies in authenticating the Notes and on which the Noteholders rely in purchasing and making advances under the Notes. (a) The Servicer covenants as follows: (i) Liens in Force. The Financed Vehicle securing each Receivable -------------- shall not be released in whole or in part from the security interest granted by the Receivable, except upon payment in full of the Receivable or as otherwise contemplated herein; (ii) No Impairment. The Servicer shall do nothing to impair the rights -------------- of the Trust or the Noteholders in the Receivables, the Dealer Agreements, the Auto Loan Purchase and Sale Agreements, the Dealer Assignments, the Third-Party Lender -14- Assignments, the Insurance Policies or the Other Conveyed Property except as otherwise expressly provided herein; (iii) No Amendments. The Servicer shall not extend or otherwise ------------- amend the terms of any Receivable, except in accordance with Section 4.2; and (iv) Restrictions on Liens. The Servicer shall not (i) create, --------------------- incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien or restriction on transferability of the Receivables except for the Lien in favor of the Trust Collateral Agent for the benefit of the Noteholders and the restrictions on transferability imposed by this Agreement or (ii) sign or file under the Uniform Commercial Code of any jurisdiction any financing statement which names AmeriCredit or the Servicer as a debtor, or sign any security agreement authorizing any secured party thereunder to file such financing statement, with respect to the Receivables, except in each case any such instrument solely securing the rights and preserving the Lien of the Trust Collateral Agent, for the benefit of the Noteholders. (v) Notices. Within 10 days after the date any material change ------- in or amendment to the Servicing Collection and Credit Policy and Procedures is made, the Servicer will deliver to the Issuer, the Trust Collateral Agent, the Agents and the Administrative Agent a copy of the Servicing Collection and Credit Policy and Procedures then in effect indicating such change or amendment. AmeriCredit shall not change the Servicing Collection and Credit Policy and Procedures or the manner in which it services the Receivables in any way that would have a material adverse effect on the Receivables or the Noteholders. (b) The Servicer represents, warrants and covenants as of the Closing Date as to itself that the representations and warranties set forth on the Schedule of Representations attached hereto as Schedule B are true and correct, provided that such representations and warranties contained therein and herein shall not apply to any entity other than AmeriCredit. SECTION 4.7. Purchase of Receivables Upon Breach of Covenant. Upon ----------------------------------------------- discovery by any of the Servicer, a Responsible Officer of the Trust Collateral Agent, the Owner Trustee or a Responsible Officer of the Trustee of a breach of any of the covenants set forth in Sections 4.5(a) or 4.6(a), the party discovering such breach shall give prompt written notice to the others; provided, however, that the failure to give any such notice shall not affect any obligation of AmeriCredit as Servicer under this Section. As of the fifth Business Day following its discovery or receipt of notice of any breach of any covenant set forth in Sections 4.5(a) or 4.6(a) which materially and adversely affects the interests of the Noteholders in any Receivable (including any Liquidated Receivable) or the related Financed Vehicle, AmeriCredit shall, unless such breach shall have been cured in all material respects, purchase from the Trust the Receivable affected by such breach and, on the related Determination Date, AmeriCredit shall pay (x) if any Borrowing Base Deficiency shall exist, the related Purchase Price or (y) otherwise, zero. It is understood and agreed that the obligation of AmeriCredit to purchase any Receivable (including any Liquidated Receivable) with respect to which such a breach has occurred and is continuing shall, if such obligation is fulfilled, constitute the sole remedy against AmeriCredit for such breach -15- available to the Noteholders, the Owner Trustee or the Trust Collateral Agent; provided, however, that AmeriCredit shall indemnify the Trust, the Backup Servicer, the Administrative Agent, the Agents, the Owner Trustee, the Trust Collateral Agent, the Trustee and the Noteholders from and against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to such breach. This section shall survive the termination of this Agreement and the earlier removal or resignation of the Trustee and/or the Trust Collateral Agent and/or the Backup Servicer. SECTION 4.8. Total Servicing Fee; Payment of Certain Expenses by --------------------------------------------------- Servicer. On each Distribution Date, the Servicer shall be entitled to receive - -------- out of the Collection Account the Servicing Fee for the related Collection Period pursuant to Section 5.5. The Servicer shall be required to pay all expenses incurred by it in connection with its activities under this Agreement (including taxes imposed on the Servicer, expenses incurred in connection with distributions and reports made by the Servicer to Noteholders and all other fees and expenses of the Owner Trustee, the Administrative Agent, the Backup Servicer, the Trust Collateral Agent or the Trustee, except taxes levied or assessed against the Trust, and claims against the Trust in respect of indemnification, which taxes and claims in respect of indemnification against the Trust are expressly stated to be for the account of AmeriCredit). The Servicer shall be liable for the fees and expenses of the Owner Trustee, the Backup Servicer, the Trust Collateral Agent, the Trustee, the Custodian, the Collateral Agent, the Lockbox Bank (and any fees under the Lockbox Agreement) and the Independent Accountants. Notwithstanding the foregoing, if the Servicer shall not be AmeriCredit, a successor to AmeriCredit as Servicer including the Backup Servicer permitted by Section 8.3 shall not be liable for taxes levied or assessed against the Trust or claims against the Trust in respect of indemnification, or the fees and expenses referred to above. SECTION 4.9. Servicer's Certificate. No later than 10:00 a.m. Eastern ---------------------- time on each Determination Date, the Servicer shall deliver (e-mail or facsimile delivery being acceptable) to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent and each Rating Agency a Servicer's Certificate executed by a Responsible Officer of the Servicer containing among other things, (i) all information necessary to enable the Trust Collateral Agent to make any withdrawal and deposit required by Section 5.4 and to make the distributions required by Section 5.5, (ii) a listing of all Purchased Receivables and Administrative Receivables purchased during the related Collection Period, identifying the Receivables so purchased, and (iii) all information necessary to enable the Trust Collateral Agent to reconcile the aggregate cash flows, the Collection Account for the related Collection Period, Distribution Date and Insured Distribution Date. Receivables purchased by the Servicer or by the Seller during the related Collection Period and each Receivable which became a Liquidated Receivable or which was paid in full during the related Collection Period shall be identified by account number (as set forth in the Schedule of Receivables). In addition to the information set forth in the preceding sentence, the Servicer's Certificate shall also contain the following information: (a) the Servicer Delinquency Ratio and Loss Ratio for such Determination Date; (b) whether any Event of Default has occurred as of such Determination Date; and (c) whether any Event of Default that may have occurred as of a prior Determination Date is deemed cured as of such Determination Date. Any Noteholder shall be entitled to notify the Servicer of any error it discovers in any Servicer's Certificate. -16- SECTION 4.10. Annual Statement as to Compliance, Notice of Servicer ----------------------------------------------------- Termination Event. - ----------------- (a) The Servicer shall deliver to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent and each Rating Agency, on or before October 31 (or 120 days after the end of the Servicer's fiscal year, if other than June 30) of each year, beginning on October 31, 2002, an officer's certificate signed by any Responsible Officer of the Servicer, dated as of June 30 (or other applicable date) of such year, stating that (i) a review of the activities of the Servicer during the preceding 12-month period (or such other period as shall have elapsed from the Closing Date to the date of the first such certificate (which period shall not be less than six months)) and of its performance under this Agreement has been made under such officer's supervision, and (ii) to such officer's knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. (b) The Sellers or the Servicer shall deliver to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent, the Servicer or the Sellers (as applicable) and each Rating Agency promptly after having obtained knowledge thereof, but in no event later than two (2) Business Days thereafter, written notice in an officer's certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Termination Event or Event of Default. SECTION 4.11. Annual Independent Accountants' Report. -------------------------------------- The Servicer shall cause a firm of nationally recognized independent certified public accountants (the "Independent Accountants"), who ----------------------- may also render other services to the Servicer or to either Seller, to deliver to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent and each Rating Agency, on or before October 31 (or 120 days after the end of the Servicer's fiscal year, if other than June 30) of each year, beginning on October 31, 2002, with respect to the twelve months ended the immediately preceding June 30 (or other applicable date) (or such other period as shall have elapsed from the Closing Date to the date of such certificate (which period shall not be less than six months)), a statement (the "Accountants' Report") addressed to the Board of Directors of the ------------------- Servicer, to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer and to the Administrative Agent, to the effect that such firm has audited the books and records of AmeriCredit Corp., in which the Servicer is included as a consolidated subsidiary, and issued its report thereon in connection with the audit report on the consolidated financial statements of AmeriCredit Corp. and that (1) such audit was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances; (2) the firm is independent of the Sellers and the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants, and (3) includes a report on the application of agreed upon procedures (such procedures to be substantially similar to those set forth in the letter attached as Exhibit F hereto) to (A) three randomly selected Servicer's Certificates including the delinquency, default and loss statistics required to be specified therein noting whether any exceptions or errors in the Servicer's Certificates were found and (B) a -17- statistically significant number of randomly selected Receivables Files (which shall in no event be less than 50 or more than 190). If the long-term senior unsecured debt of AmeriCredit Corp. is rated by either S&P or Moody's below B or Ba3, respectively, or if an Event of Default shall have occurred and be continuing, then the Servicer will cause the Independent Accountants to deliver an Accountants' Report quarterly to the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent and each Rating Agency, on or before January 31, April 30, July 31 and October 31 of each year with respect to the three months ended the immediately preceding September 30, December 31, March 31 or June 30, as applicable. SECTION 4.12. Access to Certain Documentation and Information ----------------------------------------------- Regarding Receivables. The Servicer shall provide to representatives of the - --------------------- Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, each Agent and the Administrative Agent reasonable access to the documentation regarding the Receivables. In each case, such access shall be afforded without charge but only upon reasonable request and during normal business hours. Nothing in this Section shall affect the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access as provided in this Section as a result of such obligation shall not constitute a breach of this Section. SECTION 4.13. Monthly Tape. On or before the Distribution Date, but ------------ in no event later than the eighteenth calendar day, of each month, the Servicer will deliver to the Trust Collateral Agent and the Backup Servicer a computer tape and a diskette (or any other electronic transmission acceptable to the Trust Collateral Agent and the Backup Servicer) in a format acceptable to the Trust Collateral Agent and the Backup Servicer containing the information with respect to the Receivables as of the preceding Accounting Date necessary for preparation of the Servicer's Certificate relating to the immediately preceding Determination Date and necessary to review the application of collections as provided in Section 5.3. The Backup Servicer shall use such tape or diskette (or other electronic transmission acceptable to the Trust Collateral Agent and the Backup Servicer) to (i) confirm that the Servicer's Certificate is complete, (ii) confirm that such tape, diskette or other electronic transmission is in readable form, (iii) verify the mathematical accuracy of all calculations contained within the Servicer's Certificate and (iv) calculate and confirm (A) the aggregate amount distributable as principal on the related Distribution Date to each Class of Notes, (B) the aggregate amount distributable as interest on the related Distribution Date to each Class of Notes, and (C) any amounts distributable on the related Distribution Date which are to be paid with funds withdrawn from the Reserve Account. The Backup Servicer shall certify to the Trust Collateral Agent that it has verified the Servicer's Certificate in accordance with this Section and shall notify the Servicer, the Administrative Agent, the Agents and the Trust Collateral Agent of any discrepancies, in each case, on or before the second Business Day following the Distribution Date. In the event that the Backup Servicer reports any discrepancies, the Servicer and the Backup Servicer shall attempt to reconcile such discrepancies prior to the next succeeding Distribution Date, but in the absence of a reconciliation, the Servicer's Certificate shall control for the purpose of calculations and distributions with respect to the next succeeding Distribution Date. In the event that the Backup Servicer and the Servicer are unable to reconcile discrepancies with respect to a Servicer's Certificate by the next succeeding Distribution Date, the Servicer shall cause the Independent Accountants, at the Servicer's expense, to audit the Servicer's Certificate and, prior to the last -18- day of the month after the month in which such Servicer's Certificate was delivered, reconcile the discrepancies. The effect, if any, of such reconciliation shall be reflected in the Servicer's Certificate for such next succeeding Determination Date. In addition, upon the occurrence of a Servicer Termination Event the Servicer shall, if so requested by the Trust Collateral Agent, an Agent or the Class A Majority, the Class B Majority, the Class C Majority, the Class D Majority or the Class E Majority, deliver to the Backup Servicer its Collection Records and its Monthly Records within 15 days after demand therefor and a computer tape containing as of the close of business on the date of demand all of the data maintained by the Servicer in computer format in connection with servicing the Receivables. Other than the duties specifically set forth in this Agreement, the Backup Servicer shall have no obligations hereunder, including, without limitation, to supervise, verify, monitor or administer the performance of the Servicer. The Backup Servicer shall have no liability for any actions taken or omitted by the Servicer. SECTION 4.14. Retention and Termination of Servicer. The Servicer ------------------------------------- hereby covenants and agrees to act as such under this Agreement for an initial term, commencing on the Closing Date and ending on March 31, 2002, which term shall be subject to automatic extension for successive quarterly terms ending on each successive March 31, June 30, September 30 and December 31, until the Notes and the Certificates are paid in full, unless the Administrative Agent gives written notice at least 15 Business Days prior to the end of the related calendar quarter that such term will not be extended. Each such notice (a "Servicer Non-Extension Notice") shall be delivered by the Administrative Agent to the Trust Collateral Agent and the Servicer. The Servicer hereby agrees that, as of the date hereof and until its receipt of any such Servicer Non-Extension Notice, the Servicer shall become bound, for the initial term beginning on the Closing Date and until the delivery of a Servicer Non-Extension Notice, to continue as the Servicer subject to and in accordance with the other provisions of this Agreement. At any time, the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together, may vote to rescind a Servicer Non-Extension Notice delivered by the Administrative Agent no later than 5 Business Days prior to the effective date of such notice; and, at any time, the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together, may vote to instruct the Administrative Agent to deliver a Servicer Non-Extension Notice. SECTION 4.15. Fidelity Bond and Errors and Omissions Policy. The --------------------------------------------- Servicer has obtained, and shall continue to maintain in full force and effect, a Fidelity Bond and Errors and Omissions Policy of a type and in such amount as is customary for servicers engaged in the business of servicing automobile receivables. ARTICLE V Trust Accounts; Distributions ----------------------------- SECTION 5.1. Establishment of Trust Accounts. ------------------------------- (a) (i) The Trust Collateral Agent, on behalf of the Noteholders, shall establish and maintain in its own name an Eligible Deposit Account (the "Collection Account"), bearing a designation clearly ------------------ indicating that the funds deposited therein are held for the -19- benefit of the Trust Collateral Agent on behalf of the Noteholders. The Collection Account shall initially be established with the Trust Collateral Agent. (ii) The Trust Collateral Agent, on behalf of the Noteholders, shall establish and maintain in its own name an Eligible Deposit Account (the "Reserve Account"), bearing a --------------- designation clearly indicating that the funds deposited therein are held for the benefit of the Trust Collateral Agent on behalf of the Noteholders. The Reserve Account shall initially be established with the Trust Collateral Agent. (iii) The Trust Collateral Agent, on behalf of the Noteholders, shall establish and maintain in its own name an Eligible Deposit Account (the "Collateral Account"), bearing a ------------------ designation clearly indicating that the funds deposited therein are held for the benefit of the Trust Collateral Agent on behalf of the Noteholders. The Collateral Account shall initially be established with the Trust Collateral Agent. There shall be deposited to the Collateral Account any amount delivered by the Issuer to the holder of the Collateral Account that the Issuer designates in writing to such holder (with a copy to the Administrative Agent) to be deposited in the Collateral Account. (b) Funds on deposit in the Collection Account, the Reserve Account and the Collateral Account (collectively, the "Trust Accounts") and the Lockbox -------------- Accounts shall be invested by the Trust Collateral Agent (or any custodian with respect to funds on deposit in any such account) in Eligible Investments selected in writing by the Servicer (pursuant to standing instructions or otherwise). All such Eligible Investments shall be held by or on behalf of the Trust Collateral Agent for the benefit of the Noteholders. Other than as permitted by the Rating Agencies, funds on deposit in any Account shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Business Day immediately preceding the following Distribution Date. Funds deposited in a Trust Account on the day immediately preceding a Distribution Date upon the maturity of any Eligible Investments are required to be invested overnight. All Eligible Investments will be held to maturity. (c) All investment earnings of moneys deposited in the Trust Accounts shall be deposited (or caused to be deposited) by the Trust Collateral Agent in the Collection Account, and any loss resulting from such investments shall be charged to such account. The Servicer will not direct the Trust Collateral Agent to make any investment of any funds held in any of the Trust Accounts unless the security interest granted and perfected in such account will continue to be perfected in such investment, in either case without any further action by any Person, and, in connection with any direction to the Trust Collateral Agent to make any such investment, if requested by the Trust Collateral Agent, the Servicer shall deliver to the Trust Collateral Agent an Opinion of Counsel, acceptable to the Trust Collateral Agent, to such effect. (d) The Trust Collateral Agent shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Trust Collateral Agent's negligence or bad faith or its failure to make payments on such Eligible Investments issued by the Trust Collateral Agent, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. -20- (e) If (i) the Servicer shall have failed to give investment directions in writing for any funds on deposit in the Trust Accounts to the Trust Collateral Agent by 1:00 p.m. Eastern Time (or such other time as may be agreed by the Issuer and Trust Collateral Agent) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable, or, if such Notes shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Trust Property are being applied as if there had not been such a declaration; then the Trust Collateral Agent shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in the investment described in clause (g) of the definition of Eligible Investments. (f) (i) The Trust Collateral Agent shall possess all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof and all such funds, investments, proceeds and income shall be part of the Owner Trust Estate. Except as otherwise provided herein, the Trust Accounts shall be under the sole dominion and control of the Trust Collateral Agent for the benefit of the Noteholders. If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Trust Collateral Agent (or the Servicer on its behalf) shall within five Business Days (or such longer period as to which each Rating Agency may consent) establish a new Trust Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account. In connection with the foregoing, the Servicer agrees that, in the event that any of the Trust Accounts are not accounts with the Trust Collateral Agent, the Servicer shall notify the Trust Collateral Agent in writing promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account. (ii) With respect to the Trust Account Property, the Trust Collateral Agent agrees that: (A) any Trust Account Property that is held in deposit accounts shall be held solely in the Eligible Deposit Accounts; and, except as otherwise provided herein, each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Trust Collateral Agent, and the Trust Collateral Agent shall have sole signature authority with respect thereto; (B) any Trust Account Property that constitutes Physical Property shall be delivered to the Trust Collateral Agent in accordance with paragraph (a) of the definition of "Delivery" and -------- shall be held, pending maturity or disposition, solely by the Trust Collateral Agent or a financial intermediary (as such term is defined in Section 8-313(4) of the UCC) acting solely for the Trust Collateral Agent; (C) any Trust Account Property that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations shall be delivered in accordance with paragraph (b) of the definition of "Delivery" and shall be maintained -------- by the Trust Collateral Agent, pending maturity or disposition, through continued book-entry registration of such Trust Account Property as described in such paragraph; and -21- (D) any Trust Account Property that is an "uncertificated -------------- security" under Article 8 of the UCC and that is not governed by -------- clause (C) above shall be delivered to the Trust Collateral Agent in accordance with paragraph (c) of the definition of "Delivery" and -------- shall be maintained by the Trust Collateral Agent, pending maturity or disposition, through continued registration of the Trust Collateral Agent's (or its nominee's) ownership of such security. (g) The Servicer shall have the power, revocable by the Class A Majority, the Class B Majority, the Class C Majority, the Class D Majority or the Class E Majority or by the Administrative Agent, to instruct the Trust Collateral Agent to make withdrawals and payments from the Trust Accounts for the purpose of permitting the Servicer and the Trust Collateral Agent to carry out its respective duties hereunder. (h) The Trust Collateral Agent acknowledges that, pursuant to the provisions of an Interest Rate Hedge, the Interest Rate Hedge Provider may be required to post collateral with the Trust Collateral Agent to secure the Interest Rate Hedge Provider's obligations under the Interest Rate Hedge. The Trust Collateral Agent agrees to establish and maintain an Eligible Deposit Account to hold such collateral, if requested to do so by the Servicer or an Agent. The Trust Collateral Agent further agrees to follow such written instructions relating to the administration of, and transfers from such account, as may be delivered by the Servicer (unless such instructions are revoked by the Class A Majority, the Class B Majority or the Class C Majority or by the Administrative Agent). SECTION 5.2. Certain Reimbursements to the Servicer. The Servicer will be -------------------------------------- entitled to be reimbursed pursuant to Section 5.5(a)(iv) and Section 5.5(b)(iv) from amounts on deposit in the Collection Account with respect to a Collection Period for amounts previously deposited in the Collection Account but later determined by the Servicer to have resulted from mistaken deposits or postings or checks returned for insufficient funds. The amount to be reimbursed hereunder shall be paid to the Servicer on the related Distribution Date pursuant to Section 5.5(a)(iv) or (b)(iv) upon certification by the Servicer of such amounts and the provision of such information to the Trust Collateral Agent and the Administrative Agent as may be necessary to verify the accuracy of such certification; provided, however, that the Servicer must provide such clarification and request and receive such reimbursement within 12 months of such mistaken deposit, posting, or returned check. In the event that any of the Class A Majority, the Class B Majority or the Class C Majority notifies the Servicer within 12 months of such reimbursement that it has not received evidence satisfactory to it of the Servicer's entitlement to reimbursement pursuant to this Section, such Class A Majority, the Class B Majority or the Class C Majority may give the Trust Collateral Agent notice in writing to such effect, following receipt of which the Trust Collateral Agent shall not make a distribution to the Servicer in respect of such amount pursuant to Section 5.5, or if the Servicer prior thereto has been reimbursed pursuant to Section 5.5, the Trust Collateral Agent shall withhold such amounts from amounts otherwise distributable to the Servicer on the next succeeding Distribution Date. The Servicer will additionally be entitled to receive from amounts on deposit in the Collection Account, pursuant to such provisions of this Agreement, with respect to a Collection Period any amounts paid by Obligors that were collected in the Lockbox Account but that do not relate to principal and interest payments due on the Receivables. -22- SECTION 5.3. Application of Collections. All collections for the Collection -------------------------- Period shall be applied by the Servicer as follows: With respect to each Simple Interest Receivable (other than a Purchased Receivable), payments by or on behalf of the Obligor shall be applied to interest and principal in accordance with the Simple Interest Method. With respect to each Pre-Computed Receivable, payments by or on behalf of the Obligor shall be applied to interest and principal in accordance with the terms thereof. SECTION 5.4. Additional Deposits. The Servicer and the related Seller, as ------------------- applicable, shall deposit or cause to be deposited in the Collection Account on the Determination Date on which such obligations are due the aggregate Purchase Amount with respect to Purchased Receivables. (a) The proceeds of any purchase or sale of the assets of the Trust described in Section 9.1 hereof shall be deposited in the Collection Account. SECTION 5.5. Distributions. ------------- (a) On each Distribution Date prior to the occurrence of an Event of Default, the Trust Collateral Agent shall (based solely on the information contained in the Servicer's Certificate delivered with respect to the related Determination Date) distribute the following amounts from the Collection Account unless otherwise specified, to the extent of the sources of funds stated to be available therefor, and in the following order of priority: (i) from the Available Funds, to the Interest Rate Hedge Providers, net payments, if any, (excluding termination payments) then due to them under the Interest Rate Hedges; (ii) from the Available Funds, (A) to the Backup Servicer and the Trust Collateral Agent, the Backup Servicer/Trust Collateral Agent Fee for the related Collection Period; (B) to the Backup Servicer, the Trust Collateral Agent and the Trustee, the Capped Expenses; and (C) to the Owner Trustee its unpaid trustees' fees and expenses and any accrued fees and expenses of the Owner Trustee (to the extent such fees and expenses have not previously been paid by the Servicer), provided that such fees and -------- expenses shall not exceed $100,000 in the aggregate in any calendar year; (iii) from the Available Funds, to the Custodian, the Custodial Fee for the related Collection Period, and to the Administrative Agent, the Administrative Agent Fee for such Distribution Date; (iv) from the Available Funds, to the Servicer, the Servicing Fee for the related Collection Period, any amounts specified in Section 5.2 and to pay to AmeriCredit any amounts paid by Obligors during the preceding calendar month that did not relate to principal and interest payments due on the Receivables; (v) from Available Funds, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and Class S Noteholders pro rata, the --- ---- -23- Class A-1 Monthly Interest and Fees and any Class A-1 Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class A-1 Monthly Interest Cap with respect to such Distribution Date), the Class A-2 Monthly Interest and Fees and any Class A-2 Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class A-2 Monthly Interest Cap with respect to such Distribution Date) and the Class S Monthly Interest and Fees and any Class S Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date with respect to such Distribution Date (but not in excess of the Class S Monthly Interest Cap with respect to such Distribution Date); (vi) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Interest and Fees with respect to such Distribution Date and any Class B Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class B Monthly Interest Cap with respect to such Distribution Date); (vii) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Interest and Fees with respect to such Distribution Date and any Class C Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class C Monthly Interest Cap with respect to such Distribution Date); (viii) if the Class D Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the Class D Monthly Interest and Fees with respect to such Distribution Date (and any Class D Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (ix) if the Class E Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the Class E Monthly Interest and Fees with respect to such Distribution Date (and any Class E Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (x) from Available Funds, to the Administrative Agent for the benefit of the Class A Noteholders and the Class S Noteholders, pro rata, --- ---- the principal amount of Class A-1 Notes and Class A-2 Notes and the Class A Swingline Percentage of the outstanding principal amount of the Class S Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, (a) any amount of such principal required to prevent the existence of or remedy a Class A Borrowing Base Deficiency, (b) the Class A Swingline Percentage of the outstanding principal amount of the Class S Notes and (c) any Class A Limited Amortization Amount; (xi) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders and the Class S Noteholders, pro rata, --- ---- the principal amount of Class B Notes and the Class B Swingline Percentage of the outstanding principal amount of the -24- Class S Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, (a) any amount of such principal required to prevent the existence of or remedy a Class B Borrowing Base Deficiency, (b) the Class B Swingline Percentage of the outstanding principal amount of the Class S Notes and (c) any Class B Limited Amortization Amount; provided that after giving effect to such allocation -------- and distribution, there shall be no Class A Borrowing Base Deficiency or Class S Borrowing Base Deficiency; (xii) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders and the Class S Noteholders, pro rata, --- ---- the principal amount of Class C Notes and the Class C Swingline Percentage of the outstanding principal amount of the Class S Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, (a) any amount of such principal required to prevent the existence of or remedy a Class C Borrowing Base Deficiency, (b) the Class C Swingline Percentage of the outstanding principal amount of the Class S Notes and (c) any Class C Limited Amortization Amount; provided that after -------- giving effect to such allocation and distribution, there shall be no Class A Borrowing Base Deficiency, Class B Borrowing Base Deficiency or Class S Borrowing Base Deficiency; (xiii) from the Available Funds, to the Reserve Account, an amount, if necessary, required to increase the amount therein to the Reserve Account Required Amount; (xiv) if the Class D Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the principal amount of Class D Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, any amount of such principal required to prevent the existence of or remedy a Class D Borrowing Base Deficiency; (xv) if the Class E Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the principal amount of Class E Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, any amount of such principal required to prevent the existence of or remedy a Class E Borrowing Base Deficiency; (xvi) from Available Funds, to the extent not previously paid pursuant to Clause (v) above, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and the Class S Noteholders pro rata, the Class A-1 Monthly Interest and Fees, the Class --- ---- A-2 Monthly Interest and Fees and the Class S Monthly Interest and Fees with respect to such Distribution Date (and any Class A-1 Monthly Interest and Fees, the Class A-2 Monthly Interest and Fees and the Class S Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); -25- (xvii) from Available Funds, to the extent not previously paid pursuant to clause (vi) above to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Interest and Fees with respect to such Distribution Date (and any Class B Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xviii) from Available Funds, to the extent not previously paid pursuant to clause (vii) above to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Interest and Fees with respect to such Distribution Date (and any Class C Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xix) from Available Funds, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and the Class S Noteholders, pro rata, the Class A-1 Monthly Costs and Expenses, the Class A-2 Monthly Costs and Expenses and the Class S Monthly Costs and Expenses with respect to such Distribution Date (and any Class A-1 Monthly Costs and Expenses, the Class A-2 Monthly Costs and Expenses and the Class S Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xx) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Costs and Expenses with respect to such Distribution Date (and any Class B Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xxi) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Costs and Expenses with respect to such Distribution Date (and any Class C Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xxii) from the Available Funds, to the Interest Rate Hedge Providers, net termination payments, if any, then due to them under the Interest Rate Hedges; (xxiii) from Available Funds, to the extent not previously paid pursuant to clause (ii) above, to the Backup Servicer and Trust Collateral Agent, any costs and expenses due to the Backup Servicer and Trust Collateral Agent under the Basic Documents; (xxiv) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the Class D Monthly Interest and Fees with respect to such Distribution Date (and any Class D Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xxv) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the Class E Monthly Interest and Fees with respect to such Distribution Date (and any Class E Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); -26- (xxvi) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the principal amount of Class D Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, any amount of such principal required to prevent the existence of or remedy a Class D Borrowing Base Deficiency; (xxvii) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the principal amount of Class E Notes which are to be paid or prepaid to the extent then due and owing including, without limitation, any amount of such principal required to prevent the existence of or remedy a Class E Borrowing Base Deficiency; and (xxviii) from Available Funds, any remaining Available Funds to the Issuer. (b) On each Distribution Date after the occurrence and during the continuance of an Event of Default, the Trust Collateral Agent shall (based solely on the information contained in the Servicer's Certificate delivered with respect to the related Determination Date) distribute the following amounts from the Collection Account unless otherwise specified, to the extent of the sources of funds stated to be available therefor, and in the following order of priority: (i) from the Available Funds, to the Interest Rate Hedge Providers, net payments, if any, (excluding termination payments) then due to them under the Interest Rate Hedges; (ii) from the Available Funds, (A) to the Backup Servicer and the Trust Collateral Agent, the Backup Servicer/Trust Collateral Agent Fee for the related Collection Period; (B) to the Backup Servicer and the Trust Collateral Agent and the Trustee, the Capped Expenses; and (C) to the Owner Trustee its unpaid trustees' fees and expenses and any accrued fees and expenses of the Owner Trustee (to the extent such fees and expenses have not previously been paid by the Servicer), provided that such fees and -------- expenses shall not exceed $100,000 in the aggregate in any calendar year; (iii) from the Available Funds, to the Custodian, the Custodial Fee for the related Collection Period, and to the Administrative Agent, the Administrative Agent Fee for such Distribution Date; (iv) from the Available Funds, to the Servicer, the Servicing Fee for the related Collection Period, any amounts specified in Section 5.2, and to pay to AmeriCredit any amounts paid by Obligors during the preceding calendar month that did not relate to principal and interest payments due on the Receivables; (v) from Available Funds, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and Class S Noteholders pro rata, the Class A-1 Monthly Interest and Fees and any Class --- ---- A-1 Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class A-1 Monthly Interest Cap with respect to such Distribution -27- Date), the Class A-2 Monthly Interest and Fees and any Class A-2 Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class A-2 Monthly Interest Cap with respect to such Distribution Date) and the Class S Monthly Interest and Fees and any Class S Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date with respect to such Distribution Date (but not in excess of the Class S Monthly Interest Cap with respect to such Distribution Date); (vi) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Interest and Fees with respect to such Distribution Date and any Class B Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class B Monthly Interest Cap with respect to such Distribution Date); (vii) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Interest and Fees with respect to such Distribution Date and any Class C Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date (but not in excess of the Class C Monthly Interest Cap with respect to such Distribution Date); (viii) if the Class D Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the Class D Monthly Interest and Fees with respect to such Distribution Date (and any Class D Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (ix) if the Class E Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the Class E Monthly Interest and Fees with respect to such Distribution Date (and any Class E Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (x) from Available Funds, to the Administrative Agent for the benefit of the Class A Noteholders and the Class S Noteholders, pro rata, --- ---- the outstanding principal amount of Class A-1 Notes and Class A-2 Notes and the Class A Swingline Percentage of the outstanding principal amount of the Class S Notes; (xi) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders and the Class S Noteholders, pro rata, --- ---- the outstanding principal amount of Class B Notes and the Class B Swingline Percentage of the outstanding principal amount of the Class S Notes; (xii) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders and the Class S Noteholders, pro rata, --- ---- the outstanding principal amount of Class C Notes and the Class C Swingline Percentage of the outstanding principal amount of the Class S Notes; -28- (xiii) if the Class D Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the outstanding principal amount of Class D Notes; (xiv) if the Class E Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the outstanding principal amount of Class E Notes; (xv) from Available Funds, to the extent not previously paid pursuant to Clause (v) above, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and the Class S Noteholders pro rata, the Class A-1 Monthly Interest and Fees, the Class --- ---- A-2 Monthly Interest and Fees and the Class S Monthly Interest and Fees with respect to such Distribution Date (and any Class A-1 Monthly Interest and Fees, the Class A-2 Monthly Interest and Fees and the Class S Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xvi) from Available Funds, to the extent not previously paid pursuant to clause (vi) above to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Interest and Fees with respect to such Distribution Date (and any Class B Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xvii) from Available Funds, to the extent not previously paid pursuant to clause (vii) above to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Interest and Fees with respect to such Distribution Date (and any Class C Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xviii) from Available Funds, to the Administrative Agent for the benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and the Class S Noteholders, pro rata, the Class A-1 Monthly Costs and Expenses, --- ---- the Class A-2 Monthly Costs and Expenses and the Class S Monthly Costs and Expenses with respect to such Distribution Date (and any Class A-1 Monthly Costs and Expenses, the Class A-2 Monthly Costs and Expenses and the Class S Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xix) from Available Funds, to the Administrative Agent for the benefit of the Class B Noteholders, the Class B Monthly Costs and Expenses with respect to such Distribution Date (and any Class B Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xx) from Available Funds, to the Administrative Agent for the benefit of the Class C Noteholders, the Class C Monthly Costs and Expenses with respect to such Distribution Date (and any Class C Monthly Costs and Expenses with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); -29- (xxi) from the Available Funds, to the Interest Rate Hedge Providers, net termination payments, if any, then due to them under the Interest Rate Hedges; (xxii) from Available Funds, to the extent not previously paid pursuant to clause (ii) above, to the Backup Servicer and Trust Collateral Agent, any costs and expenses due to the Backup Servicer and Trust Collateral Agent under the Basic Documents; and (xxiii) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the Class D Monthly Interest and Fees with respect to such Distribution Date (and any Class D Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xxiv) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the Class E Monthly Interest and Fees with respect to such Distribution Date (and any Class E Monthly Interest and Fees with respect to any prior Interest Period to the extent not paid on a prior Distribution Date); (xxv) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class D Noteholders, the outstanding principal amount of Class D Notes; (xxvi) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, from Available Funds, to the Administrative Agent for the benefit of the Class E Noteholders, the outstanding principal amount of Class E Notes; and (xxvii) from Available Funds, any remaining Available Funds to the Issuer. (c) With prior written notice to the Trustee and the Administrative Agent before 1:00 p.m. at least two Business Days prior to the Interim Distribution Date, the Servicer may apply the proceeds of any purchase of Receivables pursuant to Section 2.9(b) of the Indenture on a date (an "Interim Distribution -------------------- Date") prior to the succeeding Distribution Date to the repayment of some or all - ---- of the outstanding principal of the Notes and interest accrued thereon to such Interim Distribution Date, provided that no Borrowing Base Deficiency would -------- exist after giving effect to such repayment and amounts sufficient to make any payments of interest, fees and expenses due on such succeeding Distribution Date are already on deposit or are deposited from the proceeds of such purchase in the Collection Account. The Servicer shall notify the Administrative Agent of the amount which will be a deposit in the Collection Account after giving effect to any such payment. The Servicer shall increase such amount if the Class A Majority, Class B Majority and Class C Majority reasonably determine that the amount remaining on deposit in the Collection Account following any such payment would be insufficient to make any payment of interest, fees and expenses due on such succeeding Distribution Date and so notify the Servicer, then the Servicer will leave the amount necessary to prevent such deficiency in the Collection Account. (d) In the event that the Collection Account is maintained with an institution other than the Trust Collateral Agent, the Servicer shall instruct and cause such institution to make all -30- deposits and distributions pursuant to Sections 5.5(a), 5.5(b) and 5.5(c) on the related Distribution Date or Interim Distribution Date. SECTION 5.7. Reserve Account; Collateral Account. (a) If, on any ----------------------------------- Distribution Date, Available Funds allocated to make distributions to be made on such Distribution Date pursuant to clauses (i) through (ix) of Section 5.5(a) or 5.5(b), respectively, are less than the aggregate amount required to be distributed pursuant to such clauses of Section 5.5(a) or Section 5.5(b), respectively, the Trust Collateral Agent shall withdraw (or, if the Reserve Account shall not at such time be maintained by the Trust Collateral Agent, the Trust Collateral Agent shall direct the holder of the Reserve Account to withdraw) the amount of such deficiency, up to the amount available in the Reserve Account, from the Reserve Account and apply such amount in the order of priority and in the manner set forth in such clauses of Section 5.5(a) and/or 5.5(b), as the case may be. (b) If, on any Distribution Date, Available Funds allocated to make distributions to be made on the related Distribution Date pursuant to clauses (i) through (xii) and clauses (xvi) though (xviii) of Section 5.5(a) or pursuant to clauses (i) through (xii) and clauses (xv) though (xvii) of 5.5(b), respectively, plus the amount withdrawn from the Reserve Account pursuant to Section 5.6(a) are less than the aggregate amount required to be distributed pursuant to such clauses of Section 5.5(a) or Section 5.5(b), respectively, the Trust Collateral Agent shall withdraw (or, if the Collateral Account shall not at such time be maintained by the Trust Collateral Agent, the Trust Collateral Agent shall direct the holder of the Collateral Account to withdraw) the amount of such deficiency, up to the amount available in the Collateral Account, from the Collateral Account and apply such amount in the order of priority and in the manner set forth in such clauses of Section 5.5(a) and/or 5.5(b), as the case may be, provided that no such allocation and distribution shall be permitted if -------- it would cause a Borrowing Base Deficiency. (c) On the first Distribution Date following the occurrence and during the continuance of an Event of Default, the Trust Collateral Agent shall withdraw (or direct the holder of the applicable account to withdraw) all amounts on deposit in the Collateral Account and apply such amount as provided in Section 5.5(b) and at such time the Collateral Account shall be closed. (d) On each Distribution Date prior to the occurrence of an Event of Default and based solely on the Servicer's Certificate for such Distribution Date, the Trust Collateral Agent shall withdraw from the Reserve Account the amount on deposit in the Reserve Account in excess of the Reserve Account Required Amount (after giving effect to all distributions to be made on such Distribution Date pursuant to Section 5.5(a) or Section 5.5(b), and any withdrawals to be made from the Reserve Account pursuant to paragraph (a) of this Section 5.6), and distribute such amount to the Issuer or as it may direct. On each Interim Distribution Date prior to the occurrence of an Event of Default and based solely on instructions from the Servicer, the Trust Collateral Agent shall withdraw from the Reserve Account the lesser of (i) the amount on deposit in the Reserve Account in excess of the Minimum Reserve Account Amount (after giving effect to all distributions to be made on such Distribution Date pursuant to Section 5.5(a) or Section 5.5(b), and any withdrawals to be made from the Reserve Account pursuant to paragraph (a) of this Section 5.6) and (ii) the -31- product of the amount on deposit in the Reserve Account and a fraction the numerator of which is the Aggregate Principal Balance of the Receivables released from the lien of the Indenture on such Interim Distribution Date and the denominator of which is the Aggregate Principal Balance of the Receivables prior to such release, and distribute such lesser amount to the Issuer or as it may direct. (e) On each Distribution Date prior to the occurrence of an Event of Default (after giving effect to the distributions to be made on such Distribution Date pursuant to Section 5.5(a) and any withdrawals to be made from the Collateral Account pursuant to paragraph (b) of this Section 5.6), the Issuer shall be entitled to direct the Trust Collateral Agent (with a copy of such directions to be delivered to the Administrative Agent and the Agents) to withdraw and pay to the Issuer (or as it may direct), any and all amounts on deposit in the Collateral Account so long as after giving effect to such withdrawal no Class A Borrowing Base Deficiency, Class B Borrowing Base Deficiency, Class C Borrowing Base Deficiency, Default or Event of Default shall occur or be continuing and the amount on deposit in the Reserve Account equals the Reserve Account Required Amount. (f) On the Distribution Date following the payment in full of all amounts due to the Noteholders and termination of all the Note Purchase Agreements, the Trust Collateral Agent shall withdraw (or direct the holder of the Reserve Account to withdraw) all amounts on deposit therein and distribute such amount to the Issuer or as it may direct. ARTICLE VI The Sellers ----------- SECTION 6.1. Representations of Sellers. Each Seller makes the following -------------------------- representations on which the Noteholders shall be deemed to have relied in purchasing and making advances under the Notes and on which the Issuer is deemed to have relied in acquiring the Receivables and on which the Trustee, the Administrative Agent, Trust Collateral Agent and Backup Servicer may rely. The representations speak as of the execution and delivery of this Agreement and as of the applicable Transfer Date, and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture. (a) Schedule of Representations. The representations and warranties set --------------------------- forth on the Schedule of Representations attached hereto as Schedule B are true and correct. (b) Organization and Good Standing. The related Seller has been duly ------------------------------ organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire, own and sell the Receivables and the Other Conveyed Property transferred to the Trust. (c) Due Qualification. The related Seller is duly qualified to do business ----------------- as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions where the failure to do so would materially and adversely affect such Seller's ability to transfer the Receivables and the Other Conveyed Property to the Trust pursuant to this -32- Agreement, or the validity or enforceability of the Receivables and the Other Conveyed Property or to perform such Seller's obligations hereunder and under such Seller's Basic Documents. (d) Power and Authority. The related Seller has the power and authority to ------------------- execute and deliver this Agreement and its Basic Documents and to carry out its terms and their terms, respectively; the related Seller has full power and authority to sell and assign the Receivables and the Other Conveyed Property to be sold and assigned to and deposited with the Trust by it and has duly authorized such sale and assignment to the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement and such Seller's Basic Documents have been duly authorized by such Seller by all necessary corporate action. (e) Valid Sale, Binding Obligations. This Agreement effects a valid sale, ------------------------------- transfer and assignment of the related Receivables and the Other Conveyed Property, enforceable against the related Seller and creditors of and purchasers from the related Seller; and this Agreement and the related Seller's Basic Documents, when duly executed and delivered, shall constitute legal, valid and binding obligations of the related Seller enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law. (f) No Violation. The consummation of the transactions contemplated by this ------------ Agreement and the Basic Documents and the fulfillment of the terms of this Agreement and the Basic Documents shall not conflict with, result in any breach of any of the terms and provisions of or constitute (with or without notice, lapse of time or both) a default under the certificate of incorporation or by-laws of the related Seller, or any indenture, agreement, mortgage, deed of trust or other instrument to which the related Seller is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, or violate any law, order, rule or regulation applicable to the related Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the related Seller or any of its properties. (g) No Proceedings. There are no proceedings or investigations pending or, -------------- to the related Seller's knowledge, threatened against the related Seller, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the related Seller or its properties (A) asserting the invalidity of this Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the related Seller of its obligations under, or the validity or enforceability of, this Agreement or any of the Basic Documents, or (D) seeking to adversely affect the federal income tax or other federal, state or local tax attributes of the Securities. (h) True Sale. The Receivables are being transferred with the intention of --------- removing them from the related Seller's estate pursuant to Section 541 of the Bankruptcy Code, as the same may be amended from time to time. -33- (i) Chief Executive Office. The chief executive office of the related ---------------------- Seller is at 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102. SECTION 6.2. Corporate Existence. (a) During the term of this Agreement, ------------------- each Seller will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Basic Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby. (b) During the term of this Agreement, each Seller shall observe the applicable legal requirements for the recognition of such Seller as a legal entity separate and apart from its Affiliates, including as follows (provided, however, that the limitations set forth in subsections (x), (xi) and (xiv) shall be applicable solely to AFC and shall not limit AmeriCredit's activities): (i) such Seller shall maintain corporate records and books of account separate from those of its Affiliates; (ii) except as otherwise provided in this Agreement, such Seller shall not commingle its assets and funds with those of its Affiliates; (iii) such Seller shall hold such appropriate meetings of its Board of Directors as are necessary to authorize all such Seller's corporate actions required by law to be authorized by the Board of Directors, shall keep minutes of such meetings and of meetings of its stockholder(s) and observe all other customary corporate formalities (and any successor Seller not a corporation shall observe similar procedures in accordance with its governing documents and applicable law); (iv) such Seller shall at all times hold itself out to the public under such Seller's own name as a legal entity separate and distinct from its Affiliates; (v) all transactions and dealings between such Seller and its Affiliates will be conducted on an arm's-length basis; (vi) such Seller shall obtain proper authorization for all action requiring such authorization; (vii) such Seller shall pay its own operating expenses and liabilities from its own funds; (viii) such Seller's resolutions, agreements and other instruments underlying the transactions described in this Agreement shall be continuously maintained by it as part of its official records; (ix) AFC shall not maintain bank accounts or other depository accounts to which any Affiliate is an account party or from which any Affiliate has the power to make withdrawals; -34- (x) AFC shall not amend, supplement or otherwise modify its organizational documents, except in accordance therewith and upon satisfaction of the Rating Agency Condition; (xi) AFC shall not create, incur, assume or suffer to exist any indebtedness on which it is obligated, except as contemplated by this Agreement and the other Basic Documents. It shall not assume, guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other things, agreeing to purchase any obligation of another Person (other than the Receivables), agreeing to advance funds to such Person or causing or assisting such Person to maintain any amount of capital. It shall not be party to any indenture, agreement, mortgage, deed of trust or other instrument other than this Agreement and the other Basic Documents; (xii) AFC shall not enter into, or be a party to any transaction with any of its Affiliates, except as contemplated by this Agreement and the other Basic Documents; (xiii) such Seller shall observe all procedures required by its organizational documents and preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualifications would materially adversely affect the interests hereunder of the Noteholders or its ability to perform its obligations hereunder; and (xiv) AFC shall not form, or cause to be formed, any subsidiaries; or make or suffer to exist any loans or advances to, or extend any credit to, or make any investments (by way of transfer of property, contributions to capital, purchase of stock or securities or evidences of indebtedness (other than the Receivables), acquisition of the business or assets, or otherwise) in, any Affiliate or any other Person except as otherwise permitted herein. SECTION 6.3. Liability of Sellers; Indemnities. Each Seller shall be liable --------------------------------- in accordance herewith only to the extent of the obligations specifically undertaken by such Seller under this Agreement. (a) Each Seller shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Trust, the Trustee, Backup Servicer, the Agents, the Administrative Agent and the Trust Collateral Agent and its officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated in this Agreement and any of the Basic Documents (except any income taxes arising out of fees paid to the Owner Trustee, the Trust Collateral Agent, the Trustee, the Agents and the Administrative Agent and except any taxes to which the Owner Trustee, the Trust Collateral Agent or the Trustee may otherwise be subject to, without regard to the transactions contemplated hereby), including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes and costs and expenses in defending against the same. (b) Each Seller shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Trustee, Backup Servicer, the Agents, the Administrative Agent and the Trust -35- Collateral Agent, their respective officers, directors, employees and agents thereof, the Noteholders and the Purchasers from and against any loss, liability or expense incurred by reason of (i) such Seller's willful misfeasance, bad faith or negligence in the performance of its duties under this Agreement, or by reason of reckless disregard of its obligations and duties under this Agreement and (ii) such Seller's or the Issuer's violation of federal or state securities laws in connection with the offering and sale of the Notes. (c) Each Seller shall indemnify, defend and hold harmless the Owner Trustee, Trustee, Trust Collateral Agent, the Agents, the Administrative Agent and Backup Servicer and the officers, directors, employees and agents thereof from and against any and all costs, expenses, losses, claims, damages and liabilities arising out of, or incurred in connection with the acceptance or performance of the trusts and duties set forth herein and in the Basic Documents except to the extent that such cost, expense, loss, claim, damage or liability shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Owner Trustee, Trustee, Trust Collateral Agent, the Agents, the Administrative Agent and Backup Servicer respectively. Indemnification under this Section shall survive the resignation or removal of the Owner Trustee, the Trustee, any Agent, the Administrative Agent or the Trust Collateral Agent and the termination of this Agreement or the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and other expenses of litigation. If either Seller shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the related Seller, without interest. SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations ------------------------------------------------------------ of the Sellers. Any Person (a) into which either Seller may be merged or - -------------- consolidated, (b) which may result from any merger or consolidation to which either Seller shall be a party or (c) which may succeed to the properties and assets of either Seller substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the related Seller under this Agreement, shall be the successor to the related Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that (i) if the related Seller shall not be the surviving entity or if the debt rating of AmeriCredit Corp. by S&P or Moody's would be lower after giving effect to such transaction than prior to giving effect to the transaction, the related Seller shall have received the written consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, prior to entering into any such transaction, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 3.1 shall have been breached and no Servicer Termination Event, and no event which, after notice or lapse of time, or both, would become a Servicer Termination Event shall have happened and be continuing, (iii) the related Seller shall have delivered to the Owner Trustee, the Trust Collateral Agent, the Trustee, the Agents and the Administrative Agent an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, (iv) the Rating Agency Condition shall have been satisfied with respect to such transaction and (v) the related Seller shall have delivered to the Owner Trustee, the Trust Collateral Agent, the Backup -36- Servicer, the Trustee, the Agents and the Administrative Agent an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Trust Collateral Agent, the Owner Trustee and the Trustee, respectively, in the Receivables and reciting the details of such filings or (B) no such action shall be necessary to preserve and protect such interest. Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be conditions to the consummation of the transactions referred to in clauses (a), (b) or (c) above. SECTION 6.5. Limitation on Liability of the Sellers and Others. The Sellers ------------------------------------------------- and any director or officer or employee or agent of the Sellers may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising under any Basic Document. The Sellers shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability. SECTION 6.6. Ownership of the Certificates or Notes. Each Seller and any -------------------------------------- Affiliate thereof may in its individual or any other capacity become the owner or pledgee of Certificates or Notes with the same rights as it would have if it were not a Seller or an Affiliate thereof, except as expressly provided herein or in any Basic Document. Notes or Certificates so owned by a Seller or such Affiliate shall have an equal and proportionate benefit under the provisions of the Basic Documents, without preference, priority, or distinction as among all of the Notes or Certificates; provided, however, that any Notes or Certificates owned by a Seller or any Affiliate thereof, during the time such Notes or Certificates are owned by such party, shall be without voting rights for any purpose set forth in the Basic Documents. The Sellers shall notify the Owner Trustee, the Trustee, the Trust Collateral Agent and the Administrative Agent with respect to any transfer of any Certificate. ARTICLE VII The Servicer ------------ SECTION 7.1. Representations of Servicer. The Servicer makes the following --------------------------- representations on which the Noteholders shall be deemed to have relied in purchasing and making advances under the Notes and on which the Issuer is deemed to have relied in acquiring the Receivables. The representations speak as of the execution and delivery of this Agreement and as of the Closing Date and as of the applicable Transfer Date, and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture. (i) Representations and Warranties. The representations and ------------------------------ warranties set forth on the Schedule of Representations attached hereto as Schedule B are true and correct, provided that such representations and warranties contained therein and herein shall not apply to any entity other than AmeriCredit; -37 (ii) Organization and Good Standing. The Servicer has been duly ------------------------------ organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power, authority and legal right to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to enter into and perform its obligations under this Agreement; (iii) Due Qualification. The Servicer is duly qualified to do business ----------------- in good standing and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Receivables as required by this Agreement) requires or shall require such qualification; (iv) Power and Authority. The Servicer has the power and authority to ------------------- execute and deliver this Agreement and its Basic Documents and to carry out its terms and their terms, respectively, and the execution, delivery and performance of this Agreement and the Servicer's Basic Documents have been duly authorized by the Servicer by all necessary corporate action; (v) Binding Obligation. This Agreement and the Servicer's Basic ------------------ Documents shall constitute legal, valid and binding obligations of the Servicer enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law; (vi) No Violation. The consummation of the transactions contemplated ------------ by this Agreement and the Servicer's Basic Documents, and the fulfillment of the terms of this Agreement and the Servicer's Basic Documents, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Servicer, or any indenture, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, or violate any law, order, rule or regulation applicable to the Servicer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or any of its properties; (vii) No Proceedings. There are no proceedings or investigations -------------- pending or, to the Servicer's knowledge, threatened against the Servicer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Servicer or its properties (A) asserting the invalidity of this Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, or (C) seeking any determination or ruling -38- that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any of the Basic Documents or (D) seeking to adversely affect the federal income tax or other federal, state or local tax attributes of the Securities; (viii) No Consents. The Servicer is not required to obtain the consent ----------- of any other party or any consent, license, approval or authorization, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement which has not already been obtained. SECTION 7.2. Liability of Servicer; Indemnities. ---------------------------------- (a) The Servicer (in its capacity as such) shall be liable hereunder only to the extent of the obligations in this Agreement specifically undertaken by the Servicer and the representations made by the Servicer. (b) The Servicer shall defend, indemnify and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Agents, the Administrative Agent, their respective officers, directors, agents and employees, the Noteholders and the Purchasers from and against any and all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel and expenses of litigation arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of any Financed Vehicle; (c) The Servicer (when the Servicer is AmeriCredit) shall indemnify, defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Agents, the Administrative Agent, their respective officers, directors, agents and employees, the Noteholders and the Purchasers from and against any taxes that may at any time be asserted against any of such parties with respect to the transactions contemplated in this Agreement, including, without limitation, any sales, gross receipts, tangible or intangible personal property, privilege or license taxes (but not including any federal or other income taxes, including franchise taxes asserted with respect to, and as of the date of, the sale of the Receivables and the Other Conveyed Property to the Trust or the issuance and original sale of the Securities) and costs and expenses in defending against the same; The Servicer (when the Servicer is not AmeriCredit) shall indemnify, defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Agents, the Administrative Agent, their respective officers, directors, agents and employees, the Noteholders and the Purchasers from and against any taxes with respect to the sale of Receivables in connection with servicing hereunder that may at any time be asserted against any of such parties with respect to the transactions contemplated in this Agreement, including, without limitation, any sales, gross receipts, tangible or intangible personal property, privilege or license taxes (but not including any federal or other income taxes, including franchise taxes asserted with respect to, and as of the date of, the sale of the Receivables and the Other Conveyed Property to the Trust or the issuance and original sale of the Securities) and costs and expenses in defending against the same; and -39- (d) The Servicer shall indemnify, defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Agents, the Administrative Agent, their respective officers, directors, agents and employees, the Noteholders and the Purchasers from and against any and all costs, expenses, losses, claims, damages, and liabilities to the extent that such cost, expense, loss, claim, damage, or liability arose out of, or was imposed upon the Trust, the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Agents, the Administrative Agent, the Noteholders or the Purchasers by reason of the breach of this Agreement by the Servicer, the negligence, misfeasance, or bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement. (e) AmeriCredit shall indemnify, defend and hold harmless the Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Agents, the Administrative Agent, their respective officers, directors, agents and employees, the Noteholders and the Purchasers from and against any loss, liability or expense incurred by reason of the violation by Servicer or Seller of federal or state securities laws in connection with the registration or the sale of the Securities. This section shall survive the termination of this Agreement, or the earlier removal or resignation of the Trustee, Trust Collateral Agent, Backup Servicer, any Agent or the Administrative Agent. (f) AmeriCredit shall indemnify the Trustee, the Owner Trustee, the Trust Collateral Agent, the Agents, the Administrative Agent and the Backup Servicer, and the respective officers, directors, agents and employees thereof against any and all loss, liability or expense, (other than overhead and expenses incurred in the normal course of business) incurred by each of them in connection with the acceptance or administration of the Trust and the performance of their duties under the Basic Documents other than if such loss, liability or expense was incurred by the Trustee, the Owner Trustee, the Trust Collateral Agent, such Agent or the Administrative Agent as a result of any such entity's willful misconduct, bad faith or negligence. (g) Indemnification under this Article shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation. If the Servicer has made any indemnity payments pursuant to this Article and the recipient thereafter collects any of such amounts from others, the recipient shall promptly repay such amounts collected to the Servicer, without interest. SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations ------------------------------------------------------------ of the Servicer or Backup Servicer. - ---------------------------------- (a) AmeriCredit shall not merge or consolidate with any other person, convey, transfer or lease substantially all its assets as an entirety to another Person, or permit any other Person to become the successor to AmeriCredit's business unless, after the merger, consolidation, conveyance, transfer, lease or succession, the successor or surviving entity shall be capable of fulfilling the duties of AmeriCredit contained in this Agreement and, if the surviving entity shall not be AmeriCredit or the debt rating of AmeriCredit Corp. from S&P or Moody's would be lowered as a result of such transaction, shall be acceptable to the Class A Majority, the Class B Majority and the Class C Majority, acting together, and shall be an Eligible Servicer. Any corporation (i) into which AmeriCredit may be merged or consolidated, (ii) -40- resulting from any merger or consolidation to which AmeriCredit shall be a party, (iii) which acquires by conveyance, transfer, or lease substantially all of the assets of AmeriCredit, or (iv) succeeding to the business of AmeriCredit, in any of the foregoing cases shall execute an agreement of assumption to perform every obligation of AmeriCredit under this Agreement and, whether or not such assumption agreement is executed, shall be the successor to AmeriCredit under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, anything in this Agreement to the contrary notwithstanding; provided, however, that nothing -------- ------- contained herein shall be deemed to release AmeriCredit from any obligation. AmeriCredit shall provide notice of any merger, consolidation or succession pursuant to this Section to the Owner Trustee, the Trust Collateral Agent, the Noteholders, the Administrative Agent and each Rating Agency. Notwithstanding the foregoing, AmeriCredit shall not merge or consolidate with any other Person or permit any other Person to become a successor to AmeriCredit's business, unless (x) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 4.6 shall have been breached (for purposes hereof, such representations and warranties shall speak as of the date of the consummation of such transaction) and no event that, after notice or lapse of time, or both, would become an Event of Default shall have occurred and be continuing, (y) AmeriCredit shall have delivered to the Owner Trustee, the Trust Collateral Agent, Trustee, Backup Servicer, the Rating Agencies, the Agents and the Administrative Agent an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, and (z) AmeriCredit shall have delivered to the Owner Trustee, the Trust Collateral Agent, the Rating Agencies, the Agents and the Administrative Agent an Opinion of Counsel, stating in the opinion of such counsel, either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary to preserve and protect the interest of the Trust in the Receivables and the Other Conveyed Property and reciting the details of the filings or (B) no such action shall be necessary to preserve and protect such interest. (b) Any corporation (i) into which the Backup Servicer may be merged or consolidated, (ii) resulting from any merger or consolidation to which the Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer or lease substantially all of the assets of the Backup Servicer, or (iv) succeeding to the business of the Backup Servicer, in any of the foregoing cases shall execute an agreement of assumption to perform every obligation of the Backup Servicer under this Agreement and, whether or not such assumption agreement is executed, shall be the successor to the Backup Servicer under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, anything in this Agreement to the contrary notwithstanding; provided, however, that nothing contained herein shall be deemed to release the Backup Servicer from any obligation. SECTION 7.4. Limitation on Liability of Servicer, Backup Servicer and -------------------------------------------------------- Others. - ------ (a) Neither AmeriCredit, the Backup Servicer nor any of the directors or officers or employees or agents of AmeriCredit or Backup Servicer shall be under any liability to the Trust or the Noteholders, except as provided in this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement; provided, however, that this provision shall not -------- ------- protect AmeriCredit, the Backup Servicer or any such person against any liability that -41- would otherwise be imposed by reason of a breach of this Agreement or willful misfeasance, bad faith or negligence (excluding errors in judgment) in the performance of duties; provided further that this provision shall not affect any liability to indemnify the Trust Collateral Agent and the Owner Trustee for costs, taxes, expenses, claims, liabilities, losses or damages paid by the Trust Collateral Agent and the Owner Trustee, in their individual capacities. AmeriCredit, the Backup Servicer and any director, officer, employee or agent of AmeriCredit or Backup Servicer may rely in good faith on the written advice of counsel or on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement. (b) The Backup Servicer shall not be liable for any obligation of the Servicer contained in this Agreement or for any errors of the Servicer contained in any computer tape, certificate or other data or document delivered to the Backup Servicer hereunder or on which the Backup Servicer must rely in order to perform its obligations hereunder, and the Owner Trustee, the Trustee, the Trust Collateral Agent, the Administrative Agent, the Agents, the Backup Servicer, the Sellers and the Noteholders shall look only to the Servicer to perform such obligations. The Backup Servicer, Trust Collateral Agent, the Trustee, the Administrative Agent, the Owner Trustee and the Custodian shall have no responsibility and shall not be in default hereunder or incur any liability for any failure, error, malfunction or any delay in carrying out any of their respective duties under this Agreement if such failure or delay results from the Backup Servicer acting in accordance with information prepared or supplied by a Person other than the Backup Servicer (or contractual agents) or the failure of any such other Person to prepare or provide such information. The Backup Servicer shall have no responsibility, shall not be in default and shall incur no liability for (i) any act or failure to act of any third party (other than its contractual agents), including the Servicer or the Trustee, (ii) any inaccuracy or omission in a notice or communication received by the Backup Servicer from any third party (other than its contractual agents), (iii) the invalidity or unenforceability of any Receivable under applicable law, (iv) the breach or inaccuracy of any representation or warranty made with respect to any Receivable, or (v) the acts or omissions of any successor Backup Servicer. (c) The parties expressly acknowledge and consent to Bank One, NA acting in the possible dual capacity of Backup Servicer or successor Servicer and in the capacity as Trust Collateral Agent. Bank One, NA may, in such dual or other capacity, discharge its separate functions fully, without hindrance or regard to conflict of interest principles, duty of loyalty principles or other breach of fiduciary duties to the extent that any such conflict or breach arises from the performance by Bank One, NA of express duties set forth in the this Agreement in any of such capacities, all of which defenses, claims or assertions are hereby expressly waived by the other parties hereto and the Noteholders except in the case of gross negligence and willful misconduct by Bank One, NA. SECTION 7.5. Delegation of Duties. The Servicer may delegate duties under -------------------- this Agreement to an Affiliate of AmeriCredit with the prior written consent of the Trust Collateral Agent, the Owner Trustee and the Backup Servicer. The Servicer also may at any time perform through sub-contractors the specific duties of (i) repossession of Financed Vehicles, (ii) tracking Financed Vehicles' insurance and (iii) pursuing the collection of deficiency balances on certain Liquidated Receivables, in each case, without the consent of the Administrative Agent and may perform other specific duties through such sub-contractors in accordance with Servicer's -42- customary servicing policies and procedures, provided, however, that no such delegation or sub-contracting duties by the Servicer shall relieve the Servicer of its responsibility with respect to such duties. Neither AmeriCredit nor any party acting as Servicer hereunder shall appoint any subservicer hereunder without the prior written consent of the Administrative Agent, the Trustee and the Backup Servicer. SECTION 7.6. Servicer and Backup Servicer Not to Resign. Subject to the ------------------------------------------ provisions of Section 7.3, neither the Servicer nor the Backup Servicer shall resign from the obligations and duties imposed on it by this Agreement as Servicer or Backup Servicer except upon a determination that by reason of a change in legal requirements the performance of its duties under this Agreement would cause it to be in violation of such legal requirements in a manner which would have a material adverse effect on the Servicer or the Backup Servicer, as the case may be, and the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together, does not elect to waive the obligations of the Servicer or the Backup Servicer, as the case may be, to perform the duties which render it legally unable to act or to delegate those duties to another Person. Any such determination permitting the resignation of the Servicer or Backup Servicer shall be evidenced by an Opinion of Counsel to such effect delivered and acceptable to the Trust Collateral Agent, the Owner Trustee, the Agents and the Administrative Agent. No resignation of the Servicer shall become effective until the Backup Servicer or an entity acceptable to the Class A Majority, the Class B Majority and the Class C Majority, acting together, shall have assumed the responsibilities and obligations of the Servicer. No resignation of the Backup Servicer shall become effective until, an entity acceptable to the Class A Majority, the Class B Majority and the Class C Majority, acting together, shall have assumed the responsibilities and obligations of the Backup Servicer; provided, however, that (i) in the event a successor Backup Servicer is not appointed within 60 days after the Backup Servicer has given notice of its resignation and has provided the Opinion of Counsel required by this Section, the Backup Servicer may petition a court for its removal, (ii) the Backup Servicer may resign with the written consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, and (iii) if Bank One, NA resigns as the Trustee under the Indenture it will no longer be the Backup Servicer. ARTICLE VIII Default ------- SECTION 8.1. Servicer Termination Event. For purposes of this Agreement, -------------------------- each of the following shall constitute a "Servicer Termination Event": (a) Any failure by the Servicer to deliver to the Trust Collateral Agent for distribution to Noteholders any proceeds or payment required to be so delivered under the terms of this Agreement that continues unremedied for a period of two Business Days (one Business Day with respect to payment of Purchase Amounts) after written notice is received by the Servicer from the Trust Collateral Agent or the Administrative Agent or after discovery of such failure by a Responsible Officer of the Servicer; -43- (b) Failure by the Servicer to deliver to the Trust Collateral Agent, the Agents and the Administrative Agent the Servicer's Certificate by the second Business Day prior to the Distribution Date, or failure on the part of the Servicer to observe its covenants and agreements set forth in Section 7.3(a); (c) Failure on the part of the Servicer to duly observe or perform any other covenants or agreements of the Servicer set forth in this Agreement, which failure (i) materially adversely affects the Trust or the rights of the Noteholders, and (ii) continues unremedied for a period of 30 days after knowledge thereof by the Servicer or after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trust Collateral Agent; (d) The entry of a decree or order for relief by a court or regulatory authority having jurisdiction in respect of the Servicer in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or another present or future, federal bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Servicer or of any substantial part of its property or ordering the winding up or liquidation of the affairs of the Servicer and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days or the commencement of an involuntary case under the federal bankruptcy laws, as now or hereinafter in effect, or another present or future federal or state bankruptcy, insolvency or similar law and such case is not dismissed within 60 days; or (e) The commencement by the Servicer of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future, federal or state, bankruptcy, insolvency or similar law, or the consent by the Servicer to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Servicer or of any substantial part of its property or the making by the Servicer of an assignment for the benefit of creditors or the failure by the Servicer generally to pay its debts as such debts become due or the taking of corporate action by the Servicer in furtherance of any of the foregoing; or (f) Any representation, warranty or statement of the Servicer made in this Agreement or any certificate, report or other writing delivered pursuant hereto shall prove to be incorrect in any material respect as of the time when the same shall have been made (excluding, however, any representation or warranty set forth in the definition of "Eligible Receivable"), and the incorrectness of such ------------------- representation, warranty or statement has a material adverse effect on the Trust or the Noteholders and, within 30 days after knowledge thereof by the Servicer or after written notice thereof shall have been given to the Servicer by the Trust Collateral Agent or the circumstances or condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured; or (g) If (i) during any period hereafter commencing April 1 and ending the following September 30, the average of the Servicer Delinquency Ratios for the last day of each of the preceding three Collection Periods exceeds 5.5%, or (ii) during any period hereafter commencing October 1 and ending the following March 31, the average of the Servicer Delinquency Ratios for the last day of each of the preceding three Collection Periods exceeds 6.5%; or -44- (h) The Administrative Agent shall have delivered a Servicer Non-Extension Notice pursuant to Section 4.14; or (i) The Loss Ratio exceeds 8%; or (j) An Event of Default has occurred and is continuing. SECTION 8.2. Consequences of a Servicer Termination Event. If a Servicer -------------------------------------------- Termination Event shall occur and be continuing, either the Trust Collateral Agent (to the extent it has knowledge thereof) or the Class A Majority, the Class B Majority, or the Class C Majority by notice given in writing to the Servicer (and to the Trust Collateral Agent if given by the Noteholders) or by non-extension of the term of the Servicer as referred to in Section 4.14 may terminate all of the rights and obligations of the Servicer under this Agreement. On or after the receipt by the Servicer of such written notice or upon termination of the term of the Servicer, all authority, power, obligations and responsibilities of the Servicer under this Agreement, whether with respect to the Notes, the Certificates or the Other Conveyed Property or otherwise, automatically shall pass to, be vested in and become obligations and responsibilities of the Backup Servicer (or such other successor Servicer appointed by the Trust Collateral Agent); provided, however, that the successor Servicer shall have no liability with respect to any obligation which was required to be performed by the terminated Servicer prior to the date that the successor Servicer becomes the Servicer or any claim of a third party based on any alleged action or inaction of the terminated Servicer. The successor Servicer is authorized and empowered by this Agreement to execute and deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and the Other Conveyed Property and related documents to show the Trust as lienholder or secured party on the related Lien Certificates, or otherwise. The terminated Servicer agrees to cooperate with the successor Servicer in effecting the termination of the responsibilities and rights of the terminated Servicer under this Agreement, including, without limitation, the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the terminated Servicer for deposit, or have been deposited by the terminated Servicer, in the Collection Account or thereafter received with respect to the Receivables and the delivery to the successor Servicer of all Receivable Files, Monthly Records and Collection Records and a computer tape in readable form as of the most recent Business Day containing all information necessary to enable the successor Servicer or a successor Servicer to service the Receivables and the Other Conveyed Property. If requested by the Class A Majority, the Class B Majority and the Class C Majority, acting together, the successor Servicer shall terminate the Lockbox Agreement and direct the Obligors to make all payments under the Receivables directly to the successor Servicer (in which event the successor Servicer shall process such payments in accordance with Section 4.2(e)), or to a lockbox established by the successor Servicer at the direction of the Class A Majority, the Class B Majority and the Class C Majority, acting together, at the successor Servicer's expense. The terminated Servicer shall grant the Trust Collateral Agent, the successor Servicer and the Administrative Agent reasonable access to the terminated Servicer's premises at the terminated Servicer's expense. SECTION 8.3. Appointment of Successor. ------------------------ -45- (a) On and after the time the Servicer receives a notice of termination pursuant to Section 8.2, upon non-extension of the servicing term as referred to in Section 4.14, or upon the resignation of the Servicer pursuant to Section 7.6, the Backup Servicer shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for in this Agreement, and shall be subject to all the rights, responsibilities, restrictions, duties, liabilities and termination provisions relating thereto placed on the Servicer by the terms and provisions of this Agreement except as otherwise stated herein. The Trust Collateral Agent and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. If a successor Servicer is acting as Servicer hereunder, it shall be subject to term-to-term servicing as referred to in Section 4.14 and to termination under Section 8.2 upon the occurrence of any Servicer Termination Event applicable to it as Servicer. (b) Notwithstanding the above, if the Backup Servicer shall be legally unable or unwilling to act as Servicer, the Backup Servicer, the Trust Collateral Agent or the Class A Majority, the Class S Majority, the Class B Majority or the Class C Majority may petition a court of competent jurisdiction to appoint any Eligible Servicer as the successor to the Servicer. Pending appointment pursuant to the preceding sentence, the Backup Servicer shall act as successor Servicer unless it is legally unable to do so, in which event the outgoing Servicer shall continue to act as Servicer until a successor has been appointed and accepted such appointment. Subject to Section 7.6, no provision of this Agreement shall be construed as relieving the Backup Servicer of its obligation to succeed as successor Servicer upon the termination of the Servicer pursuant to Section 8.2, the resignation of the Servicer pursuant to Section 7.6 or the non-extension of the servicing term of the Servicer, as referred to in Section 4.14. If upon the termination of the Servicer pursuant to Section 8.2 or the resignation of the Servicer pursuant to Section 7.6, the Trust Collateral Agent appoints a successor Servicer other than the Backup Servicer, the Backup Servicer shall not be relieved of its duties as Backup Servicer hereunder. (c) Any successor Servicer shall be entitled to such compensation (whether payable out of the Collection Account or otherwise) as the Servicer would have been entitled to under this Agreement if the Servicer had not resigned or been terminated hereunder. If any successor Servicer is appointed as a result of the Backup Servicer's refusal (in breach of the terms of this Agreement) to act as Servicer although it is legally able to do so, the Class A Majority, the Class B Majority and the Class C Majority, acting together, and such successor Servicer may agree on reasonable additional compensation to be paid to such successor Servicer by the Backup Servicer, which additional compensation shall be paid by such breaching Backup Servicer in its individual capacity and solely out of its own funds; provided, however, it being understood and agreed that the Class A -------- ------- Majority, the Class B Majority and the Class C Majority shall give prior notice to the Backup Servicer with respect to the appointment of such successor and the payment of additional compensation, if any. If any successor Servicer is appointed for any reason other than the Backup Servicer's refusal to act as Servicer although legally able to do so, the Class A Majority, the Class B Majority and the Class C Majority and such successor Servicer may agree on additional compensation to be paid to such successor Servicer, which additional compensation shall in no event exceed $150,000 in the aggregate. If, any successor Servicer is appointed for any reason other than the Backup Servicer's refusal to act as Servicer although legally able to do so, the Backup Servicer shall not be liable for any Servicing Fee, additional -46- compensation or other amounts to be paid to such successor Servicer in connection with its assumption and performance of the servicing duties described herein. SECTION 8.4. Notification to Noteholders. Upon any termination of, or --------------------------- appointment of a successor to, the Servicer, the Trust Collateral Agent shall give prompt written notice thereof to each Noteholder and to the Rating Agencies. SECTION 8.5. Waiver of Past Defaults. The Class A Majority, the Class S ----------------------- Majority, Class B Majority and the Class C Majority, acting together, may, on behalf of all Noteholders, waive any default by the Servicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Termination Event arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. ARTICLE IX Termination ----------- SECTION 9.1. Optional Purchase of All Receivables. ------------------------------------ (a) On the last day of any Collection Period after the termination of the Commitments as of which the Aggregate Principal Balance shall be less than or equal to 10% of the highest Aggregate Principal Balance since the Closing Date, the Servicer and each Seller each shall have the option to purchase the Owner Trust Estate, other than the Trust Accounts; provided, however, that the amount to be paid for such purchase (as set forth in the following sentence) shall be sufficient to pay the full amount of principal and interest then due and payable on the Notes and amounts due to the Interest Rate Hedge Providers. To exercise such option, the Servicer or a Seller, as the case may be, shall deposit pursuant to Section 5.4 in the Collection Account an amount equal to the aggregate Purchase Amount for the Receivables (including Liquidated Receivables), plus the appraised value of any other property held by the Trust, such value to be determined by an appraiser mutually agreed upon by the Servicer and the Trust Collateral Agent, and shall succeed to all interests in and to the Trust. (b) Upon any sale of the assets of the Trust pursuant to Section 8.1 of the Trust Agreement, the Servicer shall instruct the Trust Collateral Agent to deposit the proceeds from such sale after all payments and reserves therefrom (including the expenses of such sale) have been made (the "Insolvency Proceeds") in the Collection Account. (c) Notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee, the Trustee, the Backup Servicer, the Trust Collateral Agent, the Administrative Agent and the Rating Agencies as soon as practicable after the Servicer has received notice thereof. (d) Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders will succeed to the rights of the Noteholders hereunder and the Owner Trustee will succeed to the rights of, and assume the obligations of, the Trust Collateral Agent pursuant to this Agreement. -47- ARTICLE X Administrative Duties of the Servicer ------------------------------------- SECTION 10.1. Administrative Duties. --------------------- (a) Duties with Respect to the Indenture. The Servicer shall perform all ------------------------------------ its duties and the duties of the Issuer under the Indenture. In addition, the Servicer shall consult with the Owner Trustee as the Servicer deems appropriate regarding the duties of the Issuer under the Indenture. The Servicer shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the Issuer's duties under the Indenture. The Servicer shall prepare for execution by the Issuer or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of the foregoing, the Servicer shall take all necessary action that is the duty of the Issuer to take pursuant to the Indenture. (b) Duties with Respect to the Issuer. --------------------------------- (i) In addition to the duties of the Servicer set forth in this Agreement or any of the Basic Documents, the Servicer shall perform such calculations and shall prepare for execution by the Issuer or the Owner Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to this Agreement or any of the Basic Documents or under state and federal tax and securities laws, and at the request of the Owner Trustee shall take all appropriate action that it is the duty of the Issuer to take pursuant to this Agreement or any of the Basic Documents, including, without limitation, pursuant to Sections 2.10 of the Trust Agreement. In accordance with the directions of the Issuer or the Owner Trustee, the Servicer shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Basic Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Issuer or the Owner Trustee and are reasonably within the capability of the Servicer. (ii) Notwithstanding anything in this Agreement or any of the Basic Documents to the contrary, the Servicer shall be responsible for promptly notifying the Owner Trustee and the Trust Collateral Agent in the event that any withholding tax is imposed on the Issuer's payments (or allocations of income) to an Owner (as defined in the Trust Agreement) as contemplated this Agreement. Any such notice shall be in writing and specify the amount of any withholding tax required to be withheld by the Owner Trustee or the Trust Collateral Agent pursuant to such provision. (iii) Notwithstanding anything in this Agreement or the Basic Documents to the contrary, the Servicer shall be responsible for performance of the duties of the Issuer set forth in Section 5.1(a) and (b) of the Trust Agreement with respect to, among other things, accounting and reports to Owners (as defined in the Trust Agreement); provided, however, that once -------- ------- prepared by the Servicer the Owner Trustee shall retain responsibility -48- for the distribution of the Schedule K-1s necessary to enable the Certificateholder to prepare its federal and state income tax returns. (iv) The Servicer shall perform the duties of the Servicer specified in Section 9.2 of the Trust Agreement required to be performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Servicer under this Agreement or any of the Basic Documents. (v) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Servicer may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that -------- ------- the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Servicer's opinion, no less favorable to the Issuer in any material respect. (c) Tax Matters. The Servicer shall prepare and file, on behalf of the ----------- Sellers, all tax returns, tax elections, financial statements and such annual or other reports attributable to the activities engaged in by the Issuer as are necessary for preparation of tax reports, including without limitation forms 1099. All tax returns will be signed by the Sellers. (d) Non-Ministerial Matters. With respect to matters that in the ----------------------- reasonable judgment of the Servicer are non-ministerial, the Servicer shall not take any action pursuant to this Article unless within a reasonable time before the taking of such action, the Servicer shall have notified the Owner Trustee and the Trustee of the proposed action and the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the Trustee shall not have withheld consent or provided an alternative direction. For the purpose of the preceding sentence, "non-ministerial matters" shall include: (A) the amendment of or any supplement to the Indenture; (B) the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables); (C) the amendment, change or modification of this Agreement or any of the Basic Documents; (D) the appointment of successor Note Registrars, successor Paying Agents and successor Trustees pursuant to the Indenture or the appointment of Successor Servicers or the consent to the assignment by the Note Registrar, Paying Agent or Trustee of its obligations under the Indenture; and (E) the removal of the Trustee or the Trust Collateral Agent. (e) Exceptions. Notwithstanding anything to the contrary in this ---------- Agreement, except as expressly provided herein or in the other Basic Documents, the Servicer, in its capacity hereunder, shall not be obligated to, and shall not, (1) make any payments to the Noteholders or Certificateholders under the Basic Documents, (2) sell the Indenture Trust Property pursuant to Section 5.5 of the Indenture, (3) take any other action that the Issuer directs the Servicer not to -49- take on its behalf or (4) in connection with its duties hereunder assume any indemnification obligation of any other Person. (f) The Backup Servicer or any successor Servicer shall not be responsible for any obligations or duties of the servicer under this Section 10.1. SECTION 10.2. Records. The Servicer shall maintain appropriate books of ------- account and records relating to services performed under this Agreement, which books of account and records shall be accessible for inspection by the Issuer at any time during normal business hours. SECTION 10.3. Additional Information to be Furnished to the Issuer. The ---------------------------------------------------- Servicer shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request. ARTICLE XI Miscellaneous Provisions ------------------------ SECTION 11.1. Amendment. This Agreement may be amended from time to time by --------- the parties hereto, with the consent of the Trustee (which consent may not be unreasonably withheld), with the prior written consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, to cure any ambiguity, to correct or supplement any provisions in this Agreement, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to Owner Trustee and the Trustee, adversely affect in any material respect the interests of any Noteholder. This Agreement may also be amended from time to time by the parties hereto, with the consent of the Trustee, and with the consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase -------- ------- or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or (b) reduce the aforesaid percentage of the outstanding principal amount of the Notes, the Holders of which are required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes of each class affected thereby. Promptly after the execution of any such amendment or consent, the Trust Collateral Agent shall furnish written notification of the substance of such amendment or consent to each Noteholder and the Rating Agencies. It shall not be necessary for the consent of Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and -50- any other consents of Noteholders provided for in this Agreement) and of evidencing the authorization of any action by Noteholders shall be subject to such reasonable requirements as the Trustee or the Owner Trustee, as applicable, may prescribe. Prior to the execution of any amendment to this Agreement, the Owner Trustee and the Trustee, Trust Collateral Agent, Administrative Agent and Backup Servicer shall be entitled to receive and conclusively rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 11.2(h)(1) has been delivered. The Owner Trustee, the Trust Collateral Agent, the Backup Servicer and the Trustee may, but shall not be obligated to, enter into any such amendment which affects the Issuer's, the Owner Trustee's, the Trust Collateral Agent's, the Backup Servicer's or the Trustee's, as applicable, own rights, duties or immunities under this Agreement or otherwise. SECTION 11.2. Protection of Title to Trust. (a) The Sellers shall execute ---------------------------- and file such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer and the interests of the Trust Collateral Agent in the related Receivables and in the proceeds thereof. The Sellers shall deliver (or cause to be delivered) to the Agents, the Administrative Agent, the Owner Trustee and the Trust Collateral Agent file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. (b) Neither any Seller nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of 9-506 of the UCC, unless it shall have given the Administrative Agent, the Owner Trustee, the Trust Collateral Agent and the Trustee at least five days' prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements. Promptly upon such filing, the related Seller or the Servicer, as the case may be, shall deliver an Opinion of Counsel in form and substance reasonably satisfactory to the Trust Collateral Agent, stating either (A) all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trust and the Trust Collateral Agent in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest. (c) Each of the Sellers and the Servicer shall have an obligation to give the Administrative Agent, the Owner Trustee, the Trust Collateral Agent and the Trustee at least 60 days' prior written notice of any relocation of its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment. The Servicer shall at all times maintain each office from which it shall service Receivables, and its principal executive office, within the United States of America and, in the case of servicing offices, Canada. -51- (d) The Servicer shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Receivable and the amounts from time to time deposited in the Collection Account in respect of such Receivable. (e) The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables to the Issuer, the Servicer's master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of the Trust in such Receivable and that such Receivable is owned by the Trust. Indication of the Trust's interest in a Receivable shall be deleted from or modified on the Servicer's computer systems when, and only when, the related Receivable shall have been paid in full or repurchased. (f) If at any time either Seller or the Servicer shall propose to sell, grant a security interest in or otherwise transfer any interest in automotive receivables to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Trust. (g) Upon request, the Servicer shall furnish to the Administrative Agent, the Owner Trustee or to the Trustee, within five Business Days, a list of all Receivables (by contract number and name of Obligor) then held as part of the Trust, together with a reconciliation of such list to the Schedule of Receivables and to each of the Servicer's Certificates furnished before such request indicating removal of Receivables from the Trust. (h) The Servicer shall deliver to the Agents, the Administrative Agent, the Owner Trustee and the Trustee: (1) promptly after the execution and delivery of the Agreement and, if required pursuant to Section 11.1, of each amendment, an Opinion of Counsel in substantially the form of Exhibit E hereto stating that, in the opinion of such Counsel, in form and substance reasonably satisfactory to the Trust Collateral Agent, either (A) all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trust and the Trustee in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest; and (2) within 90 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trust and the Trustee in the Receivables, and reciting the details of such filings or -52- referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest. Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest. SECTION 11.3. Notices. All demands, notices and communications upon or to ------- the Sellers, the Servicer, the Owner Trustee, the Trustee or the Rating Agencies under this Agreement shall be in writing, personally delivered, or mailed by certified mail, return receipt requested, and shall be deemed to have been duly given upon receipt (a) in the case of AFC to AmeriCredit Funding Corp. VII, 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102, (b) in the case of AmeriCredit or the Servicer to AmeriCredit Financial Services, Inc., 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102, Attention: Chief Financial Officer, (c) in the case of the Issuer or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, Bankers Trust (Delaware), E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington Delaware, 19805-1266, Attention: Corporate Trust with a copy to Bankers Trust Company, 100 Plaza One, Jersey City, New Jersey, Attention: Corporate Trust Agency, Structured Finance, (d) in the case of the Trustee, the Trust Collateral Agent or the Collateral Agent, at the Corporate Trust Office; (e) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007; and (f) in the case of Standard & Poor's, to Standard & Poor's Ratings Group, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department. Any notice required or permitted to be mailed to a Noteholder shall be given by first class mail, postage prepaid, at the address of such Holder as shown in the Note Register. Any notice so mailed within the time prescribed in the Agreement shall be conclusively presumed to have been duly given, whether or not the Noteholder shall receive such notice. SECTION 11.4. Assignment. This Agreement shall inure to the benefit of and ---------- be binding upon the parties hereto and their respective successors and permitted assigns. Notwithstanding anything to the contrary contained herein, except as provided in Sections 6.4 and 7.3 and as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by either Seller or the Servicer without the prior written consent of the Owner Trustee, the Trust Collateral Agent, the Backup Servicer, the Trustee and the Class A Majority, the Class S Majority, the Class B Majority and the Class C Majority, acting together. SECTION 11.5. Limitations on Rights of Others. The provisions of this ------------------------------- Agreement are solely for the benefit of the parties hereto, the Trustee, the Interest Rate Hedge Providers and the Noteholders, as third-party beneficiaries. Nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. SECTION 11.6. Severability. Any provision of this Agreement that is ------------ prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any -53- such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 11.7. Separate Counterparts. This Agreement may be executed by the --------------------- parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 11.8. Headings. The headings of the various Articles and Sections -------- herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. SECTION 11.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ------------- ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION 11.10. Assignment to Trustee. Each Seller hereby acknowledges and --------------------- consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in, to and under the Receivables and/or the assignment of any or all of the Issuer's rights and obligations hereunder to the Trustee. SECTION 11.11. Nonpetition Covenants. Notwithstanding any prior termination --------------------- of this Agreement, the Servicer and the Sellers shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. (a) Notwithstanding any prior termination of this Agreement, the Servicer shall not, prior to the date that is one year and one day after the termination of this Agreement with respect to AFC, acquiesce to, petition or otherwise invoke or cause AFC to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against AFC under any federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of AFC or any substantial part of its property, or ordering the winding up or liquidation of the affairs of AFC. SECTION 11.12. Limitation of Liability of Owner Trustee and Trustee. ---------------------------------------------------- Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by Bankers Trust (Delaware) not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall Bankers Trust (Delaware) in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant -54- hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles V, VI and VII of the Trust Agreement. (a) Notwithstanding anything contained herein to the contrary, this Agreement has been executed and delivered by Bank One, NA, not in its individual capacity but solely as Trust Collateral Agent and Backup Servicer and in no event shall Bank One, NA, have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. (b) In no event shall Bank One, NA, in any of its capacities hereunder, be deemed to have assumed any duties of the Owner Trustee under the Delaware Business Trust Statute, common law, or the Trust Agreement. SECTION 11.13. Independence of the Servicer. For all purposes of this ---------------------------- Agreement, the Servicer shall be an independent contractor and shall not be subject to the supervision of the Issuer, the Trust Collateral Agent and Backup Servicer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by this Agreement, the Servicer shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee. SECTION 11.14. No Joint Venture. Nothing contained in this Agreement (i) ---------------- shall constitute the Servicer and either of the Issuer or the Owner Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others. -55- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the day and the year first above written. AMERICREDIT MASTER TRUST By: BANKERS TRUST (DELAWARE), not in its individual capacity but solely as Owner Trustee on behalf of the Trust. By: _____________________________________ Name: Title: AMERICREDIT FUNDING CORP. VII, as a Seller, By: _____________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., as a Seller and as Servicer, By: _____________________________________ Name: Title: [Sale and Servicing Agreement] BANK ONE, NA, not in its individual capacity but solely as Backup Servicer By: _________________________________________ Name: Title: Acknowledged and accepted by BANK ONE, NA, not in its individual capacity but solely as Trust Collateral Agent By: _________________________________ Name: Title: [Sale and Servicing Agreement] SCHEDULE A SCHEDULE OF RECEIVABLES ----------------------- SCHEDULE B ---------- REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SERVICER ------------------------------------------------------------- 1. Characteristics of Receivables. Each Receivable (A) was ------------------------------ originated (i) by AmeriCredit, (ii) by a Dealer and purchased by AmeriCredit from such Dealer under an existing Dealer Agreement or pursuant to a Dealer Assignment with AmeriCredit and was validly assigned by such Dealer to AmeriCredit pursuant to a Dealer Assignment or (iii) by a Third-Party Lender and purchased by AmeriCredit from such Third-Party Lender under an existing Auto Loan Purchase and Sale Agreement or pursuant to a Third-Party Lender Assignment with AmeriCredit and was validly assigned by such Third-Party Lender to AmeriCredit pursuant to a Third-Party Lender Assignment, (B) was originated by AmeriCredit, such Dealer or such Third-Party Lender for the retail sale of a Financed Vehicle in the ordinary course of AmeriCredit's, the Dealer's or the Third-Party Lender's business, in each case was originated in accordance with AmeriCredit's credit policies and was fully and properly executed by the parties thereto, and AmeriCredit, each Dealer and each Third-Party Lender had all necessary licenses and permits to originate Receivables in the state where AmeriCredit, each such Dealer or each such Third-Party Lender was located, (C) contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for realization against the collateral security, (D) is a fully amortizing Simple Interest Receivable or Pre-Computed Receivable which provides for level monthly payments (provided that the period -------- in the first Collection Period and the payment in the final Collection Period of the Receivable may be minimally different from the normal period and level payment) which, if made when due, shall fully amortize the Amount Financed over the original term and (E) has not been amended or collections with respect to which waived, other than as evidenced in the Receivable File relating thereto. 2. Fraud or Misrepresentation. Each Receivable was originated (i) by -------------------------- AmeriCredit, (ii) by a Dealer and was sold by the Dealer to AmeriCredit, or (iii) by a Third-Party Lender and was sold by the Third-Party Lender to AmeriCredit, without any fraud or misrepresentation on the part of such Dealer or Third-Party Lender in any case. 3. Compliance with Law. All requirements of applicable federal, ------------------- state and local laws, and regulations thereunder (including, without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Moss-Magnuson Warranty Act, the Federal Reserve Board's Regulations "B" and "Z" (including amendments to the Federal Reserve's Official Staff Commentary to Regulation Z, effective October 1, 1998, concerning negative equity loans), the Soldiers' and Sailors' Civil Relief Act of 1940, each applicable state Motor Vehicle Retail Installment Sales Act, and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and other consumer credit laws and equal credit opportunity and disclosure laws) in respect of the Receivables and the Financed Vehicles, have been complied with in all material respects, and each Receivable and the sale of the Financed Vehicle evidenced by each Receivable complied at the time it was originated or made and now complies in all material respects with all applicable legal requirements. 4. Origination. Each Receivable is the Dollar denominated obligation ----------- of an Obligor domiciled in the United States of America at the time of origination. 5. Binding Obligation. Each Receivable represents the genuine, ------------------ legal, valid and binding payment obligation of the Obligor thereon, enforceable by the holder thereof in accordance with its terms, except (A) as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (B) as such Receivable may be modified by the application after the Cutoff Date of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all parties to each Receivable had full legal capacity to execute and deliver such Receivable and all other documents related thereto and to grant the security interest purported to be granted thereby. 6. No Government Obligor. No Obligor is the United States of America --------------------- or any State or any agency, department, subdivision or instrumentality thereof. 7. Obligor Bankruptcy. No Obligor has been identified on the records ------------------ of AmeriCredit as being the subject of a current bankruptcy proceeding. 8. Schedule of Receivables. The information set forth in the ----------------------- Schedule of Receivables has been produced from the Electronic Ledger and was true and correct in all material respects as of the close of business on the related Cutoff Date. 9. Marking Records. By the Closing Date or Transfer Date, as --------------- applicable, the Servicer will have caused the portions of the Electronic Ledger relating to the Receivables to be clearly and unambiguously marked to show that the Receivables have been sold by the Sellers to the Trust in accordance with the terms of the Sale and Servicing Agreement. 10. Computer Tape. The Computer Tape made available by the Sellers to ------------- the Trust on the Closing Date or Transfer Date, as applicable, was complete and accurate as of the related Cutoff Date and includes a description of the same Receivables that are described in the Schedule of Receivables, including, without limitation, the following information with respect to each such Receivable: loan number, remaining balance ($), original balance ($), remaining term (months), original term (months), WAC (%), vehicle identification number, AmeriCredit Score, 1st payment date (date), next payment date (date), last scheduled payment date (date), payment amount ($). 11. Adverse Selection. No selection procedures adverse to the ----------------- Noteholders were utilized in selecting the Receivables from those receivables owned by the related Seller which met the selection criteria contained in the Sale and Servicing Agreement. 12. Chattel Paper. The Receivables constitute tangible chattel paper ------------- within the meaning of the UCC as in effect in the States of Texas, New York and Delaware. 13. One Original. There is only one original executed copy of each ------------ Receivable. -2- 14. Receivable Files Complete. There exists a Receivable File ------------------------- pertaining to each Receivable and such Receivable File contains (a) a fully executed original of the Receivable, (b) the original executed credit application, or a paper or electronic copy thereof and (c) the original Lien Certificate or application therefor. Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces. All blanks on any form have been properly filled in and each form has otherwise been correctly prepared. The complete Receivable File for each Receivable currently is in the possession of the Custodian. 15. Receivables in Force. No Receivable has been satisfied, -------------------- subordinated or rescinded, and the Financed Vehicle securing each such Receivable has not been released from the lien of the related Receivable in whole or in part. No terms of any Receivable have been waived, altered or modified in any respect since its origination, except by instruments or documents identified in the Receivable File. No Receivable has been modified as a result of application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. 16. Lawful Assignment. No Receivable was originated in, or is subject ----------------- to the laws of, any jurisdiction the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Receivable under this Agreement or pursuant to transfers of the Securities. 17. Good Title. Immediately prior to the conveyance of the ---------- Receivables to the Trust pursuant to this Agreement, the related Seller was the sole owner thereof and had good and indefeasible title thereto, free of any Lien and, upon execution and delivery of this Agreement by such Seller, the Trust shall have good and indefeasible title to and will be the sole owner of such Receivables, free of any Lien. No Dealer or Third-Party Lender has a participation in, or other right to receive, proceeds of any Receivable. The related Seller has not taken any action to convey any right to any Person that would result in such Person having a right to payments received under the related Insurance Policies or the related Dealer Agreements, Auto Loan Purchase and Sale Agreements, Dealer Assignments or Third-Party Lender Assignments or to payments due under such Receivables. 18. Security Interest in Financed Vehicle. Each Receivable created or ------------------------------------- shall create a valid, binding and enforceable first priority security interest in favor of the related Seller in the Financed Vehicle. The Lien Certificate and original certificate of title for each Financed Vehicle show, or if a new or replacement Lien Certificate is being applied for with respect to such Financed Vehicle the Lien Certificate will be received within 180 days of the Closing Date or related Transfer Date, as applicable, and will show AmeriCredit (or a Titled Third-Party Lender) named as the original secured party under each Receivable as the holder of a first priority security interest in such Financed Vehicle. With respect to each Receivable for which the Lien Certificate has not yet been returned from the Registrar of Titles, AmeriCredit has applied for or received written evidence from the related Dealer or Third-Party Lender that such Lien Certificate showing AmeriCredit (or a Titled Third-Party Lender) as first lienholder has been applied for and AmeriCredit's security interest has been validly assigned to the Trust pursuant to this Agreement. Immediately after the sale, transfer and assignment thereof by the related Seller to the Trust, each Receivable will be secured by an enforceable and perfected first priority security interest in the Financed Vehicle in favor of the Trustee as secured party, which security interest is prior to all other Liens upon and security interests in such Financed Vehicle which now exist or may hereafter arise or be created (except, as to priority, for any lien for taxes, labor -3- or materials affecting a Financed Vehicle). There are no Liens or claims for taxes, work, labor or materials affecting a Financed Vehicle which are or may be Liens prior or equal to the Liens of the related Receivable. 19. All Filings Made. All filings (including, without limitation, UCC ---------------- filings) required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction to give the Trust a first priority perfected lien on, or ownership interest in, the Receivables and the proceeds thereof and the Other Conveyed Property have been made, taken or performed. 20. No Impairment. Neither Seller has done anything to convey any ------------- right to any Person that would result in such Person having a right to payments due under the Receivable or otherwise to impair the rights of the Trust, the Administrative Agent, the Trustee, the Trust Collateral Agent and the Noteholders in any Receivable or the proceeds thereof. 21. Receivable Not Assumable. No Receivable is assumable by another ------------------------ Person in a manner which would release the Obligor thereof from such Obligor's obligations to AmeriCredit with respect to such Receivable. 22. No Defenses. No Receivable is subject to any right of rescission, ----------- setoff, counterclaim or defense and no such right has been asserted or threatened with respect to any Receivable. 23. No Default. There has been no default, breach, violation or event ---------- permitting acceleration under the terms of any Receivable (other than payment delinquencies of not more than 30 days), and no condition exists or event has occurred and is continuing that with notice, the lapse of time or both would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable, and there has been no waiver of any of the foregoing. No Financed Vehicle has been repossessed. 24. Insurance. At the time of an origination of a Receivable by --------- AmeriCredit or a purchase of a Receivable by AmeriCredit from a Dealer or Third-Party Lender, each Financed Vehicle is required to be covered by a comprehensive and collision insurance policy (i) in an amount at least equal to the lesser of (a) its maximum insurable value or (b) the principal amount due from the Obligor under the related Receivable, (ii) naming AmeriCredit as loss payee and (iii) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage. Each Receivable requires the Obligor to maintain physical loss and damage insurance, naming AmeriCredit and its successors and assigns as additional insured parties, and each Receivable permits the holder thereof to obtain physical loss and damage insurance at the expense of the Obligor if the Obligor fails to do so. No Financed Vehicle is insured under a policy of Force-Placed Insurance. 25. Past Due. No Receivable is a Defaulted Receivable or a Delinquent -------- Receivable. No Receivable is a Borrowing Base Delinquent Receivable, provided -------- that the requirements of this sentence shall no longer be applicable if any Take-Out Securitization includes Borrowing Base Delinquent Receivables and if all Take-Out Securitizations that have closed subsequent thereto also include Borrowing Base Delinquent Receivables. -4- 26. Remaining Principal Balance. The Principal Balance of each --------------------------- Receivable set forth in the Schedule of Receivables is true and accurate in all material respects. 27. Certain Characteristics of Receivables. (A) Each Receivable had a -------------------------------------- remaining maturity, as of the related Cutoff Date, of not more than 72 months; (B) each Receivable had an original maturity of at least 6 months but not more than 72 months; (C) [reserved]; (D) each Receivable had a remaining Principal Balance as of the related Cutoff Date of at least $1,000 and not more than $60,000 as of the related Cutoff Date; (E) each Receivable has an Annual Percentage Rate of at least 7.75% and not more than 27%; (F) no Receivable is more than 30 days past due and (G) no funds have been advanced by AmeriCredit, any Dealer, any Third-Party Lender, or anyone acting on behalf of any of them in order to cause any Initial Receivable to qualify under clause (F) above. 28. No Financed Repossessions. No Receivable is secured by vehicle which ------------------------- is a financed repossession. 29. Aging. No Receivable has been owned by the Issuer for more than 180 ----- days. 30. No Corporate Obligor. No Obligor is a corporation, partnership or -------------------- limited liability company. 31. Extensions. No Receivable has had its payments extended beyond the ---------- date 80 months after the date on which such Receivable was originated. 32. Rewrite of Loan Number. No Receivable has been rewritten to a new ---------------------- loan number in connection with a refinancing of the related Financed Vehicle. 33. No Future Advances. The full amount of each Receivables has been ------------------ advanced and there are no requirements for future advances under the related Contract. -5- SCHEDULE C SERVICING POLICIES AND PROCEDURES --------------------------------- Note: Applicable Time Periods Will Vary by State Compliance with state collection laws is required of all AmeriCredit Collection Personnel. Additionally, AmeriCredit has chosen to follow the guidelines of the Federal Fair Debt Collection Practices Act (FDCPA). The Collection Process - ---------------------- AmeriCredit mails each customer a monthly billing statement 16 to 20 days before payment is due. A. All accounts are issued to the Computer Assisted Collection System (CACS) at 5 days delinquent or at such other dates of delinquency as determined by historical payment patterns of the account. B. The CACS segregates accounts into two groups: loans less than 30 days delinquent and those over 30 days delinquent. C. Loans delinquent for less than 30 days are then further segregated into two groups: accounts that have good phone numbers and those that do not. D. Loans with good phone numbers are transferred to the Davox system (AmeriCredit's predictive dialing system). The system automatically dials the phone number related to a delinquent account. When a connection is made, the account is then routed to the next available account representative. E. Loans without good phone numbers are assigned to front-end collectors. F. All reasonable collection efforts are made in an attempt to prevent these accounts from becoming 30+ days delinquent - this includes the use of collection letters. Collection letters may be utilized between 15th and 25th days of delinquency. G. When an account reaches 31 days delinquent, a collector determines if any default notification is required in the state where the debtor lives. H. When an account exceeds 61 days delinquent, the loan is assigned to a hard-core collector who will continue the collection effort. If the account cannot be resolved through normal collection efforts (i.e., satisfactory --- payment arrangements) then the account may be submitted for repossession approval. An officer must approve all repossession requests. I. CACS allows each collector to accurately document and update each customer file when contact (verbal or written) is made. Repossessions - ------------- If repossession of the collateral occurs, the following steps are taken: A. Proper authorities are notified (if applicable). B. An inventory of all personal property is taken and a condition report is prepared on the vehicle. C. Written notification, as required by state law, is sent to the customer(s) stating their rights of redemption or reinstatement along with information on how to obtain any personal property that was in the vehicle at the time of repossession. D. Written request to the originating dealer for all refunds due for dealer adds is made. E. Collateral disposition through public or private sale, (dictated by state law), in a commercially reasonable manner, through a third-party auto auction. F. After the collateral is liquidated, the debtor(s) is notified in writing of the deficiency balance owed, if any. Use of Due Date Changes - ----------------------- Due dates may be changed subject to the following conditions: A. The account is contractually current or will be brought current with the due date change. B. Due date changes cannot exceed the total of 15 days over the life of the contract. C. The first installment payment has been paid in full. D. Only one due date change in a twelve month period. E. An Officer must approve any exceptions to the above stated policy. Use of Payment Deferments - ------------------------- A payment deferral is offered to customers who have the desire and capacity to make future payments but who have encountered temporary financial difficulties, with management approval. A. Without prior approval, minimum of six payments have been made on the account and a minimum of nine payments have been made since the most recent deferment (if any). B. The account will be brought current with the deferment, but not paid ahead, without management approval. C. A deferment fee is collected on all transactions. -2- D. No more than eight total payments may be deferred over the life of the loan, without management approval. E. No single payment deferral may defer payment for more than two payment periods. An Officer must approve any exceptions to the above stated policy. Charge-Offs - ----------- It is AmeriCredit's policy that any account that is not successfully recovered by 120 days delinquent is submitted to an Officer for approval and charge-off. It is AmeriCredit's policy to carry all Chapter 13 bankruptcy accounts until 120 days delinquent. A partial charge-off is taken for the unsecured portion of the account. On fully reaffirmed Chapter 7 bankruptcy accounts, the accounts can be deferred current at the time of discharge. Deficiency Collections - ---------------------- Accounts are assigned to third party collection agencies for deficiency collections. -3- EXHIBIT A SERVICER'S CERTIFICATE ---------------------- Table of Contents -----------------
Page ---- ARTICLE I Definitions......................................................................................... 1 SECTION 1.1. Definitions................................................................................. 1 SECTION 1.2. Other Definitional Provisions............................................................... 1 ARTICLE II Conveyance of Receivables.......................................................................... 2 SECTION 2.1. Conveyance of Receivables................................................................... 2 SECTION 2.2. Further Encumbrance of Trust Property....................................................... 4 ARTICLE III The Receivables................................................................................... 5 SECTION 3.1. Representations and Warranties of Seller.................................................... 5 SECTION 3.2. Repurchase upon Breach...................................................................... 5 SECTION 3.3. Custody of Receivables Files................................................................ 6 SECTION 3.4. Credit Scoring Methodology.................................................................. 6 ARTICLE IV Administration and Servicing of Receivables........................................................ 7 SECTION 4.1. Duties of the Servicer...................................................................... 7 SECTION 4.2. Collection of Receivable Payments; Modifications of Receivables; Lockbox Agreements......... 9 SECTION 4.3. Realization upon Receivables................................................................ 11 SECTION 4.4. Insurance................................................................................... 12 SECTION 4.5. Maintenance of Security Interests in Vehicles............................................... 13 SECTION 4.6. Covenants, Representations, and Warranties of Servicer...................................... 14 SECTION 4.7. Purchase of Receivables Upon Breach of Covenant............................................. 15 SECTION 4.8. Total Servicing Fee; Payment of Certain Expenses by Servicer................................ 16 SECTION 4.9. Servicer's Certificate...................................................................... 16 SECTION 4.10. Annual Statement as to Compliance, Notice of Servicer Termination Event..................... 17 SECTION 4.11. Annual Independent Accountants' Report...................................................... 17 SECTION 4.12. Access to Certain Documentation and Information Regarding Receivables....................... 18 SECTION 4.13. Monthly Tape................................................................................ 18 SECTION 4.14. Retention and Termination of Servicer....................................................... 19 SECTION 4.15. Fidelity Bond and Errors and Omissions Policy............................................... 19 ARTICLE V Trust Accounts; Distributions....................................................................... 19 SECTION 5.1. Establishment of Trust Accounts............................................................. 19
i Table of Contents ----------------- (continued)
Page ---- SECTION 5.2. Certain Reimbursements to the Servicer..................................................... 22 SECTION 5.3. Application of Collections................................................................. 23 SECTION 5.4. Additional Deposits........................................................................ 23 SECTION 5.5. Distributions.............................................................................. 23 SECTION 5.6. Reserve Account; Collateral Account........................................................ 31 ARTICLE VI The Sellers...................................................................................... 32 SECTION 6.1. Representations of Seller.................................................................. 32 SECTION 6.2. Corporate Existence........................................................................ 34 SECTION 6.3. Liability of Seller; Indemnities........................................................... 35 SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations of the Sellers................ 36 SECTION 6.5. Limitation on Liability of the Sellers and Others.......................................... 37 SECTION 6.6. Ownership of the Certificates or Notes..................................................... 37 ARTICLE VII The Servicer.................................................................................... 37 SECTION 7.1. Representations of Servicer................................................................ 37 SECTION 7.2. Liability of Servicer; Indemnities......................................................... 39 SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations of the Servicer or Backup Servicer................................................................... 40 SECTION 7.4. Limitation on Liability of Servicer, Backup Servicer and Others............................ 41 SECTION 7.5. Delegation of Duties....................................................................... 42 SECTION 7.6. Servicer and Backup Servicer Not to Resign................................................. 43 ARTICLE VIII Default........................................................................................ 43 SECTION 8.1. Servicer Termination Event................................................................. 43 SECTION 8.2. Consequences of a Servicer Termination Event............................................... 45 SECTION 8.3. Appointment of Successor................................................................... 45 SECTION 8.4. Notification to Noteholders................................................................ 47 SECTION 8.5. Waiver of Past Defaults.................................................................... 47 ARTICLE IX Termination...................................................................................... 47 SECTION 9.1. Optional Purchase of All Receivables....................................................... 47 ARTICLE X Administrative Duties of the Servicer............................................................. 48 SECTION 10.1. Administrative Duties...................................................................... 48 SECTION 10.2. Records.................................................................................... 50
ii Table of Contents ----------------- (continued)
Page ---- SECTION 10.3. Additional Information to be Furnished to the Issuer........ 50 ARTICLE XI Miscellaneous Provisions......................................... 50 SECTION 11.1. Amendment................................................... 50 SECTION 11.2. Protection of Title to Trust................................ 51 SECTION 11.3. Notices..................................................... 53 SECTION 11.4. Assignment.................................................. 53 SECTION 11.5. Limitations on Rights of Others............................. 53 SECTION 11.6. Severability................................................ 53 SECTION 11.7. Separate Counterparts....................................... 54 SECTION 11.8. Headings.................................................... 54 SECTION 11.9. Governing Law............................................... 54 SECTION 11.10. Assignment to Trustee....................................... 54 SECTION 11.11. Nonpetition Covenants....................................... 54 SECTION 11.12. Limitation of Liability of Owner Trustee and Trustee........ 54 SECTION 11.13. Independence of the Servicer................................ 55 SECTION 11.14. No Joint Venture............................................ 55 SCHEDULES Schedule A Schedules of Receivables Schedule B Representations and Warranties of the Seller and the Servicer Schedule C Servicing Policies and Procedures Schedule D List of Lockbox Banks Schedule E List of Custodian Banks
iii Table of Contents ----------------- (continued)
Page ---- EXHIBITS Exhibit A Form of Servicer's Certificate Exhibit B Form of Supplement Exhibit C Form of Lockbox Agreement Exhibit D Form of Custodian Agreement Exhibit E Form of Opinion of Counsel regarding Amendment Exhibit F Form of Agreed Upon Procedures Letter ANNEX Annex A Defined Terms
iv EX-10.3 5 dex103.txt ANNEX A TO THE SALE AND SERVICING AGREEMENT Exhibit 10.3 EXECUTION COPY ANNEX A ------- Whenever used in either (i) the Amended and Restated Indenture, dated as of February 22, 2002, among AMERICREDIT MASTER TRUST, a Delaware business trust, BANK ONE, NA, a national banking association, as trustee and BANKERS TRUST COMPANY, as Administrative Agent (as amended, supplemented or otherwise modified from time to time, the "Indenture"), or (ii) the Amended and Restated Sale and --------- Servicing Agreement, dated as of February 22, 2002, among AMERICREDIT MASTER TRUST, a Delaware business trust, AMERICREDIT FUNDING CORP. VII, a Delaware corporation, AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation, and BANK ONE, NA, a national banking association, as Backup Servicer and Trust Collateral Agent (as amended, supplemented or otherwise modified from time to time, the "Sale and Servicing Agreement"), the following words and phrases shall ---------------------------- have the following meanings: "ABS" shall mean the assumed rate of prepayments on the Receivables for --- each Collection Period based upon the "Absolute Prepayment Model", applied in accordance with current market standards. "Accountants' Report" means the report of a firm of nationally recognized ------------------- independent accountants described in Section 4.11 of the Sale and Servicing Agreement. "Accounting Date" means, with respect to any Collection Period, the last --------------- day of such Collection Period. "Act" has the meaning specified in Section 12.3(a) of the Indenture. --- "Additional Class A-1 Principal Amount" shall mean, with respect to any ------------------------------------- Borrowing, the amount, if any, advanced under the Class A-1 Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. "Additional Class A-2 Principal Amount" shall mean, with respect to any ------------------------------------- Borrowing, the amount, if any, advanced under the Class A-2 Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. "Additional Class B Principal Amount" shall mean, with respect to any ----------------------------------- Borrowing, the amount, if any, advanced under the Class B Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. "Additional Class C Principal Amount" shall mean, with respect to any ----------------------------------- Borrowing, the amount, if any, advanced under the Class C Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. "Additional Class D Principal Amount" shall mean, with respect to any ----------------------------------- Borrowing, the amount, if any, advanced under the Class D Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. Annex A-1 "Additional Class E Principal Amount" shall mean, with respect to any ----------------------------------- Borrowing, the amount, if any, advanced under the Class E Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Borrowing. "Additional Class S Principal Amount" shall mean, with respect to any ----------------------------------- Borrowing, the amount, if any, advanced under the Class S Notes to the Issuer pursuant to Section 12.6 of the Indenture in connection with such Swingline Borrowing. "Additional Issuance Date" means each date on which additional Notes of any ------------------------ Class are issued pursuant to Section 12.7 of the Indenture. "Administrative Agent" means, initially, Bankers Trust Company, in its -------------------- capacity as administrative agent on behalf of the Noteholders, including its successors-in-interest, until and unless a successor Person shall have become the Administrative Agent pursuant to Section 11.9 of the Indenture, and thereafter "Administrative Agent" shall mean such successor Person. "Administrative Agent Fee" means, for any Distribution Date, to the extent ------------------------ not paid pursuant to the fee letter between the Issuer and the Administrative Agent, the amount, if any, due and owing to the Administrative Agent as its regular fee on such Distribution Date pursuant to such fee letter. "Administrative Receivable" means, with respect to any Collection Period, a ------------------------- Receivable which the Servicer is required to purchase pursuant to Section 4.7 of the Sale and Servicing Agreement or which the Servicer has elected to purchase pursuant to Section 4.4(c) of the Sale and Servicing Agreement on the Determination Date with respect to such Collection Period. "AFC" means AmeriCredit Funding Corp. VII. ---- "Affiliate" means, with respect to any specified Person, any other Person --------- controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. A person shall not be deemed to be an Affiliate of any person solely because such other Person has the contractual right or obligation to manage such Person, unless such other Person controls such Person through equity ownership or otherwise. "Agents" means the Class A-1 Agents, the Class A-2 Agents, the Class S ------ Agents, the Class B Agents, the Class C Agents, the Class D Agents and the Class E Agents. "Aggregate Note Principal Balance" means, as of any date, the sum of the -------------------------------- Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class S Principal Balance, the Class B Principal Balance, the Class C Principal Balance, the Class D Principal Balance and the Class E Principal Balance on such date. "Aggregate Principal Balance" means, with respect to any date of --------------------------- determination, the sum of the Principal Balances for all Receivables (other than (i) any Receivable that became a Liquidated Receivable prior to the end of the related Collection Period and (ii) any Receivable Annex A-2 that became a Purchased Receivable prior to the end of the related Collection Period) as of the date of determination. "AmeriCredit" means AmeriCredit Financial Services, Inc. ----------- "AmeriCredit Score" means, with respect to a Receivable at any time, the ----------------- credit score for the related Obligor at such time, determined in accordance with the Servicing Collection and Credit Policy and Procedures (as in effect from time to time). "Amount Financed" means, with respect to a Receivable, the aggregate amount --------------- advanced under such Receivable toward the purchase price of the Financed Vehicle and any related costs, including amounts advanced in respect of accessories, insurance premiums (excluding premiums on force-placed insurance), service and warranty contracts, other items customarily financed as part of retail automobile installment sale contracts or promissory notes, and related costs. "Annual Percentage Rate" or "APR" of a Receivable means the annual ---------------------- --- percentage rate of finance charges or service charges, as stated in the related Contract. "Authorized Officer" means, with respect to the Issuer and the Servicer, ------------------ any officer or agent acting pursuant to a power of attorney of the Owner Trustee or the Servicer, as applicable, who is authorized to act for the Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by each of the Owner Trustee and the Servicer to the Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter). "Auto Loan Purchase and Sale Agreement" means any agreement between a ------------------------------------- Third-Party Lender and AmeriCredit relating to the acquisition of Receivables from a Third Party Lender by AmeriCredit. "Available Funds" means, with respect to any Distribution Date, the sum of --------------- (i) the Collected Funds for the related Collection Period, (ii) all Purchase Amounts deposited in the Collection Account during the related Collection Period, plus Investment Earnings with respect to the Trust Accounts for the related Collection Period, (iii) following the acceleration of the Notes pursuant to Section 5.2 of the Indenture, the amount of money or property collected pursuant to Section 5.3 of the Indenture since the preceding Distribution Date by the Trust Collateral Agent for distribution pursuant to Section 5.6 of the Indenture, (iv) the proceeds of any purchase or sale of the assets of the Trust described in Section 9.1 of the Sale and Servicing Agreement, and (v) any amounts received by the Trust Collateral Agent pursuant to any Interest Rate Hedge. "Backup Servicer" means Bank One, NA, solely in its capacity as backup --------------- servicer, together with its permitted successors and assigns in such capacity. "Backup Servicer/Trust Collateral Agent Fee" means, for any Distribution ------------------------------------------ Date, the amount calculated at the Backup Servicer/Trust Collateral Agent Fee Rate payable to the Backup Servicer and Trust Collateral Agent as its regular fee on such Distribution Date pursuant to the Backup Servicer/Trust Collateral Agent Fee Letter. Annex A-3 "Backup Servicer/Trust Collateral Agent Fee Letter" means (a) that certain ------------------------------------------------- schedule of fees of Bank One, NA, acknowledged by AmeriCredit and the Issuer and the Administrative Agent, as the same may be amended, supplemented or otherwise modified by the parties thereto, provided that if such fees increase more than -------- 10% per annum, any such amendment or modification shall have been approved by the Class A Majority, the Class B Majority and the Class C Majority, acting together. and (b) any letter agreement(s) or schedule of fees entered into by AmeriCredit and the Issuer, with the consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, with a substitute Backup Servicer and/or Trust Collateral Agent in replacement of the schedule of fees referred to in clause (a) above relating to fees payable to such substitute Backup Servicer and/or Trust Collateral Agent, as the case may be. "Backup Servicing/Trust Collateral Agent Fee Rate" has the meaning set ------------------------------------------------ forth in the Backup Servicer/Trust Collateral Agent Fee Letter. "Basic Documents" means the Indenture, the Certificate of Trust, the Trust --------------- Agreement, as amended, the Sale and Servicing Agreement, the Master Sale and Contribution Agreement, each Note Purchase Agreement, the Custodian Agreement, any Interest Rate Hedge Agreement and other documents and certificates delivered in connection therewith. "Benefit Plan Entity" has the meaning specified in Section 2.4 of the ------------------- Indenture. "Book Entry Notes" means a beneficial interest in the Notes, ownership and ---------------- transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10 of the Indenture. "Borrowing" has the meaning specified in Section 12.6 of the Indenture. --------- "Borrowing Base" means each of the Class A Borrowing Base, the Class B -------------- Borrowing Base, the Class S Borrowing Base, the Class C Borrowing Base, the Class D Borrowing Base and the Class E Borrowing Base. "Borrowing Base Confirmation" has the meaning specified in Section 12.6(a) --------------------------- of the Indenture. "Borrowing Base Deficiency" means each of a Class A Borrowing Base ------------------------- Deficiency, a Class B Borrowing Base Deficiency, a Class S Borrowing Base Deficiency, Class C Borrowing Base Deficiency, a Class D Borrowing Base Deficiency and a Class E Borrowing Base Deficiency. "Borrowing Base Delinquent Receivable" means a Receivable (other than a ------------------------------------ Defaulted Receivable) with respect to which more than 5% of a Scheduled Receivable Payment is more than 30 days past due. "Borrowing Date" has the meaning specified in Section 12.6 of the -------------- Indenture. Annex A-4 "Business Day" means a day other than a Saturday, a Sunday or other day on ------------ which commercial banks located in the states of Delaware, New York, Ohio or Texas are authorized or obligated to be closed. "Calculation Date" means the close of business on the last day of each ---------------- Collection Period. "Calendar Quarter" means the three-month period ending on the last day of ---------------- March, June, September or December. "Capped Expenses" means, at any time, costs and expenses due at such time --------------- (if any) to the Backup Servicer, the Trust Collateral Agent and to the Trustee under the Basic Documents not in excess of $7,500 with respect to any Collection Period. "Certificate" means a trust certificate evidencing a beneficial interest of ----------- a Certificateholder in the Trust. "Certificateholder" means a Person in whose name a Certificate is ----------------- registered. "Certificate of Trust" means the certificate of trust of the Issuer -------------------- substantially in the form of Exhibit B to the Trust Agreement. "Change of Control" means a change resulting when any Unrelated Person or ----------------- any Unrelated Persons, acting together, that would constitute a Group together with any Affiliates or Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (i) Beneficially Own more than 30% of the aggregate voting power of all classes of Voting Stock of AmeriCredit Corp. or (ii) succeed in having sufficient of its or their nominees elected to the Board of Directors of AmeriCredit Corp. such that such nominees when added to any existing director remaining on the Board of Directors of AmeriCredit Corp. after such election who is an Affiliate or Related Person of such Person or Group, shall constitute a majority of the Board of Directors of AmeriCredit Corp. As used herein, (a) "Beneficially Own" shall mean "beneficially own" as ---------------- defined in Rule 13d-3 of the Exchange Act, or any successor provision thereto; provided, however, that, for purposes of this definition, a Person shall not be deemed to Beneficially Own securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates until such tendered securities are accepted for purchase or exchange; (b) "Group" shall mean a "group" for purposes of Section 13(d) of the Exchange Act; ----- (c) "Unrelated Person" shall mean at any time any Person other than AmeriCredit ---------------- Corp. or any of its Subsidiaries, any of the shareholders of AmeriCredit Corp. on the Closing Date and other than any trust for any employee benefit plan of AmeriCredit Corp. or any of its Subsidiaries; (d) "Related Person" of any Person -------------- shall mean any other Person owning (1) 5% or more of the outstanding common stock of such Person or (2) 5% or more of the Voting Stock of such Person; and (e) "Voting Stock" of any Person shall mean the capital stock or other indicia ------------ of equity rights of such Person which at the time has the power to vote for the election of one or more members of the Board of Directors (or other governing body) of such Person. "Class" means the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, ------ the Class B Notes, the Class C Notes, the Class D Notes or the Class E Notes as the context requires. Annex A-5 "Class A Aggregate Undrawn Amount" means, at any time, the sum of the Class -------------------------------- A-1 Aggregate Undrawn Amount and the Class A-2 Aggregate Undrawn Amount. "Class A Borrowing Base" means, on any day, the excess, if any, of (a) the ---------------------- sum of (i) the Aggregate Principal Balance of all Eligible Receivables on such day minus (ii) the Excluded Receivables Balance on such day plus (iii) the amount on deposit in the Collateral Account on such day plus (iv) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (b) the sum of (i) the Class A Required Note Enhancement and (ii) the Class A Swingline Percentage of the Class S Principal Balance. "Class A Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5.1(vi) of the Indenture. "Class A Borrowing Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is the Class A Borrowing Base on such date and the denominator of which is the sum of the Class A Borrowing Base, the Class B Borrowing Base and the Class C Borrowing Base. "Class A Commitment" shall mean, for any Committed Purchaser (as defined in ------------------ each of the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement), the maximum amount of such Committed Purchaser's commitment to purchase a portion of the Class A-1 Principal Amount or Class A-2 Principal Amount, as appropriate, as determined pursuant to the related Note Purchase Agreement. "Class A Credit Score Enhancement Rate" has then meaning set forth on ------------------------------------- Schedule 2 to the Indenture. "Class A Limited Amortization Amount" has the meaning specified in Section ----------------------------------- 10.4 of the Indenture. "Class A Majority" means the "Class A Majority Owners" together with the ---------------- "Class A Majority Purchasers". "Class A Majority Owners" shall mean, at any time, Class A Owners holding ----------------------- more than 50% of the Class A Principal Balance at such time. "Class A Majority Purchasers" shall mean, at any time, Committed Purchasers --------------------------- (as defined in each of the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement) having Class A Commitments under the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement aggregating more than 50% of the Class A Total Commitment. "Class A Notes" means the Class A-1 Notes and the Class A-2 Notes. ------------- "Class A Owners" shall mean the Class A Purchasers that are owners of -------------- record of the Class A-1 Notes or Class A-2 Notes, as applicable, or, with respect to any Class A-1 Note or Class A-2 Note held by a Class A-1 Agent or Class A-2 Agent as nominee, the Class A Annex A-6 Purchasers that are beneficial owners of such Note as reflected on the books of such Agent in accordance with the related Note Purchase Agreement. "Class A Principal Balance" shall mean, with respect to any date, the sum ------------------------- of the Class A-1 Principal Balance and the Class A-2 Principal Balance on such date. "Class A Purchasers" shall mean, collectively, the Class A-1 Purchasers (as ------------------ defined in the Class A-1 Note Purchase Agreement) and the Class A-2 Purchasers (as defined in the Class A-2 Note Purchase Agreement). "Class A Required Noteholders" means the "Class A Required Owners" together ---------------------------- with the "Class A Required Purchasers". "Class A Required Note Enhancement" means, on any day, the product of (a) --------------------------------- the Class A Credit Score Enhancement Rate and (b) the Aggregate Principal Balance of the Eligible Receivables minus the Excluded Receivables Balance on such day. "Class A Required Owners" shall mean, at any time, Class A Owners holding ------------------------ more than two-thirds of the Class A Principal Balance at such time. "Class A Required Purchasers" shall mean, at any time, Committed Purchasers --------------------------- (as defined in each of the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement) having Class A Commitments under the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement aggregating more than two-thirds of the Class A Total Commitment. "Class A Swingline Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is 100% minus the Class A Credit Score Enhancement Rate on such date and the denominator of which is 100% minus the Class C Credit Score Enhancement Rate on such date. "Class A Total Commitment" shall mean, on any date of determination, the ------------------------ aggregate Class A Commitments of the Committed Purchasers (as defined in each of the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement) under the Class A-1 Note Purchase Agreement and the Class A-2 Note Purchase Agreement. "Class A-1 Agent" means each person designated as such under the Class A-1 --------------- Note Purchase Agreement. "Class A-1 Aggregate Undrawn Amount" means, at any time, the aggregate ---------------------------------- amount of the Class A-1 Commitments over the Class A-1 Principal Balance. "Class A-1 Commitments" means the "Commitments" as defined in the Class A-1 --------------------- Note Purchase Agreement. "Class A-1 Initial Principal Balance" shall mean $0. ----------------------------------- Annex A-7 "Class A-1 Majority" means the "Majority Class A-1 Owners" together with ------------------ the "Majority Class A-1 Purchasers", each as defined in the Class A-1 Note Purchase Agreement. "Class A-1 Monthly Costs and Expenses" has the meaning specified in the ------------------------------------ Class A-1 Note Purchase Agreement. "Class A-1 Monthly Interest and Fees" has the meaning specified in the ----------------------------------- Class A-1 Note Purchase Agreement. "Class A-1 Monthly Interest Cap" means, with respect to any Distribution ------------------------------ Date, the sum of the daily interest which would have accrued on the Class A-1 Principal Balance on each day during the Interest Period with respect to such Distribution Date at a rate per annum equal to 0.875% in excess of the LIBOR Rate (determined as set forth in the Class A-1 Note Purchase Agreement, provided -------- that the Fixed Period referred to in the definition of LIBOR Rate shall be the - ---- Interest Period with respect to such Distribution Date). "Class A-1 Note Purchase Agreement" means the Amended and Restated Class --------------------------------- A-1 Note Purchase Agreement, dated as of February 22, 2002, among the Issuer, the Sellers, the Servicer, the financial institutions parties thereto, the Class A-1 Agents and the Administrative Agent, as from time to time amended, supplemented or otherwise modified. "Class A-1 Notes" means the Class A-1 Floating Rate Asset Backed Notes, --------------- substantially in the form of Exhibit A-1 to the Indenture. "Class A-1 Principal Balance" shall mean, with respect to any date, an --------------------------- amount equal to the excess of (a) the sum of (i) the Class A-1 Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class A-1 Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class A-1 Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. "Class A-1 Required Noteholders" means the "Required Class A-1 Owners" ------------------------------ together with the "Required Class A-1 Purchasers", each as defined in the Class A-1 Note Purchase Agreement. "Class A-2 Agent" means each person designated as such under the Class A-2 --------------- Note Purchase Agreement. "Class A-2 Aggregate Undrawn Amount" means, at any time, the aggregate ---------------------------------- amount of the Class A-2 Commitments over the Class A-2 Principal Balance. "Class A-2 Commitments" means the "Commitments" as defined in the Class A-2 --------------------- Note Purchase Agreement. "Class A-2 Initial Principal Balance" shall mean $0. ----------------------------------- "Class A-2 Majority" means the "Majority Class A-2 Owners" together with ------------------ the "Majority Class A-2 Purchasers", each as defined in the Class A-2 Note Purchase Agreement. Annex A-8 "Class A-2 Monthly Costs and Expenses" has the meaning specified in the ------------------------------------ Class A-2 Note Purchase Agreement. "Class A-2 Monthly Interest and Fees" has the meaning specified in the ----------------------------------- Class A-2 Note Purchase Agreement. "Class A-2 Monthly Interest Cap" means, with respect to any Distribution ------------------------------ Date, the sum of the daily interest which would have accrued on the Class A-2 Principal Balance on each day during the Interest Period with respect to such Distribution Date at a rate per annum equal to 1.10% in excess of the LIBOR Rate (determined as set forth in the Class A-2 Note Purchase Agreement, provided that the Fixed Period referred to in the definition of LIBOR Rate shall be the Interest Period with respect to such Distribution Date). "Class A-2 Note Purchase Agreement" means the Amended and Restated Class --------------------------------- A-2 Note Purchase Agreement, dated as of February 22, 2002, among the Issuer, the Sellers, the Servicer, the financial institutions parties thereto, the Class A-2 Agents and the Administrative Agent, as from time to time amended, supplemented or otherwise modified. "Class A-2 Notes" means the Class A-2 Floating Rate Asset Backed Notes, --------------- substantially in the form of Exhibit A-2 to the Indenture. "Class A-2 Principal Balance" shall mean, with respect to any date, an --------------------------- amount equal to the excess of (a) the sum of (i) the Class A-2 Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class A-2 Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class A-2 Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. "Class A-2 Required Noteholders" means the "Required Class A-2 Owners" ------------------------------ together with the "Required Class A-2 Purchasers", each as defined in the Class A-2 Note Purchase Agreement. "Class B Agent" means each person designated as such under the Class B Note ------------- Purchase Agreement. "Class B Aggregate Undrawn Amount" means, at any time, the aggregate amount -------------------------------- of the Class B Commitments over the Class B Principal Balance. "Class B Borrowing Base" means, on any day, the excess, if any, of (a) the ---------------------- sum of (i) the Aggregate Principal Balance of all Eligible Receivables on such day minus (ii) the Excluded Receivables Balance on such day plus (iii) the amount on deposit in the Collateral Account on such day plus (iv) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (b) the sum of (i) the Class B Required Note Enhancement, (ii) the Class A Principal Balance, (iii) the Class A Swingline Percentage of the Class S Principal Balance and (iv) the Class B Swingline Percentage of the Class S Principal Balance. "Class B Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5.1(vi) of the Indenture. Annex A-9 "Class B Borrowing Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is the Class B Borrowing Base on such date and the denominator of which is the sum of the Class A Borrowing Base, the Class B Borrowing Base and the Class C Borrowing Base. "Class B Commitment" shall mean, for any Committed Purchaser (as defined in ------------------ each of the Class B Note Purchase Agreement), the maximum amount of such Committed Purchaser's commitment to purchase a portion of the Class B Principal Amount, as determined pursuant to the Class B Note Purchase Agreement. "Class B Credit Score Enhancement Rate" has then meaning set forth on ------------------------------------- Schedule 2 to the Indenture. "Class B Initial Principal Balance" shall mean $0. --------------------------------- "Class B Limited Amortization Amount" has the meaning specified in Section ----------------------------------- 10.4 of the Indenture. "Class B Majority" means the "Majority Class B Owners" together with the ---------------- "Majority Class B Purchasers", each as defined in the Class B Note Purchase Agreement. "Class B Monthly Costs and Expenses" has the meaning specified in the Class ---------------------------------- B Note Purchase Agreement "Class B Monthly Interest and Fees" has the meaning specified in the Class --------------------------------- B Note Purchase Agreement. "Class B Monthly Interest Cap" means, with respect to any Distribution ---------------------------- Date, the sum of the daily interest which would have accrued on the Class B Principal Balance on each day during the Interest Period with respect to such Distribution Date at a rate per annum equal to 1.50% in excess of the LIBOR Rate (determined as set forth in the Class B Note Purchase Agreement, provided that the Fixed Period referred to in the definition of LIBOR Rate shall be the Interest Period with respect to such Distribution Date). "Class B Note Purchase Agreement" means the Amended and Restated Class B ------------------------------- Note Purchase Agreement, dated as of February 22, 2002, among the Issuer, the Sellers, the Servicer, the financial institutions parties thereto, the Class B Agents and the Administrative Agent, as from time to time amended, supplemented or otherwise modified. "Class B Notes" means the Class B Floating Rate Asset Backed Notes, ------------- substantially in the form of Exhibit A-4 to the Indenture. "Class B Principal Balance" shall mean, with respect to any date, an amount ------------------------- equal to the excess of (a) the sum of (i) the Class B Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class B Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class B Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. Annex A-10 "Class B Required Note Enhancement" means, on any day, the product of (a) --------------------------------- the Class B Credit Score Enhancement Rate and (b) the Aggregate Principal Balance of the Eligible Receivables minus the Excluded Receivables Balance on such day. "Class B Required Noteholders" means the "Required Class B Owners" together ---------------------------- with the "Required Class B Purchasers", each as defined in the Class B Note Purchase Agreement. "Class B Swingline Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is the Class A Credit Score Enhancement Rate less the Class B Credit Score Enhancement Rate on such date and the denominator of which is 100% minus the Class C Credit Score Enhancement Rate on such date. "Class B Total Commitment" shall mean, on any date of determination, the ------------------------ aggregate Class B Commitments of the Committed Purchasers (as defined in the Class B Note Purchase Agreement) under the Class B Note Purchase Agreement. "Class C Agent" means each person designated as such under the Class C Note ------------- Purchase Agreement. "Class C Aggregate Undrawn Amount" means, at any time, the aggregate amount -------------------------------- of the Class C Commitments over the Class C Principal Balance. "Class C Borrowing Base" means, on any day, the excess, if any, of (a) the ---------------------- sum of (i) the Aggregate Principal Balance of all Eligible Receivables on such day minus (ii) the Excluded Receivables Balance on such day plus (iii) the amount on deposit in the Collateral Account on such day plus (iv) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (b) the sum of (i) the Class C Required Note Enhancement, (ii) the Class S Principal Balance, (iii) the Class A Principal Balance and (iv) the Class B Principal Balance. "Class C Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5.1(vi) of the Indenture. "Class C Borrowing Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is the Class C Borrowing Base on such date and the denominator of which is the sum of the Class A Borrowing Base, the Class B Borrowing Base and the Class C Borrowing Base. "Class C Commitment" shall mean, for any Committed Purchaser (as defined in ------------------ each of the Class C Note Purchase Agreement), the maximum amount of such Committed Purchaser's commitment to purchase a portion of the Class C Principal Amount, as determined pursuant to the Class C Note Purchase Agreement. "Class C Credit Score Enhancement Rate" has then meaning set forth on ------------------------------------- Schedule 2 to the Indenture. "Class C Initial Principal Balance" shall mean $0. --------------------------------- Annex A-11 "Class C Limited Amortization Amount" has the meaning specified in Section ----------------------------------- 10.4 of the Indenture. "Class C Majority" means the "Majority Class C Owners" together with the ---------------- "Majority Class C Purchasers", each as defined in the Class C Note Purchase Agreement. "Class C Monthly Costs and Expenses" has the meaning specified in the Class ---------------------------------- C Note Purchase Agreement. "Class C Monthly Interest and Fees" has the meaning specified in the Class --------------------------------- C Note Purchase Agreement. "Class C Monthly Interest Cap" means, with respect to any Distribution ---------------------------- Date, the sum of the daily interest which would have accrued on the Class C Principal Balance on each day during the Interest Period with respect to such Distribution Date at a rate per annum equal to 2.25% in excess of the LIBOR Rate (determined as set forth in the Class C Note Purchase Agreement, provided that the Fixed Period referred to in the definition of LIBOR Rate shall be the Interest Period with respect to such Distribution Date). "Class C Note Purchase Agreement" means the Amended and Restated Class C ------------------------------- Note Purchase Agreement, dated as of February 22, 2002, among the Issuer, the Sellers, the Servicer, the financial institutions parties thereto, the Class C Agents and the Administrative Agent, as from time to time amended, supplemented or otherwise modified. "Class C Notes" means the Class C Floating Rate Asset Backed Notes, ------------- substantially in the form of Exhibit A-5 to the Indenture. "Class C Principal Balance" shall mean, with respect to any date, an amount ------------------------- equal to the excess of (a) the sum of (i) the Class C Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class C Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class C Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. "Class C Required Note Enhancement" means, on any day, the product of (a) --------------------------------- the Class C Credit Score Enhancement Rate and (b) the Aggregate Principal Balance of the Eligible Receivables minus the Excluded Receivables Balance on such day. "Class C Required Noteholders" means the "Required Class C Owners" together ---------------------------- with the "Required Class C Purchasers", each as defined in the Class C Note Purchase Agreement. "Class C Swingline Percentage" shall mean with respect to any date, the ---------------------------- percentage equivalent of a fraction the numerator of which is the Class B Credit Score Enhancement Rate minus the Class C Credit Score Enhancement Rate on such date and the denominator of which is 100% minus the Class C Credit Score Enhancement Rate on such date. Annex A-12 "Class C Total Commitment" shall mean, on any date of determination, the ------------------------ aggregate Class C Commitments of the Committed Purchasers (as defined in the Class C Note Purchase Agreement) under the Class C Note Purchase Agreement. "Class D Agent" means each person designated as such under the Class D Note ------------- Purchase Agreement. "Class D Borrowing Base" (a) means, on any day if the Class D Notes are not ---------------------- held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, the excess, if any, of (i) the sum of (A) the Aggregate Principal Balance of all Eligible Receivables on such day minus (B) the Excluded Receivables Balance on such day plus (C) the amount on deposit in the Collateral Account on such day plus (D) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (ii) the sum of (A) the Class D Required Note Enhancement, (B) the Class A Principal Balance, (C) the Class B Principal Balance, (D) the Class S Principal Balance and (E) the Class C Principal Balance and (b) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class D Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5(vi) of the Indenture. "Class D Credit Score Enhancement Rate" (a) if the Class D Notes are not ------------------------------------- held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, has then meaning set forth on Schedule 2 to the Indenture and (b) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class D Initial Principal Balance" shall mean $0. --------------------------------- "Class D Monthly Interest and Fees" means, with respect to any Distribution --------------------------------- Date, the product of (a) the lesser of (i) 8% (or such other percentage as may be substituted by the Issuer subject to satisfaction of the Rating Agency Condition) and (ii) the rate provided for in the Class D Note, (b) 1/12 and (c) the average daily Class D Principal Balance during the preceding Interest Period. "Class D Note Purchase Agreement" means any note purchase agreement entered ------------------------------- into from time to time by the Issuer and purchasers of the Class D Notes, as from time to time amended, supplemented or otherwise modified. "Class D Notes" means the Class D Floating Rate Asset Backed Notes, ------------- substantially in the form of Exhibit A-6 to the Indenture. "Class D Principal Balance" shall mean, with respect to any date, an amount ------------------------- equal to the excess of (a) the sum of (i) the Class D Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class D Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class D Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. Annex A-13 "Class D Required Note Enhancement" (a) means, on any day if the Class D --------------------------------- Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, the product of (i) the Class D Credit Score Enhancement Rate and (ii) the Aggregate Principal Balance of the Eligible Receivables minus the Excluded Receivables Balance on such day and (b) if the Class D Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class D Required Noteholders" means Class D Noteholders holding Class D ---------------------------- Notes with an aggregate outstanding principal balance greater than 66-2/3% of the outstanding Class D Principal Balance. "Class E Agent" means each person designated as such under the Class E Note ------------- Purchase Agreement. "Class E Borrowing Base" (a) means, on any day if the Class E Notes are not ---------------------- held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, the excess, if any, of (i) the sum of (A) the Aggregate Principal Balance of all Eligible Receivables on such day minus (B) the Excluded Receivables Balance on such day plus (C) the amount on deposit in the Collateral Account on such day plus (D) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (ii) the sum of (A) the Class E Required Note Enhancement, (B) the Class A Principal Balance, (C) the Class B Principal Balance, (D) the Class S Principal Balance, (E) the Class C Principal Balance and (F) the Class D Principal Balance and (b) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class E Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5.1(vi) of the Indenture. "Class E Credit Score Enhancement Rate" (a) if the Class D Notes are not ------------------------------------- held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, has then meaning set forth on Schedule 2 to the Indenture and (b) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class E Initial Principal Balance" shall mean $0. --------------------------------- "Class E Monthly Interest and Fees" means, with respect to any Distribution --------------------------------- Date, the product of (a) the lesser of (i) 10% (or such other percentage as may be substituted by the Issuer subject to satisfaction of the Rating Agency Condition) and (ii) the rate provided for in the Class E Note, (b) 1/12 and (c) the average daily Class E Principal Balance during the preceding Interest Period. "Class E Note Purchase Agreement" means any note purchase agreement entered ------------------------------- into from time to time by the Issuer and purchasers of the Class E Notes, as from time to time amended, supplemented or otherwise modified. "Class E Notes" means the Class E Floating Rate Asset Backed Notes, ------------- substantially in the form of Exhibit A-7 to the Indenture. Annex A-14 "Class E Principal Balance" shall mean, with respect to any date, an amount ------------------------- equal to the excess of (a) the sum of (i) the Class E Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class E Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class E Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. "Class E Required Note Enhancement" (a) means, on any day if the Class E --------------------------------- Notes are not held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, the product of (i) the Class E Credit Score Enhancement Rate and (ii) the Aggregate Principal Balance of the Eligible Receivables minus the Excluded Receivables Balance on such day and (b) if the Class E Notes are held by the Issuer, AFC, AmeriCredit or any Affiliate thereof, shall not be applicable. "Class E Required Noteholders" means Class E Noteholders holding Class E ---------------------------- Notes with an aggregate outstanding principal balance greater than 66-2/3% of the outstanding Class D Principal Balance. "Class S Agent" means each person designated as such under the Class S Note ------------- Purchase Agreement. "Class S Aggregate Undrawn Amount" means, at any time, the aggregate amount -------------------------------- the Class S Commitments over the Class S Principal Balance. "Class S Borrowing Base" shall mean on any day, the excess, if any, of (a) ---------------------- the sum of (i) the Aggregate Principal Balance of all Eligible Receivables on such day minus (ii) the Excluded Receivables Balance on such day plus (iii) the amount on deposit in the Collateral Account on such day plus (iv) (without duplication) the amount of principal collections on deposit in the Collection Account on such day over (b) the sum of the Class C Required Note Enhancement, the Class A Principal Balance, the Class B Principal Balance and the Class C Principal Balance. "Class S Borrowing Base Deficiency" has the meaning set forth in Section --------------------------------- 5.1(vi) of the Indenture. "Class S Commitments" means the "Commitments" as defined in the Class S ------------------- Note Purchase Agreement. "Class S Initial Principal Balance" shall mean $0. --------------------------------- "Class S Majority" means the "Majority Class S Owners" together with the ---------------- "Majority Class S Purchasers", each as defined in the Class S Note Purchase Agreement. "Class S Monthly Costs and Expenses" has the meaning specified in the Class ---------------------------------- S Note Purchase Agreement. "Class S Monthly Interest and Fees" has the meaning specified in the Class --------------------------------- S Note Purchase Agreement. Annex A-15 "Class S Monthly Interest Cap" means, with respect to any Distribution ---------------------------- Date, the sum of the daily interest which would have accrued on the Class S Principal Balance on each day during the Interest Period with respect to such Distribution Date at a rate per annum equal to 2.25% in excess of the LIBOR Rate (determined as set forth in the Class S Note Purchase Agreement, provided that -------- ---- the Fixed Period referred to in the definition of LIBOR Rate shall be the Interest Period with respect to such Distribution Date). "Class S Note Purchase Agreement" means the Amended and Restated Class S ------------------------------- Note Purchase Agreement, dated as of February 22, 2002, among the Issuer, the Sellers, the Servicer, the financial institutions parties thereto, the Class S Agents and the Administrative Agent, as from time to time amended, supplemented or otherwise modified. "Class S Notes" means the Class S Swingline Asset Backed Notes, ------------- substantially in the form of Exhibit A-3 to the Indenture. "Class S Principal Balance" shall mean, with respect to any date, an amount ------------------------- equal to the excess of (a) the sum of (i) the Class S Initial Principal Balance, plus (ii) the aggregate principal amount of any Additional Class S Principal Amounts advanced pursuant to Section 12.6 of the Indenture, over (b) the aggregate amount of any principal payments in respect of the Class S Notes pursuant to the Sale and Servicing Agreement and the Indenture through and including such date. "Class S Required Noteholders" means the "Required Class S Owners" together ---------------------------- with the "Required Class S Purchasers", each as defined in the Class S Note Purchase Agreement. "Clearing Agency" means an organization registered as a "clearing agency" --------------- pursuant to Section 17A of the Exchange Act. "Clearing Agency Participant" means a broker, dealer, bank, other financial --------------------------- institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means March 8, 2002. ------------ "Code" means the Internal Revenue Code of 1986, as amended from time to ---- time, and Treasury Regulations promulgated thereunder. "Collateral" has the meaning specified in the Granting Clause of the ---------- Indenture. "Collateral Account" means the account designated as such, established and ------------------ maintained pursuant to Section 5.1 of the Sale and Servicing Agreement. "Collateral Insurance" shall have the meaning set forth in Section 4.4(a) -------------------- of the Sale and Servicing Agreement. "Collected Funds" means, with respect to any Collection Period, the amount --------------- of funds in the Collection Account representing collections on the Receivables during such Collection Annex A-16 Period, including all Net Liquidation Proceeds collected during such Collection Period (but excluding any Purchase Amounts). "Collection Account" means the account designated as such, established and ------------------ maintained pursuant to Section 5.1 of the Sale and Servicing Agreement. "Collection Period" means, with respect to the first Distribution Date, the ----------------- period beginning on the close of business on December 13, 2001 and ending on the close of business on December 31, 2001. With respect to each subsequent Distribution Date, "Collection Period" means the period beginning on the close of business on the last day of the immediately preceding Collection Period and ending on the close of business on the last day of the immediately preceding calendar month. Any amount stated "as of the close of business of the last day of a Collection Period" shall give effect to the following calculations as determined as of the end of the day on such last day: (i) all applications of collections and (ii) all distributions. "Collections" means, with respect to any Receivable, all cash collections ----------- and other cash proceeds (including liquidation proceeds) of such Receivable, including, without limitation, all Finance Charges, if any, and any refunded portion of extended warranty protection plan costs or of insurance costs (for example, physical damage, credit life or disability) included in the original amount financed under such Receivable, and cash proceeds of security related to such Receivable. "Collection Records" means all manually prepared or computer generated ------------------ records relating to collection efforts or payment histories with respect to the Receivables. "Computer Tape" means the computer tapes or other electronic media ------------- furnished by AmeriCredit to the Issuer and its assigns (and delivered to the Backup Servicer) describing certain characteristics of the Receivables as of the related Cutoff Date. "Contract" means a motor vehicle retail installment sale contract. -------- "Controlling Class" means the Class A Notes so long as any Class A Notes ----------------- are Outstanding or any Class A Commitment is in effect; then the Class B Notes so long as any Class B Notes are Outstanding or any Class B Commitment is in effect; then the Class C Notes so long as any Class C Notes are Outstanding or any Class C Commitment is in effect; then the Class D Notes so long as any Class D Notes are Outstanding; and then the Class E Notes. "Corporate Trust Office" means (i) with respect to the Owner Trustee, the ---------------------- principal corporate trust office of the Owner Trustee, which at the time of execution of this agreement is E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19801, Attention: Corp. Trust Dept., and (ii) with respect to the Trustee, the Trust Collateral Agent and the Backup Servicer, the principal office thereof at which at any particular time its corporate trust business shall be administered, which at the time of execution of this agreement is 1111 Polaris Parkway, Suite 1K, Mail Code OH1-0181, Columbus, Ohio 43240 (facsimile number: (614) 248-5195), Attention: John Rothrock, or at such other address as the Trustee may designate from time to time by notice to the Noteholders, the Administrative Agent, the Agents, the Servicer and the Issuer, or the principal corporate trust office of any Annex A-17 successor Trustee (the address of which the successor Trustee will notify the Noteholders and the Issuer). "Cram Down Loss" means, with respect to a Receivable, if a court of -------------- appropriate jurisdiction in a proceeding related to an Insolvency Event shall have issued an order reducing the amount owed on a Receivable or otherwise modifying or restructuring the Scheduled Receivable Payment to be made on a Receivable, an amount equal to (i) the excess of the principal balance of such Receivable immediately prior to such order over the principal balance of such Receivable as so reduced and/or (ii) if such court shall have issued an order reducing the effective rate of interest on such Receivable, the excess of the principal balance of such Receivable immediately prior to such order over the net present value (using as the discount rate the higher of the APR on such Receivable or the rate of interest, if any, specified by the court in such order) of the Scheduled Receivable Payments as so modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on the date of issuance of -------------- such order. "Cumulative Net Losses" means, as of any date, for any Receivables Pool, --------------------- the aggregate cumulative amount of gross charge-offs of receivables in such Receivables Pool as of the end of the preceding Collection Period net of all Recoveries with respect to any such receivables as of the end of the preceding Collection Period. "Cumulative Net Loss Ratio" means, as of any date, for any Receivables ------------------------- Pool, the ratio, expressed as a percentage, computed by dividing: (a) the sum (without duplication) of (i) Cumulative Net Losses for such Receivables Pool as of the end of the preceding Collection Period and (ii) the product of (x) 0.50 and (y) the aggregate principal balance of all receivables in such Receivables Pool which are more than ninety (90) days past due as of the end of the preceding Collection Period; by -- (b) the aggregate initial principal balance for the related Receivables Pool. "Custodial Fee" means, for any Distribution Date, the amount payable to the ------------- Custodian as its regular fee on such Distribution Date, equal to the product of (i) the Custodial Fee Rate multiplied by (ii) 1/12 multiplied by (iii) the average daily Aggregate Principal Balance during the preceding Collection Period. "Custodial Fee Rate" means (a) if AmeriCredit is the Custodian, 0% and (b) ------------------ if a Person other than AmeriCredit is the Custodian, a rate, not to exceed 0.05% per annum, agreed to by such Person and the Trust Collateral Agent. "Custodian" means AmeriCredit and any other Person named from time to time --------- as custodian in any Custodian Agreement acting as agent for the Trust Collateral Agent, which Person must be listed on Schedule E to the Sale and Servicing Agreement. "Custodian Agreement" means any Custodian Agreement from time to time in ------------------- effect between the Custodian named therein and the Trust Collateral Agent, as the same may be Annex A-18 amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, which Custodian Agreement and any amendments, supplements or modifications thereto shall be substantially in the form of Exhibit D to the Sale and Servicing Agreement. "Cutoff Date" means, with respect to any Transfer Date, such Transfer Date. ----------- "DBNY" means Deutsche Bank AG, a German banking corporation acting through ---- its New York Branch. "Dealer" means a dealer who sold a Financed Vehicle and who originated and ------ assigned the respective Receivable to AmeriCredit under a Dealer Agreement or pursuant to a Dealer Assignment. "Dealer Agreement" means any agreement between a Dealer and AmeriCredit ---------------- relating to the acquisition of Receivables from a Dealer by AmeriCredit. "Dealer Assignment" means, with respect to a Receivable, the executed ----------------- assignment executed by a Dealer conveying such Receivable to AmeriCredit. "Dealer Underwriting Guide" means the underwriting manual used by ------------------------- AmeriCredit in the purchase of Receivables as amended from time to time. "Default" means any occurrence that is, or with notice or the lapse of time ------- or both would become, an Event of Default. "Defaulted Receivable" means, with respect to any date, a Receivable with -------------------- respect to which (i) all or any portion in excess of 5% of a Scheduled Receivable Payment is more than 90 days past due, (ii) the Servicer has repossessed the related Financed Vehicle (and any applicable redemption period has expired), (iii) the Obligor has been identified in the records of the Servicer as being the subject of a current bankruptcy proceeding or (iv) such Receivable is in default and the Servicer has charged-off such Receivable in accordance with its standard policies or otherwise has determined in good faith that payments thereunder are not likely to be resumed. "Definitive Notes" has the meaning specified in Section 2.10 of the ---------------- Indenture. "Delinquent Receivable" means a Receivable (other than a Defaulted --------------------- Receivable) with respect to which more than 5% of a Scheduled Receivable Payment is more than 60 days past due. "Delivery" when used with respect to Trust Account Property means: -------- (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute "instruments" within the meaning of Section 9-102(a)(47) of the UCC and are susceptible of physical delivery, transfer thereof to the Trust Collateral Agent or its nominee or custodian by physical delivery to the Trust Collateral Agent or its nominee or custodian endorsed to, or registered in the name of, the Trust Collateral Agent or its nominee or custodian or endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102 of the UCC), transfer thereof (i) by delivery of such certificated security Annex A-19 endorsed to, or registered in the name of, the Trust Collateral Agent or its nominee or custodian or endorsed in blank to a financial intermediary (as defined in Section 8-313 of the UCC) and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Trust Collateral Agent or its nominee or custodian and the sending by such financial intermediary of a confirmation of the purchase of such certificated security by the Trust Collateral Agent or its nominee or custodian, or (ii) by delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) of the UCC) and the making by such clearing corporation of appropriate entries on its books reducing the appropriate securities account of the transferor and increasing the appropriate securities account of a financial intermediary by the amount of such certificated security, the identification by the clearing corporation of the certificated securities for the sole and exclusive account of the financial intermediary, the maintenance of such certificated securities by such clearing corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of either subject to the clearing corporation's exclusive control, the sending of a confirmation by the financial intermediary of the purchase by the Trust Collateral Agent or its nominee or custodian of such securities and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Trust Collateral Agent or its nominee or custodian (all of the foregoing, "Physical Property"), and, in any ----------------- event, any such Physical Property in registered form shall be in the name of the Trust Collateral Agent or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Trust Account Property to the Trust Collateral Agent or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; (b) with respect to any security issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable Federal regulations and Articles 8 and 9 of the UCC: book-entry registration of such Trust Account Property to an appropriate book-entry account maintained with a Federal Reserve Bank by a financial intermediary which is also a "depository" pursuant to applicable Federal regulations and issuance by such financial intermediary of a deposit advice or other written confirmation of such book-entry registration to the Trust Collateral Agent or its nominee or custodian of the purchase by the Trust Collateral Agent or its nominee or custodian of such book-entry securities; the making by such financial intermediary of entries in its books and records identifying such book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations as belonging to the Trust Collateral Agent or its nominee or custodian and indicating that such custodian holds such Trust Account Property solely as agent for the Trust Collateral Agent or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Trust Account Property to the Trust Collateral Agent or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; and (c) with respect to any item of Trust Account Property that is an uncertificated security under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books and records of the issuer thereof in the name of the financial intermediary, the sending Annex A-20 of a confirmation by the financial intermediary of the purchase by the Trust Collateral Agent or its nominee or custodian of such uncertificated security, the making by such financial intermediary of entries on its books and records identifying such uncertificated certificates as belonging to the Trust Collateral Agent or its nominee or custodian. "Depositor" shall mean AmeriCredit in its capacity as Depositor under the --------- Trust Agreement. "Determination Date" means, with respect to any Collection Period, the ------------------ second Business Day preceding the Distribution Date in the next calendar month. "Distribution Date" means, with respect to each Collection Period, the ----------------- fifteenth day of the following calendar month, or, if such day is not a Business Day, the immediately following Business Day, commencing April 15, 2002. "Electronic Ledger" means the electronic master record of the retail ----------------- installment sales contracts or installment loans of the Servicer. "Eligible Deposit Account" means a segregated trust account with the ------------------------ corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade. "Eligible Investments" mean book-entry securities, negotiable instruments -------------------- or securities represented by instruments in bearer or registered form which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America; (b) demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof or the District of Columbia (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in clause (a) above or portion of such obligation for the benefit of the holders of such depository receipts); provided, however, that at the time of the investment or contractual -------- ------- commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Distribution Date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating from Standard & Poor's of A-1+ and from Moody's of Prime-1; (c) commercial paper and demand notes investing solely in commercial paper having, at the time of the investment or contractual commitment to invest therein, a rating from Standard & Poor's of A-1+ and from Moody's of Prime-1; Annex A-21 (d) investments in money market funds (including funds for which the Trust Collateral Agent or the Owner Trustee in each of their individual capacities or any of their respective Affiliates is investment manager, controlling party or advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa; (e) bankers' acceptances issued by any depository institution or trust company referred to in clause (b) above; (f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) referred to in clause (b) above; (g) any other investment which would satisfy the Rating Agency Condition and is consistent with the ratings of the Securities, or any other investment that by its terms converts to cash within a finite period, if the Rating Agency Condition is satisfied with respect thereto; and (h) cash denominated in United States dollars. Any of the foregoing Eligible Investments may be purchased by or through the Owner Trustee or the Trust Collateral Agent or any of their respective Affiliates. "Eligible Receivable" means, with respect to any day, a Receivable as to ------------------- which each of the representations and warranties set forth on the Schedule of Representations attached as Schedule B to the Sale and Servicing Agreement is true and correct on such day, provided that if the eligibility criteria for any asset-backed securitization sponsored by AmeriCredit after the Closing Date are more restrictive than those set forth on such Schedule B, Schedule B shall be deemed amended by the substitution of such more restrictive criteria. "ERISA" has the meaning specified in Section 2.4 of the Indenture. ----- "Event of Default" has the meaning specified in Section 5.1 of the ---------------- Indenture. "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Excluded Receivables Balance" means, with respect to any day, the sum, ---------------------------- without duplication, of the following amounts: (i) the aggregate amount, with respect to each state, by which the Aggregate Principal Balance of Eligible Receivables the Obligors of which have mailing addresses in such state (other than Texas or California) exceeds 15% of the Aggregate Principal Balance of all Eligible Receivables; (ii) the amount by which the Aggregate Principal Balance of Eligible Receivables the Obligors of which have mailing addresses in Texas and California exceeds 35% of the Aggregate Principal Balance of all Eligible Receivables; (iii) the amount by which the Aggregate Principal Balance of Eligible Receivables secured by used Financed Vehicles exceeds 90% of the Aggregate Principal Balance of all Eligible Receivables; (iv) the amount by which the Aggregate Principal Balance of Eligible Receivables originated by Third-Party Lenders (other than JP Morgan Chase Bank) or over the internet exceeds 15% of the Annex A-22 Aggregate Principal Balance of all Eligible Receivables; (v) the amount by which the Aggregate Principal Balance of Eligible Receivables originated by any single Third-Party Lender (other than JPMorgan Chase Bank) exceeds 7.5% of the Aggregate Principal Balance of all Eligible Receivables; (vi) if Borrowing Base Delinquent Receivables constitute Eligible Receivables pursuant to the provisions of Schedule B to the Sale and Servicing Agreement, the greater of (x) 50% of the Aggregate Principal Balance of Borrowing Base Delinquent Receivables and (y) the amount by which the Aggregate Principal Balance of Borrowing Base Delinquent Receivables exceeds the product of (I) the Aggregate Principal Balance of all Eligible Receivables and (II) the percentage of Borrowing Base Delinquent Receivables permitted in the latest Take-Out Securitization; (vii) the amount by which the Aggregate Principal Balance of Eligible Receivables the Obligors of which have AmeriCredit Scores below 205 exceeds 5% of the Aggregate Principal Balance of all Eligible Receivables and (viii) any Eligible Receivable amended or modified by the Servicer except as provided in Section 4.2(b) and Section 4.2(c)(i) and (ii) of the Sale and Servicing Agreement. "Executive Officer" means, with respect to any corporation, the Chief ----------------- Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof. "FDIC" means the Federal Deposit Insurance Corporation. ---- "Finance Charges" means, with respect to a Contract, any finance, interest --------------- or similar charges owing by an Obligor or another Person pursuant to such Contract. "Financed Vehicle" means an automobile or light-duty truck, van or minivan, ---------------- together with all accessions thereto, securing an Obligor's indebtedness under the respective Receivable. "Force-Placed Insurance" has the meaning ascribed thereto in Section 4.4 of ---------------------- the Sale and Servicing Agreement. "Grant" means mortgage, pledge, bargain, warrant, alienate, remise, ----- release, convey, assign, transfer, create, grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. "Gross Charge-Offs" means, with respect to any Collection Period, the ----------------- aggregate Principal Balances of all Receivables (i) as to which 5% or more of a Scheduled Receivable Payment shall have become 120 or more days delinquent (excluding Receivables for which the Financed Vehicle has been repossessed and Receivables for which the Obligor is bankrupt), or Annex A-23 (ii) that the Servicer has charged-off (or in respect of which the Servicer has otherwise determined in good faith that payments relating thereto are not likely to be resumed). "Holder" or "Noteholder" means the Person in whose name a Note is ------ ---------- registered on the Note Register. "Indebtedness" means, with respect to any Person at any time, (a) ------------ indebtedness or liability of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of property or services (including trade obligations); (b) obligations of such Person as lessee under leases which should have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (c) current liabilities of such Person in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (d) obligations issued for or liabilities incurred on the account of such Person; (e) obligations or liabilities of such Person arising under acceptance facilities; (f) obligations of such Person under any guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; (g) obligations of such Person secured by any lien on property or assets of such Person, whether or not the obligations have been assumed by such Person; or (h) obligations of such Person under any interest rate or currency exchange agreement. "Indenture" means the Indenture specified in the introductory paragraph --------- to this Annex A. "Independent" means, when used with respect to any specified Person, ----------- that the person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Sellers and any Affiliate of any of the foregoing persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Sellers or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Sellers or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions. "Initial Closing Date" means December 13, 2001. -------------------- "Insolvency Event" means, with respect to a specified Person, (a) the ---------------- filing of a petition against such Person or the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation or such Person's affairs, and such petition, decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by, a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by Annex A-24 such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. "Insurance Add-On Amount" means the premium charged to the Obligor in ----------------------- the event that the Servicer obtains Force-Placed Insurance pursuant to Section 4.4 of the Sale and Servicing Agreement. "Insurance Policy" means, with respect to a Receivable, any insurance ---------------- policy (including the insurance policies described in Section 4.4 of the Sale and Servicing Agreement) benefiting the holder of the Receivable providing loss or physical damage, credit life, credit disability, theft, mechanical breakdown or similar coverage with respect to the Financed Vehicle or the Obligor. "Interest Period" means, with respect to any Distribution Date, the --------------- period from and including the most recent Distribution Date on which interest has been paid (or in the case of the first Distribution Date, from and including the Closing Date) to, but excluding, the following Distribution Date. In the case of the first Distribution Date, the Interest Period shall be 37 days for the Class A-1 Notes, Class A-2 Notes, Class S Notes, Class B Notes and Class C Notes and 37 days for the Class D Notes and Class E Notes. "Interest Rate Hedge" means any interest rate cap or other hedging ------------------- mechanism which satisfies the requirements of Section 3.23 of the Indenture. "Interest Rate Hedge Assignment Acknowledgment" means an acknowledgment --------------------------------------------- in substantially the form of Exhibit B to the Indenture executed by a counterparty to an Interest Rate Hedge in favor of the Trust Collateral Agent. "Interest Rate Hedge Cap Strike Price/Swap Fixed Rate" means, with ---------------------------------------------------- respect to an Interest Rate Hedge which is an interest rate cap, the "strike price" set forth in such Interest Rate Hedge, and with respect to an Interest Rate Hedge which is fixed rate/floating rate swap, the fixed rate payable by the Issuer thereunder. "Interest Rate Hedge Payment" means any payment received by the Trust --------------------------- Collateral Agent under any Interest Rate Hedge. "Interim Distribution Date" has the meaning specified in Section 5.5(c) ------------------------- of the Sale and Servicing Agreement. "Investment Earnings" means, with respect to any date of determination ------------------- and Trust Account, the investment earnings on amounts on deposit in such Trust Account on such date. "Issuer" means AmeriCredit Master Trust, the party named as such in the ------ Indenture until a successor replaces it and, thereafter, means the successor. "Issuer Order" and "Issuer Request" means a written order or request ------------ -------------- signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Trustee. Annex A-25 "Issuer Secured Obligations" means all amounts and obligations which -------------------------- the Issuer may at any time owe to or on behalf of the Trustee for the benefit of the Noteholders under the Indenture, the Notes or any Basic Document. "Level I Trigger Event" means, as of any date, that (x) a Portfolio --------------------- Trigger Event has occurred on or prior to such date or (y) a Portfolio Default has occurred prior to such date and such Portfolio Default has been cured or waived in accordance with the related transaction documents. "Level II Trigger Event" means, as of any date, the existence of a ---------------------- Portfolio Default on such date. A "Level II Trigger Event" shall be deemed to exist so long as the underlying Portfolio Default is not cured or waived in accordance with the related transaction documents. "Level III Trigger Event" means, on any Distribution Date, that the ----------------------- Receivables Pool Servicer Delinquency Ratio for any Receivables Pool exceeds the amount set forth opposite the number of months since such Receivables Pool was securitized on Schedule 5 to the Indenture. "Level IV Trigger Event" means, on any Distribution Date, the ---------------------- Cumulative Net Loss Ratio for any Receivables Pool exceeds the amount set forth opposite the number of months since such Receivables Pool was securitized on Schedule 6 to the Indenture. "Lien" means a security interest, lien, charge, pledge, equity, or ---- encumbrance of any kind, other than tax liens, mechanics' liens and any liens that attach to the respective Receivable by operation of law as a result of any act or omission by the related Obligor. "Lien Certificate" means, with respect to a Financed Vehicle, an ---------------- original certificate of title, certificate of lien or other notification issued by the Registrar of Titles of the applicable state to a secured party which indicates that the lien of the secured party on the Financed Vehicle is recorded on the original certificate of title. In any jurisdiction in which the original certificate of title is required to be given to the Obligor, the term "Lien Certificate" shall mean only a certificate or notification issued to a secured party. "Limited Amortization Amount" shall mean, with respect to any Limited --------------------------- Amortization Period, the sum of the Class A Limited Amortization Amount, the Class B Limited Amortization Amount and the Class C Limited Amortization Amount for such Limited Amortization Period. "Limited Amortization Period" shall mean, unless an Event of Default --------------------------- shall have occurred and be continuing, a period beginning on the first day of the Collection Period specified in the notice delivered by the Issuer in accordance with Section 10.4 of the Indenture, and ending upon the first to occur of (i) the occurrence of an Event of Default and (ii) the last day of the Collection Period related to the Distribution Date on which the applicable Limited Amortization Amount shall have been paid in full. "Liquidated Receivable" means, with respect to any Collection Period, a --------------------- Receivable as to which (i) 90 days have elapsed since the Servicer repossessed the Financed Vehicle, (ii) the Servicer has determined in good faith that all amounts it expects to recover have been received, or (iii) 5% or more of a Scheduled Receivable Payment shall have become 120 or more days delinquent, except in the case of a repossessed Financed Vehicle. Annex A-26 "Lockbox Account" means an account maintained on behalf of the Trust --------------- Collateral Agent by the Lockbox Bank pursuant to Section 4.2(d) of the Sale and Servicing Agreement. "Lockbox Agreement" means the Tri-Party Remittance Processing ----------------- Agreement, dated as of December 13, 2001, as amended and restated as of February 22, 2002, by and among AmeriCredit, Bank One, NA (Chicago)and the Trust Collateral Agent, as such agreement may be amended or supplemented from time to time, unless the Trust Collateral Agent shall cease to be a party thereunder, or such agreement shall be terminated in accordance with its terms, in which event "Lockbox Agreement" shall mean such other agreement, substantially in the form of Exhibit C to the Sale and Servicing Agreement, among the Servicer, the Trust Collateral Agent and the Lockbox Bank. "Lockbox Bank" means a depository institution named by the Servicer and ------------ listed on Schedule D to the Sale and Servicing Agreement. "Loss Ratio" means, as of any date, the ratio (expressed as a ---------- percentage) computed by dividing "A" by "B" and multiplying the result by "C", where "A" equals the aggregate amount of Gross Charge-Offs of Receivables owned by the Issuer during the six Collection Periods immediately preceding such date net of all Recoveries with respect to any such Receivables (including post-disposition amounts received on previously charged-off Receivables) divided by the average Aggregate Principal Balance during such six Collection Periods, where "B" equals the actual number of days in such six Collection Periods and where "C" equals the actual number of days in the fiscal year of the Servicer in which the most recent Collection Period ended. "Majority Noteholders" means the Class A Majority, the Class B -------------------- Majority, the Class C Majority, the Class S Majority, the Class D Majority or the Class E Majority, as the case may be. "Master Sale and Contribution Agreement" means the Master Sale and -------------------------------------- Contribution Agreement among AFC and AmeriCredit, dated as of December 13, 2001, as amended and restated as of February 22, 2002, pursuant to which AFC acquires certain Receivables from AmeriCredit, as such Agreement may be amended and supplemented from time to time. "Minimum Reserve Account Amount" means, on any date, the greater of (a) ------------------------------ $1,000,000 and (b) 1% of the Aggregate Principal Balance of the Eligible Receivables on such date. "Monthly Extension Rate" means, with respect to any Determination Date, ---------------------- the fraction, expressed as a percentage, the numerator of which is the Aggregate Principal Balance of all Receivables in the Servicing Portfolio whose payments were extended during the related Collection Period and the denominator of which is the Aggregate Principal Balance of all Receivables in the Servicing Portfolio as of the close of business on the last day of the Collection Period immediately preceding such related Collection Period. "Monthly Records" means all records and data maintained by the Servicer --------------- with respect to the Receivables, including the following with respect to each Receivable: the account number; the originating Dealer; Obligor name; Obligor address; Obligor home phone number; Obligor business phone number; original Principal Balance; original term; Annual Percentage Rate; current Principal Balance; current remaining term; origination date; first payment date; final scheduled payment date; next payment due date; date of most recent payment; new/used Annex A-27 classification; collateral description; days currently delinquent; number of contract extensions (months) to date; amount of Scheduled Receivable Payment; current Insurance Policy expiration date; and past due late charges. "Moody's" means Moody's Investors Service, or its successor. ------- "Net Liquidation Proceeds" means, with respect to a Liquidated ------------------------ Receivable, all amounts realized with respect to such Receivable net of (i) reasonable expenses incurred by the Servicer in connection with the collection of such Receivable and the repossession and disposition of the Financed Vehicle and (ii) amounts that are required to be refunded to the Obligor on such Receivable; provided, however, that the Liquidation Proceeds with respect to any -------- ------- Receivable shall in no event be less than zero. "Net Spread" means, as of any date, the positive excess (rounded upward ---------- to the nearest 0.5%), if any, of (a) the product of the weighted average APR of the Eligible Receivables times the Performing Loan Factor on such date over (b) ----- ---- the sum of (i) the Total Expense Percentage plus (ii) the weighted (on the basis ---- of notional amounts) average Interest Rate Hedge Cap Strike Price/Swap Fixed Rates for the Interest Rate Hedges in effect on such date plus (iii) 1.25%. ---- "Note" means a Class A-1 Note, a Class A-2 Note, a Class S Note, a ---- Class B Note, a Class C Note, a Class D Note and a Class E Note. "Noteholder" means the Person in whose name a Note is registered in the ---------- Note Register. "Note Owner" means, with respect to a Book-Entry Note, the person who ---------- is the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Note Paying Agent" means the Trustee or any other Person that meets ----------------- the eligibility standards for the Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments to and distributions from the Collection Account, including payment of principal or of interest on the Notes on behalf of the Issuer. "Note Purchase Agreements" means the Class A-1 Note Purchase Agreement, ------------------------ the Class A-2 Note Purchase Agreement, the Class S Note Purchase Agreement, the Class B Note Purchase Agreement, the Class C Note Purchase Agreement, the Class D Note Purchase Agreement and the Class E Note Purchase Agreement. "Note Register" and "Note Registrar" have the respective meanings ------------- -------------- specified in Section 2.4 of the Indenture. "Obligor" on a Receivable means the purchaser or co-purchasers of the ------- Financed Vehicle and any other Person who owes payments under the Receivable. "Officers' Certificate" means, (i) with respect to the Sale and --------------------- Servicing Agreement, a certificate signed by the chairman of the board, the president, any executive vice president or any Annex A-28 vice president, any treasurer, assistant treasurer, secretary or assistant secretary of a Seller or the Servicer, as appropriate, and (ii) with respect to the Indenture, a certificate signed by any Authorized Officer of the Owner Trustee, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 12.1 of the Indenture, and delivered to the Trustee. Unless otherwise specified, any reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer. "Opinion of Counsel" means, (i) with respect to the Sale and Servicing ------------------ Agreement, a written opinion of counsel that is reasonably acceptable to the Trust Collateral Agent, and is satisfactory in form and substance to the Trust Collateral Agent, and (ii) with respect to the Indenture, one or more written opinions of counsel who may, except as otherwise expressly provided in the Indenture, be employees of or counsel to the Issuer and who shall be satisfactory to the Trustee, and which shall comply with any applicable requirements of Section 12.1 of the Indenture, and shall be in form and substance satisfactory to the Trustee. "Other Conveyed Property" means all property conveyed by the Sellers to ----------------------- the Trust pursuant to Section 2.1(a)(ii) through (vii) of the Sale and Servicing Agreement. "Outstanding" means, as of the date of determination, all Notes ----------- theretofore authenticated and delivered under the Indenture except: (i) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Trustee or any Note Paying Agent in trust for the Noteholders (provided, however, that -------- ------- if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor, satisfactory to the Trustee); and (iii) Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Trustee is presented that any such Notes are held by a bona fide purchaser; provided, however, that in determining whether the Holders of the requisite - -------- ------- Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, either Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Trustee either actually knows to be so owned or has received written notice thereof shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, either Seller, the Servicer or any Affiliate of any of the foregoing Persons. Annex A-29 "Outstanding Amount" means the aggregate principal amount of all Notes, ------------------ or class of Notes, as applicable, Outstanding at the date of determination. "Owner Trust Estate" has the meaning assigned to such term in the Trust ------------------ Agreement. "Owner Trustee" means Bankers Trust (Delaware), not in its individual ------------- capacity but solely as Owner Trustee under the Trust Agreement, its successors in interest or any successor Owner Trustee under the Trust Agreement. "Performing Loan Factor" means, on any day, 1 minus the most recently ---------------------- ----- calculated Servicer Delinquency Ratio. "Person" means any individual, corporation, estate, partnership, joint ------ venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "Physical Property" has the meaning assigned to such term in the ----------------- definition of "Delivery" above. "Portfolio Default" means, with respect to any date, the occurrence, ----------------- with respect to securities issued within the three year period ending on such date, which are backed by automobile installment sales contracts ("receivables") (other than securities which are backed, except for an insubstantial portion, by automobile installment sales contracts with respect to which the Obligors thereunder, at the time of origination of such sales contracts, were residents of Canada) and with respect to which AmeriCredit or any Affiliate of AmeriCredit is the servicer, of an "event of default" or similar event under any applicable enhancement or insurance agreement or an "amortization event", "pay-out event" or similar event under any applicable sale and servicing agreement or indenture which event has the potential consequence, inter alia, under the related ----- ---- agreements of requiring the acceleration or early amortization of the related securities or permitting the realization upon the receivables and/or other collateral. A Portfolio Trigger Event is not in and of itself a Portfolio Default. "Portfolio Trigger Event" means, with respect to any date, the ----------------------- occurrence of a "trigger event" or any other analogous event however denominated, with respect to securities issued within the three year period ending on such date which are backed by automobile installment sales contracts ("receivables") (other than securities which are backed, except for an insubstantial portion, by automobile installment sales contracts with respect to which the Obligors thereunder, at the time of origination of such sales contracts, were residents of Canada) and with respect to which AmeriCredit or any Affiliate of AmeriCredit is the servicer, which event is based on the performance of such receivables and has the potential consequence under the related agreements of causing the amount required to be retained in any related spread or reserve account or the level of any other enhancement to be increased. "Pre-Computed Receivable" means any Receivable under which the portion ----------------------- of a payment allocable to earned interest (which may be referred to in the related Receivable as an add-on finance charge) and the portion allocable to the Amount Financed is determined according to the sum of periodic balances or the sum of monthly balances or any equivalent method or are monthly actuarial receivables. Annex A-30 "Predecessor Note" means, with respect to any particular Note, every ---------------- previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. "Principal Balance" means, with respect to any Receivable, as of any ----------------- date, the sum of (x) the Amount Financed minus (i) that portion of all amounts received on or prior to such date and allocable to principal in accordance with the terms of the Receivable and (ii) any Cram Down Loss in respect of such Receivable plus (y) the accrued and unpaid interest on such Receivable. "Proceeding" means any suit in equity, action at law or other judicial ---------- or administrative proceeding. "Purchase Amount" means, with respect to a Receivable, the Principal --------------- Balance and all accrued and unpaid interest on the Receivable, after giving effect to the receipt of any moneys collected (from whatever source) on such Receivable, if any. "Purchase Percentage" means, with respect to any date, the percentage ------------------- equivalent of a fraction the numerator of which is the sum of the Class A Borrowing Base, the Class B Borrowing Base, the Class C Borrowing Base, the Class D Borrowing Base and the Class E Borrowing Base on such date and the denominator of which is the Aggregate Principal Balance on such date. "Purchase Price" means, with respect to a Receivable on any date, the -------------- product of (i) the Principal Balance of such Receivable and (ii) Purchase Percentage on such date. "Purchased Receivable" means a Receivable purchased as of the close of -------------------- business on the last day of a Collection Period by the Servicer pursuant to Section 4.7 of the Sale and Servicing Agreement or repurchased by a Seller or the Servicer pursuant to Section 3.2 or Section 9.1(a) of the Sale and Servicing Agreement. "Purchasers" means the Class A Purchasers, the Class B Purchasers (as ---------- defined in the Class B Note Purchase Agreement), the Class C Purchasers (as defined in the Class C Note Purchase Agreement) and the Class S Purchasers (as defined in the Class S Note Purchase Agreement). "Rating Agency" means Moody's and Standard & Poor's. ------------- "Rating Agency Condition" means, with respect to any action, that each ----------------------- Rating Agency shall have been given 10 days' (or such shorter period as shall be acceptable to each Rating Agency) prior notice thereof and that each of the Rating Agencies shall have notified the Sellers, the Servicer, the Agents, the Administrative Agent, the Trustee, the Owner Trustee, the Issuer and the Trust Collateral Agent in writing that such action will not result in a reduction or withdrawal of the then current rating of any Class of Notes, provided that if -------- Moody's shall have acknowledged (verbally or in writing) receipt of such notice and shall not have responded in writing to any such notice within 10 days, Moody's shall be deemed to have notified the Sellers, the Servicer, the Agents, the Administrative Agent, the Trustee, the Owner Trustee, the Issuer Annex A-31 and the Trust Collateral Agent in writing that such action will not result in a reduction or withdrawal of the then current rating of any Class of Notes. "Ratings Reaffirmation Dates" means each of (a) the Distribution Dates --------------------------- occurring in March, June, September and December of each year, starting June, 2002 and (b) the date of any supplemental indenture to the Indenture or amendment to the Sale and Servicing Agreement which amends Section 5.1(xvi), (xvii) or (xx) of the Indenture or Section 3.4, 8.1(g) or (i) or Schedule B to the Sale and Servicing Agreement. "Realized Losses" means, with respect to any Receivable that becomes a --------------- Liquidated Receivable, the excess of the Principal Balance of such Liquidated Receivable over Net Liquidation Proceeds to the extent allocable to principal. "Receivable" means any Contract listed on the Schedule of Receivables. ---------- "Receivable Files" means the documents specified in Section 3.3 of the ---------------- Sale and Servicing Agreement. "Receivables Pool" means, with respect to any date of determination, ---------------- each receivables pool supporting an asset-backed securitization sponsored by AmeriCredit on and after the date two years prior to such date of determination (excluding any Receivables held as part of any warehouse arrangement). "Receivables Pool Servicer Delinquency Ratio" means, as of the last day ------------------------------------------- of a Collection Period, for any Receivables Pool, the ratio, expressed as a percentage, computed by dividing (i) the aggregate principal balance on such date of each receivable in such Receivables Pool which is a Delinquent Receivable (excluding a receivable for which the Financed Vehicle has been repossessed and the proceeds thereof have not been realized by the Servicer) by (ii) the aggregate principal balance of all receivables in such Receivables Pool on the first day of such Collection Period. "Record Date" means, with respect to a Distribution Date, Redemption ----------- Date or Interim Distribution Date, the close of business on the Business Day immediately preceding such Distribution Date, Redemption Date or Interim Distribution Date, unless otherwise specified in the Indenture or the Sale and Servicing Agreement. "Records" means all Contracts and other documents, books, records and ------- other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) maintained with respect to Receivables and the related Obligors. "Recoveries" means, with respect to any Defaulted Receivable, monies ---------- collected in respect thereof (other than Scheduled Receivable Payments collected from the related Obligor which cause such Receivable to be no longer a Defaulted Receivable), from whatever source (including those received from Titled Third-Party Lenders), during any Collection Period, net of the sum of any reasonable expenses incurred by the Servicer in connection with the collection, repossession and disposition of the related Financed Vehicle and any amounts required by law to Annex A-32 be remitted to the related Obligor; provided that Recoveries with respect to any -------- Defaulted Receivable shall in no event be less than zero. "Redemption Date" means (a) in the case of a redemption of the Notes --------------- pursuant to Section 10.1(a) of the Indenture or a payment to Noteholders pursuant to Section 10.1(b) of the Indenture, the Distribution Date specified by the Servicer or the Issuer pursuant to Section 10.1(a) or (b) of the Indenture as applicable. "Redemption Price" means (a) in the case of a redemption of the Notes ---------------- pursuant to Section 10.1(a) of the Indenture, an amount equal to the unpaid principal amount of the then outstanding principal amount of each class of Notes being redeemed plus accrued and unpaid interest thereon to and including the Redemption Date plus all other amounts accrued and unpaid with respect thereto, including, without limitation, Class A-1 Monthly Costs and Expenses, Class A-2 Monthly Costs and Expenses, Class B Monthly Costs and Expenses, Class C Monthly Costs and Expenses and Class S Monthly Costs and Expenses, or (b) in the case of a payment made to Noteholders pursuant to Section 10.1(b) of the Indenture, the amount on deposit in the Collection Account, but not in excess of the amount specified in clause (a) above. "Registrar of Titles" means, with respect to any state, the ------------------- governmental agency or body responsible for the registration of, and the issuance of certificates of title relating to, motor vehicles and liens thereon. "Required Noteholders" means the Class A Required Noteholders, the -------------------- Class B Required Noteholders, the Class C Required Noteholders, the Class S Required Noteholders, the Class D Required Noteholders or the Class E Required Noteholders, as the case may be. "Requisite Ratings" means with respect to each Class of Notes not held ----------------- by AmeriCredit or its Affiliates, the ratings from S&P and Moody's set forth opposite such Class of Notes below. Class S&P Moody's ----- --- ------- A-1 and A-2 AAA Aaa B AA Aa2 C and S A A2 D BBB Baa2 E BB Ba1 "Reserve Account" means the account designated as such, established and --------------- maintained pursuant to Section 5.1 of the Sale and Servicing Agreement. Annex A-33 "Reserve Account Required Amount" means, on any date, the greater of ------------------------------- (a) the Minimum Reserve Account Amount and (b) the product of 6% and the Aggregate Principal Balance of the Eligible Receivables on such date. "Responsible Officer" means, with respect to the Trustee or the Trust ------------------- Collateral Agent, any officer within the Corporate Trust Office of the Trustee, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other officer of the Trustee or the Trust Collateral Agent customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Sale and Servicing Agreement" means the Sale and Servicing Agreement ---------------------------- specified in the introductory paragraph to this Annex A. "Schedule of Receivables" has the meaning specified in Section ----------------------- 2.1(b)(i) of the Sale and Servicing Agreement. "Schedule of Representations" means the Schedule of Representations and --------------------------- Warranties attached as Schedule B to the Sale and Servicing Agreement. "Scheduled Receivable Payment" means, with respect to any Collection ---------------------------- Period for any Receivable, the amount set forth in such Receivable as required to be paid by the Obligor in such Collection Period. If after the Closing Date, the Obligor's obligation under a Receivable with respect to a Collection Period has been modified so as to differ from the amount specified in such Receivable as a result of (i) the order of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940 or (iii) modifications or extensions of the Receivable permitted by Section 4.2(b) of the Sale and Servicing Agreement, the Scheduled Receivable Payment with respect to such Collection Period shall refer to the Obligor's payment obligation with respect to such Collection Period as so modified. "Securities" means the Notes and the Certificate, collectively. ---------- "Sellers" means AmeriCredit and AFC in their capacities as Sellers ------- under the Sale and Servicing Agreement, and their successors in interest to the extent permitted under the Sale and Servicing Agreement. "Service Contract" means, with respect to a Financed Vehicle, the ---------------- agreement, if any, financed under the related Receivable that provides for the repair of such Financed Vehicle. "Service Non-Extension Notice" has the meaning specified in Section ---------------------------- 4.14 of the Sale and Servicing Agreement. "Servicer" means AmeriCredit Financial Services, Inc., as the servicer -------- of the Receivables, and each successor Servicer pursuant to Section 8.3 of the Sale and Servicing Agreement. Annex A-34 "Servicer Delinquency Ratio" means, as of the last day of a Collection -------------------------- Period, the ratio, expressed as a percentage, computed by dividing (i) the aggregate principal balance on such date of each receivable in the Servicing Portfolio which is a Delinquent Receivable (including a receivable for which the Financed Vehicle has been repossessed and the proceeds thereof have not been realized by the Servicer) by (ii) the aggregate principal balance of all receivables in the Servicing Portfolio on the last day of such Collection Period. "Servicer Termination Event" means an event specified in Section 8.1 of -------------------------- the Sale and Servicing Agreement. "Servicer's Certificate" means an Officers' Certificate of the Servicer ---------------------- delivered pursuant to Section 4.9 of the Sale and Servicing Agreement, substantially in the form of Exhibit A attached to the Sale and Servicing Agreement. "Servicing Fee" means, with respect to any Collection Period, the fee ------------- payable to the Servicer for services rendered during such Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the average Aggregate Principal Balance of Receivables for each day during such Collection Period. "Servicing Fee Rate" means 2.00% per annum. ------------------ "Servicing Portfolio" means as of any date, all receivables (whether or ------------------- not thereafter sold or disposed of) which are serviced by the Servicer or any of its Affiliates at such time. "Servicing Collection and Credit Policy and Procedures" means ----------------------------------------------------- AmeriCredit's written credit, servicing and collections procedures delivered or otherwise made available to the Administrative Agent prior to the Closing Date, as amended from time to time in accordance herewith. "Simple Interest Method" means the method of allocating a fixed level ---------------------- payment on an obligation between principal and interest, pursuant to which the portion of such payment that is allocated to interest is equal to the product of the fixed rate of interest on such obligation multiplied by the period of time (expressed as a fraction of a year, based on the actual number of days in the calendar month and 365 days in the calendar year) elapsed since the preceding payment under the obligation was made. "Simple Interest Receivable" means a Receivable under which the portion -------------------------- of the payment allocable to interest and the portion allocable to principal is determined in accordance with the Simple Interest Method. "Standard & Poor's" means Standard & Poor's, a Division of The ----------------- McGraw-Hill Companies, Inc., or its successor. "State" means any one of the 50 states of the United States of America ----- or the District of Columbia. Annex A-35 "Stated Maturity Date" means the Distribution Date in the 81st month -------------------- following the month in which all the Class A Commitments, the Class B Commitments and the Class C Commitments shall have terminated. "Step-Up Percentage" means, on any date, the aggregate of each ------------------ Percentage Add-On in effect on such date (if any) as computed below, provided -------- that the Step-Up Percentage shall not exceed 3%: If on such date (i) a Level I Trigger Event exists, the Percentage Add-On related thereto shall be 2%; (ii) a Level II Trigger Event exists, the Percentage Add-On related thereto shall be 3%; (iii) a Level III Trigger Event exists, the Percentage Add-On related thereto shall be 3%; and (iv) a Level IV Trigger Event exits, the Percentage Add-On related thereto shall be 3%. Percentage Add-Ons shall be determined on each Determination Date and shall remain in effect until the succeeding Determination Date. "Supplement" means an agreement by and among the Issuer, AmeriCredit, ---------- AFC, the Backup Servicer and the Trust Collateral Agent pursuant to which AmeriCredit and AFC sell, and the Issuer purchases, Receivables, substantially in the form of Exhibit B to the Sale and Servicing Agreement. "Swingline Borrowing" has the meaning specified in Section 12.6 of the ------------------- Indenture. "Swingline Borrowing Date" has the meaning specified in Section 12.6 of ------------------------ the Indenture. "Take-Out Securitization" means (a) a financing transaction of any sort ----------------------- undertaken by a Seller or any Affiliate of the Sellers secured, directly or indirectly, by any Receivables or (b) any other asset securitization, secured loans or similar transactions involving any Receivables or any beneficial interest therein. "Tangible Net Worth" means, with respect to any Person, the net worth ------------------ of such Person calculated in accordance with GAAP after subtracting therefrom the aggregate amount of such Person's intangible assets, including, without limitation, goodwill, franchises, licenses, patents, trademarks, tradenames, copyrights and service marks. "Termination Date" means the date on which the Trustee shall have ---------------- received payment and performance of all Issuer Secured Obligations. "Third-Party Lender" means an entity that originated a loan to a ------------------ consumer for the purchase of a motor vehicle and sold the loan to AmeriCredit pursuant to an Auto Loan Purchase and Sale Agreement. "Third-Party Lender Assignment" means, with respect to a Receivable, ----------------------------- the executed assignment executed by a Third-Party Lender conveying such Receivable to AmeriCredit. "Titled Third-Party Lender" means a Third-Party Lender having a short ------------------------- term debt rating of at least A-1/P-1 from S&P and Moody's, respectively, that has agreed to assist AmeriCredit, to the extent necessary, with any repossession or legal action in respect of Financed Vehicles with respect to which such Third-Party Lender has assigned its full interest therein to Annex A-36 AmeriCredit and is listed as first lienholder or secured party on the certificate of title relating to such Financed Vehicle. "Total Expense Percentage" means, as of any date, the sum of (a) the ------------------------ Servicing Fee Rate plus (b) the Custodial Fee Rate plus (c) the Backup Servicing/Trust Collateral Agent Fee Rate. "Transfer Date" means, with respect to any Receivables to be ------------- transferred to the Trust pursuant hereto, the date on which such transfer is to take place. "Trust" means the Issuer. ----- "Trust Account Property" means the Trust Accounts, all amounts and ---------------------- investments held from time to time in any Trust Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise), and all proceeds of the foregoing. "Trust Accounts" has the meaning assigned thereto in Section 5.1(b) of -------------- the Sale and Servicing Agreement. "Trust Agreement" means the Trust Agreement dated as of October 1, --------------- 2001, among AmeriCredit, AFC and the Owner Trustee, as amended and restated as of December 13, 2001, and as further amended and restated as of February 22, 2002, as the same may be amended and supplemented from time to time. "Trust Collateral Agent" means, initially, Bank One, NA, in its ---------------------- capacity as collateral agent on behalf of the Noteholders, including its successors-in-interest, until and unless a successor Person shall have become the Trust Collateral Agent pursuant to Section 6.17 of the Indenture, and thereafter "Trust Collateral Agent" shall mean such successor Person. "Trustee" means Bank One, NA, a national banking association, not in ------- its individual capacity but as trustee under the Indenture, or any successor trustee under the Indenture. "Trust Estate" means all money, instruments, rights and other property ------------ that are subject or intended to be subject to the lien and security interest of the Indenture for the benefit of the Noteholders (including all property and interests Granted to the Trust Collateral Agent), including all proceeds thereof. "Trust Officer" means, (i) in the case of the Trust Collateral Agent, ------------- the chairman or vice-chairman of the board of directors, any managing director, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president, assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer of the Trust Collateral Agent customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject, and (ii) in the case of the Owner Trustee, any officer in the corporate trust office of the Owner Trustee or any agent of Annex A-37 the Owner Trustee under a power of attorney with direct responsibility for the administration of this Agreement or any of the Basic Documents on behalf of the Owner Trustee. "Trust Property" means the property and proceeds conveyed pursuant to -------------- Section 2.1 of the Sale and Servicing Agreement, together with certain monies paid on or after the related Cut-off Date, the Collection Account (including all Eligible Investments therein and all proceeds therefrom), the Lockbox Account and certain other rights under the Sale and Servicing Agreement. "UCC" means, unless the context otherwise requires, the Uniform --- Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time. Annex A-38 EX-10.4 6 dex104.txt AMENDED AND RESTATED INDENTURE Exhibit 10.4 EXECUTION COPY AMERICREDIT MASTER TRUST Class A-1 Floating Rate Asset Backed Notes Class A-2 Floating Rate Asset Backed Notes Class S Swingline Asset Backed Notes Class B Floating Rate Asset Backed Notes Class C Floating Rate Asset Backed Notes Class D Floating Rate Asset Backed Notes Class E Floating Rate Asset Backed Notes _______________________________ AMENDED AND RESTATED INDENTURE Dated as of February 22, 2002 ________________________________ BANK ONE, NA Trustee and Trust Collateral Agent BANKERS TRUST COMPANY Administrative Agent AMENDED AND RESTATED INDENTURE dated as of February 22, 2002, among AMERICREDIT MASTER TRUST, a Delaware business trust (the "Issuer"), BANK ONE, ------ NA, a national banking association, as trustee (the "Trustee") and Trust ------- Collateral Agent (as defined below), and BANKERS TRUST COMPANY, as administrative agent (the "Administrative Agent"). -------------------- WHEREAS, the Issuer, the Trustee and DBNY, as the initial Administrative Agent, are parties to a certain Indenture dated as of December 13, 2001; and WHEREAS, the parties hereto desire to amend and restate the Indenture in the manner, and on the terms and conditions, herein provided. NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, each party hereto agrees to amend and restate the Indenture in its entirety as follows for the benefit of the other parties and for the benefit of the Holders of the Issuer's Class A-1 Floating Rate Asset Backed Notes (the "Class A-1 Notes"), the Class A-2 Floating --------------- Rate Asset Backed Notes (the "Class A-2 Notes"), the Class S Swingline Asset --------------- Backed Notes (the "Class S Notes"), the Class B Floating Rate Asset Backed Notes ------------- (the "Class B Notes"), the Class C Floating Rate Asset Backed Notes (the "Class ------------- ----- C Notes"), the Class D Floating Rate Asset Backed Notes (the "Class D Notes") - ------- ------------- and the Class E Floating Rate Asset Backed Notes (the "Class E Notes"; and ------------- together with the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes, the "Notes"). ----- As security for the payment and performance by the Issuer of its obligations under this Indenture and the Notes, the Issuer has agreed to assign the Collateral (as defined below) as collateral to the Trust Collateral Agent for the benefit of the Trustee on behalf of the Noteholders. GRANTING CLAUSE The Issuer hereby Grants to the Trust Collateral Agent at the Closing Date, for the benefit of the Noteholders, all of the Issuer's right, title and interest in and to (a) the Receivables; (b) an assignment of the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest of the Issuer in the Financed Vehicles; (c) any proceeds with respect to the Receivables repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of representation or warranty in the related Dealer Agreement or repurchased by a Third-Party Lender, pursuant to an Auto Loan Purchase and Sale Agreement, as a result of a breach of representation or warranty in the related Auto Loan Purchase and Sale Agreement; (d) all rights under any Service Contracts on the related Financed Vehicles; (e) any proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors; (f) the Trust Accounts and all funds on deposit from time to time in the Trust Accounts, and in all investments and proceeds thereof and all rights of the Issuer therein (including all income thereon); (g) the Issuer's rights and benefits, but none of its obligations or burdens, under the Master Sale and Contribution Agreement and each Sale and Contribution Agreement Supplement entered in connection therewith, including the delivery requirements, representations and warranties and the cure and repurchase obligations of AmeriCredit under the Master Sale and Contribution Agreement and each Sale and Contribution Agreement Supplement entered in connection therewith; (h) all items contained in the Receivable Files and any and all other documents that AmeriCredit keeps on file in accordance with its customary procedures relating to the Receivables, the Obligors or the Financed Vehicles, (i) the Issuer's rights and benefits, but none of its obligations or burdens, under the Sale and Servicing Agreement and each Supplement entered in connection therewith (including all rights of AFC under the Master Sale and Contribution Agreement and each Sale and Contribution Agreement Supplement entered into in connection therewith assigned to the Issuer pursuant to the Sale and Servicing Agreement); (j) the Issuer's rights and benefits, but none of its obligations or burdens, under any Interest Rate Hedge; and (k) all present and future claims, demands, causes and choses of action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the "Collateral"). ---------- The foregoing Grant is made in trust to the Trust Collateral Agent, for the benefit of the Trustee on behalf of the Noteholders. The Trust Collateral Agent hereby acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the end that the interests of such parties, recognizing the priorities of their respective interests may be adequately and effectively protected. ARTICLE I. Definitions and Incorporation by Reference ------------------------------------------ SECTION 1.1. Definitions. Capitalized terms used herein and not ----------- otherwise defined herein shall have the meanings assigned to them in Annex A hereto or the Trust Agreement. SECTION 1.2. Rules of Construction. Unless the context otherwise --------------------- requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time; (iii) "or" is not exclusive; (iv) "including" means including without limitation; and (v) words in the singular include the plural and words in the plural include the singular. -2- ARTICLE II. The Notes --------- SECTION 2.1. Form. The Class A-1 Notes, the Class A-2 Notes, the Class ---- S Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes in each case together with the Trustee's certificate of authentication, shall be in substantially the form set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6 and A-7, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note. The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication. The terms of the Notes set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6 and A-7 are part of the terms of this Indenture. The Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes are revolving notes. Additional borrowings may be made under the Notes pursuant to Section 12.6 and the principal of the Notes may be repaid and reborrowed without penalty pursuant to the terms hereof. SECTION 2.2. Execution, Authentication and Delivery. The Notes shall -------------------------------------- be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. The Trustee shall, upon receipt of Issuer Order, authenticate and deliver Class A-1 Notes, Class A-2 Notes, Class S Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes, each for original issue in an aggregate principal amount set forth in such Issuer Order. The Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class S, Class D and Class E Notes outstanding at any time may not exceed such amounts except as provided in Section 12.7. The Notes shall be issuable as registered Notes in the minimum denomination of $1,000,000 and in integral multiples thereof (except for one Note of each class which may be issued in a denomination other than an integral multiple of $1,000,000). -3- No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. SECTION 2.3. Temporary Notes. Pending the preparation of Definitive --------------- Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes. If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.2, without charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes. SECTION 2.4. Registration; Registration of Transfer and Exchange. The --------------------------------------------------- Issuer shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Trustee shall be "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar. If a Person other than the Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Trustee shall have the right to conclusively rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Noteholders of the Notes and the principal amounts and number of such Notes. Subject to Sections 2.10 and 2.12 hereof, upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.2, if the requirements of Section 8-401(1) of the UCC are met the Issuer shall execute and upon its request the Trustee shall authenticate and the Noteholder shall obtain from the Trustee, in the name of the designated transferee or transferees, one or more new Notes, in any authorized denominations, of the same class and a like aggregate principal amount. -4- At the option of the Noteholder, Notes may be exchanged for other Notes in any authorized denominations, of the same class and a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, subject to Sections 2.10 and 2.12 hereof, if the requirements of Section 8-401(1) of the UCC are met the Issuer shall execute and upon its request the Trustee shall authenticate and the Noteholder shall obtain from the Trustee, the Notes which the Noteholder making the exchange is entitled to receive. All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Every Note presented or surrendered for registration of transfer or exchange shall be (i) duly endorsed by, or be accompanied by a written instrument of transfer in the form attached to Exhibits A-1, A-2, A-3, A-4, A-5, A-6 and A-7 duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing, and (ii) accompanied by such other documents as the Trustee may require. Notwithstanding the foregoing, in the case of any sale or other transfer of a Definitive Note, the transferor of such Definitive Note shall be required to represent and warrant in writing that the prospective transferee either (a) is not (i) an employee benefit plan (as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), ----- which is subject to the provisions of Title I of ERISA, (ii) a plan (as defined in section 4975(e)(1) of the Code), which is subject to Section 4975 of the Code, or (iii) an entity whose underlying assets are deemed to be assets of a plan described in (i) or (ii) above by reason of such plan's investment in the entity (any such entity described in clauses (i) through (iii), a "Benefit Plan ------------ Entity") or (b) is a Benefit Plan Entity and the acquisition and holding of the - ------ Definitive Note by such prospective transferee is covered by a Department of Labor Prohibited Transaction Class Exemption. Each transferee of a Book Entry Note that is a Benefit Plan Entity shall be deemed to represent that its acquisition and holding of the Book Entry Note is covered by a Department of Labor Prohibited Transaction Class Exemption. No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not involving any transfer. The preceding provisions of this section notwithstanding, the Issuer shall not be required to make and the Note Registrar shall not register transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to the Note. No Note shall be sold or transferred if, at the time of such sale or transfer, such sale or transfer would result in the beneficial ownership of the Notes exceeding 99 persons (within the meaning of the Investment Company Act of 1940, as amended). -5- SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any ------------------------------------------ mutilated Note is surrendered to the Trustee, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Trustee such security or indemnity as may be required by it to hold the Issuer and the Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute and upon its request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may direct the Trustee, in writing, to pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Trustee in connection therewith. Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) connected therewith. Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. SECTION 2.6. Persons Deemed Owner. Prior to due presentment for -------------------- registration of transfer of any Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee, may treat the Person in whose name any Note is registered (as of the Record Date) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected by notice to the contrary. SECTION 2.7. Payment of Principal and Interest. --------------------------------- -6- (a) The Notes shall accrue interest as provided in the forms of the Class A-1 Note, the Class A-2 Note, the Class S Note, the Class B Note, the Class C Note, the Class D Note, the Class E Note set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6 and A-7, respectively, and such interest shall be due and payable on each Distribution Date (or Interim Distribution Date with respect to the amount of principal being repaid on such date). Any installment of interest or principal, if any, payable on any Note which is punctually paid or duly provided for by the Issuer on the applicable Distribution Date (or Interim Distribution Date) shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date, by check mailed first-class, postage prepaid, to such Person's address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Class D Notes or Class E Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee and except for the final installment of principal payable with respect to such Note on a Distribution Date or Interim Distribution Date (and except for the Redemption Price for any Note called for redemption pursuant to Section 10.1(a)) which shall be payable as provided below. The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.3. (b) The principal of each Note shall be payable on each Distribution Date or Interim Distribution Date as provided in the Sale and Servicing Agreement and in the forms of the Class A-1 Note, the Class A-2 Note, the Class S Note, the Class B Note, the Class C Note, the Class D Note and the Class E Note set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6 and A-7, respectively. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if the Trustee or the Class A Required Noteholders, Class B Required Noteholders or the Class C Required Noteholders have declared the Notes to be immediately due and payable in the manner provided in Section 5.2. All principal payments on each class of Notes shall be made pro rata to the Noteholders of such class entitled thereto. Upon written notice from the Issuer, the Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Distribution Date or Interim Distribution Date, as the case may be, on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date or Interim Distribution Date, as the case may be, and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2. (c) Payment of principal and interest on the Class E Notes is subordinated to payment on each Distribution Date and Interim Distribution Date of the principal, interest and other amounts due and payable on the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes to the extent set forth in Section 5.5 of the Sale and Servicing Agreement. Payment of principal and interest on the Class D Notes is subordinated to payment on each Distribution Date and Interim Distribution Date of the principal, interest and other amounts due and payable on the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes to the extent set forth in -7- Section 5.5 of the Sale and Servicing Agreement. Payment of principal and interest on the Class C Notes is subordinated to payment on each Distribution Date and Interim Distribution Date of the principal, interest and other amounts due and payable on the Class A-1 Notes, the Class A-2 Notes, the Class S Notes and the Class B Notes to the extent set forth in Section 5.5 of the Sale and Servicing Agreement. Payment of principal and interest on the Class B Notes is subordinated to payment on each Distribution Date and Interim Distribution Date of the principal, interest and other amounts due and payable on the Class A-1 Notes, the Class A-2 Notes and the Class S Notes to the extent set forth in Section 5.5 of the Sale and Servicing Agreement. SECTION 2.8. Cancellation. All Notes surrendered for payment, ------------ registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by the Trustee. The Issuer may at any time deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Notes may be held or disposed of by the Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall timely direct by an Issuer Order that they be destroyed or returned to it; provided that such Issuer Order is timely and the Notes have not been previously disposed of by the Trustee. SECTION 2.9. Release of Collateral. --------------------- (a) Termination Date. The Trust Collateral Agent shall, on or ---------------- after the Termination Date, release any remaining portion of the Trust Estate from the lien created by this Indenture and deposit in the Collection Account any funds then on deposit in any other Trust Account. The Trust Collateral Agent shall release property from the lien created by this Indenture pursuant to this Section 2.9 only upon receipt of an Issuer Request accompanied by an Officer's Certificate meeting the applicable requirements of Section 12.1. (b) Take-Out Securitization; Other Repurchases. For purposes of ------------------------------------------ selling and transferring Receivables to AmeriCredit, either Seller or third parties in connection with any Take-Out Securitization, or for any other reason, the Issuer may obtain releases of the Trust Collateral Agent's (for the benefit of the Noteholders) security interest in all or any part of the Collateral from time to time, provided that (i) immediately after giving effect to any requested -------- release, there exists no Borrowing Base Deficiency, (ii) unless the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class B Principal Balance, the Class C Principal Balance and the Class S Principal Balance have been reduced to zero and interest thereon and other amounts due hereunder with respect thereto have been paid in full, there is no Event of Default or Default, (iii) in selecting Receivables for release in connection with any Take-Out Securitization, the Issuer shall select Receivables in accordance with the eligibility criteria established for such Take-Out Securitization and additionally in accordance with the earliest origination date of all Receivables and (iv) in selecting Receivables for release, the Issuer shall not use any adverse selection procedures with respect to the Receivables released. In addition, the Trust Collateral Agent shall release its lien on the related Receivable in connection with the purchase of such Receivable by the Servicer or by either Seller which is required or permitted -8- under the Sale and Servicing Agreement. Each Receivable released pursuant to either of the two preceding sentences shall be purchased for an amount equal to the Purchase Price with respect thereto (or such other amount as may be provided in the Sale and Servicing Agreement with respect thereto). Each request (a "Transfer Request") for a partial release of Collateral, except in connection ---------------- with the repurchase by the Servicer or by either Seller under the Sale and Servicing Agreement, shall be in substantially the form of Exhibit D hereto, addressed to the Administrative Agent, the Agents and the Trust Collateral Agent, demonstrating compliance with the third immediately preceding sentence and acknowledging that the receipt of proceeds from such sale or transfer shall be deposited into the Collection Account. Each Transfer Request shall be given by the Issuer to the Trustee and the Administrative Agent before 1:00 p.m. (New York City time) at least two Business Days prior to the requested date of release, and the Administrative Agent shall give notice of any such Transfer Request to the related Agents before 4:00 p.m. (New York City time) on the day it receives such request from the Issuer. (c) Transfers. With respect to each Transfer Request that is --------- received by the Agent by 12:00 noon, New York City time, on a Business Day, the Trust Collateral Agent shall use reasonable efforts to review such Transfer Requests and to instruct the Custodian (if AmeriCredit is not the Custodian) to prepare the files, identified in each Transfer Request, for delivery or shipment by 12:00 noon, New York City time on the second succeeding Business Day. (d) Continuation of Lien. Unless released in writing by the -------------------- Trust Collateral Agent, as herein provided, the security interest in favor of the Trust Collateral Agent, for the benefit of the Noteholders, in any item of Collateral shall continue in effect until such time as the Trust Collateral Agent (on behalf of the Noteholders) shall have received payment in full of the proceeds from the sale or transfer of such Collateral to third parties in accordance with this Section 2.9. ----------- (e) Application of Proceeds; No Duty. Neither of the Trust -------------------------------- Collateral Agent nor any Noteholder shall be under any duty at any time to credit Issuer for any amount due from any third party in respect of any purchase of any Collateral contemplated above, until the Trust Collateral Agent has actually received such amount in immediately available funds for deposit to the Collection Account. Neither the Trust Collateral Agent nor any Noteholder shall be under any duty at any time to collect any amounts or otherwise enforce any obligations due from any third party in respect of any such purchase of Receivables covered by the release of such portion of Collateral or in respect of a securitization thereof with a third party. (f) Representation in Connection with Releases, Sales and ----------------------------------------------------- Transfers. The Issuer represents and warrants that each request for any release - --------- or transfer in connection with Take-Out Securitizations pursuant to Section ------- 2.9(b) shall automatically constitute a representation and warranty to the - ----- Noteholders, the Trust Collateral Agent and the Trustee to the effect that immediately before and after giving effect to such release or Transfer Request, there is no Event of Default or Default (including, without limitation any Borrowing Base Deficiency). (g) Release of Security Interest. Upon receipt of a Transfer ---------------------------- Request or, in connection with the purchase of a Receivable by the Servicer or by a Seller under the Sale and Servicing Agreement, upon the Servicer's written request, and, in each case upon receipt in the -9- Collection Account of proceeds from the related sale or transfer, the Trust Collateral Agent shall promptly release, at the Issuer's expense, such part of Collateral covered in connection with the Transfer Request or such Servicer's request and shall deliver, at the Issuer's expense, the documents and certificates on the released portion of Collateral to the trustee or such similar entity in connection with any release pursuant to Section 2.9(b) or, in connection with the purchase of a Receivable by the Servicer or by a Seller under the Sale and Servicing Agreement; provided that the trustee or such -------- similar entity in connection with any release pursuant to Section 2.9(b) or the Servicer, as the case may be, acknowledges and agrees (i) that all proceeds thereof, but in an amount not in excess of the Purchase Price with respect thereto, that it receives are held in trust for the Noteholders and are to be paid to the Trust Collateral Agent and (ii) on the date such trustee receives such proceeds, such trustee shall transfer such funds pursuant to instructions from the Trust Collateral Agent. The Trust Collateral Agent shall deposit any such proceeds it receives in the Collection Account. SECTION 2.10. Book-Entry Notes. If specified in an Issuer Order, ---------------- the Class D Notes and/or the Class E Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer. Such Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner with respect to such Notes will receive a Definitive Note representing such Note Owner's interest in such Note, except as provided in Section 2.12. Unless and until definitive, fully registered Notes (the "Definitive Notes") have been issued to such Note Owners pursuant to Section 2.12: (i) the provisions of this Section shall be in full force and effect; (ii) the Note Registrar and the Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on such Notes and the giving of instructions or directions hereunder) as the sole Holder of such Notes, and shall have no obligation to such Note Owners; (iii) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control; (iv) the rights of such Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless and until Definitive Notes are issued pursuant to Section 2.12, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on such Notes to such Clearing Agency Participants; (v) whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders evidencing a specified percentage of the Outstanding Amount of the Notes, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from such Note Owners and/or Clearing Agency Participants owning or representing, -10- respectively, such required percentage of the beneficial interest in such Notes and has delivered such instructions to the Trustee; and (vi) Such Note Owners may receive copies of any reports sent to Noteholders pursuant to this Indenture, upon written request, together with a certification that they are Note Owners and payment of reproduction and postage expenses associated with the distribution of such reports, from the Trustee at the Corporate Trust Office. SECTION 2.11. Notices to Clearing Agency. Whenever a notice or -------------------------- other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Note Owners with respect to Book Entry Notes, pursuant to Section 2.12, the Trustee shall give all such notices and communications specified herein to be given to the Noteholders to the Clearing Agency, and shall have no obligation to such Note Owners. SECTION 2.12. Definitive Notes. If (i) the Servicer advises the ---------------- Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to Notes issued as Book Entry Notes, and the Servicer is unable to locate a qualified successor, (ii) the Servicer at its option advises the Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (iii) after the occurrence of an Event of Default, Note Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount of any class of Notes issued as Book Entry Notes advise the Trustee through the Clearing Agency in writing that the continuation of a book entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then the Clearing Agency shall notify all such Note Owners and the Trustee of the occurrence of any such event and of the availability of Definitive Notes to such Note Owners requesting the same. Upon surrender to the Trustee of the typewritten Note or Notes representing such Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Trustee shall authenticate such Definitive Notes in accordance with the instructions of the Clearing Agency. None of the Issuer, the Note Registrar or the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. Upon the issuance of such Definitive Notes, the Trustee shall recognize the Holders of the Definitive Notes as Noteholders. SECTION 2.13. Subordination. ------------- (a) Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders of the Class E Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes that the Class E Notes and the Issuer's rights in and to the Collateral (the "Subordinate Class ----------------- E Interests") shall be subordinate and junior to the Class A-1 Notes, the Class - ----------- A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes to the extent and in the manner set forth in this Indenture including, without limitation, as set forth in Section 2.7(c) (and Section 5.5 of the Sale and Servicing Agreement) and hereinafter provided. If any Event of Default has not been cured or waived and acceleration occurs in accordance with Article V, including, without limitation, as a result of an Event of Default specified in Section 5.1(a)(iii) or (iv), the principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class S -11- Notes, the Class B Notes, the Class C Notes and the Class D Notes shall be paid in full in cash before any further payment or distribution is made on account of the principal amount of the Subordinate Class E Interest. The Holders of the Class E Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes, not to cause the filing of a petition in bankruptcy against the Issuer for failure to pay to them amounts due under the Class E Notes or hereunder in respect of any such Class E Notes until the payment in full of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes, the Class C Notes and the Class D Notes and not before at least one year and one day has elapsed since such payment or, if longer, the applicable preference period then in effect. (b) Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders of the Class D Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes that the Class D Notes and the Issuer's rights in and to the Collateral (the "Subordinate Class D Interests") ----------------------------- shall be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes to the extent and in the manner set forth in this Indenture including, without limitation, as set forth in Section 2.7(c) (and Section 5.5 of the Sale and Servicing Agreement) and hereinafter provided. If any Event of Default has not been cured or waived and acceleration occurs in accordance with Article V, including, without limitation, as a result of an Event of Default specified in Section 5.1(a)(iii) or (iv), the principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes shall be paid in full in cash before any further payment or distribution is made on account of the principal amount of the Subordinate Class D Interest. The Holders of the Class D Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes, not to cause the filing of a petition in bankruptcy against the Issuer for failure to pay to them amounts due under the Class D Notes or hereunder in respect of any such Class D Notes until the payment in full of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, the Class B Notes and the Class C Notes and not before at least one year and one day has elapsed since such payment or, if longer, the applicable preference period then in effect. (c) Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders of the Class C Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes and the Class B Notes that the Class C Notes and the Issuer's rights in and to the Collateral (the "Subordinate Class C Interests") shall be subordinate ----------------------------- and junior to the Class A-1 Notes, the Class A-2 Notes, the Class S Notes, and the Class B Notes to the extent and in the manner set forth in this Indenture including, without limitation, as set forth in Section 2.7(c) (and Section 5.5 of the Sale and Servicing Agreement) and hereinafter provided. If any Event of Default has not been cured or waived and acceleration occurs in accordance with Article V, including, without limitation, as a result of an Event of Default specified in Section 5.1(a)(iii) or (iv), the principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes and the Class B Notes shall be paid in full in cash before any further payment or distribution is made on account of the principal amount of the Subordinate Class C Interest. The Holders of the Class C Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes and the Class B Notes, not to cause the filing of a petition in bankruptcy against the Issuer for failure to pay to them amounts due under -12- the Class C Notes or hereunder in respect of any such Class C Notes until the payment in full of the Class A-1 Notes, the Class A-2 Notes, the Class S Notes and the Class B Notes and not before at least one year and one day has elapsed since such payment or, if longer, the applicable preference period then in effect. (d) Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders of the Class B Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes and the Class S Notes that the Class B Notes and the Issuer's rights in and to the Collateral (the "Subordinate Class B Interests"; together with the Subordinate Class E ----------------------------- Interests, the Subordinate Class D Interests and the Subordinate Class C Interests, the "Subordinate Interests") shall be subordinate and junior to the --------------------- Class A-1 Notes, the Class A-2 Notes and the Class S Notes to the extent and in the manner set forth in this Indenture including, without limitation, as set forth in Section 2.7(c) (and Section 5.5 of the Sale and Servicing Agreement) and hereinafter provided. If any Event of Default has not been cured or waived and acceleration occurs in accordance with Article V, including, without limitation, as a result of an Event of Default specified in Section 5.1(a)(iii) or (iv), the principal amount of the Class A-1 Notes, the Class A-2 Notes and the Class S Notes shall be paid in full in cash before any further payment or distribution is made on account of the principal amount of the Subordinate Class B Interest. The Holders of the Class B Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes and the Class S Notes, not to cause the filing of a petition in bankruptcy against the Issuer for failure to pay to them amounts due under the Class B Notes or hereunder in respect of any such Class B Notes until the payment in full of the Class A-1 Notes, the Class A-2 Notes and the Class S Notes and not before at least one year and one day has elapsed since such payment or, if longer, the applicable preference period then in effect. (e) In the event that notwithstanding the provisions of this Indenture, any holder of any Subordinate Interest shall have received any payment or distribution in respect of such Subordinate Interests contrary to the provisions of this Indenture, then, unless and until the relevant Class or Classes of Notes to which the related Subordinate Interest is subordinated shall have been paid in full in cash in accordance with this Indenture, such payment or distribution shall be received and held in trust for the benefit of, and shall forthwith be paid over and delivered to, the Trustee, which shall pay and deliver the same to the Holders of the relevant Class or Classes of Notes to which the related Subordinate Interest is subordinated in accordance with this Indenture; provided, however, that, if any such payment or distribution is made -------- ------- other than in cash, it shall be held by the Trustee as part of the Collateral and subject in all respects to the provisions of this Indenture, including, without limitation, this Section 2.13. (f) Each Registered Owner of Subordinate Interests agrees with all Holders of the relevant Class or Classes of Notes to which the related Subordinate Interest is subordinated that such Holder of Subordinate Interests shall not demand, accept, or receive any payment or distribution in respect of such Subordinate Interests in violation of the provisions of this Indenture including, without limitation, this Section 2.13; provided, however, that after -------- ------- the relevant Class or Classes of Notes to which the related Subordinate Interest is subordinated have been paid in full, the Holders of Subordinate Interests shall be fully subrogated to the rights of the Holders of the relevant Class or Classes of Notes to which the related Subordinate Interest is subordinated. Nothing in this Section 2.13 shall affect the obligation of the Issuer to pay Holders of Subordinate Interests. -13- ARTICLE III. Covenants --------- SECTION 3.1. Payment of Principal and Interest. The Issuer will --------------------------------- duly and punctually pay the principal of and interest on the Notes in accordance with the terms of the Notes and this Indenture. Without limiting the foregoing, the Issuer will cause to be distributed all amounts on deposit in the Collection Account on a Distribution Date deposited therein pursuant to the Sale and Servicing Agreement or pursuant hereto (i) for the benefit of the Class A-l Notes, to Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to Class A-2 Noteholders, (iii) for the benefit of the Class S Notes, to Class S Noteholders, (iv) for the benefit of the Class B Notes, to Class B Noteholders, (v) for the benefit of the Class C Notes, to the Class C Noteholders, (vi) for the benefit of the Class D Notes, to the Class D Noteholders, and (vii) for the benefit of the Class E Notes, to the Class E Noteholders. Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture. SECTION 3.2. Maintenance of Office or Agency. The Issuer will ------------------------------- maintain in New York, New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Trustee to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the Trustee of the location, and of any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Trustee as its agent to receive all such surrenders, notices and demands. SECTION 3.3. Money for Payments to be Held in Trust. On or before -------------------------------------- each Distribution Date and Redemption Date, the Issuer shall deposit or cause to be deposited in the Collection Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto and shall promptly notify the Trustee of its action or failure so to act. The Issuer will cause each Note Paying Agent other than the Trustee to execute and deliver to the Trustee, the Agents and the Administrative Agent an instrument in which such Note Paying Agent shall agree with the Trustee (and if the Trustee acts as Note Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Note Paying Agent will: (i) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; -14- (ii) give the Trustee notice of any default by the Issuer (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes; (iii) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent; (iv) immediately resign as a Note Paying Agent and forthwith pay to the Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Note Paying Agent at the time of its appointment; and (v) comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Note Paying Agent to pay to the Trustee all sums held in trust by such Note Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which the sums were held by such Note Paying Agent; and upon such a payment by any Note Paying Agent to the Trustee, such Note Paying Agent shall be released from all further liability with respect to such money. Subject to applicable laws with respect to the escheat of funds, any money held by the Trustee or any Note Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request and shall be deposited by the Trustee in the Collection Account; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Trustee or such Note Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or such Note Paying Agent, -------- ------- before being required to make any such repayment, shall at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Trustee shall also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Trustee or of any Note Paying Agent, at the last address of record for each such Holder). SECTION 3.4. Existence. Except as otherwise permitted by the --------- provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a business -15- trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other state or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate. SECTION 3.5. Protection of Trust Estate. The Issuer intends the security -------------------------- interest Granted pursuant to this Indenture in favor of the Noteholders to be prior to all other liens in respect of the Trust Estate, and the Issuer shall take all actions necessary to obtain and maintain, in favor of the Trust Collateral Agent, for the benefit of the Noteholders, a first lien on and a first priority perfected security interest in the Trust Estate. The Issuer will from time to time prepare (or shall cause to be prepared), execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to: (i) Grant more effectively all or any portion of the Trust Estate; (ii) maintain or preserve the lien and security interest (and the priority thereof) in favor of the Trust Collateral Agent for the benefit of the Noteholders created by this Indenture or carry out more effectively the purposes hereof; (iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; (iv) enforce any of the Collateral; (v) preserve and defend title to the Trust Estate and the rights of the Trust Collateral Agent in such Trust Estate against the claims of all persons and parties; and (vi) pay all taxes or assessments levied or assessed upon the Trust Estate when due. The Issuer hereby designates the Trust Collateral Agent its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required by the Trust Collateral Agent pursuant to this Section. SECTION 3.6. Opinions as to Trust Estate. --------------------------- (a) On the Closing Date, the Issuer shall furnish to the Trustee, the Trust Collateral Agent and the Administrative Agent an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the first priority lien and security interest in favor of the Trust Collateral Agent, for the benefit of the Noteholders, created by this Indenture and -16- reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective. (b) Within 120 days after the beginning of each calendar year, beginning with the first calendar year beginning more than six months after the Closing Date, the Issuer shall furnish to the Trustee, Trust Collateral Agent and the Administrative Agent an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as are necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until January 31 in the following calendar year. SECTION 3.7. Performance of Obligations; Servicing of Receivables. ---------------------------------------------------- (a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person's material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as ordered by any bankruptcy or other court or as expressly provided in this Indenture, the Basic Documents or such other instrument or agreement. (b) The Issuer may contract with other Persons acceptable to the Class A Majority, the Class B Majority and the Class C Majority, acting together, to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Trustee and the Administrative Agent in an Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Servicer to assist the Issuer in performing its duties under this Indenture. (c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including, but not limited to, preparing (or causing to prepared) and filing (or causing to be filed) all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein. Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together. (d) If a responsible officer of the Owner Trustee shall have actual knowledge of the occurrence of a Servicer Termination Event under the Sale and Servicing Agreement, the -17- Issuer shall promptly notify the Trustee, the Administrative Agent and the Rating Agencies thereof in accordance with Section 12.4, and shall specify in such notice the action, if any, the Issuer is taking in respect of such default. If a Servicer Termination Event shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the Issuer shall take all reasonable steps available to it to remedy such failure. (e) The Issuer agrees that it will not waive timely performance or observance by the Servicer or either Seller of their respective duties under the Basic Documents without the prior consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together. SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding, the ------------------ Issuer shall not: (i) except as expressly permitted by this Indenture or the Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless directed to do so by the Trustee; (ii) claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate; or (iii) (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien in favor of the Trust Collateral Agent created by this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics' liens and other liens that arise by operation of law, in each case on a Financed Vehicle and arising solely as a result of an action or omission of the related Obligor), (C) permit the lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics' or other lien) security interest in the Trust Estate, or (D) amend, modify or fail to comply with the provisions of the Basic Documents without the prior written consent of the Trustee. SECTION 3.9. Annual Statement as to Compliance. The Issuer will deliver to --------------------------------- the Trustee, the Agents and the Administrative Agent, within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ended December 31, 2002), an Officer's Certificate stating, as to the Authorized Officer signing such Officer's Certificate, that -18- (i) a review of the activities of the Issuer during such year and of performance under this Indenture has been made under such Authorized Officer's supervision; and (ii) to the best of such Authorized Officer's knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture and the other Basic Documents throughout such year, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof. SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms. -------------------------------------------------- (a) The Issuer shall not consolidate or merge with or into any other Person, unless (i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any state and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction; (iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Trustee, the Agents and the Administrative Agent) to the effect that such transaction will not have any material adverse tax consequence to the Trust, the Administrative Agent, the Agents, any Noteholder or the Certificateholder; (v) any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; (vi) the Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act); and (viii) the Issuer shall have given the Administrative Agent written notice of such conveyance or transfer at least 20 Business Days prior to the consummation of such action and the Issuer or the Person (if other than the Issuer) formed by or surviving such conveyance or transfer has a net worth, immediately after such conveyance or transfer, -19- that is (a) greater than zero and (b) not less than the net worth of the Issuer immediately prior to giving effect to such conveyance or transfer. (b) Except in accordance with Section 2.9, the Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Trust Estate, to any Person, unless (i) the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture and each of the Basic Documents on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agree by means of such supplemental indenture that such Person (or if a group of persons, then one specified Person) shall prepare (or cause to be prepared) and make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction; (iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Trustee, the Agents and the Administrative Agent) to the effect that such transaction will not have any material adverse tax consequence to the Trust, the Administrative Agent, the Agents, any Noteholder or the Certificateholder; (v) any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; (vi) the Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act); and (vii) the Issuer shall have given the Administrative Agent written notice of such conveyance or transfer at least 20 Business Days prior to the consummation of such action and the acquiring Person has a net worth, immediately after such conveyance or -20- transfer, that is (a) greater than zero and (b) not less than the net worth of the Issuer immediately prior to giving effect to such conveyance or transfer. (c) The Issuer shall deliver written notice to the Administrative Agent and the Agents of any transfer of the ownership of, or financing of, its trust certificates. The Issuer shall deliver written notice to the Administrative Agent and the Agents of any transfer of the Class D Notes or the Class E Notes from an Affiliate of the Issuer to a Person which is not an Affiliate of the Issuer. SECTION 3.11. Successor or Transferee. ----------------------- (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein. (b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), AmeriCredit Master Trust will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice from the Issuer to the Trustee stating that AmeriCredit Master Trust is to be so released. SECTION 3.12. No Other Business. The Issuer shall not engage in any ----------------- business other than financing, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the Basic Documents and activities incidental thereto. SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, ------------ assume, guarantee or otherwise become liable, directly or indirectly, for any Indebtedness except for (i) the Notes, and (ii) any other Indebtedness permitted by or arising under the Basic Documents. The proceeds of the Notes shall be used exclusively to fund the Issuer's purchase of the Receivables and the other assets specified in the Sale and Servicing Agreement, to fund the Reserve Account and to pay the Issuer's organizational, transactional and start-up expenses. SECTION 3.14. Servicer's Obligations. The Issuer shall cause the ---------------------- Servicer to comply with Sections 4.9, 4.10 and 4.11 of the Sale and Servicing Agreement. SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. ------------------------------------------------- Except as contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person. -21- SECTION 3.16. Capital Expenditures. The Issuer shall not make any -------------------- expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty). SECTION 3.17. Compliance with Laws. The Issuer shall comply with the -------------------- requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any Basic Document. SECTION 3.18. Restricted Payments. The Issuer shall not, directly or ------------------- indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the Owner Trustee, the Trustee and the Certificateholders as permitted by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement or Trust Agreement so long as, at the time of such declaration or payment (and after giving effect thereto), no Event of Default or Default shall occur or be continuing and no amount payable by the Issuer under any Basic Document is then due and owing but unpaid. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the Basic Documents. SECTION 3.19. Notice of Events of Default. Upon a responsible officer of --------------------------- the Owner Trustee having actual knowledge thereof, the Issuer agrees to give the Trustee, the Administrative Agent, the Agents and the Rating Agencies prompt written notice of each Event of Default or Default hereunder and each default on the part of the Servicer or a Seller of its obligations under the Sale and Servicing Agreement. SECTION 3.20. Further Instruments and Acts. Upon request of the Trustee, ---------------------------- any Agent or any Administrative Agent, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust ---------------------------------------------------- Agreement. The Issuer shall not agree to any amendment to Section 11.1 of the - --------- Sale and Servicing Agreement or Section 10.1 of the Trust Agreement to eliminate the requirements thereunder that the Trustee or the Holders of the Notes consent to amendments thereto as provided therein. SECTION 3.22. Income Tax Characterization. For purposes of federal income, --------------------------- state and local income and franchise and any other income taxes, the Issuer will treat the Notes as indebtedness and hereby instructs the Trustee, and each Noteholder (or beneficial Note Owner) shall be deemed, by virtue of acquisition of its interest in such Note, to have agreed, to treat the Notes as indebtedness for all applicable tax reporting purposes. -22- SECTION 3.23. Interest Rate Hedges. The Issuer shall maintain, at all times -------------------- on and after the date of the initial Borrowing hereunder, Interest Rate Hedges (a) between the Issuer and any bank or other financial institution whose long-term rating is at least A+ from S&P and A1 from Moody's and whose short-term unsecured debt obligation rating is at least A-1/P-1 by S&P and Moody's, respectively, and is listed on Schedule 1 hereto, (b) with an aggregate notional principal amount not less than (and, in the case of a hedge which is not an interest rate cap, not greater than) the Aggregate Note Principal Balance at the time any such Interest Rate Hedge is entered into, which aggregate notional principal amount may be stepped down on a schedule resulting from the usage of an ABS not greater than 0.5 with respect to the Receivables, provided that such ABS may not exceed 0.0 on any date after the termination of the Commitments as of which the Aggregate Principal Balance shall be less than or equal to 10% of the highest Aggregate Principal Balance since the Closing Date, (c) with a final maturity date which is the date of the last required Scheduled Receivable Payment or such earlier date (resulting from the usage of an ABS not greater than 0.5 with respect to the Receivables, provided that such ABS may not exceed 0.0 on any date after the termination of the Commitments as of which the Aggregate Principal Balance shall be less than or equal to 10% of the highest Aggregate Principal Balance since the Closing Date) approved by the Class A Majority, the Class B Majority and the Class C Majority, acting together, (d) with respect to which the Trust Collateral Agent has received an Interest Rate Hedge Assignment Acknowledgment, (e) which is either (I) substantially in the form of Exhibit C or (II) otherwise in form and substance reasonably acceptable to the Class A Majority, the Class B Majority and the Class C Majority, acting together, and the Rating Agencies and (f) a copy of which has been delivered to the Administrative Agent, the Agents and the Trust Collateral Agent. SECTION 3.24. Ratings Reaffirmations. On each Ratings Reaffirmation Date or ---------------------- within 30 days thereafter, the Servicer shall obtain from S&P and Moody's written reaffirmations that each Class of Notes have at least the Requisite Ratings and shall distribute copies thereof to the Administrative Agent and the Agents. SECTION 3.25. Tangible Net Worth. The Issuer shall maintain at all times a ------------------ positive Tangible Net Worth. SECTION 3.26. Change in Name or Jurisdiction of Organization. The Issuer ---------------------------------------------- shall not make any change to its name or use any trade names, fictitious names, assumed names or "doing business as" names or change the jurisdiction under the laws of which it is organized. SECTION 3.27. Limitation on Transactions with Affiliates. The Issuer shall ------------------------------------------ not enter into, or be a party to any transaction with any Affiliate of the Issuer, except for (a) the transactions contemplated by the Basic Documents and (b) to the extent not otherwise prohibited under this Agreement, other transactions in the nature of employment contracts and directors' fees, upon fair and reasonable terms materially no less favorable to the Issuer than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate. SECTION 3.28. Limitation on Investments. The Issuer shall not form, or ------------------------- cause to be formed, any subsidiaries; or make or suffer to exist any loans or advances to, or extend any credit to, or make any investments (by way of transfer of property, contributions to capital, purchase of stock or securities or evidences of indebtedness, acquisition of the business -23- or assets, or otherwise) in, any Affiliate or any other Person except as otherwise permitted herein and pursuant to the Sale and Servicing Agreement. SECTION 3.29. Borrowing Base Confirmation. The Issuer shall deliver, --------------------------- or cause the Servicer to deliver, a Borrowing Base Confirmation to the Trustee, the Agents and the Administrative Agent , (a) in connection with each Borrowing pursuant to Section 12.6, (b) on each monthly date a Servicer's Certificate is to be delivered, (c) on each Interim Payment Date or other date Receivables are released from the lien hereof pursuant to Section 2.9 and (d) on any date it wishes to demonstrate that a Borrowing Base Deficiency has been cured. ARTICLE IV. Satisfaction and Discharge -------------------------- SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture --------------------------------------- shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights, obligations and immunities of the Trustee hereunder (including the rights of the Trustee under Section 6.7 and the obligations of the Trustee under Section 4.2) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when (A) either (1) all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.3) have been delivered to the Trustee for cancellation; or (2) all Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, -24- and the Issuer, in the case of (i) or (ii) above, has irrevocably deposited or caused to be irrevocably deposited with the Trust Collateral Agent cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation when due to the final Distribution Date therefor or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.1(a)), as the case may be; (B) the Issuer has paid or caused to be paid all Issuer Secured Obligations; and (C) the Issuer has delivered to the Trustee, the Agents, the Trust Collateral Agent and the Administrative Agent an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. SECTION 4.2. Application of Trust Money. All moneys deposited with -------------------------- the Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes, this Indenture and the other Basic Documents, to the payment, either directly or through any Note Paying Agent, as the Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law. SECTION 4.3. Repayment of Moneys Held by Note Paying Agent. In --------------------------------------------- connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Note Paying Agent other than the Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Trustee to be held and applied according to Section 3.3 and thereupon such Note Paying Agent shall be released from all further liability with respect to such moneys. ARTICLE V. Remedies -------- SECTION 5.1. Events of Default. "Event of Default", wherever used ----------------- herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) default in the payment of any interest on any Note (other than a Note held by AmeriCredit or an Affiliate thereof) or any other amount (except principal) due with respect to any such Note when the same becomes due and payable, and such default shall continue for a period of two days; or -25- (ii) default in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, and such default shall continue for a period of one day; or (iii) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of AmeriCredit, the Issuer, AFC, either Seller, the Servicer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of AmeriCredit, the Issuer, AFC, either Seller, the Servicer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the affairs AmeriCredit, AFC, either Seller, the Servicer or the Issuer, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (iv) the commencement by AmeriCredit, AFC, either Seller, the Servicer or the Issuer of a voluntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by AmeriCredit, AFC, either Seller, the Servicer or the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by AmeriCredit, AFC, either Seller, the Servicer or the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of AmeriCredit, AFC, the Issuer, either Seller, the Servicer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by AmeriCredit, AFC, either Seller, the Servicer or the Issuer generally to pay its debts as such debts become due, or the taking of action by AmeriCredit, AFC, either Seller, the Servicer or the Issuer in furtherance of any of the foregoing. (v) default in the observance or performance of any covenant or agreement of the Issuer, either Seller, the Servicer, AmeriCredit (in any capacity) or AFC (in any capacity) made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Issuer, either Seller, the Servicer, AmeriCredit (in any capacity) or AFC (in any capacity) made in this Indenture, in any Basic Document or in any certificate or any other writing delivered pursuant hereto or thereto or in connection herewith or therewith (including any Servicer's Certificate or any Borrowing Base Confirmation) proving to have been incorrect in any material respect as of the time when the same shall have been made or deemed to have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of, except in the case of the covenants and agreements contained in Section 3.25 of this Indenture ------------ (as to which a five Business Day grace period shall apply) and Sections -------- 3.24 of this Indenture and Section 7.3 of the Sale and Servicing Agreement ---- (as to each of which no grace period shall apply), 30 days after there shall have been given, by registered or certified mail, to the Issuer, the Sellers, the Servicer, AmeriCredit and AFC by the Trustee or to the Issuer, the Servicer, the Sellers, AmeriCredit, AFC and the Trustee by the Holders of at least 25% of the Outstanding Amount of any Class of Notes, a written notice specifying such default or incorrect -26- representation or warranty and requiring it to be remedied and stating that such notice is a "Notice of Event of Default" hereunder; provided that no -------------------------- -------- breach shall be deemed to occur hereunder in respect of any representation or warranty relating to eligibility of any Receivable on the Closing Date or its related Borrowing Date to the extent the related Seller has repurchased such Receivable in accordance with the provisions of the Sale and Servicing Agreement; or (vi) (a) The Class A Principal Balance on any day shall exceed the Class A Borrowing Base on such day (a "Class A Borrowing Base Deficiency"), --------------------------------- (b) the Class B Principal Balance on any day shall exceed the Class B Borrowing Base on such day (a "Class B Borrowing Base Deficiency"), (c) the --------------------------------- Class C Principal Balance on any day shall exceed the Class C Borrowing Base on such day (a "Class C Borrowing Base Deficiency"), (d) the Class D --------------------------------- Principal Balance on any day shall exceed the Class D Borrowing Base, if any, on such day (a "Class D Borrowing Base Deficiency") (e) the Class E --------------------------------- Principal Balance on any day shall exceed the Class E Borrowing Base, if any, on such day (a "Class E Borrowing Base Deficiency") or (f) the Class S --------------------------------- Principal Balance on any day shall exceed the Class S Borrowing Base on such day (a "Class S Borrowing Base Deficiency") and, in any case, such --------------------------------- condition continues unremedied for (x) if such Borrowing Base Deficiency arises as a result of an increase in the Class A Credit Score Enhancement Rate, the Class B Credit Score Enhancement Rate or the Class C Credit Score Enhancement Rate required by a Rating Agency in connection with a rating reaffirmation pursuant to Section 3.24, two weeks or (y) otherwise, (i) if the sum of the Class A Borrowing Base Deficiency, the Class B Borrowing Base Deficiency, the Class S Principal Balance and the Class C Borrowing Base Deficiency is less than 5% of the sum of the Class A Principal Balance, the Class B Principal Balance, the Class S Borrowing Base Deficiency and the Class C Principal Balance, five Business Days or (ii) otherwise, two Business Days; (vii) The Internal Revenue Service shall file notice of a Lien pursuant to Section 6323 of the Internal Revenue Code with regard to any assets of the Issuer or any material portion of the assets of AmeriCredit Corp., AFC or AmeriCredit and such Lien shall not have been released within 30 days, or the Pension Benefit Guaranty Corporation shall file notice of a Lien pursuant to Section 4068 of ERISA with regard to any of the assets of AmeriCredit Corp., the Issuer, AmeriCredit or AFC and such Lien shall not have been released within 30 days; (viii) (a) Any Basic Document or any Lien granted thereunder by the Issuer, either Seller or AmeriCredit, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Issuer, such Seller or AmeriCredit; or (b) the Issuer, either Seller or AmeriCredit or any other party shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or (c) any Lien securing any Issuer Secured Obligation shall, in whole or in part, not be or cease to be a perfected first priority security interest against the Issuer; (ix) A Servicer Termination Event shall have occurred; -27- (x) The Issuer, either Seller, the Servicer, AmeriCredit Corp., AmeriCredit, or AFC shall fail to pay any principal of or premium or interest on any Indebtedness having a principal amount of $10,000,000 (or, in the case of the Issuer or AFC, $50,000) or greater, 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 Indebtedness; or any other default under any agreement or instrument relating to any such Indebtedness of the Issuer, either Seller, the Servicer, AmeriCredit Corp., AmeriCredit, or AFC, as applicable, 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 Indebtedness; or any such Indebtedness 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 Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof; (xi) There shall occur a "termination event" or "event of default" or similar event (other than a default by a Noteholder (except AmeriCredit and its Affiliates) or by an Interest Rate Hedge counterparty) under any other Basic Document; (xii) Either (i) the long-term senior unsecured debt of AmeriCredit Corp. is rated by either S&P or Moody's below B or Ba3, respectively, or (ii) the long-term senior unsecured debt of AmeriCredit Corp. is not rated by both S&P and Moody's; (xiii) As of any Distribution Date, the amount in the Reserve Account is less than the Minimum Reserve Account Amount, and such deficiency is not cured on or prior to the immediately succeeding Distribution Date; (xiv) Any Class of Notes does not have at least the Requisite Ratings from S&P and Moody's; (xv) A notice of termination with respect to the Lockbox Account shall have been delivered, or a termination of the Lockbox Agreement shall have otherwise occurred, and a replacement Lockbox Bank listed on Schedule D to the Sale and Servicing Agreement shall not have executed a lockbox agreement substantially in the form of Exhibit C to the Sale and Servicing Agreement within 30 days of such notice; (xvi) The weighted average AmeriCredit Score for all Receivables shall be less than 220 for any period of three consecutive Business Days; (xvii) The average of the Monthly Extension Rates, as set forth in the Servicer Certificates, for three consecutive Determination Dates shall exceed 5.0%; (xviii) A Change of Control shall occur with respect to AmeriCredit Corp.; (xix) The Tangible Net Worth of AmeriCredit Corp. shall be less than the sum of (a) $800,000,000 and (b) 75% of the cumulative positive net income (without -28- deduction for negative net income) of AmeriCredit Corp. for each fiscal quarter since September 30, 2001, as reported in each annual report on Form 10-K and periodic report on Form 10-Q filed by AmeriCredit Corp. with the Securities and Exchange Commission; (xx) On any Determination Date, the Cumulative Net Loss Ratio for any Receivables Pool with a pool factor greater than 25% exceeds the amount set forth opposite the number of months since such Receivables Pool was securitized on Schedule 3 hereto; or (xxi) AFC shall cease to be a direct or indirect wholly-owned subsidiary of AmeriCredit; or AmeriCredit shall cease to be a direct or indirect wholly-owned subsidiary of AmeriCredit Corp.; or AFC and AmeriCredit shall at any time own less than 100% of the Certificates issued pursuant to the Trust Agreement. SECTION 5.2. Rights Upon Event of Default. ---------------------------- (a) If an Event of Default specified in Section 5.1(iii) or (iv) shall have occurred and be continuing, the Notes shall become immediately due and payable at par, together with accrued interest thereon. If any other Event of Default shall have occurred and be continuing, the Trustee in its discretion may, or if so requested in writing by any of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class D Required Noteholders or the Class E Required Noteholders shall exercise any of the remedies specified in Section 5.4(a), subject to any limitations set forth therein. (b) If an Event of Default shall have occurred and be continuing, the Trustee in its discretion may, or if so requested in writing by any of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class D Required Noteholders or the Class E Required Noteholders shall declare by written notice to the Issuer that the Notes become, whereupon they shall become, immediately due and payable at par, together with accrued interest thereon. (c) At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article V provided, the Required Noteholders of each Class which declared such acceleration may, by written notice to the Issuer and the Trustee, rescind and annul such declaration and its consequences if: (i) the Issuer has paid or deposited with the Trustee a sum sufficient to pay: (A) all payments of principal of and interest on all Notes and all other amounts that would then be due hereunder or upon such Notes (including, without limitation, Class A-1 Monthly Costs and Expenses, Class A-2 Monthly Costs and Expenses, Class B Monthly Costs and Expenses, Class C Monthly Costs and Expenses and Class S Monthly Costs and Expenses) if the Event of Default giving rise to such acceleration had not occurred; and -29- (B) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel; and (ii) all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereto. SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by ------------------------------------------------------- Trustee. - ------- (a) The Issuer covenants that if (i) default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, and such default continues for a period of one day, the Issuer will pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the applicable interest rate set forth in the related Note Purchase Agreement and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel. (b) Each Noteholder hereby irrevocably and unconditionally appoints the Trustee as the true and lawful attorney-in-fact of such Noteholder, with full power of substitution, to execute, acknowledge and deliver any notice, document, certificate, paper, pleading or instrument and to do in the name of the Trustee as well as in the name, place and stead of such Noteholder, such acts, things and deeds for or on behalf of and in the name of such Noteholder under this Indenture (including specifically under Section 5.4) and under the Basic Documents which such Noteholder could or might do or which may be necessary, desirable or convenient in such Trustee's sole discretion to effect the purposes contemplated hereunder and under the Basic Documents and, without limitation, following the occurrence of an Event of Default, exercise full right, power and authority to take, or defer from taking, any and all acts with respect to the administration, maintenance or disposition of the Trust Estate. (c) If an Event of Default occurs and is continuing, the Trustee may in its discretion and shall, at the direction of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class S Required Noteholders (if the Class S Notes are Outstanding), the Class D Required Noteholders or the Class E Required Noteholders (except as provided in Section 5.3(d) below), proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as the Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or -30- to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law. (d) Notwithstanding anything to the contrary contained in this Indenture (including, without limitation, Sections 5.4(a), 5.12, 5.13 and 5.17), if the Issuer fails to perform its obligations under Section 10.1(b) hereof when and as due, the Trustee shall, at the direction of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class S Required Noteholders (if the Class S Notes are Outstanding), the Class D Required Noteholders or the Class E Required Noteholders, proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate proceedings as the Trustee shall deem most effective to protect and enforce any such rights, whether for specific performance of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law. (e) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, proceedings under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise: (i) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence, bad faith or willful misconduct) and of the Noteholders allowed in such proceedings; (ii) unless prohibited by applicable law and regulations, to vote on behalf of the Noteholders in any election of a trustee, a standby trustee or person performing similar functions in any such proceedings; (iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Trustee on their behalf; and -31- (iv) to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee or the Noteholders allowed in any judicial proceedings relative to the Issuer, its creditors and its property; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith. (f) Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person. (g) All rights of action and of asserting claims under this Indenture or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes or the production thereof in any trial or other proceedings relative thereto, and any such action or Proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes. (h) In any Proceedings brought by the Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture), the Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such proceedings. SECTION 5.4. Remedies. -------- (a) If an Event of Default shall have occurred and be continuing, the Trustee may and shall, at the direction of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class S Required Noteholders (if the Class S Notes are Outstanding), the Class D Required Noteholders or the Class E Required Noteholders (except as provided in Section 5.3(d) above), do one or more of the following (subject to Section 5.5): (i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged due; (ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; -32- (iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Holders of the Notes; and (iv) direct the Trust Collateral Agent to sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided, however, that the Trustee may not sell or otherwise liquidate the -------- ------- Trust Estate following an Event of Default unless (a) the Majority Noteholders of the Controlling Class consent thereto and (b) either (I) all amounts due and owing under the Notes and the other Related Documents to the holders of Notes of each Class of Notes which are (x) not held by the Issuer, AFC, AmeriCredit or an Affiliate and (y) junior to the Controlling Class shall be paid in full with the proceeds of such sale or liquidation or (II) the Majority Noteholders of each such Class of Notes which is not paid in full with the proceeds of such sale or liquidation consent thereto. In determining such sufficiency or insufficiency with respect to clause (y) and (z), the Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. SECTION 5.5. Optional Preservation of the Receivables. If the Notes ---------------------------------------- have been declared to be due and payable under Section 5.2 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Trustee may, at the direction of the Required Noteholders of the Controlling Class, elect to direct the Trust Collateral Agent to maintain possession of the Trust Estate. SECTION 5.6. Priorities(a) Following the acceleration of the Notes ---------- pursuant to Section 5.2, the receipt of Insolvency Proceeds pursuant to Section 9.1(b) of the Sale and Servicing Agreement, such Insolvency Proceeds, shall be applied by the Trust Collateral Agent on the related Distribution Date in the order of priority set forth in Section 5.5(b) of the Sale and Servicing Agreement. (b) The Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section 5.6. At least 15 days before such record date the Issuer shall mail to each Noteholder and the Trustee a notice that states the record date, the payment date and the amount to be paid. SECTION 5.7. [Reserved]. ---------- SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal -------------------------------------------------------- and Interest. Notwithstanding any other provisions in this Indenture, the Holder - ------------ of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. -33- SECTION 5.9. Restoration of Rights and Remedies. If the Trustee or ---------------------------------- any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Trustee or to such Noteholder, then and in every such case the Issuer, the Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Noteholders shall continue as though no such Proceeding had been instituted. SECTION 5.10. Rights and Remedies Cumulative. No right or remedy ------------------------------ herein conferred upon or reserved to the Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of ------------------------------ the Trustee or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Noteholders, as the case may be. SECTION 5.12. Control by Noteholders. The Required Noteholders of the ---------------------- Controlling Class shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee with respect to the Notes or exercising any trust or power conferred on the Trustee; provided that (i) such direction shall not be in conflict with any rule of law or with this Indenture; and (ii) subject to the express terms of Section 5.4, any direction to the Trustee to sell or liquidate the Trust Estate shall be subject to the requirements the Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default unless (a) the Majority Noteholders of the Controlling Class consent thereto and (b) either (I) all amounts due and owing under the Notes and the other Related Documents to the holders of Notes of each Class of Notes which are (x) not held by the Issuer, AFC, AmeriCredit or an Affiliate and (y) junior to the Controlling Class shall be paid in full with the proceeds of such sale or liquidation or (II) the Majority Noteholders of each such Class of Notes which is not paid in full with the proceeds of such sale or liquidation consent thereto; (iii) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction; -34- provided, however, that, subject to Article VI, the Trustee need not take any - -------- ------- action that it determines might involve it in liability, financial or otherwise, without receiving indemnity satisfactory to it. SECTION 5.13. Waiver of Past Defaults. Prior to the declaration of the ----------------------- acceleration of the maturity of the Notes as provided in Section 5.4, the Class A Majority, the Class B Majority and the Class C Majority, acting together, may waive any past Default or Event of Default and its consequences except a Default (a) in payment of principal of or interest on any of the Notes, (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Note, (c) a Borrowing Base Deficiency and (d) a Default or Event of Default under Section 5.1(viii)(c) or 5.1(xiv). (Waivers of any Default or Event of Default of a type set forth in (a) through (d) of the preceding sentence shall require the consent of all Noteholders.) In the case of any such waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. SECTION 5.14. [Reserved]. ---------- SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants -------------------------------- (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 5.16. Action on Notes. The Trustee's right to seek and recover --------------- judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. SECTION 5.17. Performance and Enforcement of Certain Obligations. -------------------------------------------------- (a) Promptly following a request from the Trustee to do so and at the Servicer's expense, the Issuer agrees to take all such lawful action as the Trustee may request to compel or secure the performance and observance by either Seller and the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and -35- Servicing Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Trustee, including the transmission of notices of default on the part of either Seller or the Servicer thereunder and the institution of legal or administrative actions or Proceedings to compel or secure performance by either Seller or the Servicer of each of their obligations under the Sale and Servicing Agreement. (b) If an Event of Default has occurred and is continuing, the Trustee may, and, at the written direction of the Class A Required Noteholders, the Class B Required Noteholders, the Class C Required Noteholders, the Class S Required Noteholders (if the Class S Notes are Outstanding), the Class D Required Noteholders or the Class E Required Noteholders, shall, subject to Article VI, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Sellers or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Sellers or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall be suspended. ARTICLE VI. The Trustee and the Trust Collateral Agent ------------------------------------------ SECTION 6.1. Duties of Trustee. ----------------- (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and the Basic Documents to which is a party and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; however, the Trustee shall examine the certificates and opinions to determine whether or not they conform on their face to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; -36- (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.12. (d) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. (e) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Sale and Servicing Agreement. (f) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or indemnity reasonably satisfactory to it against such risk or liability is not assured to it. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.1. (h) The Trustee shall, upon two Business Days' prior notice to the Trustee, permit any representative of the Administrative Agent at the expense of the Trust, during the Trustee's normal business hours, to examine all books of account, records, reports and other papers of the Trustee relating to the Notes, to make copies and extracts therefrom and to discuss the Trustee's affairs and actions, as such affairs and actions relate to the Trustee's duties with respect to the Notes, with the Trustee's officers and employees responsible for carrying out the Trustee's duties with respect to the Notes. (i) The Trustee shall, and hereby agrees that it will, perform all of the obligations and duties required of it under the Sale and Servicing Agreement. (j) Without limiting the generality of this Section 6.1, the Trustee shall have no duty (i) to see to any recording, filing or depositing of this Indenture or any agreement referred to herein or any financing statement evidencing a security interest in the Financed Vehicles, or to see to the maintenance of any such recording or filing or depositing or to any recording, refiling or redepositing of any thereof, (ii) to see to any insurance of the Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii) to see to the payment or discharge of any tax, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against any part of the Trust, (iv) to confirm or verify the contents of any reports or certificates delivered to the Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed by the Trustee to be genuine and to have been signed or presented by the proper party or parties, or (v) to inspect the Financed Vehicles at any time or ascertain or inquire as to the performance of observance of any of the Issuer's, each -37- Seller's or the Servicer's representations, warranties or covenants or the Servicer's duties and obligations as Servicer and as custodian of the Receivable Files under the Sale and Servicing Agreement. (k) In no event shall Bank One, NA, in any of its capacities hereunder, be deemed to have assumed any duties of the Owner Trustee under the Delaware Business Trust Statute, common law, or the Trust Agreement. SECTION 6.2. Rights of Trustee. ----------------- (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer's Certificate or Opinion of Counsel. (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, AmeriCredit Financial Services, Inc., or any other such agent, attorney, custodian or nominee appointed with due care by it hereunder. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute -------- ------- willful misconduct, negligence or bad faith. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall be under no obligation to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture, at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; provided, however, that the -------- ------- Trustee shall, upon the occurrence of an Event of Default (that has not been cured), exercise the rights and powers vested in it by this Indenture with reasonable care and skill. (g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Class A Majority, the Class B Majority, the Class C Majority, the Class D Majority or the Class E Majority; provided, however, that if the payment within a reasonable time to the -------- ------- Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such -38- investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture or the Sale and Servicing Agreement, the Trustee may require reasonable indemnity against such cost, expense or liability as a condition to so proceeding; the reasonable expense of every such examination shall be paid by the Person making such request, or, if paid by the Trustee, shall be reimbursed by the Person making such request upon demand. (h) The Trustee shall not be liable for any losses on investments except for losses resulting from the failure of the Trustee to make an investment in accordance with instructions given in accordance hereunder. If the Trustee acts as the Note Paying Agent or Note Registrar, the rights and protections afforded to the Trustee shall be afforded to the Note Paying Agent and Note Registrar. SECTION 6.3. Individual Rights of Trustee. The Trustee in its ---------------------------- individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Note Paying Agent, Note Registrar, co-registrar or co-Note Paying Agent may do the same with like rights. However, the Trustee must comply with Section 6.11. SECTION 6.4. Trustee's Disclaimer. The Trustee shall not be -------------------- responsible for and makes no representation as to the validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall not be accountable for the Issuer's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee's certificate of authentication. SECTION 6.5. Conflicting Instructions. If the Trustee shall receive ------------------------ conflicting directions or instructions from the Noteholders, the Trustee shall forward such directions or instructions to the Administrative Agent and the Administrative Agent shall contact the Noteholders with respect to such conflict. SECTION 6.6. Reports by Trustee to Holders. The Trustee shall deliver ----------------------------- to each Noteholder such information as may be reasonably required to enable such Holder to prepare its federal and State income tax returns. SECTION 6.7. Compensation and Indemnity. -------------------------- (a) Pursuant to Section 5.5(a) and (b) of the Sale and Servicing Agreement, the Issuer shall, or shall cause the Servicer to, pay to the Trustee from time to time compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall cause the Servicer to reimburse the Trustee and the Trust Collateral Agent for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's, the Backup Servicer's, and the Trust Collateral Agent's agents, counsel, accountants and experts. The Issuer shall cause the Servicer to indemnify the Trustee, the Trust Collateral Agent and their respective officers, directors, employees and agents against any and all loss, -39- liability or expense (including attorneys' fees and expenses) incurred by each of them in connection with the acceptance or the administration of this Trust and the performance of its duties hereunder. The Trustee, Trust Collateral Agent or the Backup Servicer shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity. Failure by the Trustee or Trust Collateral Agent to so notify the Issuer and the Servicer shall not relieve the Issuer of its obligations hereunder or the Servicer of its obligations under Article X of the Sale and Servicing Agreement. The Issuer shall cause the Servicer to defend the claim, and the Trustee, Trust Collateral Agent or the Backup Servicer may have separate counsel and the Issuer shall cause the Servicer to pay the fees and expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or Trust Collateral Agent through the Trustee's or Trust Collateral Agent's own willful misconduct, negligence or bad faith. (b) The Issuer's payment obligations to the Trustee pursuant to this Section shall survive the discharge of this Indenture or the earlier resignation or removal of the Trustee or the Trust Collateral Agent or the Backup Servicer. When the Trustee, the Trust Collateral Agent or the Backup Servicer incurs expenses after the occurrence of an Event of Default specified in Section 5.1(iii) or (iv) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or similar law. Notwithstanding anything else set forth in this Indenture or the Basic Documents, the Trustee agrees that the obligations of the Issuer (but not the Servicer) to the Trustee hereunder and under the Basic Documents shall be recourse to the Trust Estate only and specifically shall not be recourse to the assets of the Certificateholder or any Noteholder. In addition, the Trustee agrees that its recourse to the Issuer, the Trust Estate and AFC shall be limited to the right to receive the distributions referred to in Section 5.5 of the Sale and Servicing Agreement. SECTION 6.8. Replacement of Trustee. The Trustee may resign at ---------------------- any time by so notifying the Issuer and the Administrative Agent. The Issuer may and, at the request of the Class A Majority, the Class B Majority and of the Class C Majority shall, remove the Trustee, if: (i) the Trustee fails to comply with Section 6.11; (ii) a court having jurisdiction in the premises in respect of the Trustee in an involuntary case or proceeding under federal or State banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, shall have entered a decree or order granting relief or appointing a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or similar official) for the Trustee or for any substantial part of the Trustee's property, or ordering the winding-up or liquidation of the Trustee's affairs; (iii) an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or another present or future federal or State bankruptcy, insolvency or similar law is commenced with respect to the Trustee and such case is not dismissed within 60 days; -40- (iv) the Trustee commences a voluntary case under any federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or other similar official) for the Trustee or for any substantial part of the Trustee's property, or makes any assignment for the benefit of creditors or fails generally to pay its debts as such debts become due or takes any corporate action in furtherance of any of the foregoing; or (v) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee listed on Schedule 4 hereto. If the Issuer fails to appoint such a successor Trustee, the Class A Majority, the Class B Majority and the Class C Majority, acting together, may appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, the Administrative Agent and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture subject to satisfaction of the Rating Agency Condition. The successor Trustee shall mail a notice of its succession to Noteholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Trustee pursuant to this Section 6.8 and payment of all fees and expenses owed to the outgoing Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer's and the Servicer's obligations under Section 6.7 shall continue for the benefit of the retiring Trustee. SECTION 6.9. Successor Trustee by Merger. If the Trustee --------------------------- consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. The Trustee shall provide the Rating Agencies prior written notice of any such transaction. -41- In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. --------------------------------------------- (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust may at the time be located, the Trustee with the consent of the Class C Majority shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.8 hereof. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, including acts or omissions of predecessor or successor trustees; and (iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given -42- to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee. (d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, dissolve, become insolvent, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall invest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. (e) Any and all amounts relating to the fees and expenses of the co-trustee or separate trustee will be borne by the Trust Estate. SECTION 6.11. Eligibility; Disqualification. The Trustee shall ----------------------------- have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of BBB-, or an equivalent rating, or better by the Rating Agencies. The Trustee shall provide copies of such reports to the Administrative Agent upon request. SECTION 6.12. Appointment and Powers. Subject to the terms and ---------------------- conditions hereof, each of the Noteholders hereby appoints Bank One, NA as the Trust Collateral Agent with respect to the Collateral, and Bank One, NA hereby accepts such appointment and agrees to act as Trust Collateral Agent with respect to the Collateral for the Noteholders, to maintain custody and possession of such Collateral (except as otherwise provided hereunder) and to perform the other duties of the Trust Collateral Agent in accordance with the provisions of this Indenture and the other Basic Documents. Each Noteholder hereby authorizes the Trust Collateral Agent to take such action on its behalf, and to exercise such rights, remedies, powers and privileges hereunder, as the Trustee may direct and as are specifically authorized to be exercised by the Trust Collateral Agent by the terms hereof, together with such actions, rights, remedies, powers and privileges as are reasonably incidental thereto, including, but not limited to, the execution of any powers of attorney. The Trust Collateral Agent shall act upon and in compliance with the written instructions of the Trustee delivered pursuant to this Indenture promptly following receipt of such written instructions; provided that the Trust Collateral Agent shall not act in accordance with any instructions (i) which are not authorized by, or in violation of the provisions of, this Indenture, (ii) which are in violation of any applicable law, rule or regulation or (iii) for which the Trust Collateral Agent has not received reasonable indemnity. Receipt of such instructions shall not be a condition to the exercise by the Trust Collateral Agent of its express duties hereunder, except where this Indenture provides that the Trust Collateral Agent is permitted to act only following and in accordance with such instructions. -43- SECTION 6.13. Performance of Duties. The Trust Collateral Agent --------------------- shall have no duties or responsibilities except those expressly set forth in this Indenture and the other Basic Documents to which the Trust Collateral Agent is a party or as directed by the Trustee in accordance with this Indenture. The Trust Collateral Agent shall not be required to take any discretionary actions hereunder except at the written direction and with the indemnification of the Trustee. The Trust Collateral Agent shall, and hereby agrees that it will, subject to this Article, perform all of the duties and obligations required of it under the Sale and Servicing Agreement. SECTION 6.14. Limitation on Liability. Neither the Trust ----------------------- Collateral Agent nor any of its directors, officers or employees shall be liable for any action taken or omitted to be taken by it or them hereunder, or in connection herewith, except that the Trust Collateral Agent shall be liable for its negligence, bad faith or willful misconduct; nor shall the Trust Collateral Agent be responsible for the validity, effectiveness, value, sufficiency or enforceability against the Issuer of this Indenture or any of the Collateral (or any part thereof). Notwithstanding any term or provision of this Indenture, the Trust Collateral Agent shall incur no liability to the Issuer or the Noteholders for any action taken or omitted by the Trust Collateral Agent in connection with the Collateral, except for the negligence, bad faith or willful misconduct on the part of the Trust Collateral Agent, and, further, shall incur no liability to the Noteholders except for negligence, bad faith or willful misconduct in carrying out its duties to the Noteholders. The Trust Collateral Agent shall be protected and shall incur no liability to any such party in relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of any notice, demand, certificate, signature, instrument or other document reasonably believed by the Trust Collateral Agent to be genuine and to have been duly executed by the appropriate signatory, and (absent actual knowledge to the contrary by a Responsible Officer of the Trust Collateral Agent) the Trust Collateral Agent shall not be required to make any independent investigation with respect thereto. The Trust Collateral Agent shall at all times be free independently to establish to its reasonable satisfaction, but shall have no duty to independently verify, the existence or nonexistence of facts that are a condition to the exercise or enforcement of any right or remedy hereunder or under any of the Basic Documents. The Trust Collateral Agent may consult with counsel, and shall not be liable for any action taken or omitted to be taken by it hereunder in good faith and in accordance with the advice of such counsel. The Trust Collateral Agent shall not be under any obligation to exercise any of the remedial rights or powers vested in it by this Indenture or to follow any direction from the Trustee or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder unless it shall have received reasonable security or indemnity satisfactory to the Trust Collateral Agent against the costs, expenses and liabilities which might be incurred by it. SECTION 6.15. Reliance Upon Documents. In the absence of ----------------------- negligence, bad faith or willful misconduct on its part, the Trust Collateral Agent shall be entitled to conclusively rely on any communication, instrument, paper or other document reasonably believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons and shall have no liability in acting, or omitting to act, where such action or omission to act is in reasonable reliance upon any statement or opinion contained in any such document or instrument. -44- SECTION 6.16. Successor Trust Collateral Agent. -------------------------------- (a) Merger. Any Person into which the Trust Collateral Agent may ------ be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any Person resulting from any such conversion, merger, consolidation, sale or transfer to which the Trust Collateral Agent is a party, shall (provided it is otherwise qualified to serve as the Trust Collateral Agent hereunder) be and become a successor Trust Collateral Agent hereunder and be vested with all of the title to and interest in the Collateral and all of the trusts, powers, discretions, immunities, privileges and other matters as was its predecessor without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding, except to the extent, if any, that any such action is necessary to perfect, or continue the perfection of, the security interest of the Noteholders in the Collateral; provided that any such successor shall also be the successor Trustee under Section 6.9. (b) Resignation. The Trust Collateral Agent and any successor ----------- Trust Collateral Agent may resign at any time by so notifying the Issuer and the Administrative Agent; provided that the Trust Collateral Agent shall not so resign unless it shall also resign as Trustee hereunder. (c) Removal. The Trust Collateral Agent may be removed by the ------- Trustee at any time (and should be removed at any time that the Trustee has been removed), with or without cause, by an instrument or concurrent instruments in writing delivered to the Trust Collateral Agent, the Administrative Agent and the Issuer. A temporary successor may be removed at any time to allow a successor Trust Collateral Agent to be appointed pursuant to subsection (d) below. Any removal pursuant to the provisions of this subsection (c) shall take effect only upon the date which is the latest of (i) the effective date of the appointment of a successor Trust Collateral Agent and the acceptance in writing by such successor Trust Collateral Agent of such appointment and of its obligation to perform its duties hereunder in accordance with the provisions hereof, and (ii) receipt by the Trustee of an Opinion of Counsel to the effect described in Section 3.6. (d) Acceptance by Successor. The Trustee shall have the sole ----------------------- right to appoint each successor Trust Collateral Agent. Every temporary or permanent successor Trust Collateral Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Trustee, each Noteholder and the Issuer an instrument in writing accepting such appointment hereunder and the relevant predecessor shall execute, acknowledge and deliver such other documents and instruments as will effectuate the delivery of all Collateral to the successor Trust Collateral Agent, whereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, duties and obligations of its predecessor. Such predecessor shall, nevertheless, on the written request of any Agent or the Issuer, execute and deliver an instrument transferring to such successor all the estates, properties, rights and powers of such predecessor hereunder. In the event that any instrument in writing from the Issuer or the Trustee is reasonably required by a successor Trust Collateral Agent to more fully and certainly vest in such successor the estates, properties, rights, powers, duties and obligations vested or intended to be vested hereunder in the Trust Collateral Agent, any and all such written instruments shall, at the request of the temporary or permanent successor Trust -45- Collateral Agent, be forthwith executed, acknowledged and delivered by the Trustee or the Issuer, as the case may be. The designation of any successor Trust Collateral Agent and the instrument or instruments removing any Trust Collateral Agent and appointing a successor hereunder, together with all other instruments provided for herein, shall be maintained with the records relating to the Collateral and, to the extent required by applicable law, filed or recorded by the successor Trust Collateral Agent in each place where such filing or recording is necessary to effect the transfer of the Collateral to the successor Trust Collateral Agent or to protect or continue the perfection of the security interests granted hereunder. SECTION 6.17. Compensation. The Trust Collateral Agent shall not ------------ be entitled to any compensation for the performance of its duties hereunder other than the compensation it is entitled to receive in its capacity as Trustee. SECTION 6.18. Representations and Warranties of the Trust ------------------------------------------- Collateral Agent. The Trust Collateral Agent represents and warrants to the - ---------------- Issuer and to each Noteholder as follows: (a) Due Organization. The Trust Collateral Agent is a national ---------------- banking association and is duly authorized and licensed under applicable law to conduct its business as presently conducted. (b) Corporate Power. The Trust Collateral Agent has all requisite --------------- right, power and authority to execute and deliver this Indenture and to perform all of its duties as Trust Collateral Agent hereunder. (c) Due Authorization. The execution and delivery by the Trust ----------------- Collateral Agent of this Indenture and the other Transaction Documents to which it is a party, and the performance by the Trust Collateral Agent of its duties hereunder and thereunder, have been duly authorized by all necessary corporate proceedings and no further approvals or filings, including any governmental approvals, are required for the valid execution and delivery by the Trust Collateral Agent, or the performance by the Trust Collateral Agent, of this Indenture and such other Basic Documents. (d) Valid and Binding Indenture. The Trust Collateral Agent has --------------------------- duly executed and delivered this Indenture and each other Basic Document to which it is a party, and each of this Indenture and each such other Basic Document constitutes the legal, valid and binding obligation of the Trust Collateral Agent, enforceable against the Trust Collateral Agent in accordance with its terms, except as (i) such enforceability may be limited by bankruptcy, insolvency, reorganization and similar laws relating to or affecting the enforcement of creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. SECTION 6.19. Waiver of Setoffs. The Trust Collateral Agent ----------------- hereby expressly waives any and all rights of setoff that the Trust Collateral Agent may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the provisions hereof. -46- SECTION 6.20. Control by the Trustee. The Trust Collateral Agent ---------------------- shall comply with notices and instructions given by the Issuer only if accompanied by the written consent of the Trustee, except that if any Event of Default shall have occurred and be continuing, the Trust Collateral Agent shall act upon and comply with notices and instructions given by the Trustee alone in the place and stead of the Issuer. ARTICLE VII. Noteholders' Lists and Reports ------------------------------ SECTION 7.1. Issuer To Furnish To Trustee Names and Addresses of --------------------------------------------------- Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a) - ----------- not more than five days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Record Date, (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Trustee is the Note Registrar, no such list shall be required to be furnished. The Trustee or, if the Trustee is not the Note Registrar, the Issuer shall furnish to the Administrative Agent in writing on an annual basis on each June 30 and at such other times as the Administrative Agent may request a copy of the list. SECTION 7.2. Preservation of Information. The Trustee shall --------------------------- preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Note Registrar. The Trustee may destroy any list furnished to it as provided in such Section 7.1 upon receipt of a new list so furnished. ARTICLE VIII. Accounts, Disbursements and Releases ------------------------------------ SECTION 8.1. Collection of Money. Except as otherwise expressly ------------------- provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Trust Collateral Agent pursuant to this Indenture and the Sale and Servicing Agreement. The Trustee shall apply all such money received by it, or cause the Trust Collateral Agent to apply all money received by it as provided in this Indenture and the Sale and Servicing Agreement. Except as otherwise expressly provided in this Indenture or in the Sale and Servicing Agreement, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V. -47- SECTION 8.2. Release of Trust Estate. ----------------------- (a) Subject to the payment of its fees and expenses and other amounts pursuant to Section 6.7, the Trust Collateral Agent may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Trust Collateral Agent as provided in this Article VIII shall be bound to ascertain the Trust Collateral Agent's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. (b) The Trust Collateral Agent shall, at such time as there are no Notes outstanding and all sums due the Trustee pursuant to Section 6.7 have been paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts. The Trustee shall release property from the lien of this Indenture pursuant to this Section 8.2(b) only upon receipt of an Issuer Request accompanied by an Officer's Certificate and an Opinion of Counsel. SECTION 8.3. Opinion of Counsel. The Trust Collateral Agent shall ------------------ receive at least seven days' notice when requested by the Issuer to take any action pursuant to Section 8.2(a), accompanied by copies of any instruments involved, and the Trustee shall also require as a condition to such action, an Opinion of Counsel in form and substance satisfactory to the Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Trustee in connection with any such action. ARTICLE IX. Supplemental Indentures ----------------------- SECTION 9.1. Supplemental Indentures Without Consent of Noteholders. ------------------------------------------------------ Without the consent of the Holders of any other Notes and with prior notice to the Rating Agencies by the Issuer, as evidenced to the Trustee, the Issuer and the Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, to increase the Class A Credit Score Enhancement Rate, the Class B Credit Score Enhancement Rate or the Class C Credit Score Enhancement Rate. SECTION 9.2. Supplemental Indentures with Consent of Noteholders. --------------------------------------------------- -48- The Issuer and the Trustee, when authorized by an Issuer Order, may, with prior notice to the Rating Agencies and with the consent of the Class A Majority, the Class B Majority and the Class C Majority, acting together, by Act of such Holders delivered to the Issuer and the Trustee, at any time and from time to time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, -------- ------- that, no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby: (i) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provision of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable; (ii) impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date); (iii) reduce the percentage of the Outstanding Amount of the Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture; (iv) modify or alter the provisions of the proviso to the definition of the term "Outstanding"; ----------- (v) reduce the percentage of the Outstanding Amount of the Notes required to direct the Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.4; (vi) modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby; (vii) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Distribution Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Noteholders to the benefit of any provisions for the mandatory redemption of the Notes contained herein; (viii) permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein or in any of the Basic Documents, terminate the lien of -49- this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture; or (ix) decrease the Class A Credit Score Enhancement Rate, the Class B Credit Score Enhancement Rate or the Class C Credit Score Enhancement Rate or modify the definition of Class A Required Note Enhancement, Class A Borrowing Base, Class B Required Note Enhancement, Class B Borrowing Base, Class C Required Note Enhancement or Class C Borrowing Base; provided, further, however, that no such supplemental indenture shall, without - -------- ------- ------- the consent of the Holder of each Outstanding Class S Note, amend Section 12.6(b); and provided, further, however, that no such supplemental indenture -------- ------- ------- shall, without the consent of the Administrative Agent, amend Article XI. It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. No such amendment, supplement, waiver or modification which would have a material, adverse effect on the Noteholders shall be effective unless the Rating Agency Condition shall have been satisfied; it being understood that amendments, supplements, waivers and modifications which do any of the following shall not require satisfaction of the Rating Agency Condition: (A) correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Trust Collateral Agent any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; (B) evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained; (C) add to the covenants of the Issuer, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuer; (D) convey, transfer, assign, mortgage or pledge any property to or with the Trust Collateral Agent; (E) cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided that such action shall not -------- adversely affect the interests of the Holders of the Notes; or (F) evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions -50- of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI. Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to this Section, the Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.3. Execution of Supplemental Indentures. In executing, or ------------------------------------ permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the amendments or modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise. SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of any -------------------------------- supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Trustee, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.5. Reference in Notes to Supplemental Indentures. Notes --------------------------------------------- authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Notes. ARTICLE X. Redemption of Notes ------------------- SECTION 10.1. Redemption. ---------- (a) The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer or the Sellers pursuant to Section 9.1(a) of the Sale and Servicing Agreement, on any Distribution Date on which the Servicer or a Seller exercises its option to purchase the Trust Estate pursuant to said Section 9.1(a), for a purchase price equal to the Redemption Price; provided, -------- however, that the Issuer has available funds sufficient to pay the - ------- -51- Redemption Price. The Servicer or the Issuer shall furnish the Administrative Agent and the Rating Agencies notice of such redemption. If the Notes are to be redeemed pursuant to this Section 10.1(a), the Servicer or the Issuer shall furnish notice of such election to the Trustee not later than 25 days prior to the Redemption Date and the Issuer shall deposit with the Trustee in the Collection Account the Redemption Price of the Notes to be redeemed whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.2 to each Holder of Notes. (b) In the event that the assets of the Trust are distributed pursuant to Section 8.1 of the Trust Agreement, all amounts on deposit in the Collection Account shall be paid to the Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid interest thereon and all other amounts accrued and unpaid with respect thereto, including, without limitation, Class A-1 Monthly Costs and Expenses, Class A-2 Monthly Costs and Expenses, Class B Monthly Costs and Expenses, Class C Monthly Costs and Expenses and Class S Monthly Costs and Expenses. If amounts are to be paid to Noteholders pursuant to this Section 10.1(b), the Servicer or the Issuer shall, to the extent practicable, furnish notice of such event to the Trustee not later than 45 days prior to the Redemption Date whereupon all such amounts shall be payable on the Redemption Date. SECTION 10.2. Form of Redemption Notice. ------------------------- (a) Notice of redemption under Section 10.1(a) shall be given by the Trustee by facsimile or by first-class mail, postage prepaid, transmitted or mailed prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder's address appearing in the Note Register. All notices of redemption shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii) that the Record Date otherwise applicable to such Redemption Date is not applicable and that payments shall be made only upon presentation and surrender of such Notes and the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.2); and (iv) that interest on the Notes shall cease to accrue on the Redemption Date. Notice of redemption of the Notes shall be given by the Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note. (b) Prior notice of redemption under Section 10.1(b) is not required to be given to Noteholders. -52- SECTION 10.3. Notes Payable on Redemption Date. The Notes to be redeemed -------------------------------- shall, following notice of redemption as required by Section 10.2 (in the case of redemption pursuant to Section 10.1(a)), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price. SECTION 10.4. Limited Amortization. The Issuer may from time to time, in -------------------- its sole discretion, unless an Event of Default shall have occurred prior thereto, cause a Limited Amortization Period to commence for one or more Collection Periods by delivering to the Servicer, each Agent, the Administrative Agent and the Indenture Trustee an irrevocable written notice by 3:00 p.m. (New York City time) on the Business Day preceding the first day of the Collection Period in which such Limited Amortization Period is scheduled to commence, which notice shall specify the aggregate amount of the decrease in the Class A Principal Balance (the "Class A Limited Amortization Amount"), the decrease in the Class B Principal Balance (the "Class B Limited Amortization Amount") and/or the decrease in the Class C Principal Balance (the "Class C Limited Amortization Amount"), for such Limited Amortization Period. ARTICLE XI. THE ADMINISTRATIVE AGENT ------------------------ SECTION 11.1. Appointment. By its acceptance of its Note, each ----------- Noteholder hereby irrevocably designates and appoints the Administrative Agent as the Administrative Agent of such Noteholder under the Basic Documents, and each such Noteholder irrevocably authorizes the Administrative Agent, as the Administrative Agent for such Noteholder, to take such action on its behalf under the provisions of the Basic Documents and to exercise such powers and perform such duties thereunder as are expressly delegated to the Administrative Agent by the terms of the Basic Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Indenture or any other Basic Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Noteholder, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture or any other Basic Document or otherwise exist against the Administrative Agent. SECTION 11.2. Delegation of Duties. The Administrative Agent may execute -------------------- any of its duties under any of the Basic Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. SECTION 11.3. Exculpatory Provisions. Neither the Administrative Agent ---------------------- nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable to any of the Noteholders for any action lawfully taken or omitted to be taken by it or such Person under or in connection with any of the Basic Documents (except for its or such Person's own gross negligence or willful misconduct) or (b) responsible in any manner to any of the -53- Noteholders for any recitals, statements, representations or warranties made by AFC, either Seller, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, or the Trustee or any officer thereof contained in any of the Basic Documents or in any certificate, report, statement or other document referred to or provided for in, or received by a Administrative Agent under or in connection with, any of the Basic Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Indenture or any of the other Basic Documents or for any failure of AFC, either Seller, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, or the Trustee to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Noteholder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, any of the basic Documents, or to inspect the properties, books or records of AFC, either Seller, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, or the Trustee. SECTION 11.4. Reliance by Administrative Agent. The Administrative Agent -------------------------------- shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, written statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to the Administrative Agent), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any of the Basic Documents unless it shall first receive such advice or concurrence of such of the Noteholders, as specified in the related Basic Document, or otherwise as it deems appropriate, or it shall first be indemnified to its satisfaction by some or all of the Noteholders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. SECTION 11.5. Notices. The Administrative Agent shall not be deemed to ------- have knowledge or notice of the occurrence of any breach of any Basic Document or the occurrence of any Event of Default unless the Administrative Agent has received notice from the Servicer, the Trustee or any Noteholder, referring to this Indenture and describing such event. In the event that the Administrative Agent receives such a notice, it shall promptly give notice thereof to each Agent. SECTION 11.6. Non-Reliance on Administrative Agent and Other ---------------------------------------------- Noteholders. By its acceptance of a Note, each Noteholder expressly acknowledges - ----------- that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of AFC, either Seller, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer or the Trustee, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Noteholder. By its acceptance of a Note, each Noteholder represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Noteholder, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of AFC, the Sellers, the Issuer, AmeriCredit, -54- the Servicer, the Trust Collateral Agent, the Backup Servicer, the Trustee, and the Receivables and made its own decision to purchase its interest in the Notes. Each Noteholder also represents that it will, independently and without reliance upon the Administrative Agent or any other Noteholder, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis, appraisals and decisions in taking or not taking action under any of the Basic Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of AFC, the Sellers, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, the Trustee, and the Receivables. Except for notices, reports and other documents received by the Administrative Agent under Section 5 of the Note Purchase Agreements, the Administrative Agent shall not have any duty or responsibility to provide any Noteholder with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of AFC, the Sellers, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, the Trustee, and the Receivables which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. SECTION 11.7. Indemnification. The Noteholders (other than CP Conduits --------------- (as defined in each Note Purchase Agreement)) and, with respect to CP Conduits which are also Committed Purchasers, the related Agents, agree to indemnify the Administrative Agent in its capacity as such (without limiting the obligation (if any) of AFC, either Seller, the Issuer, AmeriCredit or the Servicer to reimburse the Administrative Agent for any such amounts), ratably according to the outstanding principal balances of their Notes from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the obligations under this Indenture) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no such Noteholder or Agent shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of the Administrative Agent resulting from its own gross negligence or willful misconduct or bad faith. The agreements in this subsection shall survive the payment of the obligations under this Agreement. SECTION 11.8. Administrative Agent in its Individual Capacity. The ----------------------------------------------- Administrative Agent and its Affiliates may make loans to, accept deposits from, act as underwriter for and generally engage in any kind of business with AFC, either Seller, the Issuer, AmeriCredit, the Servicer, the Trust Collateral Agent, the Backup Servicer, or the Trustee as though the Administrative Agent were not an agent hereunder. In addition, the Noteholders acknowledge that the Administrative Agent may act (i) as administrator, sponsor or agent for one or more CP Conduits and in such capacity acts and may continue to act on behalf of each such CP Conduit in connection with its business, and (ii) as the agent for certain financial institutions under the liquidity and credit enhancement agreements relating to this Indenture to which any one or more CP Conduits is party and in various other capacities relating to the business of any such CP Conduit under various agreements. The Administrative Agent, shall not, by virtue of its acting in any such other capacities, be deemed to have duties or responsibilities hereunder or be -55- held to a standard of care in connection with the performance of its duties as Administrative Agent other than as expressly provided in this Indenture. Any Person which is Administrative Agent may act as Administrative Agent without regard to and without additional duties or liabilities arising from its role as such administrator or agent or arising from its acting in any such other capacity. SECTION 11.9. Successor Administrative Agent. The Administrative Agent ------------------------------ may resign as Administrative Agent upon ten days' notice to the Agents, the Trustee and the Servicer with such resignation becoming effective upon a successor agent succeeding to the rights, powers and duties of the Administrative Agent pursuant to this Section 11.9. If the Administrative Agent shall resign as Administrative Agent under this Agreement, then the Class A Majority, the Class B Majority and the Class C Majority, acting together, shall appoint from among the Agents a successor administrative agent, which successor Administrative Agent, so long as no Event of Default has occurred and is continuing, shall be reasonably acceptable to AmeriCredit. Any successor administrative agent or agent shall succeed to the rights, powers and duties of resigning Administrative Agent, and the term "Administrative Agent" shall mean such successor administrative agent or agent effective upon its appointment, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Indenture. After the retiring Administrative Agent's resignation as Administrative Agent, the provisions of this Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Indenture. ARTICLE XII. Miscellaneous ------------- SECTION 12.1. Compliance Certificates and Opinions, etc. Upon any ------------------------------------------ application or request by the Issuer to the Trustee or the Trust Collateral Agent to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee or the Trust Collateral Agent, as the case may be, (i) an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with. (a) Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; -56- (iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such signatory such condition or covenant has been complied with. (b) (i) Prior to the deposit of any Collateral or other property or securities with the Trust Collateral Agent that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 12.1(a) or elsewhere in this Indenture, furnish to the Trust Collateral Agent and the Administrative Agent an Officer's Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited. (ii) Other than with respect to the release of any Purchased Receivables or Liquidated Receivables, whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Trust Collateral Agent and the Administrative Agent an Officer's Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof. (iii) Notwithstanding Section 2.9 or any other provision of this Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents. SECTION 12.2. Form of Documents Delivered to Trustee. In any case -------------------------------------- where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or -57- opinion of, or representations by, an officer or officers of the Servicer, either Seller or the Issuer, stating that the information with respect to such factual matters is in the possession of the Servicer, such Seller or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Whenever in this Indenture, in connection with any application or certificate or report to the Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Trustee's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI. SECTION 12.3. Acts of Noteholders. ------------------- (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the --- Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any person of any such instrument or writing may be proved in any customary manner of the Trustee. (c) The ownership of Notes shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note. SECTION 12.4. Notices, etc., to Trustee, Issuer and Rating Agencies. ----------------------------------------------------- Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other -58- documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with: (a) The Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested and shall be deemed to have been duly given upon receipt to the Trustee at its Corporate Trust Office, or (b) The Issuer by the Trustee or by any Noteholder shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested and shall deemed to have been duly given upon receipt to the Issuer addressed to: AmeriCredit Master Trust, in care of Bankers Trust (Delaware), E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19805, with a copy to Bankers Trust Company, 4 Albany Street, New York, New York 10006, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Trustee by Issuer. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Trustee. Notices required to be given to the Rating Agencies by the Issuer, the Trustee or the Owner Trustee shall be in writing, personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested to (i) in the case of Moody's, at the following address: Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, and (ii) in the case of Standard & Poor's, at the following address: Standard & Poor's, A Division of The McGraw-Hill Companies, Inc., 55 Water Street, 40/th/ Floor, New York, New York 10041, Attention of Asset Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Section 12.5. Notices to Noteholders; Waiver. Where this Indenture ------------------------------ provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner here in provided shall conclusively be presumed to have been duly given. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver. In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, -59- then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default. SECTION 12.6. Borrowings; Swingline Borrowings(a)Subject to the -------------------------------- conditions set forth below and provided that no Class A Limited Amortization Amount, Class B Limited Amortization Amount or Class C Limited Amortization Amount is outstanding, on any Business Day prior to the termination of the Commitments, additional amounts may be borrowed or reborrowed by the Issuer under the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and/or the Class E Notes (a "Borrowing"). Notice of any Borrowing shall be given by the Issuer to the Trustee and the Administrative Agent before 11:00 a.m., New York City time, at least one Business Day prior to such Borrowing, and the Administrative Agent shall give notice of any such Borrowing (including a copy of the related Borrowing Notice) to the related Agents before 2:00 p.m., New York City time, on the day it receives such notice from the Issuer. Borrowings within each Class (and Class A-1 and Class A-2 shall constitute a single class for these purposes) shall be pro rata according to the unused Commitments related to such Class. It shall be a condition to Borrowing under any Note that (i) each applicable condition to such Borrowing specified in the related Note Purchase Agreement is satisfied on the date of such Borrowing (a "Borrowing Date"), (ii) the Issuer shall have delivered to the Trustee and the Administrative Agent (A) an updated Schedule of Receivables, (B) an Officer's Certificate in substantially the form of Exhibit E hereto (a "Borrowing Base Confirmation") certifying the calculation of the Borrowing Bases as of the latest practicable date, but in no event earlier than the Business Day prior to the Borrowing Date, such calculation to be in the form set forth in the form of Servicer's Certificate attached to the Sale and Servicing Agreement and (C) an Officer's Certificate to the effect that the conditions precedent set forth herein and in the related Note Purchase Agreement shall have been satisfied, and (iii) in no event may the aggregate amount of Borrowings outstanding under any Class of Notes exceed the aggregate amount of the Commitments (as such Commitments may be increased or reduced from time to time pursuant to the related Note Purchase Agreement(s)) with respect to such Class; provided, further, that, other than Borrowings with respect to the Class S Notes pursuant to Section 12.6(b), Borrowing Dates shall occur no more frequently than twice every calendar week. The proceeds of each Borrowing shall be applied first to repay the principal amount of any outstanding Swingline Borrowing and then as the Issuer may direct. If either the Class D Notes or the Class E Notes have not been rated by Moody's and S&P, then the Servicer, on behalf of the Trustee, shall maintain records of all amounts borrowed and repaid on such Notes. (b) (i) Subject to the conditions set forth below, on any Business Day prior to the termination of the Commitments, additional amounts may be borrowed or reborrowed by the Issuer under the Class S Notes (a "Swingline Borrowing"). Notice of any Swingline Borrowing shall be given by the Issuer to the Trustee, each Class S Agent and the Administrative Agent before 10:00 a.m., New York City time, on the day of such Borrowing. It shall be a condition to a Swingline Borrowing that (i) each applicable condition to such Swingline Borrowing specified -60- in the Class S Note Purchase Agreement is satisfied on the date of such Swingline Borrowing (a "Swingline Borrowing Date"), (ii) the Issuer shall have delivered to the Trustee and the Administrative Agent (A) an Amended Schedule of Receivables, (B) a Borrowing Base Confirmation certifying (i) the calculation of the Class S Borrowing Base as of the latest practicable date, but in no event earlier than the Business Day prior to the Borrowing Date, and (ii) that, absent such Swingline Borrowing, the Issuer would have been permitted to borrow on such Swingline Borrowing Date additional amounts under the Class A Notes, the Class B Notes and the Class C Notes pursuant to the terms hereof and of the Class A-1 Note Purchase Agreement, Class A-2 Note Purchase Agreement, the Class B Note Purchase Agreement and the Class C Note Purchase Agreement in an aggregate amount equal to or greater than the amount of the requested Swingline Borrowing and (C) an Officer's Certificate to the effect that the conditions precedent set forth herein and in the Class S Note Purchase Agreement shall have been satisfied, (iii) each holder of a Class A Commitment, Class B Commitment or Class C Commitment shall have a short term debt rating of at least A-2 by S&P and P-2 by Moody's and (iv) in no event may the aggregate amount of Borrowings outstanding under the Class S Notes exceed the aggregate amount of the Class S Commitments (as such Commitments may be reduced from time to time pursuant to the Class S Note Purchase Agreement); provided, further, that Swingline Borrowing Dates shall occur no more frequently than two times every calendar week. The Class S Purchasers shall not be entitled to waive the conditions precedent to Swingline Borrowings set forth herein and in the Class S Note Purchase Agreement, and the Issuer agrees that it shall not be entitled to Swingline Borrowings absent satisfaction of all such conditions. The amount of each outstanding Swingline Borrowing shall reduce the Commitments with respect to the Class A Notes, the Class B Notes and the Class C Notes pro rata based on the Class A Borrowing Percentage, the Class B Borrowing Percentage and the Class C Borrowing Percentage, respectively. Unless the Administrative Agent otherwise consents, the amount of any proposed Swingline Borrowing shall be at least $5,000,000 and shall be an integral multiple of $1,000,000. With respect to each Swingline Borrowing, the Issuer agrees that pursuant to Section 12.6(a) it will request a Borrowing, the proceeds of which will be at least sufficient to repay the principal amount of such Swingline Borrowing, for funding on the earliest of (i) the first Determination Date after the related Swingline Borrowing Date, (ii) the date the Class S Principal Amount equals $100,000,000, (iii) the next Borrowing Date with respect to any of the Class A Notes, Class B Notes or Class C Notes, (iv) the date on which any Class A Commitment, Class B Commitment or Class C Commitment terminates and (v) the date on which an Event of Default occurs (on which earliest date the Issuer must repay all outstanding Swingline Borrowings). The Issuer may, at its option, request a Borrowing, the proceeds of which will be at least sufficient to repay the principal amount of such Swingline Borrowing, at any time the Class S Principal Amount equals or exceeds $40,000,000. Unless a Swingline Borrowing has been repaid by the Issuer (including from the proceeds of other Borrowings hereunder) by the earliest of (i) the first Determination Date after the related Swingline Borrowing Date, (ii) the date the Class S Principal Amount equals $100,000,000, (iii) the next Borrowing Date with respect to any of the Class A Notes, Class B -61- Notes or Class C Notes, (iv) the date on which any Class A Commitment, Class B Commitment or Class C Commitment terminates and (v) the date on which an Event of Default occurs (on which earliest date the Issuer must repay all outstanding Swingline Borrowings), the Issuer shall be deemed to have requested a Borrowing from the holders of the Class A Notes, Class B Notes and Class C Notes in an amount sufficient to repay the principal amount of such Swingline Borrowing plus all accrued and unpaid interest thereon. If the Issuer shall be precluded from making any such Borrowing, the holders of the Class A Notes, Class B Notes and Class C Notes shall make a purchase, in accordance with the terms of the related Note Purchase Agreement, from the Class S Noteholders in the respective amounts set forth in the last sentence of this paragraph for an aggregate purchase price equivalent to the amount of such Borrowing. By accepting delivery of the Class A Notes, Class B Notes and Class C Note, the Class A Noteholders, Class B Noteholders and Class C Noteholders are deemed to have agreed to advance such Borrowings (or make such purchases) from time to time in accordance with the terms hereof and of the applicable Note Purchase Agreement. In such event, the Administrative Agent shall give written notice to the Class A-1 Agents, Class A-2 Agents, Class B Agents, Class C Agents and Class S Agents, which notice shall include (i) the date on which such Borrowing (or purchase and sale) is to occur, which shall be a Business Day (the "Swingline Purchase Date") and (ii) ----------------------- the amount of such Swingline Borrowing (plus all accrued and unpaid interest thereon). Such notice shall be given not later than 2:00 p.m. (New York City time) on the Business Day prior to the Swingline Purchase Date. Following receipt by such Agents, the Class A Noteholders, Class B Noteholders and Class C Noteholders shall fund, in accordance with the terms of the related Note Purchase Agreement, a Borrowing (or purchase a portion of the principal amount of such Swingline Borrowing and all interest accrued thereon) on the applicable Swingline Purchase Date in the following respective amounts: (a) the lesser of (i) the excess of the Class A Borrowing Base on such date over the Class A Principal Balance on such date and (ii) the amount of such Swingline Borrowing, (b) the lesser of (i) the excess of the Class B Borrowing Base on such date over the Class B Principal Balance on such date and (ii) the amount of such Swingline Borrowing minus the amount determined pursuant to clause (a), and (c) the lesser of (i) the excess of the Class C Borrowing Base on such date over the Class C Principal Balance on such date and (ii) the amount of such Swingline Borrowing minus the sum of the amounts determined pursuant to clauses (a) and (b), provided, that if the amount of such Swingline Borrowing exceeds the sum of the - -------- amounts determined pursuant to clauses (a), (b) and (c), the Class A Noteholders, Class B Noteholders and Class C Noteholders shall fund (or purchase) such excess pro rata based on the Class A Swingline Percentage, the --- ---- Class B Swingline Percentage and the Class C Swingline Percentage. Before 2:00 p.m. (New York City time) on each Swingline Purchase Date, each purchasing Noteholder shall make the purchase price for its pro rata share --- ---- of the applicable Swingline Borrowing available to the Administrative Agent by wire transfer of immediately available funds. Subject to the Administrative Agent's receipt of such funds, the Administrative Agent will not later than 4:00 p.m. (New York City time) on such Swingline Purchase Date make such funds available, in the same type of funds received, by wire transfer thereof to the selling Class S Noteholders. Subject to the terms and conditions set forth in the applicable Note Purchase Agreement, the obligation of each holder of a Class A Note, the Class B Note or the Class C Note to purchase Swingline Borrowings pursuant to this Section 12.6(b) shall be absolute, - --------------- -62- irrevocable and unconditional, and not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Noteholder or the Issuer may have against the Class S Noteholders, the Issuer, either Seller, the Servicer, the Trustee, the Administrative Agent or any other Person for any reason whatsoever, (ii) the occurrence or continuance of any Default or Event of Default (including the occurrence of any Insolvency Event with respect to the Issuer), (iii) any Borrowing Base Deficiency or any adverse change in the Collateral or in the condition (financial or other) of the Issuer, either Seller or the Servicer, (iv) any breach of this Indenture or any Basic Document by the Issuer, either Seller, the Servicer, the Trust Collateral Agent, the Custodian, the Backup Servicer, the Administrative Agent or the Trustee, (v) the failure of the conditions set forth in any Note Purchase Agreement to have been or to be satisfied, or (vii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. The Administrative Agent shall give prompt notice to the Issuer of each purchase of Swingline Borrowings pursuant to this Section 12.6(b). --------------- SECTION 12.7. Additional Commitments; Reallocation of Certain ----------------------------------------------- Commitments. (a) The Issuer may from time to time, subject to the conditions set - ----------- forth in the a Note Purchase Agreement, supplement such Note Purchase Agreement to provide for additional Commitments with respect to the Class of Notes related thereto. On the date of any such supplement, the Issuer shall execute and deliver to the Trustee for authentication, additional notes in a maximum principal amount equal to the amount of such additional Commitments. If on any Additional Issuance Date for any Class of Notes, the aggregate outstanding principal balance of such Notes exceeds zero, then the person to whom such additional Notes are issued shall make an advance (which shall constitute an Additional Class A-1 Principal Amount, an Additional Class A-2 Principal Amount, an Additional Class B Principal Amount, an Additional Class C Principal Amount, an Additional Class D Principal Amount or an Additional Class E Principal Amount, as the case may be) to the Administrative Agent, for pro rata distribution to the other holders of the Notes of such Class (and Class A-1 and Class A-2 shall constitute a single class for these purposes), an amount such that, after giving effect to such distribution, the outstanding principal balance of each Note of such Class shall be proportionate to the related Commitment with respect to such Note. (b) Without the consent of any other Noteholder, the Class A Commitment of any Committed Purchaser (as defined in a Class A Note Purchase Agreement) and/or the Class B Commitment of any Committed Purchaser (as defined in the Class B Note Purchase Agreement) may be reallocated at any time to be a Commitment with respect to any other Class of Notes subordinate to the Class of Notes to which such commitment originally applied if such Committed Purchaser and the Issuer mutually agree to such reallocation. SECTION 12.8. Effect of Headings and Table of Contents. The Article ---------------------------------------- and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 12.9. Successors and Assigns. All covenants and agreements in ---------------------- this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so -63- expressed or not. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of the Trust Collateral Agent in this Indenture shall bind its successors. SECTION 12.10. Separability. In case any provision in this Indenture ------------ or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 12.11. Legal Holidays. In any case where the date on which any -------------- payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date an which nominally due, and no interest shall accrue for the period from and after any such nominal date. SECTION 12.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ------------- ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION 12.13. Counterparts. This Indenture may be executed in any ------------ number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 12.14. Recording of Indenture. If this Indenture is subject to ---------------------- recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other person secured hereunder or for the enforcement of any right or remedy granted to the Trustee or the Trust Collateral Agent under this Indenture. SECTION 12.15. Trust Obligation. No recourse may be taken, directly or ---------------- indirectly, with respect to the obligations of the Issuer, AFC, the Servicer, the Owner Trustee, the Trust Collateral Agent or the Trustee on the Notes or under this Indenture, any other Basic Document or any certificate or other writing delivered in connection herewith or therewith, against (i) AFC, the Servicer, the Trustee, the Trust Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of AFC, the Servicer, the Trustee, the Trust Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, AFC, the Servicer, the Owner Trustee, the Trust Collateral Agent or the Trustee or of any successor or assign of AFC, the Servicer, the Trustee, the Trust Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Trustee, the Trust Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or -64- obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement. SECTION 12.16. No Petition. The Trustee and the Trust Collateral ----------- Agent, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against AFC, or the Issuer, or join in any institution against AFC, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents. SECTION 12.17. Inspection. The Issuer agrees that, on reasonable prior ---------- notice, it will permit any representative of the Trustee, of any Agent or of the Administrative Agent, during the Issuer's normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by independent certified public accountants, and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees, and independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known, (ii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any respects of the Trustee's business or that of its affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Trustee or an affiliate or an officer, director, employer or shareholder thereof is a party, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by the Indenture approved in advance by the Servicer or the Issuer or (E) to any independent or internal auditor, agent, employee or attorney of the Trustee having a need to know the same, provided that the Trustee advises such recipient of the confidential nature of the information being disclosed, or (iii) any other disclosure authorized by the Servicer or the Issuer. SECTION 12.18. Substituted Administrative Agent. Notwithstanding -------------------------------- anything else contained herein to the contrary, the parties hereto hereby acknowledge and consent to (i) the resignation by DBNY as the Administrative Agent, and (ii) and the appointment of Bankers Trust Company as the successor Administrative Agent, and Bankers Trust Company hereby accepts such appointment by its execution hereof as Administrative Agent. [SIGNATURE PAGE FOLLOWS] -65- IN WITNESS WHEREOF, the Issuer, the Trustee and the Administrative Agent have caused this Indenture to be duly executed by their respective officers, hereunto duly authorized, all as of the day and year first above written. AMERICREDIT MASTER TRUST, By: BANKERS TRUST (DELAWARE), not in its individual capacity but solely as Owner Trustee By:_______________________________________ Name: Title: BANK ONE, NA, not in its individual capacity but solely as Trustee and Trust Collateral Agent By:_______________________________________ Name: Title: BANKERS TRUST COMPANY, as Administrative Agent By:_______________________________________ Name: Title: By:_______________________________________ Name: Title: Effective as of the date hereof, the undersigned hereby resigns as Administrative Agent under the Indenture: DEUTSCHE BANK AG, NEW YORK BRANCH, By:_______________________________________ Name: Title: By:_______________________________________ Name: Title: [Indenture] SCHEDULE 2 "Class A Credit Score Enhancement Rate" means, as of any date, the sum ------------------------------------- of (1) the Step-Up Percentage and (2) the greater of (a) 17.50% and (b) the percentage set forth in the following table opposite the Net Spread as of such date in the column in which the weighted average AmeriCredit Score for the Eligible Receivables as of such date appears:
Class A Weighted Average AmeriCredit Score 220-224 225 to 229 230-234 235-239 240+ Net Spread ** 9.0% 34.00% 32.10% 31.60% 23.75% 17.50% ** 8.5% and *** 9.0% 34.20% 33.85% 33.50% 25.50% 19.50% **8.0% and *** 8.5% 35.00% 35.50% 34.05% 26.00% 23.25% **7.5% and *** 8.0% 35.60% 35.75% 35.00% 28.00% 23.50% **7.0% and *** 7.5% 37.20% 36.50% 35.40% 29.50% 26.25% **6.5% and *** 7.0% 41.70% 38.75% 37.75% 35.80% 29.50% **6.0% and *** 6.5% 42.40% 40.90% 38.25% 36.50% 32.05% **5.5% and *** 6.0% 48.10% 43.75% 40.00% 38.70% 32.75%
"Class B Credit Score Enhancement Rate" means, as of any date, the sum ------------------------------------- of (1) the Step-Up Percentage and (2) the greater of (a) 12.00% and (b) the percentage set forth in the following table opposite the Net Spread as of such date in the column in which the weighted average AmeriCredit Score for the Eligible Receivables as of such date appears:
Class B Weighted Average AmeriCredit Score 220-224 225 to 229 230-234 235-239 240+ Net Spread **9.0% 24.60% 23.50% 23.50% 17.75% 12.00% **8.5% and *** 9.0% 24.90% 25.25% 25.50% 19.50% 14.50% **8.0% and *** 8.5% 25.70% 27.00% 26.15% 20.00% 17.75% **7.5% and *** 8.0% 26.40% 27.75% 27.20% 22.00% 18.00%
** greater than *** less than/equal to ** 7.0% and *** 7.5% 28.20% 28.50% 28.40% 24.00% 20.25% ** 6.5% and *** 7.0% 29.70% 29.25% 28.75% 26.20% 22.50% ** 6.0% and *** 6.5% 31.40% 30.40% 29.25% 28.50% 24.80% ** 5.5% and *** 6.0% 33.10% 31.50% 29.50% 28.70% 25.00%
"Class C Credit Score Enhancement Rate" means, as of any date, the sum ------------------------------------- of (1) the Step-Up Percentage and (2) the greater of (a) 5.50% and (b) the percentage set forth in the following table opposite the Net Spread as of such date in the column in which the weighted average AmeriCredit Score for the Eligible Receivables as of such date appears:
Class C Weighted Average AmeriCredit Score 220-224 225 to 229 230-234 235-239 240+ Net Spread ** 9.0% 16.00% 13.00% 10.00% 7.00% 5.50% ** 8.5% and *** 9.0% 18.50% 13.50% 10.50% 7.50% 5.50% ** 8.0% and *** 8.5% 18.50% 14.00% 11.40% 8.50% 5.50% ** 7.5% and *** 8.0% 18.50% 15.00% 12.20% 9.00% 6.50% ** 7.0% and *** 7.5% 19.00% 16.00% 13.00% 9.50% 7.00% ** 6.5% and *** 7.0% 19.50% 16.75% 14.00% 10.00% 7.50% ** 6.0% and *** 6.5% 20.00% 17.50% 15.00% 10.50% 8.00% ** 5.5% and *** 6.0% 20.50% 18.25% 16.00% 11.50% 9.00%
"Class D Credit Score Enhancement Rate" shall have the meaning, if ------------------------------------- any, set forth in a supplement or amendment to the Indenture. "Class E Credit Score Enhancement Rate" shall have the meaning, if ------------------------------------- any, set forth in a supplement or amendment to the Indenture. ** greater than *** less than/equal to -2- SCHEDULE 3 Cumulative Net Loss Ratio Triggers ------------------------------------------------------------ Seasoning Cumulative Net ------------------------------------------------------------ in Months Loss Ratio ------------------------------------------------------------ 1 2.54% ------------------------------------------------------------ 2 2.54% ------------------------------------------------------------ 3 2.54% ------------------------------------------------------------ 4 4.24% ------------------------------------------------------------ 5 4.24% ------------------------------------------------------------ 6 4.24% ------------------------------------------------------------ 7 6.01% ------------------------------------------------------------ 8 6.01% ------------------------------------------------------------ 9 6.01% ------------------------------------------------------------ 10 7.86% ------------------------------------------------------------ 11 7.86% ------------------------------------------------------------ 12 7.86% ------------------------------------------------------------ 13 9.65% ------------------------------------------------------------ 14 9.65% ------------------------------------------------------------ 15 9.65% ------------------------------------------------------------ 16 10.53% ------------------------------------------------------------ 17 10.53% ------------------------------------------------------------ 18 10.53% ------------------------------------------------------------ ------------------------------------------------------------ 19 11.64% ------------------------------------------------------------ 20 11.64% ------------------------------------------------------------ 21 11.64% ------------------------------------------------------------ 22 12.50% ------------------------------------------------------------ 23 12.50% ------------------------------------------------------------ 24 12.50% ------------------------------------------------------------ 25 13.14% ------------------------------------------------------------ 26 13.14% ------------------------------------------------------------ 27 13.14% ------------------------------------------------------------ 28 13.61% ------------------------------------------------------------ 29 13.61% ------------------------------------------------------------ 30 13.61% ------------------------------------------------------------ 31 13.93% ------------------------------------------------------------ 32 13.93% ------------------------------------------------------------ 33 13.93% ------------------------------------------------------------ 34 14.14% ------------------------------------------------------------ 35 14.14% ------------------------------------------------------------ 36 14.14% ------------------------------------------------------------ 37 14.27% ------------------------------------------------------------ 38 14.27% ------------------------------------------------------------ 39 14.27% ------------------------------------------------------------ 40 14.34% ------------------------------------------------------------ 41 14.34% ------------------------------------------------------------ 42 14.34% ------------------------------------------------------------ -2- ------------------------------------------------------------ 43 14.37% ------------------------------------------------------------ 44 14.37% ------------------------------------------------------------ 45 14.37% ------------------------------------------------------------ 46 14.38% ------------------------------------------------------------ 47 14.38% ------------------------------------------------------------ 48 14.38% ------------------------------------------------------------ -3- SCHEDULE 4 Approved Trustees The Bank of New York The Chase Manhattan Bank / JPMorgan Chase Bank State Street Bank and Trust Company Deutsche Banc Alex. Brown Lehman Brothers U.S. Bank National Association Wells Fargo Bank Minnesota, National Association Manufacturers and Traders Trust Company Bankers Trust Company SCHEDULE 5 Level III Triggers ------------------------------------------------------------ Seasoning Delinquency ------------------------------------------------------------ in Months Ratio ------------------------------------------------------------ 1-12 4.0% ------------------------------------------------------------ 13-24 5.0% ------------------------------------------------------------ SCHEDULE 6 Level IV Triggers ------------------------------------------------------------ Seasoning Cumulative Net ------------------------------------------------------------ in Months Loss Ratio ------------------------------------------------------------ 1-3 2.13% ------------------------------------------------------------ 4-6 3.44% ------------------------------------------------------------ 7-9 4.80% ------------------------------------------------------------ 10-12 6.17% ------------------------------------------------------------ 13-15 7.45% ------------------------------------------------------------ 16-18 8.26% ------------------------------------------------------------ 19-21 9.17% ------------------------------------------------------------ 22-24 9.88% ------------------------------------------------------------ Table of Contents -----------------
Page ---- ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.................................... 2 SECTION 1.1. Definitions........................................................... 2 SECTION 1.2. Rules of Construction................................................. 2 ARTICLE II. The Notes.................................................................... 3 SECTION 2.1. Form.................................................................. 3 SECTION 2.2. Execution, Authentication and Delivery................................ 3 SECTION 2.3. Temporary Notes....................................................... 4 SECTION 2.4. Registration; Registration of Transfer and Exchange................... 4 SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes............................ 6 SECTION 2.6. Persons Deemed Owner.................................................. 6 SECTION 2.7. Payment of Principal and Interest..................................... 6 SECTION 2.8. Cancellation.......................................................... 8 SECTION 2.9. Release of Collateral................................................. 8 SECTION 2.10. Book-Entry Notes...................................................... 10 SECTION 2.11. Notices to Clearing Agency............................................ 11 SECTION 2.12. Definitive Notes...................................................... 11 SECTION 2.13. Subordination......................................................... 11 ARTICLE III. COVENANTS................................................................... 14 SECTION 3.1. Payment of Principal and Interest..................................... 14 SECTION 3.2. Maintenance of Office or Agency....................................... 14 SECTION 3.3. Money for Payments to be Held in Trust................................ 14 SECTION 3.4. Existence............................................................. 15 SECTION 3.5. Protection of Trust Estate............................................ 16 SECTION 3.6. Opinions as to Trust Estate........................................... 16 SECTION 3.7. Performance of Obligations; Servicing of Receivables.................. 17 SECTION 3.8. Negative Covenants.................................................... 18 SECTION 3.9. Annual Statement as to Compliance..................................... 18 SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms.................... 19 SECTION 3.11. Successor or Transferee............................................... 21 SECTION 3.12. No Other Business..................................................... 21 SECTION 3.13. No Borrowing.......................................................... 21 SECTION 3.14. Servicer's Obligations................................................ 21 SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities..................... 21 SECTION 3.16. Capital Expenditures.................................................. 22 SECTION 3.17. Compliance with Laws.................................................. 22 SECTION 3.18. Restricted Payments................................................... 22 SECTION 3.19. Notice of Events of Default........................................... 22 SECTION 3.20. Further Instruments and Acts.......................................... 22 SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust Agreement........ 22 SECTION 3.22. Income Tax Characterization........................................... 22 SECTION 3.23. Interest Rate Hedges.................................................. 23 SECTION 3.24. Ratings Reaffirmations................................................ 23 SECTION 3.25. Tangible Net Worth.................................................... 23 SECTION 3.26. Change in Name........................................................ 23 SECTION 3.27. Limitation on Transactions with Affiliates............................ 23 SECTION 3.28. Limitation on Investments............................................. 23 SECTION 3.29. Borrowing Base Confirmation........................................... 24
i Table of Contents ----------------- (continued)
Page ---- ARTICLE IV. SATISFACTION AND DISCHARGE..................................................... 24 SECTION 4.1. Satisfaction and Discharge of Indenture................................... 24 SECTION 4.2. Application of Trust Money................................................ 25 SECTION 4.3. Repayment of Moneys Held by Note Paying Agent............................. 25 ARTICLE V. REMEDIES........................................................................ 25 SECTION 5.1. Events of Default......................................................... 25 SECTION 5.2. Rights Upon Event of Default.............................................. 29 SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee........... 30 SECTION 5.4. Remedies.................................................................. 32 SECTION 5.5. Optional Preservation of the Receivables.................................. 33 SECTION 5.6. Priorities................................................................ 33 SECTION 5.7. [Reserved]................................................................ 33 SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal and Interest..... 33 SECTION 5.9. Restoration of Rights and Remedies........................................ 34 SECTION 5.10. Rights and Remedies Cumulative............................................ 34 SECTION 5.11. Delay or Omission Not a Waiver............................................ 34 SECTION 5.12. Control by Noteholders.................................................... 34 SECTION 5.13. Waiver of Past Defaults................................................... 35 SECTION 5.14. [Reserved]................................................................ 35 SECTION 5.15. Waiver of Stay or Extension Laws.......................................... 35 SECTION 5.16. Action on Notes........................................................... 35 SECTION 5.17. Performance and Enforcement of Certain Obligations........................ 35 ARTICLE VI. THE TRUSTEE AND THE TRUST COLLATERAL AGENT..................................... 36 SECTION 6.1. Duties of Trustee......................................................... 36 SECTION 6.2. Rights of Trustee......................................................... 38 SECTION 6.3. Individual Rights of Trustee.............................................. 39 SECTION 6.4. Trustee's Disclaimer...................................................... 39 SECTION 6.5. Conflicting Instructions.................................................. 39 SECTION 6.6. Reports by Trustee to Holders............................................. 39 SECTION 6.7. Compensation and Indemnity................................................ 39 SECTION 6.8. Replacement of Trustee.................................................... 40 SECTION 6.9. Successor Trustee by Merger............................................... 41 SECTION 6.10. Appointment of Co-Trustee or Separate Trustee............................. 42 SECTION 6.11. Eligibility; Disqualification............................................. 43 SECTION 6.12. Appointment and Powers.................................................... 43 SECTION 6.13. Performance of Duties..................................................... 44 SECTION 6.14. Limitation on Liability................................................... 44 SECTION 6.15. Reliance Upon Documents................................................... 44 SECTION 6.16. Successor Trust Collateral Agent.......................................... 45 SECTION 6.17. Compensation.............................................................. 46 SECTION 6.18. Representations and Warranties of the Trust Collateral Agent.............. 46 SECTION 6.19. Waiver of Setoffs......................................................... 46 SECTION 6.20. Control by the Trustee.................................................... 47 ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS................................................ 47 Section 7.1. Issuer To Furnish To Trustee Names and Addresses of Noteholders............ 47
ii Table of Contents ----------------- (continued)
Page ---- SECTION 7.2. Preservation of Information..................................... 47 ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES................................ 47 SECTION 8.1. Collection of Money............................................. 47 SECTION 8.2. Release of Trust Estate......................................... 48 SECTION 8.3. Opinion of Counsel.............................................. 48 ARTICLE IX. SUPPLEMENTAL INDENTURES............................................... 48 SECTION 9.1. [Reserved]..........................Error! Bookmark not defined. SECTION 9.2. Supplemental Indentures with Consent of Noteholders............. 48 SECTION 9.3. Execution of Supplemental Indentures............................ 51 SECTION 9.4. Effect of Supplemental Indenture................................ 51 SECTION 9.5. Reference in Notes to Supplemental Indentures................... 51 ARTICLE X. REDEMPTION OF NOTES.................................................... 51 SECTION 10.1. Redemption...................................................... 51 SECTION 10.2. Form of Redemption Notice....................................... 52 SECTION 10.3. Notes Payable on Redemption Date................................ 53 SECTION 10.4. Limited Amortization............................................ 53 ARTICLE XI. THE ADMINISTRATIVE AGENT.............................................. 53 SECTION 11.1. Appointment..................................................... 53 SECTION 11.2. Delegation of Duties............................................ 53 SECTION 11.3. Exculpatory Provisions.......................................... 53 SECTION 11.4. Reliance by Administrative Agent................................ 54 SECTION 11.5. Notices......................................................... 54 SECTION 11.6. Non-Reliance on Administrative Agent and Other Noteholders...... 54 SECTION 11.7. Indemnification................................................. 55 SECTION 11.8. Administrative Agent in its Individual Capacity................. 55 SECTION 11.9. Successor Administrative Agent.................................. 56 ARTICLE XII. MISCELLANEOUS........................................................ 56 SECTION 12.1. Compliance Certificates and Opinions, etc....................... 56 SECTION 12.2. Form of Documents Delivered to Trustee.......................... 57 SECTION 12.3. Acts of Noteholders............................................. 58 SECTION 12.4. Notices, etc., to Trustee, Issuer and Rating Agencies........... 58 SECTION 12.5. Notices to Noteholders; Waiver.................................. 59 SECTION 12.6. Borrowings; Swingline Borrowings................................ 60 SECTION 12.7. Additional Commitments; Reallocation of Certain Commitment...... 63 SECTION 12.8. Effect of Headings and Table of Contents........................ 63 SECTION 12.9. Successors and Assigns.......................................... 63 SECTION 12.10. Separability.................................................... 64 SECTION 12.11. Legal Holidays.................................................. 64 SECTION 12.12. GOVERNING LAW................................................... 64 SECTION 12.13. Counterparts.................................................... 64 SECTION 12.14. Recording of Indenture.......................................... 64 SECTION 12.15. Trust Obligation................................................ 64 SECTION 12.16. No Petition..................................................... 65 SECTION 12.17. Inspection...................................................... 65
iii Table of Contents ----------------- (continued)
Page ---- Exhibits EXHIBIT A-1 Form of Class A-1 Note EXHIBIT A-2 Form of Class A-2 Note EXHIBIT A-3 Form of Class S Note EXHIBIT A-4 Form of Class B Note EXHIBIT A-5 Form of Class C Note EXHIBIT A-6 Form of Class D Note EXHIBIT A-7 Form of Class E Note EXHIBIT B Form of Interest Rate Hedge Assignment Acknowledgment EXHIBIT C Form of Interest Rate Cap EXHIBIT D Form of Transfer Request EXHIBIT E Form of Borrowing Base Confirmation SCHEDULES SCHEDULE 1 Approved Hedge Counterparties SCHEDULE 2 Class Credit Score Enhancement Rate SCHEDULE 3 Cumulative Net Loss Ratio Triggers SCHEDULE 4 Approved Trustees SCHEDULE 5 Level III Triggers SCHEDULE 6 Level IV Triggers ANNEX ANNEX A Defined Terms
iv EX-10.5 7 dex105.txt MASTER RECEIVABLES PURCHASE AGREEMENT Exhibit 10.5 EXECUTION COPY MASTER RECEIVABLES PURCHASE AGREEMENT among AMERICREDIT MTN RECEIVABLES TRUST III, as Purchaser, AMERICREDIT FINANCIAL SERVICES, INC., individually and as Seller, AmeriCredit MTN Corp. III, as Seller, and JPMORGAN Chase Bank, as Collateral Agent dated as of February 25, 2002 TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS............................................................... 1 SECTION 1.1 General............................................................. 1 SECTION 1.2 Specific Terms...................................................... 1 SECTION 1.3 Usage of Terms...................................................... 2 SECTION 1.4 No Recourse......................................................... 3 ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY............ 3 SECTION 2.1 Conveyance of the Receivables and the Other Conveyed Property....... 3 ARTICLE III. REPRESENTATIONS AND WARRANTIES.......................................... 4 SECTION 3.1 Representations and Warranties of AFS............................... 4 SECTION 3.2 [Reserved].......................................................... 6 SECTION 3.3 Representations and Warranties of AMTN.............................. 6 ARTICLE IV. COVENANTS OF SELLERS..................................................... 8 SECTION 4.1 Liens in Force...................................................... 8 SECTION 4.2 No Impairment....................................................... 8 SECTION 4.3 No Amendments....................................................... 8 SECTION 4.4 Restrictions on Liens............................................... 8 SECTION 4.5 Preservation of Collateral.......................................... 8 SECTION 4.6 Transfers Treated as Sales.......................................... 8 ARTICLE V. REPURCHASES............................................................... 9 SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty................... 9 SECTION 5.2 Reassignment of Purchased Receivables............................... 9 SECTION 5.3 Waivers............................................................. 10 ARTICLE VI. CONDITIONS PRECEDENT..................................................... 10 SECTION 6.1 Conditions Precedent to each Receivables Sale....................... 10 ARTICLE VII. MISCELLANEOUS........................................................... 11 SECTION 7.1 Liability of Sellers................................................ 11 SECTION 7.2 Merger or Consolidation of Sellers.................................. 11 SECTION 7.3 Limitation on Liability of Sellers and Others....................... 11 SECTION 7.4 Amendment........................................................... 11 SECTION 7.5 Notices............................................................. 11 SECTION 7.6 Merger and Integration.............................................. 12 SECTION 7.7 Severability of Provisions.......................................... 12 SECTION 7.8 Intention of the Parties............................................ 12 SECTION 7.9 Governing Law....................................................... 12 SECTION 7.10 Counterparts........................................................ 12 SECTION 7.11 Conveyance of the Receivables and the Other Conveyed Property to the Collateral Agent.................................................. 12
SECTION 7.12 Nonpetition Covenant............................................... 13 SECTION 7.13 Limitation of Liability of Trustee................................. 13 SECTION 7.14 Additional Transfers............................................... 13 SECTION 7.15 Binding Effect..................................................... 13
EXHIBITS Exhibit A -- Form of Supplement ii MASTER RECEIVABLES PURCHASE AGREEMENT ------------------------------------- THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as of February 25, 2002, executed among AmeriCredit MTN Receivables Trust III, a Delaware business trust, as purchaser ("Purchaser"), JPMorgan Chase Bank, as collateral agent (the --------- "Collateral Agent"), AmeriCredit MTN Corp. III, a Delaware corporation, as ---------------- seller ("AMTN") and AmeriCredit Financial Services, Inc., a Delaware ---- corporation, as seller ("AFS" and together with AMTN, the "Sellers"). --- ------- W I T N E S S E T H : - - - - - - - - - - WHEREAS, Purchaser has agreed to purchase from time to time from the Sellers, and the Sellers, pursuant to this Agreement, have agreed to transfer from time to time to the Purchaser the Receivables and Other Conveyed Property. NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter contained, and for other good and valuable consideration, the receipt of which is acknowledged, Purchaser and the Sellers, intending to be legally bound, hereby agree as follows: ARTICLE I. DEFINITIONS SECTION 1.1 General. The specific terms defined in this Article ------- include the plural as well as the singular. The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision, and Article, Section, Schedule and Exhibit references, unless otherwise specified, refer to Articles and Sections of and Schedules and Exhibits to this Agreement. Capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Security Agreement (as defined herein) or the Servicing and Custodian Agreement (as defined herein). SECTION 1.2 Specific Terms. Whenever used in this Agreement, the -------------- following words and phrases, unless the context otherwise requires, shall have the following meanings: "Agreement" shall mean this Master Receivables Purchase Agreement and --------- all amendments hereof and supplements hereto. "Collateral Agent" means JPMorgan Chase Bank, as collateral agent and ---------------- any successor collateral agent appointed and acting pursuant to the Security Agreement. "Other Conveyed Property" means all property conveyed by the Sellers ----------------------- to the Purchaser pursuant to this Agreement and the Supplement other than the Receivables. "Purchase Amount" means, with respect to a Receivables the --------------- Outstanding Balance of such Receivable and all accrued and unpaid interest on such Receivables, after giving effect to the receipt of any funds collected (from whatever source on such Receivable). "Receivables" means the Receivables (as defined in the Security ----------- Agreement) listed on the Schedules of Receivables attached to each Supplement. "Receivables Transfer Date" means the date specified in the related ------------------------- Supplement as the date of contribution and/or sale of Receivables by the Sellers named therein to the Purchaser. "Relevant Cutoff Date" means the date specified in the related -------------------- Supplement, provided, however that such date shall be on or before the related Receivables Transfer Date. "Repurchase Event" means the occurrence of a breach of any of ---------------- Seller's representations and warranties hereunder or under the Servicing and Custodian Agreement, or the breach of any Seller's covenants set forth in Article IV. "Sale Agreement" means each "Sale Agreement" in substantially the -------------- form attached as Exhibit A to the Sale and Contribution Agreement, which is hereafter executed by AFS and AMTN. "Sale and Contribution Agreement" means the Sale and Contribution ------------------------------- Agreement, dated as of the dated hereof, by and between AMTN (as Purchaser) and AFS (as Seller). "Schedules of Receivables" means the lists of Receivables sold and ------------------------ transferred pursuant to this Agreement and the Schedules which are attached to the Supplements as Schedules A and B thereto. "Security Agreement" means the Security Agreement, dated as of the ------------------ date hereof, by and among the Purchaser (as Debtor), AFS (in its individual capacity and as Servicer), AMTN and the Collateral Agent. "Servicing and Custodian Agreement" means the Servicing and Custodian --------------------------------- Agreement, dated as of the date hereof, by and among AFS (as Servicer and as Custodian), the Trust and the Collateral Agent. "Supplement" means each agreement by and among the Sellers and the ---------- Purchaser pursuant to which the Purchaser will acquire Receivables, substantially in the form of Exhibit A hereto. SECTION 1.3 Usage of Terms. With respect to all terms used in this -------------- Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other gender; references to "writing" include printing, typing, lithography, and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all subsequent amendments thereto or changes therein entered into in accordance with their respective terms and not prohibited by this Agreement, the Servicing and Custodian Agreement, the Security Agreement or the Note Purchase Agreement; references to Persons include their permitted successors and assigns; and the terms "include" or "including" mean "include without limitation" or "including without limitation." 2 SECTION 1.4 No Recourse. Without limiting the obligations of Sellers ----------- hereunder and except to the extent otherwise provided in the Transaction Documents, no recourse may be taken, directly or indirectly, under this Agreement or any certificate or other writing delivered in connection herewith or therewith, against any stockholder, officer or director, as such, of Sellers, or of any predecessor or successor of Sellers. ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY SECTION 2.1 Conveyance of the Receivables and the Other Conveyed ---------------------------------------------------- Property. By execution of this Agreement and subject to the terms and conditions - -------- of this Agreement and simultaneously with the execution and delivery of the related Supplement, the relevant Sellers shall sell and/or contribute, transfer and assign to the Purchaser (collectively, the "Conveyance") without recourse ---------- (but without limitation of its obligations in this Agreement and the other Transaction Documents), and the Purchaser shall purchase or acquire as a contribution, all right, title and interest of such Sellers in and to: (i) each and every Receivable listed on Schedule A and B to the related Supplement and all Collections thereon or in respect thereof on or after the Relevant Cutoff Date; (ii) the Related Security with respect to each Receivable; (iii) all Proceeds and the rights to receive Proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies or Collateral Insurance (if any), covering Financed Vehicles or Obligors; (iv) all rights under any service contracts on the related Financed Vehicles; (v) all rights of the Sellers against Dealers pursuant to Dealer Agreements or Dealer Assignments; (vi) all rights of Seller against Third Party Lenders pursuant to Third Party Loan Purchase Agreements and/or Third Party Assignments. (vii) the related Records; and (viii) all Proceeds of any or all of the foregoing. 3 ARTICLE III. REPRESENTATIONS AND WARRANTIES SECTION 3.1 Representations and Warranties of AFS. AFS makes the ------------------------------------- following representations and warranties as of the date hereof and as of each Receivables Transfer Date, as the case may be, on which Purchaser relies in purchasing the Receivables and the Other Conveyed Property. Such representations are made as of the execution and delivery of this Agreement and as of the execution and delivery by AFS of any Supplement, but shall survive the sale and/or contribution, transfer and assignment of the Receivables and the Other Conveyed Property hereunder and under any Supplement, and the grant of the security interest therein and the continuing lien therein by Purchaser to the Collateral Agent for the benefit of the Secured Parties under the Security Agreement. AFS and Purchaser agree that Purchaser will assign to Collateral Agent all Purchaser's rights under this Agreement and that the Collateral Agent will thereafter be entitled to enforce this Agreement against AFS in the Collateral Agent's own name on behalf of the Secured Parties. (a) Eligible Receivables. Upon each Receivables Transfer Date, the -------------------- Purchaser (i) will acquire each Receivable and the Other Conveyed Property free and clear of any Adverse Claim and (ii) will purchase each Receivable at fair market value. Each Receivable (including all Receivables sold hereunder by AFS or AMTN) as of the date hereof and the Receivables Transfer Date is an Eligible Receivable. (b) Organization and Good Standing. AFS has been duly organized and ------------------------------ is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire, own and sell the Receivables and the Other Conveyed Property to be transferred to Purchaser. (c) Due Qualification. AFS is duly qualified to do business as a ----------------- foreign corporation in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification. (d) Power and Authority. AFS has the power and authority to execute ------------------- and deliver this Agreement and its Transaction Documents and to carry out its terms and their terms, respectively; AFS has full power and authority to sell and/or contribute, transfer and assign the Receivables and the Other Conveyed Property to be sold and/or contributed, transferred and assigned to and deposited with Purchaser hereunder and has duly authorized such sale or contribution, transfer and assignment to Purchaser by all necessary corporate action; and the execution, delivery and performance of this Agreement and AFS's Transaction Documents have been duly authorized by AFS by all necessary corporate action. (e) Valid Sale; Binding Obligations. This Agreement and AFS's ------------------------------- Transaction Documents have been duly executed and delivered, shall effect a valid sale or 4 contribution, transfer and assignment of the Receivables and the Other Conveyed Property to the Purchaser, enforceable against AFS and creditors of and purchasers from AFS; and this Agreement and AFS's Transaction Documents constitute legal, valid and binding obligations of AFS enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law. (f) No Violation. The consummation of the transactions ------------ contemplated by this Agreement and the Transaction Documents, and the fulfillment of the terms of this Agreement and the Transaction Documents, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice, lapse of time or both) a default under, the articles of incorporation or bylaws of AFS, or any indenture, agreement, mortgage, deed of trust or other instrument to which AFS is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, the Security Agreement and the Note Purchase Agreement, or violate any law, order, rule or regulation applicable to AFS of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over AFS or any of its properties and do not require any action by or require the consent or approval of or the filing of any notice with any Official Body or any other Person. (g) No Proceedings. There are no proceedings or investigations -------------- pending or, to AFS's knowledge, threatened against AFS, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over AFS or its properties (i) asserting the invalidity of this Agreement or any of the Transaction Documents, (ii) seeking to prevent the issuance of the Note or the consummation of any of the transactions contemplated by this Agreement or any of the Transaction Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by AFS of its obligations under, or the validity or enforceability of, this Agreement or any of the Transaction Documents or (iv) seeking to affect adversely the federal income tax or other federal, state or local tax attributes of, or seeking to impose any excise, franchise, transfer or similar tax upon, the transfer and acquisition of the Receivables and the Other Conveyed Property hereunder or under the Security Agreement. (h) Chief Executive Office. The chief executive office of AFS is ---------------------- located at 801 Cherry Street, Fort Worth, Texas 76102. (i) No Adverse Selection. No selection procedures adverse to the -------------------- parties hereto or to the Secured Parties have been utilized in selecting the Receivables from all other similar Receivables owned by AFS and its Affiliates. (j) Solvency. AFS shall not be insolvent on any Receivables -------- Transfer Date and no Conveyance will cause AFS to become insolvent. 5 SECTION 3.2 [Reserved] ---------- SECTION 3.3 Representations and Warranties of AMTN. AMTN makes -------------------------------------- the following representations and warranties as of the date hereof and as of each Receivables Transfer Date, as the case may be, on which Purchaser relies in purchasing the Receivables and the Other Conveyed Property. Such representations are made as of the execution and delivery of this Agreement and as of the execution and delivery by AMTN of any Supplement, but shall survive the sale and/or contribution, transfer and assignment of the Receivables and the Other Conveyed Property hereunder and under any Supplement, and the sale and/or contribution, transfer and assignment thereof by Purchaser to the Collateral Agent under the Security Agreement. AMTN and Purchaser agree that Purchaser will assign to Collateral Agent all Purchaser's rights under this Agreement and that the Collateral Agent will thereafter be entitled to enforce this Agreement against AMTN in the Collateral Agent's own name on behalf of the Secured Parties. (a) Eligible Receivables. Upon each Receivables Transfer Date, -------------------- the Purchaser (i) will acquire each Receivable and the Other Conveyed Property free and clear of any Adverse Claim and (ii) will purchase each Receivable at fair market value. Each Receivable (including all Receivables sold hereunder by AFS or AMTN) as of the date hereof and the Receivables Transfer Date is an Eligible Receivable. (b) Organization and Good Standing. AMTN has been duly ------------------------------ organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire, own and sell the Receivables and the Other Conveyed Property to be transferred to Purchaser. (c) Power and Authority. AMTN has the power and authority to ------------------- execute and deliver this Agreement and its Transaction Documents and to carry out its terms and their terms, respectively; AMTN has full power and authority to sell and/or contribute, transfer and assign the Receivables and the Other Conveyed Property to be sold and/or contributed, transferred and assigned to and deposited with Purchaser hereunder and has duly authorized such sale and/or contribution, transfer and assignment to Purchaser by all necessary corporate action; and the execution, delivery and performance of this Agreement and AMTN's Transaction Documents have been duly authorized by AMTN by all necessary corporate action. (d) Due Qualification. AMTN 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 property or the conduct of its business requires such qualification (e) Valid Sale; Binding Obligations. This Agreement and AMTN's ------------------------------- Transaction Documents have been duly executed and delivered, shall effect a valid sale and/or contribution, transfer and assignment of the Receivables and the Other Conveyed Property to the Purchaser, enforceable against AMTN and creditors of and purchasers 6 from AMTN; and this Agreement and AMTN's Transaction Documents constitute legal, valid and binding obligations of AMTN enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law. (f) No Violation. The consummation of the transactions ------------ contemplated by this Agreement and the Transaction Documents and the fulfillment of the terms of this Agreement and the Transaction Documents shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice, lapse of time or both) a default under, the articles of incorporation or bylaws of AMTN, or any indenture, agreement, mortgage, deed of trust or other instrument to which AMTN is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, the Security Agreement and the Note Purchase Agreement, or violate any law, order, rule or regulation applicable to AMTN of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over AMTN or any of its properties and do not require any action by or require the consent or approval of or the filing of any notice with any Official Body or any other Person. (g) No Proceedings. There are no proceedings or investigations -------------- pending or, to AMTN's knowledge, threatened against AMTN, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over AMTN or its properties (i) asserting the invalidity of this Agreement or any of the Transaction Documents, (ii) seeking to prevent the issuance of the Note or the consummation of any of the transactions contemplated by this Agreement or any of the Transaction Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by AMTN of its obligations under, or the validity or enforceability of, this Agreement or any of the Transaction Documents, or (iv) seeking to affect adversely the federal income tax or other federal, state or local tax attributes of, or seeking to impose any excise, franchise, transfer or similar tax upon, the transfer and acquisition of the Receivables and the Other Conveyed Property hereunder or under the Security Agreement. (h) Chief Executive Office. The chief executive office of AMTN ---------------------- is located at 801 Cherry Street, Fort Worth, Texas 76102. (i) No Adverse Selection. No selection procedures adverse to the -------------------- parties hereto or to the Secured Parties have been utilized in selecting the Receivables from all other similar Receivables owned by AMTN and its Affiliates. (j) Solvency. AMTN shall not be insolvent on any Receivables -------- Transfer Date and no Conveyance will cause AMTN to become insolvent. 7 ARTICLE IV. COVENANTS OF SELLERS SECTION 4.1 Liens in Force. The Financed Vehicle securing each -------------- Receivable shall not be released by the related Seller in whole or in part from the security interest granted under the related Receivable, except upon payment in full of the Receivable or as otherwise contemplated herein or the Transaction Documents and the related Seller shall not take or permit any action inconsistent with the foregoing. SECTION 4.2 No Impairment. The related Seller shall do nothing to impair the rights of the Purchaser or the Secured Parties in the Receivables, the Dealer Agreements, the Dealer Assignments, the Insurance Policies or any other property or interest comprising the Other Conveyed Property. SECTION 4.3 No Amendments. The Sellers shall not take or permit ------------- any action to extend or otherwise amend the terms of any Receivable, except in accordance with the Transaction Documents. SECTION 4.4 Restrictions on Liens. The Sellers shall not: (i) --------------------- create or incur or agree to create or incur, or consent to cause (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien or restriction on transferability of the Receivables or of any Other Conveyed Property except for the Lien in favor of the Purchaser and the Collateral Agent on behalf of the Secured Parties as assignee thereof, and the restrictions on transferability imposed by this Agreement or (ii) sign or file under the Uniform Commercial Code (the "UCC") of any jurisdiction any financing statement or sign any security agreement authorizing any secured party thereunder to file such financing statement, with respect to the Receivables or to any Other Conveyed Property, except in each case any such instrument solely securing the rights and preserving the Lien of the Purchaser and the Collateral Agent as assignee thereof. The Sellers will take no action to cause any Receivable to be evidenced by an instrument (as such term is defined in the relevant UCC). SECTION 4.5 Preservation of Collateral. The Sellers will do, -------------------------- execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such instruments of transfer or take such other steps or actions as may be necessary, or required by the Purchaser or the Collateral Agent or the Note Insurer, to effect the Conveyance, to perfect the security interest granted in the Receivables and the Other Conveyed Property to the Collateral Agent on behalf of the Secured Parties, to ensure that such Conveyance and security interest ranks prior to all other Liens and to preserve the priority of such Conveyance and security interest and the validity and enforceability thereof. SECTION 4.6 Transfers Treated as Sales. Each Seller agrees to -------------------------- treat each transfer for all purposes other than federal income tax purposes (but including, without limitation, financial accounting purposes) as a sale on all relevant books, records, financial statements and other applicable documents; for federal income tax purposes, the parties hereto intend the contribution of Receivables by the Sellers to the Purchaser to be characterized as a contribution of property to a partnership in exchange for an interest in the partnership in which 8 no gain or loss shall be recognized pursuant to Section 721(a) of the Internal Revenue Code of 1986, as amended. In the event that, notwithstanding the intent of each Seller, the transfer and assignment contemplated hereby is not held to be a sale, each Seller hereby grants to the Purchaser a security interest in the Receivables and Other Conveyed Property described in each Supplement. ARTICLE V. REPURCHASES SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty. ------------------------------------------------- Upon the occurrence of a Repurchase Event, AFS shall (unless the breach which is the subject of such Repurchase Event shall have been cured in all material respects by the last day of the second Settlement Period after such breach), repurchase the Receivable relating thereto (whether or not it was the Seller thereof) from the Purchaser and, simultaneously with the repurchase of the Receivable, AFS shall deposit the Purchase Amount in full, without deduction or offset, to the Collection Account, pursuant to Section 2.7(b) of the Security Agreement. It is understood and agreed that the obligation of AFS to repurchase any Receivable, as to which a breach has occurred and is continuing, shall, if such obligation is fulfilled, constitute the sole remedy against AFS or AMTN for such breach available to Purchaser, the Note Insurer or the Collateral Agent on behalf of the Secured Parties except as otherwise specified in the Insurance Agreement. The provisions of this Section 5.1 are intended to grant the Collateral Agent and the Note Insurer a direct right against AFS to demand performance hereunder, and in connection therewith, AFS waives any requirement of prior demand against Purchaser with respect to such repurchase obligation. Any such repurchase shall take place in the manner specified in Section 2.7 of the Servicing and Custodian Agreement. Notwithstanding any other provision of this Agreement or the Servicing and Custodian Agreement to the contrary, the obligation of AFS under this Section shall not terminate upon a termination of AFS as Servicer under the Servicing and Custodian Agreement and shall be performed in accordance with the terms hereof notwithstanding the failure of the Servicer or Purchaser to perform any of their respective obligations with respect to such Receivable under the Servicing and Custodian Agreement. SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit ------------------------------------- in the Collection Account of the Purchase Amount of any Receivable repurchased by AFS under Section 5.1 hereof or Section 2.7 of the Servicing and Custodian Agreement, Purchaser (at AFS's expense) shall take such steps as may be reasonably requested by AFS in order to assign to AFS all of Purchaser's and the Collateral Agent's right, title and interest in and to such Receivable and all security and documents and all Other Conveyed Property conveyed to Purchaser and the Collateral Agent directly relating thereto, without recourse, representation or warranty, except as to the absence of Liens created by or arising as a result of actions of Purchaser or the Collateral Agent. Such assignment shall be a sale and assignment outright, and not for security. If, following the reassignment of a Purchased Receivable, in any enforcement suit or legal proceeding, it is held that AFS may not enforce any such Receivable on the ground that it shall not be a real party in interest or a holder entitled to enforce the Receivable, Purchaser and the Collateral Agent shall, at the expense of AFS, take such steps as AFS deems reasonably 9 necessary to enforce the Receivable, including bringing suit in Purchaser's or in the Collateral Agent's name. SECTION 5.3 Waivers. No failure or delay on the part of Purchaser, or ------- the Collateral Agent on behalf of the Secured Parties as assignee of Purchaser, in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other or future exercise thereof or the exercise of any other power, right or remedy. ARTICLE VI. CONDITIONS PRECEDENT SECTION 6.1 Conditions Precedent to each Receivables Sale. Each sale --------------------------------------------- and/or contribution of Receivables shall be subject to the conditions precedent that: (a) each relevant Seller and the Purchaser shall have executed and delivered to the Collateral Agent and the Note Insurer a duly executed Supplement substantially in the form attached hereto as Exhibit A which shall include Schedules listing the Receivables to be sold and/or contributed on such Receivables Transfer Date and the Seller shall have delivered the Receivable Files to the Custodian and any other documents as the Purchaser may request; (b) all conditions to a Receivables Delivery under the Security Agreement shall have been fulfilled; (c) the Sellers shall, to the extent required by the Security Agreement, have deposited in the Collection Account all Collections received after the Relevant Cutoff Date with respect to the Receivables to be sold on such Receivables Transfer Date; (d) the Sellers shall take any action (including, but not limited to, the filing of appropriate UCC-1 financing statements and/or UCC-3 releases, as applicable) required to (i) perfect the ownership interest of the Purchaser in the Receivables and the Other Conveyed Property and (ii) provide the Collateral Agent on behalf of the Secured Parties with a first priority perfected security interest in the Receivables and the Other Conveyed Property and shall promptly provide to each of the Purchaser and the Collateral Agent and the Note Insurer a copy of a stamped acknowledgement copy of such UCC-1 or UCC-3 (if any are necessary or required); (e) such sale or contribution shall be reflected on the books and records of the Trust; (f) and to the extent that, after giving effect to the sale and/or contribution of Receivables made on such date there would be one or more states of the United States in which Financed Vehicles securing more than 10% of the Net Receivables Balance were titled and as to which states an opinion of counsel, in form and substance acceptable to the Note Insurer, had not previously been given in connection with this facility as to the 10 perfection, priority and enforceability of the Collateral Agent's security interest for each such state, AFS shall cause, within thirty (30) days, to be delivered to the Purchaser, the Rating Agencies, the Collateral Agent and the Note Insurer such an opinion of counsel. ARTICLE VII. MISCELLANEOUS SECTION 7.1 Liability of Sellers. Sellers shall be liable in -------------------- accordance herewith only to the extent of the obligations in this Agreement specifically undertaken by Sellers and the representations and warranties of Sellers. SECTION 7.2 Merger or Consolidation of Sellers . Any corporation or ---------------------------------- other entity (i) into which a Seller may be merged or consolidated, (ii) resulting from any merger or consolidation to which a Seller is a party or (iii) succeeding to the business of Seller shall execute an agreement of assumption to perform every obligation of such Seller under this Agreement and, whether or not such assumption agreement is executed, shall be the successor to such Seller hereunder (without relieving such Seller of their responsibilities hereunder, if it survives such merger or consolidation) without the execution or filing of any document or any further action by any of the parties to this Agreement; provided, however, that, with respect to AMTN, any such merger or consolidation is subject in all respects to the restrictions set forth in its articles of incorporation. SECTION 7.3 Limitation on Liability of Sellers and Others. Each --------------------------------------------- Seller and any director, officer, employee or agent thereof may rely in good faith on the advice of counsel or on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement. No Seller shall be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Agreement or its Transaction Documents. SECTION 7.4 Amendment. --------- (a) This Agreement may be amended by Sellers and Purchaser (with the consent of the Note Insurer) without the consent of the Collateral Agent (i) to cure any ambiguity or (ii) to correct any provisions in this Agreement; provided, however, that such action shall not adversely affect -------- ------- the interests of any Secured Party. (b) This Agreement may also be amended from time to time by Sellers and Purchaser with the consent of the Collateral Agent and of the Note Insurer, in accordance with the Security Agreement. SECTION 7.5 Notices. All demands, notices and communications to ------- Sellers or Purchaser hereunder shall be in writing, personally delivered, or sent by telecopier (subsequently confirmed in writing), reputable overnight courier or mailed by certified mail, return receipt requested, and shall be deemed to have been given upon receipt (a) in the case of Sellers, to AmeriCredit Financial Services, Inc., 801 Cherry Street, Fort Worth, Texas 76102, Attention: Chief Financial Officer, (b) in the case of Purchaser, to AmeriCredit MTN 11 Receivables Trust III, c/o Bankers Trust (Delaware), E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19085, Attention: Corporate Trust Administration, or (c) in the case of the Collateral Agent, JPMorgan Chase Bank, 450 W. 33rd Street, New York, NY 10001, Attention: AmeriCredit MTN Receivables Trust III, or such other address as shall be designated by a party in a written notice delivered to the other party or to the Collateral Agent, as applicable. SECTION 7.6 Merger and Integration. Except as specifically stated ---------------------- otherwise herein, this Agreement and Transaction Documents set forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement and the Transaction Documents. This Agreement may not be modified, amended, waived or supplemented except as provided herein. SECTION 7.7 Severability of Provisions. If any one or more of the -------------------------- covenants, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, provisions or terms shall be deemed severable from the remaining covenants, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement. SECTION 7.8 Intention of the Parties. The execution and delivery of ------------------------ this Agreement shall constitute an acknowledgment by Sellers and Purchaser that they intend that the assignments and transfers herein contemplated constitute a sale and/or contribution, transfer and assignment outright, and not for security, of the Receivables and the Other Conveyed Property, conveying good title thereto free and clear of any Liens, from Sellers to Purchaser, and that the Receivables and the Other Conveyed Property shall not be a part of Sellers' estates in the event of the bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, or the occurrence of another similar event, of, or with respect to Sellers. In the event that such conveyance is determined to be made as security for a loan made by Purchaser or the Secured Parties to Sellers, the parties intend that Sellers shall have granted to Purchaser a security interest in all of Sellers' right, title and interest in and to the Receivables and the Other Conveyed Property conveyed pursuant to Section 2.1 hereof, and that this Agreement shall constitute a security agreement under applicable law. SECTION 7.9 Governing Law. This Agreement shall be construed in ------------- accordance with the laws of the State of New York without regard to the principles of conflicts of laws thereof and the obligations, rights and remedies of the parties under this Agreement shall be determined in accordance with such laws. SECTION 7.10 Counterparts. For the purpose of facilitating the ------------ execution of this Agreement and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. SECTION 7.11 Conveyance of the Receivables and the Other Conveyed ---------------------------------------------------- Property to the Collateral Agent. Sellers acknowledge that Purchaser intends, - -------------------------------- pursuant to the Security Agreement, to pledge the Receivables and the Other Conveyed Property, together with 12 its rights under this Agreement, to the Collateral Agent on the Receivables Transfer Dates. Sellers acknowledge and consent to such conveyance and pledge and waive any further notice thereof and covenant and agree that the representations and warranties of Sellers contained in this Agreement and the rights of Purchaser hereunder are intended to benefit the Note Insurer, the Collateral Agent and the Secured Parties. In furtherance of the foregoing, Sellers covenant and agree to perform their duties and obligations hereunder, in accordance with the terms hereof for the benefit of the Collateral Agent and the Secured Parties and that, notwithstanding anything to the contrary in this Agreement, Sellers shall be directly liable to the Collateral Agent and the Secured Parties and that the Note Insurer may enforce, and the Collateral Agent shall enforce, at the direction of the Note Insurer, the duties and obligations of Sellers under this Agreement against Sellers for the benefit of the Secured Parties and the Collateral Agent. SECTION 7.12 Nonpetition Covenant. Neither Purchaser nor Sellers -------------------- shall petition or otherwise invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Purchaser, AMTN or the Debtor under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Purchaser, AMTN or the Debtor (as defined in the Note Purchase Agreement) or any substantial part of their respective property, or ordering the winding up or liquidation of the affairs of the Purchaser, AMTN or the Debtor. This Section 7.12 shall be continuing and shall survive any termination of this Agreement. SECTION 7.13 Limitation of Liability of Trustee. It is expressly ---------------------------------- understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Bankers Trust (Delaware), not individually or personally but solely as Trustee of the Purchaser, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Purchaser is made and intended not as personal representations, undertakings and agreements by Bankers Trust (Delaware) but is made and intended for the purpose for binding only the Purchaser, (c) nothing herein contained shall be construed as creating any liability on Bankers Trust (Delaware), individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Bankers Trust (Delaware) be personally liable for the payment of any indebtedness or expenses of the Purchaser or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Purchaser under this Agreement or any other Transaction Documents. SECTION 7.14 Additional Transfers. It is contemplated that from time -------------------- to time on and/or after the date hereof that AFS will transfer (by sale or contribution) to AMTN, pursuant to the provisions of a Sale Agreement (substantially in the form of Exhibit A attached to the Sale and Contribution Agreement), as of the Relevant Cutoff Date set forth therein, certain Receivables, as described on the Schedule 1 attached to such Sale Agreement. Furthermore, it is anticipated that such Receivables so transferred to AMTN pursuant to a Sale Agreement will be retransferred by AMTN to the Purchaser pursuant to the terms of this Agreement. SECTION 7.15 Binding Effect. This Agreement shall be binding upon and -------------- shall inure to the benefit of the parties hereto and their respective successors and assigns. In 13 addition, each of the Secured Parties shall be an express third party beneficiary hereof entitled to enforce the terms hereof as if it were a party hereto. Concurrently with the appointment of a successor Collateral Agent under the Security Agreement, the parties hereto shall amend this Agreement to make said Collateral Agent, the successor to the Collateral Agent hereunder. [Remainder of page intentionally left blank] 14 IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be duly executed by their respective officers as of the day and year first above written. AMERICREDIT MTN RECEIVABLES TRUST III, as Purchaser By: BANKERS TRUST (DELAWARE), not in its individual capacity but solely as Trustee on behalf of the Trust By ___________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., as Seller By ___________________________________ Name: Title: Americredit MTN Corp. III, as Seller By ___________________________________ Name: Title: JPMorgan Chase Bank as Collateral Agent By ___________________________________ Name: Title: [Master Receivables Purchase Agreement] Exhibit A --------- SUPPLEMENT ASSIGNMENT No. [____] of Receivables made this __ day of ______________, 200_, among Americredit MTN Corp. III, a Delaware corporation ("AMTN"), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation ("AFS" ---- --- and together with AMTN, the "Sellers") and AMERICREDIT MTN RECEIVABLES TRUST ------- III, a Delaware business trust (the "Purchaser"). --------- W I T N E S S E T H: WHEREAS, pursuant to the Sale Agreement (the form of which is attached hereto as Addendum A), AFS wishes to sell/and or contribute Receivables to AMTN; WHEREAS, the relevant Sellers wish to sell/and or contribute Receivables to the Purchaser; and WHEREAS, the Purchaser is willing to purchase or acquire as a contribution such Receivables subject to the terms and conditions hereof. NOW, THEREFORE, the Purchaser and the Sellers hereby agree as follows: 1. Defined Terms. Capitalized terms used herein shall have the ------------- meanings ascribed to them in the Master Receivables Purchase Agreement, dated as of February 25, 2002, (the "Purchase Agreement"), unless otherwise defined ------------------ herein. "Relevant Cutoff Date" shall mean, with respect to the Receivables -------------------- sold and/or contributed hereby, _____________ __, 200_. "Receivables Transfer Date" shall mean, with respect to the ------------------------- Receivables assigned hereby, the date hereof. 2. Schedule of Receivables. Annexed hereto are Schedule A and ----------------------- Schedule B from AFS and AMTN, respectively, listing the Receivables sold and/or contributed by it pursuant to this Supplement on the Receivables Transfer Date. The term "Receivables" as used in this Supplement means and includes each and every chattel paper and other form of receivable relating to the sale or financing provided for new or used motor vehicles transferred by Sellers to Purchaser pursuant to this Supplement and identified on the Schedule A and Schedule B provided by AFS and AMTN, respectively, attached thereto, together with all payment obligations thereunder and all proceeds thereof, including all items listed in 2.1 to the Purchase Agreement. It is intended that Sellers will transfer to Purchaser hereafter from time to time additional Receivables, whether now existing or hereafter arising and wherever located. 3. Sale and/or Contribution of Receivables. (a) Each Seller, does --------------------------------------- hereby sell and/or contribute, transfer, assign, set over and otherwise convey to the Purchaser (the "Assignment"), without recourse (except as expressly ---------- provided in the Purchase Agreement), all right, title and interest of such Seller in and to: (i) each and every Receivable listed on the Schedule A and B to this Supplement and all Collections thereon or in respect thereof on or after the Relevant Cutoff Date; (ii) the Related Security with respect to each Receivable; (iii) all Proceeds and the rights to receive Proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies or Collateral Insurance (if any), covering Financed Vehicles or Obligors; (iv) all rights under any service contracts on the related Financed Vehicles; (v) all rights of the Sellers against Dealers pursuant to Dealer Agreements or Dealer Assignments; (vi) all rights of the Sellers against Third Party Lenders pursuant to Third Party Loan Purchase Agreements and/or Third Party Assignments. (vii) the related Records; and (viii) all Proceeds of any or all of the foregoing. (b) The Assignment is in consideration of the Purchaser's delivery to or upon the order of Sellers as set forth below: (i) $___________ to AFS; and (ii) $___________ to AMTN. 4. Representations and Warranties of the Sellers. --------------------------------------------- (a) Representations and Warranties of AFS. AFS hereby represents ------------------------------------- and warrants to the Purchaser as of the Receivables Transfer Date that: (i) Purchase Agreement. The representations and ------------------ warranties set forth in the Purchase Agreement are true and correct and with respect to any representation which relates to Receivables or Other Conveyed Property with respect to the related Receivables and Other Conveyed Property sold and/or contributed pursuant to Section 3 hereof are true and correct. (ii) Principal Balance. As of the Relevant Cutoff ----------------- Date, the aggregate Outstanding Balance of the Receivables listed on the Schedule of Receivables provided by AFS (annexed hereto as Schedule A) E-A-2 and sold to the Purchaser pursuant to this Supplement is $___________________. (b) Representations and Warranties of AMTN. AMTN hereby -------------------------------------- represents and warrants to the Purchaser as of the Receivables Transfer Date that: (i) Purchase Agreement. The representations and ------------------ warranties set forth in the Purchase Agreement are true and correct and with respect to any representation which relates to Receivables or Other Conveyed Property with respect to the related Receivables and Other Conveyed Property sold and/or contributed pursuant to Section 3 hereof are true and correct. (ii) Principal Balance. As of the Relevant Cutoff ----------------- Date, the aggregate Outstanding Balance of the Receivables listed on the Schedule of Receivables provided by AMTN (annexed hereto as Schedule B) and sold to the Purchaser pursuant to this Supplement is $__________________. 5. Conditions Precedent. The obligation of the Purchaser to acquire -------------------- the Receivables hereunder is subject to the satisfaction, on or prior to the Receivables Transfer Date, of the following conditions precedent: (a) Representations and Warranties. Each of the representations ------------------------------ and warranties made by the Sellers in Section 4 of this Supplement and by AFS in Section 3.1 and AMTN in Section 3.3 of the Purchase Agreement shall be true and correct with respect to the property sold and/or contributed pursuant to Section 3 hereof as of the Receivables Transfer Date. (b) Delivery of Receivable Files. The Seller shall have delivered ---------------------------- the Receivable Files to the Custodian and any other documents as the Purchaser may request; (c) Purchase Agreement Conditions. Each of the conditions set ----------------------------- forth in Section 6.1 of the Purchase Agreement shall have been satisfied with respect to the property sold pursuant to Section 3 hereof. (d) Additional Information. The Sellers shall have delivered to ---------------------- the Purchaser such information as was reasonably requested by the Purchaser to satisfy itself as to the satisfaction of the conditions set forth in this Section 5. 6. Ratification of Agreement. As supplemented by this Supplement, the ------------------------- Purchase Agreement is in all respects ratified and confirmed and the Purchase Agreement as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument. 7. Counterparts. This Supplement may be executed in two or more ------------ counterparts (and by different parties in separate counterparts), each of which shall be an original E-A-3 but all of which together shall constitute one and the same instrument. 8. Intention of the Parties. (a) The execution and delivery of this ------------------------ Agreement shall constitute an acknowledgment by Sellers and Purchaser that they intend that the assignments and transfers herein contemplated constitute a sale and/or contribution, transfer and assignment outright, and not for security, of the Receivables and the Other Conveyed Property, conveying good title thereto free and clear of any Liens, from Sellers to Purchaser, and that the Receivables and the Other Conveyed Property shall not be a part of Sellers' estates in the event of the bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, or the occurrence of another similar event, of, or with respect to Sellers. In the event that such conveyance is determined to be made as security for a loan made by Purchaser or the Secured Parties to Sellers, the parties intend that Sellers shall have granted to Purchaser a security interest in all of Sellers' right, title and interest in and to the Receivables and the Other Conveyed Property conveyed pursuant to Section 3 of this Agreement and Section 2.1 of the Master Receivables Purchase Agreement, and that this Agreement shall constitute a security agreement under applicable law. (b) For federal income tax purposes, the parties hereto intend the contribution of Receivables by the Sellers to the Purchaser to be characterized as a contribution of property to a partnership in exchange for an interest in the partnership in which no gain or loss shall be recognized pursuant to Section 721(a) of the Internal Revenue Code of 1986, as amended. 9. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE ------------- WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. E-A-4 IN WITNESS WHEREOF, the Purchaser and the Sellers have caused this Supplement to be duly executed and delivered by their respective duly authorized officers as of the day and the year first above written. AMERICREDIT MTN RECEIVABLES TRUST III, as Purchaser By: AMERICREDIT FINANCIAL SERVICES, INC., attorney-in-fact By_____________________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., as Seller By_____________________________________________ Name Title: AMERICREDIT MTN CORP. III, as Seller By_____________________________________________ Name: Title: Acknowledged: JPMORGAN CHASE BANK, solely in its capacity as Collateral Agent By___________________________________ Name Title: E-A-5 EX-10.6 8 dex106.txt SERVICING AND CUSTODIAN AGREEMENT Exhibit 10.6 EXECUTION COPY SERVICING AND CUSTODIAN AGREEMENT among AMERICREDIT FINANCIAL SERVICES, INC., as Servicer and Custodian, AMERICREDIT MTN RECEIVABLES TRUST III, as Debtor, and JPMORGAN CHASE BANK, as Collateral Agent dated as of February 25, 2002 TABLE OF CONTENTS ARTICLE I DEFINITIONS................................................................... 2 Section 1.1. Definitions.......................................................... 2 Section 1.2. Other Definitional Provisions........................................ 5 ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES.................................. 6 Section 2.1. Duties of the Servicer............................................... 6 Section 2.2. Collection of Receivable Payments; Modifications of Receivables; Lock-Box Agreements..................................... 7 Section 2.3. Realization upon Receivables......................................... 9 Section 2.4. Insurance............................................................ 10 Section 2.5. Maintenance of Security Interests in Vehicles........................ 12 Section 2.6. Covenants, Representations, and Warranties of Servicer............... 12 Section 2.7. Purchase of Receivables Upon Breach of Covenant or Representation and Warranty.......................................... 14 Section 2.8. Total Servicing Fee; Payment of Certain Expenses by Servicer......... 15 Section 2.9. Servicer's Certificate............................................... 15 Section 2.10. Annual Statement as to Compliance, Notice of Servicer Termination Event.................................................... 15 Section 2.11. Annual Servicing Review.............................................. 16 Section 2.12. Access to Certain Documentation and Information Regarding Receivables.......................................................... 16 Section 2.13. Monthly Tape......................................................... 17 Section 2.14. Fidelity Bond and Errors and Omissions Policy........................ 17 ARTICLE III THE SERVICER................................................................ 18 Section 3.1. Liability of Servicer; Indemnities................................... 18 Section 3.2. Merger or Consolidation of, or Assumption of the Obligations of the Servicer...................................................... 19 Section 3.3. Limitation on Liability of Servicer and Others....................... 19 Section 3.4. Delegation of Duties................................................. 20 Section 3.5. Servicer Not to Resign............................................... 20 Section 3.6. Administrative Duties of Servicer.................................... 20 ARTICLE IV SERVICER TERMINATION......................................................... 21 Section 4.1. Servicer Termination Event........................................... 21 Section 4.2. Consequences of a Servicer Termination Event......................... 22 Section 4.3. Appointment of Successor............................................. 23 Section 4.4. Notification to Secured Parties...................................... 23 Section 4.5. Waiver of Past Defaults.............................................. 23
ARTICLE V THE CUSTODIAN.............................................................. 24 Section 5.1. Appointment of Custodian; Acknowledgment of Receipt; Monthly Exception Reports.......................................... 24 Section 5.2. Maintenance of Records at Office................................... 24 Section 5.3. Duties of Custodian................................................ 24 Section 5.4. Instructions; Authority to Act..................................... 26 Section 5.5. Custodian Fee...................................................... 26 Section 5.6. Indemnification by the Custodian................................... 26 Section 5.7. Advice of Counsel.................................................. 26 Section 5.8. Effective Period, Termination, and Amendment; Interpretive and Additional Provisions.......................................... 26 Section 5.9. Representations, Warranties and Covenants of Custodian............. 27 ARTICLE VI MISCELLANEOUS............................................................. 28 Section 6.1. Governing Law...................................................... 28 Section 6.2. Notices............................................................ 28 Section 6.3. Binding Effect..................................................... 30 Section 6.4. Severability....................................................... 30 Section 6.5. Separate Counterparts.............................................. 30 Section 6.6. Limitation of Liability of Trustee................................. 30 Section 6.7. Waivers; Amendment................................................. 31 Section 6.8. Nonpetition Covenants.............................................. 31
EXHIBITS AND SCHEDULES Exhibit A - Form of Servicer's Certificate Exhibit B - Form of Monthly Exception Report Exhibit C - Scope of Quarterly Audit Schedule A - Form of Custodian's Acknowledgment ii THIS SERVICING AND CUSTODIAN AGREEMENT, dated as of February 25, 2002, is between AmeriCredit Financial Services, Inc. ("AmeriCredit"), as Servicer (in ----------- such capacity, the "Servicer") and as Custodian (in such capacity, the -------- "Custodian"), AmeriCredit MTN Receivables Trust III (the "Trust") and JPMorgan --------- ----- Chase Bank, as Collateral Agent (in such capacity, the "Collateral Agent"). ---------------- W I T N E S S E T H - - - - - - - - - - WHEREAS, AmeriCredit MTN Receivables Trust III (the "Trust"), ----- AmeriCredit, MBIA Insurance Corporation, as Administrative Agent, and Meridian Funding Company, LLC ("Meridian") have entered into a Note Purchase Agreement, -------- dated as of the date hereof (the "Note Purchase Agreement"); ----------------------- WHEREAS, the Trust, AmeriCredit, AmeriCredit MTN Corp. III ("AMTN") and the Collateral Agent have entered into a Security Agreement dated as of the date hereof (the "Security Agreement"); ------------------ WHEREAS, AmeriCredit, AMTN, the Collateral Agent, and the Trust have entered into a Master Receivables Purchase Agreement, dated as of the date hereof (the "Receivables Purchase Agreement"), pursuant to which the Sellers (as defined in the Receivables Purchase Agreement) agree to sell, transfer and ------------------------------ assign to the Trust all of their right, title and interest in and to the Receivables described in the Schedules of Receivables attached to the Supplements (as defined below); WHEREAS, pursuant to the Receivables Purchase Agreement, the Sellers and the Trust will enter into Supplements to the Receivables Purchase Agreement from time to time (each a "Supplement"), whereby the Sellers will sell, transfer ---------- and assign to the Trust on the applicable Receivables Transfer Date (as defined in the Receivables Purchase Agreement) all of their right, title and interest in and to Receivables listed on the Schedules of Receivables attached to such Supplements; WHEREAS, pursuant to the Security Agreement, the Trust will pledge to the Collateral Agent for the benefit of the Secured Parties all of its right, title and interest in the Collateral, including, but not limited to, the Receivables and the Other Conveyed Property (as defined in the Receivables Purchase Agreement); WHEREAS, the Servicer is willing to service the Receivables; and WHEREAS, the Collateral Agent wishes to appoint the Custodian to hold the Receivable Files as the custodian on behalf of the Collateral Agent. NOW, THEREFORE, in consideration of the mutual agreements herein contained and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: ARTICLE 1 DEFINITIONS ----------- Section 1.1. Definitions. Whenever used in this Agreement, the ----------- following words and phrases shall have the following meanings: "Accounting Date" means, with respect to any Settlement Period the last --------------- day of such Settlement Period. "Agreement" means this Agreement, as the same may be amended and --------- supplemented from time to time. "AmeriCredit" means AmeriCredit Financial Services, Inc. ----------- "Amount Financed" means, with respect to a Receivable, the aggregate --------------- amount advanced under such Receivable toward the purchase price of the Financed Vehicle and any related costs, including amounts advanced in respect of accessories, insurance premiums, service and warranty contracts, other items customarily financed as part of retail automobile installment sale contracts or promissory notes, and related costs. "Annual Percentage Rate" of a Receivable means the annual percentage ---------------------- rate of finance charges or service charges, as stated in the related Contract. "Collateral Agent" means JPMorgan Chase Bank, in its capacity as ---------------- Collateral Agent under the Security Agreement. "Collateral Insurance" shall have the meaning set forth in Section -------------------- 2.4(a). "Collection Records" means all manually prepared or computer generated ------------------ records relating to collection efforts or payment histories with respect to the Receivables. "Cram Down Loss" means, with respect to a Receivable, if a court of -------------- appropriate jurisdiction in a proceeding related to an Insolvency Event shall have issued an order reducing the amount owed on a Receivable or otherwise modifying or restructuring the Scheduled Receivables Payments to be made on a Receivable, an amount equal to (i) the excess of the Outstanding Balance of such Receivable immediately prior to such order over the Outstanding Balance of such Receivable as so reduced and/or (ii) if such court shall have issued an order reducing the effective rate of interest on such Receivable, the excess of the Outstanding Balance of such Receivable immediately prior to such order over the net present value (using as the discount rate the higher of the Annual Percentage Rate on such Receivable or the rate of interest, if any, specified by the court in such order) of the Scheduled Receivables Payments as so modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on the date of issuance of such order. "Custodian" means AmeriCredit acting as agent for the Collateral Agent --------- and any successor Custodian selected pursuant to Section 4.3(a) hereof. 2 "Custodian's Acknowledgment" means an acknowledgment from the Custodian -------------------------- substantially in the form of Schedule A. "Dealer" means a dealer who sold a Financed Vehicle and who originated ------ and assigned the respective Receivable to AmeriCredit under a Dealer Agreement or pursuant to a Dealer Assignment. "Dealer Agreement" means any agreement between a Dealer and AmeriCredit ---------------- relating to the acquisition of Receivables from a Dealer by AmeriCredit. "Dealer Assignment" means, with respect to a Receivable, the executed ----------------- assignment executed by a Dealer conveying such Receivable to AmeriCredit. "Dealer Underwriting Guide" means the underwriting manual used by ------------------------- AmeriCredit in the purchase of Receivables as amended from time to time. "Force-Placed Insurance" has the meaning ascribed thereto in Section ---------------------- 2.4 hereof. "Independent Accountants" means a firm of nationally recognized ----------------------- independent certified public accountants. "Insolvency Event" means, with respect to a specified Person, (a) the ---------------- filing of a petition against such Person or the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such petition, decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by, a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. "Insurance Add-On Amount" means the premium charged to the Obligor in ----------------------- the event that the Servicer obtains Force-Placed Insurance pursuant to Section 2.4. "Insurance Policy" means, with respect to a Receivable, any insurance ---------------- policy (including the insurance policies described in Section 2.4 hereof) benefiting the holder of the Receivable providing loss or physical damage, credit life, credit disability, theft, mechanical breakdown or similar coverage with respect to the Financed Vehicle or the Obligor. "Lien Certificate" means, with respect to a Financed Vehicle, an ---------------- original certificate of title, certificate of lien or other notification issued by the Registrar of Titles of the 3 applicable state to a secured party which indicates that the lien of the secured party on the Financed Vehicle is recorded on the original certificate of title. In any jurisdiction in which the original certificate of title is required to be given to the Obligor, the term "Lien Certificate" shall mean only a certificate or notification issued to a secured party. "Monthly Records" means all records and data maintained by the Servicer --------------- with respect to the Receivables, including the following with respect to each Receivable: the account number; the originating Dealer; Obligor name; Obligor address; Obligor home phone number; Obligor business phone number; original Outstanding Balance; original term; Annual Percentage Rate; current Outstanding Balance; current remaining term; origination date; first payment date; final scheduled payment date; next payment due date; date of most recent payment; new/used classification; collateral description; days currently delinquent; number of contract extensions (months) to date; amount of Scheduled Receivables Payment; current Insurance Policy expiration date; and past due late charges. "Net Liquidation Proceeds" means, with respect to a Defaulted ------------------------ Receivable, all amounts realized with respect to such Receivable net of (i) reasonable expenses incurred by the Servicer in connection with the collection of such Receivable and the repossession and disposition of the Financed Vehicle and (ii) amounts that are required to be refunded to the Obligor on such Receivable; provided, however, that the Net Liquidation Proceeds with respect to -------- ------- any Receivable shall in no event be less than zero. "Note Insurer" means MBIA Insurance Corporation. ------------ "Opinion of Counsel" means a written opinion of counsel addressed to ------------------ and acceptable to the Note Insurer. "Purchase Amount" means, with respect to a Receivable, the Outstanding --------------- Balance and all accrued and unpaid interest on the Receivable, after giving effect to the receipt of any moneys collected (from whatever source) on such Receivable, if any. "Purchased Receivable" means a Receivable purchased as of the close of -------------------- business on the last day of a Settlement Period by AmeriCredit pursuant to Section 2.7. "Rating Agency" means Moody's and Standard & Poor's. ------------- "Receivable Files" means the following documents: ---------------- (i) the fully executed original of the retail installment contract, promissory note, security agreement, or similar document evidencing such Receivable (together with any agreements modifying the Receivable, including without limitation any extension agreements); (ii) the original credit application, or a copy thereof, of each Obligor, fully executed by each such Obligor on AmeriCredit's customary form, or on a form approved by AmeriCredit, for such application; and (iii) the original certificate of title (when received) and otherwise such documents, if any, that AmeriCredit keeps on file in accordance with its customary procedures 4 indicating that the Financed Vehicle is owned by the Obligor and subject to the interest of AmeriCredit as first lienholder or secured party (including any Lien Certificate received by AmeriCredit), or, if such original certificate of title has not yet been received, a copy of the application therefor, showing AmeriCredit as secured party. "Registrar of Titles" means, with respect to any state, the ------------------- governmental agency or body responsible for the registration of, and the issuance of certificates of title relating to, motor vehicles and liens thereon. "Responsible Officer" means any officer in the corporate trust office ------------------- of the Trustee or any agent of the Trustee under a power of attorney with direct responsibility for the administration of this Agreement or any of the other Transaction Documents on behalf of the Trustee. "Scheduled Receivables Payment" means, with respect to any Settlement ----------------------------- Period for any Receivable, the amount set forth in such Receivable as required to be paid by the Obligor in such Settlement Period. If after the Closing Date, the Obligor's obligation under a Receivable with respect to a Settlement Period has been modified so as to differ from the amount specified in such Receivable as a result of (i) the order of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940 or (iii) modifications or extensions of the Receivable permitted by Section 2.2(b), the Scheduled Receivables Payment with respect to such Settlement Period shall refer to the Obligor's payment obligation with respect to such Settlement Period as so modified. "Servicer" means AmeriCredit Financial Services, Inc., as the servicer -------- of the Receivables, and "Servicer Termination Event" each successor Servicer pursuant to -------------------------- Section 4.3. "Servicer Termination Event" means an event specified in Section 4.1. "Servicer's Certificate" means an Officers' Certificate of the Servicer ---------------------- delivered pursuant to Section 2.9, substantially in the form of Exhibit A. Section 1.2. Other Definitional Provisions. ----------------------------- (a) Capitalized terms used herein and not otherwise defined herein have meanings assigned to them in the Security Agreement or the Note Purchase Agreement. (b) All terms defined in this Agreement shall have the defined meanings when used in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (c) As used in this Agreement, in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such instrument, certificate or other document, and accounting terms partly defined in this Agreement or in any such instrument, certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of this Agreement or any such instrument, certificate or other document, as applicable. To the extent that the definitions of 5 accounting terms in this Agreement or in any such instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such instrument, certificate or other document shall control. (d) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation." (e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. (f) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES ------------------------------------------- Section 2.1. Duties of the Servicer. ---------------------- (a) The Servicer is hereby authorized to act as agent for the Trust and in such capacity shall manage, service, administer and make collections on the Receivables, and perform the other actions required by the Servicer under this Agreement. The Servicer agrees that its servicing of the Receivables shall be carried out in accordance with customary and usual procedures of institutions which service motor vehicle retail installment sales contracts and, to the extent more exacting, the degree of skill and attention that the Servicer exercises from time to time with respect to all comparable motor vehicle receivables that it services for itself or others. The Servicer's duties shall include, without limitation, collection and posting of all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, sending payment coupons to Obligors, reporting any required tax information to Obligors, monitoring the collateral, complying with the terms of the Lock-Box Agreement, accounting for collections and furnishing monthly and annual statements to the Collateral Agent with respect to distributions, monitoring the status of Insurance Policies with respect to the Financed Vehicles and performing the other duties specified herein. (b) The Servicer shall also administer and enforce all rights and responsibilities of the holder of the Receivables provided for in the Dealer Agreements and Third Party Loan Purchase Agreements (and shall maintain possession of the Dealer Agreements and Third Party Loan Purchase Agreements, to the extent it is necessary to do so), the Dealer Assignments, Third Party Lender Assignments and the Insurance Policies, to the extent that such Dealer Agreements, 6 Third Party Loan Purchase Agreements, Dealer Assignments, Third Party Lender Assignments and Insurance Policies relate to the Receivables, the Financed Vehicles or the Obligors. The Servicer shall follow its customary standards, policies, and procedures and shall have full power and authority, acting alone, to do any and all things in connection with such managing, servicing, administration and collection that it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered by the Trust to execute and deliver, on behalf of the Trust, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and with respect to the Financed Vehicles; provided, however, that notwithstanding the foregoing, the Servicer shall not, except pursuant to an order from a court of competent jurisdiction, release an Obligor from payment of any unpaid amount under any Receivable or waive the right to collect the unpaid balance of any Receivable from the Obligor. (c) The Servicer is hereby authorized to commence, in its own name or in the name of the Trust, a legal proceeding to enforce a Receivable pursuant to Section 2.3 or to commence or participate in any other legal proceeding (including, without limitation, a bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or participates in such a legal proceeding in its own name, the Trust shall thereupon be deemed to have automatically assigned such Receivable to the Servicer solely for purposes of commencing or participating in any such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Trust to execute and deliver in the Servicer's name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. The Collateral Agent shall, in its reasonable discretion, furnish the Servicer with any limited powers of attorney and other documents which the Servicer may reasonably request and which the Servicer deems necessary or appropriate and take any other steps which the Servicer may deem necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement. Section 2.2. Collection of Receivable Payments; Modifications of --------------------------------------------------- Receivables; Lock-Box Agreements. - -------------------------------- (a) Consistent with the standards, policies and procedures required by this Agreement and the Credit and Collection Policy, the Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable automobile receivables that it services for itself or others and otherwise act with respect to the Receivables, the Dealer Agreements, the Dealer Assignments, the Third Party Loan Purchase Agreements, the Third Party Lender Assignments, the Insurance Policies and the Other Conveyed Property in such manner as will, in the reasonable judgment of the Servicer, maximize the amount to be received by the Trust with respect thereto. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable. (b) So long as no Servicer Termination Event shall have occurred and be continuing, and in accordance with the Credit and Collection Policy, the Servicer may at any time agree to a modification or amendment of a Receivable in order to (i) change the Obligor's regular due date to a date within the Settlement Period in which such due date occurs or (ii) re- 7 amortize the Scheduled Receivables Payments on the Receivable following a partial prepayment of principal, in accordance with its customary procedures if the Servicer believes in good faith that such extension, modification or amendment is necessary to avoid a default on such Receivable, will maximize Collections with respect to such Receivable, and is otherwise in the best interests of the Trust. (c) So long as no Servicer Termination Event shall have occurred and be continuing, and in accordance with the Credit and Collection Policy, the Servicer may grant payment extensions on, or other modifications or amendments to, a Receivable (in addition to those modifications permitted by Section 2.2(b)) in accordance with its customary procedures if the Servicer believes in good faith that such extension, modification or amendment is necessary to avoid a default on such Receivable, will maximize Collections with respect to such Receivable, and is otherwise in the best interests of the Trust; provided, that any such amendment, modification or extension shall be delivered by the Servicer to the Custodian promptly after execution thereof. The Servicer shall use its best efforts to notify or direct Obligors to make all payments on the Receivables, whether by check or by direct debit of the Obligor's bank account, to be made directly to one or more Lock-Box Banks, acting as agent for the Collateral Agent, on behalf of the Secured Parties pursuant to a Lock-Box Agreement. The Servicer shall use its best efforts to notify or direct any Lock-Box Bank to deposit all payments on the Receivables in the Lock-Box Account no later than the Business Day after receipt, and to cause all amounts credited to the Lock-Box Account on account of such payments to be transferred to the Collection Account no later than the second Business Day after receipt of such payments. The Lock-Box Account shall be a demand deposit account held by the Lock-Box Bank, or at the request of the Note Insurer, an Eligible Deposit Account. Notwithstanding any Lock-Box Agreement, or any of the provisions of this Agreement relating to the Lock-Box Agreement, the Servicer shall remain obligated and liable to the Trust, the Collateral Agent and Secured Parties for servicing and administering the Receivables and the Other Conveyed Property in accordance with the provisions of this Agreement without diminution of such obligation or liability by virtue thereof. In the event of a termination of the Servicer, the successor Servicer shall assume all of the rights and obligations of the outgoing Servicer under the Lock-Box Agreement subject to the terms hereof. In such event, the successor Servicer shall be deemed to have assumed all of the outgoing Servicer's interest therein and to have replaced the outgoing Servicer as a party to each such Lock-Box Agreement to the same extent as if such Lock-Box Agreement had been assigned to the successor Servicer, except that the outgoing Servicer shall not thereby be relieved of any liability or obligations on the part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box Agreement. The outgoing Servicer shall, upon request of the Collateral Agent, but at the expense of the outgoing Servicer, deliver to the successor Servicer all documents and records relating to each such Lock-Box Agreement and an accounting of amounts collected and held by the Lock-Box Bank and otherwise use its best efforts to effect the orderly and efficient transfer of any Lock-Box Agreement to the successor Servicer. In the event that the Note Insurer elects to change the identity of the Lock-Box Bank, the outgoing Servicer, at its expense, shall cause the Lock-Box Bank to deliver, at the direction of the Note Insurer to the Collateral Agent 8 or a successor Lock-Box Bank, all documents and records relating to the Receivables and all amounts held (or thereafter received) by the Lock-Box Bank (together with an accounting of such amounts) and shall otherwise use its best efforts to effect the orderly and efficient transfer of the Lock-Box arrangements and the Servicer shall notify the Obligors to make payments to the Lock-Box established by the successor. (d) The Servicer shall remit all payments by or on behalf of the Obligors received directly by the Servicer to the Lock-Box Bank for deposit into the Lock-Box Account and for transfer to the Collection Account in accordance with Section 2.2(c) hereof, in either case, without deposit into any intervening account and as soon as practicable, but in no event later than the Business Day after receipt thereof. Section 2.3 Realization upon Receivables. ---------------------------- (a) Consistent with the standards, policies and procedures required by this Agreement and the Credit and Collection Policy, the Servicer shall use its best efforts to repossess (or otherwise comparably convert the ownership of) and liquidate any Financed Vehicle securing a Receivable with respect to which the Servicer has determined that payments thereunder are not likely to be resumed, as soon as is practicable after default on such Receivable but in no event later than the date on which all or any portion of a Scheduled Receivables Payment has become ninety-one (91) days delinquent; provided, however, that the Servicer may -------- ------- elect not to repossess a Financed Vehicle within such time period if in its good faith judgment it determines that the proceeds ultimately recoverable with respect to such Receivable would be increased by forbearance. The Servicer is authorized to follow such customary practices and procedures as it shall deem necessary or advisable, consistent with the standard of care required by Section 2.1, which practices and procedures may include reasonable efforts to realize upon any recourse to Dealers and Third Party Lenders, the sale of the related Financed Vehicle at public or private sale, the submission of claims under an Insurance Policy and other actions by the Servicer in order to realize upon such a Receivable. The foregoing is subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its reasonable discretion that such repair and/or repossession shall increase the proceeds of liquidation of the related Receivable by an amount greater than the amount of such expenses. All amounts received upon liquidation of a Financed Vehicle shall be remitted by the Servicer to the Collection Account as soon as practicable, but in no event later than the Business Day after receipt thereof. The Servicer shall be entitled to recover all reasonable expenses incurred by it in the course of repossessing and liquidating a Financed Vehicle into cash proceeds, but only out of the cash proceeds of such Financed Vehicle, any deficiency obtained from the Obligor with respect to such Financed Vehicle or any amounts received from the related Dealer and Third Party Lender with respect to such Financed Vehicle, which amounts in reimbursement may be retained by the Servicer to the extent of such expenses. The Servicer shall pay on behalf of the Trust any personal property taxes assessed on repossessed Financed Vehicles. (b) If the Servicer elects to commence a legal proceeding to enforce a Dealer Agreement, Third Party Loan Purchase Agreement, Dealer Assignment or Third Party Lender Assignment, the act of commencement shall be deemed to be an automatic assignment from the 9 Trust to the Servicer of the rights under such Dealer Agreement, Third Party Loan Purchase Agreement, Dealer Assignment and Third Party Lender Assignment for purposes of collection only. If, however, in any enforcement suit or legal proceeding it is held that the Servicer may not enforce a Dealer Agreement, Third Party Loan Purchase Agreement, Dealer Assignment or Third Party Lender Assignment on the grounds that it is not a real party in interest or a Person entitled to enforce the Dealer Agreement, Third Party Loan Purchase Agreement, Dealer Assignment or Third Party Lender Assignment, the Sellers, at the Sellers' expense, shall take such steps as the Servicer deems reasonably necessary to enforce the Dealer Agreement, Third Party Loan Purchase Agreement, Dealer Assignment or Third Party Lender Assignment, including bringing suit in its name or the name of the Sellers or of the Trust. All amounts recovered in any legal proceeding shall be remitted directly by the Servicer to the Lock-Box Bank as provided in Section 2.2(d). Notwithstanding anything to the contrary contained herein, (i) the Note Insurer may, in its reasonable discretion, direct the Servicer (whether the Servicer is AmeriCredit or any other Person) to commence or settle any legal action to enforce collection of any Receivable or to foreclose upon or repossess any Related Security and (ii) the Servicer shall not make the Collateral Agent or the Secured Parties a party to any litigation without the prior written consent of such Person; provided, however, that in the case of subsection (i) of this sentence, the Servicer may decline or refuse to act on instructions provided by the Note Insurer if, in the reasonable determination of the Servicer, such action is not consistent with any Requirements of Law (as defined in the Note Purchase Agreement) or the Credit and Collection Policy (as defined in the Security Agreement), or could result in legal or regulatory action against the Servicer. Section 2.4 Insurance. --------- (a) The Servicer shall require, in accordance with its customary servicing policies and procedures, that each Financed Vehicle be insured by the related Obligor under the Insurance Policies and shall monitor the status of such physical loss and damage insurance coverage thereafter, in accordance with its customary servicing procedures. Each Receivable requires the Obligor to maintain such physical loss and damage insurance, naming AmeriCredit and its successors and assigns as additional insureds, and permits the holder of such Receivable to obtain physical loss and damage insurance at the expense of the Obligor if the Obligor fails to maintain such insurance. If the Servicer shall determine that an Obligor has failed to obtain or maintain a physical loss and damage Insurance Policy covering the related Financed Vehicle (including, without limitation, during the repossession of such Financed Vehicle) the Servicer may enforce the rights of the holder of the Receivable under the Receivable to require the Obligor to obtain such physical loss and damage insurance in accordance with its customary servicing policies and procedures. The Servicer may maintain a vendor's single interest or other collateral protection insurance policy with respect to all Financed Vehicles ("Collateral ---------- Insurance") which policy shall by its terms insure against physical loss and - --------- damage in the event any Obligor fails to maintain physical loss and damage insurance with respect to the related Financed Vehicle. All policies of Collateral Insurance shall be endorsed with clauses providing for loss payable to the Servicer. Costs incurred by the Servicer in maintaining such Collateral Insurance shall be paid by the Servicer. The Servicer will administer the filing of claims under the Insurance Policies. 10 (b) The Servicer may, if an Obligor fails to obtain or maintain a physical loss and damage Insurance Policy, obtain insurance with respect to the related Financed Vehicle and advance on behalf of such Obligor, as required under the terms of the insurance policy, the premiums for such insurance (such insurance being referred to herein as "Force-Placed Insurance"). All policies of Force-Placed Insurance shall be endorsed with clauses providing for loss payable - ---------------------- to the Servicer. Any cost incurred by the Servicer in maintaining such Force-Placed Insurance shall only be recoverable out of premiums paid by the Obligors or Net Liquidation Proceeds with respect to the Receivable, as provided in Section 2.4(c). (c) In connection with any Force-Placed Insurance obtained hereunder, the Servicer may, in the manner and to the extent permitted by applicable law, require the Obligors to repay the entire premium to the Servicer. In no event shall the Servicer include the amount of the premium in the Amount Financed under the Receivable. For all purposes of this Agreement, the Insurance Add-On Amount with respect to any Receivable having Force-Placed Insurance will be treated as a separate obligation of the Obligor and will not be added to the Outstanding Balance of such Receivable, and amounts allocable thereto will not be available for distribution on the Note. The Servicer shall retain and separately administer the right to receive payments from Obligors with respect to Insurance Add-On Amounts or rebates of Forced-Placed Insurance premiums. If an Obligor makes a payment with respect to a Receivable having Force-Placed Insurance, but the Servicer is unable to determine whether the payment is allocable to the Receivable or to the Insurance Add-On Amount, the payment shall be applied first to any unpaid Scheduled Receivables Payments and then to the Insurance Add-On Amount. Net Liquidation Proceeds on any Receivable will be used first to pay the Outstanding Balance and accrued interest on such Receivable (until reduced to zero) and then to pay the related Insurance Add-On Amount. If an Obligor under a Receivable with respect to which the Servicer has placed Force-Placed Insurance fails to make scheduled payments of such Insurance Add-On Amount as due, and the Servicer has determined that eventual payment of the Insurance Add-On Amount is unlikely, the Servicer may, but shall not be required to, purchase such Receivable from the Trust for the Purchase Amount on any subsequent Determination Date. Any such Receivable, and any Receivable with respect to which the Servicer has placed Force-Placed Insurance which has been paid in full (excluding any Insurance Add-On Amounts) will be assigned to the Servicer. (d) The Servicer may sue to enforce or collect upon the Insurance Policies, in its own name, if possible, or as agent of the Trust. If the Servicer elects to commence a legal proceeding to enforce an Insurance Policy, the act of commencement shall be deemed to be an automatic assignment of the rights of the Trust under such Insurance Policy to the Servicer for purposes of collection only. If, however, in any enforcement suit or legal proceeding it is held that the Servicer may not enforce an Insurance Policy on the grounds that it is not a real party in interest or a holder entitled to enforce the Insurance Policy, the Sellers, at the Sellers' expense, shall take such steps as the Servicer deems necessary to enforce such Insurance Policy, including bringing suit in its name or the name of the Trust. (e)The Servicer will cause itself and may cause the Collateral Agent on behalf of the Secured Parties to be named as named insured under all policies of Collateral Insurance. 11 Section 2.5. Maintenance of Security Interests in Vehicles. --------------------------------------------- (a) Consistent with the policies and procedures required by this Agreement, the Servicer shall take such steps on behalf of the Trust as are necessary to maintain perfection of the security interest created by each Contract in the related Financed Vehicle with respect to each Receivable, including, but not limited to, obtaining the execution by the Obligors and the recording, registering, filing, re-recording, re-filing, and re-registering of all security agreements, financing statements and continuation statements as are necessary to maintain the security interest granted by the Obligors under the respective Contracts. The Servicer shall take all action required under Section 2.1 and 2.6 of the Security Agreement with respect to the notation of Contracts and the marking of records of the Trust. The Collateral Agent hereby authorizes the Servicer, and the Servicer agrees, to take any and all steps necessary to re-perfect such security interest on behalf of the Trust as necessary because of the relocation of a Financed Vehicle or for any other reason. In the event that the assignment of a Receivable to the Trust is insufficient, without a notation on the related Financed Vehicle's certificate of title, or without fulfilling any additional administrative requirements under the laws of the state in which the Financed Vehicle is located, to perfect a security interest in the related Financed Vehicle in favor of the Trust, the Servicer hereby agrees that AmeriCredit's designation as the secured party on the certificate of title is in its capacity as Servicer as agent of the Trust. (b) Upon the occurrence of a Termination and Amortization Event, the Note Insurer may instruct the Collateral Agent and the Servicer to take or cause to be taken such action as may, in the discretion of the Note Insurer, be necessary to perfect or re-perfect the security interests in the Financed Vehicles securing the Receivables in the name of the Trust by amending the title documents of such Financed Vehicles to name the Collateral Agent on behalf of the Secured Parties as lienholder or by such other reasonable means as may, in the opinion of counsel to the Note Insurer, be necessary or prudent. Any costs associated with such retitling shall be paid by the Servicer and to the extent not so paid, the Note Insurer shall have the option to pay such costs and shall be entitled to reimbursement therefor pursuant to Section 2.3(a)(ix) of the Security Agreement and the Collateral Agent shall not be responsible for any such costs. Section 2.6. Covenants, Representations, and Warranties of Servicer. ------------------------------------------------------ (a) The Servicer covenants as follows: (i) Liens in Force. The Financed Vehicle securing each Receivable -------------- shall not be released in whole or in part from the security interest granted by the related Contract, except upon payment in full of the Receivable or as otherwise contemplated herein; (ii) No Impairment. The Servicer shall do nothing to impair the ------------- rights of the Trust or the Secured Parties in the Receivables, the Dealer Agreements, the Third Party Loan Purchase Agreements, the Dealer Assignments, the Third Party Lender Assignments, the Insurance Policies or the Other Conveyed Property except as otherwise expressly provided herein; (iii) No Amendments. The Servicer shall not extend or otherwise amend ------------- the terms of any Receivable, except in accordance with Section 2.2; and 12 (iv) Restrictions on Liens. The Servicer shall not (i) create, incur --------------------- or suffer to exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien or restriction on transferability of the Receivables except for the Lien in favor of the Collateral Agent for the benefit of the Secured Parties and the restrictions on transferability imposed by this Agreement or (ii) sign or file under the Uniform Commercial Code of any jurisdiction any financing statement which names AmeriCredit or the Servicer as a debtor, or sign any security agreement authorizing any secured party thereunder to file such financing statement, with respect to the Receivables, except in each case any such instrument solely securing the rights and preserving the Lien of the Collateral Agent, for the benefit of the Secured Parties. (b) The Servicer represents and warrants as follows: (i) Representations and Warranties. Each Receivable is an Eligible ------------------------------ Receivable; (ii) Organization and Good Standing. The Servicer has been duly ------------------------------ organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power, authority and legal right to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, all power, authority and legal right required to enter into and perform its obligations under this Agreement and each of the other Transaction Documents to which it is a party; (iii) Due Qualification. The Servicer is duly qualified to do business ----------------- as a foreign corporation, is in good standing and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Receivables as required by this Agreement) requires or shall require such qualification; (iv) Power and Authority. The Servicer has the full 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 the Servicer by all necessary corporate action; (v) Binding Obligation. This Agreement and the other Transaction ------------------ Documents to which the Servicer is a party shall constitute legal, valid and binding obligations of the Servicer enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law; (vi) No Violation. The consummation of the transactions contemplated ------------ by this Agreement and the other Transaction Documents to which the Servicer is a party, and the 13 fulfillment of the terms of this Agreement and the Transaction Documents to which the Servicer is a party, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Servicer, or any indenture, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, or violate any law, order, rule or regulation applicable to the Servicer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or any of its properties and do not require any action by or require the consent of or the filing of any notice with any Official Body or other Person; (vii) No Proceedings. There are no proceedings or investigations -------------- pending or, to the Servicer's knowledge, threatened against the Servicer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Servicer or its properties (A) asserting the invalidity of this Agreement or any of the Transaction Documents, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Transaction Documents, or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any of the Transaction Documents or (D) that could have a Material Adverse Effect on the Receivables; and (viii) No Consents. The Servicer is not required to obtain the consent ----------- of any other party or any consent, license, approval or authorization, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement which has not already been obtained. Section 2.7. Purchase of Receivables Upon Breach of Covenant or -------------------------------------------------- Representation and Warranty. Upon discovery by either of the Servicer or a - --------------------------- Responsible Officer of the Note Insurer of a breach of any of the covenants set forth in Sections 2.5(a), 2.6(a), 5.1, 5.2, 5.3 or 5.9, the party discovering such breach shall give prompt written notice to all of the parties hereto; provided, however, that the failure to give any such notice shall not affect any - -------- ------- obligation of AmeriCredit as Servicer under this Section. As of the second Accounting Date following its discovery or receipt of notice of any breach of any covenant set forth in Sections 2.5(a), 2.6(a), 5.1, 5.2, 5.3 or 5.9 which materially and adversely affects the interests of the Secured Parties in any Receivable (including any Defaulted Receivable) (or, at AmeriCredit's election, the first Accounting Date so following) or the related Financed Vehicle, AmeriCredit shall, unless such breach shall have been cured in all material respects by the last day of the second Settlement Period after such breach, purchase from the Trust the Receivable affected by such breach and, on the related Determination Date, AmeriCredit shall pay the related Purchase Amount to the Trust. It is understood and agreed that the obligation of AmeriCredit to purchase any Receivable (including any Defaulted Receivable) with respect to which such a breach has occurred and is continuing shall, if such obligation is fulfilled, constitute the sole remedy against AmeriCredit for such breach available to the Secured Parties or the Collateral Agent except as 14 otherwise provided in the Insurance Agreement; provided, however, that -------- ------- AmeriCredit shall indemnify the Trust, the Collateral Agent and the Secured Parties from and against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to such breach. Section 2.8. Total Servicing Fee; Payment of Certain Expenses by --------------------------------------------------- Servicer. On each Remittance Date, the Servicer shall to the extent provided in - -------- Section 2.3(a) of the Security Agreement be entitled to receive out of the Collection Account the Servicing Fee for the related Settlement Period. The Servicer shall be required to pay all expenses incurred by it in connection with its activities under this Agreement (including taxes imposed on the Servicer, expenses incurred in connection with distributions and reports made by the Servicer to Secured Parties and all other fees and expenses of the Collateral Agent (to the extent such fees and expenses are not paid pursuant to Section 2.3(a) of the Security Agreement), except taxes levied or assessed against the Trust, and claims against the Trust in respect of indemnification, which taxes and claims in respect of indemnification against the Trust are expressly stated to be for the account of AmeriCredit). The Servicer shall be liable for the fees and expenses of the Custodian, the Collateral Agent, the Lock-Box Bank (and any fees under the Lock-Box Agreement) and the Independent Accountants. Section 2.9. Servicer's Certificate. No later than 5 p.m. Eastern ---------------------- time on each Determination Date, the Servicer shall deliver (facsimile delivery being acceptable) to the Trust, the Note Insurer and the Collateral Agent a Servicer's Certificate executed by a Responsible Officer of the Servicer in the form attached hereto as Exhibit A. Receivables purchased by the Servicer or by the Sellers on the related Accounting Date and each Receivable which became a Defaulted Receivable or which was paid in full during the related Settlement Period shall be identified by account number (as set forth in the Schedule of Receivables). In addition to the information set forth in the preceding sentence, the Servicer's Certificate shall also state whether to the knowledge of the Servicer a Termination and Amortization Event or Potential Termination and Amortization Event has occurred. Section 2.10. Annual Statement as to Compliance, Notice of Servicer ------------------------------------------------------ Termination Event. - ----------------- (a) The Servicer shall deliver to the Note Insurer, the Trust, and the Collateral Agent, on or before October 31 (or one hundred twenty (120) days after the end of the Servicer's fiscal year, if other than June 30) of each year, beginning on October 31, 2002, an officer's certificate signed by any Responsible Officer of the Servicer, dated as of June 30 (or other applicable date) of such year, stating that (i) a review of the activities of the Servicer during the preceding 12-month period (or such other period as shall have elapsed from the Closing Date to the date of the first such certificate) and of its performance under this Agreement has been made under such officer's supervision, and (ii) to such officer's knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. 15 (b) The Servicer shall deliver to the Trust, the Note Insurer and the Collateral Agent, promptly after having obtained knowledge thereof, but in no event later than two (2) Business Days thereafter, written notice in an officer's certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Termination Event under Section 4.1(a). The Servicer shall, and shall cause the Sellers to, deliver to the Note Insurer, the Collateral Agent and the Servicer promptly after having obtained knowledge thereof, but in no event later than two (2) Business Days thereafter, written notice in an Officer's Certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Termination Event under any other clause of Section 4.1. Section 2.11. Annual Servicing Review. The Servicer shall cause a firm ----------------------- of nationally recognized independent certified public accountants (the "Independent Accountants"), who may also render other services to the Servicer, ----------------------- to deliver to the Trustee, the Collateral Agent, the Note Insurer and each Rating Agency, on or before October 31 (or 120 days after the end of the Servicer's fiscal year, if other than June 30) of each year, beginning on October 31, 2002, with respect to the twelve (12) months ended the immediately preceding June 30 (or other applicable date) (or such other period as shall have elapsed from the Closing Date to the date of such certificate (which period shall not be less than six months)), a statement (the "Accountants' Report") ------------------- addressed to the Board of Directors of the Servicer, to the Trustee, the Collateral Agent, and to the Note Insurer, to the effect that such firm has audited the books and records of AmeriCredit Corp., in which the Servicer is included as a consolidated subsidiary, and issued its report thereon in connection with the audit report on the consolidated financial statements of AmeriCredit Corp. and that (1) such audit was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances; (2) the firm is independent of the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants, and (3) includes a report on the application of agreed upon procedures to three (3) randomly selected Servicer's Certificates including the delinquency, default and loss statistics required to be specified therein noting whether any exceptions or errors in the Servicer's Certificates were found. Without otherwise limiting the scope of the examination, the Note Insurer may, using generally accepted audit procedures, verify the status of each Receivable and review the Receivable Files and records relating thereto for conformity to the Servicer's Certificates prepared pursuant to Section 2.09 hereof, conformity with the Dealer Underwriting Guide and with the Credit and Collection Policy and compliance with the servicing standards and the Credit and Collection Policy pursuant to this Agreement. In furtherance and not in limitation of the foregoing, a quarterly operational audit shall be performed with respect to the Receivable Files by an independent auditor approved in writing by the Note Insurer commencing with the June 2002 quarter end and such report shall be delivered 30 days after each quarter end. The scope of such quarterly audit shall be as set forth in Exhibit C hereto. Section 2.12. Access to Certain Documentation and Information ----------------------------------------------- Regarding Receivables. The Servicer shall provide to representatives of the - --------------------- Collateral Agent and the Note Insurer reasonable access to the documentation regarding the Receivables. In each case, such access shall be afforded without charge and, provided no Servicer Termination Event or Potential Termination and Amortization Event shall have occurred, only upon reasonable request and during normal business hours. Nothing in this Section shall affect the obligation of the Servicer 16 to observe any applicable law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access as provided in this Section as a result of such obligation shall not constitute a breach of this Section. Section 2.13. Monthly Tape. On or before the Remittance Date, the ------------ Servicer will deliver to the Collateral Agent and the Note Insurer a computer tape or a diskette (or any other electronic transmission acceptable to the Collateral Agent) in a format acceptable to the Collateral Agent containing the information with respect to the Receivables as of the preceding Accounting Date necessary for preparation of the Servicer's Certificate relating to the immediately preceding Determination Date and necessary to review the application of collections. The Collateral Agent shall use such tape or diskette (or other electronic transmission acceptable to the Collateral Agent) to (i) confirm that the Servicer's Certificate is complete, (ii) confirm that such tape, diskette or other electronic transmission is in readable form, (iii) verify the mathematical accuracy of all calculations contained within the Servicer's Certificate and (iv) calculate and confirm any amounts distributed. The Collateral Agent shall certify to the Note Insurer that it has verified the Servicer's Certificate in accordance with this Section and shall notify the Servicer and the Note Insurer of any discrepancies, in each case, on or before the second Business Day following the Remittance Date. In the event that the Collateral Agent reports any discrepancies, the Servicer and the Collateral Agent shall attempt to reconcile such discrepancies prior to the next succeeding Remittance Date, but in the absence of a reconciliation, the Servicer's Certificate shall control for the purpose of calculations and distributions with respect to the next succeeding Remittance Date. In the event that the Collateral Agent and the Servicer are unable to reconcile discrepancies with respect to a Servicer's Certificate by the next succeeding Remittance Date, the Servicer shall cause the Independent Accountants, at the Servicer's expense, to audit the Servicer's Certificate and, prior to the last day of the month after the month in which such Servicer's Certificate was delivered, reconcile the discrepancies. The effect, if any, of such reconciliation shall be reflected in the Servicer's Certificate for the next succeeding Remittance Date, and/or the Servicer's Certificate for such next succeeding Determination Date. In addition, upon the occurrence of a Servicer Termination Event the Servicer shall, if so requested by the Note Insurer, deliver to the Collateral Agent its Collection Records and its Monthly Records within fifteen (15) days after demand therefor and a computer tape containing as of the close of business on the date of demand all of the data maintained by the Servicer in computer format in connection with servicing the Receivables. Other than the duties specifically set forth in this Agreement, the Collateral Agent shall have no obligations hereunder, including, without limitation, to supervise, verify, monitor or administer the performance of the Servicer. The Collateral Agent shall have no liability for any actions taken or omitted by the Servicer. Section 2.14. Fidelity Bond and Errors and Omissions Policy. The --------------------------------------------- Servicer has obtained, and shall continue to maintain in full force and effect, a fidelity bond and errors and omissions policy of a type and in such amount as is customary for servicers engaged in the business of servicing automobile receivables. 17 ARTICLE III THE SERVICER ------------ Section 3.1. Liability of Servicer; Indemnities. --------------------------------------- (a) The Servicer (in its capacity as such) shall be liable hereunder only to the extent of the obligations in this Agreement and the Security Agreement specifically undertaken by the Servicer and the representations made by the Servicer herein and therein. (b) The Servicer shall defend, indemnify and hold harmless the Trust, the Trustee, the Collateral Agent, the Note Insurer, the Secured Parties and their respective officers, directors, agents and employees, from and against any and all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel and expenses of litigation arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of any Financed Vehicle; (c) AmeriCredit shall indemnify, defend and hold harmless the Trust, the Trustee, the Collateral Agent, the Note Insurer, the Secured Parties and their respective officers, directors, agents and employees from and against any taxes that may at any time be asserted against any of such parties with respect to the transactions contemplated in this Agreement, including, without limitation, any sales, gross receipts, tangible or intangible personal property, privilege or license taxes (but not including any federal or other income taxes, including franchise taxes asserted with respect to, and as of the date of, the sale of the Receivables and the Other Conveyed Property to the Trust) and costs and expenses in defending against the same; (d) The Servicer shall indemnify, defend and hold harmless the Trust, the Trustee, and the Collateral Agent, the Secured Parties and their respective officers, directors, agents and employees from and against any and all costs, expenses, losses, claims, damages, and liabilities to the extent that such cost, expense, loss, claim, damage, or liability arose out of, or was imposed upon the Trust, the Trustee, the Collateral Agent or the Secured Parties by reason of the breach of this Agreement by the Servicer, the negligence, misfeasance, or bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement; (e) AmeriCredit shall indemnify the Collateral Agent, the Trustee and their officers, directors, agents and employees thereof against any and all loss, liability or expense, (other than overhead and expenses incurred in the normal course of business) incurred by each of them in connection with the acceptance or administration of the Trust and the performance of their duties under the Transaction Documents other than if such loss, liability or expense is conclusively determined by a judicial proceeding to have been incurred by the Collateral Agent as a result of any such entity's willful misconduct, bad faith or negligence,; and (f) Indemnification under this Article shall survive the termination of the Transaction Documents or the resignation and removal of the Trustee and the Collateral Agent and shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation. If the Servicer has made any indemnity payments pursuant to this Article and the 18 recipient thereafter collects any of such amounts from others, the recipient shall promptly repay such amounts collected to the Servicer, without interest. Section 3.2. Merger or Consolidation of, or Assumption of the ------------------------------------------------ Obligations of the Servicer. AmeriCredit shall not merge or consolidate with any - --------------------------- other person, convey, transfer or lease substantially all its assets as an entirety to another Person, or permit any other Person to become the successor to AmeriCredit's business unless, after the merger, consolidation, conveyance, transfer, lease or succession, the successor or surviving entity shall be capable of fulfilling the duties of AmeriCredit contained in this Agreement and shall be acceptable to the Note Insurer in the Note Insurer's sole discretion. Any corporation (i) into which AmeriCredit may be merged or consolidated, (ii) resulting from any merger or consolidation to which AmeriCredit shall be a party, (iii) which acquires by conveyance, transfer, or lease substantially all of the assets of AmeriCredit, or (iv) succeeding to the business of AmeriCredit, in any of the foregoing cases shall execute an agreement of assumption to perform every obligation of AmeriCredit under this Agreement and, whether or not such assumption agreement is executed, shall be the successor to AmeriCredit under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, anything in this Agreement to the contrary notwithstanding; provided, however, that nothing contained herein shall be deemed to release AmeriCredit from any obligation. AmeriCredit shall provide notice of any merger, consolidation or succession pursuant to this Section to the Collateral Agent and the Secured Parties. Notwithstanding the foregoing, AmeriCredit shall not merge or consolidate with any other Person or permit any other Person to become a successor to AmeriCredit's business, unless (x) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 2.6 shall have been breached (for purposes hereof, such representations and warranties shall speak as of the date of the consummation of such transaction) and no Termination and Amortization Event or Potential Termination and Amortization Event shall have occurred and be continuing, (y) AmeriCredit shall have delivered to the Collateral Agent and the Note Insurer an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, and (z) AmeriCredit shall have delivered to the Collateral Agent and the Note Insurer an Opinion of Counsel, stating in the opinion of such counsel, either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary to preserve and protect the interest of the Trust in the Receivables and the Other Conveyed Property and reciting the details of the filings or (B) no such action shall be necessary to preserve and protect such interest. Section 3.3. Limitation on Liability of Servicer and Others. None of ---------------------------------------------- AmeriCredit nor any of the directors or officers or employees or agents of AmeriCredit shall be under any liability to the Trust or the Secured Parties, except as provided in this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement; provided, however, that this provision shall not protect AmeriCredit or any such person against any liability that would otherwise be imposed by reason of a breach of this Agreement or willful misfeasance, bad faith or negligence in the performance of duties; provided further that this provision shall not affect any liability to indemnify the Collateral Agent for costs, taxes, expenses, claims, liabilities, losses or damages paid by the Collateral Agent, in its individual capacity. AmeriCredit and any director, officer, employee or agent of AmeriCredit may rely in 19 good faith on the written advice of counsel selected by it with due care or on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement. Section 3.4. Delegation of Duties. The Servicer may delegate duties -------------------- under this Agreement to an Affiliate of AmeriCredit with the prior written consent of the Note Insurer. The Servicer also may at any time perform through sub-contractors the specific duties of (i) repossession of Financed Vehicles, (ii) tracking Financed Vehicles' insurance and (iii) pursuing the collection of deficiency balances on certain Defaulted Receivables, in each case, without the consent of the Note Insurer and may perform other specific duties through such sub-contractors in accordance with Servicer's customary servicing policies and procedures, with the prior consent of the Note Insurer; provided, however, that -------- ------- no such delegation or sub-contracting duties by the Servicer shall relieve the Servicer of its responsibility with respect to such duties. Neither AmeriCredit or any party acting as Servicer hereunder shall appoint any subservicer hereunder without the prior written consent of the Note Insurer. Section 1.1. Servicer Not to Resign. Subject to the provisions of ---------------------- Section 3.2, the Servicer shall not resign from the obligations and duties imposed on it by this Agreement as Servicer except upon a determination that by reason of a change in legal requirements the performance of its duties under this Agreement would cause it to be in violation of such legal requirements in a manner which would have a material adverse effect on the Servicer and the Note Insurer does not elect to waive the obligations of the Servicer to perform the duties which render it legally unable to act or to delegate those duties to another Person. Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered and acceptable to the Note Insurer. No resignation of the Servicer shall become effective until a successor Servicer that is an eligible servicer as approved by the Note Insurer, shall have assumed the responsibilities and obligations of the Servicer. Section 1.2. Administrative Duties of Servicer. --------------------------------- (a) Duties with Respect to the Transaction Documents. The Servicer shall perform the duties of the Debtor under the Transaction Documents. In furtherance of the foregoing, the Servicer shall consult with the Trustee as the Servicer deems appropriate regarding the duties of the Debtor under the Transaction Documents. The Servicer shall monitor the performance of the Debtor and shall advise the Trustee when action is necessary to comply with the Debtor's duties under the Transaction Documents. The Servicer shall prepare for execution by the Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Debtor or the Trustee to prepare, file or deliver pursuant to the Transaction Documents. (b) Duties with Respect to the Debtor. --------------------------------- (i) In addition to the duties of the Servicer set forth in this Agreement or any of the Transaction Documents, the Servicer shall perform such calculations and shall prepare, or shall cause the preparation, for execution by the Trustee or other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Debtor to prepare, file or deliver pursuant to state and federal tax and securities laws. The 20 Servicer shall administer, perform or supervise the performance of such other activities in connection with the Debtor as are not covered by any of the foregoing provisions and as are expressly requested by the Trustee and are reasonably within the capability of the Servicer. (ii) Notwithstanding anything in this Agreement or any of the Transaction Documents to the contrary, the Servicer shall be responsible for promptly notifying the Trustee in the event that any withholding tax is imposed on the Debtor's payments (or allocations of income) to a Certificateholder. Any such notice shall be in writing and specify the amount of any withholding tax required to be withheld by the Trustee pursuant to such provision. (c) Records. The Servicer shall maintain appropriate books of account ------- and records relating to services performed under this Agreement and as required by the Transaction Documents, which books of account and records shall be accessible for inspection by the Trustee and the Note Insurer at any time during normal business hours. (d) Additional Information to be Furnished to the Trustee and the ------------------------------------------------------------- Note Insurer. The Servicer shall furnish to the Trustee from time to time such - ------------ additional information regarding the Debtor or the Transaction Documents as the Trustee and the Note Insurer shall reasonably request. ARTICLE IV SERVICER TERMINATION -------------------- Section 4.1. Servicer Termination Event. For purposes of this -------------------------- Agreement, each of the following shall constitute a "Servicer Termination Event": (a) Any failure by the Servicer to deliver to the Collateral Agent for distribution to Secured Parties payment required to be so delivered under the terms of the Transaction Documents; (b) Failure on the part of the Servicer duly to observe or perform in any material respect any covenant or agreement set forth in this Agreement or any other Transaction Document to which it is a party, which failure continues unremedied for a period of ten (10) days; (c) Any representation, warranty, certification or statement made by the Servicer (including AmeriCredit, if it is the Servicer) or the Trust, any Seller or any Affiliate of the Trust or any Seller (in the event that the Trust, any Seller or such Affiliate is then acting as the Servicer) in this Agreement, the Receivables Purchase Agreement or in any of the other Transaction Documents or in any certificate or report delivered by it pursuant to any of the foregoing shall prove to have been incorrect in any material respect when made or deemed made; (d) The Servicer shall materially modify the Credit and Collection Policy, unless it has given the Note Insurer prompt notification of such modification and the Note Insurer has determined in its reasonable discretion that such modification is not a material adverse change; 21 (e) The occurrence of a Termination and Amortization Event listed in Section 6.1 of the Security Agreement; (f) Any Event of Bankruptcy shall occur with respect to the Servicer or any of its Subsidiaries or Affiliates; (g) There shall have occurred a Material Adverse Effect with respect to the Servicer since the end of the last fiscal year ending prior to the date of its appointment as Servicer hereunder or any other event shall have occurred which, in the commercially reasonable judgment of the Note Insurer, materially and adversely affects the Servicer's ability to either collect the Receivables or to perform under this Agreement; and (h) Failure of the Servicer or any Subsidiary of the Servicer to pay when due any amounts due under any agreement to which any such Person is a party and under which any Indebtedness greater than $5,000,000, in the case of AmeriCredit or any Subsidiary of AmeriCredit (other than the Debtor), is governed; or the default by the Servicer or any Subsidiary of the Servicer in the performance of any term, provision or condition contained in any agreement to which any such Person is a party and under which any Indebtedness owing by the Servicer or any Subsidiary of the Servicer greater than such respective amounts was created or is governed, regardless of whether such event is an "event of default" or "default" under any such agreement; or any Indebtedness owing by the Servicer or any Subsidiary of the Servicer greater than such respective amounts shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof. Section 4.2. Consequences of a Servicer Termination Event. If a -------------------------------------------- Servicer Termination Event shall occur and be continuing, the Collateral Agent, with the consent of the Note Insurer, by notice given in writing to the Servicer may, or at the direction of the Note Insurer shall, terminate all of the rights and obligations of the Servicer under this Agreement. On or after the receipt by the Servicer of such written notice or upon termination of the term of the Servicer, all authority, power, obligations and responsibilities of the Servicer under this Agreement, whether with respect to the Receivables or the Other Conveyed Property (as defined in the Master Receivables Purchase Agreement) or otherwise, automatically shall pass to, be vested in and become obligations and responsibilities of a successor Servicer acceptable to the Note Insurer); provided, however, that the successor Servicer shall have no liability with - -------- ------- respect to any obligation which was required to be performed by the terminated Servicer prior to the date that the successor Servicer becomes the Servicer or any claim of a third party based on any alleged action or inaction of the terminated Servicer. The successor Servicer is authorized and empowered by this Agreement to execute and deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and the Other Conveyed Property and related documents to show the Trust as lienholder or secured party on the related Lien Certificates, or otherwise. The terminated Servicer agrees to cooperate with the successor Servicer in effecting the termination of the responsibilities and rights of the terminated Servicer under this Agreement, including, without limitation, the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the terminated Servicer for deposit, or have been deposited by the terminated Servicer, in the 22 Collection Account or thereafter received with respect to the Receivables and the delivery to the successor Servicer of all Receivable Files, Monthly Records and Collection Records and a computer tape in readable form as of the most recent Business Day containing all information necessary to enable the successor Servicer or a successor Servicer to service the Receivables and the Other Conveyed Property. If requested by the Note Insurer, the successor Servicer shall terminate the Lock-Box Agreement and direct the Obligors to make all payments under the Receivables directly to the successor Servicer (in which event the successor Servicer shall process such payments in accordance with Section 2.2(d)), or to a Lock-Box Account established by the successor Servicer at the direction of the Note Insurer, at the successor Servicer's expense. The terminated Servicer shall grant the Collateral Agent, the successor Servicer and the Note Insurer reasonable access to the terminated Servicer's premises at the terminated Servicer's expense. Section 4.3. Appointment of Successor. ------------------------ (a) On and after the time the Servicer receives a notice of termination pursuant to Section 4.2, or upon the resignation of the Servicer, the Collateral Agent shall appoint an alternate successor Servicer upon written direction from the Note Insurer, provided that any successor Servicer may not be an Affiliate (as defined in the Security Agreement) of the Note Insurer, who shall be subject to all the rights, responsibilities, restrictions, duties, liabilities and termination provisions relating thereto placed on the Servicer by the terms and provisions of this Agreement except as otherwise stated herein. The Collateral Agent and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. If a successor Servicer is acting as Servicer hereunder, it shall be subject to termination under Section 4.2 upon the occurrence of any Servicer Termination Event applicable to it as Servicer. (b) Any successor Servicer shall be entitled to such compensation (whether payable out of the Collection Account or otherwise) as the Servicer would have been entitled to under this Agreement if the Servicer had not resigned or been terminated hereunder. The Collateral Agent and such successor Servicer may agree on additional reasonable compensation to be paid to such successor Servicer. In addition, any successor Servicer shall be entitled to reasonable transition expenses incurred in acting as successor Servicer. Section 4.4. Notification to Secured Parties. Upon any termination of, ------------------------------- or appointment of a successor to, the Servicer, the Collateral Agent shall give prompt written notice thereof to each Secured Party. Section 4.5. Waiver of Past Defaults. The Agent may, on behalf of all ----------------------- Secured Parties, waive any default by the Servicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Termination Event arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. 23 ARTICKE V THE CUSTODIAN ------------- Section 5.1. Appointment of Custodian; Acknowledgment of Receipt; ---------------------------------------------------- Monthly Exception Reports. Subject to the terms and conditions hereof, the - ------------------------- Collateral Agent hereby revocably appoints the Custodian and the Custodian hereby accepts such appointment, as custodian and bailee on behalf of the Collateral Agent (for the benefit of the Secured Parties) to maintain exclusive custody of the Receivable Files relating to the Receivables from time to time held as part of the Collateral; provided, however, that neither the Collateral -------- ------- Agent nor any Secured Party shall be responsible for the acts or omissions of the Custodian. In performing its duties hereunder, the Custodian agrees to act with that degree of care, skill and attention that a commercial bank acting in the capacity of a custodian would exercise with respect to files relating to comparable automotive or other receivables that it services or holds for itself or others, and, in any event, to exercise at least that degree of care, skill and attention that it exercises with respect to its own assets. The Custodian, as of each Receivables Transfer Date with respect to the Receivables sold on such date, hereby acknowledges receipt of the Receivable File for each Receivable listed in the Schedules of Receivables attached to the related Supplement, subject to any exceptions noted on the applicable Custodian's Acknowledgment. As evidence of its acknowledgement of such receipt of such Records, the Custodian shall execute and deliver to the Collateral Agent and the Note Insurer on each Receivables Transfer Date with respect to the Receivables sold on such date, the Custodian's Acknowledgement in the form attached hereto as Schedule A. In addition, the Custodian shall deliver to the Collateral Agent and the Note Insurer a monthly exception report in the form attached as Exhibit B hereto. AmeriCredit shall be required to repurchase the Receivables listed on the monthly exception report pursuant to Section 2.7 hereof, in the event that the related Lien Certificates are indicated as not having been received by the 181st day following the date of origination of the related Receivables. Section 5.2. Maintenance of Records at Office. The Custodian agrees to -------------------------------- maintain the Receivable Files at 4001 Embarcadero Drive, Arlington, Texas 76014 or at such other office as shall from time to time be identified to the Collateral Agent and the Note Insurer, and the Custodian will hold the Receivable Files in such office on behalf of the Collateral Agent (for the benefit of the Secured Parties), clearly identified on its records as being separate from any other instruments and files, including other instruments and files held by the Custodian, and in compliance with Section 5.3(b) hereof. Section 5.3. Duties of Custodian. ------------------- (a) Safekeeping. (i) The Custodian shall hold the Receivable Files on ----------- behalf of the Collateral Agent (for the benefit of the Secured Parties) clearly identified as being separate from all other files or records maintained by the Custodian, whether at the same or any other location, and shall maintain such accurate and complete accounts, records or computer systems pertaining to each Receivable File as are required to comply with the terms and conditions of the Note Purchase Agreement. Each Contract shall be stamped on both of the first page and the signature page (if different) in accordance with the requirements of any Opinion of Counsel or as otherwise is deemed necessary or desirable by the Collateral Agent and the Note Insurer. Each 24 Receivable shall be identified on the books and records of the Custodian in an manner that (x) is consistent with the practices of a commercial bank acting in the capacity of custodian with respect to similar receivables, (y) indicates that the Receivables are held by the Custodian on behalf of the Collateral Agent and (z) is otherwise necessary, as reasonably determined by the Custodian, to comply with the terms of this Agreement. The Custodian shall conduct, or cause to be conducted, periodic physical inspections of the Receivable Files held by it under this Agreement, and of the related accounts, records and computer systems, in such a manner as shall enable the Collateral Agent, the Note Insurer and the Custodian to verify the accuracy of the Custodian's inventory and recordkeeping. Such inspections shall be conducted at such times, in such manner and by such persons, including, without limitation, independent accountants, as the Collateral Agent and the Note Insurer may request and the cost of such inspections shall be borne by the Custodian. The Custodian shall promptly report to the Collateral Agent and the Note Insurer any failure on the Custodian's part to hold the Receivable Files and maintain its accounts, records and computer systems as herein provided and the Custodian shall promptly take appropriate action to remedy any such failure. (ii) Notwithstanding the above paragraph (i), upon a Servicer Termination Event, at the direction of the Note Insurer, the Custodian shall deliver the Receivable Files within thirty (30) days of such notice to the Collateral Agent and the Collateral Agent shall hold such Receivable Files on behalf of the Secured Parties. Subject to Section 5.3(c) hereof and the preceding sentence, the Custodian shall at all times maintain the original of the fully executed original retail installment sales contract or promissory note and of the Lien Certificate or application therefore, if no such Lien Certificate has yet been issued, relating to each Receivable in a fire resistant vault. (b) Access to Records. The Custodian shall, subject only to the ----------------- Custodian's security requirements applicable to its own employees having access to similar records held by the Custodian, which requirements shall be consistent with the practices of a commercial bank acting in the capacity of custodian with respect to similar files or records, and at such times as may be reasonably imposed by the Custodian, permit only the Secured Parties and the Collateral Agent or their duly authorized representatives, attorneys or auditors to inspect the Receivable Files and the related accounts, records, and computer systems maintained by the Custodian pursuant hereto at such times as any of the Secured Parties or the Collateral Agent may reasonably request. (c) Release of Documents. The Custodian shall release such Receivable -------------------- Files to the Servicer only (1) upon payment in full of such Receivable or (2) as required from time to time as appropriate for servicing and enforcing any Receivable but, in the case of clause (1) or (2), only as is consistent with the terms of the Note Purchase Agreement and the Security Agreement. (d) Administration; Reports. The Custodian shall, in general, attend ----------------------- to all ministerial matters in connection with maintaining custody of the Receivable Files on behalf of the Collateral Agent. In addition, the Custodian shall assist the Collateral Agent or the Servicer, as the case may be, in the preparation of any routine reports to Secured Parties or to regulatory bodies, to the extent necessitated by the Custodian's custody of the Receivable Files. 25 Section 5.4. Instructions; Authority to Act. The Custodian shall be ------------------------------ deemed to have received proper instructions with respect to the Receivable Files upon its receipt of written instructions signed by a Responsible Officer of the Collateral Agent. Such instructions may be general or specific in terms. Section 5.5. Custodian Fee. For its services under this Agreement, the ------------- Custodian shall be entitled to reasonable compensation to be paid by the Servicer. Section 5.6. Indemnification by the Custodian. The Custodian agrees to -------------------------------- indemnify the Secured Parties, the Trust, the Note Insurer, the Trustee and the Collateral Agent for any and all liabilities, obligations, losses, damage, payments, costs or expenses of any kind whatsoever (including the fees and expenses of counsel) that may be imposed on, incurred or asserted against any of the Secured Parties, the Trust, the Note Insurer and/or the Collateral Agent as the result of any act or omission in any way relating to the maintenance and custody by the Custodian of the Receivable Files or any default by the Custodian of its obligations hereunder; provided, however, that the Custodian shall not be -------- ------- liable to any party indemnified hereunder for any portion of any such liabilities, obligations, losses, damages, payments or costs or expenses as are due to the willful misfeasance, bad faith or gross negligence of such indemnified party. Section 5.7. Advice of Counsel. The Custodian shall be entitled to rely ----------------- and act upon advice of counsel selected by it with due care with respect to its performance hereunder as custodian and shall be without liability for any action reasonably taken in good faith pursuant to such advice, provided that such action is not in violation of applicable federal or state law. Section 5.8. Effective Period, Termination, and Amendment; Interpretive ---------------------------------------------------------- and Additional Provisions. This Agreement shall become effective as of the date - ------------------------- hereof and shall continue in full force and effect until terminated as hereinafter provided. This Agreement may be amended at any time by agreement of the Collateral Agent, the Note Insurer and the Custodian and the rights and obligations of the Servicer and the Custodian may be terminated by the Note Insurer following a Termination and Amortization Event; provided so long as -------- AmeriCredit is Custodian, the Custodian shall not resign from the obligations and duties imposed on it by this Agreement, except upon a determination that by reason of a change in legal requirements, the performance of its duties under this Agreement would cause it to be in violation of such legal requirements in a manner which would have a material adverse effect on it and the Note Insurer does not elect to waive the obligations of the Custodian to perform the duties which render it legally unable to act or to delegate those duties to another Person; provided, further, that any such determination permitting the -------- ------- resignation of the Custodian shall be evidenced by an Opinion of Counsel to such effect delivered to the Note Insurer and the Collateral Agent that is acceptable to the Note Insurer. So long as AmeriCredit is serving as Custodian, any termination of AmeriCredit as Servicer under the Note Purchase Agreement or the Security Agreement shall terminate AmeriCredit as Custodian under this Agreement. Immediately after receipt of notice of termination of this Agreement, the Custodian shall deliver the Receivable Files to the Collateral Agent on behalf of the Secured Parties, at such place or places as the Collateral Agent may designate, and the Collateral Agent, or its agent, as the case may be, shall act as custodian for such Records on behalf of the Secured Parties until such times as a successor custodian acceptable to the Note Insurer has been appointed by the Collateral 26 Agent. (For the avoidance of doubt, during any such period, the Collateral Agent shall be acting in its capacity as Collateral Agent, including the standard of care and liability in such capacity, and not as a successor "Custodian" hereunder.) If, within thirty (30) days after the termination of this Agreement, the Custodian has not delivered the Receivable Files in accordance with the preceding sentence, the Collateral Agent may enter the premises of the Custodian and remove the Receivable Files from such premises. In connection with the administration of this Agreement, the parties may agree from time to time upon the interpretation of the provisions of this Agreement as may in their joint opinion be consistent with the general tenor and purposes of this Agreement, any such interpretation to be signed by all parties and annexed hereto. Section 5.9. Representations, Warranties and Covenants of Custodian. ------------------------------------------------------ (a) The Custodian hereby represents and warrants to, and covenants with, the Collateral Agent and the Secured Parties that as of the date hereof and as of each Receivables Transfer Date: (i) The Custodian is duly organized, validly existing and in good standing under the laws of the state of its incorporation; (ii) The Custodian has the full power and authority to hold each Receivable File on behalf of the Collateral Agent, and to execute, deliver and perform, and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding obligation of the Custodian, enforceable against it in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and by the availability of equitable remedies; (iii) The consummation of the transactions contemplated by this Agreement and the Transaction Documents to which the Custodian is a Party, and the fulfillment of the terms of this Agreement and the Transaction Documents to which the Custodian is a Party, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Custodian, or any indenture, agreement, mortgage, deed of trust or other instrument to which the Custodian is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, or violate any law, order, rule or regulation applicable to the Custodian of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Custodian or any of its properties and do not require any action by or require the consent of or the filing of any notice with any Official Body or other Person; (iv) There is no litigation pending or, to the Custodian's knowledge, threatened, which if determined adversely to the Custodian, would adversely affect the execution, delivery or enforceability of this Agreement, or any of the duties or 27 obligations of the Custodian thereunder, or which would have a material adverse effect on the financial condition of the Custodian; (v) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Custodian of or compliance by the Custodian with this Agreement or the consummation of the transactions contemplated hereby or thereby; (vi) Upon written request of the Collateral Agent or the Note Insurer, the Custodian shall take such steps as requested by the Collateral Agent or the Note Insurer to protect or maintain any interest in any Receivable; and (vii) The Custodian has not been notified by any party that any third party claims an interest in the Receivables or is requesting the Custodian to act as a bailee with respect to the Records, except such interests that are created under the Master Receivables Purchase Agreement, the Security Agreement, the Note Purchase Agreement and any Supplement. (b) The Custodian covenants and warrants to the Collateral Agent and each of the Secured Parties that as of the date of each Custodian's Acknowledgment: (i) it holds no adverse interest, by way of security or otherwise, in any Receivable or Receivable File; and (ii) the execution of this Agreement and the creation of the custodial relationship hereunder does not create any interest, by way of security or otherwise, of the Custodian in or to any Receivable or Receivable File, other than the Custodian's rights as custodian hereunder. (c) The Custodian shall, at its own expense, maintain at all times during the existence of this Agreement and keep in full force and effect, a fidelity bond and errors and omissions policy of a type and in such amount as is customary for custodians engaged in the business of acting as custodian of automobile receivables and shall maintain any other similar insurance policies that are customarily maintained by custodians engaged in the business of acting as custodian of automobile receivables. A certificate of the respective insurer as to each such policy or a blanket policy for such coverage shall be furnished to the Collateral Agent and the Note Insurer containing the insurer's statement or endorsement that such insurance shall not terminate prior to receipt by such party, by certified mail, of ten (10) days advance notice thereof. ARTICLE VI MISCELLANEOUS ------------- Section 6.1. Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the laws of the State of New York without giving effect to the conflict of law provisions thereof. Section 6.2. Notices. All demands, notices and communications hereunder ------- shall be in writing (including bank wire, telex, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other party at its address or telecopy number set forth below or at such other address or telecopy number as such party may hereafter specify for the 28 purposes of notice to such party. Each such notice or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section and confirmation is received, (ii) if given by mail three (3) Business Days following such posting, if postage prepaid, or if sent via U.S. certified or registered mail, (iii) if given by overnight courier, one (1) Business Day after deposit thereof with a national overnight courier service, or (iv) if given by any other means, when received at the address specified in this Section. If to the Trust: --------------- AmeriCredit MTN Receivables Trust III c/o Bankers Trust (Delaware) E.A. Delle Donne Corporate Center Montgomery Building 1011 Centre Road, Suite 200 Wilmington, Delaware 19805 Attention: Corporate Trust Administration Telephone: (302) 636-3305 Telecopy: (302) 636-3222 with a copy to: Bankers Trust Company 100 Plaza One, 6/th/ Floor Jersey City, New Jersey 07310 Attention: Asset Backed Finance Unit If to the Servicer or the Custodian: ----------------------------------- AmeriCredit Financial Services, Inc. 801 Cherry Street Suite 3900 Fort Worth, Texas 76102 Telephone: (817) 302-7022 Telecopy: (817) 302-7942 If to the Note Insurer: ---------------------- MBIA Insurance Corporation 113 King Street Armonk, NY 10504 Attention: Insured Portfolio Management - SF Telephone: (914) 273-4545 Telecopy: (914) 765-3810 29 If to the Collateral Agent: -------------------------- JPMorgan Chase Bank 450 W. 33rd Street New York, NY 10001 Attention: AmeriCredit MTN Receivables Trust III Telephone: (212) 946-3651 Telecopy: (212) 946-8302 Section 6.3. Binding Effect. This Agreement shall be binding upon and -------------- shall inure to the benefit of the parties hereto and their respective successors and assigns. In addition, each of the Secured Parties shall be an express third party beneficiary hereof entitled to enforce the terms hereof as if it were a party hereto. Concurrently with the appointment of a successor Collateral Agent under the Security Agreement, the parties hereto shall amend this Agreement to make said Collateral Agent, the successor to the Collateral Agent hereunder. Section 6.4. Severability. Any provision of this Agreement that is ------------ prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 6.5. Separate Counterparts. This Agreement may be executed by --------------------- the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 6.6. Limitation of Liability of Trustee. It is expressly ---------------------------------- understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Bankers Trust (Delaware), not individually or personally but solely as Trustee of the Trust, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as personal representations, undertakings and agreements by Bankers Trust (Delaware) but is made and intended for the purpose for binding only the Trust, (c) nothing herein contained shall be construed as creating any liability on Bankers Trust (Delaware), individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Bankers Trust (Delaware) be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Agreement or any other Transaction Documents; provided, however, that no provision of this Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, its action in bad faith or its own willful misconduct. 30 Section 6.7.Waivers; Amendment ------------------ (a) No failure or delay on the part of the Collateral Agent, the Note Insurer, the Note Insurer or any of the Secured Parties in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. (b) Any provision of this Agreement or any of the Transaction Documents may be amended or waived if, but only if, such amendment is in writing and is signed by the Debtor, the Collateral Agent, the Custodian, the Servicer and the Purchaser and the Note Insurer. Section 6.8. Nonpetition Covenants. None of the parties shall petition --------------------- or otherwise invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Debtor, AMTN or Purchaser under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Debtor, AMTN or the Purchaser (as defined in the Note Purchase Agreement) or any substantial part of their respective property, or ordering the winding up or liquidation of the affairs of the Debtor, AMTN and the Purchaser. This Section 6.8 shall be continuing and shall survive any termination of this Agreement. Notwithstanding anything else herein to the contrary, in no event shall the Collateral Agent be liable for any servicing fee or for any differential in the amount of the servicing fee paid hereunder and the amount necessary to induce any successor Servicer to act as successor Servicer under this Agreement and the transactions set forth or provided for herein. 31 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by a duly authorized officer on the day and year first above written. JPMorgan Chase Bank solely in its capacity as Collateral Agent By:_________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., as Servicer and Custodian By:_________________________________ Name: Title: AMERICREDIT MTN RECEIVABLES TRUST III By: BANKERS TRUST (DELAWARE), not in its individual capacity but solely as Trustee By:_________________________________ Name: Title: [Servicing and Custodian Agreement] 32 EXHIBIT C SCOPE OF QUARTERLY AUDIT 1. MBIA will provide an account listing of a random sample of 125 accounts on a quarterly basis. The accounts will be selected from the pool of collateral then backing the Meridian facilities. AmeriCredit will provide a pool cut to MBIA on a quarterly basis for this purpose. 2. The auditor will specify any changes to AmeriCredit's underwriting guidelines since the last quarterly review. 3. The auditor will review the random sample of 125 accounts for document completeness and adherence to AmeriCredit's stated underwriting criteria. 4. The auditor will review the contract files for the following documents and report on any missing items: . Signed Credit Application . Credit Report . Title or Application for Title . Income and Employment Confirmations . Residence Confirmations . Signed Installment Sales Contract . Agreement to Obtain Insurance or Insurance Binder . Odometer Statement 5. The auditor will review the selected sample and identify and document any exceptions or deviations from the stated underwriting guidelines with regards to the following items: - -------------------------------------------------------------------------------- Guideline Criteria - -------------------------------------------------------------------------------- Minimum Time at Residence 1 year - -------------------------------------------------------------------------------- Minimum Housing Payment $300 (Typically) - -------------------------------------------------------------------------------- Monthly Payment for Auto Insurance $100 - -------------------------------------------------------------------------------- Minimum Age of Borrower 18 years - -------------------------------------------------------------------------------- Minimum Years on the Job 1 year - -------------------------------------------------------------------------------- Minimum Monthly Income $1,300 (Gross) - -------------------------------------------------------------------------------- Maximum Debt Ratio (Credit Score * 230) 55% - -------------------------------------------------------------------------------- Maximum Debt Ratio (Credit Score **** 230) 60% - -------------------------------------------------------------------------------- Maximum Payment to Income Ratio 21% - -------------------------------------------------------------------------------- Bankruptcy Score **** 200 - -------------------------------------------------------------------------------- * means less than **** means more than equal to
- ------------------------------------------------------------------------------------ Guideline Criteria - ------------------------------------------------------------------------------------ Income and Employment Verification Required/1/ - ------------------------------------------------------------------------------------ Residence Verification Required/1/ - ------------------------------------------------------------------------------------ Minimum Internal Credit Score 210 - ------------------------------------------------------------------------------------ Maximum Mileage (Loan Term *** 60 months) 80,000 miles - ------------------------------------------------------------------------------------ Maximum Mileage (Loan Term ** 60 months) 30,000 miles - ------------------------------------------------------------------------------------ Maximum Loan Term (Credit Score *** 220) 60 months - ------------------------------------------------------------------------------------ Maximum Loan Term (Credit Score **** 220) 72 months - ------------------------------------------------------------------------------------ Maximum Unpaid Loan to Value (Credit Score * 200)/3/ 115% - ------------------------------------------------------------------------------------ Maximum Unpaid Loan to Value (Credit Score *** 200)/3/ 120% - ------------------------------------------------------------------------------------ Maximum Amount Financed to Value (Credit Score * 210) 120% - ------------------------------------------------------------------------------------ Maximum Amount Financed to Value (Credit Score **** 210 *** 229) 136% - ------------------------------------------------------------------------------------ Maximum Amount Financed to Value (Credit Score **** 230) 137% - ------------------------------------------------------------------------------------ Excluded Vehicles vs. Current List/2/ - ------------------------------------------------------------------------------------
**** means more than equal to *** means less than equal to ** means more than * means less than Any exceptions to stated policy should be checked as to whether or not they were authorized/approved by management and documented as such. ___________________ /1/ This requirement is waived on transactions that are considered "Preferred," "Select" or "Valued" customer programs. /2/ Current List: Alfa Romeo, Daihatsu, Merkur, Peugeot, Yugo, Sterling and Renault. Also 1998 and older Hyundai, Suzuki, Kia and Daewoo. /3/ The unpaid loan to value ratio equals the sales price of the vehicles plus sales tax less all down-payments including trade-in and manufacturer's rebate (Contract line 3) divided by the value of the vehicle. ii SCHEDULE A FORM OF CUSTODIAN'S ACKNOWLEDGMENT AmeriCredit Financial Services, Inc. (the "Custodian"), acting as --------- Custodian under a Servicing and Custodian Agreement, dated as of February 25, 2002 (the "Servicing and Custodian Agreement"), between the Custodian, --------------------------------- AmeriCredit MTN Receivables Trust III, as Debtor, and JPMorgan Chase Bank, as Collateral Agent, pursuant to which the Custodian holds on behalf of the Secured Parties certain Receivable Files (as defined in the Servicing and Custodian Agreement), hereby acknowledges receipt of the Receivable File for each Receivable listed in the Schedules of Receivables attached as Exhibits to the Supplements to the Receivables Purchase Agreement, dated [insert date of the ------------------ relevant Supplement], except as noted in the Exception List attached as Schedule - ------------------- I hereto, if any. IN WITNESS WHEREOF, AmeriCredit Financial Services, Inc., has caused this acknowledgment to be executed by its duly authorized officer as of this [_] day of [_], [_]. AMERICREDIT FINANCIAL SERVICES, INC. as Custodian By:________________________ Name: Title: EX-10.7 9 dex107.txt SECURITY AGREEMENT Exhibit 10.7 EXECUTION COPY ================================================================================ SECURITY AGREEMENT among AMERICREDIT MTN RECEIVABLES TRUST III, as the Debtor AMERICREDIT FINANCIAL SERVICES, INC., Individually and as the Servicer AMERICREDIT MTN CORP. III, Individually and JPMORGAN CHASE BANK as the Collateral Agent and as the Securities Intermediary Dated as of February 25, 2002 ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS; THE NOTE.............................................................................. 1 SECTION 1.1. Certain Defined Terms...................................................................... 1 SECTION 1.2. Other Terms................................................................................ 30 SECTION 1.3. Computation of Time Periods................................................................ 30 SECTION 1.4. Form of Notes.............................................................................. 30 SECTION 1.5. Execution, Authentication and Delivery..................................................... 30 SECTION 1.6. Registration; Registration of Transfer and Exchange........................................ 31 SECTION 1.7. Mutilated, Destroyed, Lost or Stolen Notes................................................. 32 SECTION 1.8. Persons Deemed Owner....................................................................... 33 SECTION 1.9. Cancellation............................................................................... 33 SECTION 1.10. Maintenance of Office or Agency............................................................ 33 ARTICLE II GRANT OF SECURITY INTEREST AND SETTLEMENTS........................................................ 34 SECTION 2.1. Grant of Security Interest................................................................. 34 SECTION 2.2. Note Interest, Premium Amounts, Fees and Other Costs and Expenses.......................... 34 SECTION 2.3. Monthly Flow of Funds...................................................................... 35 SECTION 2.4. Prepayments................................................................................ 37 SECTION 2.5. Liquidation Settlement Procedures.......................................................... 37 SECTION 2.6. Protection of Interest of the Collateral Agent............................................. 37 SECTION 2.7. Deemed Collections; Application of Payments................................................ 39 SECTION 2.8. Payments and Computations, Etc. ........................................................... 39 SECTION 2.9. Reports.................................................................................... 40 SECTION 2.10. Collection Account......................................................................... 40 SECTION 2.11. Funding Account............................................................................ 41 SECTION 2.12. Yield Supplement Account; Withdrawals; Releases............................................ 43 SECTION 2.13. [Intentionally Omitted].................................................................... 44 SECTION 2.14. [Intentionally Omitted].................................................................... 44 SECTION 2.15. Reserve Account; Withdrawals; Releases..................................................... 45 SECTION 2.16. Optional Release........................................................................... 46 SECTION 2.17. Delivery of Collateral. With respect to the Collateral, the Debtor and the Collateral Agent hereby agree that: ....................................................... 47 ARTICLE III REPRESENTATIONS AND WARRANTIES................................................................... 48 SECTION 3.1. Representations and Warranties of the Debtor, AmeriCredit and AMTN......................... 48 SECTION 3.2. Representations and Warranties of the Servicer............................................. 51 ARTICLE IV CONDITIONS PRECEDENT.............................................................................. 53 SECTION 4.1. Conditions to Closing...................................................................... 53 ARTICLE V COVENANTS ......................................................................................... 56
i SECTION 5.1. Affirmative Covenants of the Debtor and AmeriCredit........................................ 56 SECTION 5.2. Negative Covenants of Debtor, AMTN and AmeriCredit......................................... 60 SECTION 5.3. Hedging Arrangements....................................................................... 63 SECTION 5.4. Affirmative Covenants of the Servicer...................................................... 64 SECTION 5.5. Negative Covenants of the Servicer......................................................... 65 ARTICLE VI TERMINATION AND AMORTIZATION EVENTS; OPTIONAL TERMINATION......................................... 66 SECTION 6.1. Termination and Amortization Events........................................................ 66 SECTION 6.2. Termination................................................................................ 69 SECTION 6.3. Optional Redemption of Note................................................................ 70 SECTION 6.4. Optional Purchase of All Receivables....................................................... 70 SECTION 6.5. Proceeds................................................................................... 71 ARTICLE VII THE COLLATERAL AGENT............................................................................. 71 SECTION 7.1. Duties of the Collateral Agent............................................................. 71 SECTION 7.2. Compensation and Indemnification of Collateral Agent....................................... 71 SECTION 7.3. [Intentionally Omitted].................................................................... 72 SECTION 7.4. Liability of the Collateral Agent.......................................................... 72 SECTION 7.5. [Intentionally Omitted].................................................................... 74 SECTION 7.6. Limitation on Liability of the Collateral Agent and Others................................. 74 ARTICLE VIII THE SECURITIES INTERMEDIARY..................................................................... 75 SECTION 8.1. Duties of the Securities Intermediary...................................................... 75 SECTION 8.2. Representations, Warranties and Covenants of the Securities Intermediary................... 75 SECTION 8.3. Governing Law for Certain Securities Intermediary Matters.................................. 76 ARTICLE IX MISCELLANEOUS..................................................................................... 76 SECTION 9.1. Term of Agreement.......................................................................... 76 SECTION 9.2. Waivers; Amendments........................................................................ 76 SECTION 9.3. Notices.................................................................................... 77 SECTION 9.4. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Integration; Appointment of Agent for Service of Process................................................ 79 SECTION 9.5. Counterparts; Severability................................................................. 80 SECTION 9.6. Successors and Assigns..................................................................... 80 SECTION 9.7. Waiver of Confidentiality.................................................................. 80 SECTION 9.8. Confidentiality Agreement.................................................................. 80 SECTION 9.9. No Bankruptcy Petition Against the Purchaser, AMTN, or the Debtor.......................... 81 SECTION 9.10. Further Assurances......................................................................... 81 SECTION 9.11. Characterization of the Transactions Contemplated by the Agreement; Tax Treatment.................................................................................. 81 SECTION 9.12. Responsibilities of the Debtor............................................................. 81 SECTION 9.13. Headings................................................................................... 82 SECTION 9.14. Limitation on Liability.................................................................... 82 SECTION 9.15. Binding Effect............................................................................. 82
ii SECTION 9.16. Effect of Note Insurer Default............................................................. 82 EXHIBITS EXHIBIT A List of Lock-Box Banks and Lock-Box Accounts EXHIBIT B Form of Lock-Box Agreement EXHIBIT C Form of Note EXHIBIT D Form of Investor Representation Letter EXHIBIT E List of Actions and Suits EXHIBIT F Schedule of Locations of Records EXHIBIT G List of Subsidiaries, Divisions and Tradenames EXHIBIT H [Intentionally Omitted] EXHIBIT I Form of Secretary's Certificate EXHIBIT J [Intentionally Omitted] EXHIBIT K Form of Take-Out Notice EXHIBIT L Form of Delivery Notice EXHIBIT M Cumulative Net Loss Table EXHIBIT N Delinquency Ratio Table EXHIBIT O Default Ratio Table EXHIBIT P Collateral Agent's Fee Schedule EXHIBIT Q Trustee's Fee Schedule
iii SECURITY AGREEMENT SECURITY AGREEMENT (as amended, supplemented or otherwise modified from time to time, this "Agreement"), dated as of February 25, 2002, by and --------- among AMERICREDIT MTN RECEIVABLES TRUST III, a Delaware business trust, as debtor (in such capacity, the "Debtor"), AMERICREDIT FINANCIAL SERVICES, INC., a ------ Delaware corporation ("AmeriCredit"), individually and in its capacity as ----------- Servicer (in such capacity, the "Servicer"), AMERICREDIT MTN CORP. III, a -------- Delaware corporation ("AMTN"), individually, and JPMORGAN CHASE BANK, a New York ---- banking corporation ("JPMorgan"), individually and as collateral agent for the -------- Secured Parties (in such capacity, the "Collateral Agent") and as securities ---------------- intermediary (in such capacity, the "Securities Intermediary"). ----------------------- PRELIMINARY STATEMENTS ---------------------- WHEREAS, subject to the terms and conditions of this Agreement, the Debtor desires to grant a security interest in and to the Receivables and related property including the Debtor's interest in certain retail automotive installment sales contracts and loans or promissory notes secured by automobiles; WHEREAS, pursuant to the Note Purchase Agreement, the Debtor has issued the Note to the Purchaser and will be obligated to the holder of the Note to pay the principal of and interest on the Note in accordance with the terms thereof; MBIA Insurance Corporation (the "Note Insurer"), a New York stock ------------ insurance company, has issued and delivered a note guaranty insurance policy, dated the Closing Date (with endorsements and exhibits, the "Note Policy"), ----------- pursuant to which the Note Insurer guarantees Insured Payments, as defined in the Note Policy. As an inducement to the Note Insurer to issue and deliver the Note Policy, the Debtor and the Note Insurer have executed and delivered the Insurance Agreement, dated as of February 25, 2002 (as amended from time to time, the "Insurance Agreement"), among the Note Insurer, the Debtor, ------------------- AmeriCredit, the Servicer, the Collateral Agent and AMTN. As an additional inducement to the Note Insurer to issue the Note Policy, and as security for the performance by the Debtor of its obligations hereunder the Debtor has agreed to assign the Collateral (as defined below) as collateral to the Collateral Agent for the benefit of the Secured Parties, as their respective interests may appear. NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS; THE NOTE SECTION 1.1. Certain Defined Terms. As used in this Agreement, the --------------------- following terms shall have the following meanings: "ABS" means the assumed rate of prepayments on the Receivables for --- each Settlement Period based upon the "Absolute Prepayment Model," applied in accordance with current market standards. "Account(s)" means, singularly, each of the Lock-Box Account, the ---------- Collection Account, the Funding Account, the Reserve Account and the Yield Supplement Account, and, collectively, all such Accounts. "Accrual Period" means, with respect to each MTN Payment Date other -------------- than the first MTN Payment Date, the period commencing on the prior MTN Payment Date and ending on the day immediately preceding such MTN Payment Date and, with respect to the first MTN Payment Date, the period commencing on the Closing Date and ending on the day immediately preceding such first MTN Payment Date. "Adjusted EBITDA" means, with respect to AmeriCredit Corp., earnings --------------- before interest, taxes, depreciation, and amortization, plus cash distributions from the trusts created in connection with securitizations sponsored by AmeriCredit (i.e., residual interest income) minus any non-cash gain on the sale of receivables. "Administrative Agent" means MBIA, as agent for the Purchaser, and any -------------------- successor thereto appointed pursuant to the Note Purchase Agreement. "Adverse Claim" means a lien, security interest, charge or ------------- encumbrance, or other right or claim in, of or on any Person's assets or properties in favor of any other Person (including any UCC financing statement or any similar instrument filed against such Person's assets or properties). "Affected Assets" means, collectively, the Receivables and the Related --------------- Security, Collections and Proceeds relating thereto. "Affiliate" means, with respect to any Person, any other Person --------- directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of voting stock, by contract or otherwise. "Aggregate Outstanding Balance" means, with respect to any group of ----------------------------- Receivables as of any date, the sum of the Outstanding Balances of all such Receivables as of the close of business on the immediately preceding date. "AMTN" means AmeriCredit MTN Corp. III, a Delaware corporation, and ---- its successors and assigns. "AmeriCredit" means AmeriCredit Financial Services, Inc., a Delaware ----------- corporation, and its successors and assigns. "AmeriCredit Corp." means AmeriCredit Corp., a Texas corporation, and ----------------- its successors and assigns. 2 "AmeriCredit Score" means, with respect to a Receivable, the credit ----------------- score for the related Obligor, determined in accordance with the Credit and Collection Policy. "Amortization Period" means the period commencing on the earlier to ------------------- occur of (i) the date on which the Regular Amortization Period commences or (ii) the date on which the Rapid Amortization Period commences and ending on the later of (x) the date on which the Net Investment is reduced to zero and there are no amounts outstanding to the Note Insurer and (y) the Final Maturity Date. "Amortization Period Reserve Percentage" means, -------------------------------------- (x) with respect to any date of determination which occurs after the commencement of the Amortization Period and prior to the seventh (7th) Remittance Date during the Amortization Period: (i) 7.0% if the Portfolio Net Loss Ratio calculated as of the most recent Determination Date is less than 5.00%. (ii) 8.0%, if the Portfolio Net Loss Ratio calculated as of the most recent Determination Date is greater than or equal to 5.00% but less than 6.00%. (iii) 9.0%, if the Portfolio Net Loss Ratio calculated as of the most recent Determination Date is greater than or equal to 6.00% but less than 7.00%. (iv) 10.0%, if the Portfolio Net Loss Ratio calculated as of the most recent Determination Date is greater than or equal to 7.00% but less than 7.50%. (v) 11.0%, if the Portfolio Net Loss Ratio calculated as of the most recent Determination Date is greater than or equal to 7.50%; and (y) with respect to any date of determination occurring on and after the seventh (7/th/) Remittance Date during the Amortization Period, the applicable percentage set forth in the numbered clauses (i) through (v) in paragraph (x) above calculated with respect to the (6/th/) Remittance Date. "Amount Financed" means, with respect to a Receivable, the aggregate --------------- amount of credit extended under the Contract related to such Receivable to pay, or to refinance, the purchase price of or outstanding balance with respect to the Financed Vehicle and related costs, including amounts advanced in respect of accessories, insurance premiums, service and warranty contracts, other items customarily financed as part of retail automobile installment sales contracts or promissory notes, and related costs. "Annualized Net Loss Ratio" means, as of any date of determination, ------------------------- the ratio (expressed as a percentage), computed by dividing "A" by "B," and then multiplying the result by "C" where: 3 "A" is equal to the Monthly Net Losses for all Receivables held as Collateral which have occurred during six Settlement Periods immediately preceding such date divided by the average Aggregate Outstanding Balance of all Receivables held as Collateral during such six-month period; "B" is equal to the actual number of days in such six-month period; and "C" is equal to the actual number of days in the Servicer's fiscal year in which the most recently-ended Settlement Period occurred. "Annual Percentage Rate" or "APR" means, with respect to a Receivable, ---------------------- --- the rate per annum of finance charges stated in the Contract related to such Receivable as the "annual percentage rate" (within the meaning of the Federal Truth-in-Lending Act). If, after the applicable Delivery Date, the rate per annum with respect to a Receivable as of such Delivery Date is reduced as a result of (a) an insolvency proceeding involving the related Obligor or (b) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940, "Annual Percentage Rate" or "APR" shall refer to such reduced rate. "Authorized Officer" means, with respect to the Debtor, any officer, ------------------ or agent acting pursuant to a power of attorney of the Debtor, who is authorized to act for the Debtor, in matters relating to the Debtor and who is identified on the list of Authorized Officers delivered by the Debtor to the Collateral Agent on the Closing Date (as such list may be modified or supplemented from time to time thereafter). "Available Funds" means, with respect to any Remittance Date, the --------------- aggregate amount then on deposit in the Collection Account which represents the amounts described in clause (i), (ii), (iii) and (iv) of Section 2.10(a) hereof on such Remittance Date. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978 (11 --------------- U.S.C.)(S)(S) 101 et seq., as amended. "Benefit Plan" means any employee benefit plan as defined in Section ------------ 3(3) of ERISA in respect of which the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN is, or at any time during the immediately preceding six years was, an "employer" as defined in Section 3(5) of ERISA. "Borrowing Base" means, as of any Borrowing Base Determination Date, -------------- the sum of (x) the product of (i) 95% and (ii) the Net Receivables Balance as of the close of business on such Borrowing Base Determination Date after taking into account all Facility Activity on such Borrowing Base Determination Date plus (y) the amount on deposit in the Funding Account at the close of business on such Borrowing Base Determination Date after taking into account all Facility Activity on such Borrowing Base Determination Date plus (z) the amount on deposit in the Collection Account with respect to principal at the close of business on such Borrowing Base Determination Date after taking into account all Facility Activity on such Borrowing Base Determination Date. 4 "Borrowing Base Determination Date" means each of the following dates: --------------------------------- (i) the last day of each Settlement Period, (ii) each Take-Out Date and (iii) each Receivables Delivery Date. "Business Day" means any day excluding Saturday, Sunday and any day on ------------ which banks in New York, New York, Fort Worth, Texas or London, England are authorized or required by law to close. "Capitalized Lease" of a Person means any lease of property by such ----------------- Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Certificateholders" means the holders of the Class A Certificates and ------------------ the Class B Certificates issued under the Trust Agreement. The Debtor shall inform the Collateral Agent and the Note Insurer in writing of the identity of the Certificateholders. "Class A Certificates" means the Class A Certificates issued under the -------------------- Trust Agreement. "Class B Certificates" means the Class B Certificates issued under the -------------------- Trust Agreement. "Closing Date" means February 25, 2002. ------------ "Code" means the Internal Revenue Code of 1986, as amended. ---- "Collateral" has the meaning specified in Section 2.1 hereof. ---------- "Collateral Agent" means JPMorgan Chase Bank, as collateral agent for ---------------- the Secured Parties, and its successors and assigns. "Collateral Agent Accounts" has the meaning described in Section ------------------------- 8.2(i) hereof. "Collection Account" means the account established by the Collateral ------------------ Agent, for the benefit of the Secured Parties, pursuant to Section 2.10. "Collections" means, with respect to any Receivable, all cash ----------- collections and other cash proceeds (including liquidation proceeds) of such Receivable, including, without limitation, all Finance Charges, if any, and any refunded portion of extended warranty protection plan costs or of insurance costs (for example, physical damage, credit life or disability) included in the original amount financed under such Receivable, and cash proceeds of Related Security with respect to such Receivable. "Contract" means any and all retail installment sales contracts or -------- installment notes and security agreements relating to the sale or refinancing of a new or used automobile, light duty truck, van or minivan and other writings related thereto now existing and hereafter created or acquired by AmeriCredit or AMTN and assigned from time to time to the Debtor pursuant to the Master Receivables Purchase Agreement. 5 "Cram Down Loss" has the meaning given such term in the Servicing and -------------- Custodian Agreement. "Credit and Collection Policy" means the Servicer's credit and ---------------------------- collection policy or policies and practices relating to automobile installment sales contracts, existing on the date hereof and in effect from time to time in compliance with Section 5.2(d). "Credit Score Based Reserve Percentage" means, with respect to the ------------------------------------- Amortization Period, the applicable percentage set forth in the numbered clauses (i) through (v) below: (i) 7% if the Weighted Average AmeriCredit Score of all Eligible Receivables as of the commencement of the Amortization Period, after taking into account all Facility Activity on such date is greater than or equal to 227.00; or (ii) 8%, if the Weighted Average AmeriCredit Score of all Eligible Receivables as of the commencement of the Amortization Period, after taking into account all Facility Activity on such date is greater than or equal to 226.00 but less than 227.00; or (iii) 9%, if the Weighted Average AmeriCredit Score of all Eligible Receivables as of the commencement of the Amortization Period, after taking into account all Facility Activity on such date is greater than or equal to 224.00 but less than 226.00; or (iv) 10%, if the Weighted Average AmeriCredit Score of all Eligible Receivables as of the commencement of the Amortization Period, after taking into account all Facility Activity on such date is greater than or equal to 222.00 but less than 224.00; or (v) 11%, if the Weighted Average AmeriCredit Score of all Eligible Receivables as of the commencement of the Amortization Period, after taking into account all Facility Activity on such date is less than 222.00. "Cumulative Net Loss" means, for any Receivables Pool or the Regular ------------------- Amortization Receivables Pool, as appropriate, the positive difference between (i) the sum of (A) the Aggregate Outstanding Balance of all Liquidated Receivables plus (B) aggregate Cram Down Losses minus (ii) Liquidation Proceeds received with respect to the Receivables described in clause (i). "Cumulative Net Loss Ratio" means, for any Receivables Pool, the ------------------------- ratio, expressed as a percentage, computed by dividing: (a) the sum (without duplication) of (i) Cumulative Net Losses and (ii) the product of (x) 0.50 and (y) the Aggregate Outstanding Balance of all Receivables which are more than ninety (90) days past due as of the end of the related Settlement Period; by -- (b) the sum of (i) the aggregate initial principal balance plus (ii) the initial pre-funding account balance, if any, in each case for the related Receivables Pool. 6 "Debtor" means AmeriCredit MTN Receivables Trust III, a Delaware ------ business trust, and its successors and permitted assigns. "Debtor Order" means a written order or request signed in the name of ------------ the Debtor by any one of its Authorized Officers and delivered to the Collateral Agent. "Defaulted Receivable" means a Receivable with respect to which (i) -------------------- all or any portion in excess of 5% of a Scheduled Payment is more than ninety (90) days past due, (ii) the Servicer has repossessed the related Financed Vehicle (and any applicable redemption period has expired), or (iii) such Receivable is in default and the Servicer has charged-off such Receivable in accordance with the Credit and Collection Policy or otherwise has determined in good faith that payments thereunder are not likely to be resumed. "Default Ratio" means a fraction, expressed as a percentage, the ------------- numerator of which is the Aggregate Outstanding Balance of all Defaulted Receivables since the commencement of the Regular Amortization Period and the denominator of which is the Initial Regular Amortization Receivables Pool Balance. "Deficiency Amount" has the meaning specified in the Note Policy. ----------------- "Delinquency Ratio" means, the ratio (expressed as a percentage) ----------------- computed by dividing: (a) the Aggregate Outstanding Balance of all Receivables which were Delinquent Receivables as of the close of business on the last day of the related Settlement Period. by -- (b) the sum of the Aggregate Outstanding Balance of all Receivables as of the close of business on the first day of the related Settlement Period. "Delinquent Receivable" means a Receivable with respect to which 5% or --------------------- more of a scheduled payment is more than sixty (60) days past due (excluding (i) Receivables which the Servicer has repossessed the related Financed Vehicle and (ii) Receivables which have become Liquidated Receivables). "Delivery" when used with respect to Collateral means: -------- (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute instruments and are susceptible of physical delivery ("Physical Property"): ----------------- (i) transfer of possession thereof to the Collateral Agent, endorsed to, or registered in the name of, the Collateral Agent or its nominee or endorsed in blank; 7 (b) with respect to a certificated security: (i) delivery thereof in bearer form to the Collateral Agent; or (ii) delivery thereof in registered form to the Collateral Agent; and (A) the certificate is endorsed to the Collateral Agent or in blank by effective endorsement; or (B) the certificate is registered in the name of the Collateral Agent, upon original issue or registration of transfer by the issuer; (c) with respect to an uncertificated security: (i) the delivery of the uncertificated security to the Collateral Agent; or (ii) the issuer has agreed that it will comply with instructions originated by the Collateral Agent without further consent by the registered owner; (d) with respect to any security issued by the U.S. Treasury that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations: (i) a Federal Reserve Bank by book entry credits the book-entry security to the securities account (as defined in 31 CFR Part 357) of a participant (as defined in 31 CFR Part 357) which is also a Securities Intermediary; and (ii) the participant indicates by book entry that the book-entry security has been credited to the Collateral Agent's securities account; (e) with respect to a security entitlement: (i) the Collateral Agent becomes the entitlement holder; or (ii) the Securities Intermediary has agreed that it will comply with entitlement orders originated by the Collateral Agent without further consent by the entitlement holder; (f) for the purposes of clauses (b) and (c) hereof "delivery" means: (i) with respect to a certificated security: (A) the Collateral Agent acquires possession thereof; (B) another person (other than a Securities Intermediary) either acquires possession thereof on behalf of the Collateral Agent or, having previously acquired possession thereof, acknowledges that it holds for the Collateral Agent; or 8 (C) a Securities Intermediary acting on behalf of the Collateral Agent acquires possession of thereof, only if the certificate is in registered form and has been specially endorsed to the Collateral Agent by an effective endorsement; (ii) with respect to an uncertificated security: (A) the issuer registers the Collateral Agent as the registered owner, upon original issue or registration of transfer; or (B) another person (other than a Securities Intermediary) either becomes the registered owner thereof on behalf of the Collateral Agent or, having previously become the registered owner, acknowledges that it holds for the Collateral Agent; (g) for purposes of this definition, except as otherwise indicated, the following terms shall have the meaning assigned to each such term in the UCC: (i) "certificated security"; (ii) "effective endorsement"; (iii) "entitlement holder"; (iv) "instrument"; (v) "securities account"; (vi) "securities entitlement"; (vii) "Securities Intermediary"; and (viii) "uncertificated security"; (h) in each case of Delivery contemplated herein, the Collateral Agent shall make appropriate notations on its records, and shall cause the same to be made on the records of its nominees, indicating that securities are held in trust pursuant to and as provided in this Agreement. "Delivery Date" means the date on which a Receivables Delivery occurs. ------------- "Delivery Notice" means the notice, substantially in the form attached --------------- hereto as Exhibit L, furnished by the Debtor in accordance with Section 2.11(b)(1). "Depositary" has the meaning set forth in 31 C.F.R. 306.118 or similar ---------- federal regulations governing the transfer of securities issued by the United States Treasury which are maintained in book-entry form. "Determination Date" means, with respect to each Remittance Date, the ------------------ second Business Day preceding such Remittance Date, notwithstanding anything else to the contrary herein, the Determination Date for any month in which any repayment of principal is to be made 9 by the Debtor (currently expected to begin in February 2005) shall be the 11th Business Day prior to the MTN Payment Date in such month, unless such day falls in the prior calendar month, in which case it shall be the first Business Day of the month. "Eligible Collateral" means, collectively, Eligible Receivables, ------------------- Eligible Investments credited to the Funding Account, and Eligible Investments credited to the Collection Account. "Eligible Deposit Account" means a segregated trust account with the ------------------------ corporate trust department of a depository institution acceptable to the Note Insurer organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a long term unsecured debt rating of "AA" or higher from S&P and "Aa2" or higher by Moody's and in the highest short-term rating category by S&P and Moody's or is otherwise acceptable to the Note Insurer. Each Eligible Deposit Account created hereunder shall be established as follows: "[name of account], JPMorgan Chase Bank, as Collateral Agent." "Eligible Investments" means any of the following (a) negotiable -------------------- instruments or securities represented by instruments in bearer or registered or in book-entry form which evidence (i) obligations fully guaranteed by the United States; (ii) time deposits in, or bankers acceptances issued by, any depository institution or trust company incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the -------- ------- time of investment or contractual commitment to invest therein, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations (other than such obligation whose rating is based on collateral or on the credit of a Person other than such institution or trust company) of such depository institution or trust company has a credit rating from Moody's and S&P of at least "P-1" and "A-1," respectively, in the case of the certificates of deposit or short-term deposits, or a rating not lower than one of the two highest investment categories granted by Moody's and by S&P; (iii) certificates of deposit having, at the time of investment or contractual commitment to invest therein, a rating from Moody's and S&P of at least "P-1" and "A-1," respectively; or (iv) investments in money market funds rated in the highest investment category or otherwise approved in writing by the applicable rating agencies; (b) demand deposits in any depository institution or trust company referred to in (a)(ii) above; (c) commercial paper (having original or remaining maturities of no more than thirty-one (31) days) having, at the time of investment or contractual commitment to invest therein, a credit rating from Moody's and S&P of at least "P-1" and "A-1," respectively; (d) Eurodollar time deposits having a credit rating from Moody's and S&P of at least "P-1" and "A-1," respectively; and (e) repurchase agreements involving any of the Eligible Investments described in clauses (a)(i), (a)(iii) and (d) hereof, so long as the other party to the repurchase agreement has at the time of investment therein, a rating from Moody's and S&P of at least "P-1" and "A-1," respectively. "Eligible Receivable" means, at any time, any Receivable: ------------------- (i) (A) which shall have been originated by AmeriCredit directly with an Obligor or through an automobile dealer or Third Party Lender approved in accordance with 10 AmeriCredit's standard operating procedures and which has been acquired from a Dealer by means of a Dealer Agreement or a Dealer Assignment (as defined in the Servicing Agreement), which dealer shall be located in the United States and which, together with the Contract related thereto, if originated by a dealer, shall have been validly assigned by such dealer to AmeriCredit and which assignment, if part of a bulk sale by such dealer to AmeriCredit, shall have been approved in writing by the Note Insurer, or pursuant to the terms of such Contract, for the retail sale or refinancing of the related Financed Vehicle in the ordinary course of its business, shall have been fully and properly executed by the parties thereto, and shall have been advanced directly to or for the benefit of the Obligor for the purchase or refinancing of the related Financed Vehicle, (B) which shall have been sold by AmeriCredit or AMTN to the Debtor pursuant to the Master Receivables Purchase Agreement, and to which the Debtor has good and marketable title thereto, free and clear of all Adverse Claims, and (C) the Contract related to which contains customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for the realization against the collateral of the benefits of the security provided thereby; (ii) which (together with the Collections and Related Security related thereto) has been the subject of the grant of a first priority perfected security interest therein (and in the Collections and Related Security related thereto) to the Collateral Agent for the benefit of the Secured Parties, effective until the termination of this Agreement; (iii) the Obligor of which (A) is a United States resident and is recorded in the Servicer's records as having a United States billing address or is a member of the U.S. military and is recorded in the Servicer's records as having an overseas U.S. military base address, (B) is a natural person, (C) is not an Affiliate of any of the parties hereto, and (D) is not a government or a governmental subdivision or agency or any other governmental entity; (iv) which is not a Defaulted Receivable at the time of the related Receivables Delivery hereunder; (v) (A) during the Revolving Period with respect to which 5% or more of a scheduled payment is not more than thirty (30) days past due and (B) during the Amortization Period, with respect to which 5% or more of a scheduled payment is not more than thirty (30) days past due as of the date the Amortization Period commences; (vi) the Contract related to which provides for level monthly payments (provided that the payment in the first or last month in the life of -------- the Receivable may be minimally different from such level payment) that fully amortizes the Amount Financed over the original term and yields interest at the related APR; (vii) the Contract related to which provides for the calculation of interest payable thereunder under either the "simple interest" or "Rule of 78's" or the "sum of the periodic time balances" method; (viii) the Contract related to which provides for no more than 72 monthly payments; 11 (ix) which is an "eligible asset" as defined in Rule 3a-7 under the Investment Company Act of 1940, as amended; (x) which is "chattel paper" within the meaning of Article 9 of the UCC of all applicable jurisdictions and, which is secured by a first priority perfected lien on the related Financed Vehicle, free and clear of any Adverse Claim or for which all necessary steps to result in such a first priority perfected lien shall have been taken as of the Delivery Date; (xi) which is denominated and payable only in United States dollars in the United States; (xii) which arises under a Contract that, together with the Receivable related thereto, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms, is the complete, accurate and entire financing agreement with the Obligor relating to the Financed Vehicle, is not subject to any litigation, dispute, offset, counterclaim or other defense and the provisions of which have not been extended, waived or modified except in accordance with the Credit and Collection Policy or upon the written instructions of the Note Insurer; (xiii) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation in any material respect; (xiv) which (A) satisfies all applicable requirements of the Credit and Collection Policy and is identified on the Servicer's master servicing records as a automobile installment sales contract or installment note, (B) arises under a Contract which is assignable without the consent of, or notice to, the Obligor thereunder, and which does not contain a confidentiality provision that purports to restrict the ability of the Servicer to exercise its rights under this Agreement, including, without limitation, its right to review the Contract, and (C) arises under a Contract with respect to which AmeriCredit, AMTN and the Debtor have each performed all obligations required to be performed by them thereunder, and, in the event such Contract is an installment sales contract, delivery of the Financed Vehicle to the related Obligor has occurred; (xv) which was generated in the ordinary course of AmeriCredit's business; (xvi) the assignment of which under the Master Receivables Purchase Agreement by AmeriCredit or AMTN to the Debtor and the grant of a security interest with respect thereto hereunder by the Debtor to the Collateral Agent does not violate, conflict or contravene any applicable laws, rules, regulations, orders or writs or any contractual or other restriction, limitation or encumbrance; (xvii) with respect to which AmeriCredit or any Affiliate thereof has not advanced any funds to or for the benefit of the related Obligor in order to make such Receivable an "Eligible Receivable"; 12 (xviii) the Obligor of which has been or will be directed to make all payments to a specified account of the Servicer with respect to which there shall be a Lock-Box Agreement in effect; (xix) with respect to which there is only one original Contract which original Contract has been delivered to the Custodian; (xx) with respect to which the Amount Financed does not exceed $60,000; (xxi) the APR of which is no less than 7.0%; (xxii) the Contract related to which provides that any prepayment in full of such Receivable fully pays all remaining principal and all interest due at the applicable APR as of such date of prepayment, in each case with respect to such Receivable; (xxiii) which is not, at the time of an initial creation of an interest therein hereunder, subject to any right of rescission, cancellation, set-off, claim, counterclaim or defense (including the defense of usury) of the Obligor; (xxiv) which is secured by a valid, existing and enforceable first priority perfected security interest in favor of the Receivable's originator in the related Financed Vehicle, which security interest has been validly assigned by the originator to AmeriCredit (if such Receivable is not originated by, or the security interest is not initially perfected in favor of, AmeriCredit) and either (A) by AmeriCredit to the Debtor or (B) by AmeriCredit to AMTN and by AMTN to the Debtor, and by the Debtor to the Collateral Agent; (xxv) the Contract related to which requires it to be insured by an individual physical damage insurance policy; and (xxvi) provides for enforcement of the lien or the clear legal right of repossession as applicable on the Financed Vehicle securing such Receivable, and the certificate of title names the Servicer as the secured party, or an application for a certificate of title naming the Servicer as secured party has been filed with the relevant jurisdiction. "Entitlement Order" shall have the meaning given such term in Section ----------------- 8-102(a)(8) of the UCC. "ERISA" means the Employee Retirement Income Security Act of 1974, as ----- amended from time to time, and the regulations promulgated thereunder. "ERISA Affiliate" means, with respect to any Person, (i) any --------------- corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as such Person; (ii) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with such Person; or (iii) a member of the same affiliated service group (within the meaning of Section 414(n) of the Code) as such Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above. 13 "Event of Bankruptcy" means, with respect to any Person, (i) that such ------------------- Person (a) shall generally not pay its debts as such debts become due or (b) shall admit in writing its inability to pay its debts generally or (c) shall make a general assignment for the benefit of creditors; (ii) any proceeding shall be instituted by or against such Person seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or (iii) if such Person is a corporation, such Person or any Subsidiary shall take any corporate action to authorize any of the actions set forth in the preceding clauses (i) or (ii). "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Executive Officer" means, with respect to any corporation, the Chief ----------------- Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof. "Facility Activity" means, with respect to any calculation as of a ----------------- specified date or time after taking into account all Facility Activity, adjusting (x) all Accounts for any withdrawals, transfers and deposits on such date and prior to such time, (y) for any Receivables Delivery or any Take-Out which occurs on such date and prior to such time and (z) any amortization of Receivables and the Net Investment on such date and prior to such time. "Final Maturity Date" means the Remittance Date in February 2012. ------------------- "Finance Charges" means, with respect to a Contract, any finance, --------------- interest or similar charges owing by an Obligor or another Person pursuant to such Contract. "Financed Vehicle" means, with respect to a Receivable, any new or ---------------- used automobile, light-duty truck, van or minivan, together with all accessories thereto, securing the related Obligor's indebtedness thereunder. "Funding Account" has the meaning specified in Section 2.11 hereof. --------------- "Guaranty" means, with respect to any Person any agreement by which -------- such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any other creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement or take-or-pay contract and shall include, without limitation, the contingent liability of such Person in connection with any application for a letter of credit. "Hedging Arrangement" means any financial arrangement obtained by the ------------------- Debtor from a counterparty rated "A" or better by S&P and "A2" or better by Moody's satisfying the requirements of Section 5.3 hereof and otherwise in form and substance reasonably satisfactory 14 to the Purchaser and the Note Insurer, the benefits of which are in favor of the Debtor and pledged to the Collateral Agent for the benefit of the Secured Parties. "Indebtedness" means, with respect to any Person such Person's (i) ------------ obligations for borrowed money, (ii) obligations representing the deferred purchase price of property other than accounts payable arising in the ordinary course of such Person's business on terms customary in the trade, (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or products of property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) Capitalized Lease obligations and (vi) obligations for which such Person is obligated pursuant to a Guaranty. "Initial Regular Amortization Receivables Pool Balance" means the ----------------------------------------------------- Aggregate Outstanding Balance of all Receivables held as Collateral at the commencement of the Regular Amortization Period. "Initial Reserve Percentage" means, with respect to any Delivery Date: --------------------------- (i) 1.5% if both ---- (a) the Weighted Average AmeriCredit Score of all Eligible Receivables (including the Receivables to be delivered on such Receivables Delivery Date) is greater than or equal to 227.00; and (b) the most-recently calculated Portfolio Net Loss Ratio is less than 5.00%. (ii) 2.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables (including the Receivables to be delivered on such Receivables Delivery Date) is greater than or equal to 226.00 but less than 227.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 5.00% but less than 6.00%. (iii) 3.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables (including the Receivables to be delivered on such Receivables Delivery Date) is greater than or equal to 224.00 but less than 226.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 6.00% but less than 7.00%. 15 (iv) 4.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables (including the Receivables to be delivered on such Receivables Delivery Date) is greater than or equal to 222.00 but less than 224.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 7.00% but less than 7.50%. (v) 5.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables (including the Receivables to be delivered on such Receivables Delivery Date) is less than 222.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 7.50%. "Insurance Agreement" has the meaning specified in the Recitals ------------------- hereto. "Insurance Termination Date" means the date on which the Net -------------------------- Investment has been reduced to zero, and there are no amounts outstanding to the Note Insurer. "Interest Expense" means with respect to AmeriCredit Corp. and for any ---------------- period, AmeriCredit Corp.'s interest expense during such period for money borrowed (exclusive of any such interest expense on any "off-balance sheet" securitizations or warehouse facilities), calculated in accordance with GAAP. "Late Payment Rate" has the meaning specified in the Insurance ----------------- Agreement. "Law" means any law (including common law), constitution, statute, --- treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body. "LIBOR" means, with respect to any LIBOR Determination Date, the rate ----- for deposits in U.S. dollars for one month which appears on Telerate Page 3750 as of 11:00 a.m., London time, on the LIBOR Determination Date. If such rate does not appear on the Telerate Page 3750, the rate will be determined on the basis of the rates at which deposits for U.S. dollars are offered by four major banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date to prime banks in the London interbank market for one month commencing on the first day of the Accrual Period. The Collateral Agent will request the principal London office of each such banks to provide a quotation of its rate. If at least two such quotations are provided, the LIBOR rate for that Accrual Period will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the rate will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Collateral Agent, at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date for 16 loans in the U.S. dollars to leading European banks for one month commencing on the first day of the related Accrual Period. "LIBOR Determination Date" means, with respect to any Accrual Period, ------------------------ the second day preceding such Accrual Period and is a day on which commercial banks are open for international business (including dealings in U.S. dollar deposits) in London. "Lien" means any mortgage, deed of trust, pledge, hypothecation, ---- assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing. "Liquidated Receivable" means with respect to any Settlement Period, a --------------------- Receivable (i) as to which ninety (90) days have elapsed since the related Financed Vehicle was repossessed by the Servicer, (ii) as to which (A) 210 days or more have elapsed since 5% or more of any Scheduled Payment became due, which amount remains unpaid, and (B) the related Financed Vehicle has been repossessed by the Servicer, (iii) other than a Receivable falling under clause (i) or (ii) as to which 120 days or more have elapsed since 5% or more of any Scheduled Payment became due, which amount remains unpaid or (iv) as to which the Servicer has in good faith determined that it has allocated all amounts that it expects to collect with respect to such Receivable. "Liquidation Proceeds" means, with respect to a Liquidated Receivable, -------------------- all amounts realized with respect to such Receivable. "Lock-Box Account" means an account or accounts maintained by the ---------------- Servicer at a Lock-Box Bank for the purpose of receiving Collections from Receivables. "Lock-Box Agreement" means an agreement between the Servicer, the ------------------ Collateral Agent and a Lock-Box Bank in substantially the form of Exhibit B hereto. "Lock-Box Bank" means each of the banks set forth in Exhibit A hereto ------------- and such banks as may be added thereto or deleted therefrom pursuant to Section 2.6 hereof. "Master Receivables Purchase Agreement" means the Master Receivables ------------------------------------- Purchase Agreement, dated as of the date hereof, among the Debtor, AmeriCredit, AMTN and the Collateral Agent, as such agreement may be amended, supplemented, or otherwise modified from time to time. "Material Adverse Effect" means any event or condition which would ----------------------- have a material adverse effect on (i) the collectibility of the Receivables, (ii) the condition (financial or otherwise), businesses or properties of the Debtor, the Servicer, AmeriCredit or AMTN, (iii) the ability of the Debtor, the Servicer, AmeriCredit or AMTN to perform its respective obligations under the Transaction Documents to which it is a party, or (iv) the interests of the Note Insurer, the Collateral Agent or the Secured Parties under the Transaction Documents. 17 "MBIA" means MBIA Insurance Corporation. ---- "Monthly Administrative Fee" means, with respect to any Remittance -------------------------- Date, the product of (x) one twelfth, (y) 0.10% per annum and (z) the Net Investment outstanding immediately prior to such Remittance Date. The Monthly Administrative Fee is included in the calculation of the Note Rate. "Monthly Extension Ratio" means, with respect to any Determination ----------------------- Date, the fraction expressed as a percentage, the numerator of which is the Aggregate Outstanding Balance of all Receivables in the Servicing Portfolio whose payments are extended during the related Settlement Period and the denominator of which is the Aggregate Outstanding Balance of all Receivables in the Servicing Portfolio as of the close of business on the last day of the Settlement Period immediately preceding such related Settlement Period. "Monthly Net Losses" means the positive difference, if any, of (i) the ------------------ sum of (A) the Aggregate Outstanding Balance of all Receivables that became Liquidated Receivables during the related Settlement Period plus (B) all Cram Down Losses incurred during the related Settlement Period minus (ii) all Liquidation Proceeds received during the related Settlement Period. "Monthly Principal Amount" means, as of any Remittance Date: ------------------------ (A) during the Revolving Period, the amount equal to the excess, if any, of (x) the sum of (i) the principal portion of all Collections received during the related Settlement Period (other than Collections with respect to Liquidated Receivables and Purchased Receivables) and (ii) the principal portion of the Purchase Amounts received with respect to all Receivables that became Purchased Receivables during the related Settlement Period over (y) the Step-Down Amount, if any, for such Remittance Date; and (B) during the Amortization Period, the amount equal to the excess, if any, of (x) the sum of (i) the principal portion of all Collections received during the related Settlement Period (other than Collections with respect to Liquidated Receivables and Purchased Receivables), (ii) the principal portion of the Purchase Amounts received with respect to all Receivables that became Purchased Receivables during the related Settlement Period, (iii) the Aggregate Outstanding Balance of all Receivables that became Liquidated Receivables during the related Settlement Period (other than Purchased Receivables), (iv) in the sole discretion of the Note Insurer, the Principal Balance of all the Receivables that were required to be become Purchased Receivables during such Settlement Period but were not purchased, (v) the aggregate amount of Cram Down Losses that occurred during the related Settlement Period and (vi) if such Remittance Date is the first Remittance Date to occur during the Amortization Period, the amount transferred from the Funding Account to the Collection Account in accordance with Section 2.11(e) hereof over (y) the Step-Down Amount, if any, for such Remittance Date. "Moody's" means Moody's Investors Service, Inc. ------- "MTN Eligible Collateral" means all Eligible Collateral in the ----------------------- aggregate AmeriCredit MTN Receivables Trust, AmeriCredit MTN Receivables Trust II and AmeriCredit MTN Receivables Trust III. 18 "MTN Eligible Receivables" means all Eligible Receivables in the ------------------------ aggregate in AmeriCredit MTN Receivables Trust, AmeriCredit MTN Receivables Trust II and AmeriCredit MTN Receivables Trust III. "MTN Payment Date" means the 15th day of each month or next succeeding ---------------- Business Day, commencing March 15, 2002. "Multiemployer Plan" means a "multiemployer plan" as defined in ------------------ Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN on behalf of its employees. "Net Investment" means (i) $500,000,000 minus (ii) the aggregate -------------- amount applied to reduce such Net Investment pursuant to Section 2.3 hereof. "Net Receivables Balance" means at any time the Aggregate Outstanding ----------------------- Balance of all Eligible Receivables at such time. "Net Spread Deficiency" means, as of any Borrowing Base Determination --------------------- Date, the positive difference, if any, of (i) the sum of (A) 8.25% plus (B) the Servicing Fee, expressed as a percentage of the Net Receivables Balance plus (C) the lesser of (x) one-month LIBOR plus (I) from the Closing Date up to and including the thirty-sixth (36th) Remittance Date, 0.7500% and (II) after the thirty-sixth (36th) Remittance Date, 1.8750% and (y) the weighted average strike price under the Hedging Arrangements then in effect, minus (ii) the weighted average APR of all Eligible Receivables then held as Collateral. "Note" means the Debtor's note issued and delivered pursuant to ---- Section 1.5 hereof, in substantially the form set forth as Exhibit C hereto. "Noteholder" or "Holder" means the Person in whose name a Note is ---------- ------ registered on the Note Register. "Note Insurer" means MBIA, as Note Insurer, and its successors and ------------ assigns. "Note Insurer Default" means any one of the following events shall -------------------- have occurred and be continuing: (a) the Note Insurer shall have failed to make a payment required under the Note Policy; (b) the Note Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made a general assignment for the benefit of its creditors, or (iii) had an order for relief entered against it under the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or 19 (c) a court of competent jurisdiction, the New York Department of Insurance, or other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, trustee, agent or receiver for the Note Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Note Insurer (or the taking of possession of all or any material portion of the property of the Note Insurer). "Note Interest" means, with respect to each Remittance Date, the ------------- product of (x) the Note Rate in effect with respect to such Remittance Date, (y) the Net Investment outstanding immediately prior to such Remittance Date and (z) a fraction, the numerator of which is the actual number of days in the related Accrual Period and the denominator of which is 360. The Note Interest shall be reduced by the interest portion of any Prepayment Amount applied since the preceding Remittance Date. "Note Policy" means the note guaranty insurance policy No. 37434(1), ----------- issued by the Note Insurer. "Note Purchase Agreement" means that certain Note Purchase Agreement, ----------------------- dated as of February 15, 2002, among the Debtor, AmeriCredit, the Purchaser and the Administrative Agent. "Note Rate" means, (i) with respect to each Accrual Period relating to --------- a Remittance Date prior to the Remittance Date in February 2005, LIBOR as of the related LIBOR Determination Date plus 0.50% per annum and (ii) with respect to each Accrual Period thereafter, LIBOR as of the related LIBOR Determination Date plus 1.60% per annum; provided, that with respect to the first Accrual Period, -------- the Note Rate shall be 2.35% per annum. "Obligor" means a Person obligated to make payments pursuant to a ------- Contract. "Officer's Certificate" means, with respect to any Person which is not --------------------- an individual, a certificate signed by the President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, any Senior Vice President, or any Vice President of such Person. "Official Body" means any government or political subdivision or any ------------- agency, authority, bureau, central bank, commission, department or instrumentality of any such government or political subdivision, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Outstanding Balance" means, with respect to any Receivable, as of any ------------------- date, the sum of the Amount Financed minus that portion of all amounts received ----- by the Servicer with respect to such Receivable on or prior to such date and allocable to principal in accordance with the terms of the Contract related to such Receivable minus any Cram Down Loss in respect of such Receivable plus the ----- ---- accrued and unpaid interest on such Receivable. "Owner" has the meaning specified in the Note Purchase Agreement. ----- 20 "Person" means any corporation, limited liability company, natural ------ person, firm, joint venture, partnership, trust, unincorporated organization, enterprise, government or any department or agency of any government. "Portfolio Delinquency Ratio" means as of any date of determination a --------------------------- fraction, expressed as a percentage, equal to (i) the Aggregate Outstanding Balance of all Receivables included in the Servicing Portfolio which are Delinquent Receivables on the last day of the related Settlement Period divided by (ii) the average Aggregate Outstanding Balance of the Servicing Portfolio during the related Settlement Period. "Portfolio Net Loss Ratio" means, as of any date of determination, the ------------------------ ratio (expressed as a percentage), computed by dividing "A" by "B," and then multiplying the result by "C" where: "A" is equal to the Monthly Net Losses for the Servicing Portfolio which have occurred during the six Settlement Periods immediately preceding such date divided by (ii) the average Aggregate Outstanding Balance of the Servicing Portfolio during such six-month period; "B" is equal to the actual number of days in such six-month period; and "C" is equal to the actual number of days in the Servicer's fiscal year in which the most recently-ended Settlement Period occurred. "Portfolio Repossession Ratio" means as of any date of determination a ---------------------------- fraction, expressed as a percentage, equal to (i) the Aggregate Outstanding Balance of all repossessed Receivables included in the Servicing Portfolio as of the last Business Day of the related Settlement Period divided by (ii) the average Aggregate Outstanding Balance of the Servicing Portfolio during the related Settlement Period. "Potential Termination and Amortization Event" means an event which -------------------------------------------- but for the lapse of time or the giving of notice, or both, would constitute a Termination and Amortization Event. "Premium Amount" shall have the meaning set forth in the Premium Side -------------- Letter. "Premium Side Letter" means the letter agreement dated the date hereof ------------------- between AmeriCredit and the Note Insurer, as amended, modified or otherwise supplemented from time to time. "Prepayment Amount" means, with respect to any Prepayment Date, the ----------------- sum of (i) the amount deposited in the Collection Account in accordance with Section 6.5 hereof on account of principal and not previously applied as a principal reduction of the Net Investment and (ii) accrued interest at the Note Rate on the amount described in clause (i). "Prepayment Date" means each date on which a Prepayment Amount is --------------- applied, which date shall be a Remittance Date. 21 "Proceeds" means "proceeds" as defined in Section 9-306(1) of the UCC -------- of the states set forth in Section 2.6 hereof. "Purchase Amount" has the meaning given such term in the Master --------------- Receivables Purchase Agreement. "Purchased Receivables" means a Receivable purchased from the Debtor --------------------- pursuant to Article V of the Master Receivables Purchase Agreement or Section 2.7 of the Servicing Agreement. "Purchaser" means Meridian Funding Company, LLC, a Delaware limited --------- liability company. "Rapid Amortization Period" means the period commencing on the close ------------------------- of business on the Business Day immediately preceding the day on which a Termination and Amortization Event occurs or is deemed to have occurred and ending on the later of (i) the date on which the Net Investment is reduced to zero and there are no amounts outstanding to the Note Insurer and (ii) the Final Maturity Date. "Receivable" means indebtedness owed to the Debtor by an Obligor ---------- (without giving effect to any transfer hereunder) under a Contract, whether constituting an account, chattel paper, instrument or general intangible, arising out of or in connection with the sale, refinancing or loan made or purchased by AmeriCredit with respect to new or used automobiles, light-duty trucks, vans or minivans or the rendering of services by the originating dealer in connection therewith, and includes the right of payment of any Finance Charges and other obligations of the Obligor with respect thereto. Notwithstanding the foregoing, once the Collateral Agent has released its security interest in a Receivable and the related Contract pursuant to Section 2.4, 2.7 or Section 2.15 hereof, it shall no longer constitute a Receivable hereunder. "Receivables Delivery" means the delivery by the Debtor of Eligible -------------------- Receivables hereunder (x) in exchange for a release of cash from the Funding Account or (y) for any other reason pursuant to this Agreement or the other Transaction Documents. "Receivables Delivery Payment Amount" has the meaning specified in ----------------------------------- Section 2.11(c)(ii) hereof. "Receivables Pool" means each receivables pool supporting an ---------------- asset-backed securitization sponsored by AmeriCredit on and after December 31, 2001 (excluding any Receivables held as part of any warehouse arrangement), or, if the initial Aggregate Outstanding Balance of any such asset-backed securitization is less than $500,000,000, the Aggregate Outstanding Balance of all Receivables originated or purchased by AmeriCredit in each calendar quarter, on or after December 31, 2001. "Receivables Systems" means, with respect to any Person, all computer ------------------- applications of such Person (including, but not limited to, those of any suppliers, vendors, customers and any third party Servicers of such Person), which are related to or involved in the origination, collection, management or servicing of the Receivables. 22 "Records" means all Contracts and other documents, books, records and ------- other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) maintained with respect to Receivables and the related Obligors. "Regular Amortization Period" means the period commencing on the --------------------------- thirty-sixth (36/th/) Remittance Date and ending on the earlier of (i) the date on which a Termination and Amortization Event occurs and (ii) the later of (A) the date on which the Net Investment is reduced to zero and there are no amounts outstanding to the Note Insurer and (B) the Final Maturity Date. "Regular Amortization Period Cumulative Net Loss Ratio" means the ----------------------------------------------------- ratio, expressed as a percentage, computed by dividing: (a) the sum (without duplication) of (i) Cumulative Net Losses for the Regular Amortization Receivables Pool and (ii) the product of (x) 0.50 multiplied by (y) the Aggregate Outstanding Balance of all Receivables which are more than ninety (90) days past due as of the end of the related Settlement Period by -- (b) the Initial Regular Amortization Receivables Pool Balance. "Regular Amortization Receivables Pool" means all Eligible Receivables ------------------------------------- held as Collateral during the Regular Amortization Period. "Regulation D" means Regulation D of the Board of Governors of the ------------ Federal Reserve System, as the same may be amended, supplemented or otherwise modified and in effect from time to time. "Reimbursement Amount" means, with respect to any Remittance Date, the -------------------- sum of (i) any draws under the Note Policy paid by the Note Insurer to the Collateral Agent which was not previously repaid to the Note Insurer pursuant to Section 2.3(a)(ix) hereof plus (ii) any other amounts then due and owing to the Note Insurer pursuant to the Insurance Agreement and (iii) interest accrued on each such amount described in (i) or (ii) above which was not previously repaid, calculated from the date the Trust Collateral Agent received the related amount, at the Late Payment Rate applicable to such Remittance Date. On each Determination Date, the Note Insurer shall notify the Collateral Agent and the Servicer of the amount of any Reimbursement Amount due on the related Remittance Date if such amount is greater than zero. "Related Security" means with respect to any Receivable: ---------------- (i) all of the Debtor's interest in the Financed Vehicles (including repossessed vehicles) or in any document or writing evidencing any security interest in any Financed Vehicle and all of the Debtor's interest in all rights to payment under all insurance contracts with respect to a Financed Vehicle, including, without limitation, any monies collected from whatever source in connection with any default of an Obligor with respect to a Financed Vehicle and any proceeds from claims or refunds of premiums on any physical damage, lender's single interest, 23 credit life, disability and hospitalization insurance policies covering Financed Vehicles or Obligors; (ii) all of the Debtor's interest in all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related thereto or otherwise, together with all financing statements signed by an Obligor and security agreements describing any collateral securing such Contract; (iii) all of the Debtor's interest in all guaranties, indemnities, warranties, insurance (and proceeds and premium refunds thereof) and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise; (iv) all of the Debtor's interest in all rights to payment under all service contracts and other contracts and agreements associated with such Receivables and all of the Debtor's interest in all recourse rights against the dealers (excluding any rights in any dealer reserve); (v) all of the Debtor's interest in all Records, documents and writings evidencing or related to such Receivables or the Contracts; (vi) all of the Debtor's interest in all rights and remedies of the Debtor under the Master Receivables Purchase Agreement, together with all financing statements filed by the Debtor against each of AmeriCredit and AMTN in connection therewith; (vii) all of the Debtor's interest in all Lock-Box Accounts and Lock-Box Agreements; (viii) all of the Debtor's interest in the Hedging Agreements; and (ix) all Proceeds of the foregoing. "Remittance Date" means, for each Settlement Period, the third --------------- Business Day prior to the MTN Payment Date, commencing in March 2002. "Repossessions" means Financed Vehicles the Servicer has voluntarily ------------- or involuntarily taken possession of and has not yet disposed of at auction or otherwise. "Reserve Account" has the meaning specified in Section 2.15 hereof. --------------- "Reserve Account Deposit Amount" has the meaning specified in Section ------------------------------ 2.11(c)(i) hereof. 24 "Reserve Account Required Amount" means, ------------------------------- (x) as of any Borrowing Base Determination Date during the Revolving Period, the product of (i) the applicable Revolving Period Reserve Percentage and (ii) the Net Receivables Balance as of such Borrowing Base Determination Date; and (y) as of any date of determination during the Amortization Period, the lesser of: (i) the greatest of: (A) 1.5% of the Aggregate Outstanding Balance of all Receivables as of the commencement of the Amortization Period; (B) the product of (I) the applicable Amortization Period Reserve Percentage and (II) the Aggregate Outstanding Balance of all Receivables as of such date of determination; and (C) the product of (I) the Credit Score Based Reserve Percentage applicable to the Amortization Period and (II) the Aggregate Outstanding Balance of all Receivables as of such date of determination; and (ii) the Net Investment as of such date of determination. "Reserve Account Shortfall" means, as of any Delivery Date, ------------------------- that the amount on deposit in the Reserve Account on such Determination Date is less than the Reserve Account Deposit Amount for such Delivery Date. "Revolving Period" means the period commencing on the Closing ---------------- Date and ending on the commencement of the earlier of (i) the date on which the Regular Amortization Period commences and (ii) the date on which the Rapid Amortization Period commences. "Revolving Period Reserve Percentage" means, with respect to ----------------------------------- any Borrowing Base Determination Date during the Revolving Period, the sum of (x) if, and only if, the Weighted Average Age of the Eligible Receivables then exceeds 180 days, 3%, plus (y) the applicable percentage set forth in the numbered clauses (i) through (v) below: (i) 3.5% if both ---- (a) the Weighted Average AmeriCredit Score of all Eligible Receivables as of such date of determination, after taking into account all Facility Activity on such date is greater than or equal to 227.00; and (b) the most-recently calculated Portfolio Net Loss Ratio is less than 5.00%. 25 (ii) 4.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables as of such date of determination, after taking into account all Facility Activity on such date is greater than or equal to 226.00 but less than 227.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 5.00% but less than 6.00%. (iii) 5.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables as of such date of determination, after taking into account all Facility Activity on such date is greater than or equal to 224.00 but less than 226.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 6.00% but less than 7.00%. (iv) 6.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables as of such date of determination, after taking into account all Facility Activity on such date is greater than or equal to 222.00 but less than 224.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 7.00% but less than 7.50%. (v) 7.5%, if either ------ (a) the Weighted Average AmeriCredit Score of all Eligible Receivables as of such date of determination, after taking into account all Facility Activity on such date is less than 222.00; or (b) the most-recently calculated Portfolio Net Loss Ratio is greater than or equal to 7.50%. "S&P" or "Standard & Poor's" means Standard & Poor's Ratings --- ----------------- Services, a Division of the McGraw-Hill Companies. "Schedule of Receivables" means the schedule of all retail ----------------------- installment sales contracts and promissory notes originally held as part of the Trust. "Secured Obligations" means, at any time, collectively but ------------------- without duplication, all of the following: the Net Investment then outstanding, any accrued and unpaid Note Interest, 26 any accrued and unpaid Premiums and Reimbursement Amounts, the Monthly Administration Fee, all amounts due to the Trustee and to the Collateral Agent, all amounts due to the Note Insurer, and all other amounts due from the Debtor hereunder or under any other Transaction Document. "Secured Parties" means, collectively, the Purchaser and the --------------- Note Insurer. "Securities Account" shall have the meaning given such term in ------------------ Section 8-501(a) of the UCC. "Security Entitlement" shall have the meaning given such term -------------------- in Section 8-102(a)(17) of the UCC. "Securities Intermediary" has the meaning specified in Article ----------------------- VIII hereto. "Securitization Assets" means the sum of (i) restricted cash --------------------- deposits under securitizations sponsored by AmeriCredit, (ii) investments in trust receivables from securitizations sponsored by AmeriCredit and (iii) the interest-only receivables from the trusts created in connection with securitizations sponsored by AmeriCredit. "Servicer" means at any time the Person then authorized -------- pursuant to Section 2.1 of the Servicing Agreement to service, administer and collect Receivables. "Servicer's Certificate" has the meaning specified in the ---------------------- Servicing Agreement. "Servicing Agreement" means the Servicing and Custodian ------------------- Agreement, dated as of the date hereof, among the Servicer, the Custodian, the Debtor and the Collateral Agent, as such agreement may be amended, supplemented or otherwise modified from time to time. "Servicing Fee" means, for any Settlement Period, the fee ------------- payable to the Servicer from Collections pursuant to Section 2.3(b) hereof on the related Remittance Date, in an amount equal to 2.00% per annum on the average daily Aggregate Outstanding Balance of the Receivables during such Settlement Period. "Servicing Portfolio" means, as of any date, the Aggregate ------------------- Outstanding Balance of all Receivables (whether or not thereafter sold or disposed of) relating to retail installment sales contracts or installment notes and security agreements relating to the sale or refinancing of new or used automobiles, light-duty trucks, vans, or minivans that are serviced by the Servicer or any of its Affiliates as of such date, calculated in a manner consistent with the components of "managed receivables" in the most recent reports on Form 10-K or Form 10-Q filed by AmeriCredit Corp. "Settlement Period" means any calendar month, provided that ----------------- the initial Settlement Period shall commence on the Closing Date and end on February 28, 2002. "Step-Down Amount" means zero for any Remittance Date ---------------- occurring during the Revolving Period or during the Rapid Amortization Period; for any Remittance Date occurring during the Regular Amortization Period, the excess, if any, of (x) the excess of (i) the Aggregate 27 Outstanding Balance of all Receivables held as Collateral as of the end of the related Settlement Period over (ii) the Net Investment outstanding on such Remittance Date, assuming that 100% of the Monthly Principal Amount (without deduction for any Step-Down Amount) were applied in reduction of the Net Investment on such Remittance Date over (y) 5% of the Aggregate Outstanding Balance of all Receivables held as Collateral as of the end of the related Settlement Period. "Subsidiary" of a Person means any corporation more than 50% ---------- of the outstanding voting securities of which, and any partnership more than 50% of the partnership interests of which, shall at any time be owned or controlled, directly or indirectly, by such Person or by one or more Subsidiaries of such Person or any similar business organization which is so owned or controlled. "Take-Out" means the release, pursuant to Section 2.16 hereof, -------- by the Collateral Agent of Receivables and the Contracts related thereto. "Take-Out Date" means the date on which a Take-Out occurs. ------------- "Take-Out Notice" means the notice, substantially in the form --------------- attached hereto as Exhibit K, furnished by the Debtor to the Collateral Agent and the Note Insurer in accordance with Section 2.15. "Tangible Net Worth" means, with respect to any Person, the ------------------ net worth of such Person calculated in accordance with GAAP, after subtracting therefrom the aggregate amount of such Person's intangible assets, including, without limitation, goodwill, franchises, licenses, patents, trademarks, copyrights and service marks. "Target Yield Supplement Account Amount" means as of any -------------------------------------- Borrowing Base Determination Date the product of (i) the amount credited to the Funding Account and the amount on deposit in the Collection Account with respect to principal at the close of business on such Determination Date multiplied by (ii)(A) from the first until the sixth Determination Dates after the Closing Date, 1.75%, (B) from the seventh until the twelfth Determination Dates after the Closing Date, 1.20%, and (C) thereafter, 0.70%. "Termination and Amortization Event" means an event described ---------------------------------- in Section 6.1 hereof. "Third Party Lender" means a lender other than the Sellers ------------------ that has originated a Receivable in connection with the sale of a Financed Vehicle and has sold such Receivable to AmeriCredit under a Third Party Loan Purchase Agreement or pursuant to a Third Party Lender Assignment and (i) which has been approved by AmeriCredit in accordance with comparable procedures as Dealers are approved, (ii) which will be monitored by AmeriCredit in accordance with comparable procedures as Dealers are monitored, (iii) whose motor vehicle installment sale contracts or installment loan contracts are underwritten in accordance with AmeriCredit's underwriting standards, and (iv) whose motor vehicle installment sales contracts or installment loan contracts are serviced in accordance with the Servicer's servicing standards. 28 "Third Party Lender Assignment" means, with respect to a ----------------------------- Receivable, the executed assignment executed by a Third Party Lender conveying such Receivable to AmeriCredit, as the same may be amended, supplemented or otherwise modified and in effect. "Third Party Loan Purchase Agreement" means any agreement ----------------------------------- between a Third Party Lender and AmeriCredit relating to the acquisition of Receivables from a Third Party Lender by AmeriCredit, as the same may be amended, supplemented or otherwise modified and in effect. "Total Available Funds" means, with respect to any Remittance --------------------- Date, the sum of (x) the Available Funds for such Remittance Date and (y) the amounts, if any, withdrawn from the Yield Supplement Account and from the Reserve Account on such Remittance Date and deposited to the Collection Account pursuant to Section 2.3(b) hereof. "Transaction Documents" means this Agreement, the Note --------------------- Purchase Agreement, the Note, the Master Receivables Purchase Agreement, the Servicing Agreement, the Insurance Agreement, the Trust Agreement, the Lockbox Agreement, the Premium Side Letter, each Hedging Arrangement and all other agreements, documents and instruments delivered pursuant thereto or in connection therewith. "Trust Agreement" means the Amended and Restated Trust --------------- Agreement, dated as of the date hereof, among AmeriCredit, AMTN and the Trustee, together with all permitted amendments, modifications and supplements thereto. "Trustee" means the Trustee under the Trust Agreement. ------- "UCC" means, with respect to any state, the Uniform Commercial --- Code as from time to time in effect in such state. "U.S." or "United States" means the United States of America. ---- ------------- "Weighted Average Age" means, with respect to any group of -------------------- Eligible Receivables, the quotient equal to (x) the product of (i) the number of days each Receivable in such group has been included as Collateral multiplied by (ii) the Outstanding Balance of the related Receivable divided by (y) the Aggregate Outstanding Balance of all such Receivables. "Weighted Average AmeriCredit Score" means, with respect to ---------------------------------- any group of Eligible Receivables, the quotient equal to (x) the product of (i) the AmeriCredit Score for each Receivable in such group multiplied by (ii) the Outstanding Balance of the related Receivable divided by (y) the Aggregate Outstanding Balance of all such Receivables. "Yield Supplement Account" has the meaning specified in ------------------------ Section 2.12 hereof. "Yield Supplement Account Shortfall" means, as of any ---------------------------------- Determination Date, that the amount on deposit in the Yield Supplement Account on such Determination Date is less than the required Yield Supplement Account Amount for such Determination Date. 29 SECTION 1.2. Other Terms. Unless the context otherwise requires, all ----------- capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Note Purchase Agreement, and shall include in the singular number the plural and in the plural number the singular. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. SECTION 1.3. Computation of Time Periods. Unless otherwise stated in --------------------------- this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each means "to but excluding," and the word "within" means "from and excluding a specified date and to and including a later specified date." SECTION 1.4. Form of Notes. The Notes, in each case together with the ------------- Collateral Agent's certificate of authentication, shall be in substantially the form set forth in Exhibit C, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Security Agreement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Note, as evidenced by their execution of the Notes. Any portion of the text of such Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note. The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication. SECTION 1.5. Execution, Authentication and Delivery. The Notes shall be -------------------------------------- executed on behalf of the Debtor by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Debtor shall bind the Debtor, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. The Collateral Agent shall, upon receipt of the Debtor Order, authenticate and deliver Notes for original issue in an aggregate principal amount of $500,000,000. The Notes shall be issuable as registered Notes in the minimum denomination of $1,000,000 and in integral multiples thereof (except for one Note which may be issued in a denomination other than an integral multiple of $1,000,000). No Note shall be entitled to any benefit under this Security Agreement or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Collateral Agent by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be 30 conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. SECTION 1.6. Registration; Registration of Transfer and Exchange. The --------------------------------------------------- Debtor shall cause to be kept a register (the "Note Register") in which, subject ------------- to such reasonable regulations as it may prescribe, the Debtor shall provide for the registration of Notes and the registration of transfers of Notes. The Collateral Agent shall be "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Debtor shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar. If a Person other than the Collateral Agent is appointed by the Debtor as Note Registrar, the Debtor will give the Collateral Agent prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Collateral Agent shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Collateral Agent shall have the right to conclusively rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Noteholders of the Notes and the principal amounts and number of such Notes. Upon surrender for registration of transfer of any Note at the office or agency of the Debtor to be maintained as provided in Section 1.10 hereof, if the requirements of Section 8-401(1) of the UCC are met the Issuer shall execute and upon its request the Collateral Agent shall authenticate and the Noteholder shall obtain from the Collateral Agent, in the name of the designated transferee or transferees, one or more new Notes, in any authorized denominations, of the same class and a like aggregate principal amount. At the option of the Noteholder, Notes may be exchanged for other Notes in any authorized denominations, of the same class and a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(1) of the UCC are met the Debtor shall execute and upon its request the Collateral Agent shall authenticate and the Noteholder shall obtain from the Collateral Agent, the Notes which the Noteholder making the exchange is entitled to receive. All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Debtor, evidencing the same debt, and entitled to the same benefits under this Security Agreement, as the Notes surrendered upon such registration of transfer or exchange. Every Note presented or surrendered for registration of transfer or exchange shall be (i) duly endorsed by, or be accompanied by a written instrument of transfer in the form attached to Exhibit C duly executed by the Holder thereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program ("STAMP") or such ----- other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by an investor 31 representation letter in substantially the form of Exhibit D hereto or, in lieu thereof, a legal opinion to the effect that such transfer or exchange constitutes an exempt transaction under Section 4(2) of the Securities Act of 1933, as amended. Notwithstanding the foregoing, in the case of any sale or other transfer of a Note, the transferor of such Note shall be required to represent and warrant in writing that the prospective transferee either (a) is not (i) an employee benefit plan (as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), which is subject to the ----- provisions of Title I of ERISA, (ii) a plan (as defined in section 4975(e)(1) of the Code), which is subject to Section 4975 of the Code, or (iii) an entity whose underlying assets are deemed to be assets of a plan described in (i) or (ii) above by reason of such plan's investment in the entity (any such entity described in clauses (i) through (iii), a "Benefit Plan Entity") or (b) is a ------------------- Benefit Plan Entity and the acquisition and holding of the Definitive Note by such prospective transferee is covered by a Department of Labor Prohibited Transaction Class Exemption. Each transferee of a Book Entry Note that is a Benefit Plan Entity shall be deemed to represent that its acquisition and holding of the Book Entry Note is covered by a Department of Labor Prohibited Transaction Class Exemption. Notwithstanding the foregoing, the transferor of such Note shall be further required to represent and warrant in writing that it reasonably believes, after due inquiry, that the prospective transferee is not a Benefit Plan Entity. Each transferee of such Note shall be deemed to represent that it is not a Benefit Plan Entity. No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes. The preceding provisions of this section notwithstanding, the Debtor shall not be required to make and the Note Registrar shall not register transfers or exchanges of Notes selected for redemption or of any Note for a period of fifteen (15) days preceding the due date for any payment with respect to the Note. SECTION 1.7. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any ------------------------------------------ mutilated Note is surrendered to the Collateral Agent, or the Collateral Agent receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Collateral Agent such security or indemnity as may be required by it to hold the Debtor and the Collateral Agent harmless, then, in the absence of notice to the Debtor, the Note Registrar or the Collateral Agent that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Debtor shall execute and upon its request the Collateral Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if -------- ------- any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven (7) days shall be due and payable, instead of issuing a replacement Note, the Debtor may direct the Collateral Agent, in writing, to pay such destroyed, lost or stolen Note when so due or payable without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide 32 purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Debtor and the Collateral Agent shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Debtor or the Collateral Agent in connection therewith. Upon the issuance of any replacement Note under this Section 1.7, the Debtor may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Collateral Agent) connected therewith. Every replacement Note issued pursuant to this Section 1.7 in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Debtor, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Security Agreement equally and proportionately with any and all other Notes duly issued hereunder. The provisions of this Section 1.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. SECTION 1.8. Persons Deemed Owner. Prior to due presentment for -------------------- registration of transfer of any Note, the Debtor, the Collateral Agent and any agent of the Debtor or the Collateral Agent may treat the Person in whose name any Note is registered as the owner of such Note for the purpose of receiving payments of principal of and interest, if any on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Debtor, the Collateral Agent nor any agent of the Debtor or the Collateral Agent shall be affected by notice to the contrary. SECTION 1.9. Cancellation. All Notes surrendered for payment, ------------ registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Collateral Agent, be delivered to the Collateral Agent and shall be promptly canceled by the Collateral Agent. The Debtor may at any time deliver to the Collateral Agent for cancellation any Notes previously authenticated and delivered hereunder which the Debtor may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Collateral Agent. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 1.9, except as expressly permitted by this Security Agreement. All canceled Notes may be held or disposed of by the Collateral Agent in accordance with its standard retention or disposal policy as in effect at the time unless the Debtor shall timely direct by a Debtor Order that they be destroyed or returned to it; provided that such Debtor Order is timely and the Notes have not been previously disposed of by the Collateral Agent. SECTION 1.10. Maintenance of Office or Agency. The Debtor will maintain ------------------------------- in New York, New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Debtor in respect of the Notes and 33 this Security Agreement may be served. The Debtor hereby initially appoints the Collateral Agent to serve as its agent for the foregoing purposes. The Debtor will give prompt written notice to the Collateral Agent of the location, and of any change in the location, of any such office or agency. If at any time the Debtor shall fail to maintain any such office or agency or shall fail to furnish the Collateral Agent with the address thereof, such surrenders, notices and demands may be made or served at the Collateral Agent's office, and the Debtor hereby appoints the Collateral Agent as its agent to receive all such surrenders, notices and demands. ARTICLE II GRANT OF SECURITY INTEREST AND SETTLEMENTS SECTION 2.1. Grant of Security Interest. As security for the prompt and -------------------------- complete payment of the Note and the performance of all of the Debtor's obligations under the Transaction Documents, the Debtor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, without recourse except as provided herein, a security interest in and continuing Lien on all of the Debtor's property, in existence on the Closing Date or thereafter acquired and wherever located, including, without limitation, all of its right, title and interest in, to and under all accounts, contract rights, general intangibles, chattel paper, instruments, documents, money, cash, deposit accounts, certificates of deposit, goods, letters of credit, securities, investment property, financial assets or security entitlements (all of the foregoing, collectively, the "Collateral"); provided, that once the Secured Parties have ---------- -------- released their interest in a Receivable and the related Contract pursuant to Section 2.7 or 2.15 hereof, such Receivable and related Contract shall no longer be part of the Collateral. In connection with such grant, the Debtor agrees to record and file, at its own expense, financing statements with respect to the Collateral now existing and hereafter created meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect the first priority security interest of the Collateral Agent in the Collateral, and to deliver a file-stamped copy of such financing statements or other evidence of such filing (which may, for purposes of this Section 2.1, consist of telephone confirmation of such filing) to the Collateral Agent on or prior to the Closing Date. In addition, in order to show that the Collateral, including that portion of the Collateral consisting of the Receivables and the related Contracts, have been pledged to the Collateral Agent hereunder, the Debtor and the Servicer agree (i) to clearly and unambiguously mark their respective general ledgers and all accounting records and documents and all computer tapes and records and (ii) to stamp all Contracts and related files with the following legend: All right, title and interest in the foregoing finance contract has been assigned to a financial institution in its capacity as agent or collateral agent for the secured parties in connection with a credit facility. SECTION 2.2. Note Interest, Premium Amounts, Fees and Other Costs and -------------------------------------------------------- Expenses. Notwithstanding the limitation on recourse under Section 2.1 hereof, - -------- the Debtor shall pay, as and when due in accordance with this Agreement, all Note Interest, all Reimbursement Amounts, the 34 Monthly Administration Fee, all amounts payable pursuant to Article VII hereof, if any, all Premium Amounts, and the Servicing Fee. Nothing in this Agreement shall limit in any way the obligations of the Debtor to pay the amounts set forth in this Section 2.2. SECTION 2.3. Monthly Flow of Funds. --------------------- (a) On each Remittance Date, the Available Funds or the Total Available Funds, as applicable, plus, in the case of priorities (v) and (vi), the amount of any draws made under the Note Policy by the Collateral Agent shall be applied, without duplication, by the Collateral Agent as follows: (i) first, from the Total Available Funds, (x) to pay any ----- regularly scheduled amounts due under any Hedging Arrangement and (y) to pay, with the prior consent of the Note Insurer, any other amounts then due to the counterparty under any such Hedging Agreements; (ii) second, from the Total Available Funds, to pay the ------ Servicer, the Servicing Fee for such Settlement Period; (iii) third, from the Total Available Funds, to the extent ----- available, to pay to AmeriCredit, any amounts on deposit in the Collection Account with respect to a Settlement Period for amounts previously deposited in the Collection Account but later determined to have resulted from mistaken deposits or postings or checks returned for insufficient funds, together with amounts paid by Obligors that were collected during the related Settlement Period and which do not relate to principal and interest payments due on the Receivables; (iv) fourth, from the Total Available Funds, to pay to the ------ Collateral Agent all fees and expenses due pursuant to Section 7.2 hereof, but not, for any single Remittance Date, in excess of 1/12 of the annual amount set forth on the fee schedule attached as Exhibit P hereto, and to the Trustee, its fees and expenses (to the extent not paid by the Servicer), but not, for any single Remittance Date, in excess of the monthly amount set forth in part III of the fee schedule attached as Exhibit Q hereto; (v) fifth, from the Total Available Funds, to pay the ----- Purchaser an amount equal to all accrued and unpaid Note Interest in respect of such Settlement Period and with respect to any previous Settlement Period to the extent not previously paid; (vi) sixth, from the Total Available Funds, the Monthly ----- Principal Amount shall be paid (x) if such Remittance Date occurs during the Revolving Period, to the Funding Account, or (y) if such Remittance Date occurs during the Amortization Period, to the Purchaser, in reduction of the Net Investment; (vii) seventh, from the Total Available Funds, to the extent of ------- any remaining Total Available Funds, to pay the Note Insurer, the Premium Amount then due and any accrued and unpaid Premium Amount with interest at the Late Payment Rate; (viii) eighth, from the Total Available Funds, to the Note ------ Insurer, the Reimbursement Amount, if any, then due to it; 35 (ix) ninth, from the Total Available Funds, to the successor ----- Servicer, if any, expenses incurred in connection with transition of servicing, and any fees owed to the successor Servicer not paid in (ii) above; (x) tenth, from the Available Funds, to the Reserve Account, ----- the amount, if any, by which the Reserve Account Required Amount, after taking into account any Receivables Delivery which occurs on such Remittance Date, then exceeds the amount then on deposit in the Reserve Account, after taking into account all other deposits to, and all withdrawals and transfers from, the Reserve Account on such Remittance Date; (xi) eleventh, from the Available Funds, to the Yield -------- Supplement Account, the amount, if any, by which the Target Yield Supplement Account Amount then exceeds the amount on deposit in the Yield Supplement Account, after taking into account all other deposits to, and all withdrawals and transfers from, the Yield Supplement Account on such Remittance Date; (xii) twelfth, from the Available Funds, any amounts owed to the ------- Collateral Agent and the Trustee not paid in (iv) above; (xiii) thirteenth, from the Available Funds, an amount equal to ---------- the positive excess, if any, of (x) the Net Investment on such Remittance Date, after taking into account all other Facility Activity on such Remittance Date over (y) the Borrowing Base as of such Remittance Date, after taking into account all other Facility Activity on such Remittance Date, which amount shall be paid (a) if such Remittance Date occurs during the Revolving Period, to the Funding Account, or (b) if such Remittance Date occurs during the Amortization Period, to the Purchaser, in reduction of the Net Investment; and (xiv) fourteenth, from the Available Funds, all remaining ---------- Available Funds shall be paid (x) if the Rapid Amortization Period is then in effect unless the Note Insurer otherwise directs, to the Purchaser, as a reduction in the Net Investment until the Net Investment has been reduced to zero or (y) if the Rapid Amortization Period is not then in effect, to the holders of the Class A Certificates. (b) (i) In the event that, on any Remittance Date, the Available Funds are insufficient, after following the priority of payments as enumerated in paragraph (a) above, to fund in full the amounts described in clauses (i), (ii), (iii), (iv) and (v) of paragraph (a) above on such Remittance Date, the Collateral Agent shall transfer the amount of the insufficiency to the Collection Account (x) first, from the Yield Supplement Account, until the amount on deposit therein has been reduced to zero and (y) second, and to the extent of any remaining insufficiency once the amount on deposit in the Yield Supplement Account has been reduced to zero, from the Reserve Account. (ii) In the event that, on any Remittance Date, the Available Funds are insufficient after following the payment priorities enumerated in paragraph (a) above, to fund in full the amounts described in clauses (vi), (vii), (viii) and (ix) of paragraph (a) above on such Remittance Date, the Collateral Agent shall transfer the amount of such insufficiency to the 36 Collection Account from the Reserve Account, to the extent of amounts then on deposit therein and after taking into account any withdrawal therefrom pursuant to clause (b)(i)(y) above. (c) In the event that, on any Determination Date, the Collateral Agent determines that, after application of the Total Available Funds on such Remittance Date, a Deficiency Amount then exists, the Collateral Agent shall, submit a claim under the Note Policy pursuant to the terms thereof demanding that the Note Insurer pay to the Collateral Agent for deposit in the Collection Account the amount of such Deficiency Amount, in immediately available funds pursuant to the terms of the Note Policy. SECTION 2.4. Prepayments. On each Prepayment Date the Collateral Agent ----------- shall apply an amount on deposit in the Collection Account, to the extent of the Prepayment Amount, as directed by the Servicer as follows: (a) an amount equal to the amount described in clause (i) of the definition of Prepayment Amount shall be paid to the Purchaser, in reduction of the Net Investment; and (b) an amount equal to the amount described in clause (ii) of the definition of Prepayment Amount shall be paid to the Purchaser on account of accrued interest on the Note, through the Prepayment Date. SECTION 2.5. Liquidation Settlement Procedures. --------------------------------- Following any date after the date on which all Secured Obligations have been paid in full in cash, (i) the Collateral Agent shall be considered to have released its security interest in and continuing Lien on the Collateral, including all of the Receivables and Related Security, (ii) the Servicer shall pay to the Debtor any remaining Collections set aside and held by the Servicer, and (iii) the Collateral Agent shall, at the written request of the Debtor, execute and deliver to the Debtor, at the Debtor's expense, such documents or instruments as are necessary to terminate the Collateral Agent's security interest in the Collateral, including all of the Receivables and Related Security and Collections with respect thereto. Any such documents shall be prepared by or on behalf of the Debtor at the expense of the Debtor. After giving effect to any such liquidation, any amounts remaining in the Reserve Account, the Yield Supplement Account and in the Funding Account shall be paid to the holders of the Class A Certificates. SECTION 2.6. Protection of Interest of the Collateral Agent. ---------------------------------------------- (a) AmeriCredit and AMTN agree that they shall, and shall cause the Debtor to, from time to time, at its expense, promptly execute and deliver all instruments and documents and take all actions as may be necessary or as the Collateral Agent may reasonably request in order to perfect or protect the Collateral or to enable the Collateral Agent or any Secured Party to exercise or enforce any of its rights hereunder. Nothing contained herein shall imply a duty of the Collateral Agent to initiate the preparation of documents or the taking of action to perfect or protect the Collateral beyond the duties specifically enumerated herein and contained in the Transaction Documents. Without limiting the foregoing, AmeriCredit and AMTN shall, and shall cause the Debtor to, in order to accurately reflect the security interest of the Collateral 37 Agent for the benefit of the Secured Parties in the Collateral, (i) stamp (or cause to be stamped) all Contracts and related files with the legend set forth in Section 2.1 hereof and (ii) upon the request of any Secured Party, execute and file such financing or continuation statements or amendments thereto or assignments thereof as may be requested by such Secured Party and mark its master data processing records and other documents (or to cause such records or other documents to be marked) so as to indicate the Collateral Agent's security interest in the portion of the Collateral consisting of Receivables, the related Contracts, the Collections and the Related Security with respect thereto. AmeriCredit and AMTN agree that they shall take all actions necessary to cause the Debtor to similarly mark its records to reflect the sale of the Receivables and the Contracts to the Debtor and the Collateral Agent's security interest in the Receivables, the related Contracts, the Collections and the Related Security with respect thereto. AmeriCredit and AMTN shall, and shall cause the Debtor to, at their own expense, upon request of any Secured Party, obtain such additional search reports as any such Secured Party shall request. To the fullest extent permitted by applicable law, the Collateral Agent shall be permitted to sign and file continuation statements and amendments thereto and assignments thereof in respect of security interests created under this Agreement without the Debtor's, AmeriCredit's or AMTN's signature. Carbon, photographic or other reproduction of this Agreement or any financing statement shall be sufficient as a financing statement. The Debtor shall not, and shall not permit AmeriCredit or AMTN to, change its name, identity or corporate structure (within the meaning of Section 9-402(7) of the UCC as in effect in the State of New York, Delaware and Texas) or relocate its chief executive office or any office where Records are kept unless it shall have: (i) given the Collateral Agent and the Note Insurer at least thirty (30) days' prior notice thereof and (ii) prepared at the Debtor's expense and delivered to the Collateral Agent all financing statements, instruments and other documents necessary to preserve and protect the Collateral or requested by the Collateral Agent or any Secured Party in connection with such change or relocation. Any filings under the UCC or otherwise that are occasioned by such change in name or location shall be made at the expense of the Debtor. On the Closing Date, the Debtor shall deliver to the Collateral Agent and the Note Insurer a listing by account number of the Contracts as of the Closing Date, which listing shall constitute Schedule A hereto and is hereby incorporated herein by reference. On each Remittance Date, the Debtor shall deliver to the Collateral Agent and the Note Insurer an updated listing by account number of the Contracts as of the last day of such Settlement Period (giving effect to any releases by the Purchaser pursuant to Section 2.15 hereof) and such updated list shall thereupon constitute Schedule A hereto and is hereby incorporated by reference herein. (b) The Servicer shall instruct all Obligors to cause all Collections to be deposited directly with a Lock-Box Bank, acting as agent for the Collateral Agent, on behalf of the Secured Parties, pursuant to a Lock-Box Agreement. Amounts received by a Lock-Box Bank in respect of Receivables may initially be deposited into a Lock-Box Account maintained by the Lock-Box Bank as agent for the Collateral Agent, on behalf of the Secured Parties, and for other owners of automobile Receivables serviced by the Servicer. The Servicer shall be permitted to give instructions to the Lock-Box Banks for so long as neither a Potential Termination and Amortization Event nor any Termination and Amortization Event has occurred hereunder. The Servicer shall not add any bank as a Lock-Box Bank to those listed on Exhibit A attached hereto unless such bank has entered into a Lock-Box Agreement. The Servicer shall not terminate any bank as a Lock-Box Bank unless the Collateral Agent and the Note Insurer shall have received fifteen (15) days' prior notice of such termination. The Servicer shall use its best efforts to cause 38 the Lock-Box Bank, pursuant to the Lock-Box Agreement, to deposit all payments on the Receivables in the Lock-Box Account not later than the Business Day after receipt thereof and, within two (2) Business Days of receipt of Collections into the Lock-Box Account, the Servicer shall cause such Collections to be remitted into the Collection Account. If the Debtor, AmeriCredit, AMTN or the Servicer receives any Collections, the Debtor, AmeriCredit, AMTN or the Servicer, as applicable, shall immediately, but in any event within two (2) Business Days of receipt, remit (and shall cause AmeriCredit and AMTN to remit) such Collections to the Collection Account. SECTION 2.7. Deemed Collections; Application of Payments. ------------------------------------------- (a) If on any day the Outstanding Balance of a Receivable is either (x) reduced as a result of any defective, rejected or returned merchandise or services, any discount, credit, rebate, dispute, warranty claim, repossessed or returned goods, charge-back, allowance, any billing adjustment, dilutive factor or other adjustment or (y) reduced or canceled as a result of a setoff or offset in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Debtor shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation and the Debtor shall pay to the Servicer an amount equal to such reduction or cancellation and such amount shall be deposited into the Collection Account and applied by the Servicer as a Collection in accordance with Section 2.3 or 2.4 hereof, as applicable. (b) If on any day any of the representations or warranties in Article III was or becomes untrue with respect to a Receivable (whether on or after the date of any transfer of an interest therein to the Collateral Agent, for the benefit of the Secured Parties, as contemplated hereunder), the Debtor shall be deemed to have received on such day a Collection of such Receivable in full and the Debtor shall on such day pay to the Servicer an amount equal to the Outstanding Balance of such Receivable and such amount shall be deposited into the Collection Account and allocated and applied by the Servicer as a Collection on account of such Receivable. (c) Any payment by an Obligor in respect of any indebtedness owed by it to the Debtor, AmeriCredit or AMTN shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Note Insurer, be applied as a Collection of any Receivable of such Obligor included in the Net Investment (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other indebtedness of such Obligor. SECTION 2.8. Payments and Computations, Etc. All amounts to be paid or ------------------------------ deposited by the Debtor or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. (New York City time) on the day when due in immediately available funds; if such amounts are payable to the Note Insurer (whether on behalf of the Purchaser or any other Owners or otherwise), they shall be paid or deposited in the Note Insurer's account indicated in Section 9.3 hereof, until otherwise notified by the Note Insurer, the Purchaser or any other Owners. The Debtor shall, to the extent permitted by law, pay to the applicable Secured Parties upon demand, interest on all amounts not paid or deposited when due to the Secured Parties hereunder at a rate equal to 2% per annum plus LIBOR as of the most 39 recent LIBOR Determination Date. All computations of Note Interest, Premium Amount, the Monthly Administration Fee, the Late Payment Rate and the Servicing Fee hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Any computations by the Note Insurer of amounts payable by the Debtor hereunder shall be binding upon the Debtor absent manifest error. SECTION 2.9. Reports. On or before each Determination Date, the Servicer ------- shall prepare and forward to the Collateral Agent and the Note Insurer, (i) a Servicer's Certificate as of the end of the preceding Settlement Period, (ii) if requested by the Collateral Agent or the Note Insurer, a computer tape listing by Obligor all Receivables, together with an aging of such Receivables, and (iii) such other information as the Collateral Agent, the Note Insurer or any Secured Party may reasonably request. The Note Insurer shall provide to the Debtor, the Servicer and to the Collateral Agent, within three (3) Business Days of each LIBOR Determination Date indicating LIBOR as it applies to the Purchaser's medium term notes with respect to the upcoming MTN Payment Date. The Collateral Agent will determine LIBOR as it applies to the Note, on each LIBOR Determination Date, and will forward such determination to the Debtor and to the Servicer within three (3) Business Days. The Servicer will compare the two LIBOR rates, and will promptly contact the Purchaser, the Collateral Agent and the Note Insurer if such rates do not reconcile. SECTION 2.10. Collection Account. ------------------ (a) There shall be established on or prior to the Closing Date and maintained, for the benefit of the Secured Parties, with the Collateral Agent, an Eligible Deposit Account (the "Collection Account"), bearing a designation ------------------ clearly indicating that the funds deposited therein are held in the name of the Collateral Agent, for the benefit of the Secured Parties. The Collection Account shall be under the exclusive ownership and control of the Collateral Agent, for the benefit of the Secured Parties. Subject to the terms hereof, the Collateral Agent shall possess all right, title and interest in and to all funds deposited from time to time in the Collection Account. There shall be deposited in the Collection Account: (i) by the Servicer, on a daily basis and from the Lock-Box Account, all Collections on account of the Receivables, within two (2) Business Days upon receipt or such Collections in the Lock-Box Account; (ii) amounts representing net investment earnings (a) on the Funding Account, as provided in Section 2.11(h), (b) on the Yield Supplement Account as provided in Section 2.12(a)(iii) and (c) on the Reserve Account, as provided in Section 2.15(a)(iii), in each case, upon the Collateral Agent's receipt of any such net investment earnings; (iii) amounts received under any Hedging Arrangement; (iv) amounts transferred from the Funding Account to the Collection Account pursuant to Section 2.11(e), and from the Yield Supplement Account to the Collection Account pursuant to Section 2.12(a)(vi), in each case in connection with the commencement of the Amortization Period; 40 (v) amounts transferred from the Reserve Account and from the Yield Supplement Account pursuant to Section 2.3(b) hereof; (vi) the proceeds of each draw under the Note Policy; and (vii) the amount deposited in the Collection Account as provided in Section 6.5 hereof. On the date on which Secured Obligations have been paid in full, any funds remaining on deposit in the Collection Account shall be paid to the Debtor. (b) Subject to subsection (d) below, funds on deposit in the Collection Account shall be invested in Eligible Investments by the Collateral Agent at the written direction of the Servicer, provided that if such Eligible Investments are not available or a Termination and Amortization Event shall have occurred, such investments shall be made in the investment described in subclause (a)(iv) of the definition of Eligible Investments. Any such written directions shall specify the particular investment to be made and shall certify that such investment is an Eligible Investment and is permitted to be made under this Agreement. (c) The Servicer shall provide the Collateral Agent on or prior to the Closing Date and from time to time an incumbency certificate or the substantial equivalent with respect to each officer of the Servicer that is authorized to provide instructions relating to investments in Eligible Investments in the Collection Account. (d) Funds on deposit in the Collection Account shall be invested by the Collateral Agent, in the name of the Collateral Agent, in Eligible Investments that will mature so that such funds will be available so as to permit amounts in the Collection Account to be paid and applied on the Remittance Date and otherwise in accordance with the provisions of Sections 2.3 and 2.4 hereof. Realized losses, if any, on amounts invested in such Eligible Investments shall be charged against investment earnings on amounts on deposit in the Collection Account SECTION 2.11. Funding Account. --------------- (a) There shall be established on or prior to the Closing Date and maintained, for the benefit of the Secured Parties, with the Collateral Agent, an Eligible Deposit Account (the "Funding Account"), bearing a designation --------------- clearly indicating that the funds deposited therein are held in the name of the Collateral Agent, for the benefit of the Secured Parties. The Funding Account shall be under the exclusive ownership and control of the Collateral Agent, for the benefit of the Secured Parties. Subject to the terms hereof, the Collateral Agent shall possess all right, title and interest in and to all funds deposited from time to time in the Funding Account. There shall be deposited in the Funding Account: (i) on the Closing Date, $500,000,000; (ii) on each Remittance Date, the amounts, if any, described in Sections 2.3(a)(vi) and 2.3(a)(xiii) hereof with respect to such Remittance Date; 41 (iii) on each Take-Out Date, the amount, if any, specified in the related Take-Out Notice which is to be deposited in the Funding Account in connection with the related Take-Out; and (iv) any amounts delivered to the Collateral Agent by the Debtor and designated by the Debtor for deposit in the Funding Account. All interest and earnings (net of losses and investment expenses) on funds on deposit in the Funding Account shall be deposited upon receipt in the Collection Account. On the date on which the Net Investment is zero and all Secured Obligations have been paid in full, any funds remaining on deposit in the Funding Account shall be paid to the holders of the Class A Certificates. (b) On any Business Day during the Revolving Period, amounts on deposit in the Funding Account may be released therefrom and paid to the Debtor in exchange for a Receivables Delivery on such Business Day, provided that: ------------- (i) the Collateral Agent, the Purchaser and the Note Insurer shall have received an executed copy of the related Delivery Notice not later than 10:30 a.m. Eastern Standard Time on the related Delivery Date; and (ii) the Debtor shall have timely delivered an Officer's Certificate regarding Hedging Arrangements, as required pursuant to Section 5.3 hereof. (c) The amount to be released from the Funding Account in connection with a Receivables Delivery shall be comprised of two components: (i) the "Reserve Account Deposit Amount," which shall equal the ------------------------------ product of (x) the applicable Initial Reserve Percentage and (y) the aggregate Net Receivable Balance of all Receivables comprising the Receivables Delivery, but in no event an amount which would increase the amount on deposit in the Reserve Account to a level above the then Reserve Account Required Amount; and (ii) the "Receivables Delivery Payment Amount," which shall be ----------------------------------- equal to, after giving effect to any related release pursuant to Section 2.11(c)(i) hereof, the excess of (A) the Borrowing Base immediately following such Receivables Delivery over (B) the Net Investment. On the related Delivery Date, the Collateral Agent shall transfer the related Reserve Account Deposit Amount from the Funding Account to the Reserve Account, and shall pay the Receivables Delivery Payment Amount to the accounts designated by the Debtor on behalf of the holders of the Class A Certificates in the related Delivery Notice. (d) On any Business Day on which the Borrowing Base exceeds the Net Investment, the amount of such excess, to the extent then on deposit in the Funding Account may be paid by the Collateral Agent to the accounts designated by the Debtor on behalf of the holders of the Class A Certificates, if the Debtor so requests. If, after taking into account the payment to the Debtor of any such amount from the Funding Account, the Borrowing Base still exceeds the 42 Net Investment, the Debtor may deliver a Take-Out Notice and request the release to it of Receivables designated by the Debtor such that, when so released, the Net Investment would equal the Borrowing Base, provided that no Termination and Amortization Event would result from such release. The provisions of this paragraph (d) shall be inoperative following the occurrence of a Termination and Amortization Event. (e) On the first Remittance Date occurring during the Amortization Period, the Collateral Agent shall transfer all amounts then on deposit in the Funding Account to the Collection Account for application in accordance with Section 2.3(a) hereof. (f) Subject to subsection (h) below, funds on deposit in the Funding Account shall be invested in Eligible Investments by the Collateral Agent at the written direction of the Servicer, provided that if such Eligible Investments are not available or a Termination and Amortization Event shall have occurred, such investments shall be made in the investment described in subclause (a)(iv) of the definition of Eligible Investments. Any such written directions shall specify the particular investment to be made and shall certify that such investment is an Eligible Investment and is permitted to be made under this Agreement. (g) The Servicer shall provide the Collateral Agent on or prior to the Closing Date and from time to time an incumbency certificate or the substantial equivalent with respect to each officer of the Servicer that is authorized to provide instructions relating to investments in Eligible Investments in the Funding Account. (h) Funds on deposit in the Funding Account shall be invested by the Collateral Agent, in the name of the Collateral Agent, in Eligible Investments that will mature so that such funds will be available so as to permit amounts in the Collection Account to be paid and applied on each Remittance Date and otherwise in accordance with the provisions of this Section 2.11. Investment earnings on amounts on deposit in the Funding Account shall be deposited into the Collection Account immediately following receipt thereof. Realized losses, if any, on amounts invested in such Eligible Investments shall be charged against investment earnings on amounts on deposit in the Collection Account SECTION 2.12. Yield Supplement Account; Withdrawals; Releases. ----------------------------------------------- (i) There shall be established on the Closing Date and maintained, for the benefit of the Secured Parties, with the Collateral Agent, an Eligible Deposit Account (the "Yield Supplement Account"), bearing a designation clearly ------------------------ indicating that the funds deposited therein are held in the name of the Collateral Agent, for the benefit of the Secured Parties. Subject to the terms hereof, the Collateral Agent shall possess all right, title and interest in and to all funds deposited from time to time in the Yield Supplement Account, including all Eligible Investments in which such funds are invested. (ii) There shall be deposited in the Yield Supplement Account: (x) by the Debtor, on any Take-Out Date, the amount, if any, by which the Target Yield Supplement Account Amount then exceeds the amount on deposit in the Yield Supplement Account; (y) any amounts delivered to the Collateral Agent by the Debtor and designated by the Debtor for 43 deposit to the Yield Supplement Account; and (z) on each Remittance Date, the amount, if any, described in Section 2.3(a)(xi) hereof with respect to such Remittance Date. (iii) Funds on deposit in the Yield Supplement Account (other than investment earnings) shall be invested by the Collateral Agent (in the name of the Collateral Agent on behalf of the Secured Parties) in Eligible Investments that will mature so that such funds will be available on the Remittance Date following such investment. Investment earnings on amounts on deposit in the Yield Supplement Account shall be deposited into the Collection Account immediately following receipt thereof. (iv) Subject to clause (iii) above, funds on deposit in the Yield Supplement Account shall be invested in Eligible Investments by or at the written direction of the Servicer, provided that if such Eligible Investments are not available or a Termination and Amortization Event shall have occurred, such investments shall be made in the investment described in subclause (a)(iv) of the definition of Eligible Investments. Any such written directions shall specify the particular investment to be made and shall certify that such investment is an Eligible Investment and is permitted to be made under this Agreement. (v) The Servicer shall provide the Collateral Agent on the date hereof and from time to time an incumbency certificate or the substantial equivalent with respect to each officer of the Servicer that is authorized to provide instructions relating to investments in Eligible Investments in the Yield Supplement Account. (vi) On the first Remittance Date occurring during the Amortization Period, the Collateral Agent shall withdraw all amounts on deposit in the Yield Supplement Account and deposit such amounts into the Collection Account. Realized losses, if any, on amounts invested in such Eligible Investments shall be charged against investment earnings on amounts on deposit in the Yield Supplement Account, as applicable. (b) In the event that on any Borrowing Base Determination Date, after giving effect to the amounts required to be distributed pursuant to Section 2.3(a) hereof and any amounts to be withdrawn pursuant to clause Section 2.3(b), the amount on deposit in the Yield Supplement Account exceeds the Target Yield Supplement Account Amount, the Collateral Agent shall, if no Termination and Amortization Event or Potential Termination and Amortization Event shall have occurred, release to the Debtor an amount equal to the excess of the amount on deposit in the Yield Supplement Account over the Target Yield Supplement Account Amount. (c) On the day on which the Secured Obligations shall have been paid in full, in cash, the Collateral Agent shall release to the Debtor all amounts on deposit in the Yield Supplement Account. SECTION 2.13. [Intentionally Omitted]. --------------------- SECTION 2.14. [Intentionally Omitted]. --------------------- 44 SECTION 2.15. Reserve Account; Withdrawals; Releases. -------------------------------------- (i) There shall be established on the Closing Date and maintained, for the benefit of the Secured Parties, with the Collateral Agent, an Eligible Deposit Account (the "Reserve Account"), bearing a designation clearly --------------- indicating that the funds deposited therein are held in the name of the Collateral Agent, for the benefit of the Secured Parties. Subject to the terms hereof, the Collateral Agent shall possess all right, title and interest in and to all funds deposited from time to time in the Reserve Account. (ii) There shall be deposited in the Reserve Account (x) on each Receivables Delivery Date, the related Reserve Account Deposit Amount transferred from the Funding Account, or if not so available from the Funding Account, then from the Servicer as described in Section 2.11(c)(i) hereof and (y) on each Remittance Date, the amount, if any, described in Section 2.3(a)(x) hereof on such Remittance Date. (iii) Funds on deposit in the Reserve Account (other than investment earnings) shall be invested by the Collateral Agent (in the name of the Collateral Agent on behalf of the Secured Parties) in Eligible Investments that will mature so that such funds will be available on the Remittance Date following such investment. Investment earnings on amounts on deposit in the Reserve Account shall be deposited into the Collection Account immediately following receipt thereof. (iv) Subject to clause (iii) above, funds on deposit in the Reserve Account shall be invested in Eligible Investments by or at the written direction of the Servicer, provided that if such Eligible Investments are not available or a Termination and Amortization Event shall have occurred, such investments shall be made in the investment described in subclause (iv) of the definition of Eligible Investments. Any such written directions shall specify the particular investment to be made and shall certify that such investment is an Eligible Investment and is permitted to be made under this Agreement. (v) The Servicer shall provide the Collateral Agent on the date hereof and from time to time an incumbency certificate or the substantial equivalent with respect to each officer of the Servicer that is authorized to provide instructions relating to investments in Eligible Investments in the Reserve Account. (vi) Realized losses, if any, on amounts invested in such Eligible Investments shall be charged against investment earnings on amounts on deposit in the Reserve Account, as applicable. (b) In the event that on any Borrowing Base Determination Date or on any Remittance Date, after taking into account all other Facility Activity on such date, the amount on deposit in the Reserve Account exceeds the Reserve Account Required Amount, the Collateral Agent shall, if no Termination and Amortization Event or Potential Termination and Amortization Event shall have occurred, release to the holders of the Class A Certificates an amount equal to the excess of the amount on deposit in the Reserve Account over the Reserve Account Required Amount. 45 (c) On the day on which the Secured Obligations shall have been paid in full, in cash, the Collateral Agent shall release to the holders of the Class A Certificates all amounts on deposit in the Reserve Account. SECTION 2.16. Optional Release. ---------------- On any Business Day, the Debtor shall have the right, upon delivery to the Collateral Agent of a Take-Out Notice substantially in the form of Exhibit K hereto, to require the Collateral Agent to release its security interest in and its Lien on all or part of the Contracts and the related Receivables on the terms and conditions set forth herein. It shall be a condition precedent to any such release that (i) the Debtor shall pay to the Collateral Agent for deposit in the Funding Account an amount equal to the amount necessary to maintain the Borrowing Base at a level at least equal to the Net Investment (calculated after giving effect to such proposed release of Receivables and by including in the Net Receivables Balance only those Receivables that as of such date satisfy (as if determined on such date) the definition of Eligible Receivable provided that no Delinquent Receivable shall be classified as an Eligible Receivable on such day) (ii) the Debtor shall have given the Note Insurer and the Collateral Agent irrevocable prior written notice by not later than 10:30 a.m. Eastern Standard Time on the day of such release of (x) its intention to request a release with respect to such Contracts and Receivables and (y) the proposed date of such release, (iii) the Debtor shall provide to the Note Insurer and the Collateral Agent, either in the Take-Out Notice or in an Officer's Certificate, certification that as of the date of such release all non-released Receivables satisfy the definition of Eligible Receivable (and are not Delinquent Receivables or Defaulted Receivables) set forth herein, (iv) after giving effect to such release the amount on deposit in the Reserve Account shall be at least equal to the Reserve Account Required Amount, (v) the Debtor shall not have applied any adverse selection criteria to the Contracts and the Receivables being released on such date and (vi) AmeriCredit shall pay any breakage costs incurred in connection with such release under any Hedging Arrangement. Nothing above shall imply a duty of the Collateral Agent to determine whether such above-referenced conditions precedent have been satisfied. The Debtor shall pay to the Note Insurer, for the benefit of the Purchaser, such amounts as are required under this Section on the date of such release. The Debtor shall be obligated to pay all reasonable legal fees, expenses or other costs of the Note Insurer, the Collateral Agent, and the Secured Parties arising in connection with any such assignment. Upon the deposit of all required amounts and the payment by the Debtor of the amounts described in this Section, the Collateral Agent shall execute and deliver to the Debtor, at the Debtor's expense, such documents or instruments as are necessary to terminate the Collateral Agent's security interest in the released Receivables and the Contracts related thereto. Any such documents shall be prepared by or on behalf of the Debtor in form and substance satisfactory to the Collateral Agent. 46 SECTION 2.17. Delivery of Collateral. With respect to the Collateral, the ---------------------- Debtor and the Collateral Agent hereby agree that: (i) Any Collateral that is held in deposit accounts shall be held in the Collection Account and shall be subject to the exclusive dominion and control of the Collateral Agent, and the Collateral Agent shall have sole signature authority with respect thereto; (ii) Any Collateral that is Physical Property (as defined under the definition of "Delivery") shall be delivered to the Collateral Agent in accordance with paragraph (a) of the definition of "Delivery" and shall be held, pending maturity or disposition, solely by the Collateral Agent or a Securities Intermediary (as such term is defined in Section 8-102(a)(14) of the UCC; (iii) Any Collateral that is a "certificated security" under Article 8 of the UCC shall be delivered to the Collateral Agent in accordance with paragraph (b) of the definition of "Delivery" and shall be held, pending maturity or disposition, solely by the Collateral Agent or a Securities Intermediary (as such term is defined in Section 8-102(a)(14) of the UCC); (iv) Any Collateral that is an "uncertificated security" under Article 8 of the UCC shall be delivered to the Collateral Agent in accordance with paragraph (c) of the definition of "Delivery" and shall be maintained by the Collateral Agent, pending maturity or disposition, through continued registration on the books and records of the issuer thereof of the ownership of such security by the Collateral Agent (or its nominee) or a Securities Intermediary (as such term is defined in Section 8-102(a)(14) of the UCC); (v) Any Collateral that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations shall be delivered to the Collateral Agent in accordance with paragraph (d) of the definition of "Delivery" and shall be maintained by the Collateral Agent, pending maturity or disposition, through continued book-entry registration of such Collateral in the name of the Collateral Agent or a Securities Intermediary (as such term is defined in Section 8-102(a)(14) of the UCC; and (vi) Any Collateral held through a Securities Intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) shall be held in a securities account (as such term is defined in Section 8-501(a) of the UCC) that is established by such Securities Intermediary in the name of the Collateral Agent for which the Collateral Agent is the sole entitlement holder (as defined in Section 8-102(a)(7) of the UCC). Effective upon Delivery of any Collateral in the form of Physical Property, book-entry securities or uncertificated securities, the Collateral Agent shall be deemed to have purchased such Collateral for value, in good faith and without notice of any adverse claim thereto. 47 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Representations and Warranties of the Debtor, AmeriCredit and ------------------------------------------------------------- AMTN. On the Closing Date and on each Determination Date, Remittance Date and - ---- Delivery Date, the Debtor, AmeriCredit and AMTN represent and warrant to the Note Insurer, the Collateral Agent and the Secured Parties that: (a) Existence and Power. The Debtor is a business trust duly organized, ------------------- validly existing and in good standing under the laws of the State of Delaware and has all power and all material governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted. The Debtor is duly qualified to do business in, and is in good standing in, every other jurisdiction in which the nature of its business requires it to be so qualified. (b) Authorization; Contravention. The execution, delivery and ---------------------------- performance by the Debtor of this Agreement and the other Transaction Documents are within the Debtor's trust powers, have been duly authorized by all necessary trust action, require no action by or in respect of, or require the consent or approval of, or the filing of any notice or other documentation with, any Official Body or other Person (except as contemplated by Section 2.6 hereof), and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the Trust Agreement of the Debtor or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Debtor or result in the creation or imposition of any Adverse Claim on the assets of the Debtor or any of its Subsidiaries (except as contemplated by Section 2.6 hereof). (c) Binding Effect. Each of this Agreement and the other Transaction -------------- Documents has been duly executed and delivered and constitutes the legal, valid and binding obligation of the Debtor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally. (d) Perfection. Immediately preceding each Receivables Delivery, the ---------- Debtor shall be the legal and beneficial owner of all of the Receivables, Related Security and Collections, free and clear of all Adverse Claims. On or prior to each Funding and each day on which a Receivable is sold to the Debtor by AmeriCredit or AMTN, as the case may be, pursuant to the Master Receivables Purchase Agreement, all financing statements and other documents required to be recorded or filed in order to perfect and protect (i) the Debtor's interest in the Receivables, the Contracts related thereto, the Related Security with respect thereto and all Proceeds thereof against all creditors of and purchasers from AmeriCredit or AMTN, as applicable and (ii) the interest of the Collateral Agent on behalf of the Purchaser and the other Owners in the Collateral against all creditors of and purchasers from AmeriCredit, AMTN and the Debtor will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full. 48 (e) Accuracy of Information. All information heretofore furnished by ----------------------- the Debtor (including without limitation, the Servicer's Certificate, any reports delivered pursuant to Section 2.9 hereof and AmeriCredit Corp.'s financial statements) to the Collateral Agent, the Secured Parties, the Note Insurer or any of the other Persons party hereto for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Debtor to any such Person will be, true and accurate in every material respect, and the Debtor has not omitted to disclose any information which is material to the transaction on the date such information is furnished. (f) Tax Status. All tax returns (federal, state and local) required to ---------- be filed with respect to the Debtor have been filed (which filings may be made by an Affiliate of the Debtor on a consolidated basis covering the Debtor and other Persons) and there has been paid or adequate provision made for the payment of all taxes, assessments and other governmental charges in respect of the Debtor (or in the event consolidated returns have been filed, with respect to the Persons subject to such returns). (g) Action, Suits. There are no actions, suits or proceedings pending, ------------- or to the knowledge of the Debtor threatened, against or affecting (x) the Debtor or its properties and (y) except as set forth in Exhibit E hereto, against any Affiliate of the Debtor or their respective properties, in or before any court, arbitrator or other body which in the case of clause (y), individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect if determined adversely to such Affiliate. The Debtor is not in violation of any order of any Official Body. (h) Use of Proceeds. The proceeds of any Receivables Delivery Payment --------------- Amount will be used by the Debtor to (a) acquire the Receivables, the Contracts related thereto and the Related Security with respect thereto from AmeriCredit or AMTN, as the case may be, pursuant to the Master Receivables Purchase Agreement, (b) to pay down debt in connection with the purchase of the Receivables and Contracts pursuant to the Master Receivables Purchase Agreement, or (c) to make distributions constituting a return of capital. No proceeds of any Receivables Delivery Payment Amount will be used by the Debtor to acquire any security in any transaction which is subject to Section 12 of the Securities Exchange Act of 1934, as amended or for any purpose that violates any applicable law, rule or regulation, including Regulation U of the Federal Reserve Board. (i) Place of Business. The principal place of business and chief ----------------- executive office (as such terms are defined in the UCC) of the Debtor are located at the address of the Debtor indicated in Section 9.3 hereof and the offices where the Debtor keeps all its Records, are located at the address(es) described on Exhibit F or such other locations notified to the Purchaser in accordance with Section 2.6 hereof in jurisdictions where all action required by Section 2.6 hereof has been taken and completed. (j) Good Title. Upon each Receivables Delivery and on each day on which ---------- a Receivable and related Contract is sold to the Debtor by AmeriCredit or AMTN, as the case may be, pursuant to the Master Receivables Purchase Agreement, the Collateral Agent shall acquire a valid and perfected first priority security interest in each Receivable and related Contract that 49 exists on the date of such Funding and sale and in the Related Security and Collections with respect thereto free and clear of any Adverse Claim. (k) Tradenames, Etc. As of the date hereof: (i) the Debtor has only the --------------- subsidiaries and divisions listed on Exhibit G hereto; and (ii) the Debtor has not operated under any tradenames and has not changed its name, merged with or into or consolidated with any other corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy). (l) Nature of Receivables. Each Receivable (x) represented by the --------------------- Debtor or the Servicer to be an Eligible Receivable (including in any report, document or instrument delivered hereunder or in connection with the other Transaction Documents) or (y) included in the calculation of the Net Receivables Balance, satisfies at the time of such representation or inclusion the definition of "Eligible Receivable" set forth herein and, in the case of clause (y) above is not a Defaulted Receivable. (m) Credit and Collection Policy. Since December 31, 2001, there have ---------------------------- been no material changes in the Credit and Collection Policy other than as permitted hereunder. Since such date, no material adverse change has occurred in the overall rate of collection of the Receivables. (n) Collection and Servicing; Material Adverse Effect. Since December ------------------------------------------------- 31, 2001, there has not been any material adverse change in the ability of the Servicer (to the extent it is AmeriCredit, the Debtor or any Subsidiary or Affiliate of any of the foregoing) to service and collect the Receivables or other Material Adverse Effect. (o) No Termination and Amortization Event. No event has occurred and is ------------------------------------- continuing and no condition exists which constitutes a Termination and Amortization Event or a Potential Termination and Amortization Event. (p) Not an Investment Company or a Holding Company. The Debtor is not, ---------------------------------------------- and is not controlled by, an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or is exempt from all provisions of such Act. The Debtor is not a "holding company," or a subsidiary or affiliate of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. (q) ERISA. Each of the Debtor and its ERISA Affiliates is in compliance ----- in all material respects with ERISA and no lien exists in favor of the Pension Benefit Guaranty Corporation on any of the Receivables. (r) Lock-Box Account. The name and address of the Lock-Box Bank, ---------------- together with the account number of the Lock-Box Account at such Lock-Box Bank, are specified in Exhibit A hereto (or at such other Lock-Box Banks and/or with such other Lock-Box Accounts as have been notified to the Collateral Agent and for which Lock-Box Agreements have been executed in accordance with Section 2.6(b) hereof and delivered to the Collateral Agent). All Obligors have been instructed (or will be instructed on their next billing statement) to make payment to a Lock-Box Account. 50 (s) Bulk Sales. No transaction contemplated hereby or by the Note ---------- Purchase Agreement or the Master Receivables Purchase Agreement requires compliance with any bulk sales act or similar law. (t) Transfers Under Master Receivables Purchase Agreement. Each ----------------------------------------------------- Receivable which has been transferred to the Debtor by AmeriCredit or AMTN has been purchased by the Debtor from AmeriCredit or AMTN, as the case may be, pursuant to, and in accordance with, the terms of the Master Receivables Purchase Agreement. (u) Preference; Voidability. With respect to each transfer of ----------------------- Receivables and Related Security from AmeriCredit or AMTN, as the case may be, to the Debtor, the Debtor has given reasonably equivalent value to AmeriCredit or AMTN, as applicable, in consideration for such transfer of Receivables and Related Security, and each such transfer has not been made for or on account of an antecedent debt owed by AmeriCredit or AMTN to the Debtor and no such transfer is or may be voidable under any Section of the Bankruptcy Code. (v) Insurance Policies. At the time of the sale of each Receivable and ------------------ related Contract by AmeriCredit or AMTN to the Debtor pursuant to the Master Receivables Purchase Agreement, each Financed Vehicle is required to be covered by physical damage and liability insurance obtained by the related Obligor at least in the amount required by the related Contract, and each such required insurance policy is required to name AmeriCredit or AMTN, as loss payee and is required to be in full force and effect. (w) Representations and Warranties of AmeriCredit and AMTN. Each of the ------------------------------------------------------ representations and warranties of AmeriCredit and AMTN set forth in Sections 3.1 and 3.3, respectively, of the Master Receivables Purchase Agreement are true and correct in all material respects and each of AmeriCredit and AMTN hereby remakes all such representations and warranties for the benefit of the Note Insurer, the Collateral Agent, the Purchaser and the Note Insurer. Any document, instrument, certificate or notice delivered hereunder by the Debtor to the Note Insurer, the Collateral Agent or the Secured Parties shall be deemed a representation and warranty by the Debtor. SECTION 3.2. Representations and Warranties of the Servicer. On the Closing ---------------------------------------------- Date and on each Determination Date, Remittance Date and Delivery Date, the Servicer represents and warrants to the Note Insurer, the Collateral Agent and the Secured Parties that: (a) Corporate Existence and Power. The Servicer is a corporation duly ----------------------------- organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate power and all material governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted. The Servicer is duly qualified to do business in and is in good standing in every other jurisdiction in which the nature of its business requires it to be so qualified. (b) Corporate and Governmental Authorization; Contravention. The ------------------------------------------------------- execution, delivery and performance by the Servicer of this Agreement and the other Transaction Documents are within the Servicer's corporate powers, have been duly authorized by all 51 necessary corporate action, require no action by or in respect of, or require the consent or approval of, or the filing of any notice or other documentation with, any Official Body (except as contemplated by Section 2.6 hereof), and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or bylaws of the Servicer or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Servicer or result in the creation or imposition of any Adverse Claim on assets of the Servicer or any of its Subsidiaries (except as contemplated by Section 2.6 hereof). (c) Binding Effect. This Agreement has been duly executed and delivered -------------- and constitutes the legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally. (d) Accuracy of Information. All information heretofore furnished by ----------------------- the Servicer to the Collateral Agent, the Secured Parties, the Note Insurer or any of the other Persons party hereto for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Servicer to the Collateral Agent, the Secured Parties or the Note Insurer will be, true and accurate in every material respect, and the Servicer has not omitted , and will not omit, to disclose any information which is material to the transactions contemplated by this Agreement on the date such information was or is furnished. (e) Action, Suits. There are no actions, suits or proceedings pending, ------------- or to the knowledge of the Servicer threatened, against or affecting the Servicer or any Affiliate of the Servicer or their respective properties, in or before any court, arbitrator or other body, which, individually or in the aggregate, could reasonably be expected to cause a Material Adverse Effect. The Servicer is not in violation of any order of any Official Body. (f) Nature of Receivables. Each Receivable included in the calculation --------------------- of the Net Receivables Balance satisfies at such time the definition of "Eligible Receivable" and is not a Defaulted Receivable. (g) Credit and Collection Policy. Since December 31, 2001, there have ---------------------------- been no material changes in the Credit and Collection Policy other than as permitted hereunder. Since such date, no material adverse change has occurred in the overall rate of collection of the Receivables. (h) Collections and Servicing; Material Adverse Effect. Since December -------------------------------------------------- 31, 2001, there has not been any material adverse change in the ability of the Servicer to service and collect the Receivables or other Material Adverse Effect relating to the Servicer. (i) Not an Investment Company or a Holding Company. The Servicer is ---------------------------------------------- not, and is not controlled by, an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or is exempt from all provisions of such Act. The Servicer is not a "holding company," or a subsidiary or affiliate of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. 52 (j) Lock-Box Account. The name and address of the Lock-Box Bank, together with the account number of the Lock-Box Account at such Lock-Box Bank, are specified in Exhibit A (or at such other Lock-Box Banks and/or with such other Lock-Box Accounts as have been notified to the Debtor and the Collateral Agent and for which Lock-Box Agreements have been executed in accordance with Section 2.6(b) hereof and delivered to the Collateral Agent). All Obligors have been instructed (or will be instructed on their next billing statement) to make payment to a Lock-Box Account. ARTICLE IV CONDITIONS PRECEDENT SECTION 4.1. Conditions to Closing. The obligation of the Purchaser to pay for the Note upon initial issuance is subject to (i) satisfaction of the conditions precedent set forth in Section 4.01 of the Note Purchase Agreement and (ii) receipt by the Note Insurer of the following documents, instruments and fees, all of which shall be in a form and substance acceptable to the Note Insurer: (a) An executed copy of this Agreement, the Master Receivables Purchase Agreement, the Premium Side Letter and each of the other Transaction Documents (other than Hedging Arrangements not then executed, which shall be subject to the review and approval procedures of Section 5.3 hereof). (b) Any other fees or amounts due and payable on the Closing Date in accordance with the Premium Side Letter. (c) Such other documents, approvals, consents, instruments, certificates or opinions as the Collateral Agent or the Secured Parties shall reasonably request. (d) A copy of the resolutions of the Board of Directors of AmeriCredit, certified by its Secretary approving the execution, delivery and performance by it (and the Debtor) of this Agreement, the Master Receivables Purchase Agreement, the Trust Agreement and the other Transactions Documents to be delivered by it (and the Debtor) hereunder or thereunder and all other documents evidencing necessary corporate action (including shareholders consents) and government approvals, if any. (e) A copy of the resolutions of the Board of Directors of AMTN, certified by its Secretary approving the execution, delivery and performance by it of this Agreement, the Master Receivables Purchase Agreement, the Trust Agreement and the other Transactions Documents to be delivered by it hereunder or thereunder and all other documents evidencing necessary corporate action (including shareholders consents, if any) and government approvals, if any. (f) The certificate of trust of the Debtor certified by the Secretary of State of the State of Delaware dated a date reasonably prior to the Closing Date. 53 (g) The certificate of incorporation of AmeriCredit certified by the Secretary of State of the State of Delaware dated a date reasonably prior to the Closing Date. (h) The certificate of incorporation of AMTN certified by the Secretary of State of the State of Delaware dated a date reasonably prior to the Closing Date. (i) (i) The articles of incorporation of the Trustee certified by an officer of the Trustee dated a date reasonably prior to the Closing Date and (ii) a power of attorney granted by the Trust in favor of Bankers Trust (Delaware). (j) A Good Standing Certificate for the Debtor issued by the Secretary of State of the State of Delaware and certificates of qualification as a foreign trust issued by the Secretary of State or other similar official of each jurisdiction where such qualification is material to the transactions contemplated by this Agreement, the Master Receivables Purchase Agreement and the other Transaction Documents, in each case, dated a date reasonably prior to the Closing Date. (k) A Good Standing Certificate for AmeriCredit issued by the Secretary of State of the State of Delaware and certificates of qualification as a foreign corporation issued by the Secretary of State or other similar official of Texas and California, in each case, dated a date reasonably prior to the Closing Date. (l) A Good Standing Certificate for AMTN issued by the Secretary of State of the State of Delaware and certificates of qualification as a foreign corporation issued by the Secretary of State or other similar official of each jurisdiction where such qualification is material to the transactions contemplated by this Agreement, the Master Receivables Purchase Agreement and the other Transaction Documents, in each case, dated a date reasonably prior to the Closing Date. (m) A Good Standing Certificate for the Trustee issued by the Secretary of State of the State of Delaware, dated a date reasonably prior to the Closing Date. (n) [Intentionally Omitted]. (o) A Certificate of the Secretary of AmeriCredit substantially in the form of Exhibit I hereto. (p) A Certificate of the Secretary of AMTN substantially in the form of Exhibit I hereto. (q) A Certificate of the Secretary of the Trustee substantially in the form of Exhibit I hereto. (r) Acknowledgement copies of proper financing statements (Form UCC-1), naming AmeriCredit as the debtor/seller in favor of the Debtor as secured party/purchaser and the Collateral Agent, for the benefit of the Secured Parties, as assignee of the secured party/purchaser or other similar instruments or documents as may be necessary or in the reasonable opinion of the Collateral Agent desirable under the UCC of all appropriate 54 jurisdictions or any comparable law to perfect the Debtor's interest in the Receivables, Related Security and Collections, free and clear of any Adverse Claim. (s) Acknowledgement copies of proper financing statements (Form UCC-1), naming AMTN as the debtor/seller in favor of the Debtor as secured party/purchaser and the Collateral Agent, for the benefit of the Secured Parties, as assignee of the secured party/purchaser or other similar instruments or documents as may be necessary or in the reasonable opinion of the Collateral Agent desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Debtor's interest in the Receivables, Related Security and Collections, free and clear of any Adverse Claim. (t) Acknowledgement copies of proper financing statements (Form UCC-1), naming the Debtor as the debtor in favor of the Collateral Agent, for the benefit of the Secured Parties, or other similar instruments or documents as may be necessary or in the reasonable opinion of the Collateral Agent desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Collateral Agent's security interest in the Collateral, including all Receivables, Related Security and Collections, free and clear of any Adverse Claim. (u) Copies of proper financing statements (Form UCC-3), if any, necessary to terminate all security interests and other rights of any person in the Receivables, Related Security and Collections, previously granted by AmeriCredit. (v) Copies of proper financing statements (Form UCC-3), if any, necessary to terminate all security interests and other rights of any person in the Receivables, Related Security and Collections, previously granted by AMTN. (w) Copies of proper financing statements (Form UCC-3), if any, necessary to terminate all security interests and other rights of any person in the Collateral, including the Receivables, Related Security and Collections, previously granted by the Debtor. (x) Certified copies of request for information or copies (Form UCC-11) (or a similar search report certified by parties acceptable to the Collateral Agent) dated a date reasonably near the date of the Initial Funding listing all effective financing statements which name the Debtor, AmeriCredit or AMTN (under its present name and any previous name) as debtor and which are filed in jurisdictions in which the filings were made pursuant to items (p), (q) and (r) above together with copies of such financing statements with respect to AMTN and the Debtor, and, with respect to AmeriCredit, as may be requested by the Note Insurer or its counsel (none of which shall cover any Receivables or Contracts). (y) Executed copies of the Lock-Box Agreement relating to the Lock-Box Account. (z) An opinion of Dewey Ballantine LLP, special counsel to the Debtor, AmeriCredit and AMTN, in form and substance satisfactory to the Note Insurer and the Note Insurer's counsel. (aa) An opinion of Dewey Ballantine LLP, special counsel to the Debtor, AmeriCredit and AMTN, covering certain bankruptcy and insolvency matters (i.e. "true sale" 55 and non-consolidation) in form and substance satisfactory to the Note Insurer and the Note Insurer's counsel. (bb) The Note, duly executed by the Debtor and appropriately completed. (cc) Executed copies of the documentation relating to any Hedging Arrangement. (dd) Such other documents, approvals, consents, instruments, certificates or opinions as the Collateral Agent or the Secured Parties shall reasonably request. ARTICLE V COVENANTS SECTION 5.1. Affirmative Covenants of the Debtor and AmeriCredit. At all --------------------------------------------------- times from the date hereof to the date on which all Secured Obligations have been paid in full in cash, unless the Collateral Agent and the Secured Parties shall otherwise consent in writing: (a) Financial Reporting and Other Information. AmeriCredit and AMTN ----------------------------------------- shall, and shall cause the Debtor and each of the Debtor's, AmeriCredit's and AMTN's Subsidiaries to, maintain, for itself and each of its respective Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to the Note Insurer and the Collateral Agent: (i) Annual Reporting. As soon as available and in any event within ---------------- ninety (90) days (or the next succeeding Business Day if the last day of such period is not a Business Day) after the end of each fiscal year, a copy of the audited consolidated financial statements for such year for AmeriCredit Corp. and its consolidated Subsidiaries prepared in accordance with GAAP and any management letter (which letter shall be furnished as soon as available) prepared by independent certified public accountants acceptable to the Note Insurer, certified, without qualification by such accountants and each other report or statement sent to shareholders or publicly filed by AmeriCredit Corp. or the Debtor. (ii) Quarterly Reporting. As soon as available and in any event within ------------------- forty-five (45) days (or the next succeeding Business Day if the last day of such period is not a Business Day) after the end of each of the first three quarters of each fiscal year of AmeriCredit Corp., a consolidated balance sheet of AmeriCredit Corp. and its consolidated Subsidiaries as of the end of such quarter and including the prior comparable period, and a consolidated statement of income of AmeriCredit Corp. and its consolidated Subsidiaries for such quarter and for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer or treasurer of AmeriCredit Corp. identifying such documents as being the documents described in this Section 5.1(a)(ii) and stating that the information set forth therein fairly presents the financial condition of AmeriCredit Corp. and its consolidated Subsidiaries as of and for the periods then ended, subject to year-end adjustments consisting only of normal, recurring accruals. 56 (iii) Compliance Certificate. Together with the financial statements ---------------------- required pursuant to clauses (i) and (ii) above, a compliance certificate signed by AmeriCredit Corp.'s chief financial officer, treasurer or authorized officer who shall hold the office of a Vice President or above, stating that (x) the attached financial statements have been prepared in accordance with GAAP and accurately reflect the financial condition of the Debtor or AmeriCredit Corp. as applicable and (y) to the best of such Person's knowledge, no Termination and Amortization Event or Potential Termination and Amortization Event exists, or if any Termination and Amortization Event or Potential Termination and Amortization Event exists, stating the nature and status thereof and showing the computation of, and showing compliance with, each of the financial ratios and restrictions set forth in Section 6.1(x), (y) and (z) hereof. (iv) Shareholders Statements and Reports. Promptly upon the ----------------------------------- furnishing thereof to the shareholders of AmeriCredit Corp., copies of all financial statements, reports and proxy statements so furnished. (v) S.E.C. Filings. Promptly upon the filing thereof, copies of all -------------- registration statements and annual, quarterly, monthly or other regular reports which AmeriCredit Corp. or any Subsidiary files with the Securities and Exchange Commission, other than any reports on Form 8-K filed with respect to securitizations unrelated to this Agreement or the transactions contemplated hereby. (vi) Notice of Termination and Amortization Events or Potential ---------------------------------------------------------- Termination and Amortization Events, Etc. (A) As soon as possible and in any - ---------------------------------------- event within two (2) days after the occurrence of each Termination and Amortization Event or each Potential Termination and Amortization Event, a statement of the chief financial officer or treasurer of the Servicer setting forth details of such Termination and Amortization Event or Potential Termination and Amortization Event and the action which the Debtor proposes to take with respect thereto, which information shall be updated promptly from time to time; (B) promptly after the Debtor obtains knowledge thereof, notice of any Termination and Amortization Event, litigation, investigation or proceeding that may exist at any time between the Servicer and any Person that may result in a Material Adverse Effect or any litigation or proceeding relating to any Transaction Document; and (C) promptly after the occurrence thereof, notice of any Material Adverse Effect. (vii) Change in Credit and Collection Policy and Debt Ratings. Within ------------------------------------------------------- ten (10) days after the date any material change in or amendment to the Credit and Collection Policy is made, a copy of the Credit and Collection Policy then in effect indicating such change or amendment. Within five (5) days after the date of any change in AmeriCredit's or AmeriCredit Corp.'s public or private debt ratings, if any, a written certification of AmeriCredit's or AmeriCredit Corp.'s public and private debt ratings after giving effect to any such change. (viii) ERISA. Promptly after the filing or receiving thereof, copies of ----- all reports and notices with respect to any Reportable Event (as defined in Article IV of ERISA) which the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN files under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which the Debtor, AmeriCredit, AMTN or any ERISA Affiliates of the Debtor, AmeriCredit or AMTN receives from the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department of Labor. 57 (ix) Change in Accountants or Accounting Policy. Promptly, notice of ------------------------------------------ any change in the accountants or material change in accounting policy of either the Debtor, AmeriCredit Corp., AmeriCredit or AMTN. (x) Other Information. Such other information (including non-financial ----------------- information) with respect to the Debtor, AmeriCredit Corp., AmeriCredit, AMTN or any of their respective Subsidiaries as the Note Insurer, the Collateral Agent or any Secured Party may from time to time reasonably request. (b) Conduct of Business. (i) AmeriCredit and AMTN shall cause the ------------------- Debtor and each of the Debtor's, AmeriCredit's and AMTN's Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly organized, validly existing and in good standing as a domestic corporation in its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted and (ii) the Debtor and AMTN shall at all times be a wholly-owned Subsidiary of AmeriCredit. (c) Compliance with Laws. AmeriCredit or AMTN shall, and shall cause -------------------- the Debtor and each of the Debtor's, AmeriCredit's and AMTN's Subsidiaries to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its respective properties may be subject. (d) Furnishing of Information and Inspection of Records. AmeriCredit --------------------------------------------------- or AMTN shall, and shall cause the Debtor to, furnish to the Note Insurer from time to time such information with respect to the Receivables as the Note Insurer may reasonably request, including, without limitation, listings identifying the Obligor and the outstanding balance for each Receivable. AmeriCredit or AMTN shall, and shall cause the Debtor to, at any time and from time to time, during regular business hours and, provided that a Termination and Amortization Event or Potential Termination and Amortization Event shall not have occurred and be continuing, upon reasonable prior notice, permit the Collateral Agent or any Secured Party, or their agents or representatives, (i) to examine and make copies of and take abstracts from all Records and (ii) to visit the offices and properties of the Debtor, AmeriCredit or AMTN, as applicable, for the purpose of examining such Records, and to discuss matters relating to Receivables or the Debtor's, AmeriCredit's or AMTN's performance hereunder and under the other Transaction Documents to which such Person is a party with any of the officers, directors, employees or independent public accountants of the Debtor, AmeriCredit or AMTN, as applicable, having knowledge of such matters. (e) Offices, Records and Books of Account. The Debtor (i) shall keep ------------------------------------- its principal place of business and chief executive office (as such terms or similar terms are used in the UCC) and the office where it keeps its records concerning the Receivables at the address of the Debtor set forth in Section 9.3 hereof or at any other locations in jurisdictions where all actions requested by the Secured Parties to protect and perfect the interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral have been taken and completed and (ii) shall provide the Collateral Agent with at least thirty (30) days' written notice before making any change in the Debtor's name or making any other change in the Debtor's identity or corporate structure that could render any UCC financing statement filed in connection with this 58 Agreement seriously misleading as such term (or similar term) is used in the UCC. Each notice to the Collateral Agent pursuant to the foregoing sentence shall set forth the applicable change and the effective date thereof. AmeriCredit or AMTN shall, and shall cause the Debtor to, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable). AmeriCredit or AMTN shall, and shall cause the Debtor to, give the Note Insurer notice of any material change in the administrative and operating procedures of the Debtor, AmeriCredit or AMTN, as applicable, referred to in the previous sentence. (f) Performance and Compliance with Contracts Related to the -------------------------------------------------------- Receivables. AmeriCredit or AMTN, at their expense, shall, and shall cause the - ----------- Debtor to, timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by the Debtor, AmeriCredit or AMTN under the Contracts related to the Receivables. (g) Credit and Collection Policies. AmeriCredit or AMTN shall, and ------------------------------ shall cause the Debtor to, comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract. (h) Collections. AmeriCredit or AMTN shall, and shall cause the Debtor ----------- to, instruct all Obligors to cause all Collections to be deposited directly to a Lock-Box Account. (i) Collections Received. AmeriCredit or AMTN shall, and shall cause -------------------- the Debtor to, hold in trust, and deposit, immediately, but in any event not later than forty-eight (48) hours of its receipt thereof, to the Collection Account all Collections received from time to time by the Debtor, AmeriCredit or AMTN, as the case may be. (j) Contribution Treatment. AmeriCredit or AMTN shall not, and shall ---------------------- not permit the Debtor to, account for (including for accounting and tax purposes), or otherwise treat, the transactions contemplated by the Master Receivables Purchase Agreement in any manner other than as a contribution of Receivables by AmeriCredit or AMTN, as applicable, to the Debtor. In addition, AmeriCredit or AMTN shall, and shall cause the Debtor to, disclose (in a footnote or otherwise) in all of its respective financial statements (including any such financial statements consolidated with any other Persons' financial statements) the existence and nature of the transactions contemplated by the Master Receivables Purchase Agreement and the interest of the Debtor (in the case of AmeriCredit's or AMTN's financial statements) in the Affected Assets. (k) Separate Business. (a) The Debtor shall be a limited purpose entity ----------------- whose primary activities are restricted in the Trust Agreement to (i) purchasing or otherwise acquiring from AmeriCredit or AMTN, owning, holding, granting security interests or selling interests in Affected Assets, (ii) entering into agreements for the selling, financing and servicing of the Affected Assets, and (iii) conducting such other activities as it deems necessary or appropriate to carry out its primary activities. The Debtor shall not create any Subsidiaries or divisions. The Debtor shall not engage in any business other than the transactions contemplated 59 by the Transaction Documents. The Debtor shall at all times (a) to the extent the Debtor's office is located in the offices of AmeriCredit, AMTN or any Affiliate of AmeriCredit or AMTN, pay fair market rent for its executive office space located in such offices, (b) maintain the Debtor's books, financial statements, accounting records and other trust documents and records separate from those of AmeriCredit, AMTN or any other entity, (c) not commingle the Debtor's assets with those of AmeriCredit, AMTN or any other entity, (d) act solely in its own name and through its own authorized officers and agents, (e) make investments directly or by brokers engaged and paid by the Debtor or its agents (provided that if any such agent is an Affiliate of the Debtor it shall -------- be compensated at a fair market rate for its services), (f) separately manage its liabilities from those of AmeriCredit, AMTN or any Affiliates of AmeriCredit or AMTN and pay its own liabilities, including all administrative expenses, from its own separate assets, except that AmeriCredit may pay the organizational expenses of the Debtor, and (g) pay from the Debtor's assets all obligations and indebtedness of any kind incurred by the Debtor. The Debtor shall abide by all trust formalities, and the Debtor shall cause its financial statements to be prepared in accordance with GAAP in a manner that indicates the separate existence of the Debtor and its assets and liabilities. The Debtor shall (i) pay all its liabilities, (ii) not assume the liabilities of AmeriCredit, AMTN or any Affiliate of AmeriCredit or AMTN, (iii) not lend funds or extend credit to AmeriCredit, AMTN or any Affiliate of AmeriCredit or AMTN and (iv) not guarantee the liabilities of AmeriCredit, AMTN or any Affiliates of AmeriCredit or AMTN. The officers of the Debtor (as appropriate) shall make decisions with respect to the business and daily operations of the Debtor independent of and not dictated by any controlling entity. The Debtor shall not engage in any business not permitted by the Trust Agreement as in effect on the Closing Date. (l) Trust Agreement. The Debtor shall only amend, alter, change or --------------- repeal the Trust Agreement with the prior written consent of the Collateral Agent and the Note Insurer. SECTION 5.2. Negative Covenants of Debtor, AMTN and AmeriCredit. At all -------------------------------------------------- times from the date hereof to the date on which all Secured Obligations shall have been paid in full in cash, unless the Collateral Agent and the Secured Parties shall otherwise consent in writing: (a) No Sales, Liens, Etc. Except as otherwise provided herein and in -------------------- the Master Receivables Purchase Agreement, AmeriCredit and AMTN shall not, and shall not permit the Debtor to, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim (or the filing of any financing statement) upon or with respect to any of the Affected Assets, or any account which concentrates in a Lock-Box Bank to which any Collections of any Receivable are sent, or assign any right to receive income in respect thereof. (b) Extensions and Amendments of Receivables. AmeriCredit or AMTN shall ---------------------------------------- not, and shall not permit the Debtor to, extend, amend or otherwise modify the terms of any Receivable, or amend, modify or waive any term or condition of any Contract related thereto, except in accordance with the Terms of Section 2.2(c) of the Servicing Agreement. (c) No Amendment of Master Receivables Purchase Agreement. AmeriCredit ----------------------------------------------------- or AMTN shall not, and shall not permit the Debtor to, amend, supplement or otherwise modify the Master Receivables Purchase Agreement or waive any provision thereof, in each case except 60 with the prior written consent of the Collateral Agent and the Secured Parties; nor shall AmeriCredit or AMTN take, or permit the Debtor to take, any other action under the Master Receivables Purchase Agreement that could have a material adverse effect on the Note Insurer, the Purchaser or any other Owner or which is inconsistent with the terms of this Agreement. (d) No Change in Business or Credit and Collection Policy. AmeriCredit or ----------------------------------------------------- AMTN shall not, and shall not permit the Debtor to, make any change in the character of its business or in the Credit and Collection Policy, which change would, in either case (i) impair the collectibility of any Receivable or (ii) otherwise have a Material Adverse Effect. (e) No Mergers, Sale of Assets, Etc. AmeriCredit or AMTN shall not, and ------------------------------- shall not permit the Debtor to, (i) consolidate or merge with or into any other Person, or (ii) sell, lease or transfer all or substantially all of its assets to any other Person; provided, however, that no such sale shall be deemed to -------- ------- occur solely as a result of a Take-Out or solely as a result of the sale of Contracts and related Receivables which are released to the Debtor pursuant to Section 2.16 hereof. (f) Change in Payment Instructions to Obligors. AmeriCredit or AMTN shall ------------------------------------------ not, and shall not permit the Debtor or the Servicer to, add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from those listed in Exhibit A hereto or make any change in its instructions to Obligors regarding payments to be made to any Lock-Box Account, unless (i) such instructions are to deposit such payments to another existing Lock-Box Account or (ii) the Collateral Agent and the Note Insurer shall have received written notice of such addition, termination or change at least thirty (30) days prior thereto and the Collateral Agent and the Note Insurer shall have received a Lock-Box Agreement executed by each new Lock-Box Bank or existing Lock-Box Bank, as applicable, with respect to each new Lock-Box Account. (g) Change of Name, Etc. AmeriCredit or AMTN shall not, and shall not ------------------- permit the Debtor to, change its name, identity or structure or the location of its chief executive office, unless at least thirty (30) days prior to the effective date of any such change the Debtor, AmeriCredit or AMTN, as applicable, delivers to the Collateral Agent (i) such documents, instruments or agreements, executed by the Debtor or the Collateral Agent, as applicable, as are necessary to reflect such change and to continue the perfection of the Collateral Agent's security interest in the Collateral and (ii) new or revised Lock-Box Agreements executed by the Lock-Box Banks which reflect such change and enable the Note Insurer to continue to exercise its rights contained in Section 2.6 hereof. (h) Contribution Treatment. AmeriCredit or AMTN shall not, and shall not ---------------------- permit the Debtor to account for (including for accounting and tax purposes), or otherwise treat, the transactions contemplated by the Master Receivables Purchase Agreement in any manner other than as a contribution of Receivables by AmeriCredit or AMTN, as applicable, to the Debtor. (i) Other Debt. Except as provided for herein, the Debtor shall not create, ---------- incur, assume or suffer to exist any indebtedness whether current or funded, or any other liability other than indebtedness of the Debtor representing fees, expenses and indemnities arising 61 hereunder or under the Master Receivables Purchase Agreement for the purchase price of the Receivables under the Master Receivables Purchase Agreement. (j) ERISA Matters. The Servicer shall not, and shall not permit ------------- AmeriCredit, AMTN or the Debtor to, (i) engage or permit any of its respective ERISA Affiliates to engage in any prohibited transaction (as defined in Section 4975 of the Code and Section 406 of ERISA) for which an exemption is not available or has not previously been obtained from the U.S. Department of Labor; (ii) permit to exist any accumulated funding deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of the Code) or funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail to make any payments to any Multiemployer Plan that the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN is required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (iv) terminate any Benefit Plan so as to result in any liability; (v) permit to exist any occurrence of any reportable event described in Title IV of ERISA which represents a material risk of a liability to the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN under ERISA or the Code; or (vi) take any action or fail to take any action which shall give rise to a lien under Section 302(f) of ERISA or cause the Internal Revenue Service to indicate its intention in writing or to file a notice of lien asserting a claim or claims pursuant to the Code with regard to any assets of the Debtor, AmeriCredit, AMTN or any ERISA Affiliate or cause the Pension Benefit Guaranty Corporation to indicate its intention in writing to file a notice of lien asserting a claim pursuant to ERISA with regard to any assets of the Debtor, AmeriCredit, AMTN or any ERISA Affiliate or to terminate any Benefit Plan, or to take any steps to terminate any Benefit Plan, if such prohibited transactions, accumulated funding deficiencies, payments, terminations, reportable events and actions or inactions occurring within any fiscal year of the Debtor, AmeriCredit and AMTN, in the aggregate, involve a payment of money or an incurrence of liability by the Debtor, AmeriCredit, AMTN or any ERISA Affiliate of the Debtor, AmeriCredit or AMTN, in an amount in excess of $10,000. (k) Payment to AmeriCredit and AMTN. With respect to any Receivable sold by ------------------------------- AmeriCredit or AMTN to the Debtor, AmeriCredit or AMTN shall, and shall cause the Debtor to, effect such sale under, and pursuant to the terms of, the Master Receivables Purchase Agreement, including, without limitation, the payment by the Debtor in cash to AmeriCredit or AMTN, as the case may be, an amount equal to the purchase price for such Receivable as required by the terms of the Master Receivables Purchase Agreement. (l) the Debtor shall not engage in any business or activity other than set forth in its organizational documents; (m) the Debtor shall not, without the affirmative vote of 100% of the its Certificateholders, institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator of the corporation or substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take corporate action in furtherance of any such action. 62 (n) the Debtor shall not amend, change or repeal its Certificate of Incorporation as in effect on the date hereof with the prior written consent of the Collateral Agent and the Note Insurer. SECTION 5.3. Hedging Arrangements. The Debtor shall (a) at or prior to the -------------------- time of any Receivables Delivery, provide to the Note Insurer, and the Collateral Agent an Officer's Certificate stating that the Servicer has Hedging Arrangements in place satisfying the conditions of this Section 5.3 as set forth below, and (b) in connection with any Servicer's Certificate provided hereunder and to the extent not previously provided, provide an executed copy of all existing Hedging Arrangements, which Hedging Arrangements shall be satisfactory to the Collateral Agent, and with respect to which the Debtor shall be the beneficiary, in respect of an aggregate notional amount equal to the lesser of (i) the Net Investment and (ii) the Net Receivables Balance, and if such Hedging Arrangement is a swap, not greater than the Net Investment related to such swap. On each Delivery Date, the notional balance of the Hedging Arrangement shall be in an amount equal to the lesser of (i) the Net Investment and (ii) the Net Receivables Balance and, in the case of a swap, not exceeding the Net Receivables Balance (including any Receivables to be added in connection with such Funding). The form, structure and counterparty to each Hedging Arrangement shall be acceptable to the Note Insurer and the Collateral Agent (and which, unless such Hedging Agreement is a cap agreement, shall be submitted to the Note Insurer and the Collateral Agent for their prior review) and must be in full force and effect at all times during which the Net Receivables Balance is greater than zero (however such required amount may be reduced for the period of time between the pricing and the funding of a structured financing utilizing receivables released to the Debtor pursuant to Section 2.16 hereof by the Aggregate Outstanding Balance of such Receivables). Any counterparty to a Hedging Arrangement shall have a long-term unsecured debt rating from Moody's and S&P of at least "A2" and "A," respectively. With respect to any Hedging Arrangement, (i) on and after the occurrence of a Termination and Amortization Event or Potential Termination and Amortization Event, the Note Insurer shall have the right, in its sole discretion, to direct the Debtor's actions with respect thereto and (ii) the related amortization schedule shall be approved by the Note Insurer. Any Hedging Arrangement relating to a Receivables Delivery which is an interest rate cap agreement shall consist of the following requirements (each interest rate cap agreement meeting the following requirements, an "Interest Rate Cap" and collectively, the "Interest Rate Caps"): (i) any such counterparty thereto not rated at least "A" by S&P or "A2" by Moody's shall be approved in writing by the Note Insurer, Moody's and S&P; (ii) each Interest Rate Cap shall be documented in form and substance reasonably acceptable to the Note Insurer; (iii) the strike rate of any Interest Rate Cap shall be set at a level that will not result in a Net Spread Deficiency; (iv) all amounts payable by the counterparty thereunder shall be required to be paid by such counterparty directly to the Collection Account; (v) the notional amount thereunder shall amortize according to the scheduled amortization of the Receivables funded on such Receivables Delivery Date assuming zero prepayments and zero defaults with respect to such Receivables; (vi) the Interest Rate Cap shall cover at least 100% of the lesser of (a) the Net Investment and (b) the Net Receivables Balance and must be in effect for at least as long as the latest maturing 63 Receivables securing the Net Investment; and (vii) the Effective Date shall be no later than the Receivables Delivery Date. SECTION 5.4. Affirmative Covenants of the Servicer. At all times from the ------------------------------------- date hereof to the date on which all Secured Obligations have been paid in full in cash, unless the Collateral Agent and the Secured Parties shall otherwise consent in writing: (a) Conduct of Business. The Servicer shall, and shall cause each of ------------------- its Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted. (b) Compliance with Laws. The Servicer shall, and shall cause each of -------------------- its Subsidiaries to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its respective properties may be subject. (c) Furnishing of Information and Inspection of Records. The Servicer --------------------------------------------------- shall furnish to the Note Insurer and the Collateral Agent from time to time such information with respect to the Receivables as the Note Insurer or the Collateral Agent may reasonably request (at the Servicer's expense), including, without limitation, listings identifying the Obligor and the outstanding balance for each Receivable. The Servicer shall, at any time and from time to time during regular business hours and, provided that a Termination and Amortization Event or Potential Termination and Amortization Event shall not have occurred and be continuing, upon reasonable prior notice, permit the Collateral Agent or any Secured Party, or their agents or representatives, (i) to examine and make copies of and take abstracts from all Records and (ii) to visit the offices and properties of the Servicer for the purpose of examining such Records, and to discuss matters relating to Receivables or its performance hereunder and under the other Transaction Documents to which it is a party with any of the officers, directors, employees or independent public accountants of the Servicer having knowledge of such matters. (d) Keeping of Records and Books of Account. The Servicer shall --------------------------------------- maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Servicer shall give the Note Insurer notice of any material change in its administrative and operating procedures referred to in the previous sentence. (e) Notice of Collateral Agent's Interest. In the event that the ------------------------------------- Debtor, AmeriCredit or AMTN shall sell or otherwise transfer any interest in accounts receivable, the Servicer shall disclose on any computer tapes or other documents or instruments provided by the Servicer in connection with any such sale or transfer the Debtor's ownership of the Receivables and the Servicer's interest therein. 64 (f) Credit and Collection Policies. The Servicer shall comply in all ------------------------------ material respects with the Credit and Collection Policy with respect to each Receivable and the related Contract. (g) Collections. The Servicer shall instruct all Obligors to cause all ----------- Collections to be deposited directly to a Lock-Box Account. (h) Collections Received. The Servicer shall hold in trust, and -------------------- deposit, immediately, but in any event not later than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account all Collections received by it from time to time. (i) Change in Accountants or Accounting Policies. The Servicer shall -------------------------------------------- promptly notify the Note Insurer of any change in its accountants or material change in its accounting policy. SECTION 5.5. Negative Covenants of the Servicer. At all times from the date ---------------------------------- hereof to the date on which all Secured Obligations shall have been paid in full in cash, unless the Collateral Agent and the Secured Parties shall otherwise consent in writing: (a) Extensions or Amendments of Receivables. The Servicer shall not --------------------------------------- extend, amend or otherwise modify the terms of any Receivable, or amend, modify or waive any term or condition of any Contract related thereto, except in accordance with the Terms of Section 2.2(c) of the Servicing Agreement. (b) No Change in Business or Credit and Collection Policy. The ----------------------------------------------------- Servicer shall not make any change in the character of its business or in the Credit and Collection Policy, which change would, in either case, impair the collectibility of any Receivable or otherwise have a Material Adverse Effect. (c) No Mergers, Etc. The Servicer shall not (i) consolidate or merge --------------- with or into any other Person or (ii) sell, lease or transfer all or substantially all of its assets to any other Person. (d) Change in Payment Instructions to Obligors. The Servicer shall not ------------------------------------------ add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from those listed in Exhibit A hereto or make any change in its instructions to Obligors regarding payments to be made to any Lock-Box Account, unless (i) such instructions are to deposit such payments to another existing Lock-Box Account or (ii) the Note Insurer shall have received written notice of such addition, termination or change at least thirty (30) days prior thereto and the Collateral Agent shall have received a Lock-Box Agreement executed by each new Lock-Box Bank or existing Lock-Box Bank, as applicable, with respect to each new Lock-Box Account. 65 ARTICLE VI TERMINATION AND AMORTIZATION EVENTS; OPTIONAL TERMINATION SECTION 6.1. Termination and Amortization Events. The occurrence of any one ----------------------------------- or more of the following events shall constitute a Termination and Amortization Event: (a) any representation or warranty made by AmeriCredit or AMTN in this Agreement, the Master Receivables Purchase Agreement (other than the representations and warranties relating to the Receivables) or in any other Transaction Document shall prove to have been incorrect in any material respect when made or deemed made, or AmeriCredit or AMTN shall fail to perform any covenant in this Agreement or any other Transaction Document; or (b) AmeriCredit or AMTN shall fail to make any payment or deposit to be made by it hereunder or under the Note Purchase Agreement, the Servicing and Custodian Agreement or the Insurance Agreement when due hereunder or thereunder; or (c) any Event of Bankruptcy shall occur with respect to the Debtor, AmeriCredit or AMTN; or (d) an "Event of Default" shall have occurred and be continuing under the Insurance Agreement; or (e) the Debtor shall at any time not be in compliance with the requirements of Section 5.3 hereof and such noncompliance shall continue for five (5) days; or (f) any event of default by the Debtor under the Hedge Agreement, as defined by the ISDA guidelines with respect to the related hedge type; or (g) the long-term debt rating of any hedge counterparty under a Hedge Agreement is either A-/A3 or below or withdrawn or suspended (unless a new hedge counterparty reasonably acceptable to the Note Insurer replaces such hedge counterparty within ten (10) Business Days or Collateral acceptable to the Note Insurer is transferred by the hedge counterparty to the Debtor pursuant to a Collateral Agreement (as defined in the Hedge Agreement) within ten (10) Business Days); or (h) the Collateral Agent, on behalf of the Secured Parties, shall, for any reason, fail to have a valid and perfected security interest in the Collateral, including, without limitation, the Receivables and Related Security and Collections with respect thereto, free and clear of any Adverse Claim; or (i) there shall have occurred any material adverse change in the operations of AmeriCredit since the Closing Date which materially adversely affects AmeriCredit's ability to service the Receivables or to perform under the Servicing Agreement (or any other agreement pursuant to which it is then servicing the Receivables), the Insurance Agreement, the Master Receivables Purchase Agreement or any other Transaction Document; or 66 (j) a final judgment for the payment of money in excess of $10,000,000 shall have been rendered against AmeriCredit or AMTN by a court of competent jurisdiction and AmeriCredit or AMTN shall not have either (1) discharged or provided for the discharge of such judgment in accordance with its terms, or (2) perfected a timely appeal of such judgment and caused the execution thereof to be stayed (by supercedes or otherwise) pending such appeal or (ii) AmeriCredit or AMTN shall have made payments of amounts in excess of $15,000,000 in settlement of any litigation unless covered by insurance; or (k) a claim shall have been made under the Note Policy; or (l) during the Revolving Period only, a Yield Supplement Account Shortfall exists, and continues for a period of five (5) Business Days; or (m) a Reserve Account Shortfall exists at the close of business on any Delivery Date, and remains uncured at the close of business on the fifth (5th) Business Day following such Delivery Date; or (n) an unwaived event of default by AmeriCredit or AMTN which continues for ten (10) or more days under any material agreement for borrowed money exceeding $5,000,000 to which any such Person is a party; or the default by the Debtor, AmeriCredit, AMTN or any Subsidiary of the Debtor or AmeriCredit in the performance of any term, provision or condition contained in any agreement to which any such Person is a party and under which any Indebtedness owing by the Debtor, AmeriCredit, AMTN or any Subsidiary of the Debtor, AmeriCredit or AMTN greater than such respective amounts was created or is governed, regardless of whether such event is an "event of default" or "default" under any such agreement; or any Indebtedness owing by the Debtor, AmeriCredit, AMTN or any Subsidiary of the Debtor, AmeriCredit or AMTN greater than such respective amounts shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof; or (o) the Portfolio Delinquency Ratio averaged for the three most recent Determination Dates shall exceed 5.50%; or (p) the Portfolio Net Loss Ratio for any Determination Date shall exceed 8.00%; or (q) the Portfolio Repossession Ratio, as measured on a 3-month rolling average basis, is greater than 1.5%; or (r) the Cumulative Net Loss Ratio exceeds the amount specified for the related Determination Date in Exhibit M hereto; or (s) the weighted average AmeriCredit Score for all Receivables shall at any time be less than 220 or more than 5.00% of the Receivables shall have an AmeriCredit Score below 200; or (t) the average Monthly Extension Ratios for the three most recent Determination Dates shall exceed 2.50%; or 67 (u) the weighted average remaining maturity of the Receivables shall exceed 65 months; or (v) during the Revolving Period only, the Net Investment exceeds the Borrowing Base, for five (5) consecutive days following any Borrowing Base Determination Date; or (w) a Net Spread Deficiency exists, and such deficiency continues for a period of more than five (5) Business Days; or (x) the Tangible Net Worth of AmeriCredit Corp. shall be less than $600,000,000 for any period of twenty (20) consecutive days; or (y) the ratio of AmeriCredit Corp.'s Securitization Assets to its Tangible Net Worth exceeds 2.5x; or (z) the ratio (on a rolling two quarter average basis) of AmeriCredit Corp.'s Adjusted EBITDA for the two most recent financial quarters to its Interest Expense for the two most recent financial quarters shall be less than 1.2x; or (aa) the Servicer or the Note Insurer shall have been informed in writing by either Rating Agency that the risk covered by the Note Policy shall no longer carry a shadow rating of at least BBB from S&P or Baa2 from Moody's and the failure to maintain either such shadow rating shall continue for a period of five (5) days from the date that such notice is provided; or (bb) one or more courts of competent jurisdiction have issued final, non-appealable orders to the effect that the Collateral Agent is not the secured party with respect to Financed Vehicles financed under Receivables with an Aggregate Outstanding Balance (i.e., as of the date upon which such Receivables were originated), equal to 5.00% or more of the Aggregate Outstanding Balance of all Receivables owned by the Debtor; or (cc) AmeriCredit shall enter into any transaction or merger whereby it is not the surviving entity (other than internal re-organization), or AMTN or the Debtor shall enter into any merger regardless of the surviving entity; or (dd) the periodic due diligence by the Note Insurer (or its designee) as permitted by the Transaction Documents, reveals that Receivables representing more than 10% of the sample reviewed (which sample must be of a reasonably statistically significant size) displays material non-compliance with the standards described in the Credit and Collection Policy; or (ee) except as permitted by the transaction documents, any assignment by AmeriCredit of its rights and obligations under the Transaction Documents without the prior written consent of the Note Insurer; or (ff) the Trust becomes an "investment company" within the meaning of the Investment Company Act of 1940; or 68 (gg) AMTN fails to repurchase Receivables in connection with a breach of representation or warranty relating to the Receivables or due to an incomplete or defective Receivable File, or as a result of the related Lien Certificate not having been received by the Custodian by the 181st day following the origination date of the related Receivable; or (hh) AmeriCredit is removed as servicer or is provided with notice of servicer non-renewal on any outstanding term asset-backed transaction; or (ii) during any calendar quarter commencing with the second calendar quarter of 2002, the daily average percentage of MTN Eligible Receivables as a portion of MTN Eligible Collateral is less than 50%; or (jj) the Eligible Receivables held as Collateral that have Contracts that provide for 72 monthly payments is greater than (I) 40% or (II) if the concentration limitation for Contracts that provide for 72 monthly payments set forth with respect to the Receivables Pool related to the most recent securitization prior to any date of determination is less than 40%, then such concentration limitation, but no less than 30%; or (kk) the Weighted Average AmeriCredit Score for all of the Eligible Receivables held as Collateral which have Contracts which provide for 72 monthly payments is (I) less than 235 or (II) if 30% or less of the Contracts provide for 72 monthly payments, less than 230; or (ll) a Servicer Termination Event occurs. In addition to the Termination and Amortization Events listed above, the following Termination and Amortization Events apply only during the Regular Amortization Period and only with respect to the Regular Amortization Receivables Pool: (a) on any Determination Date, the Regular Amortization Period Cumulative Net Loss Ratio exceeds the amount (based on weighted average pool seasoning in months) specified for the related Determination Date in Exhibit M hereto; or (b) on any Determination Date during the Regular Amortization Period, the Delinquency Ratio, averaged for the 3 most recent Determination Dates, exceeds the level specified for such Determination Date in Exhibit N hereto; or (c) on any Determination Date during the Regular Amortization Period, the Default Ratio exceeds the level specified for such Determination Date in Exhibit O hereto; or (d) (i) on any of the seventh through thirteenth Determination Dates during the Regular Amortization Period, the Annualized Net Loss Ratio for Receivables held as Collateral, exceeds 10%; or (ii) on any Determination Dates during the Regular Amortization Period thereafter, the Annualized Net Loss Ratio for Receivables held as Collateral, exceeds 11%. SECTION 6.2. Termination. Upon the occurrence of any Termination and ----------- Amortization Event hereunder, the Rapid Amortization Period shall commence, unless the Note 69 Insurer otherwise waives in writing such Termination and Amortization Event. No waiver of any Termination and Amortization Event hereunder shall be effective without the prior written consent of the Note Insurer. The Debtor and the Servicer agree that they shall take all actions (including reliening of the certificates of title or other title documents in the name of the Collateral Agent on behalf of the Secured Parties) and execute all documents as may be necessary or requested by the Collateral Agent or the Note Insurer to perfect its interest in the Collateral, including, without limitation, to perfect the Collateral Agent's security interest in the Financed Vehicles. Each of the Debtor, AmeriCredit and AMTN hereby grant to the Collateral Agent, on behalf of the Secured Parties, a power of attorney to act in its place and stead to take all actions as may be necessary to perfect the Collateral Agent's security interest in the Financed Vehicles. Each of AmeriCredit, AMTN and the Debtor acknowledge that such power of attorney is irrevocable and is coupled with an interest. In connection with any sale of the Receivables by the Collateral Agent after the occurrence of a Termination and Amortization Event, the Debtor shall have, for a period of five (5) Business Days after notice of such proposed sale from or on behalf of the Secured Parties, the right to repurchase the Receivables and related Contracts for a price, payable in immediately available funds, in an amount equal to the then outstanding Secured Obligations. SECTION 6.3. Optional Redemption of Note. On any Remittance Date (i) --------------------------- following the occurrence of a Termination and Amortization Event (which Termination and Amortization Event itself occurs on or after the twelfth (12/th/) Remittance Date), the Note Insurer, on not fewer than fifteen (15) prior Business Days' written notice delivered to the Debtor, the Servicer, the Collateral Agent and the Purchaser may, or (ii) on or after the twenty-fourth (24th Remittance Date, the Debtor not fewer than fifteen (15) prior Business Day's written notice delivered to the Note Insurer, the Purchaser and the Collateral Agent, may, redeem the Note, in whole or in part, on, in each case for a purchase price equal to the Net Investment then outstanding, plus all accrued and unpaid Note Interest, to the date of payment; and provided that all amounts, if any, then due and owing to the Note Insurer, the Collateral Agent and the Servicer are paid in full in cash. The purchase price shall be applied as set forth in Section 6.5 hereof. SECTION 6.4. Optional Purchase of All Receivables. (a) On the last day ------------------------------------ of any Settlement Period during the Amortization Period as of which the Aggregate Outstanding Balance of all Receivables shall be less than or equal to 10% of the Aggregate Outstanding Balance of all Receivables as of the beginning of the Amortization Period, the Servicer and AMTN each shall have the option to purchase the Trust Estate, other than the Accounts (with the consent of the Note Insurer if such purchase would result in a claim on the Note Policy or would result in any amount owing to the Note Insurer under the Insurance Agreement remaining unpaid); provided, however, that the amount to be paid for such purchase (as set forth in the following sentence) shall be sufficient to pay the full amount of principal, premium, if any, and interest then due and payable on the Notes and the Certificates and any amount then due and owed to the Note Insurer. To exercise such option, the Servicer or AMTN, as the case may be, shall deposit in the Collection Account an amount equal to the aggregate Purchase Amount for the Receivables (including Liquidated Receivables), plus the appraised value of any other property held by the Trust and any amount then due and owed to the Note Insurer, such value to be determined by an appraiser mutually agreed upon by the Servicer, the Note Insurer and the Collateral Agent, and shall succeed to all interests in and to the Trust. 70 (b) Notice of any termination of the Trust shall be given to the Trustee, the Collateral Agent, the Note Insurer and the Rating Agencies as soon as practicable after the Servicer has received notice thereof. (c) All amounts deposited in the Collection Account pursuant to this Section 6.4 shall be applied as set forth in Section 6.5 hereof. SECTION 6.5. Proceeds. The proceeds from the sale, disposition or -------- liquidation of the Receivables pursuant to Section 6.2 hereof, in connection with any optional redemption of the Note pursuant to Section 6.3 hereof, or in connection with the optional purchase of all Receivables pursuant to Section 6.4 hereof, shall be treated as Prepayment Amounts and applied pursuant to Section 2.4 hereof. ARTICLE VII THE COLLATERAL AGENT SECTION 7.1. Duties of the Collateral Agent. The Secured Parties hereby ------------------------------ appoint JPMorgan to act solely on their behalf as Collateral Agent hereunder, and JPMorgan hereby accepts such appointment. The Collateral Agent, both prior to the occurrence of a Termination and Amortization Event hereunder and after a Termination and Amortization Event shall have been cured or waived, shall undertake to perform such duties and only such duties as are specifically set forth in this Agreement. The Collateral Agent shall at all times after the occurrence of a Termination and Amortization Event which has not been cured or waived exercise such of the rights and powers vested in it pursuant to this Agreement using the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. All Collections received by the Collateral Agent from the Servicer or otherwise will, pending remittance to the Secured Parties entitled thereto, be held in trust by the Collateral Agent for the benefit of the Secured Parties and together with all other payment obligations of the Debtor hereunder owing to the Secured Parties shall be payable to the Secured Parties in accordance with the provisions of Article III hereof. SECTION 7.2. Compensation and Indemnification of Collateral Agent. The ---------------------------------------------------- Collateral Agent shall be compensated for its activities hereunder and reimbursed for reasonable out-of-pocket expenses (including, but not limited to, (i) securities transaction charges not waived due to the Collateral Agent's receipt of a payment from a financial institution with respect to certain Eligible Investments and (ii) the compensation and expenses of its counsel and agents) pursuant to a separate letter agreement between the Collateral Agent and the Debtor. All such amounts shall be payable from funds available therefor in accordance with Section 2.3(a)(iv) and (xiii) hereof. Notwithstanding any other provisions in this Agreement, the Collateral Agent shall not be liable for any liabilities, costs or expenses of the Debtor arising under any tax law, including without limitation any federal, state or local income or franchise taxes or any other tax imposed on or measured by income (or any interest or penalties with respect thereto or from a failure to comply therewith). 71 (a) Each of the Debtor and AmeriCredit shall, jointly and severally, indemnify the Collateral Agent, its officers, directors, employees and agents for, and hold it harmless against any loss, liability or expense incurred without willful misconduct, gross negligence or bad faith on its part, arising out of or in connection with (i) the acceptance or administration of this Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement and (ii) the negligence, willful misconduct or bad faith of the Debtor in the performance of its duties hereunder. All such amounts shall be payable in accordance with Section 2.3(a)(iv) and (xiii) hereof. The provisions of this Section 7.2 shall survive the termination of this Agreement or the earlier resignation or removal of the Collateral Agent. SECTION 7.3. [Intentionally Omitted]. ----------------------- SECTION 7.4. Liability of the Collateral Agent. --------------------------------- (a) The Collateral Agent shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Collateral Agent in such capacity herein. No implied covenants or obligations shall be read into this Agreement against the Collateral Agent and, in the absence of bad faith on the part of the Collateral Agent, the Collateral Agent may conclusively rely on the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Collateral Agent and conforming to the requirements of this Agreement. (b) The Collateral Agent shall not be liable for an error of judgment made in good faith by an authorized officer, unless it shall be conclusively proved in a judicial proceeding that the Collateral Agent shall have been negligent in ascertaining the pertinent facts of which the Collateral Agent is required by the terms of this Agreement or any other Transaction Documents to make itself aware. (c) The Collateral Agent shall not be liable with respect to any action taken, suffered or omitted to be taken in good faith in accordance with this Agreement or at the direction of a Secured Party relating to the exercise of any power conferred upon the Collateral Agent under this Agreement. (d) The Collateral Agent shall not be charged with knowledge of any Termination and Amortization Event unless an authorized officer obtains actual knowledge of such event or the Collateral Agent receives written notice of such event from the Debtor, the Purchaser, any other Owner, any other Secured Party or the Note Insurer, as the case may be. (e) Without limiting the generality of this Section 7.4, the Collateral Agent shall have no duty (i) to see to any recording, filing or depositing of this Agreement or any other Transaction Document or any financing statement or continuation statement evidencing a security interest in the Receivables or the Financed Vehicles, or to see to the maintenance of any such recording or filing or depositing or to any recording, refiling or redepositing of any thereof, (ii) to see to any insurance of the Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii) to see to the payment or discharge of any tax, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against, 72 any part of the Receivables, (iv) to confirm or verify the contents of any reports or certificates of the Servicer or the Debtor delivered to the Collateral Agent pursuant to this Agreement believed by the Collateral Agent to be genuine and to have been signed or presented by the proper party or parties or (v) to inspect the Financed Vehicles at any time or ascertain or inquire as to the performance or observance of any of the Debtor's or the Servicer's representations, warranties or covenants or the Servicer's duties and obligations as Servicer and as custodian of books, records, files and computer records relating to the Receivables. (f) The Collateral Agent shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or indemnity satisfactory to it against such risk or liability shall not be assured to it, and none of the provisions contained in this Agreement shall in any event require the Collateral Agent to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer under this Agreement. (g) The Collateral Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, officer's certificate, any Servicer's Certificate, certificate of auditors, or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties. (h) The Collateral Agent may consult with counsel and any opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it under this Agreement in good faith and in accordance with such opinion of counsel. (i) The Collateral Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or to institute, conduct or defend any litigation under this Agreement or in relation to this Agreement, at the request, order or direction of the Note Insurer pursuant to the provisions of this Agreement, unless the Note Insurer shall have offered to the Collateral Agent reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained in this Agreement, however, shall relieve the Collateral Agent of its obligations, upon the occurrence of a Termination and Amortization Event (that shall not have been cured or waived), to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (j) The Collateral Agent shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement. (k) Prior to the occurrence of a Termination and Amortization Event and before the Collateral Agent has received notice of such Termination and Amortization Event and after the waiver of any Termination and Amortization Event that may have occurred, the Collateral Agent shall not be bound to make any investigation into the facts of matters stated in 73 any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by a Secured Party; provided, however, that if the -------- ------- payment within a reasonable time to the Collateral Agent of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation shall be, in the opinion of the Collateral Agent, not reasonably assured by the Debtor, the Collateral Agent may require reasonable indemnity against such cost, expense or liability as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Debtor or, if paid by the Collateral Agent, shall be reimbursed by the Debtor upon demand. (l) The Collateral Agent may execute any of the trusts or powers hereunder or perform any duties under this Agreement either directly or by or through agents or attorneys or a custodian. The Collateral Agent shall not be responsible for any misconduct or negligence of any such Agent or custodian appointed with due care by it hereunder. (m) The Collateral Agent shall have no obligation to invest and reinvest any cash held in the applicable Eligible Deposit Account in the absence of timely and specific written investment direction of the Servicer. In no event shall the Collateral Agent be liable for the selection of investments or for investment losses incurred thereon by reason of investment performance, nor shall the Collateral Agent shall have any liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure to be provided with timely written investment direction from the Servicer. (n) The Collateral Agent may at any time resign by giving thirty (30) days written notice of resignation to the Debtor, the Servicer, AMTN and the Note Insurer. Upon receiving such notice of resignation, the Servicer, with the consent of the Note Insurer, shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning Collateral Agent from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to each of the Debtor, the Servicer, AMTN and the Note Insurer, the resigning Collateral Agent and the successor. If no successor shall have been so appointed and have accepted appointment within forty-five (45) days after the giving of such notice of resignation, the resigning Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor. SECTION 7.5. [Intentionally Omitted]. ----------------------- SECTION 7.6. Limitation on Liability of the Collateral Agent and Others. ---------------------------------------------------------- The directors, officers, employees or agents of the Collateral Agent shall not be under any liability to the Note Insurer, any Secured Party or any other Person hereunder or pursuant to any document delivered hereunder, it being expressly understood that all such liability is expressly waived and released as a condition of, and as consideration for, the execution of this Agreement; provided, however, that this provision shall not protect the directors, - -------- ------- officers, employees and agents of the Collateral Agent against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. Except as provided in Section 7.4 hereof, the Collateral Agent shall not be under any liability to any Secured Party or any other Person for any action taken or for refraining from the taking of any action in its capacity as Collateral Agent pursuant to this Agreement whether arising from express or implied duties under this Agreement; 74 provided, however, that this provision shall not protect the Collateral Agent - -------- ------- against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Collateral Agent may rely in good faith on any document of any kind prima facie properly ----- ----- executed and submitted by any Person respecting any matters arising hereunder. The Collateral Agent shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to administer the Collections and the Collection Account in accordance with this Agreement which in its reasonable opinion may involve it in any expense or liability. ARTICLE VIII THE SECURITIES INTERMEDIARY SECTION 8.1. Duties of the Securities Intermediary. JPMorgan, in its ------------------------------------- capacity as Securities Intermediary hereunder, hereby undertakes and agrees to act as "security intermediary" (as such term is defined in Section 8-501 of the Uniform Commercial Code as in effect in the State of New York (the "New York -------- UCC")) in connection with the securities accounts hereinafter referred to in - --- this Article 8 and all securities, security entitlements, cash and other property held from time to time in such securities accounts). In such capacity, the Securities Intermediary will establish each of the Collection Account, the Reserve Account, the Funding Account and the Yield Supplement Account as an Eligible Account. SECTION 8.2. Representations, Warranties and Covenants of the ------------------------------------------------ Securities Intermediary. The Securities Intermediary represents, warrants and - ----------------------- covenants that: (i) It shall not change the name or account number of the Collection Account, the Funding Account, the Yield Supplement Account or the Reserve Account (collectively, the "Collateral Agent Accounts") without the ------------------------- prior written consent of the Collateral Agent and the Note Insurer; (ii) All securities or other property comprising any financial assets deposited in or credited to the Collateral Agent Accounts shall be registered in the name of the Securities Intermediary or the Collateral Agent or in blank or shall be credited to another securities account or accounts maintained in the name of the Securities Intermediary, and in no case shall any financial asset deposited in or credited to any such account be registered in the name of the Debtor, payable to the order of the Debtor or specially endorsed to the Debtor, except to the extent the foregoing have been specifically endorsed to the Securities Intermediary or in blank; (iii) All property delivered to the Securities Intermediary pursuant to this Agreement for deposit in or credit to the Collateral Agent Accounts shall be promptly credited to such account; (iv) Each of the Collateral Agent Accounts is and shall remain a "securities account" as such term is defined in Section 8-501(a) of the New York UCC, and the Securities Intermediary agrees that each item of property (whether investment property, financial asset, security, instrument or cash) deposited in or credited to each such account shall be treated as a 75 "financial asset" within the meaning of Section 8-102(a)(9) of the New York UCC and that, subject to the terms of this Agreement, the Securities Intermediary will treat the Collateral Agent as the holder of a security entitlement in and as entitled to exercise the rights that comprise any financial asset deposited in or credited to such account; (v) JPMorgan, in the ordinary course of its business maintains securities accounts for others and is acting in that capacity in exercising its rights and discharging its duties hereunder; and (vi) If at any time the Securities Intermediary shall receive any notification from the Collateral Agent directing transfer or redemption of any financial asset relating to the Collateral Agent Accounts, the Securities Intermediary shall comply with such entitlement order without further consent by the Debtor or any other person. SECTION 8.3. Governing Law for Certain Securities Intermediary Matters. --------------------------------------------------------- Without limiting the generality of Section 9.4 of this Agreement, the parties agree that both this Agreement, the Collateral Agent Accounts shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the New York UCC, New York shall be deemed to be the Securities Intermediary's jurisdiction and the Collateral Agent Accounts (as well as all of the securities entitlements related thereto) shall be governed by the laws of the State of New York. ARTICLE IX MISCELLANEOUS SECTION 9.1. Term of Agreement. This Agreement shall terminate on the ----------------- date immediately following the date upon which all Secured Obligations have been paid in full in cash; provided, however, that (i) the rights and remedies of the -------- ------- Collateral Agent, the Note Insurer, and the Secured Parties with respect to any representation and warranty made or deemed to be made by the Debtor, AmeriCredit, AMTN or the Servicer pursuant to this Agreement, (ii) the indemnification and payment provisions of Article VII, and (iii) the agreement set forth in Section 9.9 hereof, shall be continuing and shall survive any termination of this Agreement. SECTION 9.2. Waivers; Amendments. ------------------- (a) No failure or delay on the part of the Collateral Agent, the Note Insurer or any of the Secured Parties in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. (b) Any provision of this Agreement or any of the Transaction Documents may be amended or waived if, but only if, such amendment is in writing and is signed by the Debtor, the Servicer and the Purchaser and the Note Insurer (and, if the Servicing and Custodian 76 Agreement or the rights or duties of the Collateral Agent are affected thereby, by the Collateral Agent). Prior to the execution of any amendment to this Agreement, the Collateral Agent shall be entitled to receive and conclusively rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to such execution and delivery have been satisfied. The Collateral Agent may, but shall not be obligated to enter into any such amendment which affects the Collateral Agent's own rights, duties or immunities under this Agreement. SECTION 9.3. Notices. Except as provided below, all communications and ------- notices provided for hereunder shall be in writing (including bank wire, telex, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other party at its address or telecopy number set forth below or at such other address or telecopy number as such party may hereafter specify for the purposes of notice to such party. Each such notice or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section 9.3 and confirmation is received, (ii) if given by mail three (3) Business Days following such posting, if postage prepaid, or if sent via U.S. certified or registered mail, (iii) if given by overnight courier, one (1) Business Day after deposit thereof with a national overnight courier service, or (iv) if given by any other means, when received at the address specified in this Section 9.3. However, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs in any material respect from the action taken by the Purchaser, the records of the Purchaser shall govern absent manifest error. If to the Purchaser: Meridian Funding Company, LLC c/o MBIA Insurance Corporation 113 King Street Armonk, NY 10504 Attention: Group Managing Directors-Conduits Telephone: 914-273-4545 Telecopy: 914-765-3979 (with a copy to the Note Insurer) If to the Debtor: AmeriCredit MTN Receivables Trust III c/o Bankers Trust (Delaware) E.A. Delle Donne Corporate Center Montgomery Building 1011 Centre Road, Suite 200 Wilmington, Delaware 19805 Attention: Corporate Trust Administration 77 with a copy to: Bankers Trust Company 100 Plaza One, 6th Floor Jersey City, New Jersey 07310 Attention: Asset Backed Finance Unit and a copy to: AmeriCredit Financial Services, Inc. 801 Cherry Street Suite 3900 Fort Worth, Texas 76102 Attention: Treasury Department Telephone: (817) 302-7022 Telecopy: (817) 302-7942 If to the Trustee: Bankers Trust Company 100 Plaza One, 6/th/ Floor Jersey City, New Jersey 07310 Attention: Asset Backed Finance Unit If to AmeriCredit or the Servicer: AmeriCredit Financial Services, Inc. 801 Cherry Street Suite 3900 Fort Worth, Texas 76102 Attention: Treasury Department Telephone: (817) 302-7022 Telecopy: (817) 302-7942 If to AMTN: AmeriCredit MTN Corp. III 801 Cherry Street Suite 4000 Fort Worth, Texas 76102 Attention: Treasury Department Telephone: (817) 302-7082 Telecopy: (817) 302-7915 78 If to the Note Insurer: MBIA Insurance Corporation 113 King Street Armonk, NY 10504 Attention: Insured Portfolio Management - SF Telephone: 914-273-4545 Telecopy: 914-765-3810 If to the Collateral Agent or the Securities Intermediary: JP Morgan Chase Bank 450 W. 33/rd/ Street New York, NY 10001 Attention: AmeriCredit MTN Receivables Trust III Telephone: 212-946-3651 Telecopy: 212-946-8302 SECTION 9.4. Governing Law; Submission to Jurisdiction; Waiver of Jury ---------------------------------------------------------- Trial; Integration; Appointment of Agent for Service of Process. - --------------------------------------------------------------- (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE DEBTOR, AMERICREDIT, AMTN AND THE SERVICER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each of the Debtor, AmeriCredit, AMTN and the Servicer hereby irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Nothing in this Section 9.4 shall affect the right of the Purchaser to bring any action or proceeding against the Debtor, AmeriCredit, AMTN or the Servicer or their respective properties in the courts of other jurisdictions. (b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS. (c) This Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the 79 entire Agreement between the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings. (d) The Debtor, AmeriCredit, AMTN and the Servicer each hereby appoint Corporation Servicing Company, located at 80 State Street, Albany, New York 12207-2543, as the authorized agent upon whom process may be served in any action arising out of or based upon this Agreement, the other Transaction Documents to which such Person is a party or the transactions contemplated hereby or thereby that may be instituted in the United States District Court for the Southern District of New York and of any New York State court sitting in the City of New York by the Purchaser, the Note Insurer, any other Owner, the Collateral Agent or any assignee of any of them. SECTION 9.5. Counterparts; Severability. This Agreement may be executed in -------------------------- any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 9.6. Successors and Assigns. ---------------------- (a) This Agreement shall be binding on the parties hereto and their respective successors and assigns; provided, however, that none of the -------- ------- Debtor, AmeriCredit, AMTN or the Servicer may assign any of its rights or delegate any of its duties hereunder or under the Master Receivables Purchase Agreement or under any of the other Transaction Documents without the prior written consent of the Collateral Agent. No provision of this Agreement shall in any manner restrict the ability of the Collateral Agent to assign, participate, grant security interests in, or otherwise transfer any portion of the Collateral. (b) Each of the Debtor, AmeriCredit, AMTN and the Servicer hereby consents to and acknowledges the assignment by the Purchaser of all of its rights under, interest in and title to this Agreement, the Note and the Collateral to the Note Insurer. SECTION 9.7. Waiver of Confidentiality. Each of the Debtor, AmeriCredit, ------------------------- AMTN and the Servicer hereby consents to the disclosure of any non-public information with respect to it received by any Secured Party, the Collateral Agent or the Note Insurer to any of the Purchaser, any nationally recognized rating agency rating the Purchaser's medium term notes, the Note Insurer or any Secured Party, in relation to this Agreement. SECTION 9.8. Confidentiality Agreement. Each of the Debtor, AmeriCredit and ------------------------- AMTN hereby agrees that it shall not disclose the contents of this Agreement or any other proprietary or confidential information of any of the Secured Parties, the Collateral Agent or the Note Insurer to any other Person except (i) its auditors and attorneys, employees or financial advisors (other than any commercial bank) and any nationally recognized rating agency; provided such -------- auditors, attorneys, employees, financial advisors or rating agencies are informed 80 of the highly confidential nature of such information or (ii) as otherwise required (x) by applicable law, (y) under the Securities Exchange Act of 1934, as amended, in connection with an offering of securities issued by the Debtor or an Affiliate thereof, or (z) by order of a court of competent jurisdiction (provided, however, that in the case of this clause (ii) no such disclosure -------- ------- shall occur without the prior review by the Note Insurer of the material to be disclosed). SECTION 9.9. No Bankruptcy Petition Against the Purchaser, AMTN, or the ---------------------------------------------------------- Debtor. Each of the Debtor, AmeriCredit, AMTN and the Servicer hereby covenants - ------ and agrees that, prior to the date which is one year and one day after the payment in full of all outstanding indebtedness of the Purchaser, it shall not institute against, or join any other Person in instituting against, the Purchaser, AMTN or the Debtor or any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. SECTION 9.10. Further Assurances. The Debtor agrees to do such further ------------------ acts and things and to execute and deliver to the Secured Parties, the Note Insurer or the Collateral Agent such additional assignments, agreements, powers and instruments as are required by each of them to carry into effect the purposes of this Agreement or to better assure and confirm unto each of them their rights, powers and remedies hereunder. SECTION 9.11. Characterization of the Transactions Contemplated by the --------------------------------------------------------- Agreement; Tax Treatment. - ------------------------ (a) The parties hereto agree that this Agreement shall constitute a security agreement under applicable law. The Debtor hereby assigns to the Collateral Agent, for the benefit of the Secured Parties, all of its rights and remedies under (i) the Master Receivables Purchase Agreement with respect to the Receivables and with respect to any obligations thereunder of each of AmeriCredit and AMTN with respect to the Receivables and (ii) under or in connection with any Hedging Arrangement. The Collateral Agent agrees that upon any release of a Receivable or Contract to the Debtor, the Collateral Agent shall be deemed to have released its security interest therein and reassigned to the Debtor all of the Collateral Agent's rights under the Master Receivables Purchase Agreement with respect to such Receivable or Contract. The Debtor agrees that neither it nor the Servicer shall give any consent or waiver required or permitted to be given under the Master Receivables Purchase Agreement with respect to the Receivables or the Contracts without the prior consent of the Collateral Agent and the Note Insurer. (b) Each of the parties hereto agrees to treat the transactions contemplated by this Agreement as a financing for federal income tax purposes and further agree to file on a timely basis all federal and other income tax returns consistent with such treatment. SECTION 9.12. Responsibilities of the Debtor. Anything herein to the ------------------------------ contrary notwithstanding, the Debtor shall (i) perform all of its obligations under the Contracts related to the Receivables to the same extent as if interests in such Receivables had not been pledged hereunder and the exercise by the Collateral Agent or any Secured Party of their rights hereunder shall not relieve the Debtor from such obligations and (ii) pay when due any taxes, including, without limitation, any sales taxes payable in connection with the Receivables and their creation 81 and satisfaction. Neither the Collateral Agent nor any Secured Party shall have any obligation or liability with respect to any Receivable or related Contracts, nor shall any of them be obligated to perform any of the obligations of the Debtor thereunder. SECTION 9.13. Headings. Section headings used in this Agreement are for -------- convenience of reference only and shall not affect the construction or interpretation of this Agreement. SECTION 9.14. Limitation on Liability. It is expressly understood and ----------------------- agreed by the parties hereto that (a) this Agreement is executed and delivered by Bankers Trust (Delaware), not individually or personally but solely as Trustee of the Debtor, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Debtor is made and intended not as a personal representation, undertaking and agreement by Bankers Trust (Delaware) but is made and intended for the purpose for binding only the Debtor, (c) nothing herein contained shall be construed as creating any liability on Bankers Trust (Delaware), individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Bankers Trust (Delaware) be personally liable for the payment of any indebtedness or expenses of the Debtor or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Debtor under this Agreement or any other related documents; provided, however, that no provision of this -------- ------- Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, its action in bad faith or its own willful misconduct. SECTION 9.15. Binding Effect. This Agreement shall be binding upon and -------------- shall inure to the benefit of the parties hereto and their respective successors and assigns. In addition, each of the Secured Parties shall be an express third party beneficiary hereof entitled to enforce the terms hereof as if it were a party hereto. Concurrently with the appointment of a successor Collateral Agent under the Security Agreement, the parties hereto shall amend this Agreement to make said Collateral Agent, the successor to the Collateral Agent hereunder. SECTION 9.16. Effect of Note Insurer Default. Upon the occurrence of a ------------------------------ Note Insurer Default, and for so long as such Note Insurer Default continues, all rights of the Note Insurer shall vest in the Purchaser; provided, however, that all rights of the Note Insurer shall be immediately reinstated upon cure of such Note Insurer Default. 82 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above. AMERICREDIT MTN RECEIVABLES TRUST III, as Debtor By: BANKERS TRUST (DELAWARE), not in its individual capacity but solely as Trustee By: ________________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., individually and as Servicer By: ________________________________________ Name: Title: AMERICREDIT MTN CORP. III, individually By: ________________________________________ Name: Title: JPMORGAN CHASE BANK, as Collateral Agent and as Securities Intermediary By: ________________________________________ Name: Title: 83 EXHIBIT A List of Lock-Box Banks and Lock-Box Accounts -------------------------------------------- Bank One, NA A-1 EXHIBIT B Form of Lock-Box Agreement -------------------------- [See Tri-Party Remittance Processing Agreement (Tab __)] B-1 EXHIBIT C Form of Note ------------ [See Specimen Note (Tab __)] C-1 EXHIBIT D [Intentionally Omitted] --------------------- D-1 EXHIBIT E List of Actions and Suits ------------------------- [None.] E-1 EXHIBIT F Schedule of Locations of Records -------------------------------- AmeriCredit Financial Services, Inc. 4001 Embarcadero Drive Arlington, Texas 76014 F-1 EXHIBIT G List of Subsidiaries, Divisions and Tradenames ---------------------------------------------- None. G-1 EXHIBIT H [Intentionally Omitted] --------------------- H-1 EXHIBIT I Form of Secretary's Certificate ------------------------------- [See AmeriCredit Secretary's Certificate (Tab __)] I-1 EXHIBIT J [Intentionally Omitted] --------------------- J-1 EXHIBIT K Form of Take-Out Notice ----------------------- K-1 EXHIBIT L Form of Delivery Notice ----------------------- [See Initial Delivery Notice (Tab __)] L-1 EXHIBIT M Cumulative Net Loss Table - ------------------------------------ Seasoning in Trigger Rate Months - ------------------------------------ 3 0.50% - ------------------------------------ 6 2.50% - ------------------------------------ 9 5.20% - ------------------------------------ 12 7.10% - ------------------------------------ 15 9.00% - ------------------------------------ 18 10.90% - ------------------------------------ 21 12.60% - ------------------------------------ 24 13.60% - ------------------------------------ 27 14.60% - ------------------------------------ 30 15.60% - ------------------------------------ 33 16.20% - ------------------------------------ 36 16.60% - ------------------------------------ 39 16.90% - ------------------------------------ 42 17.10% - ------------------------------------ M-1 EXHIBIT N Delinquency Ratio Table - -------------------------------------------------- Weighted Average Trigger Rate Seasoning of Pool - -------------------------------------------------- 1 - 12 months 5.00% - -------------------------------------------------- 13 - 24 months 5.50% - -------------------------------------------------- 25 - 48 months 6.50% - -------------------------------------------------- 49 - 72 months 7.00% - -------------------------------------------------- N-1 EXHIBIT O Default Ratio Table ------------------- - ------------------------------------------------------- Weighted Average Default Rate Seasoning of Pool Trigger - -------------------------------------------------------- 1-3 months 4.15% - -------------------------------------------------------- 4-6 months 7.00% - -------------------------------------------------------- 7-9 months 9.98% - -------------------------------------------------------- 10-12 months 13.36% - -------------------------------------------------------- 13-15 months 16.50% - -------------------------------------------------------- 16-18 months 17.83% - -------------------------------------------------------- 19-21 months 19.78% - -------------------------------------------------------- 22-24 months 21.29% - -------------------------------------------------------- 25-27 months 22.44% - -------------------------------------------------------- 28-30 months 23.27% - -------------------------------------------------------- 31-33 months 23.85% - -------------------------------------------------------- 34-36 months 24.23% - -------------------------------------------------------- 37-39 months 24.47% - -------------------------------------------------------- 40-42 months 24.59% - -------------------------------------------------------- 43-45 months 24.64% - -------------------------------------------------------- 46-48 months 24.66% - -------------------------------------------------------- 49-51 months 24.67% - -------------------------------------------------------- 52-54 months 24.68% - -------------------------------------------------------- 55-57 months 24.69% - -------------------------------------------------------- 58-60 months 24.70% - -------------------------------------------------------- 61-63 months 24.70% - -------------------------------------------------------- 64-66 months 24.70% - -------------------------------------------------------- 67-69 months 24.70% - -------------------------------------------------------- 70-72 months 24.70% - -------------------------------------------------------- O-1 EXHIBIT P Collateral Agent's Fee Schedule ------------------------------- P-1 EXHIBIT Q Trustee's Fee Schedule ---------------------- Q-1 EX-10.8 10 dex108.txt AMENDMENT NO. 3 Exhibit 10.8 EXECUTION COPY AMENDMENT No. 3 dated as of March 8, 2002 among AMERICREDIT BARCLAYS TRUST, as Debtor, AMERICREDIT FINANCIAL SERVICES, INC., Individually and as Collection Agent, AMERICREDIT FUNDING CORP. III, Individually SHEFFIELD RECEIVABLES CORPORATION, as Company, and BANK ONE, N.A., as Collateral Agent and Securities Intermediary to AMENDED AND RESTATED SECURITY aGREEMENT, dated as of August 31, 2000 Amendment NO. 3 dated as of March 8, 2002 ("Amendment No. 3"), by and --------------- among AMERICREDIT BARCLAYS TRUST, a Delaware business trust, as debtor (in such the "Debtor"), AMERICREDIT FINANCIAL SERVICES, INC., a capacity, Delaware ------ corporation ("AmeriCredit"), individually and in its capacity as collection ----------- agent (in such capacity, the "Collection Agent"), AMERICREDIT FUNDING CORP. III, ---------------- a Delaware corporation ("AFC III"), individually, SHEFFIELD RECEIVABLES ------- CORPORATION, a Delaware corporation (the "Company") and BANK ONE, NA ("Bank ------- ---- One"), individually and as collateral agent for the Secured Parties (in such - --- capacity, the "Collateral Agent") and as securities intermediary (in such ---------------- capacity, the "Securities Intermediary"), to the Amended and Restated Security ----------------------- Agreement dated as of August 31, 2000 (the "Security Agreement"), by and among ------------------ the Debtor, AmeriCredit, AFC III, the Company and Bank One, as previously amended by Amendment No. 1, dated as of June 27, 2001, by and among the Debtor, AmeriCredit, AFC III, the Company and Bank One, and as further amended by Amendment No. 2, dated as of August 17, 2001. WHEREAS, Section 9.2 of the Security Agreement permits amendment of the Security Agreement upon the terms and conditions specified therein; WHEREAS, the parties to the Security Agreement (the "Parties") wish to ------- amend the Security Agreement. NOW, THEREFORE, the Parties agree that the Security Agreement is hereby amended effective as of the date hereof as follows: Section 1. Definitions. Each term used but not defined herein shall have ----------- the meaning assigned to such term in the Security Agreement. Section 2. Amendment to Section 1.1. The definition of "Commitment ------------------------ Termination Date" is deleted in its entirety and replaced with the following: "Commitment Termination Date" means March 18, 2002, or such later date --------------------------- to which the Commitment Termination Date may be extended by the Debtor, the Agent and the Company not later than 30 days prior to the then current Commitment Termination Date. Section 3. Counterparts. This Amendment No. 3 to the Security Agreement may ------------ be executed in several counterparts, each of which shall be deemed an original hereof and all of which, when taken together, shall constitute one and the same Amendment No. 3 to the Security Agreement. Section 4. Ratification of Security Agreement. Except as provided herein, ---------------------------------- all provisions, terms and conditions of the Security Agreement shall remain in full force and effect. As amended hereby, the Security Agreement is ratified and confirmed in all respects. Section 5. Entire Agreement. This Amendment No. 3 sets forth the entire ---------------- agreement between the Parties with respect to the subject matter hereof, and this 1 Amendment No. 3 supersedes and replaces any agreement or understanding that may have existed between the Parties prior to the date hereof in respect of such subject matter. [Remainder of page intentionally left blank] 2 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 as of the date set forth on the first page hereof. AMERICREDIT BARCLAYS TRUST, as Debtor By: Bankers Trust (Delaware), not in its individual capacity but solely as Trustee By:_______________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC., individually and as Collection Agent By:_______________________________ Name: Connie Coffey Title: Vice President, Non-Public Financings AMERICREDIT FUNDING CORP. III, individually By:_______________________________ Name: Connie Coffey Title: Vice President, Non-Public Financings SHEFFIELD RECEIVABLES CORPORATION, as Company By:_______________________________ Name: Title: BANK ONE, N.A., as Collateral Agent and as Securities Intermediary By:_______________________________ Name: Title: ACKNOWLEDGED AND AGREED BARCLAYS BANK PLC, By:_______________________________ Name: Title: EX-11.1 11 dex111.txt COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11.1 AMERICREDIT CORP. STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended March 31, March 31, ------------------------- ------------------------- 2002 2001 2002 2001 ----------------------------------------------------- Weighted average shares outstanding 84,988,165 80,079,906 84,470,535 78,520,489 Incremental shares resulting from assumed exercise of stock options 4,521,044 6,630,080 4,864,389 6,297,229 ----------------------------------------------------- Weighted average shares and assumed incremental shares 89,509,209 86,709,986 89,334,924 84,817,718 ===================================================== NET INCOME $ 91,624 $ 60,430 $ 250,957 $ 151,145 ===================================================== EARNINGS PER SHARE: Basic $ 1.08 $ 0.75 $ 2.97 $ 1.92 ===================================================== Diluted $ 1.02 $ 0.70 $ 2.81 $ 1.78 =====================================================
Basic earnings per share have been computed by dividing net income by weighted average shares outstanding. Diluted earnings per share have been computed by dividing net income by the weighted average shares and assumed incremental shares. Assumed incremental shares were computed using the treasury stock method. The average common stock market price for the period was used to determine the number of incremental shares. -----END PRIVACY-ENHANCED MESSAGE-----