INSURANCE AND INDEMNITY AGREEMENT

Exhibit 10.3

EXECUTION COPY

 

INSURANCE AND INDEMNITY AGREEMENT

 

among

 

FINANCIAL SECURITY ASSURANCE INC.,

 

AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 2005-C-F,

 

AMERICREDIT FINANCIAL SERVICES, INC.,

 

AFS FUNDING TRUST

 

and

 

AMERICREDIT CORP.

 

Dated as of August 17, 2005

 

$182,000,000 Class A-1 3.8445% Asset Backed Notes, Series 2005-C-F

$271,000,000 Class A-2 4.31% Asset Backed Notes, Series 2005-C-F

$356,000,000 Class A-3 4.47% Asset Backed Notes, Series 2005-C-F

$291,000,000 Class A-4 4.63% Asset Backed Notes, Series 2005-C-F

TABLE OF CONTENTS

 

 

i

TABLE OF CONTENTS

(continued)

 

 

 

ii

INSURANCE AND INDEMNITY AGREEMENT

 

INSURANCE AND INDEMNITY AGREEMENT dated as of August 17, 2005 among FINANCIAL SECURITY ASSURANCE INC. (“Financial Security”), AMERICREDIT AUTOMOBILE RECEIVABLES TRUST 2005-C-F (the “Trust”), a Delaware statutory trust, AFS FUNDING TRUST, a Delaware statutory trust (when referred to individually hereunder, “Funding Trust,” when referred to as the seller under the Sale and Servicing Agreement referred to below, the “Seller”), and AMERICREDIT FINANCIAL SERVICES, INC. (the “Company”), a Delaware corporation and AMERICREDIT CORP., a Texas corporation (“AmeriCredit”).

 

INTRODUCTORY STATEMENTS

 

Funding Trust proposes to acquire the Receivables from the Company and simultaneously to sell to the Trust all of its right, title and interest in and to the Receivables and certain other property pursuant to the Sale and Servicing Agreement. The Trust will issue the Certificate pursuant to the Trust Agreement and Notes pursuant to the Indenture.

 

Each Note will be secured by the Collateral. The Trust has requested that Financial Security issue a financial guaranty insurance policy guarantying certain distributions of interest and principal on the Notes on each Insured Distribution Date (including any such distributions subsequently avoided as a preference under applicable bankruptcy law) upon the terms, and subject to the conditions, provided herein.

 

The parties hereto desire to specify the conditions precedent to the issuance of the Policy by Financial Security, the payment of premium in respect of the Policy, the indemnity and reimbursement to be provided to Financial Security in respect of amounts paid by Financial Security under the Policy or otherwise and certain other matters.

 

In consideration of the premises and of the agreements herein contained, Financial Security, the Trust, the Company, Funding Trust and AmeriCredit hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1 Definitions . Capitalized terms used herein shall have the meanings provided in Appendix I hereto or the meanings given such terms in the AmeriCredit 2005-C-F Letter Agreement, the Sale and Servicing Agreement or the Spread Account Agreement, unless the context otherwise requires.

ARTICLE II

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 2.1 Representations and Warranties of the Trust . The Trust represents and warrants, as of the date hereof and as of the Date of Issuance (except as expressly provided herein), as follows:

 

(a) Due Organization and Qualification . The Trust is duly formed and validly existing as a Delaware statutory trust and is in good standing under the laws of the State of Delaware. The Trust is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, “approvals”) necessary for the conduct of its business as currently conducted and as described in the Offering Document and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Receivable or Transaction Document unenforceable in any material respect or would otherwise have a material adverse effect upon the Transaction.

 

(b) Power and Authority . The Trust has all necessary trust power and authority to conduct its business as currently conducted and as described in the Offering Document, to execute, deliver and perform its obligations under the Transaction Documents and has full power and authority to sell and assign the Receivables as contemplated by the Transaction Documents and to consummate the Transaction.

 

(c) Due Authorization . The execution, delivery and performance of the Transaction Documents by the Trust have been duly authorized by all necessary trust action and do not require any additional approvals or consents or other action by, or any notice to or filing with, any Person, including, without limitation, any governmental entity.

 

(d) Noncontravention . None of the execution and delivery of the Transaction Documents by the Trust, the consummation of the transactions contemplated thereby nor the satisfaction of the terms and conditions of the Transaction Documents,

 

(i) conflicts with, or results in any breach or violation of, any provision of the Certificate of Trust or the Trust Agreement, or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to the Trust or its property, including regulations issued by an administrative agency or other governmental authority having supervisory powers over the Trust,

 

(ii) constitutes, or will constitute, a default by the Trust under, or a breach of, any provision of any loan agreement, mortgage, indenture or other agreement or instrument to which the Trust is a party or by which it or any of its property is or may be bound or affected, or

 

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(iii) results in or requires the creation of any Lien upon or in respect of any of the assets of the Trust, except as otherwise expressly contemplated by the Transaction Documents.

 

(e) Legal Proceedings . There is no action, proceeding, suit or investigation by or before any court, governmental or administrative agency or arbitrator against or affecting the Trust, or any properties or rights of the Trust, pending or, to the knowledge of the Trust, threatened, which, in any case, if decided adversely, would result in a Material Adverse Change with respect to the Trust, the Certificate or the Notes.

 

(f) Valid and Binding Obligations . Each of the Transaction Documents to which the Trust is a party when executed by the Owner Trustee on behalf of the Trust, will constitute the legal, valid and binding obligations of the Trust enforceable against the Trust in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally or general equitable principles (whether in a proceeding at law or in equity) and except to the extent that rights to indemnity and contribution may be limited by public policy. The Certificate, when executed, authenticated and delivered in accordance with the Trust Agreement, will be validly issued and outstanding and entitled to the benefits of the Trust Agreement and will evidence the entire beneficial ownership interest in the Trust. The Notes when executed, authenticated and delivered in accordance with the Indenture, will be entitled to the benefits of the Indenture and will constitute legal, valid and binding obligations of the Trust, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally or general equitable principles (whether in a proceeding at law or in equity) and except to the extent that rights to indemnity and contribution may be limited by public policy.

 

(g) Accuracy of Information . None of the Transaction Documents, nor any of the Provided Documents, contain any statement of a material fact with respect to the Trust or the Transaction that was untrue or misleading in any material respect when made. Since the furnishing of the Provided Documents, there has been no change, nor any development or event involving a prospective change known to the Trust, that would render any of the Provided Documents untrue or misleading in any material respect. There is no fact known to the Trust which has a material possibility of causing a Material Adverse Change with respect to the Trust or which has a material possibility of impairing the value or marketability of the Receivables, taken as a whole, or decreasing the possibility that amounts due in respect of the Receivables will be collected as due.

 

(h) Compliance With Securities Laws . The offer and sale of the Notes comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws. Without limitation of the foregoing, the Offering Document did not, as of its date, and does not, as of the date hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

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(i) Transaction Documents . Each of the representations and warranties of the Trust contained in the Transaction Documents is true and correct in all material respects and the Trust hereby makes each such representation and warranty made by it to, and for the benefit of, Financial Security as if the same were set forth in full herein.

 

(j) No Consents . No consent, license, authorization or approval from, or registration or other action by, and no notice to or filing or declaration with, any governmental entity or regulatory body, is required for the due execution, delivery and performance by the Trust of the Transaction Documents or any other material document or instrument to be delivered thereunder, except (in each case) such as have been obtained or the failure of which to be obtained would not be reasonably likely to have a material adverse effect on the Transaction.

 

(k) Compliance With Law, Etc. No practice, procedure or policy employed or proposed to be employed by the Trust in the conduct of its business violates any law, regulation, judgment, agreement, order or decree applicable to it which, if enforced, would result in a Material Adverse Change with respect to the financial condition of such Person.

 

(l) Special Purpose Entity.

 

(i) The capital of the Trust is adequate for the business and undertakings of the Trust.

 

(ii) Except as contemplated by the Transaction Documents, the Trust is not engaged in any business transactions with any AmeriCredit Party, AFS Funding or any Affiliate of any of them.

 

(iii) The Trust’s funds and assets are not, and will not be, commingled with the funds of any other Person.

 

(m) Solvency; Fraudulent Conveyance . The Trust is solvent and will not be rendered insolvent by the Transaction and, after giving effect to such Transaction, the Trust will not be left with an unreasonably small amount of capital with which to engage in its business. The Trust does not intend to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Trust does not contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of the Trust or any of its assets.

 

(n) Perfection of Liens and Security Interest . On the Date of Issuance, the Lien and security interest in favor of the Trust Collateral Agent with respect to the Collateral will be perfected by the filing of financing statements on Form UCC-1 in each jurisdiction where such recording or filing is necessary for the perfection thereof, the delivery of the Receivables Files to the Custodian, and the establishment of the Collection Account, the Capitalized Interest Account, the Pre-Funding Account and the Note Distribution Account in accordance with the provisions of the Transaction Documents, and no other filings in any jurisdiction or any other actions (except as

 

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expressly provided herein) are necessary to perfect the Trust Collateral Agent’s Lien on and security interest in the Collateral as against any third parties.

 

(o) Investment Company Act . The Trust is not an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act.

 

(p) Collateral . On the Date of Issuance and on each Subsequent Transfer Date, the Trust will have good and marketable title to each item of other Trust Property conveyed on such date and will own each such item free and clear of any Lien (other than Liens contemplated under the Indenture) or any equity or participation interest of any other Person.

 

(q) Security Interest in Funds and Investments . Assuming the retention of funds in the Accounts, such funds will be subject to a valid and perfected, first priority security interest in favor of the Trust Collateral Agent on behalf of the Indenture Trustee (on behalf of the Noteholders), the Certificateholder and Financial Security.

 

(r) [ Reserved ].

 

(s) [ Reserved ].

 

Section 2.2 Affirmative Covenants of the Trust . The Trust hereby agrees (to the extent set forth in this Section 2.2) that during the Term of this Agreement, unless Financial Security shall otherwise expressly consent in writing:

 

(a) Compliance With Agreements and Applicable Laws . The Trust shall perform each of its obligations under the Transaction Documents and shall comply with all material requirements of, and the Notes shall be offered and sold in accordance with, any law, rule, regulation or order applicable to it or thereto, or that are required in connection with its performance under any of the Transaction Documents. The Trust will not cause or permit to become effective any amendment to or modification of any of the Transaction Documents to which it is a party unless Financial Security shall have previously approved in writing the substance of such amendment or modification. The Trust shall not take any action or fail to take any action that would interfere with the enforcement of any rights under the Transaction Documents.

 

(b) Certain Information . The Trust shall keep, or cause to be kept, in reasonable detail books and records of account of its assets and business, which shall be furnished to Financial Security upon request. The Trust shall furnish to Financial Security, simultaneously with the delivery of such documents to the Indenture Trustee, the Noteholders or the Certificateholder, as the case may be, copies of all reports, certificates, statements, financial statements or notices furnished to the Indenture Trustee, the Noteholders or the Certificateholder, as the case may be, pursuant to the Transaction Documents (including, but not limited to, copies of any reports submitted to the Trust by

 

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its independent accountants in connection with any examination of the financial statements of the Trust).

 

(i) Certain Information . Not less than ten days prior to the date of filing with the IRS of any tax return or amendment thereto, copies of the proposed form of such return or amendment and, promptly after the filing or sending thereof, (A) copies of each tax return and amendment thereto that the Trust files with the IRS and (B) copies of all financial statements, reports, and registration statements which the Trust files with, or delivers to, any federal government agency, authority or body which supervises the issuance of securities by the Trust.

 

(ii) Other Information . Promptly upon the request of Financial Security, copies of all schedules, financial statements or other similar reports delivered to or by the Trust pursuant to the terms of this Agreement and the other Transaction Documents and such other data as Financial Security may reasonably request.

 

(iii) a review of the Trust’s performance under the Transaction Documents during such period has been made under such officer’s supervision; and

 

(iv) to the best of such individual’s knowledge following reasonable inquiry, no Default or Event of Default has occurred, or if a Default or Event of Default has occurred, specifying the nature thereof and, if the Trust has or had a right to cure pursuant to Section 5.1, stating in reasonable detail the steps, if any, taken or being taken by the Trust to cure such Default or Event of Default or to otherwise comply with the terms of the Transaction Document to which such default or Event of Default relates.

 

(c) Access to Records; Discussions with Officers . The Trust shall, upon the request of Financial Security, permit Financial Security, or its authorized agent, at the expense of Financial Security, at reasonable times and upon reasonable prior written notice:

 

(i) to inspect such books and records of the Trust as may relate to the Notes, the Certificate, the Receivables and the other Trust Property, the obligations of the Trust under the Transaction Documents, the business of the Trust and the transactions consummated in connection therewith; and

 

(ii) to discuss the affairs, finances and accounts of the Trust with an appropriate officer of the Trust.

 

Such inspections and discussions shall be conducted during normal business hours and shall not unreasonably disrupt the business of the Trust.

 

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(d) Notice of Material Events . The Trust shall promptly inform Financial Security in writing of the occurrence of any of the following:

 

(i) the submission of any claim or the initiation of any legal process, litigation or administrative or judicial investigation against the Trust in any federal, state or local court or before any arbitration board, or any such proceeding threatened by any governmental agency, which, if adversely determined, would have a material adverse effect on the Receivables as a whole, or which, if adversely determined, would have a material adverse effect upon the ability of the Trust to perform its obligations under any Transaction Document;

 

(ii) any change in the location of the Trust’s principal office or any change in the location of the books and records of the Trust;

 

(iii) the occurrence of any Default or Special Event; or

 

(iv) any other event, circumstance or condition that has resulted, or which is reasonably likely to result, in a Material Adverse Change in respect of the Trust.

 

(e) Further Assurances . The Trust will file all necessary financing statements, assignments or other instruments, and any amendments or continuation statements relating thereto, necessary to be kept and filed in such manner and in such places as may be required by law to preserve and protect fully the Lien on and security interest in, and all rights of the Trust Collateral Agent with respect to the Collateral under the Indenture. In addition, the Trust shall, upon the request of Financial Security, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, within thirty (30) days of such request, such amendments hereto and such further instruments and take such further action as may be reasonably necessary to effectuate the intention, performance and provisions of the Transaction Documents or to protect the interest of the Trust Collateral Agent in the Collateral under the Indenture. In addition, the Trust agrees to cooperate with S&P, Fitch and Moody’s in connection with any review of the Transaction which may be undertaken by S&P, Fitch and Moody’s after the date hereof.

 

(f) Retirement of Notes . The Trust shall, upon retirement of the Notes, furnish to Financial Security a notice of such retirement, and, upon such retirement and the expiration of the Term Of The Policy, surrender the Policy to Financial Security for cancellation.

 

(g) Third-Party Beneficiary . The Trust agrees that Financial Security shall have all rights of a third-party beneficiary in respect of the Sale and Servicing Agreement and hereby incorporates and restates its representations, warranties and covenants as set forth therein for the benefit of Financial Security.

 

(h) Preservation of Existence . The Trust shall observe in all material respects all procedures required by its Certificate of Trust and Trust Agreement and preserve and maintain its existence as a trust and its rights, franchises and privileges in the jurisdiction of its organization, and shall qualify and remain qualified in good standing in each jurisdiction where the nature of its business requires it to do so except where the failure to

 

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be so qualified, in good standing and to maintain its rights, franchises and privileges would not have a material adverse effect on the financial condition of the Trust, or its ability to perform its obligations under this Agreement or under any other Transaction Document to which it is party.

 

(i) Disclosure Document . Each Offering Document delivered with respect to the Notes shall clearly disclose that the Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law. In addition, each Offering Document delivered with respect to the Notes which includes financial statements of Financial Security prepared in accordance with generally accepted accounting principles (but excluding any Offering Document in which such financial statements are incorporated by reference) shall include the following statement immediately preceding such financial statements:

 

The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the New York Insurance Law, and for determining where its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the New York State Insurance Department to financial statements prepared in accordance with generally accepted accounting principles in making such determinations.

 

(j) Special Purpose Entity .

 

(i) The Trust shall conduct its business solely in its own name through its duly authorized officers or agents so as not to mislead others as to the identity of the entity with which those others are concerned, and particularly will use its best efforts to avoid the appearance of conducting business on behalf of AmeriCredit, the Company, AFS Funding, Funding Trust or any other Affiliates thereof or that the assets of the Trust are available to pay the creditors of AmeriCredit, the Company, AFS Funding, Funding Trust or any other Affiliates thereof. Without limiting the generality of the foregoing, all oral and written communications, including, without limitation, letters, invoices, purchase orders, contracts, statements and loan applications, will be made solely in the name of the Trust.

 

(ii) The Trust shall maintain trust records and books of account separate from those of AmeriCredit, the Company, AFS Funding, Funding Trust and Affiliates of any of them.

 

(iii) The Trust shall obtain proper authorization from its equity owners of all trust action requiring such authorization, and copies of each such authorization and the minutes or other written summary of each such meeting

 

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shall be delivered to Financial Security within two weeks of such authorization or meeting as the case may be.

 

(iv) Although the organizational expenses of the Trust have been paid by AmeriCredit, operating expenses and liabilities of the Trust shall be paid from its own funds or by AmeriCredit.

 

(v) The annual financial statements of the Trust shall disclose the effects of the Trust’s transactions in accordance with generally accepted accounting principles and shall disclose that the assets of the Trust are not available to pay creditors of AmeriCredit, the Company, AFS Funding, Funding Trust or any Affiliate of any of them.

 

(vi) The resolutions, agreements and other instruments of the Trust underlying the transactions described in this Agreement and in the other Transaction Documents shall be continuously maintained by the Trust as official records of the Trust separately identified and held apart from the records of AmeriCredit, the Company, AFS Funding, Funding Trust and each Affiliate of any of them.

 

(vii) The Trust shall maintain an arm’s-length relationship with AmeriCredit, the Company, AFS Funding, Funding Trust and each Affiliate of any of them and will not hold itself out as being liable for the debts of any such Person.

 

(viii) The Trust shall keep its assets and its liabilities wholly separate from those of all other entities, including, but not limited to, the Representative, the Company, AFS Funding, Funding Trust and each Affiliate of any of them except, in each case, as contemplated by the Transaction Documents.

 

(k) Tax Matters . The Trust will take, or refrain from taking, as the case may be, all actions necessary to ensure that for federal and state income tax purposes the Trust is not taxable as an association (or publicly traded partnership) taxable as a corporation.

 

(l) Securities Laws . The Trust shall comply in all material respects with all applicable provisions of state and federal securities laws, including blue sky laws and the Securities Act, the Exchange Act and the Investment Company Act and all rules and regulations promulgated thereunder for which non-compliance would result in a Material Adverse Change with respect to the Trust.

 

(m) Incorporation of Covenants . The Trust shall comply with each of the Trust’s covenants set forth in the Transaction Documents and hereby incorporates such covenants by reference as if each were set forth herein.

 

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Section 2.3 Negative Covenants of the Depositor on Behalf of the Trust . Funding Trust as Depositor, on behalf of the Trust, hereby agrees (to the extent set forth in this Section 2.3), that during the Term of the Agreement, unless Financial Security shall otherwise expressly consent in writing:

 

(a) Restrictions on Liens . The Trust shall not, except as contemplated by the Transaction Documents, (i) create, incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien or Restriction on Transferability of the Receivables, or (ii) sign or file under the Uniform Commercial Code of any jurisdiction any financing statement which names the Trust as a debtor, or sign any security agreement authorizing any secured party thereunder to file such financing statement, with respect to the Receivables.

 

(b) Impairment of Rights . The Trust shall not take any action, or fail to take any action, if such action or failure to take action would be reasonably likely to (i) interfere with the enforcement of any rights under the Transaction Documents that are material to the rights, benefits or obligations of the Indenture Trustee, the Certificateholder, the Noteholders or Financial Security, (ii) result in a Material Adverse Change in respect of the Receivables, or (iii) impair the ability of the Trust to perform its obligations under the Transaction Documents.

 

(c) Waiver, Amendments, Etc . The Trust shall not waive, modify or amend, or consent to any waiver, modification or amendment of, any of the provisions of any of the Transaction Documents.

 

(d) Successors . The Trust shall not terminate or designate, or consent to the termination or designation of, the Servicer, Back-up Servicer, the Collateral Agent, the Owner Trustee or any successor thereto without the prior approval of Financial Security.

 

(e) Creation of Indebtedness; Guarantees . Other than the Transaction Documents, the Trust shall not create, incur, assume or suffer to exist any indebtedness other than indebtedness guaranteed or approved in writing by Financial Security. Without the prior written consent in writing of Financial Security, the Trust shall not assume, guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other things, agreeing to purchase any obligation of another Person, agreeing to advance funds to such Person or causing or assisting such Person to maintain any amount of capital.

 

(f) Subsidiaries . The Trust shall not form, or cause to be formed, any Subsidiaries.

 

(g) No Mergers . The Trust shall not consolidate with or merge into any Person or transfer all or any material amount of its assets to any Person, liquidate or dissolve except as permitted by the Trust Agreement and as contemplated by the Transaction Documents.

 

(h) Other Activities . The Trust shall not:

 

(i) sell, pledge, transfer, exchange or otherwise dispose of any of its assets except as permitted under the Transaction Documents; or

 

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(ii) engage in any business or activity except as contemplated by the Transaction Documents and as permitted by the Trust Agreement.

 

(i) Insolvency . The Trust shall not commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to the bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, corporation or other relief or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets or make a general assignment for the benefit of its creditors. The Trust shall not take any action in furtherance of, or indicating the consent to, approval of, or acquiescence in, any of the acts set forth above. The Trust shall not admit in writing its inability to pay its debts.

 

(j) [ Reserved ].

 

(k) [ Reserved ].

 

Section 2.4 [ Reserved ].

 

(a) [ Reserved ].

 

(b) [ Reserved ].

 

(c) [ Reserved ].

 

(d) [ Reserved ].

 

(e) [ Reserved ].

 

(f) [ Reserved ].

 

(g) [ Reserved ].

 

(h) [ Reserved ].

 

(i) [ Reserved ].

 

(j) [ Reserved ].

 

Section 2.5 [ Reserved ].

 

(a) [ Reserved ].

 

(b) [ Reserved ].

 

(c) [ Reserved ].

 

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(d) [ Reserved ].

 

(e) [ Reserved ].

 

(f) [ Reserved ].

 

(g) [ Reserved ].

 

(h) [ Reserved ].

 

Section 2.6 [ Reserved ].

 

Section 2.7 Representations and Warranties with Respect to Funding Trust and the Company . Each AmeriCredit Party represents, warrants and covenants, as of the Date of Issuance, with respect to Funding Trust and the Company, as follows:

 

(a) Due Organization and Qualification . Funding Trust is duly formed and validly existing as a Delaware statutory trust and is in good standing under the laws of the State of Delaware and the Company is a corporation, duly organized, validly existing and in good standing under the laws of Delaware. Each of Funding Trust and the Company is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, “approvals”) necessary for the conduct of its business as currently conducted and as described in the Offering Document and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Receivable unenforceable in any respect or would otherwise have a material adverse effect upon the Transaction.

 

(b) Power and Authority . Each of Funding Trust and the Company has all necessary trust power and corporate power, respectively and authority to conduct its business as currently conducted and as described in the Offering Document, to execute, deliver and perform its obligations under the Transaction Documents and has full power and authority to sell and assign the Receivables as contemplated by the Transaction Documents and to consummate the Transaction.

 

(c) Due Authorization . The execution, delivery and performance of the Transaction Documents by each of Funding Trust and the Company have been duly authorized by all necessary trust action and corporate action, respectively and do not require any additional approvals or consents or other action by, or any notice to, or filing with, any Person, including, without limitation, any governmental entity or the Company’s stockholder.

 

(d) Noncontravention . None of the execution and delivery of the Transaction Documents by the Company or by Funding Trust, the consummation of the transactions contemplated thereby nor the satisfaction of the terms and conditions of the Transaction Documents,

 

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(i) conflicts with or results in any breach or violation of any provision of the Certificate of Incorporation or Bylaws of the Company or the Certificate of Trust or the Funding Trust Agreement of Funding Trust, as the case may be, or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to the Company or Funding Trust, as the case may be, or any of their respective properties, including regulations issued by an administrative agency or other governmental authority having supervisory powers over the Company or Funding Trust, as the case may be,

 

(ii) constitutes or will constitute a default by the Company or Funding Trust, as the case may be, under or a breach of any provision of any loan agreement, mortgage, indenture or other agreement or instrument to which the Company or Funding Trust is a party or by which it, or any of its or their properties is, or may be, bound or affected, or

 

(iii) results in or requires the creation of any Lien upon or in respect of any of the assets of the Company or Funding Trust except as otherwise expressly contemplated by the Transaction Documents.

 

(e) Legal Proceedings . There is no action, proceeding or investigation pending, or to the best knowledge of the Company or Funding Trust after reasonable inquiry, threatened by or before any court, regulatory body, governmental or administrative agency or arbitrator against or affecting the Company or Funding Trust, or any properties or rights of the Company or Funding Trust, including without limitation, the Receivables, which might result in a Material Adverse Change with respect to the Company, Funding Trust or the Certificate.

 

(f) Valid and Binding Obligations . Each of the Transaction Documents to which either the Company or Funding Trust is a party when executed and delivered by the Company or Funding Trust, as the case may be, will constitute the legal, valid and binding obligations of such Person, enforceable in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equitable principles. The Certificate, when executed, authenticated and delivered in accordance with the Trust Agreement, will be validly issued and outstanding and entitled to the benefits of the Trust Agreement and will evidence the entire beneficial ownership interest in the Trust. The Notes when executed, authenticated and delivered in accordance with the Indenture, will be entitled to the benefits of the Indenture and will constitute legal, valid and binding obligations of the Trust, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally or general equitable principles (whether in a proceeding at law or in equity) and except to the extent that rights to indemnity and contribution may be limited by public policy.

 

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(g) ERISA . Each of Funding Trust and the Company is in compliance with ERISA and has not incurred and does not reasonably expect to incur, any liabilities to the PBGC under ERISA in connection with any Plan or Multiemployer Plan.

 

(h) Accuracy of Information . None of the Transaction Documents nor any of the Provided Documents contain any statement of a material fact with respect to the Company or Funding Trust or the Transaction that was untrue or misleading in any material respect when made. Since the furnishing of the Provided Documents, there has been no change, nor any development or event involving a prospective change known to the Company or to Funding Trust, that would render any of the Provided Documents untrue or misleading in any material respect. There is no fact known to the Company or Funding Trust which has a material possibility of causing a Material Adverse Change with respect to either of the Company or Funding Trust, or which has a material possibility of impairing the value or marketability of the Receivables, taken as a whole, or decreasing the possibility that amounts due in respect of the Receivables will be collected as due.

 

(i) Compliance With Securities Laws . The offer and sale of the Securities comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws. Without limitation of the foregoing, the Offering Document does not contain any untrue statement of a material fact and does not omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

(j) Transaction Documents . Each of the representations and warranties of Funding Trust and the Company contained in the Transaction Documents is true and correct in all material respects and each of Funding Trust and the Company hereby makes each such representation and warranty made by it to, and for the benefit of, Financial Security as if the same were set forth in full herein.

 

(k) No Consents . No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency, or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other nongovernmental person, is required in connection with the execution, delivery and performance by the Company or Funding Trust of this Agreement or of any other Transaction Document to which such Person is a party, except (in each case) such as have been obtained and are in full force and effect.

 

(l) Compliance With Law, Etc. No practice, procedure or policy employed or proposed to be employed by the Company or Funding Trust in the conduct of their respective businesses violates any law, regulation, judgment, agreement, order or decree applicable to it which, if enforced, would result in a Material Adverse Change with respect to such Person.

 

14

(m) Special Purpose Entity .

 

(i) The capital of Funding Trust is adequate for the business and undertakings of Funding Trust.

 

(ii) Other than with respect to the purchase by the Company of the stock of AFS Funding, which owns all the stock of Funding Trust, with respect to matters covered in the Administration Agreement and as provided in this Agreement, the Transaction Documents and documents entered into with respect to the Other Transactions, Funding Trust is not engaged in any business transactions with the Company.

 

(iii) [ Reserved ].

 

(iv) The funds and assets of Funding Trust are not, and will not be, commingled with the funds of any other person.

 

(v) [ Reserved ].

 

(n) Solvency; Fraudulent Conveyance . Each of Funding Trust and the Company is solvent and will not be rendered insolvent by the Transaction and, after giving effect to such Transaction, neither the Company nor Funding Trust will be left with an unreasonably small amount of capital with which to engage in its business. Neither the Company nor Funding Trust intends to incur, or believes that it has incurred, debts beyond its ability to pay such debts as they mature. Neither the Company nor Funding Trust contemplates the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of the Company or Funding Trust, as the case may be, or any of their respective assets. The amount of consideration being received by the Seller upon the sale of the Receivables to the Trust constitutes reasonably equivalent value and fair consideration for the Receivables. The Seller is not selling the Receivables to the Trust, as provided in the Transaction Documents, with any intent to hinder, deal or defraud any of the Company’s creditors.

 

(o) Good Title; Valid Transfer; Absence of Liens; Security Interest .

 

(i) Immediately prior to the pledge of the Collateral to the Trust Collateral Agent pursuant to the Indenture, the Trust was the owner of, and had good and marketable title to, such property free and clear of all Liens and Restrictions on Transferability, and had or will have had full right, power and lawful authority to assign, transfer and pledge such Receivables. The Indenture constitutes a valid pledge of the Collateral to the Trust Collateral Agent and the Trust Collateral Agent shall have a valid and perfected first priority security interest in the Collateral, free and clear of all Liens and Restrictions on Transferability.

 

(ii) Immediately prior to the transfer of any Receivables to the Trust pursuant to the Sale and Servicing Agreement, Funding Trust was or will have

 

15

been the owner of, and had good and marketable title to, such property free and clear of all Liens and Restrictions on Transferability, and had or will have had full right, corporate power and lawful authority to assign, transfer and pledge such Receivables. In the event that a transfer of the Receivables by Funding Trust to the Trust is characterized as other than a sale, such transfer shall be characterized as a secured financing, and the Trustee shall have a valid and perfected first priority security interest in such Receivables free and clear of all Liens and Restrictions on Transferability.

 

(iii) Immediately prior to the sale of the Receivables to Funding Trust pursuant to the Purchase Agreement, the Company was or will have been the owner of, and had good and marketable title to, the Receivables being transferred by such party free and clear of all Liens and Restrictions on Transferability, and had or will have had full right, corporate power and lawful authority to assign, transfer and pledge such Receivables. In the event that a transfer of the Receivables by the Company to Funding Trust is characterized as other than a sale, such transfer shall be characterized as a secured financing, and Funding Trust shall have a valid and perfected first priority security interest in such Receivables free and clear of all Liens and Restrictions on Transferability.

 

(p) Subsequent Receivables; Good Title; Valid Transfer; Absence of Liens; Security Interest .

 

(i) Immediately prior to the sale of Subsequent Receivables and related Other Conveyed Property to the Trust pursuant to a Subsequent Transfer Agreement, Funding Trust will be the owner of, and shall have good and marketable title to, such property free and clear of all Liens and Restrictions on Transferability, and have full right, corporate power and lawful authority to assign, transfer and pledge such Subsequent Receivables and related Other Conveyed Property. The Subsequent Transfer Agreement will constitute a valid sale, transfer and assignment of such Subsequent Receivables and related Other Conveyed Property to the Trust enforceable against creditors of and purchasers of Funding Trust. In the event that, in contravention of the intention of the parties, the transfer of the Subsequent Receivables and related Other Conveyed Property by Funding Trust to the Trust is characterized as other than a sale, such transfer shall be characterized as a secured financing, and the Trust shall have a valid and perfected first priority security interest in the Subsequent Receivables and related Other Conveyed Property free and clear of all Liens and Restrictions on Transferability.

 

(ii) Immediately prior to the sale of Subsequent Receivables and related Other Conveyed Property to Funding Trust pursuant to a Subsequent Purchase Agreement, the Company will be the owner of, and shall have good and marketable title to, such property free and clear of all Liens and Restrictions on Transferability, and have full right, corporate power and lawful authority to assign, transfer and pledge such Subsequent Receivables and related Other Conveyed Property. The Subsequent Purchase Agreement will constitute a valid

 

16

sale, transfer and assignment of such Subsequent Receivables and related Other Conveyed Property to Funding Trust enforceable against creditors of and purchasers of Funding Trust. In the event that, in contravention of the intention of the parties, the transfer of the Subsequent Receivables and related Other Conveyed Property by the Company to Funding Trust is characterized as other than a sale, such transfer shall be characterized as a secured financing, and Funding Trust shall have a valid and perfected first priority security interest in the Subsequent Receivables and related Other Conveyed Property free and clear of all Liens and Restrictions on Transferability.

 

(q) Taxes . The Company has filed all federal and state tax returns which are required to be filed and paid all taxes, including any assessments received by the Company, to the extent that such taxes have become due. Any taxes, fees and other governmental charges payable by the Company or Funding Trust in connection with the Transaction, the execution and delivery of the Transaction Documents and the issuance of the Securities have been paid or shall have been paid at or prior to the Date of Issuance.

 

(r) Security Interest in Funds and Investments in the Spread Account . Assuming the retention of funds in the Spread Account, such funds will be subject to a valid and perfected, first priority security interest in favor of the Collateral Agent on behalf of the Indenture Trustee (on behalf of the Noteholders), the Certificateholder and Financial Security.

 

(s) [ Reserved ].

 

(t) [ Reserved ].

 

Section 2.8 Affirmative Covenants with Respect to the Company and Funding Trust . Each AmeriCredit Party hereby agrees with respect to the Company and with respect to Funding Trust that during the Term of this Agreement, unless Financial Security shall otherwise expressly consent in writing:

 

(a) Compliance With Agreements and Applicable Laws . Each of Funding Trust and the Company shall perform each of its respective obligations under the Transaction Documents and shall comply with all material requirements of any law, rule or regulation applicable to it, or that are required in connection with its performance under any of the Transaction Documents. Neither the Company nor Funding Trust will cause or permit to become effective any amendment to or modification of any of the Transaction Documents to which it is a party unless Financial Security shall have previously approved in writing the form of such amendment or modification. Neither the Company nor Funding Trust shall take any action or fail to take any action that would interfere with the enforcement of any rights under the Transaction Documents.

 

(b) Reports; Other Information . Each of Funding Trust and the Company shall keep or cause to be kept in reasonable detail books and records of account of their

 

17

respective assets and business. Each of Funding Trust and the Company shall furnish or caused to be furnished to Financial Security:

 

(i) Promptly upon receipt thereof, copies of all reports, statements, certifications, schedules, or other similar items delivered to or by the Company or Funding Trust pursuant to the terms of the Transaction Documents and, promptly upon request, such other data as Financial Security may reasonably request; provided, however, that neither the Company nor Funding Trust shall be required to deliver any such items if provision by some other party to Financial Security is required under the Transaction Documents unless such other party wrongfully fails to deliver such item. The Company and Funding Trust shall, upon the request of Financial Security, permit Financial Security or its authorized agents (A) to inspect its books and records as they may relate to the Securities, the Receivables, the Certificate, the obligations of Funding Trust and the Company under the Transaction Documents, the Transaction and, but only following the occurrence of a Special Event, Funding Trust’s business; (B) to discuss the affairs, finances and accounts of Funding Trust and the Company with an officer of each upon Financial Security’s reasonable request; and (C) upon the occurrence of a Special Event, to discuss the affairs, finances and accounts of Funding Trust and the Company with its independent accountants, provided that an officer of such Person shall have the right to be present during such discussions. Such inspections and discussions shall be conducted during normal business hours and shall not unreasonably disrupt the business of such Person. The fees and expenses of Financial Security or any such authorized agents shall be for the account of AmeriCredit.

 

(ii) The Company shall provide or cause to be provided to Financial Security an executed original copy of each document executed in connection with the transaction within 30 days after the date of closing.

 

(c) Notice of Material Events . The Company and Funding Trust shall promptly inform Financial Security in writing of the occurrence of any of the following:

 

(i) the submission of any claim or the initiation of any legal process, litigation or administrative or judicial investigation (A) against the Company or Funding Trust pertaining to the Receivables in general, (B) with respect to a material portion of the Receivables, or (C) in which a request has been made for certification as a class action (or equivalent relief) that would involve a material portion of the Receivables;

 

(ii) any change in the location of the principal office of either of the Company or Funding Trust or any change in the location of the books and records of the Company or Funding Trust;

 

(iii) the occurrence of any Default or Special Event; or

 

18

(iv) any other event, circumstance or condition that has resulted, or which the Company or Funding Trust, as the case may be, reasonably believes might result, in a Material Adverse Change in respect of the Company or Funding Trust.

 

(d) Further Assurances . Each of Funding Trust and the Company will file all necessary financing statements, assignments or other instruments, and any amendments or continuation statements relating thereto, necessary to be kept and filed in such manner and in such places as may be required by law to preserve and protect fully the Lien on and security interest in, and all rights of the Trust Collateral Agent, for the benefit of the Trust Collateral Agent (for the Certificateholder and Financial Security), with respect to the Receivables, the Collection Account and the Spread Account. In addition, each of Funding Trust and the Company shall, upon the request of Financial Security, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, within thirty (30) days of such request, such amendments hereto and such further instruments and take such further action as may be reasonably necessary to effectuate the intention, performance and provisions of the Transaction Documents or to protect the interest of the Trust, the Owner Trustee, the Indenture Trustee and Financial Security, in the Receivables, the Collection Account and the Spread Account, free and clear of all Liens and Restrictions on Transferability except as contemplated by the Transaction Documents. In addition, each of Funding Trust and the Company agrees to cooperate with S&P, Fitch and Moody’s in connection with any review of the Transaction which may be undertaken by S&P, Fitch and Moody’s after the date hereof.

 

(e) Third-Party Beneficiary . Each of Funding Trust and the Company agrees that Financial Security shall have all rights of a third-party beneficiary in respect of the Sale and Servicing Agreement and hereby incorporates and restates its representations, warranties and covenants as set forth therein for the benefit of Financial Security.

 

(f) Existence . Funding Trust shall maintain its existence and the Company shall maintain its corporate existence and shall at all times continue to be duly organized under the laws of Delaware, and duly qualified and duly authorized (as described in Sections 2.7(a), (b) and (c) hereof) and shall conduct its business in accordance with the terms of its Certificate of Trust and its Funding Trust Agreement (with respect to Funding Trust) or its Certificate of Incorporation and Bylaws (with respect to the Company).

 

(g) Disclosure Document . Each Offering Document delivered with respect to the Securities shall clearly disclose that the Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law. In addition, each Offering Document delivered with respect to the Securities which includes financial statements of Financial Security prepared in accordance with generally accepted accounting principles (but excluding any Offering Document in which such financial statements are incorporated by reference) shall include the following statement immediately preceding such financial statements:

 

The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the

 

19

financial condition and results of operations of an insurance company, for determining its solvency under the New York Insurance Law, and for determining where its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the New York State Insurance Department to financial statements prepared in accordance with generally accepted accounting principles in making such determinations.

 

(h) Special Purpose Entity .

 

(i) Funding Trust shall conduct its business solely in its own name through its duly authorized agents (including but not limited to the Administrator) so as not to mislead others as to the identity of the entity with which those others are concerned, and particularly will use its best efforts to avoid the appearance of conducting business on behalf of any affiliate thereof or that the assets of Funding Trust are available to pay the creditors of the Company, AFS Funding or AmeriCredit or any affiliate thereof. Without limiting the generality of the foregoing, all oral and written communications, including, without limitation, letters, invoices, purchase orders, contracts, statements and loan applications, will be made solely in the name of Funding Trust.

 

(ii) Funding Trust shall maintain trust records and books of account separate from those of the Company, AFS Funding, the Trust and AmeriCredit, and the affiliates thereof.

 

(iii) Funding Trust shall obtain proper authorization from its equity owners of all trust action requiring such authorization, and copies of each such authorization and the minutes or other written summary of each such meeting shall be delivered to Financial Security within two weeks of such authorization or meeting as the case may be.

 

(iv) [ Reserved ].

 

(v) Although the organizational expenses of Funding Trust have been paid by AmeriCredit, Funding Trust shall pay its own operating expenses and liabilities from its own funds.

 

(vi) The annual financial statements of Funding Trust shall disclose the effects of Funding Trust’s transactions in accordance with generally accepted accounting principles and shall disclose that the assets of Funding Trust are not available to pay creditors of AmeriCredit, AFS Funding, the Trust or the Company or any Affiliate thereof.

 

(vii) The agreements and other instruments of Funding Trust underlying the transactions described in this Agreement and in the other Transaction Documents shall be continuously maintained by Funding Trust as official records of Funding Trust, separately identified and held apart from the records of

 

20

AmeriCredit, AFS Funding, the Trust and the Company and each Affiliate thereof.

 

(viii) Funding Trust shall maintain an arm’s-length relationship with AmeriCredit, AFS Funding, the Trust and the Company and the affiliates thereof, and will not hold itself out as being liable for the debts of AmeriCredit or the Company or any affiliate thereof.

 

(ix) Funding Trust shall keep its assets and liabilities wholly separate from those of all other entities, including, but not limited to, the Representative, AFS Funding, AmeriCredit, the Trust and the Company and each Affiliate of them except, in each case, as contemplated by the Transaction Documents.

 

(x) [ Reserved ].

 

(i) Maintenance of Licenses . Each of Funding Trust and the Company shall maintain all licenses, permits, charters and registrations which are material to the performance by it of its obligations under this Agreement and each other Transaction Document to which it is a party or by which it is bound.

 

(j) Release of Liens . The Company shall duly file on behalf of Wells Fargo Bank, National Association no later than the first Business Day immediately following the Closing Date, the amendments to, and/or terminations of, UCC financing statements evidencing the Release of Security Interests.

 

Section 2.9 Negative Covenants with Respect to Funding Trust and the Company . Each AmeriCredit Party hereby agrees with respect to Funding Trust and with respect to the Company that during the Term of this Agreement, unless Financial Security shall otherwise expressly consent in writing:

 

(a) Restrictions on Liens . Neither Funding Trust nor the Company shall, except as contemplated by the Transaction Documents, (i) create, incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future (upon the happening of a contingency or otherwise) the creation, incurrence or existence of any Lien or Restriction on Transferability of the Receivables, or (ii) sign or file under the Uniform Commercial Code of any jurisdiction any financing statement which names the Company or Funding Trust as a debtor, or sign any security agreement authorizing any secured party thereunder to file such financing statement, with respect to the Receivables.

 

(b) Impairment of Rights . Neither Funding Trust nor the Company shall take any action, or fail to take any action, if such action or failure to take action may (i) interfere with the enforcement of any rights under the Transaction Documents that are material to the rights, benefits or obligations of the Indenture Trustee, the Certificateholder, the Noteholders or Financial Security, (ii) result in a Material Adverse Change in respect of the Receivables, or (iii) impair the ability of the Company or Funding Trust to perform their respective obligations under the Transaction Documents, including any consolidation, merger with any Person or any transfer of all or any material

 

21

amount of the assets of the Company or Funding Trust to any other Person if such consolidation, merger or transfer would materially impair the net worth of the Company or Funding Trust or any successor Person obligated, after such event, to perform such Person’s obligations under the Transaction Documents.

 

(c) Waiver, Amendments, Etc. Neither Funding Trust nor the Company shall waive, modify or amend, or consent to any waiver, modification or amendment of, any of the provisions of any of the Transaction Documents.

 

(d) Successors . Neither Funding Trust nor the Company shall terminate or designate, or consent to the termination or designation of, the Servicer, Back-up Servicer, Collateral Agent, the Owner Trustee or any successor thereto without the prior approval of Financial Security.

 

(e) Creation of Indebtedness; Guarantees . Funding Trust shall not create, incur, assume or suffer to exist any indebtedness other than indebtedness guaranteed or approved in writing by Financial Security other than the Transaction Documents. Without the prior written consent of Financial Security, the Trustee and Funding Trust shall not assume, guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other things, agreeing to purchase any obligation of another Person, agreeing to advance funds to such Person or causing or assisting such Person to maintain any amount of capital.

 

(f) Subsidiaries . Funding Trust shall not form, or cause to be formed, any Subsidiaries.

 

(g) [ Reserved ].

 

(h) No Mergers . Funding Trust shall not consolidate with or merge into any Person or transfer all or any material amount of its assets to any Person or liquidate or dissolve except as permitted by the Funding Trust Agreement and as contemplated by the Transaction Documents.

 

(i) Other Activities . Funding Trust shall not:

 

(i) sell, pledge, transfer, exchange or otherwise dispose of any of its assets except as permitted under the Transaction Documents; or

 

(ii) engage in any business or activity other than in connection with the Transaction Documents, documents entered into with respect to the Other Transactions and as permitted by its certificate of incorporation.

 

(j) Insolvency . No AmeriCredit Party shall commence with respect to the Company or Funding Trust, as the case may be, any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to the bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, corporation or other relief with respect to it or

 

22

(B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or make a general assignment for the benefit of its creditors. No AmeriCredit Party shall take any action in furtherance of, or indicating the consent to, approval of, or acquiescence in any of the acts set forth above. Neither Funding Trust nor the Company shall admit in writing its inability to pay its debts.

 

Section 2.10 Representations and Warranties of AmeriCredit . AmeriCredit represents, warrants and covenants, as of the date hereof and as of the Date of Issuance, as follows:

 

(a) Due Organization and Qualification . AmeriCredit is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas, with power and authority to own its properties and conduct its business. AmeriCredit is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, “approvals”) necessary for the conduct of its business as currently conducted and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Transaction Document unenforceable in any respect or would otherwise have a material adverse effect upon the Transaction.

 

(b) Power and Authority . AmeriCredit has all necessary corporate power and authority to conduct its business as currently conducted, to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party and to carry out the terms of each such Document and has full power and authority to consummate the Transaction.

 

(c) Due Authorization . The execution, delivery and performance by AmeriCredit of this Agreement and each other Transaction Document to which it is a party have been duly authorized by all necessary corporate action and do not require any additional approvals or consents or other action by or any notice to or filing with any Person, including, without limitation, any governmental entity or the stockholders of such Person.

 

(d) Noncontravention . Neither the execution nor delivery of this Agreement and each other Transaction Document to which AmeriCredit is a party, nor the consummation of the Transaction nor the satisfaction of the terms and conditions of this Agreement and each other Transaction Document to which AmeriCredit is a party,

 

(i) conflicts with or results, or will conflict with or result, in any breach or violation of any provision of the Certificate of Incorporation or Bylaws of AmeriCredit or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to AmeriCredit, or any of its properties, including regulations issued by an administrative agency or other governmental authority having supervisory powers over AmeriCredit,

 

23

(ii) constitutes or will constitute a default by AmeriCredit under, or a breach of any provision of, any loan agreement, mortgage, indenture or other agreement or instrument to which AmeriCredit or any of its Subsidiaries is a party or by which it or any of its or their properties is or may be bound or affected, or

 

(iii) results in or requires, or will result in or require, the creation of any Lien upon, or in respect of, any of the assets of AmeriCredit or any of its Subsidiaries except as otherwise expressly contemplated by the Transaction Documents.

 

(e) Legal Proceedings . There is no action, proceeding or investigation pending, or to the best knowledge of AmeriCredit after reasonable inquiry, threatened by or before any court, regulatory body, governmental or administrative agency or arbitrator against or affecting AmeriCredit, or any properties or rights of AmeriCredit which is likely to result in a Material Adverse Change with respect to AmeriCredit, or which might adversely affect the federal or state tax attributes of the Securities.

 

(f) Valid and Binding Obligations . Each of the Transaction Documents to which AmeriCredit is a party, when executed and delivered by it, and assuming due authorization, execution and delivery by the other parties thereto, will constitute the legal, valid and binding obligations of AmeriCredit, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equitable principles. The Certificate, when executed, authenticated and delivered in accordance with the Trust Agreement, will be validly issued and outstanding and entitled to the benefits of the Trust Agreement and will evidence the entire beneficial ownership interest in the Trust. The Notes when executed, authenticated and delivered in accordance with the Indenture, will be entitled to the benefits of the Indenture and will constitute legal, valid and binding obligations of the Trust, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally or general equitable principles (whether in a proceeding at law or in equity) and except to the extent that rights to indemnity and contribution may be limited by public policy.

 

(g) Financial Statements . The Financial Statements of AmeriCredit, copies of which have been furnished to Financial Security, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present fairly the financial condition and results of operations of AmeriCredit as of the dates and for the periods indicated, and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied, except as noted therein (subject as to interim statements to normal year-end adjustments). Since the date of the most recent Financial Statements, there has been no material adverse change in such financial condition or results of operations. Except as disclosed in the Financial Statements, AmeriCredit is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Change in respect of AmeriCredit.

 

24

(h) ERISA . AmeriCredit is in compliance with ERISA and has not incurred and does not reasonably expect to incur any liabilities to the PBGC under ERISA in connection with any Plan or Multiemployer Plan.

 

(i) Accuracy of Information . None of the Provided Documents contain any statement of a material fact with respect to AmeriCredit or the Transaction that was untrue or misleading in any material respect when made (except insofar as any such Document was connected to, or superseded by, a subsequent Provided Document). Since the furnishing of the Provided Documents, there has been no change, or any development or event involving a prospective change known to AmeriCredit that would render any representation or warranty or other statement made by it in any of the Provided Documents untrue or misleading in any material respect. There is no fact known to AmeriCredit which has a material possibility of causing a Material Adverse Change with respect to it (for purposes of the foregoing representation and warranty, Material Adverse Change shall be determined only with respect to AmeriCredit, but not any of its Subsidiaries individually) or which has a material possibility of impairing the value or marketability of the Receivables, taken as a whole, or decreasing the possibility that amounts due in respect of the Receivables will be collected as due.

 

(j) Compliance With Securities Laws . Neither the Trust nor AmeriCredit is required to be registered as an “investment company” under the Investment Company Act and the Trust is not subject to the information reporting requirements of the Securities Exchange Act.

 

(k) Transaction Documents . Each of the representations and warranties of AmeriCredit contained in the Transaction Documents is true and correct in all material respects and AmeriCredit hereby makes each such representation and warranty made by it to, and for the benefit of, Financial Security as if the same were set forth in full herein.

 

(l) No Consents . No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency, or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other non-governmental person, is required in connection with the execution, delivery and performance by AmeriCredit of this Agreement or of any other Transaction Document to which it is a party, except (in each case) such as have been obtained and are in full force and effect.

 

(m) Compliance Wi