Execution Copy
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$85,200,000
NATIONAL AUTO FINANCE 1998-1 TRUST
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UNDERWRITING AGREEMENT
Dated as of January 15, 1998
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$85,200,000
NATIONAL AUTO FINANCE 1998-1 TRUST
UNDERWRITING AGREEMENT
January 15, 1998
First Union Capital Markets Corp.
One First Union Center, TW-10
Charlotte, NC 28288-06 10
Ladies and Gentlemen:
NATIONAL FINANCIAL AUTO FUNDING TRUST, a Delaware business trust (the
"Seller"), xxxxxx agrees with you as follows:
Section I. Authorization of Notes. The Seller has authorized the issuance
by National Auto Finance 1998-1 Trust (the "Trust") of $85,200,000 of 5.88%
Class A Automobile Receivables-Backed Notes, Series 1998-1 (the "Notes"). The
Notes will evidence indebtedness of the Trust to be formed pursuant to a Trust
Agreement, dated as of January 20, 1998 (the "Trust Agreement"), between the
Seller and Wilmington Trust Company, a Delaware corporation, as owner trustee
(the "Owner Trustee"). The Notes will be issued pursuant to an Indenture, dated
as of December 15, 1997 (the "Indenture"), between the Owner Trustee and Xxxxxx
Trust and Saving Bank (the "Trustee"). The assets of the Trust (the "Trust
Property") will include a pool of non-prime motor vehicle retail installment
sale contracts (the "Contracts"), all monies paid or payable thereunder on or
after the applicable cut-off date, security interests in the new and used
automobiles, light-duty trucks, vans and minivans financed by the Contracts, a
financial guaranty insurance policy (the "Policy") issued by Financial Security
Assurance ("FSA"), certain bank accounts, all proceeds of the foregoing, and
certain other property. The Seller will be the sole owner of the Certificates
issued by the Trust which evidences a beneficial ownership interest in certain
distributions of the Trust (the "Seller Interest"). The Seller Interest will be
subordinated to the Notes. The Contracts will be serviced by National Auto
Finance Company, Inc. (in such capacity, the "Servicer"), an affiliate of the
Seller, and subserviced initially by Omni Financial Services of America, Inc.
("OFSA"), a wholly owned subsidiary of World Omni Financial Corp. ("World
Omni"). The Notes will be purchased by the Underwriter pursuant to this
Agreement. The Notes will be issued on January 20, 1998 or such other date as we
shall mutually agree upon (the "Closing Date").
The Seller has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-28829) and on
Form 5-3-MEF filing (File No. 333-44159), including a base prospectus relating
to the Notes under the Securities Act of 1933, as amended (the "1933 Act"). The
term "Registration Statement" means such registration statement as amended to
the date of the Underwriting Agreement. The term "Base Prospectus" means the
prospectus included in the Registration Statement. The term "Prospectus" means
the Base Prospectus together with the prospectus supplement specifically
relating to the Notes, as first filed with the Commission pursuant to Rule 424.
The term "Preliminary Prospectus" means a preliminary prospectus supplement
specifically relating to the Notes together with the Base Prospectus.
Upon the execution of the Underwriting Agreement and the authorization by
the Underwriter of the release of such Notes, the Underwriter proposes to offer
for sale to the public (each such purchaser, a "Purchaser") the Notes at the
prices and upon the terms set forth in the Prospectus.
Section 2. Appointment of Underwriter. Subject to the terms and conditions
set forth herein, the Seller agrees to issue and sell to First Union Capital
Markets Corp. (the "Underwriter"), and the Underwriter agrees to purchase from
the Seller, at the time and place and at the Purchase Price and in the manner
set forth herein, the entire original principal balance of the Notes. The
"Purchase Price" for the Notes, including the underwriting discount, shall be
equal to $84,923,909.40.
Section 3. Purchase. Sale and Delivery. Payment for the Notes shall be made
by a same day federal funds wire payable to the order of the Seller upon
delivery of the Notes registered in global form to the custodian for DTC, at the
offices of Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, before 4:00 P.M., New York time, on the Closing Date. The
denominations of the Notes to be delivered and the name in which each Note is to
be registered will be set forth in a notice to be delivered by you to the
Trustee.
Section 4. Representations and Warranties. (a) The Seller hereby represents
and warrants to you that as of the date hereof, unless otherwise stated:
(i) The Registration Statement including a base prospectus relating to
the Notes and the offering thereof from time to time in accordance with
Rule 415 under the 1933 Act has been filed with the Commission and such
Registration Statement, as amended to the date of the Underwriting
Agreement, has become effective. No stop order suspending the effectiveness
of such Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission. A prospectus
supplement specifically relating to the Notes will be filed with the
Commission pursuant to Rule 424 under the 1933 Act; provided, however, that
a supplement to the Prospectus prepared pursuant to Section 5(ii) hereof
shall be deemed to have supplemented the Base Prospectus only with respect
to the Notes to which it relates. The conditions to the use of a
registration statement on Form S-3 under the 1933 Act, as set forth in the
General Instructions on Form S-3, and the conditions of Rule 415 under the
1933 Act, have been satisfied with respect to the Seller and the Trust, as
the case may be, and the Registration Statement. There are no contracts or
documents that are required to be filed as exhibits to the Registration
Statement pursuant to the 1933 Act or the rules and regulations thereunder
that have not been so filed.
(ii) On the effective date of the Registration Statement, the
Registration Statement and the Base Prospectus conformed in all material
respects to the requirements of the 1933 Act and the rules and regulations
thereunder, and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; on the date of the
Underwriting Agreement and as of the Closing Date, the Registration
Statement and the Prospectus conform, and as amended or supplemented, if
applicable, will conform in all material respects to the requirements of
the 1933 Act and the rules and regulations thereunder, and on the date of
the Underwriting Agreement and as of the Closing Date, neither of such
documents includes any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and neither of such documents as
amended or supplemented, if
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applicable, will include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the
foregoing does not apply to statements or omissions in any of such
documents based upon written information furnished to the Seller by any
Underwriter specifically for use therein.
(iii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has been no material adverse change in the condition
(financial or otherwise), business, properties or results of operations of
the Seller or the Trust, as the case may be, whether or not arising in the
ordinary course of the business.
(iv) Each of the Seller and the Trust, as the case may be, is a
Delaware business trust with full power and authority to own its properties
and conduct its business, as presently conducted, and to enter into and
perform its obligations, as the case may be, under this Agreement, the Sale
Agreement, dated as of December 15, 1997 (the "Sale Agreement"), by and
between National Financial Auto Funding Trust II ("Funding Trust II") and
the Seller, the Purchase and Contribution Agreement, dated as of December
15, 1997 (the "Purchase Agreement"), by and between the Seller and National
Auto Finance Company, Inc. ("NAFI"), the Insurance and Indemnity Agreement,
dated as of January 20, 1998 (the "Insurance and Indemnity Agreement"), by
and among NAFI, the Seller and FSA, the Spread Account Agreement, dated as
of January 20, 1998 (the "Spread Account Agreement"), by and among the
Seller, FSA and the Trustee (together, the "Transaction Documents") and the
Notes.
(v) Each of the Transaction Documents has been duly authorized,
executed and delivered by the Seller or the Trust, as the case may be, and
constitutes a valid and binding agreement of the Seller or the Trust, as
the case may be.
(vi) The Notes will conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus and, when issued and delivered pursuant to this Agreement, will
have been duly executed, issued and delivered and will be entitled to the
benefits of the Indenture.
(vii) Neither the transfer and assignment of all of the Seller's
right, title and interest in the Contracts and the Trust Property to the
Trustee, nor the issuance nor the delivery of the Notes, nor the
consummation of any other of the transactions herein contemplated, nor the
fulfillment of the terms of the Notes, the Transaction Documents or this
Agreement, will result in the breach of any term or provision of the
organizational documents of the Seller or the Trust, as the case may be, or
conflict with, result in a breach, violation or acceleration of or
constitute a default under, the terms of any indenture, mortgage, deed of
trust or other agreement or instrument to which the Seller or the Trust, as
the case may be, is a party or by which it is bound, or result in the
creation or imposition of any lien upon any of its material properties
pursuant to the terms of such indenture, mortgage, deed of trust or other
such instrument, other than the lien created pursuant to the Sale and
Servicing Agreement, or violate any law, statute, order or regulation
applicable to the Seller or the Trust, as the case may be, of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller or the Trust, as the case may be, or any of
their properties.
(viii) Neither the Seller nor the Trust, as the case may be, is
subject to or in
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violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it or any of its properties, which materially and adversely affects (A) the
ability of the Seller or the Trust, as the case may be, to perform any of
its obligations under the Transaction Documents, or the ability of the
Seller or the Trust, as the case may be, to perform any of its obligations
hereunder, or (B) the business, operations, financial condition, properties
or assets of the Seller or the Trust, as the case may be, and the Seller or
the Trust, as the case may be, is not a party to, bound by or in breach or
violation of any indenture, mortgage, deed of trust or other agreement or
instrument, which materially and adversely affects the ability of the
Seller or the Trust, as the case may be, to perform any of its obligations
under the Transaction Documents, or the ability of the Seller or the Trust,
as the case may be, to perform any of its obligations hereunder.
(ix) There are no actions, proceedings or investigations to which the
Seller or the Trust, as the case may be, or any of its affiliates, is a
party pending, or, to the knowledge of the Seller or Trust, as the case may
be, threatened, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (A) asserting the invalidity
of the Transaction Documents or the Notes, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which might materially and
adversely affect the performance by the Seller or the Trust, as the case
may be, of its obligations under the Transaction Documents or the Notes,
(D) which might materially and adversely affect the validity or
enforceability of the Transaction Documents or the Notes or (E) which might
adversely affect the federal income tax attributes of the Notes described
in the Prospectus.
(x) Any taxes, fees and other governmental charges arising from the
execution and delivery of Transaction Documents and in connection with the
execution, delivery and issuance of the Notes and with the execution and
delivery of the Contracts, including any amendments thereto and assignments
and/or endorsements thereof have been paid or will be paid by NAFI or the
Seller or the Trust.
(xi) As of the Closing Date and each date of purchase of Contracts
thereafter, each of the Seller and the Trust, as the case may be, will have
good and marketable title to, and will be the sole owner of record of each
Contract free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest except for the security interest
granted to the Trustee (collectively, "Liens").
(xii) As of the Closing Date and each date of purchase of Contracts
thereafter, neither the Seller or the Trust, as the case may be, nor any
Person acting on the Seller's or the Trust's, as the case may be, behalf
will have offered, transferred, pledged, sold or otherwise disposed of any
of its right, title and interest in the Contracts, the Sale and Servicing
Agreement or the Indenture other than as contemplated by this Agreement,
the Sale and Servicing Agreement and the Indenture; and upon the execution
and delivery of the Sale and Servicing Agreement and the Indenture and the
execution and delivery of the Notes, the Seller or the Trust, as the case
may be, will have taken all necessary steps to convey good and marketable
title to the Notes to the Underwriter, in each case free and clear of any
Liens.
(xiii) Each of the Seller and the Trust, as the case may be, is
unaware of any facts or circumstances that would materially adversely
affect the Seller's or the Trust's, as the case may be, ability to perform
its obligations under the Transaction Documents or its
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obligations with respect to the Contracts.
(xiv) Each of the representations and warranties of the Seller set
forth in Section 3.1 and Section 8.1 of the Sale and Servicing Agreement
are true and correct.
(xv) Each of the representations and warranties of NAFI set forth in
Section 9.1 of the Sale and Servicing Agreement and Section 4.1 of the
Purchase Agreement are true and correct.
(xvi) There has not been any material adverse change in the business,
operations, financial condition, properties or assets of NAFI since the
financial statements dated September 30, 1997 were delivered to you. Such
financial statements (together with notes and schedules, if any, thereto)
fairly present the financial condition of NAFI, as of the dates indicated,
for the periods specified, in conformity with generally accepted accounting
principles applied on a consistent basis during such periods, except as
indicated therein. Since the date of the latest audited financial
statements (together with the notes and schedules, if any, thereto)
previously delivered to you, NAFI has not sustained any material loss or
interference with its business from court or governmental action, order or
decree, or otherwise, and, there has not been any material reduction in the
partners' capital (as such terms are used in the audited financial
statements of NAFI) or a material adverse change in the financial condition
of NAFI or any material adverse change, or any development involving a
prospective material adverse change in or affecting the general affairs,
management, financial position or results of operations of NAFI, which
would adversely affect the ability of NAFI to perform its obligations
hereunder or NAFI's ability to perform its obligations under the Purchase
Agreements, the Insurance and Indemnity Agreement, the Amended and Restated
Servicing Agreement, dated as of December 8, 1994, as assigned and amended
(the "Amended and Restated Servicing Agreement") by and between NAFI, World
Omni and OFSA, as the case may be, and the Sale and Servicing Agreement.
(xvii) The Indenture has been qualified under the Trust Indenture Act
of 1939, as amended.
(xviii) The Trust is not required to be registered under the
Investment Company Act of 1940, as amended.
Section 5. Covenants of the Seller. The Seller hereby covenants and agrees
with you as follows:
(a) To furnish the Underwriter, without charge, copies of the
Registration Statement and any amendments thereto including exhibits and as
many copies of the Prospectus and any supplements and amendments thereto as
the Underwriter may from time to time reasonably request.
(b) Immediately following the execution of the Underwriting Agreement,
the Seller will prepare a prospectus supplement setting forth the principal
amount, notional amount or stated amount, as applicable, of the Notes
covered thereby, the price at which the Notes are to be purchased by the
Underwriter from the Seller, either the initial public offering price or
prices or the method by which the price or prices at which the Notes are to
be sold will be determined, the selling concessions and reallowances, if
any, any delayed delivery arrangements, and such other information as the
Underwriter and the
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Seller deem appropriate in connection with the offering of the Notes, but
the Seller will not file any amendment to the Registration Statement or any
supplement to the Prospectus of which the Underwriter shall not previously
have been advised and furnished with a copy within a reasonable time prior
to the proposed filing or to which the Underwriter shall have reasonably
objected. The Seller will use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective as promptly as
possible. During the time when a Prospectus is required to be delivered
under the 1933 Act, the Seller will comply so far as it is able with all
requirements imposed upon it by the 1933 Act and the rules and regulations
thereunder to the extent necessary to permit the continuance of sales or of
dealings in the Notes in accordance with the provisions hereof and of the
Prospectus, and the Seller will prepare and file with the Commission,
promptly upon request by the Underwriter, any amendments to the
Registration Statement or supplements to the Prospectus which may be
necessary or advisable in connection with the distribution of the Notes by
the Underwriter, and will use its reasonable best efforts to cause the same
to become effective as promptly as possible. The Seller will advise the
Underwriter, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement or any amended Registration
Statement has become effective or any supplement to the Prospectus or any
amended Prospectus has been filed. The Seller will advise the Underwriter,
promptly after it receives notice or obtains knowledge thereof, of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus, or the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceeding for any such purpose, or of
any request made by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information, and
the Seller will use its reasonable best efforts to prevent the issuance of
any such stop order or any order suspending any such qualification, and if
any such order is issued, to obtain the lifting thereof as promptly as
possible.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the 1933 Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if it is necessary for any other reason to amend or
supplement the Prospectus to comply with the 1933 Act, to promptly notify
the Underwriter thereof and upon its request to prepare and file with the
Commission, at the Seller's own expense, an amendment or supplement which
will correct such statement or omission or any amendment which will effect
such compliance.
(d) During the period when a prospectus is required by law to be
delivered in connection with the sale of the Notes pursuant to the
Underwriting Agreement, the Seller will file, on a timely and complete
basis, all documents that are required to be filed by the Seller with the
Commission pursuant to Sections 13, 14, or 15(d) of the 1934 Act.
(e) To qualify the Notes for offer and sale under the securities or
"Blue Sky" laws of such jurisdictions as the Underwriter shall reasonably
request and to pay all expenses (including fees and disbursements of
counsel in the amounts previously agreed to) in connection with such
qualification of the eligibility of the Notes for investment under the laws
of such jurisdictions as the Underwriter may designate provided that in
connection therewith the Seller shall not be required to qualify to do
business or to file a
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general consent to service of process in any jurisdiction.
(f) To make generally available to the Seller's security holders, as
soon as practicable, but in any event not later than eighteen months after
the date on which the filing of the Prospectus, as amended or supplemented,
pursuant to Rule 424 under the 1933 Act first occurs, an earnings statement
of the Seller covering a twelve-month period beginning after the date of
the Underwriting Agreement, which shall satisfy the provisions of Section
11(a) and Rule 158 of the 1933 Act.
(g) The Seller agrees that, so long as the Notes shall be outstanding,
it will deliver to you and each Purchaser upon request, all monthly
servicing reports and any other reports available to the holders of Notes.
(h) The Seller agrees that any person designated in writing by you or
by any other holder of the Notes may consult with the proper officials and
the Seller shall use its reasonable best efforts to arrange the cooperation
of the officials of its affiliates (including, without limitation,
officials in charge of servicing the Contracts) at such times and as often
as you may reasonably request regarding the information required to be
furnished pursuant to Section 5(g) or regarding the performance of the
Seller's covenants and agreements contained in this Agreement or the
Transaction Documents or regarding the information required to be furnished
pursuant to the Transaction Documents. In addition, the Seller agrees to
provide any further information and documentation as may reasonably be
requested by the holders of the Notes regarding any of the matters set
forth herein or in the Transaction Documents; it being understood that all
such information and documentation may be subject to appropriate
confidentiality agreements.
Section 6. Conditions of Underwriter Obligation. Your obligation to act as
Underwriter for the Notes on the Closing Date shall be subject to the accuracy
in all material respects of the representations and warranties of the Seller and
the Trust, as the case may be, herein and in the Transaction Documents, to the
performance by the Seller and the Trust, as the case may be, in all material
respects of its obligations hereunder, and to the execution and delivery of the
Transaction Documents, the Notes and the Amended and Restated Servicing
Agreement, by all parties thereto, and to the following additional conditions:
(a) All actions required to be taken and all filings required to be
made by or on behalf of the Seller and the Trust, as the case may be, under
the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934
Act") prior to the sale of the Notes shall have been duly taken or made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall be in effect; (ii) no proceedings for such purpose shall be
pending before or threatened by the Commission, or by any authority
administering any state securities or "Blue Sky" laws; (iii) any requests
for additional information on the part of the Commission shall have been
complied with to the Underwriter's reasonable satisfaction, (iv) since the
respective dates as of which information is given in the Registration
Statement and the Prospectus except as otherwise stated therein, there
shall have been no material adverse change in the condition (financial or
otherwise), business, properties or results of operations of the Seller and
the Trust, as the case may be; (v) there are no material actions, suits or
proceedings pending before any court or governmental agency, authority or
body or to the knowledge of the Seller and the Trust, as the case may be,
threatened, affecting the Seller and the Trust, as the case may be, or the
transactions
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contemplated by the Underwriting Agreement; (vi) each of the Seller and the
Trust, as the case may be, is not in violation of its charter or its
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it is a
party or by which it or its properties may be bound, which violations or
defaults separately or in the aggregate would have a material adverse
effect on the Seller and the Trust, as the case may be.
(c) Subsequent to the execution of the Underwriting Agreement, there
shall not have occurred any of the following: (i) if at or prior to the
Closing Date, trading in securities on the New York Stock Exchange shall
have been suspended or any material limitation in trading in securities
generally shall have been established on such exchange, or a banking
moratorium shall have been declared by New York or United States
authorities; (ii) if at or prior to the Closing Date, there shall have been
an outbreak or escalation of hostilities between the United States and any
foreign power, or of any other insurrection or armed conflict involving the
United States which results in the declaration of a national emergency or
war, and, in the reasonable opinion of the Representative, makes it
impracticable or inadvisable to offer or sell the Notes or (iii) if at or
prior to the Closing Date, a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New
York State authorities.
(d) The representations and warranties of the Seller contained in
Section 4 hereof and of NAFI, the Seller and the Trust in the Transaction
Documents shall be true and correct in all material respects, and NAFI and
the Seller shall have delivered to you certificates, dated the Closing
Date, of an executive officer of NAFI, acting solely in his capacity as
executive officer of NAFI and not in his individual capacity, to the effect
that the signer of such certificate examined this Agreement, the
Transaction Documents, the Registration Statement and the Prospectus and
that: (i) the representations and warranties of the Seller in Section 4 of
this Agreement and in the Transaction Documents are true and correct in all
material respects, (ii) each of NAFI, the Seller and the Trust have
complied in all material respects with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the
Closing Date, (iii) nothing has come to his attention that would lead him
to believe that the Registration Statement or the Prospectus as of the date
thereof contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(iv) the conditions contained in Section 4(b) have been satisfied. Such
certificate shall further state that the contents thereof constitute
representations and warranties of the Seller to you and each Purchaser as
to the matters covered thereby.
(e) You shall have received from Xxxxxxxx & Xxxxxxxx LLP, a favorable
opinion, dated the Closing Date and reasonably satisfactory in form and
substance to you and your special counsel. In rendering such opinion,
counsel may rely, to the extent deemed proper and as stated therein, as to
matters of fact on certificates of responsible officers of NAFI, the
Seller, the Trust and public officials. In rendering such opinion, such
counsel may rely to the extent deemed proper and as stated therein, as to
matters of state law of jurisdictions other than the jurisdictions in which
such counsel is admitted to practice, and opinions of local counsel
satisfactory to your special counsel. Each opinion shall state that it may
be relied upon by the Purchasers and you as if the same had been addressed
to them or to you.
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(f) You shall have received from Xxxxx Xxxxxxxxxx LLP, your special
counsel, a favorable opinion, dated the Closing Date and reasonably
satisfactory in form and substance to you, and NAFI, the Seller and the
Trust shall have furnished to your special counsel such documents as they
may request for the purpose of enabling them to pass on certain matters.
(g) You shall have received a comfort letter, dated the Closing Date
and satisfactory to you (the "Comfort Letter") from independent
accountants, with respect to the Contracts.
(h) The Notes shall have been rated "AAA" by Standard and Poor's
Ratings Service ("S&P") and "Aaa" by Xxxxx'x Investor Services, Inc.
("Moody's").
(i) The Policy shall have been issued by FSA with respect to the Notes
guaranteeing the payment of the Scheduled Payments under the Indenture.
(j) You shall have received a certificate of a responsible officer of
FSA stating that the information contained in the sections of the
Prospectus entitled "The Certificate Policy", "The Certificate Insurer" and
Appendix A thereto are true and correct in all material respects.
(k) You shall have received a certificate of a responsible officer of
OFSA stating that the information contained in the Section of the
Prospectus entitled "Omni Financial Services of America, Inc." is true and
correct in all material respects.
(1) You shall have received an opinion of the general counsel of XXXX,
dated the Closing Date and reasonably satisfactory in form and substance to
you and your special counsel.
(m) You shall have received an opinion of counsel to FSA, dated the
Closing Date and reasonably satisfactory in form and substance to you and
your special counsel.
(n) You shall have received an opinion of counsel to the Trustee dated
the Closing Date and reasonably satisfactory in form and substance to you
and your special counsel.
(o) You shall have received an opinion of counsel to OFSA, dated the
Closing Date and reasonably satisfactory in form and substance to you and
your special counsel.
(p) You shall have received an opinion of local Delaware counsel to
the Seller and the Trust, dated the Closing Date, and reasonably
satisfactory in form and substance to you and your special counsel.
(q) You shall have received an opinion of counsel to the trustee of
the Seller and the Trust, dated the Closing Date and reasonably
satisfactory in form and substance to you and your special counsel.
(r) You shall have received from counsel in each state in which 10% or
more of the Obligors on the Contracts, by aggregate principal balance, are
located a favorable opinion as to the lack or necessity of noting the
Trust's security interest on the
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certificates of title for the Financed Vehicles to maintain its first
priority security interest, subject to certain exceptions and
qualifications.
(s) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto shall be reasonably
satisfactory in form and substance to you and your special counsel.
(t) You and your special counsel shall have received such other
information, certificates and documents as you or they may reasonably
request.
Section 7. Survival. The Seller agrees that the representations, warranties
and agreements made by it herein, in any certificate or other instrument
delivered pursuant hereto and in the Transaction Documents shall be deemed to be
relied upon by you, notwithstanding any investigation heretofore or hereafter
made by or on behalf of you, and that such representations, warranties and
agreements made by the Seller shall survive the delivery and payment for the
Notes.
Section 8. Expenses. In the event that no closing of the sale of the Notes
occurs through no fault of the Seller or because the conditions set forth in
Sections 6(e) and 6(f) have not been met, then the Seller's liability to the
Underwriter shall be limited to the reimbursement of the Underwriter's expenses
incurred through the date of termination for its reasonable out-of-pocket and
incidental expenses. In addition, whether or not the Notes are issued or sold,
the Seller shall pay the reasonable fees and expenses associated with the
transactions contemplated hereby including, without limitation, the following
fees and expenses:
(a) Rating Agency fees payable to S&P and Moody's with respect to
their rating of the Notes;
(b) The fees and expenses of the Seller's and XXXX's counsel and any
special counsel required to be retained;
(c) Fees charged by the firm of independent public accountants
referred to in Section 6(g) for the Comfort Letter;
(d) Reasonable copying costs for the Prospectus;
(e) Legal fees and expenses of Xxxxx Xxxxxxxxxx LLP, special counsel
to the Underwriter;
(f) Trustee's fees and reasonable fees of counsel to the Trustee;
(g) Fees and expenses of the Underwriter (including legal fees and
expenses) in connection with compliance with Blue Sky laws;
(h) The Commission's registration fee; and
(i) The expenses of printing and distributing this Agreement, the
Registration Statement, any Preliminary Prospectus, the Prospectus, any
amendments or supplements to the Registration Statement or the Prospectus.
; provided that the Seller shall not be liable for the fees and expenses of the
Underwriter in the
10
event that this Agreement is terminated without cause by the Underwriter or if
the Underwriter defaults in its obligation to purchase the Notes hereunder.
Section 9. Indemnification. (a) The Seller will indemnify and hold harmless
the Underwriter against any losses, claims, damages or liabilities to which the
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, or the Registration
Statement or the Prospectus, including any amendment or supplement thereto and
materials incorporated by reference in any of the foregoing documents, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will promptly reimburse the Underwriter for any
legal or other expenses (as such expenses are incurred) reasonably incurred by
the Underwriter in connection with investigating, preparing to defend or
defending, or appearing as a third party witness in connection with, any such
action or claim; provided, however, (i) that the Seller shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Seller
by you expressly for use therein and (ii) such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriter from
whom the Purchaser asserting any such action or claim purchased the Notes which
are the subject thereof if such Purchaser did not receive a copy of the
Prospectus (or the Prospectus as amended or supplemented) at or prior to the
confirmation of sale of such Notes to such Purchaser in any case where such
delivery is required by the Act and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) and such corrected
Prospectus was available by the date of such confirmation. The Seller
acknowledges that the Underwriter may enter into one or more dealer agreements
in connection with the offering of the Notes and agrees that the terms of this
Section 9(a) will accrue to the benefit of such dealers.
(b) The Underwriter hereby agrees to indemnify and hold harmless the Seller
and its affiliates, their respective directors, officers, controlling persons
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, if any, agents and employees of the Seller or any of the Seller's
affiliates (collectively, "Seller Indemnified Persons", and individually, a
"Seller Indemnified Person") from and against any and all claims, liabilities,
losses, damages and expenses incurred by any Indemnified Person (including
reasonable fees and disbursements of the Seller's and a Seller Indemnified
Person's counsel) which arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, including any amendment
or supplement thereto and materials incorporated by reference in any of the
foregoing documents, or any other prospectus relating to the Notes, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statements or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Seller by the Underwriter specifically for use therein and the
Underwriter shall reimburse the Seller, its affiliates, and each of their
directors, officers, or controlling persons for any legal and other expenses
reasonably incurred by the Seller, its affiliates, or any such directors,
officers, employees, agents or controlling persons in investigating or defending
or preparing to defend
11
against any such loss, claim, damage, liability or action.
(c) The Seller acknowledges that the statements set forth under the caption
"Underwriting" in the Prospectus Supplement constitute the only information
furnished to the Seller by or on behalf of any Underwriter for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus, and the
Underwriter represents and warrants that such statements are correct as to it.
Furthermore, the Underwriter will not be responsible for any claims liabilities,
losses, damages, or expenses which are finally judicially determined to have
resulted primarily from the Seller's or NAFI's bad faith or negligence.
(d) In order to provide for just and equitable contribution, if a claim for
indemnification is made pursuant to these provisions but is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification is not available for any reason (except, with respect
to indemnification sought solely pursuant to clause (b) of the first paragraph
hereof, for the reasons specified in the second sentence thereof), even though
the express provisions hereof provide for indemnification in such case, then the
Seller or the Underwriter as the case may be shall contribute to such claim,
liability, loss, damage or expense for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate to
reflect the relative benefits to the Seller or the Underwriter as the case may
be in connection with the transactions contemplated by the engagement. The
relative benefits received by the Seller or the Underwriter as the case may be
shall be deemed to be in the same proportion as the total net proceeds from the
placement of securities (before deducting expenses) received by the Seller or
the Underwriter as the case may be. The Seller and the Underwriter agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation other than described above.
(e) The foregoing right to indemnity and contribution shall be in addition
to any rights that any party or Underwriter Indemnified Person or Seller
Indemnified Person may have at common law or otherwise and shall remain in full
force and effect following the completion or any termination of your engagement.
Each party hereby consents to personal jurisdiction and to service and venue in
any court in which any claim which is subject to this agreement is brought
against any Underwriter Indemnified Person or Seller Indemnified Person.
Section 10. Termination.
(a) This Agreement may be terminated by you at any time upon the giving of
notice prior to the Closing Date: (A) if there has been, since the respective
dates as of which information is given in the Registration Statement or the
Prospectus, any material adverse change in the condition (financial or
otherwise), of NAFI or the Seller or in the business, properties or results of
operations of NAFI or the Seller, whether or not arising in the ordinary course
of business, or (B) if there has occurred any outbreak or escalation of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your reasonable judgment,
impracticable to market the Notes or enforce contracts for the sale of the
Notes, or (C) if trading generally on either the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Securities and Exchange
Commission or any other governmental authority, or (D) if a banking moratorium
has been declared by either federal or New York authorities. In the event of any
such termination, no party will have any liability to any other party hereto,
except as otherwise provided in Section 8 or 9 hereof.
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(b) This Agreement may not be terminated by the Seller without the written
consent of the Underwriter until after December 31, 1998.
(c) Notwithstanding anything herein to the contrary, in the event the
Seller does not perform any obligation under this Agreement or any
representation and warranty hereunder is incomplete or inaccurate in any
material respect, this Agreement and all of the Underwriter's obligations
hereunder may be immediately cancelled by the Underwriter by notice thereof to
the Seller. Any such cancellation shall be without liability of any party to any
other party except that the provisions of Sections 8 and 9 hereof shall survive
any such cancellation.
Section 11. Survival. The provisions of Section 5(g) and Section 9 of this
Agreement shall survive the termination of this Agreement.
Section 12. Notices. All communications provided for or permitted hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by certified or registered mail, postage prepaid, or
transmitted by facsimile and confirmed by a similar mailed writing, if to you,
addressed to you, at the address first stated in this Agreement, or to such
other address as you may designate in writing to the Seller and, if to the
Seller, addressed to the Seller at Xxx Xxxx Xxxxx, 000 X.X. 00xx Xxxxxx, Xxxx
Xxxxx, Xxxxxxx 00000 or to such other address as the Seller may have designated
in writing to you.
Section 13. Successors. This Agreement will inure to the benefit of and be
binding upon the Seller and its successors and assigns and you and your
successors and assigns, except that no Purchaser will be bound by any part of
this Agreement. No other person will have any right or obligation hereunder,
except that the provisions of this Agreement, including, without limitation, the
representations and warranties and the covenants and agreements of the Seller
contained herein are intended to be for the benefit of all Purchasers and shall
be enforceable by any such Purchaser, whether or not an express assignment to
such Purchaser of rights under this Agreement has been made by you, any
intervening Purchaser or any of your or their successors and assigns.
Section 14. Entire Agreement. This Agreement and the documents referred to
herein and to be delivered pursuant hereto constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
Section 15. Miscellaneous. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
Section 16. Defined Terms. Capitalized terms used herein but not defined
herein shall have the meaning ascribed to them in the Sale and Servicing
Agreement and/or the Indenture.
Section 17. GOVERNING LAW: CONSENT TO JURISDICTION: WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS (AS OPPOSED TO
13
CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
(B) THE UNDERWRITER AND THE SELLER HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, AND EACH WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE RESPECTIVE ADDRESS
SET FORTH HEREIN AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS
AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
UNDERWRITER AND THE SELLER EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
EITHER THE UNDERWRITER OR THE SELLER, AS THE CASE MAY BE, TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE UNDERWRITER OR ITS PROPERTY OR THE SELLER OR ITS PROPERTY
IN THE COURT OF ANY OTHER JURISDICTION.
(C) THE UNDERWRITER AND THE SELLER EACH HEREBY WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH
THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A
BENCH TRIAL WITHOUT A JURY.
Section 18. Limitation of Liability. It is expressly understood and agreed
by the parties hereto that (a) this Agreement is executed and delivered by Chase
Manhattan Bank Delaware ("Chase Delaware"), not individually or personally but
solely as trustee of the Seller ("Seller's Trustee"), in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Seller or the Seller's Trustee is made and intended not as personal
representations, undertakings and agreements by Chase Delaware but is made and
intended for the purpose for binding only the Seller, (c) nothing herein
contained shall be construed as creating any liability on Chase Delaware,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
Seller, NAFI and by any Person claiming by, through or under the Seller and NAFI
and (d) under no circumstances shall Chase Delaware be personally liable for the
payment of any indebtedness or expenses of the Seller or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Seller under this Agreement.
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If you are in agreement with the foregoing, please sign a counterpart
hereof and return the same to that company, whereupon this Agreement shall
become a binding agreement between you and the Seller.
Very truly yours,
NATIONAL FINANCIAL AUTO FUNDING
TRUST, as Seller
By: CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Trustee of the National Financial
Auto Funding Trust
By: _____________________________________
Name:
Title:
BY AFFIXING ITS SIGNATURE HERETO, NATIONAL AUTO FINANCE COMPANY, INC. ALSO
XXXXXX AGREES TO BE JOINTLY AND SEVERALLY LIABLE FOR THE OBLIGATIONS OF NATIONAL
FINANCIAL AUTO FUNDING TRUST AND BE BOUND BY SECTION 17 OF THIS AGREEMENT AS IF
SET FORTH HEREIN IN REGARD TO IT.
NATIONAL AUTO FINANCE COMPANY, INC.
By: _____________________________________
Name:
Title:
The foregoing Agreement is
hereby accepted and entered
into as of the date hereof.
FIRST UNION CAPITAL
MARKETS CORP.
By: _____________________________________
Name:
Title:
