EXHIBIT 10.7
EXECUTION COPY
AMENDMENT NO. 3
dated as of February 28, 2003
among
AMERICREDIT MTN RECEIVABLES TRUST,
as Debtor,
AMERICREDIT FINANCIAL SERVICES, INC.,
Individually and as Servicer,
MBIA INSURANCE CORPORATION,
as Insurer
and
MERIDIAN FUNDING COMPANY, LLC,
as Purchaser
to SECURITY AGREEMENT
dated as of December 18, 2000
AMENDMENT NO. 3, dated as of February 28, 2003 (the "Amendment"),
among AMERICREDIT MTN RECEIVABLES TRUST (the "Debtor"), AMERICREDIT FINANCIAL
SERVICES, INC., individually and in its capacity as Servicer ("AFS"), MBIA
INSURANCE CORPORATION, as Insurer ("MBIA"), and MERIDIAN FUNDING COMPANY, LLC,
as Purchaser ("Meridian"), to the Security Agreement dated as of December 18,
2000 (the "Security Agreement"), among the Debtor, AFS, AmeriCredit MTN Corp.
and the Chase Manhattan Bank (predecessor to JPMorgan Chase Bank), as Collateral
Agent and Securities intermediary.
WHEREAS, Section 9.2(b) of the Security Agreement permits amendment of
the Security Agreement by the Debtor, AFS, MBIA and Meridian (the "Parties")
upon the terms and conditions specified therein;
WHEREAS, the Security Agreement has previously been amended by
Amendment No. 1, dated as of December 1, 2002, and Amendment No. 2, dated as of
February 1, 2003, among the Parties;
WHEREAS, the Parties wish to amend the Security Agreement.
NOW, THEREFORE, the Parties agree that the Security Agreement is
hereby amended effective as of the date hereof as follows:
Section 1. Definitions. Each term used herein but not defined herein
shall have the meaning assigned to such term in the Security Agreement.
Section 2. Amendment to Section 1.1 (Certain Defined Terms)
(a) The definition of "Amortization Period Reserve Percentage" in
Section 1,1 is deleted in its entirety and replaced with the following:
"Amortization Period Reserve Percentage" means,
(x) with respect to any date of determination which occurs after
the commencement of the Amortization Period and prior to the
seventh (7th) Remittance Date during the Amortization
Period:
(i) 13.0% if the Portfolio Net Loss Ratio calculated as of
the most recent Determination Date is less than 7.00%.
(ii) 14.0%, if the Portfolio Net Loss Ratio calculated as
of the most recent Determination Date is greater than
or equal to 7.00% but less than 7.50%.
(iii) 15.0%, if the Portfolio Net Loss Ratio calculated as
of the most recent Determination Date is greater than
or equal to 7.50% but less than 8.00%.
2
(iv) 16.0%, if the Portfolio Net Loss Ratio calculated as
of the most recent Determination Date is greater than
or equal to 8.00% but less than 8.50%.
(v) 17.0%, if the Portfolio Net Loss Ratio calculated as
of the most recent Determination Date is greater than
or equal to 8.50%; and
(y) with respect to any date of determination occurring on and
after the seventh (7th) Remittance Date during the
Amortization Period, the applicable percentage set forth in
the numbered clauses (i) through (v) in paragraph (x) above
calculated with respect to the (6th) Remittance Date.
(b) The definition of "Initial Reserve Percentage" in Section 1.1 is
deleted in its entirety and replaced with the following:
"Initial Reserve Percentage" means, with respect to any Delivery Date:
(i) 6%, if both
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables (including the Receivables to be delivered on
such Receivables Delivery Date) is greater than or equal to
227.00; and
(b) the most-recently calculated Portfolio Net Loss Ratio is
less than 7.00%
(ii) 7%, if either
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables (including the Receivables to be delivered on
such Receivables Delivery Date) is greater than or equal to
226.00 but less than 227.00; or
(b) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 7.00% but less than 7.50%.
(iii) 8%, if either
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables (including the Receivables to be delivered on
such Receivables Delivery Date) is less than 226.00; or
(b) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 7.50% but less than 8.00%.
(iv) 9%, if
3
(a) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 8.00%.
(c) The definition of "Net Spread Deficiency" in Section 1.1 is
deleted in its entirety and replaced with the following:
"Net Spread Deficiency" means, as of any Borrowing Base Determination
Date, the positive difference, if any, of (i) the sum of (A) 8.75%
plus (B) the Servicing Fee, expressed as a percentage of the Net
Receivables Balance plus (C) the lesser of (x) one-month LIBOR plus
(I) from the Closing Date up to and including the thirty-sixth (36th)
Remittance Date, 0.7205% and (II) after the thirty-sixth (36th)
Remittance Date, 1.8505% and (y) the weighted average strike price
under the Hedging Arrangements then in effect, minus (ii) the weighted
average APR of all Eligible Receivables then held as Collateral.
(d) The definition of "Reserve Account Required Amount" in Section 1.1
is deleted in its entirety and replaced with the following:
"Reserve Account Required Amount" means,
(x) as of any Borrowing Base Determination Date during the
Revolving Period, the product of (i) the applicable
Revolving Period Reserve Percentage and (ii) the Net
Receivables Balance as of such Borrowing Base Determination
Date; and
(y) as of any date of determination during the Amortization
Period, the lesser of:
(i) the greatest of:
(A) 6.0% of the Aggregate Outstanding Balance of
all Receivables as of the commencement of the
Amortization Period;
(B) the product of (I) the applicable Amortization
Period Reserve Percentage and (II) the Aggregate
Outstanding Balance of all Receivables as of such
date of determination; and
(C) the product of (I) the Credit Score Based
Reserve Percentage applicable to the Amortization
Period and (II) the Aggregate Outstanding Balance
of all Receivables as of such date of
determination; and
(ii) the Net Investment as of such date of
determination
4
(e) The definition of "Revolving Period Reserve Percentage" in Section
1.1 is deleted in its entirety and replace with the following:
"Revolving Period Reserve Percentage" means, with respect to any
Borrowing Base Determination Date during the Revolving Period, the sum
of (x) if, and only if, the Weighted Average Age of the Eligible
Receivables then exceeds 180.00 days, 3%, plus (y) the applicable
percentage set forth in the numbered clauses (i) through (v) below:
(i) 8%, if both
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables as of such date of determination, after taking
into account all Facility Activity on such date is greater
than or equal to 227.00; and
(b) the most-recently calculated Portfolio Net Loss Ratio is
less than 7.00%.
(ii) 9%, if either
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables as of such date of determination, after taking
into account all Facility Activity on such date is greater
than or equal to 226.00 but less than 227.00; or
(b) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 7.00% but less than 7.50%.
(iii) 10%, if either
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables as of such date of determination, after taking
into account all Facility Activity on such date is greater
than or equal to 224.00 but less than 226.00; or
(b) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 7.50% but less than 8.00%.
(iv) 11%, if either
(a) the Weighted Average AmeriCredit Score of all Eligible
Receivables as of such date of determination, after taking
into account all Facility Activity on such date is less than
224.00; or
(b) the most-recently calculated Portfolio Net Loss Ratio is
greater than or equal to 8.00%.
(f) A new definition of "GAAP Portfolio Net Loss Ratio" is added to
Section 1.1 in alphabetical order as follows:
5
"GAAP Portfolio Net Loss Ratio" means, as of any date of determination, the
ratio (expressed as a percentage), computed by dividing "A" by "B", and then
multiplying the result by "C" where:
"A" is equal to the net charge-offs (as defined in AmeriCredit
Corp.'s 10-Q and 10-K SEC filings) for the Servicing Portfolio
that have occurred during the six Settlement Periods immediately
preceding such date divided by (ii) the average Aggregate
Outstanding Balance of the Servicing Portfolio during such
six-month period;
"B" is equal to the actual number of days in such six-month
period; and
"C" is equal to the actual number of days in the Servicer's
fiscal year in which the most recently ended Settlement Period
occurred.
Section 3. Amendment to Section 6.1 (Termination and Amortization Events).
(a) Clause (p) of Section 6.1 is deleted in its entirety and replaced with the
following:
(p) the Portfolio Net Loss Ratio (i) for any Determination Date
occurring prior to March 1, 2003 shall exceed 8.00%, (ii) for any
Determination Date occurring subsequent to March 1, 2003 and prior to
August 1, 2003 shall exceed 9.00%, or (iii) for any Determination Date
occurring subsequent to August 1, 2003 shall exceed 8.00%; or
(b) Clause (q) of Section 6.1 is deleted in its entirety and replaced with the
following:
(q) the Portfolio Repossession Ratio, on a 3-month rolling average
basis, (i) as measured on or prior to the February 2003 Determination
Date, is greater than 1.5%, (ii) as measured on the Determination
Dates occurring in the months March 2003 through July 2003 is greater
than 2.00%, or (iii) as measured on or subsequent to the August 2003
Determination Date is greater than 1.5%; or
(c) Clause (z) of Section 6.1 is deleted in its entirety and replaced with the
following:
(z) the ratio of AmeriCredit Corp.'s EBITDA (plus any loss provision
minus net charge-offs and excluding in the calculation a one-time,
non-cash impairment charge to the credit enhancement assets related to
the present value effect of the expected delay in receiving cash
distributions from FSA insured securitization trusts) for the
financial quarter ended December 31, 2002 to its Interest Expense for
the financial quarter ended December 31, 2002 shall be less than 1.5x.
The ratio of AmeriCredit Corp.'s EBITDA (plus any charge or charges
related to restructuring, plus any loss provision minus net
charge-offs) for the financial quarter ended March 31, 2003 to its
Interest Expense for the financial quarter ended
6
March 31, 2003 shall be less than 1.8x. The average of the ratios of
AmeriCredit Corp.'s EBITDA to Interest Expense for the two most recent
financial quarters ended June 30, 2003 shall be less than l.0x. The
average of the ratios of AmeriCredit Corp.'s EBITDA to Interest
Expense for the two most recent financial quarters ended September 30,
2003 or December 31, 2003 shall be less than 1.1x. The average of the
ratios of AmeriCredit Corp.'s EBITDA to Interest Expense for the two
most recent financial quarters ended March 31, 2004 and any two
consecutive financial quarters thereafter shall be less than 1.2x; or
(d) Clause (11) of Section 6.1 is deleted in its entirety and replaced with the
following:
(11) a Servicer Termination Event occurs; or
(e) A new Section 6.1(mm) is added as follows:
(mm) the GAAP Portfolio Net Loss Ratio for any Determination Date
exceeds 8.00%; or
(f) A new Section 6.1(nn) is added as follows:
(nn) Excluding MBIA's MTN transactions, AmeriCredit fails to maintain
$1.75 billion in committed and in good standing warehouse facilities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date set forth on the first page hereof.
AMERICREDIT MTN RECEIVABLES TRUST
By: DEUTSCHE BANK TRUST COMPANY
DELAWARE, not in its individual
capacity but solely as Owner
Trustee on behalf of the Issuer
ATTORNEY-IN-FACT
By: /s/ Louis Bodi
------------------------------------
Name: LOUIS BODI
Title: VICE PRESIDENT
AMERICREDIT FINANCIAL SERVICES, INC.,
Individually and as Servicer,
By: /s/ Beth Sorensen
------------------------------------
Name: Beth Sorensen
Title: Senior Vice President, Finance
MBIA INSURANCE CORPORATION,
as Insurer,
By /s/ Rosemary Kelley
------------------------------------
Name: Rosemary Kelley
Title: Director
MERIDIAN FUNDING COMPANY, LLC,
as Purchaser
By /s/ Bernard J. Angelo
------------------------------------
Name: Bernard J. Angelo
Title: Vice President
Signature Page for Amendment No. 3
to the Security Agreement (MTN)