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CUSTODIAL AGREEMENT
NATIONAL AUTO FINANCE COMPANY, L.P.
Company
and
OMNI FINANCIAL SERVICES OF AMERICA
Custodian
Dated as of November 21, 1995
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CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT ("Agreement"), dated as of
November 21, 1995, is entered into by and between OMNI FINANCIAL
SERVICES OF AMERICA, INC. as custodian ("Custodian"or "OFSA"), and
NATIONAL AUTO FINANCE COMPANY, L.P., as master servicer (the "Company"
or "NAFCO").
RECITALS
A. National Financial Auto Funding Trust ("National
Financial"), a Delaware business trust, intends to transfer, set over,
assign and otherwise convey the accounts designated in Schedule 1 to
the Servicing Agreement (as defined below) (the "Assigned Accounts")
to National Auto Finance 1995-1 Trust (the "Trust") pursuant to the
Pooling and Servicing Agreement, dated as of October 1, 1995 (the
"Pooling and Servicing Agreement"), by and among National Financial,
NAFCO and Xxxxxx Trust and Savings Bank, as trustee (the "Trustee").
B. NAFCO and OFSA have agreed pursuant to the Amended and
Restated Servicing Agreement (the "Servicing Agreement") dated as of
December 5, 1994, as amended as of October 1, 1995 and supplemented as
of November 21, 1995 that OFSA shall provide certain accounting and
collection services with respect to the Assigned Accounts following
assignment of the Assigned Accounts by National Financial to the
Trust.
C. NAFCO desires to have OFSA take possession of the Contract
Files as custodian and bailee of the Trustee and NAFCO and the
Trustee, as assignee of NAFCO in accordance with the terms and
conditions hereof.
D. Capitalized terms used but not defined herein shall have
the same meanings ascribed thereto in the Pooling and Servicing
Agreement.s
STATEMENT OF AGREEMENT
A. The Custodian shall maintain custody and possession of the
Contract Files as custodian for the benefit of, and bailee for, NAFCO
and the Trustee, as assignee of NAFCO.
B. The Custodian shall maintain possession of the related
Contract Files at its offices in Memphis, Tennessee or at such other
offices of the Custodian as shall from time to time be identified to
NAFCO by written notice; provided that, if such other offices are
outside of Tennessee, the Custodian must get NAFCO's prior written
consent. The Custodian may temporarily move individual Contract Files
or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its
customary practices and procedures. It is intended that by the
Custodian's agreements pursuant to this agreement that the Trustee
will be deemed to have possession of the Contract Files for purposes
of Section 9-305 of the UCC as in effect in the state in which the
Contract Files are located.
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C. As custodian and bailee, the Custodian shall have and
perform the following powers and duties:
(i) hold the Contract Files on behalf of
NAFCO and the Trustee, as assignee of NAFCO maintain accurate
records pertaining to each Contract to enable it to comply
with the terms and conditions of this custodial agreement and
maintain a current inventory thereof (by computer records or
otherwise);
(ii) implement policies and procedures with
respect to the reasonable and customary handling and custody of
the Contract Files;
(iii) attend to details in maintaining custody of
the Contract Files on behalf of NAFCO; and
(iv) at all times maintain the original of
each fully executed Contract and store such original Contract
in a secure place.
D. The Custodian shall:
(i) act with reasonable care, using that
degree of skill and care that it exercises with respect to
similar contracts owned and/or serviced by it;
(ii) promptly report to NAFCO any material
failure by it to hold the Contract Files as herein provided;
(iii) promptly take appropriate action to remedy
any such failure; and
(iv) in acting as custodian and bailee of the
Contract Files, not assert, and shall cause a related
subservicer not to assert, any beneficial ownership interests
in the Contracts or the Contract Files.
E. The Custodian agrees to indemnify the Company and the
Trustee, its respective officers, directors, employees and agents for
any and all liabilities, obligations, losses, damages, payments,
costs, or expenses of any kind whatsoever which may be imposed on or
incurred by the Company and the Trustee arising from the gross
negligence or willful misconduct of the Custodian in maintaining
custody of the Contract Files pursuant to this Agreement; provided,
however, that the Custodian will not be liable to the extent that any
such amount resulted from the gross negligence or willful misconduct
of the Company and provided further that the Custodian will not be
liable for any such liability, obligation, loss, damage, payment, cost
or expense that resulted from any act or omission to act by it done in
conformity with the written instructions of the Company.
F. If at any time the Company notifies the Custodian that other
custodial arrangements have been made for the holding of the Contract
Files, such Custodian shall
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cooperate with the Company in such new custodial arrangement at the
expense of the Company. Such Custodian shall cooperate with the
Company to assure that the various documents contained in such
Contract Files are made available to the Company, as necessary for the
performance of the Company's duties under the other custodial
agreements.
G. The Custodian shall not without the prior written consent
of the Company and the Trustee, deliver or release to any Person any
Contracts or related Title Documents (or any security interest in the
related Financed Vehicle) except (i) in the ordinary course of its
business in connection with the release of collateral securing such
Contract after satisfaction of the related indebtedness thereunder or
in connection with correcting vehicle lienholder or similar
information on a Contract or title document or (ii) upon written
notice from the Transferor or NAFCO that such contract has been
retransferred to the Transferor in accordance with the Pooling and
Servicing Agreement.
H. The Custodian shall retain possession of the Contract File
for each Assigned Account until written notice from NAFCO that the
related account has been determined to be a contract with respect to
which any of the following has occurred during the due period: (i) 91
days have elapsed since repossession of the related financed vehicle,
(ii) NAFCO has in good faith determined that all amounts that it
expects to recover under such contract have been received, or (iii)
90% of any scheduled payment on such contract is 120 days or more
delinquent as of the end of such due period; provided that, OFSA shall
not be required to continue collection efforts beyond its standard
collection practices (as provided in the Servicing Agreement) except
at NAFCO's expense.
MISCELLANEOUS PROVISIONS
A. Effect of Invalidity of Provisions. In case any
one or more of the provisions contained in this Agreement should be or
become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed
thereby.
B. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
without regard to conflict of laws rules.
C. Termination. It is agreed that NAFCO may terminate
this Agreement at anytime without cause. In addition, this Agreement
will terminate if and to the extent that the Supplement dated November
21, 1995 to the Servicing Agreement terminates. The custodian will
deliver the Contract files to the Trustee or at the direction of the
Trustee upon such termination.
D. Assignment. This Agreement may be assigned only
with the prior written consent of the other party hereto and the
Trustee; provided that, the Company may assign all
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its rights under this Agreement to the Trustee, to which the Custodian
hereby expressly consents. The Trustee as assignee of the Company can
enforce the rights under this Agreement directly against the
Custodian.
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IN WITNESS WHEREOF, the Company and Custodian have
caused this Agreement to be duly executed as of the date and year
first above written.
NATIONAL AUTO FINANCE COMPANY, L.P.
By: NATIONAL AUTO FINANCE
CORPORATION, its General Partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Executive Vice President
OMNI FINANCIAL SERVICES OF AMERICA, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
