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PURCHASE AND CONTRIBUTION AGREEMENT
between
National Auto Finance Company L.P.
and
National Financial Auto Funding Trust
_____________________
Dated as of October 21, 1996
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PURCHASE AND CONTRIBUTION AGREEMENT
PURCHASE AND CONTRIBUTION AGREEMENT, dated as of October 21, 1996,
by and between National Auto Finance Company L.P., a Delaware limited
partnership ("NAFCO"), and National Financial Auto Funding Trust, a Delaware
business trust ("National Financial").
W I T N E S E T H:
In consideration of the mutual covenants herein contained, NAFCO and
National Financial agree as follows:
ARTICLE I
DEFINITIONS
1.1 Incorporation of Definitions. Capitalized terms used but not
defined herein have the meanings ascribed to them in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of October 21, 1996,
by and among National Financial, as Transferor, NAFCO, as Servicer, and Xxxxxx
Trust and Savings Bank, not in its individual capacity but solely as Trustee
(the "Trustee").
1.2 Other Definitions. When used in this Agreement, the following
words and phrases shall have the following meanings:
Contract Assets: The assets sold, transferred, conveyed and assigned
by NAFCO to National Financial pursuant to this Agreement, which consist of (i)
all Contracts identified in the Contract Schedules attached to the Conveyances
delivered hereunder on each Subsequent Transfer Date; (ii) all monies paid or
payable thereunder on or after the related Cut-Off Date; (iii) the Contract
Files relating to such Contracts; (iv) property which secured any such Contract
and which has been acquired by Repossession or otherwise; (v) all rights to
Insurance Proceeds and Liquidation Proceeds with respect to any such Contract;
(vi) NAFCO's rights against Dealers under the Dealer Agreements in respect of
the representations and warranties made by the Dealer thereunder with regard to
the related Contracts; (vii) NAFCO's right, title and interest in and to the
Purchase Agreement, dated as of October 21, 1996 between NAFCO and Auto Credit
Clearinghouse L.P. ("ACCH") and (viii) the proceeds of the foregoing and the
rights to enforce the foregoing.
Contract Documents: With respect to a Contract, all Contract papers
and documents (including those contained in the Contract File) and all other
papers and records (including computerized data) of whatever size or
description, whether developed or originated by NAFCO, ACCH, a Dealer or another
Person, required to document the Contract or to service the Contract.
Contract File: With respect to a Contract, the fully executed
original of such Contract; the assignment of such Contract by a Dealer to NAFCO
or ACCH, as the case may be; the original Title Document or UCC financing
statement evidencing that the security interest in a Financed Vehicle granted to
NAFCO or ACCH, as the case may be, under such Contract has been perfected under
applicable state law (except for any Title Documents or UCC financing statements
not returned from the applicable public records office, in which case NAFCO will
deliver to National Financial, on the Closing Date or the Subsequent Transfer
Date, as the case may be, an Officer's Certificate of NAFCO indicating that the
original of such Title Document has been applied for at, or the original of such
UCC financing statement was delivered to, such public office and shows NAFCO or
ACCH, as the case may be, as the lienholder or secured party and that NAFCO will
deliver the originals thereof when returned from such office); the original of
any assumption agreement or any modification, extension or refinancing
agreement; and the original application of the related Obligor to obtain the
financing extended by such Contract.
Contract Schedule: The schedule of Contracts attached as Schedule 1
to any Conveyance delivered hereunder, such schedule identifying each Contract
by name of the Obligor and setting forth as to each Contract its Individual Sold
Balance as of the Cut-off Date, loan number, Contract Rate, scheduled monthly
payment of principal and interest, final maturity date and original principal
amount.
Conveyance: As defined in Section 2.3(b).
Purchase Price: As defined in Section 2.1.
ARTICLE II
PURCHASE, SALE AND CONTRIBUTION
2.1 Purchase and Contribution. (a) Subject to and on the terms and
conditions set forth herein, NAFCO hereby agrees to sell, transfer , convey and
assign, without recourse except as expressly provided herein, all of its right,
title and interest in and to the Contract Assets to National Financial on each
Subsequent Transfer Date. National Financial agrees to pay to NAFCO on each
Subsequent Transfer Date as the purchase price (the "Purchase Price") for the
Contract Assets sold hereunder on such date an amount equal to 100% of the
aggregate Outstanding Principal Balance of the Contracts included in such
Contract Assets as of the related Cut-off Date.
(b) NAFCO may, from time to time during the term of this Agreement
and in its sole discretion, elect to contribute capital to National Financial in
the form of Contracts and Contract Assets conveyed hereunder, in an amount equal
to the excess of (i) the Outstanding Principal Balance of Contracts included in
Contract Assets conveyed on any Subsequent Transfer Date over (ii) the amount of
the cash Purchase Price paid by National Financial to NAFCO on such Subsequent
Transfer Date.
2.2 Filings. On or prior to the Closing Date, NAFCO shall have filed
in the office of the Secretary of State of Florida a UCC financing statement,
appropriate under the
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applicable UCC, to reflect the transfer of the Contract Assets from NAFCO to
National Financial and to protect National Financial's interest in the Contract
Assets against all other Persons. NAFCO shall thereafter file any appropriate
continuation statements in respect thereof.
2.3 Sales. (a) During the Revolving Period and the Pre-Funding
Period, National Financial shall, to the extent permitted by the Pooling and
Servicing Agreement, use funds on deposit in the Revolving Account and the
Pre-Funding Account established under the Pooling and Servicing Agreement to
purchase Additional Contracts and other Contract Assets from NAFCO. On or prior
to each Subsequent Transfer Date, NAFCO shall notify National Financial in
writing of the outstanding principal amount of eligible Contracts included in
Contract Assets available to be sold and conveyed by NAFCO to National Financial
on such Subsequent Transfer Date pursuant to this Agreement, and subject to the
terms and conditions of this Agreement, NAFCO shall, on the applicable
Subsequent Transfer Date, sell and convey to National Financial eligible
Contracts and other Contract Assets having an aggregate outstanding principal
amount equal to the amount specified in such written notice. Each Subsequent
Transfer Date shall be on the date and at the time and place mutually agreed
upon by National Financial and NAFCO. Payment of the Purchase Price for the
Additional Contracts and other Contract Assets sold and conveyed on a Subsequent
Transfer Date shall be made by National Financial to NAFCO in immediately
available funds to an account at a bank designated to National Financial by
NAFCO. National Financial's obligation to purchase Additional Contracts and
other Contract Assets shall be limited by the amount of funds available for such
purchase in the Revolving Account and the Pre-Funding Account pursuant to the
Pooling and Servicing Agreement and shall be subject to the satisfaction of the
conditions in the Pooling and Servicing Agreement.
(b) On or prior to any Subsequent Transfer Date, NAFCO shall (i)
deliver to National Financial a conveyance instrument substantially in the form
attached hereto as Exhibit A (a "Conveyance") with respect to the Contract
Assets sold and conveyed hereunder on such Subsequent Transfer Date, (ii)
deliver to National Financial or such other Person as National Financial shall
direct the original motor vehicle retail installment sale contracts, duly
endorsed by NAFCO or ACCH, as the case may be, and the Contract Files with
respect to each Additional Contract included in the Contract Assets then being
sold to National Financial, (iii) deliver to National Financial or such other
Person as National Financial shall direct cash equal to all payments received by
NAFCO on such Additional Contracts on or after the applicable Cut-off Date and
on or before two Business Days prior to such Subsequent Transfer Date. Within
two Business Days after such Subsequent Transfer Date, NAFCO shall deliver to
National Financial or such other Person as National Financial shall direct all
other payments received by NAFCO on such Additional Contracts on or after the
applicable Cut-off Date and on or before such Subsequent Transfer Date. National
Auto hereby directs NAFCO to deliver the materials referenced in the preceding
clause (ii) of the second preceding sentence to OFSA, as Custodian, and hereby
directs NAFCO to remit any payments received by NAFCO and referenced in the
preceding sentence or in clause (iii) of the second preceding sentence to the
Collection Account.
2.4 No Recourse. Except as specifically provided in this Agreement,
the sale and purchase of Contracts and the other Contract Assets under this
Agreement shall be without recourse to NAFCO; provided that NAFCO shall be
liable to National Financial for all representations, warranties and covenants
made by NAFCO pursuant to the terms of this
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Agreement, it being understood that such obligations of NAFCO do not constitute
recourse for the credit risk of the Obligors.
2.5 True Sales. NAFCO and National Financial intend that the
transactions contemplated hereby be true sales of Contracts and other Contract
Assets by NAFCO to National Financial providing National Financial with the full
benefits of ownership of the Contracts and other Contract Assets free and clear
of any Liens, and neither NAFCO nor National Financial intends the transactions
contemplated hereby to be, or for an purpose to be characterized as, a loan from
National Financial to NAFCO. NAFCO shall reflect sales of the Contract Assets
hereunder on its balance sheet and other financial statements as sales of
assets, and shall treat such sales as sales for all purposes. NAFCO will respond
to third party inquiries by indicating that the Contracts have been sold.
2.6 Receipt of Payments after Closing Date and Subsequent Transfer
Dates. National Financial shall be entitled to all payments received or
receivable with respect to any Contract or Additional Contract sold and conveyed
by NAFCO to National Financial hereunder that are received on and after the
applicable Cut-off Date. If NAFCO receives any payment on a Contract belonging
to the Trust, NAFCO promptly shall turn such payment over to the Trustee not
later than two Business Days after receipt for deposit in the Collection
Account.
2.7 Servicing of Contracts. Consistent with National Financial's
ownership of the Contract Assets, National Financial shall have the sole right
to service, administer and collect the Contracts, to assign such right and to
delegate such right to others. In consideration of National Financial's purchase
of the Contract Assets, NAFCO agrees to cooperate fully with National Financial
to facilitate the full and proper performance of such duties and obligations for
the benefit of National Financial.
2.8 Other Sales. Prior to the later of the end of the Pre-Funding
Period and the end of the Revolving Period, NAFCO shall not sell, transfer,
convey or assign any motor vehicle retail installment sale contract originated
or purchased by it, except as follows: (i) NAFCO may sell, transfer, convey and
assign any such motor vehicle retail installment sale contract to National
Financial pursuant to this Agreement; (ii) NAFCO may sell, transfer, convey and
assign to any Person, without limitation, any such motor vehicle retail
installment sale contract that does not comply with the representations and
warranties set forth in Section 4.1(b) or otherwise would result in a violation
of clause (v) of Article III; and (iii) NAFCO may sell, transfer, assign and
convey such motor vehicle retail installment sale contract to any Person,
without limitation, pursuant to a warehouse lending, repurchase or other similar
arrangement for the financing of the Contract Assets pending transfer to
National Auto hereunder on the next Subsequent Transfer Date.
2.9 Protection of Title to Interest. (a) NAFCO shall execute and
file such financing statements and cause to be executed and filed such
continuation and other statements, all in such manner and in such places as may
be required by law fully to preserve, maintain and protect the interest of
National Financial, the Trustee and the Certificate Insurer under this Agreement
in the Trust Estate and in the proceeds thereof. NAFCO shall deliver (or cause
to be delivered) to National Financial and the Certificate Insurer file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
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(b) NAFCO shall not change its name, identity or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed by the Transferor in accordance with paragraph (a)
above seriously misleading within the meaning of Section 9-402(7) of the UCC,
unless it shall have given the Trustee and the Certificate Insurer (so long as a
Certificate Insurer Default shall not have occurred and be continuing) at least
60 days prior written notice thereof, and shall promptly file appropriate
amendments to all previously filed financing statements and continuation
statements as may be required to preserve and protect National Financial's
interest in the Contract Assets, which filings shall be made no later than 30
days after the effective date of any such change.
(c) NAFCO shall give National Financial, the Trustee and the
Certificate Insurer at least 60 days prior written notice of any relocation of
its principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement, and shall promptly file appropriate amendments to all previously
filed financing statements and continuation statements as may be required to
preserve and protect National Financial's interest in the Contract Assets, which
filings shall be made no later than 30 days after the effective date of any such
change. NAFCO shall at all times maintain each office from which it services
Contracts and its principal executive office within the United States of
America.
(d) If at any time NAFCO proposes to sell, grant a security interest
in, or otherwise transfer any interest in automotive receivables to any
prospective purchaser, lender or other transferee, NAFCO shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
printouts (including any restored from backup archives) that, if they refer in
any manner whatsoever to any Contract, indicate clearly that such contract has
been sold and is owned by the Trust unless such Contract has been paid in full
or repurchased by NAFCO, the Transferor or the Servicer.
(e) NAFCO shall permit National Financial, the Trustee, the
Certificate Insurer, their respective agents, at any time to inspect, audit and
make copies of and abstracts from NAFCO's records regarding any Contracts or any
other portion of the Trust Estate.
(f) NAFCO shall furnish to National Financial, the Trustee and the
Certificate Insurer at any time upon request a list of all Contracts then held
as part of the Trust, together with a reconciliation of such list to the
Contract Schedules and to each of the Servicer's statements furnished before
such request indicating removal of Contracts from the Trust. The Trustee shall
hold any such list and Contract Schedules for examination by interested parties
during normal business hours at the Corporate Trust Office upon reasonable
notice by such Persons of their desire to conduct an examination.
ARTICLE III
CONDITIONS PRECEDENT
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National Financial's obligation to purchase Contract Assets
hereunder on each Subsequent Transfer Date shall be subject to the execution,
delivery and effectiveness of the Pooling and Servicing Agreement and the
delivery of the purchase price for the Certificates to National Financial by the
initial purchasers thereof. In addition, the obligation of National Financial to
purchase Contract Assets hereunder on each Subsequent Transfer Date shall be
further subject to the satisfaction of the following conditions on or before the
Closing Date or such Subsequent Transfer Date, as the case may be:
(i) all representations and warranties of NAFCO contained in Section
4.1(a) shall be true and correct and all representations and warranties of NAFCO
in Section 4.1(b) shall be true and correct with respect to the Contracts sold
transferred, conveyed and assigned to National Financial on the Subsequent
Transfer Date, in each case, on and as of such Subsequent Transfer Date, as the
case may be;
(ii) on such Subsequent Transfer Date, NAFCO shall have duly
completed and executed and delivered to National Financial a Conveyance
conforming to the requirements of Section 2.3(b) or 2.4(b), as applicable;
(iii) on or before such Subsequent Transfer Date, (a) NAFCO shall
have delivered to National Financial or such other Person as National Financial
shall direct the original motor vehicle retail installment sale contract, duly
endorsed by ACCH or NAFCO, as the case may be, to National Financial, and the
Contract Files that relate to each Contract included in the Contract Assets then
being sold by NAFCO to National Financial and (b) NAFCO shall have performed all
other obligations then required to be performed by it pursuant to this
Agreement, including, without limitation, Sections 2.2 and 2.3(b) or 2.4(b), as
applicable;
(iv) no Bankruptcy Event or Servicer Default shall have occurred and
be continuing on and as of such Subsequent Transfer Date;
(v) as of such Subsequent Transfer Date, the Contracts then in the
Trust, together with the Additional Contracts to be transferred to National
Financial on such Subsequent Transfer Date, shall meet the following criteria
(computed based on the characteristics of the Additional Contracts as of the
applicable Subsequent Cut-off Date): (A) the weighed average Contract Rate of
the Contracts shall not be less than 18.0%, (B) the weighted average remaining
term of the Contracts shall not be greater than 55 months, and (C) not more than
80% of the aggregate Outstanding Principal Balance Contracts shall represent
loans to finance the purchase of used Financed Vehicles and (D) the final
scheduled payment date on the Contract with the latest maturity shall not be
later than April 30, 2002; and
(vi) all conditions precedent in Section 2.06 of the Pooling and
Servicing Agreement to the transfer and assignment of such Additional Contracts
to the Trust pursuant to the Pooling and Servicing Agreement shall have been
satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
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4.1 (a) NAFCO hereby represents, warrants and covenants to National
Financial on and as of the Closing Date and each Subsequent Transfer Date that:
(i) NAFCO is a Delaware limited partnership duly organized, validly
existing, and in good standing under the laws of the state of its incorporation
and has all licenses necessary to carry on its business as now being conducted
and shall appoint and employ agents or attorneys in each jurisdiction where it
shall be necessary to take action under this Agreement; NAFCO has the full power
and authority to own its property, to carry on its business as presently
conducted, and to execute, deliver and perform this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by NAFCO and
the consummation of the transaction contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and enforceable
obligation of NAFCO (subject to applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of creditors' rights generally);
and all requisite partnership action has been taken by NAFCO to make this
Agreement valid and binding upon NAFCO;
(ii) NAFCO is not required to obtain the consent of any other party
or obtain the consent, license, approval or authorization of, or make any
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement except for those which have been obtained;
(iii) the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of the
partnership agreement of NAFCO or result in the breach of any term or provision
of, or conflict with or constitute a default (with or without notice, lapse of
time, or both) under or result in the acceleration of any obligation under, any
material agreement, indenture or loan or credit agreement or other instrument to
which NAFCO or its property is subject, or result in the violation of any law
(including, without limitation, any bulk transfer or similar law), rule,
regulation, order, judgment or decree to which NAFCO or its property or the
Contracts are subject;
(iv) no statement, report or other document furnished or to be
furnished pursuant to this Agreement or in connection with the transaction
contemplated hereby contains or will, when furnished, contain any untrue
statement of a material fact or omits or will, when furnished, omit to state a
material fact necessary to make the statements contained therein not misleading,
in light of the circumstances under which they were made;
(v) neither NAFCO nor any of its subsidiaries or affiliates is a
party to, bound by or in breach or violation of any indenture or other agreement
or instrument, or is subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which materially and adversely affects, or may
in the future materially and adversely affect, the ability of NAFCO to perform
its obligations under this Agreement
(vi) there are no actions, suits or proceedings pending or, to the
knowledge of NAFCO, threatened against NAFCO, before or by any court, regulatory
body, administrative agency, arbitrator or governmental body with respect to any
of the transactions contemplated by
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this Agreement, which will, if determined adversely to NAFCO, affect the
validity or enforceability hereof or materially and adversely affect NAFCO's
ability to perform its obligations under this Agreement;
(vii) NAFCO has obtained or made all necessary consents, approvals,
waivers and notifications of creditors, lessors and other non-governmental
persons, in each case, in connection with the execution and delivery of this
Agreement, and the consummation of all the transactions herein contemplated;
(viii) NAFCO shall not take any action to impair National
Financial's rights in any Contract; and
(ix) NAFCO is solvent and will not become insolvent after giving
effect to the transactions contemplated hereunder and under the Transaction
Documents; NAFCO is paying its debts as they become due; NAFCO, after giving
effect to the contemplated transactions, will have adequate capital to conduct
its business.
NAFCO shall indemnify National Financial and the Certificate Insurer
and hold National Financial and the Certificate Insurer harmless against any
loss and damages resulting from a breach of the representations and warranties
set forth in Section 4.1(a).
(b) NAFCO hereby represents and warrants to National Financial as of
the Closing Date with respect to the Initial Contracts sold and conveyed to
National Financial on the Closing Date by National Financial Auto Funding Trust
II ("Funding Trust II") and as of each Subsequent Transfer Date with respect to
the Additional Contracts sold and conveyed to National Financial on such
Subsequent Transfer Date by NAFCO (unless another date or time period is
otherwise specified or indicated in the particular representation or warranty):
(i) the information regarding such Contracts set forth in the
applicable Contract Schedule or Receivables Schedule is true and
correct in all material respects at the applicable Cut-off Date;
each Contract was originated in the United States of America and no
Obligor in the United States of America or any state or any agency,
department, subdivision or instrumentality thereof;
(ii) immediately prior to the Closing Date or such Subsequent
Transfer Date, as the case may be, Funding Trust II or NAFCO, as the
case may be, had a valid and enforceable security interest in the
related Financed Vehicle, and such security interest had been duly
perfected and was prior to all other present and future liens and
security interests (except future tax liens and liens that, by
statute, may be granted priority over previously perfected security
interests) that exist or may hereafter arise, and Funding Trust II
or NAFCO, as applicable, had the full right to assign such security
interest to National Financial;
(iii) on and after the Closing Date or such Subsequent
Transfer Date, as the case may be, there shall exist under the
Contract a valid, subsisting and enforceable first priority
perfected security interest in the Financed Vehicle securing such
Contract (other than, as to the priority of such security interest,
any
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statutory lien arising by operation of law after the Closing Date or
the Subsequent Transfer Date, as the case may be, which is prior to
such interest) and at such time as enforcement of such security
interest is sought there shall exist a valid, subsisting and
enforceable first priority perfected security interest in such
Financed Vehicle in favor of National Financial or its assigns
(other than, as to the priority of such security interest, any
statutory lien arising by operation of law after the Closing Date or
such Subsequent Transfer Date which is prior to such interest);
(iv) (a) if such Contract was originated in a state in which
notation of a security interest on the Title Document for the
Financed Vehicle securing such Contract is required or permitted to
perfect such security interest, the Title Document for such Financed
Vehicle shows, or if a new or replacement Title Document is being
applied for with respect to such Financed Vehicle the Title Document
will show NAFCO or ACCH, as the case may be, as sole original holder
of a security interest in such Financed Vehicle and (b) if such
Contract was originated in a state in which the filing of a
financing statement under the UCC is required to perfect a security
interest in motor vehicles, such filings or recordings have been
duly made and show NAFCO or ACCH, as the case may be, as the sole
holder of a security interest in such Financed Vehicle;
(v) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, each such Contract has not been sold, assigned
or pledged to any other Person other than an endorsement to the
Servicer for purposes of servicing or any such pledge has been
released, and NAFCO or National Financial Auto Funding Trust II, as
applicable, has good and marketable title to each such Contract free
and clear of any encumbrance, equity, pledge, charge, claim or
security interest and is the sole owner thereof and has full right
to transfer each such Contract to National Financial and, upon the
transfers pursuant to Article II or the Sale Agreement, as
applicable, National Financial will have good and marketable title
to each such Contract and will be the sole owner of each such
Contract free and clear of any encumbrance, lien, pledge, charge,
claim, security interest or rights of others; the purchase of each
such Contract by NAFCO or ACCH, as the case may be, from a Dealer
was not an extension of financing to such Dealer. No Dealer has a
participation in, or other right to receive, proceeds of any
Contract. NAFCO, ACCH, Funding Trust II, the Master Trust and
National Financial have not taken any action to convey any right to
any Person that would result in such Person having a right to
payments received under the related insurance policies or Dealer
Agreements or to payments due under such Contract;
(vi) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, no such Contract is delinquent for more than
thirty days in payment as to any scheduled payment;
(vii) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, there is no lien against any related Financed
Vehicle for delinquent taxes;
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(viii) as of the Closing Date or such Subsequent Transfer
Date, as the case may be, there is no right of rescission, offset,
defense or counterclaim to the obligation of the related Obligor to
pay the unpaid principal or interest due under such Contract; the
operation of the terms of such Contract or the exercise of any right
thereunder will not render such Contract unenforceable in whole or
in part or subject to any right of rescission, offset, defense or
counterclaim, and no such right of rescission, offset, defense or
counterclaim has been asserted;
(ix) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, there are no prior liens or claims for work,
labor or material affecting any related Financed Vehicle which are
or may become a lien prior to or equal with the security interest
granted by such Contract;
(x) each such Contract, and the sale of the Financed Vehicle
securing such Contract, where applicable, complied, at the time it
was made and as of the Closing Date or related Subsequent Transfer
Date, as applicable, in all material respects with applicable state
and federal laws (and regulations thereunder), including, without
limitation, usury, disclosure and consumer protection laws, equal
credit opportunity, fair-credit reporting, truth-in-lending or other
similar laws, the Federal Trade Commission Act, and applicable state
laws regulating retail installment sales contracts and loans in
general and motor vehicle retail installment sales contracts and
loans in particular, and the receipt of interest on, and the
ownership of, such Contract by National Financial will not violate
any such laws;
(xi) each such Contract is a legal, valid and binding
obligation of the Obligor thereunder and is enforceable in
accordance with its terms, except only as such enforcement of
creditors' rights generally, and all parties to such Contract had
full legal capacity to execute such Contract and all documents
related thereto and to grant the security interest purported to be
granted thereby;
(xii) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, the terms of each such Contract have not been
impaired, waived, altered or modified in any respect, except by
written instruments that are part of the Contract Documents, and no
such Contract has been satisfied, subordinated or rescinded;
(xiii) at the time of origination of each such Contract, the
proceeds of such Contract were fully disbursed, there is no
requirement for future advances thereunder, and all fees and
expenses in connection with the origination of such Contract have
been paid;
(xiv) as of the Closing Date or such Subsequent Transfer Date,
as the case may be, there is no default, breach, violation or event
of acceleration existing under any such Contract (except payment
delinquencies permitted by subparagraph (vi) above) and no event
which, with the passage of time or with notice or with both, would
constitute a default, breach, violation or event of acceleration
under
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any such Contract or would otherwise affect the value or
marketability of such contract; and NAFCO, ACCH, Funding Trust II or
the Master Trust have not waived any such default, breach, violation
or event of acceleration and as of the applicable Cut-Off Date, the
related Finance Vehicle has not been repossessed;
(xv) at the origination date of each such Contract, the
related Financed Vehicle was covered by a comprehensive and
collision insurance policy (i) in an amount at least equal to the
lesser of (a) the actual cash value of the related Financed Vehicle
or (b) the unpaid balance owing on such Contract, less the related
Unearned Finance Charge, (ii) naming NAFCO or ACCH, as the case may
be, as a loss payee and (iii) insuring against loss and damage due
to fire, theft, transportation, collision and other risks generally
covered by comprehensive and collision coverage; each Contract
requires the Obligor to maintain physical loss and damage insurance,
naming NAFCO or ACCH, as the case may be, as an additional insured
party;
(xvi) each such Contract was acquired by NAFCO or ACCH, as the
case may be, from a Dealer with which it ordinarily does business;
such Dealer had full right to assign to NAFCO or ACCH, as the case
may be, such Contract and the security interest in the related
Financed Vehicle and the Dealer's assignment thereof to NAFCO or
ACCH, as the case may be, is legal, valid and binding and the Master
Trust or ACCH, as the case may be, had full right to assign to NAFCO
or Funding Trust II, as the case may be, such Contract and the
security interest in the related Financed Vehicle and NAFCO or
Funding Trust II, as the case may be, had full right to assign to
National Financial such Contract and the security interest in the
related Financed Vehicle and NAFCO's or Funding Trust II's
assignment thereof to National Financial is legal, valid and
binding;
(xvii) each such Contract contains customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the related Financed
Vehicle of the benefits of the security;
(xviii) scheduled payments under each such Contract are due
monthly (or, in the case of the first payment, no later than the
forty-fifth day after the date of the Contract) in substantially
equal amounts to maturity (other than with respect to those
Contracts designated as balloon contracts on the related Contract
Schedule), and will be sufficient to fully amortize such Contract at
maturity, assuming that each scheduled payment is made on its Due
Date; such scheduled payments are applicable only to payment of
principal and interest on such Contract and not to the payment of
any insurance premiums (although the proceeds of the extension of
credit on such Contract may have been used to pay insurance
premiums); the original term to maturity of such Contract was not
more than 60 months;
(xix) the collection practices used with respect to each such
Contract have been in all material respects legal, proper, prudent
and customary in the automobile installment sales contract or
installment loan servicing business;
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(xx) there is only one original of each such Contract, the
Servicer is currently in possession of the Contract Documents for
such Contract and there are no custodial agreements in effect
adversely affecting the rights of NAFCO to make the deliveries
required hereunder on the Closing Date or such Subsequent Transfer
Date;
(xxi) as of the Cut-off Date or Subsequent Cut-off Date, as
applicable, no Obligor was the subject of a current bankruptcy
proceeding;
(xxii) with respect to each Due Period, the aggregate of the
interest due on all the Contracts in such Due Period from scheduled
payments is in excess of the sum of (i) Servicing Fee due and any
fees due to the Trustee and the Certificate Insurer, each in such
Due Period and (ii) the amount of interest payable on the
Certificates with respect to such Due Period, in each case assuming
that each scheduled payment is made on its Due Date; and
(xxiii) the Contracts constitute "chattel paper" within the
meaning of the UCC as in effect in the States of Florida, New York
and Delaware, and all filings (including without limitation, UCC
filings) required to be made and all actions required to be taken or
performed by any Person in any jurisdiction to give National
Financial an ownership interest in the Contracts and the proceeds
thereof and the remaining Trust Estate have been made, taken or
performed.
(xxiv) by the Closing Date and prior to each Subsequent
Transfer Date, as applicable, NAFCO will have caused the portions of
NAFCO's servicing records relating to the Contracts to be clearly
and unambiguously marked to show that the Contracts constitute part
of the Trust Estate and are owned by the Trust in accordance with
the terms of this Agreement;
(xxv) the computer tape or listing made available by NAFCO to
the Trustee on the Closing Date and on each Subsequent Transfer Date
was complete and accurate as of the applicable Cut-off Date, and
includes a description of the same Contracts that are described in
the applicable Contract Schedule;
(xxvi) no Contract was originated in, or is subject to the
laws of, any jurisdiction the laws of which would make unlawful,
void or voidable the sale, transfer and assignment of such contract
under this Agreement or the Transfer Agreement, as applicable, or
pursuant to transfers of the Certificates. National Financial has
not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of any portion of
the Contracts; and
(xxvii) no selection procedures adverse to the
Certificateholders or to the Certificate Insurer have been utilized
in selecting such Contract from all other similar Contracts
originated by NAFCO or ACCH, as the case may be.
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(xxix) as of the Initial Cut-off Date, the weighted average
annual percentage rate, as such term is used with respect to the
Federal Truth-in-Lending Act ("APR") of the Initial Contracts was
approximately 18.88% and the weighted average remaining scheduled
maturity on the Initial Contracts was approximately 50.27 months and
the percentage of the aggregate outstanding balance of the Initial
Contracts relating to the financing of used Financed Vehicles was
75.05%. The final scheduled payment date on the Initial Contract
with the latest maturity is November 1, 2001. Each Contract is a
Simple Interest or Actuarial Contract.
In the event NAFCO has breached any of the foregoing representations
and warranties and National Financial has accepted a retransfer or is required
to accept a retransfer of the affected Contract pursuant to the Pooling and
Servicing Agreement, NAFCO shall, upon demand, repurchase such Contract from
National Financial. In addition, with respect to any Contract in respect of
which the Title Document was being applied for on the Closing Date or the
applicable Subsequent Transfer Date, as the case may be, if such Title Document
has not been received by National Financial or its transferee within 180 days
after the Closing Date or such Subsequent Transfer Date, as the case may be and
National Financial is required to accept a retransfer of such Contract pursuant
to the Pooling and Servicing Agreement, NAFCO shall, upon demand by National
Financial, repurchase such Contract. Any such repurchases by NAFCO shall be at a
repurchase price equal to the Retransfer Amount determined in the manner
provided in the Pooling and Servicing Agreement. Such repurchase price shall be
paid by NAFCO at the direction of National Financial and upon receipt of such
repurchase price, National Financial shall release, or cause to be released, to
NAFCO the related Contract File and National Financial or its transferee shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in NAFCO or its designee any
Contract released pursuant thereto. Except as expressly provided in the next
sentence, it is understood and agreed that the obligation of NAFCO to purchase
any Contract as to which such a breach has occurred and is continuing as
described above shall constitute the sole remedy respecting such breach
available to National Financial. NAFCO shall indemnify, defend and hold National
Financial harmless from and against any and all losses, damages, claims,
expenses and liabilities arising out of or relating to a breach by NAFCO of its
representations and warranties in clauses (viii) and (x) of this Section 4.1(b).
Notwithstanding Section 5.1, it is understood and agreed that the
representations, warranties and covenants set forth in this Section 4.1 shall
survive until the date upon which the Trust terminates pursuant to Section 9.01
of the Pooling and Servicing Agreement.
ARTICLE V
MISCELLANEOUS
5.1 Term. This Agreement shall commence as of the Closing Date and
shall continue in full force and effect until the close of business on the last
day of the Revolving Period.
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5.2 Notices. All notices, demands and requests that may be given or
that are required to be given hereunder shall be sent by United States certified
mail, postage prepaid, return receipt requested, to the parties at their
respective addresses as follows:
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If to NAFCO: National Auto Finance Company L.P.
Xxx Xxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: President
Telecopy No: (000) 000-0000
Confirmation: (000) 000-0000
If to National Financial:
National Financial Auto Funding Trust
c/o Chase Manhattan Bank USA, N.A.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopy No: (000) 000-0000
Confirmation: (000) 000-0000
with a copy to: The Chase Manhattan Bank, N.A.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy No: (000) 000-0000
Confirmation: (000) 000-0000
If to the Trustee:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Division
Telecopy No: (000) 000-0000
Confirmation: (000) 000-0000
15
If to the Certificate Insurer:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Telecopier No: (000) 000-0000
(000) 000-0000
Confirmation: (000) 000-0000
Re: NAFCO Auto Finance 1996-1 Trust,
6.33% Automobile Receivables-Backed
Certificates
5.3 Choice of Law. This Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
5.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
5.5 Amendment. This Agreement may be amended from time to time by
NAFCO and National Financial to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein or
therein, or to make any other provisions with respect to matters or questions
arising under this agreement which shall not be materially inconsistent with the
provisions of this Agreement, provided that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect in any
material respect the interests of the Certificateholders and provided further
that such action shall be consented to in writing by the Certificate Insurer
(unless a Certificate Insurer Default shall have occurred and be continuing).
5.6 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
5.7 Assignment. This Agreement may not be assigned by NAFCO or
National Financial except as contemplated by this Section and the Pooling and
Servicing Agreement; provided however, that simultaneously with the execution
and delivery of this Agreement, National Financial shall assign all of its
right, title and interest under Section 4.1 to the Trustee on behalf of the
Certificateholders and the Certificate Insurer as provided in Section 2.01 of
the Pooling and Servicing Agreement, to which NAFCO hereby expressly consents.
NAFCO agrees to perform its obligations hereunder for the benefit of the Trust
and further agrees that the Trustee or the Certificate Insurer may (but shall
have no obligation to) enforce the provisions of Section 4.1 and exercise the
rights of National Financial to enforce the obligations of NAFCO
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under Section 4.1 on behalf of the Trust and the Certificateholders without the
consent of National Financial.
5.8 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, and the Trustee for the
benefit of the Certificateholders and the Certificate Insurer, which shall be
considered to be third-party beneficiaries and shall be entitled to rely on and
directly enforce the provisions of this Agreement. The Certificate Insurer may
disclaim any of its rights and powers under this Agreement upon delivery of a
writt7en note to NAFCO and National Financial. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation hereunder.
5.9 No Petition. NAFCO hereby agrees that it will not institute
against National Financial, or join any other Person instituting against
National Financial, any bankruptcy or insolvency proceeding under any applicable
state or federal law so long as any Certificate issued pursuant to the Pooling
and Servicing Agreement remains outstanding or there shall have not elapsed one
year plus one day since the date of the final payment on the Certificates issued
pursuant to the Pooling and Servicing Agreement. The foregoing shall not limit
the right of NAFCO to file any claim in or otherwise take any action with
respect to any bankruptcy or insolvency proceeding that was instituted against
National Financial by any Person other than NAFCO.
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IN WITNESS WHEREOF, the parties hereto have executed this Purchase
and Contribution Agreement as of the day and year first written above.
NATIONAL FINANCIAL AUTO FUNDING
TRUST
By: CHASE MANHATTAN BANK USA, N.A.
not in its individual capacity but
solely as Owner Trustee of the
National Financial Auto Funding Trust
By: ____________________________________
Name:
Title:
NATIONAL AUTO FINANCE COMPANY L.P.
By: NATIONAL AUTO FINANCE
CORPORATION, as General Partner
By: ____________________________________
Name:
Title:
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IN WITNESS WHEREOF, the undersigned have caused this Conveyance to
be duly executed and delivered by their respective duly authorized officers as
of the day and year first above written.
NATIONAL AUTO FINANCE COMPANY L.P.
By: NATIONAL AUTO FINANCE CORPORATION,
its General Partner
By:_______________________________________________
Name:_________________________
Title:________________________
NATIONAL FINANCIAL AUTO FUNDING TRUST
By: CHASE MANHATTAN BANK USA, N.A.
not in its individual capacity but solely as Owner
Trustee of the National Financial Auto Funding
Trust
By:_______________________________________________
Name:_________________________
Title:________________________
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