<PAGE>   1
                                                                   EXHIBIT 10.19


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                           CONTITRADE SERVICES L.L.C.



                              ____________________


                           WAREHOUSE CREDIT AGREEMENT

                            dated as of May 17, 1996


                              ____________________


                       NATIONAL AUTO FUNDING CORPORATION

                             N.A.F. AUTO LOAN TRUST





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<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
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SECTION 1.  DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

         1.1       Defined Terms  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

SECTION 2.  AMOUNT AND TERMS OF LENDER FUNDING COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2

         2.1       Lender Funding Commitment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         2.2       Promissory Note  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         2.3       Availability of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         2.4       Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         2.5       Principal Payments on the Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         2.6       Security and Collateral Agent Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         2.7       Deposits to Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         2.8       Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         2.9       Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

SECTION 3.  REPRESENTATIONS AND WARRANTIES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

         3.1       Representations and Warranties of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         3.2       Representations and Warranties of NAF Corp.  . . . . . . . . . . . . . . . . . . . . . . . . . . .   9

SECTION 4.  CONDITIONS PRECEDENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

         4.1       Conditions to Initial Advance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         4.2       Conditions to Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

SECTION 5.  RELEASE OF LIENS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

SECTION 6.  AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

         6.1       Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         6.2       Certificates; Other Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         6.3       [Reserved].  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.4       Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.5       Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.6       Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.7       Inspection of Property; Books and Records; Discussions; Audit Reports  . . . . . . . . . . . . . .  19
         6.8       Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         6.9       Delivery of Other Reports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
</TABLE>
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<TABLE>
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         6.10      Approval of New FIs  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         6.11      Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.12      Cooperation in Making Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.13      Securitization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.14      Additional Credit Support  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.15      Minimum Net Worth.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         6.16      Underwriting and Review  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

SECTION 7.  NEGATIVE COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

         7.1       Limitation on Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         7.2       Limitation on Liens  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         7.3       Limitation on Fundamental Changes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         7.4       Sale, Transfer or Encumbrance of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         7.5       Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         7.6       Limitation on Dividends  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         7.7       Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         7.8       Limitation on Investments, Loans and Advances  . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         7.9       Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.10      Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.11      Trust Documents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.12      Fiscal Year  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.13      Limitation on Negative Pledge Clauses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.14      Activities of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.15      Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.16      Bank Accounts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.17      Lock-Box Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.18      Subordinated Debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.19      Margin Securities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.20      No Commingling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.21      Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.22      Amendment of Facility Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.23      Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         7.24      Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25

SECTION 8.  REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

         8.1       Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         8.2       Files  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         8.3       Collections  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         8.4       Power of Attorney  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
</TABLE>
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<TABLE>
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SECTION 9.  MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

         9.1       Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         9.2       Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         9.3       No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         9.4       Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         9.5       Payment of Expenses and Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         9.6       Successors and Assigns; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         9.7       Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.8       Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.9       Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.10      Integration; Construction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.11      Limited Liability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.12      GOVERNING LAW  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         9.13      SUBMISSION TO JURISDICTION; WAIVERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         9.14      Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         9.15      WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
</TABLE>



SCHEDULES

Schedule I     -   List of Documents


EXHIBITS

Exhibit A      -   Definition List
Exhibit B      -   Form of Promissory Note
Exhibit C      -   Notice of Borrowing
<PAGE>   5
                           WAREHOUSE CREDIT AGREEMENT


                   WAREHOUSE CREDIT AGREEMENT, dated as of May 17, 1996 (the
"Credit Agreement"), by and between CONTITRADE SERVICES L.L.C., a Delaware
limited liability company ("Lender"), N.A.F. Auto Loan Trust, a Delaware
business trust ("Borrower") and National Auto Funding Corporation, a Texas
corporation ("NAF Corp." and together with the Borrower, the "NAF Entities").

                              W I T N E S S E T H:

                   WHEREAS, Borrower desires to purchase certain Contracts from
time to time; and

                   WHEREAS, Borrower has requested that Lender make the Loans
to Borrower, the proceeds of which shall be used to purchase Contracts; and

                   WHEREAS, as security for its obligations under this Credit
Agreement, Borrower shall pledge the Collateral; and

                   WHEREAS, there is also being executed and delivered in
connection with this Agreement a Funding Commitment dated as of May 17, 1996
(the "Funding Commitment") by and between FirstCity Financial Corporation
("FirstCity") and the Lender and an Investment Banking Services Agreement dated
as of May 17, 1996 (the "IBSA") between NAF Corp. and ContiFinancial Services
Corporation ("ContiFinancial"); and

                   WHEREAS, subject to the terms and conditions set forth
herein, Lender is willing to make the Loans to Borrower.

                   NOW, THEREFORE, the parties hereto agree as follows:


                            SECTION 1.  DEFINITIONS

                 1.1       Defined Terms.  (a)  As used in this Credit
Agreement, the Funding Commitment, the Promissory Note, the Servicing
Agreement, the Security and Collateral Agent Agreement, the Paying Agent
Agreement, the IBSA or any certificate or other document made or delivered
pursuant hereto or thereto (collectively, the "Facility Agreements"), the
capitalized terms used herein and therein shall, unless otherwise defined
herein or therein, have the meanings assigned to them in the Definitions List
dated as of the date hereof that refers to this Credit Agreement, which is
incorporated herein by reference and attached as Exhibit A hereto (the
"Definitions List").

                 (b)       As used herein or in any other Facility Agreement,
accounting terms not defined in the Definitions List and accounting terms
partly defined in the Definitions List to the extent not defined shall have the
respective meanings given to them under GAAP.





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<PAGE>   6
                 (c)       The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Credit Agreement shall refer to this
Credit Agreement as a whole and not to any particular provision of this Credit
Agreement, and Section, subsection, Schedule and Exhibit references are to this
Credit Agreement unless otherwise specified.

                 (d)       Capitalized terms used herein or in any other
Facility Agreement shall be equally applicable to both the singular and plural
forms of such terms.


           SECTION 2.  AMOUNT AND TERMS OF LENDER FUNDING COMMITMENT

                 2.1       Lender Funding Commitment.  (a)  Subject to the
terms and conditions hereof, Lender agrees to make revolving credit loans
(collectively, "Advances" or the "Loan", and, individually, an "Advance") to
Borrower from time to time during the Funding Commitment Period, as requested;
provided, however, that in no event shall Lender make any Advance, (x) if,
after giving effect to such Advance the Outstanding Facility Balance would
exceed either (i) the Maximum Loan Amount or (ii) the Borrowing Base or (y) an
Event of Default or an Unmatured Event of Default shall have occurred and be
continuing and not waived by Lender.  Funds may be borrowed, repaid and
reborrowed on a revolving basis subject to the terms and conditions set forth
herein.  The lending arrangement described herein is referred to herein as the
"Facility".

                 (b)       The Facility will cancel automatically on the
Funding Commitment Termination Date; provided, however, that the Borrower may
request a renewal, in writing (a "Renewal Request"), not more than 120 days
prior to the Funding Commitment Termination Date; and provided, further, that
the Lender must notify the Borrower, in writing, by the later of (x) 30 days
from receipt by the Lender of the Renewal Request or (y) at least 60 days prior
to the Funding Commitment Termination Date that it has elected to renew the
Facility.

                 (c)       If the Facility is not renewed pursuant to Section
2.1(b), Lender shall extend the Facility 60 days if no Event of Default or
Unmatured Event of Default shall have occurred and be continuing and if the
Borrower delivers to the Lender (i) a commitment letter, acceptable to the
Lender, for a replacement warehouse loan facility from a financial institution
acceptable to the Lender or (ii) a guarantee, from a party acceptable to the
Lender, of all amounts payable under the Facility.

                 2.2       Promissory Note.  The Borrower shall, in connection
with the Facility, execute and deliver a promissory note, substantially in the
form of Exhibit B hereto (the "Promissory Note"), payable to the order of
Lender.  Borrower is obligated to make payments to Lender as provided in this
Agreement whether or not Borrower has executed the Promissory Note.  The actual
amount Borrower is obligated to pay the Lender shall be determined by this
Agreement and the records of the Lender, regardless of the terms of the
Promissory Note.  Any Promissory Note executed in connection with the Facility
need not be amended to reflect changes made to this Agreement.  The records of
the Lender shall,





                                       2
<PAGE>   7
absent demonstrable error, be conclusive evidence at any time as to the amount
of the Loan, the interest due thereon, and all other amounts owed in connection
with this Agreement with respect to the Borrower.  The Promissory Note shall
(a) be dated the Closing Date, (b) be stated to mature on the Funding
Commitment Termination Date and (c) provide for the payment of interest in
accordance with Section 2.4.

                 2.3       Availability of Borrowings.  Borrower may request an
Advance on any Business Day during the Funding Commitment Period, subject to
the provisions contained in Section 2.1, by giving Lender prior irrevocable
notice of each borrowing in the form of Exhibit C hereto ("Notice of
Borrowing") by 11:00 A.M. (New York City time) on the second Business Day prior
to a Borrowing Date which shall specify (a) the Borrowing Date for such
borrowing, (b) the Outstanding Facility Balance on such date (prior to the
making of the requested Advance), (c) the Borrowing Base applicable to such
Advance, and (d) the Available Facility Amount; provided, however, that Lender
shall not be obligated to make more than one Loan in any single calendar week.
Subject to satisfaction of the conditions precedent set forth in Section 4
hereof, the proceeds of such Advance will be made available to Borrower by
Lender by wire transfer of immediately available funds to the Collection
Account.  The amount of such Advance shall be paid out from the Collection
Account as set forth in Section 2.02(a)(i) of the Paying Agent Agreement.

                 2.4       Interest.  Interest shall accrue on the Outstanding
Facility Balance at a fluctuating rate per annum equal to LIBOR plus three
percent (3.00%) percent.  Interest accrued on the Loans shall be paid monthly
in arrears on the third day of each calendar month, or if such day is not a
Business Day the next succeeding Business Day, commencing in the first calendar
month following the Closing Date (each such date, a "Payment Date").  Upon the
occurrence, and during the continuance of, an Event of Default, the Outstanding
Facility Balance shall bear interest at the rate per annum equal to LIBOR plus
seven percent (7.00%); provided, however, that no provision of this Agreement
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law; and provided, further, that interest shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.  Interest shall accrue on the
basis of a 360-day year and the actual number of days elapsed.

                 2.5       Principal Payments on the Loan.

                           (a)      Other than as set forth in Section
2.01(a)(iii) of the Paying Agent Agreement, the Borrower shall prepay the Loan
with the proceeds of a Securitization to at least an extent such that the
Outstanding Facility Balance (after such prepayment) does not exceed the
Borrowing Base (after taking into account the Contracts transferred from the
Facility to the Securitization); provided, however, after completion of
Securitizations with Lender and ContiFinancial of $600,000,000, Borrower may
thereafter prepay the Loan in whole or in part from any source of funds.  Any
such prepayment shall be accompanied by payment of all accrued and unpaid
interest thereon and all fees and other amounts due to the Lender hereunder
through the date of such prepayment.

                           (b)      Borrower shall pay the Outstanding Facility
Balance, together with any accrued and unpaid interest thereon, and any other
sums due pursuant to





                                       3
<PAGE>   8
the terms hereof as set forth in Section 2.02(a)(ix) of the Paying Agent
Agreement and otherwise on or before the Funding Commitment Termination Date.

                 2.6       Security and Collateral Agent Agreement.  The
Facility is secured pursuant to a Security and Collateral Agent Agreement,
dated as of the date hereof (the "Security and Collateral Agent Agreement"),
among the Borrower, the Lender and Texas Commerce Bank National Association, as
Collateral Agent (together with any successors thereto, the "Collateral
Agent").

                 2.7       Deposits to Collection Account.

                           (a)      Borrower shall establish on or prior to the
Closing Date, a bank account in the name of the Borrower (the "Collection
Account"), bearing an additional designation clearly indicating that the funds
deposited therein are for the benefit of the Lender.  The Collection Account
shall be initially established with the Paying Agent.  The Collection Account
shall at all times be an Eligible Deposit Account. All amounts held in such
account shall, to the extent permitted by applicable laws, rules and
regulations, be invested by the Collateral Agent at the written direction of
the Borrower, in Permitted Investments which mature prior to the following
Payment Date, or such earlier date as may be specified by the Borrower.
Investments in Permitted Investments shall be made in the name of the Borrower,
and such investments shall not be sold or otherwise disposed of prior to their
maturity unless (x) a Securitization or an Event of Default shall have occurred
and be continuing, (y) the Lender shall have instructed the Borrower to sell or
otherwise dispose of such investments prior to their maturity or (z) as needed
to fund the disbursements listed in Section 2.02(a) of the Paying Agent
Agreement.  Should the Collection Account no longer be an Eligible Deposit
Account, then the Borrower shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Lender shall consent),
with such bank's or trust company's assistance as necessary, cause the
Collection Account to be moved to a bank or trust company such that the
Collection Account will be an Eligible Deposit Account.  Investment earnings on
funds deposited in the Collection Account shall be deposited in the Collection
Account.

                           (b)      Borrower shall cause each Lock-Box Bank to
deposit, no later than the close of business on each Business Day, all
available Collections received by each such Lock-Box Bank into the Collection
Account.

                           (c)      All Collections received directly by the
Borrower or the Servicer shall be held by the Borrower or the Servicer, as
applicable, in trust for the benefit of the Lender.  Borrower shall remit for
deposit, and shall cause the Servicer to remit for deposit, no later than the
close of business on the day received, such Collections in the Lock-Box
Account.

                           (d)      Borrower may, from time to time, deposit
cash and/or deliver to the Paying Agent Permitted Investments to be credited to
the Collection Account.

                 2.8       Proceeds.  The proceeds of the Loan shall be used by
Borrower solely to finance the purchase or holding of Eligible Contracts, and
to pay other amounts





                                       4
<PAGE>   9
expressly permitted under the terms and conditions of the Facility Agreements.

                 2.9       Taxes.  All payments made by Borrower under this
Credit Agreement and the Promissory Note shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority having taxing authority,
excluding income taxes and franchise taxes (imposed in lieu of income taxes)
imposed on Lender, as a result of any present or former connection between the
jurisdiction of the government or taxing authority imposing such tax or any
political subdivision or taxing authority thereof or therein and Lender
(excluding a connection arising solely from Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Credit Agreement or the Promissory Note) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called "Taxes").  If any Taxes are required to be withheld from any amounts
payable to or under the Promissory Note, the amounts so payable to Lender shall
be increased to the extent necessary to yield to Lender (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Credit Agreement and the Promissory Note.
Whenever any Taxes are payable by Borrower, as promptly as possible thereafter
Borrower shall send to Lender a certified copy of an original official receipt
received by Borrower showing payment thereof.  If Borrower fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to Lender
the required receipts or other required documentary evidence, Borrower shall
indemnify Lender for any incremental Taxes, interest or penalties that Lender
is legally required to pay as a result of any such failure.  The agreements in
this subsection shall survive the termination of this Credit Agreement and the
payment of the Promissory Note.

                   SECTION 3.  REPRESENTATIONS AND WARRANTIES

                 3.1       Representations and Warranties of Borrower. To
induce Lender to enter into this Credit Agreement and to make the Advances,
Borrower hereby represents and warrants to Lender that:

                 (a)       Trust Existence; Compliance with Law. Borrower (i)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the power and authority, and the
legal right, as a Delaware business trust, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (iii) is duly qualified as a foreign business trust or
unincorporated association, is in good standing and has all licenses (in full
force and effect) under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification and/or licensing and (iv) is in compliance with all Requirements
of Law.

                 (b)       Trust Power; Authorization; Enforceable Obligations.
Borrower has the power and authority, and the legal right, as a Delaware
business trust, to make, deliver and perform this Credit Agreement and the
other Facility Agreements to which it is





                                       5
<PAGE>   10
a party and to borrow hereunder and has taken all necessary action to authorize
the borrowings on the terms and conditions of this Credit Agreement and the
other Facility Agreements to which it is a party and to authorize the
execution, delivery and performance of this Credit Agreement and the other
Facility Agreements to which it is a party.  All consents or authorizations of,
filing with or other act by or in respect of, any Governmental Authority or any
other Person required to be obtained, made or given by it in connection with
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of this Credit Agreement or the other Facility Agreements to
which it is a party have been so obtained, made or received.  This Credit
Agreement and each other Facility Agreement to which it is a party has been
duly executed and delivered on behalf of Borrower.  This Credit Agreement and
each other Facility Agreement to which it is a party constitutes a legal, valid
and binding obligation of Borrower enforceable against Borrower in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).

                 (c)       No Legal Bar.  The execution, delivery and
performance of this Credit Agreement and the other Facility Agreements, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of Borrower and will not result
in, or require, the creation or imposition of any Lien on any of its properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation
other than the Lien set forth herein.

                 (d)       No Material Litigation.  No litigation,
investigation or proceeding of or before any arbitrator, court or Governmental
Authority is pending or threatened, by or against Borrower or against any of
its properties or revenues (i) with respect to this Credit Agreement or the
other Facility Agreements or any of the transactions contemplated hereby or
thereby, or (ii) which could have a material adverse effect on the business,
prospects, properties, assets, operations or condition, financial or otherwise,
of Borrower, or the ability of Borrower to perform its obligations hereunder or
under the other Facility Agreements.

                 (e)       No Default; No Event of Default.  Borrower is not in
default under or with respect to any of its Contractual Obligations in any
respect which could have a material adverse effect on the business, operations,
properties, assets, condition or prospects, financial or otherwise, of
Borrower, or on the ability of Borrower to perform its obligations hereunder or
under the other Facility Agreements.  No Event of Default or Unmatured Event of
Default has occurred or is continuing.

                 (f)       No Burdensome Restrictions.  Borrower is not a party
to or subject to any Contractual Obligation (other than the Facility
Agreements) which could have a material adverse effect on the business,
properties, assets, operations, condition or prospects, financial or otherwise,
of Borrower, or on the ability of Borrower to carry out its obligations
hereunder or under the other Facility Agreements.

                 (g)       Taxes.  Borrower has filed or caused to be filed all
federal, state and other tax returns which are required to be filed by it, or
has filed extensions with respect





                                       6
<PAGE>   11
thereto (which extensions have not expired) and has paid all taxes shown to be
due and payable on said returns or on any federal, state and other tax
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental
Authority having taxing power; no tax Lien has been filed against it, and no
claim is being asserted by any Governmental Authority with respect to any such
tax, fee or other charge.

                 (h)       ERISA.  Neither Borrower nor any ERISA Affiliate of
Borrower has participated in any Multiemployer Plan.  Neither Borrower nor any
ERISA Affiliate of Borrower has maintained any Single-Employer Plan.

                 (i)       Investment Company Act; Other Regulations. Borrower
is not an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
Borrower is not subject to regulation under any federal or state statute or
regulation which limits its ability to incur Debt.

                 (j)       Subsidiaries.  Borrower has no Subsidiaries, other
than Subsidiaries formed in connection with any Securitization.

                 (k)       Purpose of Advances.  The proceeds of the Advances
shall be used by Borrower to purchase Eligible Contracts and for other purposes
expressly permitted by the Facility Agreements.

                 (l)       No Deduction.  Borrower is not required to make any
deduction or withholding from payments to be made by it to Lender under this
Credit Agreement, and the execution and performance of this Credit Agreement
and any of the other Facility Agreements does not make Borrower liable for any
registration tax, stamp duty or similar tax or duty imposed by any authority of
or within its jurisdiction of creation, which tax or duty has not been, or will
not be, paid when due.

                 (m)       No Other Debt.  Borrower has no liability in respect
of any Debt or in respect of any guarantee by Borrower of the obligations of
another under which the lender, creditor or lessor or the Person in whose favor
such guarantee is given has any right, by operation of law or otherwise, to
have any claim in respect of such obligation or guarantee satisfied out of any
assets of Borrower, other than Subordinated Debt consented to by Lender in
writing.

                 (n)       Title; Liens.  Except for the Liens granted to the
Lender pursuant to the Facility Agreements and any Subordinate Liens consented
to by the Lender in writing, Borrower owns each item of the Collateral free and
clear of any and all Liens or claims of others.  No security agreement,
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as may
have been filed in favor of the Lender pursuant to the Facility Agreements.

                 (o)       Ownership of Contracts.  Each purchase by Borrower
of Contracts constitutes a valid sale of the Contracts to Borrower and creates
in favor of Borrower a





                                       7
<PAGE>   12
perfected ownership interest in and valid, legal and equitable title to such
Contracts, which ownership interest is not subject to any Lien.

                 (p)       No Petition.  There is no intent to file a voluntary
petition under the federal bankruptcy laws with respect to Borrower and
Borrower is not insolvent or generally unable to pay its debts as they become
due.

                 (q)       Eligible Contracts.  Each Contract is an Eligible
Contract.  With respect to each such Contract, (i) no effective financing
statement, lien notation on any certificate of title or other instrument
similar in effect covering all or any part of such Contract or the security
therefor, which would give the Person filing, named on or entitled to the
benefit of such statement or instrument priority senior to or pari passu with
the Borrower, is on file in any recording office or is otherwise effective
except such as may be filed in favor of the Dealer, the related FI or the
Borrower and collaterally assigned to Lender in accordance with the Facility
Agreements; and (ii) the Vehicle, including any equipment sold and financed in
connection with such Contract, is the subject of an application for a
certificate of title to be issued in the name of the Obligor which will
indicate a security interest therein held by the Borrower or the Collateral
Agent, in the appropriate form and in compliance with all appropriate
procedures as may be necessary under applicable law to cause a perfected and
first priority security interest to exist in favor of, or for the benefit of,
the Borrower, to secure the obligations of such Obligor under such Contract;
(iii) each of the Representations and Warranties are true and correct and (iv)
it is in compliance with the Underwriting Criteria.

                 (r)       Tangible Net Worth Requirement.  The Tangible Net
Worth Requirement is met.

                 (s)       Representations and Warranties in Facility
Agreements.  The representations and warranties of the Borrower contained in
each of the Facility Agreements to which it is a party and in any document,
certificate or instrument delivered pursuant to any such Facility Agreement are
true and correct and the Lender may rely on such representations and
warranties, if not made directly to the Lender, as if such representations and
warranties were made directly to the Lender.  To the best of the Borrower's
knowledge, the representations and warranties of the FIs in each of the Loan
Origination Agreements and in any document, certificate or instrument delivered
pursuant to the Loan Origination Agreements are true and correct in all
material respects and the Lender may rely on such representations and
warranties as if such representations and warranties were made directly to the
Lender, except that no such representation or warranty is made with respect to
the Loan Origination Agreement with Farmers and Mechanics Bank.

                 (t)       Principal Place of Business.  The Borrower's
principal place of business is located at 4545 Fuller Drive, Suite 101, Irving,
Texas.

                 3.2       Representations and Warranties of NAF Corp. To
induce Lender to enter into this Credit Agreement and to make the Loans, NAF
Corp. hereby represents and warrants to Lender that:





                                       8
<PAGE>   13
                 (a)       Financial Condition.  (i)  The pro forma
consolidated balance sheet of NAF Corp. as of the Closing Date and reflecting
all Closing Date transactions is complete and correct and presents fairly the
financial condition of NAF Corp. as at such date.  NAF Corp. does not have any
Debt, contingent liability or liability for taxes, or any long-term lease or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction except to the
extent reflected as a liability on the balance sheet referred to above.  Such
balance sheet has been prepared in accordance with GAAP.

                 (b)       Corporate Existence; Compliance with Law. NAF Corp.
(i) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (ii) has the power and authority, and the
legal right, as a Texas corporation, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (iii) is duly qualified as a foreign corporation, is in good
standing and has all licenses (in full force and effect) under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and/or licensing and (iv) is in
compliance with all Requirements of Law.

                 (c)       Corporate Power; Authorization; Enforceable
Obligations.  NAF Corp. has the power and authority, and the legal right, as a
Texas corporation, to make, deliver and perform this Credit Agreement and the
other Facility Agreements to which it is a party and to borrow hereunder and
has taken all necessary action to authorize the borrowings on the terms and
conditions of this Credit Agreement and the other Facility Agreements to which
it is a party and to authorize the execution, delivery and performance of this
Credit Agreement and the other Facility Agreements to which it is a party.  All
consents or authorizations of, filing with or other act by or in respect of,
any Governmental Authority or any other Person required to be obtained, made or
given by it in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Credit Agreement or
the other Facility Agreements to which it is a party have been so obtained,
made or received.  This Credit Agreement and each other Facility Agreement to
which it is a party has been duly executed and delivered on behalf of NAF Corp.
This Credit Agreement and each other Facility Agreement to which it is a party
constitutes a legal, valid and binding obligation of NAF Corp. enforceable
against NAF Corp. in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

                 (d)       No Legal Bar.  The execution, delivery and
performance of this Credit Agreement and the other Facility Agreements, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of NAF Corp. and will not result
in, or require, the creation or imposition of any Lien on any of its properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation
other than the Lien set forth herein.

                 (e)       No Material Litigation.  No litigation,
investigation or proceeding





                                       9
<PAGE>   14
of or before any arbitrator, court or Governmental Authority is pending or
threatened, by or against NAF Corp. or against any of its properties or
revenues.

                 (f)       No Default; No Event of Default.  NAF Corp. is not
in default under or with respect to any of its Contractual Obligations in any
respect which could have a material adverse effect on the business, operations,
properties, assets, condition or prospects, financial or otherwise, of NAF
Corp., or on the ability of NAF Corp. to perform its obligations hereunder or
under the other Facility Agreements.  No Event of Default or Unmatured Event of
Default has occurred or is continuing.

                 (g)       No Burdensome Restrictions.  NAF Corp. is not a
party to or subject to any Contractual Obligation (other than the Facility
Agreements) which could have a material adverse effect on the business,
properties, assets, operations, condition or prospects, financial or otherwise,
of NAF Corp., or on the ability of NAF Corp. to carry out its obligations
hereunder or under the other Facility Agreements.

                 (h)       Taxes.  NAF Corp. has filed or caused to be filed
all federal, state and other tax returns which are required to be filed by it,
or has filed extensions with respect thereto (which extensions have not
expired) and has paid all taxes shown to be due and payable on said returns or
on any federal, state and other tax assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority having taxing power; no tax Lien has
been filed against it, and no claim is being asserted by any Governmental
Authority with respect to any such tax, fee or other charge.

                 (i)       ERISA.  Prior to May 17, 1996, neither NAF Corp. nor
any ERISA Affiliate of NAF Corp. has participated in any Multiemployer Plan.
Prior to May 17, 1996, neither NAF Corp. nor any ERISA Affiliate of NAF Corp.
has maintained any Single-Employer Plan.  Beginning May 17, 1996, NAF Corp. and
Borrower are participants in FirstCity's employee benefit plans.

                 (j)       Investment Company Act; Other Regulations. NAF Corp.
is not an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
NAF Corp. is not subject to regulation under any federal or state statute or
regulation which limits its ability to incur Debt.

                 (k)       No Deduction.  NAF Corp. is not required to make any
deduction or withholding from payments to be made by it to Lender under this
Credit Agreement, and the execution and performance of this Credit Agreement
and any of the other Facility Agreements does not make NAF Corp. liable for any
registration tax, stamp duty or similar tax or duty imposed by any authority of
or within its jurisdiction of creation, which tax or duty has not been, or will
not be, paid when due.

                 (l)       No Priority Claim Debt.  NAF Corp. has no liability
in respect of any Debt or in respect of any guarantee by NAF Corp. of the
obligations of another under which the lender, creditor or lessor or the Person
in whose favor such guarantee is given has





                                       10
<PAGE>   15
any right, by operation of law or otherwise, to have any claim in respect of
such obligation or guarantee first satisfied out of the general assets of NAF
Corp. in priority to the claims of its general creditors, other than (i) a
non-recourse promissory note to Cargill Financial Services Corporation and (ii)
an indemnification agreement with High Industries, Inc. copies of which have
been supplied to the Lender.

                 (m)       No Petition.  There is no intent to file a voluntary
petition under the federal bankruptcy laws with respect to NAF Corp. and NAF
Corp. is not insolvent or generally unable to pay its debts as they become due.

                 (n)       Eligible Contracts.  Each Contract is an Eligible
Contract.  With respect to each such Contract, (i) no effective financing
statement, lien notation on any certificate of title or other instrument
similar in effect covering all or any part of such Contract or the security
therefor, which would give the Person filing, named on or entitled to the
benefit of such statement or instrument priority senior to or pari passu with
the Borrower, is on file in any recording office or is otherwise effective
except such as may be filed in favor of the Dealer, the related FI or the
Borrower and collaterally assigned to Lender in accordance with the Facility
Agreements; and (ii) the Vehicle, including any equipment sold and financed in
connection with such Contract is the subject of an application for a
certificate of title to be issued in the name of the Obligor which will
indicate a security interest therein held by the Borrower or the Collateral
Agent, in the appropriate form and in compliance with all appropriate
procedures as may be necessary under applicable law to cause a perfected and
first priority security interest to exist in favor of, or for the benefit of,
to secure the obligations of such Obligor under such Contract; (iii) each of
the Representations and Warranties are true and correct and (iv) it is in
compliance with the Underwriting Criteria.

                 (o)       Representations and Warranties in Facility
Agreements.  The representations and warranties of NAF Corp. contained in each
of the Facility Agreements to which it is a party and in any document,
certificate or instrument delivered pursuant to any such Facility Agreement are
true and correct and the Lender may rely on such representations and
warranties, if not made directly to the Lender, as if such representations and
warranties were made directly to the Lender.  To the best of NAF Corp.'s
knowledge, the representations and warranties of the FIs in each of the Loan
Origination Agreements and in any document, certificate or instrument delivered
pursuant to the Loan Origination Agreements are true and correct in all
material respects and the Lender may rely on such representations and
warranties as if such representations and warranties were made directly to the
Lender, except that no such representation or warranty is made with respect to
the Loan Origination Agreement with Farmers' and Mechanics' Bank.

                 (p)       Principal Place of Business.  NAF Corp.'s principal
place of business is located at 4545 Fuller Drive, Suite 101, Irving, Texas.





                                       11
<PAGE>   16
                        SECTION 4.  CONDITIONS PRECEDENT

                 4.1       Conditions to Initial Advance.  The agreement of
Lender to fund the initial Advance is subject to the satisfaction, immediately
prior to or concurrently with the making of such Loan on the Closing Date, of
the following conditions precedent:

                 (a)       Facility Agreements.  Lender shall have received (i)
         this Credit Agreement executed and delivered by a duly authorized
         officer of Borrower, (ii) the Promissory Note executed and delivered
         by a duly authorized officer of Borrower, (iii) the Security and
         Collateral Agent Agreement, duly executed and delivered by the parties
         thereto, (iv) the Servicing Agreement, duly executed and delivered by
         the parties thereto; (v) the Paying Agent Agreement, (vi) the Funding
         Commitment, duly executed by the parties thereto, (vii) the IBSA, duly
         executed by the parties hereto, (viii) copies of all the other
         Facility Agreements, executed by all parties thereto and in form and
         substance satisfactory to Lender, and (ix) such other documents or
         instruments as may be reasonably requested by Lender.

                 (b)       Trust Documents; Incumbency.  (i) Lender shall have
         received copies of the certificate of trust of Borrower certified by
         the Secretary of State or other appropriate official of the State of
         Delaware and the Governing Instrument of Borrower certified as of the
         Closing Date as complete and correct copies thereof by a Responsible
         Officer, (ii) good standing certificates for Borrower issued by the
         Secretary of State or other appropriate official of the State of
         Delaware and each jurisdiction where the conduct of Borrower's
         business activities or its ownership of properties makes qualification
         necessary and (iii) a certificate of a Responsible Officer of
         Borrower, certifying the names and true signatures of the officers of
         Borrower authorized to sign the Facility Agreements to which it is a
         party.

                 (c)       Credit Committee Approval.  Lender shall have
         received the approval of its credit committee with respect to the
         transactions contemplated by the Facility Agreements.

                 (d)       No Violation.  The consummation of the transactions
         contemplated hereby and by the other Facility Agreements shall not
         contravene, violate or conflict with, nor involve Borrower in any
         violation of, any Requirement of Law except to the extent that any
         such contravention, violation, conflict or involvement would not
         adversely affect the transactions contemplated hereby and by the other
         Facility Agreements.

                 (e)       Legal Opinions.  Lender shall have received the
         executed legal opinion of counsel to Borrower, NAF Corp. and
         FirstCity.

                 (f)       Collection Account and Paying Agent Agreement.
         Borrower shall have established the Collection Account, and the
         financial institution at which the Collection Account is established
         shall have executed and delivered the Paying





                                       12
<PAGE>   17
         Agent Agreement (the "Paying Agent Agreement").

                 (g)       Lien Certificate.  Lender shall have received a
         certificate of a Responsible Officer of Borrower to the effect that
         the Collateral is not subject to any Lien, except Liens created by the
         Facility Agreements.

                 (h)       UCC Searches.  Lender shall have received lien
         searches and other evidence as to the absence of any Lien on or
         security interest in the Collateral in form and substance satisfactory
         to Lender.  Any termination statements or releases requested by Lender
         to be filed with respect to the Contracts shall have been filed.

                 (i)       Filings.  Lender shall have received acknowledgment
         copies of proper financing statements, duly filed under the UCC of all
         jurisdictions that Lender may deem necessary or desirable in order to
         perfect the security interests created by this Credit Agreement and
         the other Facility Agreements and all other filings, notifications,
         consents and recordings necessary to consummate the transactions
         contemplated hereunder and under the other Facility Agreements shall
         be accomplished and Lender shall have received evidence of such
         filings, notifications, consents and recordings satisfactory in form
         and substance to Lender.

                 (j)       Lock-Boxes.  Borrower shall have established or
         caused to have been established Lock-Boxes in its name and the name of
         the Lender and shall have received an executed Lock-Box Agreement (a
         "Lock-Box Agreement") for each Lock-Box from each Lock-Box Bank.  All
         Obligors shall have been instructed to remit Collections to a
         Lock-Box.

                 (k)       Consents.  Lender shall have received copies of all
         consents, licenses and approvals, if any, required in connection with
         the execution, delivery and performance by Borrower and the validity
         and enforceability against it of the Facility Agreements to which it
         is a party and such consents, licenses and approvals shall be in full
         force and effect.

                 (l)       Insurance.  Lender shall have received evidence that
         the Blanket Policy is in full force and effect.

                 (m)       Servicer's Certificates.  Lender shall have received
         a certificate from EDS and the Servicer confirming the loss and
         delinquency status of the portfolio immediately prior to Closing.

                 (n)       No Default.  Neither NAF Corp. nor the Borrower is
         in default under any agreement to which either is a party.

                 (o)       Due Diligence.  Lender shall have had the
         opportunity to conduct legal, financial, operational and key man due
         diligence on the NAF Entities and FirstCity.

                 (p)       FI Deferred Fees.  Borrower shall have assigned its
         rights to any





                                       13
<PAGE>   18
         remaining FI deferred fees to the Lender.

                 (q)       Funding Commitment.  FirstCity and Lender shall have
         executed and delivered the Funding Commitment.

                 (r)       Servicing Agreement.  Borrower, the Servicer, the
         Lender and the Collateral Agent shall have entered into the Servicing
         Agreement.

                 (s)       Loan Origination Agreements.  NAF Corp. and the FIs
         (other than Tammac Corporation and Mellon Bank) shall have entered
         into amended Loan Origination Agreements satisfactory to Lender (with
         executed waivers of defaults from the prior Loan Origination
         Agreements), or, in the case of Farmers and Mechanics Bank, a
         termination and release.

                 (t)       Exercise of First City's Options.  FirstCity shall
         have exercised each of its options so as to gain control of the
         Borrower and NAF Corp.; provided that up to 20% of the equity in NAF
         Corp., and less than a majority of the board seats of NAF Corp., may
         be controlled by parties other than FirstCity (except that Cargill
         Financial Services Corporation may control not more than 15% of such
         equity and not more than one board seat).

                 (u)       IBSA.  NAF Corp. and ContiFinancial shall have
         executed and delivered the IBSA.

                 (v)       Other Agreements.  The Lender shall have received
         executed copies of all of the documents listed on Schedule I hereto.

                 (w)       Funding Commitment Fee.  On the Closing Date, the
         Borrower shall pay $125,000 to the Lender as a commitment fee.

                 4.2       Conditions to Each Advance.  The agreement of Lender
to fund any Advance requested to be made by it on any date (including, without
limitation, the initial Advance) is subject to the satisfaction of the
following conditions precedent:

                 (a)       Representations and Warranties.  Each of the
         representations and warranties made by Borrower and NAF Corp. in or
         pursuant to any of the Facility Agreements, and by FirstCity in the
         Funding Commitment, shall be true and correct on and as of such date
         as if made on and as of such date.

                 (b)       Notice of Borrowing.  Borrower shall have delivered
         to Lender a Notice of Borrowing within the time period specified in
         Section 2.3.

                 (c)       Section 2.1 Requirements.  After giving effect to
         the Advance to be made on such day, the Outstanding Facility Balance
         does not exceed either (x) the Maximum Loan Amount or (y) the
         Borrowing Base.

                 (d)       Evidence of Pledge.  Prior to the release of the
         proceeds of such





                                       14
<PAGE>   19
         Advance in consideration of the Borrower's acquisition of any
         Contracts, Lender shall have received an approving (i.e., indicating
         no material exceptions) Custodial Certification with respect to the
         related Contracts not later than 11 A.M., New York time, on the
         Business Day preceding the day on which such amounts are to be
         released.

                 (e)       Additional Documents.  The Lender shall have
         received each additional document, instrument, legal opinion or item
         of information reasonably requested by Lender with respect of any
         aspect or consequence of the transactions contemplated hereby or by
         any other Facility Agreement.

                 (f)       Additional Matters.  All proceedings, documents,
         instruments and legal matters specified in subsection 4.1 hereof, or
         required after the Closing Date, shall be satisfactory in form and
         substance to Lender.

                 (g)       Event of Default.  No Event of Default or Unmatured
         Event of Default shall have occurred and be continuing to occur.

Each borrowing by Borrower hereunder shall constitute a representation and
warranty by Borrower as of the date of such Loan that the conditions contained
in this subsection 4.2 have been satisfied.


                          SECTION 5.  RELEASE OF LIENS

                 In connection with any payment of principal on the Facility,
upon receipt of a written request from the Borrower to the Lender in the form
attached as Exhibit B to the Collateral Agent Agreement, the Lender shall take
such actions as are necessary to release or cause the lien of the Lender on the
related  Contract to be released and to cause the related Contract Files to be
returned to the Borrower; as used in this Article 5, the "related Contracts"
shall be those Contracts, specified by Borrower to be released from this
Facility; provided that, following such release and the related payment of
principal on the Facility, the Outstanding Facility Balance does not exceed the
Borrowing Base.  Upon payment in full of all Obligations, termination of all
obligations of Lender to make Advances hereunder and expiration or termination
of this Credit Agreement, the Lender shall take such actions as are necessary
to release or cause the Lien of the Lender on the Collateral to be released and
to cause the Contract Files then held by the Collateral Agent to be returned to
the Borrower.  To the extent the Borrower consummates a Securitization and so
long as the proceeds thereof are applied to repay Loans hereunder, the Lender
shall take such actions as are necessary to release the Lien of the Lender on
the related Collateral and shall instruct the Collateral Agent to deliver
possession of the related Contracts and Contract Files in the Collateral
Agent's possession which will be used as collateral for such securities.





                                       15
<PAGE>   20
                       SECTION 6.  AFFIRMATIVE COVENANTS

                 NAF Corp. and/or the Borrower hereby agree that, so long as
this Credit Agreement remains in effect, NAF Corp. and/or the Borrower shall:

                 6.1       Financial Statements.  (a)  NAF Corp. shall furnish
to Lender, commencing with the year ending December 31, 1996:

                 (i)  as soon as available, but in any event within 120 days
         after the end of each fiscal year of NAF Corp. a copy of the unaudited
         consolidated balance sheet as at the end of such year and the related
         unaudited consolidated statements of income and of cash flows for such
         year, setting forth in each case in comparative form the figures for
         the previous year and including all footnotes thereto and management
         discussions and analysis contained therein, certified by a Responsible
         Officer of FirstCity as being fairly stated in all respects (subject
         to normal year-end audit adjustments); and

                 (ii)  as soon as available, but in any event not later than 60
         days after the end of each fiscal quarter of NAF Corp., the unaudited
         balance sheet of NAF Corp. as at the end of such quarter and the
         related unaudited statements of income and cash flows of NAF Corp for
         such period and the portion of the fiscal year through the end of such
         quarter, setting forth in each case in comparative form the figures,
         for the previous year;

                 (b)  the Borrower shall furnish to Lender, commencing with the
year ending December 31, 1996:

                 (i)  as soon as available, but in any event within 120 days
         after the end of each fiscal year of the Borrower, a copy of the
         balance sheet as at the end of such year and the related statements of
         income and of cash flows for such year, setting forth in each case in
         comparative form the figures for the previous year and including all
         footnotes thereto and management discussions and analysis contained
         therein, audited by KPMG Peat Marwick or another nationally recognized
         accounting firm acceptable to Lender (the "Accountants"); and

                 (ii)  as soon as available, but in any event not later than 60
         days after the end of each fiscal quarter of the Borrower, the
         unaudited balance sheet of the Borrower as at the end of such quarter
         and the related unaudited statements of income and cash flows of the
         Borrower for such period and the portion of the fiscal year through
         the end of such quarter, setting forth in each case in comparative
         form the figures, for the previous year, certified by a Responsible
         Officer of NAF Corp. as being fairly stated in all respects (subject
         to normal year-end audit adjustments);

all such financial statements to be complete and correct in all respects and to
be prepared in detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or Responsible Officer, as the case may be, and
disclosed therein).





                                       16
<PAGE>   21
                 6.2       Certificates; Other Information.  NAF Corp. shall
furnish to Lender:

                 (a)       concurrently with the delivery of the financial
         statements referred to in subsection 6.1(a), a certificate of the
         Accountants reporting on such financial statements stating that (i)
         such audit was made in accordance with GAAP and (ii) no knowledge was
         obtained of any Event of Default or Unmatured Event of Default, except
         as specified in such certificate;

                 (b)       concurrently with the delivery of the financial
         statements referred to in subsection 6.1, a certificate of a
         Responsible Officer stating that each of NAF Corp. and the Borrower
         during such period has observed or performed all of its covenants and
         other agreements, and satisfied every condition contained in this
         Credit Agreement and the other Facility Agreements to be observed,
         performed or satisfied by it, and that such Responsible Officer has
         obtained no knowledge of any Unmatured Event of Default or Event of
         Default, except as specified in such certificate;

                 (c)       copies of all financial statements, reports and
         other communications that NAF Corp. or the Borrower may make to, or
         file or have with, the SEC or any state securities commission
         contemporaneously with the filing thereof;

                 (d)       at the time of each securitization or whole-loan
         sale, a comfort letter from the Accountants covering the loss and
         delinquency statistics on the Servicer's servicing portfolio of the
         Borrower's contracts;

                 (e)       copies of any written communication received from an
         FI, outside of the ordinary course of business; and

                 (f)       promptly, such additional financial and other
         information as Lender may from time to time reasonably request.

                 6.3       [Reserved].

                 6.4       Payment of Obligations.  The NAF Entities shall pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, each of their obligations (with a balance of
$50,000 or more) of whatever nature.

                 6.5       Conduct of Business and Maintenance of Existence.
The NAF Entities shall continue to engage in business of the same type as now
conducted by it and preserve, renew and keep in full force and effect its
existence and take all action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; and comply in all
material respects with all Contractual Obligations and Requirements of Law.





                                       17
<PAGE>   22
                 6.6       Maintenance of Property; Insurance.  The NAF
Entities shall keep all property useful and necessary in its business in good
working order and condition; maintain, or cause to be maintained on its behalf,
with financially sound and reputable insurance companies, the Blanket Policy
and insurance on all its property in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to Lender, at least
annually, and otherwise upon written request, full information as to the
insurance carried.

                 6.7       Inspection of Property; Books and Records;
Discussions; Audit Reports.  NAF Corp. and the Borrower shall each

                 (a)       keep proper books of records and account in which
         full, true and correct entries in conformity with GAAP and all
         Requirements of Law shall be made of all dealings and transactions in
         relation to its business and activities; and permit representatives of
         Lender to visit and inspect any of its properties and examine and make
         abstracts from any of its books and records on prior notice during
         normal business hours and to discuss the business, prospects,
         operations, properties and financial and other condition of NAF Corp.
         with officers and employees of NAF Corp. and the Borrower and with its
         independent certified public accountants.

                 (b)       permit all accountants and auditors employed by NAF
         Corp. and the Borrower at any time to exhibit and deliver to the
         Lender copies of any and all of NAF Corp.'s and the Borrower's
         financial statements, trial balances or other accounting records of
         any sort in the accountant's or auditor's possession and to disclose
         to the Lender any information they may have concerning the Borrower's
         financial status and business operations which the Lender may
         reasonably request.  NAF Corp. and the Borrower shall authorize all
         federal, state and municipal authorities to furnish to the Lender
         copies of reports or examinations relating to NAF Corp. or the
         Borrower, whether made by NAF Corp., the Borrower or otherwise.

                 (c)       permit the Lender to conduct at any time and from
         time to time, and fully cooperate with, field examinations and audits
         of the business affairs of NAF Corp. and/or the Borrower.  NAF Corp.
         shall reimburse the Lender for all reasonable costs and expenses in
         connection with such examinations.

                 (d)       permit the Lender to inspect the Collateral, during
         normal business hours and upon reasonable notice; the Borrower shall
         reimburse the Lender for the reasonable expenses of the Lender in
         conducting any such inspection.

                 (e)       deliver promptly upon receipt thereof, one copy of
         each other report submitted to the Borrower by its independent
         accountants, including management letters and "comment" letters, in
         connection with any annual, interim or special audit report made by
         them of the books of the Borrower.





                                       18
<PAGE>   23
                 6.8       Notices.  NAF Corp. shall promptly give notice to
Lender of:

                 (a)       the occurrence of any Event of Default or Unmatured
         Event of Default;

                 (b)       any (i) default or event of default by Borrower or
         NAF Corp. under any Contractual Obligation of Borrower or NAF Corp. or
         (ii) litigation, investigation or proceeding which may exist at any
         time affecting the Borrower or NAF Corp. and which is likely to result
         in a material adverse change in the financial condition or business
         prospects of the Borrower or of NAF Corp;

                 (c)       a material adverse change in the business,
         properties, assets, operations, prospects or condition (financial or
         otherwise) of the Borrower or NAF Corp.; and

                 (d)       any change in its principal place of business or
         chief executive office from the address set forth in paragraph (v) of
         subsection 3.1.

Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the NAF Entities propose to take with respect
thereto.

                 6.9       Delivery of Other Reports.  The NAF Entities shall
furnish any reports required to be delivered by the NAF Entities pursuant to
any Facility Agreement to which any NAF Entity is a party or which any NAF
Entity has signed.

                 6.10      Approval of New FIs.  The NAF Entities shall not
execute a Loan Origination Agreement with a new FI unless they have received
approval of the new FI and the new Loan Origination Agreement from the Lender,
which approval shall not be unreasonably withheld.  This provision shall apply,
without limitation, to Tammac Corporation and to Mellon Bank.

                 6.11      Further Assurances.  The NAF Entities shall do such
further acts and things and execute and deliver to Lender such assignments,
agreements, financing statements, powers and instruments as are required by
Lender to carry into effect the purposes of this Credit Agreement and the other
Facility Agreements or to better assure and confirm unto Lender its rights,
powers and remedies hereunder and under the other Facility Agreements,
including, without limitation, to obtain such consents and give such notices,
and to file and record all such documents, financing statements and
instruments, and renew each such consent, notice, filing and recordation, at
such time or times, in such manner and at such places, as may be necessary or
desirable to preserve and protect the position of Lender hereunder and under
the other Facility Agreements.  This covenant shall survive the termination of
this Credit Agreement.

                 6.12      Cooperation in Making Calculations.  The NAF
Entities shall cooperate with Lender at all times in the calculation of all
formulas used in any Facility Agreement, including, without limitation,
delivering in written or electronic form any and





                                       19
<PAGE>   24
all data and other information as may be so required.  The NAF Entities hereby
agree to provide all such information or data on or before each date, without
prior request by Lender, as required to make any such calculation, and to
provide such information and data in such form as may be immediately used by
Lender without further interpretation or purchase or license of any software.
The NAF Entities do hereby further agree that if they fail to provide any such
information or data as required in this subsection 6.12, Lender may use any
estimate of any amount or calculation that it, in its sole discretion,
determines.

                 6.13      Securitization.  The Borrower shall use its best
efforts to effect a refinancing of the Loans through the issuance by Borrower
or an Affiliate of asset backed securities secured by Contracts (each such
refinancing a "Securitization") on a semi-annual basis.  Borrower further
agrees to use its best efforts to consummate the first such Securitization on
or prior to October 31, 1996 in an amount of not less than $40,000,000.

                 6.14      Additional Credit Support.

                 (a)  The NAF Entities will deliver or cause to be delivered to
         the Lender any and all subordinate securities (together with
         appropriate, fully-executed bond powers and assignments) received by
         them or by any Affiliate of the NAF Entities pursuant to any
         Securitization in order to create a first-priority, perfected security
         interest therein in favor of the Lender.

                 (b)  NAF Corp. shall cause the beneficial owner of Borrower to
         deliver to the Lender the "Certificates" issued under the Trust
         Agreement creating the Borrower, together with appropriate,
         fully-executed bond powers and assignments, not later than ten
         Business Days following the Closing Date.

                 (c)  The Borrower shall deposit any rebated FI deferred fees
         to the Collection Account.

                 6.15      Minimum Net Worth.  For so long as there are any
Obligations to Lender, the Borrower shall maintain at all times the Tangible
Net Worth Requirement.

                 6.16      Underwriting and Review.  (a)  NAF shall review each
Contract for compliance with the Underwriting Criteria.

                           (b)(i)  The Borrower shall cause to be furnished to
the Lender, by August 31, 1996, a report stating the conclusions of a review to
be conducted by an independent firm (such as Baker and Associates), of the
Servicer, any Sub-Servicer and of the Contracts originated after the Closing
Date.  The costs of such report shall be paid as follows:  the Lender shall pay
the first $10,000; the Borrower shall pay the balance of such cost, which is
not expected to exceed $18,000 in the aggregate.

                           (ii)  In addition to the costs of such initial
review, the Borrower agrees to pay up to $20,000 per year in additional fees
and expenses of a third-party contract reviewer (such as Baker and Associates);
provided, that if any such review reveals material inconsistencies in the
application of the Underwriting Criteria, the Lender may require





                                       20
<PAGE>   25
additional reviews to be performed, all at the Borrower's expense.


                         SECTION 7.  NEGATIVE COVENANTS

                 Each NAF Entity hereby agrees that, so long as this Credit
Agreement remains in effect, it shall not directly or indirectly, without the
prior written consent of the Lender, in its sole discretion:

                 7.1       Limitation on Debt.  Create, incur, assume or suffer
to exist any Debt, except (i) indebtedness in respect of the Loans, the
Promissory Note, and other obligations of the NAF Entities under the Facility
Agreements, (ii) Subordinated Debt which is subordinated to the Obligations on
terms reasonably satisfactory to Lender, (iii) a non-recourse promissory note
to Cargill Financial Services Corporation and (iv) in the case of NAF Corp.,
intercompany Debt approved by the Lender and trade Debt.

                 7.2       Limitation on Liens.  Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
including, without limitation, the Collateral, whether now owned or hereafter
acquired, except Subordinate Liens.

                 7.3       Limitation on Fundamental Changes.  Except as
expressly permitted by the Facility Agreements, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business.

                 7.4       Sale, Transfer or Encumbrance of Assets.  Sell,
lease, or otherwise dispose of, move, relocate, or transfer, whether by sale or
otherwise, any of its property, business or assets, including, without
limitation, the Collateral, (whether now owned or hereafter acquired) except
for (i) the movement of assets in the ordinary course of business to locations
disclosed in advance to Lender and where Borrower has executed and tendered to
Lender appropriate UCC-1 financing statements for filing or taken other steps
required to enable Lender to perfect its lien and (ii) Securitizations.

                 7.5       Contracts.

                           (a)       Sell, assign or otherwise encumber any
Contract except as expressly permitted by the Facility Agreements; or

                           (b)       Cancel, terminate, amend, modify or waive
any term or condition of any Contract (including the granting of rebates or
adjustments with respect thereto), or the related certificates of title except
in accordance with the Credit and Collection Policy.

                 7.6       Limitation on Dividends.  The NAF Entities shall not
declare or pay any dividend on, or make any payment on account of, or set apart
assets for a sinking or





                                       21
<PAGE>   26
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Capital Stock of the NAF
Entities or any warrants or options to purchase any such Capital Stock, whether
now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of NAF Corp.

                 7.7       Limitation on Capital Expenditures.  NAF Corp. shall
not make or commit to make (by way of the acquisition of securities of a Person
or otherwise) any expenditure in respect of the purchase or other acquisition
of fixed or capital assets (including, without limitation, pursuant to an
operating lease or a lease which is required to be capitalized for financial
reporting purposes in accordance with GAAP) in excess of $250,000 in the
aggregate in any year.

                 7.8       Limitation on Investments, Loans and Advances.  The
Borrower or NAF Corp. shall not make any advance, loan, extension of credit or
capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting a business unit of, or make any
other investment in, any Person, except:

                 (a)       purchases of Contracts;

                 (b)       investments in Permitted Investments of funds, if
         any, on deposit in the Collection Account; and

                 (c)       capitalization of any special purpose entity formed
         for the purpose of a Securitization.

                 7.9       Transactions with Affiliates.  The Borrower shall
not enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate, except for transactions expressly permitted by the Facility
Agreements, and transactions in the ordinary course of Borrower's business and
which are upon fair and reasonable terms not less favorable to Borrower than it
would obtain in a comparable arm's length transaction with a person that is not
an Affiliate.

                 7.10      Sale and Leaseback.  NAF Corp. shall not enter into
any arrangement with any Person providing for the leasing by NAF Corp. of real
or personal property which has been or is to be sold or transferred by NAF
Corp. to such Person or to any other Person to whom funds have been or are to
be advanced by such Person on the security of such property or rental
obligations of Borrower.

                 7.11      Trust Documents.  The Borrower shall not amend its
Governing Instrument.

                 7.12      Fiscal Year.  The Borrower shall not permit the
fiscal year of Borrower to end on a day other than December 31.

                 7.13      Limitation on Negative Pledge Clauses.  The Borrower
shall not





                                       22
<PAGE>   27
enter into any agreement with any Person other than Lender which prohibits or
limits the ability of Borrower to create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired.

                 7.14      Activities of Borrower.  The Borrower shall not
engage in any business or activity of any kind, or enter into any transaction
or indenture, mortgage, instrument, agreement, contract, lease or other
undertaking or expend any funds (other than incidental expenses incurred in the
ordinary course of business), which are not directly related to the
transactions contemplated and authorized hereby or by the other Facility
Agreements other than an agreement or other arrangement approved in writing by
Lender to share taxes of any affiliated, consolidated, unitary, combined or
similar group including Borrower, such approval not to be unreasonably
withheld.

                 7.15      Agreements.  The Borrower shall not, except for the
Facility Agreements, and as expressly permitted by the Facility Agreements,
become a party to, or permit any of its properties to be bound by, any
indenture, mortgage, instrument, contract, agreement, lease or other
undertaking, or issue any power of attorney except to Lender except for
instruments, contracts, agreements or leases entered into in the ordinary
course of the Borrower's business which are necessary or desirable in
furtherance of the transactions contemplated by the Facility Agreements.

                 7.16      Bank Accounts.  The NAF Entities shall not, except
as otherwise permitted by this Credit Agreement, move the Bank Accounts from
the institution at which they are maintained on the Closing Date.

                 7.17      Lock-Box Banks.  The NAF Entities shall not add or
terminate any bank as a Lock-Box Bank from those delivering a Lock-Box
Agreement pursuant to Section 4.1(o) hereof, or make any change in its
instructions to Obligors regarding payments to be made to any Lock-Box Bank,
unless the Lender shall have received notice of such addition of any Lock-Box
Bank and a Lock-Box Agreement executed by Borrower, the Lender and such
Lock-Box Bank shall have been delivered to the Lender; or deposit or otherwise
credit, or cause or permit to be so deposited or credited, Collections to any
lock-box account except the Lock-Boxes and the Collection Account.

                 7.18      Subordinated Debt.  The Borrower shall not make or
take any action to authorize or effect any payment of principal on or in
respect of any part or all of any Debt that is by its terms subordinated to the
Obligations or voluntarily prepay any such Debt or otherwise repurchase, redeem
or retire any instrument evidencing any such Debt.

                 7.19      Margin Securities.  The NAF Entities shall not own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by any regulation of the Federal Reserve Board as
now in effect or as the same may hereinafter be in effect.

                 7.20      No Commingling.  The Borrower shall maintain
separate bank accounts and no funds of the Borrower shall be commingled with
funds of any other entity.  The Borrower shall not maintain bank accounts other
than those which have been identified in writing to the Lender.





                                       23
<PAGE>   28
                 7.21      Guarantees.  Neither the Borrower nor NAF Corp. will
guarantee (directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of, or own or purchase any
stock, obligations or securities of or any other interest in, or make any
capital contribution to, any other Person.

                 7.22      Amendment of Facility Agreements.  The NAF Entities
will not amend the Facility Agreements without the prior written approval of
the Lender, such approval not to be unreasonably withheld.

                 7.23      Policies.  The NAF Entities shall not amend the
Credit and Collection Policy or the Underwriting Criteria without the prior
written approval of Lender, such approval not to be unreasonably withheld.

                 7.24      Miscellaneous.

                           (i)       The Borrower will at all times hold itself
out to the public under the Borrower's own name and as a separate and distinct
entity from National Auto Funding Corporation, National Auto Funding I, LP or
National Auto Funding II, LP.

                           (ii)      The Borrower will at all times be
responsible for the payment of all its obligations and indebtedness, will at
all times maintain a business office, records, books of account, and funds
separate from any other entity and will observe all customary formalities of
independent existence.


                       SECTION 8.  REMEDIES UPON DEFAULT

                 8.1       Acceleration.  Upon the occurrence of one or more
Events of Default (other than pursuant to clause (e) of the definition of Event
of Default), the Lender may cease making Advances, and may immediately declare
all or any portion of the Obligations to be immediately due and payable.  Upon
such declaration, the Obligations shall become immediately due and payable
without presentation, demand or further notice of any kind to the Borrower.
Upon the occurrence of an Event of Default specified in clause (e) of the
definition of Event of Default, the Lender shall immediately cease making
Advances and the Obligations shall automatically accelerate and become due and
payable, without any further action of the Lender.  Upon acceleration of the
Obligations for any reason, Borrower shall thereupon be obligated to pay to
Lender the Obligations then outstanding, and Lender shall not be obligated to
make any further Advance under this Credit Agreement.

                 8.2       Files.  Upon the occurrence of one or more Events of
Default, the Lender shall have the right to obtain physical possession of the
Collateral, on a servicing-retained or servicing-released basis, as Lender may
elect, together with all files of Borrower relating to the Collateral and all
documents relating to the Collateral which are then or may thereafter come into
the possession of Borrower or any third party acting for Borrower,





                                       24
<PAGE>   29
including the Collateral Agent and the Servicer.

                 8.3       Collections.  Upon the occurrence of one or more
Events of Default, Lender may exercise all rights and remedies under each
Contract, lease, security agreement and other contract included among the
Collateral as are afforded to the secured party thereunder or which are
otherwise afforded to Borrower thereunder; Lender may, subject to the rights of
Obligors, recover possession of any tangible personal property under any
Contract, and require that the same be assembled and delivered to a specific
location.  Without limiting the foregoing, the Lender shall have the right to
give direction to the Servicer, replace or remove the Servicer, collect and
receive all further payments made on the Collateral, to instruct the Obligors
to make payments to a lock-box or other location designated by the Lender, to
control deposits to and disbursements from the Collection Account, to notify
Lock-Box Banks to follow the instructions of the Lender, and if any payments
are received by Borrower, the Borrower shall not commingle the amounts received
with other funds of the Borrower and shall promptly pay them over to the
Lender.  In addition, the Lender shall have the right to dispose of all or any
part of the Collateral as provided in the other documents executed in
connection herewith, or in any commercially reasonable manner, or as provided
by law.  The Lender shall be entitled to place the Contracts which it recovers
after any default in a pool for issuance of automobile loan receivable
pass-through securities and to sell such securities at the then prevailing
price for such securities in the open market as a commercially reasonable
disposition of collateral subject to the applicable requirements of the UCC.
The Lender shall also be entitled to sell (on a servicing-retained or
servicing-released basis, as Lender may elect) any or all of such Contracts
individually for the prevailing price as a commercially reasonable disposition
of collateral subject to the applicable requirements of the UCC and to retitle
in Lender's or Lender's nominee's name, the subordinate certificates referenced
in Section 6.14 hereof.  Any surplus which exists after payment and performance
in full of the Loans and any other Obligations which arise hereunder shall be
promptly paid over to Borrower or otherwise disposed of in accordance with the
UCC or other applicable law.  The specification in this subsection 8.3 of
manners of disposition of collateral as being commercially reasonable shall not
preclude the use of other commercially reasonable methods (as contemplated by
the UCC) at the option of the Lender.

                 8.4       Power of Attorney.  Borrower hereby authorizes the
Lender, at Borrower's expense, to file such financing statement or statements
relating to the Collateral without Borrower's signature thereon as Lender at
its option may deem appropriate, and appoints the Lender as the Borrower's
attorney-in-fact (but without requiring the Lender to act) to execute any such
financing statement or statements in Borrower's name and to perform all other
acts which the Lender deems appropriate to perfect and continue the security
interest granted hereby and to protect, preserve and realize upon the
Collateral, including, but not limited to, the right to endorse notes and
instruments, complete blanks in documents and sign assignments on behalf of
Borrower as its attorney-in-fact and to prove and adjust any losses and to
endorse any loss drafts under applicable insurance policies.  This power of
attorney is coupled with an interest and is irrevocable without the Lender's
consent.  Notwithstanding the foregoing, the power of attorney hereby granted
shall only be effective during the occurrence and continuance of any Event of
Default hereunder.





                                       25
<PAGE>   30
                           SECTION 9.  MISCELLANEOUS

                 9.1       Amendments and Waivers.  None of this Credit
Agreement, the Promissory Note, any other Facility Agreement to which Lender or
Borrower is a party, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection.  Lender, the Collateral Agent and Borrower may, from time to time,
enter into written amendments, supplements or modifications hereto and to the
Promissory Note and the other Facility Agreements to which they are parties for
the purpose of adding any provisions to this Credit Agreement or the Promissory
Note or such other Facility Agreements or changing in any manner the rights of
Lender, the Collateral Agent or Borrower hereunder or thereunder and, in
addition, waiving, on such terms and conditions as Lender may specify in such
instrument, any of the requirements of this Credit Agreement or the Promissory
Note or such other Facility Agreements or any Unmatured Event of Default or
Event of Default and its consequences.  Any such waiver and any such amendment,
supplement or modification shall be binding upon Lender and all future holders
of the Promissory Note.  In the case of any waiver, Lender and Borrower shall
be restored to their former position and rights hereunder and under the
Promissory Note and any other Facility Agreements to which they are parties,
and any Unmatured Event of Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Unmatured Event of Default or Event of Default, or impair
any right consequent thereon.

                 9.2       Notices.  Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto shall be in writing and shall be personally delivered or sent by
overnight courier service, or by registered, certified or express mail, postage
prepaid, return receipt requested, or by facsimile copy (accompanied by a
telephonic confirmation or receipt thereof), or telegram (with messenger
delivery specified in the case of a telegram) and shall be deemed to be
delivered for purposes of this Credit Agreement on: (a) the second Business Day
following the day on which such notice was placed in the custody of the U.S.
Postal Service, (b) the next Business Day following the day on which such
notice was placed in the custody of any overnight courier service, including
express mail service or (c) the same Business Day on which such notice is sent
by telegram, messenger or facsimile.  Unless otherwise specified in a notice
sent or delivered in accordance with the foregoing provisions of this
subsection, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated
below, and, in the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party below:





                                       26
<PAGE>   31

If to Borrower:               N.A.F. Auto Loan Trust
                              4545 Fuller Drive, Suite 101
                              Irving, TX 75038
                        
                              Attention:
                              Tel. No.: 214-791-1113
                              Telecopier No.: 214-791-0464
                        
with a copy to:               N.A.F. Auto Loan Trust
                              c/o Delaware Trust Company
                              900 Market Street, 2-M
                              Wilmington, Delaware 19801
                              Attention:  Corporate Trust Administrator
                        
                              Facsimile Number: 302-421-7387
                              Telephone Number: 302-421-7748
                        
If to NAF Corp.:              National Auto Funding Corporation
                              4545 Fuller Drive, Suite 101
                              Irving, TX 75038
                        
                              Attention: Jim W. Moore, President
                              Tel. No.: 214-791-1113
                              Telecopier No.: 214-791-0464
                        
If to Lender:                 ContiTrade Services L.L.C.
                              277 Park Avenue, 38th Floor
                              New York, New York 10172
                        
                              Attention: Chief Counsel
                              Tel. No.: 212-207-2822
                              Telecopier No.: 212-207-2935


                 9.3       No Waiver; Cumulative Remedies.  No failure to
exercise and no delay in exercising, on the part of Lender; 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 not exclusive of any rights, remedies,
powers and privileges provided by law.

                 9.4       Survival of Representations and Warranties.  All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Credit Agreement and the Promissory Note.





                                       27
<PAGE>   32
                 9.5       Payment of Expenses and Taxes.  Borrower agrees, on
demand, and except as otherwise specifically set forth herein, to (a) pay or
reimburse Lender and the Collateral Agent for all out-of-pocket costs and
expenses incurred in connection with the preparation and execution of this
Credit Agreement, the Promissory Note and the other Facility Agreements and any
other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, subject to the limitations in Section 5.2 hereof, any and
all collateral audit fees and the reasonable fees and disbursements of counsel
to Lender, (b) pay or reimburse Lender for all of its costs incurred in
connection with its due diligence review of Borrower and all of its
out-of-pocket expenses incurred in connection with the preparation, negotiation
and execution of the Facility Agreements, (c) pay or reimburse Lender and the
Collateral Agent for all out-of-pocket costs and expenses incurred in
connection with the preparation and execution of any amendment, modification or
supplement to this Credit Agreement, the Promissory Note and the other Facility
Agreements and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, any and all collateral audit fees and
the reasonable fees and disbursements of counsel to Lender, (d) pay or
reimburse Lender for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Credit Agreement, the
Promissory Note, the other Facility Agreements and any such other documents,
including, without limitation, reasonable fees and disbursements of counsel to
Lender, (e) pay, indemnify, and hold Lender, its directors, members, officers,
employees, agents and Affiliates, harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, any registration tax, stamp, duty and other similar taxes or
duties, if any, which may be payable or determined to be payable in connection
with 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 Credit Agreement, the Promissory Note,
the other Facility Agreements and any such other documents (other than income
taxes and franchise taxes), and (f) pay, indemnify, and hold Lender, its
directors, members, officers, employees, agents and Affiliates, 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 Credit Agreement, the Promissory Note
and the other Facility Agreements (all the foregoing, collectively, the
"indemnified liabilities"), provided that Borrower has no obligation hereunder
to the Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Lender.

                 9.6       Successors and Assigns; Participations.   (a)
This Credit Agreement shall be binding upon and inure to the benefit of
Borrower and Lender, and all future holders of the Promissory Note and their
respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Credit Agreement and
Lender, except as set forth in paragraph (b) below, may not assign or transfer
any of its rights or obligations under this Credit Agreement without (except
following the occurrence of, and during the continuance of, an Event of
Default) the prior consent of Borrower, which consent shall not unreasonably be
withheld; provided, however, that if Lender desires to assign, transfer, sell
or otherwise dispose of all of its right, title and





                                       28
<PAGE>   33
interest in the Collateral or the Obligations owed to it under the Facility
Agreements to any institutional investor pursuant to any repurchase agreement
or similar arrangement, or to a Subsidiary or Affiliate of Continental Grain
Company, the consent of Borrower shall not be required.

                 (b)       Lender may, in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to it, the Promissory Note, the
Facility or any other interest of Lender hereunder and under the other Facility
Agreements.  In the event of any such sale by Lender of participating interests
to a Participant, Lender's obligations under this Credit Agreement to the other
parties hereto shall remain unchanged, Lender shall remain solely responsible
for the performance thereof, Lender shall remain the holder of the Promissory
Note for all purposes under this Credit Agreement and the other Facility
Agreements, and Borrower shall continue to deal solely and directly with Lender
in connection with Lender rights and obligations under this Credit Agreement
and the other Facility Agreements.  Borrower agrees that if amounts outstanding
under this Credit Agreement and the Promissory Note are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of the Funding Commitment Termination Date, each Participant shall
be deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Credit Agreement and the Promissory Note to the
same extent as if the amount of its participating interest were owing directly
to it under this Credit Agreement or the Promissory Note.  Borrower also agrees
that each Participant shall be entitled to the benefits of Subsections 2.9 and
9.5 with respect to its participation in the Facility and the Loans outstanding
from time to time; provided, that no Participant shall be entitled to receive
any greater amount pursuant to such subsections than Lender would have been
entitled to receive in respect of the amount of the participation transferred
by Lender to such Participant had no such transfer occurred.

                 (c)       Borrower authorizes Lender to disclose to any
Participant and any prospective Participant any and all financial information
in its possession concerning the Borrower and its Affiliates which has been
delivered to it by or on behalf of such Person pursuant to this Credit
Agreement or which has been delivered to it by or on behalf of such Person in
connection with its credit evaluation of Borrower and its Affiliates prior to
becoming a party to this Credit Agreement; provided such Participant agrees to
keep such financial information confidential unless required to be disclosed by
applicable Requirements of Law.

                 (d)       If, pursuant to this Subsection 9.6, any interest in
this Credit Agreement or the Promissory Note is transferred or assigned to any
Participant or assignee which is organized under the laws of any jurisdiction
other than the United States or any state thereof, Lender shall cause such
Participant or assignee, as a condition to the effectiveness of such transfer,
(i) to represent to Lender and Borrower that under applicable law and treaties
then in effect no taxes will be required to be withheld by Borrower or Lender
with respect to any payments to be made to such Participant or assignee, in
respect of the Loans, (ii) to furnish to Borrower either U.S. Internal Revenue
Service Form 4224 (or any successor form) or U.S. Internal Revenue Service Form
1001 (or any successor form) (wherein such Participant or assignee claims
entitlement to complete exemption from U.S.





                                       29
<PAGE>   34
federal withholding tax on all interest payments hereunder) and (iii) to agree
(for the benefit of Lender and Borrower) timely to provide Lender and Borrower
a new Form 4224 (or any successor form) or Form 1001 (or any successor form)
upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with and if permitted under applicable U.S.
laws and regulations and amendments then in effect duly executed and completed
by such Participant or assignee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.

                 (e)       Lender shall not grant to any Participant the right
to consent to any amendment or waiver entered into in accordance with
subsection 9.1 except for any such amendment or waiver which would increase the
Lender Funding Commitment, or reduce the amount or extend the due date of any
principal of or interest on the Promissory Note.

                 9.7       Termination.  This Credit Agreement (except for
Sections 9.4 and 9.5) shall terminate following the Funding Commitment
Termination Date upon payment in full of all outstanding principal, interest
and other amounts due hereunder to Lender.

                 9.8       Counterparts.  This Credit Agreement may be executed
by one or more of the parties to this Credit Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                 9.9       Severability.  Any provision of this Credit
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 invalidating 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.

                 9.10      Integration; Construction.  This Credit Agreement
represents the agreement of Borrower and Lender with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Facility Agreements.

                 9.11      Limited Liability.  No recourse under any Facility
Agreement shall be had against, and no personal liability shall attach to, any
officer, employee, director, member, affiliate, beneficial owner, trustee or
shareholder of any party hereto, as such, by the enforcement of any assessment
or by any legal or equitable proceeding, by virtue of any statute or otherwise
in respect of any of the Facility Agreements, it being expressly agreed and
understood that each Facility Agreement is solely a corporate or trust
obligation of each party hereto, and that any and all personal liability,
either at common law or in equity, or by statute or constitution, of every such
officer, employee, director, member, affiliate, beneficial owner, trustee or
shareholder for breaches by any party hereto of any obligations under any
Facility Agreement is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Agreement.





                                       30
<PAGE>   35
                 9.12      GOVERNING LAW.  THIS CREDIT AGREEMENT AND THE
PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS CREDIT
AGREEMENT AND THE PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

                 9.13      SUBMISSION TO JURISDICTION; WAIVERS.  EACH PARTY
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

                 (a)       SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS CREDIT 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;

                 (b)       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;

                 (c)       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 SUBSECTION 9.2 OR AT SUCH OTHER ADDRESS OF WHICH ALL OF
THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

                 (d)       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

                 (e)       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.

                 9.14      Acknowledgements.  Borrower and NAF Corp. each
hereby acknowledge that:





                                       31
<PAGE>   36
                 (a)       it has been advised by counsel in the negotiation,
execution and delivery of this Credit Agreement, the Promissory Note and the
other Facility Agreements;

                 (b)       the Lender has no fiduciary relationship to Borrower
or NAF Corp., and the relationship between Lender and Borrower is solely that
of debtor and creditor; and

                 (c)       no joint venture exists between Borrower, NAF Corp.
and Lender.

                 9.15      WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR THE PROMISSORY NOTE OR ANY
OTHER FACILITY AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.





                                       32
<PAGE>   37
                 IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers, members or trustees as of the day and year
first above written.

                                        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
                                       
                                       
                                        NATIONAL AUTO FUNDING CORPORATION      
                                       


                                        By    /s/ JIM W. MOORE   
                                          ----------------------------
                                          Name:   Jim W. Moore
                                          Title:  President



                                        CONTITRADE SERVICES L.L.C.



                                        By    /s/ JEROME PEARLSON
                                          ----------------------------
                                          Name:   Jerome Pearlson 
                                          Authorized Signatory

                                              /s/ SUSAN O'DONOVAN
                                          ----------------------------
                                          Name:   Susan O'Donovan 
                                          Authorized Signatory





                                       33
<PAGE>   38
                                                                       EXHIBIT A

                                DEFINITIONS LIST


                 Adjusted Eligible Contract Balance:  On any day, the aggregate
of the Outstanding Balances of all Contracts minus the sum of (a) the aggregate
Outstanding Balance of all Defaulted Contracts on such day and (b), without
duplication of the amount described in clause (a) of this definition, the
aggregate Outstanding Balance of all Ineligible Contracts on such day;
provided, that for this purpose only a Contract shall not be an Ineligible
Contract by reason of clause (d) of the definition of the Eligible Contract.

                 Administration Agreement:  The Administration Agreement dated
as of October 31, 1994 between the Borrower and NAF Corp.

                 Advance Rate:  Eighty-five percent (85%).

                 Affiliate:  As to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.  Notwithstanding the
foregoing, no "acquisition vehicle" (such as WAMCO XXIII, Ltd.) shall be
considered an "Affiliate" of FirstCity or any NAF Entity.

                 Annual Percentage Rate:  The annual rate of interest
applicable to each Contract, as disclosed therein.

                 Available Facility Amount:  On any date, the excess, if any,
of (a) the Borrowing Base, as of such date, minus (b) the Outstanding Facility
Balance.

                 Bank Accounts:  Collectively, the Lock-Boxes and the
Collection Account.

                 Bankruptcy Event:  With respect to a Person, (a) such Person
or any of its Affiliates (if any) shall commence any case, proceeding or other
action (i) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or such Person or any of its Affiliates shall
make a general assignment for the benefit of its creditors; or (b) there shall
be commenced against such Person or any of its Affiliates any case, proceeding
or other action of a nature referred to in clause (a) above which (i) results
in the entry of an order for relief or any such adjudication or
<PAGE>   39
appointment or (ii) remains undismissed, undischarged or unbonded for a period
of 60 days; or (c) there shall be commenced against such Person or any of its
Affiliates any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (d) such Person or any
of its Affiliates shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (a), (b), or (c) above; or (e) such Person or any of its Affiliates
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due.

                 Blanket Policy:  An Insurance Policy maintained by the
Borrower and its assignees for "vendor's single interest" coverage with respect
to each Vehicle.

                 Borrower:  N.A.F. Auto Loan Trust, a Delaware business trust.

                 Borrowing Base:  On any day, an amount equal to

                 (x)      the sum of:

                            (i)   the product of the Advance Rate times the
                                  Adjusted Eligible Contract Balance as of the
                                  end of the prior Collection Period (or as of
                                  the Closing Date, with respect to the initial
                                  period),

                           (ii)   the product of the Advance Rate times the
                                  Outstanding Contract Balance of all Contracts
                                  acquired by the Borrower since the end of the
                                  immediately preceding Collection Period,

                          (iii)   the Eligible Amount on deposit in the
                                  Collection Account at the end of the
                                  immediately preceding Collection Period,

                           (iv)   the Deposit Amount on deposit in the 
                                  Collection Account on such day, and

                            (v)   the product of the Advance Rate and 50% of
                                  the Outstanding Balance of each Contract
                                  which (a) is less than 60 days past due and
                                  (b) for which the related vehicle has been
                                  repossessed but not sold,

                                     minus

                 (y)      the sum of:

                                  (i)      the Borrowing Base Adjustment Amount
                                           as of such date; and
<PAGE>   40
                                  (ii)     from the first day of the related
                                           Collection Period through the
                                           related Determination Date, zero;
                                           from the related Determination Date
                                           through the end of the related
                                           Collection Period, the principal
                                           amortization amount during the prior
                                           Collection Period, as reported on
                                           the Servicer's Certificate; and

                                  (iii)    the excess, if any, of:

                                            (x)  the cumulative amount disbursed
                                                 from the Collection Account
                                                 pursuant to Section
                                                 2.03(a)(i) of the Paying
                                                 Agent Agreement since the
                                                 beginning of the related
                                                 Collection Period;

                                                      over

                                            (y)  the sum of:
                                         (i)      the cumulative amount
                                                  deposited to the Collection
                                                  Account pursuant to Section
                                                  2.02(a)(ii) of the Paying
                                                  Agent Agreement since the
                                                  beginning of the related
                                                  Collection Period; and

                                        (ii)     the Deposit Amount as of such
                                                 day.

                 Borrowing Base Adjustment Amount:  means $2,000,000, until
such time as the Lender notifies the Borrower, NAF Corp., the Paying Agent and
FirstCity that the Lender has accepted FirstCity's delivery of its additional
funding commitment pursuant to Section 3.1(b) of Commitment, the Borrowing Base
Adjustment Amount shall thereafter be zero.

                 Borrowing Date:  Any Business Day specified in a notice
pursuant to subsection 2.3 of the Credit Agreement as a date on which Borrower
requests Lender to make Loans thereunder.

                 Business Day:  A day of the year on which banks are not
required or authorized to close in New York City, New York, Wilmington,
Delaware, Dallas, Texas and Los Angeles, California.

                 Capital Stock:  With respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
<PAGE>   41
                 Change of Control:

                 (i) Except with respect to a securitization contemplated by
the Facility Agreements, all or substantially all of either of the NAF
Entities' assets are sold, leased, transferred or otherwise disposed of as an
entirety or substantially as an entirety (in one transaction or in a series of
transactions) to any Person or Persons which are not at least 80% owned,
directly or indirectly, by FirstCity; or

                 (ii) the beneficial owners or trustees of either of the NAF
Entities consummate, or approve a definitive agreement or plan for:

                          (A) any merger, consolidation, exchange of
certificates, recapitalization, restructuring or other business combination
with or into another business trust or any sale of beneficial ownership of
either of the NAF Entities (for purposes of this definition, a "Transaction")
pursuant to which (x) either of the NAF Entities will not survive, or (y)
FirstCity, directly or indirectly, will not hold at least 80% of the beneficial
interest in either of the NAF Entities after such Transaction, or (z)
FirstCity, directly or indirectly, is entitled to receive any cash, securities
or other property, except any such Transaction as a result of which at least
80% of the beneficial ownership of the surviving Person is owned, directly or
indirectly, by FirstCity, or

                          (B) the liquidation or dissolution of either of 
the NAF Entities.

                 Closing Date:  the date on which all of the Facility
Agreements have been executed by all the parties thereto.

                 Code:  The United States Internal Revenue Code of 1986,
amended.

                 Collateral:  As defined in Section 2 of the Security and
Collateral Agent Agreement.

                 Collateral Agent:  Texas Commerce Bank National Association,
acting in its capacity as Collateral Agent under the Security and Collateral
Agent Agreement and any successor Collateral Agent appointed pursuant to the
Security and Collateral Agent Agreement.

                 Collateral Agent Certification:  As defined in Section
7.08(a)(i) of the Security and Collateral Agent Agreement.

                 Collateral Agent's Certification  As defined in Section
7.08(a)(i) of the Collateral Agent Agreement.

                 Collection Account:  The Collection Account maintained by the
Collateral Agent pursuant to the Paying Agent Agreement.

                 Collection Period:  With respect to any Payment Date, the
calendar month (or portion of such calendar month, in the case of the first
Payment Date) immediately
<PAGE>   42
preceding such Payment Date.

                 Collections:  All amounts (including, without limitation,
Recoveries) due and owing on, or otherwise received by Borrower in respect of
the Contracts and the Vehicles.

                 Commitment Period:  The period from and including the date
hereof to but not including the Commitment Termination Date.

                 Commitment Termination Date:  The date which is 360 days after
the Closing Date; or such later date to which the Commitment Termination Date
may be extended pursuant to Section 2.1(a) of the Credit Agreement.

                 Computer Tape:  A computer tape generated by the Borrower
containing, without limitation, the information set forth on the Contract List.

 ContiFinancial:  ContiFinancial Services Corporation, a Delaware Corporation.

                 Contract:  Each retail installment sale contract for a Vehicle
that was originated under a Loan Origination Agreement with an FI approved by
the Lender, any amendment, supplement or modification thereto, and all rights
and obligations thereunder.

                 Contract List:  Each schedule of Contracts delivered by
Borrower to Lender and the Collateral Agent with respect to each Borrowing Date
identifying, in such detail as such parties may require, each Contract being
purchased by Borrower, delivered to the Lender and, for so long as the Security
and Collateral Agent Agreement is in effect, the Collateral Agent, pledged by
Borrower to the Lender, organized by the name of the Obligor and the state in
which the Obligor's billing address is located and setting forth for each such
Contract:  (i) a number identifying the Contract, (ii) the original amount
financed of such Contract, (iii) Annual Percentage Rate, (iv) the original
maturity of the Contract, (v) the remaining maturity of the Contract, (vi) the
amount of the Obligor's monthly payment, (vii) the purchase price of such
Contract, (viii) the name and address of the Obligor on such Contract and (ix)
the Outstanding Balance of such Contract.

                 Contractual Obligation:  As to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

                 Credit Agreement:  The Warehouse Credit Agreement dated as of
May 17, 1996 between Borrower, Lender and NAF Corp.

                 Credit Enhancer:  A monoline insurer, letter of credit bank or
other third- party supplier of credit enhancement, if any.

                 Dealer Assignment:  Any agreement pursuant to which a Contract
or
<PAGE>   43
security interest in a Vehicle has been transferred, sold or assigned by a
Vehicle Dealer to Borrower (or to an FI and then assigned to Borrower).

                 Debt:  Of a Person on any day, the sum on such day of (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services, or evidenced by bonds, notes or other similar instruments, (b)
obligations as lessee under any operating leases and any leases which shall
have been or should be, in accordance with GAAP, recorded as capital leases,
and (c) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (a) or (b) above.

                 Defaulted Contract:  As of any Determination Date, any
Contract that as of the end of the preceding Collection Period (a) is
classified by the Borrower, on a contractual basis, as 60 or more days past
due, or (b) with respect to which the related Vehicle has been repossessed by
Borrower.

                 Delinquency Ratio:  With respect to the Determination Dates in
June and July of 1996, the aggregate Outstanding Contract Balances of all
Contracts which are 30 or more days past due as of the end of the preceding
Collection Period divided by the aggregate Outstanding Contract Balances of all
Contracts as of the end of such preceding Collection Period; with respect to
any subsequent Determination Date, the average, as of the last day of each of
the three preceding Collection Periods, of the aggregate Outstanding Contract
Balance of all Contracts.

                 Delinquent Contract:  Any Contract (a) that is classified by
the Borrower, on a contractual basis, as 30 or more days past due and (b) that
is not a Defaulted Contract.

                 Deposit Amount:  means all funds deposited in the Collection
Account (i) by the Borrower, pursuant to Section 2.01(a)(iii) of the Paying
Agent Agreement or (ii) by the Lender, pursuant to Section 2.01(a)(i) of the
Paying Agent Agreement in each case (a) since the end of the immediately
preceding Collection Period and (b) which remain on deposit in the Collection
Account at the time of the Borrowing Base calculation is being made and, thus
have not been applied to the acquisition of Contracts.

                 Deposited Funds:  On any day, all Principal Collections on
deposit in or otherwise to the credit of the Collection Account at the close of
business on the previous Business Day.

                 Determination Date:  With respect to a Collection Period, the
tenth day following the end of such Collection Period.

                 Dollars and $:  Lawful money of the United States of America.

                 EDS:  Electronic Data Systems Corporation, a Texas
corporation.
<PAGE>   44
                 Eligible Amount:  means the amount on deposit in the
Collection Account at the end of the immediately preceding Collection Period,
less (i) the interest due to Lender on the Facility on the interest payment
date which next follows the end of the such Collection Period, (ii) the
Servicing Fees to be due to the Servicer on the 15th day of the month which
next follows the end of such Collection Period and (iii) $250,000, representing
miscellaneous amounts.

                 Eligible Contract:  On any day, a Contract (a) that arises
from the completed delivery of a Vehicle and which has been fully performed by
Borrower and the Dealer party thereto, (b) that arises from the normal course
of the Dealer's business, (c) that is not a Defaulted Contract, (d) that is not
a Delinquent Contract; provided, that this clause (d) shall not apply to WAMCO
Contracts at the time the Advance is made against such WAMCO Contracts, (e) the
Obligor of which is a natural person residing in any state of the United States
or the District of Columbia, (f) the Obligor of which is not a government or
governmental subdivision or agency, (g) the Obligor of which has full power and
capacity to enter into such Contract and perform his or her obligations
thereunder, (h) as to which the Obligor has executed and delivered an original
note that is in full force and effect and constitutes the legal, valid and
binding obligation of the Obligor in accordance with its terms, (i) that is
denominated and payable in Dollars in the United States, (j) that is not
subject to any dispute, litigation, counterclaim or defense, or any offset or
right of offset at the time of purchase by Borrower, (k) that has an original
term to maturity of not less than 24 nor more than 60 months, (l) that provides
for equal monthly payments which will cause the Contract to fully amortize
during its term, (m) that has an Annual Percentage Rate of not less than the
lesser of (A) 700 basis points over the two-year Treasury rate in effect on the
date of origination of such Contract and (B) the maximum interest rate
permissible by law with respect to such Contract, (n) that, together with the
note applicable thereto, does not contravene any Requirements of Law applicable
thereto, (o) with respect to which all required consents, approvals and
authorizations have been obtained, (p) as to which the security interest in the
Vehicle securing such Contract has been recorded in the name of Borrower or the
Collateral Agent and which security interest is in full force and effect and
subject to no prior or equal liens, claims or encumbrances, (q) which was
originated using the Underwriting Criteria, (r) that requires the Borrower to
be named as loss payee or beneficiary (as applicable) under an insurance policy
with respect to the Vehicle financed by such Contract and entitles the Borrower
to the benefits of such insurance policy and (s) as to which the
Representations and Warranties are true and correct, (t) that, if such Contract
is a Modified Contract, the Lender has not given the Borrower notice that such
Contract is to be excluded as not being an Eligible Contract and (u) as to
which the Collateral Agent has issued a Collateral Agent's Certification
listing no exceptions.

                 Eligible Deposit Account:  Either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the States thereof or the
District of Columbia (or any domestic branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository institution have a
credit rating acceptable to the Lender.
<PAGE>   45
                 Eligible Institution:  A depository institution organized
under the laws of the United States of America or any one of the States thereof
or the District of Columbia (or any domestic branch of a foreign bank), (A)
which has either (1) a long-term unsecured debt rating of at least AA by S&P
and Aa by Moody's or otherwise acceptable to the Lender or (2) a short-term
unsecured debt rating or certificate of deposit rating of at least A-1 by S&P
and P-1 by Moody's or otherwise acceptable to the Lender and (B) whose deposits
are insured by the FDIC.

                 ERISA:  The Employee Retirement Income Security Act of 1974,
as amended.

                 ERISA Affiliate:  With respect to any Person (a) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person, (b) a
partnership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with such
Person or (c) a member of the same affiliated service group (within the meaning
of Section 414(m) of the Code) as such Person, any corporation described in
clause (a) above or any partnership or other trade or business described in
clause (b) above.

                 Event of Default:  The occurrence of any of the following
events:

                 (a)  Borrower fails to pay when due any amount payable under 
         the Credit Agreement.

                 (b)  Any representation or warranty made or deemed made by
         Borrower or NAF Corp., in any capacity which is contained in the
         Facility Agreements or in any agreement, written report or written
         information furnished at any time under or required by the Facility
         Agreements shall prove to have been false or incorrect on or as of the
         date made or deemed made, which remains uncured for five Business Days
         following NAF Corp.'s receipt of notice thereof, and which is likely
         to have a material, adverse effect on the financial condition or
         business prospects of the Borrower or of NAF Corp.

                 (c)(i) Borrower (x) defaults in any payment of principal of or
         interest on any Debt, beyond the period of grace, if any, provided in
         the instrument or agreement under which such Debt was created or (y)
         defaults in the observance or performance of any agreement or
         condition contained in any instrument or agreement to which it is a
         party or by which its property or assets are bound, which remains
         uncured for five Business Days following the Borrower's and NAF
         Corp.'s receipt of notice thereof.

                  (ii) NAF Corp. (x) defaults in any payment of principal of or
         interest on any Debt, beyond the period of grace, if any, provided in
         the instrument or agreement under which such Debt was created and
         which has an outstanding principal balance of $50,000 or more or (y)
         defaults in the observance or
<PAGE>   46
         performance of any agreement or condition contained in any instrument
         or agreement to which it is a party or by which its property or assets
         are bound, which remains uncured for five Business Days following NAF
         Corp.'s receipt of notice thereof, and which is likely to have a
         material adverse effect on the financial condition or business
         prospects of NAF Corp.

                 (d)  For any reason, Borrower shall cease to have a valid and
         perfected first priority ownership interest in the Contracts or Lender
         shall cease to have a valid and perfected first priority security
         interest in the Collateral or any other collateral pledged under the
         Facility Agreements or any other Operative Document shall cease to be
         in full force and effect or cease to be the legal, valid, binding and
         enforceable obligation of any party thereto.

                 (e)  A Bankruptcy Event shall occur with respect to Borrower,
         NAF Corp. or any Affiliate of NAF Corp.

                 (f) One or more judgments or decrees (in the case of NAF
         Corp., in an aggregate amount in excess of $50,000) shall have been
         entered against any NAF Entity which is not paid, bonded, stayed or
         covered by insurance, provided, that this clause shall not apply to
         actions relating to individual Contracts, unless a material portion of
         the Contracts is affected.

                 (g) Borrower or NAF Corp. becomes liable for environmental
         remediation or compliance expenses or fines, penalties or other
         charges related to environmental matters in excess of $50,000.

                 (h) Borrower or NAF Corp. or any ERISA Affiliate of Borrower,
         (i) shall engage in any "prohibited transaction" (as defined in
         Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
         (ii) any "accumulated funding deficiency" (as defined in Section 302
         of ERISA), whether or not waived, shall exist with respect to any
         Plan, (iii) a Reportable Event shall occur with respect to, or
         proceedings shall commence to have a trustee appointed, or a trustee
         shall be appointed, to administer or to terminate, any Single Employer
         Plan, which Reportable Event or commencement of proceedings or
         appointment of a trustee is, in the reasonable opinion of the Lender,
         likely to result in the termination of such Plan for purposes of Title
         IV of ERISA, (iv) any Single Employer Plan shall terminate for
         purposes of Title IV of ERISA, (v) the Borrower or any ERISA Affiliate
         shall, or in the reasonable opinion of Lender is likely to, incur any
         liability in connection with a withdrawal from, or the Insolvency or
         Reorganization of, a Multiemployer Plan or (vi) any other event or
         condition shall occur or exist, with respect to a Plan; and in each
         case in clauses (i) through (vi) above, such event or condition,
         together with all other such events or conditions, if any, could
         subject Borrower or any ERISA Affiliate to any tax, penalty or other
         liabilities which are materially adverse to the business, operations,
         prospects, property or financial or other condition of Borrower.

                 (i) Any financial statement delivered pursuant to the Facility
         Agreements
<PAGE>   47
         and reported on by any independent certified public accountants shall
         contain any qualification or exception, or qualification arising out
         of the scope of the audit.

                 (j) A material adverse change from the date hereof in the
         business, properties, operations, prospects or financial or other
         condition of Borrower or NAF Corp., as determined by Lender in its
         reasonable, good faith business judgment.

                 (k) A material adverse change from the date hereof in the
         collectibility of the Contracts taken as a whole.

                 (l) Borrower or NAF Corp. becomes an "investment company" or a
         company "controlled" by an "investment company" within the meaning of
         the Investment Company Act of 1940, as amended.

                 (m) Borrower shall fail to provide any information required to
         be provided by Section 6.3 of the Credit Agreement by the time
         required thereby.

                 (n) Borrower or NAF Corp. shall default in the observance or
         performance of any other term, condition or covenant under the
         Facility Agreements and such failure to observe or perform continues
         for five Business Days.

                 (o) As of any Determination Date, the Delinquency Ratio is
         greater than or equal to (i) for the Determination Dates in June and
         July 1996, 30%, or, (ii) for the Determination Dates in August and
         September 1996, 25% or (iii) thereafter, 15%.

                 (p) As of the November, 1996, Determination Date, the Net Loss
         Ratio is greater than or equal to 13%; for each Determination Date
         thereafter, the Net Loss Ratio is greater than or equal to 10%, in
         each case, on an annualized basis.

                 (q) As of any Determination Date, the average of the Recovery
         Percentages for the three preceding Collection Periods is less than
         (i) prior to the Determination Date in September, 1996, 35%, or (ii)
         thereafter, 45%.

                 (r) As of any date, the Outstanding Facility Balance exceeds
         the Borrowing Base.

                 (s) A Change of Control shall occur.

                 (t) The aggregate principal amount of Contracts originated is
         less than $20,000,000 for the first six months following the Closing
         Date or $25,000,000 for any six month period thereafter.

                 (u) FirstCity shall default in the observance or performance
         of any term, condition or covenant in the Funding Commitment and such
         failure to observe or perform continues for five Business Days.
<PAGE>   48
                 (v) Borrower fails to observe any financial covenant set forth
         in Section 6.15 of the Credit Agreement.

                 (w) Any two FI's cancel their Loan Origination Agreements in
         any consecutive two-month period, or any FI which accounts for 10% or
         more of Contract originations (by principal balance, on a rolling
         six-month basis) cancels its Loan Origination Agreement.

                 (x) An Event of Servicing Termination occurs under the 
         Servicing Agreement.

                 (y) Any NAF Entity shall default in the observance or
performance of any term, condition or covenant in any other Facility Agreement
and such failure to observe or perform continues for five Business Days.

                 Facility Agreements:  The collective reference to the Credit
Agreement, the Promissory Note, the Commitment, the Security and Collateral
Agent Agreement, the Servicing Agreement, the IBSA, the Loan Origination
Agreements and any other agreement or instrument related or delivered to any
party to any of the foregoing pursuant to or in connection with any of the
foregoing.

                 FDIC:  The Federal Deposit Insurance Corporation or any
successor thereof.

                 File:  With respect to each Contract to be purchased by
Borrower:

                 (a)  the original Dealer Assignment;

                 (b)  the fully executed original of the Contract;

                 (c)  documents evidencing or related to any Insurance Policy
         with respect to a Vehicle;

                 (d)  the original or a copy of the credit application of the
         Obligor, fully executed by such Obligor, such application to be in a
         form substantially similar to that included in the Credit and
         Collection Policy;

                 (e)  where permitted by law, the original certificate of title
         and otherwise such documents, if any, that the Servicer keeps on file
         in accordance with its customary procedures and the Credit and
         Collection Policy indicating that the Vehicle is owned by the Obligor
         and subject to the interest of Borrower as first lienholder or secured
         party; and

                 (f)      any and all other documents that Borrower, Collateral
         Agent or Servicer keeps on file in accordance with its procedures
         relating to the Contract, Obligor or Vehicle.
<PAGE>   49
                 Finance Charges:  Interest charges, late charges, and other
fees, charges and similar items with respect to Contracts.

                 FirstCity:  FirstCity Financial Corporation, a Delaware
corporation.

                 FIs:  The financial institutions or agencies (except for
Farmers' and Mechanics' Bank, Tammac Corporation and Mellon Bank) which have
entered into respective Loan Origination Agreements with the Borrower.

                 Funding Commitment:  The Funding Commitment dated as of May
17, 1996 by and between FirstCity and Lender

                 GAAP:  Generally accepted accounting principles in effect from
time to time in the United States of America.

                 Governing Instrument:  The trust instrument which created the
Borrower and provides for the governance of its affairs and the conduct of its
business.

                 Governmental Authority:  Any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

                 IBSA:  The Investment Banking Services Agreement dated as of
May 17, 1996 between NAF Corp. and ContiFinancial.

                 Ineligible Contracts:  Any Contract that, subsequent to the
date of the Borrower's acquisition of such Contract, (A) is determined not to
have conformed to the definition of "Eligible Contracts" on such date of
purchase or (B) which has become (x) a Defaulted Contract or (y) a Modified
Contract which the Lender has rejected from the Borrowing Base or (C) as to
which the Servicer has not received the related Lien Certificate by the 136th
day following the date on which the Contract was originated.

                 Insolvency:  With respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of Section 4245 of
ERISA.

                 Interest Period:  With respect to any Payment Date, the prior
calendar month.

                 Lender:  ContiTrade Services L.L.C.

                 Lender Commitment:  $50,000,000, or such other amount agreed
upon in writing by Borrower and Lender.

                 LIBOR:  With respect to any Advance, (x) through the end of
the Interest Period in which such Advance is made, one-month LIBOR on the
related Borrowing Date, and (y) for subsequent Interest Periods, one-month
LIBOR on the first day of such
<PAGE>   50
Interest Period, in either case as published on such date in the Wall Street
Journal.

                 Lien:  Any lien, mortgage, security interest, pledge,
hypothecation, charge, equity, encumbrance or right of any kind whatsoever
(except any lien, mortgage, security interest, pledge, hypothecation, charge,
equity, encumbrance or right of any kind granted under the Credit Agreement
with respect to the Contracts).

                 Liquidated Contract:  A Contract which is a Defaulted Contract
and with respect to which the Borrower has concluded that all Recoveries to be
received in respect of such Contract have been deposited in the Lockbox
Account.

                 Loan:  As defined in subsection 2.1 of the Credit Agreement.

                 Loan Origination Agreement:  The Non-Standard Auto Loan
Origination Agreements, each in substantially the form attached as Exhibit K to
the Credit Agreement (or with such changes from such form as are approved by
the Lender), entered into between the Borrower and an FI pursuant to which the
Borrower agrees to acquire Eligible Contracts, each as form time to time
amended, supplemented or modified.

                 Lock-Box:  Any lock-box or account to which Obligors remit
Collections.

                 Lock-Box Agreement:  As defined in Section 4.1(m) of the 
Credit Agreement.

                 Lock Box Bank:  Any institution at which a Lock-Box is kept.

                 Maximum Loan Amount:  At any time, the lesser of (a)
$50,000,000 and (b) the Borrowing Base.

                 Milco:  Milco Loan Servicing Corporation.

                 Modified Contract:  As defined in Section 2.2(b) of the
Servicing Agreement.

                 Moody's:  Moody's Investors Service, Inc.

                 Multiemployer Plan:  A "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA Affiliates is
making or accruing an obligation to make contributions, or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.

                 NAF Corp.:  National Auto Funding Corporation, a Texas
corporation.

                 NAF Entities:  The Borrower, NAF Corp. and all subsidiaries
(including trusts) of NAF Corp.

                 Net Loss Ratio:  As of any Determination Date, the average,
over the three
<PAGE>   51
most recent Collection Periods, of the product of (a)(i) the principal balance
of all Contracts where (A) the Vehicle has been repossessed and sold, (B) the
Vehicle has been repossessed, and more than 30 days has passed since the end of
the related redemption period, or (C) the Contract is more than 120 days
delinquent or has been written off, less all Recoveries received on each
related Contract (net of associated expenses), in each case during the
preceding Collection Period, divided by (ii) the principal balance of all
Contracts outstanding at the end of such Collection Period and (b) 12.

                 Notice of Borrowing:  As defined in Section 2.3 of the Credit
Agreement.

                 Obligations:  All the unpaid principal amount of, and interest
on (including interest accruing on or after any Bankruptcy Event, whether or
not a claim for post-filing or post-petition interest is allowed in a
proceeding relating thereto, and interest on overdue interest), the Promissory
Note and all other obligations and liabilities of Borrower or any Affiliate of
the NAF Entities to Lender or any Affiliate of Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Promissory Note, the Facility Agreement and any other
document executed and delivered in connection therewith whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to Lender) or otherwise.

                 Obligor:  Each Person who is indebted on a Contract.

                 Outstanding Contract Balance:  On any day, with respect to any
Contract, the principal amount due and owing on such Contract on such day.

                 Outstanding Facility Balance:  On any day, with respect to the
Loan, the outstanding principal amount of the Loan on such day.

                 Owner Trustee:  Delaware Trust Company.

                 Paying Agent:  The Collateral Agent, acting in its capacity as
paying agent under the Paying Agent Agreement.

                 Paying Agent Agreement:  The Paying Agent Agreement dated as
of May 17, 1996 among Borrower, Lender and the Paying Agent.

                 Payment Date:  As defined in Section 2.4 of the Credit
Agreement.

                 PBGC:  The Pension Benefit Guaranty Corporation established
under ERISA.

                 Permitted Investments:  Book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:

        (i) direct obligations of, and obligations fully guaranteed as to timely
<PAGE>   52
         payment by, the United States of America;

                 (ii) demand deposits, time deposits or certificates of deposit
         of any depository institution or trust company incorporated under the
         laws of the United States of America or any state thereof (or any
         domestic branch of a foreign bank) and subject to supervision and
         examination by Federal or State banking or depository institution
         authorities; provided, however, that at the time of the investment or
         contractual commitment to invest therein, the commercial paper or
         other short-term unsecured debt obligations (other than such
         obligations the rating of which is based on the credit of a person
         other than such depository institution or trust company) thereof shall
         have a credit rating from each of S&P and Moody's in the highest
         investment category granted thereby;

                 (iii) commercial paper having, at the time of the investment
         or contractual commitment to invest therein, a rating from each of S&P
         and Moody's in the highest investment category granted thereby;

                 (iv) investments in money market or common trust funds having
         a rating from each of S&P and Moody's in the highest investment
         category granted thereby;

                 (v) demand deposits, time deposits and certificates of deposit
         which are fully insured by the FDIC;

                 (vi) bankers' acceptances issued by any depository institution
         or trust company referred to in clause (ii) above; and

                 (vii) repurchase obligations with respect to any security that
         is a direct obligation of, or fully guaranteed by, the United States
         of America or any agency or instrumentality thereof, the obligations
         of which are backed by the full faith and credit of the United States
         of America, in either case entered into with a depository institution
         or trust company (acting as principal) the deposits of which are
         insured by the FDIC.

                 Person:  An individual, a partnership, a corporation, a
limited liability company, a limited liability partnership, a business trust, a
joint stock company, a trust, an unincorporated association, a joint venture, a
Governmental Authority or other entity of whatever nature.

                 Pipeline Contract:  Any Contract funded directly by an FI
prior to May 17, 1996, and acquired by the Borrower from such FI.

                 Plan:  Any employee benefit plan defined in Section 3(3) of
ERISA in respect of which Borrower or any ERISA Affiliate thereof is or at any
time within the immediately preceding five years was an "employer" as defined
in Section 3(5) of ERISA or may have liability, including liability as a
substantial employer, within the meaning of Section 4063 of ERISA and as a
contributing sponsor under Section 4069 of ERISA.
<PAGE>   53
                 Principal Collections:  Collections other than Finance
Charges.

                 Promissory Note:  The note issued pursuant to Section 2.2 of
the Credit Agreement.

                 Rating Agencies:  Moody's Investors Service, Standard & Poor's
Corporation, Duff & Phelps Credit Rating Service and Fitch Investors Service.

                 Recoveries:  With respect to any Collection Period, the
aggregate amount of all cash received by Borrower during such Collection Period
in respect of any Contract which is a Defaulted Contract including, through the
sale or other disposition of the related Vehicle, proceeds of Insurance
Policies with respect to the related Vehicle, or payments made by or on behalf
of the Obligor, net of amounts that are legally required to be refunded to the
Obligor and net of the Servicer's expenses in connection with such liquidation.

                 Recovery Percentage:  With respect to any Collection Period,
the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Recoveries deposited in the Collection Account during such
Collection Period in respect of Contracts which became Liquidated Contracts
during such Collection Period and the denominator of which is the aggregate
Outstanding Balance of such Liquidated Contracts.

                 Reorganization:  With respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.

                 Reportable Event:  Any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder other than those events as to
which the thirty day notice period is waived under Sections .13, .14, .18, .19
or .20 of PBGC regulation Section 2615.

                 Representations and Warranties:  With respect to any Contract,
the representations and warranties made by an FI (including, for this purpose,
Tammac Corporation, Mellon Bank and Farmers' and Mechanics' Bank) in the
related Loan Origination Agreement.

                 Requirements of Law:  As to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of
such Person and any law, treaty, rule or regulation or determination of any
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.

                 Responsible Officer:  As to any Person, the chief executive
officer, president, vice president-operations, chief financial officer,
controller, secretary or treasurer of a corporation, provided, that (a) with
respect to any certificate to be delivered by a Responsible Officer, such
Responsible Officer shall have personal knowledge of the subject matter of such
certificate, and (b) with respect to any other matter to be
<PAGE>   54
undertaken by a Responsible Officer, such Responsible Officer shall be duly
authorized by all necessary corporate or other action with respect to such
matter.

                 S&P:  Standard & Poor's Ratings Services, a Division of The
McGraw Hill Companies, Inc.

                 SEC:  The Securities and Exchange Commission.

                 Securitization:  As defined in Section 6.14 of the Credit
Agreement.

                 Security and Collateral Agent Agreement:  The Security and
Collateral Agent Agreement dated as of May 17, 1996 among Borrower, Lender and
the Collateral Agent.

                 Servicer:  J-Hawk Servicing Corporation, a Texas corporation.

                 Servicing Agreement:  The servicing agreement dated as of May
17, 1996 among Borrower, the Servicer and the Collateral Agent.

                 Servicing Report:  The report to be delivered by Borrower
pursuant to Section 6.2 of the Credit Agreement, substantially in the form of
Exhibit I thereto.

                 Single-Employer Plan:  A single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (a) is maintained for employees of Borrower
or an ERISA Affiliate thereof and no Person other than the Borrower and their
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower
or any ERISA Affiliate thereof could have liability under Title IV of ERISA in
the event such plan has been or were to be terminated.

                 Subordinated Debt:  Any Debt which (x) is by its terms
subordinated to the Obligations, and (y) provides for a non-petition covenant
against Borrower.

                 Subordinated Lien:  A Lien approved in writing by the Lender,
and which secures any Subordinated Debt.

                 Subsidiary:  As to any Person, any Person of which a Person
owns, directly or indirectly through one or more intermediaries, more than 50%
of the Capital Stock or beneficial interest thereof.

                 Tangible Assets:  All assets of Borrower except:   (i)
deferred assets, other than prepaid insurance and prepaid taxes, (ii) patents,
copyrights, trademarks, trade names, non-compete agreements, franchises and
similar intangibles, (iii) good will, including any amounts, however designated
on the balance sheet of Borrower, representing the excess of the purchase price
paid for assets or stock over the value assigned thereto on the books of
Borrower, (iv) unamortized debt discount and expense, and (v) accounts, notes
and other receivables due from Affiliates or employees.
<PAGE>   55
                 Tangible Net Worth:  At any date means a sum equal to (i) the
net book value (after deducting related depreciation, amortization and other
proper reserves) at which the Tangible Assets of Borrower would be shown on a
balance sheet at such date in accordance with GAAP applied on a consistent
basis, minus (ii) the amount at which the liabilities of Borrower (excluding
Subordinated Debt) would be shown on such balance sheet in accordance with
GAAP, and including as liabilities all reserves, required in accordance with
GAAP, for contingencies and other potential liabilities.

                 Tangible Net Worth Requirement:  The total Tangible Net Worth
of Borrower is equal to at least $4 million.

                 Taxes:  As defined in Section 2.10 of the Credit Agreement.

                 UCC:  The Uniform Commercial Code as in effect in the
specified jurisdiction or, if no jurisdiction is specified, as in effect in the
state whose law, by agreement of the parties, governs the document or agreement
in which the term "UCC" appears.

                 Underwriting Criteria:  The criteria agreed upon for
underwriting Contracts between Borrower and Lender and attached to the Credit
Agreement as Exhibit K.

                 Unmatured Event of Default:  Any of the events specified in
the definition of Event of Default, whether or not any requirement for the
giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.

                 Vehicle:  Any new or used automobile or light truck that
secures a Contract.

                 Vehicle Dealer:  Any seller of automobile or light trucks that
originated one or more of the Contracts and transferred, sold or assigned the
respective Contract, directly or indirectly, to Borrower under a Dealer
Assignment.

                 WAMCO Contract:  Any Contract acquired by the Borrower from
WAMCO XXIII, Ltd.
<PAGE>   56
                                                                       EXHIBIT B

                                PROMISSORY NOTE


                                                              New York, New York
                                                                    May 17, 1996

                 FOR VALUE RECEIVED, the undersigned, N.A.F. Auto Loan Trust, a
Delaware business trust (the "Borrower"), promises to pay to the order of
ContiTrade Services L.L.C. ("Lender"), on the date specified in Section 2.5 of
the Credit Agreement hereinafter referred to, at the office of Lender at 277
Park Avenue, New York, New York, in lawful money of the United States of
America and in immediately available funds, the principal amount of FIFTY
MILLION DOLLARS AND NO CENTS DOLLARS ($50,000,000), or if less, the aggregate
unpaid principal amount of all Advances made by Lender to Borrower pursuant to
the Credit Agreement, and to pay interest at such office, in like money, from
the date hereof on the unpaid principal amount of such Loans from time to time
outstanding at the rate and on the dates specified in Section 2.4 of the Credit
Agreement.

                 Lender is authorized to record, on the schedule annexed
thereto and made a part hereof or on other appropriate records of Lender, the
date and amount of each Loan made by Lender, each continuation thereof, the
interest rate from time to time on each Loan and the date and amount of each
payment or repayment of principal thereof.  Any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure of Lender to make any such recordation (or any error
in such recordation) shall not affect the obligations of Borrower hereunder or
under the Credit Agreement in respect of the Loan.

                 This Promissory Note is the Promissory Note referred to in the
Warehouse Credit Agreement dated as of May 17, 1996 (as amended, supplemented
or otherwise modified and in effect from time to time, the "Credit Agreement")
between Borrower, Lender and NAF Corp., and is entitled to the benefits
thereof.  Capitalized terms used herein without definition have the meanings
assigned to them in the Credit Agreement.

                 This Promissory Note is subject to original and mandatory
prepayment as provided in the Credit Agreement.

                 Upon the occurrence of an Event of Default, the Lender shall
have all of the remedies specified in the Credit Agreement, and Borrower hereby
waives presentment, demand, protest and all notices of any kind.
<PAGE>   57
                 THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.


                                        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:
                                               ----------------------------
                                        Name:  Richard N. Smith
                                        Title: Vice President
<PAGE>   58
                                 Schedule 1 to
                                PROMISSORY NOTE


<TABLE>
<CAPTION>
                                              Interest             Prepayment              Notation
     Date               Principal             on Loans              of Loans                  By   
     ----               ---------             --------             ----------              --------
<S>                  <C>                  <C>                   <C>                    <C>
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
 ------------         --------------        ------------         ---------------         ------------
                                                                                                     
 ------------         --------------        ------------         ---------------         ------------

                                                                                                     
</TABLE>
<PAGE>   59
                                                                       EXHIBIT C



                              NOTICE OF BORROWING



               N.A.F. Auto Loan Trust hereby requests that ContiTrade Services
L.L.C. make a Loan to it on [insert Borrowing Date] in the amount of [amount of
Loan requested] by crediting Texas Commerce Bank Account No. _______ by 4:00
p.m. (New York City time) on [insert Borrowing Date] (capitalized terms used
herein have the meaning assigned to them in the Warehouse Credit Agreement
dated as of May __, 1996 as amended, modified or supplemented from time to
time).  N.A.F.  Auto Loan Trust hereby certifies as of the date hereof that the
representations and warranties made in Section 3 of the Credit Agreement are
true and correct on and as of the Borrowing Date for such Loan, both before and
after giving effect to such Loan.



                                                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:
                                                        -----------------------
                                                Name:   Richard N. Smith
                                                Title:  Vice President
<PAGE>   60
                                                                    Attachment A
                                                          to Notice of Borrowing


                             TRUSTEE'S CERTIFICATE


               The undersigned, [TRUSTEE'S NAME], Trustee of N.A.F. AUTO LOAN
TRUST, a Delaware business trust ("Borrower"), hereby gives this Certificate to
induce CONTITRADE SERVICES, L.L.C. ("Lender") to consummate certain financial
accommodations with Borrower pursuant to the terms of the Warehouse Credit
Agreement (as amended, modified or supplemented from time to time and together
with the schedules and exhibits thereto, the "Credit Agreement") dated as of
May __, 1996.  The undersigned, as Trustee, hereby certifies to Lender that:

               1.      The representations and warranties of Borrower contained
in the Credit Agreement are true and correct in all materials respects on and
as of this day.

               2.      Borrower is in compliance with all of the terms and
provisions set forth in the Credit Agreement required to be complied with or
performed by Borrower on or before the date hereof.

               3.      No Event of Default or Default (as defined in the Credit
Agreement) has occurred and is continuing as of today's date.

               4.      The Collateral is not subject to any Lien, except Liens
created by the Operative Documents.  Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings assigned to them in
the Credit Agreement.

               IN WITNESS WHEREOF, the undersigned has executed and delivered
this Certificate this ______ day of _____________, ____.



                                                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:
                                                        -----------------------
                                                Name:   Richard N. Smith
                                                Title:  Vice President
                                                        N.A.F. AUTO LOAN TRUST



<PAGE>   61
                                                                      Schedule I


                               LIST OF DOCUMENTS