\n Schedule A – Intentionally Omitted
\n Schedule B – Schedule of Representations
\n Schedule 2.4 – Form of Prepaid Receivables Notice
\n Schedule 3.1 – Conditions to Effectiveness of Agreement
\n Schedule 5.11 – Procedures for Data Integrity Reviews<\/p>\nEXHIBITS<\/p>\n
Exhibit A – Form of Receivables Sale Agreement
\n Exhibit B – Form of Servicer’s Determination Date Certificate
\n Exhibit B-1 – Form of Servicer’s VFN Prepayment Date Certificate
\n Exhibit C – Form of Receivables Sale Notice
\n Exhibit D – Form of Servicer’s Receivables Sale Date Certificate
\n Exhibit E – Form of Receivables Purchase Note
\n<\/c><\/s><\/table>\n
v<\/p>\n
SALE AND SERVICING AGREEMENT dated as of October 8, 1997, among CP
\nFunding Corp., a Nevada corporation (the “Borrower”), AMERICREDIT FINANCIAL
\nSERVICES, INC., a Delaware corporation (“AFS”) as seller and as servicer (in
\nsuch capacities, the “Seller” and the “Servicer”, respectively), and The
\nChase Manhattan Bank, a New York banking corporation (“Chase”) as backup
\nservicer and as funding agent (in such capacities, the “Backup Servicer” and
\nthe “Funding Agent”, respectively).<\/p>\n
WHEREAS, AFS is engaged in the business of acquiring motor vehicle
\nretail installment sale contracts from motor vehicle dealers and of servicing
\nsuch contracts and the related receivables; and<\/p>\n
WHEREAS, the Borrower desires to enter into an agreement with AFS, pursuant
\nto which the Borrower may, at its option, from time to time purchase from AFS
\nsuch contracts and the related receivables; and<\/p>\n
WHEREAS, the Borrower desires to retain AFS as servicer of such purchased
\ncontracts and receivables; and <\/p>\n
WHEREAS, AFS is willing to sell and to service all such contracts and
\nreceivables; and<\/p>\n
WHEREAS, the Borrower desires to obtain financing for its purchase of the
\ncontracts and receivables from Park Avenue Receivables Corporation and from a
\nsyndicate of bank lenders;<\/p>\n
NOW, THEREFORE, in consideration of the premises and the mutual covenants
\nherein contained, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
SECTION 1.1 DEFINITIONS.<\/p>\n
As used herein, “Agreement” shall mean this Sale and Servicing
\nAgreement, as it may from time to time be amended, supplemented or otherwise
\nmodified in accordance with the terms hereof. Unless the context otherwise
\nrequires, other capitalized terms used herein and not otherwise defined shall
\nhave the meanings assigned to such terms in Annex A hereto, which Annex A is
\nincorporated by reference herein.<\/p>\n
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.<\/p>\n
(a) All terms defined in Annex A shall have such defined meanings when
\nused in any instrument governed hereby and in any certificate or other document
\nmade or delivered pursuant hereto unless otherwise defined therein.<\/p>\n
(b) The principles of construction set forth in Annex A shall apply to
\nthis Agreement.<\/p>\n
ARTICLE II<\/p>\n
SALE OF RECEIVABLES<\/p>\n
SECTION 2.1 SALE OF RECEIVABLES. Subject to the satisfaction of the
\nconditions precedent set forth in Article III hereof, in consideration of the
\nBorrower’s delivery to or upon the order of the Seller of the Receivables
\nPurchase Price therefor, the Seller, as to the Receivables sold on the Initial
\nReceivables Sale Date and on each subsequent Receivables Sale Date, in each case
\npursuant to a Receivables Sale Agreement, shall sell, transfer, assign, pledge,
\nset over and otherwise convey to the Borrower, without recourse (subject to the
\nobligations set forth herein), all right, title and interest of the Seller in,
\nto and under:<\/p>\n
(a) the Receivables sold on each such date, as listed in Schedule A to the
\n relevant Receivables Sale Agreement, and all moneys received thereon
\n after the Relevant Cutoff Date;<\/p>\n
(b) all security interests in the Financed Vehicles granted by Obligors
\n pursuant to the Receivables sold and any other interest of the Seller
\n in such Financed Vehicles;<\/p>\n
(c) all proceeds and all rights to receive proceeds with respect to the
\n Receivables sold from claims on any physical damage, credit life or
\n disability insurance policies covering Financed Vehicles or Obligors
\n and any proceeds from the liquidation of such Receivables;<\/p>\n
(d) all rights of the Seller against Dealers pursuant to Dealer Agreements
\n and\/or Dealer Assignments;<\/p>\n
(e) all rights under any Service Contracts on the related Financed
\n Vehicles;<\/p>\n
(f) the related Receivables Files; and<\/p>\n
(g) all proceeds of any and all of the foregoing. <\/p>\n
2<\/p>\n
SECTION 2.2 THE CONVEYED PROPERTY; NATURE OF TRANSACTION.<\/p>\n
(a) Any and all of the property described in the foregoing Section 2.1 is
\nreferred to as the “Conveyed Property”.<\/p>\n
(b) It is the intention of the Seller that each sale and assignment
\ncontemplated by this Agreement shall constitute a sale of the Receivables and
\nother property from the Seller to the Borrower and the beneficial interest in
\nand title to the Receivables and the Other Conveyed Property shall not be part
\nof the Seller’s estate in the event of the filing of a bankruptcy petition by or
\nagainst the Seller under any bankruptcy law. In the event that, notwithstanding
\nthe intent of the Seller, the sale and assignment contemplated hereby is held
\nnot to be a sale, this Agreement and each Receivables Sale Agreement shall
\nconstitute a security agreement, and the Seller hereby grants to the Borrower a
\nsecurity interest in all of the Conveyed Property, whether now owned or
\nhereafter acquired and wherever located. At the request of the Borrower or the
\nFunding Agent, the Seller, at its expense, will take all action necessary or
\nadvisable to perfect and protect such security interest, free and clear of all
\nLiens (other than the Lien of the Funding Agent).<\/p>\n
SECTION 2.3 FURTHER ENCUMBRANCE OF CONVEYED PROPERTY; ADDITIONAL COVENANTS
\nOF THE SELLER.<\/p>\n
(a) Immediately upon the conveyance to the Borrower by the Seller of any
\nitem of the Conveyed Property, all right, title and interest of the Seller in
\nand to such item of Conveyed Property shall terminate, and all such right, title
\nand interest shall vest in the Borrower.<\/p>\n
(b) Immediately upon the vesting of the Conveyed Property in the Borrower,
\nthe Borrower shall have the sole right to transfer, sell, pledge or otherwise
\nencumber, such Conveyed Property. As required by the Funding Agreement, the
\nBorrower shall grant a security interest in the Conveyed Property to secure the
\nrepayment of the Secured Obligations, pursuant to the Security Agreement.<\/p>\n
(c) Without limiting the foregoing, the Seller covenants as follows:<\/p>\n
(i) LIENS IN FORCE. The Financed Vehicle securing each Receivable
\n shall not be released by the Seller in whole or in part from the security
\n interest granted under the Receivable, except upon payment in full of the
\n Receivable or as otherwise contemplated herein and the Seller shall not
\n take or permit any action inconsistent with the foregoing;<\/p>\n
(ii) NO IMPAIRMENT. The Seller shall do nothing to impair the rights
\n of the Borrower or the Secured Parties in the Receivables, the Dealer
\n Agreements, the Dealer Assignments, the Insurance Policies or any other
\n property or interest comprising the Other Conveyed Property;<\/p>\n
3<\/p>\n
(iii) NO AMENDMENTS. The Seller shall not take or permit any
\n action to extend or otherwise amend the terms of any Receivable, except
\n in accordance with Section 5.2 hereof; and<\/p>\n
(iv) RESTRICTIONS ON LIENS. The Seller shall not: (i) create or
\n incur or agree to create or incur, or consent to cause (upon the
\n happening of a contingency or otherwise) the creation, incurrence or
\n existence of any Lien or restriction on transferability of the
\n Receivables or of any Other Conveyed Property except for the Lien in
\n favor of the Funding Agent for the benefit of the Secured Parties, and
\n the restrictions on transferability imposed by this Agreement or (ii)
\n sign or file under the Uniform Commercial Code of any jurisdiction any
\n financing statement or sign any security agreement authorizing any
\n secured party thereunder to file such financing statement, with respect
\n to the Receivables or to any Other Conveyed Property, except in each
\n case any such instrument solely securing the rights and preserving the
\n Lien of the Funding Agent, for the benefit of the Secured Parties. The
\n Seller will take no action to cause any Receivable to be evidenced by an
\n instrument (as such term is defined in the Relevant UCC).<\/p>\n
(d) The Seller will furnish or cause to be furnished to the Funding Agent
\n(and the Funding Agent promptly after receipt thereof shall forward to each of
\nthe Secured Parties):<\/p>\n
(i) within 90 days after the end of each fiscal year of AmeriCredit
\n Corp., the audited consolidated balance sheet and related statements of
\n operations, shareholders’ equity and cash flows of AmeriCredit Corp. as of
\n the end of and for such year, setting forth in each case in comparative
\n form the figures for the previous fiscal year, all reported on by Coopers & Lybrand, LLC or other independent public accountants of recognized national
\n standing (without a “going concern” or like qualification or exception and
\n without any qualification or exception as to the scope of such audit) to
\n the effect that such consolidated financial statements present fairly in
\n all material respects the financial condition and results of operations of
\n AmeriCredit Corp. and its consolidated subsidiaries on a consolidated basis
\n in accordance with GAAP;<\/p>\n
(ii) within 45 days after the end of each of the first three fiscal
\n quarters of each fiscal year of AmeriCredit Corp., the consolidated balance
\n sheet and related statements of operations of AmeriCredit Corp. as of the
\n end of and for such fiscal quarter and the then elapsed portion of the
\n fiscal year, and statements of cash flows for AmeriCredit Corp. for the
\n then elapsed portion of the fiscal year, setting forth in each case in
\n comparative form the figures for the corresponding period or periods of
\n (or, in the case of the balance sheet, as of the end of) the previous
\n fiscal year, all certified by one of the financial officers of AmeriCredit
\n Corp. as presenting fairly in all material respects the financial condition
\n and results of its operations and its consolidated subsidiaries on a
\n consolidated basis in accordance with GAAP consis-<\/p>\n
4<\/p>\n
tently applied, subject to normal year-end audit adjustments and the
\n absence of footnotes;<\/p>\n
(iii) promptly after the same become publicly available, copies of
\n all periodic and other reports (excluding the monthly 8-K filed for the
\n securitization trusts for the securitizations of AmeriCredit Corp. and\/or
\n its subsidiaries), proxy statements and other materials filed by
\n AmeriCredit Corp. or any subsidiary with the Securities and Exchange
\n Commission, or any governmental authority succeeding to any or all of the
\n functions of said Commission, or with any national securities exchange, or
\n distributed by AmeriCredit Corp. to its shareholders generally, as the case
\n may be; and<\/p>\n
(iv) promptly following any request therefor, such other information
\n regarding the operations, business affairs and financial condition of
\n AmeriCredit Corp. or any subsidiary, or compliance with the terms of this
\n Agreement, as the Funding Agent may reasonably request.<\/p>\n
SECTION 2.4 PREPAYMENT OF PURCHASE PRICE OF RECEIVABLES.<\/p>\n
From time to time, the Borrower may make a cash payment to the Seller
\nout of funds available therefor, by way of prepayment for future sales of
\nReceivables hereunder, which payment shall be accompanied by a notice
\nsubstantially in the form of Schedule 2.4 hereto. The Seller’s acceptance
\nof any such prepayment shall constitute its agreement to sell Receivables
\nsatisfying the criteria set forth in Schedule B hereto and otherwise in
\naccordance with the terms and conditions of this Agreement.<\/p>\n
ARTICLE III<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
SECTION 3.1 CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
\nThe effectiveness of this Agreement is subject to the following conditions
\nprecedent (provided, however, that payment by the Borrower of the amounts
\nreferred to in clauses (ii) and (iv) below may be made out of the proceeds of
\nthe Initial Funding):<\/p>\n
(i) the Borrower and the Funding Agent shall have received, and
\n found satisfactory in form and substance, each of the Basic Agreements,
\n and each of the other documents, certificates and opinions set forth in
\n Schedule 3.1;<\/p>\n
(ii) without limiting the foregoing, the Funding Agent shall have
\n received and found satisfactory in form and substance the Hedge Contract(s)
\n to be effective as of the Effective Date which shall, among other things,
\n (A) be in an aggregate notional amount equal to the Facility Limit; (B) be
\n a 6% LIBOR cap with the entire<\/p>\n
5<\/p>\n
consideration payable by the Borrower thereunder to be paid in full on the
\n Effective Date; (C) provide for a term equal to the initial term of the
\n Facility, with an amortization schedule in the event of a Termination Event
\n or non-renewal of the Facility satisfactory to the Funding Agent and the
\n Rating Agencies; and (D) provide for any payments by the Hedge Counterparty
\n thereunder to be payable on the last Business Day of each calendar month;<\/p>\n
(iii) the Funding Agent shall have entered into an intercreditor
\n agreement, satisfactory to it in form and substance (the “Intercreditor
\n Agreement”), with Wells Fargo in its capacity as agent bank under the
\n Restated Revolving Credit Agreement, dated as of October 3, 1997, to which
\n the Seller is a party; and<\/p>\n
(iv) the amount of $2,450,000 in immediately available funds shall
\n have been received by the Funding Agent from the Borrower for deposit to
\n the Reserve Account.<\/p>\n
SECTION 3.2 CONDITIONS PRECEDENT TO EACH RECEIVABLES SALE.<\/p>\n
(a) The initial sale and each subsequent sale of Receivables shall be
\nsubject to the further conditions precedent that:<\/p>\n
(i) the Seller shall have provided the Borrower and the Funding
\n Agent with a Receivables Sale Notice not later than three Business Days
\n prior to such Receivables Sale Date and shall have provided any
\n information reasonably requested by the Borrower and\/or the Funding
\n Agent with respect to the Receivables to be sold to the Borrower on such
\n Receivables Sale Date, said Receivables Sale notice to including as an
\n exhibit thereto the form of UCC financing statement to be filed with
\n respect to such Receivables which shall include a schedule listing the
\n Receivables to be sold on such Receivables Sale Date substantially in
\n the form of the Schedule A to the related Receivables Sale Agreement;<\/p>\n
(ii) the Seller shall have caused the Servicer to provide the
\n Borrower and the Funding Agent with a Servicer’s Receivables Sale Date
\n Certificate not later than three Business Days prior to such Receivables
\n Sale Date, which Certificate shall set forth the Pool Balance as of the
\n Reference Date, the Principal Balance of the Receivables to be sold, and
\n such additional information as the Borrower and\/or the Funding Agent
\n shall specify;<\/p>\n
(iii) the Seller and the Borrower shall have executed and delivered
\n to the Funding Agent a duly executed Receivables Sale Agreement which
\n shall include a Schedule A listing the Receivables to be sold on such
\n Receivables Sale Date;<\/p>\n
6<\/p>\n
(iv) the Seller shall, to the extent required by Section 5.2, have
\n deposited in the Collection Account all collections received after the
\n Relevant Cutoff Date with respect to the Receivables to be sold on such
\n Receivables Sale Date;<\/p>\n
(v) as of each Receivables Sale Date, (A) the Seller shall not be
\n insolvent and shall not become insolvent as a result of the sale of
\n Receivables on such Receivables Sale Date, (B) the Seller shall not
\n intend to incur or believe that it shall incur debts that would be
\n beyond its ability to pay as such debts mature, (C) such sale shall not
\n have been made with actual intent to hinder, delay or defraud any Person
\n and (D) the assets of the Seller shall not constitute unreasonably small
\n capital to carry out its business as conducted;<\/p>\n
(vi) the Termination Date shall not have occurred;<\/p>\n
(vii) after giving effect to the sale of Receivables proposed to
\n be made on any Receivables Sale Date, no Pool Limitation shall have been
\n exceeded;<\/p>\n
(viii) each of the representations and warranties made by the
\n Seller pursuant to Section 4.1 with respect to the Receivables to be sold
\n on such Receivables Sale Date shall be true and correct as of such
\n Receivables Sale Date, and the Seller shall have performed all obligations
\n to be performed by it hereunder on or prior to such Receivables Sale Date;<\/p>\n
(ix) the Seller shall, at its own expense, on or prior to the
\n Receivables Sale Date indicate in its computer files that the Receivables
\n identified in the Receivables Sale Agreement have been sold to the Borrower
\n pursuant to this Agreement;<\/p>\n
(x) the Seller shall have taken any action (including, but not
\n limited to, the filing of appropriate UCC financing statements) required to
\n maintain the ownership interest of the Borrower in the Receivables
\n (PROVIDED, HOWEVER, that after the Initial Receivables Sale Date the Seller
\n shall make such filings as promptly as possible and in no event later than
\n the third Business Day following the respective Receivables Sale Date and
\n shall promptly provide to each of the Borrower and the Funding Agent a copy
\n of a stamped acknowledgment copy thereof);<\/p>\n
(xi) each of the Funding Agent and the Borrower shall have received,
\n duly executed and delivered by Wells Fargo, a lien release substantially in
\n the form specified in Section 1(b) of the Intercreditor Agreement;<\/p>\n
(xii) no selection procedures adverse to the interests of the
\n Borrower and\/or the Secured Parties shall have been utilized in selecting
\n the Receivables to be sold on such Receivables Sale Date;<\/p>\n
7<\/p>\n
(xiii) without limiting any of the foregoing, no event shall have
\n occurred and remain continuing, nor would result from such sale of
\n Receivables, that constitutes a Termination Event or a Potential
\n Termination Event;<\/p>\n
(xiv) on each Receivables Sale Date after the Initial Receivables
\n Sale Date, the Borrower shall transfer to the Funding Agent for deposit in
\n the Reserve Account, the amount of the Subsequent Reserve Account Deposit,
\n if any, required to be made in connection with such sale; <\/p>\n
(xv) the Seller shall have received a cash payment in the amount of
\n the entire Receivables Purchase Price of the Receivables sold on such
\n Receivables Sale Date, except to the extent that the Seller, at its option,
\n elects to extend credit to the Borrower under the Receivables Purchase Note
\n or to make a capital contribution to the Borrower;<\/p>\n
(xvi) to the extent that, after giving effect to the sale of
\n Receivables made on such date there would be one or more states of the
\n United States in which Financed Vehicles securing more than 10% of the Pool
\n Balance were titled and as to which states an Opinion of Counsel had not
\n been given on the Effective Date or on a prior Receivables Sale Date as to
\n the perfection, priority and enforceability of the Funding Agent’s security
\n interest for each such state, the Seller shall have caused to be delivered
\n to the Borrower and the Funding Agent such an Opinion of Counsel together
\n with the related opinion of counsel, satisfactory in form and substance to
\n the Borrower and the Funding Agent to be given by in-house counsel to the
\n Seller with respect to such jurisdiction; and<\/p>\n
(xvii) the Borrower shall have delivered to the Funding Agent an
\n Officer’s Certificate confirming the satisfaction of each condition
\n precedent specified in this Section 3.2.<\/p>\n
(b) Notwithstanding anything to the contrary contained in the foregoing
\nSection 3.2(a), in connection with any contemplated CP Funding, upon the request
\nof the Borrower, the Funding Agent, in its discretion, may accept a revised
\nReceivables Sale Notice and a revised Servicer’s Receivables Sale Date
\nCertificate, up to 1 p.m. on the Business Day immediately preceding such
\ncontemplated CP Funding, subject to the satisfaction of all other conditions set
\nforth above.<\/p>\n
8<\/p>\n
ARTICLE IV<\/p>\n
THE RECEIVABLES<\/p>\n
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF SELLER.<\/p>\n
The Seller makes the following representations and warranties as to the
\nReceivables on which the Borrower is deemed to have relied in acquiring the
\nReceivables and upon which the Secured Parties shall be deemed to have relied in
\nmaking any Advance pursuant to the Funding Agreement, as the case may be. Such
\nrepresentations and warranties speak as of the execution and delivery of this
\nAgreement and as of each Receivables Sale Date with respect to the Receivables
\nsold on such date, but shall survive the sale, transfer and assignment of the
\nReceivables to the Borrower and the pledge thereof to the Funding Agent pursuant
\nto the Security Agreement:<\/p>\n
(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties
\n set forth on the Schedule of Representations attached hereto as Schedule B
\n are true and correct.<\/p>\n
SECTION 4.2 REPURCHASE UPON BREACH.<\/p>\n
The Seller, the Servicer or the Borrower, as the case may be, shall inform
\nthe other parties to this Agreement promptly, in writing, (i) upon the discovery
\nof any breach of the Seller’s representations and warranties made pursuant to
\nSection 4.1, and (ii) of any Receivable for which the related Lien Certificate
\nhas not been received within 150 days following the Receivables Sale Date with
\nrespect thereto (for purposes of this Section 4.2, each of the foregoing
\nreferred to as a “breach”). As of the last day of the month in which the
\nSeller, the Servicer or the Borrower, as the case may be, discovers the breach,
\nor in which the Seller receives notice of such breach, unless such breach is
\ncured by such date, the Seller shall have an obligation to repurchase any
\nReceivable that is adversely affected and\/or in which the interests of the
\nBorrower or the Secured Parties are adversely affected by any such breach. In
\nconsideration of and simultaneously with the repurchase of the Receivable, the
\nSeller shall remit, or cause the Servicer to remit, to the Collection Account
\nthe Repurchase Obligation Amount in the manner specified in Section 6.7 and the
\nBorrower shall execute such assignments and other documents reasonably requested
\nby such Person in order to effect such repurchase. The sole remedy of the
\nBorrower, the Funding Agent, or the Secured Parties with respect to a breach of
\nrepresentations and warranties pursuant to Section 4.1 and the agreement
\ncontained in this Section shall be the repurchase of Receivables and Seller
\nindemnity pursuant to this Section, subject to the conditions contained herein.
\nNeither the Funding Agent nor the Borrower shall have a duty to conduct any
\naffirmative investigation as to the occurrence of any conditions requiring the
\nrepurchase of any Receivable pursuant to this Section.<\/p>\n
In addition to the foregoing and notwithstanding whether the related
\nReceivable shall have been purchased by the Seller, the Seller shall indemnify
\nthe Borrower, the Backup Servicer, the Funding Agent, and the Secured Parties
\nagainst all costs, expenses, losses, damages, claims and<\/p>\n
9<\/p>\n
liabilities, including reasonable fees and expenses of counsel, which may be
\nasserted against or incurred by any of them as a result of third party claims
\narising out of the events or facts giving rise to such breach.<\/p>\n
SECTION 4.3 CUSTODY OF RECEIVABLES FILES.<\/p>\n
(a) In connection with the sale, transfer and assignment of the
\nReceivables and the Other Conveyed Property to the Borrower pursuant to this
\nAgreement and simultaneously with the execution and delivery of this Agreement,
\nthe Funding Agent shall enter into the Custodian Agreement with the Custodian,
\ndated as of the date hereof, pursuant to which the Funding Agent shall revocably
\nappoint the Custodian, and the Custodian shall accept such appointment, to act
\nas the agent of the Funding Agent as custodian of the following documents or
\ninstruments in its possession which shall be delivered to the Custodian as agent
\nof the Funding Agent on or before the Initial Receivables Sale Date and each
\nsubsequent Receivables Sale Date (with respect to each Receivable):<\/p>\n
(i) The fully executed original of the Receivable (together with any
\n agreements modifying the Receivable, including without limitation any
\n extension agreements);<\/p>\n
(ii) The original credit application, or a copy thereof, of each
\n Obligor, fully executed by each such Obligor on the Servicer’s customary
\n form, or on a form approved by the Servicer, for such application; and<\/p>\n
(iii) The original certificate of title (when received) and
\n otherwise such documents, if any, that the Servicer keeps on file in
\n accordance with its customary procedures indicating that the Financed
\n Vehicle is owned by the Obligor and subject to the interest of the Seller
\n as first lienholder or secured party, or, if such original certificate of
\n title has not yet been received, a copy of the application therefor,
\n showing the Seller as secured party.<\/p>\n
The Funding Agent may act as the Custodian, in which case the Funding Agent
\nshall be deemed to have assumed the obligations of the Custodian specified in
\nthe Custodian Agreement.<\/p>\n
(b) Upon payment in full of any Receivable, the Servicer will notify the
\nCustodian pursuant to a certificate of an officer of the Servicer (which
\ncertificate shall include a statement to the effect that all amounts received in
\nconnection with such payments which are required to be deposited in the
\nCollection Account pursuant to Section 5.1 have been so deposited) and shall
\nrequest delivery of the Receivable and Receivable File to the Servicer;
\nPROVIDED, HOWEVER, that so long as AFS acts in the capacities of Servicer and of
\nCustodian, such notice by the Servicer may be made in such other form and manner
\nas are consistent with the Servicer’s customary operating procedures. From time
\nto time as appropriate for servicing and enforcing any Receivable, the Custodian
\nshall, upon written request of an officer of the Servicer and delivery to the
\nCustodian of a receipt signed by such officer, cause the original Receivable and
\nthe related Receivable File to be released to the Servicer. The<\/p>\n
10<\/p>\n
Servicer’s receipt of a Receivable and\/or Receivable File shall obligate the
\nServicer to return the original Receivable and the related Receivable File to
\nthe Custodian when its need by the Servicer has ceased unless the Receivable
\nis repurchased as described in Section 4.2 or 5.7.<\/p>\n
ARTICLE V<\/p>\n
ADMINISTRATION AND SERVICING OF RECEIVABLES<\/p>\n
SECTION 5.1 APPOINTMENT; STANDARD OF CARE; DUTIES OF THE SERVICER.<\/p>\n
(a) The Servicer is hereby authorized to act as agent for the Borrower and
\nin such capacity shall manage, service, administer and make collections on the
\nReceivables, and perform the other actions required by the Servicer under this
\nAgreement. So long as AFS is the Servicer, the Servicer agrees that its
\nservicing of the Receivables shall be carried out in accordance with the Credit
\nand Servicing Procedures and, with respect to any matters not expressly covered
\nby such Credit and Servicing Procedures, or, in the event the Servicer is not
\nAFS, in accordance with customary and usual procedures of institutions that are
\nprimarily engaged in the business of servicing motor vehicle retail installment
\nsales contracts; PROVIDED, that in any event the Servicer shall exercise at
\nleast the degree of skill and attention that the Servicer exercises from time to
\ntime with respect to all comparable motor vehicle receivables that it services
\nfor itself or others (the foregoing standard of care being referred to as the
\n“Servicing Standard”).<\/p>\n
(b) The Servicer’s duties shall include, without limitation: collection and
\nposting of all payments; responding to inquiries of Obligors on the Receivables;
\ninvestigating delinquencies; sending payment coupons to Obligors; reporting any
\nrequired tax information to Obligors; monitoring the Collateral; complying with
\nthe terms of the Lockbox Agreement; accounting for collections and furnishing
\nmonthly and annual statements to the Borrower and the Funding Agent with respect
\nto collections and distributions, as well as the Servicer statements required in
\nconnection with the each sale of Receivables; monitoring the status of Insurance
\nPolicies with respect to the Financed Vehicles and performing the other duties
\nspecified herein. The Servicer shall also administer and enforce all rights and
\nresponsibilities of the holder of the Receivables provided for in the Dealer
\nAgreements (and shall maintain possession of the Dealer Agreements, to the
\nextent it is necessary to do so), the Dealer Assignments and the Insurance
\nPolicies, to the extent that such Dealer Agreements, Dealer Assignments and
\nInsurance Policies relate to the Receivables, the Financed Vehicles or the
\nObligors. To the extent consistent with the standards, policies and procedures
\notherwise required hereby, the Servicer shall follow its customary standards,
\npolicies, and procedures and shall have full power and authority, acting alone,
\nto do any and all things in connection with such managing, servicing,
\nadministration and collection that it may deem necessary or desirable. Without
\nlimiting the generality of the foregoing, the Servicer is hereby authorized and
\nempowered by the Borrower to execute and deliver, on behalf of the Borrower, any
\nand all instruments of satisfaction or cancellation, or of partial or full
\nrelease or discharge, and all other comparable instruments, with respect to the
\nReceivables and with respect to the Financed Vehicles; PROVIDED, HOWEVER, that
\nnotwithstanding the foregoing, the<\/p>\n
11<\/p>\n
Servicer shall not, except pursuant to an order from a court of competent
\njurisdiction, release an Obligor from payment of any unpaid amount under any
\nReceivable or waive the right to collect the unpaid balance of any Receivable
\nfrom the Obligor. The Servicer is hereby authorized to commence, in its own
\nname or in the name of the Borrower, a legal proceeding to enforce a
\nReceivable pursuant to Section 5.3 or to commence or participate in any other
\nlegal proceeding (including, without limitation, a bankruptcy proceeding)
\nrelating to or involving a Receivable, an Obligor or a Financed Vehicle. If
\nthe Servicer commences or participates in such a legal proceeding in its own
\nname, the Borrower shall thereupon be deemed to have automatically assigned
\nsuch Receivable to the Servicer solely for purposes of commencing or
\nparticipating in any such proceeding as a party or claimant, and the Servicer
\nis authorized and empowered by the Borrower to execute and deliver in the
\nServicer’s name any notices, demands, claims, complaints, responses,
\naffidavits or other documents or instruments in connection with any such
\nproceeding. The Funding Agent shall furnish the Servicer with any powers of
\nattorney and other documents which the Servicer may reasonably request and
\nwhich the Servicer deems necessary or appropriate and take any other steps
\nwhich the Servicer may deem necessary or appropriate to enable the Servicer
\nto carry out its servicing and administrative duties under this Agreement.<\/p>\n
(c) The provisions of this subsection (c) are applicable only so long as
\nAFS is the Servicer. On each Determination Date, together with the Servicer’s
\nDetermination Date Certificate to be delivered on such date, which Servicer’s
\nDetermination Date Certificate shall include a statement that no modification
\nhas been made to the Credit and Servicing Procedures that could be reasonably
\nexpected to have a material adverse effect on the Borrower and\/or the Secured
\nParties, the Servicer shall deliver to the Funding Agent a description of any
\nmodification made to the Credit and Servicing Procedures since the last
\nDetermination Date. The Servicer further agrees that it shall not make any
\nchanges to the Credit and Servicing Procedures that could reasonably be expected
\nto have a material adverse effect on the Borrower and\/or the Secured Parties
\nunless it has given the Funding Agent (for transmittal to the Required Banks and
\nthe Rating Agencies) at least 20 days’ prior written notice of such proposed
\nmodification and the Required Banks have not objected in writing prior to the
\nexpiration of such 20 day period.<\/p>\n
SECTION 5.2 COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
\nRECEIVABLES; LOCKBOX AGREEMENTS.<\/p>\n
(a) Consistent with the Servicing Standard, the Servicer shall make
\nreasonable efforts to collect all payments called for under the terms and
\nprovisions of the Receivables as and when the same shall become due, and shall
\nfollow such collection procedures as it follows with respect to all comparable
\nautomobile receivables that it services for itself or others and otherwise act
\nwith respect to the Receivables, the Dealer Agreements, the Dealer Assignments,
\nthe Insurance Policies and the Other Conveyed Property in such manner as will,
\nin the reasonable judgment of the Servicer, maximize the amount to be received
\nby the Borrower with respect thereto. The Servicer is authorized in its
\ndiscretion to waive any prepayment charge, late payment charge or any other
\nsimilar fees that may be collected in the ordinary course of servicing any
\nReceivable.<\/p>\n
12<\/p>\n
(b) The Servicer may at any time agree to a modification or amendment of a
\nReceivable in order to (i) change the Obligor’s regular due date to a date
\nwithin the Collection Period in which such due date occurs or (ii) reamortize
\nthe Scheduled Payments on the Receivable following a partial prepayment of
\nprincipal.<\/p>\n
(c) The Servicer may grant payment extensions on, or other modifications
\nor amendments to, a Receivable (in addition to those modifications permitted by
\nSection 5.2(b)) in accordance with the Credit and Servicing Procedures and the
\nServicing Standard if the Servicer believes in good faith that such extension,
\nmodification or amendment is necessary to avoid a default on such Receivable,
\nwill maximize the amount to be received by the Borrower with respect to such
\nReceivable, and is otherwise in the best interests of the Borrower; PROVIDED,
\nHOWEVER, that:<\/p>\n
(i) The aggregate period of all extensions on a Receivable shall not
\n exceed six months;<\/p>\n
(ii) In no event may a Receivable be extended such that the final
\n payment scheduled to be made thereunder would be more than 66 months beyond
\n the Commitment Expiry Date; and<\/p>\n
(iii) the Servicer shall not amend or modify a Receivable (except
\n as provided in Section 5.2(b) and this Section 5.2(c)) without the consent
\n of the Funding Agent (acting at the direction of the Required Banks).<\/p>\n
(d) The Servicer shall use its best efforts to notify or direct Obligors
\nto make all payments on the Receivables, whether by check or by direct debit of
\nthe Obligor’s bank account, to be made directly to one or more Lockbox Banks,
\nacting as agent for the Borrower pursuant to a Lockbox Agreement. The Servicer
\nshall use its best efforts to notify or direct any Lockbox Bank to deposit all
\npayments on the Receivables in the Lockbox Account no later than the Business
\nDay after receipt, and to cause all amounts credited to the Lockbox Account on
\naccount of such payments to be transferred to the Collection Account no later
\nthan the second Business Day after receipt of such payments. The Lockbox
\nAccount shall be a demand deposit account held by the Lockbox Bank, or at the
\nrequest of the Funding Agent, acting at the direction of the Required Banks, an
\nEligible Deposit Account.<\/p>\n
On each Receivables Sale Date, the Servicer shall have notified each
\nObligor that makes its payments on the Receivables by check to make such
\npayments thereafter directly to the Lockbox Bank (except in the case of Obligors
\nthat have already been making such payments to the Lockbox Bank), and shall have
\nprovided each such Obligor with remittance invoices in order to enable such
\nObligors to make such payments directly to the Lockbox Bank for deposit into the
\nLockbox Account, and the Servicer will continue, not less often than every three
\nmonths, to so notify those Obligors who have failed to make payments to the
\nLockbox Bank. If and to the extent requested by the Funding Agent, acting at
\nthe direction of the Required Banks, the Servicer shall request each Obligor
\nthat makes payment on the Receivables by direct debit of such Obligor’s bank
\naccount, to<\/p>\n
13<\/p>\n
execute a new authorization for automatic payment which in the judgment of
\nthe Funding Agent, acting at the direction of the Required Banks, is
\nsufficient to authorize direct debit by the Lockbox Bank on behalf of the
\nBorrower. If at any time, the Lockbox Bank is unable to directly debit an
\nObligor’s bank account that makes payment on the Receivables by direct debit
\nand if such inability is not cured within 15 days or cannot be cured by
\nexecution by the Obligor of a new authorization for automatic payment, the
\nServicer shall notify such Obligor that it cannot make payment by direct
\ndebit and must thereafter make payment by check.<\/p>\n
Notwithstanding any Lockbox Agreement, or any of the provisions of this
\nAgreement relating to the Lockbox Agreement, the Servicer shall remain obligated
\nand liable to the Borrower, the Funding Agent and Secured Parties for servicing
\nand administering the Receivables and the other Conveyed Property in accordance
\nwith the provisions of this Agreement without diminution of such obligation or
\nliability by virtue thereof, PROVIDED, however, that the foregoing shall not
\napply to any Backup Servicer for so long as a Lockbox Bank is performing its
\nobligations pursuant to the terms of a Lockbox Agreement.<\/p>\n
In the event of a termination of the Servicer, the successor Servicer
\nshall assume all of the rights and obligations of the outgoing Servicer under
\nthe Lockbox Agreement subject to the terms hereof. In such event, the
\nsuccessor Servicer shall be deemed to have assumed all of the outgoing
\nServicer’s interest therein and to have replaced the outgoing Servicer as a
\nparty to each such Lockbox Agreement to the same extent as if such Lockbox
\nAgreement had been assigned to the successor Servicer, except that the
\noutgoing Servicer shall not thereby be relieved of any liability or
\nobligations on the part of the outgoing Servicer to the Lockbox Bank under
\nsuch Lockbox Agreement. The outgoing Servicer shall, upon request of the
\nFunding Agent, but at the expense of the outgoing Servicer, deliver to the
\nsuccessor Servicer all documents and records relating to each such Lockbox
\nAgreement and an accounting of amounts collected and held by the Lockbox Bank
\nand otherwise use its best efforts to effect the orderly and efficient
\ntransfer of any Lockbox Agreement to the successor Servicer. In the event
\nthat the Funding Agent elects to change the identity of the Lockbox Bank, the
\noutgoing Servicer, at its expense, shall cause the Lockbox Bank to deliver,
\nat the direction of the Funding Agent to the Funding Agent or a successor
\nLockbox Bank, all documents and records relating to the Receivables and all
\namounts held (or thereafter received) by the Lockbox Bank (together with an
\naccounting of such amounts) and shall otherwise use its best efforts to
\neffect the orderly and efficient transfer of the lockbox arrangements and the
\nServicer shall notify the Obligors to make payments to the Lockbox
\nestablished by the successor.<\/p>\n
(e) The Servicer shall remit all payments by or on behalf of the Obligors
\nreceived directly by the Servicer (including any such payments forwarded to the
\nServicer for special handling pursuant to the Lockbox Agreement) into the
\nCollection Account as soon as practicable, but in no event later than the
\nBusiness Day after receipt thereof.<\/p>\n
SECTION 5.3 REALIZATION UPON RECEIVABLES.<\/p>\n
14<\/p>\n
(a) Consistent with the Servicing Standard, the Servicer shall use its
\nbest efforts to repossess (or otherwise comparably convert the ownership of) and
\nliquidate any Financed Vehicle securing a Receivable with respect to which the
\nServicer has determined that payments thereunder are not likely to be resumed,
\nas soon as is practicable after default on such Receivable but in no event later
\nthan the date on which all or any portion of a Scheduled Payment has become 91
\ndays delinquent; provided, however, that the Servicer may elect not to repossess
\na Financed Vehicle within such time period if in its good faith judgment it
\ndetermines that the proceeds ultimately recoverable with respect to such
\nReceivable would be increased by forbearance. The Servicer is authorized to
\nfollow such customary practices and procedures as it shall deem necessary or
\nadvisable, consistent with the Servicing Standard, which practices and
\nprocedures may include reasonable efforts to realize upon any recourse to
\nDealers, the sale of the related Financed Vehicle at public or private sale, the
\nsubmission of claims under an Insurance Policy and other actions by the Servicer
\nin order to realize upon such a Receivable. The foregoing is subject to the
\nprovision that, in any case in which the Financed Vehicle shall have suffered
\ndamage, the Servicer shall not expend funds in connection with any repair or
\ntowards the repossession of such Financed Vehicle unless it shall determine in
\nits discretion that such repair and\/or repossession shall increase the proceeds
\nof liquidation of the related Receivable by an amount greater than the amount of
\nsuch expenses. All amounts received upon liquidation of a Financed Vehicle
\nshall be remitted directly by the Servicer to the Collection Account as soon as
\npracticable, but in no event later than the Business Day after receipt thereof.
\nThe Servicer shall be entitled to recover all reasonable expenses incurred by it
\nin the course of repossessing and liquidating a Financed Vehicle into cash
\nproceeds (including, without limitation, any personal property taxes assessed on
\nsuch Financed Vehicles). Such expenses, at the option of the Servicer: (i)
\nshall be reimbursable as Servicer Advances on the Distribution Date next
\nfollowing the liquidation of the Financed Vehicle (or, if consistent with the
\nServicing Standard the Servicer shall have made a determination that the
\nFinanced Vehicle cannot be repossessed and\/or liquidated, on the Distribution
\nDate next following the delivery to the Borrower and the Funding Agent of an
\nOfficer’s Certificate of the Servicer to such effect); or (ii) shall be retained
\nby the Servicer as deductions from the cash proceeds of such Financed Vehicle,
\nany deficiency obtained from the Obligor or any amounts received from the
\nrelated Dealer, which proceeds and other such cash receipts shall not be
\nrequired to be deposited as required by Section 5.2(e) and the foregoing
\nprovisions of this Section 5.3(a) to the extent of such Servicer disbursements.
\nNotwithstanding anything to the contrary in the foregoing, the Servicer shall
\nnot pay any such reimbursable expense with respect to a Financed Vehicle to the
\nextent that it does not reasonably expect, after reasonable inquiry, to be
\nreimbursed for such expenses from the collections on the Receivable relating to
\nsuch Financed Vehicle.<\/p>\n
(b) If the Servicer elects to commence a legal proceeding to enforce a
\nDealer Agreement or Dealer Assignment, the act of commencement shall be deemed
\nto be an automatic assignment from the Borrower to the Servicer of the rights
\nunder such Dealer Agreement and Dealer Assignment for purposes of collection
\nonly. If, however, in any enforcement suit or legal proceeding it is held that
\nthe Servicer may not enforce a Dealer Agreement or Dealer Assignment on the
\ngrounds that it is not a real party in interest or a Person entitled to enforce
\nthe Dealer Agreement or Dealer Assignment, the Funding Agent, at the Borrower’s
\nexpense, or the Seller, at the Borrower’s expense, shall take such steps as the
\nServicer deems necessary to enforce the Dealer Agreement or Dealer<\/p>\n
15<\/p>\n
Assignment, including bringing suit in its name or the name of the Seller or
\nof the Borrower and\/or the Funding Agent for the benefit of the Secured
\nParties. All amounts recovered shall be remitted directly by the Servicer as
\nprovided in Section 5.2(e).<\/p>\n
SECTION 5.4 INSURANCE.<\/p>\n
(a) The Servicer shall require, in accordance with the Servicing Standard,
\nthat each Financed Vehicle be insured by the related Obligor under the Insurance
\nPolicies referred to in Paragraph “n” of the Schedule of Representations and
\nWarranties and shall monitor the status of such physical loss and damage
\ninsurance coverage thereafter, in accordance with the Servicing Standard. Each
\nReceivable requires the Obligor to maintain such physical loss and damage
\ninsurance, naming the Seller and its successors and assigns as additional
\ninsureds, and permits the holder of such Receivable to obtain physical loss and
\ndamage insurance at the expense of the Obligor if the Obligor fails to maintain
\nsuch insurance. If the Servicer shall determine that an Obligor has failed to
\nobtain or maintain a physical loss and damage Insurance Policy covering the
\nrelated Financed Vehicle which satisfies the conditions set forth in such
\nParagraph “n” (including, without limitation, during the repossession of such
\nFinanced Vehicle) the Servicer may enforce the rights of the holder of the
\nReceivable under the Receivable to require the Obligor to obtain such physical
\nloss and damage insurance. At its sole option, the Servicer may maintain a
\nvendor’s single interest or other collateral protection insurance policy with
\nrespect to all Financed Vehicles (“Collateral Insurance”) which policy shall by
\nits terms insure against physical loss and damage in the event any Obligor fails
\nto maintain physical loss and damage insurance with respect to the related
\nFinanced Vehicle. Any such policy of Collateral Insurance shall be endorsed
\nwith clauses providing for loss payable to the Borrower. Costs incurred by the
\nServicer in maintaining such Collateral Insurance shall be paid by the Borrower.<\/p>\n
(b) The Servicer may sue to enforce or collect upon the Insurance
\nPolicies, in its own name, if possible, or as agent of the Borrower and\/or the
\nSecured Parties. If the Servicer elects to commence a legal proceeding to
\nenforce an Insurance Policy, the act of commencement shall be deemed to be an
\nautomatic assignment of the rights of the Borrower under such Insurance Policy
\nto the Servicer for purposes of collection only. If, however, in any
\nenforcement suit or legal proceeding it is held that the Servicer may not
\nenforce an Insurance Policy on the grounds that it is not a real party in
\ninterest or a holder entitled to enforce the Insurance Policy, the Borrower
\nand\/or the Funding Agent, at the Borrower’s expense, or the Seller, at the
\nBorrower’s expense, shall take such steps as the Servicer deems necessary to
\nenforce such Insurance Policy, including bringing suit in its name or the name
\nof the Borrower and\/or the Funding Agent for the benefit of the Secured Parties.<\/p>\n
SECTION 5.5 MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.<\/p>\n
(a) Consistent with the Servicing Standard, the Servicer shall take such
\nsteps on behalf of the Borrower as are necessary to maintain perfection of the
\nsecurity interest created by each Receivable in the related Financed Vehicle,
\nincluding but not limited to obtaining the execution by the Obligors and the
\nrecording, registering, filing, re-recording, re-filing, and re-registering of
\nall security agreements, financing statements and continuation statements as are
\nnecessary to maintain<\/p>\n
16<\/p>\n
the security interest granted by the Obligors under the respective
\nReceivables. The Funding Agent hereby authorizes the Servicer, and the
\nServicer agrees, to take any and all steps necessary to re-perfect such
\nsecurity interest on behalf of the Borrower as necessary because of the
\nrelocation of a Financed Vehicle or for any other reason. In the event that
\nthe assignment of a Receivable to the Borrower is insufficient, without a
\nnotation on the related Financed Vehicle’s certificate of title, or without
\nfulfilling any additional administrative requirements under the laws of the
\nstate in which the Financed Vehicle is located, to perfect a security
\ninterest in the related Financed Vehicle in favor of the Borrower, the
\nServicer hereby agrees that the Seller’s designation as the secured party on
\nthe certificate of title shall be deemed in its capacity as Servicer as agent
\nof the Secured Parties and further agrees to hold such certificate of title
\nas the agent and custodian of the Secured Parties.<\/p>\n
(b) Upon the occurrence of a Servicer Termination Event, the Funding
\nAgent may instruct the Servicer to take or cause to be taken such action as
\nmay be necessary to perfect or re-perfect the security interests in the
\nFinanced Vehicles securing the Receivables in the name of the Borrower by
\namending the title documents of such Financed Vehicles or by such other
\nreasonable means as may, in the opinion of counsel to the Required Banks, be
\nnecessary or prudent. The Servicer hereby agrees to pay all expenses related
\nto such perfection or re-perfection and to take all action necessary
\ntherefor. In addition, the Required Banks may instruct the Funding Agent and
\nthe Servicer to take or cause to be taken such action as may be necessary to
\nperfect or re-perfect the security interest in the Financed Vehicles
\nunderlying the Receivables in the name of the Borrower, including by amending
\nthe title documents of such Financed Vehicles or by such other reasonable
\nmeans as may, in the opinion of counsel to the Required Banks, be necessary
\nor prudent. The Servicer hereby appoints the Funding Agent as its
\nattorney-in-fact to take any and all steps required to be performed by AFS
\npursuant to this Section 5.5(b) including, but not limited to, execution of
\ncertificates of title or any other documents in the name and stead of the
\nServicer, and the Funding Agent hereby accepts such appointment.<\/p>\n
SECTION 5.6 COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER. By
\nits execution and delivery of this Agreement, the Servicer makes the following
\nrepresentations, warranties and covenants on which on which the Borrower is
\ndeemed to have relied in acquiring the Receivables and upon which the Secured
\nParties shall be deemed to have relied in making any Advance pursuant to the
\nFunding Agreement, as the case may be.<\/p>\n
The Servicer covenants as follows:<\/p>\n
(i) LIENS IN FORCE. The Financed Vehicle securing each Receivable
\n shall not be released by the Servicer in whole or in part from the security
\n interest granted under the Receivable, except upon payment in full of the
\n Receivable or as otherwise contemplated herein;<\/p>\n
(ii) NO IMPAIRMENT. The Servicer shall do nothing to impair the
\n rights of the Borrower or the Secured Parties in the Receivables, the
\n Dealer Agreements, the Dealer Assignments, the Insurance Policies or the
\n Other Conveyed Property;<\/p>\n
17<\/p>\n
(iii) NO AMENDMENTS. The Servicer shall not extend or otherwise
\n amend the terms of any Receivable, except in accordance with Section 5.2;
\n and<\/p>\n
(iv) RESTRICTIONS ON LIENS. The Servicer shall not: (i) create or
\n incur or agree to create or incur, or consent to cause (upon the happening
\n of a contingency or otherwise) the creation, incurrence or existence of any
\n Lien or restriction on transferability of the Receivables or of any Other
\n Conveyed Property except for the Lien in favor of the Funding Agent for the
\n benefit of the Secured Parties, and the restrictions on transferability
\n imposed by this Agreement or (ii) sign or file under the Uniform Commercial
\n Code of any jurisdiction any financing statement or sign any security
\n agreement authorizing any secured party thereunder to file such financing
\n statement, with respect to the Receivables or to any Other Conveyed
\n Property, except in each case any such instrument solely securing the
\n rights and preserving the Lien of the Funding Agent, for the benefit of the
\n Secured Parties. The Servicer will take no action to cause any Receivable
\n to be evidenced by an instrument (as such term is defined in the Relevant
\n UCC).<\/p>\n
SECTION 5.7 PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
\ndiscovery by any of the Seller, the Custodian, the Servicer, the Borrower,
\nthe Funding Agent or the Secured Parties of a breach of any of the covenants
\nset forth in Sections 5.5(a) or 5.6, the party discovering such breach shall
\ngive prompt written notice to the others; PROVIDED, HOWEVER, that the failure
\nto give any such notice shall not affect any obligation of the Servicer under
\nthis Section 5.7. As of the last day of the month following its discovery or
\nreceipt of notice of any breach of any covenant set forth in Sections 5.5(a)
\nor 5.6 which adversely affects any Receivable(s) (or the related Financed
\nVehicle) and\/or the interests of the Borrower and\/or the Secured Parties
\ntherein (including any Defaulted or Delinquent Receivable), the Servicer
\nshall, unless such breach shall have been cured in all material respects,
\npurchase from the Borrower the Receivable affected by such breach and, on the
\nrelated Determination Date, the Servicer shall pay the related Repurchase
\nObligation Amount. It is understood and agreed that the obligation of the
\nServicer to purchase any Receivable (including any Delinquent or Defaulted
\nReceivable) with respect to which such a breach has occurred and is
\ncontinuing shall, if such obligation is fulfilled, constitute the sole remedy
\nagainst the Servicer for such breach available to the Borrower, the Secured
\nParties or the Funding Agent; PROVIDED, HOWEVER, that the Servicer shall
\nindemnify the Borrower, the Backup Servicer, the Funding Agent and the
\nSecured Parties against all costs, expenses, losses, damages, claims and
\nliabilities, including reasonable fees and expenses of counsel, which may be
\nasserted against or incurred by any of them as a result of third party claims
\narising out of the events or facts giving rise to such breach.<\/p>\n
SECTION 5.8 TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY SERVICER.
\nOn each Distribution Date, the Servicer shall be entitled to receive out of the
\nCollection Account the Base Servicing Fee and any Supplemental Servicing Fee for
\nthe related Collection Period pursuant to Section 6.8 (the “Servicing Fee”). The
\nServicer shall be required to pay all expenses incurred by it in connection with
\nits activities under this Agreement (including taxes imposed on the Servicer and
\nexpenses incurred in connection with distributions and reports made by the
\nServicer to the Secured<\/p>\n
18<\/p>\n
Parties). The Servicer shall be liable for the fees and expenses of the
\nCustodian, the Backup Servicer, the Lockbox Bank and the Independent
\nAccountants; PROVIDED, HOWEVER that any successor to AFS as Servicer
\n(including the Backup Servicer) shall not be liable for such fees and
\nexpenses which shall, in such event, be the responsibility of the Borrower.<\/p>\n
SECTION 5.9 CERTAIN SERVICER’S CERTIFICATES.<\/p>\n
(a) No later than 10:00 a.m. New York City time on each Determination
\nDate, the Servicer shall deliver to the Funding Agent, the Backup Servicer and
\neach Rating Agency a Servicer’s Determination Date Certificate executed by a
\nResponsible Officer of the Servicer in substantially the form of Exhibit B
\nhereto and including such credit and other information as the Funding Agent may
\nreasonably request with respect to the Managed Assets, including newly
\noriginated Managed Assets.<\/p>\n
(b) In addition, in connection with any Optional Prepayment pursuant to
\nSection 2.1(f)(ii) of the Funding Agreement, unless such Optional Prepayment is
\nto be effected on a Distribution Date (in which case the relevant calculations
\nwith respect to such Optional Prepayment shall be reflected in the applicable
\nServicer’s Determination Date Certificate), the Servicer shall deliver to the
\nFunding Agent, the Backup Servicer and each Rating Agency a Servicer’s VFN
\nPrepayment Date Certificate in substantially the form of Exhibit B-1 hereto.
\nSuch Servicer’s VFN Prepayment Date Certificate shall be delivered to the
\nFunding Agent by 1:00 p.m., five (5) Business Days prior to the contemplated VFN
\nPrepayment Date.<\/p>\n
SECTION 5.10 ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF SERVICER
\nTERMINATION EVENT.<\/p>\n
(a) The Servicer shall deliver to the Funding Agent, the Backup Servicer
\nand each Rating Agency, on or before April 30 of each year, beginning on April
\n30, 1998, an Officer’s Certificate, dated as of December 31 of the preceding
\nyear, stating that (i) a review of the activities of the Servicer during the
\npreceding 12-month period (or such other period as shall have elapsed from the
\nClosing Date to the date of the first such certificate) and of its performance
\nunder this Agreement has been made under such officer’s supervision, and (ii) to
\nsuch officer’s knowledge, based on such review, the Servicer has fulfilled all
\nits obligations under this Agreement throughout such period, or, if there has
\nbeen a default in the fulfillment of any such obligation, specifying each such
\ndefault known to such officer and the nature and status thereof.<\/p>\n
(b) The Servicer shall deliver to the Funding Agent, the Backup Servicer
\nand each Rating Agency, promptly after having obtained knowledge thereof, but in
\nno event later than two (2) Business Days thereafter, written notice in an
\nOfficer’s Certificate of any event which with the giving of notice or lapse of
\ntime, or both, would become a Servicer Termination Event under Section 9.1.<\/p>\n
19<\/p>\n
SECTION 5.11 ANNUAL INDEPENDENT ACCOUNTANTS’ REPORT; QUARTERLY REVIEWS.<\/p>\n
(a) The Servicer shall cause a firm of nationally recognized
\nindependent certified public accountants who shall be selected by the
\nServicer and acceptable to the Funding Agent (the “Independent Accountants”),
\nwho may also render other services to the Servicer or to the Seller, to
\ndeliver to the Funding Agent, the Backup Servicer and each Rating Agency, on
\nor before October 31 (or 120 days after the end of the Servicer’s fiscal
\nyear, if other than June 30) of each year, beginning on October 31, 1998,
\nwith respect to the twelve months ended the immediately preceding June 30 (or
\nother applicable date) (or such other period as shall have elapsed from the
\nClosing Date to the date of such certificate), a statement (the “Accountants’
\nReport”) addressed to the Board of Directors of the Servicer, to the Funding
\nAgent and the Backup Servicer, to the effect that such firm has audited the
\nbooks and records of AmeriCredit Corp., in which the Servicer is included as
\na consolidated subsidiary, and issued its report thereon in connection with
\nthe audit report on the consolidated financial statements of AmeriCredit
\nCorp. and that (1) such audit was made in accordance with generally accepted
\nauditing standards, and accordingly included such tests of the accounting
\nrecords and such other auditing procedures as such firm considered necessary
\nin the circumstances; and (2) the firm is independent of the Seller and the
\nServicer within the meaning of the Code of Professional Ethics of the
\nAmerican Institute of Certified Public Accountants. With respect to the
\nfiscal year ended June 30, 1997, the Servicer shall deliver to the Funding
\nAgent, the Backup Servicer and each Rating Agency, on or before October 31,
\n1997, a copy of each of the foregoing described reports, as well as a copy of
\nthe report on the application of agreed upon procedures to three randomly
\nselected servicer certificates of AFS as servicer delivered in connection
\nwith the outstanding AmeriCredit securitization transactions for which it
\nacts as servicer, including the delinquency, default and loss statistics
\nrequired to be specified therein and noting whether any exceptions or errors
\nin the such servicer certificates were found.<\/p>\n
(b) On the first to occur of (i) 60 days after the Closing Date and (ii)
\n30 days following the date on which a cumulative aggregate of $50,000,000
\nPrincipal Balance of Receivables have been purchased by the Borrower, and
\nthereafter on a quarterly basis, the Independent Accountants shall undertake a
\ndata integrity review in accordance with Schedule 5.11 hereof, as such Schedule
\n5.11 may from time to time be amended by agreement of the Borrower and the
\nFunding Agent, with the consent of the Required Banks. The report of the
\nIndependent Accountants on the results of each such data integrity review shall
\nbe completed and delivered to the Funding Agent, the Borrower and the Servicer
\nwithin 20 days following the first, fourth, seventh and tenth months of each
\ncalendar year.<\/p>\n
SECTION 5.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
\nRECEIVABLES. The Servicer shall provide to representatives of the Borrower, the
\nFunding Agent and the Backup Servicer reasonable access to the Receivable Files
\nand all other documentation regarding the Receivables. In each case, such
\naccess shall be afforded without charge but only upon reasonable request and
\nduring normal business hours. Nothing in this Section shall derogate from the
\nobligation of the Servicer to observe any applicable law prohibiting disclosure
\nof information regarding the<\/p>\n
20<\/p>\n
Obligors, and the failure of the Servicer to provide access as provided in
\nthis Section as a result of such obligation shall not constitute a breach of
\nthis Section.<\/p>\n
SECTION 5.13 MONTHLY TAPE. On or before the Determination Date, but in no
\nevent later than the seventh calendar day, of each month, the Servicer will
\ndeliver to the Backup Servicer a computer tape and a diskette (or any other
\nelectronic transmission acceptable to the Funding Agent and the Backup Servicer)
\nin a format acceptable to the Backup Servicer containing the information with
\nrespect to the Receivables as of the preceding Accounting Date necessary for
\npreparation of the Servicer’s Determination Date Certificate relating to the
\nimmediately succeeding Determination Date and necessary to determine the
\napplication of collections as provided in Section 6.4. The Backup Servicer shall
\nuse such tape or diskette (or other electronic transmission acceptable to the
\nBackup Servicer) to verify the Servicer’s Determination Date Certificate
\ndelivered by the Servicer, and the Backup Servicer shall certify to the Funding
\nAgent that it has verified the Servicer’s Determination Date Certificate in
\naccordance with this Section 5.13 and shall notify the Servicer and the Funding
\nAgent of any discrepancies, in each case, on or before the second Business Day
\nfollowing the Determination Date. In the event that the Backup Servicer reports
\nany discrepancies, the Servicer and the Backup Servicer shall attempt to
\nreconcile such discrepancies prior to the related Distribution Date, but in the
\nabsence of a reconciliation, the Servicer’s Determination Date Certificate shall
\ncontrol for the purpose of calculations and distributions with respect to the
\nrelated Distribution Date. In the event that the Backup Servicer and the
\nServicer are unable to reconcile discrepancies with respect to a Servicer’s
\nDetermination Date Certificate by the related Distribution Date, the Servicer
\nshall cause the Independent Accountants, at the Servicer’s expense, to audit the
\nServicer’s Determination Date Certificate and, prior to the next succeeding
\nDetermination Date, reconcile the discrepancies. The effect, if any, of such
\nreconciliation shall be reflected in the Servicer’s Determination Date
\nCertificate for such next succeeding Determination Date. In addition, upon the
\noccurrence of a Servicer Termination Event the Servicer shall, if so requested
\nby the Funding Agent deliver to the Backup Servicer its Collection Records and
\nits Monthly Records within 5 Business Days after demand therefor and a computer
\ntape, or other electronic transmission acceptable to the Backup Servicer,
\ncontaining as of the close of business on the date of demand all of the data
\nmaintained by the Servicer in computer format in connection with servicing the
\nReceivables. Other than the duties specifically set forth in this Agreement,
\nthe Backup Servicer shall have no obligations hereunder, including, without
\nlimitation, to supervise, verify, monitor or administer the performance of the
\nServicer. The Backup Servicer shall have no liability for any actions taken or
\nomitted by the Servicer.<\/p>\n
SECTION 5.14 RETENTION AND TERMINATION OF SERVICER. The Servicer hereby
\ncovenants and agrees to act as such under this Agreement during the term of the
\nFacility, as such term may be extended pursuant to the Funding Agreement, unless
\nthe Servicer is terminated pursuant to Article IX hereof, or is permitted to
\nresign pursuant to Section 8.6 hereof.<\/p>\n
SECTION 5.15 FIDELITY BOND AND ERRORS AND OMISSIONS POLICY. The
\nServicer has obtained, and shall continue to maintain in full force and
\neffect, a Fidelity Bond and Errors and Omissions Policy of a type and in such
\namount as is customary for servicers engaged in the business of servicing
\nautomobile receivables.<\/p>\n
21<\/p>\n
ARTICLE VI<\/p>\n
COLLECTION AND RESERVE ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO SECURED PARTIES<\/p>\n
SECTION 6.1 ESTABLISHMENT OF COLLECTION AND RESERVE ACCOUNTS.<\/p>\n
(a) The Funding Agent, on behalf of the Secured Parties, shall establish
\nand maintain in its own name accounts that are Eligible Deposit Accounts, the
\n“COLLECTION ACCOUNT” and the “RESERVE ACCOUNT”, bearing a designation clearly
\nindicating that the funds deposited therein are held for the benefit of the
\nFunding Agent on behalf of the Secured Parties. The Collection Account and the
\nReserve Account shall initially be established with the Funding Agent, and may
\nbe on a sub-ledger of the Funding Agent.<\/p>\n
(b) Funds on deposit in the Collection Account and the Reserve Account
\n(collectively, the “PLEDGED ACCOUNTS”) in excess of $25,000 shall be invested by
\nthe Funding Agent in Eligible Investments selected by the Funding Agent in its
\ndiscretion among Eligible Investments specified in standing written instructions
\nof the Borrower, or, in the absence of such instructions, solely in the
\ndiscretion of the Funding Agent. All such Eligible Investments shall be held by
\nthe Funding Agent for the benefit of the Secured Parties, and funds on deposit
\nin any Pledged Account shall be invested in Eligible Investments having
\nmaturities that are determined by the Funding Agent to be consistent with
\nPARCO’s cashflow requirements, including availability of funds for the payment
\nof maturing Commercial Paper, and that in any event will mature no later than
\nthe close of business on the Business Day immediately preceding the following
\nDistribution Date. Funds deposited in a Pledged Account on the day immediately
\npreceding a Distribution Date are not required to be invested overnight. All
\nEligible Investments made in accordance with this subsection will be held to
\nmaturity, except to the extent otherwise required in connection with an
\nacceleration of indebtedness pursuant to the terms of the Funding Agreement.<\/p>\n
(c) All investment earnings of moneys deposited in the Pledged Accounts
\nshall be deposited (or caused to be deposited) by the Funding Agent in the
\nCollection Account, and any loss resulting from such investments shall be
\ncharged to such account. The Borrower will not direct the Funding Agent to make
\nany investment of any funds held in any of the Pledged Accounts unless the
\nsecurity interest granted and perfected in such account will continue to be
\nperfected in such investment, in either case without any further action by
\nany Person, and, in connection with any direction to the Funding Agent to make
\nany such investment, if requested by the Funding Agent, the Borrower shall
\ndeliver to the Funding Agent an Opinion of Counsel, acceptable to the Funding
\nAgent, to such effect.<\/p>\n
(d) The Funding Agent shall not in any way be held liable by reason of any
\ninsufficiency in any of the Pledged Accounts resulting from any loss on any
\nEligible Investment included therein except for losses attributable to the
\nFunding Agent’s gross negligence or willful misconduct (provided that the
\nforegoing shall not be deemed to relieve the Funding Agent of any<\/p>\n
22<\/p>\n
liability in its individual capacity as an issuer of any Eligible Investment
\nfor failure to make payments thereon in accordance with the terms thereof).<\/p>\n
(e) It is expressly acknowledged and agreed that the Funding Agent is
\nauthorized hereby to direct the purchase of investments constituting Eligible
\nInvestments (i) from any Affiliate of the Funding Agent, including securities
\nthat are underwritten, placed or dealt in by any such Affiliate and\/or from
\nmanagement investment companies of which the Funding Agent (in its individual
\ncapacity) or any Affiliate is an investment advisor, administrator, shareholder,
\nservicing agent and\/or custodian, or (ii) that involve the Funding Agent (in its
\nindividual capacity) or an Affiliate of the Administrative Agent as a
\nparticipant or counterparty. It is further acknowledged and agreed that the
\nFunding Agent (in its individual capacity) and\/or such Affiliates may receive
\nadvisory fees, referral fees and other compensation in connection with such
\nservices that are distinct from the fees, charges and expenses of the Funding
\nAgent under or in connection with any of the Basic Agreements.<\/p>\n
(f)(i) The Funding Agent, on behalf of the Secured Parties, shall
\npossess all right, title and interest in and to all funds on deposit from
\ntime to time in the Pledged Accounts and in and to all proceeds thereof and
\nall such funds, investments, proceeds and income shall be part of the
\nConveyed Property. Except as otherwise provided herein, the Pledged Accounts
\nshall be under the sole dominion and control of the Funding Agent for the
\nbenefit of the Secured Parties. If, at any time, any of the Pledged Accounts
\nceases to be an Eligible Deposit Account, the Funding Agent (or the Servicer
\non its behalf) shall within five Business Days (or such longer period as to
\nwhich each Rating Agency and the Funding Agent may consent) establish a new
\nPledged Account as an Eligible Deposit Account and shall transfer any cash
\nand\/or any investments to such new Pledged Account. In connection with the
\nforegoing, the Servicer agrees that, in the event that any of the Pledged
\nAccounts are not accounts with the Funding Agent, the Servicer shall notify
\nthe Funding Agent in writing immediately upon any of such Pledged Accounts
\nceasing to be an Eligible Deposit Account.<\/p>\n
(ii) With respect to the Conveyed Property, the Funding Agent agrees and
\n Borrower agrees to cause that:<\/p>\n
(A) any Conveyed Property that is held in deposit accounts
\n (within the meaning of the New York UCC) shall be held solely in
\n Eligible Deposit Accounts; and, except as otherwise provided herein,
\n each such Eligible Deposit Account shall be subject to the exclusive
\n custody and control of the Funding Agent, and the Funding Agent shall
\n have sole signature authority with respect thereto;<\/p>\n
(B) prior to “Uniform Commercial Code-Investment Securities,”
\n 1997 N.Y. Laws ch. 566 (“New York Revised Article 8”) becoming
\n effective, any Conveyed Property or Collateral invested in Eligible
\n Investments that constitutes “instruments” within the meaning of
\n Section 9-105(1)(i) of the New York UCC (other than Certificated
\n Securities), Certificated Securities, or “uncertificated securities”
\n within the meaning of Article 8 of the New York<\/p>\n
23<\/p>\n
UCC shall be delivered to the Funding Agent in accordance with the
\n appropriate paragraph of the definition of “Delivery”;<\/p>\n
(C) with respect to all other Conveyed Property or Collateral not
\n listed in subparagraph (B) above, and with respect to all Conveyed
\n Property or Collateral after New York Revised Article 8 becomes
\n effective, any Conveyed Property or Collateral invested in Eligible
\n Investments shall be delivered to the Funding Agent by causing a
\n financial institution then maintaining a Pledged Account (such
\n institution being referred to as a “Pledged Accounts Securities
\n Intermediary”) to create a Security Entitlement (or a United States
\n Securities Entitlement, when applicable) in such Pledged Account in
\n favor of the Funding Agent on behalf of the Secured Parties with
\n respect to such Eligible Investment by indicating by book-entry that
\n such Eligible Investment has been credited to such Pledged Account;<\/p>\n
(D) the Funding Agent shall only invest in Eligible Investments
\n which the applicable Pledged Account Securities Intermediary agrees to
\n credit to the applicable Pledged Account;<\/p>\n
(E) any Conveyed Property or Collateral may be delivered: (i)
\n upon the instruction of the Funding Agent, by any additional or
\n alternative procedures as may hereafter become appropriate, in the
\n sole judgment of the Funding Agent, under applicable law or
\n regulations or the interpretation thereof to obtain and maintain a
\n first priority perfected security interest in any such Conveyed
\n Property or Collateral in favor of the Funding Agent on behalf of the
\n Secured Parties, or (ii) upon the request of the Borrower or the
\n Servicer and the consent of the Funding Agent, by any additional or
\n alternative procedures that will, in the written opinion of counsel,
\n create and maintain a first priority perfected security interest in
\n any such Conveyed Property or Collateral in favor of the Funding Agent
\n on behalf of the Secured Parties.<\/p>\n
(g) The Servicer shall have the power, revocable by the Funding Agent, to
\ninstruct the Funding Agent to make withdrawals and payments from the Pledged
\nAccounts for the purpose of permitting each of the Servicer and the Funding
\nAgent to carry out its respective duties hereunder.<\/p>\n
(h) Notwithstanding anything else contained herein, the Funding Agent
\nagrees that, with respect to each Pledged Account, it will cause each
\nSecurities Intermediary establishing such Pledged Account to enter into an
\nagreement pursuant to which the Funding Agent, for the benefit of the Secured
\nParties, shall have “control” (within the meaning of Section 8-106 of the New
\nYork UCC) of such Pledged Account and all securities, investment property,
\nfinancial assets, investments and other property credited thereto from time
\nto time; PROVIDED that each such agreement entered into between the Funding
\nAgent and any Securities Intermediary shall, in the opinion of special
\ncounsel to the Secured Parties, be effective to perfect by “control” (within
\nthe meaning of Section 8-106 of<\/p>\n
24<\/p>\n
the New York UCC) the security interest of the Funding Agent for the benefit
\nof the Secured Parties in such Pledged Account and property credited thereto.<\/p>\n
SECTION 6.2 RESERVE ACCOUNT.<\/p>\n
(a) The Servicer shall cause the Funding Agent to establish and maintain
\nan Eligible Deposit Account (the “RESERVE ACCOUNT”) with the Funding Agent,
\nbearing a designation clearly indicating that the funds deposited therein are
\nheld in trust for the benefit of the Secured Parties. On or prior to the
\nEffective Date, the Borrower shall transfer to the Funding Agent for deposit
\ninto the Reserve Account an amount equal to the Reserve Account Initial Deposit.<\/p>\n
(b) At all times during the term of the Facility, the Borrower shall
\nmaintain the Minimum Reserve Account Balance. In the event that the amount on
\ndeposit in the Reserve Account shall fall below the Minimum Reserve Account
\nBalance then as promptly as possible and in no event later than five Business
\nDays following such event (or, if sooner, the next contemplated Funding Date
\npursuant to the Funding Agreement), the Borrower shall pay to the Funding Agent,
\nfor deposit in the Reserve Account, the amount of any such shortfall in
\nimmediately available funds (it being understood that the payment of any such
\namount, being referred to as a “Subsequent Reserve Account Deposit”, shall be a
\ncondition precedent to the occurrence of any Funding on such contemplated
\nFunding Date).<\/p>\n
(c) Prior to the occurrence of a Termination Event or the Commitment
\nExpiry Date (or the occurrence and continuation of a Pool Seasoning Event), on
\nany Distribution Date after application of Available Funds as set forth in
\nclauses (i) through (xii) of Section 6.8(a) hereof, funds on deposit in the
\nReserve Account in excess of the higher of (i) the Minimum Reserve Account
\nBalance and (ii) 6% of the VFN Balance, shall be available for distribution to
\nthe Borrower in accordance with Section 6.8 hereof. Further, in connection with
\nan Optional Prepayment of the VFN as described in Section 2.1(f) of the Funding
\nAgreement, and after payment of (i) all obligations to PARCO required in
\nconnection with such prepayment and (ii) all other costs and expenses related to
\nsuch prepayment (and provided that no Termination Event is then in existence,
\nthat no Pool Seasoning Event is or would be in existence after giving effect to
\nsuch Optional Prepayment and that the Commitment Expiry Date has not occurred),
\nthen, funds in the Reserve Account in excess of the Minimum Reserve Account
\nBalance may be released to the Borrower in an amount determined as follows: the
\nproduct of (i) funds on deposit in the Reserve Account and (ii) a fraction, the
\nnumerator of which is the Principal Balance of Receivables released in
\nconnection with the prepayment that had been included in the Pool Balance, and
\nthe denominator of which is the Pool Balance before giving effect to the
\nprepayment; PROVIDED that an amount at least equal to the Minimum Reserve
\nAccount Balance shall be retained after such distribution.<\/p>\n
Notwithstanding anything to the contrary herein, following the occurrence
\nof a Termination Event, any amounts on deposit in the Reserve Account shall be
\ntransferred to the Collection Account and applied in accordance with Section
\n6.8(a).<\/p>\n
25<\/p>\n
SECTION 6.3 CERTAIN REIMBURSEMENTS TO THE SERVICER. The Servicer will be
\nentitled to be reimbursed from amounts on deposit in the Collection Account with
\nrespect to a Collection Period for amounts previously deposited in the
\nCollection Account but later determined by the Servicer to have resulted from
\nmistaken deposits or postings or checks returned for insufficient funds. The
\namount to be reimbursed hereunder shall be paid to the Servicer on the related
\nDistribution Date pursuant to Section 6.8 upon certification by the Servicer of
\nsuch amounts and the provision of such information to the Funding Agent as may
\nbe necessary in the opinion of the Funding Agent to verify the accuracy of such
\ncertification. In the event that the Funding Agent has not received evidence
\nsatisfactory to it of the Servicer’s entitlement to reimbursement pursuant to
\nthis Section, the Funding Agent shall give notice to such effect.<\/p>\n
SECTION 6.4 APPLICATION OF COLLECTIONS. All collections for the
\nCollection Period shall be applied by the Servicer as follows:<\/p>\n
With respect to each Receivable (other than a Repurchased Receivable),
\npayments by or on behalf of the Obligor, (other than Supplemental Servicing Fees
\nwith respect to such Receivable, to the extent collected) shall be applied to
\ninterest and principal in accordance with the Simple Interest Method.<\/p>\n
All amounts collected that are payable to the Servicer as Supplemental
\nServicing Fees hereunder shall be deposited in the Collection Account and paid
\nto the Servicer in accordance with Section 5.8.<\/p>\n
SECTION 6.5 SERVICER ADVANCES.<\/p>\n
In the event that, on any date, there are not sufficient Available Funds to
\npay the sum of the amounts described in Section 6.8(a), clauses (ii)(B), (iv)
\nand (v), due and payable on such date, the Servicer shall advance an amount
\nequal to such amounts due and payable on such date (each, a “Servicer Advance”),
\nPROVIDED that the Servicer shall not make such an advance to the extent that it
\ndoes not reasonably expect, after reasonable inquiry, to be reimbursed for such
\nadvance from the collections on the Receivables.<\/p>\n
SECTION 6.6 WITHDRAWALS FROM THE RESERVE ACCOUNTS; SPECIAL WITHDRAWALS
\nFROM THE PLEDGED ACCOUNTS.<\/p>\n
(a) In the event that the Servicer’s Determination Date Certificate with
\nrespect to any Determination Date shall state that the amount of the Available
\nFunds with respect to such Determination Date is less than the sum of the
\namounts payable on the related Distribution Date pursuant to clauses (i) through
\n(xii) of Section 6.8(a), then, on the Business Day preceding the related
\nDistribution Date, the Funding Agent shall withdraw the amount of such
\ndeficiency (to the extent of the funds available in the Reserve Account) from
\nthe Reserve Account and deposit the same in the Collection Account.<\/p>\n
26<\/p>\n
(b) Notwithstanding anything in this Agreement or any other Basic
\nAgreement to the contrary, to the extent that PARCO (or the Administrative Agent
\non its behalf) notifies the Funding Agent with respect to any date other than a
\nDistribution Date that PARCO has insufficient funds on hand to pay any portion
\nof the Carrying Costs representing Accrued Discount payable on such date, then
\nthe Funding Agent may immediately withdraw the necessary amount from the
\nCollection Account, and, to the extent there are not sufficient Available Funds
\nin the Collection Account may immediately withdraw the necessary amount from the
\nReserve Account (to the extent of the funds available in the Reserve Account)
\nand deposit the same in the Collection Account for distribution to PARCO on such
\ndate. The Funding Agent shall give notice to the Borrower and the Servicer by
\ntelephone as promptly as practicable and in any event no later than the Business
\nDay following such withdrawal, such notice to be promptly confirmed in writing.<\/p>\n
SECTION 6.7 ADDITIONAL DEPOSITS. The Servicer or the Seller, as
\napplicable, shall deposit or cause to be deposited in the Collection Account, on
\nthe Determination Date following the date on which such obligations are due, the
\naggregate Repurchase Obligation Amount with respect to Repurchased Receivables.<\/p>\n
SECTION 6.8 DISTRIBUTIONS.<\/p>\n
(a) No later than 11:00 a.m. New York time on each Distribution Date, the
\nFunding Agent shall cause to be made the following transfers and distributions
\nfrom the Collection Account in accordance with the following priorities (such
\ntransfers and distributions to be based solely on the information contained in
\nthe Servicer’s Determination Date Certificate delivered on the related
\nDetermination Date, SUBJECT HOWEVER (A) in the case of clause (x) below to the
\neffect of any intervening Funding, in which case the relevant information shall
\nbe as updated in the relevant Servicer’s Receivables Sale Date Certificate, and
\n(B) to the occurrence of an intervening Termination Event):<\/p>\n
(i) to the Servicer, to repay any outstanding Servicer Advances;<\/p>\n
(ii) on a PARI PASSU basis (A) to each of the Lockbox Bank, the
\n Custodian and the Independent Accountants, its respective accrued
\n and unpaid fees and expenses (in each case, only to the extent
\n such fees and expenses have not been previously paid when due by
\n the Servicer and provided that, so long as the Servicer is also
\n the Custodian, such fees shall not exceed $200,000 in the
\n aggregate in any calendar year) and (B) any amounts owing to the
\n Lockbox Bank as reimbursement for checks that have been credited
\n to the Lockbox Account and are not collectible in accordance with
\n the procedures specified in the Lockbox Agreement;<\/p>\n
(iii) to the Servicer, the Base Servicing Fee and any Supplemental
\n Servicing Fees for the related Collection Period (as well as
\n any amounts specified in Section 6.3, to the extent the
\n Servicer has not reimbursed itself in<\/p>\n
27<\/p>\n
respect of such amounts pursuant to Section 6.3 and to the
\n extent not retained by the Servicer), but LESS the total of any
\n fees and expenses to be paid to the Lockbox Bank(s), the
\n Custodian, the Independent Accountants or the Backup
\n Servicer pursuant to clauses (ii)(A) or (iv);<\/p>\n
(iv) to the Backup Servicer (or any successor Servicer) to pay
\n servicing fees (in the case of the Backup Servicer, only to the
\n extent such fees have not been previously paid when due by the
\n Servicer);<\/p>\n
(v) to the Funding Agent for the benefit of the Secured Parties, the
\n following amounts in the following priority:<\/p>\n
(A) On a PARI PASSU basis, Accrued Discount and Accrued Interest
\n with respect to such Collection Period (after giving effect,
\n in the case of Accrued Discount, to any portion thereof paid
\n since the previous Distribution Date as contemplated by
\n Section 6.6(b) hereof);<\/p>\n
(B) without duplication, all dealer fees due and owing with
\n respect to Commercial Paper issued to fund the Net
\n Investment during such Collection Period;<\/p>\n
(C) any past due Discount and any past due interest due and
\n owing to the APA Banks specified in Section 2.4 of the
\n Funding Agreement (in each case, together with interest at
\n the default rate specified therein) with respect to prior
\n Collection Periods, on a PARI PASSU basis; and<\/p>\n
(D) the Utilization Fee and the Facility Fee accrued from the
\n first day through the last day of such Collection Period,
\n whether or not such amounts are payable during such
\n Collection Period; <\/p>\n
(vi) to the Funding Agent for the benefit of the Secured Parties, the
\n Targeted Monthly Principal Payment;<\/p>\n
(vii) following any replacement of the Servicer, to the Backup
\n Servicer to pay the reasonable costs of transition,
\n including any required re-liening of the Financed Vehicles,
\n to the extent such costs have not been paid by the
\n terminated Servicer;<\/p>\n
(viii) the costs of PARCO and the costs of the APA Banks with
\n respect to the operation of the Yield Protection Provision,
\n on a PARI PASSU basis;<\/p>\n
28<\/p>\n
(ix) after the occurrence of the first to occur of the Commitment
\n Expiry Date or a Termination Event, or the occurrence and
\n continuation of a Pool Seasoning Event, the remainder to reduce
\n the VFN Balance;<\/p>\n
(x) prior to the occurrence of the Commitment Expiry Date, a
\n Termination Event, or the occurrence and continuation of a Pool
\n Seasoning Event, the balance, if any, will first be deposited
\n into the Reserve Account until the Reserve Account is equal to
\n the greater of 6% of the VFN Balance and $2,450,000;<\/p>\n
(xi) to the Funding Agent for the benefit of the Secured Parties, any
\n indemnity amounts owing by the Borrower pursuant hereto (other
\n than those described in clause (vii) above), payable on a PARI
\n PASSU basis to the Secured Parties; <\/p>\n
(xii) without duplication, on a PARI PASSU basis, any other costs
\n and expenses due and owing to PARCO, the Funding Agent and
\n the APA Banks pursuant to this Agreement and the other Basic
\n Agreements that are accrued and unpaid during such
\n Collection Period, together with any unpaid costs and
\n expenses due and owing to PARCO, the Funding Agent and the
\n APA Banks from prior Collection Periods; and<\/p>\n
(xiii) any remaining funds will then be paid to the Borrower;
\n PROVIDED, HOWEVER, that following the occurrence of a
\n Termination Event no such distribution shall be made to the
\n Borrower until after payment of any and all other amounts
\n owed by the Borrower to the Secured Parties under or in
\n connection with any Basic Agreement, including, without
\n limitation, any costs and expenses incurred in connection
\n with such Termination Event.<\/p>\n
(b) In the event that the Collection Account is maintained with an
\ninstitution other than the Funding Agent, the Servicer shall instruct and cause
\nsuch institution to make all deposits and distributions pursuant to Section
\n6.8(a) on the related Distribution Date.<\/p>\n
(c) on each Distribution Date, the Funding Agent shall send to each
\nSecured Party the statement provided to the Funding Agent by the Servicer
\npursuant to Section 5.9 hereof with respect to such Distribution Date.<\/p>\n
(d) In the event that any withholding tax is imposed on the Borrower’s
\npayment (or allocations of income) to a Secured Party, the Borrower shall be
\nobligated to indemnify such Secured Party (or Parties) for such taxes pursuant
\nto Article IV of the Funding Agreement. Without limiting the obligations of the
\nBorrower under the Funding Agreement, or the rights of the Secured Parties in
\nthe event of the Borrower’s failure to make full and timely payment of any
\namounts owing pursuant<\/p>\n
29<\/p>\n
to Article IV thereof, the Funding Agent is hereby authorized and directed to
\nretain from amounts otherwise distributable to the Secured Parties sufficient
\nfunds for the payment of any tax that is legally owed by the Borrower. The
\namount of any withholding tax imposed with respect to a Secured Party shall
\nbe treated as cash distributed to such Secured Party at the time it is
\nwithheld by the Borrower or the Funding Agent and remitted to the appropriate
\ntaxing authority. If there is a possibility that withholding tax is payable
\nwith respect to a distribution (such as a distribution to a non-US Secured
\nParty), the Funding Agent may in its sole discretion withhold such amounts in
\naccordance with this clause (d). In the event that a Secured Party wishes to
\napply for a refund of any such withholding tax, the Funding Agent shall
\nreasonably cooperate with such Secured Party in making such claim so long as
\nsuch Secured Party agrees to reimburse the Funding Agent for any
\nout-of-pocket expenses incurred.<\/p>\n
(e) Distributions required to be made to Secured Parties on any
\nDistribution Date shall be made in immediately available funds, to the account
\nof the Funding Agent for distribution to such Secured Party at a bank or other
\nentity having appropriate facilities therefor.<\/p>\n
(f) Subject to Section 6.1 and this section, monies received by the
\nFunding Agent hereunder need not be segregated in any manner except to the
\nextent required by law and may be deposited under such general conditions as may
\nbe prescribed by law, and the Funding Agent shall not be liable for any interest
\nthereon.<\/p>\n
ARTICLE VII<\/p>\n
THE SELLER<\/p>\n
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller makes
\nthe following representations on which the Borrower is deemed to have relied in
\nacquiring the Receivables and on which the Secured Parties have relied in
\nadvancing funds to the Borrower under the Funding Agreement. The
\nrepresentations speak as of the execution and delivery of this Agreement and as
\nof each Receivables Sale Date with respect to the Receivables sold on such date,
\nand shall survive the sale of the Receivables to the Borrower and the pledge
\nthereof to the Funding Agent on behalf of the Secured Parties.<\/p>\n
(a) ORGANIZATION AND GOOD STANDING. The Seller has been duly organized
\nand is validly existing as a corporation in good standing under the laws of the
\nState of Delaware, with power and authority to own its properties and to conduct
\nits business as such properties are currently owned and such business is
\ncurrently conducted, and had at all relevant times, and now has, power,
\nauthority and legal right to acquire, own and sell the Receivables and the Other
\nConveyed Property sold to the Borrower.<\/p>\n
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as a
\nforeign corporation in good standing and has obtained all necessary licenses and
\napprovals in all jurisdictions<\/p>\n
30<\/p>\n
where the failure to do so would materially and adversely affect Seller’s
\nability to sell the Receivables and the Other Conveyed Property to the
\nBorrower pursuant to this Agreement, or the validity or enforceability of the
\nReceivables and the Other Conveyed Property or to perform Seller’s
\nobligations hereunder and under the other Basic Agreements.<\/p>\n
(c) POWER AND AUTHORITY. The Seller has the power and authority to
\nexecute and deliver this Agreement and the other Basic Agreements to which it is
\na party and to carry out its terms and their terms, respectively; the Seller has
\nfull power and authority to sell and assign the Receivables and the Other
\nConveyed Property to be sold and assigned to and deposited with the Borrower by
\nit and has duly authorized such sale and assignment to the Borrower by all
\nnecessary corporate action; and the execution, delivery and performance of this
\nAgreement and the other Basic Agreements to which the Seller is a party have
\nbeen duly authorized by the Seller by all necessary corporate action.<\/p>\n
(d) VALID SALE, BINDING OBLIGATIONS. This Agreement effects a valid sale,
\ntransfer and assignment of the Receivables and the Other Conveyed Property,
\nenforceable against the Seller and creditors of and purchasers from the Seller;
\nand this Agreement and the other Basic Agreements to which the Seller is a
\nparty, when duly executed and delivered, shall constitute legal, valid and
\nbinding obligations of the Seller enforceable in accordance with their
\nrespective terms, except as enforceability may be limited by bankruptcy,
\ninsolvency, reorganization or other similar laws affecting the enforcement of
\ncreditors’ rights generally and by equitable limitations on the availability of
\nspecific remedies, regardless of whether such enforceability is considered in a
\nproceeding in equity or at law.<\/p>\n
(e) ERISA. The Seller is in compliance in all material respects with
\nERISA and there is no lien of the Pension Benefit Guaranty Corporation on any of
\nthe Receivables or Other Conveyed Property.<\/p>\n
(f) NOT AN INVESTMENT COMPANY. The Seller is not an “investment company”
\nwithin the meaning of the Investment Company Act of 1940, as amended, or is
\nexempt from all provisions of such Act.<\/p>\n
(g) NO VIOLATION. The consummation of the transactions contemplated by
\nthis Agreement and the other Basic Agreements to which the Seller is a party and
\nthe fulfillment of the terms of this Agreement and the other Basic Agreements to
\nwhich the Seller is a party shall not conflict with, result in any breach of any
\nof the terms and provisions of or constitute (with or without notice, lapse of
\ntime or both) a default under the certificate of incorporation or by-laws of the
\nSeller, or any indenture, agreement, mortgage, deed of trust or other instrument
\nto which the Seller is a party or by which it is bound, or result in the
\ncreation or imposition of any Lien upon any of its properties pursuant to the
\nterms of any such indenture, agreement, mortgage, deed of trust or other
\ninstrument, other than this Agreement, or violate any law, order, rule or
\nregulation applicable to the Seller of any court or of any federal or state
\nregulatory body, administrative agency or other governmental instrumentality
\nhaving jurisdiction over the Seller or any of its properties.<\/p>\n
31<\/p>\n
(h) NO PROCEEDINGS. There are no proceedings or investigations pending
\nor, to the Seller’s knowledge, threatened, against the Seller, before any court,
\nregulatory body, administrative agency or other tribunal or governmental
\ninstrumentality having jurisdiction over the Seller or its properties (A)
\nasserting the invalidity of this Agreement or any of the other Basic Agreements,
\n(B) seeking to prevent the consummation of any of the transactions contemplated
\nby this Agreement or any of the other Basic Agreements, (C) seeking any
\ndetermination or ruling that might materially and adversely affect the
\nReceivables or the performance by the Seller of its obligations under, or the
\nvalidity or enforceability of, this Agreement or any of the other Basic
\nAgreements, (D) seeking to adversely affect the federal income tax or other
\nfederal, state or local tax attributes of the transactions contemplated by the
\nBasic Agreements, or (E) involving any Receivable.<\/p>\n
(i) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller is
\nat 200 Bailey Avenue, Fort Worth, Texas.<\/p>\n
(j) NO CONSENTS. The Seller is not required to obtain the consent of any
\nother party or any consent, license, approval or authorization, or registration
\nor declaration with, any governmental authority, bureau or agency in connection
\nwith the execution, delivery, performance, validity or enforceability of this
\nAgreement which has not already been obtained.<\/p>\n
SECTION 7.2 CORPORATE EXISTENCE. (a) During the term of this Agreement,
\nthe Seller will keep in full force and effect its existence, rights and
\nfranchises as a corporation under the laws of the jurisdiction of its
\nincorporation and will obtain and preserve its qualification to do business in
\neach jurisdiction in which such qualification is or shall be necessary to
\nprotect the validity and enforceability of this Agreement, any Receivables Sale
\nAgreement, the other Basic Agreements and each other instrument or agreement
\nnecessary or appropriate to the proper administration of this Agreement and the
\ntransactions contemplated hereby.<\/p>\n
(b) During the term of this Agreement, the Seller shall observe the
\napplicable legal requirements for the recognition of the Seller as a legal
\nentity separate and apart from its Affiliates, including as follows:<\/p>\n
(i) the Seller shall maintain corporate records and books of account
\n separate from those of its Affiliates;<\/p>\n
(ii) except as otherwise provided in this Agreement, the Seller shall
\n not commingle its assets and funds with those of its Affiliates;<\/p>\n
(iii) the Seller shall hold such appropriate meetings of its Board
\n of Directors as are necessary to authorize all the Seller’s corporate
\n actions required by law to be authorized by the Board of Directors, shall
\n keep minutes of such meetings and of meetings of its stockholders) and
\n observe all other customary corporate formalities (and any successor Seller
\n not a corporation shall observe similar procedures in accordance with its
\n governing documents and applicable law);<\/p>\n
32<\/p>\n
(iv) the Seller shall at all times hold itself out to the public under
\n the Seller’s own name as a legal entity separate and distinct from its
\n Affiliates; and<\/p>\n
(v) all transactions and dealings between the Seller and its
\n Affiliates will be conducted on an arm’s length basis.<\/p>\n
(c) During the term of this Agreement, the Seller shall take no action
\nthat would cause the Borrower to violate any of its covenants under the Basic
\nAgreements or that otherwise would be likely to have a material adverse effect
\non the Borrower and\/or the Secured Parties.<\/p>\n
SECTION 7.3 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be liable
\nin accordance herewith only to the extent of the obligations specifically
\nundertaken by the Seller under this Agreement.<\/p>\n
(a) The Seller shall indemnify, defend and hold harmless the Borrower, the
\nFunding Agent, the Secured Parties, the Backup Servicer and the Servicer (if
\nother than the Seller) from and against any taxes that may at any time be
\nasserted against any such Person with respect to, and as of the date of, each
\nsale of Receivables to the Borrower including any sales, gross receipts, general
\ncorporation, tangible or intangible personal property, privilege or license
\ntaxes (but not including any taxes asserted with respect to ownership of the
\nReceivables or federal or other income taxes, including franchise taxes measured
\nby net income) and all costs and expenses in defending against the same.<\/p>\n
(b) The Seller shall indemnify, defend and hold harmless the Borrower, the
\nFunding Agent, the Secured Parties, the Backup Servicer and the Servicer (if
\nother than the Seller) from and against any loss, liability or expense incurred
\nby reason of the Seller’s willful malfeasance, bad faith or negligence in the
\nperformance of its duties under this Agreement, or by reason of reckless
\ndisregard of its obligations and duties under this Agreement.<\/p>\n
Indemnification under this Section shall survive the resignation or removal
\nof the Funding Agent and the termination of this Agreement and shall include all
\nreasonable fees and expenses of counsel and other expenses of litigation. If
\nthe Seller shall have made any indemnity payments pursuant to this Section and
\nthe Person to or on behalf of whom such payments are made thereafter shall
\ncollect any of such amounts from others, such Person shall promptly repay such
\namounts to the Seller, without interest.<\/p>\n
SECTION 7.4 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
\nOF, SELLER. Any Person (a) into which the Seller may be merged or consolidated,
\n(b) which may result from any merger or consolidation to which the Seller shall
\nbe a party or (c) which may succeed to the properties and assets of the Seller
\nsubstantially as a whole, which Person in any of the foregoing cases executes an
\nagreement of assumption to perform every obligation of the Seller under this
\nAgreement, shall be the successor to the Seller hereunder without the execution
\nor filing of any document or any further act by any of the parties to this
\nAgreement; PROVIDED, HOWEVER, that (i) the Seller shall have received the
\nwritten consent of the Borrower and the Required Banks prior to entering into
\nany such<\/p>\n
33<\/p>\n
transaction, (ii) immediately after giving effect to such transaction, no
\nrepresentation or warranty made pursuant to Section 4.1 shall have been
\nbreached and (if AFS is the Servicer) no Servicer Termination Event, and no
\nevent which, after notice or lapse of time, or both, would become a Servicer
\nTermination Event shall have happened and be continuing, (iii) the Seller
\nshall have delivered to the Funding Agent and the Rating Agencies an
\nOfficers’ Certificate and an Opinion of Counsel each stating that such
\nconsolidation, merger or succession and such agreement of assumption comply
\nwith this Section and that all conditions precedent, if any, provided for in
\nthis Agreement relating to such transaction have been complied with, (iv) the
\nRating Agency Condition shall have been satisfied with respect to such
\ntransaction and (v) the Seller shall have delivered to the Funding Agent an
\nOpinion of Counsel stating that, in the opinion of such counsel, either (A)
\nall financing statements and continuation statements and amendments thereto
\nrelating to the sale of the Receivables from the Seller to the Borrower have
\nbeen executed and filed that are necessary fully to preserve and protect the
\ninterest of the Borrower in the Receivables and reciting the details of such
\nfilings or (B) no such action shall be necessary to preserve and protect such
\ninterest. For the avoidance of doubt, it is understood that the execution of
\nthe foregoing agreement of assumption and compliance with clauses (i) through
\n(v) above shall be conditions to the consummation of the transactions
\nreferred to in clauses (a), (b) or (c) above.<\/p>\n
SECTION 7.5 LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller and
\nany director or officer or employee or agent of the Seller may rely in good
\nfaith on the advice of counsel or on any document of any kind, prima facie
\nproperly executed and submitted by any Person respecting any matters arising
\nunder any Basic Agreement. The Seller shall not be under any obligation to
\nappear in, prosecute or defend any legal action that shall not be incidental to
\nits obligations under this Agreement, and that in its opinion may involve it in
\nany expense or liability.<\/p>\n
ARTICLE VIII<\/p>\n
THE SERVICER<\/p>\n
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF AFS, IN ITS CAPACITY AS
\nSERVICER. AFS makes the following representations and warranties on which the
\nBorrower is deemed to have relied in acquiring the Receivables and on which the
\nSecured Parties have relied in advancing funds to the Borrower under the Funding
\nAgreement. The representations speak as of the execution and delivery of this
\nAgreement and as of each Receivables Sale Date with respect to the Receivables
\nsold on such date, and shall survive the sale of the Receivables to the Borrower
\nand the pledge thereof to the Funding Agent on behalf of the Secured Parties.<\/p>\n
(i) ORGANIZATION AND GOOD STANDING. AFS has been duly organized and
\n is validly existing and in good standing under the laws of its jurisdiction
\n of organization, with power, authority and legal right to own its
\n properties and to conduct its business as such properties are currently
\n owned and such business is currently conducted, and<\/p>\n
34<\/p>\n
had at all relevant times, and now has, power, authority and legal right to
\n enter into and perform its obligations under this Agreement;<\/p>\n
(ii) DUE QUALIFICATION. AFS is duly qualified to do business as a
\n foreign corporation in good standing and has obtained all necessary
\n licenses and approvals, in all jurisdictions in which the ownership or
\n lease of property or the conduct of its business (including the servicing
\n of the Receivables as required by this Agreement) requires or shall require
\n such qualification;<\/p>\n
(iii) POWER AND AUTHORITY. AFS has the power and authority to
\n execute and deliver this Agreement and the other Basic Agreements to which
\n it is a party and to carry out its terms and their terms, respectively, and
\n the execution, delivery and performance of this Agreement and the other
\n Basic Agreements to which it is a party have been duly authorized by the
\n Servicer by all necessary corporate action;<\/p>\n
(iv) BINDING OBLIGATION. This Agreement and the other Basic
\n Agreements to which AFS is a party shall constitute legal, valid and
\n binding obligations of AFS enforceable in accordance with their respective
\n terms, except as enforceability may be limited by bankruptcy, insolvency,
\n reorganization, or other similar laws affecting the enforcement of
\n creditors’ rights generally and by equitable limitations on the
\n availability of specific remedies, regardless of whether such
\n enforceability is considered in a proceeding in equity or at law;<\/p>\n
(v) ERISA. AFS is in compliance in all material respects with ERISA
\n and there is no lien of the Pension Benefit Guaranty Corporation on any of
\n the Receivables or Other Conveyed Property;<\/p>\n
(vi) NOT AN INVESTMENT COMPANY. AFS is not an “investment company”
\n within the meaning of the Investment Company Act of 1940, as amended, or is
\n exempt from all provisions of such Act;<\/p>\n
(vii) NO VIOLATION. The consummation of the transactions contemplated
\n by this Agreement and the other Basic Agreements to which AFS is a party,
\n and the fulfillment of the terms of this Agreement and the other Basic
\n Agreements to which AFS is a party, shall not conflict with, result in
\n any breach of any of the terms and provisions of, or constitute (with or
\n without notice or lapse of time) a default under, the articles of
\n incorporation or bylaws of AFS, or any indenture, agreement, mortgage, deed
\n of trust or other instrument to which AFS is a party or by which it is
\n bound, or result in the creation or imposition of any Lien upon any of its
\n properties pursuant to the terms of any such indenture, agreement,
\n mortgage, deed of trust or other instrument, other than this Agreement, or
\n violate any law, order, rule or regulation applicable to AFS of any court
\n or of any federal or state regulatory body,<\/p>\n
35<\/p>\n
administrative agency or other governmental instrumentality having
\n jurisdiction over AFS or any of its properties;<\/p>\n
(viii) NO PROCEEDINGS. There are no proceedings or investigations
\n pending or, to the knowledge of AFS threatened, against AFS, before any
\n court, regulatory body, administrative agency or other tribunal or
\n governmental instrumentality having jurisdiction over AFS or its properties
\n (A) asserting the invalidity of this Agreement or any of the other Basic
\n Agreements, (B) seeking to prevent the consummation of any of the
\n transactions contemplated by this Agreement or any of the other Basic
\n Agreements, (C) seeking any determination or ruling that might materially
\n and adversely affect the performance by AFS of its obligations under, or
\n the validity or enforceability of, this Agreement or any of the Basic
\n Agreements or (D) seeking to adversely affect the federal income tax or
\n other federal, state or local tax attributes of the transactions
\n contemplated by the Basic Agreements;<\/p>\n
(ix) NO CONSENTS. AFS is not required to obtain the consent of any
\n other party or any consent, license, approval or authorization, or
\n registration or declaration with, any governmental authority, bureau or
\n agency in connection with the execution, delivery, performance, validity or
\n enforceability of this Agreement which has not already been obtained.<\/p>\n
SECTION 8.2 LIABILITY OF SERVICER; INDEMNITIES.<\/p>\n
(a) The Servicer (in its capacity as such) shall be liable hereunder only
\nto the extent of the obligations in this Agreement specifically undertaken by
\nthe Servicer and the representations made by the Servicer.<\/p>\n
(b) The Servicer shall defend, indemnify and hold harmless the Borrower,
\nthe Funding Agent, the Secured Parties, the Backup Servicer, their respective
\nofficers, directors, agents and employees, from and against any and all costs,
\nexpenses, losses, damages, claims and liabilities, including reasonable fees and
\nexpenses of counsel and expenses of litigation arising out of or resulting from
\nthe use, ownership or operation by the Servicer or any Affiliate thereof of any
\nFinanced Vehicle.<\/p>\n
(c) The Servicer shall indemnify, defend and hold harmless the Borrower,
\nthe Funding Agent, the Secured Parties, the Backup Servicer, their respective
\nofficers, directors, agents and employees from and against any and all costs,
\nexpenses, losses, claims, damages, and liabilities to the extent that such cost,
\nexpense, loss, claim, damage, or liability arose out of, or was imposed upon the
\nBorrower, the Funding Agent, the Backup Servicer or the Secured Parties by
\nreason of the breach of this Agreement by the Servicer, the negligence,
\nmisfeasance, or bad faith of the Servicer in the performance of its duties under
\nthis Agreement, or by reason of reckless disregard of its obligations and duties
\nunder this Agreement.<\/p>\n
36<\/p>\n
(d) Indemnification under this Article shall include, without limitation,
\nreasonable fees and expenses of counsel and expenses of litigation. If the
\nServicer has made any indemnity payments pursuant to this Article and the
\nrecipient thereafter collects any of such amounts from others, the recipient
\nshall promptly repay such amounts collected to the Servicer, without interest.
\nThe indemnification obligations of the Servicer set forth in this Section 8.2
\nshall survive the termination of this Agreement and, with respect to any
\nServicer, shall survive the termination of such Servicer with respect to any act
\nor omission that occurs prior to such Servicer’s termination.<\/p>\n
SECTION 8.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
\nOF THE SERVICER OR BACKUP SERVICER.<\/p>\n
(a) For so long as AFS is the Seller and the Servicer, in the event of any
\nconflict between this Section 8.3 and Section 7.4, this Section 8.3 shall
\ncontrol. Any Person (A) into which the Servicer may be merged or consolidated,
\n(B) which may result from any merger or consolidation to which the Servicer
\nshall be a party or (C) which may succeed to the properties and assets of the
\nServicer substantially as a whole, which Person in any of the foregoing cases
\nexecutes an agreement of assumption to perform every obligation of the Servicer
\nunder this Agreement, shall be the successor to the Servicer hereunder without
\nthe execution or filing of any document or any further act by any of the parties
\nto this Agreement; PROVIDED, HOWEVER, that the Servicer shall not merge or
\nconsolidate with any other person, convey, transfer or lease substantially all
\nits assets as an entirety to another Person, or permit any other Person to
\nbecome the successor to the Servicer’s business except as expressly provided in
\nthis Section 8.3.<\/p>\n
(b) The Servicer shall be permitted to merge or consolidate with any other
\nperson, convey, transfer or lease substantially all its assets as an entirety to
\nanother Person, or permit another Person to become the successor to the
\nServicer’s business; provided (i) that such Person is a direct or indirect
\nwholly-owned subsidiary of AmeriCredit Corp.; and (ii) that, after giving effect
\nto such merger, consolidation, conveyance, transfer, lease or succession, the
\nsuccessor or surviving entity shall be capable of fulfilling the duties of the
\nServicer contained in this Agreement in the reasonable judgment of the Funding
\nAgent. <\/p>\n
(c) Except as described in clause (b) above, the Servicer shall not merge
\nor consolidate with any other person, convey, transfer or lease substantially
\nall its assets as an entirety to another Person, or permit any other Person to
\nbecome the successor to the Servicer’s business unless: (i) the Servicer shall
\nhave received the written consent of the Funding Agent and the Borrower prior to
\nentering into any such transaction, (ii) immediately after giving effect to such
\ntransaction, no representation or warranty made pursuant to Section 5.6 shall
\nhave been breached and no Servicer Termination Event, and no event which, after
\nnotice or lapse of time, or both, would become a Servicer Termination Event
\nshall have happened and be continuing, (iii) the Servicer shall have delivered
\nto the Funding Agent and the Rating Agencies an Officer’s Certificate and an
\nOpinion of Counsel each stating that such consolidation, merger or succession
\nand such agreement of assumption comply with this Section and that all
\nconditions precedent, if any, provided for in this Agreement relating to such
\ntransaction have been complied with, (iv) the Rating Agency Condition shall have<\/p>\n
37<\/p>\n
been satisfied with respect to such transaction and (v) the Servicer shall
\nhave delivered to the Funding Agent an Opinion of Counsel stating that, in
\nthe opinion of such counsel, either (A) all financing statements and
\ncontinuation statements and amendments thereto that are otherwise required
\nhereunder to be filed by the Servicer have been executed and filed that are
\nnecessary fully to preserve and protect the interest of the Borrower and the
\nFunding Agent, respectively, in the Receivables and reciting the details of
\nsuch filings or (B) no such action shall be necessary to preserve and protect
\nsuch interest. Notwithstanding anything herein to the contrary, the execution
\nof the foregoing agreement of assumption and compliance with clauses (i),
\n(ii), (iii), (iv) and (v) above shall be conditions to the consummation of
\nthe transactions referred to in clauses (a) or (c) above.<\/p>\n
(d) Any corporation (i) into which the Backup Servicer may be merged or
\nconsolidated, (ii) resulting from any merger or consolidation to which the
\nBackup Servicer shall be a party, (iii) which acquires by conveyance, transfer
\nor lease substantially all of the assets of the Backup Servicer, or (iv)
\nsucceeding to the business of the Backup Servicer, in any of the foregoing cases
\nshall execute an agreement of assumption to perform every obligation of the
\nBackup Servicer under this Agreement and, whether or not such assumption
\nagreement is executed, shall be the successor to the Backup Servicer under this
\nAgreement without the execution or filing of any paper or any further act on the
\npart of any of the parties to this Agreement, anything in this Agreement to the
\ncontrary notwithstanding; PROVIDED, HOWEVER, that nothing contained herein shall
\nbe deemed to release the Backup Servicer from any obligation.<\/p>\n
SECTION 8.4 LIMITATION ON LIABILITY OF THE SERVICER AND THE BACKUP
\nSERVICER. (a) Neither the Servicer, the Backup Servicer nor any of the
\ndirectors or officers or employees or agents of the Servicer or Backup Servicer
\nshall be under any liability to the Borrower or the Secured Parties, except as
\nprovided in this Agreement, for any action taken or for refraining from the
\ntaking of any action pursuant to this Agreement; PROVIDED, HOWEVER, that this
\nprovision shall not protect the Servicer, the Backup Servicer or any such person
\nagainst any liability that would otherwise be imposed by reason of a breach of
\nthis Agreement or willful misfeasance, bad faith or negligence in the
\nperformance of duties; PROVIDED FURTHER that this provision shall not affect any
\nliability to indemnify the Funding Agent, the Secured Parties and the Borrower
\nfor costs, taxes, expenses, claims, liabilities, losses or damages paid by the
\nFunding Agent, the Secured Parties and the Borrower. The Servicer, the Backup
\nServicer and any director, officer, employee or agent of the Servicer or Backup
\nServicer may rely in good faith on the written advice of counsel or on any
\ndocument of any kind prima facie properly executed and submitted by any Person
\nrespecting any matters arising under this Agreement.<\/p>\n
(b) Notwithstanding anything herein to the contrary, the Backup Servicer
\nshall not be liable for any obligation of the Servicer contained in this
\nAgreement, and the Funding Agent, the Borrower, the Seller, and the Secured
\nParties shall look only to the Servicer to perform such obligations.<\/p>\n
SECTION 8.5 DELEGATION OF DUTIES. The Servicer may delegate duties
\nunder this Agreement to an Affiliate of the Servicer with the prior written
\nconsent of the Borrower, the Funding<\/p>\n
38<\/p>\n
Agent (acting at the direction of the Required Banks) and the Backup
\nServicer. The Servicer also may at any time perform through sub-contractors
\nthe specific duties of (i) repossession of Financed Vehicles, (ii) tracking
\nFinanced Vehicles’ insurance and (iii) pursuing the collection of deficiency
\nbalances on certain Delinquent and Defaulted Receivables, in each case,
\nwithout the consent of the Funding Agent or the Borrower and may perform
\nother specific duties through such sub-contractors in accordance with
\nServicer’s customary servicing policies and procedures, with the prior
\nconsent of the Funding Agent and the Borrower; PROVIDED, HOWEVER, that no
\nsuch delegation or sub-contracting duties by the Servicer shall relieve the
\nServicer of its responsibility with respect to such duties. Neither AFS or
\nany party acting as Servicer hereunder shall appoint any subservicer
\nhereunder without the prior written consent of the Funding Agent (acting at
\nthe direction of the Required Banks), the Borrower, and the Backup Servicer.<\/p>\n
SECTION 8.6 SERVICER AND BACKUP SERVICER NOT TO RESIGN. Subject to the
\nprovisions of Section 8.3, neither the Servicer nor the Backup Servicer shall
\nresign from the obligations and duties imposed on it by this Agreement as
\nServicer or Backup Servicer except upon a determination that by reason of a
\nchange in legal requirements the performance of its duties under this
\nAgreement would cause it to be in violation of such legal requirements in a
\nmanner which would have a material adverse effect on the Servicer or the
\nBackup Servicer, as the case may be, and the Required Banks and the Borrower
\ndo not elect to waive the obligations of the Servicer or the Backup Servicer,
\nas the case may be, to perform the duties which render it legally unable to
\nact or to delegate those duties to another Person. Any such determination
\npermitting the resignation of the Servicer or Backup Servicer shall be
\nevidenced by an Opinion of Counsel to such effect delivered and acceptable to
\nthe Funding Agent and the Borrower. No resignation of the Servicer shall
\nbecome effective until the Backup Servicer or an entity acceptable to the
\nFunding Agent (at the direction of the Required Banks) and the Borrower shall
\nhave assumed the responsibilities and obligations of the Servicer. No
\nresignation of the Backup Servicer shall become effective until an entity
\nacceptable to the Funding Agent (at the direction of the Required Banks) and
\nthe Borrower shall have assumed the responsibilities and obligations of the
\nBackup Servicer; PROVIDED, HOWEVER, that in the event a successor Backup
\nServicer is not appointed within 60 days after the Backup Servicer has given
\nnotice of its resignation and has provided the Opinion of Counsel required by
\nthis Section 8.6, the Backup Servicer may petition a court for its removal.<\/p>\n
ARTICLE IX<\/p>\n
DEFAULT<\/p>\n
SECTION 9.1 SERVICER TERMINATION EVENT. For purposes of this Agreement,
\neach of the following shall constitute a “Servicer Termination Event”:<\/p>\n
(a) Any failure by the Servicer to deliver to the Funding Agent for
\ndistribution to the Secured Parties any proceeds or payment required to be so
\ndelivered under the terms of this Agreement that continues unremedied for a
\nperiod of two Business Days (one Business Day with<\/p>\n
39<\/p>\n
respect to payment of Repurchase Obligation Amounts) after written notice is
\nreceived by the Servicer from the Funding Agent or after discovery of such
\nfailure by a Responsible Officer of the Servicer;<\/p>\n
(b) Failure by the Servicer (i) to deliver to the Funding Agent the
\nServicer’s Determination Date Certificate by the fourth Business Day prior to
\nthe Distribution Date, which failure continues unremedied as of the close of
\nbusiness on the first to occur of the next Business Day after written notice is
\nreceived by the Servicer from the Funding Agent or the second Business Day prior
\nto the Distribution Date, or (ii) to observe its covenants and agreements set
\nforth in Section 8.3(a), (b) or (c);<\/p>\n
(c) Failure on the part of the Servicer duly to observe or perform any
\nother covenants or agreements of the Servicer set forth in this Agreement or any
\nother Basic Agreement, which failure continues unremedied for a period of 30
\ndays after knowledge thereof by the Servicer or after the date on which written
\nnotice of such failure shall have been given to the Servicer by the Funding
\nAgent (acting at the direction of the Required Banks) or the Borrower;<\/p>\n
(d) Any representation, warranty or statement of the Servicer made in this
\nAgreement or any other Basic Agreement or in any certificate, report or other
\nwriting delivered pursuant hereto or thereto shall prove to be incorrect in any
\nmaterial respect as of the time when the same shall have been made, and, within
\n30 days after knowledge thereof by the Servicer or after written notice thereof
\nshall have been given to the Servicer by the Funding Agent or the Borrower, the
\ncircumstances or condition in respect of which such representation, warranty or
\nstatement was incorrect shall not have been eliminated or otherwise cured;<\/p>\n
(e) The occurrence of an Insolvency Event with respect to the Servicer; or<\/p>\n
(f) Without duplication of any of the foregoing, a Termination Event shall
\nhave occurred and be continuing.<\/p>\n
SECTION 9.2 CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a Servicer
\nTermination Event shall occur and be continuing, the Funding Agent or the
\nRequired Banks or the Borrower (so long as no other Termination Event shall have
\nthen occurred and remain continuing), by notice given in writing to the Servicer
\n(and to the Funding Agent if given by the Required Banks), may terminate all of
\nthe rights and obligations of the Servicer under this Agreement. On or after
\nthe receipt by the Servicer of such written notice, all authority, power,
\nobligations and responsibilities of the Servicer under this Agreement
\nautomatically shall pass to, be vested in and become obligations and
\nresponsibilities of the Backup Servicer (or such other successor Servicer
\nappointed by the Funding Agent at the direction of the Required Banks, or by the
\nBorrower with the consent of the Required Banks); PROVIDED, HOWEVER, that the
\nsuccessor Servicer shall have no liability with respect to any obligation which
\nwas required to be performed by the terminated Servicer prior to the date that
\nthe successor Servicer becomes the Servicer or any claim of a third party based
\non any alleged action or inaction of the terminated Servicer. The successor
\nServicer is authorized and empowered by this Agreement to execute and deliver,
\non behalf of the terminated Servicer, as attorney-in-fact or<\/p>\n
40<\/p>\n
otherwise, any and all documents and other instruments and to do or
\naccomplish all other acts or things necessary or appropriate to effect the
\npurposes of such notice of termination, whether to complete the sale and
\nendorsement of the Receivables and the Other Conveyed Property and related
\ndocuments to show the Borrower as lienholder or secured party on the related
\nLien Certificates, or otherwise. The terminated Servicer agrees to cooperate
\nwith the successor Servicer in effecting the termination of the
\nresponsibilities and rights of the terminated Servicer under this Agreement,
\nincluding, without limitation, the transfer to the successor Servicer for
\nadministration by it of all cash amounts that shall at the time be held by
\nthe terminated Servicer for deposit, or have been deposited by the terminated
\nServicer, in the Collection Account or thereafter received with respect to
\nthe Receivables and the delivery to the successor Servicer of all Receivable
\nFiles, Monthly Records and Collection Records and a computer tape in readable
\nform as of the most recent Business Day containing all information necessary
\nto enable the successor Servicer or a successor Servicer to service the
\nReceivables and the Other Conveyed Property. If requested by the Funding
\nAgent or by the Borrower with the consent of the Funding Agent, the successor
\nServicer shall terminate the Lockbox Agreement and direct the Obligors to
\nmake all payments under the Receivables directly to the successor Servicer
\n(in which event the successor Servicer shall process such payments in
\naccordance with Section 4.2(e)), or to a lockbox established by the successor
\nServicer at the direction of the Funding Agent or by the Borrower with the
\nconsent of the Funding Agent, at the successor Servicer’s expense. The
\nterminated Servicer shall grant the Funding Agent, the Borrower, the
\nsuccessor Servicer and the Required Banks reasonable access to the terminated
\nServicer’s premises and to its equipment, systems and personnel, at the
\nterminated Servicer’s expense.<\/p>\n
SECTION 9.3 APPOINTMENT OF SUCCESSOR. (a) On and after the time the
\nServicer receives a notice of termination pursuant to Section 9.2, or upon
\nthe resignation of the Servicer pursuant to Section 8.6, the Backup Servicer
\n(unless the Funding Agent, at the direction of the Required Banks or the
\nBorrower with the consent of the Required Banks, shall have exercised its
\noption pursuant to Section 9.3 (b) to appoint an alternate successor
\nServicer) shall be the successor in all respects to the Servicer in its
\ncapacity as servicer under this Agreement and the transactions set forth or
\nprovided for in this Agreement, and shall be subject to all the rights,
\nresponsibilities, restrictions, duties, liabilities and termination
\nprovisions relating thereto placed on the Servicer by the terms and
\nprovisions of this Agreement except as otherwise stated herein. The Funding
\nAgent and such successor shall take such action, consistent with this
\nAgreement, as shall be necessary to effect any such succession. If a
\nsuccessor Servicer is acting as Servicer hereunder, it shall be subject to
\ntermination under Section 9.2 upon the occurrence of any Servicer Termination
\nEvent applicable to it as Servicer.<\/p>\n
(b) The Funding Agent, at the direction of the Required Banks, may
\nexercise at any time its right to appoint as successor to the Servicer a Person
\nother than the Person serving as Backup Servicer at the time, and shall have no
\nliability to AFS, the Seller, the Person then serving as Backup Servicer, any
\nSecured Party or any other Person if it does so. Notwithstanding the above, if
\nthe Backup Servicer shall be legally unable or unwilling to act as Servicer, the
\nBackup Servicer, the Funding Agent, acting at the direction of the Required
\nBanks, or the Borrower with the consent of the Required Banks may petition a
\ncourt of competent jurisdiction to appoint any Eligible Servicer<\/p>\n
41<\/p>\n
as the successor to the Servicer. Pending appointment pursuant to the
\npreceding sentence, the Backup Servicer shall act as successor Servicer
\nunless it is legally unable to do so, in which event the outgoing Servicer
\nshall continue to act as Servicer until a successor has been appointed and
\naccepted such appointment. Subject to Section 8.6, no provision of this
\nAgreement shall be construed as relieving the Backup Servicer of its
\nobligation to succeed as successor Servicer upon the termination of the
\nServicer pursuant to Section 9.2 or the resignation of the Servicer pursuant
\nto Section 8.6. If upon the termination of the Servicer pursuant to Section
\n9.2 or the resignation of the Servicer pursuant to Section 8.6, the Funding
\nAgent, acting at the direction of the Required Banks, or the Borrower with
\nthe consent of the Required Banks appoints a successor Servicer other than
\nthe Backup Servicer, the Backup Servicer shall not be relieved of its duties
\nas Backup Servicer hereunder.<\/p>\n
(c) Any successor Servicer shall be entitled to such compensation
\n(whether payable out of the Collection Account or otherwise, including,
\nwithout limitation, any Supplemental Servicing Fee) as the Servicer would
\nhave been entitled to under this Agreement if the Servicer had not resigned
\nor been terminated hereunder. If any successor Servicer is appointed as a
\nresult of the Backup Servicer’s refusal (in breach of the terms of this
\nAgreement) to act as Servicer although it is legally able to do so, the
\nFunding Agent, the Borrower, and such successor Servicer may agree on
\nreasonable additional compensation to be paid to such successor Servicer by
\nthe Backup Servicer, which additional compensation shall be paid by such
\nbreaching Backup Servicer in its individual capacity and solely out of its
\nown funds. If any successor Servicer is appointed for any reason other than
\nthe Backup Servicer’s refusal to act as Servicer although legally able to do
\nso, the Funding Agent, the Borrower (so long as no Termination Event other
\nthan a Servicer Termination Event shall have then occurred and remain
\ncontinuing), and such successor Servicer may agree on additional compensation
\nto be paid to such successor Servicer, subject to satisfaction of the Rating
\nAgency Condition, which additional compensation shall be payable as provided
\nin the Section 6.8 hereof. In addition, any successor Servicer shall be
\nentitled to reasonable transition expenses incurred in acting as successor
\nServicer.<\/p>\n
SECTION 9.4 NOTIFICATION TO SECURED PARTIES. Upon any termination of, or
\nappointment of a successor to, the Servicer, the Funding Agent shall give prompt
\nwritten notice thereof to each Secured Party, to the Borrower, and to the Rating
\nAgencies.<\/p>\n
SECTION 9.5 WAIVER OF PAST DEFAULTS. The Required Banks, or the Borrower
\nwith the consent of the Required Banks may waive any default by the Servicer in
\nthe performance of its obligations hereunder and its consequences. Upon any
\nsuch waiver of a past default, such default shall cease to exist, and any
\nServicer Termination Event arising therefrom shall be deemed to have been
\nremedied for every purpose of this Agreement; PROVIDED, HOWEVER, that no such
\nwaiver shall extend to any subsequent or other default or impair any right
\nconsequent thereto.<\/p>\n
ARTICLE X<\/p>\n
ADMINISTRATIVE DUTIES OF THE SERVICER<\/p>\n
42<\/p>\n
SECTION 10.1 ADMINISTRATIVE DUTIES. <\/p>\n
(a) DUTIES WITH RESPECT TO THE BORROWER.<\/p>\n
(i) Notwithstanding anything in this Agreement or any of the Basic
\nAgreements to the contrary, the Servicer shall be responsible for promptly
\nnotifying, in writing, the Borrower and the Funding Agent in the event that any
\nwithholding tax is imposed on the Borrower’s payments (or allocations of income)
\nto any Secured Party. Any such notice shall be in writing and specify the
\namount of any withholding tax required to be withheld by the Funding Agent
\npursuant to such provision.<\/p>\n
(ii) The Servicer shall perform the duties of the Servicer specified herein
\nand any other duties expressly required to be performed by the Servicer under
\nany other Basic Agreement.<\/p>\n
(iii) Notwithstanding anything to the contrary in this Agreement, except
\nas expressly provided herein or in the other Basic Agreements, the Servicer,
\nin its capacity hereunder, shall not be obligated to, and shall not, (1) take
\nany action that the Borrower directs the Servicer not to take on its behalf
\nor (2) in connection with its duties hereunder assume any indemnification
\nobligation of any other Person.<\/p>\n
SECTION 10.2 RECORDS. The Servicer shall maintain appropriate books of
\naccount and records relating to services performed under this Agreement, which
\nbooks of account and records shall be accessible for inspection by the Borrower
\nat any time during normal business hours.<\/p>\n
SECTION 10.3 ADDITIONAL INFORMATION TO BE FURNISHED TO THE BORROWER The
\nServicer shall furnish to the Borrower from time to time such additional
\ninformation regarding the Collateral as the Borrower shall reasonably request.<\/p>\n
ARTICLE XI<\/p>\n
MISCELLANEOUS PROVISIONS<\/p>\n
SECTION 11.1 AMENDMENT. This Agreement may be amended from time to time
\nby the parties hereto, with the consent of the Funding Agent (such consent not
\nto be unreasonably withheld), but without the consent of any of the Secured
\nParties, to cure any ambiguity, to correct or supplement any provisions in this
\nAgreement, to comply with any changes in the Uniform Commercial Code, or to make
\nany other provisions with respect to matters or questions arising under this
\nAgreement which shall not be inconsistent with the provisions of this Agreement
\nor the other Basic Agreements or the transactions contemplated hereby or
\nthereby; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
\nOpinion of Counsel delivered to the Funding Agent, adversely affect in any
\nmaterial respect the interests of any Secured Party.<\/p>\n
43<\/p>\n
This Agreement may also be amended from time to time by the parties
\nhereto, with the consent of the Funding Agent (as directed by the Required
\nBanks) for the purpose of adding any provisions to or changing in any manner
\nor eliminating any of the provisions of this Agreement or of modifying in any
\nmanner the rights of the Secured Parties; PROVIDED, however, that no such
\namendment shall (a) increase or reduce in any manner the amount of, or
\naccelerate or delay the timing of, collections of payments on Receivables or
\ndistributions that shall be required to be made for the benefit of the
\nSecured Parties, (b) reduce the aforesaid percentage of the outstanding
\nprincipal amount of the VFN, the Holders of which are required to consent to
\nany such amendment, (c) amend this Section, or (d) increase the funding
\namount of the VFN, without the consent of all the Secured Parties.<\/p>\n
Promptly after the execution of any such amendment or consent, the Funding
\nAgent shall furnish written notification of the substance of such amendment or
\nconsent to each Secured Party and the Rating Agencies.<\/p>\n
It shall not be necessary for the consent of Secured Parties pursuant to
\nthis Section to approve the particular form of any proposed amendment or
\nconsent, but it shall be sufficient if such consent shall approve the substance
\nthereof. The manner of obtaining such consents (and any other consents of
\nSecured Parties provided for in this Agreement) and of evidencing the
\nauthorization of any action by Secured Parties shall be subject to such
\nreasonable requirements as the Funding Agent may prescribe.<\/p>\n
Prior to the execution of any amendment to this Agreement, the Funding
\nAgent shall be entitled to receive and rely upon an Opinion of Counsel stating
\nthat the execution of such amendment is authorized or permitted by this
\nAgreement and the Opinion of Counsel referred to in the first paragraph of this
\nSection 11.1 has been delivered. The Funding Agent, the Borrower, and the
\nBackup Servicer may, but shall not be obligated to, enter into any such
\namendment which affects the Borrower’s, the Funding Agent’s or the Backup
\nServicer’s, as applicable, own rights, duties or immunities under this Agreement
\nor otherwise.<\/p>\n
SECTION 11.2 PROTECTION OF TITLE. (a) The Seller shall execute and file
\nsuch financing statements and cause to be executed and filed such continuation
\nstatements, all in such manner and in such places as may be required by law
\nfully to preserve, maintain and protect the interest of the Borrower in the
\nConveyed Property and in the proceeds thereof. The Seller shall deliver (or
\ncause to be delivered) to the Borrower and the Funding Agent file-stamped copies
\nof, or filing receipts for, any document filed as provided above, as soon as
\navailable following such filing.<\/p>\n
(b) Without limiting any other provision of this Agreement, neither the
\nSeller nor the Servicer shall change its name, identity or corporate structure
\nin any manner that would, could or might make any financing statement or
\ncontinuation statement filed in accordance with paragraph (a) above seriously
\nmisleading within the meaning of Section 9-402 (7) of the Relevant UCC, unless
\nit shall have given the Funding Agent and the Borrower at least 15 days’ prior
\nwritten notice thereof and shall have promptly filed appropriate amendments to
\nall previously filed financing statements or<\/p>\n
44<\/p>\n
continuation statements. Promptly upon such filing, the Seller or the
\nServicer, as the case may be, shall deliver an Opinion of Counsel in form and
\nsubstance reasonably satisfactory to the Funding Agent, stating either (A)
\nall financing statements and continuation statements have been executed and
\nfiled that are otherwise required hereunder to be filed by the Seller or the
\nServicer, as applicable, that are necessary fully to preserve and protect the
\ninterest of the Borrower in the Receivables, and reciting the details of such
\nfilings or referring to prior opinions of Counsel in which such details are
\ngiven, or (B) no such action shall be necessary to preserve and protect such
\ninterest.<\/p>\n
(c) Each of the Seller and the Servicer shall have an obligation to give
\nthe Funding Agent and the Borrower at least 60 days’ prior written notice of any
\nrelocation of its principal executive office if, as a result of such relocation,
\nthe applicable provisions of the Relevant UCC would require the filing of any
\namendment of any previously filed financing or continuation statement or of any
\nnew financing statement and shall promptly file any such amendment. The
\nServicer shall at all times maintain each office from which it shall service
\nReceivables, and its principal executive office, within the United States of
\nAmerica.<\/p>\n
(d) The Servicer shall maintain accounts and records as to each Receivable
\naccurately and in sufficient detail to permit (i) the reader thereof to know at
\nany time the status of such Receivable, including payments and recoveries made
\nand payments owing (and the nature of each) and (ii) reconciliation between
\npayments or recoveries on (or with respect to) each Receivable and the amounts
\nfrom time to time deposited in the Collection Account in respect of such
\nReceivable.<\/p>\n
(e) The Servicer shall maintain its computer systems so that, from and
\nafter the time of sale under this Agreement of the Receivables to the Borrower,
\nthe Servicer’s master computer records (including any backup archives) that
\nrefer to a Receivable shall indicate clearly that the Borrower owns such
\nReceivable and that such Receivable has been pledged by the Borrower to the
\nFunding Agent for the benefit of the Secured Parties. Indication of the
\nBorrower’s ownership of a Receivable shall be deleted from or modified on the
\nServicer’s computer systems when, and only when, the related Receivable shall
\nhave been paid in full or repurchased.<\/p>\n
(f) If at any time the Seller or the Servicer shall propose to sell, grant
\na security interest in or otherwise transfer any interest in automotive
\nreceivables to any prospective purchaser, lender or other transferee, the Seller
\nor the Servicer, as applicable, shall give to such prospective purchaser, lender
\nor other transferee computer tapes, records or printouts (including any restored
\nfrom backup archives) that, if they shall refer in any manner whatsoever to any
\nReceivable, shall indicate clearly that such Receivable has been sold and is
\nowned by the Borrower and has been pledged by the Borrower to the Funding Agent
\nfor the benefit of the Secured Parties.<\/p>\n
(g) Upon request, the Servicer shall furnish to the Funding Agent, within
\nfive Business Days, a list of all Receivables (by contract number and name of
\nObligor) then held as part of the Conveyed Property, together with a
\nreconciliation of such list to the Schedule of Receivables and to each of the
\nServicer’s Determination Date Certificates furnished before such request.<\/p>\n
45<\/p>\n
SECTION 11.3 NOTICES. All demands, notices and communications upon or
\nto the Seller, the Servicer, the Borrower, the Funding Agent, the Secured
\nParties or the Rating Agencies under this Agreement shall be in writing,
\npersonally delivered, or mailed by overnight courier, express mail or
\ncertified mail, return receipt requested, and shall be deemed to have been
\nduly given upon receipt by such Person at its address specified in Annex A
\nhereto.<\/p>\n
SECTION 11.4 ASSIGNMENT. This Agreement shall inure to the benefit of and
\nbe binding upon the parties hereto and their respective successors and permitted
\nassigns. Notwithstanding anything to the contrary contained herein, except as
\nprovided in Sections 7.4 and 8.3 and as provided in the provisions of this
\nAgreement concerning the resignation of the Servicer, this Agreement may not be
\nassigned by the Seller or the Servicer without the prior written consent of the
\nFunding Agent, the Borrower, and the Backup Servicer.<\/p>\n
SECTION 11.5 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
\nAgreement are solely for the benefit of the parties hereto and their respective
\nsuccessors and permitted assigns. Except as expressly stated otherwise herein,
\nany right of the Funding Agent to direct, appoint, consent to, approve of, or
\ntake any action under this Agreement, shall be a right exercised by the Funding
\nAgent in its sole and absolute discretion. The Funding Agent may disclaim any
\nof its rights and powers under this Agreement. Nothing in this Agreement,
\nwhether express or implied, shall be construed to give to any other Person any
\nlegal or equitable right, remedy or claim in the Property or under or in respect
\nof this Agreement or any covenants, conditions or provisions contained herein.<\/p>\n
SECTION 11.6 SEVERABILITY. Any provision of this Agreement that is
\nprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
\nbe ineffective to the extent of such prohibition or unenforceability without
\ninvalidating the remaining provisions hereof, and any such prohibition or
\nunenforceability in any jurisdiction shall not invalidate or render
\nunenforceable such provision in any other jurisdiction.<\/p>\n
SECTION 11.7 SEPARATE COUNTERPARTS. This Agreement may be executed by the
\nparties hereto in separate counterparts, each of which when so executed and
\ndelivered shall be an original, but all such counterparts shall together
\nconstitute but one and the same instrument.<\/p>\n
SECTION 11.8 HEADINGS. The headings of the various Articles and Sections
\nherein are for convenience of reference only and shall not define or limit any
\nof the terms or provisions hereof.<\/p>\n
SECTION 11.9 ASSIGNMENT TO FUNDING AGENT. The Seller hereby acknowledges
\nand consents to any mortgage, pledge, assignment and grant of a security
\ninterest by the Borrower to the Funding Agent for the benefit of the Secured
\nParties of all right, title and interest of the Borrower in, to and under the
\nReceivables and Other Conveyed Property, and\/or the assignment of any or all of
\nthe Borrower’s rights and obligations hereunder to the Funding Agent. All
\nrights of the Borrower hereunder may be exercised by the Funding Agent for the
\nbenefit of the Secured Parties or their assignees to the extent of their
\nrespective rights pursuant to such assignments. Any assignee<\/p>\n
46<\/p>\n
(including, but not limited to, any Secured Party) is hereby intended by the
\nparties hereto to be a third-party beneficiary of this Agreement.<\/p>\n
SECTION 11.10 CHASE ROLES; LIMITATION OF LIABILITY. The parties expressly
\nacknowledge and consent to The Chase Manhattan Bank acting in the capacities of
\nFunding Agent, Backup Servicer, Administrative Agent and APA Bank. The Chase
\nManhattan Bank may, in any such or other capacities, discharge its separate
\nfunctions fully, without hinderance or regard to conflict of interest
\nprinciples, duty of loyalty principles or other breach of fiduciary duties to
\nthe extent that any such conflict or breach arises from the performance by The
\nChase Manhattan Bank of express duties set forth in this Agreement or in any
\nother Basic Agreement in any of such capacities, all of which defenses, claims
\nor assertions are hereby expressly waived by the other parties hereto and the
\nSecured Parties except in the case of gross negligence and willful misconduct by
\nThe Chase Manhattan Bank. Without limiting any other provision hereof, the
\nparties further expressly acknowledge and agree that in no event shall The Chase
\nManhattan Bank be liable under or in connection with this Agreement or any other
\nBasic Agreement for indirect, special or consequential losses or damages of any
\nkind, including lost profits, even if advised of the possibility thereof and
\nregardless of the form of action by which such losses or damages may be claimed.<\/p>\n
SECTION 11.11 NON-PETITION COVENANTS. (a) Notwithstanding any prior
\ntermination of this Agreement, the Servicer, the Seller, the Funding Agent, and
\neach Secured Party shall not, prior to the date which is one year and one day
\nafter the later of (i) termination of this Agreement with respect to the
\nBorrower and (ii) the payment in full of all obligation due and owing by the
\nBorrower to the Funding Agent and the Secured Parties under the Basic
\nAgreements, acquiesce, petition or otherwise invoke or cause the Borrower to
\ninvoke the process of any court or government authority for the purpose of
\ncommencing or sustaining a case against the Borrower under any federal or state
\nbankruptcy, insolvency or similar law or appointing a receiver, liquidator,
\nassignee, trustee, custodian, sequestrator or other similar official of the
\nBorrower or any substantial part of its property, or ordering the winding up or
\nliquidation of the affairs of the Borrower.<\/p>\n
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
\nthe Funding Agent, and each Secured Party shall not, prior to the date that is
\none year and one day after the termination of this Agreement with respect to the
\nSeller, acquiesce to, petition or otherwise invoke or cause the Seller to invoke
\nthe process of any court or government authority for the purpose of commencing
\nor sustaining a case against the Seller under any federal or state bankruptcy,
\ninsolvency or similar law, appointing a receiver, liquidator, assignee, trustee,
\ncustodian, sequestrator, or other similar official of the Seller or any
\nsubstantial part of its property, or ordering the winding up or liquidation of
\nthe affairs of the Seller.<\/p>\n
(c) Notwithstanding anything contained herein to the contrary, this
\nAgreement has been executed and delivered by The Chase Manhattan Bank, not in
\nits individual capacity but solely in its capacities as Funding Agent and as
\nBackup Servicer and in no event shall The Chase Manhattan Bank have any
\nliability for the representations, warranties, covenants, agreements or other
\nobligations<\/p>\n
47<\/p>\n
of the Borrower hereunder or in any of the certificates, notices or
\nagreements delivered pursuant hereto, as to all of which recourse shall be
\nhad solely to the assets of the Borrower.<\/p>\n
SECTION 11.12 INDEPENDENCE OF THE SERVICER. For all purposes of this
\nAgreement, the Servicer shall be an independent contractor and shall not be
\nsubject to the supervision of the Borrower, the Funding Agent or the Backup
\nServicer with respect to the manner in which it accomplishes the performance of
\nits obligations hereunder. Unless expressly authorized by this Agreement, the
\nServicer shall have no authority to act for or represent the Borrower in any way
\nand shall not otherwise be deemed an agent of the Borrower.<\/p>\n
SECTION 11.13 NO JOINT VENTURE. Nothing contained in this Agreement (i)
\nshall constitute the Servicer or the Borrower as members of any partnership,
\njoint venture, association, syndicate, unincorporated business or other separate
\nentity, (ii) shall be construed to impose any liability as such on any of them
\nor (iii) shall be deemed to confer on any of them and express, implied or
\napparent authority to incur any obligation or liability on behalf of the others.<\/p>\n
SECTION 11.14 CONSENTS TO JURISDICTION. Each of the parties hereto
\nirrevocably submits to the jurisdiction of the United States District Court for
\nthe Southern District of New York, any court in the State of New York located in
\nthe city and county of New York, and any appellate court from any thereof, in
\nany action, suit or proceeding brought against it and related to or in
\nconnection with this Security Agreement, the other Basic Agreements or the
\ntransactions contemplated hereunder or thereunder or for recognition or
\nenforcement of any judgment and each of the parties hereto irrevocably and
\nunconditionally agrees that all claims in respect of any such suit or action or
\nproceeding may be heard or determined in such New York State court or, to the
\nextent permitted by law, in such federal court. Each of the parties hereto
\nagrees that a final judgment in any such action, suit or proceeding shall be
\nconclusive and may be enforced in other jurisdictions by suit on the judgment or
\nin any other manner provided by law. To the extent permitted by applicable law,
\neach of the parties hereby waives and agrees not to assert by way of motion, as
\na defense or otherwise in any such suit, action or proceeding, any claim that it
\nis not personally subject to the jurisdiction of such courts, that the suit,
\naction or proceeding is brought in an inconvenient forum, that the venue of the
\nsuit, action or proceeding is improper or that this Security Agreement or any of
\nthe other Basic Agreements or the subject matter hereof or thereof may not be
\nlitigated in or by such courts. The Borrower hereby irrevocably appoints and
\ndesignates The Prentice-Hall Corporation System, 500 Central Avenue, Albany, New
\nYork 12206-2290 as its true and lawful attorney and duly authorized agent for
\nacceptance of service of legal process. The Borrower agrees that service of
\nsuch process upon such Person shall constitute personal service of such process
\nupon it. Nothing contained in this Security Agreement shall limit or affect the
\nrights of any party hereto to serve process in any other manner permitted by law
\nor to start legal proceedings relating to any of the Basic Agreements against
\nthe Seller, the Servicer, the Borrower or their respective property in the
\ncourts of any jurisdiction.<\/p>\n
SECTION 11.15 TRIAL BY JURY WAIVED. EACH OF THE PARTIES HERETO WAIVES, TO
\nTHE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
\nRESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
\nCONNECTION WITH THIS SECURITY<\/p>\n
48<\/p>\n
AGREEMENT, ANY OF THE OTHER BASIC AGREEMENTS OR ANY OF THE TRANSACTIONS
\nCONTEMPLATED HEREUNDER OR THEREUNDER. EACH OF THE PARTIES HERETO (A)
\nCERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
\nREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
\nEVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
\nACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT
\nAND THE OTHER BASIC AGREEMENTS TO WHICH IT IS A PARTY, BY AMONG OTHER THINGS,
\nTHIS WAIVER.<\/p>\n
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
\nACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
\nAND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
\nSUCH LAWS.<\/p>\n
49<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
\nduly executed and delivered by their respective duly authorized officers as of
\nthe day and the year first above written.<\/p>\n
CP FUNDING CORP., Borrower<\/p>\n
by______________________________
\n Name: Preston A. Miller
\n Title: Senior Vice President
\n and Treasurer<\/p>\n
AMERICREDIT FINANCIAL SERVICES, INC.,
\n Seller<\/p>\n
by______________________________
\n Name: Preston A. Miller
\n Title: Senior Vice President
\n and Treasurer<\/p>\n
AMERICREDIT FINANCIAL SERVICES, INC.,
\n Servicer<\/p>\n
by______________________________
\n Name: Preston A. Miller
\n Title: Senior Vice President
\n and Treasurer<\/p>\n
THE CHASE MANHATTAN BANK,
\n not in its individual capacity but solely
\n as Backup Servicer<\/p>\n
by______________________________
\n Name:<\/p>\n
Title: <\/p>\n
THE CHASE MANHATTAN BANK, as Funding
\n Agent on behalf of the Secured Parties,<\/p>\n
by______________________________
\n Name:
\n Title<\/p>\n
SCHEDULE A<\/p>\n
SCHEDULE OF RECEIVABLES<\/p>\n
THIS SCHEDULE INTENTIONALLY OMITTED<\/p>\n
SCHEDULE B<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE SELLER<\/p>\n
(a) GENERAL CHARACTERISTICS.<\/p>\n
Each Receivable:<\/p>\n
(i) has been originated in the United States by a dealer for the
\n retail sale of a Financed Vehicle in the ordinary course of such
\n dealer’s business, which dealer has all necessary licenses and permits
\n to originate Receivables in the state where such dealer is located, has
\n been fully and properly executed by the parties thereto, and has been
\n purchased from the dealer by the Seller under an existing Dealer
\n Agreement or validly assigned by a dealer to the Seller;<\/p>\n
(ii) has created or shall create a valid, subsisting and enforceable
\n first priority perfected security interest in favor of the Seller in the
\n related Financed Vehicle (which security interest has been assigned to
\n the Borrower and shall be validly assignable by the Borrower to the
\n Funding Agent on behalf of the Secured Parties), except as
\n enforceability may be limited by bankruptcy, insolvency, reorganization
\n or similar laws affecting the enforcement of creditors’ rights generally;<\/p>\n
(iii) contains customary and enforceable provisions (except as
\n enforceability may be limited by bankruptcy, insolvency, reorganization
\n or similar laws affecting the enforcement of creditors’ rights
\n generally) such that the rights and remedies of the holder thereof shall
\n be adequate for realization against the collateral of the benefits of
\n the security;<\/p>\n
(iv) provides for level monthly payments (PROVIDED that the payment in
\n the first or last month in the life of the Receivable may be minimally
\n different from the level payment) that fully amortize the amount
\n financed over the original contractual term and yield interest at the
\n annual percentage rate;<\/p>\n
(v) provides for, in the event that such contract is prepaid, a
\n prepayment that fully pays the principal balance and includes accrued
\n but unpaid interest through the date of prepayment in an amount at least
\n equal to the annual percentage rate; and <\/p>\n
(vi) has not been amended, or rewritten or collections with respect
\n thereto deferred or waived.<\/p>\n
(b) COMPLIANCE WITH LAW. Each Receivable and the sale of the related
\n Financed Vehicle complied at the time it was originated or made, and at
\n the date such Receivable is sold by the Seller to the Borrower,
\n complies, in all material respects, with all requirements of applicable<\/p>\n
Federal, state and local laws and regulations thereunder, including,
\n without limitation, usury laws, the Federal Truth-in-Lending Act, the
\n Equal Credit Opportunity Act, the Federal Trade Commission Act, the
\n Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
\n Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal
\n Reserve Board’s Regulations B and Z, the Federal Trade Commission Credit
\n Practices Rule, state unfair and deceptive trade practice laws, and state
\n adaptations of the National Consumer Act and of the Uniform Consumer
\n Credit Code, and any other applicable consumer credit, equal credit
\n opportunity and disclosure laws.<\/p>\n
(c) NO FRAUD. Each Receivable was originated by a dealer and was sold by
\n the dealer to the Seller without any fraud or misrepresentation by the
\n dealer.<\/p>\n
(d) BINDING OBLIGATION. Each Receivable represents the genuine, legal,
\n valid and binding payment obligation in writing of the Obligor, enforceable
\n by the holder thereof in accordance with its terms (except as
\n enforceability may be limited by bankruptcy, insolvency, reorganization or
\n similar laws affecting the enforcement of creditors’ rights generally) and
\n all parties to each Receivable had full legal capacity to execute and
\n deliver such Receivable and all other documents related thereto and to
\n grant the security interest purported to be granted thereby.<\/p>\n
(e) NO GOVERNMENT OBLIGOR. No Receivable is due from the United States of
\n America or any state or local government or from any agency, department or
\n instrumentality of the United States of America, any state or local
\n government.<\/p>\n
(f) NO OBLIGOR BANKRUPTCY. At the Relevant Cutoff Date no Obligor had been
\n identified on the records of the Seller as being the subject of a current
\n bankruptcy proceeding.<\/p>\n
(g) SCHEDULE OF RECEIVABLES. The information set forth in the Schedule of
\n Receivables has been produced from the Seller’s electronic ledger and was
\n true and correct in all material respects on the Relevant Cutoff Date, and
\n is a complete and accurate description, on the relevant Receivables Sale
\n Date, of the Receivables sold to the Borrower on such date; and on or prior
\n to the relevant Receivables Sale Date, the Seller has appropriately marked
\n its computer records to indicate the sale to the Borrower of the
\n Receivables sold on such date.<\/p>\n
(h) CERTAIN CHARACTERISTICS OF RECEIVABLES.<\/p>\n
Each Receivable:<\/p>\n
(i) has a remaining maturity, as of the Relevant Cutoff Date, of not more
\n than 60 months;<\/p>\n
(ii) each Receivable has an original maturity of not more than 60 months;<\/p>\n
B-2<\/p>\n
(iii) each Receivable has a remaining Principal Balance as of the
\n Relevant Cutoff Date of not more than $30,000;<\/p>\n
(iv) no Receivable is more than 30 days past due as of the Relevant Cutoff
\n Date; and<\/p>\n
(v) no funds have been advanced by the Seller, any dealer, or anyone
\n acting on behalf of any of them in order to cause any Receivable to
\n qualify under clause (iv) above.<\/p>\n
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied, subordinated
\n or rescinded, nor shall any Financed Vehicle have been released from the
\n security interests granted by the related Contract in whole or in part.<\/p>\n
(j) NO WAIVER. No provision of any Receivable has been waived.<\/p>\n
(k) NO DEFENSES. Except for the security interests in favor of the Seller
\n and the Borrower, the Receivables are free and clear of all security
\n interests, liens, charges, and encumbrances and to the best knowledge of
\n the Seller no right of rescission, setoff, counterclaim or defense has been
\n asserted or threatened with respect to any Receivable.<\/p>\n
(l) NO LIENS. No liens or claims have been filed for work, labor or
\n materials relating to a Financed Vehicle that are liens prior to or equal
\n or coordinate with, the security interest in the Financed Vehicle granted
\n by the Receivable.<\/p>\n
(m) NO DEFAULT. No default, breach, violation or event permitting
\n acceleration under the terms of any Receivable has occurred, and the Seller
\n has not waived any of the foregoing.<\/p>\n
(n) INSURANCE. The Obligor under each Receivable has obtained physical
\n damage and theft insurance covering the Financed Vehicle, and is required
\n under the terms of the Receivable to maintain such insurance.<\/p>\n
(o) TITLE. (i) Immediately prior to the sale of the subject Receivables,
\n the Seller had, and has conveyed to the Borrower, good and marketable title
\n to each Receivable free and clear of all liens, encumbrances, security
\n interests and rights of others, and (ii) the sale and assignment of the
\n Receivables to the Borrower has been perfected under the Relevant UCC.<\/p>\n
(p) RECEIVABLE FILES COMPLETE. There exists a Receivable File pertaining
\n to each Receivable and such Receivable File contains (1) a fully executed
\n original of the Receivable, (2) the original executed credit application,
\n or a copy thereof and (3) the original Lien Certificate or application
\n therefor. Each of such documents which is required to be signed by the
\n Obligor has been signed by the Obligor in the appropriate spaces. All
\n blanks on any form have been properly filled in and each form has otherwise
\n been correctly prepared. The complete Receivable File for each Receivable
\n currently is in the possession of the Custodian.<\/p>\n
B-3<\/p>\n
(q) LAWFUL ASSIGNMENT. No Receivable has been originated in, or is
\n subject to the laws of, any jurisdiction under which the sale, transfer and
\n assignment of such Receivable shall be unlawful, void or voidable.<\/p>\n
(r) ALL FILINGS MADE. All filings (including, without limitation, UCC
\n filings) necessary in any jurisdiction to give the Borrower a first
\n priority perfected security interest in the Receivables have been made.<\/p>\n
(s) ONE ORIGINAL. There is in existence one, and only one, original
\n executed copy of each Receivable.<\/p>\n
(t) LOCKBOX. The Obligor of each Receivable is required to make payments
\n to a lockbox that is subject to a Lockbox Agreement.<\/p>\n
(u) UCC CHARACTERIZATION. The contract evidencing such Receivable
\n constitutes “chattel paper” under the Relevant UCC.<\/p>\n
(v) No selection procedures adverse to the Secured Parties or the Borrower
\n were used in selecting the Receivables from the receivables owned by the
\n Seller and\/or otherwise constituting Managed Assets, that met the selection
\n criteria contained in the Sale and Servicing Agreement and set forth above
\n in this Schedule B.<\/p>\n
B-4<\/p>\n
SCHEDULE 2.4 TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
FORM OF PREPAID RECEIVABLES NOTICE <\/p>\n
Reference is made to the Sale and Servicing Agreement, dated as of
\nOctober 8, 1997 (the “Sale and Servicing Agreement”), among CP FUNDING CORP.,
\na Nevada corporation (“CP Funding”), AMERICREDIT FINANCIAL SERVICES, INC., a
\nDelaware corporation, as Seller and as Servicer (the “Seller”), and The Chase
\nManhattan Bank, a New York banking corporation, as Backup Servicer and as
\nFunding Agent. Capitalized terms used herein and not otherwise defined shall
\nhave the meanings assigned in the Sale and Servicing Agreement.<\/p>\n
CP Funding has, on the date hereof, made a payment to the Seller in the
\namount of $[___________________] (the “Prepaid Amount”) representing
\nprepayment for Receivables that, in the aggregate, will have a fair market
\nvalue (determined to be the price that would be obtained in an arm’s-length
\ntransaction between a seller under no compulsion to sell and a buyer under no
\ncompulsion to buy, and taking into account such relevant factors as the
\nprepayment of such purchase price and the anticipated sale date(s) of such
\nReceivables) equal to the Prepaid Amount and meeting all of the necessary
\nconditions for a sale and purchase pursuant to the Sale and Servicing
\nAgreement. CP Funding understands that the Seller’s acceptance of such amount
\nconstitutes its agreement: (i) to sell Receivables meeting such requirements
\non one or more Receivables Sale Dates occurring within [____] days following
\nthe date hereof; (ii) that the aggregate Principal Balance of the Receivables
\nto be sold pursuant to this Prepaid Receivables Notice shall be not less than
\n$[____________________]; and (iii) that the application of amounts paid
\nhereunder toward the Receivables Purchase Price on such Receivables Sale
\nDate(s) shall be reflected in the Seller’s Receivables Sale Notice for each
\nsuch date.<\/p>\n
CP FUNDING CORP.<\/p>\n
By:
\n ——————————
\n Name:
\n —————————
\n Title:
\n —————————<\/p>\n
SCHEDULE 3.1 TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
In addition to the receipt of documents and satisfaction of other
\nconditions set forth in Section 3.1 of the Sale and Servicing Agreement, the
\nfollowing shall have been delivered, and shall be satisfactory in form and
\nsubstance, to the Funding Agent and the Borrower:<\/p>\n
1. Certified copy of the Credit and Servicing Procedures.<\/p>\n
2. A Borrower Officer’s Certificate, including as attachments thereto:<\/p>\n
a. Resolutions of the Board of Directors of the Borrower duly authorizing
\n the execution, delivery and performance by the Borrower of each of the
\n Basic Agreements to which it is a party and any other documents executed by
\n or on behalf of the Borrower in connection with the transactions
\n contemplated thereby;<\/p>\n
b. Certified Certificate of Incorporation of the Borrower; and<\/p>\n
c. By-laws of the Borrower.<\/p>\n
3. An Incumbency Certificate of the Borrower setting forth the names, titles
\n and signatures of the officers of the Borrower who are authorized to
\n execute documents, give instructions and otherwise to take actions in
\n connection with the contemplated transactions.<\/p>\n
4. A Borrower Good Standing Certificate.<\/p>\n
5. A Borrower Officer’s Certificate re: liens, location of records of
\n Receivables and certain corporate matters.<\/p>\n
6. A Borrower’s Certificate regarding establishment of Reserve Account.<\/p>\n
7. Servicer Certificate regarding establishment of Collection Account.<\/p>\n
8. AFS Officer’s Certificate, including as attachments thereto:<\/p>\n
a. Resolutions of the Board of Directors duly authorizing the
\n execution, delivery and performance by the Seller and the Servicer of
\n each of the Basic Agreements to which each is a party and any other
\n documents executed by or on behalf of the Seller and the Servicer in
\n connection with the transactions contemplated thereby;<\/p>\n
b. Certified Certificate of Incorporation; and<\/p>\n
c. By-laws.<\/p>\n
9. An Incumbency Certificate of AFS setting forth the names, titles and
\n signatures of the officers of AFS who are authorized to execute documents,
\n give instructions and otherwise take actions on behalf of AFS in connection
\n with the contemplated transactions, in its roles as Seller and as Servicer.<\/p>\n
10. A Good Standing Certificate of AFS.<\/p>\n
11. Seller Officer’s Certificate re: liens, location of records of Receivables
\n and certain corporate matters.<\/p>\n
12. Certificate of the Lockbox Bank as to due execution of the Lockbox
\n Agreement.<\/p>\n
13. An Opinion of special counsel to Chase Securities Inc. as to true sale and
\n nonconsolidation matters.<\/p>\n
14. An Opinion of special counsel to Chase Securities Inc. with respect to the
\n validity and enforceability of certain transaction documents.<\/p>\n
15. Opinion of counsel to the APA Banks addressed to the Rating Agencies.<\/p>\n
16. Opinions of local counsel to the Seller with respect to perfection and
\n priority of the security interests in the
\n Collateral.(1)<\/p>\n
17. Opinion of local counsel to the Borrower, as to the formation of and other
\n corporate matters relating to the Borrower, as to the enforceability of
\n certain transaction documents and as to the enforceability, perfection and
\n priority of the security interests in the Collateral.<\/p>\n
18. The Opinion of Chris A. Choate, General Counsel of AmeriCredit Corp. as to
\n pending and threatened litigation.<\/p>\n
19. The Opinion of Chris A. Choate, General Counsel of AmeriCredit Corp. as to
\n certain matters relating to the Receivables.<\/p>\n
————————–
\n(1) Jurisdictions where such an opinion is required to include California, Texas
\nand any other jurisdiction where financed vehicles securing more than 10% of the
\nReceivables from time to time are titled.<\/p>\n
3.1-2<\/p>\n
20. The Opinion of Chris A. Choate, General Counsel to AmeriCredit Corp., AFSI,
\n and Borrower, with respect to corporate matters for each of the Seller, the
\n Servicer and the Borrower.<\/p>\n
21. Acknowledgment copy of financing statement on Form UCC-1 naming AFSI, as
\n debtor, the Borrower, as secured party, and the Funding Agent, as assignee,
\n filed with the Office of the Secretary of State of the State of Texas.<\/p>\n
22. Acknowledgment copy of financing statement on Form UCC-1 naming the
\n Borrower, as debtor, and the Funding Agent, as secured party, filed with
\n the Secretaries of State of the States of Nevada and Texas.<\/p>\n
23. Letter(s) re: Wire Instructions.<\/p>\n
24. Rating Letters:<\/p>\n
a. Letters from Standard & Poor’s and Moody’s confirming PARCO’s A-1\/P-1
\n commercial paper ratings; and <\/p>\n
b. VFN rating letter from Moody’s.<\/p>\n
3.1-3<\/p>\n
SCHEDULE 5.11 TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
PROCEDURES FOR DATA INTEGRITY REVIEWS<\/p>\n
Capitalized terms are used as defined in Annex A to the Sale and Servicing
\nAgreement.<\/p>\n
SERVICER’S DETERMINATION DATE CERTIFICATES; Servicer’s Receivables Sale Date
\nCertificates<\/p>\n
On the quarterly basis specified in Section 5.11 of the Sale and Servicing
\nAgreement, the latest monthly Servicer’s Determination Date Certificate should
\nbe selected as well as the most current Servicer’s Receivables Sale Date
\nCertificate. The line items should be reconciled including the raw data lines
\nand the calculation of formulas within the statement.<\/p>\n
FILE INTEGRITY<\/p>\n
On a quarterly basis, a file integrity check will be conducted. This process
\nwill include pulling 100 files, chosen randomly, from the Receivables
\nconstituting Collateral during the specified three-month period. A completeness
\ncheck should be performed to see that each of the following items is present in
\neach selected Obligor file:<\/p>\n
– fully executed original of the Contract evidencing the Receivable
\n – evidence of credit approval by an authorized AmeriCredit employee is
\n present on contract
\n – original executed credit application or copy of credit application
\n – original lien certificate showing the security interest of AmeriCredit
\n or the application therefor
\n – credit bureau report
\n – agreement to provide insurance or a completed credit application
\n showing evidence of insurance
\n – truth in lending disclosure statement
\n – contract is stamped with legend indicating assignment<\/p>\n
DATA INTEGRITY<\/p>\n
Additionally, for the selected files, the following fields should be checked to
\nsee that they appear accurately on the electronic installment loan database with
\nrespect to the security agreement, installment sale contract, title or
\napplication for title present in each obligor loan file:<\/p>\n
– name of the obligor
\n – original amount financed (rounded to the nearest dollar)<\/p>\n
– original term
\n – monthly payment amount
\n – the new or used status of the related Financed Vehicle
\n – VIN number
\n – annual percentage rate
\n – APR should be recalculated using the APR recalculation program
\n distributed by the Office of the Comptroller of the Currency and the
\n accuracy rated to within 1\/8 of one percent tolerance
\n – coding indicates assignment to the Funding Agent (Chase)<\/p>\n
Within the installment loan database, the following items should be checked:<\/p>\n
– the Receivable is not more than 30 days delinquent
\n – as of the date of sale to the Borrower, the remaining maturity of the
\n Receivable did not exceed 60 months
\n – the original maturity of the Receivable does not exceed 60 months
\n – as of the date of sale to the Borrower, the receivable had remaining
\n principal of no more than $30,000<\/p>\n
5.11-2<\/p>\n
EXHIBIT A TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
RECEIVABLES SALE AGREEMENT<\/p>\n
SALE No. [____] of Receivables made this ___ day of ____________, 199_, pursuant
\nto the Sale and Servicing Agreement, dated as of October 8, 1997 (the “Sale and
\nServicing Agreement”), among CP FUNDING CORP., a Nevada corporation (“CP
\nFunding”), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation as
\nSeller and as Servicer (the “Seller”), and The Chase Manhattan Bank, a New York
\nbanking corporation, as Backup Servicer and as Funding Agent.<\/p>\n
W I T N E S S E T H:<\/p>\n
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller wishes to
\nsell Receivables to CP Funding; and<\/p>\n
WHEREAS, CP Funding is willing to purchase such Receivables subject to the
\nterms and conditions hereof.<\/p>\n
NOW, THEREFORE, CP Funding and the Seller hereby agree as follows:<\/p>\n
1. DEFINED TERMS. Capitalized terms used herein shall have the meanings
\nascribed to them in Annex A to the Sale and Servicing Agreement, unless
\notherwise defined herein.<\/p>\n
“Relevant Cutoff Date” shall mean, with respect to the Receivables sold
\nhereby, ___________ ___, 199_.<\/p>\n
“Receivables Sale Date” shall mean, with respect to the Receivables sold
\nhereby, the date hereof.<\/p>\n
2. SCHEDULE OF RECEIVABLES. Annexed hereto is a Schedule A listing the
\nReceivables sold pursuant to this Receivables Sale Agreement on the Receivables
\nSale Date.<\/p>\n
3. SALE OF RECEIVABLES. In consideration of CP Funding’s delivery to or
\nupon the order of the Seller of $________, the Seller does hereby sell,
\ntransfer, assign, set over and otherwise convey to CP Funding, without recourse
\n(except as expressly provided in the Sale and Servicing Agreement), all right,
\ntitle and interest of the Seller in and to:<\/p>\n
(a) the Receivables listed in Schedule A and all moneys received
\n thereon, on and after the Relevant Cutoff Date;<\/p>\n
(b) all security interests in the Financed Vehicles granted by
\n Obligors pursuant to the Receivables and any other interest of the Seller
\n in such Financed Vehicles;<\/p>\n
(c) all proceeds and all rights to receive proceeds with respect to
\n the Receivables from claims on any physical damage, credit life or
\n disability insurance policies covering Financed Vehicles or Obligors;<\/p>\n
(d) all rights of the Seller against Dealers pursuant to Dealer
\n Agreements and\/or Dealer Assignments;<\/p>\n
(e) all rights under any Service Contracts on the related Financed
\n Vehicles; <\/p>\n
(f) the related Receivables Files;<\/p>\n
(g) all proceeds of any and all of the foregoing.<\/p>\n
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
\nrepresents and warrants to CP Funding as of the Receivables Sale Date that:<\/p>\n
(a) SALE AND SERVICING AGREEMENT. The representations and warranties set
\nforth in Sections 4.1 and 7.1 of the Sale and Servicing Agreement are true and
\ncorrect with respect to the property sold pursuant to Section 3 hereof. <\/p>\n
(b) PRINCIPAL BALANCE. As of the Relevant Cutoff Date, the aggregate
\nPrincipal Balance of the Receivables listed on Schedule A annexed hereto and
\nsold to CP Funding pursuant to this Receivables Sale Agreement is
\n$_______________.<\/p>\n
5. CONDITIONS PRECEDENT. The obligation of CP Funding to acquire the
\nReceivables hereunder is subject to the satisfaction, on or prior to the
\nReceivables Sale Date, of the following conditions precedent:<\/p>\n
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
\nwarranties made by the Seller in Section 4 of this Receivables Sale Agreement
\nand in Sections 4.1 and 7.1 of the Sale and Servicing Agreement shall be true
\nand correct with respect to the property sold pursuant to Section 3 hereof as of
\nthe Receivables Sale Date.<\/p>\n
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions set
\nforth in Section 3.2 of the Sale and Servicing Agreement shall have been
\nsatisfied with respect to the property sold pursuant to Section 3 hereof.<\/p>\n
(c) ADDITIONAL INFORMATION. The Seller shall have delivered to CP Funding
\nsuch information as was reasonably requested by CP Funding to satisfy itself as
\nto the satisfaction of the conditions set forth in this Section 5.<\/p>\n
6. RATIFICATION OF AGREEMENT. As supplemented by this Receivables Sale
\nAgreement, the Sale and Servicing Agreement, including without limitation
\nSection 2.2(b) thereof, is in all respects ratified and confirmed and the Sale
\nand Servicing Agreement as so supplemented by this Receivables Sale Agreement
\nshall be read, taken and construed as one and the same instrument.<\/p>\n
7. COUNTERPARTS. This Receivables Sale Agreement may be executed in two
\nor more counterparts (and by different parties in separate counterparts), each
\nof which shall be an original but all of which together shall constitute one and
\nthe same instrument.<\/p>\n
8. GOVERNING LAW. THIS RECEIVABLES SALE AGREEMENT SHALL BE CONSTRUED IN
\nACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
\nCONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
\nPARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.<\/p>\n
A-3<\/p>\n
IN WITNESS WHEREOF, CP Funding and the Seller have caused this Receivables
\nSale Agreement to be duly executed and delivered by their respective duly
\nauthorized officers as of the day and the year first above written.<\/p>\n
CP FUNDING CORP.<\/p>\n
by__________________________
\n Title:<\/p>\n
AMERICREDIT FINANCIAL SERVICES, INC.,
\n Seller<\/p>\n
by___________________________
\n Title:<\/p>\n
Acknowledged:<\/p>\n
THE CHASE MANHATTAN BANK,
\nas Funding Agent<\/p>\n
by______________________________
\n Title:<\/p>\n
EXHIBIT B TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
FORM OF SERVICER’S DETERMINATION DATE CERTIFICATE<\/p>\n
[To Follow]<\/p>\n
EXHIBIT B-1 TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
FORM OF SERVICER’S VFN PREPAYMENT DATE CERTIFICATE<\/p>\n
[To Follow]<\/p>\n
EXHIBIT C TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
FORM OF RECEIVABLES SALE NOTICE<\/p>\n
[To Follow]<\/p>\n
EXHIBIT D TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
FORM OF SERVICER’S RECEIVABLES SALE DATE CERTIFICATE<\/p>\n
[To Follow]<\/p>\n
EXHIBIT E TO
\n SALE AND SERVICING AGREEMENT<\/p>\n
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR
\n UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED
\n EXCEPT IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES
\n ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.<\/p>\n
October ______, 1997<\/p>\n
RECEIVABLES PURCHASE NOTE<\/p>\n
Capitalized terms used and not otherwise defined in this Receivables
\nPurchase Note (this “Note”) shall have the respective meanings assigned in the
\nSale and Servicing Agreement, dated as of October 8, 1997, among the AmeriCredit
\nFinancial Services Inc., as Seller, the Obligor (as defined below), as
\nPurchaser, The Chase Manhattan Bank, as Funding Agent, and the other parties
\nthereto (the “Sale and Servicing Agreement”). This Note is the Receivables
\nPurchase Note referred to in the Sale and Servicing Agreement.<\/p>\n
CP FUNDING CORP., a Nevada corporation (the “Obligor”), for value received,
\nhereby promises to pay to AMERICREDIT FINANCIAL SERVICES, INC., a Delaware
\ncorporation (together with any other permitted holder hereof the “Holder”), the
\nprincipal amount hereof as set forth in Schedule I attached hereto together with
\nany and all accrued and unpaid interest thereon in accordance with the terms set
\nforth herein. Subject to the terms and conditions hereof, the principal amount
\nthen outstanding on this Note, together with any accrued and unpaid interest
\nthereon, shall be due and payable on the Termination Date. Interest on the
\nunpaid principal balance hereof from time to time outstanding shall accrue at a
\nrate per annum equal to the Applicable Rate in effect during the relevant
\nCollection Period, plus 2.5%, but not to exceed a rate per annum of 8.5%,
\ncomputed on the basis of a 360-day year consisting of 30-day months and shall be
\npayable on each Distribution Date.<\/p>\n
Principal and interest shall be payable in lawful money of the United
\nStates of America at the principal office of the Holder.<\/p>\n
The Obligor also shall pay interest at the rate referred to above on any
\noverdue principal and (to the extent permitted by applicable law) on any overdue
\ninterest, from the date on<\/p>\n
which payment thereof is due until the obligation of the Obligor with respect
\nto the payment thereof shall be discharged.<\/p>\n
The principal amount hereof shall be increased from time to time by the
\namount of advances made to the Obligor by AmeriCredit Financial Services Inc. in
\nits discretion pursuant to the Sale and Servicing Agreement; PROVIDED, HOWEVER,
\nthat the principal amount hereof after giving effect to any particular sale of
\nReceivables and any related advance hereunder, shall not exceed 7% of the Pool
\nBalance.<\/p>\n
Subject to the restrictions set forth below, this Note may be prepaid in
\nwhole or in part, at any time or from time to time, without premium or penalty.<\/p>\n
The rights of the Holder to receive payment with respect to this Note shall
\nnot be subject to any offset by Obligor.<\/p>\n
No delay or omission on the part of the Holder in exercising any rights
\nhereunder shall operate as a waiver of such right or any other right of such
\nHolder, nor shall any delay, omission or waiver on any one occasion be deemed a
\nbar to or waiver of the same or any other right on any future occasion.<\/p>\n
The Obligor hereby waives presentment, demand, protest and notice of every
\nkind, and the Obligor assents to any extension or postponement of the time of
\npayment or any other indulgence, to the addition of any collateral that at any
\ntime may be security for payment of this Note and to the substitution, release,
\nor addition of any party that may, from time to time, be primarily or
\nsecondarily obligated for the payment of this Note.<\/p>\n
The Obligor shall pay on demand all costs, including court costs and
\nreasonable attorneys’ fees paid or incurred by the holder hereof in enforcing
\nthis Note upon default.<\/p>\n
If any payment or distribution of any kind is collected or received by the
\nHolder under this Note when pursuant hereto such payment should not have been
\nmade to or received by the Holder, the Holder forthwith shall deliver the same
\nto the Funding Agent for the benefit of the Secured Parties. Until so
\ndelivered, such payment or distribution shall be held in trust by the Holder as
\nthe property of the Secured Parties, segregated from other funds and property
\nheld by the Holder.<\/p>\n
PAYMENT OF PRINCIPAL AND INTEREST ON THIS NOTE IS SUBJECT TO THE FOLLOWING
\nTERMS, CONDITIONS AND RESTRICTIONS, TO WHICH EACH HOLDER OF THIS NOTE SHALL BE
\nDEEMED TO HAVE AGREED BY ITS ACCEPTANCE HEREOF:<\/p>\n
(1) PAYMENT OF ANY AMOUNTS DUE HEREUNDER SHALL BE SUBJECT AND SUBORDINATE
\n TO THE PAYMENT OF THE VFN AND OTHER SECURED OBLIGATIONS PURSUANT TO THE
\n SECURITY AGREEMENT, AND SHALL BE MADE ONLY OUT OF AVAILABLE FUNDS OF THE
\n OBLIGOR<\/p>\n
THAT ARE NOT REQUIRED TO BE USED TO MAKE ANY PAYMENTS THEN DUE AND OWING TO
\n THE SECURED PARTIES; <\/p>\n
(2) IN NO EVENT SHALL ANY PAYMENT BE MADE (OR BE CLAIMED) ON ANY DATE IF A
\n TERMINATION EVENT OR POTENTIAL TERMINATION EVENT HAS OCCURRED AND IS
\n CONTINUING ON SUCH DATE (OR WOULD OCCUR AS A RESULT OF SUCH PAYMENT); AND<\/p>\n
(3) PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE DATE OF
\n TERMINATION OF THE SECURITY AGREEMENT PURSUANT TO SECTION 4.5 THEREOF, IT
\n WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST
\n THE OBLIGOR, ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY, OR
\n LIQUIDATION PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY FEDERAL OR STATE
\n BANKRUPTCY OR SIMILAR LAW.<\/p>\n
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
\nTHE STATE OF NEW YORK. THE OBLIGOR AGREES THAT ANY ACTION ON THIS NOTE MAY BE
\nBROUGHT IN THE FEDERAL OR STATE COURTS IN THE STATE OF NEW YORK.<\/p>\n
E-3<\/p>\n
IN WITNESS WHEREOF, the Obligor has caused this Note to be signed as of the
\ndate above written.<\/p>\n
CP FUNDING CORP.<\/p>\n
By:____________________________<\/p>\n
Name:_________________________<\/p>\n
Title:__________________________<\/p>\n
Schedule I to
\n RECEIVABLES PURCHASE NOTE<\/p>\n
RECEIVABLES PURCHASE ADVANCES AND PAYMENTS OF PRINCIPAL<\/p>\n
\n\n Amount of Unpaid
\n Amount of Principal Principal
\n Notation
\nDate Advances Repaid Balance
\n—– ——— ——– ——–
\n Made By
\n ——–
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