Exhibit 10.6
August 23, 2001
AMERICREDIT FINANCIAL SERVICES
OF CANADA LTD.
- - and to -
AMERICREDIT CORP.
c/o AmeriCredit Corp.
801 Cherry Street
Suite 3900
Fort Worth, Texas
76107
Attention: Mr. Preston A. Miller
Executive Vice-President, Treasurer
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Dear Sirs/Mesdames:
Re: Cancellation and Repayment of Existing Convertible Revolving
Term Credit Facility in Favour of AmeriCredit Financial
Services of Canada Ltd.
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We refer to that certain letter loan agreement between AmeriCredit
Financial Services of Canada Ltd. (the "Borrower") and The Bank of Nova Scotia
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(the "Bank") dated November 13, 1998, as amended to date (such agreement, as
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amended, being the "Agreement"), whereby the Bank has made available to the
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Borrower a convertible revolving term credit facility, currently with a
committed limit of $40,000,000 Cdn. (the "Credit") upon the terms and conditions
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as described therein. All capitalized terms used and not otherwise defined in
this letter shall have the respective meanings ascribed to them in the
Agreement.
Further to discussions between the Borrower and the Bank, and at the mutual
consent of the parties, the Bank wishes to confirm that the Credit shall be and
is hereby cancelled, effective upon the later to occur of:
(i) the Bank's receipt of an original copy of this letter duly signed
without amendment by the respective authorized officers of the Borrower
and AmeriCredit Corp. (the "Parent Company");
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(ii) the completion date for the term loan financing to be established by
Merrill Lynch Capital Canada Inc. ("Merrill Canada") in favour of the
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Borrower subject to and in accordance with the terms and conditions of
the credit agreement by and among the Borrower, Merrill Canada and
AmeriCredit Financial Services, Inc. (a draft of which credit agreement
has been delivered to the Bank); and
(iii) the repayment on the date hereof of all indebtedness and liability of
the Borrower outstanding under or in connection with the Credit, the
Agreement and all other Loan Documents in the amounts specified in the
following paragraph, provided that if any indebtedness and liability of
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the Borrower under or in connection with the Credit, the Agreement
and/or any other Loan Document shall remain outstanding after the
aforesaid date, then the Bank reserves its rights to issue a demand for
the immediate payment or other
TO: AMERICREDIT FINANCIAL SERVICES OF CANADA LTD. Page 2
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appropriate discharge thereof.
and provided that the borrowing privileges of the Borrower under the Credit
shall nevertheless be deemed to be abolished effective at the close of
business on August 22, 2001.
As of the date of this letter, our records disclose that the principal
balance outstanding under the Credit is $38,235,524.10 Cdn. (comprised by Prime
Rate Advances exclusively), that accrued interest on that principal balance is
$184,692.35 and that accrued standby fee in the amount of $2,027.77 Cdn. is also
outstanding (the foregoing, being collectively the "Current Obligations").
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Interest shall continue to accrue on the outstanding principal balance of the
Current Obligations at the Bank's Prime Rate, and on any unpaid amounts due and
owing in respect of any of the Current Obligations at the same rate plus 2% per
annum, all in accordance with the applicable terms of the Agreement.
Immediately upon and subject to the satisfaction of each of the conditions
specified in (i), (ii) and (iii) above, the parties further hereby agree that
the Agreement shall then terminate and be of no force or effect (subject only to
such rights of reimbursement, contribution and/or indemnity in favour of the
Bank as may be continuing if and to the extent that the survival of any such
rights is contemplated by the respective Loan Documents), and, further, that the
Bank's security interests in and to all of the collateral held by the Bank as
Security pursuant to the Agreement or any other Loan Document (the "BNS
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Collateral") shall then be hereby terminated and released, including, without
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limitation, the Guarantee by the Parent Company. Following the effective date of
such termination and release of the Bank's security interests in respect of the
BNS Collateral, upon any request in writing by the Borrower to the Bank to do
so, the Bank will promptly execute any and all such specific consents, releases,
discharges or other filings or instruments in connection with its release of its
security interests in the BNS Collateral as aforesaid, provided that the
Borrower shall pay all reasonable costs and expenses of the Bank incurred in
connection therewith or the taking of any related actions, including, without
limitation, all legal fees on a solicitor and client basis.
The Borrower hereby irrevocably and unconditionally waives its right to
exercise its option to convert the Credit to a non-revolving term credit
facility, and agrees that all terms and conditions of the Agreement giving rise
to (or otherwise relating to) such conversion or the exercise of the option in
respect thereof shall be and are hereby deleted. Any Conversion Notice
delivered by the Borrower to the Bank prior to the date hereof shall be hereby
rescinded at the mutual consent of the parties and, notwithstanding the delivery
of any such Conversion Notice prior to the date of this letter, the parties
agree that the Credit shall be deemed to be and to have remained at all times a
revolving term credit facility.
The Borrower agrees that, it shall, at its own expense do, make, execute,
or deliver all such further acts, documents and things in connection with this
letter and the Agreement, or any other document or instrument executed in
connection herewith or therewith as the Bank may reasonably require from time to
time for the purpose of giving effect to the intentions of the parties expressed
herein, all immediately upon the request of the Bank.
Please indicate your acceptance of the foregoing by signing the enclosed
duplicate copy of this letter and by then returning or arranging for the return
of the same to the Bank (at the address noted above on page 1 hereof).
By its execution hereof, each of the undersigned acknowledges that it has
received and read a true copy of this letter and consents to all of the terms
hereof. This letter may be executed in counterparts, provided that each
counterpart bear an original signature of the applicable party, and each such
counterpart shall be deemed to be an original of this letter, but all such
counterparts shall together constitute one and the same instrument.
Notwithstanding anything stated to the contrary herein, the provisions of this
letter shall not be effective unless the Bank receives from the applicable
parties one or more duly signed and otherwise satisfactory original counterparts
of this letter by the reply date prescribed above, whereupon (subject to such
delivery and otherwise to the
TO: AMERICREDIT FINANCIAL SERVICES OF CANADA LTD. Page 3
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satisfaction of all other conditions as specified herein) the terms of this
letter shall be deemed to be effective as and when provided herein.
Yours truly,
THE BANK OF NOVA SCOTIA
By: ____________________________
M. Lawson
Managing Director
By: ____________________________
A. Sabada
Director
AMERICREDIT FINANCIAL SERVICES
OF CANADA LTD. (as Borrower)
Acknowledged and accepted on this 23rd
day of August, 2001.
By: _________________________
Name: ___________________
Title: ____________________
By: _________________________
Name: ___________________
Title: ____________________
TO: AMERICREDIT FINANCIAL SERVICES OF CANADA LTD. Page 4
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AMERICREDIT CORP. (as a Guarantor)
Acknowledged and accepted on this 23rd
day of August, 2001.
By: _________________________
Name: ___________________
Title: ____________________
By: _________________________
Name: ___________________
Title: ____________________