Common use of Hedging Strategy Clause in Contracts

Hedging Strategy. (a) At all times on and after the Closing Date, the Borrower shall have established and shall maintain one or more Hedge Agreements with an aggregate notional schedule provided by the Administrator on behalf of the Borrower and acceptable to the Lender and consistent with a strategy designed to offset the risk of interest rate movements, which strategy (the "Hedge Strategy") shall include, without limitation, the execution of Hedge Agreements which (i) are calculated to avoid or remedy any Excess Spread Deficiency or Swap Spread Deficiency, (ii) provide that the notional amounts thereunder shall amortize according to the expected amortization of the Aggregate Loan Balance as of the date of execution of each such Hedge Agreement (assuming a prepayment speed of 1.2% ABS) and (iii) in the aggregate, shall cover 100% of the then Aggregate Loan Balance (as adjusted from time to time pursuant to the terms hereof). The Borrower shall deliver to the Secured Party a copy of each Hedge Agreement entered into between the Borrower and any other Person and each confirmation related thereto. As additional security hereunder, the Borrower shall, pursuant to the Auto Fund Security Agreement, assign to the Lender all rights (but none of the obligations) of the Borrower under each Hedge Agreement, including, but not limited to, all present and future amounts payable by a Hedge Counterparty to the Borrower under or in connection with such Hedge Agreement, and all such amounts payable by a Hedge Counterparty shall be paid by it directly to the Collection Account. The Borrower acknowledges that, as a result of such assignment, it may not, without the prior written consent of the Lender, exercise any rights under any Hedge Agreement that would adversely affect the rights of the Lender, as the beneficiary of the Borrower's assignment of its rights under such Hedge Agreement to the Lender; provided that nothing herein or in the Auto Fund Security Agreement shall have the effect of releasing the Borrower from any of its obligations under a Hedge Agreement nor be construed as requiring the consent of the Lender for the performance of the Borrower's obligations thereunder. (b) Each Hedge Agreement shall provide that if the Hedge Counterparty or any party providing credit support on its behalf suffers a Hedge Counterparty Downgrade Event, the Hedge Counterparty will be required to (i) transfer (at its own cost) all of its rights and obligations under its Hedge Agreement to an Eligible Hedge Counterparty in accordance with the terms of its Hedge Agreement within 60 days after the occurrence of the Hedge Counterparty Downgrade Event or (ii) within 10 Business Days after the occurrence of the Hedge Counterparty Downgrade Event, post collateral reasonably acceptable to the Lender securing its obligation under the Hedge Agreement. In the event the Hedge Counterparty fails to transfer its rights and interests under the Hedge Agreement or post collateral, as applicable, in accordance with the terms of this Agreement, the Lender, as collateral assignee of the Borrower, shall have the right to terminate the Hedge Agreement and require the Borrower to, and the Borrower shall, simultaneously enter into a replacement Hedge Agreement. (c) The Borrower shall cause any collateral received from a Hedge Counterparty under a Hedge Agreement to be delivered to the Lender. The only permitted use of any such collateral delivered to the Lender in respect of any Hedge Agreement shall be (i) for application to obligations of the applicable Hedge Counterparty to the Borrower under its Hedge Agreement if such Hedge Agreement becomes subject to early termination or (ii) to return collateral or investment earnings to such Hedge Counterparty when and required by such Hedge Agreement. (d) The Administrator agrees that at no time during the term of this Agreement will the aggregate notional amounts for the then current calculation period of all outstanding transactions under each Hedge Agreement then in effect materially mismatch the then Aggregate Loan Balance (i.e., the difference between the aggregate notional amounts for the then current calculation period of all outstanding transactions under each Hedge Agreement then in effect is less than or greater than the Aggregate Loan Balance by five percent (5%)) after giving effect to each payment of principal on the related Payment Date. So long as any Excess Spread Deficiency, Swap Spread Deficiency, Event of Default or Pending Event of Default is then continuing, neither the Administrator nor the Borrower may exercise any discretion in selecting the specific agreements and notional amounts thereof to be terminated or reduced. In the event that at any time there is a material mismatch (i.e., the difference between the aggregate notional amounts for the then current calculation period of all outstanding transactions under each Hedge Agreement then in effect is less than or greater than the Aggregate Loan Balance by five percent (5%)) between the existing Hedge Agreements and the Aggregate Loan Balance, the Lender shall have the right in its sole discretion to reduce or increase, as necessary, the notional amounts, in whole or in part, for all outstanding transactions under each Hedge Agreement then in effect, based on the respective notional amounts for current and remaining calculation periods in accordance with the requirements of this Section 3.7.

Hedging Strategy. (a) At all times on and after On or before the Closing Date, AmeriCredit, as the Borrower shall have established and shall maintain one or more Hedge Agreements with an aggregate notional schedule provided by the Administrator Servicer, on behalf of the Borrower for the benefit of the Noteholders, has established and acceptable to the Lender and consistent with a strategy designed to offset the risk of interest rate movements, which strategy shall maintain an account (the "Hedge StrategyDerivative Supplement Account") with a banking institution approved by the Noteholders (having account number 6800061702 (ABA:▇▇▇-▇▇▇-▇▇▇; DDA# ▇▇▇▇ ▇▇▇▇▇) into which the Required Derivative Supplement Amount (defined below) shall include, without limitation, be deposited by the execution of Hedge Agreements which (i) are calculated to avoid or remedy any Excess Spread Deficiency or Swap Spread Deficiency, (ii) provide that the notional amounts thereunder shall amortize according to the expected amortization Servicer on behalf of the Aggregate Loan Balance as Borrower on each Borrowing Base Determination Date and each other date of determination required by the Noteholders in their sole discretion. Amounts on deposit in the Derivative Supplement Account shall be invested in category (a)(4) of the definition of Eligible Investments. On each Borrowing Base Determination Date and each other date of execution of each such Hedge Agreement (assuming a prepayment speed of 1.2% ABS) and (iii) in determination required by the aggregate, shall cover 100% of the then Aggregate Loan Balance (as adjusted from time to time pursuant to the terms hereof). The Borrower shall deliver to the Secured Party a copy of each Hedge Agreement entered into between the Borrower and any other Person and each confirmation related thereto. As additional security hereunderNoteholders, the Borrower shall, pursuant shall deposit into the Derivative Supplement Account an amount sufficient to the Auto Fund Security Agreement, assign to the Lender all rights (but none of the obligations) of the Borrower under each Hedge Agreement, including, but not limited to, all present and future amounts payable by purchase a Hedge Counterparty to the Borrower under or in connection with such Hedge Agreement, and all such amounts payable by a Hedge Counterparty shall be paid by it directly to the Collection Account. The Borrower acknowledges that, as a result of such assignment, it may not, without the prior written consent of the Lender, exercise any rights under any Hedge Agreement that would adversely affect the rights of the Lender, as the beneficiary of the Borrower's assignment of its rights under such Hedge Agreement to cover any increase in LIBOR above the Lender; provided that nothing herein or in the Auto Fund Security Agreement shall have the effect of releasing the Borrower from any of its obligations under a Hedge Agreement nor be construed as requiring the consent of the Lender Strike Price for the performance of Borrowing Base (with respect to any Drawdown Date, including any Receivables for which an Advance has been made on such Drawdown Date) (the Borrower's obligations thereunder. (b) Each Hedge Agreement shall provide that if "Required Derivative Supplement Amount"). If, at any times the Hedge Counterparty Net Spread is an amount equal to or any party providing credit support on its behalf suffers a Hedge Counterparty Downgrade Eventless than 8.75%, the Hedge Counterparty will be required to (i) transfer (at its own cost) all of its rights and obligations under its Hedge Agreement to an Eligible Hedge Counterparty in accordance with the terms of its Hedge Agreement within 60 days after the occurrence of the Hedge Counterparty Downgrade Event or (ii) within 10 Business Days after the occurrence of the Hedge Counterparty Downgrade Event, post collateral reasonably acceptable to the Lender securing its obligation under the Hedge Agreement. In the event the Hedge Counterparty fails to transfer its rights and interests under the Hedge Agreement or post collateral, as applicable, in accordance with the terms of this Agreement, the Lender, as collateral assignee of the Borrower, Noteholders shall have the right to terminate the Hedge Agreement and purchase or require the Borrower to, and the Borrower shall, simultaneously enter into a replacement Hedge Agreement. (c) The Borrower shall cause any collateral received from a Hedge Counterparty under purchase, using amounts on deposit in the Derivative Supplement Account, a Hedge Agreement provided that, at any other time, the Borrower shall be permitted to be delivered to the Lender. The only permitted use of any such collateral delivered to the Lender in respect of any purchase a Hedge Agreement shall and amounts on deposit in the Derivative Supplement Account may be (i) used for application to obligations of such purpose so long as the applicable Hedge Counterparty to the Borrower under its Hedge Agreement if such Hedge Agreement becomes subject to early termination or (ii) to return collateral or investment earnings to such Hedge Counterparty when and required by such Hedge Agreement. (d) The Administrator agrees that at no time during the term of this Agreement will the aggregate notional amounts for the then current calculation period of all outstanding transactions under each Hedge Agreement then in effect materially mismatch the then Aggregate Loan Balance (i.e., the difference between the aggregate notional amounts for the then current calculation period of all outstanding transactions under each Hedge Agreement then in effect is less than or greater than the Aggregate Loan Balance by five percent (5%)) 11- balance remaining after giving effect to each payment of principal on the related Payment Date. So long as any Excess Spread Deficiency, Swap Spread Deficiency, Event of Default or Pending Event of Default such purchase is then continuingsufficient to purchase a Hedge Agreement for any unhedged portion of the Receivables. If on any Business Day the amount on deposit in the Derivative Supplement Account exceeds the Required Derivative Supplement Amount, neither the Administrator nor Paying Agent, subject to the consent of the Noteholders, shall withdraw such excess amount and deliver it to an account designated by the Servicer. (b) If the Borrower may exercise for any discretion in selecting reason whatsoever fails to deposit any or all of the specific agreements and notional amounts thereof to be terminated or reduced. In Required Derivative Supplement Amount into the event that at any time there is a material mismatch (i.e.Derivative Supplement Account, the difference between the aggregate notional amounts for the then current calculation period Servicer absolutely, unconditionally and irrevocably covenants and agrees, to promptly and completely pay such, without any right of all outstanding transactions under each Hedge Agreement then in effect is less than or greater than the Aggregate Loan Balance by five percent (5%)) between the existing Hedge Agreements and the Aggregate Loan Balance, the Lender shall have the right in its sole discretion to reduce or increaseset off whatsoever, as necessary, the notional amounts, in whole or in part, for all outstanding transactions under each Hedge Agreement then in effect, based on the respective notional amounts for current and remaining calculation periods when due and payable in accordance with the requirements terms of this Agreement. The Servicer, shall pay any and all expenses (including reasonable attorney's fees and disbursements) which may be paid or incurred by the Noteholders or the Secured Party in enforcing any rights with respect to, or collecting against, the Servicer or the Borrower under this Section 3.73.7 or any other document or instrument executed in connection with or related to the obligation to pay the Required Derivative Supplement Amount.