EXHIBIT 10.15
SECURITY AND COLLATERAL AGENT AGREEMENT
among
N.A.F. AUTO LOAN TRUST
(as Borrower)
CONTITRADE SERVICES L.L.C.
(as Lender)
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(as Collateral Agent)
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Dated as of May 17, 1996
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SECURITY AND COLLATERAL AGENT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS................................................. 1
SECTION 2. SECURITY INTERESTS............................................ 2
SECTION 3. CERTAIN RIGHTS OF LENDER WITH RESPECT TO COLLATERAL........... 3
SECTION 4. REMEDIES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT........... 4
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS..................... 5
SECTION 6. [Reserved].................................................... 6
SECTION 7. THE COLLATERAL AGENT.......................................... 6
7.01. Appointment................................................... 6
7.02. Exculpatory Provisions........................................ 6
7.03. Reliance by Collateral Agent.................................. 7
7.04. Notice of Default............................................. 7
7.05. Non-Reliance on Collateral Agent.............................. 7
7.06. Successor Collateral Agent.................................... 8
7.07. Delivery of Collateral and Permitted Investments.............. 8
7.08. Duties and Covenants of Collateral Agent...................... 8
SECTION 8. AMENDMENTS AND WAIVERS........................................ 9
SECTION 9. NOTICES....................................................... 10
SECTION 10. LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF
COLLATERAL.................................................... 11
SECTION 11. SEVERABILITY.................................................. 11
SECTION 12. NO WAIVER; CUMULATIVE REMEDIES................................ 11
SECTION 13. PAYMENT OF EXPENSES AND TAXES................................. 12
SECTION 14. SUCCESSORS AND ASSIGNS; GOVERNING LAW......................... 13
SECTION 15. ENFORCEMENT RIGHTS OF LENDER.................................. 14
SECTION 16. BANKRUPTCY PETITION AGAINST THE BORROWER...................... 14
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SECURITY AND COLLATERAL AGENT AGREEMENT
SECTION 17. MISAPPLICATION OF FUNDS....................................... 14
SECTION 18. COUNTERPART SIGNATURES........................................ 15
SECTION 19. THIRD PARTY BENEFICIARY....................................... 15
SECTION 20. STATUS OF COLLATERAL AGENT.................................... 15
SECTION 21. ACTS OF LENDER................................................ 15
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SECURITY AND COLLATERAL AGENT AGREEMENT
SECURITY AND COLLATERAL AGENT AGREEMENT, dated as of May 17, 1996,
made by and among N.A.F. AUTO LOAN TRUST, a Delaware business trust (the
"Borrower"), CONTITRADE SERVICES, L.L.C., a Delaware Limited Liability Company
(the "Lender") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), as
collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Borrower has entered into a Credit Agreement dated as
of May 17, 1996 (as may from time to time, be amended, supplemented, or
modified, the "Credit Agreement" with the Lender, the Borrower and National Auto
Funding Corporation ("NAF Corp."), pursuant to which the Borrower will take out
loans (the "Loans") from time to time;
WHEREAS, the Borrower intends to enter into from time to time
Non-Standard Contract Origination Agreements (each, as from time to time
amended, supplemented or modified, a "Loan Origination Agreement" and,
collectively, the "Loan Origination Agreements") with certain financial
institutions and agencies (the "FIs"), pursuant to which the Borrower will agree
to purchase Eligible Contracts; and
WHEREAS, it is a condition to the obligations of the Lender to
make the Facility available to the Borrower that this Security and Collateral
Agent Agreement be executed and delivered.
NOW, THEREFORE, to induce the Lender to make the Facility
available to the Borrower the parties hereto hereby agree as follows:
SECTION 1. DEFINED TERMS.
(a) The terms "inventory", "goods", "accounts", "contract rights",
"chattel paper", "general intangibles", and "documents" have the respective
meanings ascribed in the UCC.
(b) Capitalized terms used herein undefined shall, unless
otherwise defined herein, have the respective meanings ascribed in the Credit
Agreement, including the "Definitions List" attached as Exhibit A thereto; and
the following terms shall have the following meanings:
"Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
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SECURITY AND COLLATERAL AGENT AGREEMENT
"Collateral Agent Fee" shall have the meaning set forth in a
separate letter agreement between Borrower and the Collateral Agent.
"Proceeds" shall have the meaning assigned such term under the UCC
of the State of New York, and of each other jurisdiction whose law governs the
grant or perfection of the Collateral Agent's interest in the particular
proceeds of the Collateral and shall also include (to the extent not already
included): (i) any and all proceeds of any insurance, indemnity, warranty,
guaranty or letter of credit payable to the Borrower from time to time with
respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or rights to amounts payable to the Borrower from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), (iii) any and all other amounts, products, rents or profits from
time to time paid or payable under or in connection with the Collateral and (iv)
all additions to or substitutions or replacements for any of the Collateral.
"Responsible Officer" shall mean, when used with respect to the
Collateral Agent, any officer within the corporate trust department in Dallas,
Texas (or any successor thereof) including any vice president, assistant vice
president, or any officer or assistant officer of the Collateral Agent
customarily performing functions similar to those performed by any of the
above-designated officers.
SECTION 2. SECURITY INTERESTS.
(a) As security for the prompt, complete and unconditional payment
and performance of all Obligations of the Borrower, the Borrower hereby pledges,
assigns, transfers and delivers to the Collateral Agent for the benefit of the
Lender, and grants to the Collateral Agent for the benefit of the Lender, a
continuing first lien on, and first and prior security interest in, all of the
Borrower's assets and properties, real, personal and mixed, tangible and
intangible, of any kind or description, whether now owned or at any time
hereafter acquired, whether now existing or hereafter acquired, and wherever
located (collectively, the "Collateral") including, without limitation all
estate, right, title and interest in, to and under:
(i) all inventory, goods, accounts, contract rights, chattel
paper, instruments, general intangibles and documents;
(ii) each Contract, including without limitation, all rights to
payments thereunder, purchased by or otherwise conveyed to or established
by the Borrower pursuant to the related Loan Origination Agreement(s);
(iii) each Financed Vehicle and all other property, now or
hereafter acquired, securing or evidenced by, each Contract including,
without limitation, the certificate of title relating to each Financed
Vehicle, any insurance proceeds with respect to any Financed Vehicle or
Contract, the proceeds of any repossession and liquidation of an Financed
Vehicle, rights under judgments with respect to defaulted obligors, right
to deficiency judgments with
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SECURITY AND COLLATERAL AGENT AGREEMENT
respect to defaulted obligors and rights under any service contracts with
respect to any Financed Vehicle;
(iv) all bank and trust accounts (including, without limitation,
the Lockbox Account and the Collection Account and all moneys, checks,
instruments, documents, securities, Investments, deposits and other
credits (whether or not permitted by the Facility Agreements) credited to
the Collection Account, or otherwise held by the Collateral Agent;
(v) the certificates of title relating to the Contracts, credit
applications, payment history records, and other origination and servicing
records relating to the Contracts;
(vi) all securities and other Investments held at any time by the
Borrower including any and all subordinate certificates (including any
"interest only" certificates and the rights to any other distributions
from any securitization) received by the Borrower or any Affiliate of the
Borrower from any securitization, together with appropriate bond powers,
duly executed (the "Subordinate Certificates");
(vii) each Facility Agreement; and
(viii) all Proceeds of any of the foregoing.
(b) All rights of the Collateral Agent and the Lender and all
liens and security interests granted hereunder, shall be absolute, unconditional
and irrevocable unless and until released pursuant to the Facility Agreements,
irrespective of any condition or circumstance whatsoever.
(c) The grant of the security interest to the Collateral Agent
pursuant to this Section 2 shall not: (i) relieve the Borrower from the
performance of any term, covenant, condition or agreement on the Borrower's part
to be performed or observed under or in connection with the Collateral, (ii)
impose any obligation on the Collateral Agent or the Lender to perform or
observe any such term, covenant, condition or agreement on the Borrower's part
to be so performed or observed, or (iii) impose any liability on the Collateral
Agent or the Lender for any act or omission on the part of the Borrower, or any
Person acting as agent for or on behalf of the Borrower, relative to or for any
breach of any representation or warranty on the part of the Borrower in
connection with the Collateral.
SECTION 3. CERTAIN RIGHTS OF LENDER WITH RESPECT TO COLLATERAL.
Upon the occurrence and during the continuance of an Event of
Default, the Borrower hereby irrevocably authorizes the Collateral Agent to
execute and deliver, as the attorney-in-fact of the Borrower, any consent,
waiver or amendment which, under the terms of any Facility Agreement, is or may
be executed and delivered by the Borrower with respect to the Collateral,
subject to the provisions of the Facility Agreements; provided, however, that
the Collateral Agent shall have no duty or obligation to execute and deliver any
such consent, waiver or amendment unless directed in writing to take the actions
specified therein by the Lender; and provided, further, that the Collateral
Agent shall
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SECURITY AND COLLATERAL AGENT AGREEMENT
not be required to take any action which the Collateral Agent reasonably
believes may be contrary to applicable law or which would expose the Collateral
Agent to financial liability if the Collateral Agent has reasonable grounds to
believe that repayment of such financial liability is not reasonably assured to
it. The Borrower hereby agrees to remit to the Collateral Agent for deposit in
accordance with this Agreement any and all Proceeds of any Collateral received
by the Borrower (other than money paid to the Borrower by the Collateral Agent
in accordance with the Facility Agreements).
SECTION 4. REMEDIES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.
(a) (i) If at any time an Event of Default shall have occurred and
be continuing, the Collateral Agent shall, if directed by the Lender,
without demand of performance or other demand, advertisement or notice of
any kind (except for any notice of the time and place of public or private
sale required by law) to or upon the Borrower or any other Person (all of
which demands, advertisements and/or notices are hereby expressly waived),
and in its own name or in the name of the Lender, forthwith demand,
collect, receive, sue for, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, assign, grant an option or
options to purchase, contract to sell or otherwise dispose of and deliver
said Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at any location or locations at the option of the
Collateral Agent acting upon any instructions received from the Lender,
all upon such terms and conditions and at such prices as the Lender may
deem advisable, for cash or on credit or for future delivery without
assumption of any credit risk, with the right of the Collateral Agent or
the Lender upon any such public sale or sales to purchase the whole or any
part of said Collateral so sold, free of any right of redemption in the
Borrower, which right is hereby expressly waived and released. At the
instruction of the Lender, the Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which the
same may be so adjourned.
(ii) If at any time an Event of Default shall have occurred and
be continuing and the Lender has given written notice to the Collateral
Agent as to the disposition of the Collateral or as to the exercise of
remedies against the Collateral, the Collateral Agent hereby agrees to
follow such direction; provided, however, no provision of this Agreement
shall require the Collateral Agent to take any action which it or its
counsel deems to be unlawful nor shall the Collateral Agent be obligated
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any rights, powers or duties hereunder, if the
Collateral Agent shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Until all Obligations have been
repaid and satisfied in full, the Collateral Agent shall be obligated,
subject to the foregoing proviso, to take direction only from the Lender
as to, upon the occurrence and during the continuance of an Event of
Default, the disposition of the Collateral, or the exercise of remedies
against the Collateral.
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SECURITY AND COLLATERAL AGENT AGREEMENT
(iii) If an Event of Default shall have occurred and be
continuing, then the Collateral Agent shall, if directed by the Lender, at
any time thereafter, without demand of performance or other demand,
succeed to the Borrower's rights and privileges with respect to each
Facility Agreement.
(iv) If an Event of Default shall have occurred and be continuing,
the Collateral Agent shall, if directed by the Lender, re-register the
Subordinate Certificates in the name of the Lender (which Subordinate
Certificates will in turn be re-registered to the appropriate NAF Entity
when and if all Obligations have been repaid and satisfied in full).
(b) If any notification of a proposed disposition of the
Collateral is required by law, such notification shall be deemed reasonably and
properly given if made in any manner provided in Section 9 hereof at least ten
days before such disposition.
(c) In addition to the rights, powers and remedies granted to it
in this Security and Collateral Agent Agreement and in any other instrument or
agreement securing, evidencing or relating to the Loans, the Collateral Agent
shall have all of the rights, powers and remedies now or hereafter permitted in
law or equity, including, without limitation, those of a secured party under the
UCC of the State of New York and any other applicable jurisdiction.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Borrower represents, warrants and agrees that:
(a) No security agreement, financing statement, equivalent
security or lien instrument or continuation statement listing the Borrower as
debtor covering all or any part of the Collateral is on file or of record in any
jurisdiction, except such as may have been filed, for the benefit of the Lender
recorded or made by the Borrower in favor of the Collateral Agent pursuant to
this Security and Collateral Agent Agreement or the Credit Agreement.
(b) This Security and Collateral Agent Agreement is effective to
create a valid and continuing Lien on the Collateral in favor of the Collateral
Agent for the benefit of the Lender, which Lien is prior to all other Liens, and
is enforceable as such as against creditors of and purchasers from the Borrower.
All action necessary or desirable to protect and perfect such security interest
has been duly taken.
(c) The Borrower's chief executive office is at 4545 Fuller Drive,
Suite 101, Irving, Texas 75038. The Borrower will not change its name and will
not change its principal place of business or chief executive office unless the
Borrower shall have given the Collateral Agent at least thirty (30) days prior
written notice thereof and shall have taken all action necessary to assure
continuous perfection of the security interest held by the Collateral Agent in
the Collateral as evidenced by an opinion of counsel addressed to the Collateral
Agent and the Lender to the effect that the lien and security interest created
by this Security and Collateral Agent Agreement with respect to such
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SECURITY AND COLLATERAL AGENT AGREEMENT
Collateral will continue to be maintained, and that the priority thereof will
not be affected, after giving effect to such action or actions.
(d) At any time and from time to time, and at the sole expense of
the Borrower, the Borrower will promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as the
Lender may reasonably deem desirable in obtaining the full benefits of this
Security and Collateral Agent Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the liens and security interests granted hereby.
The Borrower also hereby authorizes the Collateral Agent to file any such
financing or continuation statement the signature of the Borrower to the extent
permitted by applicable law; provided, however, that such authorization shall
not be deemed to create a duty in the Collateral Agent to monitor the compliance
of the Borrower with the foregoing covenants and provided further that the duty
of the Collateral Agent to execute any instrument pursuant to the authorizations
of Section 5(d) or (f) shall arise only if a Responsible Officer of the
Collateral Agent has actual knowledge, or has received written notice, of the
failure of the Borrower to comply with the foregoing covenants. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note or other instrument, or any chattel paper, the
Borrower shall, upon request of the Lender, duly endorse such note, instrument
or chattel paper to the order of the Collateral Agent and deliver such note,
instrument or chattel paper to the Collateral Agent promptly, and shall take
such other actions and execute such other documents as shall be requested by the
Lender to perfect the Collateral Agent's interest in such note, instrument or
chattel paper.
(e) The Borrower will warrant and defend the Collateral Agent's
right, title and interest in and to the Collateral, for the benefit of the
Lender against the claims and demands of all Persons whomsoever.
(f) All authorizations in this Security and Collateral Agent
Agreement for the Collateral Agent to endorse checks, instruments and securities
and to execute, deliver and file financing statements, continuation statements,
security agreements and other instruments with respect to the Collateral are
powers coupled with an interest and are irrevocable so long as any Loans are
outstanding.
SECTION 6. [Reserved]
SECTION 7. THE COLLATERAL AGENT.
7.01 Appointment. By accepting the benefits of the security
interest granted herein, the Lender hereby designates and appoints Texas
Commerce Bank National Association as the Collateral Agent of the Lender under
this Security and Collateral Agent Agreement, and the Lender authorizes Texas
Commerce Bank National Association as the Collateral Agent for the Lender, to
take such action on its behalf under the provisions of this Security and
Collateral Agent Agreement and to exercise such powers and perform such duties
as are expressly delegated to the Collateral Agent by the terms of this Security
and Collateral Agent Agreement together with such other powers as are reasonably
incidental
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SECURITY AND COLLATERAL AGENT AGREEMENT
thereto but in each instance solely at the written instruction of the Lender.
Notwithstanding any provision to the contrary elsewhere in this Security and
Collateral Agent Agreement , the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with the Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Security and Collateral Agent Agreement or otherwise exist against the
Collateral Agent. Texas Commerce Bank National Association hereby accepts its
appointment as Collateral Agent, subject to, and in reliance upon, the provision
of this Section 7.01.
7.02 Exculpatory Provisions. Neither the Collateral Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Security and Collateral Agent
Agreement (except for its or such Person's own gross negligence or wilful
misconduct), or (ii) responsible in any manner to any of the Lender for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained herein or in any Loan Origination Agreement, the
Administration Agreement, the Servicing Agreement, the Credit Agreement or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Collateral Agent under or in connection with, this
Agreement, any other Facility Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency (except with respect
to the Collateral Agent) of this Agreement, any other Facility Agreement, or the
Collateral or for any failure of the Borrower to perform its obligations
hereunder or under any other Facility. The Collateral Agent shall not be under
any obligation to the Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any of the
Facility Agreements, or to inspect the properties, books or records of the
Borrower.
7.03 Reliance by Collateral Agent. The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Loan,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Collateral
Agent. The Collateral Agent shall be fully justified in failing or refusing to
take any action under this Security and Collateral Agent Agreement unless it
shall first receive such written advice or concurrence as it deems appropriate
or it shall first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent may from time to time
consult with legal counsel, independent accountants or other experts of its own
selection in the event of any disagreement, controversy, question or doubt as to
the construction of any provision of this Agreement or any of its duties
hereunder, and the Collateral Agent shall be fully protected in acting in good
faith in reliance upon the advice or opinion of any such counsel or other
expert.
7.04 Notice of Default. The Collateral Agent shall not be deemed
to have knowledge or notice of the occurrence of any Event of Default under the
Credit Agreement unless a Responsible Officer has received written notice from
the Lender or the Borrower referring to this Security and
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SECURITY AND COLLATERAL AGENT AGREEMENT
Collateral Agent Agreement and describing such Event of Default or unless a
Responsible Officer otherwise has actual knowledge of such Event of Default.
7.05 Non-Reliance on Collateral Agent. Neither the Collateral
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to the Lender, and no
act by the Collateral Agent hereafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Collateral Agent to the Lender. The Lender represents (or will be deemed to
have represented at such time as such party becomes a Lender hereunder) to the
Collateral Agent that it has, independently and without reliance upon the
Collateral Agent, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to extend credit to the Borrower. The Lender
will, independently and without reliance upon the Collateral Agent, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Security and Collateral Agent Agreement , and to
make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished by the Collateral Agent hereunder,
the Collateral Agent shall have no duty or responsibility to provide the Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Collateral Agent or any of its
officers, directors, employees, agencies, attorneys-in-fact or affiliates.
7.06 Successor Collateral Agent. The Collateral Agent may resign
as collateral agent upon 60 days' notice to the Borrower, NAF Corp. and the
Lender. The Collateral Agent may be removed at any time by the Lender. No such
resignation or removal shall be effective unless and until a successor
collateral agent named by the Borrower and approved by the Lender has accepted
appointment as such pursuant to this Agreement and in the case of a removal, any
and all amounts then due to the Collateral Agent hereunder have been paid in
full. Such successor collateral agent shall succeed to the rights, powers and
duties of the Collateral Agent, and the term "Collateral Agent" shall mean such
successor collateral agent effective upon its appointment, and the former
Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent. Such successor collateral agent shall be entitled to amend any
UCC financing statements and any other filings, recordation and declarations it
deems advisable or necessary in connection with such termination and
cancellation. After any retiring Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Section 7.06 and Section
13 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Collateral Agent under this Security and Collateral Agent
Agreement . Notwithstanding the foregoing, if no successor collateral agent
shall be appointed as aforesaid, or if appointed, such successor shall not have
accepted its appointment within thirty (30) days after resignation of the
Collateral Agent, the Collateral Agent may petition a court of competent
jurisdiction to make such appointment.
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SECURITY AND COLLATERAL AGENT AGREEMENT
7.07 Delivery of Collateral and Permitted Investments. All
certificates representing or evidencing the Collateral and Permitted Investments
from time to time which are delivered to and held by or on behalf of the
Collateral Agent pursuant hereto shall, in the case of the Collateral, be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank. The Lender hereby appoints TCB
as its agent for the purpose of holding the Collateral and Permitted Investments
which are delivered to it. The Collateral Agent shall be the agent solely of the
Lender and shall not be the agent of the Borrower. The Collateral Agent shall
not release possession of any Contract, any Permitted Investments or the
security interest in any Financed Vehicle or Permitted Investment except as
permitted in the next sentence, or upon the written instruction of the Lender.
The Collateral Agent shall not release possession of any Contracts to the
Servicer or any documents related thereto except (i) upon receipt of a trust
receipt substantially in the form attached hereto as Exhibit A obligating the
Servicer to hold same in trust for the benefit of the Lender and obligating the
Servicer to return same when the need therefor no longer exists unless such
Trust Receipt indicates that the related Contract has been paid in full.
7.08 Duties and Covenants of Collateral Agent.
(a) The Collateral Agent undertakes to perform the duties as are
set forth in this Agreement, including, without limitation:
(i) reviewing each Contract delivered to it by the Borrower
against the Contract List attached to the related Contract Acquisition
Funding Request, ascertaining whether the information listed in items
(ii), (iii) and (viii) of the Contract List is accurate with respect to
such Contract; within three Business Days of the Collateral Agent's
receipt of any Contract, provide a certification to the Borrower and the
Lender (the "Collateral Agent's Certification") listing (x) the Contracts
so reviewed by the Collateral Agent and in its possession and (y) whether
there were any exceptions to the Collateral Agent's review of such items
(ii), (iii) and (viii) on the Contract List;
(ii) maintaining possession of such Contracts on behalf of the
Lender, and releasing such Contracts from the Collateral Agent's
possession only upon the Lender's written instruction or pursuant to
Section 7.07 hereof;
(iii) upon request, providing information reasonably within its
possession and within reasonable time constraints regarding the Collateral
and to the NAF Corp., the Servicer, the Lender and the FIs;
(iv) acting as Collateral Agent of all documents related to the
Collateral which are delivered to it;
(v) providing confirmation to the Paying Agent of the Borrowing
Base, and whether a Borrowing Base Deficiency exists on any day;
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SECURITY AND COLLATERAL AGENT AGREEMENT
(vi) cooperating with the Servicer, as requested by the Servicer
at the expense of the Borrower, in enforcing any Contracts or Insurance
Policies;
(vii) furnishing the Servicer with any limited powers of attorney
and other documents which the Servicer may reasonably request in writing
and which the Servicer deems necessary or appropriate and take any other
steps which the Servicer may deem necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under the
Servicing Agreement;
(viii) providing to the Lender and the Borrower a manifest of
Contracts then held by the Collateral Agent, on the first Business Day of
each week, at the end of each month, and otherwise upon request of the
Lender; and
(ix) upon a Responsible Officer obtaining actual knowledge of the
occurrence of an Event of Servicing Termination or an Event of Default,
promptly give notice to the Lender and the Borrower of such occurrence.
(b) The Collateral Agent covenants and agrees that it will not
release any Lien created hereby on any of the Collateral, release possession of
any of the Collateral held by it, or affirmatively create any Lien on the
Collateral adverse to the Lien created hereby, except, in all cases, as
expressly permitted hereby or as directed by the Lender. The Collateral Agent
shall give the Lender prompt written notice of any Liens on any of the
Collateral adverse to the Lien created hereby, of which a Responsible Officer
obtains actual knowledge.
SECTION 8. AMENDMENTS AND WAIVERS.
The parties hereto may, from time to time, enter into written
amendments, supplements or modifications hereto for the purpose of adding any
provision to this Security and Collateral Agent Agreement or changing in any
manner the rights of the Collateral Agent or the Borrower hereunder.
The Collateral Agent may, but shall not be obligated to, enter
into any such supplement, amendment or modification that affects the Collateral
Agent's own rights, duties or immunities under this Security and Collateral
Agent Agreement or otherwise.
The parties hereto agree not to execute any supplement, amendment
or modification to any Facility Agreement to which the Collateral Agent is not a
party, without the prior written consent of the Collateral Agent, if the effect
of such supplement. amendment or modification would be to affect the Collateral
Agent's rights, duties, or immunities thereunder or under this Security and
Collateral Agent Agreement .
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SECURITY AND COLLATERAL AGENT AGREEMENT
SECTION 9. NOTICES.
Unless otherwise expressly provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be in
writing and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, or when deposited in the mail,
postage prepaid, or in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of facsimile notice, when sent, confirmation
received, addressed as follows, or to such other addresses as may be hereafter
notified by the respective parties hereto:
The Borrower and the Owner Trustee:
N.A.F. Auto Loan Trust
4545 Fuller Drive
Suite 101
Irving, Texas 75038
Telecopy: (214) 791-0464
Delaware Trust Company
900 Market Street, 2-M
Wilmington, DE 19801
Attention: Corporate Trust Administration
Telecopy: (302) 421-7387
with a copy to:
National Auto Funding Corporation
4545 Fuller Drive
Suite 101
Irving, Texas 75038
Telecopy: (214) 791-0464
The Collateral Agent:
Texas Commerce Bank National Association
2200 Ross Avenue
Fifth Floor
Dallas, Texas 75201
Attention: Corporate Trust Administration
NAF Auto Loan Trust
Telecopy: (214) 965-3577
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SECURITY AND COLLATERAL AGENT AGREEMENT
The Lender:
ContiTrade Services L.L.C.
277 Park Avenue
New York, New York 10172
Attention: Chief Counsel
Telecopy: (212) 207-2935
provided, that any notice to or upon the Borrower shall be deemed to have been
duly given or made as aforesaid when so given or made to the Borrower whether or
not any other party indicated above as the recipient of a copy thereof shall
have received a copy of each notice.
SECTION 10. LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF
COLLATERAL.
Except as set forth herein and beyond the safe custody thereof,
the Collateral Agent shall not have any duty as to any Collateral in its
possession or control or the possession or control of any agent or nominee of it
or any income thereof or as to the preservation of rights against prior parties
or any other rights pertaining thereto.
SECTION 11. SEVERABILITY.
Any provision of this Security and Collateral Agent Agreement
which is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidation of the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 12. NO WAIVER; CUMULATIVE REMEDIES.
Neither the Collateral Agent nor the Lender shall by any act,
delay, omission or otherwise be deemed to have waived any of its or their rights
or remedies hereunder and no waiver shall be valid unless in writing, signed by
the Collateral Agent on behalf of the Lender, and then only to the extent
therein set forth. A waiver by the Collateral Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or the Lender would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising on the part
of the Collateral Agent or the Lender any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently and are not exclusive of any rights and remedies provided by law.
12
SECURITY AND COLLATERAL AGENT AGREEMENT
SECTION 13. PAYMENT OF EXPENSES AND TAXES.
(a) The Borrower hereby agrees to pay to the Collateral Agent a
fee for its services hereunder equal to the Collateral Agent Fee. The Borrower
and NAF Corp., jointly and severally, each agrees to pay, indemnify, and to hold
the Collateral Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp and other similar taxes, if any, which may be payable or determined to be
payable in connection the execution and delivery of, or consummation of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Security and
Collateral Agent Agreement , and any such other documents, and to pay,
indemnify, and hold the Collateral Agent and its officers, directors,
shareholders, employees, agents and representatives harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Security and Collateral Agent Agreement and any such
other documents (including but not limited to those incurred by any negligent
act or negligent omission to act of the Collateral Agent) (all the foregoing,
collectively, the "indemnified liabilities"); provided, that the Borrower and
NAF Corp. shall not be liable to the Collateral Agent for any losses incurred by
the Collateral Agent as a result of the fraudulent actions, misrepresentations,
gross negligence or willful misconduct of the Collateral Agent. The obligations
of the Borrower under this Section 13 shall survive the termination of this
Security and Collateral Agent Agreement and the discharge of the other
obligations of the Borrower hereunder and also shall survive the resignation or
removal of the Collateral Agent hereunder.
(b) Promptly after receipt by the Collateral Agent of notice of
the commencement of any action, such Collateral Agent shall, if a claim in
respect thereof is to be made against the Borrower under this Section 13, notify
the Borrower in writing of the commencement thereof; but the omission so to
notify the Borrower will not relieve it from any liability which it may have to
the Collateral Agent except to the extent the Borrower is prejudiced thereby. In
case any action is brought against the Collateral Agent, and it notifies the
Borrower of the commencement thereof, the Borrower will be entitled to appoint
counsel satisfactory to the Collateral Agent and the Borrower (who shall not,
except with the consent of the Collateral Agent, be counsel to the Borrower or
the NAF Corp.) to represent the Collateral Agent in such action; provided,
however, that, if the defendants in any action include both the Collateral Agent
and the Borrower and the Collateral Agent shall have reasonably concluded that
there may be legal defenses available to it which are different from or
additional to those available to the Borrower, the Collateral Agent shall have
the right to select separate counsel to defend such action on behalf of it. Upon
receipt of notice from the Borrower to the Collateral Agent of its election so
to appoint counsel to defend such action and approval by the Collateral Agent of
such counsel, the Borrower will not be liable to the Collateral Agent under this
Section 13 for any legal or other expenses subsequently incurred by the
Collateral Agent in connection with the defense thereof unless (i) the
Collateral Agent shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the Borrower shall not have
employed counsel satisfactory to the Collateral Agent to represent the
Collateral Agent within a reasonable time after notice of commencement of the
action or (iii) the Borrower has authorized the employment of counsel for the
13
SECURITY AND COLLATERAL AGENT AGREEMENT
Collateral Agent at the expense of the Borrower; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(c) The obligations of the Borrower and the Collateral Agent under
this Section 13 shall be in addition to any liability which each of them may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Collateral Agent within the meaning of the
Securities Act; and, with respect to the obligation of the Borrower to the
Collateral Agent as indemnified party, shall extend, upon the same terms and
conditions, to each director of the Collateral Agent.
(d) The agreement, indemnities and other statements of the parties
hereto in or made pursuant to this Section 13 will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any other parties hereto or any of the officers,
directors or controlling persons referred to in this Section 13. The provisions
of this Section 13 shall survive the termination or cancellation of this
Agreement.
SECTION 14. SUCCESSORS AND ASSIGNS; GOVERNING LAW; WAIVERS
(a) This Security and Collateral Agent Agreement and all
obligations of the Borrower hereunder shall be binding upon the successors and
assigns of the Borrower, and shall, together with the rights and remedies of the
Collateral Agent hereunder, inure to the benefit of the Collateral Agent, the
Lender and their respective successors and assigns. THIS SECURITY AND COLLATERAL
AGENT AGREEMENT SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
(B) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY:
(I) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER FACILITY AGREEMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT OF
THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;
(II) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
TO PLEAD OR
CLAIM THE SAME;
14
SECURITY AND COLLATERAL AGENT AGREEMENT
(III) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 9 OR AT SUCH OTHER ADDRESS OF
WHICH ALL OF THE OTHER PARTIES HERETO
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(IV) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(V) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
(VI) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER FACILITY AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
SECTION 15. ENFORCEMENT RIGHTS OF LENDER.
Unless the Collateral Agent shall fail to take action required to
be taken by it in the immediately succeeding sentence, no Lender shall have any
right directly to enforce the security interests granted by this Security and
Collateral Agent Agreement . No Lender shall have any right to require the
Collateral Agent to take or fail to take any action under this Security and
Collateral Agent Agreement , except as otherwise provided in the Credit
Agreement or in this Security and Collateral Agent Agreement .
SECTION 16. BANKRUPTCY PETITION AGAINST THE BORROWER.
The Collateral Agent hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all
outstanding Loans, it will not institute against, or join any other Person in
instituting against, the Borrower any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other similar proceeding under the laws
of the United States or any state of the United States.
SECTION 17. MISAPPLICATION OF FUNDS.
The Collateral Agent agrees that any funds incorrectly paid to it
by the Borrower shall be promptly returned to the Borrower upon receipt of
written notice from the Borrower that such funds were incorrectly paid to the
Collateral Agent prior to the Collateral Agent's transfer of such funds in
15
SECURITY AND COLLATERAL AGENT AGREEMENT
accordance with this Agreement. The Collateral Agent shall be completely
protected against any liability for returning such funds in reliance on such
written notice that funds were incorrectly paid.
SECTION 18. COUNTERPART SIGNATURES.
This Agreement may be executed and delivered to you simultaneously
in two (2) or more counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 19. THIRD PARTY BENEFICIARY.
For all purposes of this Agreement, the NAF Corp. shall be a third
party beneficiary of the agreements and covenants herein contained and the
Servicer shall be a third party beneficiary of the provisions of this Agreement
which specify the amount and priority of payment of their respective fees.
SECTION 20. STATUS OF COLLATERAL AGENT.
The parties hereto acknowledge and agree that upon payment in full of all
amounts owing under the Credit Agreement and the release of the Lender's
security interest in the Collateral, the rights and obligations of the
Collateral Agent under this Agreement shall continue but shall be performed
solely at the direction of the Borrower.
SECTION 21. ACTS OF LENDER.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Lender may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the Lender in person or by agents duly
appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments is or are
delivered to the Collateral Agent. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 21.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Collateral Agent
deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Lender shall bind the Lender in respect
of anything done, omitted or suffered to be done by the Collateral Agent in
reliance thereon, whether or not notation of such action is made upon the
Promissory Note.
16
SECURITY AND COLLATERAL AGENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed by their duly authorized officers as of the date first
set forth above.
N.A.F. AUTO LOAN TRUST
By: DELAWARE TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee on behalf of N.A.F AUTO LOAN TRUST
By: /s/ Richard N. Smith
Name: Richard N. Smith
Title: Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Collateral Agent
By: /s/ Linda J. Henderson
Name: Linda J. Henderson
Title: Assistant Vice President
CONTITRADE SERVICES L.L.C.
By /s/ Jerome M. Perelson
Name: Jerome M. Perelson
Authorized Signatory
By /s/ Susan E. O'Donovan
Name: Susan E. O'Donovan
Authorized Signatory
JOINDER WITH RESPECT TO SECTION 13
ONLY
17
SECURITY AND COLLATERAL AGENT AGREEMENT
NATIONAL AUTO FUNDING CORPORATION
By: /s/ Jim W. Moore
Name: Jim W. Moore
Title: President
18
SECURITY AND COLLATERAL AGENT AGREEMENT
EXHIBIT A
TRUST RECEIPT
DATE
N.A.F. Trust Auto Loan Trust
c/o Delaware Trust Company
900 Market Street
Wilmington, Delaware 19801
Re: Security and Collateral Agent Agreement, dated as of May 17, 1996
(the "Security Agreement") among N.A.F. Auto Loan Trust, ContiTrade
Services L.L.C. and Texas Commerce Bank National Association
Ladies and Gentlemen:
In accordance with Section 7.07 of the Security Agreement, the
undersigned hereby certifies that it has taken possession of the items set forth
on Annex I hereto with respect to the Contracts on the attached schedule. The
undersigned (i) confirms that it holds such items in trust for the benefit of
the Lender and (ii) agrees to promptly return such items to the Collateral Agent
after its need for possession of them ceases, except with respect to any
Contract paid in full or liquidated, in which case the Servicer shall forward
all proceeds and/or recoveries to the Lockbox Account.
J-HAWK SERVICING CORPORATION
By:_____________________________
Name:
Title:
APPROVED
CONTITRADE SERVICES L.L.C.
By:_____________________________
Name:
Title:
1