Paying Agent Agreement

EXHIBIT 10.17


PAYING 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 Paying Agent)


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Dated as of May 17, 1996
----------------------


TABLE OF CONTENTS
Page SECTION 1. DEFINED TERMS................................................ 1


SECTION 2. COLLECTION ACCOUNT........................................... 2


2.01. Establishment of Collection Account.......................... 2
2.02. Deposits to the Collection Account........................... 3
2.03. Withdrawals from the Collection Account...................... 3
2.04. Investment of Funds Deposited in the Collection Account...... 4


SECTION 3. THE PAYING AGENT............................................. 5


3.01. Appointment.................................................. 5
3.02. Exculpatory Provisions....................................... 5
3.03. Reliance by Paying Agent..................................... 5
3.04. Notice of Default............................................ 6
3.05. Non-Reliance on Paying Agent................................. 6
3.06. Successor Paying Agent....................................... 6
3.07. Duties and Covenants of Paying Agent......................... 7


SECTION 4. AMENDMENTS AND WAIVERS....................................... 7


SECTION 5. NOTICES...................................................... 7


SECTION 6. SEVERABILITY................................................. 9


SECTION 7. NO WAIVER; CUMULATIVE REMEDIES............................... 9


SECTION 8. PAYMENT OF EXPENSES AND TAXES................................ 9


SECTION 9. SUCCESSORS AND ASSIGNS; GOVERNING LAW; SUBMISSION
TO JURISDICTION; WAIVERS..................................... 10


SECTION 10. ENFORCEMENT RIGHTS OF LENDER................................. 11


SECTION 11. BANKRUPTCY PETITION AGAINST THE BORROWER..................... 12


SECTION 12. MISAPPLICATION OF FUNDS...................................... 12


SECTION 13. COUNTERPART SIGNATURES....................................... 12


SECTION 14. THIRD PARTY BENEFICIARIES.................................... 12


SECTION 15. STATUS OF PAYING AGENT....................................... 12


SECTION 16. ACTS OF LENDER............................................... 12


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PAYING AGENT AGREEMENT


PAYING AGENT AGREEMENT, dated as of May 17, 1996, made by and between 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 paying agent (in such capacity, the "Paying 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") among 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 Auto Loan 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 contracts; and


WHEREAS, the Borrower has entered into a Security and Collateral Agent Agreement dated as of May 17, 1996 (the "Collateral Agent Agreement") with TCB as Collateral Agent (the "Collateral Agent") and the Lender; and


WHEREAS, it is a condition to the obligations of the Lender to make the Facility available to the Borrower under the Credit Agreement that the Borrower, the Lender and TCB shall have executed and delivered this Paying Agent Agreement.


NOW, THEREFORE, to induce the Lender to make the Facility available to the Borrower, the Borrower and the Lender hereby agree with the Paying Agent, for the benefit of the Lender, 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 "Definitions List" attached to the Credit Agreement; and the following terms shall have the following meanings:


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"Borrowing Base Deficiency" shall mean the situation in which the Outstanding Facility Balance exceeds the Borrowing Base.


"Collateral" shall have the meaning assigned to such term in Section 2 of the Security and Collateral Agent Agreement.


"Contract Acquisition Disbursement Request" shall mean a form in substantially the form of Exhibit A hereto.


"Disbursement Date" shall mean the 15th day of each calendar month (or next succeeding Business Day) commencing June, 1996.


"Disbursement Request" shall mean any of a Contract Acquisition Disbursement Request, a Miscellaneous Disbursement Request, a Servicer Disbursement Request or a Weekly Fee Disbursement Request.


"Miscellaneous Disbursement Request" shall mean a form in substantially the form of Exhibit B hereto.


"NAF Procurement Fee" shall mean with respect to any Auto Loan purchased by the Borrower an amount equal to the product of 0.02 and the principal amount of such Auto Loan, which amount shall be payable to NAF Corp. upon the purchase by the Borrower of such Auto Loan.


"Paying Agent Fee" shall have the meaning set forth in a separate letter agreement between NAF Corp. and the Paying Agent.


"Responsible Officer" shall mean, when used with respect to the Paying 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 Paying Agent customarily performing functions similar to those performed by any of the above-designated officers.


"Servicer Disbursement Request" shall mean a form in substantially the form of Exhibit C hereto.


"VSI Provider" shall mean any provider of "vendor's single interest" coverage identified by NAF Corp.


"Weekly Fee Disbursement Request" shall mean a form in substantially the form of Exhibit D hereto.


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SECTION 2. COLLECTION ACCOUNT.


2.1 Establishment of Collection Account. Concurrently with the execution and delivery hereof, the Collateral Agent shall establish at the office of TCB located in Dallas, Texas, a segregated account entitled the "N.A.F. Auto Loan Trust Collection Account, TCB, as Collateral Agent on behalf of ContiTrade Services L.L.C." (the "Collection Account"). The Collection Account shall be maintained in the State of Texas in either (i) segregated trust accounts with the corporate trust department of TCB or any replacement collateral agent approved by the Lender or (ii) segregated deposit account with banks or trust companies approved by the Lender (which may include the Collateral Agent or a replacement collateral agent) the short-term debt obligations of which are rated "A-1+" by S&P (or its equivalent from another Rating Agency).


2.2 Deposits to the Collection Account. (a) The following amounts received by the Paying Agent shall be deposited in the Collection Account:


(i) the proceeds of all Advances made by the Lender pursuant to
Section 2.1 of the Credit Agreement;


(ii) all amounts remitted by the Lock-Box Bank pursuant to Section
2.2 of the Servicing Agreement; and


(iii) all amounts remitted by the Borrower pursuant to Section
2.7(d) of the Credit Agreement;


(b) The Paying Agent is hereby irrevocably authorized and empowered, as the Borrower's attorney-in-fact, to endorse any check or any other instrument or security presented for deposit in the Collection Account requiring the endorsement of the Borrower.


(c) Notwithstanding the foregoing provisions of this Section 2.01, if at any time the Borrower, or any Person on behalf of the Borrower (including any FI, the Servicer under the related Loan Origination Agreement or the Servicing Agreement), receives any proceeds or payments required to be deposited in the Collection Account, all such amounts shall be held by the Borrower or such other person as the agent of, and in trust for, the Paying Agent and shall, forthwith upon receipt by the Borrower, or such other Person, be turned over to the Paying Agent for deposit to the Collection Account in the same form as received by the Borrower or such other Person (and, if received in the form of a check, instrument or security requiring endorsement, duly endorsed on behalf of the Borrower or such other Person to the order of the Paying Agent).


2.3 Withdrawals from the Collection Account. (a) Prior to the occurrence of an Event of Default, the Paying Agent shall apply funds in the Collection Account as follows:


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(i) from time to time, to the N.A.F. Trust Account, at the
appropriate FI, for the related Dealers, the amounts set forth on the
related Contract Acquisition Disbursement Request provided by NAF Corp. to
the Payment Agent, provided that before releasing any such amount the
Paying Agent shall receive confirmation from the Collateral Agent, based
upon information supplied by the Servicer, that, immediately following the
release of any such amount, no Borrowing Base Deficiency would result and
provided further, that if more than $750,000 is requested to be disbursed
pursuant to any single Contract Acquisition Disbursement Request, then the
Lender shall countersign such Contract Acquisition Disbursement Request;
and


(ii) on the first Business Day of each week, to the FIs certain
fees due to them (including pass-through document fees deducted from
amounts due to the Dealers), and to NAF Corp. the NAF Procurement Fees due
to it, in each case as set forth in the related Weekly Fee Disbursement
Request prepared by NAF Corp. and countersigned by the Lender; provided,
that before releasing any such amount (whether or not the Lender's
signature appears on the related Weekly Fee Disbursement Request) the
Paying Agent shall confirm that the Paying Agent has in its possession,
from the Collateral Agent, a Collateral Agent's Certification, without
exceptions, with respect to the related Contracts;


(iii) on each Disbursement Date:


(a) to the Servicer, the Servicing Fee then due,
together with other amounts owing to the Servicer;


(b) to the Paying Agent and to the Collateral Agent,
the fees then due to each;


(c) on the Disbursement Date occurring in the month
following each anniversary date of this Agreement, to the
Owner Trustee, the fees and expenses then due to it; and


(d) to each VSI Provider, the amounts then due to it,
in each case, as set forth on a Monthly Disbursement
Request prepared by NAF Corp. and countersigned by the
Lender;


(iv) from time to time, to certain Obligors, certain rebates due
to them, as set forth in a Miscellaneous Disbursement Request prepared by
the Servicer and, if such rebates exceed $1,000 per Disbursement Request,
countersigned by the Lender;


(v) on the third Business Day of each month, commencing in June,
1996, to the Lender, the monthly interest then due with respect to the
Facility, as set forth in a Miscellaneous Disbursement Request prepared by
NAF Corp.;


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(vi) from time to time, to the Lender, such additional amounts
with respect to the Facility, as set forth in a Miscellaneous Disbursement
Request prepared by NAF Corp.


Each Disbursement Request shall be furnished to the Paying Agent by NAF C ...