AMENDED AND RESTATED
SERVICING AGREEMENT
This Amended and Restated Servicing Agreement is
hereby made effective as of the 5th day of December 1994 by
and between World Omni Financial Corp. ("WOFC") and National
Auto Finance Company L.P. (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.
The Servicing Agreement which this Amended and
Restated Servicing Agreement amends and restates was made as of July
25, 1994 by and between WOFC and National Auto Finance Corporation.
This Servicing Agreement was amended as of September 10, 1994. On
September 10, 1994 National Auto Finance Corporation transferred to
National Auto Finance Company L.P., with the consent of WOFC, all of
its rights and obligations under the Servicing Agreement by means of a
Novation and Consent 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.
2
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.
6. Company Account. The NAFCO Master Trust
Certificate Account into which are deposited amounts received by WOFC
on behalf of the Company which may include deduction of certain
amounts due WOFC pursuant to Article II, paragraph 5 of this
Agreement. The wiring address for such account is Bankers Trust ABA
000000000 Corporate Trust and Agency Group Certificate Account
#00000000 Attention: Xxxxx Xxxxxxxx; NAFCO Master Trust Certificate
Account.
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
3
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 application, the retail installment
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
4
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 thereof or pending
issuance of the actual title; alternatively, in those 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 therefor
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
5
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 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 Files 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 as to
Lease Accounts only, 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
6
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 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
7
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 agrees and understands that until the
conversion and 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 Company
Account within two Business Days of receipt. WOFC shall use reasonable
efforts to deposit such amounts within one Business Day.
f. WOFC shall report to the appropriate
credit bureaus the historical payment and default activity on
each Account.
8
3. Collection of Delinquent Accounts. WOFC shall
use its standard collection practices for similar accounts to 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, except that, unless otherwise directed in writing by the
Company, WOFC shall be permitted to extend the payment obligations of
a Borrower only two times during the life of such Borrower's
obligations to the Company. 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 Company'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
9
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
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 of 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 WOFC may deduct
10
such expenses from the amount received by WOFC upon disposition of the
Collateral, with the balance to be paid to the Company's 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.
6. Insurance. WOFC shall monitor each Lease 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 Lease 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
11
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. 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
12
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. 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. Company's Payment of such attorneys fees and
costs shall be made monthly, as invoiced by WOFC, concurrently with
payment of the Servicing Fees.
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.
Company shall pay monthly by the fifteenth (15th) day of each
month the Servicing Fees as well as any other expenses or
13
charges due WOFC pursuant to this Agreement. Any other expenses or
charges, other than Servicing Fees and other expenses or 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, National Auto
Finance Company L.P. 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
14
an agent for WOFC and is not authorized to make representations on
behalf of WOFC and that WOFC shall have no 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 agrees
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 Commuter Software
1. WOFC hereby grants 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 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
("Application 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 for 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. The Application Fees and related fees and
expenses shall be paid monthly concurrently with payment of the
Servicing Fees. Company shall deposit with WOFC the amount of
$5,000.00 which amount may be drawn upon by WOFC in the event of
non-payment by Company of such Application Fees and related fees and
expenses, or any other Servicing Fees or
16
other fees and expenses due WOFC under this Agreement which Company
has failed to pay for 30 days or more.
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 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 $12.30 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
17
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 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 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.
18
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.
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
19
business, results of operations, net worth or condition
(financial or otherwise) of Company.
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 limited partnership duly
formed under the laws of the State of Delaware.
b. Company has all necessary 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 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 any 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 in
multiple forms. It is further acknowledged that the Company
23
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, partners, agents,
successors and assigns, respectively, as applicable, from and against
any claim, action, loss, damage,
24
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, settle or otherwise deal with any such proceeding, claim or
demand; provided, however, that Company may participate in
25
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 performed or
observed by it under this Agreement in any material respect and such
breach or default is not cured
26
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.
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
27
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
date upon which the breach becomes known or should have been known,
but in no event to exceed the applicable statute of limitations, 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 December 31, 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
(iii) if terminated after the second
anniversary date but prior to or on the third anniversary
29
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 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
30
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.
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:
31
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
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
32
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.
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
33
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. Without WOFC's
consent, Company may assign all or any part of its rights and/or
obligations under this Agreement to a financial institution or trust
assisting in the securitization of the Accounts, provided Company
shall not be released from this Agreement by virtue 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.
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
34
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 Agreement. 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 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
35
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 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,
36
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.
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
37
Association then prevailing in the capital city of the state governing
this Agreement.
Executed this ___ day of _____
WORLD OMNI FINANCIAL CORP.
By:__________________________
Its:__________________________
NATIONAL AUTO FINANCE
CORPORATION, General Partner,
on behalf of National Auto
Finance Company L.P.
By:__________________________
Its:_________________________
38
