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NAFCO AUTO RECEIVABLES MASTER TRUST
POOLING AND ADMINISTRATION AGREEMENT
dated as of December 8, 1994
among
NAFCO FUNDING TRUST,
as transferor,
NATIONAL AUTO FINANCE COMPANY L.P.,
as the Administrator,
and
BANKERS TRUST COMPANY
as Trustee
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; TRANSITIONAL MATTERS
Section 1.01 Definitions................................................... 1
ARTICLE II
CONVEYANCE OF CERTAIN ASSETS; ISSUANCE
OF CERTIFICATES
Section 2.01 Creation of the Trust; Conveyance of Certain
Assets..................................................... 1
Section 2.02 Acceptance by Trustee......................................... 3
Section 2.03 Representations and Warranties of NAFCO
Relating to the Trust Assets............................... 3
Section 2.04 Repurchase Upon Breach........................................ 7
ARTICLE III
ADMINISTRATION OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Administrator.............................. 8
Section 3.02 Duties of the Administrator and NAFCO......................... 9
Section 3.03 Compensation.................................................. 12
Section 3.04 Records of the Administrator and Reports to be
Prepared by the Administrator.............................. 12
Section 3.05 Rights of the Trustee......................................... 15
Section 3.06 Further Action Evidencing Transfers........................... 16
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders.................................. 18
Section 4.02 Establishment of Trust Accounts............................... 18
Section 4.03 Distributions................................................. 19
Section 4.04 Distributions to NAFCO........................................ 23
Section 4.05 Establishment of Reserve Fund................................. 23
Section 4.06 Application of Reserve Fund................................... 23
Section 4.07 Investment of Funds in Trust Accounts......................... 24
Section 4.08 Attachment of Trust Accounts.................................. 25
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ARTICLE V
REPORTS TO CERTIFICATEHOLDERS
Section 5.01 Information to Certificateholders............................. 25
Section 5.02 Notice of Early Liquidation at Seller
Election................................................... 25
Section 5.03 Annual Tax Information........................................ 26
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates.............................................. 26
Section 6.02 Authentication of Certificates................................ 27
Section 6.03 Registration of Transfer and Exchange of
Certificates............................................... 27
Section 6.04 Mutilated, Destroyed, Lost or Stolen
Certificates............................................... 31
Section 6.05 Persons Deemed Owners......................................... 32
Section 6.06 Appointment of Paying Agent................................... 32
Section 6.07 Access to List of Certificateholders' Names
and Addresses.............................................. 33
Section 6.08 Authenticating Agent.......................................... 34
Section 6.09 Tax Treatment................................................. 35
Section 6.10 Changes in Amount of Certificates............................. 35
ARTICLE VII
NAFCO
Section 7.01 Representations and Warranties of NAFCO
Relating to NAFCO and the Transaction
Documents.................................................. 36
Section 7.02 Covenants of NAFCO............................................ 42
Section 7.03 Indemnification by the Class C
Certificateholders......................................... 47
ARTICLE VIII
THE ADMINISTRATOR
Section 8.01 Representations and Warranties of the
Administrator.............................................. 48
Section 8.02 Covenants of the Administrator................................ 51
Section 8.03 Merger or Consolidation of, or Assumption of
the Obligations of, the Administrator...................... 52
Section 8.04 Administrator Liability....................................... 53
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Section 8.05 Limitation on Liability of the Administrator
and Others................................................. 53
ARTICLE IX
AMORTIZATION EVENTS
Section 9.01 Amortization Events........................................... 55
Section 9.02 Remedies...................................................... 58
Section 9.03 Additional Rights Upon the Occurrence of
Certain Events............................................. 59
ARTICLE X
ADMINISTRATOR DEFAULTS
Section 10.01 Administrator Defaults....................................... 60
Section 10.02 Trustee to Act; Appointment of Successor..................... 62
Section 10.03 Notification of Administrator Default;
Notification of Appointment of Successor
Administrator............................................. 65
ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee............................................ 65
Section 11.02 Certain Matters Affecting the Trustee........................ 69
Section 11.03 Limitation on Liability of Trustee........................... 71
Section 11.04 Trustee May Deal with Other Parties.......................... 72
Section 11.05 Administrator To Pay Trustee's Fees and
Expenses.................................................. 72
Section 11.06 Eligibility Requirements for Trustee......................... 73
Section 11.07 Resignation or Removal of Trustee............................ 74
Section 11.08 Successor Trustee............................................ 75
Section 11.09 Merger or Consolidation of Trustee........................... 75
Section 11.10 Appointment of Co-Trustee or Separate
Trustee................................................... 76
Section 11.11 Tax Returns.................................................. 77
Section 11.12 Trustee May Enforce Claims Without Possession
of Certificates........................................... 78
Section 11.13 Suits for Enforcement........................................ 78
Section 11.14 Rights of Certificateholders To Direct
Trustee................................................... 79
Section 11.15 Representations and Warranties of Trustee.................... 79
Section 11.16 Maintenance of Office or Agency.............................. 80
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ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust......................................... 80
Section 12.02 Final Distribution........................................... 80
Section 12.03 Rights Upon Termination of the Trust......................... 81
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment, Waiver, Etc....................................... 83
Section 13.02 Actions by Certificateholders................................ 85
Section 13.03 Limitation on Rights of Certificateholders................... 86
Section 13.04 Governing Law................................................ 87
Section 13.05 Notices...................................................... 87
Section 13.06 Severability of Provisions................................... 88
Section 13.07 Certificates Nonassessable and Fully Paid.................... 88
Section 13.08 Further Assurances........................................... 88
Section 13.09 Nonpetition Covenant......................................... 88
Section 13.10 No Waiver; Cumulative Remedies............................... 89
Section 13.11 Counterparts................................................. 89
Section 13.12 Third-Party Beneficiaries.................................... 89
Section 13.13 Integration.................................................. 90
Section 13.14 Binding Effect; Assignability; Survival of
Provisions................................................ 90
Section 13.15 Recourse to NAFCO............................................ 90
Section 13.16 Recourse to Trust Assets..................................... 90
Section 13.17 Submission to Jurisdiction................................... 91
Section 13.18 Waiver of Jury Trial......................................... 91
Section 13.19 Limitation of Liability.................... 92
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Servicing Agreement
Exhibit C Form of Distribution Date Statement
Exhibit D Trust Accounts
Exhibit E Form of Investor Letter
Exhibit F Form of Accountant's Agreed-Upon Procedures
Exhibit G Form of Daily Report
SCHEDULES
Schedule 7.01(h) Office of NAFCO and the Administrator where
Records are maintained
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APPENDIX
Appendix A Definitions
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THIS POOLING AND ADMINISTRATION AGREEMENT, dated as of December 8, 1994
(this "Agreement"), is by and among NAFCO FUNDING TRUST, a Delaware business
trust ("NAFCO"), as transferor, NATIONAL AUTO FINANCE COMPANY L.P., a Delaware
limited partnership ("National Auto"), as initial Administrator, and BANKERS
TRUST COMPANY, a New York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders to the extent provided herein:
ARTICLE I
DEFINITIONS; TRANSITIONAL MATTERS
Section 1.01 Definitions. Whenever used in this Agreement, capitalized
terms, unless otherwise defined herein, have the meanings that Appendix A
assigns to such terms. In addition, this Agreement shall be interpreted in
accordance with the conventions set forth in Parts B, C and D of Appendix A.
ARTICLE II
CONVEYANCE OF CERTAIN ASSETS; ISSUANCE
OF CERTIFICATES
Section 2.01 Creation of the Trust; Conveyance of Certain Assets. (a) Upon
the execution of this Agreement by the parties hereto, there is hereby created
NAFCO Auto Receivables Master Trust.
(b) By execution and delivery of this Agreement, NAFCO does hereby
transfer, assign, set over and otherwise convey to the Trust, for the benefit of
the Certificateholders, all its right, title and interest in, to and under,
whether now existing or hereafter created, without recourse except as expressly
provided otherwise herein, (i) each Receivable that is or has been transferred
by the Seller to NAFCO, pursuant to the Purchase Agreement or NAFCO Trust
Agreement, from and including the date on which the first Purchase occurs under
the Purchase Agreement to but excluding the Purchase Termination Date, (ii) all
Related Assets, (iii) the Seller Transaction Documents (all of NAFCO's right,
title and interest in, to and under such Seller Transaction Documents and the
Related Assets being herein called the "Related Transferred Assets"), (iv) all
funds from time to time on deposit in each of the Trust Accounts representing
Collections on, or other proceeds of, the foregoing and, in each case, all
certificates and instruments, if any, from time to time evidencing such funds,
all Investment Proceeds, all claims thereunder or in connection therewith and
all interest, dividends, monies, instruments, securities and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing, and (v) all moneys due or to become
due and all amounts received or receivable with respect to any of the foregoing
and all proceeds of the foregoing. Such property shall constitute the assets of
the Trust (collectively, the "Trust Assets"). The foregoing transfer,
assignment, setover and conveyance to the Trust shall be made to the Trustee, on
behalf of the Trust, and each reference in this Agreement to such transfer,
assignment, setover and conveyance shall be construed accordingly. In no event
shall the Trust acquire any real estate mortgages or interests in any real
estate mortgages.
(c) In connection with the transfer described above in subsection (b),
NAFCO has recorded and filed or caused to be recorded and filed, financing
statements (and continuation statements with respect to such financing
statements when applicable) with respect to the Trust Assets (whether now
existing or hereafter created) meeting the requirements of applicable state law
in such manner and in such jurisdictions as are reasonably determined necessary
or desirable to perfect, and maintain perfection of, the transfer and assignment
of the Trust Assets to the Trust. The Trustee shall be under no obligation
whatsoever to file such financing statements, or continuation statements to such
financing statements, or to make any other filing under the UCC in connection
with such transfer unless otherwise instructed to do so by the Required
Certificateholders. In connection with the transfer described above in
subsection (b), NAFCO and the Administrator further agree to deliver to the
Trustee each Trust Asset (including any original documents or instruments
included in the Trust Assets as are necessary to effect such transfer) in which
the transfer of an interest is perfected under the UCC or otherwise by
possession. NAFCO or the Administrator shall deliver each such Trust Asset to
the Trustee immediately upon the transfer of any such Trust Asset to the Trust
pursuant to Section 2.01(b).
(d) In connection with the transfer described above in subsection (b),
NAFCO shall, on or prior to the Closing Date, ▇▇▇▇ the master data processing
records evidencing the Receivables with the following legend:
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"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO NAFCO FUNDING
TRUST PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF
DECEMBER 8, 1994, BETWEEN NATIONAL AUTO FINANCE COMPANY L.P., AS
SELLER, AND NAFCO FUNDING TRUST; AND SUCH RECEIVABLES HAVE BEEN
TRANSFERRED TO NAFCO AUTO RECEIVABLES MASTER TRUST PURSUANT TO A
POOLING AND ADMINISTRATION AGREEMENT, DATED AS OF DECEMBER 8, 1994,
AMONG NAFCO FUNDING TRUST, AS TRANSFEROR, NATIONAL AUTO FINANCE
COMPANY L.P., AS THE ADMINISTRATOR, AND BANKERS TRUST COMPANY, AS
TRUSTEE."
(e) Upon the request of NAFCO, the Trustee will cause the Class B and
Class C Certificates in authorized denominations evidencing the entire interest
in the Trust to be duly authenticated and delivered to or upon the order of
NAFCO pursuant to Section 6.02.
Section 2.02 Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust pursuant to
Section 2.01(b) and declares that it shall maintain such right, title and
interest, upon the trust herein set forth, for the benefit of all
Certificateholders, on the terms and subject to the conditions hereinafter set
forth.
Section 2.03 Representations and Warranties of NAFCO Relating to the Trust
Assets.
(a) Representations and Warranties. At the time that any Receivable or
Related Asset is sold or transferred by NAFCO to the Trust, NAFCO hereby
represents and warrants that:
(i) Characteristics of Receivables. Each Receivable (a) shall have
been originated in the United States of America by a Dealer for the retail
sale of a Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by NAFCO from the Seller pursuant to
the Purchase Agreement (or contributed by the Seller to NAFCO pursuant to
NAFCO Trust Agreement), shall have been purchased by the Seller from such
Dealer under an existing dealer agreement, and shall have been validly
assigned by such Dealer to the Seller, which in turn
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shall have been validly assigned pursuant to the Purchase Agreement by the
Seller to NAFCO in accordance with its terms, (b) shall have created or
shall create a valid, subsisting, and enforceable first priority security
interest in favor of the Seller in the Financed Vehicle, which security
interest has been assigned pursuant to the Purchase Agreement by the
Seller to NAFCO, which in turn shall be assigned by NAFCO to the Trustee,
(c) shall contain customary and enforceable provisions such that the
rights and remedies of the holder thereof shall be adequate for
realization against the collateral of the benefits of the security, and
(d) shall provide for level monthly payments (provided that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount Financed
over an original term of no greater than 60 months and the related
Contract has not been modified since its issuance date.
(ii) Compliance with Law. Each Receivable and the sale of the
Financed Vehicle shall have complied in all material respects at the time
it was originated or made and at the execution of this Agreement shall
comply in all material respects with all requirements of applicable
federal, state, and local laws, and regulations thereunder, including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B and
Z, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iii) Binding Obligation. Each Receivable shall represent the
genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally. No
Obligor on a Contract is the United States of America, any state or local
governmental agency or instrumentality, or any of the foregoing.
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(iv) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment, and transfer thereof, each Receivable shall be secured
by a validly perfected first priority security interest in the Financed
Vehicle in favor of the Seller as secured party or all necessary and
appropriate actions shall have been commenced that would result in the
valid perfection of a first priority security interest in the Financed
Vehicle in favor of the Seller as secured party.
(v) Receivables in Force. No Receivable shall have been satisfied,
subordinated, or rescinded, nor shall any Financed Vehicle have been
released from the lien granted by the related Receivable in whole or in
part.
(vi) No Defenses. No Contract is subject to any asserted reduction
(including any reduction on account of any offsetting account payable by
NAFCO or the Seller to an Obligor or funds of an Obligor held by NAFCO or
the Seller), cancellation, rebate (including any advertising rebate) or
refund or any dispute, offset, counterclaim, lien or defense whatsoever;
(vii) No Liens. To the best of NAFCO's knowledge, no liens or claims
shall have been filed for work, labor, or materials relating to a Financed
Vehicle that shall be liens prior to, or equal with, the security interest
in the Financed Vehicle granted by the Contract.
(viii) No Default. Except for payment defaults continuing for a
period of not more than 45 days, no default, breach, violation, or event
permitting acceleration under the terms of any Receivable shall have
occurred; and no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have arisen; and
NAFCO shall not waive any of the foregoing except as otherwise permitted
hereunder.
(ix) Insurance. The Seller, in accordance with its customary
procedures, shall have determined that the Obligor has obtained or agreed
to obtain physical damage insurance covering the Financed Vehicle or the
vehicle is protected by force-placed insurance.
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(x) Title. It is the intention of NAFCO that the transfer and
assignment herein contemplated constitute a sale of the Receivables from
NAFCO to the Trust and that the beneficial interest in and title to the
Receivables not be part of NAFCO's estate in the event of the filing of a
bankruptcy petition by or against NAFCO under any bankruptcy law. No
Receivable has been sold, transferred, assigned, or pledged by NAFCO to
any Person other than the Trustee on behalf of the Trust. Immediately
prior to the transfer and assignment herein contemplated, NAFCO had good
and marketable title to each Receivable free and clear of all Liens,
security interests, and rights of others and no offsets, defenses or
counterclaims against it had been asserted or threatened and, immediately
upon the transfer thereof, the Trustee for the benefit of the
Certificateholders shall have good and marketable title to each
Receivable, free and clear of all Liens, security interests, and rights of
others and no offsets, defenses or counterclaims against it have been
asserted or threatened; and the transfer has been perfected under the UCC.
(xi) Possession; One Contract. With respect to each Receivable,
there is only one Contract, which Contract shall be held by the Servicer
on behalf of NAFCO, pursuant to the Servicing Agreement.
(xii) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Trustee a first
priority perfected ownership interest in the Receivables shall have been
made and shall remain in full force and effect.
(xiii) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(xiv) Delinquency. No Receivable is more than 45 days past due.
(b) Notice of Breach. The representations and warranties set forth in this
Section 2.03 shall survive the transfer and assignment of the Receivables and
the Related Transferred Assets to the Trust. Upon discovery by NAFCO, the
Administrator or a Responsible Officer of the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.03, the party
discovering such breach shall give written notice to the other parties to
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this Agreement within three Business Days following such discovery. The
Trustee's obligations in respect of discovering any such breach are limited as
provided in Section 11.02(g).
Section 2.04 Repurchase Upon Breach. NAFCO, the Administrator or a
Responsible Officer of the Trustee, as the case may be, shall inform the other
parties to the Agreement promptly, in writing, upon the discovery of any breach
of NAFCO representations and warranties pursuant to Section 2.03 unless the
breach shall have been cured by the last day of the second full Calculation
Period following the discovery by NAFCO, or receipt of notice by NAFCO, of such
breach, NAFCO shall have an obligation, and the Trustee shall (provided that it
either has made such discovery or has received such notice thereof) enforce such
obligation of NAFCO to repurchase any Receivable materially and adversely
affected by the breach as of such last day (or, at NAFCO's option, the last day
of the first full Collection Period following the discovery). In consideration
of the purchase of the Receivable, NAFCO shall remit, or cause the Seller to
remit, to the Certificate Account on the Business Day immediately preceding the
next succeeding Distribution Date, the Purchase Amount. Except as provided in
the preceding sentence, the sole remedy of the Trustee, the Trust, or the
Certificateholders with respect to a breach of NAFCO's representations and
warranties pursuant to Section 2.03 shall be to require NAFCO to repurchase
Receivables pursuant to this Section 2.04 or to enforce the obligation of the
Seller to repurchase such Receivables pursuant to the Purchase Agreement.
Section 2.05 No Assumption of Obligations Relating to Receivables, Related
Transferred Assets or Contracts. The transfer, assignment, setover and
conveyance described above in Section 2.01 does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee or
any Certificateholder of any obligation of the Administrator, NAFCO or any other
Person in connection with the Receivables or the Related Transferred Assets or
under the related Contracts or any other agreement or instrument relating
thereto, including any obligation to any Obligors. None of the Trustee, the
Trust or any Certificateholder shall have any obligation or liability to any
Obligor or other customer or client of the Seller (including any obligation to
perform any of the obligations of the Seller to any Obligor under any such
Receivables, related Contracts or any other related purchase orders or other
agreements or otherwise). No such obligation or liability is intended to
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be assumed by the Trustee, the Trust or any Certificateholder hereunder, and any
such assumption is hereby expressly disclaimed.
ARTICLE III
ADMINISTRATION OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to the
Administrator. (a) The administering of the Receivables and the Related
Transferred Assets shall be conducted by the Administrator hereunder in
accordance with this Section 3.01. Until the Trustee gives a Termination Notice
to National Auto pursuant to Section 10.01, National Auto is hereby designated
as, and National Auto hereby agrees to act as, the Administrator under this
Agreement and the other Transaction Documents with respect to the Receivables
and the Related Transferred Assets, and the Certificateholders by their
acceptance of the Certificates consent to National Auto acting as the
Administrator.
(b) Termination. The designation of the Administrator under this Agreement
shall automatically cease and terminate upon termination of the Trust pursuant
to Section 12.01.
(c) Resignation of the Administrator. The Administrator shall not resign
from the obligations and duties hereby imposed on it except upon the
Administrator's determination that (i) the performance of its duties hereunder
is no longer permissible under applicable law and (ii) there is no reasonable
action which the Administrator could take to make the performance of its duties
hereunder permissible under applicable law. If the Administrator makes a
determination that it must resign for the reasons stated above, the
Administrator shall, prior to the tendering of its resignation, deliver to the
Trustee an Opinion of Counsel for the Administrator, in form and substance
reasonably satisfactory to the Trustee, confirming the satisfaction of the
conditions set forth in clause (i) of the preceding sentence. No resignation by
the Administrator shall become effective until the Trustee or a Successor
Administrator shall have assumed the responsibilities and obligations of the
Administrator in accordance with Section 10.02 hereof. If the Administrator has
tendered its resignation and no Successor Administrator has been appointed, the
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a Successor
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Administrator hereunder. The Trustee shall give prompt notice to the Applicable
Rating Agencies of the appointment of any Successor Administrator.
Section 3.02 Duties of the Administrator and NAFCO.
(a) Duties of Administrator in General. The Administrator shall monitor
the servicing of and administer the Receivables and the Related Transferred
Assets and, subject to the terms and provisions of this Agreement, shall have
full power and authority, acting alone or through any Person properly designated
by it (provided that in any event the Administrator shall remain liable for all
actions taken), to do any and all things in connection with such administration
which it may deem necessary or appropriate. In connection therewith, the
Administrator shall take direction from the majority in interest of the Class C
Certificateholders or the Class B Certificateholders, provided, however, that
such direction is neither contrary to any specific provision of this Agreement
nor may result in any adverse consequences to the Certificateholders of any
other Class (and further provided that in the event of a conflict between the
directions of the Class C and Class B Certificateholders, the directions of the
Class C Certificateholders will control). The Trustee shall execute and deliver
to the Administrator any powers of attorney or other instruments or documents
that are prepared by the Administrator and stated in an Officer's Certificate to
be necessary or appropriate to enable the Administrator to carry out its
administrative duties hereunder. The Administrator shall exercise the same care
and apply the same policies with respect to the administration of the
Receivables and the Related Transferred Assets as is customary for administering
Receivables and that it would exercise and apply if it owned such Receivables
and the Related Transferred Assets.
The Administrator shall take or cause to be taken all such actions as it
deems necessary or appropriate to collect each Receivable and Related
Transferred Asset (and shall cause the Servicer to take or cause to be taken all
such actions as the Administrator deems necessary or appropriate to collect each
Receivable and Related Transferred Asset for which such Servicer is responsible
in its capacity as Servicer) from time to time, all in accordance with
applicable law.
The Administrator has appointed World Omni Financial Corp. to act as
Servicer pursuant to the Servicing Agreement
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attached hereto as Exhibit B, and the Servicer shall perform such duties of the
Administrator delegated to it pursuant to the terms of the Servicing Agreement,
provided that under no circumstances shall the Administrator's responsibility to
perform such administrative duties hereunder be diminished by such delegation to
the Servicer.
Without limiting the generality of the foregoing and subject to the next
preceding paragraph and Section 10.01, the Administrator or its designee is
hereby authorized and empowered, unless such power and authority is revoked by
the Trustee on account of the occurrence of an Administrator Default pursuant to
Section 10.01, (i) to instruct the Trustee to make withdrawals and payments from
the Trust Accounts as set forth in this Agreement, (ii) to execute and deliver,
on behalf of the Trust for the benefit of the Certificateholders, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
and the Related Transferred Assets, (iii) to make any filings, reports, notices,
applications and registrations with, and to seek any consents or authorizations
from, the Securities and Exchange Commission and any state securities authority
on behalf of the Trust as may be necessary or appropriate to comply with any
federal or state securities laws or reporting requirements or other laws or
regulations, and (iv) after the delinquency of any Receivable or any default in
connection with a Related Transferred Asset and to the extent permitted under
and in compliance with all applicable laws, rules, regulations, judgments,
orders and decrees of courts and other governmental authorities (whether
federal, state, local or foreign) and all other tribunals, to commence or settle
collection proceedings with respect to such Receivable and otherwise to enforce
the rights and interests of the Trust and the Certificateholders in, to and
under such Receivable or Related Transferred Asset (as applicable). The Trustee
shall promptly comply with the instructions of the Administrator to withdraw
funds and make payments from the Trust Accounts pursuant to the terms of this
Agreement.
(b) Modification of Receivables, Etc. So long as no default shall have
occurred and be continuing, the Administrator may adjust, and may permit the
Servicer to adjust the outstanding unpaid balance of any Receivable, or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto, all as it may determine to be
appropriate to maximize collection thereof, in accordance with the
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Credit and Collection Policy. The Administrator shall, or shall cause the
Servicer to, write off Receivables from time to time in accordance with the
terms of this Agreement (including Section 7.02(n)).
(c) Authorization to Act as NAFCO's Agent. Without limiting the generality
of Section 3.02(a), NAFCO hereby appoints the Administrator as its agent for the
following purposes: (i) specifying accounts to which payments are to be made to
NAFCO, (ii) making transfers among, and deposits to and withdrawals from, all
deposit accounts of NAFCO for the purposes described in the Transaction
Documents, (iii) arranging payment by NAFCO of all fees, expenses and other
amounts payable by NAFCO pursuant to the Transaction Documents, (iv) and taking
any other action not specifically required to be taken by the NAFCO Trustee
hereunder or under any other Transaction Documents. NAFCO irrevocably agrees
that (A) it shall be bound by all actions taken by the Administrator pursuant to
the preceding sentence, and (B) the Trustee and the banks holding all deposit
accounts of NAFCO are entitled to accept submissions, determinations,
selections, specifications, transfers, deposits and withdrawal requests, and
payments from the Administrator on behalf of NAFCO.
(d) Grant of Power of Attorney. NAFCO and the Trustee hereby each grant to
the Administrator a power of attorney, with full power of substitution, to take
in the name of NAFCO and the Trustee all steps which are necessary or
appropriate to endorse, negotiate, deposit or otherwise realize on any writing
of any kind held or transmitted by NAFCO or transmitted or received by the
Trustee (whether or not from NAFCO) in connection with any Receivable or Related
Transferred Asset. The power of attorney that NAFCO and the Trustee have granted
to the Administrator pursuant to this Section 3.02(d) may be revoked by the
Trustee, and shall be revoked by NAFCO,in the event of an Administrator Default.
In exercising its power granted hereby, the Administrator shall take directions
from the Trustee, if any, arising out of the exercise of the rights granted
under Section 11.14.
(e) Turnover of Collections. If NAFCO, the Administrator or any of their
respective agents or representatives shall at any time receive any cash, checks
or other instruments constituting Collections including any payments received by
NAFCO on account of the Seller Noncomplying Receivables Adjustment, such
recipient shall segregate such payments and hold such payments in trust for, and
in a manner acceptable to the Trustee and shall,
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promptly upon receipt (and in any event within one Business Day following
receipt), remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Certificate Account.
(f) Credit and Collection Policies. The Administrator shall comply in all
material respects with its Credit and Collection Policy in regard to each
Receivable and the Related Assets and the Contracts related to each such
Receivable, where the failure so to comply, individually or in the aggregate for
all such failures, would reasonably be expected to have a Material Adverse
Effect.
Section 3.03 Compensation. The Administrator, as full compensation for
activities performed by the Administrator under this Agreement and the other
Transaction Documents, shall be entitled to a fee (the "Administration Fee") in
respect of each Calculation Period (or portion thereof) prior to the termination
of the Trust pursuant to Section 12.01, payable in arrears on each Distribution
Date as set forth in Section 4.03(a) hereof. The Administration Fee shall be
paid out of funds in the Certificate Account as more fully described in Article
IV, and shall be payable to the Administrator solely to the extent amounts are
available for payment pursuant to Article IV. In no event shall the Trust, the
Trustee or the Certificateholders be liable for payment of the Administration
Fee.
The fees, costs and expenses of the Servicer, the Trustee, the Paying
Agent, the Authenticating Agent, and the Transfer Agent and Registrar, and
certain other costs and expenses payable from the Administration Fee pursuant to
other provisions of this Agreement, and all other fees and expenses that are not
expressly stated in this Agreement or any Supplement to be payable by the Trust
or NAFCO, other than Federal, state, local and foreign income and franchise
taxes, if any, or any interest or penalties with respect thereto, of the Trust,
shall be paid out of the Administration Fee and shall be paid by the
Administrator from the funds that constitute the Administration Fee. The
Administration Fee shall be paid to the Administrator solely to the extent that
funds are available to make such payment pursuant to Section 4.03, and there
shall be no recourse to NAFCO for all or any part of the Administration Fee that
is payable from time to time if such funds are at any time insufficient to pay
the Administration Fee.
Section 3.04 Records of the Administrator and Reports to be Prepared by
the Administrator.
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(a) Keeping of Records and Books of Account. The Administrator shall
maintain at all times accurate and complete books, records and accounts relating
to the Receivables, Related Transferred Assets and Contracts and all Collections
thereon in which timely entries shall be
made.
The Administrator shall maintain and implement administrative and
operating procedures (including an ability to generate or cause to be generated
duplicates of Records evidencing Receivables and the Related Transferred Assets
in the event of the destruction of the originals thereof), and shall keep and
maintain all documents, books, records and other information which the
Administrator deems reasonably necessary for the collection of all Receivables
and Related Transferred Assets.
(b) Receivables Reviews. The Administrator shall, during regular business
hours upon reasonable advance notice permit the Trustee and its agents or
representatives, at the expense of the Administrator, (i) to examine and make
copies of and abstracts from, and to conduct accounting reviews of, all Records
in the possession or under the control of the Administrator relating to the
Receivables or Related Assets generated by National Auto and (ii) to visit the
offices and properties of the Administrator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to any
Receivables or any Related Assets of the Administrator or the Administrator's
performance hereunder with any of the Authorized Officers of National Auto or,
with the prior consent of an Authorized Officer of National Auto, with employees
of National Auto having knowledge of such matters (the examinations set forth in
the foregoing clauses (i) and (ii) being herein called an "Administrator
Receivables Review"). The Trustee and its agents or representatives shall be
entitled to conduct Administrator Receivables Reviews whenever the Trustee, in
its reasonable judgment, deems an Administrator Receivables Review appropriate.
(c) Distribution Date Statement. The Administrator shall on each
Determination Date, by 12:00 noon (New York City time), prepare and deliver to
the Trustee, the Applicable Rating Agencies and the Certificateholders a report
substantially in the form of Exhibit C or in such other form as is reasonably
acceptable to the Trustee and the Administrator (each such report in the form of
Exhibit C (as supplemented) or such other forms being herein called a
"Distribution Date Statement"); provided that, with respect
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to any Distribution Date Statement, if a Force Majeure or a "system failure" or
other similar technical failure in the operations of the Administrator shall
occur that prevents the preparation or delivery of any Distribution Date
Statement, a Distribution Date Statement containing all information for each day
required to be included therein shall be prepared and delivered to the Trustee
and the Applicable Rating Agencies by 1:00 p.m. on the second Business Day from
the date such Distribution Date Statement was otherwise required to be
delivered.
(d) Daily Reports. Prior to 10:00 a.m. New York City time, on each
Business Day, the Administrator shall prepare and deliver to the Trustee a
report substantially in the form of Exhibit G (as the same may be supplemented
in accordance with any Supplement) or in such other form as is reasonably
acceptable to the Trustee (each such report in the form of Exhibit G (as
supplemented) or such other forms being herein called a "Daily Report").
(e) Compliance Statements. The Administrator shall deliver to NAFCO and to
the Trustee, on or before April 30 of each year (beginning April 30, 1995) a
certificate signed by a financial officer stating that (1) a review of its
activities relating to the administration of the Receivables during the prior
year ending December 31 and performance under this Agreement has been made under
such officer's supervision, and (2) to the best of such officer's knowledge,
based on such review, the Administrator has fulfilled all its obligations under
this Agreement throughout the period covered by such certificate, or, if there
has been a default in the fulfillment of any such obligations, specifying each
such default known to such officer and the nature and status thereof.
(f) Annual Independent Public Accountant's Administration Report. The
Administrator shall, no later than September 30 of each year (commencing
September 30, 1995), cause either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., Price Waterhouse,
Coopers & ▇▇▇▇▇▇▇, Deloitte & Touche, Ernst & Young or KPMG Peat Marwick (or any
of their successors in interest) (which firm may also render other services to
the Administrator or any Affiliate thereof) to furnish a report, as of June 30
of such year, to NAFCO, the Seller, each Applicable Rating Agency and the
Trustee, which accounting firm is performing certain agreed upon procedures with
respect to certain documents and records relating to the administration of the
Receivables set forth as Exhibit F hereto and which accounting firm states that,
based upon such agreed-upon
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procedures, no matters came to its attention that caused it to believe that such
administration was not conducted in compliance with this Agreement except for
such exceptions or errors as such firm shall believe to be immaterial and such
other exceptions as shall be set forth in such statement. Each such accountant's
report shall state that the accountants have compared the amounts contained in
one randomly selected Distribution Date Statement from each fiscal quarter
delivered by the Administrator during the period covered by such report with the
records from which such amounts were derived and that, on the basis of such
comparison, such accountants are of the opinion that the amounts are in
agreement with such records, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such report.
Section 3.05 Rights of the Trustee.
(a) Each of NAFCO and the Administrator hereby authorizes the Trustee,
from time to time after the designation of an Administrator other than National
Auto pursuant to Section 10.02, to take any and all steps in NAFCO's name and on
behalf of NAFCO and the Administrator which are necessary or appropriate, in the
reasonable determination of the Trustee, to collect all amounts due under any
and all Receivables or Related Transferred Assets, including endorsing the name
of NAFCO or the Seller on checks and other instruments representing Collections
and enforcing such Receivables and the Related Transferred Assets.
(b) NAFCO hereby irrevocably appoints the Trustee to act as NAFCO's
attorney-in-fact, with full authority in the place and stead of NAFCO and in the
name of NAFCO or otherwise, from time to time after the designation of an
Administrator other than National Auto pursuant to Section 10.02, to take
(subject to the same protections which are afforded the Trustee in Section 11.14
hereof) any action and to execute any instrument or document that the Trustee,
in its reasonable determination, may deem necessary to accomplish the purposes
of this Agreement, including:
(i) to ask, demand, collect, ▇▇▇ for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any Receivable or any Related Transferred Asset;
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(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
above;
(iii) to file any claims or take any action or institute any
proceedings which the Trustee in its reasonable determination may deem
necessary or appropriate for the collection of any of the Receivables or
any Related Transferred Asset or otherwise to enforce the rights of the
Trustee and the Certificateholders with respect to any of the Receivables
or any Related Transferred Asset; and
(iv) to perform the affirmative obligations of
NAFCO under any Transaction Document.
NAFCO hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 3.05(b) is irrevocable and coupled with an
interest.
Section 3.06 Further Action Evidencing Transfers.
(a) Each of NAFCO and the Administrator agrees that from time to time, as
an expense of the Administrator paid out of the Administration Fee, it will
promptly execute and deliver (or cause the Servicer to execute and deliver) all
further instruments and documents, and will promptly take all further action (or
cause the Servicer to take all further action) that the Trustee may reasonably
request, in order to perfect, protect or more fully evidence the conveyances
hereunder, or to enable the Certificateholders or the Trustee to exercise or
enforce any of their respective rights hereunder or under any other Transaction
Document. Without limiting the generality of the foregoing, upon the Trustee's
request, NAFCO (or, in the case of clause (ii) below, the Administrator) will,
or will cause the Administrator to:
(i) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be required from time to time pursuant to Section 7.02(c)
or as the Trustee reasonably determines necessary or desirable; and
(ii) ▇▇▇▇ its master data processing records that evidence or list
Receivables or Related Transferred Assets as described in Section 2.01(d).
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The Administrator shall cause all financing statements and continuation
statements and any other necessary documents relating to the right, title and
interest of the Trustee (for the benefit of the Certificateholders) in and to
the Trust Assets to be promptly recorded, registered and filed, and at all times
to be kept recorded, registered and filed, all in such manner and in such places
as may be required by law fully to preserve, maintain and protect the right,
title and interest of the Trustee hereunder (for the benefit of the
Certificateholders) in and to all property comprising the Trust Assets. The
Administrator shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing. NAFCO shall
cooperate fully with the Administrator in connection with the obligations set
forth above and will execute any and all documents which are reasonably required
to fulfill the intent of this Section 3.06.
(b) If NAFCO or the Administrator fails to perform any of its agreements
or obligations under any Transaction Document and does not remedy such failure
within the applicable cure period, if any, then the Trustee or its designee may
(but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of the Trustee or its
designee incurred in connection therewith shall be payable by the Administrator
as provided in Section 11.05 and (if applicable) by NAFCO as provided in Section
7.03. If, at any time, NAFCO or the Administrator fails to file any financing
statement or continuation statement, or amendment thereto or assignment thereof,
that is required to be filed pursuant to this Agreement or any of the other
Transaction Documents, the Trustee may (but shall not be obligated to), and
NAFCO and the Administrator hereby authorize the Trustee to, file such financing
or continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Receivables or the Related Transferred Assets now
existing or hereafter arising in the name of NAFCO or the Administrator as an
expense of the Administrator paid out of the Administration Fee.
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
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Section 4.01 Rights of Certificateholders. Each Certificate shall
represent a fractional undivided ownership interest in the Trust, consisting of,
among others, a right to receive Collections, funds on deposit in the Trust
Accounts and other Trust Assets, to the extent and at the times provided herein,
in payment of the principal amount of such Certificate (which principal amount
shall vary from time to time in accordance with the terms of this Agreement) and
interest accrued on the principal amount of any Certificate from time to time at
the applicable Certificate Rate, and other Obligations owed to the Holder of a
Certificate (all such undivided interests being herein collectively called the
"Certificate Interest").
In addition, the Class C Certificate shall represent the ownership
interest in the remainder of the Trust Assets not allocated pursuant to this
Agreement to the Certificate Interest, including the right to receive payments
at the times and in the amounts specified in this Article IV to be paid in
respect of the Class C Certificates (the "Residual Interest").
Section 4.02 Establishment of Trust Accounts. (a) The Trustee shall
establish and maintain in the name of the Trustee, on behalf of the Trust and
for the benefit of the Certificateholders, the segregated trust accounts
referred to in clauses (b) and (c) below and listed on Exhibit D hereto (and
such additional accounts as may be required by any Supplement). Each of the
Trust Accounts shall be established and maintained in the Corporate Trust Office
of the Trustee or as provided in Section 4.02(d) below and shall bear a
designation clearly indicating that funds deposited therein are held for the
benefit of the Certificateholders.
(b) All Collections and all other Trust Assets consisting of cash or cash
equivalents transferred from the Servicer Account shall be deposited in a
segregated trust account (the "Certificate Account"). Funds on deposit in the
Certificate Account will be allocated as provided in Section 4.03.
(c) From time to time prior to the occurrence of an Amortization Event,
the purchase price for purchases of Trust Interests by Certificateholders
pursuant to the applicable Certificate Purchase Agreement will be deposited by
the Trustee in a segregated trust account (the "Excess Funding Account"). On any
Business Day, the Administrator may cause the Trustee to withdraw from the
Excess Funding
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Account and distribute to NAFCO amounts on deposit therein; provided, (i) that
no Amortization Event shall have occurred and be continuing, and (ii) after
giving effect to such withdrawals from or deposits into the Excess Funding
Account, there shall not exist any Overcollateralization Deficit. In addition,
funds on deposit in the Excess Funding Account shall be withdrawn from the
Excess Funding Account and deposited in the Certificate Account in accordance
with Section 4.03(c).
(d) Interest accrued on any class of Certificates that is not
distributable to Certificateholders on the Distribution Date relating to such
Interest Period shall be deposited in a segregated trust account (the "Accrued
Interest Account") pursuant to Section 4.03(a)(v). The Trustee shall, on the
Business Day preceding the Distribution Date on which such funds are
distributable to Certificateholders, withdraw such funds from the Accrued
Interest Account and deposit such funds in the Certificate Account for
application on such Distribution Date pursuant to Section 4.03(a).
(e) The Certificate Account shall be held by the Trustee for the benefit
of all Certificateholders. Each Trust Account shall be maintained in the
Corporate Trust Office of the Trustee or with a bank which is organized under
the laws of the United States or any state which is a member of the FDIC and has
a certificate of deposit rating in the highest investment category granted by
the Applicable Rating Agency or otherwise approved by each Applicable Rating
Agency.
(f) The Trustee shall possess (for its benefit and for the benefit of the
Certificateholders) all right, title and interest in and to all funds on deposit
from time to time in each of the Trust Accounts and in all proceeds thereof. The
Trust Accounts shall be under the sole dominion and control of the Trustee for
the benefit of the applicable Certificateholders. Pursuant to the authority
granted to the Administrator, the Administrator shall have the power, revocable
at any time by the Trustee or by the Trustee at the direction of the Majority
Certificateholders, to instruct the Trustee to make withdrawals and payments
from the Trust Accounts for the purposes of carrying out the Administrator's or
the Trustee's duties hereunder.
Section 4.03 Distributions.
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In the manner and to the degree set forth in the applications of
Collections described below in Sections 4.03(a) and (b), the rights of the Class
B and Class C Certificateholders to receive distributions shall be and hereby
are subordinated to the rights of the Class A Certificateholders to receive
distributions, and the rights of the Class C Certificateholders to receive
distributions shall be and hereby are subordinated to the rights of the Class A
and Class B Certificateholders to receive distributions, in the event of
delinquency or defaults on the Receivables. On each Distribution Date, the
Trustee (based on the information contained in the Distribution Date Statement
delivered on the related Determination Date pursuant to Section 3.04(c)) shall
make the following distributions from the Certificate Account in the following
order of priorities, satisfying in full, to the extent required and possible,
each priority before making any distribution with respect to any succeeding
priority:
(a) Available Certificateholder Finance Charge Collections,
Investment Proceeds in respect of the related Calculation Period and funds
withdrawn from the Accrued Interest Account and deposited in the Certificate
Account on such Distribution Date pursuant to Section 4.02(d) hereof shall be
applied in the following priority:
(i) to the Administrator, an amount equal to the sum of (i)
one-half (1/2) of the Administration Fee and (ii) all unpaid amounts from
prior Calculation Periods distributable pursuant to this subsection (i),
if any;
(ii) to the Structuring Advisor, an amount
equal to the Monthly Structuring Fee due and owing on
such Distribution Date, if any;
(iii) to the Class A Certificateholders, an amount equal to
the sum of the Class A Interest Distributable Amount and any outstanding
Class A Interest Carryover Shortfall as of the close of business on the
preceding Distribution Date;
(iv) to the Class B Certificateholders, an amount equal to the
sum of the Class B Interest Distributable Amount and any outstanding Class
B Interest Carryover Shortfall as of the close of business on the
preceding Distribution Date;
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(v) to the Accrued Interest Account in an amount equal to the
excess of (i) interest accrued on the Class A Certificates and Class B
Certificates during the related Interest Period over (ii) the sum of the
Class A Interest Distributable Amount and the Class B Interest
Distributable Amount.
(vi) to the Class A Certificateholders, an amount equal to any
shortfall in amounts distributed on such Distribution Date to Class A
Certificateholders pursuant to Section 4.03(b)(i);
(vii) to the Class B Certificateholders, an amount equal to
any shortfall in amounts distributed on such Distribution Date to Class B
Certificateholders pursuant to Section 4.03(b)(ii);
(viii) to the Reserve Fund in an amount equal
to the Reserve Fund Deposit Amount;
(ix) on any Distribution Date occurring prior to the
Amortization Commencement Date, an amount equal to any
Overcollateralization Deficit remaining after giving effect to the
distributions pursuant to Section 4.3(b)(i) and (b)(ii), either (as
specified in the Distribution Date Statement) (a) to the Excess Funding
Account or (b) pro rata to the Class A Certificateholders and Class B
Certificateholders in reduction of the respective outstanding principal
amounts thereof;
(x) on any Distribution Date occurring on or after the
Liquidation Commencement Date, to the Reserve Fund in an amount equal to
the Liquidation Reserve Requirement.
(xi) to the Administrator, the portion of the Administration
Fee not distributed pursuant to subsection (i) above and all unpaid
amounts distributable pursuant to this subsection (x) from prior
Distribution Dates, if any;
(xii) the remainder to the Class C Certificateholder
in respect of the Residual Interest.
(b) Available Certificateholder Principal Collections, the aggregate
Purchase Amounts for Receivables repurchased pursuant to Section 2.04 in respect
of the related Calculation Period and any amounts withdrawn from
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the Excess Funding Account and deposited in the Certificate Account pursuant to
Section 4.03(c) hereof shall be applied in the following priority:
(i) to the Class A Certificateholders, an amount equal to the
sum of the Class A Principal Distributable Amount and any outstanding
Class A Principal Carryover Shortfall as of the close of business on the
preceding Distribution Date;
(ii) to the Class B Certificateholders, an amount equal to the
sum of the Class B Principal Distributable Amount and any outstanding
Class B Principal Carryover Shortfall as of the close of business on the
preceding Distribution Date;
(iii) on any Distribution Date occurring prior to the
Amortization Commencement Date, an amount equal to any
Overcollateralization Deficit remaining after giving effect to the
distributions pursuant to Section 4.03(a) and clauses (b)(i) and (b)(ii)
above, either (as specified in the Distribution Date Statement) (a) to the
Excess Funding Account or (b) pro rata to the Class A Certificateholders
and Class B Certificateholders in reduction of the respective outstanding
principal amounts thereof;
(iv) on any Distribution Date occurring on or after the
Liquidation Commencement Date, to the Reserve Fund in an amount equal to
the Liquidation Reserve Requirement (as calculated after giving effect to
any deposits to the Reserve Fund on such Distribution Date pursuant to
Section 4.03(a)(x), provided that, if on such date, the amount on deposit
in the Reserve Fund at least equals the sum of the outstanding principal
amounts of the Class A Certificates and the Class B Certificates, the
Trustee shall apply such amounts to the Class A and Class B
Certificateholders in reduction of the respective outstanding principal
amounts thereof; and
(v) the remainder to the Class C Certificateholder in
respect of the Residual Interest.
(c) Commencing with the first Distribution Date occurring on or
after the Amortization Commencement Date and on each succeeding Distribution
Date, until the balance of funds on deposit in the Excess Funding Account has
been reduced to zero, funds on deposit in the Excess Funding
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Account shall be deposited in the Certificate Account and applied in reduction
of the outstanding principal amount of the Certificates in the priority set
forth in Section 4.03(b) in an amount equal to the lesser of (i) the balance of
funds on deposit in the Excess Funding Account and (ii) the sum of the
outstanding principal balances of the Class A and Class B Certificates (or
portions thereof) for which the designated interest tranches are maturing on the
applicable Distribution Date prior to giving effect to distributions made
pursuant to Section 4.03(b) on such Distribution Date. In addition, the
Administrator may instruct the Trustee on any Distribution Date prior to the
Amortization Commencement Date to withdraw funds from the Excess Funding Account
and deposit such funds in the Certificate Account for application pro rata to
the Class A Certificateholders and Class B Certificateholders in reduction of
the respective outstanding principal amounts thereof, such withdrawal and
application only to be made to the extent that, after giving effect to such
withdrawals and applications and any withdrawals from the Excess Funding Account
pursuant to Section 4.02(c), there exists no Overcollateralization Deficit.
Section 4.04 Distributions to NAFCO. The Administrator shall calculate on
each Determination Date the Transferor Distribution Amount and shall instruct
the Trustee to distribute such amount to NAFCO or to any other party whom NAFCO
designates on the following Distribution Date. Distribution of the Transferor
Distribution Amount shall be in addition to any Excess Amounts or other payments
distributed to NAFCO in its capacity as the Class C Certificateholder.
Section 4.05 Establishment of Reserve Fund. The Administrator, for the
benefit of the Certificateholders, shall cause to be established and maintained
in the name of the Trustee, on behalf of the Trust, an account (the "Reserve
Fund") which shall be identified as the "Reserve Fund for NAFCO Auto Receivables
Master Trust" and shall bear a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders.
Section 4.06 Application of Reserve Fund. (a) If amounts distributed on
any Distribution Date pursuant to Section 4.03 are not sufficient to make the
entire distributions required on such Distribution Date by Section 4.03(a)(iii),
(iv), (vi) and (vii) and Section 4.03(b)(i) and (b)(ii), the Administrator shall
cause the Trustee to withdraw funds from the Reserve Fund to the extent
available
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therein, and apply such funds first to complete the distributions pursuant to
Section 4.03(a)(iii) through 4.03(a)(vi) in the priority therein provided, and
second to complete the distributions pursuant to Section 4.03(b)(i) and (b)(ii),
in the priority therein provided.
(b) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Fund on any Distribution Date, the amount in
the Reserve Fund is greater than (i) in the case of any Distribution Date
occurring prior to the Liquidation Commencement Date, the Required Reserve Fund
Amount for such Distribution Date, and (ii) in the case of any Distribution Date
occurring on or after the Liquidation Commencement Date, the Certificate
Principal Amount (after giving effect to distributions in reduction thereof on
such Distribution Date), the Administrator shall cause the Trustee to distribute
such excess amount to the holders of the Class C Certificates. Upon payment in
full of the outstanding principal balance of the Certificates plus all
outstanding interest and other amounts owing in respect of the Certificates, any
funds remaining on deposit in the Reserve Fund shall be paid to the holders of
the Class C Certificates.
Section 4.07 Investment of Funds in Trust Accounts. On any day when funds
on deposit in any Trust Account shall exceed $100,000.00 (after giving effect to
the allocations of such funds required by this Article IV), and at such other
times as investment is practicable, the Trustee, at the written direction of the
Administrator, shall invest and reinvest monies on deposit in such Trust Account
(in the name of the Trustee) in such Eligible Investments as are specified in a
notice from the Administrator, subject to the restrictions set forth
hereinafter. The Trustee shall, at the direction of the Administrator: (a)
invest the funds in the Excess Funding Account in Eligible Investments that
mature not later than one Business Day preceding the next succeeding
Distribution Date (or, if earlier, the Business Day next preceding the Scheduled
Amortization Commencement Date or the Final Scheduled Payment Date); (b) invest
all other funds in the Trust Accounts in Eligible Investments that mature not
later than one Business Day preceding the next succeeding Distribution Date (or,
if earlier, the Business Day next preceding the Scheduled Amortization
Commencement Date or the Final Scheduled Payment Date). All Eligible Investments
made from funds in any Trust Account, and the interest, dividends and income
received thereon and therefrom and the net proceeds realized on the sale
thereof, shall be deposited in such Trust Account. The Trustee may
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liquidate an Eligible Investment prior to maturity if such liquidation would not
result in a loss of all or part of the principal portion of such Eligible
Investment or if, prior to the maturity of such Eligible Investment, a default
occurs in the payment of principal, interest or any other amount with respect to
such Eligible Investment. In the absence of negligence of the Trustee or willful
misconduct by the Trustee, the Trustee shall have no liability in connection
with investment losses incurred on Eligible Investments. It is intended for
income tax purposes that the income earned through investment of funds in the
Trust Accounts shall be treated as income of the Class C Certificateholders.
Section 4.08 Attachment of Trust Accounts. If the Trustee receives written
notice that any account designated as a Trust Account has or will become subject
to any writ, judgment, warrant of attachment, execution or similar process, the
Trustee shall (notwithstanding any other provision of the Transaction Documents)
promptly notify NAFCO, the Administrator and the Certificateholders thereof, and
shall not deposit or transfer funds into such Trust Account but shall cause
funds otherwise required to be deposited into such Trust Account to be held in
another account pending distribution of such funds in the manner required by the
Transaction Documents.
ARTICLE V
REPORTS TO CERTIFICATEHOLDERS
Section 5.01 Information to Certificateholders.
Distribution Date Statement. Within two Business Days after each
Distribution Date, the Trustee shall send to each Certificateholder a copy of a
monthly report prepared by the Administrator in the form of Exhibit C by
first-class mail, postage prepaid, to the address of such Certificateholder that
is indicated in the Certificate Register.
Section 5.02 Notice of Early Liquidation at Seller Election. If NAFCO
shall receive a notice from the Seller, pursuant to Section 8.1 of the Purchase
Agreement, to the effect that the Seller desires to terminate its agreement to
sell Receivables to NAFCO, NAFCO shall deliver a copy of such notice to the
Trustee, and the Trustee shall deliver a copy of such notice to each
Certificateholder and to the Applicable Rating Agencies, as soon as practicable
(and in
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any event within two Business Days), which notice shall become effective at the
time, and subject to the conditions, specified in such notice and in Section 8.1
of the Purchase Agreement.
Section 5.03. Annual Tax Information. On or before February 15, of each
calendar year, beginning with calendar year 1994, the Administrator on behalf of
the Trust, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was a Certificateholder such information for
such preceding calendar year, or the applicable portion thereof during which
such Person was a Holder of record of a Certificate, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable the Certificateholders to prepare their federal income tax
returns. Such obligation of the Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent to such Certificateholder pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. The Class B Certificates shall be
substantially in the form of Exhibit A and the Class C Certificate shall be
substantially in the form of Exhibit B. Upon issuance, all Certificates
including the Class C Certificate shall be executed and delivered by NAFCO to
the Trustee for authentication and redelivery as provided in Section 6.02.
Except to the extent provided otherwise in an applicable Supplement,
Certificates shall be issued in minimum denominations of $20,000 (and such
interests shall not be subdivided in denominations of less than $20,000) and in
integral multiples of $20,000 in excess thereof. The Certificates shall
initially be issued with an initial aggregate Stated Amount in the amount set
out in the related Supplement and Certificate Purchase Agreement.
Each Certificate shall be executed by manual or facsimile signature on
behalf of NAFCO by an Authorized Officer of the NAFCO Trustee or by any
attorney-in-fact duly authorized to execute such Certificate on behalf of any
such
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officer. The Certificates shall be authenticated on behalf of the Trust by
manual signature of a duly authorized signatory of the Trustee. Certificates
bearing the manual or facsimile signature of the individual who was, at the time
when such signature was affixed, authorized to sign on behalf of NAFCO or the
Trust (as applicable) shall be valid and binding obligations of the Trust,
notwithstanding that such individuals or any of them ceased to be so authorized
prior to the authentication and delivery of such Certificates or do not hold
such office on the date of issuance of such Certificates. No Certificates shall
be entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Trustee by the manual signature of a duly authorized signatory, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Agreement. Except as
otherwise provided in the applicable Supplement, all Certificates shall be dated
the date of their authentication.
Section 6.02 Authentication of Certificates. (a) The Trustee will
authenticate and deliver the Class B Certificate and the Class C Certificate to
NAFCO pursuant to an order from NAFCO to the Trustee.
(b) On each Subsequent Issuance Date, upon the written order of NAFCO, the
Trustee shall authenticate and deliver to NAFCO the Series of Certificates that
are to be issued originally on such Subsequent Issuance Date (the "Subsequent
Issuance Certificates") pursuant to the applicable Supplement. The Subsequent
Issuance Certificates shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal, in the aggregate, to the aggregate
Stated Amounts of such Certificates, in the case of a Series of Certificates.
Section 6.03 Registration of Transfer and Exchange of Certificates. (a)
The Trustee, as agent for NAFCO, shall keep, or shall cause to be kept, at the
office or agency to be maintained in accordance with the provisions of Section
11.16 a register, in written form or capable of being converted into written
form within a reasonable time (the "Certificate Register") in which, subject to
such reasonable regulations as it may prescribe, a transfer agent and registrar
(which may be the Trustee) (the "Transfer Agent
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and Registrar") shall provide for the registration of the Certificates and of
transfers and exchanges of the Certificates as herein provided. NAFCO hereby
appoints the Trustee as the initial Transfer Agent and Registrar.
NAFCO, or the Trustee, as agent for NAFCO (if the Trustee is not then
acting as Transfer Agent and Registrar), may revoke such appointment as Transfer
Agent and Registrar and remove the then-acting Transfer Agent and Registrar as
Transfer Agent and Registrar if the Trustee or NAFCO (as applicable) determines
in its sole discretion that the then-acting Transfer Agent and Registrar has
failed to perform its obligations under this Agreement in any material respect.
The then-acting Transfer Agent and Registrar shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' prior written notice to the Trustee,
NAFCO and the Administrator; provided, however, that such resignation shall not
be effective and the then-acting Transfer Agent and Registrar shall continue to
perform its duties as Transfer Agent and Registrar until NAFCO or the Trustee
has appointed a successor Transfer Agent and Registrar reasonably acceptable to
NAFCO and the Person so appointed has given NAFCO or the Trustee written notice
that it accepts the appointment. The provisions of Sections 11.01 through 11.05
shall apply to the Transfer Agent and Registrar as if all references to "the
Trustee" in the applicable provisions of Sections 11.01 through 11.05 were also
references to the Transfer Agent and Registrar.
It is intended that the registration of Certificates which is described in
this Section 6.03(a) comply with the registration requirements contained in
Section 163 of the Internal Revenue Code.
(b) None of the Certificates may be sold, transferred or otherwise
disposed of (any such sale, transfer or other disposition, as defined for
purposes of this Section 6.03(b), being called a "Sale", with "Sell" having a
correlative meaning), except in compliance with this Section 6.03(b). The
Certificates will not be registered under the provisions of the Securities Act
of 1933 (the "Act") and the Certificateholders, by purchasing their
Certificates, acknowledge that the Certificates will not be so registered.
A Certificateholder may not Sell any of the Certificates held by it
unless
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(i) such Sale is to a "qualified institutional buyer" within the
meaning of Rule 144A promulgated under the Securities Act ("Rule 144A")
that purchases for its own account or for the account of another Person
that is a "qualified institutional buyer," (or such Certificateholder
reasonably believes its buyer is a "qualified institutional buyer") which
Person is aware that the proposed Sale is being made in reliance on Rule
144A and to whom such Sale is being made pursuant to an available
exemption from the registration requirements of applicable state
securities laws, and, prior to the proposed Sale, such Certificateholder
has executed and delivered to the Trustee and NAFCO an investor letter,
substantially in the form of Exhibit E; or
(ii) such Sale is being made pursuant to an applicable exemption
from the registration requirements of the Securities Act and applicable
state securities laws and, prior to the proposed Sale, such
Certificateholder and the proposed transferee each provide the Trustee and
NAFCO with written representations and an opinion of counsel (which may be
in-house counsel), in each case satisfactory in form and substance to the
Trustee and NAFCO, concerning the proposed Sale and the availability of
such exemption.
No Certificateholder or other Person acting on behalf of a Certificateholder
shall use any means of general solicitation or distribution in connection with
the marketing, sale, transfer or other disposition of any Certificates. The
Certificates shall bear a legend substantially as set forth in the form of the
Certificate attached to this Agreement pursuant to which such Certificate is
issued.
The provisions of this Section 6.03(b) shall not apply to any Sale
of any Certificates in a transaction that is registered under the Securities Act
and all applicable state securities laws. None of National Auto or any of its
Subsidiaries, NAFCO or the Trustee shall be required to effect any registration
of the Certificates under the Securities Act or the Securities Exchange Act of
1934, as amended.
NAFCO, the Administrator and the Trustee shall make available to any
selling Certificateholder and any prospective transferee of Certificates such
information within the possession of NAFCO, the Administrator or the
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Trustee about the Trust, the Trust Assets and the servicing of the Receivables
and the Related Transferred Assets as is required to permit such Holder to
comply with the requirements of Rule 144A in connection with the resale of
Certificates, in any such case promptly after the same is requested.
(c) In connection with each issuance of a Series of Certificates,
NAFCO will determine whether such Certificates may be purchased by employee
benefit plans (as defined in ERISA) and shall cause the Certificates evidencing
such Series to bear a legend describing any restrictions on such purchases.
(d) (i) The holders of the Class C Certificates shall not transfer,
assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in any Class C Certificate or any interest represented
thereby, (ii) the purchaser of the Class B Certificates shall at all times
retain at least fifty percent (50%) of the Class B Certificates and shall not
transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in such Certificates, and any attempt to
transfer, assign, exchange, convey, pledge, hypothecate or grant a security
interest in such Class C Certificates or such Class B Certificates or any
interest represented thereby shall be void and of no effect.
(e) Subject to the requirements of Sections 6.03(b), 6.03(c) and, if
applicable, Section 6.03(d) having been fulfilled, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Transfer Agent and Registrar maintained for such purpose, NAFCO shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the appropriate Class
and Series which are in authorized denominations of like aggregate fractional
interest in the Certificate Interest, and, in the case of each Certificate,
which bear numbers that are not contemporaneously outstanding.
At the option of a Certificateholder, such Holder's Certificates may be
exchanged for other Certificates of the same Class and Series (and bearing the
same interest rate as the Certificate surrendered for registration of exchange)
of authorized denominations of like aggregate fractional interests in the
Certificate Interest and bearing numbers that are not contemporaneously
outstanding, upon surrender of the Certificates to be exchanged at any such
office or
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agency. Whenever any Certificates are so surrendered for exchange, NAFCO shall
execute, and the Trustee shall authenticate and deliver, the appropriate number
of Certificates of the Class and Series which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Transfer Agent and
Registrar duly executed by the Certificateholder thereof or his attorney-in-fact
duly authorized in a writing delivered to the Transfer Agent and Registrar.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Registrar or any
co-transfer agent and co-registrar may require any Certificateholder that is
transferring or exchanging one or more Certificates to pay a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and disposed of in a manner satisfactory to the Trustee.
(f) Certificates may be surrendered for registration of transfer or
exchange at the office of the Transfer Agent and Registrar designated in Section
13.05.
Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Transfer Agent and Registrar, or the
Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar and the Trustee such security or indemnity as may
be required by them and NAFCO to hold each of them, the Trust and NAFCO
harmless, then, in the absence of notice to the Trustee that such Certificate
has been acquired by a bona fide purchaser, NAFCO shall execute and, upon the
request of NAFCO, the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, Series, tenor, terms and principal amount and bearing
a number that is not contemporaneously outstanding. In connection with the
issuance of any new Certificate under this Section 6.04, the Trustee or the
Transfer Agent and Registrar may require the payment by the Certificateholder of
a sum sufficient to cover any tax or other governmental
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charge that may be imposed in relation thereto and any other expenses (including
the reasonable fees and expenses of the Trustee and Transfer Agent and
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 6.04 shall constitute conclusive and indefeasible evidence of
ownership of an interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be enforceable by anyone, and
shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all Certificates of the same Class and Series that
are duly issued hereunder.
Section 6.05 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, NAFCO, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article IV
and for all other purposes whatsoever, and none of NAFCO, the Trustee, the
Paying Agent, the Transfer Agent and Registrar or any agent of any of them shall
be affected by any notice to the contrary. Any Certificate held by NAFCO or an
Affiliate thereof shall be deemed not to be outstanding for purposes of
determining Majority Certificateholders or Required Certificateholders.
Section 6.06 Appointment of Paying Agent. The Paying Agent shall initially
be the Trustee. NAFCO hereby appoints the Paying Agent as its agent to make
distributions to Certificateholders from the Certificate Account pursuant to
Section 4.03 and to report the amounts of such distributions to the Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Certificate Account for the purpose of making the distributions referred to
above. The Trustee or, at any time when the Trustee is also the Paying Agent,
NAFCO may revoke such power of the Paying Agent and remove the Paying Agent if
the Trustee or NAFCO (as applicable) determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' prior written notice to the Trustee, NAFCO, the
Administrator and the Applicable Rating Agencies. In the event that the Trustee
shall no longer be the Paying Agent, the Trustee shall appoint a successor
Paying Agent (which shall be a bank or trust company) reasonably acceptable to
NAFCO, which appointment shall be effective on the date on which the Person so
appointed gives the Trustee written
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notice that it accepts the appointment. The Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Trustee to execute
and deliver to the Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustee that, as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Trustee, and upon removal of a Paying Agent such Paying Agent shall also return
all funds in its possession to the Trustee. The provisions of Sections 11.01
through 11.05 shall apply to the Paying Agent as if all references in the
applicable provisions thereof to "the Trustee" were also references to the
Paying Agent.
Section 6.07 Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to NAFCO, the Administrator or the Paying Agent, within two Business
Days after receipt by the Trustee of a request therefor from the Administrator
or the Paying Agent, respectively, in writing, a list in such form as the
Administrator or the Paying Agent may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If any
Holder or group of Holders of the Certificates in any Series evidencing not less
than 10% of the aggregate unpaid principal amount of such Series (the
"Applicant") applies in writing to the Trustee, and such application states that
the Applicant desires to communicate with other Certificateholders with respect
to their rights under this Agreement, any Supplement or the Certificates and is
accompanied by a copy of the communication which such Applicant proposes to
transmit, then the Trustee, after having been indemnified to its reasonable
satisfaction by the Applicant for its costs and expenses, shall afford or shall
cause the Transfer Agent and Registrar to afford such Applicant access during
normal business hours to the most recent list of Certificateholders held by the
Trustee, within five Business Days after the receipt of such application and
indemnification. Such list shall be as of a date no more than 45 days prior to
the date of receipt of such Applicant's request.
Every Certificateholder, by receiving and holding a Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar,
NAFCO, the
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Administrator nor any of their respective agents, shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders hereunder, regardless of the sources from which such
information was derived.
Section 6.08 Authenticating Agent. (a) The Trustee may appoint one or more
Authenticating Agents (each an "Authenticating Agent") with respect to the
Certificates which shall be authorized to act on behalf of the Trustee in
authenticating the Certificates in connection with the issuance, delivery,
registration of transfer, exchange or repayment of the Certificates. Either the
Trustee or the Authenticating Agent, if any, then appointed and acting on behalf
of the Trustee shall authenticate the Certificates. Whenever reference is made
in this Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be reasonably acceptable to
NAFCO.
(b) Any institution succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any document or any further act on the part of the
Trustee, such Authenticating Agent or any other Person.
(c) An Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to NAFCO. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving notice of termination
to such Authenticating Agent and to NAFCO. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an Authenticating
Agent shall cease to be acceptable to the Trustee or NAFCO, the Trustee may
promptly appoint a successor Authenticating Agent. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless acceptable to the Trustee and NAFCO.
(d) The Administrator agrees to pay to each Authenticating Agent (if any),
as an expense of the Administrator paid out of the Administration Fee,
reasonable
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compensation from time to time for services performed by such Authenticating
Agent under this Section 6.08.
(e) The provisions of Sections 11.01, 11.02, 11.03, 11.04 and 11.05 shall
be applicable to any Authenticating Agent as if the references in the applicable
provisions thereof to "the Trustee" were also references to the Authenticating
Agent.
(f) Pursuant to an appointment made under this Section 6.08, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in
the Supplement dated as of __________ ___, 199_.
__________________, as Trustee
By:_________________________
as Authenticating Agent
for the Trustee,
By:_________________________
Authorized Officer."
Section 6.09 Tax Treatment. It is the intent of NAFCO and the
Certificateholders that, for federal, state and local income and franchise tax
purposes, the Class A and Class B Certificates will be treated as evidence of
indebtedness secured by the Trust Assets and the Trust will not be characterized
as an association taxable as a corporation. NAFCO, by entering into this
Agreement, and each Certificateholder, by its acceptance of its Certificate,
agree to treat the Class A and Class B Certificates for federal, state and local
income and franchise tax purposes as indebtedness. The provisions of this
Agreement and all related Transaction Documents shall be construed to further
these intentions of the parties.
Section 6.10 Changes in Amount of Certificates. (a) The outstanding
principal amount of a Certificate shall at no time exceed the Stated Amount then
applicable to such Certificate. The Stated Amount of a Certificate may be
increased or decreased from time to time by NAFCO, with the prior written
consent of the Holder of such Certificate, if
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the following conditions shall have each been satisfied on or prior to the
effective date of such proposed increase or decrease (as the case may be):
(i) NAFCO shall have delivered to the Trustee a Tax Opinion with
respect to such proposed increase; and
(ii) the Rating Agency Condition shall have been satisfied with
respect to the increase.
(b) NAFCO may, pursuant to the Certificate Purchase Agreement or
Supplement that applies to a particular Certificate, request the Holder of such
Certificate to provide funds to the Trustee in respect of such Holder's
Certificate in order to increase the then-outstanding principal amount of such
Certificate, which requested increase shall be subject to the further provisions
of this Section 6.11(b) and to the provisions of such Certificate Purchase
Agreement or Supplement. NAFCO may make such a request at any time prior to the
occurrence of an Amortization Event and provided that there shall not exist an
Overcollateralization Deficit and shall make any such request in a writing that
is substantially in the form required by such Certificate Purchase Agreement or
the applicable Supplement, appropriately completed, and that is delivered to the
Holder of such Certificate at the time required by such Certificate Purchase
Agreement or the applicable Supplement. The outstanding principal amount of such
Holder's Certificate shall be increased on the Business Day on which such Holder
provides to the Excess Funding Account immediately available funds in the amount
of the requested increase by an amount equal to the amount of such funds.
ARTICLE VII
NAFCO
Section 7.01 Representations and Warranties of NAFCO Relating to NAFCO and
the Transaction Documents. On the date hereof and on each date Receivables are
transferred hereunder, NAFCO hereby represents and warrants that:
(a) Organization and Good Standing. NAFCO is a business trust duly
organized and validly existing in good standing under the laws of the
State of Delaware and has full power and authority to own its properties
and to conduct its business as such properties are
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presently owned and such business is presently conducted. NAFCO had at all
relevant times, and now has, all necessary power, authority, and legal
right to acquire, own and transfer the Receivables and the Related
Transferred Assets.
(b) Due Qualification. NAFCO is duly qualified to do business and is
in good standing as a business trust, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualification, licenses or approvals and where the failure so to qualify,
to obtain such licenses and approvals or to preserve and maintain such
qualification, licenses or approvals could have a Material Adverse Effect.
(c) Power and Authority; Due Authorization. NAFCO has (i) all
necessary power and authority to (A) execute and deliver this Agreement
and the other Transaction Documents to which it is a party, (B) perform
its obligations under this Agreement and the other Transaction Documents
to which it is a party, (C) transfer, assign, set-over and convey its
right, title and interest in, to and under the Receivables, the Related
Transferred Assets and the funds in the Trust Accounts on the terms and
subject to the conditions herein and therein provided and (ii) duly
authorized by all necessary action such transfer, assignment, set-over and
conveyance and the execution, delivery, and performance of this Agreement
and the other Transaction Documents to which it is a party and the
consummation of the transactions provided for in this Agreement and the
other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to which NAFCO is a party when executed and delivered
will constitute, a legal, valid and binding obligation of NAFCO,
enforceable against NAFCO in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) No Conflict or Violation. The execution, delivery and
performance of, and the consummation of
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the transactions contemplated by, this Agreement and the other Transaction
Documents to be signed by NAFCO and the fulfillment of the terms hereof
and thereof will not (i) conflict with, violate, result in any breach of
any of the terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, (A) NAFCO Trust Agreement or
(B) any indenture, loan agreement, mortgage, deed of trust, or other
agreement or instrument to which NAFCO is a party or by which it or any of
its properties is bound, (ii) result in the creation or imposition of any
Adverse Claim upon any of its properties pursuant to the terms of any such
contract, indenture, loan agreement, mortgage, deed of trust, or other
agreement or instrument, other than this Agreement and the other
Transaction Documents, or (iii) conflict with or violate any federal,
state, local or foreign law or any decision, decree, order, rule, or
regulation applicable to NAFCO or any of its properties of any court or of
any federal, state, local or foreign regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over
NAFCO or any of its properties, which conflict, violation, breach, default
or Adverse Claim, individually or in the aggregate, could have a Material
Adverse Effect.
(f) No Proceedings. (i) There is no action, suit, proceeding or
investigation pending or, to the best knowledge of NAFCO, threatened
against NAFCO before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental instrumentality
and (ii) NAFCO is not subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other government
authority, that, in the case of each of foregoing clauses (i) and (ii),
(A) asserts the invalidity of this Agreement or any other Transaction
Document, (B) seeks to prevent the transfer of any Receivables or Related
Transferred Assets to the Trust, the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that
would materially and adversely affect the performance by NAFCO of its
obligations under this Agreement or any other Transaction Document or the
validity or enforceability of this Agreement or any other Transaction
Document, (D) seeks to affect adversely the income tax attributes of the
transfers hereunder or the Trust under the
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United States federal income tax system or any state income tax system or
(E) individually or in the aggregate for all such actions, suits,
proceedings and investigations, could have a Material Adverse Effect.
(g) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by NAFCO, and all notices to and filings with any
Governmental Authority that are required to be made by NAFCO, in the case
of each of the foregoing in connection with the transfer of Receivables
and Related Transferred Assets to the Trust or the execution, delivery and
performance by NAFCO of this Agreement and any other Transaction Documents
to which it is a party and the consummation of the transactions
contemplated by this Agreement, have been obtained or made and are in full
force and effect, except where the failure to obtain or make any such
authorization, consent, order, approval, notice or filing, individually or
in the aggregate for all such failures, could not have a Material Adverse
Effect.
(h) Offices. NAFCO's principal place of business and chief executive
office is located at the address set forth under NAFCO's signature hereto,
and the offices where NAFCO and the Administrator keep all Records and all
Contracts, purchase orders and agreements related to the Receivables and
the Related Transferred Assets (and all original documents relating
thereto) are located at the addresses specified in Schedule 7.01(h) (or at
such other locations, notified to the Administrator and the Trustee in
accordance with Section 7.02(c), in jurisdictions where all action
required by Section 7.02(c) has been taken and completed).
(i) Investment Company Act. NAFCO is not, and is not controlled by,
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(j) Margin Regulations. No use of any funds obtained by NAFCO under
this Agreement will conflict with or contravene any of Regulations G, T, U
and X promulgated by the Federal Reserve Board from time to time.
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(k) Quality of Title.
(i) Immediately before each transfer to the Trust to be made
by NAFCO under this Agreement, each Receivable and Related Asset of NAFCO
which is then to be transferred to the Trust hereunder, and the related
Contracts, shall be owned by NAFCO free and clear of any Adverse Claim
(other than any Adverse Claim arising solely as the result of any action
taken by NAFCO under this Agreement); and NAFCO shall have made all
filings and shall have taken all other action under applicable law in each
relevant jurisdiction in order to protect and perfect the ownership
interest of the Trust and its successors in such Receivables and Related
Assets against all creditors of, and purchasers from, NAFCO.
(ii) Whenever NAFCO makes a purchase under the Purchase
Agreement or accepts a contribution under NAFCO Trust Agreement, it shall
have acquired a valid and perfected first priority ownership interest in
each Transferred Asset, free and clear of any Adverse Claim (other than
any Adverse Claim arising solely as the result of any action taken by
NAFCO under the Purchase Agreement or under this Agreement).
(iii) No effective financing statement or other instrument
similar in effect that covers all or part of any Receivable, any interest
therein or any Related Asset with respect thereto is on file in any
recording office except (x) such as may be filed (A) in favor of Seller in
accordance with the Contracts, (B) in favor of NAFCO pursuant to the
Purchase Agreement or NAFCO Trust Agreement and (C) in favor of the
Trustee, for the benefit of the Certificateholders, in accordance with
this Agreement and (y) such as may have been identified to NAFCO prior to
the Closing Date and termination statements relating to which have been
placed with LEXIS Document Services for filing on the Closing Date or the
first Business Day thereafter.
(iv) No purchase of an interest in any Receivable or Related
Asset of National Auto by NAFCO from National Auto constitutes a
fraudulent transfer or fraudulent conveyance under the United States
Bankruptcy Code or applicable state bankruptcy or insolvency laws or is
otherwise void or voidable or subject to subordination under similar laws
or principles or for any other reason.
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(v) The purchase of Receivables and Related Assets by NAFCO
from National Auto constitutes a true and valid sale of such Receivables
and Related Assets under applicable state law and true and valid
assignments and transfers for consideration (and not merely a pledge of
such Receivables and Related Assets for security purposes), enforceable
against the creditors of National Auto, and no Receivables or Related
Assets transferred to NAFCO under the Purchase Agreement or under NAFCO
Trust Agreement shall constitute property of National Auto.
(l) Accuracy of Information. All written information furnished on
and after the Closing Date by NAFCO to the Administrator, the Trustee or
any Certificateholder pursuant to or in connection with any Transaction
Document or any transaction contemplated herein or therein shall not
contain any untrue statement of a material fact or omit to state material
facts necessary to make the statements made not misleading, in each case
on the date such statement was made and in light of the circumstances
under which such statements were made or such information was furnished.
(m) Compliance with Applicable Laws. NAFCO is in compliance with the
requirements of all applicable laws, rules, regulations, and orders of all
Governmental Authorities (federal, state, local or foreign, and including
environmental laws), a violation of any of which, individually or in the
aggregate for all such violations, could have a Material Adverse Effect.
(n) Valid Transfer. Each transfer made by NAFCO pursuant to this
Agreement constitutes a valid transfer and assignment of all of its right,
title and interest in, to and under the Receivables and the Related
Transferred Assets to the Trust which is perfected and of first priority
under the UCC and otherwise enforceable against creditors of, and
purchasers from, NAFCO and National Auto and free and clear of any Adverse
Claim (other than any Adverse Claim arising solely as a result of any
action taken by the Trustee under this Agreement).
The representations and warranties set forth in this Section 7.01 shall
survive the transfer and assignment of the Receivables and the other Trust
Assets to the Trust. Upon discovery by NAFCO, the Administrator or a Responsible
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Officer of the Trustee of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give written notice to the
other parties to this Agreement within three Business Days following such
discovery. The Trustee's obligations in respect of discovering any such breach
are limited as provided in Section 11.02(g).
Section 7.02 Covenants of NAFCO. From the Closing Date until the date
following the Amortization Commencement Date on which the Certificate Invested
Amount shall be reduced to zero and all Obligations of NAFCO and the
Administrator to the Certificateholders that have ever been outstanding
hereunder shall have been finally and fully paid and performed, NAFCO hereby
covenants that NAFCO will:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations, judgments, decrees and orders
(including those relating to the Receivables, the Related Transferred
Assets, the funds in the Trust Accounts and the related Contracts and any
other agreements related thereto), where the failure so to comply,
individually or in the aggregate for all such failures, could have a
Material Adverse Effect.
(b) Preservation of Trust Existence. Preserve and maintain its trust
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a
foreign trust in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualifications
could have a Material Adverse Effect.
(c) Location of Records and Offices. Keep its principal place of
business and chief executive office, and (and will cause the Servicer to)
keep substantially all Records, Contracts and other agreements related to
the Receivables and the Related Transferred Assets (and all original
documents relating thereto), at the addresses referred to in Schedule
7.01(h). NAFCO will at all times maintain its chief executive offices
within the United States of America, and will cause the Servicer to
maintain at all times each office from which the Servicer services or
collects Receivables and Related Transferred Assets and the Servicer's
chief executive offices within the United States of America.
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(d) Reporting Requirements of NAFCO. Furnish to the Trustee, the
Certificateholders and to the Applicable Rating Agencies:
(i) Amortization Events. As soon as possible, and in any event
within one Business Day after an Authorized Officer of NAFCO has
obtained knowledge of the occurrence of any Amortization Event or
any Unmatured Amortization Event, a written statement of an
Authorized Officer of NAFCO describing such event and the action
that NAFCO proposes to take with respect thereto, in each case in
reasonable detail;
(ii) Material Adverse Effect. As soon as possible and in any
event within one Business Day after an Authorized Officer of NAFCO
has knowledge thereof, written notice that describes in reasonable
detail any Adverse Claim against the Trust Assets or any other event
or occurrence which, individually or in the aggregate for all such
events or occurrences, has had, or could have, in the reasonable,
good faith judgment of NAFCO, a Material Adverse Effect;
(iii) Proceedings. As soon as possible and in any event within
three Business Day after an Authorized Officer of NAFCO has
knowledge thereof, written notice of (A) any litigation,
investigation or proceeding of the type described in Section 7.01(f)
not previously disclosed to the Trustee and (B) any material adverse
development that has occurred with respect to any such previously
disclosed litigation, investigation or proceeding; and
(iv) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or the Related Transferred Assets or such other
information respecting the condition or operations, financial or
otherwise, of NAFCO, in each case as the Trustee may from time to
time reasonably request in order to protect the interests of the
Trustee, the Trust or the Certificateholders under or as
contemplated by this Agreement.
(e) Sales, Liens, Etc. Except for the conveyances hereunder and
under the other Transaction
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Documents, NAFCO will not (i)(A) sell, assign (by operation of law or
otherwise) or otherwise transfer to any Person, (B) pledge any interest
in, (C) grant, create, incur, assume or permit to exist any Adverse Claim
to or in favor of any Person upon or with respect to, or (D) cause to be
filed any financing statement or equivalent document relating to
perfection that covers, any Receivable, related Contract, Related
Transferred Asset or other Trust Asset, or any interest therein, or (ii)
assign to any Person any right to receive income from or in respect of any
of the foregoing. NAFCO shall defend the right, title and interest of the
Trust in, to and under the Trust Assets, whether now existing or hereafter
created, against all claims of third parties claiming through or under
NAFCO.
In the event that NAFCO fails to keep any Trust Assets free and
clear of any Adverse Claim (other than Adverse Claims arising hereunder
and other Adverse Claims permitted by any other Transaction Document), the
Trustee may (without limiting its other rights with respect to NAFCO's
breach of its obligations hereunder) make reasonable expenditures
necessary to release such Adverse Claim. The Trustee shall be entitled to
indemnification for any such expenditures pursuant to the indemnification
provisions of Section 7.03. Alternatively, the Trustee may deduct such
expenditures as an offset to any amounts owed to NAFCO hereunder.
(f) Mergers, Acquisitions, Sales, Etc. NAFCO shall not
(i) (A) be a party to any merger or consolidation, or directly
or indirectly purchase or otherwise acquire all or substantially all
of the assets or any stock of any class of, or any partnership or
joint venture interest in, any other Person, or (B) except pursuant
to the Transaction Documents, directly or indirectly, sell,
transfer, assign, convey or lease, whether in one transaction or in
a series of transactions, all or substantially all of its assets, or
sell or assign with or without recourse any Receivables or Related
Transferred Assets (other than pursuant hereto);
(ii) except as contemplated in the Purchase Agreement in
connection with NAFCO's purchases of Receivables and Related Assets
from the Sellers,
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(A) make, incur or suffer to exist an investment in, equity
contribution to, or payment obligation in respect of the deferred
purchase price of property or services from, any Person, or (B) make
any loan or advance to any Person other than for reasonable and
customary operating expenses; or
(iii) create any direct or indirect Subsidiary or otherwise
acquire direct or indirect ownership of any equity interests in any
other Person (other than the Trust).
(g) Change in Name. NAFCO will not change its name or the name under
or by which it does business unless NAFCO shall have given the
Administrator and the Trustee 30 days' prior written notice thereof and
unless, prior to any such change in name, NAFCO shall have filed (or shall
have caused to be filed) such financing statements or amendments as the
Administrator or the Trustee determines may be necessary to continue the
perfection of the Trust's interest in the Receivables, the Related
Transferred Assets and the proceeds thereof.
(h) Change in Business. NAFCO will not engage in any business other
than as contemplated by the Transaction Documents, unless the Required
Certificateholders consent and the Rating Agency Condition has been
satisfied in connection with such amendment or such change in NAFCO's
business.
(i) Amendments to Purchase Agreement. Except as expressly provided
otherwise in this Agreement, no amendment, waiver, modification to or
consent under the Purchase Agreement shall be made that would adversely
affect in any material respect the interests of the Certificateholders or
any Enhancement Provider unless there shall have been obtained the prior
written consent of the Required Certificateholders and any such
Enhancement Provider.
(j) Enforcement of Purchase Agreement. NAFCO will perform all its
obligations under and otherwise comply with the Purchase Agreement and
will enforce, for the benefit of the Trust, the covenants and agreements
of the Seller in the Purchase Agreement.
(k) Other Indebtedness. NAFCO shall not (i) create, incur or permit
to exist any Indebtedness,
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Guaranty or liability or (ii) cause or permit to be issued for its account
any letters of credit or bankers' acceptances, except for (A) Indebtedness
incurred pursuant to NAFCO Notes, (B) other liabilities specifically
permitted to be created, incurred or owed by NAFCO pursuant to or in
connection with the Transaction Documents and (C) reasonable and customary
operating expenses.
(l) Separate Existence. NAFCO hereby acknowledges that the Trustee
and the Certificateholders are, and will be, entering into the
transactions contemplated by the Transaction Documents in reliance upon
NAFCO's identity as a legal entity separate from National Auto and any
other Person. Therefore, from and after the Closing Date, NAFCO shall take
all reasonable steps to continue its identity as a separate legal entity
and to make it apparent to third Persons that NAFCO is an entity with
assets and liabilities distinct from those of National Auto and any other
Person, and that NAFCO is not a division of National Auto or any other
Person.
(m) Acquisition of Receivables. NAFCO will acquire Receivables only
through (i) its purchase of such Receivables pursuant to the Purchase
Agreement or (ii) as a contribution by National Auto to NAFCO in
accordance with the NAFCO Trust Agreement.
(n) Extension or Amendment of Receivables; Change in Credit and
Collection Policy or Contracts. The Administrator will not extend, amend
or otherwise modify the terms of any Receivable or Contract in a manner
that could have a Material Adverse Effect other than in accordance with
the Credit and Collection Policy.
(o) Amendment of Certificate of Trust. NAFCO will not amend, modify,
restate or change in any manner its certificate of trust or the NAFCO
Trust Agreement, unless the Rating Agency Condition has been satisfied in
connection with, and the Required Certificateholders have consented to,
such amendment, modification, restatement or change.
The covenants set forth in this Section 7.02 shall survive the transfer
and assignment of the Receivables and the other Trust Assets to the Trust. Upon
discovery by NAFCO, the Administrator or a Responsible Officer of the
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Trustee of a breach of any of the foregoing covenants, the party discovering
such breach shall give written notice to the other parties to this Agreement
within three Business Days following such discovery. The Trustee's obligations
in respect of discovering any such breach are limited as provided in Section
11.02(g).
Section 7.03 Indemnification by the Class C Certificateholders. (a)
Without limiting any other rights which any Indemnified Party may have hereunder
or under applicable law, the Class C Certificateholders hereby agree to
indemnify the Trust, the Trustee, each Certificateholder and each of the
successors, permitted transferees and assigns of any such Person and all
officers, directors, shareholders, controlling Persons, employees and agents of
any of the foregoing (each of the foregoing Persons being individually called an
"Indemnified Party"), forthwith on demand, from and against any and all damages,
losses, claims (whether on account of settlements or otherwise, and whether or
not the relevant Indemnified Party is a party to any action or proceeding that
gives rise to any Indemnified Losses (as defined below)), judgments, liabilities
and related reasonable costs and expenses (including reasonable attorneys' fees
and disbursements) (all of the foregoing being collectively called "Indemnified
Losses") awarded against or incurred by any of them that arise out of or relate
to this Agreement, any other Transaction Document or any of the transactions
contemplated herein or therein or the use of proceeds herefrom or therefrom.
Payments to be made pursuant to this Section 7.03 shall be paid to the extent
that funds are available to make such payments after all amounts to be paid to
the Certificateholders pursuant to Section 4.03 shall have been paid, and there
shall be no recourse to the Class C Certificateholders for all or any part of
any amounts payable pursuant to this Section 7.03 if such funds are at any time
insufficient to make all or part of any such payments.
Notwithstanding the foregoing (and with respect to clause (b) below,
without prejudice to the rights that the Trustee may have pursuant to the other
provisions of this Agreement or the provisions of any of the other Transaction
Documents), in no event shall any Indemnified Party be indemnified for any
Indemnified Losses (a) resulting from gross negligence or willful misconduct on
the part of such Indemnified Party (or the gross negligence or willful
misconduct on the part of any of such Indemnified Party's officers, directors,
employees or agents), (b) to the extent the same includes Indemnified Losses in
respect of
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Receivables and reimbursement therefor that would constitute credit recourse to
the Class C Certificateholders for the amount of any Receivable or Related
Transferred Asset not paid by the related Obligor, (c) to the extent such
Indemnified Losses are or result from lost profits, (d) to the extent such
Indemnified Losses are or result from taxes (including interest and penalties
thereon) asserted with respect to (i) distributions on the Certificates, (ii)
franchise or withholding taxes imposed on any Indemnified Party other than the
Trust or the Trustee in its capacity as Trustee, or (iii) federal or other
income taxes on or measured by the net income of such Indemnified Party and
costs and expenses in defending against the same, or (e) to the extent such
Indemnified Losses constitute consequential, or punitive damages.
If for any reason the indemnification provided above in this Section 7.03
is unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Class C Certificateholders shall contribute to the
amount paid by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and the Class C
Certificateholders on the other hand, but also the relative fault (if any) of
such Indemnified Party and the Class C Certificateholders and any other relevant
equitable considerations.
(b) Notwithstanding anything to the contrary herein, the Class C
Certificateholders shall be liable to all creditors of the Trust (but not to
Holders of the Certificates) for all liabilities of the Trust to the same extent
as it would be if the Trust constituted a partnership under the Delaware Revised
Uniform Limited Partnership Act and the Class C Certificateholders were a
general partner thereof. Notwithstanding anything to the contrary herein, any
such creditor shall be a third party beneficiary of this clause (b).
ARTICLE VIII
THE ADMINISTRATOR
Section 8.01 Representations and Warranties of the Administrator. On the
date hereof, on each date Receivables are transferred and on each Subsequent
Issuance Date, the Administrator hereby makes, and any Successor
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Administrator also shall be deemed to make by its acceptance of its appointment
hereunder, the following representations and warranties for the benefit of the
Trustee and the Certificateholders:
(a) Organization and Good Standing. The Administrator is a limited
partnership duly organized and validly existing in good standing under the
laws of its jurisdiction of organization and has full power and authority
to own its properties and to conduct its business as such properties are
presently owned and as such business is presently conducted.
(b) Due Qualification. The Administrator is duly qualified to do
business and is in good standing (or is exempt from such requirements),
and has obtained all necessary licenses and approvals, in all
jurisdictions in which the administration of the Receivables and the
Related Transferred Assets as required by this Agreement requires such
qualification, licenses or approvals and where the failure so to qualify,
to obtain such licenses and approvals or to preserve and maintain such
qualification, licenses or approvals would have a reasonable likelihood of
having a material adverse effect on its ability to perform its obligations
as Administrator under this Agreement or a Material Adverse Effect.
(c) Power and Authority; Due Authorization. The Administrator has
(i) all necessary power and authority to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, and
(B) perform its obligations under this Agreement and the other Transaction
Documents to which it is a party, and (ii) duly authorized by all
necessary action the execution, delivery, and performance of this
Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions provided for in this Agreement and
the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to which the Administrator is party when executed and
delivered will constitute, a legal, valid and binding obligation of the
Administrator, enforceable against the Administrator in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws
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affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) No Conflict or Violation. The execution and delivery by the
Administrator of this Agreement and the other Transaction Documents to
which it is a party, the performance by the Administrator of its
obligations hereunder and thereunder and the fulfillment by the
Administrator of the terms hereof and thereof that are applicable to it
will not (i) conflict with, violate, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, (A) the Limited Partnership Agreement of
the Administrator or (B) any indenture, loan agreement, mortgage, deed of
trust, or other material agreement or instrument to which the
Administrator is a party or by which it or any of its properties is bound
or (ii) conflict with or violate any federal, state, local or foreign law
or any decision, decree, order, rule, or regulation applicable to the
Administrator or any of its properties of any court or of any federal,
state, local or foreign regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Administrator or
any of its properties, which conflict, violation, breach or default
described in clause (i) or clause (ii), individually or in the aggregate,
would have a reasonable likelihood of having a Material Adverse Effect.
(f) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by the Administrator, and all notices to and
filings with any Governmental Authority that are required to be made by
the Administrator, in the case of each of the foregoing in connection with
the execution, delivery and performance by the Administrator of this
Agreement and any other Transaction Documents to which it is a party and
the consummation of the transactions contemplated by this Agreement, have
been obtained or made and are in full force and effect (other than the
filing of the UCC financing statements referred to in Section 2.03(a), all
of which, at the time required in Section 2.03(a), will be duly made),
except where the failure to obtain or make such authorization, consent,
order, approval,
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notice or filing would not reasonably be expected to have a Material
Adverse Effect.
(g) No Proceedings. (i) There is no action, suit, proceeding or
investigation pending or, to the best knowledge of the Administrator,
threatened against the Administrator before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality and (ii) the Administrator is not subject to any order,
judgment, decree, injunction, stipulation or consent order of or with any
court or other government authority, that, in the case of foregoing
clauses (i) and (ii), (A) seeks to affect adversely the income tax
attributes of the transfers hereunder or the Trust under the United States
federal income tax system or any state income tax system, or (B)
individually or in the aggregate for all such actions, suits, proceedings
and investigations, would have a reasonable likelihood of having a
Material Adverse Effect.
The representations and warranties set forth in this Section 8.01 shall survive
the transfer and assignment of the Trust Assets to the Trust. Upon discovery by
NAFCO, the Administrator or a Responsible Officer of the Trustee of a breach of
any of the foregoing representations and warranties, the party discovering such
breach shall give written notice to the other parties to this Agreement within
three Business Days following such discovery. The Trustee's obligations in
respect of discovering any such breach are limited as provided in Section
11.02(g).
Section 8.02 Covenants of the Administrator. From the Closing Date until
the day following the Amortization Commencement Date on which the Certificate
Invested Amount shall be reduced to zero and all Obligations of NAFCO and the
Administrator to the Certificateholders that have ever been outstanding under
this Agreement shall have been finally and fully paid and performed, the
Administrator hereby covenants and agrees, and any Successor Administrator by
its acceptance of its appointment hereunder shall be deemed to covenant and
agree, as follows for the benefit of the Trust and the Certificateholders:
(a) Compliance with Laws, Etc. The Administrator shall maintain in
effect all qualifications required under applicable law in order to
service properly the Receivables and shall comply in all material respects
with all applicable laws, rules, regulations,
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judgments, decrees and orders, in each case to the extent the failure to
comply with which, individually or in the aggregate for all such failures,
would have a reasonable likelihood of having a Material Adverse Effect.
(b) Preservation of Existence. The Administrator shall preserve and
maintain its partnership existence, rights, franchises and privileges in
the jurisdiction of its formation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would have a reasonable likelihood of having
a Material Adverse Effect.
(c) Compliance with Transaction Documents. The Administrator will
comply with the terms and provisions of each of the Transaction Documents
to which it is a party.
(d) Adequate Collection Systems. The Administrator shall maintain
and implement, or cause to be maintained or implemented, administrative
and operating procedures reasonably necessary or advisable for the
administration, servicing and collection of amounts owing on all
Receivables.
The covenants set forth in this Section 8.02 shall survive the transfer and
assignment of the Trust Assets to the Trust. Upon discovery by NAFCO, the
Administrator or a Responsible Officer of the Trustee of a breach of any of the
foregoing covenants, the party discovering such breach shall give written notice
to the other parties to this Agreement within three Business Days following such
discovery. The Trustee's obligations in respect of discovering any such breach
are limited as provided in Section 11.02(g).
Section 8.03 Merger or Consolidation of, or Assumption of the Obligations
of, the Administrator. The Administrator shall not consolidate with or merge
into any other Person or convey, transfer or sell all or substantially all of
its properties and assets to any Person, unless:
(a) (i) the Administrator is the surviving entity or, if the
Administrator is not the surviving entity, the Person formed by such
consolidation or into which the Administrator is merged or the Person
which
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acquires by conveyance, transfer or sale all or substantially all of the
properties and assets of the Administrator shall be organized and existing
under the laws of the United States of America or any State thereof or the
District of Columbia and, if the Administrator is not the surviving
entity, such entity shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee and in form and substance
satisfactory to the Trustee, the performance of every covenant and
obligation of the Administrator hereunder and under the other Transaction
Documents to which the Administrator is a party; and (ii) the
Administrator shall have delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel for the Administrator each stating that such
consolidation, merger, conveyance, transfer or sale and such supplemental
agreement comply with this Section 8.03(a), that such supplemental
agreement is a valid and binding obligation of such surviving entity
enforceable against such surviving entity in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity, and that
all conditions precedent in Section 8.03(a)(i) that relate to such
transaction have been complied with;
(b) the Rating Agency Condition shall have been satisfied in
connection with such merger, consolidation or succession; and
(c) the Trustee shall have received an Officer's Certificate of the
Administrator to the effect that the conditions set forth in clauses (a)
and (b) have been satisfied.
Section 8.04 Administrator Liability. The Administrator shall be liable in
accordance with this Agreement only to the extent of the obligations
specifically undertaken by the Administrator in such capacity herein and as set
forth herein.
Section 8.05 Limitation on Liability of the Administrator and Others. No
recourse under or upon any obligation or covenant of this Agreement, any
Supplement, any Certificate or any other Transaction Document, or for any claim
based thereon or otherwise in respect thereof, shall be had against any partner,
limited partner,
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shareholder, officer or director, as such, past, present or future, of the
Administrator or of any successor entity, either directly or through the
Administrator, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Agreement, any Supplement, all other relevant Transaction
Documents and the obligations incurred hereunder or thereunder are solely
partnership obligations, and that no such personal liability whatsoever shall
attach to, or is or shall be incurred by the general and limited partners,
officers or directors, as such, of the Administrator or of any successor entity,
or any of them, by reason of the obligations, covenants or agreements contained
in this Agreement, any Supplement, any of the Certificates or any other
Transaction Documents, or implied therefrom; and that any and all such personal
liability of, either at common law or in equity or by constitution or statute,
and any and all such rights and claims against, every such partner, limited
partner, officer or director, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations or
covenants contained in this Agreement, any Supplement, any of the Certificates
or any other Transaction Documents, or implied therefrom, are hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Agreement and any Supplement. The Administrator and any director,
officer, employee or agent of the Administrator may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Administrator shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to administer the Receivables in accordance with this
Agreement or any Supplement which in its reasonable opinion may involve it in
any expense or liability. The Administrator may, in its sole discretion,
undertake any such legal action relating to the administration of Receivables
and Related Transferred Assets that it may reasonably deem necessary or
appropriate for the benefit of the Certificateholders with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder.
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ARTICLE IX
AMORTIZATION EVENTS
Section 9.01 Amortization Events. Any of the following events shall
constitute a "Amortization Event":
(a) (i) failure on the part of NAFCO or the Administrator to make or
cause to be made any payment or deposit, or any delivery of any report,
required by the terms of this Agreement, any Supplement, any Certificate
Purchase Agreement or the Purchase Agreement on or before five Business
Days after the date such payment, deposit or delivery is required to be
made herein; (ii) failure on the part of the Seller to duly observe or
perform Sections 6.1(g) and 6.3(a) of the Purchase Agreement or NAFCO to
duly observe or perform Sections 7.02(e) or 7.02(n) or clause (i) or (ii)
of Section 7.02(d) of this Agreement, or the Trustee to duly observe or
perform Section 5.01 of this Agreement, which failure has a Material
Adverse Effect and continues unremedied for a period of five Business Days
after the date on which written notice of such failure, requiring same to
be remedied, shall have been given to NAFCO by the Trustee or to NAFCO and
the Trustee by any Certificateholder; or (iii) failure on the part of
NAFCO to duly observe or perform any other covenant or agreement of NAFCO
set forth in any Transaction Document, which failure has a Material
Adverse Effect and continues unremedied for a period of 30 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to NAFCO by the Trustee or to NAFCO and
the Trustee by any Certificateholder;
(b) any representation or warranty made by the Seller in Sections
5.1(d) or 5.1(i)(i), (ii) or (iii) of the Purchase Agreement or by NAFCO
in Sections 7.01(k)(i), (ii), or (iii) or 7.01(n) of this Agreement shall
prove to have been incorrect in any material respect when made, and
continues to be incorrect in any material respect for a period of five
Business Days after the date on which written notice of such breach,
requiring the same to be remedied, shall have been given to NAFCO by the
Trustee or to NAFCO and the Trustee by any Certificateholder, or any other
representation or warranty made by the Seller in the Purchase Agreement or
by NAFCO in this Agreement shall prove to have been incorrect in any
material respect
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when made, and continues to be incorrect in any material respect for a
period of 30 days after the date on which written notice of such breach,
requiring the same to be remedied, shall have been given to NAFCO by the
Trustee, or to NAFCO and the Trustee by any Certificateholder; provided,
however, that a mistake in representation of a Receivable as an Eligible
Receivable shall not constitute a Liquidation Event unless and until the
Seller or NAFCO, as the case may be, has failed to make any cash payments
owed under the Purchase Agreement or this Agreement in respect of the
Noncomplying Receivables arising from such misrepresentation;
(c) an Event of Bankruptcy shall occur with respect to National Auto
or NAFCO, or NAFCO shall become unable for any reason to transfer
Receivables or Related Transferred Assets to the Trust in accordance with
the provisions of this Agreement;
(d) the Trust shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(e) the occurrence and continuance of an Administrator Default;
(f) the Net Loss Rate for any Distribution Date exceeds 7% for four
consecutive Calculation Periods and the first such Calculation Period was
subsequent to the first Calculation Period in which the aggregate number
of Contracts in the Trust exceeded 500 as of the end of such Calculation
Period.
(g) the Net Loss Rate for any Distribution Date exceeds 9% for four
consecutive Calculation Periods and the first such Calculation Period was
subsequent to the first Calculation Period in which the aggregate number
of Contracts in the Trust exceeded 500 as of the end of such Calculation
Period.
(h) the Delinquency Rate exceeds 10% for four consecutive
Calculation Periods and the first such Calculation Period was subsequent
to the first Calculation Period at the end of which the number of
Receivables in the Trust exceeded 500.
(i) the Servicing Agreement is terminated and a successor Servicer,
appointment of which shall have
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been consented to by the Class B Certificateholder (which consent shall
not be unreasonably withheld), shall not have been so appointed by the
Administrator;
(j) the number of Financed Vehicles repossessed and liquidated
during the four preceding Calculation Periods is equal to or greater than
75 and the aggregate Recoveries in respect of such Financed Vehicles is
less than 50% of the aggregate unpaid principal balance of the related
Receivables;
(k) the number of Financed Vehicles repossessed and liquidated
during the four preceding Calculation Periods is equal to or greater than
75 and the aggregate Recoveries in respect of such Financed Vehicles is
less than 60% of the aggregate unpaid principal balance of the related
Receivables;
(l) a requirement set forth in clauses (iii), (iv) and (v) of the
definition of "Portfolio Requirements" shall not have been satisfied for
two consecutive Calculation Periods;
(m) a requirement set forth in clauses (i) and (ii) of the
definition of "Portfolio Requirements" shall not have been satisfied for
three consecutive Calculation Periods;
(n) the Delinquency Rate exceeds 15% for four consecutive
Calculation Periods and the first such Calculation Period was subsequent
to the first Calculation Period at the end of which the number of
Receivables in the Trust exceeded 500; or
(o) the Seller shall have ceased selling Receivables to NAFCO
pursuant to Section 8.1 of the Purchase Agreement.
Upon the occurrence and continuance of any event described in subsection (c),
(d) or (o) above, subject to the applicable grace period, if any, set forth in
such subsection, the Liquidation Commencement Date shall occur without any
notice or other action on the part of the Trustee or the Certificateholders,
immediately upon the occurrence of such event. Upon the occurrence and
continuance of any event described in subsections (a)(i), (b), (e), (g), (i),
(j), (l) or (n) above (each such event, and the events described in subsections
(c) and (d), a "Liquidation Event"), subject to the applicable grace
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period, if any, set forth in such subsection, the Trustee may (and, at the
direction of the Majority Certificateholders shall) by notice then given in
writing to NAFCO and the Administrator, declare that the Liquidation
Commencement Date shall have occurred as of the date of NAFCO's receipt of such
notice. Upon the occurrence and continuance of any event described in any
subsection above other than a Liquidation Event, after the applicable grace
period, if any, set forth in such subsection (each, an "Early Amortization
Event"), the Trustee may (and, at the direction of the Required
Certificateholders shall) by notice then given in writing to NAFCO and the
Administrator, declare that the Early Amortization Commencement Date shall have
occurred as of the date of NAFCO's receipt of such notice.
Notwithstanding the foregoing, a delay in or failure in performance
referred to in subsection (a)(i) above for a period of 10 Business Days after
the applicable grace period, or in subsections a(ii), a(iii) or (b) above for a
period of 30 Business Days after the applicable grace period, shall not
constitute an Amortization Event if such delay or failure could not have been
prevented by the exercise of reasonable diligence by NAFCO or the Administrator
and such delay or failure was caused by an act of God or the public enemy,
riots, acts of war, acts of terrorism, epidemics, flood, embargoes, weather,
landslides, fire, earthquakes or similar causes. The preceding sentence shall
not relieve NAFCO or the Administrator from using its best efforts to perform
its obligations in a timely manner in accordance with the terms of the
Transaction Documents, and NAFCO and/or the Administrator, as applicable, shall
promptly give the Trustee and, in the case of such delay or failure in
performance by the Administrator, NAFCO, an Officer's Certificate notifying them
of such failure or delay by it.
Section 9.02 Remedies. Upon the occurrence of an Amortization Event, the
Trustee shall have, in addition to all other rights and remedies available to
the Trustee under this Agreement or otherwise, (a) the right to apply
Collections to the payment of the Obligations of NAFCO and the Administrator
under this Agreement or under any of the other Transaction Documents, as
provided herein, and (b) all rights and remedies provided under all other
applicable laws, which rights, in the case of each and all of the foregoing,
shall be cumulative. The Trustee shall exercise such rights at the direction of
the Certificateholders
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pursuant to (and subject to the limitations specified in) Section 11.14.
Section 9.03 Additional Rights Upon the Occurrence of Certain Events. (a)
If an Event of Bankruptcy shall occur with respect to any of the Class C
Certificateholders in this Agreement and the Trust shall be deemed to have
terminated on the day of such Event of Bankruptcy; and within 7 Business Days of
the date of written notice to the Trustee of such Event of Bankruptcy, the
Trustee shall:
(i) publish a notice in an Authorized Newspaper that an Event of
Bankruptcy has occurred with respect to any of the Class C
Certificateholders, that the Trust has terminated, and that the Trustee
intends to sell, dispose of or otherwise liquidate the Receivables and the
Related Transferred Assets pursuant to this Agreement in a commercially
reasonable manner and on commercially reasonable terms, which shall
include the solicitation of competitive bids (a "Disposition"); and
(ii) send written notice to the Certificateholders describing the
provisions of this Section 9.03 and requesting each Certificateholder to
advise the Trustee in writing whether (A) it wishes the Trustee to
instruct the Administrator not to effectuate a Disposition, (B) it refuses
to advise the Trustee as to the specific action the Trustee shall instruct
the Administrator to take or (C) it wishes the Administrator to effect a
Disposition.
If, after 60 days from the day notice pursuant to clause (a)(i) is first
published (the "Publication Date"), the Trustee shall not have received the
written instruction described in sub-clause (A) of clause (a)(ii) from Holders
of the Certificates representing in excess of 50% of the outstanding principal
amount of each of the Certificates, the Trustee shall instruct the Administrator
to effectuate a Disposition, and the Administrator shall proceed to consummate a
Disposition. If, however, Holders of the Certificates representing in excess of
50% of the outstanding principal amount of each Class of the Certificates
instruct the Trustee not to effectuate a Disposition, the Trustee shall consent
to the formation of a new trust, transfer the Trust Assets to such trust,
exchange new certificates for the existing Certificates and otherwise continue
pursuant to the terms of this Agreement.
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(b) Notwithstanding the termination of this Agreement and the Trust
pursuant to clause (a), the proceeds from any Disposition of the Receivables and
the Related Transferred Assets pursuant to clause (a) shall be treated as
Collections on the Receivables and shall be allocated and deposited in
accordance with the provisions of Article IV.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Section 9.03 with respect to competitive bids.
(d) NAFCO or any of its Affiliates shall be permitted to bid for the
Receivables and the Related Transferred Assets. The Trustee may obtain a prior
determination from any bankruptcy trustee, receiver or liquidator that the terms
and manner of any proposed Disposition are commercially reasonable.
(e) Notwithstanding the termination of this Agreement and the Trust
pursuant to clause (a), the Trustee shall continue to have the rights described
in Section 9.2 and Article XI, and be subject to direction on terms consistent
with those set out in Section 11.14, pending the completion of any Disposition
and/or the reconstitution of the Trust.
ARTICLE X
ADMINISTRATOR DEFAULTS
Section 10.01 Administrator Defaults. Any of the following events shall
constitute an "Administrator Default":
(a) any failure by the Administrator in its capacity as
Administrator to make any payment, transfer or deposit, or deliver any
report, required by any Transaction Document to be made by it or to give
instructions or to give notice to the Trustee to make such payment,
transfer or deposit, which failure continues unremedied (A) in the case of
distributions of interest to the Certificateholders or the delivery of
such reports, for three Business Days and (B) in the case of all payments
not included in clause (A) above, for five Business Day after the date on
which an Authorized Officer of the Administrator has actual knowledge of
such failure;
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(b) failure on the part of the Administrator duly to observe or
perform in any material respect any other covenants or agreements of the
Administrator set forth in this Agreement or any other Transaction
Document, which failure has a Material Adverse Effect and continues
unremedied for a period of 30 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Administrator by the Trustee, or to the Administrator and the
Trustee by any Certificateholder;
(c) the Administrator shall assign its duties under this Agreement,
except as permitted by Sections 3.01(b) and 8.03;
(d) any representation, warranty or certification made by the
Administrator in any Transaction Document or in any certificate or other
document or instrument delivered pursuant to any Transaction Document
shall prove to have been incorrect in any material respect when made or
delivered, which has a material adverse effect on the Certificateholders
of any Series and which material adverse effect continues unremedied for a
period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Administrator by the Trustee, or to the Administrator and the Trustee by
any Certificateholder; or
(e) any Event of Bankruptcy shall occur with respect to the
Administrator.
In the event of any Administrator Default, so long as the Administrator Default
shall not have been remedied, the Trustee may (and, at the direction of the
Required Certificateholders, shall), by notice then given in writing to the
Administrator (a "Termination Notice"), terminate all (but not less than all)
the rights and obligations of the Administrator as Administrator under this
Agreement and in and to the Receivables, the Related Transferred Assets and the
proceeds thereof.
As soon as possible, and in any event within five Business Days, after an
Authorized Officer of the Administrator has obtained knowledge of the occurrence
of any Administrator Default, the Administrator shall furnish the Trustee, and
the Applicable Rating Agencies, and the Trustee shall promptly furnish each
Certificateholder, notice of such Administrator Default.
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Notwithstanding the foregoing, a delay in or failure in performance
referred to in Subsection (a) above for a period of 10 Business Days after the
applicable grace period, or in subsection (b) or (d) above for a period of 30
Business Days after the applicable grace period, shall not constitute an
Administrator Default if such delay or failure could not have been prevented by
the exercise of reasonable diligence by the Administrator and such delay or
failure was caused by an act of God or the public enemy, riots, acts of war,
acts of terrorism, epidemics, flood, embargoes, weather, landslides, fire,
earthquakes or similar causes. The preceding sentence shall not relieve the
Administrator from using its best efforts to perform its obligations in a timely
manner in accordance with the terms of the Transaction Documents, and the
Administrator shall promptly give the Trustee, and NAFCO an Officer's
Certificate notifying them of such failure or delay by it.
Section 10.02 Trustee to Act; Appointment of Successor. (a) On and after
the Administrator's receipt of a Termination Notice pursuant to Section 10.01,
the Administrator shall continue to perform all administration functions under
this Agreement until the date specified in the Termination Notice or otherwise
specified by the Trustee in writing or, if no such date is specified in such
Termination Notice, or otherwise specified by the Trustee, until a date mutually
agreed upon by the Administrator and the Trustee. The Trustee shall, as promptly
as possible after the giving of a Termination Notice, nominate a successor
administrator (the "Successor Administrator"); provided, however, that such
Successor shall accept its appointment by a written assumption in a form
acceptable to the Trustee. Any Person who is nominated to be a Successor
Administrator shall accept its appointment by a written assumption in form and
substance acceptable to the Trustee. In the event that a Successor Administrator
has not been appointed or has not accepted its appointment at the time when the
Administrator ceases to act as Administrator, the Trustee without further action
shall automatically be appointed the Successor Administrator. The Trustee may
delegate any of its administration obligations to an affiliate or agent in
accordance with Section 3.01(b). If the Trustee is prohibited by applicable law
from performing the duties of the Administrator hereunder, the Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Administrator hereunder. The Trustee shall give prompt notice to the
Applicable Rating Agencies and each Certificateholder upon the appointment of a
Successor Administrator.
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(b) After the Administrator's receipt of a Termination Notice, and on the
date that a Successor Administrator shall have been appointed by the Trustee and
shall have accepted such appointment pursuant to Section 10.02(a), all authority
and power of the Administrator under this Agreement shall pass to and be vested
in the Successor Administrator (an "Administration Transfer"); and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Administrator, as attorney-in-fact or otherwise, all
documents and instruments, and to do and accomplish all other acts or things
that the Trustee reasonably determines are necessary or appropriate to effect
the purposes of such Administration Transfer. Upon the appointment of such
Successor Administrator and its acceptance thereof, the Administrator agrees
that it will terminate its activities as Administrator hereunder in a manner
that the Trustee indicates will facilitate the transition of the performance of
such activities to the Successor Administrator. The Administrator agrees that it
shall use reasonable efforts to assist the Successor Administrator in assuming
the obligations to administer the Receivables and the Related Transferred
Assets, on the terms and subject to the conditions set forth herein, and to
effect the termination of the responsibilities and rights of the Administrator
to conduct administration hereunder, including the transfer to such Successor
Administrator of all authority of the Administrator to service the Receivables
and Related Transferred Assets provided for under this Agreement and all
authority over all cash amounts which shall thereafter be received with respect
to the Receivables or the Related Transferred Assets. The Administrator shall,
within five Business Days after the designation of a Successor Administrator,
transfer its electronic records (including software) relating to the
Receivables, the related Contracts and the Related Transferred Assets to the
Successor Administrator in such electronic form as the Successor Administrator
may reasonably request and shall promptly transfer to the Successor
Administrator all other records, correspondence and documents necessary for the
continued administration of the Receivables and the Related Transferred Assets
in the manner and at such times as the Successor Administrator shall request. To
the extent that compliance with this Section 10.02(b) shall require the
Administrator to disclose to the Successor Administrator information of any kind
which the Administrator reasonably deems to be confidential, prior to the
transfer contemplated by the preceding sentence the Successor Administrator
shall be required to enter into such customary licensing and confidentiality
agreements as the
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Administrator shall reasonably deem necessary to protect its interest. All
reasonable costs and expenses (including attorneys' fees and disbursements)
incurred in connection with transferring the Receivables, the Related
Transferred Assets and all related Records (including the related Contracts) to
the Successor Administrator and amending this Agreement and the other
Transaction Documents to reflect such succession as Administrator pursuant to
this Section 10.02(b) shall be paid by the predecessor Administrator (or, if the
Trustee serves as Successor Administrator on an interim basis, the initial
Administrator) within 15 days after presentation of reasonable documentation of
such costs and expenses.
(c) Upon its appointment and acceptance thereof, the Successor
Administrator shall be the successor in all respects to the Administrator with
respect to administration functions under this Agreement and shall be subject to
all the responsibilities and duties relating thereto placed on the Administrator
by the terms and provisions hereof, and all references in this Agreement to the
Administrator shall be deemed to refer to the Successor Administrator.
(d) All authority and power granted to the Administrator or the Successor
Administrator under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.01, and shall pass to and be
vested in NAFCO and, without limitation, NAFCO is hereby authorized and
empowered, on and after the effective date of such termination, to execute and
deliver, on behalf of the Successor Administrator, as attorney-in-fact or
otherwise, all documents and other instruments and to do and accomplish all
other acts or things that NAFCO reasonably determines are necessary or
appropriate to effect the purposes of such transfer of administration rights.
The Successor Administrator agrees to cooperate with NAFCO in effecting the
termination of the responsibilities and rights of the Successor Administrator to
conduct administration of the Receivables and the Related Transferred Assets.
The Successor Administrator shall, within five Business Days after such
termination, transfer its electronic records relating to the Receivables and the
Related Transferred Assets to NAFCO in such electronic form as NAFCO may
reasonably request and shall transfer all other records, correspondence and
documents relating to the Receivables and the Related Transferred Assets to
NAFCO in the manner and at such times as NAFCO shall reasonably request. To the
extent that compliance with this Section 10.02(d) shall require the Successor
Administrator to
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disclose to NAFCO information of any kind which the Successor Administrator
deems to be confidential, NAFCO shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Administrator shall
reasonably deem necessary to protect its interests. All reasonable costs and
expenses (including attorneys' fees and disbursements) incurred by the Trustee,
in its capacity as Successor Administrator, in connection with such termination
shall be paid by NAFCO within 15 days after presentation of reasonable
documentation of such costs and expenses.
Section 10.03 Notification of Administrator Default; Notification of
Appointment of Successor Administrator. Within three Business Days after an
Authorized Officer of the Administrator becomes aware of any Administrator
Default, the Administrator shall give written notice thereof to the Trustee and
the Applicable Rating Agencies, and the Trustee shall, promptly upon receipt of
such written notice (and in any event within two days), give notice to the
Certificateholders at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Administrator
pursuant to this Article X, the Trustee shall give prompt written notice thereof
to the Certificateholders at their respective addresses appearing in the
Certificate Register and to the Applicable Rating Agencies.
ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee. (a) The Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. The provisions of this Article XI shall apply to the Trustee solely
in its capacity as Trustee, and not to the Trustee in its capacity as
Administrator if it is acting as the Administrator. Following the occurrence of
an Administrator Default of which a Responsible Officer has knowledge, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs; provided, however, that if the Trustee shall assume the
duties of the Administrator pursuant to Section 10.02, the Trustee in performing
such duties shall use the degree of skill and attention customarily exercised by
a
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servicer or administrator with respect to auto receivables that it services or
administers for itself or others. The Trustee shall have no power to create,
assume or incur indebtedness or other liabilities in the name of the Trust other
than as contemplated in, or incidental to the performance of its duties under,
this Agreement.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are
complete and reasonably in the form required by this Agreement. The Trustee
shall give prompt written notice to the Person who furnished any item of the
type listed in the preceding sentence of any lack of completeness or conformity
of any such item to the applicable requirements of this Agreement. In addition,
the Trustee shall give prompt written notice to the Certificateholders of any
material lack of completeness or conformity of any such instrument to the
applicable requirements of this Agreement discovered by the Trustee which would
entitle a specified percentage of the Certificateholders to take any action
pursuant to this Agreement.
(c) Subject to Section 11.01(a), no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct; provided,
however, that:
(i) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction (as applicable) of the Majority Certificateholders or
the Required Certificateholders relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
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(iii) the Trustee shall not be charged with knowledge of (A) any
failure by the Administrator to comply with the obligations of the
Administrator referred to in subsections (a), (b), (c), (d) or (e) of
Section 10.01, (B) any breach of the representations and warranties of
NAFCO set forth in Section 2.03 or 7.01 or the representations and
warranties of the Administrator set forth in Section 8.01 or (C) any
breach of the covenants of NAFCO set forth in Section 7.02 or the
covenants of the Administrator set forth in Section 8.02 in each case
unless a Responsible Officer of the Trustee obtains actual knowledge of
such matter or the Trustee receives written notice of such matter from the
Administrator or from any Holder;
(iv) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and obligations as
shall be specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely on the truth of the statements and the correctness of
the opinions expressed in any certificates or opinions that are furnished
to the Trustee and that conform to the requirements of this Agreement; and
(v) without limiting the generality of this Section 11.01 or Section
11.02, the Trustee shall have no duty (A) to see to any recording, filing,
or depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security
interest in the Receivables or the Related Transferred Assets, or to see
to the maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see to the
payment or discharge of any tax, assessment, or other governmental charge
or any Adverse Claim or encumbrance of any kind owing with respect to,
assessed or levied against, any part of the Trust, (C) to confirm or
verify the contents of any reports or certificates of the Administrator
delivered to the Trustee pursuant to this Agreement that are believed by
the Trustee to be genuine and to have been signed or presented by the
proper party or parties or (D) to ascertain or inquire as to the
performance or observance of any of NAFCO's
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or the Administrator's representations, warranties or covenants or the
Administrator's duties and obligations as Administrator.
(d) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if the Trustee
reasonably believes that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any obligations of
the Administrator under this Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Administrator in accordance with the terms of this
Agreement.
(e) Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any Trust Asset now existing or hereafter created or to impair the value of any
Trust Asset now existing or hereafter created.
(f) Except to the extent expressly provided otherwise in this Agreement,
the Trustee shall have no power to vary the corpus of the Trust, including the
power to (i) accept any substitute obligation for a Receivable initially
transferred to the Trust under Section 2.01 hereof, (ii) add any other
investment, obligation or security to the Trust, (iii) withdraw from the Trust
any Trust Asset, except for a withdrawal permitted under Section 12.01 or a
withdrawal that has been consented to by all of the Certificateholders.
(g) In the event that the Paying Agent or the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on the
day on which such obligation, duty or agreement is required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, the Trustee shall be obligated, promptly upon the actual
knowledge thereof by a Responsible Officer, to perform such obligation, duty or
agreement in the manner so required.
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Section 11.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accordance with, any resolution, Officer's
Certificate, opinion of counsel, certificate of auditors or any other
certificate, statement, instrument, instruction, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document and
any information contained therein believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement by the proper
party or parties including, but not limited to, reports and records
required by Article III;
(b) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or permitted or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(c) the Trustee (including in its role as Successor Administrator,
if it ever acts in that capacity) shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation or other proceeding hereunder
or in relation hereto, at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby; provided, however,
that nothing contained herein shall relieve the Trustee of the
obligations, upon the occurrence and continuance of an Administrator
Default which has not been cured, to exercise such of the rights and
powers vested in it by this Agreement and to use the same degree of care
and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs;
(d) the Trustee shall not be personally liable for any action taken,
permitted or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
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(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Required Certificateholders; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses, or
liabilities likely to be incurred by it in connection with making such
investigation shall be, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such cost,
expense, or liability as a condition to proceeding with such
investigation. The reasonable expense of every such examination shall be
paid by the Administrator or, if paid by the Trustee, shall be reimbursed
by the Administrator upon demand;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
representatives, attorneys or a custodian, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, representative, attorney or custodian appointed with due care by it
hereunder;
(g) except as may be required by Section 11.01(b) hereof, the
Trustee shall not be required to make any initial or periodic examination
of any documents or records related to the Trust Assets for the purpose of
establishing the presence or absence of defects or for any other purpose;
(h) whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section 11.02;
(i) the Trustee shall have no liability with respect to the acts or
omissions of the Administrator (except and to the extent the Administrator
is the Trustee), including, but not limited to, acts or omissions in
connection with: the management or administration of the Receivables or
the Related Transferred Assets, calculations made by the Administrator
whether or not reported to the Trustee,
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and deposits into or withdrawals from any Trust Accounts established
pursuant to the terms of this Agreement; and
(j) in the event that the Trustee is also acting as Paying Agent or
Transfer Agent and Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article XI shall also be afforded
to the Trustee acting as Paying Agent or as Transfer Agent and Registrar.
Section 11.03 Limitation on Liability of Trustee. The Trustee shall at no
time have any responsibility or liability for or with respect to the correctness
of the recitals contained herein or in the Certificates (other than the
certificate of authentication on the Certificates). Except as set forth in
Section 11.15, the Trustee makes no representations as to the validity or
sufficiency of this Agreement, any Supplement, the Certificates (other than the
certificate of authentication on the Certificates) or any other Transaction
Document or any Trust Asset or related document. The Trustee shall not be
accountable for the use or application by NAFCO of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to NAFCO or the Administrator in respect of the Trust Assets or deposited
by the Administrator in or withdrawn by the Administrator from the Trust
Accounts or any other accounts hereafter established to effectuate the
transactions contemplated herein or in the other Transaction Documents and in
accordance with the terms hereof or thereof.
The Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity, or enforceability of any ownership or
security interest in any Trust Asset, or the perfection or priority of such a
security interest or the maintenance of any such perfection or priority, or for
or with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under this Agreement,
including: the existence and substance of any Trust Asset or any related Record
or any computer or other record thereof; the validity of the transfer of any
Trust Asset to the Trust or of any preceding or intervening transfer; the
performance or enforcement of any Trust Asset; the compliance by NAFCO or the
Administrator with any warranty or representation made under this Agreement or
in any other Transaction Document and the accuracy of any such warranty or
representation prior to the Trustee's receipt of actual
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notice of any noncompliance therewith or any breach thereof; any investment of
monies pursuant to Section 4.04 or any loss resulting therefrom; the acts or
omissions of NAFCO, the Administrator, or any Obligor; any action of the
Administrator taken in the name of the Trustee; or any action by the Trustee
taken at the instruction of the Administrator; provided, however, that the
foregoing shall not relieve the Trustee of its obligation to perform its duties
under the Agreement in accordance with the terms hereof.
Except with respect to a claim based on the failure of the Trustee to
perform its duties under this Agreement or based on the Trustee's negligence or
willful misconduct, no recourse shall be had against the Trustee in its
individual capacity for any claim based on any provision of this Agreement, any
other Transaction Document, the Certificates, any Trust Asset or any assignment
thereof. The Trustee shall not have any personal obligation, liability, or duty
whatsoever to any Certificateholder or any other Person with respect to any such
claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity to the Trust or the Trustee as provided
in this Agreement. Any obligation of the Trustee to give any notice or statement
to any rating agency hereunder shall constitute only a best efforts obligation
and such notice or statement shall be so provided only as a matter of courtesy
and accommodation, the Trustee having no liability to any rating agency or any
other Person for any failure to so provide such notice or statement.
Section 11.04 Trustee May Deal with Other Parties. Subject to any
restrictions that may otherwise be imposed by Section 406 of ERISA or Section
4975(e) of the Internal Revenue Code, the Trustee in its individual or any other
capacity may deal with the other parties hereto (other than NAFCO) and their
respective affiliates, with the same rights as it would have if it were not the
Trustee.
Section 11.05 Administrator To Pay Trustee's Fees and Expenses. (a) To the
extent not paid by the Administrator to the Trustee from funds constituting the
Administration Fee, the Administrator covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to receive, such reasonable
compensation as is agreed upon in writing between the Trustee and the
Administrator (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trust hereby
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created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and the Administrator will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement and the other Transaction Documents to which it is a party (including
the reasonable fees and expenses of its agents, any co-trustee and counsel)
except any such expense, disbursement or advance as may arise from the Trustee's
negligence or bad faith and except as provided in the following sentence.
(b) In addition, the Administrator agrees to indemnify the Trustee (and
its officers, employees, directors and agents) from, and hold it harmless
against, any and all losses, liabilities, damages, claims or expenses incurred
by the Trustee in the execution of the Trust or in the exercise or performance
of any of the powers or duties of the Trustee hereunder, other than those
resulting from the gross negligence or willful misconduct of the Trustee.
(c) If the Trustee is appointed Successor Administrator pursuant to
Section 10.02, the provisions of this Section 11.05 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its capacity as
Successor Administrator, which shall be paid out of the Administration Fee. The
Administrator's covenant to pay the fees, expenses, disbursements and advances
provided for in this Section 11.05 shall survive the resignation or removal of
the Trustee and the termination of this Agreement.
Section 11.06 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times
(a) be (i) a banking institution organized under the laws of the United
States, (ii) a member bank of the Federal Reserve System or (iii) any other
banking institution or trust company, incorporated and doing business under the
laws of any State or of the United States, a substantial portion of the business
of which consists of receiving deposits or exercising fiduciary powers similar
to those permitted to national banks under the authority of the Comptroller of
the Currency, and which is supervised and examined by a state or federal
authority having supervision over banks; (b) not be an Enhancement Provider or
an Affiliate of First Union National Bank of North Carolina; (c) have, in the
case of an entity that is subject to risk-based capital adequacy requirements,
risk-based capital of
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at least $50,000,000 or, in the case of an entity that is not subject to
risk-based capital adequacy requirements, a combined capital and surplus of at
least $50,000,000 and (d) a long-term unsecured debt rating of at least A or its
equivalent by each Applicable Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for the
purpose of this Section 11.06, the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.
Section 11.07 Resignation or Removal of Trustee. (a) The Trustee may at
any time resign and be discharged from the trust hereby created by giving 30
days' prior written notice thereof to NAFCO, the Administrator, the Applicable
Rating Agencies, the Certificateholders and the Purchaser Agents. Upon receiving
such notice of resignation, NAFCO shall promptly appoint a successor trustee who
meets the eligibility requirements set forth in Section 11.06 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and shall have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction to appoint a successor trustee.
(b) If at any time the Trustee shall cease to be eligible to be the
Trustee hereunder in accordance with the provisions of Section 11.06 hereof and
shall fail to resign promptly after its receipt of a written request therefor by
the Administrator, or if at any time the Trustee shall be legally unable to act,
or shall be adjudged bankrupt or insolvent, or if a receiver for the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Administrator may remove
the Trustee and promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
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(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 hereof.
Section 11.08 Successor Trustee. (a) Any successor trustee appointed as
provided in Section 11.07 hereof shall execute, acknowledge and deliver to
NAFCO, the Administrator, the Certificateholders and the predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Trustee shall, upon payment of its fees and
expenses and other amounts owed to it pursuant to Section 11.05, become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee, at the expense of the Administrator, all documents or copies thereof
and statements held by it hereunder; and NAFCO and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully vesting and confirming in the successor trustee all such
rights, powers, duties and obligations. The Administrator shall promptly give
notice to the Applicable Rating Agencies upon the appointment of a successor
trustee.
(b) No successor trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor trustee shall
be eligible to become the Trustee under the provisions of Section 11.06 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section 11.08, such successor trustee shall mail notice of such succession
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register.
(d) The retiring Trustee shall not be liable for any acts or omissions of
any successor trustee.
Section 11.09 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
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Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, if such Person meets the requirements of Section 11.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Administrator shall promptly give notice to the Applicable Rating Agencies upon
any such merger or consolidation of the Trustee.
Section 11.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee shall have the power and
may execute and deliver all instruments to appoint one or more Persons (which
may be an employee or employees of the Trustee) to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Purchasers, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 11.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or appropriate. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.06 and no notice to Certificateholders of the appointment of any such
co-trustee or separate trustee shall be required under Section 11.08; provided,
however, that the Trustee shall give the Administrator and NAFCO notice of any
such appointment as promptly as practicable.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as the Trustee
hereunder or as successor to the Administrator hereunder), the Trustee
shall be
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incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection or indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement or any other Transaction Document on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be required to
file tax returns, the Administrator shall prepare or shall cause to be prepared
any tax returns required to be filed by the Trust and shall remit such
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returns to the Trustee for signature at least five Business Days before such
returns are due to be filed. The Administrator, shall also prepare or shall
cause to be prepared all tax information required by law to be made available to
Certificateholders and shall deliver such information to the Trustee at least
five Business Days prior to the date it is required by law to be made available
to the Certificateholders. The Trustee, upon request, will furnish the
Administrator with all such information known to the Trustee as may be
reasonably required in connection with the preparation of all tax returns of the
Trust and shall, upon request, execute such returns as the Trustee determines
are appropriate.
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement, the
Certificates or the other Transaction Documents may be prosecuted and enforced
by the Trustee without the possession of any of the Certificates or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be distributed to the Certificateholders in respect of which such
judgment has been obtained in the manner specified in Section 4.03(h).
Section 11.13 Suits for Enforcement. If an Amortization Event or an
Administrator Default shall occur and be continuing, the Trustee, in its
discretion may, subject to the provisions of Sections 11.01 and 11.14, proceed
to protect and enforce its rights and the rights of the Certificateholders under
this Agreement by suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or any other Transaction Document or in aid of the execution of
any power granted in this Agreement or any other Transaction Document or for the
enforcement of any other legal, equitable or other remedy as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of the Trustee or the Certificateholders. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Certificateholder any plan of reorganization, arrangement,
adjustment or composition affecting the Certificates or the rights of any Holder
thereof or to authorize the Trustee to
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vote in respect of the claim of any Certificateholder in any such proceeding.
Section 11.14 Rights of Certificateholders To Direct Trustee. The Required
Certificateholders shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
Section 11.01, the Trustee may decline to follow any such direction if the
Trustee, being advised by counsel, determines that the action so directed may
not lawfully be taken, or if a Responsible Officer or Responsible Officers of
the Trustee shall determine, in good faith, that the proceedings so directed
would be illegal or involve the Trustee in personal liability or be unduly
prejudicial to the rights of the Certificateholders not giving such direction;
and, provided further that nothing in this Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction of the Required Certificateholders.
Section 11.15 Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(a) the Trustee is a New York banking corporation organized,
existing and in good standing under the laws of the State of New York;
(b) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement executed by it on the date hereof, and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement; and
(c) this Agreement and the other Transaction Documents executed by
it on the date hereof have been duly executed and delivered by the Trustee
and, in the case of all such Transaction Documents, are legal, valid and
binding obligations of the Trustee, enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
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Section 11.16 Maintenance of Office or Agency. The Trustee will maintain,
at its address designated pursuant to Section 13.06, an office or offices or
agency or agencies where notices and demands to or upon the Trustee in respect
of the Certificates, this Agreement and the other Transaction Documents to which
it is a party may be served. The Trustee will give prompt written notice to the
Administrator and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
Section 11.17 No Bond. The Trustee and each co-trustee and separate
trustee from time to time appointed pursuant to this Agreement are relieved from
giving any bond, surety or security, and from making any inventories, appraisals
or accountings of the Trust Assets, in each case that would otherwise have been
required under the laws of the State of Florida merely on account of their
acting in such capacities.
Section 11.18 Statements, Certificates and Reports. A copy of each
statement, certificate and report furnished to the Trustee pursuant to this
Agreement shall be provided to any Certificateholder or the Applicable Rating
Agencies requesting the same in a writing to the Trustee addressed to
the Corporate Trust Office.
ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust. The Trust and the respective
obligations and responsibilities of NAFCO, the Administrator and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders as hereinafter set forth) shall terminate, except with
respect to the duties and obligations described in Sections 7.03, 8.04, 11.05,
11.11, 12.02(b), 13.10, 13.13, 13.15, 13.16 and 13.17 and any other provision
which by its terms is stated to survive, upon the day on which the
Certificateholders and the Trustee shall have been paid all amounts required to
be paid to them pursuant to this Agreement and the Trustee has disposed of all
property held as part of the Trust (including pursuant to Section 12.03).
Section 12.02 Final Distribution. (a) The Administrator shall give the
Trustee at least ten days'
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prior written notice of the date on which the Trust is expected to terminate in
accordance with Section 12.01(a). Upon receiving such notification from the
Administrator, the Trustee shall give the Certificateholders written notice as
soon as practicable after the Trustee's receipt of notice from the
Administrator, which notice shall specify (i) the Distribution Date upon which
final payment with respect to the Certificates is expected to be made and (ii)
the amount of any such final payment. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to the Certificateholders. On the Distribution Date specified in such
notice, the Trustee shall, based upon the Distribution Date Statement relating
to such Distribution Date, cause to be distributed to the Certificateholders the
amounts distributable to them on such Distribution Date pursuant to Article IV
and Article V. Each Certificateholder shall present the Certificates owned by
them to the Trustee and surrender such Certificates for cancellation at the
address of the Trustee set forth in Section 13.06 not more than ten Business
Days after the Distribution Date upon which final payment with respect to the
Certificates has been made.
(b) Notwithstanding the termination of the Trust pursuant to Section
12.01(a), all funds then on deposit in the Certificate Account shall continue to
be held in trust for the benefit of the Certificateholders and the Paying Agent
or the Trustee shall pay such funds to the Certificateholders at the time set
forth in Section 12.01(a). In the event that any of the Certificateholders shall
not have surrendered their Certificates for cancellation within six months after
the date specified in the above-mentioned written notice from the Trustee, the
Trustee shall give a second written notice to the remaining Certificateholders
concerning the final distribution and surrender of their Certificates for
cancellation. The Trustee and the Paying Agent shall pay to the Class C
Certificateholder any monies held by them for the payment of principal of or
interest on the Certificates that remains unclaimed for two years after the
termination of the Trust pursuant to Section 12.01(a). After payment of such
monies to the Class C Certificateholder, Certificateholders entitled to the
money must look to the Class C Certificateholder for payment as general
creditors unless an applicable abandoned property law designates another Person.
Section 12.03 Rights Upon Termination of the Trust. Upon the termination
of the Trust pursuant to Section 12.01
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and the surrender of the Class C Certificate by NAFCO to the Trustee, the
Trustee shall transfer, assign, set over and otherwise convey to NAFCO (without
recourse, representation or warranty), all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter created, the
Related Transferred Assets and all of the other property previously conveyed to
the Trust pursuant to Section 2.01(b), except for amounts held by the Trustee
pursuant to Section 12.02(b) and except for the rights of RPA Indemnified
Parties (other than NAFCO and its officers, directors, shareholders, controlling
Persons, employees and agents) to indemnification and contribution under Section
9.1 of the Purchase Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment (including any document necessary to
release the security interest in favor of the Trustee (for the benefit of the
Certificateholders) in such Receivables and Related Transferred Assets and to
release any filing evidencing or perfecting such security interest), in each
case without recourse, representation or warranty, as shall be reasonably
requested by NAFCO to vest in NAFCO all right, title and interest which the
Trust had in the Trust Assets.
Section 12.04 Optional Repurchase of Investor Interests. On any
Distribution Date occurring on or after the date that the Certificate Principal
Amount is reduced to 10% or less of the initial aggregate principal amount of
the Certificates, NAFCO shall have the option, upon the giving of 10 days' prior
written notice by NAFCO to the Administrator, the Trustee and the Applicable
Rating Agencies, to repurchase the undivided interest in the Trust by depositing
into the Certificate Account, on such Distribution Date, an amount equal to the
unpaid Certificate Principal Amount plus accrued and unpaid interest on the
unpaid principal amount of such Certificates (and accrued and unpaid interest
with respect to interest amounts that were due but not paid on a prior
Distribution Date) through the day preceding such Distribution Date at the
Certificate Rate applicable to such Certificates. Upon tender of all outstanding
Certificates by the Certificateholders, the Trustee shall then distribute such
amounts, together with all other amounts on deposit in the Certificate Account
to the Certificateholders on the next Distribution Date in repayment of the
principal amount and all accrued and unpaid interest owing to such
Certificateholders. Following any such repurchase, the Certificateholders shall
have no further rights with respect to the Receivables and the Trustee shall
execute and deliver such instruments of transfer and assignment (including any
document necessary to
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release the security interest in favor of the Trustee (for the benefit of the
Certificateholders) in such Receivables and Related Transferred Assets and to
release any filing evidencing or perfecting such security interest), in each
case without recourse, representation or warranty, as shall be reasonably
requested by NAFCO to vest in NAFCO all right, title and interest which the
Trust had in the Trust Assets. In the event that NAFCO fails for any reason to
deposit the aggregate purchase price for the Certificate Principal Amount
payments shall continue to be made to the Certificateholders in accordance with
the terms of this Agreement.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment, Waiver, Etc. (a) This Agreement and any
Supplement may be amended from time to time by the Administrator, NAFCO and the
Trustee by a written instrument signed by each of them, without the consent of
any of the Certificateholders but only to cure any ambiguities, or to cure,
correct or supplement any provisions contained in this Agreement that may be
defective or inconsistent with any other provision contained in this Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any Certificateholder (as evidenced by an Officer's
Certificate of NAFCO). This Agreement and any Supplement may not be amended
unless NAFCO shall have delivered the proposed amendment to the Applicable
Rating Agencies at least ten Business Days (or such shorter period as shall be
acceptable to each of them) prior to the execution and delivery thereof and the
Rating Agency Condition has been satisfied with respect to such amendment.
(b) The provisions of this Agreement and any Supplement may also be
amended, modified or waived from time to time by the Administrator, NAFCO and
the Trustee with the consent of: the Required Certificateholders for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or of modifying in any manner the
rights of the Certificateholders; provided, however, that no such amendment
shall (i) result in the Trust becoming an association taxable as a corporation
or a "publicly traded partnership" within the meaning of the Internal Revenue
Code, (ii) reduce in any manner the amount of or delay the
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timing of any distributions to be made to Certificateholders or deposits of
amounts to be so distributed or the amount available under any Enhancement
without the consent of each affected Certificateholder, (iii) change the
definition of or the manner of calculating the interest of any Certificateholder
without the consent of each affected Certificateholder, (iv) reduce the
aforesaid percentage required to consent to any such amendment without the
consent of each Certificateholder or (v) adversely affect the rating of any
Series or Class by any Applicable Rating Agency without the consent of the
Holders of the Certificates of such Series or Class evidencing not less than 66
2/3% of the aggregate unpaid principal amount of the Certificates of such Series
or Class.
NAFCO or the Trustee shall establish a record date for determining which
Certificateholders may give such waivers and consents. No waiver of any
Amortization Event or other default hereunder given at any time shall apply to
any other prior or subsequent Amortization Event or default.
(c) Promptly after the execution of any amendment, consent or waiver
described in clause (a) or (b), the Trustee shall furnish written notification
of the substance of such amendment or consent to each Certificateholder, and the
Administrator shall furnish written notification of the substance of such
amendment or consent to the Applicable Rating Agencies and each Enhancement
Provider.
(d) It shall not be necessary for any waiver or consent given by the
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such waivers and consents and of
evidencing the authorization of the execution thereof by the Certificateholders
shall be subject to such reasonable requirements as the Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no amendment
may be made to this Agreement or any Supplement which would adversely affect in
any material respect the interests of any Enhancement Provider without the
consent of such Enhancement Provider.
(f) Any Supplement executed in accordance with the provisions of Section
6.10 shall not be considered an amendment to this Agreement for the purposes of
this Section 13.01.
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(g) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent to such execution and delivery have been
satisfied. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
Section 13.02 Actions by Certificateholders (a) By its acceptance of
Certificates pursuant to this Agreement and the applicable Supplement, each
Certificateholder (other than NAFCO and any NAFCO Person) acknowledges and
agrees that, wherever in this Agreement a provision states that an action may be
taken or a notice, demand or instruction given by any Series of
Certificateholders, any Class of Certificateholders or the Certificateholders,
such action, notice or instruction may be taken or given by any Holder of any
Certificate of such Series or Class or by any Certificateholder, respectively,
unless such provision requires a specific percentage of such Series or Class of
Certificateholders or of all Certificateholders.
(b) By its acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, each Certificateholder (other than NAFCO and any other
NAFCO Person) acknowledges and agrees that any request, demand, authorization,
direction, notice, consent, waiver or other act by the Holder of a Certificate
shall bind such Holder and every subsequent Holder of such Certificate and of
any Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done by
the Trustee or the Administrator in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement or any Supplement to be given or
taken by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to Administrator.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement or any
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Supplement and conclusive in favor of the Trustee and the Administrator, if made
in the manner provided in this Section.
(d) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
Section 13.03 Limitation on Rights of Certificateholders. (a) The death or
incapacity of any Certificateholder (other than NAFCO or any other NAFCO Person)
shall not operate to terminate this Agreement or the Trust, nor shall such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided otherwise in this Agreement) or in any manner otherwise to control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provisions
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given to the Trustee, and unless the
Required Certificateholders shall have made, written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more
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Certificateholders shall have any right in any manner whatever by virtue of, or
by availing itself or themselves of, any provisions of this Agreement to affect,
disturb or prejudice the rights of any other Certificateholder or any Holder of
any other Series of Certificates, or to obtain or seek to obtain priority over
or preference to any such other Certificateholder or any such Holder of any
other Series of Certificates, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of, in the case of actions affecting the Certificateholders as a class,
all Certificateholders or, in the case of actions affecting the Holders of any
Certificates, the Holders of the Certificates. For the protection and
enforcement of the provisions of this Section 13.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
(d) By their acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, the Certificateholders (other than NAFCO and any other
NAFCO Person) agree to the provisions of this Section 13.03.
Section 13.04 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICT
OF LAWS PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Section 13.05 Notices. All demands, notices, directions, orders, requests,
instructions and communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered, four Business Days after
mailing if mailed by registered mail, return receipt requested, or sent by
facsimile transmission (a) in the case of NAFCO, to its address set forth below
its signature hereto; (b) in the case of National Auto, to its address set forth
below its signature hereto; and (c) in the case of the Trustee, the Paying Agent
or the Transfer Agent and Registrar, to the address of the Trustee set forth on
the signature pages hereof; or, as to each party, at such other address or
facsimile number as shall be designated by such party in a written notice to
each other party given in accordance with this Section 13.05. Except to the
extent expressly provided otherwise in an applicable Supplement, any notice
required or permitted to be mailed to a Certificateholder shall be sent by
first-class mail, postage prepaid, to the address of such Certificateholder as
shown
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in the Certificate Register. Except to the extent expressly provided otherwise
in an applicable Supplement, any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given on the
fourth Business Day after such notice is so mailed, whether or not the
Certificateholder receives such notice.
Section 13.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement or such
other Transaction Document (as applicable) and shall in no way affect the
validity or enforceability of the other provisions of this Agreement, the
Certificates or any of the other Transaction Documents or the rights of the
Certificateholders or the Purchasers.
Section 13.07 Certificates Nonassessable and Fully Paid. Except to the
extent otherwise expressly provided in Section 7.03 with respect to NAFCO, it is
the intention of the parties to this Agreement that the Certificateholders shall
not be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.08 Further Assurances. NAFCO and the Administrator agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables for
filing under the provisions of the UCC or other applicable law of any applicable
jurisdiction.
Section 13.09 Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, each of the Trustee, the Administrator, NAFCO, the Paying
Agent, the Authenticating Agent and the Transfer Agent and Registrar (but not
any Certificateholder) agrees that it shall not, with respect to the Trust or
NAFCO, institute or join any other Person in instituting any proceeding of the
type referred to in the definition of "Event of Bankruptcy" so
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long as any Certificates issued by the Trust shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Certificates shall have been outstanding. The foregoing shall not limit the
right of the Trustee, the Administrator, NAFCO, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar to file any claim in
or otherwise take any action with respect to any such insolvency proceeding that
was instituted against NAFCO or the Trust by any Person other than the Trustee,
the Administrator, NAFCO, the Paying Agent, the Authenticating Agent or the
Transfer Agent and Registrar. In addition, each of the Administrator, the Paying
Agent, the Authenticating Agent, the Transfer Agent and Registrar and (as to the
Trust) NAFCO agree that all amounts owed to them by the Trust or NAFCO shall be
payable solely from amounts that become available for such payment pursuant to
this Agreement and the Receivables Purchase Agreement, and no such amounts shall
constitute a claim against the Trust or NAFCO to the extent that they are in
excess of the amounts available for their payment.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee, the Certificateholders or
the Holders of any Series of Certificates, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and are not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Certificateholders and
their respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, nothing contained in this Agreement shall confer any
rights upon any Person which is not a party to, or a permitted assignee of a
party to, this Agreement.
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Section 13.13 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
Section 13.14 Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon and inure to the benefit of NAFCO, the
Administrator and the Trustee and their respective successors and permitted
assigns; provided that NAFCO shall not delegate any of its obligations
hereunder. This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until the termination of the Trust pursuant to Section 12.01.
Section 13.15 Recourse to NAFCO. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of NAFCO under this
Agreement and the other Transaction Documents to which it is a party are solely
the obligations of NAFCO. No recourse shall be had for payment of any fee
payable by or other obligation of or claim against NAFCO that arises out of this
Agreement or any other Transaction Document to which NAFCO is a party against
any trustee ,director, officer or employee of NAFCO. Payments to be made by
NAFCO pursuant to this Agreement shall be paid to the extent that funds are
available to make such payments after all amounts to be paid to the
Certificateholders pursuant to Section 4.03(a) or 4.03(b) (as applicable) shall
have been paid, and there shall be no recourse to NAFCO for all or any part of
any amounts payable pursuant to this Agreement if such funds are at any time
insufficient to make all or part of any such payments. The provisions of this
Section 13.15 shall survive the termination of this Agreement.
Section 13.16 Recourse to Trust Assets. The Certificates do not represent
an obligation of, or an interest in, NAFCO, National Auto, the Administrator,
the Trustee or any Affiliate of any of them. Except as expressly provided
otherwise in this Agreement, the Certificates are limited in right of payment to
the Trust Assets.
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Section 13.17 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE OR FEDERAL COURT; (B) IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING; AND (C) IN THE CASE OF NAFCO,
IRREVOCABLY APPOINTS NATIONAL AUTO (THE "PROCESS AGENT"), WITH AN OFFICE ON THE
DATE HEREOF AT ONE PARK PLACE, ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS
PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE
BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO NAFCO IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND NAFCO HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, EACH OF NAFCO AND THE ADMINISTRATOR ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO NAFCO OR THE
ADMINISTRATOR (AS APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS
SECTION 13.17 SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO
BRING ANY ACTION OR PROCEEDING AGAINST ANY OR ALL OF THE OTHER PARTIES HERETO OR
ANY OF THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.
Section 13.18 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
ACTIONS OF ANY OF THE PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
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Section 13.19 Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by The Chase Manhattan Bank (USA), not individually or personally but solely as
trustee of NAFCO, 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 NAFCO is made and intended not as personal
representations, undertakings and agreements by The Chase Manhattan Bank (USA)
but is made and intended for the purpose of binding only NAFCO and (c) under no
circumstances shall The Chase Manhattan Bank (USA) be personally liable for the
payment of any indebtedness or expenses of NAFCO or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by NAFCO under this Agreement or the other Transaction Documents.
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IN WITNESS WHEREOF, NAFCO, the Administrator and the Trustee have caused
this Agreement to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
NAFCO FUNDING TRUST
as the transferor
By: THE CHASE MANHATTAN BANK (USA),
not in its individual capacity
but solely as Owner Trustee of the
NAFCO Funding Trust
By _________________________________
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone:
Facsimile:
NATIONAL AUTO FINANCE COMPANY L.P.
as Administrator
By: NATIONAL AUTO FINANCE CORPORATION,
as General Partner
By _________________________________
Name:
Title:
Address: One Park Place
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee of NAFCO Auto
Receivables Master Trust
By _________________________________
Name:
Title:
Address: Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Group
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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