<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
January 28, 2000
NAVISTAR FINANCIAL SECURITIES CORPORATION
(Exact name of registrant as specified in its charter)
NAVISTAR FINANCIAL DEALER NOTE MASTER TRUST
(Issuer with respect to the Certificates)
Delaware
(Registrant's state or other Jurisdiction of Incorporation)
333-30737
(Commission File Number)
36-3731520
(Registrant's I.R.S. Employer Identification No.)
Navistar Financial Securities Corporation
2850 W. Golf Road
Rolling Meadows, IL 60008
(Address of principal executive offices of registrant, including Zip Code)
Registrant's telephone number, including area code: (847) 734-4000
Former name or former address, if changed since last report: Not applicable
Exhibit Index appears on Page 4
<PAGE>
Item 5. Other Events
On January 28, 2000, the Navistar Financial Dealer Note Master Trust issued
a series of certificates designated the Floating Rate Dealer Note Asset Backed
Certificate, Series 2000-VFC. The Series 2000-VFC Certificate is a series of
variable funding certificates, meaning that its Funded Amount may be increased
or decreased from time to time during the Revolving Period up to the Maximum
Funded Amount. The principle characteristics of the Series 2000-VFC Certificate
is as follows:
Certificate Rate: based on CP Rate or 0.625% + Eurodollar Rate
Closing Date: January 28, 2000
Expected Payment Date: Distribution Date 6 months after Amortization Period
Commencement Date
Scheduled Amortization Period Commencement Date: February 1, 2001 (subject
to extension)
Initial Funded Amount: $300,000,000
Maximum Funded Amount: $300,000,000
Number of classes within Series: One
Ordinary means of principal repayment: Amortization Period
Primary source of credit enhancement: Subordination
Series Termination Date: 36 months after Expected Payment Date
Servicing Fee Percentage: 1.0%
Subordination Percentage: 15.5%
The terms of the Series 2000-VFC Certificate and the definitions of
capitalized terms may be found in the Series 2000-VFC Supplement to the Pooling
and Servicing Agreement and the Certificate Purchase Agreement, each of which is
attached as an exhibit to this report.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
Exhibit No. Description
- ----------- -----------
Exhibit 1.1 Certificate Purchase Agreement, dated as of January 28, 2000.
Exhibit 4.1 Series 2000-VFC Supplement, dated as of January 28, 2000, to
Pooling and Servicing Agreement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NAVISTAR FINANCIAL SECURITIES
CORPORATION
(Registrant)
Dated: February 24, 2000 By: /s/ R. Wayne Cain
---------------------------------
Its: Vice President and Treasurer
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Exhibit
- ----------- -------
Exhibit 1.1 Certificate Purchase Agreement, dated as of January 28, 2000.
Exhibit 4.1 Series 2000-VFC Supplement, dated as of January 28, 2000, to
Pooling and Servicing Agreement.
<PAGE>
EXHIBIT 1.1
____________________________________________________________
CERTIFICATE PURCHASE AGREEMENT
among
NAVISTAR FINANCIAL SECURITIES CORPORATION
as Seller,
NAVISTAR FINANCIAL CORPORATION,
as Servicer
RECEIVABLES CAPITAL CORPORATION,
as the Conduit Purchaser,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent for the Purchasers,
and
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Committed Purchaser
dated as of January 28, 2000
____________________________________________________________
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms........................................................................... 1
SECTION 1.02 Other Definitional Provisions................................................................... 10
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Purchase and Sale of the Series 2000-VFC Certificates........................................... 11
SECTION 2.02 Initial Purchase Price.......................................................................... 11
SECTION 2.03 Incremental Fundings............................................................................ 11
SECTION 2.04 Extension of Purchase Expiration Date........................................................... 13
SECTION 2.05 Reduction of Maximum Funded Amount.............................................................. 13
SECTION 2.06 Calculation of Monthly Interest................................................................. 13
ARTICLE III
CLOSING
SECTION 3.01 Closing......................................................................................... 14
SECTION 3.02 Transactions to be Effected at the Closing...................................................... 14
ARTICLE IV
CONDITIONS PRECEDENT TO
PURCHASE ON THE CLOSING DATE
SECTION 4.01 Performance by the Seller and Servicer.......................................................... 15
SECTION 4.02 Representations and Warranties.................................................................. 15
SECTION 4.03 Corporate Documents............................................................................. 15
SECTION 4.04 Opinions of Counsel to NFC and the Seller....................................................... 15
SECTION 4.05 Opinions of Counsel to the Master Trust Trustee................................................. 15
SECTION 4.06 Audit Information............................................................................... 15
SECTION 4.07 Financing Statements............................................................................ 16
SECTION 4.08 Ratings......................................................................................... 16
SECTION 4.09 Documents....................................................................................... 16
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SECTION 4.10 No Actions or Proceedings....................................................................... 16
SECTION 4.11 Approvals and Consents.......................................................................... 16
SECTION 4.12 Officer's Certificates.......................................................................... 16
SECTION 4.13 Accounts........................................................................................ 17
SECTION 4.14 Other Documents................................................................................. 17
SECTION 4.15. Fees........................................................................................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 5.01 Representations and Warranties of the Seller..................................................... 17
SECTION 5.02. Representations and Warranties of NFC.......................................................... 19
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE CONDUIT PURCHASER
SECTION 6.01 Organization.................................................................................... 21
SECTION 6.02 Authority, etc.................................................................................. 21
SECTION 6.03 Securities Act.................................................................................. 22
SECTION 6.04 Investment Company Act.......................................................................... 22
ARTICLE VII
COVENANTS OF THE SELLER
SECTION 7.01 Access to Information........................................................................... 22
SECTION 7.02 Security Interests; Further Assurances.......................................................... 23
SECTION 7.03 Covenants....................................................................................... 23
SECTION 7.04 Amendments...................................................................................... 23
ARTICLE VIIA
COVENANTS OF NFC
SECTION 7A.01 Information from NFC........................................................................... 23
SECTION 7A.02 Access to Information.......................................................................... 24
SECTION 7A.03 Covenants...................................................................................... 25
SECTION 7A.04 Amendments..................................................................................... 25
</TABLE>
ii
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<TABLE>
<S> <C>
ARTICLE VIII
ADDITIONAL COVENANTS
SECTION 8.01 Legal Conditions to Closing..................................................................... 25
SECTION 8.02 Expenses........................................................................................ 25
SECTION 8.03 Mutual Obligations.............................................................................. 25
SECTION 8.04 Restrictions on Transfer........................................................................ 25
SECTION 8.05 Consents, etc................................................................................... 25
ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Indemnification................................................................................. 26
SECTION 9.02 Procedure....................................................................................... 26
SECTION 9.03 Defense of Claims............................................................................... 26
SECTION 9.04 Indemnity for Taxes, Reserves and Expenses...................................................... 27
SECTION 9.05 Costs, Expenses, Taxes, Breakage Payments and Increased Costs
under Certificate Purchase Agreement and Program Facility....................................... 29
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.01 Authorization and Action....................................................................... 30
SECTION 10.02 Administrative Agent's Reliance, Etc........................................................... 30
SECTION 10.03 Administrative Agent and Affiliates............................................................ 31
SECTION 10.04 Indemnification................................................................................ 31
SECTION 10.05 Purchase Decision.............................................................................. 31
SECTION 10.06 Successor Administrative Agent................................................................. 32
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Amendments..................................................................................... 32
SECTION 11.02 Notices........................................................................................ 32
SECTION 11.03 No Waiver; Remedies............................................................................ 33
SECTION 11.04 Binding Effect; Assignability.................................................................. 33
SECTION 11.05 Provision of Documents and Information......................................................... 34
SECTION 11.06 GOVERNING LAW; JURISDICTION.................................................................... 35
SECTION 11.07 No Proceedings................................................................................. 35
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iii
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SECTION 11.08 Execution in Counterparts....................................................................... 35
SECTION 11.09 No Recourse..................................................................................... 35
SECTION 11.10 Limited Recourse................................................................................ 36
SECTION 11.11 Survival........................................................................................ 36
SECTION 11.12 Tax Characterization............................................................................ 36
SECTION 11.13 Master Trust Rating Agency Notices.............................................................. 36
</TABLE>
EXHIBIT A Form of Notice of Incremental Funding
EXHIBIT B Form of Investment Letter
SCHEDULE I Addresses for Notice
iv
<PAGE>
CERTIFICATE PURCHASE AGREEMENT ("Certificate Purchase Agreement") dated as
------------------------------
of January 28, 2000, among Navistar Financial Securities Corporation (the
"Seller"), Navistar Financial Corporation ("Servicer"), the Conduit Purchaser,
------ --------
the Administrative Agent and the Committed Purchaser named herein.
The parties hereto agree as follows:
ARTICLE
DEFINITIONS
SECTION 1.01 Certain Defined Terms. Capitalized terms used herein
---------------------
without definition shall have the meanings set forth in the Pooling and
Servicing Agreement (as defined below) or the Series Supplement (as defined
below), as applicable. If a term used herein is defined both in the Pooling and
Servicing Agreement and the Series Supplement, it shall have the meaning set
forth in the Series Supplement. Additionally, the following terms shall have
the following meanings:
"Act" means the Securities Act of 1933, as amended.
---
"Additional Amounts" means all amounts owed pursuant to Article IX
------------------
hereof plus any Breakage Payments owed to the Purchasers pursuant to Section
2.06(c) of this Certificate Purchase Agreement.
"Administrative Agent" means Bank of America in its capacity as
--------------------
Administrative Agent for the Purchasers.
"Alternate Rate" for any Fixed Period for any Funding Tranche means an
--------------
interest rate per annum equal to 0.625% per annum above the Eurodollar Rate for
--- -----
such Fixed Period; provided, however, that in the case of
-------- -------
(i) any Fixed Period existing on or after the first day of which
the Administrative Agent shall have been notified by the Conduit Purchaser
or a Liquidity Purchaser or other Program Support Provider that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for the Conduit Purchaser or such
Liquidity Purchaser or other Program Support Provider to fund any Funding
Tranche (based on the Eurodollar Rate) set forth above (and the Conduit
Purchaser or such Liquidity Purchaser or other Program Support Provider
shall not have subsequently notified the Administrative Agent that such
circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 13 days,
<PAGE>
(iii) any Fixed Period relating to a Funding Tranche which is
less than $1,000,000, and
(iv) any Fixed Period with respect to which the Alternate Rate,
for any reason, becomes applicable on notice to the Administrative Agent of
less than three Business Days,
the "Alternate Rate" for each such Fixed Period shall be an interest rate per
--------------
annum equal to the Corporate Base Rate in effect on each day of such Fixed
Period. The "Alternate Rate" for any day on or after the occurrence of an Early
--------------
Amortization Event shall be an interest rate equal to 2.0% per annum above the
--- -----
Corporate Base Rate in effect on such day.
"Applicable Indemnifying Party" shall have the meaning set forth in
-----------------------------
Section 9.02 hereof.
"Asset Purchase Agreement" means the liquidity asset purchase
------------------------
agreement dated as of the date hereof among RCC, the Administrative Agent and
each of the Purchasers signatory thereto, as the same may from time to time be
amended, restated, supplemented or otherwise modified.
"Assignment and Acceptance" means an assignment and acceptance
-------------------------
agreement entered into by a Purchaser, a permitted assignee and the
Administrative Agent for such Purchaser, pursuant to which such assignee may
become a party to this Certificate Purchase Agreement.
"Bank of America" means Bank of America, National Association, a
---------------
national banking association.
"Breakage Payment" is defined in Section 2.06(c) of this Certificate
----------------
Purchase Agreement.
"Closing" has the meaning specified in Section 3.01 hereof.
-------
"Closing Date" has the meaning specified in Section 3.01 hereof.
------------
"Committed Purchaser" means Bank of America and each of its assigns
-------------------
(with respect to its commitment to make Incremental Fundings) that shall become
a party to this Certificate Purchase Agreement pursuant to Section 11.04 hereof.
"Conduit Purchaser" means RCC and any of its permitted assigns that is
-----------------
a RIC.
"Corporate Base Rate" means for any day, a fluctuating interest rate
-------------------
per annum as shall be in effect from time to time, which rate shall be at all
times equal to the higher of:
2
<PAGE>
(a) the rate of interest in effect for such day as publicly announced
from time to time by Bank of America in San Francisco, California, as its
"reference rate." It is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate; and
(b) 0.50% per annum above the latest Federal Funds Rate.
"CP Rate" for any Fixed Period for any Funding Tranche means, to the
-------
extent the Conduit Purchaser funds such Funding Tranche for such Fixed Period by
issuing Notes, the per annum rate equivalent to the "weighted average cost" (as
defined below) related to the issuance of Notes that are allocated, in whole or
in part, by the Conduit Purchaser or the Administrative Agent to fund or
maintain such Funding Tranche (and which may also be allocated in part to the
funding of other Funding Tranches hereunder or of other assets of the Conduit
Purchaser); provided, however, that if any component of such rate is a discount
-------- -------
rate, in calculating the "CP Rate" for such Funding Tranche for such Fixed
-------
Period, the Conduit Purchaser shall for such component use the rate resulting
from converting such discount rate to an interest bearing equivalent rate per
annum. As used in this definition, a Conduit Purchaser's "weighted average
----------------
cost" shall consist of (w) the actual interest rate (or discount) paid to
- ----
purchasers of the Conduit Purchaser's Notes, together with the commissions of
placement agents and dealers in respect of such Notes, to the extent such
commissions are allocated, in whole or in part, to such Notes by the Conduit
Purchaser or the Administrative Agent, (x) certain documentation and transaction
costs associated with the issuance of such Notes, (y) any incremental carrying
costs incurred with respect to Notes maturing on dates other than those on which
corresponding funds are received by the Conduit Purchaser, and (z) other
borrowings by the Conduit Purchaser (other than under any Program Support
Agreement), including borrowings to fund small or odd dollar amounts that are
not easily accommodated in the commercial paper market.
"Day Count Fraction" means, as to any Funding Tranche for any Fixed
------------------
Period, a fraction (a) the numerator of which is the number of days in such
Fixed Period and (b) the denominator of which is 360 (or, with respect to any
Funding Tranche which accrues interest by reference to the Corporate Base Rate,
the actual number of days in the related calendar year).
"Eurodollar Rate" means, for any Fixed Period, an interest rate per
---------------
annum (rounded upward to the nearest 1/1000th of 1%) determined pursuant to the
following formula:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
3
<PAGE>
"Eurodollar Reserve Percentage" means, for any Fixed Period, the
-----------------------------
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/1000th of 1%) in effect on the date LIBOR for such Fixed Period
is determined under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities") having a term comparable to such Fixed Period; and
"LIBOR" means the rate of interest per annum determined by the
-----
Liquidity Agent to be the arithmetic mean (rounded upward to the nearest
1/1000th of 1%) of the rates of interest per annum notified to the
Liquidity Agent by the Reference Bank as the rate of interest at which
dollar deposits in the approximate amount of the portion of Invested Amount
associated with such Fixed Period would be offered to major banks in the
London interbank market at their request at or about 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such Fixed
Period.
"Federal Bankruptcy Code" means the bankruptcy code of the United
-----------------------
States of America codified in Title 11 of the United States Code.
"Federal Funds Rate" means, for any period, the per annum rate set
------------------
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by the Administrator of
the rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" means the agreement dated as of January 28, 2000 among
----------
the Seller, the Servicer and the Administrative Agent setting forth certain fees
payable in connection with the purchase of the Series 2000-VFC Certificates by
the Administrative Agent for the benefit of the Purchasers.
4
<PAGE>
"Fixed Period" means, unless otherwise mutually agreed by the
------------
Administrative Agent and the Conduit Purchaser, (a) with respect to any Funding
Tranche funded by the issuance of Notes, (i) initially the period commencing on
(and including) the date of the initial purchase or funding of such Funding
Tranche and ending on (and including) the last day of the current calendar
month, and (ii) thereafter, each period commencing on (and including) the first
day after the last day of the immediately preceding Fixed Period for such
Funding Tranche and ending on (and including) the last day of the current
calendar month and (b) with respect to any Funding Tranche not funded by the
issuance of Notes, (i) initially the period commencing on (and including) the
date of the initial purchase or funding of such Funding Tranche and ending on
(but excluding) the next following Distribution Date and (ii) thereafter, each
period commencing on (and including) the first day after the last day of the
immediately preceding Fixed Period for such Funding Tranche and ending on (and
excluding) the last day of the next following Distribution Date; provided, that
--------
(i) any Fixed Period with respect to any Funding Tranche not
funded by the issuance of Notes which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day; provided, however, if interest in respect of such Fixed
-------- -------
Period is computed by reference to the Eurodollar Rate, and such Fixed
Period would otherwise end on a day which is not a Business Day, and
there is no subsequent Business Day in the same calendar month as such
day, such Fixed Period shall end on the next preceding Business Day;
(ii) in the case of any Fixed Period for any Funding Tranche
which commences before the Series Termination Date and would otherwise
end on a date occurring after the Series Termination Date, such Fixed
Period shall end on such Series Termination Date and the duration of
each Fixed Period which commences on or after the Series Termination
Date shall be of such duration as shall be selected by the
Administrative Agent;
(iii) any Fixed Period in respect of which interest is computed
by reference to the CP Rate may be terminated at the election of, and
upon notice thereof to the Seller by, the Administrative Agent any
time, in which case the Funding Tranche allocated to such terminated
Fixed Period shall be allocated to a new Fixed Period commencing on
(and including) the date of such termination and ending on (but
excluding) the next following Distribution Date, and shall accrue
interest at the Alternate Rate (determined pursuant to clause (b) of
----------
such definition).
"Funded Amount" means, on any Business Day, an amount equal to the
-------------
result of (a) the Initial Funded Amount plus (b) the aggregate amount of all
----
Incremental Funded Amounts for all Incremental Fundings occurring on or prior to
such Business Day minus (c) the aggregate amount of principal payments made to
-----
Series 2000-VFC Certificateholders prior to such date.
5
<PAGE>
"Funding Rate" means, with respect to any Fixed Period and any Funding
------------
Tranche, (a) to the extent the Conduit Purchaser (or a RIC which is an assignee
of the Conduit Purchaser) is funding such Funding Tranche during such Fixed
Period through the issuance of Notes, the CP Rate, and (b) to the extent any
Purchaser is not funding such Funding Tranche through the issuance of Notes, a
rate per annum (expressed as a percentage and an interest yield equivalent and
calculated on the basis of a 360-day year and the actual days elapsed) equal to
the Alternate Rate.
"Funding Tranche" means, at any time, each portion of the Funded
---------------
Amount allocated to the same Fixed Period and accruing interest by reference to
the same Funding Rate at such time.
"Governmental Actions" means any and all consents, approvals, permits,
--------------------
orders, authorizations, waivers, exceptions, variances, exemptions or licenses
of, or registrations, declarations or filings with, any Governmental Authority
required under any Governmental Rules.
"Governmental Authority" means the United States of America, any
----------------------
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and having jurisdiction over the applicable Person.
"Governmental Rules" means any and all laws, statutes, codes, rules,
------------------
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.
"Incremental Funded Amount" shall mean the amount of the increase in
-------------------------
the Funded Amount occurring as a result of any Incremental Funding, which amount
shall equal the aggregate amount of the purchase price paid by the Series 2000-
VFC Certificateholders with respect to that Incremental Funding pursuant to this
Certificate Purchase Agreement and the Series Supplement.
"Incremental Funding" means an increase in the aggregate outstanding
-------------------
principal balance of the Series 2000-VFC Certificate in accordance with the
provisions of Section 2.03 hereof.
"Incremental Funding Date" means the date on which each Incremental
------------------------
Funding occurs.
"Indemnified Party" means any Purchaser, the Administrative Agent or
-----------------
any of their officers, directors, employees, agents, representatives, assignees
or Affiliates.
6
<PAGE>
"Initial Invested Amount" means $300,000,000.
-----------------------
"Initial Purchase Price" has the meaning specified in Section 2.02
----------------------
hereof.
"Investment Letter" means a letter in the form of Exhibit B hereto.
-----------------
"Liquidity Agent" means Bank of America in its capacity as Liquidity
---------------
Agent pursuant to the Asset Purchase Agreement.
"Liquidity Purchasers" means each of the purchasers party to the Asset
--------------------
Purchase Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
business, results of operations or financial condition or the material
properties or assets of NFSC or NFC, (ii) the performance of their obligations
hereunder or under the Series Documents or (iii) the interests of the Purchasers
hereunder.
"Maximum Funded Amount" means $300,000,000, as such amount may be
---------------------
decreased from time to time in accordance with Section 2.05 hereof.
"Monthly Interest" means, with respect to any Distribution Date, the
----------------
sum of:
(A) the sum of (i) the summation of the amount of interest accrued during
the related Due Period on each Funding Tranche funded at the CP Rate,
determined by multiplying (a) the applicable Tranche Rate times (b)
-----
the Weighted Average Funded Amount for such Funding Tranche times (c)
-----
the applicable Day Count Fraction and (ii) any Monthly Interest
calculated in accordance with clause (A)(i) above due but not paid
with respect to the prior Due Period, plus interest on such unpaid
amount calculated as the product of (x) the weighted average Tranche
Rate for all Funding Tranches funded at the CP Rate during the most
recent Due Period, times (y) the amount of such unpaid Monthly
-----
Interest, times (z) the quotient of the number of days in the related
Distribution Period divided by 360,
plus
----
(B) the sum of (i) the summation of the amount of interest accrued during
the related Distribution Period on each Funding Tranche not funded at
the CP Rate, determined by multiplying (a) the applicable Tranche Rate
times (b) the Weighted Average Funded Amount for such Funding Tranche
-----
times (c) the applicable Day Count Fraction and (ii) any Monthly
-----
Interest calculated in accordance with clause (B)(i) above due but not
paid with respect to the prior Distribution Period, plus interest on
such unpaid amount calculated as the product of (x) the weighted
average Tranche Rate for all Funding Tranches not funded at the CP
Rate during
7
<PAGE>
the most recent Distribution Period, times (y) the amount of such
-----
unpaid Monthly Interest, times (z) for Funding Tranches that do not
accrue interest by reference to the Corporate Base Rate, the quotient
of the number of days in the related Distribution Period divided by
360.
plus
- ----
(C) on any Distribution Date on which the Funded Amount of the Series
2000-VFC Certificates is reduced to zero and on the Series Termination
Date, any amounts which accrue in clause (A) above from (and
excluding) the last day of the related Due Period through (and
including) such Distribution Date.
"NFC" means Navistar Financial Corporation, a Delaware corporation,
---
and its successors and permitted assigns.
"NFC Losses" has the meaning specified in Section 9.01(b) hereof.
----------
"NFSC" means Navistar Financial Securities Corporation, a Delaware
----
corporation, and its successors and permitted assigns.
"NITC" means Navistar International Transportation Corp.
----
"NIC" means Navistar International Corporation.
---
"Non-Use Fee" is defined in the Fee Letter.
-----------
"Notes" means short-term promissory notes issued or to be issued by a
-----
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.
"Notice of Incremental Funding" means a written notice of an
-----------------------------
Incremental Funding in the form of Exhibit A hereto.
"Pooling and Servicing Agreement" means the Pooling and Servicing
-------------------------------
Agreement dated as of June 8, 1995 among the Seller, the Servicer, and The Bank
of New York, as Master Trust Trustee, as the same has been and may be amended,
modified or supplemented.
"Program Rate" is defined in the Fee Letter.
------------
"Program Support Agreement" means and includes, with respect to the
-------------------------
Conduit Purchaser, the Asset Purchase Agreement and any other agreement entered
into by any Program Support Provider providing for the issuance of one or more
letters of credit for the account of the Conduit Purchaser, the issuance of one
or more surety bonds for which the Conduit Purchaser is obligated to reimburse
the applicable Program Support Provider for any drawings thereunder, the
8
<PAGE>
sale by the Conduit Purchaser to any Program Support Provider of any interest in
the Series 2000-VFC Certificates (or portions thereof) and/or the making of
loans and/or other extensions of credit to the Conduit Purchaser in connection
with the Conduit Purchaser's securitization program, together with any letter of
credit, surety bond or other instrument issued thereunder (but excluding any
discretionary advance facility provided by the Administrative Agent).
"Program Support Provider" means and includes, with respect to the
------------------------
Conduit Purchaser, any Liquidity Purchaser and any other or additional Person
(other than any customer of the Conduit Purchaser) now or hereafter extending
credit or having a commitment to extend credit to or for the account of, or to
make purchases from, the Conduit Purchaser or issuing a letter of credit, surety
bond or other instrument to support any obligations arising under or in
connection with the Conduit Purchaser's securitization program.
"Purchase Agreement" means the Purchase Agreement dated as of June 8,
------------------
1995 between NFC and NFSC, as may be amended or otherwise modified from time to
time.
"Purchase Expiration Date" means the earlier of (i) the date which is
------------------------
364 days from the date of this Agreement and (ii) the date on which the Early
Amortization Period commences, as such date may from time to time be modified in
accordance with Section 2.04 hereof.
"Purchasers" means, the Conduit Purchaser, the Liquidity Purchasers
----------
and the Committed Purchasers.
"Purchaser Percentage" of any Committed Purchaser means (a) with
--------------------
respect to Bank of America, the percentage set forth on the signature page to
this Certificate Purchase Agreement as such Committed Purchaser's Purchaser
Percentage, or such percentage as reduced by any Assignment and Acceptance
entered into with an assignee, or (b) with respect to a Committed Purchaser that
has entered into an Assignment and Acceptance, the percentage set forth therein
as such Purchaser's Purchaser Percentage, or such percentage as reduced by any
Assignment and Acceptance entered into between such Committed Purchaser and an
assignee.
"RCC" means Receivables Capital Corporation, a Delaware corporation.
---
"Reference Bank" means Bank of America.
--------------
"RIC" means a special purpose company, other than the Conduit
---
Purchaser, which (i) is administered by the Administrative Agent or an Affiliate
thereof and (ii) has activities generally similar to the Conduit Purchaser.
"Seller Losses" has the meaning specified in Section 9.01(a) hereof.
-------------
9
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"Series 2000-VFC Certificate" means the Series 2000-VFC Floating Rate
--------------------------
Dealer Note Asset Backed Certificate in the maximum aggregate principal amount
of $300,000,000 to be issued by the Master Trust pursuant to the Pooling and
Servicing Agreement and the Series Supplement, evidencing an undivided senior
beneficial interest in certain assets of the Master Trust.
"Series Documents" means the Pooling and Servicing Agreement, the
----------------
Series Supplement, the Master Revolving Credit Agreement, the Purchase Agreement
and this Certificate Purchase Agreement.
"Series Supplement" means the Series Supplement dated as of January
-----------------
28, 2000 among the Seller, the Servicer, and The Bank of New York, as Master
Trust Trustee, supplementing the Pooling and Servicing Agreement and relating to
the Series 2000-VFC Certificates, as the same may be amended, modified or
supplemented.
"Servicer" means Navistar Financial Corporation, or any Successor
--------
Servicer appointed in accordance with the terms of the Pooling and Servicing
Agreement and Series Supplement.
"Third Party Claim" has the meaning specified in Section 9.02 hereof.
-----------------
"Tranche Rate" means for any Fixed Period, with respect to any Funding
------------
Tranche, a per annum rate equal to the sum of (i) the applicable Funding Rate
for such Fixed Period plus (ii) if such Funding Tranche is funded at the CP
----
Rate, the Program Rate.
"Weighted Average Funded Amount" means, with respect to any Funding
------------------------------
Tranche for any Fixed Period, the quotient of (i) the summation of the portion
of the Funded Amount allocated to such Funding Tranche determined as of each day
in such Fixed Period, divided by (ii) the number of days in such Fixed Period.
SECTION 1.02 Other Definitional Provisions. All terms defined in
-----------------------------
this Certificate Purchase Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.01, and accounting terms partially defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Certificate Purchase Agreement shall refer to this
Certificate Purchase
10
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Agreement as a whole and not to any particular provision of this Certificate
Purchase Agreement; and Section, subsection, Schedule and Exhibit references
contained in this Certificate Purchase Agreement are references to Sections,
subsections, the Schedules and Exhibits in or to this Certificate Purchase
Agreement unless otherwise specified.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Purchase and Sale of the Series 2000-VFC Certificates.
-----------------------------------------------------
On the terms and subject to the conditions set forth in this Certificate
Purchase Agreement, and in reliance on the covenants, representations,
warranties and agreements herein set forth, the Seller may offer to sell to the
Administrative Agent, on behalf of the Purchasers, and the Administrative Agent,
on behalf of the Purchasers, may elect to purchase at the Closing, a Series
2000-VFC Certificate in an initial outstanding principal amount equal to the
Initial Invested Amount.
SECTION 2.02 Initial Purchase Price. The Series 2000-VFC Certificate
----------------------
is to be purchased at a price (the "Initial Purchase Price") of 100% of its
----------------------
Initial Invested Amount.
SECTION2.03 Incremental Fundings. (a) Subject to the terms and
--------------------
conditions of this Certificate Purchase Agreement and the Series Supplement,
from time to time prior to the Purchase Expiration Date upon receipt by the
Administrative Agent of a Notice of Incremental Funding, (i) the Administrative
Agent, on behalf of the Conduit Purchaser, and in the sole and absolute
discretion of the Conduit Purchaser, may make Incremental Fundings and (ii) if
the Conduit Purchaser elects not to make an Incremental Funding, the Committed
Purchaser and its permitted assigns severally agree to make their respective
Purchaser Percentages of such Incremental Funding; provided, that no Committed
Purchaser shall be required to make a portion of any Incremental Funding if,
after giving effect thereto, (A) its Purchaser Percentage of the Funded Amount
would exceed its Purchaser Percentage of the Maximum Funded Amount or (B) its
Purchaser Percentage of the Funded Amount hereunder plus the aggregate
"Unrecovered Purchase Price" (as defined in the Asset Purchase Agreement) of all
"Percentage Interests" (as defined in the Asset Purchase Agreement) purchased by
such Committed Purchaser as a Liquidity Purchaser under the Asset Purchase
Agreement would exceed its Purchaser Percentage of the sum of the Maximum Funded
Amount.
(b) Each Incremental Funding hereunder shall be subject to the
further conditions precedent that:
(i) The Administrative Agent will have received copies of all
settlement statements and all reports required to be delivered by the
Servicer to the Master Trust Trustee pursuant to Section 3.04 of the
Pooling and Servicing Agreement and Section 5.02 of the Series Supplement;
11
<PAGE>
(ii) Each of the representations and warranties of the Seller
and the Servicer made in the Series Documents shall be true and correct in
all material respects as of the applicable Incremental Funding Date (except
to the extent they expressly relate to an earlier or later time);
(iii) The Seller and the Servicer shall be in compliance in all
material respects with all of their respective covenants contained in the
Series Documents;
(iv) No Early Amortization Event shall have occurred and be
continuing;
(v) The Available Subordinated Amount shall be at least equal
to the Required Subordinated Amount (calculated on a pro forma basis after
giving effect to such Incremental Funding);
(vi) The Master Trust Seller's Interest shall be at least
equal to the Minimum Master Trust Seller's Interest (after giving effect to
such Incremental Funding);
(vii) At least three Business Days prior to the Incremental
Funding Date, the Administrative Agent shall have received a completed
Notice of Incremental Funding;
(viii) The amount on deposit in the Spread Account shall be at
least equal to Projected Spread for the related Transfer Date;
(ix) The available commitments of the Liquidity Purchasers
under the Asset Purchase Agreement and the credit and/or liquidity coverage
committed under the program-wide credit and/or liquidity facilities for the
commercial paper program of the Conduit Purchaser shall be in the amounts
required to maintain the then-current ratings of the Conduit Purchaser's
Notes; and
(x) There shall have been deposited into the Incremental
Funding Reserve Account an amount at least equal to the Incremental Funding
Reserve Deposit Amount for such Distribution Date.
(c) Each Incremental Funding shall be requested in a minimum
principal amount of $5,000,000 and integral multiples of $1,000,000 in excess
thereof; provided, that an Incremental Funding may be requested in the entire
remaining Maximum Funded Amount (even if such amount is less than $5,000,000).
(d) The purchase price of each Incremental Funding shall be equal to
100% of the allocation of the related Incremental Funded Amount, and shall be
paid not later than
12
<PAGE>
1:00 p.m. New York City time on the Incremental Funding Date by wire transfer of
immediately available funds to the Seller's account no. 323-2-37053, titled "NFC
Proceeds Deposit Account," ABA# 021-000-021, maintained at The Chase Manhattan
Bank (or such other account as may from time to time be specified by the Seller
in a notice to the Administrative Agent).
SECTION 2.04 Extension of Purchase Expiration Date. The parties to this
-------------------------------------
Certificate Purchase Agreement may mutually agree in writing to the extension of
the Purchase Expiration Date to a date no later than 364 days following the date
of such extension; provided, that no agreement to any such extension shall be
--------
effective unless, the available commitments of the Liquidity Purchasers under
the Asset Purchase Agreement and the credit and/or liquidity coverage committed
under the program-wide credit and/or liquidity facilities for the commercial
paper program of the Conduit Purchaser will continue to be in effect after such
extension in the aggregate amounts, and for the period of the time, necessary to
maintain the then-current ratings of the Conduit Purchaser's Notes.
SECTION 2.05 Reduction of Maximum Funded Amount. The Seller may reduce in
----------------------------------
whole or in part the Maximum Funded Amount (but not below the Invested Amount)
by giving the Administrative Agent written notice thereof at least five Business
Days before such reduction is to take place; provided, however, that any partial
-------- -------
reduction shall be in an aggregate amount of $10,000,000, or any integral
multiples of $5,000,000 in excess thereof. Any such reduction in the Maximum
Funded Amount shall be permanent. The applicable Purchasers shall be paid any
accrued and unpaid Non-Use Fee on the date of such reduction with respect to the
reduction amount.
SECTION 2.06 Calculation of Monthly Interest. (a) On or before the second
-------------------------------
Business Day after the end of each Due Period, the Administrative Agent shall
calculate for the related Distribution Date, the Monthly Interest payable on
such Distribution Date and provide such calculation to the Servicer in writing.
If any Funding Tranche begins to accrue interest at a Funding Rate other than
the CP Rate after the date the Administrative Agent provides the Monthly
Interest calculation for any Distribution Date, the Administrative Agent shall
promptly provide the Servicer a calculation of the interest that will accrue on
such Funding Tranche and be included in the definition of "Monthly Interest" for
such Distribution Date. The parties acknowledge that the interest calculation
set forth in clause (C) of the definition of "Monthly Interest" shall be an
----------
estimate. If the estimated accruals exceed the actual accruals, the
Administrative Agent shall reimburse such excess. If the actual accruals exceed
the estimated accruals, the Seller shall reimburse the Administrative Agent.
(b) All amounts payable with respect to the Series 2000-VFC Certificates
hereunder and under the Series Supplement shall be paid to the account
designated by the Administrative Agent in the Fee Letter.
(c) If (i) any distribution of principal is made with respect to any
Funding Tranche with a Fixed Period and a fixed interest rate other than on a
Distribution Date during an
13
<PAGE>
Early Amortization Period or Amortization Period or the last day of a Fixed
Period with respect to such Funding Tranche, (ii) the Seller, or the Servicer
acting on behalf of the Seller, shall not have provided the Administrative Agent
with the number of days notice specified in the Series Supplement for such
distribution of principal and (iii) the interest paid by a Purchaser to
providers of funds to it to fund that Funding Tranche exceeds returns earned by
such Purchaser from the first day through the last day of that Fixed Period
factoring in actual returns earned during the Fixed Period and assuming
redeployment of such funds in highly rated short-term money market instruments
from the date of principal distribution through the end of the Fixed Period,
then, upon written notice (including a detailed calculation of such Breakage
Payment) from the Administrative Agent to the Servicer, such Purchaser shall be
entitled to receive additional amounts in the amount of such excess (each, a
"Breakage Payment") on the date of such distribution, so long as such written
----------------
notice is received not later than noon, New York City time, on the first
Business Day immediately preceding such distribution.
ARTICLE III
CLOSING
SECTION 3.01 Closing. The closing (the "Closing") of the purchase and
------- -------
sale of the Series 2000-VFC Certificates shall take place at 10:00 a.m. at the
offices of Kirkland & Ellis in Chicago, Illinois on January 28, 2000, or if the
conditions to closing set forth in Article IV of this Certificate Purchase
Agreement shall not have been satisfied or waived by such date, as soon as
practicable after such conditions shall have been satisfied or waived, or at
such other time, date and place as the parties shall agree upon (the date of the
Closing being referred to herein as the "Closing Date").
------------
SECTION 3.02 Transactions to be Effected at the Closing. At the Closing
------------------------------------------
(a) the Administrative Agent will deliver to the Seller funds in an amount equal
to the Initial Purchase Price (by wire transfer of immediately available funds
to a bank account designated by the Seller to the Administrative Agent at least
two Business Days prior to the Closing Date); and (b) the Seller shall deliver
the Series 2000-VFC Certificate to the Administrative Agent in satisfaction of
the Seller's obligation to the Administrative Agent hereunder.
14
<PAGE>
ARTICLE IV
CONDITIONS PRECEDENT TO
PURCHASE ON THE CLOSING DATE
The purchase by the Administrative Agent on behalf of the Purchasers of the
Series 2000-VFC Certificates is subject to the satisfaction at the time of the
Closing of the following conditions (any or all of which may be waived by the
Administrative Agent in its sole discretion):
SECTION 4.01 Performance by the Seller and Servicer. All the terms,
--------------------------------------
covenants, agreements and conditions of the Series Documents to be complied with
and performed by the Seller and the Servicer at or before the Closing shall have
been complied with and performed in all material respects.
SECTION 4.02 Representations and Warranties. Each of the representations
------------------------------
and warranties of the Seller and the Servicer made in the Series Documents shall
be true and correct in all material respects as of the time of the Closing
(except to the extent they expressly relate to an earlier or later time).
SECTION 4.03 Corporate Documents. The Administrative Agent shall have
-------------------
received copies of (a) the (i) Certificate of Incorporation, good standing
certificate and By-Laws of NFC, (ii) Board of Directors resolutions of NFC with
respect to the Series Documents, and (iii) incumbency certificate of NFC, each
certified by appropriate corporate authorities and (b) the (i) Certificate of
Incorporation, good standing certificate and By-Laws of the Seller, (ii) Board
of Directors resolutions of the Seller with respect to the Series Documents, and
(iii) incumbency certificate of the Seller, each certified by appropriate
corporate authorities.
SECTION 4.04 Opinions of Counsel to NFC and the Seller. Counsel to NFC
-----------------------------------------
and the Seller shall have delivered to the Administrative Agent favorable
opinions, dated as of the Closing Date and reasonably satisfactory in form and
substance to the Administrative Agent and its counsel.
SECTION 4.05 Opinions of Counsel to the Master Trust Trustee. Counsel to
-----------------------------------------------
the Master Trust Trustee shall have delivered to the Administrative Agent a
favorable opinion, dated as of the Closing Date and reasonably satisfactory in
form and substance to the Administrative Agent and its counsel.
SECTION 4.06 Audit Information. The Seller shall have provided to the
-----------------
Administrative Agent the most recent reports delivered pursuant to Sections
3.04(b), 3.05 and 3.06(a) and 3.06(b) of the Pooling and Servicing Agreement.
15
<PAGE>
SECTION 4.07 Financing Statements. The Administrative Agent shall have
--------------------
received evidence satisfactory to it of the completion of all recordings,
registrations, and filings as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect or evidence the transfer by each of
NFC to the Seller and by the Seller to the Master Trust of their respective
ownership interests in the Dealer Notes and the proceeds thereof and the
security interest granted pursuant to Sections 2.01 and 2.02 of the Pooling and
Servicing Agreement, including:
(a) Acknowledgment copies of all UCC financing statements and assignments
that have been filed in the offices of the Secretary of State of the applicable
states and in the appropriate office or offices of such other locations as may
be specified in the opinions of counsel delivered pursuant to Section 4.04
hereof; and
(c) Certified copies of requests for information (Form UCC-11) (or a
similar search report certified by parties acceptable to the Administrative
Agent and its counsel) dated a date reasonably near the Closing Date and listing
all effective financing statements which name NFC, the Seller, as seller,
assignor or debtor and which have been filed since the most recently issued
series of certificates under the Pooling and Servicing Agreement in all
jurisdictions in which the filings were or will be made, together with copies of
such financing statements.
SECTION 4.08 Ratings. The Conduit Purchaser's Notes shall continue to be
-------
rated at least A-1 by Standard & Poor's and P-1 by Moody's. The Administrative
Agent shall have received evidence from each of the rating agencies then rating
any outstanding series issued by the Master Trust that the issuance of the
Series 2000-VFC Certificates will not cause such rating agency to downgrade or
withdraw its rating on any such series.
SECTION 4.09 Documents. The Administrative Agent shall have received a
---------
duly executed counterpart of each of the Series Documents (or, in the case of
Series Documents executed prior to the Closing Date, copies of executed
counterparts) and each and every document or certification delivered by any
party in connection with any of such agreements, and each such document shall be
in full force and effect.
SECTION 4.10 No Actions or Proceedings. No action, suit, proceeding or
-------------------------
investigation by or before any Governmental Authority shall have been instituted
to restrain or prohibit the consummation of, or to invalidate, the transactions
contemplated by the Series Documents and the documents related thereto in any
material respect.
SECTION 4.11 Approvals and Consents. All Governmental Actions of all
----------------------
Governmental Authorities required with respect to the transactions contemplated
by the Series Documents and the other documents related thereto shall have been
obtained or made.
SECTION 4.12 Officer's Certificates. The Administrative Agent shall have
----------------------
received Officer's Certificates from NFC and the Seller in form and substance
reasonably
16
<PAGE>
satisfactory to the Administrative Agent and its counsel, dated as of the
Closing Date, certifying as to the satisfaction of the conditions set forth in
Sections 4.01 and 4.02 hereof with respect to NFC and the Seller, respectively.
SECTION 4.13 Accounts. The Administrative Agent shall have received
--------
evidence that the Series 2000-VFC Accounts have been established in accordance
with the terms of the Pooling and Servicing Agreement and Series Supplement.
SECTION 4.14 Other Documents. The Seller shall have furnished to the
---------------
Administrative Agent such other information, certificates and documents as the
Administrative Agent may reasonably request.
SECTION 4.15. Fees. Each fee specified in the Fee Letter as being due on
----
the Closing Date shall have been paid.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 5.01 Representations and Warranties of the Seller. The Seller
--------------------------------------------
hereby makes the following representations and warranties to the Purchasers and
the Administrative Agent, as of the Closing Date and as of each Incremental
Funding Date, and the Purchasers and the Administrative Agent shall be deemed to
have relied on such representations and warranties in purchasing the Series
2000-VFC Certificates on the Closing Date and in making (or committing to make)
each Incremental Funding on each Incremental Funding Date.
(a) The Seller repeats and reaffirms to the Purchasers and the
Administrative Agent the representations and warranties of the Seller set forth
in Sections 2.04 and 2.05 of the Pooling and Servicing Agreement and represents
and warrants that such representations and warranties are true and correct.
(b) Each of the Series Documents has been duly authorized, executed
and delivered by the Seller, and is the valid and legally binding obligation of
the Seller, enforceable against the Seller in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought.
(c) The Series 2000-VFC Certificates have been duly and validly
authorized, and, when executed and authenticated in accordance with the terms of
the Pooling and Servicing Agreement and the Series Supplement, and delivered to
and paid for in accordance with this Certificate Purchase Agreement, will be
duly and validly issued and outstanding and will be
17
<PAGE>
entitled to the benefits of the Pooling and Servicing Agreement and the Series
Supplement, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(d) There is no pending or, to the Seller's knowledge, threatened
action, suit or proceeding by or against the Seller before any Governmental
Authority or any arbitrator (i) asserting the invalidity of this Certificate
Purchase Agreement, any other Series Document or the Series 2000-VFC, (ii)
seeking to prevent the issuance of the Series 2000-VFC or the consummation of
any of the transactions contemplated by this Certificate Purchase Agreement or
any other Series Document, (iii) that might materially and adversely affect the
performance by Seller of its obligations under, or the validity or
enforceability of, this Certificate Purchase Agreement, any other Series
Document or the Series 2000-VFC or (iv) that if determined adversely as to
Seller would have a Material Adverse Effect.
(e) The Seller (i) is not in violation of its Certificate of
Incorporation or By-Laws and (ii) is not in breach or violation of any of the
terms or provisions of, or with the giving of notice or lapse of time, or both,
would be in default under, any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, partnership agreement, or other agreement or
instrument to which the Seller is a party or by which it may be bound or to
which any of its properties or assets may be subject, except for such violations
or defaults that would not have a Material Adverse Effect.
(f) Any taxes, fees and other charges of Governmental Authorities
applicable to the Seller in connection with the execution, delivery and
performance by the Seller of the Series Documents or otherwise applicable to the
Seller in connection with the Master Trust have been paid or will be paid by the
Seller at or prior to the Closing Date or Incremental Funding Date, as
applicable, to the extent then due, except for any such failures to pay which,
individually and in the aggregate, would not have a Material Adverse Effect.
(g) The Master Trust has been duly created and is validly existing
under the laws of the State of Illinois. The Seller has authorized the Master
Trust to issue and sell the Series 2000-VFC Certificates.
(h) On the date hereof and on each Incremental Funding Date, the
Seller is not insolvent or the subject of any voluntary or involuntary
bankruptcy proceeding.
(i) No proceeds of a purchase hereunder will be used by the Seller
(i) for a purpose that violates or would be inconsistent with Regulations T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time or (ii) to acquire any security in any transaction in violation of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
18
<PAGE>
(j) Assuming the accuracy of the representations and warranties of the
Purchaser in Article VI of this Certificate Purchase Agreement, the sale of the
----------
Series 2000-VFC Certificates pursuant to the terms of this Certificate Purchase
Agreement, the Pooling and Servicing Agreement and the Series Supplement will
not require registration of the Series 2000-VFC Certificates under the Act.
(k) Neither the Master Trust nor the Seller is an "investment company" or
is controlled by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(l) No written information furnished or to be furnished by the Seller or
any of its Affiliates, agents or representatives to the Purchasers or the
Administrative Agent for purposes of or in connection with this Certificate
Purchase Agreement, including, without limitation, any reports delivered
pursuant to Section 7A.01 and any information relating to the Dealer Notes and
NFC's dealer financing business, is or shall be inaccurate in any material
respect, or contains or shall contain any material misstatement of fact, or
omits or shall omit to state a material fact or any fact necessary to make the
statements contained therein not misleading, in each case as of the date such
information was or shall be stated or certified and as of the date such
information was delivered by the Seller or any of its Affiliates, agents or
representatives to the Purchasers or the Administrative Agent.
SECTION 5.02. Representations and Warranties of NFC. NFC hereby makes the
-------------------------------------
following representations and warranties to the Purchasers and the
Administrative Agent, as of the Closing Date and as of each Incremental Funding
Date, and the Purchasers and the Administrative Agent shall be deemed to have
relied on such representations and warranties in purchasing the Series 2000-VFC
Certificates on the Closing Date and in making (or committing to make) each
Incremental Funding on each Incremental Funding Date.
(a) NFC repeats and reaffirms to the Purchasers and the Administrative
Agent the representations, warranties and covenants of the Servicer set forth in
Section 3.03 of the Pooling and Servicing Agreement and the representations and
warranties of NFC set forth in Section 3.02 of the Purchase Agreement and
represents and warrants that all such representations and warranties are true
and correct.
(b) No Governmental Action which has not been obtained is required by or
with respect to NFC in connection with any of the Series Documents, except any
such failure which would not have a Material Adverse Effect.
(c) Each of the Series Documents has been duly authorized, executed and
delivered by NFC, and is the valid and legally binding obligation of NFC,
enforceable against NFC in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
19
<PAGE>
effect relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought.
(d) The Series 2000-VFC Certificates have been duly and validly
authorized, and, when executed and authenticated in accordance with the terms of
the Pooling and Servicing Agreement and the Series Supplement, and delivered to
and paid for in accordance with this Certificate Purchase Agreement, will be
duly and validly issued and outstanding and will be entitled to the benefits of
the Pooling and Servicing Agreement and the Series Supplement, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought.
(e) There is no pending or, to NFC's knowledge, threatened action, suit or
proceeding by or against NFC or the Seller before any Governmental Authority or
any arbitrator (i) asserting the invalidity of this Certificate Purchase
Agreement, any other Series Document or the Series 2000-VFC, (ii) seeking to
prevent the issuance of the Series 2000-VFC or the consummation of any of the
transactions contemplated by this Certificate Purchase Agreement or any other
Series Document, (iii) that might materially and adversely affect the
performance by either of NFC or the Seller of its obligations under, or the
validity or enforceability of, this Certificate Purchase Agreement, any other
Series Document or (iv) that if determined adversely as to NFC or the Seller
would have a Material Adverse Effect.
(f) NFC (i) is not in violation of its Certificate of Incorporation or By-
Laws and (ii) is not in breach or violation of any of the terms or provisions
of, or with the giving of notice or lapse of time, or both, would be in default
under, any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, partnership agreement, or other agreement or instrument to which NFC is a
party or by which it may be bound or to which any of its properties or assets
may be subject, except for such violations or defaults that would not have a
Material Adverse Effect.
(g) Any taxes, fees and other charges of Governmental Authorities
applicable to NFC in connection with the execution, delivery and performance by
NFC of the Series Documents or otherwise applicable to NFC in connection with
the Master Trust have been paid or will be paid by NFC at or prior to the
Closing Date or Incremental Funding Date, as applicable, to the extent then due,
except for any such failures to pay which, individually and in the aggregate,
would not have a Material Adverse Effect.
(h) The Master Trust has been duly created and is validly existing under
the laws of the State of Illinois.
(i) On the date hereof and on each Incremental Funding Date, NFC is not
insolvent or the subject of any insolvency proceeding.
20
<PAGE>
(j) No written information furnished or to be furnished by NFC or its
Affiliates, agents or representatives to the Purchasers or the Administrative
Agent for purposes of or in connection with this Certificate Purchase Agreement,
including, without limitation, any reports delivered pursuant to Section 7A.01
and any information relating to the Dealer Notes and NFC's dealer financing
business, is or shall be inaccurate in any material respect, or contains or
shall contain any material misstatement of fact, or omits or shall omit to state
a material fact or any fact necessary to make the statements contained therein
not misleading, in each case as of the date such information was or shall be
stated or certified, and such information heretofore furnished remains true and
correct in all material respects as of the date such information was delivered
by NFC or any of its Affiliates, agents or representatives to the Purchasers or
the Administrative Agent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE CONDUIT PURCHASER
The Administrative Agent, on behalf of the Conduit Purchaser, hereby makes
the following representations and warranties to the Seller and NFC on which the
Seller and NFC shall rely in entering into this Certificate Purchase Agreement.
SECTION 6.01 Organization. The Conduit Purchaser has been duly organized
------------
and is validly existing and in good standing as a corporation under the laws of
the State governing its incorporation, with power and authority to own its
properties and to transact the business in which it is now engaged and the
Conduit Purchaser is duly qualified to do business and is in good standing (or
is exempt from such requirements) in each State of the United States where the
nature of its business requires it to be so qualified and the failure to be so
qualified and in good standing would have a material adverse effect on the
interests of the Seller.
SECTION 6.02 Authority, etc. The Conduit Purchaser has all requisite
---------------
power and authority to enter into and perform its obligations under this
Certificate Purchase Agreement and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by the Conduit Purchaser of this
Certificate Purchase Agreement and the consummation by the Conduit Purchaser of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Conduit Purchaser. This
Certificate Purchase Agreement has been duly and validly executed and delivered
by the Conduit Purchaser and constitutes a legal, valid and binding obligation
of the Conduit Purchaser, enforceable against the Conduit Purchaser in
accordance with its terms, subject as to enforcement to bankruptcy,
reorganization, insolvency, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. Neither the execution and delivery by the Conduit
Purchaser of this Certificate Purchase Agreement nor the consummation by the
Conduit Purchaser of any of the transactions contemplated hereby, nor
21
<PAGE>
the fulfillment by the Conduit Purchaser of the terms hereof, will conflict
with, or violate, result in a breach of or constitute a default under any term
or provision of the Articles of Incorporation or By-laws of the Conduit
Purchaser or any Governmental Rule applicable to the Conduit Purchaser.
SECTION 6.03 Securities Act. The Series 2000-VFC Certificates purchased
--------------
by the Administrative Agent on behalf of the Purchasers pursuant to this
Certificate Purchase Agreement will be acquired for investment only and not with
a view to any public distribution thereof, and no Conduit Purchaser will offer
to sell or otherwise dispose of its interest in the Series 2000-VFC Certificates
so acquired by it (or any interest therein) in violation of any of the
registration requirements of the Act or any applicable state or other securities
laws. The Administrative Agent and each Purchaser acknowledges that it has no
right to require the Seller to register under the Act or any other securities
law any Series 2000-VFC Certificate to be acquired by the Administrative Agent
on behalf of such Purchaser pursuant to this Certificate Purchase Agreement.
The Conduit Purchaser, the Committed Purchaser and Administrative Agent have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of an investment in the Series 2000-VFC
Certificates and the Conduit Purchaser and Committed Purchaser are able to bear
the economic risk of such investment. The Conduit Purchaser, Committed Purchaser
and Administrative Agent have reviewed the Pooling and Servicing Agreement and
the Series Supplement (including the schedule and exhibits thereto) and have had
the opportunity to perform due diligence with respect thereto and to ask
questions of and receive answers from the Seller and its representatives
concerning the Seller, the Master Trust and the Series 2000-VFC Certificates.
Each of the Conduit Purchaser, the Committed Purchaser and Administrative Agent
is an "accredited investor" as defined in Rule 501, promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended.
SECTION 6.04 Investment Company Act. Neither the Conduit Purchaser nor
----------------------
the Administrative Agent is required to register as an "investment company" nor
is the Conduit Purchaser or the Administrative Agent controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
ARTICLE VII
COVENANTS OF THE SELLER
SECTION 7.01 Access to Information. So long as any Series 2000-VFC
---------------------
Certificate remains outstanding, the Seller will, at any time from time to time
during regular
22
<PAGE>
business hours with reasonable notice to the Seller, permit the Conduit
Purchaser or the Administrative Agent, or their agents or representatives to:
(a) examine all books, records and documents (including computer tapes and
disks) in the possession or under the control of the Seller relating to the
Dealer Notes, and
(b) visit the offices and property of the Seller for the purpose of
examining such materials described in clause (a) above.
Except as provided in Section 11.05, any information obtained by the
Conduit Purchaser or the Administrative Agent pursuant to this Section 7.01
shall be held in confidence by the Conduit Purchaser and the Administrative
Agent unless and to the extent such information (i) has become available to the
public, (ii) is required or requested by any Governmental Authority or in any
court proceeding or (iii) is required by any Governmental Rule. In the case of
any disclosure permitted by clause (ii) or (iii), the Conduit Purchaser and the
Administrative Agent shall use commercially reasonable efforts to (x) provide
the Seller with advance notice of any such disclosure and (y) cooperate with the
Seller in limiting the extent or effect of any such disclosure.
SECTION 7.02 Security Interests; Further Assurances. The Seller will
--------------------------------------
take all action reasonably necessary to maintain the Master Trust Trustee's
first priority perfected ownership or security interest in the Dealer Notes and
the collateral granted pursuant to Sections 2.01 and 2.02 of the Pooling and
Servicing Agreement. The Seller agrees to take any and all acts and to execute
any and all further instruments necessary or reasonably requested by the Conduit
Purchaser or the Administrative Agent to more fully effect the purposes of this
Agreement.
SECTION 7.03 Covenants. The Seller will duly observe and perform each of
---------
its covenants set forth in the other Series Documents in all material respects.
SECTION 7.04 Amendments. The Seller will not make, or permit any Person
----------
to make, any amendment, modification or change to, or provide any waiver under
the Series Supplement without the prior written consent of the Administrative
Agent.
ARTICLE VIIA
COVENANTS OF NFC
SECTION 7A.01 Information from NFC. So long as the Series 2000-VFC
--------------------
Certificates remain outstanding, NFC will furnish to the Administrative Agent:
(a) a copy of each certificate, opinion, report, statement, notice or
other communication (other than investment instructions) furnished by or on
behalf of NFC or the
23
<PAGE>
Seller to the Master Trust Trustee or the Rating Agencies under any Series
Document, concurrently therewith, and promptly after receipt thereof, a copy of
each notice, demand or other communication received by or on behalf of NFC or
the Seller under any Series Document;
(b) such other information (including financial information), documents,
records or reports respecting the Master Trust, the Dealer Notes, the Seller or,
to the extent it relates to the origination of Dealer Notes or the servicing of
the Master Trust, NFC, as the Conduit Purchaser or Administrative Agent may from
time to time reasonably request;
(c) as soon as available and in any event within (i) 45 days after the end
of each of the first three fiscal quarters of any fiscal year and (ii) 120 days
after the end of the last fiscal quarter of any fiscal year, copies of the
interim or annual, as applicable, financial statements of NFC, prepared in
conformity with generally accepted accounting principles consistently applied;
and
(d) as soon as possible and in any event within two Business Days after
knowledge thereof by a Responsible Officer of NFC, notice of each Early
Amortization Event or event which with the giving of notice or the passage of
time or both would constitute an Early Amortization Event.
SECTION 7A.02 Access to Information. So long as any Series 2000-VFC
---------------------
Certificate remains outstanding, NFC will, at any time from time to time during
regular business hours with reasonable notice to NFC, permit the Conduit
Purchaser or the Administrative Agent, or their agents or representatives to:
(a) examine all books, records and documents (including computer tapes and
disks) in the possession or under the control of NFC relating to the Dealer
Notes, and
(b) visit the offices and property of NFC for the purpose of examining
such materials described in clause (a) above.
Except as provided in Section 11.05, any information obtained by the
Conduit Purchaser or the Administrative Agent pursuant to this Section 7A.02
shall be held in confidence by the Conduit Purchaser and the Administrative
Agent unless and to the extent such information (i) has become available to the
public, (ii) is required or requested by any Governmental Authority or in any
court proceeding or (iii) is required by any Governmental Rule. In the case of
any disclosure permitted by clause (ii) or (iii), the Conduit Purchaser and the
Administrative Agent shall use commercially reasonable efforts to (x) provide
NFC with advance notice of any such disclosure and (y) cooperate with NFC in
limiting the extent or effect of any such disclosure.
24
<PAGE>
SECTION 7A.03 Covenants. NFC will duly observe and perform each of its
---------
covenants set forth in the other Series Documents in all material respects.
SECTION 7A.04 Amendments. NFC will not make, or permit any Person to
----------
make, any material amendment, modification or change to, or provide any waiver
under the Series Supplement without the prior written consent of the
Administrative Agent.
ARTICLE VIII
ADDITIONAL COVENANTS
SECTION 8.01 Legal Conditions to Closing. The parties hereto will take
---------------------------
all reasonable action necessary to obtain (and will cooperate with one another
in obtaining) any consent, authorization, permit, license, franchise, order or
approval of, or any exemption by, any Governmental Authority or any other
Person, required to be obtained or made by it in connection with any of the
transactions contemplated by this Certificate Purchase Agreement.
SECTION 8.02 Expenses. Whether or not the Closing takes place, except as
--------
otherwise expressly provided herein or in the Fee letter, all costs and expenses
incurred in connection with this Certificate Purchase Agreement and the
transactions contemplated hereby shall (as between the Seller and the Conduit
Purchaser) be paid by the Seller.
SECTION 8.03 Mutual Obligations. On and after the Closing, each party
------------------
hereto will do, execute and perform all such other acts, deeds and documents as
the other party may from time to time reasonably require in order to carry out
the intent of this Certificate Purchase Agreement.
SECTION 8.04 Restrictions on Transfer. The Administrative Agent agrees
------------------------
that it will comply with the restrictions on transfer of the Series 2000-VFC
Certificates set forth in the Pooling and Servicing Agreement and the Series
Supplement and that it will resell the Series 2000-VFC Certificates only in
compliance with such restrictions; provided, however, that the Seller
-------- -------
acknowledges that in the event of the purchase of the Series 2000-VFC
Certificates by any Purchaser or RIC no such purchaser will be required to
execute and deliver the Investment Letter.
SECTION 8.05 Consents, etc. Each Conduit Purchaser agrees not to
-------------
unreasonably withhold or delay its consent to any amendment or other matter
requiring consent of the Series 2000-VFC Certificateholders under a provision of
any Series Document to the extent that such provision specifies that such
consent is not to be unreasonably withheld or delayed.
25
<PAGE>
ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Indemnification. (a) The Seller hereby agrees to indemnify
---------------
and hold harmless each Indemnified Party against any and all losses, claims,
damages, liabilities or expenses (including reasonable legal and accounting
fees) (collectively, "Seller Losses"), as incurred (payable promptly upon
-------------
written request), for or on account of or arising from or in connection with
this Certificate Purchase Agreement, including any breach of any representation,
warranty or covenant of the Seller in this Certificate Purchase Agreement or in
any certificate or other written material delivered pursuant hereto.
(b) NFC hereby agrees to indemnify and hold harmless each Indemnified
Party against any and all losses, claims, damages, liabilities or expenses
(including reasonable legal and accounting fees) (collectively, "NFC Losses"),
----------
as incurred (payable promptly upon written request), for or on account of or
arising from or in connection with any breach of any representation, warranty or
covenant of NFC in this Certificate Purchase Agreement or in any certificate or
other written material delivered pursuant hereto.
(c) Notwithstanding Sections 9.01(a) and (b), in no event shall any
Indemnified Party be indemnified for Seller Losses or NFC Losses to the extent
(i) resulting from the performance of the Dealer Notes, market fluctuations or
other similar market or investment risks associated with ownership of the Series
2000-VFC Certificates, (ii) which would otherwise be covered in Sections 9.04
and 9.05 hereof, (iii) arising from such Person's gross negligence or willful
misconduct, (iv) arising from a breach of any representation or warranty set
forth in the Pooling and Servicing Agreement, a remedy for the breach of which
is provided in Section 2.06 of the Pooling and Servicing Agreement or (v)
arising from a breach of any representation or warranty set forth in the
Purchase Agreement, a remedy for the breach of which is provided in Section
4.06(d) of the Purchase Agreement.
SECTION 9.02 Procedure. In order for an Indemnified Party to be entitled
---------
to any indemnification provided for under this Certificate Purchase Agreement in
respect of, arising out of, or involving a claim made by any Person against the
Indemnified Party (a "Third Party Claim"), such Indemnified Party must notify
-----------------
NFC or the Seller, as applicable (the "Applicable Indemnifying Party") in
-----------------------------
writing of the Third Party Claim within a reasonable time after receipt by such
Indemnified Party of written notice of the Third Party Claim unless the
"Applicable Indemnifying Party shall have previously obtained actual knowledge
-----------------------------
thereof. Thereafter, the Indemnified Party shall deliver to the Applicable
Indemnifying Party, within a reasonable time after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
SECTION 9.03 Defense of Claims. If a Third Party Claim is made against an
-----------------
Indemnified Party, (a) the Applicable Indemnifying Party will be entitled to
participate in the
26
<PAGE>
defense thereof and, (b) if it so chooses, to assume the defense thereof with
counsel selected by the Applicable Indemnifying Party, provided that in
connection with such assumption (i) such counsel is not reasonably objected to
by the Indemnified Party and (ii) the Applicable Indemnifying Party first admits
in writing their joint and several liability to indemnify the Indemnified Party
with respect to all elements of such claim in full. Should the Applicable
Indemnifying Party so elect to assume the defense of a Third Party Claim, the
Applicable Indemnifying Party will not be liable to the Indemnified Party for
any legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof. If the Applicable Indemnifying Party elects to assume
the defense of a Third Party Claim, the Indemnified Party will (i) cooperate in
all reasonable respects with the Applicable Indemnifying Party in connection
with such defense and (ii) not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Applicable
Indemnifying Party's prior written consent, as the case may be. If the
Applicable Indemnifying Party shall assume the defense of any Third Party Claim,
the Indemnified Party shall be entitled to participate in (but not control) such
defense with its own counsel at its own expense. If the Applicable Indemnifying
Party does not assume the defense of any such Third Party Claim, the Indemnified
Party may defend the same in such manner as it may deem appropriate, including
settling such claim or litigation after giving notice to the Applicable
Indemnifying Party of such terms and the Applicable Indemnifying Party will
promptly reimburse the Indemnified Party upon written request. Anything
contained in this Certificate Purchase Agreement to the contrary
notwithstanding, neither the Applicable Indemnifying Party shall be entitled to
assume the defense of any part of a Third Party Claim that seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnified Party.
SECTION 9.04 Indemnity for Taxes, Reserves and Expenses. (a) If after the
------------------------------------------
date hereof, the adoption of any Governmental Rule or bank regulatory guideline
or any amendment or change in the interpretation of any existing or future
Governmental Rule or bank regulatory guideline by any Governmental Authority
charged with the administration, interpretation or application thereof, or the
compliance with any directive of any Governmental Authority (in the case of any
bank regulatory guideline, whether or not having the force of Governmental
Rule):
(i) shall subject any Indemnified Party to any tax, duty, deduction or
other charge with respect to the Dealer Notes, the Pooling and Servicing
Agreement, the Series Supplement, the Series 2000-VFC Certificates, this
Certificate Purchase Agreement or payments of amounts due thereunder, or shall
change the basis of taxation of payments to any Indemnified Party of amounts
payable in respect thereof (except for changes in the rate of general corporate,
franchise, net income or other income tax (including by means of withholding)
imposed on such Indemnified Party by the United States of America, the
jurisdiction in which such Indemnified Party's principal executive office is
located or any other jurisdiction in which the Indemnified Party would be
subject to such tax even if the transactions contemplated by this Agreement had
not occurred); or
27
<PAGE>
(ii) shall impose, modify or deem applicable any reserve, capital,
special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System)
against assets of, deposits with or for the account of, or credit extended by,
any Indemnified Party or shall impose on any Indemnified Party or on the United
States market for certificates of deposit or the London interbank market any
other condition affecting the Dealer Notes, the Pooling and Servicing Agreement,
the Series Supplement, the Series 2000-VFC Certificates, this Certificate
Purchase Agreement or payments of amounts due thereunder (including with respect
to Eurocurrency liability reserves); or
(iii) imposes upon any Indemnified Party any other cost or expense
(including, without limitation, reasonable attorneys' fees and expenses, and
expenses of litigation or preparation therefor in contesting any of the
foregoing if such a contest is requested by the Applicable Indemnifying Party)
with respect to the Dealer Notes, the Series 2000-VFC Certificates, any Series
Document or payments of amounts due hereunder or thereunder; and the result of
any of the foregoing is to increase the cost or reduce the payments to such
Indemnified Party with respect to the Dealer Notes, the Pooling and Servicing
Agreement, the Series Supplement, the Series 2000-VFC Certificates, this
Certificate Purchase Agreement or payments of amounts due thereunder or the
obligations thereunder or the funding of any purchases (including Incremental
Fundings) with respect thereto by any Purchaser, by an amount deemed by such
Indemnified Party to be material, then such amount or amounts as will compensate
such Indemnified Party for such increased cost or reduced payments shall be
payable to such Indemnified Party in accordance with Section 9.05(c).
---------------
(b) If any Indemnified Party shall have determined that, after the date
hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof by any Governmental Authority, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Governmental Authority, has or would have
the effect of reducing the rate of return on capital of such Indemnified Party
(or its parent) as a consequence of such Indemnified Party's obligations
hereunder or with respect hereto to a level below that which such Indemnified
Party (or its parent) could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Indemnified Party to be material, then
from time to time, such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction shall be payable to such
Indemnified Party in accordance with Section 9.05(c).
---------------
(c) Any Indemnified Party who makes a demand for payment of increased
costs or capital pursuant to Section 9.04(a) or (b) shall promptly deliver to
the Seller a certificate setting forth in reasonable detail the computation of
such increased costs or capital and specifying the basis therefor. In the
absence of manifest error, such certificate shall be conclusive and binding for
all purposes. Each Indemnified Party shall use reasonable efforts to mitigate
the effect upon of any such increased costs or capital requirements; provided,
--------
it shall not
28
<PAGE>
be obligated to take any action that it determines would be disadvantageous to
it or inconsistent with its policies.
SECTION 9.05 Costs, Expenses, Taxes, Breakage Payments and Increased
-------------------------------------------------------
Costs under Certificate Purchase Agreement and Program Facility. (a)Subject to
- ---------------------------------------------------------------
the payment terms of Section 9.05, each of the Seller and NFC agree to pay to
------------
each Purchaser and its Administrative Agent (i) all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
Certificate Purchase Agreement, the other documents to be delivered hereunder or
in connection herewith and any requested amendments, waivers or consents or
examination or visit by the Conduit Purchaser or Administrative Agent pursuant
to Section 7.01 or 7A.02 hereof including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Purchaser and the
Administrative Agent, with respect thereto and with respect to advising the
Purchaser and the Administrative Agent as to its respective rights and remedies
under this Certificate Purchase Agreement and the other documents delivered
hereunder or in connection herewith and (ii) all costs and expenses, if any, in
connection with the enforcement of this Certificate Purchase Agreement and the
other documents delivered hereunder or in connection herewith.
(b) Subject to the payment terms of Section 9.05, each of NFC and the
------------
Seller agrees to pay any and all stamp and other taxes and fees payable in
connection with the execution, delivery, filing and recording of this
Certificate Purchase Agreement, the Series 2000-VFC Certificates or the other
documents and agreements to be delivered hereunder, and agrees to hold each
Purchaser and its Administrative Agent harmless from and against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees.
(c) The Seller shall be obligated to pay the amount of any Breakage
Payments, other Additional Amounts or Non-Use Fee payable on each Distribution
Date to the extent not paid when required pursuant to Section 4.04 of the Series
Supplement; provided, that the Seller shall be required to make such payments
--------
solely to the extent of any cash flows payable to the Seller on such date from
the Master Trust. If and to the extent that any Additional Amounts (other than
Breakage Payments) or Non-Use Fee shall remain outstanding after payment by the
Seller pursuant to the preceding sentence on any Distribution Date, NFC shall be
required to make such payments within 10 days after demand therefor by the
Administrative Agent or the applicable payee.
(d) If a Conduit Purchaser becomes obligated to compensate any financial
institution under its commercial paper program as a result of any events or
circumstances similar to those described in Sections 9.04 or 9.05(c), the
Conduit Purchaser shall promptly deliver to the Seller a certificate setting
forth in reasonable detail the computation of such amounts. In the absence of
manifest error, such certificate shall be conclusive and binding for all
purposes. The Seller shall be obligated to pay to the Conduit Purchaser,
promptly after receipt of such certificate, such additional amounts as may be
necessary to reimburse the Conduit Purchaser for any amounts so paid by the
Conduit Purchaser. With respect to amounts to be paid pursuant to
29
<PAGE>
this Section 9.05(d) as a result of any events or circumstances similar to those
described in Section 9.04 or 9.05(c) hereof, the Conduit Purchaser shall request
the party to be compensated to use its reasonable efforts to mitigate the effect
upon the Seller of any such increased costs or capital requirements; provided,
--------
such party shall not be obligated to take any action that it determines would be
disadvantageous to it or inconsistent with its policies.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.01 Authorization and Action. Each Purchaser hereby accepts the
------------------------
appointment of and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent reserves the right, in
its sole discretion, to take any actions and exercise any rights or remedies
under this Certificate Purchase Agreement and any related agreements and
documents. Except for actions which the Administrative Agent is expressly
required to take pursuant to this Certificate Purchase Agreement or the Asset
Purchase Agreement, the Administrative Agent shall not be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to applicable law unless the Administrative Agent shall receive further
assurances to its satisfaction from the Purchasers, of the indemnification
obligations under Section 10.04 hereof against any and all liability and expense
which may be incurred in taking or continuing to take such action. The
Administrative Agent agrees to give to the Purchasers prompt notice of each
notice and determination given to it by the Seller, the Servicer or the Master
Trust Trustee, pursuant to the terms of this Certificate Purchase Agreement, the
Pooling and Servicing Agreement or the Series Supplement. Subject to Section
10.06 hereof, the appointment and authority of the Administrative Agent
hereunder shall terminate upon (i) the payment to (a) the Purchasers of all
amounts owing to the Purchasers hereunder and (b) the Administrative Agent of
all amounts due hereunder and (ii) the Series Termination Date specified in the
Series Supplement.
SECTION 10.02 Administrative Agent's Reliance, Etc. Neither the
-------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them as
Administrative Agent under or in connection with this Certificate Purchase
Agreement or any related agreement or document, except for its or their own
gross negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Purchasers and shall not be responsible to the Purchasers
for any statements, warranties or representations made by the Seller or NFC (in
any capacity) in connection with any Series Document; (iii) shall not have any
duty to ascertain or to inquire as to
30
<PAGE>
the performance or observance of any of the terms, covenants or conditions of
any Series Document on the part of the Seller or NFC (in any capacity) or to
inspect the property (including the books and records) of the Seller or NFC (in
any capacity); (iv) shall not be responsible to any Purchaser for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Certificate Purchase Agreement or any other instrument or document
furnished pursuant hereto; and (v) shall incur no liability under or in respect
of this Certificate Purchase Agreement by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which
may be by telex) believed by it in good faith to be genuine and signed or sent
by the proper party or parties.
SECTION 10.03 Administrative Agent and Affiliates. Bank of America and
-----------------------------------
its respective Affiliates may generally engage in any kind of business with the
Seller, NFC or any Obligor, any of their respective Affiliates and any Person
who may do business with or own securities of the Seller, NFC or any Obligor or
any of their respective Affiliates, all as if such entities were not the
Administrative Agent and without any duty to account therefor to the Purchasers.
SECTION 10.04 Indemnification. Each Purchaser (other than the Conduit
---------------
Purchaser) severally agrees to indemnify the Administrative Agent (to the extent
not reimbursed by the Seller or NFC), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Certificate Purchase Agreement or any action
taken or omitted by the Administrative Agent under this Certificate Purchase
Agreement; provided, that (i) no Purchaser shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting or arising from the
Administrative Agent's gross negligence or willful misconduct and (ii) no
Purchaser shall be liable for any amount in respect of any compromise or
settlement or any of the foregoing unless such compromise or settlement is
approved by the Conduit Purchaser and the majority of the Purchasers (other than
the Conduit Purchaser) (based on purchase commitments under the Asset Purchase
Agreement). Without limitation of the generality of the foregoing, each
Purchaser (other than a the Conduit Purchaser), agrees to reimburse the related
Administrative Agent, promptly upon demand, for any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Administrative
Agent in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Certificate
Purchase Agreement, provided, that no Purchaser shall be responsible for the
costs and expenses of the Administrative Agent in defending itself against any
claim alleging the gross negligence or willful misconduct of the Administrative
Agent to the extent such gross negligence or willful misconduct is determined by
a court of competent jurisdiction in a final and non-appealable decision.
SECTION 10.05 Purchase Decision. Each Purchaser acknowledges that it has,
-----------------
independently and without reliance upon the Administrative Agent, and based on
such
31
<PAGE>
documents and information as it has deemed appropriate, made its own evaluation
and decision to enter into this Certificate Purchase Agreement and to purchase
an interest in the Series 2000-VFC Certificates. Each Purchaser also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any of its Affiliates, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Certificate Purchase
Agreement or any related agreement, instrument or other document.
SECTION 10.06 Successor Administrative Agent. The Administrative Agent
------------------------------
may resign at any time by giving sixty days' written notice thereof to the
Purchasers, the Seller, the Servicer and the Master Trust Trustee. Upon any
such resignation, the Purchasers shall have the right to appoint a successor
Administrative Agent approved by the Seller (which approval will not be
unreasonably withheld or delayed). If no successor Administrative Agent shall
have been so appointed and shall have accepted such appointment, within sixty
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Purchasers, appoint
a successor Administrative Agent. If such successor Administrative Agent is not
an Affiliate of the resigning Administrative Agent, such successor
Administrative Agent shall be subject to the Seller's prior written approval
(which approval will not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Certificate
Purchase Agreement. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article X shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Administrative Agent under this Certificate Purchase Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Amendments. No amendment or waiver of any provision of this
----------
Certificate Purchase Agreement shall in any event be effective unless the same
shall be in writing and signed by all of the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 11.02 Notices. All notices and other communications provided for
-------
hereunder shall, unless otherwise stated herein, be in writing (including
telecopies, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, cabled or delivered, as to each party hereto, at its address set
forth in Schedule I hereto or at such other address as shall be designated by
such party in a written notice to the other party hereto. All such notices and
32
<PAGE>
communications shall, when mailed, telecopied, telegraphed or cabled, be
effective when deposited in the mails, confirmed by telephone, delivered to the
telegraph company or delivered to the cable company, respectively.
SECTION 11.03 No Waiver; Remedies. No failure on the part of any party
-------------------
hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 11.04 Binding Effect; Assignability. This Certificate Purchase
-----------------------------
Agreement shall be binding upon and inure to the benefit of the Seller, NFC, the
Administrative Agent and the Purchasers party this Agreement and their
respective successors and assigns (including any subsequent holders of the
Series 2000-VFC Certificates); provided, however, that the Seller shall not have
-------- -------
the right to assign its rights hereunder or any interest herein (by operation of
law or otherwise) without the prior written consent of the Administrative
Agent. The Administrative Agent agrees that it shall not transfer a Series
2000-VFC Certificate without the Seller's consent, unless such transfer (x) is
to a Purchaser, (y) is to a RIC or (z) occurs after the commencement of the
Early Amortization Period.
Without limiting the foregoing, the Administrative Agent on behalf of the
Conduit Purchaser may, from time to time, with prior or concurrent notice to the
Seller and the Servicer, in one transaction or a series of transactions, assign
all or a portion of a Series 2000-VFC Certificate and its rights and obligations
under this Agreement to a RIC. Upon and to the extent of such assignment to a
RIC, (i) the RIC shall be the owner of the assigned portion of the Series 2000-
VFC Certificate, (ii) Bank of America (or an Affiliate thereof) will act as
Administrative Agent for the RIC as well as for the assigning Conduit Purchaser,
with all corresponding rights and powers, express or implied, granted herein to
the Administrative Agent, (iii) the RIC and its Program Support Providers and
other related parties shall have the benefit of all the rights and protections
provided to the assigning Conduit Purchaser and its Program Support Providers
and other related parties, respectively, herein and in the other Series
Documents (including, without limitation, any limitation on recourse against the
assigning Conduit Purchaser or related parties, any agreement not to file or
join in the filing of a petition to commence an insolvency proceeding against
the assigning Conduit Purchaser, and the right to assign to another RIC as
provided in this paragraph), (iv) the RIC shall assume all obligations, if any,
of the assigning Conduit Purchaser under and in connection with this Certificate
Purchase Agreement, and the assigning Conduit Purchaser shall be released from
such obligations, in each case to the extent of such assignment, and the
obligations of the assigning Conduit Purchaser (if any) and the RIC shall be
several and not joint, (v) all distributions in respect of principal or interest
shall be made to the assigning Conduit Purchaser and the RIC, on a pro rata
basis according to their respective interests (or in the case of interest, the
accrued amounts thereof), (vi) the Funding Rate used to calculate the interest
with respect to the portions of the Series 2000-VFC Certificates owned on behalf
of the RIC and funded with commercial paper notes issued by the RIC from time to
time
33
<PAGE>
shall be determined in the manner set forth in the definition of "CP Rate" on
the basis of the discount or interest rates applicable to commercial paper
issued by the RIC (rather than the assigning Conduit Purchaser), (vii) the
defined terms and other terms and provisions of this Agreement and the other
Transaction Documents shall be interpreted in accordance with the foregoing, and
(viii) if requested by the Administrative Agent, the parties will execute and
deliver such further agreements and documents and take such other actions as the
Administrative Agent may reasonably request to evidence and give effect to the
foregoing.
(b) Without the consent of the Seller, each Committed Purchaser party to
this Certificate Purchase Agreement may assign all or a portion of its rights
and obligations under this Certificate Purchase Agreement to any financial or
other institution acceptable to the Administrative Agent. The parties to each
such assignment shall execute and deliver an Assignment and Acceptance to the
Administrative Agent, and the Administrative Agent shall promptly notify the
Seller of such assignment. From and after the effective date of such Assignment
and Acceptance, the assigning Committed Purchaser shall be relieved of its
obligations hereunder to the extent so assigned.
(c) Any Purchaser may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more Persons (each, a
"Participant") participating interests in all or a portion of its rights and
-----------
obligations under this Certificate Purchase Agreement. Notwithstanding any such
sale by a Purchaser of participating interests to a Participant, such
Purchaser's rights and obligations under this Certificate Purchase Agreement
shall remain unchanged, such Purchaser shall remain solely responsible for the
performance thereof, and the Seller and the Administrative Agent shall continue
to deal solely and directly with such Purchaser in connection with such
Purchaser's rights and obligations under this Certificate Purchase Agreement.
The Seller also agrees that each Participant shall be entitled to the benefits
of Article IX hereof; provided, however, that all amounts payable by the Seller
-------- -------
to any such Participant shall be limited to the amounts which would have been
payable to the Purchaser selling such participating interest had such interest
not been sold.
(d) This Certificate Purchase Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as all amounts payable
with respect to the Series 2000-VFC Certificates shall have been paid in full.
SECTION 11.05 Provision of Documents and Information. The Seller
--------------------------------------
acknowledges and agrees that the Conduit Purchaser, the Committed Purchaser and
Administrative Agent are permitted to provide to the Liquidity Purchasers,
permitted assignees and participants, the placement agents for their respective
commercial paper notes, the rating agencies with respect to such notes and other
liquidity and credit providers under their respective commercial paper programs,
opinions, certificates, documents and other information relating to the Seller,
NFC and the Dealer Notes delivered to the Conduit Purchaser, the Committed
Purchaser or the Administrative Agent pursuant to this Certificate Purchase
Agreement.
34
<PAGE>
SECTION 11.06 GOVERNING LAW; JURISDICTION. THIS CERTIFICATE PURCHASE
---------------------------
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
EACH OF THE PARTIES TO THIS CERTIFICATE PURCHASE AGREEMENT HEREBY AGREES TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS
THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
---------
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
- ----------
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
SECTION 11.07 No Proceedings. (a) The Seller agrees that so long as any
--------------
senior indebtedness of a Conduit Purchaser shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any senior
indebtedness of the Conduit Purchaser shall have been outstanding, it shall not
file, or join in the filing of, a petition against the Conduit Purchaser or the
Master Trust under the Federal Bankruptcy Code, or join in the commencement of
any bankruptcy, reorganization, arrangement, insolvency, liquidation or other
similar proceeding against the Conduit Purchaser or the Master Trust.
(b) Each Purchaser severally agrees that it shall not at any time file, or
join in the filing of, a petition against the Seller, the Master Trust Trustee
(solely in its capacity as acting as such for the Master Trust) or the Master
Trust under the Federal Bankruptcy Code, or join in the commencement of any
bankruptcy, reorganization, arrangement, insolvency, liquidation or other
similar proceeding against the Seller, the Master Trust Trustee (solely in its
capacity as acting as such for the Master Trust) or the Master Trust.
SECTION 11.08 Execution in Counterparts. This Certificate Purchase
-------------------------
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement.
SECTION 11.09 No Recourse. The obligations of any Purchaser under this
-----------
Certificate Purchase Agreement, or any other agreement, instrument, document or
certificate executed and delivered by or issued by such Purchaser or any officer
thereof are solely the corporate or partnership obligations of such Purchaser.
No recourse shall be had for payment of any fee or other obligation or claim
arising out of or relating to this Certificate Purchase Agreement or any other
agreement, instrument, document or certificate executed and delivered or issued
by such Purchaser or any officer thereof in connection therewith, against any
stockholder, limited partner, employee, officer, director or incorporator of
such Purchaser.
35
<PAGE>
SECTION 11.10 Limited Recourse. The obligations of each of the Seller and
----------------
NFC under this Certificate Purchase Agreement are solely the corporate
obligations of such Person. No recourse shall be had for the payment of any fee
or other obligation or claim arising out of or relating to this Certificate
Purchase Agreement or any other agreement, instrument, document or certificate
executed and delivered or issued by the Seller or NFC or any officer thereof in
connection therewith, against any stockholder, employee, officer or director of
the Seller or NFC.
SECTION 11.11 Survival. All representations, warranties, covenants,
--------
guaranties and indemnifications contained in this Certificate Purchase
Agreement, including, without limitation, Article IX and Sections 11.07, 11.09
and 11.10, and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the sale, transfer or repayment
of the Series 2000-VFC Certificates.
SECTION 11.12 Tax Characterization. Each party to this Certificate
--------------------
Purchase Agreement (a) acknowledges and agrees that it is the intent of the
parties to this Certificate Purchase Agreement that, for federal, state and
local income and franchise tax purposes only, the Series 2000-VFC Certificates
will be treated as evidence of indebtedness secured by the Dealer Notes and
proceeds thereof and the Master Trust will not be characterized as an
association (or publicly traded partnership) taxable as a corporation, (b)
agrees to treat the Series 2000-VFC Certificates for federal, state and local
income and franchise tax purposes as indebtedness and (c) agrees that the
provisions of this Certificate Purchase Agreement and all related Series
Documents shall be construed to further these intentions of the parties.
SECTION 11.13 Master Trust Rating Agency Notices. Each of the Seller and
----------------------------------
the Servicer hereby agree to provide written notice to each of the rating
agencies then rating any outstanding series issued by the Master Trust at least
5 days prior to the proposed effectiveness of any (i) anyextension of the
Purchase Expiration Date and (ii) any proposed action specified in Section 2.04,
------------
Section 7.04, Section 10.06 or Section 11.01 of this Certificate Purchase
- ------------ ------------- -------------
Agreement. Each such notice shall include a copy or description of any such
proposed action.
36
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Certificate Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
NAVISTAR FINANCIAL SECURITIES
CORPORATION,
as Seller
By: /s/ John J. Bongiorno
---------------------------
Name: John J. Bongiorno
Title: President & CEO
NAVISTAR FINANCIAL CORPORATION,
as Servicer
By: /s/ John J. Bongiorno
---------------------------
Name: John J. Bongiorno
Title: President & CEO
RECEIVABLES CAPITAL CORPORATION,
as a Conduit Purchaser
By: /s/ Stewart L. Cutler
---------------------------
Name: Stewart L. Cutler
Title: Managing Director
S-1
<PAGE>
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ Gregory S. Blank
------------------------------
Name: Gregory S. Blank
Title: Vice President
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Committed Purchaser
By: /s/ Gregory S. Blank
------------------------------
Name: Gregory S. Blank
Title: Vice President
Purchaser Percentage: 100%
S-2
<PAGE>
EXHIBIT A
Form of Notice of
Incremental Funding
[Letterhead of Navistar Financial Corporation]
A. Proposed Incremental Funding Date: ___________
B. Amount of requested Incremental Funding with
respect to Series 2000-VFC Certificate (must be
more than $5,000,000 (unless for any lesser
remaining Maximum Funded Amount) but not greater
than remaining Maximum Funded Amount)................... $__________
C. Purchase Price (100% of the Incremental Funded
Amount to the Series 2000-VFC Certificate).............. $__________
D. Remaining Maximum Funded Amount (after giving
effect to the requested Incremental Funding)............ $__________
E. Certifications:
(a) The representations and warranties of Navistar Financial Securities
Corporation ("Seller") in the Pooling and Servicing Agreement dated as
of June 8, 1995 (as amended, modified and supplemented, the "Pooling
and Servicing Agreement"), among the Seller, Navistar Financial
Corporation, as Servicer, and The Bank of New York, as Master Trust
Trustee (the "Master Trust Trustee"), the Series Supplement dated as
of January 28, 2000 (the "Series Supplement"), among the Seller, the
Servicer and the Master Trust Trustee and the Certificate Purchase
Agreement dated as of January 28, 2000 (the "Certificate Purchase
Agreement"), among the Seller, the Conduit Purchaser, the
Administrative Agent and the Committed Purchasers named therein, are
true and correct on the date hereof.
(b) The conditions to the Incremental Funding specified in Section 2.03(b)
of the Certificate Purchase Agreement have been satisfied and/or will
be satisfied as of the applicable Incremental Funding Date.
<PAGE>
NAVISTAR FINANCIAL CORPORATION
By ________________________
Authorized Officer
Date of Notice: __________
A-2
<PAGE>
EXHIBIT B
[Form of Investment Letter]
__________ ____, 2000
Navistar Financial Securities Corporation
[Address]
Re: Purchase of Series 2000-VFC Certificate
---------------------------------------
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by ____________________
(the "Purchaser") and ____________________ ("__________"), as Administrative
Agent pursuant to Section 6.03 of the Certificate Purchase Agreement
("Certificate Purchase Agreement") dated as of January 28, 2000 among Navistar
Financial Securities Corporation ("Seller") and the Conduit Purchaser,
Administrative Agent and Committed Purchasers named therein. Capitalized terms
used herein without definition shall have the meanings set forth in the
Certificate Purchase Agreement. The Purchaser represents to the Seller as
follows:
(i) the Purchaser is authorized to enter into the Certificate Purchase
Agreement and to perform its obligations thereunder and to consummate the
transactions contemplated thereby;
<PAGE>
(ii) the Purchaser and Administrative Agent have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Series 2000-VFC Certificate and the
Purchaser is able to bear the economic risk of such investment;
(iii) the Purchaser and Administrative Agent have reviewed the Pooling
and Servicing Agreement and the Series Supplement (including the schedule and
exhibits thereto) and have had the opportunity to perform due diligence with
respect thereto and to ask questions of and receive answers from the Seller and
its representatives concerning the Seller, the Master Trust and the Series 2000-
VFC Certificate;
(iv) Administrative Agent is an agent on behalf of the Purchaser and
the Purchaser is not acquiring the Series 2000-VFC Certificate as an agent or
otherwise for any other person. The Purchaser is a [____________________].
Administrative Agent is a [____________________];
(v) each of the Purchaser and Administrative Agent is an "accredited
investor" as defined in Rule 501, promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended. The
Purchaser and Administrative Agent understand that the offering and sale of the
Series 2000-VFC Certificate have not been and will not be registered under the
Securities Act of 1933, as amended, and have not and will not be registered or
qualified under any applicable "blue sky" law, and that the offering and sale of
the Series 2000-VFC Certificate have not been reviewed by, passed on or
submitted to any federal or state agency or commission, securities exchange or
other regulatory body;
(vi) the Purchaser, through Administrative Agent, is acquiring the
Series 2000-VFC Certificate without a view to any distribution, resale or other
transfer thereof, except as contemplated by the following sentence. The
Purchaser and Administrative Agent will not resell or otherwise transfer the
Series 2000-VFC Certificate or any portion thereof, except (A) [in accordance
with Section 8.04 of the Certificate Purchase Agreement] [with a letter from the
buyer or transferee thereof in substantially the form hereof] and (B) (i)
pursuant to an effective registration statement under the Securities Act of
1933, as amended; (ii) in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, and applicable state
securities or "blue sky" laws; (iii) to the Seller or any affiliate of the
Seller; (iv) to a person who the Purchaser and Administrative Agent reasonably
believe is a qualified institutional buyer (within the meaning thereof in Rule
144A under the Securities Act of 1933, as amended) that is aware that the resale
or other transfer is being made in reliance upon Rule 144A; or (v) pursuant to
Regulation S under the Securities Act of 1933, as amended.
(vii) the Purchaser and Administrative Agent understand that each
Series 2000-VFC Certificate will bear a legend to substantially the following
effect:
D-2
<PAGE>
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON EXEMPTIONS PROVIDED BY THE
SECURITIES ACT. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND
ANY APPLICABLE PROVISIONS UNDER STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM SUCH PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS
SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT
AND SERIES SUPPLEMENT REFERRED TO HEREIN.
[NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE ACQUIRED BY (A) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF
TITLE 1 OF ERISA, (B) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR (C) ANY ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY (EACH A
"BENEFIT PLAN"). BY ACCEPTING AND HOLDING THIS CERTIFICATE OR ANY INTEREST
HEREIN, THE HOLDER HEREOF OR ANY OWNER OF AN INTEREST HEREIN SHALL BE DEEMED TO
HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.]
(viii) this Investment Letter has been duly authorized, executed and
delivered and constitutes the legal, valid and binding obligations of the
Purchaser and Administrative Agent, enforceable against the Purchaser and
Administrative Agent in accordance with its terms, except as such enforceability
may be limited by receivership, conservatorship, bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity; and
[(ix) Each of the Purchaser and Administrative Agent represents and
warrants that neither the Purchaser nor Administrative Agent is (i) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code, or (iii) an entity
D-3
<PAGE>
whose underlying assets include plan assets by reason of a plan's investment in
such entity.]
Very truly yours,
______________________________,
as Purchaser
By:___________________________
Name:
Title:
______________________________,
as Administrative Agent
By:___________________________
Name:
Title:
D-4
<PAGE>
SCHEDULE I
Addresses for Notices
If to:
Seller: Navistar Financial Securities Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: Vice President & Treasurer
cc: General Counsel
Facsimile: (847) 734-4090
Servicer: Navistar Financial Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: Vice President & Treasurer
cc: General Counsel
Facsimile: (847) 734-4090
Conduit Receivables Capital Corporation
Purchaser: c/o Merrill Lynch Money Markets Inc.
World Financial Center, North Tower
250 Vesey Street- 11th Floor
New York, New York 10281-1311
Attention: Stewart Cutler
Facsimile: (212) 449-8939
With a copy to:
Bank of America, National Association
231 South LaSalle Street
Chicago, IL 60697
Attention: Marianne Mihalik
Facsimile: (312) 923-0273
<PAGE>
Administrative
Agent: Bank of America, National Association
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Marianne Mihalik
Facsimile: (312) 923-0273
<PAGE>
EXHIBIT 4.1
================================================================================
NAVISTAR FINANCIAL SECURITIES CORPORATION
Seller
NAVISTAR FINANCIAL CORPORATION
Servicer
and
THE BANK OF NEW YORK
Master Trust Trustee
on behalf of the Series 2000-VFC Certificateholders
__________________________________
SERIES 2000-VFC SUPPLEMENT
Dated as of January 28, 2000
to
POOLING AND SERVICING AGREEMENT
Dated as of June 8, 1995
__________________________________
Floating Rate
Dealer Note Asset Backed Certificates, Series 2000-VFC
DEALER NOTE MASTER TRUST
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
CREATION OF SERIES 2000-VFC AND
THE SERIES 2000-VFC CERTIFICATES.......................................................... 1
SECTION 1.01 Designation.................................................................. 1
SECTION 1.02 Incremental Fundings......................................................... 2
SECTION 1.03 Optional Early Pay Out....................................................... 2
ARTICLE II
DEFINITIONS............................................................................... 3
SECTION 2.01 Definitions.................................................................. 3
ARTICLE III
SERVICING FEE............................................................................. 15
SECTION 3.01 Servicing Compensation....................................................... 15
ARTICLE IV
RIGHTS OF SERIES 2000-VFC CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS........................................ 16
SECTION 4.01 Rights of the Series 2000-VFC Certificateholders............................. 16
SECTION 4.02 Establishment of Series Principal Account, Spread Account,
Liquidity Reserve Account and Incremental Funding Reserve Account.................... 17
SECTION 4.03 [Reserved]................................................................... 20
SECTION 4.04 Application of Available Certificateholder Interest Collections.............. 20
SECTION 4.05 Application of Available Seller's Finance Charge Collections,
Spread Account and Liquidity Reserve Account to Deficiency Amount.................... 22
SECTION 4.06 Investor Charge-Offs......................................................... 22
SECTION 4.07 Application of Seller's Finance Charge Collections........................... 23
SECTION 4.08 Application of Series Allocable Principal Collections........................ 23
SECTION 4.09 Shared Principal Collections................................................. 25
SECTION 4.10 Distributions to Series 2000-VFC Certificateholders.......................... 26
SECTION 4.11 [Reserved]................................................................... 26
SECTION 4.12 Partial Month Due Period..................................................... 26
SECTION 4.13 Additional Rights upon the Occurrence of Certain Events...................... 27
ARTICLE V DISTRIBUTIONS AND REPORTS
TO SERIES 2000-VFC CERTIFICATEHOLDERS..................................................... 28
SECTION 5.01 Distributions............................................................... 28
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
SECTION 5.02 Monthly and Annual Certificateholders' Statement............................ 28
ARTICLE VI
EARLY AMORTIZATION EVENTS................................................................. 31
SECTION 6.01 Additional Early Amortization Events........................................ 31
ARTICLE VII
OTHER SERIES PROVISIONS................................................................... 33
SECTION 7.01 Conveyance of Dealer Notes................................................... 33
SECTION 7.02 Tax Treatment................................................................ 33
ARTICLE VIII
FINAL DISTRIBUTIONS....................................................................... 34
SECTION 8.01 Sale of Investors' Interest Pursuant to Section 2.07 of the Agreement;
Distributions Pursuant to Section 2.03 or 12.03 of the Agreement..................... 34
SECTION 8.02 Distribution of Proceeds of Sale, Disposition or Liquidation of the
Dealer Notes Pursuant to Section 9.02 of the Agreement............................... 35
ARTICLE IX
MISCELLANEOUS PROVISIONS.................................................................. 36
SECTION 9.01 Ratification of Agreement................................................... 36
SECTION 9.02 Counterparts................................................................ 36
SECTION 9.03 GOVERNING LAW............................................................... 36
SIGNATURES..................................................................................... 42
</TABLE>
EXHIBITS
Exhibit A - Form of Investor Certificate
Exhibit B - Form of Monthly Servicer and Settlement Statement
ii
<PAGE>
SERIES 2000-VFC SUPPLEMENT
---------------------------
TO POOLING AND SERVICING AGREEMENT
----------------------------------
SERIES 2000-VFC SUPPLEMENT dated as of January 28, 2000 (the "Series
Supplement"), by and among NAVISTAR FINANCIAL SECURITIES CORPORATION, a Delaware
corporation, as Seller (the "Seller"), NAVISTAR FINANCIAL CORPORATION, a
Delaware corporation, as Servicer (the "Servicer"), and THE BANK OF NEW YORK, a
New York banking corporation, as trustee (together with its successors in trust
thereunder as provided in the Agreement referred to below, the "Master Trust
Trustee") under the Pooling and Servicing Agreement, dated as of June 8, 1995
(as amended and supplemented, the "Agreement") among the Seller, the Servicer,
the Master Trust Trustee and The Chase Manhattan Bank (formerly know as Chemical
Bank), as trustee under the 1990 Trust Agreement.
Section 6.09 of the Agreement provides that the Seller may from time
to time direct the Master Trust Trustee to issue, on behalf of the Master Trust,
one or more new Series of Investor Certificates representing fractional
undivided interests in the Master Trust. The Principal Terms of any new Series
are to be set forth in a Supplement to the Agreement.
Pursuant to this Series Supplement, the Seller and the Master Trust
Trustee shall create a new Series of Investor Certificates and specify the
Principal Terms thereof.
ARTICLE 1
CREATION OF SERIES 2000-VFC AND
THE SERIES 2000-VFC CERTIFICATES
SECTION 1.01 Designation.
-----------
(a) There is hereby created a new Series pursuant to the Agreement
and this Series Supplement to be known as the "Floating Rate Dealer Note Asset
Backed Certificates Series 2000-VFC." The interest of the Investor
Certificateholders in Series 2000-VFC shall be represented by the Series 2000-
VFC Certificates. The Series 2000-VFC Certificates are a series of variable
funding certificates, meaning that their Funded Amount may be increased from
time to time during the Revolving Period as Incremental Fundings are made under
the Certificate Purchase Agreement and may be decreased from time to time, as
Investor Principal Collections or certain other funds are distributed to the
Series 2000-VFC Certificateholders for that purpose. The Funded Amount of the
Series 2000-VFC may not at any time exceed the Maximum Funded Amount.
<PAGE>
(b) If any term or provision contained herein shall conflict with or
be inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Series Supplement shall govern with respect to Series
2000-VFC.
SECTION 1.02 Incremental Fundings. Incremental Fundings may occur on any
--------------------
Distribution Date to the extent provided in the Certificate Purchase Agreement.
Upon any Incremental Funding, the Funded Amount, the Series Allocation
Percentage, the Floating Allocation Percentage and other terms will be reset to
the extent provided herein and in the Certificate Purchase Agreement.
SECTION 1.03 Optional Early Pay Out.
----------------------
(a) On any Funding Change Date falling in the Revolving Period, the
Seller may cause the principal portion of the Certificates to be prepaid in full
or in part, (x) if the aggregate principal amount of such prepayment is greater
than $150,000,000, on not less than five Business days prior written notice by
the Servicer or (y) otherwise, on not less than three Business Days prior
written notice by the Servicer to the Master Trust Trustee and the
Administrative Agent, with Shared Principal Collections as provided in Section
4.03(e) of the Agreement; provided, however that such prepayment shall not be
permitted unless all due (or if the Certificates are paid in full, all accrued)
and unpaid Monthly Interest, Additional Amounts and Non-Use Fees have been paid
in full.
(b) In addition, on any Business Day, the Seller may cause the
principal portion of the Certificates to be prepaid in full or in part, (x) if
the aggregate principal amount of such prepayment is greater than $150,000,000,
on not less than five Business Days prior written notice by the Servicer or (y)
otherwise, on not less than three Business Days prior written notice by the
Servicer to the Master Trust Trustee and the Administrative Agent, with the
proceeds from issuance of a new Series issued substantially contemporaneously
with such prepayment; provided, however that such prepayment shall not be
permitted unless all due (or, if the Certificates are paid in full, all accrued)
and unpaid Monthly Interest, Additional Amounts and Non-Use Fees have been paid
in full.
(c) Servicer shall not give notice of any prepayment pursuant to
Section 1.03(a) unless the Master Trust has funds sufficient to make such
prepayment on the day notice is given and shall not give notice of any
prepayment pursuant to Section 1.03(b) unless the Seller has obtained binding
commitments which may be subject to customary conditions from one or more
persons to purchase the new series in such amounts as will yield the net
proceeds necessary to make the prepayment.
2
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ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions.
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(a) Whenever used in this Series Supplement, the following words and
phrases shall have the following meanings:
"Accrual Period" shall mean with respect to any Distribution Date, if
Monthly Interest is to be calculated on the basis of the CP Rate, the related
Due Period and if Monthly Interest is to be calculated on the basis of the
Alternate Rate, the related Distribution Period.
"Additional Amounts" shall have the meaning specified in the
Certificate Purchase Agreement.
"Adjusted Invested Amount" shall mean, with respect to any
Distribution Date, an amount (which shall never be less than zero) equal to the
Initial Invested Amount as of the related Determination Date, plus the Available
Subordinated Amount as of the end of the related Transfer Date, plus the amount
of any Incremental Funding to be made on that Distribution Date, if any, minus
the aggregate amount of Investor Charge-Offs since the end of the Revolving
Period not reimbursed on or prior to such Distribution Date; provided that, for
purposes of calculating the Series Allocation Percentage, the Series 2000-VFC
shall be deemed to have been outstanding as of January 25, 2000 with respect to
allocations of Principal Collections and related concepts and as of December 26,
1999 with respect to Finance Charge Collections and related concepts, in each
case with an Adjusted Invested Amount of $346,500,000.
"Administrative Agent" shall have the meaning specified in the
Certificate Purchase Agreement.
"Amortization Period" shall mean, unless an Early Amortization Event
shall have occurred prior thereto, the period commencing on the Amortization
Period Commencement Date, and ending upon the first to occur of (a) the
commencement of an Early Amortization Period, (b) the payment in full to Series
2000-VFC Certificateholders of the outstanding Funded Amount and (c) the Series
Termination Date.
"Amortization Period Commencement Date" shall mean the first day of
the Due Period occurring after the Purchase Expiration Date then in effect.
"Amortizing Due Period" shall have the meaning specified in Section
4.12.
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"Available Certificateholder Interest Collections" shall mean, with
respect to any Due Period, the sum of (a) Investor Finance Charge Collections
for such Due Period and (b) Investment Income for that Due Period.
"Available Draw Funds" shall have the meaning specified in Section
4.05(b).
"Available Seller's Finance Charge Collections" shall mean, with
respect to any Due Period, an amount equal to the product of (a) the excess of
(i) the Seller's Percentage for such Due Period over (ii) the result (if
positive) of the Excess Seller's Percentage for such Due Period minus the
Required Excess Seller Interest Percentage and (b) Series Allocable Finance
Charge Collections for such Due Period; provided, however, that Available
Seller's Finance Charge Collections shall be zero for any Due Period to the
extent the Available Subordinated Amount equals or is reduced to zero on the
Transfer Date related to such Due Period.
"Available Seller's Principal Collections" shall mean, with respect to
any Business Day, an amount equal to the product of (a) the excess of (i) the
Seller's Percentage for the Due Period in which such Business Day occurs over
(ii) the Excess Seller's Percentage for such Due Period and (b) Series Allocable
Principal Collections for such Business Day; provided, however, that Available
Seller's Principal Collections shall be zero for any Business Day to the extent
the Available Subordinated Amount equals or is reduced to zero on the Transfer
Date immediately preceding such Business Day.
"Available Subordinated Amount" shall mean for each Transfer Date
(before giving effect to all adjustments in the Available Subordinated Amount
thereto on such Transfer Date), the lesser of (i) the Maximum Subordinated
Amount as of such Transfer Date (or, in the case of the first Transfer Date
after the Closing Date $46,500,000) and (ii) the sum of (a) the Available
Subordinated Amount as of the end of the preceding Transfer Date and (b) any
Incremental Subordinated Amount with respect to the Distribution Date related to
such preceding Transfer Date, if any.
"Average Coverage Differential" shall be determined, on any
Determination Date, by reference to the Coverage Differentials for each of the
related Due Period and the three immediately preceding Due Periods, and shall
equal the sum of the three highest such Coverage Differentials divided by three.
Average Coverage Differential shall be expressed as a percentage, and shall be
rounded to the nearest one-hundredth of a percentage point.
"Business Day" shall mean, with respect to Series 2000-VFC, any day
other than a Saturday, a Sunday, or a day on which banking institutions in New
York, New York, Chicago, Illinois, or the city in which the Corporate Trust
Office is located, or in connection with the determination of LIBOR, London,
England, are authorized or obligated by law or executive order to be closed or
remain closed.
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"Certificate Purchase Agreement" shall mean the Certificate Purchase
Agreement, dated as of the Closing Date, among the Seller, the Servicer and the
other parties thereto, as amended, supplemented or otherwise modified from time
to time.
"Certificate Rate" shall mean, for any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which is the product of
(i) Monthly Interest to be paid on the Distribution Date (excluding any portion
thereof consisting of Monthly Interest carried over from the prior Distribution
Date and interest on such unpaid Monthly Interest), and (ii) a fraction, the
numerator of which is 365 and the denominator of which is the number of days in
which such Monthly Interest was calculated and (b) the denominator of which is
the weighted average Funded Amount for such Accrual Period.
"Closing Date" shall mean January 28, 2000.
"Coverage Differential" shall mean, with respect to any Due Period,
the result of (a) the Portfolio Yield for such Due Period minus (b) the sum of
(i) the Certificate Rate for the related Distribution Date and (ii) one percent
(1%). Coverage Differential shall be expressed as a percentage, and shall be
rounded to the nearest one-hundredth of a percentage point.
"Deficiency Amount" shall have the meaning specified in Section
4.05(a).
"Draw Amount" shall mean, with respect to any Transfer Date, the least
of (a) the Deficiency Amount for such Transfer Date, (b) the Available
Subordinated Amount as of the end of the preceding Transfer Date plus any
Incremental Subordinated Amount with respect to the Distribution Date related to
such preceding Transfer Date, if any, and (c) Available Draw Funds for such
Transfer Date.
"Early Amortization Event" shall mean, with respect to Series 2000-
VFC, any event specified in Section 9.01(c) of the Agreement, together with any
additional Early Amortization Event specified in Section 6.01 of this Series
Supplement, but shall not mean any other event specified in Section 9.01 of the
Agreement.
"Early Amortization Period" shall mean an Early Amortization Period
with respect to Series 2000-VFC that occurs as a result of any event specified
in Section 9.01(c) of the Agreement or any Early Amortization Event specified in
Section 6.01 of this Series Supplement.
"Early Amortization Period Shortfall Amount" shall have the meaning
specified in Section 4.08(e).
"Eligible Investments" shall mean
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(a) book-entry securities, negotiable instruments or securities represented
by instruments in bearer or registered form having (except in the case of
clause (iv) below) remaining maturities occurring not later than the
Distribution Date next succeeding the Master Trust Trustee's acquisition
thereof, except as otherwise described herein, that evidence:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit
of, or bankers' acceptances issued by, 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 Master Trust's
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 or entity other than such depository
institution or trust company) of such depository institution or
trust company shall have a credit rating not lower than the
highest investment category for short term unsecured debt
obligations granted by Moody's and S&P;
(iii) commercial paper having, at the time of the Master Trust's
investment or contractual commitment to invest therein, a rating
not lower than the highest investment category for short term
unsecured debt obligations granted by Moody's and S&P;
(iv) investments in money market funds or common trust funds
having a rating not lower than the highest investment category
for short term unsecured debt obligations granted by Moody's and
S&P or otherwise approved in writing by the Administrative Agent
(including funds for which the Master Trust Trustee or any of its
affiliates is investment manager or advisor, so long as such fund
shall have such rating);
(v) repurchase obligations (x) 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) described in clause (ii) or (y) the counterparty for
which has a rating not lower than the highest investment category
for short
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term unsecured debt obligations granted by Moody's and S&P, the
collateral for which is held by a custodial bank for the benefit
of the Master Trust or the Master Trust Trustee, is marked to
market daily and is maintained in an amount that exceeds the
amounts of such repurchase obligation, and which required
liquidation of the collateral immediately upon the amount of such
collateral being less than the amount of such repurchase
obligation (unless the counterparty immediately satisfies the
repurchase obligation upon being notified of such shortfall); or
(vi) commercial paper master notes where the issuer has, at the
time of the Master Trust's investment or contractual commitment
to invest therein, a rating not lower than the highest investment
category for short term unsecured debt obligations granted by
Moody's and S&P; and
(b) any other investment consisting of a financial asset that by its
terms converts to cash within a finite period of time approved by
the Administrative Agent.
Unless approved by the Administrative Agent, Eligible Investments of
funds in the Series Principal Account and the Liquidity Reserve Account will be
subject to the following additional restrictions: (x) no more than the greater
of (A) $1,000,000 and (B) 20% of the aggregate Eligible Investments in all such
accounts collectively shall be obligations of or investments in any single
issuer (except that such 20% limitation shall not apply to Eligible Investments
of the type specified in clause (a)(i)); and (y) each Eligible Investment shall
be denominated and be payable solely in U.S. dollars, shall bear interest at a
specified rate that is, or is based upon, LIBOR or a commercial paper rate,
shall entitle the holder to a fixed principal amount at maturity and shall have
a yield that is not inversely or disproportionately affected by changes in
interest rates.
"Excess Seller's Percentage" shall mean, with respect to any Due Period,
a percentage (which percentage shall never be less than 0% nor more than 100%)
equal to the excess of (a) the Seller's Percentage for such Due Period, over (b)
the percentage equivalent (which percentage shall never be less than 0% nor more
than 100%) of a fraction, the numerator of which is the Available Subordinated
Amount as of the end of the related Transfer Date, plus any Incremental
Subordinated Amount with respect to the Distribution Date related to such
Transfer Date, if any, and the denominator of which is the product of (x) the
sum of the aggregate principal amount of Dealer Notes in the Master Trust and
the aggregate principal amount of funds on deposit in the Excess Funding
Account, both as of the end of the immediately preceding Due Period and (y) the
Series 2000-VFC Allocation Percentage for the Due Period for which the Excess
Seller's Percentage is being calculated.
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"Excess Seller's Principal Collections" shall mean, with respect to
any Business Day during a Due Period, the product of (a) Series Allocable
Principal Collections for such Business Day and (b) the Excess Seller's
Percentage for such Due Period.
"Expected Payment Date" shall mean the Distribution Date in the
calendar month beginning six months after the Amortization Period Commencement
Date.
"Floating Allocation Percentage" shall mean, with respect to any Due
Period , the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the immediately
preceding Distribution Date (after giving effect to all increases and reductions
thereof on such Distribution Date) and the denominator of which is the product
of (a) the sum of the aggregate principal amount of Dealer Notes in the Master
Trust and the aggregate principal amount of funds on deposit in the Excess
Funding Account, both as of the end of the immediately preceding Due Period, and
(b) the Series 2000-VFC Allocation Percentage for the Due Period for which the
Floating Allocation Percentage is being calculated.
"Funded Amount" shall have the meaning specified in the Certificate
Purchase Agreement.
"Funding Change Date" shall mean any Distribution Date.
"Incremental Funded Amount" shall mean the amount of the increase in
the Funded Amount occurring as a result of any Incremental Funding, which amount
shall equal the aggregate amount of the purchase prices paid with respect to
such Incremental Funding pursuant to the Certificate Purchase Agreement.
"Incremental Funding" shall have the meaning specified in the
Certificate Purchase Agreement.
"Incremental Funding Reserve Account" shall have the meaning specified
in Section 4.02(d)(i).
"Incremental Funding Reserve Deposit Amount" shall mean (a) zero, with
respect to any Distribution Date on which the Incremental Funded Amount is zero;
and (b) with respect to any Distribution Date on which the Incremental Funded
Amount is greater than zero, the positive difference of (x) the product of (i)
the Incremental Funded Amount, (ii) the Certificate Rate for such Distribution
Date, (iii) 1.25 and (iv) a fraction, the numerator of which is the actual
number of days remaining in the Due Period in which such Distribution Date
occurs, including such Distribution Date, and the denominator of which is 360;
and (y) the balance in the Incremental Funding Reserve Account after giving
effect to any withdrawals therefrom on such Distribution Date.
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<PAGE>
Incremental Subordinated Amount" shall mean, with respect to any
Distribution Date on which there is an Incremental Funding, the product of (i)
the Incremental Funded Amount on such Distribution Date and (ii) the
Subordinated Percentage.
"Initial Funded Amount" shall mean $300,000,000.
"Initial Invested Amount" shall mean, on any Determination Date (for
purposes of any reference in the Pooling and Servicing Agreement to the "Initial
Invested Amount" or the "initial invested amount" of a Series), (a) during the
Revolving Period, the Invested Amount as of such date or (b) during an
Amortization Period or an Early Amortization Period, the Invested Amount as of
the last day of the Revolving Period.
"Initial Spread Account Required Amount" shall mean $3,750,000.
"Invested Amount" shall mean, with respect to any Distribution Date,
an amount (which shall never be less than zero) equal to the Funded Amount minus
the sum of (i) the aggregate amount, if any, of unreimbursed Investor Charge-
Offs and (ii) the aggregate amount of Series Principal Account Losses on or
prior to such Distribution Date.
"Investment Income" shall mean, for any Due Period with respect to
Series 2000-VFC, the sum of (i) income during such Due Period from the
investment of funds on deposit in the Series Principal Account and the Spread
Account and (ii) the product of (a) the Series Allocation Percentage for such
Due Period and (b) income from the investment of funds on deposit in the
Collections Account and the Excess Funding Account.
"Investor Charge-Off" shall have the meaning specified in Section
4.06.
"Investor Dealer Note Losses" shall mean, with respect to any Due
Period, the product of (a) the Floating Allocation Percentage for such Due
Period and (b) Series Allocable Dealer Note Losses for such Due Period.
"Investor Finance Charge Collections" shall mean, with respect to any
Due Period, an amount equal to the product of (a) the Floating Allocation
Percentage for such Due Period and (b) Series Allocable Finance Charge
Collections for such Due Period.
"Investor Principal Collections" shall mean, with respect to any
Business Day, the sum of (a) the product of (i) with respect to the Revolving
Period, the Floating Allocation Percentage and with respect to the Amortization
Period or any Early Amortization Period, the Principal Allocation Percentage, in
either case for the Due Period in which such Business Day occurs and (ii) Series
Allocable Principal Collections for such Business Day and (b) on any Transfer
Date, the amount, if any, of Available Certificateholder Interest Collections
treated as Investor Principal Collections pursuant to Sections 4.04(a)(iii) and
(iv).
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"Investor Servicing Fee" shall have the meaning specified in Section
3.01.
"LIBOR" shall have the meaning specified in the Certificate Purchase
Agreement.
"Liquidity Reserve Account" shall have the meaning specified in
Section 4.02(c)(i).
"Maximum Funded Amount" shall have the meaning specified in the
Certificate Purchase Agreement.
"Maximum Subordinated Amount" shall mean, with respect to any Transfer
Date related to a Due Period, the product of (a) the Invested Amount as of the
preceding Distribution Date and (b) the Subordinated Percentage; provided,
however, that with respect to a Transfer Date related to a Due Period occurring
during an Early Amortization Period, the Maximum Subordinated Amount shall not
decline until the Invested Amount equals the Maximum Subordinated Amount, and
thereafter the Maximum Subordinated Amount shall equal the Invested Amount.
"Minimum Series 2000-VFC Seller's Interest" shall mean, with respect
to any Business Day, the sum of (a) the Available Subordinated Amount as of the
end of the preceding Transfer Date, (b) the Incremental Subordinated Amount with
respect to the Distribution Date related to such preceding Transfer Date, if
any, and (c) the Required Excess Seller Interest as of the end of the preceding
Distribution Date.
"Monthly Interest" shall have the meaning specified in the Certificate
Purchase Agreement.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.01.
"New Vehicle Monthly Interest Rate" shall mean, with respect to any
Due Period, the product of (a) the per annum rate of interest and finance
charges billed by NFC during such Due Period on New Vehicle Dealer Notes and (b)
the quotient of (i) the number of days during such Due Period and (ii) the
actual number of days in the related calendar year.
"Non-Use Fee" shall have the meaning specified in the Certificate
Purchase Agreement.
"Portfolio Yield" shall mean, with respect to any Due Period, the
product of (a) the quotient of (i) Finance Charges for such Due Period and (ii)
the daily average principal amount of Dealer Notes outstanding during such Due
Period and (b) a fraction, the numerator of which is 365 and the denominator of
which is the actual number of days elapsed during such Due
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Period. Portfolio Yield shall be expressed as a percentage, and shall be rounded
to the nearest one-hundredth of a percentage point.
"Principal Allocation Percentage" shall mean, with respect to any Due
Period occurring during the Amortization Period or any Early Amortization
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the end of the
Revolving Period and the denominator of which is equal to the product of (a) the
sum of the aggregate amount of Dealer Notes in the Master Trust and the
aggregate principal amount of funds on deposit in the Excess Funding Account,
both as of the end of the Revolving Period and (b) the Series 2000-VFC
Allocation Percentage for the Due Period for which the Principal Allocation
Percentage is being calculated.
"Principal Shortfall" shall mean, with respect to Series 2000-VFC, the
Series 2000-VFC Principal Shortfall.
"Projected Dealer Note Income" shall mean, on any Transfer Date, an
amount equal to the sum of (a) the product of (i) the principal amount of Dealer
Notes financing new vehicles outstanding on such Transfer Date, (ii) the New
Vehicle Monthly Interest Rate for the Due Period in which such Transfer Date
occurs and (iii) the Series 2000-VFC Allocation Percentage for such Due Period
and (b) the product of (i) the principal amount of Dealer Notes financing used
vehicles outstanding on such Transfer Date, (ii) the Used Vehicle Monthly
Interest Rate for such Due Period and (iii) the Series 2000-VFC Allocation
Percentage for such Due Period.
"Projected Monthly Interest" shall mean, on any Transfer Date, an
amount equal to the product of (a) the Certificate Rate for the related
Distribution Date, (b) the Invested Amount as of the immediately preceding
Distribution Date, (c) the result of (i) the actual number of days in such
Accrual Period divided by (ii) 360 and (d) 1.25.
"Projected Monthly Servicing Fee" shall mean, on any Transfer Date
with respect to the Due Period in which such Transfer Date occurs, an amount
equal to one-twelfth of the product of (a) 1%, (b) the aggregate principal
amount of Dealer Notes as of such Transfer Date, (c) the Series 2000-VFC
Allocation Percentage for the Due Period related to such Transfer Date and (d)
the Floating Allocation Percentage for the Due Period related to such Transfer
Date.
"Projected Spread" shall mean, with respect to the Distribution Date
next following the Distribution Date to which such Transfer Date relates, the
sum of (a) the positive amount, if any, by which (i) the sum of (A) Projected
Monthly Interest for such Distribution Date, and (B) the Projected Monthly
Servicing Fee for the Due Period in which such Transfer Date occurs exceeds (ii)
the Projected Dealer Note Income as of such Transfer Date and (b) 1.25% of the
Invested Amount as of such Distribution Date.
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"Purchase Expiration Date" shall have the meaning specified in the
Certificate Purchase Agreement.
"Reassignment Amount" shall mean, with respect to any Distribution
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (a) the Invested Amount on such
Distribution Date, (b) accrued and unpaid interest thereon and (c) accrued and
unpaid Non-Use Fees and Additional Amounts.
"Remaining Available Seller's Principal Calculations" shall have the
meaning specified in Section 4.08(d).
"Required Excess Seller Interest" shall mean, with respect to any
Business Day, 3.0% of the Invested Amount as of the end of the preceding
Distribution Date (and such percentage shall be the "Required Excess Seller
Interest Percentage").
"Required Subordinated Amount" shall mean, with respect to any
Transfer Date related to a Due Period, an amount equal to 87.1% of the Maximum
Subordinated Amount as of such Transfer Date.
"Revolving Due Period" shall have the meaning specified in Section
4.12.
"Revolving Period" shall mean, unless an Early Amortization Event
shall have occurred prior thereto, the period beginning on the Closing Date and
ending on the earlier of (a) the close of business on the Business Day
immediately preceding the Amortization Period Commencement Date and (b) the
close of business on the Business Day immediately preceding the day on which an
Early Amortization Event occurs.
"Seller's Percentage" shall mean, with respect to any Due Period, 100%
minus (a) the Floating Allocation Percentage for such Due Period, when used with
respect to Finance Charge Collections and Dealer Note Losses at all times or
Principal Collections during the Revolving Period, and (b) the Principal
Allocation Percentage for such Due Period, when used with respect to Principal
Collections during the Amortization Period or any Early Amortization Period.
"Seller's Principal Collections" shall mean, with respect to any
Business Day, an amount equal to the sum of (a) Available Seller's Principal
Collections for such Business Day and (b) Excess Seller's Principal Collections
for such Business Day.
"Series 2000-VFC" shall mean the Series of Investor Certificates, the
terms of which are specified in this Series Supplement.
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"Series 2000-VFC Accounts" shall mean, collectively, the Series
Principal Account, the Distribution Account maintained for the Series 2000-VFC
Certificateholders, the Liquidity Reserve Account, the Incremental Funding
Reserve Account and the Spread Account.
"Series 2000-VFC Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 2000-VFC.
"Series 2000-VFC Certificateholders" shall mean the holders of Series
2000-VFC Certificates.
"Series 2000-VFC Certificateholders' Interest" shall mean that portion
of the Certificateholders' Interest evidenced by the Series 2000-VFC
Certificates.
"Series 2000-VFC Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Master Trust Trustee,
substantially in the form of Exhibit A.
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"Series 2000-VFC Principal Shortfall" shall equal, with respect to any
Business Day during any Early Amortization Period, the excess, if any, of the
Invested Amount (reduced by (i) amounts on deposit in the Series Principal
Account and (ii) the aggregate amount of Series Principal Account Losses for the
Due Period in which such Business Day occurs) as of the immediately preceding
Distribution Date over Investor Principal Collections for such Business Day.
"Series 2000-VFC Shared Principal Collections" shall have the meaning
specified in Section 4.09(b).
"Series 2000-VFC Shared Seller Principal Collections" shall have the
meaning specified in Section 4.08(d)(iv).
"Series Allocable Dealer Note Losses" shall mean, with respect to any
Due Period, the product of (a) the Series 2000-VFC Allocation Percentage for
such Due Period and (b) Dealer Note Losses for such Due Period.
"Series Allocable Finance Charge Collections" shall mean, with respect
to any Due Period, the product of (a) the Series 2000-VFC Allocation Percentage
for such Due Period and (b) the amount of Finance Charge Collections for such
Due Period.
"Series Allocable Principal Collections" shall mean, with respect to
any Business Day, the sum of (a) the product of (i) the Series 2000-VFC
Allocation Percentage for the related Due Period and (ii) the amount of
Principal Collections deposited in the Collections Account on such Business Day
and (b) if the Amortization Period Commencement Date occurs on such Business
Day, the product of (i) the Series 2000-VFC Allocation Percentage for such Due
Period
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and (ii) the amount of funds on deposit in the Excess Funding Account on such
Amortization Period Commencement Date.
"Series Invested Amount" shall mean, with respect to Series 2000-VFC,
the Invested Amount.
"Series Principal Account" shall have the meaning specified in Section
4.02(a)(i).
"Series Principal Account Losses" shall mean losses of principal on
investment of funds in the Series Principal Account.
"Series Termination Date" shall mean the Distribution Date 36 months
after the Expected Payment Date.
"Spread Account" shall have the meaning specified in Section
4.02(b)(i).
"Spread Account Deposit Amount" shall mean, with respect to any
Transfer Date, the amount, if any, by which the Projected Spread exceeds the
amount of funds on deposit in the Spread Account.
"Subject Month" shall have the meaning specified in Section 4.12.
"Subordinated Percentage" shall mean 15.5%.
"Turnover" shall have the meaning specified in Section 6.01(k).
"Used Vehicle Monthly Interest Rate" shall mean, with respect to any
Due Period, the product of (i) the per annum rate of interest and finance
charges billed by NFC during such Due Period on Used Vehicle Dealer Notes and
(ii) the quotient of (a) a number equal to the number of days during such Due
Period and (b) the actual number of days in the related calendar year.
(b) As used in this Series Supplement and in the Agreement with
respect to Series 2000-VFC, "highest investment category" shall mean (i) in the
case of Standard & Poor's, A-1+, AAA, AAAm, or AAAm-G, as applicable, and (ii)
in the case of Moody's, P-1 or Aaa, as applicable.
(c) All capitalized terms used herein and not otherwise defined
herein have the same meanings ascribed to them in the Agreement or, if not
defined therein, in the Certificate Purchase Agreement.
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(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series Supplement
as a whole and not to any particular provision of this Series Supplement;
references to any Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Series Supplement unless otherwise
specified; and the term "including" means "including without limitation."
(e) As used in this Series Supplement, references to the Available
Subordinated Amount "as of the end" of a Transfer Date shall mean the Available
Subordinated Amount as of such Transfer Date, after giving effect to all
increases and reductions thereof pursuant to Article IV hereof.
(f) As used in this Series Supplement, accounting terms which are not
defined, and accounting terms partly defined, herein shall have the respective
meanings given to them under generally accepted accounting principles as in
effect on the date hereof. To the extent that the definitions of accounting
terms in this Series Supplement are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Series Supplement will control.
(g) With respect to any Distribution Date or Transfer Date, the
"related Due Period" and the "related Distribution Period" will mean the Due
Period and Distribution Period, respectively, immediately preceding such
Distribution Date or Transfer Date, and the relationships between Due Periods
and Distribution Periods will be correlative to the foregoing relationships.
With respect to any LIBOR Determination Date, the "related Distribution Period"
will mean the Distribution Period beginning on the Distribution Date immediately
following such LIBOR Determination Date.
(h) Each defined term used in this Series Supplement has a comparable
meaning when used in its plural or singular form. Each gender-specific term
used in this Series Supplement has a comparable meaning whether used in a
masculine, feminine or gender-neutral form.
ARTICLE III
SERVICING FEE
SECTION 3.01 Servicing Compensation. The monthly servicing fee (the
----------------------
"Monthly Servicing Fee") shall be payable to the Servicer, in arrears, on each
Distribution Date in respect of a Due Period (or portion thereof) occurring
prior to the earlier of the first Distribution Date following the Series
Termination Date and the first Distribution Date on which the Invested Amount is
zero, in an amount equal to one-twelfth of the result of (a) 1% multiplied by
(b) the aggregate principal amount of Dealer Notes outstanding as of the last
day of such Due Period and multiplied by (c) the Series 2000-VFC Allocation
Percentage with respect to such Due Period. The share of the Monthly Servicing
Fee allocable to the Series 2000-VFC Certificateholders with
15
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respect to any Transfer Date (the "Investor Servicing Fee") shall be equal to
the product of (a) the Monthly Servicing Fee and (b) the Floating Allocation
Percentage with respect to such Due Period. The remainder of the Monthly
Servicing Fee shall be paid by the Seller and in no event shall the Master
Trust, the Master Trust Trustee or the Series 2000-VFC Certificateholders be
liable for the share of the Monthly Servicing Fee to be paid by the Seller; and
the remainder of the Servicing Fee shall be paid by the Seller and the Investor
Certificateholders of other Series and the Series 2000-VFC Certificateholders
shall in no event be liable for the share of the Servicing Fee to be paid by the
Seller or the Investor Certificateholders of other Series. The Investor
Servicing Fee shall be payable to the Servicer solely to the extent amounts are
available for distribution in accordance with the terms of this Series
Supplement.
The Servicer will be permitted, in its sole discretion, to waive the
Monthly Servicing Fee for any Distribution Date by notice to the Master Trust
Trustee on or before the related Determination Date; provided, however, that the
Servicer believes that sufficient Series Allocable Finance Charge Collections
will be available on any future Distribution Date to pay the Investor Servicing
Fee relating to the waived Monthly Servicing Fee. If the Servicer so waives the
Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee and
the Investor Servicing Fee for such Distribution Date shall be deemed to be zero
for all purposes of this Series Supplement and the Agreement; provided, however,
that such Investor Servicing Fee shall be paid on a future date solely to the
extent amounts are available therefor pursuant to Section 4.04(a)(vi); and
provided further that, to the extent any such waived Investor Servicing Fee is
so paid, the related portion of the Monthly Servicing Fee to be paid by the
Seller shall be paid by the Seller to the Servicer.
ARTICLE IV
RIGHTS OF SERIES 2000-VFC CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01 Rights of the Series 2000-VFC Certificateholders. The
------------------------------------------------
Series 2000-VFC Certificates shall represent fractional undivided interests in
the Master Trust, consisting of the right to receive, to the extent necessary to
make the required payments with respect to the Series 2000-VFC Certificates at
the times and in the amounts specified in this Series Supplement, Collections
allocated to Series 2000-VFC pursuant to Article IV of the Agreement and this
Article IV, funds on deposit in the Collections Account and the Excess Funding
Account allocable to Series 2000-VFC Certificateholders pursuant to Article IV
of the Agreement and this Article IV, and funds on deposit in the Series 2000-
VFC Accounts (collectively, the "Series 2000-VFC Certificateholders' Interest"),
it being understood that the Series 2000-VFC Certificates shall not represent
any interest in any Series Account or Enhancement for the benefit of any other
Series or Class. The Servicer shall apply, or instruct the Master Trust Trustee
to apply, all funds on deposit in the Collections Account and Excess Funding
Account allocable to the Series 2000-VFC Certificates, and all funds on deposit
in the Series Principal Account, the Spread Account, the Incremental Funding
Reserve Account and the
16
<PAGE>
Distribution Account maintained for the Series 2000-VFC Certificateholders, as
described in this Article IV.
SECTION 4.02 Establishment of Series Principal Account, Spread Account,
----------------------------------------------------------
Liquidity Reserve Account and Incremental Funding Reserve Account.
- -----------------------------------------------------------------
(a) Series Principal Account.
------------------------
(i) On or prior to the commencement of an Early Amortization
Period or the Amortization Period, the Master Trust Trustee, for the
benefit of the Series 2000-VFC Certificateholders, shall establish and
maintain in the name of the Master Trust an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Series 2000-VFC Certificateholders (the
"Series Principal Account"). The Master Trust Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Series Principal Account and in all proceeds thereof. Pursuant to authority
granted to it pursuant to Section 3.01(b) of the Agreement, the Servicer
shall have the revocable power to instruct the Master Trust Trustee to
withdraw funds from the Series Principal Account for the purpose of
carrying out the duties of the Servicer under this Series Supplement and
the Agreement. The Servicer at all times shall maintain accurate records
reflecting each transaction in the Series Principal Account.
(ii) Funds on deposit in the Series Principal Account overnight
or for a longer period shall at all times be invested in Eligible
Investments at the direction of the Servicer or its agent, subject to the
restrictions set forth in the Agreement and subject to the requirement that
each such Eligible Investment shall have a stated maturity on or prior to
the following Transfer Date (or such longer maturity as shall be allowed
upon the written consent of the Administrative Agent). Net interest and
earnings (less investment expenses) on funds on deposit in the Series
Principal Account, if any, shall be allocated and distributed as provided
in Section 4.04.
(b) Spread Account.
--------------
(i) The Master Trust Trustee, for the benefit of the Series
2000-VFC Certificateholders, shall cause to be established and maintained
in the name of the Master Trust, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Series 2000-VFC Certificateholders (the "Spread
Account"). The Master Trust Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Spread Account
and in all proceeds thereof. Pursuant to authority granted to it pursuant
to Section 3.01(b) of the Agreement, the Servicer shall have the revocable
power to instruct the Master Trust Trustee to withdraw funds from the
Spread Account for the purpose of carrying out the duties of the Servicer
17
<PAGE>
under this Series Supplement and the Agreement. The Servicer at all times
shall maintain accurate records reflecting each transaction in the Spread
Account. As of the Closing Date, the Servicer shall cause to be deposited
in the Spread Account an amount equal to the Initial Spread Account
Required Amount.
(ii) Funds on deposit in the Spread Account overnight or for a
longer period shall at all times be invested in Eligible Investments at the
direction of the Servicer or its agent, subject to the restrictions set
forth in the Agreement and subject to the requirement that each such
Eligible Investment shall have a stated maturity on or prior to the
following Transfer Date. Net interest and earnings (less investment
expenses) on funds on deposit in the Spread Account, if any, shall be
allocated and distributed as provided in Section 4.04.
(iii) On any Transfer Date related to a Due Period on which the
amount of funds on deposit in the Spread Account is greater than the
Projected Spread on such Transfer Date, the Servicer shall withdraw the
amount of such excess from the Spread Account and allocate and pay such
excess to the Seller.
(iv) Upon the commencement of and during an Early Amortization
Period, the Master Trust Trustee will deposit all funds in the Spread
Account into the Liquidity Reserve Account, and no additional funds shall
be deposited into the Spread Account.
(c) Liquidity Reserve Account.
-------------------------
(i) The Master Trust Trustee, for the benefit of the Seller,
shall establish on or prior to the commencement of an Early Amortization
Period and maintain or cause to be established and maintained in the name
of the Master Trust Trustee, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Seller (the "Liquidity Reserve Account"). The Seller
shall possess all right, title and interest in all funds on deposit from
time to time in the Liquidity Reserve Account and in all proceeds thereof;
provided, however, that no funds on deposit in the Liquidity Reserve
Account shall be paid to the Seller if such payment would reduce the funds
in such account below an amount equal to the Available Subordinated Amount.
Pursuant to authority granted to it pursuant to Section 3.01(b) of the
Agreement, the Servicer shall have the revocable power to instruct the
Master Trust Trustee to withdraw funds from the Liquidity Reserve Account
for the purpose of fulfilling the obligations of the Seller under this
Series Supplement and the Agreement. The Servicer at all times shall
maintain accurate records reflecting transactions in the Liquidity Reserve
Account.
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<PAGE>
(ii) Funds on deposit in the Liquidity Reserve Account overnight
or for a longer period shall at all times be invested in Eligible
Investments at the direction of the Seller or its agent, subject to the
restrictions set forth in the Agreement. Any Eligible Investment with a
stated maturity shall mature on or prior to the following Transfer Date.
All net interest and earnings (less investment expenses) on funds on
deposit in the Liquidity Reserve Account, if any, shall be paid to the
Seller. On any Transfer Date on which the amount on deposit in the
Liquidity Reserve Account exceeds the Available Subordinated Amount as of
the end of such Transfer Date, the Servicer shall withdraw the amount of
such excess from the Liquidity Reserve Account and allocate and pay such
excess to the Seller.
(d) Incremental Funding Reserve Account.
-----------------------------------
(i) The Master Trust Trustee, for the benefit of the Series
2000-VFC Certificateholders, shall establish on or prior to the
commencement of an Early Amortization Period and maintain or cause to be
established and maintained in the name of the Master Trust Trustee, an
Eligible Deposit Account bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2000-VFC
Certificateholders, (the "Incremental Funding Reserve Account"). The Master
Trust Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Incremental Funding Reserve Account and
in all proceeds thereof. Pursuant to authority granted to it pursuant to
Section 3.01(b) of the Agreement, the Servicer shall have the revocable
power to instruct the Master Trust Trustee to withdraw funds from the
Incremental Funding Reserve Account for the purpose of fulfilling the
obligations of the Servicer under this Series Supplement and the Agreement.
The Servicer at all times shall maintain accurate records reflecting
transactions in the Incremental Funding Reserve Account.
(ii) Funds on deposit in the Incremental Funding Reserve
Account overnight or for a longer period shall at all times be invested in
Eligible Investments at the direction of the Servicer or its agent, subject
to the restrictions set forth in the Agreement. Any Eligible Investment
with a stated maturity shall mature on or prior to the following Transfer
Date. All net interest and earnings (less investment expenses) on funds on
deposit in the Incremental Funding Reserve Account, if any, shall be paid
to the Seller.
(e) Replacement Series 2000-VFC Accounts. If, at any time, any of
------------------------------------
the Series 2000-VFC Accounts ceases to be an Eligible Deposit Account, the
Master Trust Trustee (or the Servicer on its behalf) shall upon the earlier of
(a) 30 calendar days, or (b) the next Determination Date, establish a new Series
2000-VFC Account meeting the conditions specified in paragraphs (a), (b), (c) or
(d) above, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Series 2000-VFC Account. Neither the
19
<PAGE>
Seller, the Servicer nor any person or entity claiming by, through or under the
Seller, the Servicer or any such person or entity shall have any right, title or
interest in, or any right to withdraw any amount from, any Series 2000-VFC
Account, except as expressly provided herein.
SECTION 4.03 [Reserved].
----------
SECTION 4.04 Application of Available Certificateholder Interest
---------------------------------------------------
Collections
-----------
(a) Application of Available Certificateholder Interest Collections.
---------------------------------------------------------------
On each Transfer Date related to a Due Period, the Master Trust Trustee, acting
in accordance with instructions from the Servicer, shall apply Available
Certificateholder Interest Collections for such Due Period in the following
amounts and in the following order of priority:
(i) Investor Servicing Fee. An amount equal to the Investor
----------------------
Servicing Fee for such Due Period (unless such amount has been netted
against deposits to the Collections Account or waived) shall be allocated
and paid to the Servicer.
(ii) Monthly Interest. An amount equal to Monthly Interest
----------------
for the Distribution Date shall be deposited in the Distribution Account.
(iiA) Non-Use Fees. An amount equal to the Non-Use Fees for
------------
the related Distribution Date shall be deposited in the Distribution
Account.
(iiB) Additional Amounts. An amount equal to the Additional
------------------
Amounts for the related Distribution Date, but not in excess of 0.40% of
the Invested Amount as of the Distribution Date immediately preceding the
related Due Period, shall be deposited into the Distribution Account.
(iii) Investor Dealer Note Losses. An amount equal to the
---------------------------
Investor Dealer Note Losses, if any, for such Due Period shall be
reimbursed by being treated as Investor Principal Collections for such
Transfer Date.
(iv) Reimbursement of Investor Charge-Offs. An amount equal to
-------------------------------------
the aggregate amount of unreimbursed Investor Charge-Offs, if any, for any
prior Due Period shall be reimbursed by being treated as Investor Principal
Collections for such Transfer Date.
(v) Spread Account Deposit Amount. An amount equal to the
-----------------------------
Spread Account Deposit Amount, if any, for such Transfer Date shall be
deposited into the Spread Account.
20
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(vi) Deferred Investor Servicing Fee. An amount equal to the
-------------------------------
aggregate outstanding amounts of the Investor Servicing Fee which have been
previously waived pursuant to Section 3.01 (unless such amounts have been
waived again) shall be allocated and paid to the Servicer.
(vii) Reinstatement of Available Subordinated Amount. An amount
----------------------------------------------
equal to the excess, if any, of the Maximum Subordinated Amount as of the
end of the preceding Transfer Date over the Available Subordinated Amount
as of the end of the preceding Transfer Date shall be (A) during the
Revolving Period or the Amortization, allocated and paid to the Seller or
(B) during an Early Amortization Period, deposited in the Liquidity Reserve
Account, and in either case (A) or (B) the Available Subordinated Amount
shall be reinstated by the amount of such payment or deposit.
(viiA) Additional Amounts. An amount equal to any Additional
------------------
Amounts for the related Distribution Date not paid pursuant to Section
4.04(iiB) shall be deposited into the Distribution Account.
(viiB) Incremental Funding Reserve Deposit Amount. An amount
------------------------------------------
equal to the Incremental Funding Reserve Deposit Amount, if any, shall be
deposited into the Incremental Funding Reserve Account.
(viii) Excess Interest Collections. Any remaining Available
---------------------------
Certificateholder Interest Collections shall be treated as Excess Interest
Collections, and applied pursuant to Section 4.03(f) of the Agreement.
If Available Certificateholder Interest Collections are not sufficient to
satisfy the application described in clauses (i) through (viiA) above on any
Transfer Date, then funds on deposit in the Incremental Funding Reserve Account
will be applied in the manner described in clause (ii) above. After such
application, any remaining funds in the Incremental Funding Reserve Account
shall be paid to the Seller. If Available Certificateholder Interest
Collections, plus amounts allocated from the Incremental Funding Reserve Account
as described above, are not sufficient to satisfy each of the applications
described in clauses (i) through (viiA) above on any Transfer Date, then Excess
Interest Collections from other Series allocable to Series 2000-VFC will be
applied as Available Certificateholder Interest Collections in the priority and
the manner described in clauses (i) through (viiA) above. If Excess Interest
Collections are less than the shortfalls for all Series that provide for
allocations of Excess Interest Collections, such Excess Interest Collections
shall be allocable to shortfalls for Series 2000-VFC and any other Series that
so provides pro rata based on the relative amounts of each Series' shortfall.
21
<PAGE>
SECTION 4.05 Application of Available Seller's Finance Charge Collections,
------------------------------------------------------------
Spread Account and Liquidity Reserve Account to Deficiency Amount.
- -----------------------------------------------------------------
(a) On each Transfer Date, the Servicer shall determine the amount
(the "Deficiency Amount"), if any, by which the amount of the entire allocations
required on such Transfer Date by Sections 4.04(a)(i) through (iv) exceeds the
amount of Available Certificateholder Interest Collections for such Due Period
and Excess Interest Collections allocated to Series 2000-VFC on such Transfer
Date, if any, for the related Due Period.
(b) If the Deficiency Amount for any Transfer Date is greater than
zero, the Master Trust Trustee, acting in accordance with instructions from the
Servicer, shall apply available funds from the following sources in the
following order of priority in the same manner as Available Certificateholder
Interest Collections, each of which applications shall reduce such Deficiency
Amount (all such available funds being the "Available Draw Funds" for such
Transfer Date):
(i) Available Seller's Finance Charge Collections;
(ii) funds on deposit in the Spread Account;
(iii) for any Transfer Date occurring during any Early
Amortization Period, funds on deposit in the Liquidity Reserve Account;
provided, however, that the amount applied pursuant to this Section 4.05(b)
shall not exceed the Draw Amount. The Available Subordinated Amount shall be
reduced by the aggregate amount of Available Draw Funds applied pursuant to this
Section 4.05(b).
(c) If all of the amounts applied pursuant to Section 4.05(a) and (b)
are insufficient to make the entire application described in Section
4.04(a)(iii), the Available Subordinated Amount shall be reduced (but not below
zero) by the amount of such deficiency and any remaining Investor Dealer Note
Losses shall be deemed to be reimbursed to the extent of such reduction.
SECTION 4.06 Investor Charge-Offs. If, for any Transfer Date on which the
--------------------
Available Subordinated Amount equals or is reduced to zero (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on such
Transfer Date) and the Deficiency Amount for such Transfer Date (as reduced by
the applications required by Section 4.05 of this Series Supplement) is greater
than zero, the Invested Amount shall be reduced by the lesser of (i) such
remaining Deficiency Amount for such Transfer Date and (ii) the amount of
Investor Dealer Note Losses for the related Due Period remaining unreimbursed
after all applications of funds or reductions of the Available Subordinated
Amount pursuant to Section 4.04 and 4.05 (such lesser amount being an "Investor
Charge-Off").
22
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SECTION 4.07 Application of Seller's Finance Charge Collections.
--------------------------------------------------
(a) Application of Available Seller's Finance Charge Collections. On
------------------------------------------------------------
each Transfer Date related to a Due Period, the Master Trust Trustee, acting in
accordance with instructions from the Servicer, shall withdraw and apply from
the Collections Account to the extent of Available Seller's Finance Charge
Collections for such Due Period, the following amounts in the following order of
priority:
(i) On each Transfer Date related to a Due Period for which a
Deficiency Amount exists, the amount required by Section 4.05(b)(i) shall
be applied as specified in Section 4.05(b).
(ii) On each Transfer Date related to a Due Period occurring
during an Early Amortization Period, the amount, if any, by which the
Available Subordinated Amount as of the end of such Transfer Date exceeds
the amount of funds on deposit in the Liquidity Reserve Account shall be
deposited in the Liquidity Reserve Account.
(iii) On each Transfer Date on which the full Spread Account
Deposit Amount was not deposited in the Spread Account pursuant to Section
4.04(a)(v), an amount equal to the shortfall in such Spread Account Deposit
Amount shall be deposited in the Spread Account.
(iv) Any remaining Available Seller's Finance Charge Collections
for the related Due Period shall be allocated and paid to the Seller.
(b) Application of Series Allocable Finance Charge Collections to the
-----------------------------------------------------------------
Seller. On each Transfer Date related to a Due Period, the Master Trust
- ------
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collections Account and allocate and pay to the Seller an
amount equal to the product of (i) the result of the Excess Seller's Percentage
for such Due Period minus the Required Excess Seller Interest Percentage and
(ii) Series Allocable Finance Charge Collections for such Due Period.
SECTION 4.08 Application of Series Allocable Principal Collections. On
-----------------------------------------------------
each Business Day, the Master Trust Trustee, acting in accordance with
instructions from the Servicer, shall withdraw Series Allocable Principal
Collections for such Business Day from the Collections Account and apply such
funds in the following amounts:
(a) Investor Principal Collections During Revolving Period. During
------------------------------------------------------
the Revolving Period, an amount equal to Investor Principal Collections for such
Business Day shall be treated as Shared Principal Collections, and applied,
pursuant to the written direction of the Servicer, pursuant to Section 4.03(e)
of the Agreement.
23
<PAGE>
(b) Investor Principal Collections during Amortization Period or
------------------------------------------------------------
Early Amortization Period. During the Amortization Period or any Early
- -------------------------
Amortization Period, Investor Principal Collections for such Business Day shall
be allocated to the Series 2000-VFC Certificateholders and deposited into the
Series Principal Account to the extent the Invested Amount as of the preceding
Distribution Date exceeds the amount of funds on deposit in the Series Principal
Account on such Business Day. Any Investor Principal Collections remaining after
the applications described in the preceding sentence shall be treated as Shared
Principal Collections, and applied, pursuant to the written direction of the
Servicer, pursuant to Section 4.03(e) of the Agreement.
(c) Seller's Principal Collections During the Revolving Period.
----------------------------------------------------------
During the Revolving Period, all Seller's Principal Collections for such
Business Day shall be deemed to be Series 2000-VFC Shared Seller Principal
Collections and shall be allocated as provided in Section 4.08(d)(iii).
(d) Seller's Principal Collections During Amortization Period or
------------------------------------------------------------
Early Amortization Period; Shared Seller Principal Collections.
- --------------------------------------------------------------
(i) During the Amortization Period, Available Seller's Principal
Collections for such Business Day shall be deemed to be "Remaining Available
Seller's Principal Collections," which shall be included in Series 2000-VFC
Shared Seller Principal Collections and allocated as provided in clause (iii)
below. During the Amortization Period, Excess Seller's Principal Collections
shall be included in Series 2000-VFC Shared Seller Principal Collections and
allocated as provided in clause (iii) below.
(ii) During any Early Amortization Period Available Seller's
Principal Collections for such Business Day shall be deposited in the Liquidity
Reserve Account to the extent the Available Subordinated Amount as of the end of
the immediately preceding Transfer Date exceeds the amount of funds on deposit
in the Liquidity Reserve Account (including amounts deposited pursuant to
Section 4.07(a)(ii)). The amount required to be deposited pursuant to the
preceding sentence shall be reduced by the amount of Available Seller's Finance
Charge Collections deposited in the Liquidity Reserve Account on such Business
Day. Any remaining Available Seller's Principal Collections for such Business
Day shall be deemed to be "Remaining Available Seller's Principal Collections."
During any Early Amortization Period, all Excess Seller's Principal Collections,
all Remaining Available Seller's Principal Collections and all shared seller
principal collections of any other Series that provides for shared seller
principal collections not allocated in respect of principal shortfalls shall be
allocated and paid to the Seller or deposited in the Excess Funding Account to
the extent necessary to maintain the Master Trust Seller's Interest at an amount
equal to (or, in the Seller's discretion, greater than) the Minimum Master Trust
Seller's Interest.
24
<PAGE>
(iii) During the Revolving Period or the Amortization Period,
Series 2000-VFC Shared Seller Principal Collections, if any, and shared seller
principal collections for any other Series that provides for shared seller
principal collections shall be determined on each business day and allocated in
the following priority: (i) to any other Series to the extent such Series
provides for the use of shared seller principal collections in respect of
principal shortfalls, (ii) to the Excess Funding Account to the extent necessary
to maintain the Master Trust Seller's Interest at an amount equal to (or, in the
discretion of the Seller, greater than) the Minimum Master Trust Seller's
Interest, (iii) at the election of the Seller, retained and allocated to the
Series 2000-VFC Certificateholders and deposited in the Series Principal Account
on the related Transfer Date to make any prepayments as described in Section
1.03 and (iv) to the Seller. If shared seller principal collections for all
Series are less than the shortfalls for which shared seller principal
collections may be used, then such shared seller principal collections will be
allocated to all such shortfalls pro rata based on the relative amounts of each
such shortfall.
(iv) "Series 2000-VFC Shared Seller Principal Collections" means
on each business day (i) during a Revolving Period, all Available Seller's
Principal Collections and all Excess Seller's Principal Collections and
(ii) during an Amortization Period, all Remaining Available Seller's
Principal Collections and all Excess Seller's Principal Collections. There
shall be no Series 2000-VFC Shared Seller Principal Collections during any
Early Amortization Period.
(e) If on any Distribution Date during an Early Amortization Period
after the application of all funds to be allocated or distributed on such date
the excess, if any, of (x) the Invested Amount over (y) the amount in the Series
Principal Account (the "Early Amortization Period Shortfall Amount") is less
than or equal to the aggregate amount of funds contained in the Liquidity
Reserve Account then funds shall be withdrawn in an amount equal to the Early
Amortization Period Shortfall Amount and shall be deposited in the Series
Principal Account.
SECTION 4.09 Shared Principal Collections.
----------------------------
(a) That portion of Shared Principal Collections for any Business Day
equal to the amount of Series 2000-VFC Shared Principal Collections for such
Business Day will be allocated to Series 2000-VFC and will be applied in the
same manner as Investor Principal Collections pursuant to Section 4.08(b) and
otherwise will be deposited in the Excess Funding Account to the extent
necessary to maintain the Master Trust Seller's Interest at an amount equal to
(or, in the discretion of the Seller, greater than) the Minimum Master Trust
Seller's Interest or allocated to the Seller.
(b) "Series 2000-VFC Shared Principal Collections," with respect to
any Business Day, shall mean an amount equal to the Series 2000-VFC Principal
Shortfall for such Business Day; provided, however, that, if the aggregate
amount of Shared Principal Collections for all Series for such Business Day is
less than the aggregate amount of Principal Shortfalls for
25
<PAGE>
all Series for such Business Day, then Series 2000-VFC Shared Principal
Collections for such Business Day shall equal the product of (x) Shared
Principal Collections for all Series for such Business Day and (y) a fraction,
the numerator of which is the Series 2000-VFC Principal Shortfall for such
Business Day and denominator of which is the aggregate amount of Principal
Shortfalls for all Series for such Business Day; provided further that if Shared
Principal Collections are not required to be applied to any other Series, the
Seller may direct that all or any portion of such Shared Principal Collections
be retained and allocated to the Series 2000-VFC Certificateholders and
deposited in the Series Principal Account on the related Transfer Date to make
any prepayment permitted by Section 1.03.
SECTION 4.10 Distributions to Series 2000-VFC Certificateholders. On each
---------------------------------------------------
Transfer Date, after all allocations to the Distribution Account and the Series
Principal Account for the related Transfer Date have been made, the Master Trust
Trustee, acting in accordance with instructions from the Servicer, shall
transfer to the Distribution Account the funds on deposit in the Series
Principal Account and shall make, without duplication, the following
distributions from the Distribution Account:
(a) Interest Distributions. On each Distribution Date (including the
----------------------
Expected Payment Date), Monthly Interest, Non-Use Fees and Additional Amounts
will be distributed as such to the Series 2000-VFC Certificateholders to the
extent of the amount on deposit in the Distribution Account for such purpose.
(b) Amortization Period and Early Amortization Period. On each
-------------------------------------------------
Distribution Date related to a Due Period occurring during an Amortization
Period or an Early Amortization Period, in addition to the amount described in
(a) above, amounts on deposit in the Series Principal Account will be
distributed as principal (up to a maximum of the Invested Amount on such
Distribution Date) on the Series 2000-VFC Certificates.
(c) Revolving Period. On each Distribution Date relating to a Due
----------------
Period during the Revolving Period, in addition to the amount described in (a)
above, amounts on deposit in the Series Principal Account will be distributed as
principal (up to a maximum of the Invested Amount on such Distribution Date) on
the Series 2000-VFC Certificates.
SECTION 4.11 [Reserved]
SECTION 4.12 Partial Month Due Period. The allocation and distribution
------------------------
provisions in this Series Supplement are based upon the assumptions that each
Due Period will be a calendar month and that each Due Period will have a unique
related Transfer Date and Distribution Date. However, under certain
circumstances (such as the occurrence of an Early Amortization Event, the
Revolving Period could end on a date other than the last day of a calendar month
(the period from the first day of such month (the "Subject Month") to and
including the date of such occurrence being referred to herein as the "Revolving
Due Period"), and an Early Amortization
26
<PAGE>
Period could commence on a date other than the first day of a calendar month
(the period from such other date until the last day of the Subject Month being
the "Amortizing Due Period"). If such a circumstance occurs, then the Servicer,
the Seller and the Master Trust Trustee shall observe the following rules:
(i) the Transfer Date for both the Revolving Due Period and the
Amortizing Due Period shall be the date on which the Transfer Date would
have occurred if the Subject Month had been an ordinary Due Period;
(ii) the allocations and distributions of Finance Charge
Collections (and all items derived from Finance Charge Collections, such as
Available Certificateholder Interest Collections and Available Seller's
Finance Charge Collections) and Dealer Note Losses occurring during the
Subject Month shall be made as if the Subject Month were one Due Period,
without any distinction between the Revolving Due Period and the Amortizing
Due Period; and
(iii) two separate sets of allocations and distributions of
Principal Collections (and all items derived from Principal Collections,
such as Investor Principal Collections and Seller's Principal Collections)
shall be made on such Transfer Date, according to whether such Principal
Collections were received during the Revolving Due Period (in which case
allocations and distributions shall be made as provided in Sections 4.08(a)
and (c)) or the Amortizing Due Period (in which case allocations and
distributions shall be made as provided in Sections 4.08(b) and (d)).
SECTION 4.13 Additional Rights upon the Occurrence of Certain Events.
-------------------------------------------------------
Notwithstanding the provisions of Section 9.02(a) of the Agreement, if any
insolvency event occurs with respect to the Seller, Navistar International
Corporation, Navistar International Transportation Corp. or Navistar Financial
Corporation on the day of such insolvency event, the Seller will (subject to the
actions of the Certificateholders) immediately cease to transfer Dealer Notes to
the Master Trust, and promptly give notice to the Master Trust Trustee of such
insolvency event. Under the terms of the Pooling and Servicing Agreement, if an
insolvency event occurs with respect to the Seller prior to the date on which
the Series 2000-VFC Certificates issued by the Master Trust have been paid in
full, then within 15 days the Master Trust Trustee will publish a notice of such
insolvency event stating that the Master Trust Trustee intends to sell,
liquidate or otherwise dispose of the Dealer Notes in a commercially reasonable
manner and on commercially reasonable terms, unless within a specified period of
time Certificate holders representing more than 50% of the aggregate series
invested amount of the certificates of each such Series and each person holding
a Supplemental Certificate, instruct the Master Trust Trustee not to sell,
dispose of or otherwise liquidate the Dealer Notes and to continue transferring
Dealer Notes as before such insolvency event.
ARTICLE V
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DISTRIBUTIONS AND REPORTS
-------------------------
TO SERIES 2000-VFC CERTIFICATEHOLDERS
-------------------------------------
SECTION 5.01 Distributions.
-------------
(a) The Paying Agent shall distribute (in accordance with the Monthly
Servicer Certificate and Settlement Statement delivered by the Servicer to the
Master Trust Trustee and the Paying Agent pursuant to Section 3.04(d) of the
Agreement) to each Series 2000-VFC Certificateholder of record on the preceding
Record Date (other than as provided in Section 12.02 of the Agreement respecting
a final distribution) on each Distribution Date such Certificateholder's pro
rata share (based on the aggregate fractional undivided interests represented by
the Series 2000-VFC Certificates held by such Certificateholder) of the amounts
on deposit in the Series 2000-VFC Accounts as is payable to the Series 2000-VFC
Certificateholders on such Distribution Date pursuant to Sections 4.10 (a), (b)
and (c).
(b) Except as provided in Section 12.03 of the Agreement with respect
to a final distribution, distributions to Series 2000-VFC Certificateholders
hereunder shall be made to each Series 2000-VFC Certificateholder by wire
transfer of immediately available funds to the account specified by such Series
2000-VFC Certificateholder without presentation or surrender of any Series 2000-
VFC Certificate or the making of any notation thereon.
SECTION 5.02 Monthly and Annual Certificateholders' Statement.
------------------------------------------------
(a) Monthly Series 2000-VFC Certificateholders' Statement. At
-----------------------------------------------------
least two Business Days prior to each Distribution Date, the Servicer will
provide to the Master Trust Trustee and the Paying Agent, and on each
Distribution Date, the Paying Agent shall forward to each Series 2000-VFC
Certificateholder a Monthly Servicer Certificate and Settlement Statement
substantially in the form of Exhibit B with such changes as the Servicer shall
---------
deem necessary or appropriate, prepared by the Servicer and delivered to the
Master Trust Trustee setting forth, among other things, the following
information:
(i) the aggregate amount of Collections, including the
aggregate amount of Finance Charge Collections and the aggregate amount of
Principal Collections for the related Due Period;
(ii) the Series 2000-VFC Allocation Percentage, the Floating
Allocation Percentage and the Principal Allocation Percentage (if
applicable) for the related Due Period;
(iii) the total amount to be distributed on the Series 2000-VFC
Certificates on such Distribution Date;
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<PAGE>
(iv) the amount, if any, of such distribution allocable to the
Invested Amount;
(v) the amount, if any, of such distribution allocable to
interest on the Series 2000-VFC Certificates;
(vi) Dealer Note Losses for the related Due Period;
(vii) the Draw Amount as of the related Transfer Date, if any;
(viii) the amount of the Investor Charge-Offs and the amount of
reimbursement thereof as of the related Transfer Date;
(ix) the amount of the Investor Servicing Fee to be paid on
such Distribution Date;
(x) the amount of any Incremental Funding or prepayment to
occur on such Distribution Date, the aggregate amount on deposit in the
Incremental Funding Reserve Account as of the related Transfer Date, if
any, the amount thereof, if any, allocated to pay Monthly Interest for such
Distribution Date, the amount, if any, thereof to be distributed to the
Seller, the Incremental Funding Reserve Account Deposit Amount for such
Distribution Date, if any, and the Incremental Subordinated Amount, if any,
for such Distribution Date;
(xi) the Invested Amount (after giving effect to all
distributions that will occur on such Distribution Date);
(xii) the aggregate amount of Dealer Notes and funds on deposit
in each of the Excess Funding Account, Series Principal Account and Spread
Account as of the end of the last day of the related Due Period (after
giving effect to payments and adjustments made pursuant to Article IV of
this Series Supplement and of the Agreement);
(xiii) the Available Subordinated Amount as of the end of the
related Transfer Date;
(xiv) with respect to Eligible Investments in the Series
Principal Account, the Excess Funding Account and the Liquidity Reserve
Account, as of the last day of the related Due Period, the aggregate amount
of funds invested in Eligible Investments in each such Series Account, a
brief description of each such Eligible Investment and amount invested in
each such Eligible Investment, the rate of interest
29
<PAGE>
applicable to each such Eligible Investment and the rating of each such
Eligible Investment;
(xv) the Dealers with the five largest aggregate outstanding
principal amounts of Dealer Notes in the Master Trust as of the end of the
related Due Period;
(xvi) the aggregate outstanding principal amount of Dealer
Notes issued to finance OEM Vehicles as of the end of the related Due
Period;
(xvii) the percentages and all other information calculated
pursuant to Section 6.01 to determine whether an Early Amortization Event
has occurred;
(xviii) the amount of Excess Interest Collections and Investor
Principal Collections treated as Shared Principal Collections, each for the
related Due Period, and the amount of such Excess Interest Collections and
Shared Principal Collections allocated to other Series; and
(xix) the amount of Remaining Available Seller's Principal
Collections, the amount of Excess Seller's Principal Collections and
Remaining Available Seller's Principal Collections treated as Series 2000-
VFC Shared Seller Principal Collections, the amount of Shared Seller
Principal Collections from other Series, and the amount of Shared Seller
Principal Collections allocated to Series 2000-VFC and to other Series,
each for the related Due Period.
(b) [Reserved]
(c) A copy of the statement provided pursuant to subsection (a) will
be made available for inspection at the Corporate Trust Office.
(d) Annual Certificateholder's Tax Statement. On or about January 31
----------------------------------------
of each calendar year, beginning with calendar year 2001, the Master Trust
Trustee shall furnish to the Servicer and Paying Agent a list of each Person who
at any time during the preceding calendar year was a Series 2000-VFC
Certificateholder and received any payment thereon and the dates such Person
held a Series 2000-VFC Certificate, and the Paying Agent shall furnish to each
such Series 2000-VFC Certificateholder a statement prepared by the Paying Agent
containing the information prepared by the Master Trust Trustee which is
required to be contained in the statement to Series 2000-VFC Certificateholders
as set forth in Sections 5.02(a)(iii)-(a)(v) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
2000-VFC Certificateholder, together with such other customary information as
the Master Trust Trustee or the Servicer deems necessary or desirable to enable
the Series 2000-VFC Certificateholders to prepare their tax returns, including
information (to be supplied by the Servicer to the Master Trust Trustee)
regarding original issue discount on the Series 2000-VFC
30
<PAGE>
Certificates, if any. Such obligation of the Paying Agent shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Trust Trustee pursuant to any requirements of
the Internal Revenue Code as from time to time in effect.
ARTICLE VI
EARLY AMORTIZATION EVENTS
-------------------------
SECTION 6.01 Additional Early Amortization Events. The occurrence of any
------------------------------------
of the following events shall, immediately upon the occurrence thereof without
notice or other action on the part of the Master Trust Trustee or the Series
2000-VFC Certificateholders, be deemed to be an Early Amortization Event solely
with respect to Series 2000-VFC:
(a) the Invested Amount is not reduced to zero by the Expected
Payment Date;
(b) the United States government or any agency or instrumentality
thereof files a notice of a lien under Internal Revenue Code (S)6323 or any
similar statutory provision (including, but not limited to, (S)302(f) or (S)4068
of ERISA) on the assets of NFC or NFSC which is or may in the future be prior to
the lien of the Master Trust Trustee or the assets of the Master Trust
(including, without limitation, proceeds of the Dealer Notes);
(c) failure on the part of the Seller (i) to make any payment,
distribution or deposit required under the Agreement within five business days
of the date required or (ii) to observe or perform in any material respect any
other material covenants or agreements of the Seller, which continues unremedied
for a period of 60 days after written notice of such failure shall have been
given to the Seller;
(d) any representation or warranty made by the Seller pursuant to the
Agreement or any information contained in the schedule of Dealer Notes delivered
thereunder or this Series Supplement shall prove to have been incorrect in any
material respect when made or when delivered, which representation, warranty or
schedule, or the circumstances or condition that caused such representation,
warranty or schedule to be incorrect, continues to be incorrect or uncured in
any material respect for a period of 60 days after written notice of such
incorrectness shall have been given to the Seller and as a result of which the
interests of the Series 2000-VFC Certificateholders are materially and adversely
affected, except that an Early Amortization Event shall not be deemed to occur
if the Seller has repurchased the related Dealer Notes or all such Dealer Notes,
if applicable, during such period in accordance with the provisions of the
Agreement;
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(e) the Seller shall become legally unable for any reason to transfer
Dealer Notes to the Master Trust in accordance with the provisions of the
Agreement;
(f) on any Transfer Date related to a Due Period, the Available
Subordinated Amount for such Transfer Date will be reduced to an amount less
than the Required Subordinated Amount;
(g) any Servicer Termination Event shall occur for which the Servicer
has received a notice of termination;
(h) the delivery by the Seller to the Master Trust Trustee of a
notice stating that the Seller will no longer continue to sell Dealer Notes to
the Master Trust commencing on the date specified in such notice;
(i) the Average Coverage Differential shall be equal to or less than
negative two percent (-2.00%) on each of three consecutive Determination Dates;
(j) at the end of any Due Period, the Master Trust Seller's Interest
is reduced to an amount less than the Master Trust Minimum Seller's Interest and
the Seller has failed to assign additional Dealer Notes to the Master Trust in
the amount of such deficiency within ten Business Days following the end of such
Due Period;
(k) on any Determination Date, the quotient of (i) the product of (a)
the sum of Dealer Note Collections for each of the related Due Period and the
two immediately preceding Due Periods and (b) four divided by (ii) the daily
average principal amount of Dealer Notes outstanding during such Due Periods
("Turnover") is less than 1.7;
(l) on any Determination Date, the quotient of (i) the sum of Dealer
Note Losses for each of the related Due Period and the five immediately
preceding Due Periods and (ii) the sum of Principal Collections for each of the
related Due Period and the five immediately preceding Due Periods, is greater
than or equal to one percent (1.00%);
(m) [Reserved]
(n) any of the Seller, NITC, NIC or NFC shall file a petition
commencing a voluntary case under any chapter of the federal bankruptcy laws; or
the Seller or NFC shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment or composition under any other similar
applicable federal law, or shall consent to the filing of any such petition,
answer or consent; or the Seller, NITC, NIC or NFC shall appoint, or consent to
the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of it or of
any substantial part of its property; or the Seller, NITC, NIC
32
<PAGE>
or NFC shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due;
(o) any order for relief against any of the Seller, NITC, NIC or NFC
shall have been entered by a court having jurisdiction in the premises under any
chapter of the federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of 120 days; or a decree or order by a
court having jurisdiction in the premises shall have been entered approving as
properly filed a petition seeking reorganization, arrangement, adjustment, or
composition of the Seller, NITC, NIC or NFC under any other similar applicable
federal law, and such decree or order shall have continued undischarged or
unstayed for a period of 120 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian, receiver,
liquidator, trustee, assignee, sequestrator or other similar official in
bankruptcy or insolvency of the Seller, NITC, NIC or NFC of any substantial part
of their property, or for the winding up or liquidation of their affairs, shall
have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 120 days; and
(p) failure on the part of NITC to make a deposit in the Interest
Deposit Account required by the terms of the Interest Deposit Agreement on or
before the date occurring five Business Days after the date such deposit is
required by the Interest Deposit Agreement to be made.
ARTICLE VII
OTHER SERIES PROVISIONS
-----------------------
SECTION 7.01 Conveyance of Dealer Notes. Upon the date on which each
--------------------------
other Series is either no longer outstanding or the fully funded date has
occurred with respect thereto, the Master Trust Trustee shall sell, assign and
convey to the Seller or its designee, without recourse, representations or
warranty, all right, title and interest of the Master Trust in the Dealer Notes,
whether then existing or thereafter created, all security interests in the
Financed Vehicles with respect thereto, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof except for
amounts on deposit in the Collections Account that are allocable to Investor
Certificates and amounts on deposit in any Series Account. The Master Trust
Trustee shall execute and deliver such instruments of transfer and assignment,
in each case without recourse, as shall be reasonably requested by the Seller to
vest in the Seller or its designee all right, title and interest which the
Master Trust had in all such property.
SECTION 7.02 Tax Treatment. The Seller has entered into the Agreement
-------------
and this Series Supplement and the Series 2000-VFC Certificates have been issued
with the intention that the Series 2000-VFC Certificates will qualify under
applicable tax law as indebtedness secured by the Master Trust assets
attributable to the Series 2000-VFC Certificates. The Seller and each
33
<PAGE>
Series 2000-VFC Certificateholder and Certificate Owner, by the acceptance of
its Series 2000-VFC Certificate or Book-Entry Certificate, as applicable, agrees
to treat the Series 2000-VFC Certificates as indebtedness secured by the Master
Trust assets attributable to the Series 2000-VFC Certificates, for Federal
income taxes, state and local income and franchise taxes and any other taxes
imposed on or measured by income in whole or in part.
ARTICLE VIII
FINAL DISTRIBUTIONS
-------------------
SECTION 8.01 Sale of Investors' Interest Pursuant to Section 2.07 of the
-----------------------------------------------------------
Agreement; Distributions Pursuant to Section 2.03 or 12.03 of the Agreement.
- ---------------------------------------------------------------------------
(a) The amount to be paid by the Seller to the Collections Account
with respect to Series 2000-VFC in connection with a purchase of the
Certificateholders' Interest pursuant to Section 2.07 of the Agreement shall
equal the Reassignment Amount for the Distribution Date on which such purchase
occurs.
(b) With respect to the Reassignment Amount, if any, deposited into
the Collections Account pursuant to this Section 8.01 of this Series Supplement
or Section 2.07 of the Agreement or any proceeds deposited into the Collections
Account pursuant to Section 12.03(c) of the Agreement, the Master Trust Trustee
shall, not later than 12:00 noon, New York City time, on the Distribution Date
on which such amounts are deposited (or, if such date is not a Distribution
Date, on the immediately following Distribution Date) (in the priority set forth
below): (i) first, deposit the Invested Amount on such Distribution Date into
-----
the Series Principal Account, (ii) second, deposit the amount of accrued and
------
unpaid interest on the unpaid balance of the Series 2000-VFC Certificates in the
Distribution Account, (iii) third, deposit the amount of accrued but unpaid
-----
Non-Use Fees and Additional Amounts in the Distribution Account, and (iv)
fourth, pay the remainder of any such Reassignment Amounts to the Seller.
- ------
(c) Notwithstanding any other provision to the contrary in this
Series Supplement or the Agreement, the entire amount deposited in the Series
Principal Account on a Distribution Date pursuant to Section 8.01(b) and all
other amounts on deposit therein shall be distributed in full to the Series
2000-VFC Certificateholders on such Distribution Date and any distribution made
pursuant to this paragraph (c) shall be deemed to be a final distribution
pursuant to Section 12.03 of the Agreement with respect to Series 2000-VFC.
34
<PAGE>
SECTION 8.02 Distribution of Proceeds of Sale, Disposition or Liquidation
------------------------------------------------------------
of the Dealer Notes Pursuant to Section 9.02 of the Agreement.
- -------------------------------------------------------------
(a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collections Account pursuant to Section 9.02(b) of the
Agreement, the Master Trust Trustee shall first (in each case, after giving
effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the Invested Amount on such
Distribution Date from the portion of the Insolvency Proceeds allocated to
Series Allocable Principal Collections and deposit such amount in the Series
Principal Account; provided that the amount of such deposit shall not exceed the
product of (x) the portion of the Insolvency Proceeds allocated to Series
Allocable Principal Collections and (y) 100% minus the Excess Seller's
Percentage with respect to the related Due Period. The remainder of the portion
of the Insolvency Proceeds allocated to Series Allocable Principal Collections
shall be allocated to the Master Trust Seller's Interest and shall be
distributed on such Distribution Date to the Seller.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Master Trust Trustee shall first (in each case, after
giving effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the sum of (i) Monthly Interest for
such Distribution Date and (ii) any accrued but unpaid Non-Use Fees and
Additional Amounts, from the portion of the Insolvency Proceeds allocated to
Series Allocable Finance Charge Collections and deposit such amount in the
Distribution Account; provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated to
Series Allocable Finance Charge Collections and (y) 100% minus the Excess
Seller's Percentage with respect to the related Due Period. The remainder of the
portion of the Insolvency Proceeds allocated to Series Allocable Finance Charge
Collections shall be allocated to the Master Trust Seller's Interest and shall
be distributed on such Distribution Date to the Seller.
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Series Principal
Account and the Distribution Account pursuant to this Section 8.02 and all other
amounts on deposit therein shall be distributed in full to the Series 2000-VFC
Certificateholders on the Distribution Date on which funds are deposited
pursuant to this Section 8.02 (or, if not so deposited on a Distribution Date,
on the immediately following Distribution Date) and any distribution made
pursuant to this Section 8.02 shall be deemed to be a final distribution
pursuant to Section 12.03 of the Agreement with respect to Series 2000-VFC.
35
<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
------------------------
SECTION 9.01 Ratification of Agreement. As supplemented by this Series
-------------------------
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 9.02 Counterparts. This Series Supplement may be executed in two
------------
or more counterparts (and by different parties on separate counterparts) each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 9.03 GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED,
-------------
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, EXCEPT THAT THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE MASTER TRUST TRUSTEE SHALL BE DETERMINED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
36
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Master Trust
Trustee have caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.
NAVISTAR FINANCIAL SECURITIES CORPORATION
as Seller
By: /s/ John J. Bongiorno
----------------------
Name: John J. Bongiorno
Title: President & CEO
NAVISTAR FINANCIAL CORPORATION
as Servicer
By: /s/ John J. Bongiorno
----------------------
Name: John J. Bongiorno
Title: President & CEO
THE BANK OF NEW YORK
as Master Trust Trustee
By: /s/ Erwin Soriano
------------------
Name: Erwin Soriano
Title: Assistant Treasurer
