Document:

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                                                                  EXHIBIT 10.116

                  AGREEMENT FOR MONITORING AND BACKUP SERVICING

         THIS AGREEMENT FOR MONITORING AND BACKUP SERVICING, dated as of
September 1, 1999 (as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
hereof, this "Agreement"), among National Auto Finance Company, Inc. ("NAFI" or
the "Servicer," formerly National Auto Finance Company L.P.), CSC Logic/MSA LLP
d/b/a Loan Servicing Enterprise, a Texas limited liability partnership ("LSE",
or the "Backup Servicer"), and FINANCIAL SECURITY ASSURANCE INC., a monoline
insurance company incorporated under the laws of the State of New York, as
certificate insurer or insurer, as applicable ("Insurer" or "FSA").

                               W I T N E S S E T H

         WHEREAS, the parties enter into this Agreement with respect to and in
connection with the Sale and Servicing Agreement, dated as of September 1, 1999,
among National Financial Auto Funding Trust, NAFI, Harris Trust and Savings
Bank, as Trust Collateral Agent and Backup Servicer ("Harris") and the National
Auto Finance 1999-1 Trust (the "Trust"), (such agreement, as may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms thereof, the "Sale and Servicing Agreement"); and

         WHEREAS, Harris serves as backup servicer under the Sale and Servicing
Agreement (in such capacity, the "S&SA Backup Servicer"); and

         WHEREAS, the parties to this Agreement desire to appoint LSE as backup
servicer with respect to the Trust; and

         WHEREAS, LSE desires to be appointed as backup servicer in accordance
with the terms hereof; and

         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the adequacy and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01 Defined Terms. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them as set forth in the
Sale and Servicing

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Agreement. Wherever used in this Agreement, the following words and phrases
shall have the following meanings:

         "Backup Servicer" or "LSE" means CSC Logic/MSA LLP d/b/a Loan Servicing
Enterprise, a Texas registered limited liability partnership, in its capacity as
backup servicer hereunder.

         "Collection Records" means all manually prepared or computer generated
records related to collection efforts or payment histories with respect to the
Receivables.

         "Controlling Class" means holders of not less than 51% of the
outstanding balance of the Class A Notes, or if the Class A Notes are not
outstanding, holders of not less than 51% of the outstanding balance of the
Class B Notes.

         "Controlling Party" means (x) the Insurer, so long as (i) the Class A
Notes shall be outstanding or amounts owing to the Insurer have not been paid to
it and (ii) no Insurer Default shall have occurred and be continuing, and (y)
the Controlling Class, in the event (i) the Class A Notes shall no longer be
outstanding, all amounts owing to the Insurer have been paid to it and the term
of the Class A Note Policy shall have expired or (ii) an Insurer Default shall
have occurred and be continuing.

         "Distribution Date" means with respect to each Due Period, the twenty
first day of the following calendar month, or if such day is not a Business Day,
the immediately following Business Day.

         "Draw Date" means with respect to any Distribution Date, the fourth
Business Day immediately preceding such Distribution Date.

         "Due Period" means with respect to any Distribution Date, the period
from and including the first day of the calendar month preceding the month in
which such Distribution Date occurs to and including the last day of the
calendar month preceding the month of such Distribution Date.

         "Independent Accountants" means a firm of nationally recognized
independent certified public accountants.

         "Insurer" means Financial Security Assurance Inc., a monoline insurance
company incorporated under the laws of the State of New York, or any successor
or assign thereto.

         "Insurer Default" means an Insurer Default (as defined in the Sale and
Servicing Agreement).

         "Monthly Records" means all records and data maintained by the Servicer
with respect to the Receivables, including the following with respect to each
Receivable: the account number; the originating Dealer; Obligor name; Obligor
address; Obligor home phone number; Obligor business phone number; the name,
address and telephone number

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of the co-borrower, if any; original Principal Balance; original term; Annual
Percentage Rate; current Principal Balance; current remaining term; origination
date; first payment date; a field identifying each contract as either a simple
interest or Rule-of-78's contract; final scheduled payment date; next payment
due date; date of most recent payment; new/used classification; collateral
description, including vehicle identification, make, model and year; days
currently delinquent; number of contract extensions to date; amount of Scheduled
Payment (as defined in the Sale and Servicing Agreement); current Insurance
Policy (as defined in the Sale and Servicing Agreement); expiration date; and
past due late charges.

         "Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.

         "Policy" means the Note Policy (as defined in the Sale and Servicing
Agreement).

         "Principal Balance" means Principal Balance (as defined in the Sale and
Servicing Agreement).

         "Receivable" means a Receivable (as defined in the Sale and Servicing
Agreement).

         "S&SA Backup Servicer" means Harris Trust and Savings Bank in its
capacity as the backup servicer under the Sale and Servicing Agreement.

         "Servicer" means National Auto Finance Company, Inc., a Delaware
corporation with its corporate headquarters in Jacksonville, Florida.

         "Servicer Termination Event" means a Servicer Termination Event (as
defined in the Sale and Servicing Agreement).

         "Servicer's Certificate" means the monthly certificate or report
delivered by the Servicer with respect to the Receivables on or prior to each
Reporting Date substantially in the form attached as Exhibit B to the Sale and
Servicing Agreement.

         "Servicing Transfer Date" means the agreed upon date on which the
Backup Servicer assumes all rights, responsibilities, and duties of the
Servicer.

         "Servicing Transfer Notification" shall have the meaning set forth in
Section 3.01 of this Agreement.

         "Spread Account Amount" means those amounts on deposit in the Spread
Account established in accordance with the Sale and Servicing Agreement.

         "Transaction Documents" shall have the meaning assigned to it in the
Sale and Servicing Agreement.

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         "Trust" shall have the meaning set forth in the Sale and Servicing
Agreement.

         "Trustee" or "Trust Collateral Agent" means Harris Trust and Savings
Bank in its capacity as Trustee or Trust Collateral Agent, as applicable, under
the Sale and Servicing Agreement.

                                   ARTICLE II

                             OVERSIGHT OF SERVICING

         Section 2.01 Requirements of Servicer and Backup Servicer; Monthly
Tape.

                  (a) On or before the fourth Business Day, but in no event
later than the fifth calendar day, of each month, commencing in October 1999,
the Servicer will deliver to each of the Trustee, the Insurer (upon request),
such Noteholders holding 5% or more of the Note Balance of any Class of Notes
(upon written request) and the Backup Servicer a computer tape or a diskette (or
any other electronic transmission acceptable to each of the Trustee, the Insurer
(if requested by the Insurer) and the Backup Servicer) in a format acceptable to
each of the Trustee, the Backup Servicer and the Insurer (if requested by the
Insurer) containing the information with respect to the Receivables as of the
preceding Determination Date (the "Monthly File") necessary for preparation of
the Servicer's Certificate relating to the immediately succeeding Reporting Date
and necessary to determine the application of the collections as provided in the
Sale and Servicing Agreement. The Backup Servicer shall use the information
contained in the Monthly File to verify the Servicer's Certificate delivered by
the Servicer pursuant to the Sale and Servicing Agreement, and commencing in
October 1999, the Backup Servicer shall notify the Servicer of any discrepancies
within three Business Days of receipt by the Backup Servicer of such Servicer's
Certificate. In the event that the Backup Servicer reports any discrepancies,
the Servicer and the Backup Servicer shall attempt to reconcile any material
discrepancies prior to the related Distribution Date; provided, however, that in
the absence of a reconciliation prior to the related Draw Date, the Backup
Servicer shall certify to the Controlling Party and the Trustee on such Draw
Date that such discrepancies remain unreconciled. In the absence of a
reconciliation prior to the related Distribution Date, the applicable Servicer's
Certificate shall control for the purpose of calculations and distributions with
respect to such related Distribution Date. In the event that the Backup Servicer
and the Servicer are unable to reconcile discrepancies with respect to a
Servicer's Certificate by the related Distribution Date, the Servicer shall
cause the Independent Accountants, at the Servicer's expense, to audit such
Servicer's Certificate and, prior to the Distribution Date for the month
following the month in which such Servicer's Certificate was delivered,
reconcile the discrepancies. The effect, if any, of such reconciliation shall be
reflected in the Servicer's Certificate next succeeding the Servicer's
Certificate with respect to which such discrepancies were noted. In addition,
upon the occurrence of a Servicer Termination Event the Servicer shall, if so
requested by the Controlling Party or the Backup Servicer, deliver to the
Controlling Party (if requested by the Controlling Party) and Backup Servicer
(i) within three Business Days of demand

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therefore a computer tape or a diskette (or any other electronic transmission
acceptable to the Controlling Party (if requested by the Controlling Party) and
the Backup Servicer) in a format acceptable to the Controlling Party (if
requested by the Controlling Party) and the Backup Servicer containing as of the
close of business on the date of demand all of the data maintained by the
Servicer in computer format in connection with servicing the Receivables and
(ii) within five (5) calendar days true and correct copies of all other
Collection Records and Monthly Records. Other than the duties specifically set
forth in this Agreement, the Backup Servicer shall have no obligations
hereunder, including, without limitation, to supervise, verify, monitor or
administer the performance of the Servicer. The Backup Servicer shall have no
liability for any actions taken or omitted by the Servicer. With respect to
Section 4.15 of the Sale and Servicing Agreement, this section shall apply in
substitution and replacement of such sections for purposes of such Sale and
Servicing Agreement.

                  (b) The Servicer's performance of its obligations under this
Agreement shall in no way relieve the Servicer of its obligations under the
Servicing Agreements.

                  (c) The Backup Servicer's performance of its obligations under
this Agreement shall in no way relieve the Servicer of its obligations under the
Sale and Servicing Agreement or relieve the S&SA Backup Servicer of its
obligations under the Sale and Servicing Agreement.

                  (d) The Backup Servicer shall consult fully with the Servicer
as may be necessary from time to time to perform or carry out the Backup
Servicer's obligations hereunder and Servicer shall cooperate with the Backup
Servicer in such consultation. The Servicer shall execute, deliver and/or
provide to the Backup Servicer from time to time as requested by the Backup
Servicer or Controlling Party such documents, tapes or materials as shall be
reasonably necessary or desirable for the Backup Servicer to perform its duties
hereunder and to complete any servicing transaction or transfer contemplated
hereby.

         Section 2.02 Duties of the Backup Servicer. In addition to, and not in
limitation of, the duties otherwise required by this Agreement, the Backup
Servicer agrees to perform the duties specified in Exhibit A hereto.

         Section 2.03 Authority of the Backup Servicer. In performing its duties
hereunder, the Backup Servicer shall have full power and authority to do or
cause to be done any and all things in connection with such backup servicing and
administration which it may deem necessary or desirable in the best interest of
the Trustee, Insurer and the Servicer, to the extent that such interest does not
conflict with the interest of the Trustee or the Insurer. In the event that
Backup Servicer, in its sole discretion, determines that there is a conflict of
interest between the Trustee, the Insurer and the Servicer, the Backup Servicer
shall defer to the interests of the Trustee and the Insurer.

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         Section 2.04 Pre-Transfer Standard of Care. In performing its duties
and obligations hereunder pursuant to this Agreement prior to a transfer of
servicing, the Backup Servicer will comply with all applicable state and federal
laws and will exercise that degree of skill and care consistent with the degree
of skill and care that the Backup Servicer exercises in its capacity as backup
servicer in similar transactions and, if more exacting, with prudent industry
standards for backup servicers performing only the functions set forth herein,
and will apply in performing such duties and obligations, those standards,
policies and procedures consistent with the standards, policies and procedures
the Backup Servicer applies in its capacity as backup servicer in similar
transactions and the standards, policies and procedures giving due consideration
and, if more exacting, to the prudent industry standards for backup servicers
performing only the functions set forth herein. In performing its duties and
obligations hereunder, the Backup Servicer shall maintain all state and federal
licenses, permits, qualifications and franchises necessary for it to perform its
servicing responsibilities hereunder, and shall not impair the rights of Trustee
or the Trust in the Receivables.

         Section 2.05 Reliance; Duty to Examine Liability. (a) In the absence of
bad faith, gross negligence or willful misconduct on its part, the Backup
Servicer may conclusively rely on the written advice of counsel (and shall be
fully protected in such reliance) respecting any matters arising under this
Agreement or any other Transaction Documents and, as to the truth of the
statements in any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement or
the Sale and Servicing Agreement or any other Transaction Documents and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Backup Servicer and conforming to the requirements of this
Agreement (other than the Servicer's Certificate, the Backup Servicer's
obligations with respect to which are set forth in Section 2.01 hereof); but in
the case of any such certificates or opinions, which by any provision hereof are
specifically required to be furnished to the Backup Servicer, the Backup
Servicer shall be under a duty to examine the same and to determine whether or
not they conform to the requirements hereof.

                  (b) The Backup Servicer in its capacity as such shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or under the Sale and
Servicing Agreement, or in the exercise of any of its rights or powers in its
capacity as the Backup Servicer, if the repayment of such funds or adequate
written indemnity against such risk or liability is not reasonably assured to it
in writing prior to the expenditure or risk of such funds or incurrence of
financial liability. Notwithstanding anything in this Agreement to the contrary,
the Backup Servicer in its capacity as such shall not be liable for any
obligation of the Servicer contained in this Agreement or the Sale and Servicing
Agreement and the Insurer shall look only to the Servicer to perform such
obligations. The Backup Servicer in its capacity as such shall perform such
duties and only such duties as are specifically set forth in this Agreement and
shall not be bound by the terms of the Sale and Servicing Agreement or any other
Transaction Documents.

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                  (c) The Backup Servicer in its capacity as such shall not be
under any obligations to appear in, prosecute or defend any legal action that is
not incidental to its duties hereunder and that in its reasonable opinion may
involve it in any expense or liability; provided, however, that the Backup
Servicer in its capacity as such may, but shall not be obligated to, take any
such action that is reasonable and that may be necessary or desirable in respect
of this Agreement and the rights and duties of the parties hereto. If any such
proposed action is commenced, the legal expenses and costs of such action and
any liabilities resulting therefrom shall be expenses, costs and liabilities of
the Servicer, and the Backup Servicer shall be entitled to be reimbursed
therefor by the Servicer.

                  (d) Neither the Backup Servicer in its capacity as such nor
any of its officers, directors, employees or agents shall be liable for any
action taken or omitted under this Agreement or in connection therewith except
to the extent caused by the Backup Servicer's gross negligence, bad faith or
willful misconduct. Each party hereto (for itself and any person or entity
claiming through it) hereby releases, waives, discharges, exculpates and
covenants not to sue the Backup Servicer in its capacity as such for any action
taken or omitted under this Agreement except to the extent caused by the Backup
Servicer's gross negligence, bad faith or willful misconduct.

                  (e) The Backup Servicer in its capacity as such will not be
responsible for delays attributable to the Servicer's failure to deliver
information, defects in the information supplied by the Servicer or other
circumstances beyond the control of the Backup Servicer. The Backup Servicer in
its capacity as such shall have no responsibility, shall not be in default and
shall incur no liability (i) for any act or failure to act by any third party,
including the Servicer or the Controlling Party, or for any inaccuracy or
omission in a notice or communication received by the Backup Servicer from any
third party or (ii) which is due to or results from the invalidity or
unenforceability of any Receivable or noncompliance of the underlying contract
with applicable law or the breach or the inaccuracy of any representation or
warranty made with respect to any Receivable.

         Section 2.06 Backup Servicing Fee.

                  (a) The Backup Servicer shall be paid a one-time acceptance
fee of $1,000 payable by Servicer on the date hereof.

                  (b) For initial General Setup, as set forth in Exhibit A,
Backup Servicer shall be owed a one-time fee of 6,500, payable by Servicer on
the date hereof.

                  (c) Legal fees of the Backup Servicer associated solely with
the drafting and negotiating of this Agreement will be charged and paid by
Servicer at the actual cost to the Backup Servicer, a maximum of which shall be
$5,000.

                  (d) The Servicer shall be charged and shall pay to the Backup
Servicer a monthly fee at a rate of $1,000 per month for the Trust pursuant to
the Sale and Servicing

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Agreement for the services provided by the Backup Servicer under Section 2.01
above and Exhibit A. Any monthly fee assessed pursuant to this subsection (e)
includes a total of fifteen (15) hours of technical support, per Trust, of
Backup Servicer's personnel time. For Backup Servicer personnel time in excess
of such fifteen (15) hours, the Backup Servicer will be entitled to charge the
Servicer its then prevailing hourly rate; provided, however, that the Backup
Servicer will notify the Servicer when the Backup Servicer has performed ten
(10) hours of such work. The Backup Servicing Fee shall be payable monthly by
the 21st day following the Due Period for which the charges relate. In the event
payment is not received within 30 days of the Distribution Date, an interest
charge of 1.5% per month on any outstanding balance will incur.

                  (e) In the event of a Servicing Transfer Notification in
Section 3.01 (as hereinafter defined), from and after the date the Backup
Servicer assumes the servicing duties pursuant to the terms of Section 3.01, the
backup servicing fee will no longer accrue or be owed by Servicer to LSE;
provided, however, that all fees owed to Backup Servicer have been paid current.

                                  ARTICLE III

                              TRANSFER OF SERVICING

         SECTION 3.01 Backup Servicer Assumption of Servicer Duties.

                  (a) Upon the occurrence of a Servicer Termination Event and at
the written request of the Controlling Party and with the reasonable cooperation
of the Servicer, the Backup Servicer will convert the existing Receivables to
the Backup Servicer's systems and commence servicing of the Receivables. The
Controlling Party and the Backup Servicer shall mutually agree upon a date (the
"Servicing Transfer Date") on which the Servicer will cease all servicing
activities and on which the Backup Servicer shall assume all servicing duties
and shall provide the Trustee with written notification of such Servicing
Transfer Date; provided that, the Backup Servicer shall be required to agree to
a date proposed by the Controlling Party which is within 45 calendar days of the
date of receipt of a Servicing Transfer Notice (the "Maximum Transfer Date"). It
is intended that no later than the Servicing Transfer Date, the Controlling
Party and LSE (along with such other parties as are necessary to effectuate such
agreement) shall enter into a mutually satisfactory servicing agreement under
which LSE will service the existing Receivables; provided however, that if by
the Maximum Transfer Date such parties shall not have entered into such an
agreement, then from the Maximum Transfer Date until such date as such an
agreement is entered into, the Backup Servicer shall service the Receivables
substantially in accordance with the terms and conditions with respect to LSE as
successor servicer and to those methods described in the Assumption Agreement,
dated as of March 1, 1999, by and among LSE, OHA Auto Receivables, Inc. ("OHA")
and Norwest Bank, National Association ("Norwest"), relating to the Pooling and
Servicing Agreement dated as of May 26, 1998 by and among OHA, OHA Financial,
Inc. and Norwest.

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                  (b) The Servicer agrees to cooperate fully and promptly in
providing the Backup Servicer with such information as is necessary for the
Backup Servicer to assume the servicing duties pursuant to this Section 3.01 and
will provide reasonable access to the Servicer's premises as requested by the
Backup Servicer or the Controlling Party in connection with such conversion. LSE
will promptly notify the Controlling Party and the Trustee of any failure of the
Servicer to cooperate and LSE shall not be liable to any party for a failure to
complete its timely assumption of servicing duties if such failure is the result
of such failure of the Servicer to cooperate.

         SECTION 3.02 Indemnity to Backup Servicer. The Backup Servicer will be
indemnified from and against all claims, damages, losses or expenses reasonably
incurred by the Backup Servicer (including reasonable attorneys' fees and
expenses), arising out of claims asserted against the Backup Servicer by third
parties arising out of or based upon any matter related to or arising out of
this Agreement to the extent the act or omission giving rise to the claim occurs
before the Servicing Transfer Date, except for any claims, damages, losses or
expenses arising from the Backup Servicer's own gross negligence, bad faith or
willful misconduct. All amounts due to the Backup Servicer as indemnification
pursuant to this Section 3.02 shall be payable (i) first, by the Servicer; and
(ii) second, from the Spread Account Amounts.

         SECTION 3.03 Indemnity by Backup Servicer. The Backup Servicer will
indemnify the Servicer, the Trustee and the Insurer from and against all claims,
damages, losses or expenses reasonably incurred by the Servicer, the Trustee or
the Insurer (including reasonable attorneys' fees), arising out of claims
asserted against the Servicer, the Trustee or the Insurer by third parties
arising out of or based upon the Backup Servicer's negligence or wrongful acts
only to the extent the act or omission giving rise to the claim occurs before
the Servicing Transfer Date, except for any claims, damages, losses or expenses
arising from the Servicer's or the Trustee's own negligence or the Insurer's own
gross negligence, bad faith or willful misconduct.

         SECTION 3.04 Conversion and Post-Conversion Fees. The Backup Servicer
shall be paid on the Servicing Transfer Date a portfolio conversion fee of an
amount per then outstanding active loan to be mutually agreed upon by the
Controlling Party and the Backup Servicer at the time of such conversion. After
the Servicing Transfer Date and pursuant to any mutually satisfactory servicing
agreement executed pursuant to Section 3.01, LSE shall be paid a monthly ongoing
servicing fee as more fully set forth in such servicing agreement.

         SECTION 3.05 Limitation of Liability. In conjunction with the
conversion, upon the occurrence of a Servicing Termination Event, LSE is
authorized to accept and rely (except to the extent that management personnel of
the Backup Servicer have actual knowledge of the inaccuracy thereof) on all the
accounting, records and work of the

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Servicer, and LSE shall have no duty, responsibility, obligation, or liability
(collectively, "Liability") for the acts or omissions of Servicer.

         SECTION 3.06 Continued Errors. Except as provided in this Agreement,
LSE may accept and reasonably rely on all accounting, records and work of the
Servicer without audit, and LSE shall have no Liability for the acts or
omissions of the Servicer. If any error, inaccuracy or omission (collectively,
"Errors") exists in any information received from the Servicer, and such Errors
should cause or materially contribute to LSE making or continuing any Errors
(collectively, "Continued Errors"), LSE shall have no Liability for such
Continued Errors; provided, however, that this provision shall not protect LSE
against any Liability which would otherwise be imposed by reason of willful
misconduct, bad faith or gross negligence in discovering or correcting any Error
or in the performance of its or their duties hereunder or under this Agreement.
In the event LSE becomes aware of Errors or Continued Errors, LSE shall, with
the prior consent of the Controlling Party, use its best efforts to reconstruct
and reconcile such data as is commercially reasonable to correct such Errors and
Continued Errors and prevent future Continued Errors. LSE shall be entitled to
recover its costs thereby expended from the Servicer.

         SECTION 3.07 Cooperation of the Trustee, the Insurer and the Servicer.
In the event of a servicing transfer pursuant to a Servicing Transfer
Notification, the Servicer agrees to assist LSE in a reasonable manner with the
transfer of servicing, and the Insurer agrees to use its reasonable best efforts
to obtain the Servicer's assistance and cooperation to the extent possible and
consistent with the Controlling Party's other agreements with the Servicer.
Except as may be otherwise provided, it is expressly agreed and understood that
LSE is not responsible for any vendor payments owed by the Servicer which LSE
reasonably believes beneficial to the completion of the systems conversion and
portfolio transfer, except that LSE shall inform the Controlling Party of any
such vendor payments. In the event LSE incurs any expenses for vendor payments
in connection with the systems conversion and portfolio transfer, such expenses
shall constitute servicing transition expenses.

                                   ARTICLE IV

                                   TERMINATION

         SECTION 4.01 Merger or Consolidation or Similar Action by Backup
Servicer. Any Person (i) into which the Backup Servicer may be merged or
consolidated, resulting from any merger or consolidation to which the Backup
Servicer shall be a party, (ii) which acquires by conveyance, transfer or lease
substantially all of the assets of the Backup Servicer, or (iii) succeeding to
the business of the Backup Servicer, in any of the foregoing cases shall execute
and deliver to each of the Servicer and the Controlling Party an agreement of
assumption to perform every obligation of the Backup Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of

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any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding. The Backup Servicer or its successor hereunder shall
provide the Servicer, the Trustee, the Noteholders and the Insurer with prompt
notice of any such transaction. Nothing contained in this Section shall be
deemed to release the Backup Servicer from any obligation under this Agreement.

         SECTION 4.02 Backup Servicer Not to Resign.

                  (a) The Backup Servicer shall not resign from the obligations
and duties imposed on it by this Agreement except (i) upon a determination that
by reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would have a material adverse effect on the Backup Servicer and the
Insurer does not elect to waive the obligations of the Backup Servicer to
perform the duties which render it legally unable to act or to delegate those
duties to another Person or (ii) with the prior written consent of the
Controlling Party in its sole discretion.

                  (b) Any such determination permitting the resignation of the
Backup Servicer pursuant to clause (i) of subparagraph (a) above shall be
evidenced by an Opinion of Counsel to such effect delivered and acceptable to
the Trustee or Trust Collateral Agent, as applicable, and the Controlling Party.
No resignation of the Backup Servicer under this Agreement shall become
effective until an entity acceptable to the Controlling Party shall have assumed
the responsibilities and obligations of the Backup Servicer hereunder; provided,
however, that in the event a successor backup servicer is not appointed within
60 days after the Backup Servicer has given notice of its resignation and has
provided an Opinion of Counsel, if so required hereunder, the Backup Servicer
may petition a court for the appointment of a successor.

         SECTION 4.03 Termination.

                  (a) The Controlling Party may elect to remove the Backup
Servicer upon the occurrence of any of the following conditions:

                  (i) The termination of the Sale and Servicing Agreement;

                  (ii) The Controlling Party terminates the Backup Servicer as
         Backup Servicer hereunder, which termination may be effected either
         immediately with cause or upon 60 days notice to the Backup Servicer
         and the Trustee without cause;

                  (iii) The entry with respect to the Backup Servicer of a
         decree or order for relief by a court or agency or supervisory
         authority having jurisdiction under any present or future federal or
         state bankruptcy, insolvency or similar law;

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                  (iv) A conservator, receiver or liquidator is appointed with
         respect to the Backup Servicer in any insolvency, readjustment of debt,
         marshaling of assets and liabilities or similar proceedings; or

                  (v) The Backup Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of any applicable insolvency or reorganization statute, make
         an assignment for the benefit of its creditors or voluntarily suspend
         payment of its obligations.

                  (b) The Backup Servicer will be allowed to terminate its
obligations under this Agreement if it does not receive any payment required to
be made under the terms of this Agreement, which failure continues unremedied
for a period of 30 Business Days after written notice of such failure shall have
been given to the Trustee, the Insurer, the Noteholders and the Servicer and
which notice shall state the intent of the Backup Servicer to terminate its
obligations hereunder in the event of non-payment after 30 Business Days.

         SECTION 4.04 Effect of Removal.(a) (a) Upon removal of LSE as Backup
Servicer hereunder, prior to the transfer of servicing to the S&SA Backup
Servicer, it is expressly agreed that the parties are under no obligation to
enter into an agreement whereby LSE will become successor Servicer under the
Sale and Servicing Agreement.

                  (b) Notwithstanding anything to the contrary herein, in the
event that: (i) the Backup Servicer either resigns or is terminated, pursuant to
Sections 4.02 or 4.03 hereof respectively, and (ii) the Servicer shall have
either previously or concurrently be terminated, then the Backup Servicer, in
the event of its resignation, or the Controlling Party, in the event of the
termination of the Backup Servicer by the Controlling Party, shall notify the
S&SA Backup Servicer at least four weeks prior to the date of such resignation
or termination, as applicable. In the event that such notice shall not be
delivered by the Backup Servicer or Controlling Party, as applicable, to the
S&SA Backup Servicer with such four week advance notice, then such resignation
or termination shall not become effective until such four week period has
elapsed.

                                   ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF BACKUP SERVICER

         SECTION 5.01 Insurance Coverage. The Backup Servicer shall at all times
maintain an errors and omissions insurance policy providing coverage in an
amount of not less than $1,000,000 and a fidelity bond in an amount of not less
than $100,000, in such form as is customary for loan servicers acting in respect
of consumer loans on behalf of institutional investors therein.

         SECTION 5.02 Representations and Warranties of the Backup Servicer. The
Backup Servicer hereby represents, warrants and covenants to the Insurer, the
Trustee and

                                                                              12
<PAGE>   13

the Servicer that as of the date of this Agreement or as of such date
specifically provided herein;

                  (a) The Backup Servicer is a limited partnership duly
organized and validly existing under the laws of the State of Texas;

                  (b) All necessary partnership, regulatory or other similar
action has been taken to authorize and empower the Backup Servicer and the
officers or representatives acting on the Backup Servicer's behalf, and the
Backup Servicer has full power and authority, and the legal right, to execute,
deliver and perform this Agreement;

                  (c) This Agreement has been duly authorized, executed and
delivered by the Backup Servicer and the performance and compliance with the
terms of this Agreement will not conflict with, result in any breach of the
terms and provisions of, or constitute (with or without notice, lapse of time or
both) a default under the Backup Servicer's partnership agreement any material
contract, indenture, lease, credit agreement or any other agreement or
instrument to which the Backup Servicer is a party or which may be applicable to
the Backup Servicer or any of its assets and will not result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument (other than the Agreement);

                  (d) This Agreement shall constitute a legal, valid, and
binding obligation of the Backup Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law;

                  (e) The Backup Servicer is duly licensed and qualified to
transact business and is in good standing under the laws of each state in which
such qualification is required to perform the functions specified herein and
this Agreement constitutes a valid, legal and binding obligation of the Backup
Servicer, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of equity;

                  (f) The Backup Servicer is not in violation of, and the
execution, delivery and performance of this Agreement by the Backup Servicer
will not constitute a violation with respect to any order or decree of any court
or any order, regulation or demand of any federal, state, municipal or
governmental agency, which violation might have consequences that would
materially and adversely affect the condition (financial or other) of operations
of the Backup Servicer or its properties or might have consequences that would
affect the performance of its duties hereunder;

                  (g) No proceeding of any kind, including but not limited to
litigation, arbitration, judicial or administrative, is pending or threatened
against or contemplated by the Backup Servicer (A) asserting the invalidity of
this Agreement, (B) seeking to prevent

                                                                              13
<PAGE>   14

the consummation of any of the transactions contemplated by this Agreement, or
(C) seeking any determination or ruling that would under any circumstances have
an adverse effect on the execution, delivery, performance or enforceability of
this Agreement;

                  (h) No information, certificate of an officer, statement
furnished in writing or report delivered to Servicer, Trustee or the Insurer, or
if applicable any escrow agent, by the Backup Servicer will, to the knowledge of
the Backup Servicer, contain any untrue statement of a material fact or omit a
material fact necessary to make the information, certificate, statement or
report not misleading; and

                  (i) All approvals, authorizations, consents, orders or other
actions of any Person, corporation or other organization, or of any court,
governmental agency or body or official, required in connection with the
execution and delivery of this Agreement by the Backup Servicer have been or
will be taken or obtained on or prior to the date hereof.

         SECTION 5.03 Representations and Warranties of the Servicer. The
Servicer hereby represents, warrants and covenants to the Backup Servicer and
the Insurer that as of the date of this Agreement or as of such date
specifically provided herein:

                  (a) The Servicer is a corporation duly organized and in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are owned and
such business is presently conducted;

                  (b) The Servicer has the power and authority to execute and
deliver this Agreement and to carry out its terms; and the execution, delivery,
and performance of this Agreement have been duly authorized by the Servicer by
all necessary corporate action;

                  (c) This Agreement shall constitute a legal, valid, and
binding obligation of the Servicer enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law;

                  (d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms thereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Servicer, or to the best knowledge of the
Servicer, after reasonable investigation, any indenture, agreement, or other
instrument to which the Servicer is a party or by which it shall be bound; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other instrument
(other than the Agreement); nor violate any law or, to the best knowledge of the
Servicer, any order, rule, or regulation applicable to the Servicer of any court
or of any federal or state regulatory body,

                                                                              14
<PAGE>   15

administrative agency, or other governmental instrumentality having jurisdiction
over the Servicer or its properties; and

                  (e) Except with respect to the pending shareholder class
action complaints against the Servicer or any amendments thereto, there are no
proceedings or investigations pending or, to the best knowledge of the Servicer,
threatened before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Servicer or its
properties (a) asserting the invalidity of this Agreement, (b) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, or (c) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its obligations under, or
the validity or enforceability of, this Agreement.

         SECTION 5.04 Survival of Representations and Warranties. The
representations and warranties set forth in this Article V are continuous and
shall survive the date of this Agreement. Upon discovery by the Insurer, the
Trustee, the Servicer or the Backup Servicer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties.

                                   ARTICLE VI

                                  MISCELLANEOUS

         SECTION 6.01 Waivers. The provisions of this Agreement may only be
waived by written consent of the party making the waiver. The failure of any
party at any time to require performance by another party of any provision of
this Agreement shall in no way affect that party's right to enforce such
provision, nor shall the waiver by any party of any breach of any provision of
this Agreement be taken or held to be a waiver of any further breach of the same
provision or any other provision.

         SECTION 6.02 Effect of Agreement. Except as expressly set forth herein,
this Agreement shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of any of the parties to
the Sale and Servicing Agreement under the Sale and Servicing Agreement, nor
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Sale and Servicing
Agreement, all of which are hereby ratified and affirmed in all respects by the
parties hereto and shall continue in full force and effect.

         SECTION 6.03 Effectiveness of Agreement. This Agreement shall become
effective as of the date first above written when counterparts hereof executed
and delivered on behalf of each party hereto shall have been received by the
Insurer.

         SECTION 6.04 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered personally
or mailed by first-class registered or certified mail, postage prepaid, or by
telephonic facsimile

                                                                              15
<PAGE>   16

transmission and overnight delivery service, postage prepaid, in any case
addressed as follows:

To the Backup Servicer:      Loan Servicing Enterprise
                             9330 LBJ Freeway, Suite 500
                             Dallas, Texas  75343-3429
                             Attn:  John Kilgore
                             TEL:  (972) 238-1898
                             FAX: (972) 783-3532

To Insurer:                  Financial Security Assurance Inc.
                             350 Park Avenue
                             New York, New York  10022
                             Attn: Errol Uhr
                             TEL:     (212) 826-0100
                             FAX:  (212) 339-3518

To Servicer:                 National Auto Finance Company, Inc.
                             10302 Deerwood Park Blvd., Suite 100
                             Jacksonville, Florida  32256
                             Attn:  Keith B. Stein
                             TEL: (904) 996-2548
                             FAX: (904) 996-2557

To Trustee:                  Harris Trust and Savings Bank
                             311 West Monroe Street, 12th Floor
                             Chicago, Illinois  60606
                             Attn:  Indenture Trust Administration
                             TEL: (312) 461-4662
                             FAX: (312) 461-3525

Such notice, request, consent or other communication shall be deemed given when
so delivered, or if mailed five days after deposit as aforesaid with the U. S.
Postal Service.

         SECTION 6.05 Rights Cumulative. All rights and remedies under this
Agreement are cumulative, and none is intended to be exclusive of another. No
delay or omission in insisting upon the strict observance or performance of any
provision of this Agreement, or in exercising any right or remedy, shall be
construed as a waiver or relinquishment of such provision, nor shall it impair
such right or remedy. Every right and remedy may be exercised from time to time
and as often as deemed expedient.

         SECTION 6.06 Captions. The article, paragraph and other headings
contained in this Agreement are for reference purposes only, and shall not limit
or otherwise affect the meaning hereof.

                                                                              16
<PAGE>   17

         SECTION 6.07 Legal Holidays. In the case where the date on which any
action required to be taken, document required to be delivered or payment
required to be made is not a Business Day in New York, New York, Dallas, Texas,
Chicago, Illinois or Jacksonville, Florida such action, delivery or payment need
not be made on that date, but may be made on the next succeeding Business Day.

         SECTION 6.08 Relationship of the Parties. The relationship of the
parties to this Agreement is that of independent contractors. Neither this
Agreement nor any of the activities contemplated hereby shall be deemed to
create any partnership, joint venture, agency or employer/employee relationship
between the Backup Servicer, Insurer or Servicer.

         SECTION 6.09 Incorporation of Exhibits. This Agreement shall from time
to time incorporate exhibits which shall be part of this Agreement. All exhibits
attached to this Agreement, at any time and from time to time, and signed by the
parties are hereby incorporated in this Agreement by reference for all purposes.

         SECTION 6.10 Integration. This Agreement, with its exhibits,
constitutes the sole agreement between the parties concerning the subject matter
hereof. All previous agreements between these parties concerning the subject
matter hereof, whether oral or written, have been integrated into this
Agreement.

         SECTION 6.11 Counterparts; Signatures. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument. Signatures to this Agreement obtained via facsimile shall
be valid.

         SECTION 6.12 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS.

         SECTION 6.13 Amendments. This Agreement may be amended from time to
time by the parties hereto with the prior written consent of the Controlling
Party and written notice to the Trustee and NAFI. Any such amendment shall
become effective when counterparts thereof executed and delivered on behalf of
each party thereto shall have been received by the Controlling Party and the
Controlling Party shall have executed a written consent to such amendment.

         SECTION 6.14 Assignment. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained herein,
this Agreement may not be assigned by NAFI, including in its capacity as
Servicer, or LSE, including in its capacity as Backup Servicer, without the
prior written consent of the Controlling Party and written notice to the
Trustee, except as contemplated by Section 4.01 hereof. Notwithstanding

                                                                              17
<PAGE>   18

anything to the contrary contained herein, the assignment or other transfer of
all or any portion of the Servicer or Backup Servicer's rights ("Rights") or
obligations under this Agreement (including, without limitation, its right to
receive all or any part of the Servicing Fee or the Backup Servicing Fee) shall
only be permitted to be transferred to a single transferee and such prospective
transferee must, as a condition to such assignment or other transfer acknowledge
and agree that (i) it has neither acquired nor will it transfer the such Rights
or cause such Rights to be marketed on or through an "established securities
market" within the meaning of Section 7704(b)(1) of the Code, including, without
limitation, an over-the-counter-market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations, (ii) it either (A) is not,
and will not become, a partnership, S corporation or grantor trust for U.S.
federal income tax purposes, or (B) is such an entity, but none of the direct or
indirect beneficial owners of any of the interests in such transferee have
allowed or caused, or will allow or cause, fifty percent (50%) or more of the
value of such interests to be attributable to such transferee's ownership of the
Rights; and (iii) it understands that tax counsel to the Trust has provided an
opinion substantially to the effect that the Trust will not be treated as a
publicly traded partnership taxable as a corporation for U.S. federal income tax
purposes and that the validity of such opinion is dependent in part on the
accuracy of the representations in paragraphs (i) and (ii) above.

         SECTION 6.15 Limitations on Rights of Others; Third Party
Beneficiaries. The provisions of this Agreement are solely for the benefit of
the parties hereto. Any right of the Controlling Party to direct, appoint,
consent to, approve of, or take any action under this Agreement, shall be a
right exercised by the Controlling Party in its sole and absolute discretion.
The Controlling Party may disclaim any of its rights and powers under this
Agreement, including, without limitation, its rights under Section 6.17, upon
delivery of a written notice to the Trustee or Trust Collateral Agent, as
applicable. Nothing in this Agreement, whether express or implied, shall be
construed to give any other Person any legal or equitable right, remedy or claim
in the Owner Trust Estate or Trust Estate, as applicable, or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein;
provided, however, that the Controlling Party is a third-party beneficiary of
this Agreement and is entitled to the rights and benefits granted to it
hereunder.

         SECTION 6.16 Severability. Any provision of this Agreement that 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 provision hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render enforceable
such provision in any other jurisdiction.

         SECTION 6.17 Insurer as Controlling Party. The parties hereby
acknowledge that the Insurer shall have certain rights and powers hereunder as
partial consideration for the issuance of the Policies. The parties hereto
hereby further acknowledge that the Insurer is the Controlling Party under Sale
and the Servicing Agreement as of the date

                                                                              18
<PAGE>   19

hereof. If an Insurer Event of Default shall have occurred and be continuing,
then the Controlling Class shall be the Controlling Party. The Insurer may give
or withhold any consent required hereunder in its sole and absolute discretion.

         SECTION 6.18 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE OR FEDERAL COURT AND (B) IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING. NOTHING IN THIS SECTION 6.18 SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST
ANY OR ALL OF THE OTHER PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTIES IN
THE COURTS OF ANY OTHER JURISDICTION.

         SECTION 6.19 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
ACTIONS OF ANY OF THE PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE
A JURY.

         SECTION 6.20 Backup Servicer Fees and Expenses. In the event that the
Backup Servicer is entitled to payment of any fee or expense hereunder from the
Servicer or under the Sale and Servicing Agreement or Transaction Document, the
Insurer agrees, upon written notice, to pay any such amount which has not been
paid within 30 Business Days of accrual of such fee or expense; provided, that
if prior consent of the Insurer is required before the Backup Servicer incurs
such expenses, such consent has been obtained.

                                                                              19
<PAGE>   20

         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.

                              CSC LOGIC/MSA LLP d/b/a LOAN
                              SERVICING ENTERPRISE, as Backup Servicer

                              By:   /s/ JOHN F. KILGORE
                                  ----------------------------------------------
                              Name:     John F. Kilgore
                                    --------------------------------------------
                              Title:    Executive Director
                                     -------------------------------------------

                              NATIONAL AUTO FINANCE
                              COMPANY, INC., as Servicer

                              By:   /s/ STEPHEN R. VETH
                                  ----------------------------------------------
                              Name:     Stephen R. Veth
                                    --------------------------------------------
                              Title:    Vice President, Secretary and
                                        General Counsel
                                     -------------------------------------------

                              FINANCIAL SECURITY ASSURANCE
                              INC., as to its obligations under Section 6.20
                              only

                              By:   /s/ AUTHORIZED SIGNATURE
                                  ----------------------------------------------
                              Name:
                                    --------------------------------------------
                              Title:
                                     -------------------------------------------

                                                                              20
<PAGE>   21

ACKNOWLEDGED AND ACCEPTED:

FINANCIAL SECURITY ASSURANCE INC.,
as Insurer

By:   /s/ AUTHORIZED SIGNATURE
    ----------------------------------------------
Name:
      --------------------------------------------
Title:
       -------------------------------------------

ACKNOWLEDGED WITH RESPECT
TO SECTION 4.04

Harris Trust and Savings Bank,
as Backup Servicer under the
Sale and Servicing Agreement

By:   /s/ KEITH RICHARDSON
    ----------------------------------------------
Name:     Keith Richardson
      --------------------------------------------
Title:    Assistant Vice President
       -------------------------------------------

                                                                              21
<PAGE>   22

                                    EXHIBIT A
                             BACKUP SERVICING DUTIES

         I.   ONE TIME, UP FRONT DUTIES:

              A.  GENERAL SETUP

                  Obtain Contact List of Personnel
                  Set up Bank Control Record
                  Input Class Codes
                  Set up Record Control Record
                  Establish Customer Service P.O. Box
                  Establish Customer Service 800 #
                  Establish Custodial Bank Accounts
                  Set up Lockbox P.O. Box
                  Set up/Format Welcome Letter
                  Set up/Format Billing Statements
                  Set up Client ID
                  Obtain Prior Servicing and Credit Agreements
                  Obtain Month End Servicer Reports
                  Obtain Trial Balance and List of Receivables
                  Obtain Copies of VSI/Default Insurance Policies

              B.  DATA COLLECTION

                  o        OBTAIN DATA FILES (necessary data listed below)
                           Loan File
                           Name & Address File and Telephone Number
                           Collection Notes
                           Transaction History

                           OBTAIN REPORTS (in order to balance to Data Files)
                           Trial Balance (derived from BNI System)
                           Suspense Account
                           Insurance Tracking Status (when available)
                           Past Due Summary with Detail
                           Aged Delinquency Summary
                           Servicer Report
                           Repossession Report
                           Inventory Report

              C.  DATA MAPPING: RECEIVE TEST FILES AND REPORTS ("0 balance"
                  loans will not be loaded, and Collection Notes and Transaction
                  History will be stored in an electronic file but will not be
                  mapped to the system)

                                                                              22
<PAGE>   23

                  PRELIMINARY MAPPING
                  Loan File
                  Name & Address File

                  INSTALLMENT LOAN (IL) DATA ANALYSIS (testing validity of data)

                  Loan File
                  Name & Address File

                  DEVELOPMENT OF CONVERSION PROGRAM
                  INSTALLMENT LOAN SYSTEM
                           Loan File
                           Name & Address File

                  SYSTEM TESTING (LSE will take output from Conversion Program
                  and load to Test System)

                  IL SYSTEM
                           Loan File
                           Name & Address File

                  PERFORM LOAN VALIDATION SYSTEM BALANCING TO REPORTS,
                  PERFORM TESTING REASONABLENESS
                           Loan File
                           Name & Address File

         II.  MONTHLY SERVICES:

                  o        RECEIVE AND STORE MONTHLY FILES AND REPORTS FROM
                           SERVICER FILES (stored on LSE system and reviewed to
                           ensure completeness on face)
                           Loan File
                           Name & Address File

                  o        RECEIVE AND STORE MONTHLY SERVICER REPORT FROM
                           SERVICER Upon receipt of the Monthly Data File and
                           Monthly Servicer Report, LSE shall compare the two
                           and will: (i) verify the aggregate Outstanding
                           Balance of Receivables at the beginning of the
                           related Collection Period; (ii) verify the number and
                           principal balance of delinquent Receivables at the
                           close of the related Collection Period; and (iii)
                           verify the aggregate Outstanding Balance of
                           Receivables at the close of the related Collection
                           period.

                                                                              23
<PAGE>   24

                  o        RECEIVE, STORE AND REVIEW MONTHLY REPOSSESSION REPORT
                           AND INVENTORY REPORT
                           Monthly Repossession Reports and Inventory Report in
                           order to monitor location and quantity of vehicles in
                           repossession and liquidation.

         III. ADDITIONAL MONTHLY SERVICES:

                  o        RECEIPT, STORAGE AND VERIFICATION OF THE FOLLOWING
                           REPORTS:
                           Trial Balance
                           Suspense Account
                           Insurance Tracking Status
                           Aged Delinquency Summary
                           Month-End Investor Report Validation
                           Repossession Report
                           Inventory Report

                  o        FULL CONVERSION OF LATEST DATA FILE RECEIVED
                           On a monthly basis, Backup Servicer will load the
                           latest Files received from Servicer onto the LSE
                           system and will run a conversion program, test system
                           and verify reports.

                  o        VERIFICATION OF REPORTS
                           Backup Servicer will produce its own reports from the
                           conversion and will compare the information on the
                           reports received from Servicer.

         The above duties may be performed on a more or less frequent basis,
provided that Backup Servicer has received prior written notification from the
Controlling Party requesting such change and that any associated fees (to be
charged to Servicer) have been mutually agreed upon.

                                                                              24<PAGE>   1

                                                                 EXHIBIT 10.117

                    SUPPLEMENT TO BACKUP SERVICING AGREEMENT

         This Supplement, dated as of September 1, 1999, by and among National
Financial Auto Funding Trust ("Funding Trust"), National Auto Finance Company,
Inc. ("NAFI", formerly National Auto Finance Company LP) and Harris Trust and
Savings Bank ("Harris") (the "Supplement") to the Backup Servicing Agreement,
dated as of March 31, 1998, by and among Funding Trust, NAFI and Harris (the
"Agreement").

                               W I T N E S E T H:

         WHEREAS, Funding Trust, NAFI and Harris wish to supplement the
Agreement in accordance with the terms of this Supplement;

         NOW THEREFORE, the parties hereby agree, in consideration of the
mutual promises and mutual obligations set forth herein, to the terms and
conditions of the Agreement as amended by this Supplement.

         SECTION 1 Survival of the Agreement. Nothing contained herein or
contained in the Agreement for Monitoring and Backup Servicing, dated as of the
date hereof (the "LSE Agreement"), by and among NAFI, CSC Logic/MSA LLP d/b/a
Loan Servicing Enterprise and Financial Security Assurance Inc. ("FSA"), shall
terminate the Agreement. Except as explicitly provided herein, the terms of the
Agreement shall continue to govern, and the rights and responsibilities of the
parties under the Agreement shall survive the parties' entry into this
Supplement and NAFI's entry into the LSE Agreement. Unless otherwise defined in
this Agreement, all terms defined in the Sale and Servicing Agreement shall
have the same meanings in this Agreement.

         SECTION 2 Suspension of Obligations.

         (a) Harris' duty to perform its duties as Backup Servicer under the
Agreement and Harris' entitlement to collect payments for services under the
Agreement, in each case arising after the date hereof, are hereby suspended
from the date of the signing of this Supplement until such date, if any, as the
parties to this Supplement are given written notice by the Controlling Party
that the LSE Agreement has been terminated and that they are to resume
performance under the Agreement thirty (30) days after Harris has received
written notice of LSE's termination (the "Notice Date"). NAFI's duty to pay
Harris for its performance of its duties as Backup Servicer incurred after the
date hereof under the Agreement is hereby suspended from the date of the
signing of this Supplement until the Notice Date. Harris and NAFI hereby agree
that as of the date hereof no amounts are due and outstanding to Harris under
the Agreement and no performance of duties under the Agreement are due and
outstanding by Harris or NAFI. After the Notice Date, the provisions of this
Supplement will terminate and the parties will resume their respective duties
and obligations under the Agreement.

<PAGE>   2

         (b) FSA hereby agrees for the benefit of Harris as Backup Servicer
pursuant to the Pooling and Servicing Agreement, dated as of October 1, 1995,
and the Pooling and Servicing Agreement, dated as of October 21, 1996, each
among Funding Trust, NAFI, and Harris, as Trustee, and for the benefit of
Harris as Standby Servicer pursuant to the Sale and Servicing Agreement, dated
as of June 29, 1997, among Funding Trust, NAFI, Harris and the National Auto
Finance 1997-1 Trust, the Sale and Servicing Agreement, dated as of December
15, 1997, among Funding Trust, NAFI, Harris, as Trust Collateral Agent and
Backup Servicer, and the National Auto Finance 1998-1 Trust and the Sale and
Servicing Agreement, dated as of September 1, 1999 among Funding Trust, NAFI,
Harris as Trust Collateral Agent and Backup Servicer, and the National Auto
Finance 1999-1 Trust (such agreements, the "Underlying Agreements"), that so
long as the Notice Date has not occurred, the Controlling Party will not
appoint Harris as successor servicer under the Underlying Agreements.

         SECTION 3 Limited Effect. Except as expressly set forth in this
Supplement, the Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.

         SECTION 4 Counterparts. This Supplement may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be
an original and all of which taken together shall constitute one and the same
instrument.

         SECTION 5. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

         SECTION 6. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Chase Manhattan Bank Delaware, not individually or personally but solely as
trustee of Funding Trust, in the exercise of the powers and authority conferred
and vested in it under the Trust Agreement, (b) each of the representations,
undertakings and agreements herein made on the part of Funding Trust is made
and intended not as personal representations, undertakings and agreements by
Chase Manhattan Bank Delaware, but is made and intended for the purpose of
binding only Funding Trust and (c) under no circumstances shall Chase Manhattan
Bank Delaware, be personally liable for the payment of any indebtedness or
expenses of Funding Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by Funding
Trust under this Agreement or the other Transaction Documents.

                                                                              2

<PAGE>   3

                  IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.

                                      HARRIS TRUST AND
                                      SAVINGS BANK

                                      By:   /s/ KIETH RICHARDSON
                                            -----------------------------------
                                      Name: Kieth Richardson
                                      Title: Assistant Vice President

                                      NATIONAL FINANCIAL AUTO
                                      FUNDING TRUST

                                      By:  CHASE MANHATTAN
                                           BANK DELAWARE, not in its
                                      individual capacity but solely as
                                      Owner Trustee

                                      By:   /s/ DENIS KELLY
                                            -----------------------------------
                                      Name: Denis Kelly
                                      Title: Assistant Vice President

                                      NATIONAL AUTO FINANCE
                                      COMPANY INC.

                                      By:   /s/ STEPHEN R. VETH
                                            -----------------------------------
                                      Name: Stephen R. Veth
                                      Title: Vice President, Secretary and
                                             General Counsel

                                                                              3

<PAGE>   4

         ACKNOWLEDGED AND ACCEPTED:

         FINANCIAL SECURITY ASSURANCE INC.

         By:    /s/ AUTHORIZED SIGNATURE
                -----------------------------
         Name:
         Title:

                                                                              4

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