SERVICING AGREEMENT
This Agreement is made the 25th day of July, 1994 by and between World Omni
Financial Corp. ("WOFC") and National Auto Finance corporation (the "Company").
RECITALS
The Company is engaged in the business of providing financing for
purchasers and lessees of motor vehicles by either purchasing Obligations (as
hereinafter defined) arising from the retail sale or lease of motor vehicles
from various motor vehicle dealers or by providing financing for such retail
sale or lease directly to the purchaser or lessee (collectively, the
"Obligations"). The Company intends to either hold these Obligations for its own
account or fund the purchase of these Obligations through third party investors.
Unless WOFC and the Company agree in writing to the contrary, in the event third
party investors purchase or obtain security interests in the Obligations, WOFC's
responsibilities hereunder shall be to the Company to subservice the
Obligations.
WOFC is engaged in the business of, among other things, servicing loans,
leases and accounts and the Company desires to retain WOFC to provide certain
accounting and collection services and WOFC agrees to provide such services in
accordance with the terms of this Agreement.
ARTICLE I
Definitions
1. Account or Accounts. A retail installment contract, closed end lease
agreement, security agreement, conditional sales contract, chattel paper,
chattel mortgage and related promissory note, or any other obligation,
evidencing a Borrower's obligation arising from the bona fide sale or lease of a
motor vehicle by a dealer to a Borrower, including but not limited to all Lease
Accounts and Retail Accounts.
2. Borrower. The purchaser or lessee of a motor vehicle through an Account.
3. Business Day. A day other than a Saturday, Sunday, or a day on which the
executive offices of WOFC are closed pursuant to its published annual schedule
which shall be provided to Company pursuant to Company's request.
4. Collateral. A motor vehicle or other personal property which is leased
pursuant to an Account or which is pledged to, or in which a security interest
is granted to secure an Account.
5. Collection Assignment. An Account which is assigned to the collection
department of WOFC in order to attempt to contact the Borrower regarding the
delinquency or insurance requirements of the Account.
2
6. Company Account. A bank account established by Company into which are
deposited any amounts remaining in the Servicing Account after deduction of the
Servicing Fee and any other amounts owed to WOFC pursuant to this Agreement.
7. Defaulted Account. An Account which is delinquent in the amount of at
least three regular installment payments or which is in default of the
contractual requirement to provide insurance to cover the Collateral and the
Company has requested that the Account be returned.
8. Delinquent Account Review. A report in either electronic or hard copy
form, at the option of WOFC, in the form attached hereto as Exhibit "A", which
shall describe Accounts which are delinquent for a period of time agreed upon in
writing by WOFC and Company.
9. Lease Account(s). A closed end lease agreement, or any other obligation,
evidencing a Borrower's obligation arising from the bona fide lease of a motor
vehicle by a dealer to a Borrower.
10. Loan File. With respect to any Account, the file delivered to WOFC by
the Company, which file shall contain the data entry worksheet in a form
substantially similar to Exhibit "B" attached hereto, the Borrower
3
application, the retail instalment sales contract, closed end lease agreement,
promissory note and/or security agreement which are related to the Account, and
such other information as the Company shall supply.
11. Retail Account(s). A retail installment contract, security agreement,
conditional sales contract, chattel paper, chattel mortgage and related
promissory note, or any other obligation, evidencing a Borrower's obligation
arising from the bona fide sale of a motor vehicle by a dealer to a Borrower.
12. Returned Account. An Account which has been returned to the Company by
WOFC pursuant to the provisions of Article II of this Agreement.
13. Servicing Account. A separate interest bearing bank account, if
available, established by WOFC into which are deposited the amount of payments,
including late charges and extension fees, if any, made on the Accounts. Such
interest, if any, shall be for the benefit of the Company.
14. Servicing Fee. A monthly fee payable to WOFC in accordance with Article
V of this Agreement.
15. Title or Certificate of Title. The actual motor vehicle title in
question or the application therefor pending issuance of the actual title;
alternatively, in those
4
certain states whose law requires or contemplates that the original of the
actual motor vehicle title be possessed by the Borrower, then, in lieu of the
actual title, "Title" or "Certificate of Title" shall mean such duplicate
titles, certificates or other documents as are permitted, required and/or
contemplated to be possessed by the secured party under such state's laws and/or
procedures or applications thereof or pending issuance of the appropriate
document.
ARTICLE II
General Obligations of WOFC
1. Standard of Care. WOFC agrees to manage, service and make collections on
the Accounts for and on behalf of the Company to the extent provided in the
Agreement and to otherwise perform and carry out the duties, responsibilities
and obligations that are to be performed and carried out by WOFC under this
Agreement. WOFC shall service the Accounts in a manner consistent with the
servicing standards and procedures generally accepted in the financial services
industry for similar accounts and as otherwise expressly provided by this
Agreement.
2. Servicing Duties. WOFC shall provide the following services with respect
to the Accounts.
a. Upon the receipt of a completed Loan File from the Company, WOFC
shall cause to be maintained for each
5
Account automated information including, but not limited to, (i) name and
address of the Borrower, (ii) principal balance plus earned interest or the
balance of monthly payments due, as well as any other accrued charges of the
Account, (iii) the loan number, (iv) a description of the Collateral, (v) the
monthly payment, (vi) the residual value of the motor vehicle for Loan File
involving closed-end lease agreements, (vii) the current payment status of the
Account, (viii) each Account with respect to which WOFC has not received a
Certificate of Title for the Collateral Financed thereby in the name of or with
a first lien in favor of Company, and (ix) proof of insurance, and (x) such
other information concerning such Accounts as Company may reasonably request and
which is available to WOFC at no additional cost or expense.
b. After the receipt of the Loan File, WOFC shall mail to each
Borrower a monthly billing statement in the forms attached to this Agreement as
Exhibit C and Exhibit D for any Account involving the sale or lease of a motor
vehicle to the Borrower.
c. WOFC shall maintain records for each Account, which records shall
include the original principal balance, the amount of each payment applied to
the Account, the date of each payment the interest or lease rate, and the
6
current outstanding principal balance. WOFC's obligation to perform its
servicing duties and maintain accurate records hereunder is limited to the
accuracy and availability of the information WOFC receives from time to time
from the Company.
d. WOFC shall provide to the Company on or before the 10th day of each
month detailed reports by investor number including, but not limited to, the
legal status of each Account, the accounting status of each Account, and the
delinquency status of each Account. WOFC shall provide to the Company on or
before the 10th day of each month summary level reports of the above information
by investor and total Company portfolios. Said reports shall be presumed correct
and accurate unless the Company delivers to WOFC by registered or certified
mail, written objection thereto specifying the error contained in the reports.
In such event, the Company's sole and exclusive remedy and WOFC's only liability
shall be to make appropriate adjustments in the report to make it effective as
of the date the report is rerun, to the extent possible. For those Accounts
which are transferred to WOFC, WOFC shall provide the above reports to Company
beginning on the 10th day of the month following the month such Accounts are
completely converted and entered into WOFC's computer system. The Company agree
and understands that until the conversion and
7
transfer of all Accounts to WOFC is complete, which conversion period shall not
exceed a reasonable number of days mutually agreed to by WOFC and Company, WOFC
will make best efforts to provide the above referenced detailed reports.
However, WOFC does not guarantee the accuracy of such reports until the
conversion of all such Accounts is complete. Company agrees to pay WOFC all
costs and expenses, including but not limited to, additional fees for accounting
and technical support, incurred by WOFC for the conversion of such Accounts.
e. WOFC shall deposit the total of all amounts received in connection
with the Accounts into the Servicing Account within two Business Days of
receipt. WOFC shall use reasonable efforts to deposit such amounts within one
Business Day. After deducting the monthly Servicing Fee and any other amounts
owed by Company to WOFC pursuant to this Agreement from the Servicing Account,
WOFC shall deposit any remaining amounts in the Servicing Account to the Company
Account no later than the 10th day of each month.
f. WOFC shall report to the appropriate credit bureaus the historical
payment and default activity on each Account.
3. Collection of Delinquent Accounts. WOFC shall use its standard
collection practices for similar accounts to
8
collect past due payments, including but not limited to, automated collections
and live collector interfaces as necessary. WOFC may in its sole discretion
waive late charges, arrange deferred payment plans, grant extensions, or make
other arrangements for payment of past due accounts. WOFC will attempt to have
telephone communication with the Borrower once the Account is 5 days delinquent,
or such other longer period as Company may instruct WOFC in writing. WOFC shall
make available to the Company, on a weekly basis a Delinquent Account Review on
all defaulted Accounts and Accounts which in WOFC's good faith judgment, are at
high risk of becoming defaulted Accounts.
4. Returned Accounts.
a. By the 15th Business Day of each month, or within three business
days of comply's request, WOFC will send to the Company the Loan File for each
Account:
i. for which WOFC has determined, in its good faith judgment,
that all funds that are recoverable (including recovery from liquidation of the
Collateral) have been collected without instituting suit and/or obtaining legal
counsel; or
ii. for which insurance proceeds representing the payment of a
claim for the total destruction of the Collateral have been applied; or
9
iii. which is in Default and for which WOFC is unable to locate
the Collateral;
b. WOFC may also return to the Company at any time an Account which
WOFC believes, in its good faith judgment, the collection of which may subject
WOFC or the Company to liability.
c. Except for Accounts which become Returned Accounts pursuant to this
Article II, Section Four, no other Account shall be returned to the Company
prior to its payment in full or its classification as a Returned Account during
the term of this Agreement without the mutual consent of the Company and WOFC.
5. Repossession of Collateral. Upon the Company's request, WOFC shall be
responsible for repossessing and disposing of collateral at any time an Account
is a Defaulted Account. WOFC may engage subcontractors to provide services for
such repossession and disposition at Collateral. The Company agrees to pay all
reasonable expenses related to the repossession, including but not limited to, a
fee of $300.00 per repossession, and agrees that WOPC may deduct such expenses
from the Servicing Account. At Company's option, upon providing 30 days written
notice to WOFC, Company may elect to repossess the Collateral of any Account, in
which case, the $300 fee per repossession shall not apply.
10
6. Insurance. WOFC shall monitor each Account for insurance coverage. The
expiration dates of insurance policies shall be tracked and reminder notices
sent to the Borrowers whose insurance policies have expired. Default letters
shall be sent to Borrowers who fail to provide insurance coverage. WOFC shall
notify the Company on a monthly basis of Accounts where the Borrower fails to
provide the required insurance. Under no circumstances shall WOFC have the
responsibility to keep in force a blanket policy which provides insurance
coverage.
7. Titles. WOFC will establish a procedure to determine whether Titles are
received for each Account. WOFC shall advise the Company of any Account for
which a Title is not received within 60 days of WOFC's receipt of the Loan File.
WOFC shall diligently attempt to obtain these Titles. WOFC shall have no
obligation to determine whether Titles are received in those states which permit
the Borrower, rather than the lienholder, to have possession of the Title.
However, WOFC is not ultimately responsible for obtaining the Title or ensuring
that the information on the Title is accurate.
8. Reporting Requirements. WOFC will provide to the Company such monthly
reports and information as Company may reasonably request and that WOFC may
reasonably provide.
11
At the request of the Company WOFC will provide a copy of any report which WOFC
receives from any outside service vendor for which WOFC is not required to pay a
fee.
9. Insurance Claims. WOFC shall cooperate with the Company in filing all
insurance claims pursuant to blanket casualty insurance and gap indemnity
insurance provided by the Company applicable to the Accounts or the Collateral,
regardless of investor status. The Company shall provide all forms and
information not included in the respective Loan File required to file each such
claim. Except for filing the claim, WOFC shall have no liability in the event a
claim is denied or not paid in full.
10. Bankruptcies. If WOFC receives a notice that a Borrower on an Account
has filed for relief under the United States Bankruptcy Code, WOFC shall file a
proof of claim and notify Company of the bankruptcy filing. In the event that
activities outside the scope of routine bankruptcy filings and follow-up are
necessary, the Company may, at its option, instruct WOFC to hire the services of
a law firm to represent the Company in the Borrower's bankruptcy at the expense
of Company. If WOFC must retain the services of an attorney to file a proof of
claim, Company agrees to pay all reasonable attorney fees and costs, including
all filing fees, relating to the filing of such proof of claim.
12
However, if Company instructs WOFC to retain the services of a specific law
firm, Company agrees to pay all attorney fees and costs, including all filing
fees, relating to the filing of such proof of claim. The Company agrees that
WOFC may deduct any reasonable or all attorney fees and/or costs, as applicable,
from the Servicing Account.
11. No Other Obligations. WOFC shall not be liable for performing any other
service other than those set forth in this Agreement. Other services which are
performed by WOFC at the request of the Company shall not be included in the
Servicing Fee and the expense of such additional services shall be paid
separately to WOFC by the Company.
ARTICLE III
General Obligations of the Company
The Company hereby agrees to undertake the following obligations.
1. Loan Files. The Company shall provide to WOFC the Loan Files when
tendering an Account for servicing.
2. Payment of Servicing Fees and Compensation. WOFC shall deduct monthly by
the tenth (10th) day of each month the Servicing Fees as well as any other
expenses or charges due WOFC pursuant to this Agreement from the amounts held in
the Servicing Account. Any other expenses or charges, other than Servicing Fees
and other expenses or
13
charges due WOFC pursuant to this Agreement, must be pre-approved in writing by
the Company.
3. Goodwill. The Company hereby acknowledges that substantial goodwill
exists with respect to the trade names "WOFC", "World Omni Financial Corp.", or
"World Omni" in the United States and that WOFC's reputation in the financial
services business is of substantial importance to the operations of WOFC.
Accordingly, the Company agrees to use its best efforts to conduct its
activities under this Agreement in a manner that will not detract from WOFC's
goodwill and standing and will not otherwise damage the reputation of WOFC. WOFC
hereby acknowledges that substantial goodwill exists with respect to the trade
names National Auto Finance corporation, and NAFCO, and that the Company's
business reputation is of substantial importance to the operations of the
Company. Accordingly, WOFC agrees to use its best efforts to conduct its
activities under this Agreement in a manner that shall not detract from the
Company's goodwill and standing and shall not otherwise damage the reputation of
the Company.
4. Marketing and Selling Interests in the Accounts. The Company
acknowledges and agrees that it is not an agent for WOFC and is not authorized
to make representations on behalf of WOFC and that WOFC shall have no
14
liability for any actions or omissions made by the Company in its marketing and
selling of interests in the Accounts or otherwise. The Company further agree
that in its obtaining leases, loans or in its marketing and selling of interests
in or related to the Accounts it shall: (i) not make any misrepresentations,
(ii) not make any representations on behalf of WOFC, and (iii) comply with all
state and federal investment offering and other applicable laws.
ARTICLE IV
Licensing Fees for Computer Software
1. WOFC shall grant Company a license to utilize its "ACE" and "Contract
Entry" computer software systems for a fee described in paragraph 2 below so
long as this Agreement remains effective. WOFC shall have the right to
immediately cancel any such license, and Company agrees to surrender such
license and return any and all software, manuals, documents, etc. relating to
ACE and Contract Entry in its possession to WOFC upon termination of this
Agreement. WOFC also agrees to provide training to Company on these systems for
a fee of $75.00 per hour. Company shall be responsible for all computer hardware
expenses, including, but not limited to all installation charges and telephone
line charges.
15
2. Company agrees to pay WOFC the following fees for each credit
application submitted by Company to ACE:
Number of Credit Applications Per Month Cost Per Application
--------------------------------------- --------------------
a) 1 through 1500 $1.90
b) 1501 - 4999 1.80
c) over 5000 1.75
Company agrees to obtain its own subscriber number from the credit bureaus, and
to pay any and all fees charged by the credit bureaus, as well as all postage
fees incurred in the mailing of the form letters generated by the ACE system.
3. If required by the below named vendor, Company agrees to obtain licenses
far the following software systems which are utilized by ACE and Contract Entry:
(a) Bureaulink;
(b) XX Xxxx verifications for vehicle identification numbers;
(c) Vertex - verification of tax information.
4. Company agrees that the above fees may be deducted monthly from the
Servicing Account.
5. This Article IV may be separately terminated by the Company upon thirty
(30) days prior written notice to WOFC. In the event the Company terminates this
Article IV, WOFC shall assist the Company with any computer system conversion.
Company agrees to pay WOFC all of WOFC's
16
reasonable costs associated with such assistance including, but not limited to,
reasonable hourly rates of all WOFC personnel and all out of pocket expenses
incurred by WOFC.
ARTICLE V
Servicing Compensation
1. WOFC shall receive as compensation for servicing the Retail Accounts a
Servicing Fee each month equal to $12.65 per Retail Account being serviced by
WOFC during that month.
2. In the event that the number of Accounts requiring collection Assignment
for any month exceed 30% of the total number of Retail Accounts being serviced
as of the first of that month, WOFC shall be entitled to additional compensation
of $6.00 for each Retail Account requiring Collection Assignment which exceeds
the 30% floor for that month.
3. WOFC shall receive as compensation for servicing the Lease Accounts a
Servicing Fee each month equal to $20.65 per Lease Account being serviced by
WOFC during that month.
4. In the event that the number of Accounts requiring collection activity
for any month exceed 30% of the total number of Lease Accounts being serviced as
of the first of that month, WOFC shall be entitled to additional
17
compensation of $6.00 for each Lease Account requiring collection activity which
exceeds the 30% floor for that month.
5. WOFC, or an affiliate of WOFC, shall receive as additional compensation
for repossessing and disposing of collateral all reasonable expenses related to
the repossession, including but not limited to, a fee of $300.00 per
repossession.
6. Upon the mutual agreement of Company and WOFC, including is but not
limited to, mutual agreement between Company and WOFC regarding the amount of
additional compensation which Company will pay to WOFC for legal and accounting
services, WOFC agrees to provide appropriate Collateral Schedules to Company, or
to a Lender designated by Company, and to provide legal and accounting review as
to WOFC performing services as a Master Servicer, in the event that Company
desires to securitize any or all of the Accounts.
7. WOFC is granted the right of set off against any funds of the Company
held in WOFC's possession or control to pay amounts owed to WOFC under any
section of this Agreement.
18
ARTICLE VI
Representations and Warranties
1. Representations and Warranties of WOFC. WOFC covenants, represents and
warrants to Company as follows:
a. WOFC is a corporation duly organized, validly existing and in good
standing under the laws of the state of Florida.
b. WOFC has the corporate power to enter into this Agreement and to
perform its obligations under this Agreement, and the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action of WOFC, and constitute
the legal, valid and enforceable actions of WOFC.
c. WOFC holds all material licenses, certificates, franchises, and
permits from all governmental authorities necessary for the conduct of its
business and has received no notice of proceedings relating to the revocation of
any such license, certificate or permit, which singly or in the aggregate, might
affect the Accounts or this transaction or might materially affect the conduct
of the business, results of operations, net worth or condition (financial or
otherwise) of Company.
19
d. There are no actions, suits or proceedings pending or, to the
knowledge of WOFC, threatened against WOFC or any of its properties or assets,
at law or in equity before or by any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over WOFC, which
might have a material adverse effect on the Accounts or the business or property
of WOFC or which in any way would prevent, interfere with or materially and
adversely affect the ability of WOFC to perform its duties and obligations under
this Agreement.
e. WOFC will maintain all policies of insurance in such amounts and
against such risks as is necessary and prudent for the conduct of its business,
including a blanket crime insurance policy in an amount not less than ten
million dollars. WOFC shall deliver to Company a certificate evidencing such
coverage. Such certificate shall provide that WOFC or its broker shall provide
Company thirty (30) days advance written notice of any material change to or
cancellation of such coverage. Furthermore, WOFC agrees to assign to Company any
monies it collects under such policies which are paid to WOFC as a result of any
WOFC employee misconduct regarding Company's Accounts.
20
2. Representations and Warranties of Company. Company covenants, represents
and warrants to WOFC as follows:
a. Company is a corporation duly organized under the laws of the State
of Delaware.
b. Company has the corporate power to enter into this Agreement and to
perform its obligations under this Agreement and the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action of Company, and
constitute the legal, valid and enforceable actions of Company.
c. Company holds all material licenses, certificates, franchises, and
permits from all governmental authorities necessary for the conduct of its
business and has received no notice of proceedings relating to the revocation of
any such license, certificate or permit, which singly or in the aggregate, might
affect the Accounts or this transaction or might materially affect the conduct
of the business, results of operations, net worth or condition (financial or
otherwise) of Company.
d. There are no actions, suits or proceedings pending or threatened
against the Company or, to the knowledge of the Company, any of its properties
or assets, at
21
law or in equity before or by any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over the Company,
which might have a material adverse effect on the Accounts or the business or
property of the Company or which in any way would prevent, interfere with or
materially and adversely affect the ability of the Company to perform its duties
and obligations under this Agreement.
e. All information provided to WOFC by the Company regarding any
Account tendered or to be tendered to WOFC for servicing is true and correct to
the best of Company's knowledge.
f. All Accounts which are tendered by Company to WOFC for servicing
will be secured by, or involve the leasing of, a motor vehicle, will be duly and
validly authorized, executed and delivered by the related Borrower and will
constitute a legal, valid and binding obligation of the related Borrower.
g. All Accounts tendered to WOFC by Company for servicing will comply
in all respects with all applicable State and Federal laws and regulations,
including but not limited to usury, credit reporting, truth-in-lending, and
provisions of the laws of the state where the Account originated which pertain
to the financing and leasing of motor vehicles.
22
ARTICLE VII
Indemnities
1. Indemnities by Company. (a) The Company shall indemnify, defend and hold
harmless WOFC, its parent, subsidiaries, affiliates and the directors, officers,
employees, partners, agents, successors and assigns of each of such companies
from and against any claim, action, loss, damage, penalty, fine, cost, expense,
or other liability, including all court costs and reasonable attorneys' fees
incurred in enforcing this indemnity or defending any claim or action, including
any claims or causes of action brought by any person who obtains an interest in
or related to the Accounts, directly or indirectly resulting from or arising out
of Company's performance of its duties under this Agreement or the Company's
breach of its duties, including without limitation, any misrepresentation or
breached warranty under this Agreement. The right of indemnification for acts
occurring during the term of this Agreement provided hereby shall survive the
termination of this Agreement. Payment of and amounts owed under this indemnity
provision are secured by and subject to set off and application out of the
payments on deposit in the Servicing Account.
(b) It is hereby acknowledged that the Company acquires installment
contracts, evidencing Accounts
23
in multiple forms. It is further acknowledged that the Company has requested
WOFC to make a distinction on its records for differences in forms relating only
to the actuarial and simple interest methods of accounting for interest. The
Company hereby indemnifies WOFC for any claim, action, loss, damage, penalty,
fine, cost, expense or other liability sustained by WOFC as a result of honoring
such request and making no further distinction between installment contract
forms.
(c) If any legal proceeding is instituted, or if any claim or demand
is made, in respect of which indemnification may be sought from Company
hereunder, WOFC shall promptly cause written notice thereof to be given to
Company. Company shall retain at its own expense, legal counsel of its choice
(who must be reasonably satisfactory to WOFC) who shall also represent WOFC if
Company accepts such indemnification request, and to defend against, negotiate,
settle or otherwise deal with any such proceeding, claim or demand; provided,
however, that WOFC may participate in any such proceeding with counsel of its
choice and at its expense.
2. Indemnities by WOFC. (a) WOFC shall indemnify, defend and hold harmless
the Company, its parent, subsidiaries, affiliates, directors, officers,
employees,
24
partners, agents, successors and assigns, respectively, as applicable, from and
against any claim, action, loss, damage, penalty, fine, cost, expense, or other
liability, including all court costs and reasonable attorneys' fees incurred in
enforcing this indemnity or defending any claim or action, directly or
indirectly resulting from or arising out of WOFC's performance of its duties
under this Agreement or WOFC's breach of its duties, including without
limitation any misrepresentation or breached warranty made by WOFC under this
Agreement except to the extent that any claim, action, loss, penalty, time,
cost, expense or other liability is caused as a result of WOFC following and
complying with the written specific instructions of Company regarding the
servicing of the Accounts. The right of indemnification provided hereby shall
survive the termination of this Agreement.
(b) If any legal proceeding is instituted, or if any claim or demand
is made, in respect of which indemnification may be sought from WOFC hereunder,
Company shall promptly cause written notice thereof to be given to WOFC. WOFC
shall retain at its own expense legal counsel of its choosing who must be
reasonably satisfactory to Company who shall also represent Company if WOFC
accepts such indemnification request and shall defend against, negotiate,
25
settle or otherwise deal with any such proceeding, claim or demand; provided,
however, that Company may participate in any such proceeding with counsel of its
choice and at its expense.
ARTICLE VIII
Default
1. Events of Default. It shall be an event of default under this Agreement
upon the happening of any of the following events (an "Event of Default"):
a. If the Company fails to timely remit to WOFC the Servicing
Compensation or other amounts due under this Agreement which are due and payable
and such failure to pay continues for a period of ten days from the date of the
mailing or delivery of an invoice from WOFC.
b. If any representation or warranty of the Company in this Agreement
is false, incorrect or misleading in any material respect, or if any
representation or warranty contained in any reports, documents, certificates or
other papers delivered to WOFC from time to time is false, incorrect or
misleading in any material respect, and is not cured within thirty days of
written notice thereof to the Company.
c. If the Company breaches or fails to perform or observe any
obligation or condition to be
26
performed or observed by it under this Agreement in any material respect and
such breach or default is not cured within thirty days after WOFC has given the
Company written notice demanding that such breach or default be cured;
d. If any representation or warranty of WOFC in this Agreement is
false, incorrect or misleading in any material respect, or if any representation
or warranty contained in any reports, documents, certificates or other papers
delivered to the Company from time to time is false, incorrect or misleading in
any material respect and is not cured within thirty days of written notice
thereof to WOFC;
e. If WOFC breaches or fails to perform or observe any obligation or
condition to be performed or observed by it under this Agreement in any material
respect and such breach or default is not cured within thirty days after the
Company has given WOFC written notice demanding that such breach or default be
cured;
f. If WOFC fails, in any material respect, to perform its obligations
under this Agreement in conformance with industry standards applicable to
servicing of similar Accounts and such failure is not cured within thirty days
after the Company has given WOFC written notice demanding such failure be cured.
27
2. Termination for Cause. Upon the happening of an Event of Default, after
the expiration of any opportunity to cure such default, the non-defaulting party
may terminate this Agreement by notice in writing to the defaulting party sent
by facsimile or certified mail, postage prepaid, or by hand delivery.
3. Record Availability. In the event of termination WOFC agrees to make
available to the Company such computer records as are reasonably required to
effect an orderly conversion to another computer system.
4. Limitation on Actions. All legal actions for breach of this Agreement
must be commenced within two years of the breach or be forever barred. Both
parties agree that the sole and exclusive remedy for any matter or cause of
action related directly or indirectly to any breach of the Agreement or the
matters contemplated hereunder shall be a cause of action sounding in contract
and with damages limited to actual and direct damages incurred. Neither party
shall in any event be liable for any consequential, special, punitive,
incidental or indirect damages, including without limitation, loss of profit or
goodwill. Except as otherwise provided herein, there are no warranties of
merchantability or fitness for a particular purpose.
28
ARTICLE IX
Term
This Agreement shall be effective upon the execution and delivery hereof,
and shall remain in full force and effect until the maturity of each Account
accepted by WOFC for servicing. WOFC may terminate the acceptance of new
Accounts on July 15, 1997 unless sooner terminated as provided in the Agreement.
Notwithstanding anything to the contrary, the Company may terminate this
Agreement at any time without cause. Upon termination of this Agreement by
Company without cause and if and when Company elects, in its sole discretion, to
terminate WOFC's duties as servicer under this Agreement with respect to any and
all Accounts transferred to WOFC by Company for servicing prior to such
termination of this Agreement, Company shall pay to WOFC the following amounts:
(i) if terminated prior to or on the first anniversary date of
the effective date of this Agreement, the amount of Forty Thousand Dollars
($40,000.00);
(ii) if terminated after the first anniversary date but prior to
or on the second anniversary date of this Agreement, the amount of Ten Thousand
Dollars ($10,000.00); and
29
(iii) if terminated after the second anniversary date but prior
to or on the third anniversary date of this Agreement, the amount of Five
Thousand Dollars ($5,000.00); and
(iv) if terminated after the third anniversary date but prior to
the fourth anniversary date of this Agreement, the amount of Five Thousand
Dollars ($5,000.00).
In the event Company terminates this Agreement without cause, WOFC shall
assist Company with any computer system conversion. Company agrees to pay WOFC
all of WOFC's reasonable costs associated with such assistance including, but
not limited to, reasonable hourly rates of all WOFC personnel and all
out-of-pocket expenses incurred by WOFC.
ARTICLE X
General Provisions
1. Confidentiality. All information not generally available to the public
with respect to the Company and WOFC shall be kept confidential and shall not be
disclosed to third parties or used by the recipient other than for purposes of
carrying out its obligations under this Agreement except for disclosures
required by law or required to be made to governmental agencies, disclosures to
an independent certified public accounting firm auditing the
30
books and records of the party, disclosures to investment banking institution,
or disclosures for which both WOFC and the Company have given written consent.
This information includes, but is not limited to, customer lists of the Company.
2. Continuation of Representations and Warranties. WOFC and Company each
acknowledge and agree that the representations and warranties given by each
party in this Agreement are to be continuing and shall remain in full force and
effect throughout the term of this Agreement and that the breach of any
representation and/or warranty shall constitute a breach of this Agreement. WOFC
and Company further agree that should any party become aware that it has
breached its representations or warranties given by it in this Agreement, it
shall give notice to the other party within 10 days of the occurrence of such
breach.
3. Company's Right of Audit. The Company shall have the right, under this
Agreement, after five days written notice to WOFC to reasonably examine and
audit, during regular business hours, the books and records of WOFC which
concern the transactions covered by this Agreement. The Company agrees to
reimburse WOFC for the costs of conducting an audit or reviewing the books and
records of WOFC.
31
4. Notices. Any notice to be given under this Agreement shall be made in
writing and shall be deemed to have been duly given upon mailing of certified or
registered mail, return receipt requested, addressed as set forth below:
a. If to WOFC:
World Omni Financial Corp.
000 X. X. 00xx Xxx.
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Vice President
with a copy to
Xxxxx XxXxxx, Associate Counsel at the above address,
and a copy to,
Attention: Xxxx Xxxxxxxx
World Omni Financial Corp.
0000 Xxxx Xxxx Xx.
Xxxxxx, Xxxxxxx 00000
b. If to Company:
National Auto Finance Corporation
000 X. X. 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxx, Executive Vice President
32
with a copy to
Xxxxx XxXxxxxx at the above address
5. CONTROLLING LAW. THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS
VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT, SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
FLORIDA NOTWITHSTANDING ANY FLORIDA OR OTHER CHOICE-OF-LAW RULES TO THE
CONTRARY.
The parties agree to the application of Florida law because Florida is the
location of WOFC'S executive and administrative offices and such application
allows for the uniform application of law to WOFC's contracts.
6. Indulgence Not Waivers. Neither the failure nor any delay on the part of
any party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege with respect to any
occurrence will be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
33
7. Provisions Separable. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason other or
others of them may be invalid or unenforceable in whole or in part.
8. Assignment. Without Company's consent, WOFC may assign its rights and/or
obligations under this Agreement to a parent, subsidiary or affiliate of WOFC
provided WOFC shall not be released from this Agreement by virtue of said
assignment. WOFC shall notify the Company of any such assignment at least thirty
(30) days prior to the effective date of such assignment. Except as set forth in
this paragraph 8, neither party may assign this Agreement or its rights
hereunder without the prior written consent of the other party.
9. Independent Contractor. WOFC undertakes to service the Accounts and to
otherwise perform and carry out the duties, responsibilities and obligations to
be performed and carried out by it under this Agreement as an independent
contractor, and nothing herein shall be construed so as to create any
partnership, joint venture or other relationship with the Company.
34
10. No Third-Party Beneficiaries. This Agreement is for the benefit of, is
binding upon and may only be enforced by the parties hereto and their respective
successors and permitted assigns, and is not for the benefit of any other person
or entity and may not be enforced by such third party, including but not limited
to those who obtain interests in or related to the Accounts.
11. Attorneys' Fees. Each party shall be responsible for its own attorney
fees associated with the preparation and enforcement of this Agreement.
12. Entire Aareement. This Agreement constitutes the entire understanding
and agreement among the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements or
conditions, express or implied, oral or written, except as expressly herein
contained. This agreement may not be modified or amended other than by an
agreement in writing executed by an authorized representative of each party at a
contemporaneous or subsequent date.
13. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall
35
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
14. Cooperation. At any time and from time to time on and after the date of
execution of this Agreement (a) WOFC shall at the request of the Company execute
and deliver or cause to be executed and delivered all such documents and take or
cause to be taken all such other actions, as the Company may reasonably deem
necessary in order to carry out the terms and provisions of this Agreement; and
(b) the Company shall, at the request of WOFC, execute and deliver or cause to
be executed and delivered such further instruments and take or cause to be taken
such further actions as WOFC may reasonably deem necessary to carry out the
terms and provisions of this Agreement.
15. Force Majeure. Neither party shall be liable to the other, or held in
breach of this Agreement if prevented, hindered, or delayed in performance or
observance of any provision contained herein by reason of acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental action or judicial order,
earthquakes, fires, floods, or other similar cause, provided, however if WOFC is
prevented from performing under this Agreement for a period in excess of ninety
(90) days due to such cause, the Company
36
may, in its sole discretion terminate this Agreement and WOFC shall cooperate,
to the extent possible, given the nature of the cause for non-performance, in an
orderly transition.
16. Usage of Terms. With respect to all terms in the Agreement the singular
includes the plural and the plural the singular; words importing any gender
include the other genders; references to "writing" include printing, typing,
lithography, and other means of reproducing words in a visible form; references
to agreements and other contractual instruments include all subsequent
amendments thereto or changes therein entered into in accordance with their
respective terms and not prohibited by the Agreement; references to Persons
include their permitted successors and assigns; and the term "including" means
"including without limitation."
17. No Jury Trial. Both parties to this Agreement waive any and all right
to a trial by jury in any action or proceeding brought or commenced by either
party which is directly or indirectly related to this Agreement.
18. Non Exclusivity. Nothing herein shall be construed so as to restrict
either party from performing the same type or similar services or entering into
the same type or similar agreements with any other Company or organization.
37
19. Survival of Covenants, Representations and Warranties. The
representations, warranties and covenants set forth herein shall survive the
termination of this Agreement.
20. Arbitration. At its option, either the Company or WOFC may require that
any claim or dispute arising under or related to the terms of this Agreement,
whether in law or in equity, shall be submitted to arbitration in accordance
with the rules of the American Arbitration Association then prevailing in the
capital city of the state governing this Agreement.
Executed this __ day of ______, 199_
WORLD OMNI FINANCIAL CORP.
By:______________________________
Its:_____________________________
NATIONAL AUTO FINANCE CORPORATION
By:______________________________
Its:_____________________________
38
