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UNITED STATES 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): November 1, 1995
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
File #1-4146-1 51-0337491
(Commission File Number) (I.R.S. Employer Identification No.)
2850 West Golf Road Rolling Meadows, Illinois 60008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 708-734-4275
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Matters.
(a) On November 1, 1995, the Registrant, a wholly owned subsidiary of
Navistar Financial Corporation ("NFC"), purchased from NFC an initial
pool of retail instalment sale contracts for, and retail loans
evidenced by notes secured by, medium and heavy-duty trucks, buses and
trailers ("Retail Receivables") with an aggregate outstanding principal
balance as of November 1, 1995 of $454,499,683.43 (the "Initial
Receivables") and agreed to purchase from NFC additional Retail
Receivables with an aggregate outstanding principal balance not to
exceed $70,500,316.57 (the "Subsequent Receivables" and, together with
the Initial Receivables, the "Receivables"). The purchase price paid by
the Registrant to NFC for the Initial Receivables was $454,499,683.43.
The Registrant paid a portion of such purchase price from the net cash
proceeds of the issuance of the Securities (as described below) and
paid a portion of the purchase price with an intercompany advance from
NFC.
The Registrant immediately transferred the Initial Receivables to the
Navistar Financial 1995-B Owner Trust (the "Trust"). The Trust issued
three classes of notes (the "Notes") and a class of certificates
(collectively, the "Securities") backed by the Initial Receivables and
any Subsequent Receivables purchased from funds on deposit in the Pre-
Funding Account (as defined below). The net cash proceeds of the
issuance of the Securities were $523,625,893.59, which, together with a
certificate with an initial certificate balance of $185,000, were
transferred to the Registrant. Portions of the net cash proceeds were
used to pay approximately $450,000 of transaction fees and expenses and
to fund a $24,997,482.59 initial deposit into a reserve account (the
"Reserve Account") as credit support for the Initial Receivables. In
addition, portions of the net cash proceeds were used (i) to establish
a pre-funding account (the "Pre-Funding Account") with an initial
deposit of $70,500,316.57 to fund the purchase of the Subsequent
Receivables and (ii) to fund a $508,924.16 initial deposit into a
negative carry account. The balance of the net cash proceeds were paid
to NFC as part of the purchase price for the Initial Receivables.
On November 10, 1995, the Registrant purchased from NFC Subsequent
Receivables with an aggregate outstanding principal balance of
$70,451,789.39. The purchase price paid by the Registrant to NFC for
the Subsequent Receivables was $70,451,789.39. The Registrant paid a
portion of the purchase price from the funds on deposit in the Pre-
Funding Account and paid a portion of the purchase price with an
intercompany advance from NFC. In connection with the purchase of the
Subsequent Receivables by the Registrant, the Registrant made a
$3,874,848.42 deposit into the Reserve Account from funds on deposit in
the Pre-Funding Account as credit support for the Subsequent
Receivables. The balance of funds on deposit in the Pre-Funding Account
was used to make a partial pre-payment on one of the classes of the
Notes.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits:
See attached Exhibit Index.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
Date: November 30, 1995 By: /s/ R. Wayne Cain
Name: R. Wayne Cain
Title: Vice President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
1.1 Underwriting Agreement between the Registrant and the
Underwriters, dated October 18, 1995
4.1 Indenture between the Trust and Indenture Trustee, dated
November 1, 1995
4.2 Trust Agreement between the Registrant and the Owner
Trustee, dated November 1, 1995
10.1 Purchase Agreement between NFC and Registrant, dated
November 1, 1995
10.2 Pooling and Servicing Agreement between the Registrant,
NFC and the Trust, dated November 1, 1995
10.3 Custodian Agreement between NFC, as Custodian, and the
Registrant, dated November 1, 1995
10.4 Administration Agreement among NFC (the "Administrator"),
the Trust and the Indenture Trustees, dated November 1,
1995
</TABLE>
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EXHIBIT 1.1
NAVISTAR FINANCIAL 1995-B OWNER TRUST
$506,625,000 ASSET BACKED NOTES
$18,190,000 ASSET BACKED CERTIFICATES
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
----------------------
October 18, 1995
Chemical Securities Inc.
As Representative of the
Several Underwriters named
on Schedule I hereto,
270 Park Avenue
New York, New York 10017
Dear Sirs:
Navistar Financial Retail Receivables Corporation, a Delaware
corporation (the "Seller"), proposes to form an owner trust, Navistar Financial
1995-B Owner Trust (the "Trust"), pursuant to a Trust Agreement (the "Trust
Agreement") to be dated as of November 1, 1995 between the Seller and Chemical
Bank Delaware, as owner trustee (the "Owner Trustee"), which will issue (i)
$122,300,000 principal amount of its 5.75% Class A-1 Asset Backed Notes (the
"Class A-1 Notes"), (ii) $100,000,000 principal amount of its 5.94% Class A-2
Notes (the "Class A-2 Notes") and (iii) $284,325,000 principal amount of its
6.05% Class A-3 Notes (the "Class A-3 Notes"; and together with the Class A-1
Notes and the Class A-2 Notes, the "Notes") pursuant to an Indenture to be dated
as of November 1, 1995 (the "Indenture") between the Trust and The Bank of New
York, as trustee (the "Indenture Trustee"), and (iv) $18,190,000 principal
amount of its 6.22% Asset Backed Certificates, representing fractional undivided
interests in the Trust (the "Certificates"; and together with the Notes, the
"Securities"). The assets of the Trust will include, among other things, a pool
of retail installment sale contracts for and retail notes evidencing loans
secured by new and used medium and heavy duty trucks, buses and trailers (the
"Receivables"), certain monies due or received thereunder on or after (i) for
the Initial Receivables, October 1, 1995 and (ii) for any Subsequent
Receivables, the date preceding the related Subsequent Transfer Date that is
designated as such by the Seller (in each case, the "Cutoff Date"), security
interests in the vehicles financed thereby, certain accounts, including monies
on deposit in the Pre-Funding Account and the Negative Carry Account, and the
proceeds thereof, the proceeds, if any, of Dealer Liability, NITC Purchase
Obligations and any Guaranties, the proceeds from claims on certain insurance
policies, the benefits of any lease assignments and certain rights of the Seller
under the Purchase Agreement. The Initial Receivables and $70,500,316.57 in
cash to
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be deposited in the Pre-Funding Account will be transferred to the Trust by the
Seller in exchange for the Securities and the Initial Receivables and any
Subsequent Receivables will be serviced for the Trust by Navistar Financial
Corporation ("NFC"; and in its capacity as Servicer, the "Servicer") pursuant to
a Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") to be
dated as of November 1, 1995 among the Seller, the Servicer and the Trust.
Capitalized terms used and not otherwise defined herein shall have the meanings
given them in the Pooling and Servicing Agreement.
This is to confirm the agreement concerning the purchase of the
Securities from the Seller by the several Underwriters named in Schedule 1
hereto (the "Underwriters").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NFC AND THE SELLER. NFC and
the Seller jointly and severally represent and warrant to and agree with the
several Underwriters that:
(a) A registration statement on Form S-3 (No. 33-55865) has been
filed by the Seller with the Securities and Exchange Commission (the
"Commission") and has become effective under the Securities Act of 1933, as
amended (the "Securities Act"). Such registration statement may have been
amended or supplemented from time to time prior to the date hereof. Any
such amendment or supplement was filed with the Commission in accordance
with the Securities Act and the rules and regulations of the Commission
thereunder (the "Rules and Regulations") and any such amendment has become
effective under the Securities Act. The Seller proposes to file with the
Commission pursuant to Rule 424(b)(5) of the Rules and Regulations a
prospectus supplement (the "Prospectus Supplement") to the prospectus dated
November 29, 1994, relating to the Securities and the method of
distribution thereof. Copies of such registration statement, any amendment
or supplement thereto, such prospectus and the Prospectus Supplement have
been delivered to you. Such registration statement, including exhibits
thereto and such prospectus, as amended or supplemented to the date hereof,
and as further supplemented by the Prospectus Supplement, are hereinafter
referred to as the "Registration Statement" and the "Prospectus,"
respectively. The conditions to the use of a registration statement on
Form S-3 under the Securities Act have been satisfied.
(b) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, and the
Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the Securities Act
and the Rules and Regulations and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and did not include any untrue statement of a
material fact and, in the case of the Registration Statement and any post-
effective amendment thereto, did not omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and, in the case of the Prospectus, did not omit to state
any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
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misleading; on the Closing Date (as hereinafter defined), the Registration
Statement and the Prospectus, as amended or supplemented as of the Closing
Date, will comply in all material respects with the applicable requirements
of the Securities Act and the Rules and Regulations and the Trust Indenture
Act and the rules and regulations of the Commission thereunder and neither
the Prospectus nor any amendment or supplement thereto will include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representation and warranty in the preceding sentence does not apply to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) of the Indenture
Trustee under the Trust Indenture Act or (ii) that information contained in
or omitted from the Registration Statement or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
the Underwriters' Information (as defined herein). The Indenture has been
qualified under the Trust Indenture Act.
(c) The Seller has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as
such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire, own and sell the Receivables.
(d) The representations and warranties of the Seller in Section 3.03
of the Purchase Agreement and Section 6.01 of the Pooling and Servicing
Agreement will be true and correct as of the Closing Date.
(e) The representations and warranties of NFC in Sections 3.01 and
3.02 of the Purchase Agreement and of the Servicer in Section 6.01 of the
Pooling and Servicing Agreement will be true and correct as of the Closing
Date.
(f) Each of the Seller and NFC has the power and authority to execute
and deliver this Agreement and to carry out the terms of this Agreement and
the execution, delivery and performance by each of the Seller and NFC of
this Agreement have been duly authorized by each of the Seller and NFC by
all necessary corporate action.
(g) This Agreement has been duly executed and delivered by NFC and
the Seller.
(h) When authenticated by the Owner Trustee in accordance with the
Trust Agreement and delivered and paid for pursuant to this Agreement, the
Certificates will be duly issued and entitled to the benefits and security
afforded by the Trust Agreement and the Pooling and Servicing Agreement.
(i) When authenticated by the Indenture Trustee in accordance with
the Indenture and delivered and paid for pursuant to this Agreement, the
Notes will be duly issued and constitute legal, valid and binding
obligations of the Trust enforceable
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4
against the Trust in accordance with their terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(j) The execution, delivery and performance of this Agreement and the
consummation by each of the Seller and NFC of the transactions contemplated
hereby shall not conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or by-laws of such party,
or any indenture, agreement or other instrument to which either such party
is a party or by which it is bound, or violate any law or, to either such
party's knowledge, any order, rule or regulation applicable to such party
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over such
party or any of its properties; and, except for the registration of the
Securities under the Securities Act, the qualification of the Indenture
under the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and applicable state
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters, no permit, consent, approval of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby.
(k) There are no proceedings or, to either of the Seller's or NFC's
knowledge, investigations pending or, to such party's knowledge, threatened
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over such party or its
properties (i) asserting the invalidity of this Agreement or any of the
Securities, (ii) seeking to prevent the issuance of any of the Securities
or the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that might materially
and adversely affect the performance by such party of its obligations
under, or the validity or enforceability of, the Securities or this
Agreement, or (iv) that may adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Securities.
(l) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations and which
have not been so described or filed.
(m) The Seller (i) is not in violation of its certificate of
incorporation or by-laws, (ii) is not in default, in any material respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, agreement,
mortgage, deed of trust or other instrument to which the Seller
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5
is a party or by which the Seller is bound or to which any of the Seller's
property or assets is subject or (iii) is not in violation in any respect
of any law, order, rule or regulation applicable to the Seller or any of
the Seller's property of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over it or any of its property, except any violation or
default that would not have a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of
the Seller.
(n) The Purchase Agreement, the Custodian Agreement, the
Administration Agreement and the Further Transfer and Servicing Agreements
conform in all material respects with the descriptions thereof contained in
the Registration Statement and the Prospectus.
(o) Neither the Trust nor the Seller is an "investment company" or
under the "control" of an "investment company" within the meaning thereof
as defined in the Investment Company Act of 1940, as amended.
(p) None of NFC, the Seller or anyone acting on its behalf has taken
any action that would require qualification of the Trust Agreement under
the Trust Indenture Act.
2. PURCHASE BY THE UNDERWRITERS. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Seller agrees to issue and sell to
each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Seller, the
respective principal amount of Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto at a purchase price equal to (i) with respect
to the Class A-1 Notes, 99.87332% of the principal amount thereof, (ii) with
respect to the Class A-2 Notes, 99.77834% of the principal amount thereof, (iii)
with respect to the Class A-3 Notes, 99.74754% of the principal amount thereof
and (iv) with respect to the Certificates, 99.47933% of the principal amount
thereof.
The Seller shall not be obligated to deliver any of the Securities
except upon payment for all the Securities to be purchased as provided herein.
3. DELIVERY OF AND PAYMENT FOR THE SECURITIES. Delivery of and
payment for the Securities shall be made at the office of Simpson Thacher &
Bartlett, or at such other place as shall be agreed upon by Chemical Securities
Inc., as representative of the Underwriters (the "Representative") and the
Seller, at 10:00 A.M., New York City time, on November 1, 1995, or at such other
date or time, not later than five full business days thereafter, as shall be
agreed upon by the Representative and the Seller (such date and time being
referred to herein as the "Closing Date"). On the Closing Date, the Seller
shall deliver or cause to be delivered to the Representative for the account of
each Underwriter the Securities against payment to or upon the order of the
Seller of the purchase price in immediately available funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, each
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6
class of the Securities shall be represented by one or more global certificates
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"). The interest of the beneficial owners of the Securities will be
represented by book-entries on the records of DTC and participating members
thereof. Definitive certificates representing the Securities will be available
only under limited circumstances.
4. FURTHER AGREEMENTS OF THE SELLER. The Seller agrees with each of
the several Underwriters:
(a) To file the Prospectus Supplement with the Commission pursuant to
and in accordance with Rule 424(b)(5) of the Rules and Regulations within
the time period prescribed by such rule and provide evidence satisfactory
to the Representative of such timely filing.
(b) During any period in which a prospectus relating to the
Securities is required to be delivered under the Securities Act: advise the
Representative promptly of any proposal to amend the Registration Statement
or amend or supplement the Prospectus and not to effect any such amendment
or supplementation without the consent of the Representative; to advise the
Representative promptly of (i) the effectiveness of any post-effective
amendment to the Registration Statement, (ii) any request by the Commission
for any amendment of the Registration Statement or the Prospectus or for
any additional information, (iii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threatening of any proceedings for that purpose, (iv) the
issuance by the Commission of any order preventing or suspending the use of
any prospectus relating to the Securities or the initiation or threatening
of any proceedings for that purpose and (v) the receipt by the Seller of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and to use best efforts to prevent the
issuance of any such stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities or suspending any such
qualification and, if any such stop order or order of suspension is issued,
to obtain the lifting thereof at the earliest possible time.
(c) If, during any period in which, in the opinion of counsel to the
Underwriters, a prospectus is required by law to be delivered in connection
with the sale of Securities, any event shall have occurred as a result of
which the Prospectus, as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when such Prospectus is delivered to a purchaser, not
misleading, or if for any other reason it shall be necessary at such time
to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representative immediately thereof, and to
promptly prepare and file with the Commission, subject to paragraph (b) of
this Section 4, an amendment or a supplement
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to the Prospectus such that the statements in the Prospectus, as so amended
or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading, or such that the
Prospectus will comply with the Securities Act.
(d) To furnish promptly to each of the Representative and counsel for
the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith; and during
the period described in paragraph (c) of this Section 4, to deliver
promptly without charge to the Representative such number of the following
documents as the Representative may from time to time reasonably request:
(i) conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement, the Purchase Agreement, the Custodian Agreement,
the Administration Agreement and the Further Transfer and Servicing
Agreements) and (ii) any preliminary prospectus supplement, the Prospectus
and any amendment or supplement thereto.
(e) During the period described in paragraph (c) of this Section 4,
to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may,
in the judgment of the Seller, or, in the reasonable judgment of the
Representative, be required by the Securities Act or requested by the
Commission.
(f) For so long as any of the Securities are outstanding, to furnish
to the Underwriters (i) copies of all materials furnished by the Trust to
its Securityholders and all reports and financial statements furnished by
the Trust to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder and (ii) from time to time, such
other information concerning the Seller and the Trust as the Representative
may reasonably request.
(g) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the
Representative may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Securities;
provided that in connection therewith the Seller shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(h) For a period of 30 days from the date of the Prospectus, to not
offer for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offering
of, any securities collateralized by, or evidencing an ownership interest
in, a pool of retail installment sale contracts for and retail notes
evidencing loans secured by, for new and used medium and heavy duty trucks,
buses and trailers (other than the Securities and retail notes sold under
NFC's retail purchase facility) without the prior written consent of the
Representative.
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8
(i) For a period from the date of this Agreement until the retirement
of the Securities, or until such time as no Underwriter shall maintain a
secondary market in the Securities, whichever occurs first, to deliver to
you the annual statement of compliance and the annual independent certified
public accountants' report furnished to the Owner Trustee and the Indenture
Trustee, pursuant to the Pooling and Servicing Agreement, as soon as such
statements and reports are furnished to the Owner Trustee and the Indenture
Trustee, respectively.
(j) To the extent, if any, that the ratings provided with respect to
the Securities by the Standard & Poor's Ratings Group ("S&P") and Moody's
Investors Service Inc. ("Moody's") are conditional upon the furnishing of
documents or the taking of any other actions by NFC or the Seller, to
furnish such documents and take any such other actions.
(k) On or prior to each Subsequent Transfer Date, the Seller shall
deliver to the Representative (i) a duly executed Subsequent Transfer
Assignment including a schedule of the Subsequent Receivables to be
transferred to the Trust on such Subsequent Transfer Date, (ii) a copy of
the Officer's Certificate delivered to the Indenture Trustee and the Owner
Trustee confirming the satisfaction of the conditions specified in Section
2.02(b) of the Pooling and Servicing Agreement, (iii) a copy of the Opinion
of Counsel with respect to the transfer of the Subsequent Receivables to be
transferred to the Trust on such Subsequent Transfer Date to be delivered
to the Rating Agencies pursuant to Section 2.02(b)(ix) of the Pooling and
Servicing Agreement, (iv) a copy of the written confirmation from a firm of
independent nationally recognized certified public accountants to be
delivered to the Trust and the Indenture Trustee pursuant to Section
2.02(b)(x) of the Pooling and Servicing Agreement and (v) a copy of the
written confirmation of S&P received by the Seller pursuant to Section
2.02(b)(xi) of the Pooling and Servicing Agreement.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of NFC
and the Seller contained herein, to the accuracy of the statements of NFC or the
Seller made in any certificates pursuant to the provisions hereof, to the
performance by the Seller of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Representative; and the Seller shall have filed the
Prospectus Supplement with the Commission pursuant to Rule 424(b)(5) of the
Rules and Regulations within the time period prescribed by such rule.
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(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities, the
Purchase Agreement, the Custodian Agreement, the Administration Agreement,
the Further Transfer and Servicing Agreements, the Registration Statement
and the Prospectus, and all other legal matters relating to such agreements
and the transactions contemplated hereby and thereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and
the Seller shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(c) Kirkland & Ellis shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in substantially the form of Exhibit A hereto.
(d) Kirkland & Ellis shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory
to the Representative, with respect to the characterization of the transfer
of the Receivables by NFC to the Seller pursuant to the Purchase Agreement
as a sale and the non-consolidation of NFC and the Seller.
(e) The Representative shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Representative may
require, and the Seller shall have furnished to such counsel such documents
as they reasonably request for enabling them to pass upon such matters.
(f) Pryor, Cashman, Sherman & Flynn shall have furnished to the
Representative their written opinion, as counsel to the Owner Trustee,
addressed to the Underwriters and dated the Closing Date, in substantially
the form of Exhibit B hereto.
(g) Emmet, Marvin & Martin shall have furnished to the Representative
their written opinion, as counsel to the Indenture Trustee, addressed to
the Underwriters and dated the Closing Date, in substantially the form of
Exhibit C hereto.
(h) The Representative shall have received a letter dated the date
hereof (the "Procedures Letter") from a firm of independent nationally
recognized certified public accountants acceptable to the Representative
verifying the accuracy of such financial and statistical data contained in
the Prospectus as the Representative shall deem advisable. In addition, if
any amendment or supplement to the Prospectus made after the date hereof
contains financial or statistical data, the Representative shall have
received a letter dated the Closing Date confirming the Procedures Letter
and providing additional comfort on such new data.
(i) The Representative shall have received certificates, dated the
Closing Date, of any two of the Chairman of the Board, the President, any
Vice President and the chief financial officer of each of NFC and the
Seller stating that (A) the representations
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and warranties of NFC or the Seller, as the case may be, contained in this
Agreement, the Purchase Agreement, the Custodian Agreement, the
Administration Agreement and the Further Transfer and Servicing Agreements
are true and correct on and as of the Closing Date, (B) NFC or the Seller,
as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder and under
such agreements at or prior to the Closing Date, (C) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or, to the best of
his or her knowledge, are contemplated by the Commission, and (D) since
July 31, 1995, there has been no material adverse change in the financial
position or results of operations of NFC, the Seller or the Trust or any
change, or any development including a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of NFC, the Seller or the Trust except as set forth in or
contemplated by the Registration Statement and the Prospectus. Any officer
making such certification may rely upon his or her knowledge as to the
proceedings pending or threatened.
(j) The Notes and the Certificates shall have been given a rating by
S&P or Moody's, that is at least equal to or better than the rating
required for such class of Securities as set forth in the Prospectus
Supplement.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on either of such exchanges or
such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, or trading in
securities of NFC on any exchange or in the over-the-counter market shall
have been suspended or (ii) a general moratorium on commercial banking
activities shall have been declared by Federal or New York State
authorities or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representative, in its absolute discretion, by notice given to
and received by the Seller prior to delivery of and payment for the Securities
if, prior to that time, any of
<PAGE>
11
the events described in Section 5(k) shall have occurred or any of the
conditions described in Section 5(i) or 5(j) shall not be satisfied.
7. DEFAULTING UNDERWRITERS. (a) If, any one or more of the
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter hereunder on the Closing Date, and such failure
constitutes a default in the performance of its or their obligations under this
Agreement, the Representative may make arrangements for the purchase of such
Securities by other persons satisfactory to the Seller and the Representative,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, then each remaining non-defaulting Underwriter shall be severally
obligated to purchase the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase on the Closing Date in the respective
proportions which the principal amount of Securities set forth opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Securities on the Closing Date if the aggregate principal
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds one-eleventh of the aggregate principal
amount of the Securities to be purchased on the Closing Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase in total more than
110% of the principal amount of the Securities which it agreed to purchase on
the Closing Date pursuant to the terms of Section . If the foregoing maximums
are exceeded and the remaining Underwriters or other underwriters satisfactory
to the Representative and the Seller do not elect to purchase the Securities
which the defaulting Underwriter or Underwriters agreed but failed to purchase,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Seller, except that the Seller will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 12
and except that the provisions of Sections 9 and 10 shall not terminate and
shall remain in effect. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context otherwise
requires, any party not listed in Schedule 1 hereto who, pursuant to this
Section , purchases Securities which a defaulting Underwriter agreed but failed
to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have for damages caused by its default. If other
underwriters are obligated or agree to purchase the Securities of a defaulting
Underwriter, either the Representative or the Seller may postpone the Closing
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Seller or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement, and the Seller agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus that effects any such
changes.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) notice shall have
been given pursuant to Section terminating the obligations of the Underwriters
hereunder, (b) the Seller shall fail to tender the Securities for delivery to
the Underwriters for any reason permitted under this Agreement or (c) the
Underwriters shall decline to purchase the Securities
<PAGE>
12
for any reason permitted under this Agreement, the Seller shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other out-
of-pocket expenses as shall have been reasonably incurred by them in connection
with this Agreement and the proposed purchase of the Securities, and upon demand
the Seller shall pay the full amount thereof to the Representative. If this
Agreement is terminated pursuant to Section by reason of the default of one or
more Underwriters, the Seller shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
9. INDEMNIFICATION. (a) NFC and the Seller shall, jointly and
severally, indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Securities
Act (collectively referred to for the purposes of this Section 9 and Section 10
as the Underwriter) against any loss, claim, damage or liability, joint or
several, to which that Underwriter may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage or liability (or any action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus supplement, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading, and shall reimburse each Underwriter for any legal or other
expenses reasonably incurred by that Underwriter in connection with
investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage or liability
(or any action in respect thereof) as such expenses are incurred; provided,
however, that neither NFC nor the Seller shall be liable in any such case to the
extent that any such loss, claim, damage or liability (or any action in respect
thereof) arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary prospectus
supplement, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with the Underwriters'
Information.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Seller, each of its directors, each officer of the Seller who
signed the Registration Statement and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act (collectively
referred to for the purposes of this Section 9 and Section 10 as the Seller),
against any loss, claim, damage or liability, joint or several, to which the
Seller may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage or liability (or any action in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus supplement, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Seller by or on behalf
of such Underwriter specifically for use therein, and shall reimburse the Seller
for any legal or other expenses reasonably incurred by the Seller in connection
with
<PAGE>
13
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage or liability (or
any action in respect thereof) as such expenses are incurred. The parties
acknowledge and agree that the written information furnished to the Seller
through the Representative by or on behalf of the Underwriters (the
"Underwriters' Information") consists solely of the paragraph below the
footnotes on the cover page of the Prospectus Supplement concerning the terms of
the offering and the second paragraph of text and the following table under the
caption "Underwriting" in the Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ one counsel to represent
jointly the Representative and those other Underwriters and their respective
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against NFC or the
Seller under this Section 9 if, in the reasonable judgment of the
Representative, it is advisable for the Representative and those Underwriters
and controlling persons to be jointly represented by separate counsel because
there may be one or more legal defenses available to such parties which are
different from or additional to those available to the indemnifying party, and
in that event the fees and expenses of such separate counsel shall be paid by
NFC or the Seller. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 9(a) and 9(b), shall use all reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
The obligations of NFC, the Seller and the Underwriters in this
Section 9 and in Section 10 are in addition to any other liability which NFC,
the Seller or the Underwriters, as the case may be, may otherwise have.
<PAGE>
14
10. CONTRIBUTION. If the indemnification provided for in Section 9
is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or (b), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by NFC and the Seller on the one hand and the Underwriters on the other
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of NFC and the Seller on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative benefits received by NFC and the Seller
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by the Seller bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Securities
purchased under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus Supplement. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by NFC or the Seller on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
NFC , the Seller and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 10 were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability referred to above in this Section 10 shall be deemed to include,
subject to the limitations on the fees and expenses of separate counsel set
forth in Section 9, for purposes of this Section 10, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such claim or any action in respect thereof. Notwithstanding
the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public less the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to indemnify as
provided in Section 9 and contribute as provided in this Section 10 are several
in proportion to their respective underwriting obligations and not joint.
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, NFC, the Seller,
and their
<PAGE>
15
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, NFC and the Seller and their respective successors and
the controlling persons and officers and directors referred to in Sections 9 and
10 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
12. EXPENSES. The Seller agrees with the Underwriters to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Securities and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any preliminary prospectus supplement, the Prospectus and any
amendment or supplement to the Prospectus, including, without limitation, the
Prospectus Supplement, all as provided in this Agreement; (d) the costs of
printing, reproducing and distributing this Agreement and any other underwriting
and selling group documents by mail, telex or other means of communications; (e)
the fees and expenses of qualifying the Securities under the securities laws of
the several jurisdictions as provided in Section and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Underwriters); (f) any fees charged by S&P
and Moody's for rating the Securities; (g) all fees and expenses of the Owner
Trustee and the Indenture Trustee and their respective counsel; and (h) all
other costs and expenses incident to the performance of the obligations of the
Seller under this Agreement; provided that, except as otherwise provided in this
Section 12 and in Section 8, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Securities which they may sell and the expenses of advertising any
offering of the Securities made by the Underwriters.
13. SURVIVAL. The respective indemnities, rights of contribution,
representations, warranties and agreements of NFC, the Seller and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any (i) termination or cancellation of this Agreement, (ii) any investigation
made by or on behalf of any of them or any person controlling any of them or
(iii) acceptance of and payment for the Securities.
14. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission and confirmed to Chemical Securities Inc., 270 Park
Avenue, 7th Floor, New York, New York 10017, Attention: Mr. Bill Magid,
with a copy to the Legal Department;
<PAGE>
16
(b) if to the Seller, shall be delivered or sent by mail or facsimile
transmission and confirmed to the address of the Seller set forth in the
Registration Statement, Attention: General Counsel, with a copy to NFC at
the address of the Servicer set forth in the Registration Statement,
Attention: General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Seller shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by the Representative.
15. DEFINITIONS OF CERTAIN TERMS. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
<PAGE>
17
If the foregoing is in accordance with your understanding of the
agreement between the Seller and NFC and the several Underwriters, kindly
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By /s/ R. Wayne Cain
----------------------------------------
Name: R.W. Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By /s/ R. Wayne Cain
----------------------------------------
Name: R.W. Cain
Title: Vice President and Treasurer
Accepted:
CHEMICAL SECURITIES INC.
For Itself and as Representative
of the Several Underwriters
By /s/ William Magid
-----------------------------------
Authorized Signatory
<PAGE>
18
SCHEDULE 1
<TABLE>
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3
Underwriter Notes Notes Notes
--------- --------- ---------
<S> <C> <C> <C>
Chemical
Securities Inc. $30,575,000 $25,000,000 $71,081,250
BA Securities
Inc. $30,575,000 $25,000,000 $71,081,250
J.P Morgan
Securities Inc. $30,575,000 $25,000,000 $71,081,250
NationsBanc
Capital Markets
Inc. $30,575,000 $25,000,000 $71,081,250
</TABLE>
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Certificates
---------------
<S> <C>
Chemical Securities Inc. $9,095,000
J.P. Morgan Securities Inc. $9,095,000
</TABLE>
<PAGE>
EXHIBIT 4.1
================================================================================
NAVISTAR FINANCIAL 1995-B OWNER TRUST
CLASS A-1 5.75% ASSET BACKED NOTES
CLASS A-2 5.94% ASSET BACKED NOTES
CLASS A-3 6.05% ASSET BACKED NOTES
_______________________________________
INDENTURE
DATED AS OF NOVEMBER 1, 1995
_______________________________________
THE BANK OF NEW YORK,
A NEW YORK BANKING CORPORATION,
INDENTURE TRUSTEE
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
=================================================================================================
TIA INDENTURE
SECTION SECTION
-------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
310(a)(1) .................................... 6.11
(a)(2) .................................... 6.11
(a)(3) .................................... 6.10
(a)(4) .................................... 6.14
(b) .................................... 6.11
(c) .................................... N.A.
311(a) .................................... 6.12
(b) .................................... 6.12
(c) .................................... N.A.
312(a) .................................... 7.1, 7.2
(b) .................................... 7.2
(c) .................................... 7.2
313(a) .................................... 7.4(a), 7.4(b)
(b)(1) .................................... 7.4(a)
(b)(2) .................................... 7.4(a)
(c) .................................... 7.4(a)
(d) .................................... 7.4(a)
314(a) .................................... 7.3(a), 3.9
(b) .................................... 3.6
(c)(1) .................................... 2.2, 2.9, 4.1, 11.1(a)
(c)(2) .................................... 11.1(a)
(c)(3) .................................... 11.1(a)
(d) .................................... 2.9, 11.1(b)
(e) .................................... 11.1(a)
(f) .................................... 11.1(a)
315(a) .................................... 6.1(b)
(b) .................................... 6.5
(c) .................................... 6.1(a)
(d) .................................... 6.2, 6.1(c)
(e) .................................... 5.13
316(a)last sentence .................................... 1.1
(a)(1)(A) .................................... 5.11
(a)(1)(B) .................................... 5.12
(a)(2) .................................... Omitted
316(b), (c) .................................... 5.7
317(a)(1) .................................... 5.3(b)
(a)(2) .................................... 5.3(d)
(b) .................................... 3.3
318(a) .................................... 11.7
N.A. means Not Applicable.
=================================================================================================
</TABLE>
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions........................................................ 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.................. 2
ARTICLE II
THE NOTES
SECTION 2.1 Form............................................................... 3
SECTION 2.2 Execution, Authentication and Delivery............................. 3
SECTION 2.3 Temporary Notes.................................................... 4
SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes....... 4
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes......................... 6
SECTION 2.6 Persons Deemed Noteholders......................................... 7
SECTION 2.7 Payment of Principal and Interest.................................. 7
SECTION 2.8 Cancellation of Notes.............................................. 9
SECTION 2.9 Release of Collateral.............................................. 9
SECTION 2.10 Book-Entry Notes................................................... 9
SECTION 2.11 Notices to Clearing Agency......................................... 10
SECTION 2.12 Definitive Notes................................................... 10
SECTION 2.13 Seller as Noteholder............................................... 11
SECTION 2.14 Tax Treatment...................................................... 11
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest.................................. 11
SECTION 3.2 Maintenance of Agency Office....................................... 12
SECTION 3.3 Money for Payments To Be Held in Trust............................. 12
SECTION 3.4 Existence.......................................................... 14
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge............... 14
SECTION 3.6 Opinions as to Trust Estate........................................ 15
SECTION 3.7 Performance of Obligations; Servicing of Receivables............... 15
SECTION 3.8 Negative Covenants................................................. 17
SECTION 3.9 Annual Statement as to Compliance.................................. 17
SECTION 3.10 Consolidation, Merger, etc., of Issuer; Disposition of Trust Assets 18
SECTION 3.11 Successor or Transferee............................................ 20
SECTION 3.12 No Other Business.................................................. 20
SECTION 3.13 No Borrowing....................................................... 20
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.14 Guarantees, Loans, Advances and Other
Liabilities........................................................ 21
SECTION 3.15 Servicer's Obligations............................................. 21
SECTION 3.16 Capital Expenditures............................................... 21
SECTION 3.17 Removal of Administrator........................................... 21
SECTION 3.18 Restricted Payments................................................ 21
SECTION 3.19 Notice of Events of Default........................................ 22
SECTION 3.20 Further Instruments and Acts....................................... 22
SECTION 3.21 Indenture Trustee's Assignment of Administrative Receivables and
Warranty Receivables............................................... 22
SECTION 3.22 Representations and Warranties by the Issuer to the Indenture Trustee 23
SECTION 3.23 Dissolution upon Bankruptcy of the Seller.......................... 23
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture............................ 23
SECTION 4.2 Application of Trust Money......................................... 25
SECTION 4.3 Repayment of Monies Held by Paying Agent........................... 25
SECTION 4.4 Duration of Position of Indenture Trustee for Benefit of
Certificateholders................................................. 25
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default.................................................. 26
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment................. 27
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee............................................................ 28
SECTION 5.4 Remedies; Priorities............................................... 30
SECTION 5.5 Optional Preservation of the Receivables........................... 31
SECTION 5.6 Limitation of Suits................................................ 32
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest 33
SECTION 5.8 Restoration of Rights and Remedies................................. 33
SECTION 5.9 Rights and Remedies Cumulative..................................... 33
SECTION 5.10 Delay or Omission Not a Waiver..................................... 33
SECTION 5.11 Control by Noteholders............................................. 33
SECTION 5.12 Waiver of Past Defaults............................................ 34
SECTION 5.13 Undertaking for Costs.............................................. 35
SECTION 5.14 Waiver of Stay or Extension Laws................................... 35
SECTION 5.15 Action on Notes.................................................... 35
SECTION 5.16 Performance and Enforcement of Certain Obligations................. 36
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee........................................ 37
SECTION 6.2 Rights of Indenture Trustee........................................ 38
SECTION 6.3 Indenture Trustee May Own Notes.................................... 39
SECTION 6.4 Indenture Trustee's Disclaimer..................................... 39
SECTION 6.5 Notice of Defaults................................................. 39
SECTION 6.6 Reports by Indenture Trustee to Holders............................ 39
SECTION 6.7 Compensation; Indemnity............................................ 39
SECTION 6.8 Replacement of Indenture Trustee................................... 40
SECTION 6.9 Merger or Consolidation of Indenture Trustee....................... 41
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.. 42
SECTION 6.11 Eligibility; Disqualification...................................... 43
SECTION 6.12 Preferential Collection of Claims Against
Issuer............................................................. 43
SECTION 6.13 Representations and Warranties of Indenture Trustee................ 43
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of Notes... 44
SECTION 6.15 Suit for Enforcement............................................... 45
SECTION 6.16 Rights of Noteholders to Direct Indenture
Trustee............................................................ 45
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders........................................................ 45
SECTION 7.2 Preservation of Information, Communications to Noteholders......... 46
SECTION 7.3 Reports by Issuer.................................................. 46
SECTION 7.4 Reports by Indenture Trustee....................................... 47
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money................................................ 47
SECTION 8.2 Designated Accounts; Payments...................................... 47
SECTION 8.3 General Provisions Regarding Accounts.............................. 48
SECTION 8.4 Release of Trust Estate............................................ 49
SECTION 8.5 Opinion of Counsel................................................. 50
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders............. 50
SECTION 9.2 Supplemental Indentures With Consent of Noteholders................ 51
SECTION 9.3 Execution of Supplemental Indentures............................... 53
SECTION 9.4 Effect of Supplemental Indenture................................... 53
SECTION 9.5 Conformity with Trust Indenture Act................................ 54
SECTION 9.6 Reference in Notes to Supplemental Indentures...................... 54
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.......................................................... 54
SECTION 10.2 Form of Redemption Notice........................................... 55
SECTION 10.3 Notes Payable on Redemption Date.................................... 55
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.......................... 56
SECTION 11.2 Form of Documents Delivered to Indenture
Trustee............................................................ 58
SECTION 11.3 Acts of Noteholders................................................ 59
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.... 59
SECTION 11.5 Notices to Noteholders; Waiver..................................... 59
SECTION 11.6 Alternate Payment and Notice Provisions............................ 60
SECTION 11.7 Conflict with Trust Indenture Act.................................. 60
SECTION 11.8 Effect of Headings and Table of Contents........................... 60
SECTION 11.9 Successors and Assigns............................................. 61
SECTION 11.10 Separability....................................................... 61
SECTION 11.11 Benefits of Indenture.............................................. 61
SECTION 11.12 Legal Holidays..................................................... 61
SECTION 11.13 Governing Law...................................................... 61
SECTION 11.14 Counterparts....................................................... 61
SECTION 11.15 Recording of Indenture............................................. 61
SECTION 11.16 No Recourse........................................................ 62
SECTION 11.17 No Petition........................................................ 62
SECTION 11.18 Inspection......................................................... 63
</TABLE>
v
<PAGE>
<TABLE>
<S> <C> <C>
Exhibit A - Locations of Schedule of Receivables
-----------------------
Exhibit B - Form of Asset Backed Note
Exhibit C - Form of Note Depository Agreement
</TABLE>
vi
<PAGE>
INDENTURE, dated as of November 1, 1995 between NAVISTAR FINANCIAL
1995-B OWNER TRUST, a Delaware business trust (the "ISSUER"), and THE BANK OF
NEW YORK, a New York banking corporation, as trustee and not in its individual
capacity (the "INDENTURE TRUSTEE").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Notes and (only to the
extent expressly provided herein) the Certificateholders:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders, all of the Issuer's right, title and
interest in, to and under (a) the Receivables listed on the Schedule of
-----------
Receivables which is on file at the locations listed on Exhibit A hereto and all
- ----------- ---------
monies paid thereon (including Liquidation Proceeds) and due thereunder on and
after the applicable Cutoff Date, whether now existing or hereafter acquired and
including, without limitation, Subsequent Receivables acquired by the Issuer
pursuant to the Pooling and Servicing Agreement listed on the schedules to the
Subsequent Transfer Assignments with respect to such Subsequent Receivables and
all monies due thereon on and after the applicable Cutoff Dates; (b) the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and, where permitted by law, any accessions thereto which are
financed by NFC; (c) the benefits of any lease assignments with respect to the
Financed Vehicles; (d) any proceeds from any Insurance Policies with respect to
the Receivables; (e) any proceeds from Dealer Liability with respect to the
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Receivables (subject to the limitations set forth in Section 2.04 of the Pooling
and Servicing Agreement) and proceeds of any Guaranties with respect to the
Receivables; (f) all funds on deposit from time to time in the Collection
Account and the Note Distribution Account; (g) the Pooling and Servicing
Agreement (including all rights of NFRRC under the Purchase Agreement assigned
to the Issuer pursuant to the Pooling and Servicing Agreement); (h) the Reserve
Account and all proceeds thereof (other than the Investment Earnings thereon),
including all other amounts and investments held from time to time in the
Reserve Account (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise); (i) the Reserve
Account Initial Deposit with respect to the Closing Date and each Subsequent
Transfer Date and all proceeds thereof (other than the Investment Earnings
thereon) ((h) and (i), collectively, the "RESERVE ACCOUNT PROPERTY"); (j) all
funds on deposit from time to time in the Pre-Funding Account and all proceeds
thereof, including all other amounts and investments held from time to time in
the Pre-Funding Account (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or otherwise)
(collectively, the "PRE-FUNDING ACCOUNT PROPERTY") and the Negative Carry
Account (other than the Investment Earnings thereon); and (k) all present and
future claims, demands, causes and choses in action in respect of any or all of
the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the
1
<PAGE>
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "COLLATERAL").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture. This Indenture constitutes a security agreement under the UCC.
The foregoing Grant includes all rights, powers and options (but none
of the Obligations, if any) of the Issuer under any agreement or instrument
included in the Collateral, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Receivables included in the Collateral and all other monies
payable under the Collateral, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Issuer or otherwise and
generally to do and receive anything that the Issuer is or may be entitled to do
or receive under or with respect to the Collateral.
The Indenture Trustee, as trustee on behalf of the Noteholders and
(only to the extent expressly provided herein) the Certificateholders,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Indenture shall have the respective meanings assigned them in Part I of Appendix
--------
A to the Pooling and Servicing Agreement of even date herewith among the Issuer,
- -
NFRRC and NFC (as it may be amended, supplemented or modified from time to time,
the "Pooling and Servicing Agreement"). All references herein to "the Indenture"
or "this Indenture" are to this Indenture as it may be amended, supplemented or
modified from time to time, the exhibits hereto and the capitalized terms used
herein which are defined in such Appendix A. All references herein to Articles,
----------
Sections, subsections and exhibits are to Articles, Sections, subsections and
exhibits contained in or attached to this Indenture unless otherwise specified.
All terms defined in this Indenture shall have the defined meanings when used in
any certificate, notice, Note or other document made or delivered pursuant
hereto unless otherwise defined therein. The rules of construction set forth in
Part II of such Appendix A shall be applicable to this Indenture.
----------
2
<PAGE>
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"INDENTURE SECURITIES" means the Notes.
"INDENTURE TRUSTEE" means the Indenture Trustee.
"OBLIGOR" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a Commission rule
have the respective meanings assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.1 Form.
----
(a) Each of the Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes, with the Indenture Trustee's certificate of authentication, shall be
substantially in the form set forth in Exhibit B, with such appropriate
---------
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and each such class may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The
terms of each class of Notes as provided for in Exhibit B hereto are part of the
---------
terms of this Indenture.
3
<PAGE>
SECTION 2.2 Execution, Authentication and Delivery.
--------------------------------------
(a) Each Note shall be dated the date of its authentication, and
shall be issuable as a registered Note in the minimum denomination of $1,000 and
in integral multiples thereof.
(b) The Notes shall be executed on behalf of the Issuer by any of
its Authorized Officers. The signature of any such Authorized Officer on the
Notes may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
office prior to the authentication and delivery of such Notes or did not hold
such office at the date of such Notes.
(d) The Indenture Trustee shall upon Issuer Order authenticate and
deliver to or upon the order of the Issuer, the Notes for original issue in
aggregate principal amount of $506,625,000.00, comprised of (i) Class A-1 Notes
in the aggregate principal amount of $122,300,000.00, (ii) Class A-2 Notes in
the aggregate principal amount of $100,000,000.00 and (iii) Class A-3 Notes in
the aggregate principal amount of $284,325,000.00. The aggregate principal
amount of all Notes outstanding at any time may not exceed $506,625,000.00
except as provided in Section 2.5.
(e) No Notes shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form set forth in Exhibit B,
---------
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 Temporary Notes.
---------------
(a) Pending the preparation of Definitive Notes, if any, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, such Temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations as are
consistent with the terms of this Indenture as the officers executing such Notes
may determine, as evidenced by their execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the Temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more Temporary
4
<PAGE>
Notes, the Issuer shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so delivered in exchange, the Temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange of
------------------------------------------------------
Notes.
- -----
(a) The Issuer shall cause to be kept the Note Register, comprising
separate registers for each class of Notes, in which, subject to such reasonable
regulations as the Issuer may prescribe, the Issuer shall provide for the
registration of the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Registrar for the
purpose of registering the Notes and transfers of the Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor Note Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register. The Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to rely upon
a certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes in any authorized denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes of the same class in any authorized denominations, of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
(e) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same
5
<PAGE>
benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee and the Note
Registrar, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by a commercial bank or
trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office of the Indenture Trustee is
located, or by a member firm of a national securities exchange, and such other
documents as the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer or Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Sections 2.3 or 9.6 not
involving any transfer.
(h) The preceding provisions of this Section 2.4 notwithstanding,
the Issuer shall not be required to transfer or make exchanges, and the Note
Registrar need not register transfers or exchanges, of Notes that: (i) have been
selected for redemption pursuant to Article X, if applicable; or (ii) are due
for repayment in full within 15 days of submission to the Corporate Trust Office
or the Agency Office.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.
------------------------------------------
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, the Issuer shall execute and upon the
Issuer's request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of a like class and aggregate principal amount; provided,
--------
however, that if any such destroyed, lost or stolen Note, but not a mutilated
- -------
Note, shall have become or within seven days shall be due and payable in full,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may make payment to the Holder of such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date, if applicable, without
surrender thereof.
(b) If, after the delivery of a replacement Note or payment in
respect of a destroyed, lost or stolen Note pursuant to subsection (a), any bona
fide purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note
6
<PAGE>
(or such payment) from (i) any Person to whom it was delivered, (ii) the Person
taking such replacement Note from the Person to whom such replacement Note was
delivered or (iii) any assignee of such Person, except any bona fide purchaser,
and the Issuer and the Indenture Trustee shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
(c) In connection with the issuance of any replacement Note under
this Section 2.5, the Issuer may require the payment by the Holder of such Note
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including all
fees and expenses of the Indenture Trustee) connected therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be found at any time or be
enforced by any Person, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Noteholders. Prior to due presentment
--------------------------
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the Noteholder
for the purpose of receiving payments of principal of and interest on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest.
---------------------------------
(a) Interest on each class of Notes shall accrue in the manner set
forth in Exhibit B at the applicable Interest Rate for such class, and such
---------
interest shall be payable on each Distribution Date as specified in the form of
Note set forth in Exhibit B. Any instalment of interest payable on any Note
---------
shall be punctually paid or duly provided for by a deposit by or at the
direction of the Issuer or the Servicer into the Note Distribution Account
before each Distribution Date for payment to Noteholders on the related
Distribution Date and shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the applicable Record Date, by
check mailed first-class, postage prepaid to such Person's address as it appears
on the Note Register on such Record Date; provided, however, that, unless and
-------- -------
until Definitive Notes have been issued pursuant to Section 2.12, with respect
to Notes registered on the applicable Record Date in the name of the Note
Depository (initially, Cede & Co.),
7
<PAGE>
payment shall be made by wire transfer in immediately available funds to the
account designated by the Note Depository.
(b) Prior to the occurrence of an Event of Default and a declaration
in accordance with Section 5.2(a) that the Notes have become immediately due and
payable, the principal of each class of Notes shall be payable in full on the
Final Scheduled Distribution Date for such class and, to the extent of funds
available therefor, in instalments on the Distribution Dates (if any) preceding
the Final Scheduled Distribution Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(c)(ii) and, if
applicable, in Section 8.2(d). All principal payments on each class of Notes
shall be made pro rata to the Noteholders of such class entitled thereto. Any
instalment of principal payable on any Note shall be punctually paid or duly
provided for by a deposit by or at the direction of the Issuer into the Note
Distribution Account prior to the applicable Distribution Date and shall be paid
to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date, by check mailed first-class, postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date; provided, however, that, unless and until Definitive Notes have
-------- -------
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record Date in the name of the Note Depository, payment shall be made by wire
transfer in immediately available funds to the account designated by the Note
Depository, except for: (i) the final instalment of principal on any Note; and
(ii) the Redemption Price for the Notes redeemed pursuant to Section 10.1,
which, in each case, shall be payable as provided herein. The funds represented
by any such checks in respect of interest or principal returned undelivered
shall be held in accordance with Section 3.3.
(c) [RESERVED]
(d) From and after the occurrence of an Event of Default and a
declaration in accordance with Section 5.2(a) that the Notes have become
immediately due and payable, until such time as all Events of Default have been
cured or waived as provided in Section 5.2(b), principal on the Notes shall be
payable as provided in Section 8.2(c)(iii).
(e) With respect to any Distribution Date on which the final
instalment of principal and interest on a class of Notes is to be paid, the
Indenture Trustee shall notify each Noteholder of such class of record as of the
Record Date for such Distribution Date of the fact that the final instalment of
principal of and interest on such Note is to be paid on such Distribution Date.
Such notice shall be sent (i) on such Record Date by facsimile, if Book-Entry
Notes are outstanding; or (ii) not later than three Business Days after such
Record Date in accordance with Section 11.5(a) if Definitive Notes are
outstanding, and shall specify that such final instalment shall be payable only
upon presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for payment of such instalment and
the manner in which such payment shall be made. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.
Within sixty days of the surrender pursuant to this Section 2.7(e) or
cancellation pursuant to Section 2.8 of all of the Notes of a particular class,
the Indenture Trustee shall provide each of the Rating
8
<PAGE>
Agencies with written notice stating that all Notes of such class have been
surrendered or cancelled.
SECTION 2.8 Cancellation of Notes. All Notes surrendered for
---------------------
payment, redemption, exchange or registration of transfer shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 2.8, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be returned to it; provided, however, that such Issuer
-------- -------
Order is timely and the Notes have not been previously disposed of by the
Indenture Trustee. The Indenture Trustee shall certify to the Issuer that
surrendered Notes have been duly cancelled and retained or destroyed, as the
case may be.
SECTION 2.9 Release of Collateral. The Indenture Trustee shall
---------------------
release property from the lien of this Indenture, other than as permitted by
Sections 3.21, 8.2, 8.4 and 11.1, only upon receipt of an Issuer Request
accompanied by an Officers' Certificate, an Opinion of Counsel (to the extent
required by the TIA) and Independent Certificates in accordance with TIA
(S)(S)314(c) and 314(d)(1).
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
----------------
shall be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency by or on behalf of the Issuer. Such Note or Notes shall be
registered on the Note Register in the name of the Note Depository (initially,
Cede & Co.), and no Note Owner shall receive a Definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.12. Unless
and until Definitive Notes have been issued to the Note Owners pursuant to
Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force
and effect;
(b) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
9
<PAGE>
(d) the rights of the Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants and unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing Agency shall make
book-entry transfers between the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants, pursuant to the Note Depository Agreement;
and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has (i) received written instructions to such effect from Note Owners
and/or Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Notes and (ii)
has delivered such instructions to the Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency and shall
have no other obligation to the Note Owners.
SECTION 2.12 Definitive Notes.
----------------
If (i) the Administrator advises the Indenture Trustee in writing that
the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Issuer is unable to locate a
qualified successor; (ii) the Administrator, at its option, advises the
Indenture Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency; or (iii) after the occurrence of an Event of
Default or a Servicer Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Notes advise
the Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the Note
Owners, then the Clearing Agency shall notify all Note Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
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SECTION 2.13 Seller as Noteholder. The Seller in its individual or
--------------------
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its affiliates with the same rights it would have if it
were not the Seller.
SECTION 2.14 Tax Treatment. The Issuer in entering into this
-------------
Indenture, and the Noteholders and the Note Owners, by acquiring any Note or
interest therein, (i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Collateral, and (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the Notes
as indebtedness secured by the Collateral for the purpose of federal income
taxes, state and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall
---------------------------------
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. On each Distribution Date and
on the Redemption Date (if applicable), the Indenture Trustee shall distribute
amounts on deposit in the Note Distribution Account to the Noteholders in
accordance with Sections 2.7 and 8.2, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or
principal. Any amounts so withheld shall be considered as having been paid by
the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the
----------------------------
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "AGENCY OFFICE"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of the Agency Office. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
--------------------------------------
(a) As provided in Section 8.2, all payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Note Distribution Account pursuant to Section 8.2(c), (d) or (e) shall
be made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Note
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Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section 3.3.
(b) Before each Distribution Date or the Redemption Date (if
applicable), the Indenture Trustee shall deposit in the Note Distribution
Account an aggregate sum sufficient to pay the amounts then becoming due with
respect to the Notes, such sum to be held in trust for the benefit of the
Persons entitled thereto.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and pay such sums to
such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required
to be met by a Paying Agent in effect at the time of
determination; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
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(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid by the Indenture Trustee to the Issuer on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
-------- -------
that the Indenture Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Issuer cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be paid to the Issuer. The Indenture
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such payment (including, but not limited to,
mailing notice of such payment to Holders whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in monies due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4 Existence. The Issuer shall keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge.
----------------------------------------------------
The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, amendments thereto,
continuation statements, assignments, certificates, instruments of further
assurance and other instruments, and shall take such other action as may be
determined to be necessary or advisable in an Opinion of Counsel to the Owner
Trustee delivered to the Indenture Trustee to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof including by making the necessary filings of financing statements or
amendments thereto within sixty days after the occurrence of any of the
following: (A) any change in the Issuer's name, (B) any change in the location
of the Issuer's principal place of business and (C) any merger or consolidation
or other change in the Issuer's identity or organizational structure and by
promptly notifying the Indenture Trustee of any such filings;
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(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce the rights of the Indenture Trustee and the Noteholders
in any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all Persons and parties,
and the Issuer hereby designates the Indenture Trustee its agent and attorney-
in-fact to execute any financing statement, continuation statement or other
instrument required by the Indenture Trustee pursuant to this Section 3.5.
SECTION 3.6 Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to perfect and make
effective the lien and security interest of this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before April 15 in each calendar year, beginning April 15,
1997, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain the lien and security interest created by this Indenture. Such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 15 in
the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer shall not take any action and shall use its
reasonable efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination
14
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or discharge of, or impair the validity or effectiveness of, any such instrument
or agreement, except as otherwise expressly provided in this Indenture, the
Pooling and Servicing Agreement, the Purchase Agreement, the Administration
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in the Basic Documents or an
Officers' Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including but
not limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed under the terms of this Indenture,
the Pooling and Servicing Agreement and the Purchase Agreement in accordance
with and within the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Pooling and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the response or action, if any, the Issuer has taken or
is taking with respect of such default. If a Servicer Default shall arise from
the failure of the Servicer to perform any of its duties or obligations under
the Pooling and Servicing Agreement with respect to the Receivables, the Issuer
and the Indenture Trustee shall take all reasonable steps available to them
pursuant to the Pooling and Servicing Agreement to remedy such failure.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it shall not, without the
prior written consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Notes, as applicable in accordance with
the terms thereof, amend, modify, waive, supplement, terminate or surrender, or
agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral or any of the Basic Documents, or
waive timely performance or observance by the Servicer or the Seller under the
Pooling and Servicing Agreement or the Purchase Agreement, the Administrator
under the Administration Agreement or NFC under the Purchase Agreement;
provided, however, that, notwithstanding the foregoing, no action specified in
- -------- -------
the proviso to Section 9.2 shall be taken except in compliance with Section 9.2.
-------
If any such amendment, modification, supplement or waiver shall be so consented
to by the Indenture Trustee or such Holders, as applicable, the Issuer agrees,
promptly following a request by the Indenture Trustee to do so, to execute and
deliver, in its own name and at its own expense, such agreements, instruments,
consents and other documents as the Indenture Trustee may deem necessary or
appropriate in the circumstances.
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SECTION 3.8 Negative Covenants. So long as any Notes are
------------------
Outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except the Issuer may (i) collect,
liquidate, sell or otherwise dispose of Receivables (including Warranty
Receivables, Administrative Receivables and Liquidating Receivables), (ii)
make cash payments out of the Designated Accounts and the Certificate
Distribution Account and (iii) take other actions, in each case as
contemplated by the Basic Documents;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(c) voluntarily commence any insolvency, readjustment of debt,
marshalling of assets and liabilities or other proceeding, or apply for an
order by a court or agency or supervisory authority for the winding-up or
liquidation of its affairs or any other event specified in Section 5.1(f);
or
(d) either (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted hereby,
(ii) permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by operation of law, in
each case on a Financed Vehicle and arising solely as a result of an action
or omission of the related Obligor), or (iii) permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate (other than with respect to any such tax, mechanics' or other
lien).
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
---------------------------------
deliver to the Indenture Trustee, with a copy to each of the Rating Agencies, on
or before February 1 of each year, beginning February 1, 1997, an Officer's
Certificate signed by an Authorized Officer, dated as of the immediately
preceding October 31, stating that:
(a) a review of the activities of the Issuer during such fiscal year
and of performance under this Indenture has been made under such Authorized
Officer's supervision; and
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(b) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has fulfilled in all material respects all of its
obligations under this Indenture throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each
such default known to such Authorized Officer and the nature and status
thereof. A copy of such certificate may be obtained by any Noteholder by a
request in writing to the Issuer addressed to the Corporate Trust Office of
the Indenture Trustee.
SECTION 3.10 Consolidation, Merger, etc., of Issuer; Disposition
---------------------------------------------------
of Trust Assets.
- ---------------
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and timely payment of the principal of and interest on all
Notes and the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such merger or
consolidation, no Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and such Person for each then outstanding
class of Notes;
(iv) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been completed; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating:
(A) that such consolidation or merger and such
supplemental indenture comply with this Section 3.10;
(B) that such consolidation or merger and such
supplemental indenture shall have no material adverse tax consequence
to the Issuer or any Securityholder; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
17
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(b) Except as otherwise expressly permitted by this Indenture or the
other Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets, including those included
in the Trust Estate, to any Person, unless:
(i) the Person that acquires such properties or assets of the
Issuer (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State and
(B) by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee:
(1) expressly assumes the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein;
(2) expressly agrees that all right, title and interest
so sold, conveyed, exchanged, transferred or otherwise disposed of
shall be subject and subordinate to the rights of Noteholders;
(3) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under
or related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction and such Person for each then outstanding class
of Notes;
(iv) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating that:
(A) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture comply with this Section
3.10;
18
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(B) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture have no material adverse
tax consequence to the Issuer or to any Noteholders or
Certificateholders; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer under this Indenture with the
same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), the Issuer shall be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Securityholders immediately upon the
delivery of written notice to the Indenture Trustee from the Person acquiring
such assets and properties stating that the Issuer is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in
-----------------
any business or activity other than acquiring, holding and managing the
Collateral and the proceeds therefrom in the manner contemplated by the Basic
Documents, issuing the Securities, making payments on the Securities and such
other activities that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto, as set forth in Section 2.3
of the Trust Agreement. After the end of the Funding Period, the Issuer shall
not fund the purchase of any new Retail Notes.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
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SECTION 3.15 Servicer's Obligations. The Issuer shall use its best
----------------------
efforts to cause the Servicer to comply with its obligations under Sections
3.10, 4.01 and 4.02 of the Pooling and Servicing Agreement.
SECTION 3.16 Capital Expenditures. The Issuer shall not make
--------------------
any expenditure (whether by long-term or operating lease or otherwise) for
capital assets (either real, personal or intangible property) other than the
purchase of the Receivables and other property and rights from the Seller
pursuant to the Pooling and Servicing Agreement.
SECTION 3.17 Removal of Administrator. So long as any Notes are
------------------------
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition for each class of Notes then outstanding shall have
been satisfied in connection with such removal.
SECTION 3.18 Restricted Payments. Except for payments of
-------------------
principal or interest on or redemption of the Notes, so long as any Notes are
Outstanding, the Issuer shall not, directly or indirectly:
(a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial
interest in the Issuer or otherwise, in each case with respect to any
ownership or equity interest or similar security in or of the Issuer or to
the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
- -------- -------
to the Servicer, the Seller, the Indenture Trustee, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Pooling and Servicing Agreement, the Trust Agreement or
the other Basic Documents. The Issuer shall not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with the Basic Documents.
SECTION 3.19 Notice of Events of Default. The Issuer agrees to
---------------------------
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each Servicer Default, any Insolvency Event with
respect to the Seller, each default on the part of the Seller of its obligations
under the Pooling and Servicing Agreement and each default on the part of NFC of
its obligations under the Purchase Agreement.
SECTION 3.20 Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such
20
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further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.21 Indenture Trustee's Assignment of Administrative
------------------------------------------------
Receivables and Warranty Receivables. Upon receipt of the Administrative
- ------------------------------------
Purchase Payment or the Warranty Payment with respect to an Administrative
Receivable or a Warranty Receivable, as the case may be, the Indenture Trustee
shall assign, without recourse, representation or warranty to the Servicer or
the Warranty Purchaser, as applicable, all of the Indenture Trustee's right,
title and interest in and to such repurchased Receivable, all monies due
thereon, the security interest in the related Financed Vehicle or Financed
Vehicles and any accessions thereto, the benefit of any lease assignment with
respect to the related Financed Vehicle or Financed Vehicles, proceeds arising
thereafter from any Insurance Policies with respect to such Receivable, proceeds
arising thereafter from any Dealer Liability on such Receivable, proceeds
arising thereafter of NITC Purchase Obligations with respect to such Receivable,
proceeds arising thereafter of any Guaranties with respect to such Receivable
and the interests of the Indenture Trustee in certain rebates of premiums and
other amounts relating to the Insurance Policies and any documents relating
thereto, such assignment being an assignment outright and not for security; and
the Servicer or the Warranty Purchaser, as applicable, shall thereupon own such
Receivable, and all such security and documents, free of any further obligation
to the Indenture Trustee or the Securityholders with respect thereto. If in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Receivable on the ground that it is not a real party in interest or a
holder entitled to enforce such Receivable, the Indenture Trustee shall, at the
Servicer's expense, take such steps as the Servicer deems necessary to enforce
the Receivable, including bringing suit in the Indenture Trustee's name or the
names of the Securityholders.
SECTION 3.22 Representations and Warranties by the Issuer to the
---------------------------------------------------
Indenture Trustee. The Issuer hereby represents and warrants to the Indenture
- -----------------
Trustee as follows:
(a) Good Title. No Receivable has been sold, transferred, assigned
----------
or pledged by the Issuer to any Person other than the Indenture Trustee;
immediately prior to the conveyance of the Receivables pursuant to this
Indenture, the Issuer had good and marketable title thereto, free of any Lien
(except for any Lien which may exist in accessions to the Financed Vehicles not
financed by NFC); and, upon execution and delivery of this Indenture by the
Issuer, the Indenture Trustee shall have all of the right, title and interest of
the Issuer in, to and under the Collateral, free of any Lien (except for any
Lien which may exist in accessions to the Financed Vehicles not financed by
NFC); and
(b) All Filings Made. All filings necessary under the UCC in any
----------------
jurisdiction to give the Indenture Trustee a first priority perfected security
interest in the Receivables and, to the extent constituting Code Collateral, the
other Collateral shall have been made. The Receivables constitute Code
Collateral.
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SECTION 3.23 Dissolution upon Bankruptcy of the Seller. The
-----------------------------------------
Indenture Trustee shall, upon receipt of the written notice of an Insolvency
Event described in Section 7.2 of the Trust Agreement, give prompt written
notice to the Noteholders of the occurrence of such event. Each Noteholder
shall be entitled to provide to the Owner Trustee the instructions described in
such Section 7.2 if such Noteholder disapproves of the liquidation of the
Receivables and the termination of the Trust. If required by Section 7.2 of the
Trust Agreement, the Trust shall thereafter be terminated as provided therein.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
---------------------------------------
Indenture shall cease to be of further effect with respect to the Notes except
as to: (i) rights of registration of transfer and exchange; (ii) substitution
of mutilated, destroyed, lost or stolen Notes; (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon; (iv) Sections 3.2,
3.3, 3.4, 3.5, 3.8, 3.10, 3.11, 3.12, 3.13, 3.14, 3.16, 3.19 and 3.21; (v) the
rights, obligations and immunities of the Indenture Trustee hereunder (including
the rights of the Indenture Trustee under Section 6.7 and the obligations of the
Indenture Trustee under Sections 4.2 and 4.4); and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and delivered
(other than (A) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.5 and (B)
Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on their respective Final
Scheduled Distribution Dates within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the
giving of
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notice of redemption by the Indenture Trustee in the name, and at
the expense, of the Issuer,
and the Issuer, in the case of (A), (B) or (C) of subsection 4.1(a)(2)
above, has irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
unpaid principal and accrued interest on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Distribution Date for such Notes or the Redemption
Date for such Notes (if such Notes are to be called for redemption
pursuant to Section 10.1(a)), as the case may be;
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.1(a) and each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.2 Application of Trust Money. All monies deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied
by it in accordance with the provisions of the Notes and this Indenture to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Pooling and Servicing Agreement or by applicable law.
SECTION 4.3 Repayment of Monies Held by Paying Agent. In
----------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
each class of Notes, all monies then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to each
such class of Notes shall, upon demand of the Issuer, be paid to the Indenture
Trustee to be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with respect to such
monies.
SECTION 4.4 Duration of Position of Indenture Trustee for Benefit
-----------------------------------------------------
of Certificateholders. Notwithstanding (i) the earlier payment in full of all
- ---------------------
principal and interest due to the Noteholders under the terms of Notes of each
class, (ii) the cancellation of such Notes pursuant to Section 3.1 and (iii) the
discharge of the Indenture Trustee's duties hereunder with
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respect to such Notes, the Indenture Trustee shall continue to act in the
capacity as Indenture Trustee hereunder for the benefit of the
Certificateholders and the Indenture Trustee, for the benefit of the
Certificateholders, shall comply with its obligations under Sections 5.01(a),
8.02 and 8.03 of the Pooling and Servicing Agreement, as appropriate, until such
time as all distributions in respect of Certificate Balance and interest due to
the Certificateholders have been paid in full.
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. For the purposes of this Indenture,
-----------------
"EVENT OF DEFAULT" wherever used herein, means any one of the following events:
(a) failure to pay any interest on any Note as and when the same
becomes due and payable, and such default shall continue unremedied for a
period of five (5) days; or
(b) except as set forth in Section 5.1(c), failure to pay any
instalment of the principal of any Note as and when the same becomes due
and payable, and such default shall continue unremedied for a period of
thirty (30) days after there shall have been given, by registered or
certified mail, to the Issuer and the Seller (or the Servicer, as
applicable) by the Indenture Trustee or to the Issuer and the Seller (or
the Servicer, as applicable) and the Indenture Trustee by the Holders of at
least 25% of the Outstanding Amount of the Notes, a written notice
specifying such default, demanding that it be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(c) failure to pay in full the outstanding principal balance of any
class of Notes by the Final Scheduled Distribution Date for such class; or
(d) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or performance of
which is specifically dealt with elsewhere in this Section 5.1) which
failure materially and adversely affects the rights of the Noteholders, and
such default shall continue or not be cured for a period of thirty (30)
days after there shall have been given, by registered or certified mail, to
the Issuer and the Seller (or the Servicer, as applicable) by the Indenture
Trustee or to the Issuer and the Seller (or the Servicer, as applicable)
and the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default, demanding
that it be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an
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involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust Estate, or
ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
(60) consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any Default under Section 5.1(d), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default should occur and be continuing, then and
in every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if given by the Noteholders) setting
forth the Event or Events of Default, and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) At any time after such declaration of acceleration of maturity
of the Notes has been made and before a judgment or decree for payment of the
money due thereunder has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes, by written notice to the Issuer
and the Indenture Trustee, may rescind and annul such declaration and its
consequences; provided, that no such rescission and annulment shall extend to or
--------
affect any subsequent or other Default or impair any right consequent thereto;
and provided further, that if the Indenture Trustee shall have proceeded to
----------------
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission and annulment or for any
other reason, or such proceedings shall have been determined adversely to the
Indenture Trustee, then and in every such case, the Indenture Trustee, the
Issuer and the
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Noteholders, as the case may be, shall be restored to their respective former
positions and rights hereunder, and all rights, remedies and powers of the
Indenture Trustee, the Issuer and the Noteholders, as the case may be, shall
continue as though no such proceedings had been commenced.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Indenture Trustee.
- --------------------
(a) The Issuer covenants that if there shall occur an Event of
Default under Sections 5.1(a), (b) or (c) which has not been waived pursuant to
Section 5.12, the Issuer shall, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the ratable benefit of the Noteholders in accordance with
their respective outstanding principal amounts, the entire amount then due and
payable on the Notes for principal and interest, with interest through the date
of such payment on the overdue principal amount of each class of Notes, at the
rate applicable to such class of Notes, and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by
applicable law.
(d) If there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
26
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have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire amount
of the unpaid principal and interest owing in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor trustee, except as
a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such
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Proceedings instituted by the Indenture Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under Section 5.2(a), the Indenture Trustee may
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then due and payable on
the Notes or under this Indenture with respect thereto, whether by
declaration of acceleration or otherwise, enforce any judgment obtained,
and collect from the Issuer and any other obligor upon such Notes monies
adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law or elect to have the Issuer
maintain possession of the Receivables and continue to apply collections on
such Receivables as if there had been no declaration of acceleration;
provided, however, that the Indenture Trustee may not sell or otherwise
-------- -------
liquidate the Trust Estate following an Event of Default and acceleration
of the Notes, unless (A) the Holders of all of the aggregate Outstanding
Amount of the Notes consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Securityholders are sufficient to
discharge in full the principal of and the accrued interest on the Notes
and the Certificate Balance of and accrued interest on the Certificates, in
each case as of the date of such sale or liquidation or (C) (i) there has
been an Event of Default under Section 5.1(a), (b) or (c) or otherwise
arising from a failure to make a required payment of principal on any
Notes, (ii) the Indenture Trustee determines that the Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as and when they would have become due if the Notes
had not been declared
28
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due and payable and (iii) the Indenture Trustee obtains the consent of
Holders of a majority of the aggregate Outstanding Amount of the Notes. In
determining such sufficiency or insufficiency with respect to clauses (B)
and (C), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out or deposit such money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7; and
SECOND: to the Collection Account, for distribution pursuant to
Section 9.02 of the Pooling and Servicing Agreement.
SECTION 5.5 Optional Preservation of the Trust Estate. If the
-----------------------------------------
Notes have been declared to be due and payable under Section 5.2(a) following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled in accordance with Section 5.2(b), the Indenture Trustee
may, but need not, elect to take and maintain possession of the Trust Estate.
It is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to take and maintain possession of the Trust Estate.
In determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
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(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no Holder or Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable (on the basis of
the respective aggregate amount of principal and interest, respectively, due and
unpaid on the Notes held by each Noteholder) and common benefit of all
Noteholders. For the protection and enforcement of the provisions of this
Section 5.6, each and every Noteholder shall be entitled to such relief as can
be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive
----------------------------------------------
Principal and Interest. Notwithstanding any other provisions in this Indenture,
- ----------------------
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, if applicable, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally to their respective former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder
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or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission
------------------------------
of the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default shall impair any such right or remedy or
constitute a waiver of any such Default or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority of
----------------------
the Outstanding Amount of the Notes shall, subject to provision being made for
indemnification against costs, expenses and liabilities in a form satisfactory
to the Indenture Trustee, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with
respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided, however, that:
-------- -------
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be by
the Holders of Notes representing 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to Section 5.5, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount of
the Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
- -------- -------
take any action that it determines might cause it to incur any liability (a)
with respect to which the Indenture Trustee shall have reasonable grounds to
believe that adequate indemnity against such liability in not assured to it and
(b) which might materially adversely affect the rights of any Noteholders not
consenting to such action.
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SECTION 5.12 Waiver of Past Defaults.
-----------------------
(a) Prior to the declaration of the acceleration of the maturity of the
Notes as provided in Section 5.2(a), the Holders of not less than a majority of
the Outstanding Amount of the Notes may waive any past Default and its
consequences except a Default (i) in the payment of principal of or interest on
any of the Notes or (ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Note.
In the case of any such waiver, the Issuer, the Indenture Trustee and the
Noteholders shall be restored to their respective former positions and rights
hereunder; but no such waiver shall extend to or affect any subsequent or other
Default or impair any right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture and for purposes of Section 8.01(b) of the Pooling and
Servicing Agreement; but no such waiver shall extend to or affect any subsequent
or other Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
Proceeding for the enforcement of any right or remedy under this Indenture, or
in any Proceeding against the Indenture Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such Proceeding
of an undertaking to pay the costs of such Proceeding, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the Outstanding Amount of
the Notes; or
(c) any Proceeding instituted by any Noteholder for the enforcement of the
payment of principal of or interest on any Note on or after the respective due
dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may adversely affect the covenants or the performance
of this Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but
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shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer agrees to take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller and the Servicer of their respective obligations to
the Issuer under or in connection with the Pooling and Servicing Agreement and
the Purchase Agreement or by NFC of its obligations under or in connection with
the Purchase Agreement in accordance with the terms thereof, and to exercise any
and all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Pooling and Servicing Agreement and the Purchase
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller, the
Servicer or NFC thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller, the
Servicer or NFC of each of their respective obligations under the Pooling and
Servicing Agreement and the Purchase Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Pooling and Servicing Agreement
and the Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Pooling and Servicing
Agreement and the Purchase Agreement, and any right of the Issuer to take such
action shall be suspended.
(c) [RESERVED.]
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding
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Amount of the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Seller against NFC under or in connection with the Purchase
Agreement, including the right or power to take any action to compel or secure
performance or observance by NFC of each of its obligations to the Seller
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Purchase Agreement, and any right of the Seller to
take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
---------------------------
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and
the Pooling and Servicing Agreement and no implied covenants or obligations
shall be read into this Indenture, the Pooling and Servicing Agreement or
any other Basic Document against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
-------- -------
Trustee shall examine the certificates and opinions to determine whether or
not they conform to any applicable requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this Section 6.1(c) does not limit the effect of Section
6.1(b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
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(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Pooling and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(g) The Indenture Trustee shall reimburse the Seller and any
director, officer, employee or agent of the Seller for any contractual damages,
liability or expense incurred by reason of the Indenture Trustee's willful
misfeasance, bad faith or gross negligence (except errors in judgment) in the
performance of its duties under any of the Further Transfer and Servicing
Agreements, or by reason of reckless disregard of its obligations and duties
under any of the Further Transfer and Servicing Agreements.
(h) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate from the Issuer or an Opinion of Counsel that
such action or omission is required or permissible hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
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(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
-------- -------
not constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.3 Indenture Trustee May Own Notes. The Indenture Trustee
-------------------------------
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer, the Servicer or any of their respective
Affiliates with the same rights it would have if it were not Indenture Trustee;
provided, however, that the Indenture Trustee shall comply with Sections 6.10
- -------- -------
and 6.11. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may
do the same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee
------------------------------
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of the Default within
60 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note, the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder the information and documents set forth
in Article VII, and, in addition, all such information with respect to the Notes
as may be required, as specified by the Servicer, to enable such Holder to
prepare its federal and state income tax returns.
SECTION 6.7 Compensation; Indemnity.
-----------------------
(a) The Issuer shall cause the Servicer pursuant to the Pooling and
Servicing Agreement to pay to the Indenture Trustee from time to time such
compensation for its services as shall be agreed upon in writing. The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall cause the Servicer pursuant to
the Pooling and Servicing Agreement to reimburse the Indenture Trustee for all
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reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall cause the Servicer pursuant to the Pooling and Servicing
Agreement to indemnify the Indenture Trustee in accordance with Section 7.01 of
the Pooling and Servicing Agreement.
(b) The Issuer's obligations to the Indenture Trustee pursuant to
this Section 6.7 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(e) or (f) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee.
--------------------------------
(a) The Indenture Trustee may at any time give notice of its intent
to resign by so notifying the Issuer; provided, however, that no such
-------- -------
resignation shall become effective and the Indenture Trustee shall not resign
prior to the time set forth in Section 6.8(c). The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. Such
resignation or removal shall become effective in accordance with Section 6.8(c).
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
(b) If the Indenture Trustee gives notice of its intent to resign or
is removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint and designate a
successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment and designation to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to Noteholders
and to each of the Rating Agencies. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
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(d) If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee gives notice of its intent to resign
or is removed, the retiring Trustee, the Issuer or the Holders of a majority of
the Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment and designation of a successor Indenture
Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the Issuer's obligations under Section 6.7 and the
Servicer's corresponding obligations under the Pooling and Servicing Agreement
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
--------------------------------------------
(a) Any corporation into which the Indenture Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
--------
however, that such corporation shall be eligible under the provisions of Section
- -------
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding. Following such merger or consolidation, the
successor Indenture Trustee shall mail a notice of such merger or consolidation
to each of the Rating Agencies.
(b) If at the time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Notes or herein with respect to the certificate of authentication of the
Indenture Trustee.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
-----------------------------------------------
Indenture Trustee.
- -----------------
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate or any Financed Vehicle may at the time be
located, the Indenture Trustee shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a
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co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders and (only to the extent
expressly provided herein) the Certificateholders, such title to the Trust
Estate, or any part hereof, and, subject to the other provisions of this Section
6.10, such powers, duties, obligations, rights and trusts as the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed,
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all of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee
-----------------------------
shall at all times satisfy the requirements of TIA (S) 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and (unless waived
by Moody's) it shall have a long term unsecured debt rating of Baa3 or better by
Moody's Investors Service, Inc. The Indenture Trustee shall comply with TIA (S)
310(b); provided, however, that there shall be excluded from the operation of
-------- -------
TIA (S) 310(b)(1) any indenture or indentures under which other securities of
the Issuer are outstanding if the requirements for such exclusion set forth in
TIA (S) 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture Trustee.
---------------------------------------------------
The Indenture Trustee represents and warrants as of the Closing Date that:
(a) the Indenture Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and the eligibility requirements set forth in Section 6.11 are
satisfied with respect to the Indenture Trustee;
(b) the Indenture Trustee has full power, authority and legal right
to execute, deliver and perform this Indenture, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Indenture;
(c) the execution, delivery and performance by the Indenture Trustee
of this Indenture (i) shall not violate any provision of any law or regulation
governing the banking and trust powers of the Indenture Trustee or any order,
writ, judgment or decree of any court, arbitrator, or governmental authority
applicable to the Indenture Trustee or any of its assets, (ii) shall not violate
any provision of the corporate charter or by-laws of the Indenture Trustee or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Trust Estate pursuant to the
provisions of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could reasonably be
expected to have a materially adverse effect on the Indenture Trustee's
performance or ability to perform its duties under this Indenture or on the
transactions contemplated in this Indenture;
(d) the execution, delivery and performance by the Indenture Trustee
of this Indenture shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental
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authority or agency regulating the banking and corporate trust activities of the
Indenture Trustee; and
(e) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of the
Indenture Trustee, enforceable in accordance with its terms.
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession
-------------------------------------------------------
of Notes. All rights of action and claims under this Indenture or the Notes may
- --------
be prosecuted and enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Indenture Trustee shall be brought in
its own name as Indenture Trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders in respect of which such judgment has
been obtained.
SECTION 6.15 Suit for Enforcement. If an Event of Default shall
--------------------
occur and be continuing, the Indenture Trustee in its discretion may, subject to
the provisions of Section 6.1, proceed to protect and enforce its rights and the
rights of the Noteholders under this Indenture by a Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee.
-------------------------------------------------
Holders of Notes evidencing not less than a majority of the Outstanding Amount
of the Notes shall have the right to direct in writing the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee or exercising any trust or power conferred on the Indenture Trustee;
provided, however, that subject to Section 6.1, the Indenture Trustee shall have
- -------- -------
the right to decline to follow any such direction if the Indenture Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Indenture Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability or be unduly prejudicial to the rights of Noteholders
not parties to such direction; and provided, further, that nothing in this
-------- -------
Indenture shall impair the right of the Indenture Trustee to take any action
deemed proper by the Indenture Trustee and which is not inconsistent with such
direction by the Noteholders.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer shall furnish or cause to be furnished by the
- --------------
Servicer to the Indenture Trustee (a) not more than five days before each
Distribution Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of the close of
business on the Record Date, and (b) at such other times as the Indenture
Trustee may request in writing, within 14 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
-------- -------
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information, Communications to
----------------------------------------------
Noteholders.
- -----------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer.
-----------------
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer
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with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA (S) 313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on October 31 of such year.
SECTION 7.4 Reports by Indenture Trustee.
----------------------------
(a) If required by TIA (S) 313(a), within 60 days after each February
1, beginning with February 1, 1997, the Indenture Trustee shall mail to each
Noteholder as required by TIA (S) 313(c) a brief report dated as of such date
that complies with TIA (S) 313(a). The Indenture Trustee also shall comply with
TIA (S) 313(b). A copy of any report delivered pursuant to this Section 7.4(a)
shall, at the time of its mailing to Noteholders, be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall include
with each payment to each Noteholder a copy of the statement for the related
Monthly Period as required pursuant to Section 4.09 of the Pooling and Servicing
Agreement.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture and the Pooling and Servicing Agreement. Except as otherwise
expressly provided in this Indenture or in Article III of the Pooling and
Servicing Agreement, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Trust Estate,
the Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
an Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.
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SECTION 8.2 Designated Accounts; Payments.
-----------------------------
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Securityholders, the Designated Accounts as provided in
Articles IV and V of the Pooling and Servicing Agreement.
(b) Before each Distribution Date, the Indenture Trustee shall cause
all withdrawals, deposits, transfers and distributions provided for in Section
4.06(b) and Section 5.02(b) of the Pooling and Servicing Agreement to be made.
Before each Distribution Date, the Indenture Trustee shall make the
distributions from the Collection Account provided for in Section 4.06(c) of the
Pooling and Servicing Agreement. Notwithstanding the preceding sentence, to the
extent permitted and as provided by Section 4.08 of the Pooling and Servicing
Agreement, deposits may be netted against amounts owing to the depositor.
(c) On each Distribution Date, the Indenture Trustee shall distribute
all amounts on deposit in the Note Distribution Account, other than amounts
deposited in the Note Distribution Account pursuant to Section 5.02(b)(i) or
5.02(b)(ii) of the Pooling and Servicing Agreement (subject to the Seller's
rights under Section 5.03 of the Pooling and Servicing Agreement to Investment
Earnings), to the Noteholders to the extent of amounts due and unpaid on the
Notes for principal and interest, in the following amounts, and in the following
order of priority:
(i) to accrued and unpaid interest on the Notes; provided,
--------
however, that if there are not sufficient funds in the Note Distribution
-------
Account to pay the entire amount of accrued and unpaid interest then due on
the Notes, the amount in the Note Distribution Account shall be applied to
the payment of such interest on each of the Notes pro rata on the basis of
the respective aggregate amount of interest due on each such Note;
(ii) unless otherwise provided in clause (iii) below, in the
following priority: (1) to the Holders of the Class A-1 Notes until the
Outstanding Amount attributable to such class is reduced to zero, (2) to
the Holders of the Class A-2 Notes until the Outstanding Amount
attributable to such class is reduced to zero and (3) thereafter, to the
Holders of the Class A-3 Notes until the Outstanding Amount attributable to
such class is reduced to zero; and
(iii) if the Notes have been declared immediately due and
payable as provided in Section 5.2(a) following the occurrence of an Event
of Default, until such time as all Events of Default have been cured or
waived as provided in Section 5.2(b), any amounts remaining in the Note
Distribution Account after the applications described in Section 8.2(c)(i)
and any amounts deposited into the Note Distribution Account thereafter
shall be applied to the repayment of principal on each of the Notes pro
rata on the basis of the respective unpaid principal amount of each such
Note.
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(d) Subject to Section 8.2(c)(iii) hereof, on the Distribution Date
on which the Funding Period ends (or, if the Funding Period does not end on a
Distribution Date, on the first Distribution Date following the end of the
Funding Period), the Indenture Trustee shall apply any and all amounts deposited
in the Note Distribution Account pursuant to Section 5.02(b)(i) of the Pooling
and Servicing Agreement to the repayment of principal on the Notes as follows:
(i) if such amount does not exceed $100,000, such amount will be applied to the
repayment of principal on the Notes in accordance with the priorities specified
in Section 8.2(c)(ii), and (ii) if such amount does exceed $100,000, such amount
will be applied to the repayment of principal of each class of Notes in
accordance with the respective aggregate initial principal balances of each
class of Notes (not to exceed, for any class, the Outstanding Amount of the
Notes of such class).
(e) On the Distribution Date on which the Funding Period ends (or,
if the Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period), the Indenture
Trustee shall distribute to the Noteholders all amounts on deposit in the Note
Distribution Account pursuant to Section 5.02(b)(ii) of the Pooling and
Servicing Agreement on the basis of each Noteholder's pro rata portion of the
Noteholders' Prepayment Premium (or portion thereof) payable with respect to the
class of Notes held by such Noteholder.
SECTION 8.3 General Provisions Regarding Accounts.
-------------------------------------
(a) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Designated
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.
(b) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Designated Accounts to the Indenture
Trustee by 11:00 a.m., New York City time (or such other time as may be agreed
by the Servicer and the Indenture Trustee) on any Business Day; or (ii) a
Default shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.2(a),
or, if such Notes shall have been declared due and payable following an Event of
Default, but amounts collected or receivable from the Trust Estate are being
applied in accordance with Section 5.5 as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Designated Accounts in one or more
Eligible Investments selected by the Indenture Trustee.
SECTION 8.4 Release of Trust Estate.
-----------------------
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property in the Trust
Estate from the lien of this Indenture, or convey the
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Indenture Trustee's interest in the same, in a manner and under circumstances
that are consistent with the provisions of this Indenture. No party relying
upon an instrument executed by the Indenture Trustee as provided in this Article
VIII shall be bound to ascertain the Indenture Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of any
monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7
have been paid, notify the Issuer thereof in writing and upon receipt of an
Issuer Request, release any remaining portion of the Trust Estate that secured
the Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Note Distribution
Account. The Indenture Trustee shall (i) release any remaining portion of the
Trust Estate that secured the Certificates from the lien of this Indenture and
(ii) release to the Issuer or any other Person entitled thereto any funds then
on deposit in the Reserve Account or the Collection Account only at such time as
(x) there are no Notes Outstanding, (y) all payments in respect of Certificate
Balance and interest due to the Certificateholders have been paid in full and
(z) all sums due to the Indenture Trustee pursuant to Section 6.7 have been
paid.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
------------------
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
shall not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
- -------- -------
an opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
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(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject additional
property to the lien of this Indenture;
(ii) to evidence the succession, in compliance with Section
3.10 and the applicable provisions hereof, of another Person to the Issuer,
and the assumption by any such successor of the covenants of the Issuer
contained herein and in the Notes;
(iii) to add to the covenants of the Issuer for the benefit of
the Securityholders, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity or to correct or supplement any
provision herein or in any supplemental indenture which may be inconsistent
with any other provision herein, in any supplemental indenture or in any
other Basic Document;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Indenture Trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts hereunder
by more than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA, and the Indenture Trustee is hereby
authorized to join in the execution of any such supplemental indenture and
to make any further appropriate agreements and stipulations that may be
therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to the Rating Agencies, at any time and from time to time enter
into one or more indentures supplemental hereto for the purpose of adding any
provisions to, changing in any manner, or eliminating any of the provisions of,
this Indenture or modifying in any manner the rights of the Noteholders under
this Indenture; provided, however, that such action shall not, as evidenced by
-------- -------
an Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
---------------------------------------------------
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(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, changing in any manner, or eliminating any
of the provisions of, this Indenture or modifying in any manner the rights of
the Noteholders under this Indenture; provided, however, that no such
-------- -------
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the due date of any instalment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate applicable thereto, or the Redemption Price with respect thereto,
change any place of payment where, or the coin or currency in which, any
Note or any interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for (a) any such
supplemental indenture, (b) any waiver of compliance with certain
provisions of this Indenture, certain defaults hereunder and their
consequences as provided for in this Indenture or (c) any action described
in Sections 2.12, 3.7(e), 5.2, 5.6, 5.11, 5.12(a), 6.8, or 6.16;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to sell or liquidate the
Trust Estate pursuant to Section 5.4 if the proceeds of such sale would be
insufficient to pay the principal amount of and accrued but unpaid interest
on the Outstanding Notes;
(v) modify any provision of this Section 9.2 to decrease the
required minimum percentage necessary to approve any amendments to any
provisions of this Indenture or any of the Basic Documents;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date (including
the calculation of any of the individual components of such calculation),
or modify or alter the provisions of the Indenture regarding the voting of
Notes held by the Issuer, the Seller or any Affiliate of either of them; or
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(vii) permit the creation of any Lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject to
the lien of this Indenture or deprive the Holder of any Note of the
security afforded by the lien of this Indenture.
(b) The Indenture Trustee may in its discretion determine whether or
not any Notes would be affected (such that the consent of each Noteholder would
be required) by any supplemental indenture proposed pursuant to this Section 9.2
and any such determination shall be conclusive and binding upon all of the
Noteholders, whether authenticated and delivered thereunder before or after the
date upon which such supplemental indenture becomes effective. The Indenture
Trustee shall not be liable for any such determination made in good faith.
(c) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.
(d) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Noteholders to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent to
such execution have been satisfied. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
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SECTION 9.5 Conformity with Trust Indenture Act. Every amendment
-----------------------------------
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes of the same class.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
----------
(a) The Class A-3 Notes are subject to redemption in whole, but not
in part, upon the exercise by the Servicer of its option to purchase the
Receivables pursuant to Section 9.01(a) of the Pooling and Servicing Agreement.
Such redemption shall occur on any Distribution Date after all Class A-1 Notes
and the Class A-2 Notes have been paid in full. The purchase price for the Class
A-3 Notes to be redeemed shall be equal to the applicable Redemption Price,
provided the Issuer has available funds sufficient to pay such amount. The
Issuer shall furnish the Rating Agencies notice of such redemption. If the Class
A-3 Notes are to be redeemed pursuant to this Section 10.1(a), the Issuer shall
furnish notice thereof to the Indenture Trustee not later than 25 days prior to
the Redemption Date and the Issuer shall deposit into the Note Distribution
Account, before the Redemption Date, the aggregate Redemption Price of the Class
A-3 Notes to be redeemed, whereupon all such Notes shall be due and payable on
the Redemption Date.
(b) If the assets of the Issuer are sold pursuant to Section 7.2 of
the Trust Agreement, all amounts deposited in the Note Distribution Account
pursuant to Section 9.01(b) of the Pooling and Servicing Agreement as a result
thereof shall be paid to the Noteholders up to the aggregate of the Outstanding
Amount of the Notes, together with all accrued and unpaid interest thereon as of
the Redemption Date. If amounts are to be so paid to the Noteholders pursuant
to this Section 10.1(b), the Servicer or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not later
than 25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.
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(c) Within sixty days after the redemption in full pursuant to
Section 10.1(a) or Section 10.1(b) of any Class of Notes, the Indenture Trustee
shall provide each of the Rating Agencies with written notice stating that all
of such Notes have been redeemed.
SECTION 10.2 Form of Redemption Notice.
-------------------------
(a) Notice of redemption of the Class A-3 Notes under Section 10.1(a)
shall be given by the Indenture Trustee by first-class mail, postage prepaid,
mailed not less than five days prior to the applicable Redemption Date to each
Holder of the Class A-3 Notes of record at such Noteholder's address appearing
in the Note Register.
(b) All notices of redemption shall state:
(i) the applicable "Redemption Date", which shall mean in the
case of a redemption of the Class A-3 Notes pursuant to Section 10.1(a) or
a payment to the Noteholders pursuant to Section 10.1(b), the Distribution
Date specified by the Servicer or the Issuer pursuant to Section 10.1(a) or
(b), as applicable;
(ii) the applicable "Redemption Price", which shall mean in the
case of a redemption of the Class A-3 Notes pursuant to Section 10.1(a), an
amount equal to the aggregate of the Outstanding Amount of the Class A-3
Notes, together with all accrued and unpaid interest thereon as of the
applicable Redemption Date, and (B) in the case of a payment made to
Noteholders pursuant to Section 10.1(b), the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause
(A) above;
(iii) the place where the Class A-3 Notes are to be surrendered
for payment of the Redemption Price (which shall be the Agency Office of
the Indenture Trustee to be maintained as provided in Section 3.2); and
(iv) CUSIP number.
(c) Notice of redemption of the Class A-3 Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Class A-3 Note
to be redeemed shall not impair or affect the validity of the redemption of any
other Class A-3 Note to be redeemed.
(d) Prior notice of redemption under Section 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date.
--------------------------------
The Redeemable Notes shall, following notice of redemption as required
by Section 10.2 (in the case of redemption pursuant to Section 10.1(a)), on the
Redemption Date
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cease to be Outstanding for purposes of this Indenture and shall thereafter
represent only the right to receive the applicable Redemption Price and (unless
the Issuer shall default in the payment of such Redemption Price) no interest
shall accrue on such Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating such Redemption
Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
------------------------------------------
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section 11.1, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit with the Indenture Trustee of any
Collateral or other property or securities that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
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Certificate certifying or stating the opinion of each Person signing such
certificate as to the fair value (within 60 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (b)(i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made on the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(b)(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Warranty
Receivables, Administrative Receivables or Liquidating Receivables,
whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each Person
signing such certificate as to the fair value (within 60 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such Person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signatory thereof as to the matters described in clause
(b)(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than Warranty
Receivables, Administrative Receivables and Liquidating Receivables, or
securities released from the lien of this Indenture since the commencement
of the then current calendar year, as set forth in the certificates
required by clause (b)(iii) above and this clause (b)(iv), equals 10% or
more of the Outstanding Amount of the Notes, but such certificate need not
be furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Outstanding Amount
of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by the
Basic Documents, (B) make cash payments out of the Designated Accounts and
the Certificate Distribution Account as and to the extent permitted or
required by the Basic Documents and (C) take any other action not
inconsistent with the TIA.
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SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
(a) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders or a class of Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
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expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "ACT" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes (or any one or more
predecessor Notes) shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent,
- --------
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with the Indenture
Trustee, the Issuer or the Rating Agencies under this Indenture shall be made
upon, given or furnished to or filed with such party as specified in Appendix B
----------
to the Pooling and Servicing Agreement.
SECTION 11.5 Notices to Noteholders; Waiver.
------------------------------
(a) Where this Indenture provides for notice to Noteholders of any
condition or event, such notice shall be given as specified in Appendix B to the
----------
Pooling and Servicing Agreement.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
55
<PAGE>
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes to
the contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA (S)(S) 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
----------------------
(a) All covenants and agreements in this Indenture and the Notes by
the Issuer shall bind its successors and assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability.
------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
56
<PAGE>
SECTION 11.11 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Noteholders and the Note Owners and (only to the extent expressly
provided herein) the Certificateholders and the Certificate Owners, any other
party secured hereunder and any other Person with an ownership interest in any
part of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12 Legal Holidays.
--------------
If the date on which any payment is due shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
SECTION 11.13 GOVERNING LAW.
-------------
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, EXCEPT
THAT THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
SECTION 11.14 Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.15 Recording of Indenture.
----------------------
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16 No Recourse. No recourse may be taken, directly or
-----------
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against:
57
<PAGE>
(i) the Indenture Trustee or the Owner Trustee in its individual
capacity;
(ii) any owner of a beneficial interest in the Issuer; or
(iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in their
individual capacities, any holder of a beneficial interest in the Issuer,
the Owner Trustee or the Indenture Trustee or of any successor or assign of
the Indenture Trustee or the Owner Trustee in their individual capacities
(or any of their successors or assigns), except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacities) and
except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any instalment or call
owing to such entity. For all purposes of this Indenture, in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.17 No Petition.
-----------
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Note Owner, by accepting a Note (or interest therein) issued
hereunder, hereby covenant and agree that they shall not, prior to the date
which is one year and one day after the termination of this Indenture with
respect to the Issuer pursuant to Section 4.1, acquiesce, petition or otherwise
invoke or cause the Seller or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller or the Issuer.
SECTION 11.18 Inspection.
----------
The Issuer agrees that, on reasonable prior notice, it shall permit
any representative of the Indenture Trustee, during the Issuer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to cause such books
to be audited by Independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts with the Issuer's officers, employees
and Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
58
<PAGE>
[This Page Intentionally Left Blank]
59
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
NAVISTAR FINANCIAL 1995-B OWNER TRUST
By: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee
By: /s/ John J. Cashin
--------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE BANK OF NEW YORK, as Indenture Trustee
By: /s/ Patricia M.F. Russo
--------------------------------------------
Name: Patricia M.F. Russo
Title: Assistant Treasurer
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared John J. Cashin, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said Navistar Financial
1995-B Owner Trust, a Delaware business trust, and that he executed the same as
the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 1st day of November,
1995.
________________________________________________
Notary Public in and for the State of New York.
My commission expires:
____________________________
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Patricia M.F. Russo, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said The Bank
of New York, a New York banking corporation, and that she executed the same as
the act of said national banking corporation for the purpose and consideration
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 1st day of November,
1995.
_________________________________________________
Notary Public in and for the State of New York.
My commission expires:
____________________________
<PAGE>
EXHIBIT A
LOCATIONS OF
SCHEDULE OF RECEIVABLES
The Schedule of Receivables is on file at the offices of:
-----------------------
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
<PAGE>
EXHIBIT B
REGISTERED $____________/1/
No. R-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NAVISTAR FINANCIAL 1995-B OWNER TRUST
CLASS A-___ _____% ASSET BACKED NOTES
NAVISTAR FINANCIAL 1995-B OWNER TRUST, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"ISSUER"), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _______________ DOLLARS ($_________)
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal amount hereof and the
denominator of which is [AGGREGATE PRINCIPAL AMOUNT FOR CLASS] by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the
_________________________________
/1/ Denominations of $1,000 and integral multiples thereof.
1
<PAGE>
Notes pursuant to Sections 2.7, 3.1 and 8.2 of the Indenture; provided, however,
-------- -------
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of ______________ (the "FINAL SCHEDULED DISTRIBUTION DATE") and the
Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture. The
Issuer shall pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date). Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding the then current Distribution Date or,
if no interest has yet been paid, from __________, 1995. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: NAVISTAR FINANCIAL 1995-B
OWNER TRUST,
By: CHEMICAL BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ______________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Indenture Trustee
By: _________________________
Name:
Title:
3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-___ ____% Asset Backed Notes (herein called the "CLASS
A-__ NOTES"), all issued under an Indenture, dated as of ____________, 1995
(such Indenture, as supplemented or amended, is herein called the "INDENTURE"),
between the Issuer and The Bank of New York, a New York banking corporation, as
trustee (the "INDENTURE TRUSTEE", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.
The Notes are governed by and subject to all terms of the Indenture (which terms
are incorporated herein and made a part hereof), to which Indenture the holder
of this Note by virtue of acceptance hereof assents and by which such holder is
bound. All capitalized terms used and not otherwise defined in this Note that
are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture.
The Class A-___ Notes and all other Notes issued pursuant to the
Indenture are and will be equally and ratably secured by the Collateral pledged
as security therefor as provided in the Indenture.
As provided in the Indenture, the Class A-3 Notes may be redeemed in
whole, but not in part, at the option of the Servicer, on any Distribution Date
on or after the date on which the Aggregate Receivables Balance is less than or
equal to 10% of the Aggregate Starting Receivables Balance.
As provided in the Indenture, the principal amount of the Notes may be
prepaid in part on the Distribution Date on which the Funding Period ends (or on
the Distribution Date immediately following the last day of the Funding Period,
if the Funding Period does not end on a Distribution Date) in the event that any
amount remains on deposit in the Pre-Funding Account after giving effect to the
purchase of all Subsequent Receivables, including any such purchase on such
Distribution Date. If on the Distribution Date on which the Funding Period ends
(or, if the Funding Period does not end on a Distribution Date, the first
Distribution Date following the end of the Funding Period) the Pre-Funded Amount
is equal to or greater than $100,000, the Issuer shall pay the Noteholders'
Prepayment Premium with respect to the Notes.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in their
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture
4
<PAGE>
Trustee or the Owner Trustee in their individual capacities, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in
their individual capacities, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacities) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any instalment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Amount of all the Notes. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note (or any one of more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation
5
<PAGE>
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "ISSUER" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws, except that the
obligations, rights and remedies of the Indenture Trustee hereunder shall be
determined in accordance with the internal laws of the State of New York.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns, shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein shall be
-------- -------
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/2/
Signature Guaranteed:
___________________________ ___________________________________
_________________________
/2/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
<PAGE>
EXHIBIT C
FORM OF NOTE DEPOSITORY AGREEMENT
8
<PAGE>
EXHIBIT 4.2
================================================================================
TRUST AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHEMICAL BANK DELAWARE
OWNER TRUSTEE
DATED AS OF NOVEMBER 1, 1995
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS ...........................................................................1
1.1 Definitions.....................................................................1
-----------
ARTICLE II
ORGANIZATION 1
2.1 Name............................................................................1
----
2.2 Office..........................................................................1
------
2.3 Purposes and Powers.............................................................1
-------------------
2.4 Appointment of Owner Trustee....................................................2
----------------------------
2.5 Initial Capital Contribution of Owner Trust Estate..............................2
--------------------------------------------------
2.6 Declaration of Trust............................................................2
--------------------
2.7 Liability of the Seller and the Certificate Owners..............................3
--------------------------------------------------
2.8 Title to Trust Property.........................................................3
-----------------------
2.9 Situs of Trust..................................................................3
--------------
2.10 Representations and Warranties of the Seller....................................4
--------------------------------------------
2.11 Tax Treatment...................................................................5
-------------
ARTICLE III
THE CERTIFICATES.......................................................................5
3.1 Initial Certificate Ownership...................................................5
-----------------------------
3.2 Form of the Certificates........................................................5
------------------------
3.3 Execution, Authentication and Delivery..........................................6
--------------------------------------
3.4 Registration; Registration of Transfer and Exchange of Certificates.............6
-------------------------------------------------------------------
3.5 Mutilated, Destroyed, Lost or Stolen Certificates...............................7
-------------------------------------------------
3.6 Persons Deemed Certificateholders...............................................8
---------------------------------
3.7 Access to List of Certificateholders' Names and Addresses.......................8
---------------------------------------------------------
3.8 Maintenance of Corporate Trust Office...........................................8
-------------------------------------
3.9 Appointment of Paying Agent.....................................................8
---------------------------
3.10 Disposition by Seller...........................................................9
---------------------
3.11 Book-Entry Certificates.........................................................9
-----------------------
3.12 Notices to Clearing Agency.....................................................10
--------------------------
3.13 Definitive Certificates........................................................10
-----------------------
3.14 Seller as Certificateholder....................................................11
---------------------------
ARTICLE IV
ACTIONS BY OWNER TRUSTEE..............................................................11
4.1 Prior Notice to Certificateholders with Respect to Certain Matters.............11
------------------------------------------------------------------
4.2 Action by Certificateholders with Respect to Certain Matters...................11
------------------------------------------------------------
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
4.3 Action by Certificateholders with Respect to Bankruptcy........................12
-------------------------------------------------------
4.4 Restrictions on Certificateholders' Power......................................12
-----------------------------------------
4.5 Majority Control...............................................................12
----------------
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES............................................12
5.1 Establishment of Certificate Distribution Account..............................12
-------------------------------------------------
5.2 Application of Trust Funds.....................................................13
--------------------------
5.3 Method of Payment..............................................................13
-----------------
5.4 Accounting and Reports to the Certificateholders, the Internal Revenue Service
------------------------------------------------------------------------------
and Others.....................................................................14
----------
5.5 Signature on Returns; Tax Matters Partner......................................14
-----------------------------------------
ARTICLE VI
THE OWNER TRUSTEE.....................................................................14
6.1 Duties of Owner Trustee........................................................14
-----------------------
6.2 Rights of Owner Trustee........................................................15
-----------------------
6.3 Acceptance of Trusts and Duties................................................16
-------------------------------
6.4 Action upon Instruction by Certificateholders..................................17
---------------------------------------------
6.5 Furnishing of Documents........................................................18
-----------------------
6.6 Representations and Warranties of Owner Trustee................................18
-----------------------------------------------
6.7 Reliance; Advice of Counsel....................................................19
---------------------------
6.8 Owner Trustee May Own Certificates and Notes...................................19
--------------------------------------------
6.9 Compensation and Indemnity.....................................................19
--------------------------
6.10 Replacement of Owner Trustee...................................................20
----------------------------
6.11 Merger or Consolidation of Owner Trustee.......................................21
----------------------------------------
6.12 Appointment of Co-Trustee or Separate Trustee..................................21
---------------------------------------------
6.13 Eligibility Requirements for Owner Trustee.....................................22
------------------------------------------
ARTICLE VII
TERMINATION OF TRUST AGREEMENT........................................................23
7.1 Termination of Trust Agreement.................................................23
------------------------------
7.2 Dissolution upon Bankruptcy of the Seller......................................24
-----------------------------------------
ARTICLE VIII
AMENDMENTS............................................................................25
8.1 Amendments Without Consent of Certificateholders or Noteholders................25
---------------------------------------------------------------
8.2 Amendments With Consent of Certificateholders and Noteholders..................25
--------------------------------------------------------------
8.3 Form of Amendments.............................................................26
------------------
ARTICLE IX
MISCELLANEOUS.........................................................................26
9.1 No Legal Title to Owner Trust Estate...........................................26
-------------------------------------
9.2 Limitations on Rights of Others................................................26
-------------------------------
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
9.3 Notices........................................................................27
-------
9.4 Severability...................................................................27
------------
9.5 Counterparts...................................................................27
------------
9.6 Successors and Assigns.........................................................27
----------------------
9.7 No Petition Covenant...........................................................27
--------------------
9.8 No Recourse....................................................................27
-----------
9.9 Headings.......................................................................28
--------
9.10 Governing Law..................................................................28
-------------
9.11 Certificate Transfer Restrictions..............................................28
---------------------------------
9.12 Administrator..................................................................28
-------------
9.13 Amended and Restated Trust Agreement...........................................28
------------------------------------
</TABLE>
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
Exhibit D Form of Undertaking Letter
-iii-
<PAGE>
TRUST AGREEMENT, dated as of November 1, 1995 between Navistar
Financial Retail Receivables Corporation, a Delaware corporation, as Seller, and
Chemical Bank Delaware, a Delaware banking corporation, as Owner Trustee.
The Seller and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in Part I of
Appendix A to the Pooling and Servicing Agreement of even date herewith, among
- ----------
the Seller, the Servicer and the Trust (as it may be amended and supplemented
from time to time, the "Pooling and Servicing Agreement"). All references
herein to "the Agreement" or "this Agreement" are to this Trust Agreement as it
may be amended and supplemented from time to time, the Exhibits hereto and the
capitalized terms used herein which are defined in such Appendix A, and all
----------
references herein to Articles, Sections and subsections are to Articles,
Sections and subsections of this Agreement unless otherwise specified. The rules
of construction set forth in Part II of such Appendix A shall be applicable to
----------
this Agreement.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as
----
"Navistar Financial 1995-B Owner Trust" in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificate Owners
and the Seller.
SECTION 2.3 Purposes and Powers. (a) The purpose of the Trust is to
-------------------
engage in the following activities:
(i) to acquire, manage and hold the Receivables;
(ii) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell, transfer or
exchange the Notes and the Certificates;
(iii) to acquire property and assets from the Seller pursuant to
the Pooling and Servicing Agreement, to make payments or distributions
on the Securities to the Securityholders, to make deposits into and
withdrawals from the Reserve Account, the Pre-
-1-
<PAGE>
Funding Account, the Negative Carry Account and other accounts
established pursuant to the Basic Documents and to pay the
organizational, start-up and transactional expenses of the Trust;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the terms of the Indenture and to hold,
manage and distribute to the Certificateholders pursuant to the terms
of this Agreement and the Pooling and Servicing Agreement any portion
of the Trust Estate released from the lien of, and remitted to the
Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations and exercise its
rights under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(vii) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of payments or
distributions to the Securityholders.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby
----------------------------
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
--------------------------------------------------
Seller hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Seller
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
--------------------
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions and obligations set forth herein and in the Pooling and Servicing
Agreement for the use and benefit of the Certificateholders, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute, that this Agreement constitute the governing instrument of such
business trust and that the Certificates represent the equity interests therein.
The rights of the Certificateholders shall be determined as set forth herein and
in the Business Trust Statute and the relationship between the parties hereto
created by this Agreement shall not constitute indebtedness for any purpose. It
is the intention of the parties hereto
-2-
<PAGE>
that, solely for purposes of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by, or based upon
gross or net income, the Trust shall be treated as a partnership. The parties
agree that, unless otherwise required by appropriate tax authorities, the Trust
shall file or cause to be filed annual or other necessary returns, reports and
other forms consis tent with the characterization of the Trust as partnership
for such tax purposes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth in this Agreement, the Pooling and
Servicing Agreement and the Business Trust Statute with respect to
accomplishing the purposes of the Trust.
SECTION 2.7 Liability of the Seller and the Certificate Owners.
--------------------------------------------------
(a) The Seller shall be liable directly to and shall indemnify the
injured party for all losses, claims, damages, liabilities and expenses of the
Trust (including Expenses, to the extent not paid out of the Owner Trust Estate)
to the extent that the Seller would be liable if the Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the Seller
were a general partner; provided, however, that the Seller shall not be liable
-------- -------
for (i) any losses incurred by a Certificateholder or a Certificate Owner in its
capacity as an investor in the Certificates or by a Noteholder or Note Owner in
its capacity as an investor in the Notes or (ii) any losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income taxes, state or local income or franchise taxes, or any
other taxes imposed on or measured by gross or net income, gross or net
receipts, capital, net worth and similar items (including any interest,
penalties or additions with respect thereto) upon the Certificateholders, the
Certificate Owners, the Noteholders, the Note Owners, the Owner Trustee or the
Indenture Trustee (including any liabilities, costs or expenses with respect
thereto) with respect to any Receivables not specifically indemnified or
represented to hereunder. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the Seller shall not be liable) shall be deemed third party
beneficiaries of this subsection 2.7(a). The obligations of the Seller under
this subsection 2.7(a) shall be evidenced by the Certificates issued pursuant to
Section 3.10, which for purposes of the Business Trust Statute shall be deemed
to be a separate class of Certificates from all other Certificates issued by the
Trust; provided, however, that the rights and obligations evidenced by all
-------- -------
Certificates, regardless of class, shall, except as provided in this subsection
2.7(a) and as provided with respect to Voting Interests, be identical.
(b) No Certificateholder or Certificate Owner, other than to the
extent set forth in subsection 2.7(a) with respect to the Seller, shall have any
personal liability for any liability or obligation of the Trust.
SECTION 2.8 Title to Trust Property. Legal title to all the Owner
-----------------------
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.9 Situs of Trust. The Trust shall be located and
--------------
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be
-3-
<PAGE>
located in the State of Delaware or the State of New York. The Trust shall not
have any employees in any state other than Delaware; provided, however, that
-------- -------
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments shall be received
by the Trust only in Delaware or New York, and payments and distributions shall
be made by the Trust only from Delaware or New York. The only office of the
Trust shall be the Corporate Trust Office in Delaware.
SECTION 2.10 Representations and Warranties of the Seller. The
--------------------------------------------
Seller hereby represents and warrants to the Owner Trustee that:
(a) The Seller has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as
such properties are presently owned and such business is presently
conducted and had at all relevant times, and now has, power, authority and
legal right to acquire and own the Receivables.
(b) The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualifications.
(c) The Seller has the power and authority to execute and deliver
this Agreement and to carry out its terms, the Seller has full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Issuer as part of the Trust and the Seller has duly
authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or
by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents),
or violate any law or, to the Seller's knowledge, any order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its
properties.
(e) This Agreement, when duly executed and delivered, shall
constitute a legal, valid and binding obligation of the Seller enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
-4-
<PAGE>
(f) There are no proceedings or, to the Seller's knowledge,
investigations pending or, to the Seller's knowledge, threatened before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Seller or its
properties (i) asserting the invalidity of this Agreement or any
Certificates issued pursuant hereto or, (ii) seeking to prevent the
issuance of such Certificates or the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, such Certificates or this Agreement.
SECTION 2.11 Tax Treatment. The Seller and the Owner Trustee, by
-------------
entering into this Agreement, and the Certificateholders and Certificate Owners,
by acquiring any Certificate or interest therein, (i) express their intention
that the Certificates will qualify under applicable tax law as partnership
interests in a partnership which holds the Owner Trust Estate for their benefit,
and (ii) unless otherwise required by appropriate taxing authorities, agree to
treat the Certificates as partnership interests in such a partnership for the
purposes of federal income taxes, state and local income and franchise taxes,
and any other taxes imposed upon, measured by or based upon gross or net income.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 Initial Certificate Ownership. Upon the formation of
-----------------------------
the Trust by the contribution by the Seller pursuant to Section 2.5 and until
the issuance of the Certificates, the Seller shall be the sole beneficiary of
the Trust.
SECTION 3.2 Form of the Certificates.
------------------------
(a) The Certificates shall be substantially in the form set forth in
Exhibit A and shall be issued (i) in minimum denominations of $20,000 and (ii)
- ---------
in integral multiples of $1,000 in excess thereof, except for one Certificate
which may be issued to the Seller in any denomination. The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of a
Responsible Officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be,
when authenticated pursuant to Section 3.3, validly issued and entitled to the
benefits of the Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
(b) The Definitive Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders) all as determined by the officers executing
such Certificates, as evidenced by their execution of such Certificates.
-5-
<PAGE>
(c) The Certificates shall be issued in fully-registered form. The
terms of the Certificates set forth in Exhibit A shall form part of this
---------
Agreement.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently
--------------------------------------
with the sale of the Initial Receivables to the Trust pursuant to the Pooling
and Servicing Agreement, the Owner Trustee shall cause the Certificates in an
aggregate principal amount equal to the initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Seller, signed by its chairman of the board, its president
or any vice president, without further corporate action by the Seller, in
authorized denominations. No Certificate shall entitle its holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Certificate a certificate of authentication substantially
in the form set forth in Exhibit A, executed by the Owner Trustee or Chemical
---------
Bank, as the Owner Trustee's authenticating agent, by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 3.4 Registration; Registration of Transfer and Exchange of
------------------------------------------ -----------
Certificates.
- ------------
(a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as provided herein; provided, however, that no
-------- -------
Certificate may be subdivided upon registration of transfer or exchange such
that the denomination of any resulting Certificate would have been less than
$20,000 if such Certificate had been issued in the initial distribution of
Certificates. Chemical Bank shall be the initial Certificate Registrar. Upon
any resignation of a Certificate Registrar, the Owner Trustee shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Certificate Registrar.
(b) Upon surrender for registration of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute on behalf of the Trust, authenticate and deliver (or shall cause
Chemical Bank as its authenticating agent to authenticate and deliver), in the
name of the designated transferee or transferees, one or more new Certificates
in authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent.
Notwithstanding the foregoing, if the Seller shall have advised the Owner
Trustee in writing that an Undertaking Letter shall be required with respect to
any transfer, such registration of transfer shall not be effective unless the
requirements of Section 9.11, with respect to the delivery of an Undertaking
Letter, shall have been complied with.
(c) At the option of a Holder, Certificates may be exchanged for
other Certificates of authorized denominations of a like aggregate principal
amount upon surrender of the Certificates to be exchanged at the Corporate Trust
Office maintained pursuant to Section 3.8. Whenever any Certificates are so
surrendered for exchange, the Owner Trustee shall execute on behalf of the
Trust, authenticate and deliver (or shall cause Chemical Bank as its
authenticating agent to authenticate and deliver) one or more Certificates dated
the date of authentication by the Owner Trustee or any authenticating agent.
Such Certificates shall be delivered to the Holder making the exchange.
-6-
<PAGE>
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or his attorney duly authorized in writing and such other
documents and instruments as may be required by Section 9.11. Each Certificate
surrendered for registration of transfer or exchange shall be cancelled and
subsequently destroyed or otherwise disposed of by the Owner Trustee or
Certificate Registrar in accordance with its customary practice.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
(a) If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar, the Owner Trustee and the Trust
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Certificate Registrar or the
Owner Trustee that such Certificate has been acquired by a bona fide purchaser,
the Owner Trustee shall execute on behalf of the Trust and the Owner Trustee
shall authenticate and deliver (or shall cause Chemical Bank as its
authenticating agent to authenticate and deliver), in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a replacement
Certificate in authorized denominations of a like amount; provided, however,
-------- -------
that if any such destroyed, lost or stolen Certificate, but not a mutilated
Certificate, shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Certificate the Owner Trustee may pay such
destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or
distribution in respect of a destroyed, lost or stolen Certificate pursuant to
subsection 3.5(a), a bona fide purchaser of the original Certificate in lieu of
which such replacement Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such replacement
Certificate (or such distribution) from the Person to whom it was delivered or
any Person taking such replacement Certificate from such Person to whom such
replacement Certificate was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Owner Trustee in connection therewith.
(c) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Owner Trustee may require the payment by the Holder
of such Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Owner Trustee and the Certificate
Registrar) connected therewith.
-7-
<PAGE>
(d) Any duplicate Certificate issued pursuant to this Section 3.5 in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the Trust, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be found at
any time or be enforced by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Certificates
duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. Prior to due
---------------------------------
presentation of a Certificate for registration of transfer, the Owner Trustee or
the Certificate Registrar may treat the Person in whose name any Certificate
shall be registered in the Certificate Register as the Certificateholder of such
Certificate for the purpose of receiving distributions pursuant to Article V and
for all other purposes whatsoever, and neither the Owner Trustee nor the
Certificate Registrar shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
- ---------
Servicer and the Seller, within 15 days after receipt by the Owner Trustee of a
request therefor from the Servicer or the Seller in writing, a list, in such
form as the Servicer or the Seller may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. Each
Holder, by receiving and holding a Certificate, shall be deemed to have agreed
not to hold any of the Servicer, the Seller or the Owner Trustee accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.8 Maintenance of Corporate Trust Office. The Owner
-------------------------------------
Trustee shall maintain in the Borough of Manhattan, the City of New York, an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Owner Trustee in respect of the Certificates and the Basic Documents
may be served. The Owner Trustee initially designates the offices of Chemical
Bank, 55 Water Street, New York, New York, as its principal office for such
purposes. The Owner Trustee shall give prompt written notice to the Seller and
to the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall
---------------------------
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be Chemical Bank, and any co-paying agent chosen by Chemical
Bank, and acceptable to the Owner Trustee. Chemical Bank shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Owner Trustee. If
Chemical Bank shall no longer be the Paying
-8-
<PAGE>
Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Owner Trustee to
execute and deliver to the Owner Trustee an instrument in which such successor
Paying Agent or additional Paying Agent shall agree with the Owner Trustee that
as Paying Agent, such successor Paying Agent or additional Paying Agent shall
hold all sums, if any, held by it for distribution to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Owner Trustee.
The provisions of Sections 6.3, 6.6, 6.7, 6.8 and 6.9 shall apply to the Owner
Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall
act as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 3.10 Disposition by Seller. On and after the Closing Date,
---------------------
the Seller shall retain beneficial and record ownership of Certificates
representing at least 1% of the Certificate Balance. Any attempted transfer of
any Certificate that would reduce such interest of the Seller below 1% of the
Certificate Balance shall be void. The Owner Trustee shall cause any
Certificate issued to the Seller to contain a legend stating "THIS CERTIFICATE
IS NOT TRANSFERABLE". Certificates issued to the Seller shall be in definitive
form only.
SECTION 3.11 Book-Entry Certificates. Except for the Certificates
-----------------------
issued to the Seller, the Certificates, upon original issuance, shall be issued
in the form of a typewritten Certificate or Certificates representing Book-Entry
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency by or on behalf of the Trust. Such Certificate or Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Certificate Owner shall
receive a definitive Certificate representing such Certificate Owner's interest
in such Certificate, except as provided in Section 3.13. Unless and until
definitive fully registered Certificates (the "Definitive Certificates") shall
have been issued to Certificate Owners pursuant to Section 3.13:
(a) the provisions of this Section 3.11 shall be in full force and
effect;
(b) the Certificate Registrar and the Owner Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Agreement
(including the distribution of Certificate Balance and interest on the
Certificates and the giving of instructions or directions hereunder) as the
sole Holder of the Certificate, and shall have no obligation to the
Certificate Owners;
(c) to the extent that the provisions of this Section 3.11 conflict
with any other provisions of this Agreement, the provisions of this Section
3.11 shall control;
(d) the rights of the Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants.
-9-
<PAGE>
Pursuant to the Certificate Depository Agreement in the form attached as
Exhibit C, unless and until Definitive Certificates are issued pursuant to
---------
Section 3.13, the initial Clearing Agency shall make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of Certificate Balance and interest on the Certificates to
such Clearing Agency Participants;
(e) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Certificates evidencing
a specified percentage of the Voting Interests, the Clearing Agency shall
be deemed to represent such percentage only to the extent that it has
received written instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of Voting Interests and has delivered such instructions
to the Owner Trustee; provided, however, that the provisions of this
-------- -------
Section 3.11 shall not be applicable in respect of Certificates issued to
the Seller. The Seller or the Owner Trustee may set a record date for the
purpose of determining the identity of Holders of Certificates entitled to
vote or to consent to any action by vote as provided in this Agreement.
SECTION 3.12 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 3.13, the Owner Trustee shall give all such notices and
communications specified herein to be given to Certificateholders to the
Clearing Agency and shall have no further obligation to the Certificate Owners.
SECTION 3.13 Definitive Certificates. If (i) the Administrator
-----------------------
advises the Owner Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Certificates, and the Administrator is unable to locate a qualified successor,
(ii) the Administrator at its option advises the Owner Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default or a Servicer Default,
Certificate Owners representing beneficial interests aggregating at least a
majority of the Voting Interests advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interest of the Certificate Owners, then the Clearing Agency shall
notify all Certificate Owners and the Owner Trustee of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Owner Trustee of the
typewritten Certificate or Certificates representing the Book-Entry Certificates
by the Clearing Agency, accompanied by registration instructions, the Owner
Trustee shall execute and authenticate the Definitive Certificates in accordance
with the instructions of the Clearing Agency. Neither the Certificate Registrar
nor the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Owner
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders.
-10-
<PAGE>
SECTION 3.14 Seller as Certificateholder. The Seller in its
---------------------------
individual or any other capacity may, subject to Section 3.10, become the owner
or pledgee of Certificates and may otherwise deal with the Owner Trustee or its
Affiliates as if it were not the Seller.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to
--------------------------------------------------
Certain Matters. The Owner Trustee shall not take action with respect to the
- ---------------
following matters, unless (i) the Owner Trustee shall have notified the
Certificateholders in writing of the proposed action at least 30 days before the
taking of such action, and (ii) the Certificateholders shall not have notified
the Owner Trustee in writing prior to the 30th day after such notice is given
that such Certificateholders have withheld consent or provided alternative
direction:
(a) the initiation of any claim or lawsuit by the Trust (other than
an action to collect on a Receivable) and the compromise of any action,
claim or lawsuit brought by or against the Trust (other than an action to
collect on a Receivable);
(b) the election by the Trust to file an amendment to the Certificate
of Trust, a conformed copy of which is attached hereto as Exhibit B;
---------
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interests of the
Certificateholders;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner that would not materially adversely affect the
interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement
of a successor Certificate Registrar, or the consent to the assignment by
the Note Registrar, Paying Agent or Indenture Trustee or Certificate
Registrar of its obligations under the Indenture or this Agreement, as
applicable.
SECTION 4.2 Action by Certificateholders with Respect to Certain
----------------------------------------------------
Matters. The Owner Trustee shall not have the power, except upon the written
- -------
direction of the Certificateholders, to (a) remove the Administrator under the
Administration Agreement pursuant to Section 10 thereof, (b) appoint a successor
Administrator pursuant to Section 10 of the Administration Agreement, (c) remove
the Servicer under the Pooling and Servicing Agreement pursuant to Section 8.02
thereof or (d) except as expressly provided in the Basic Documents, sell the
Receivables or any interest
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therein after the termination of the Indenture. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders.
SECTION 4.3 Action by Certificateholders with Respect to
--------------------------------------------
Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Holders of Certificates (including the unanimous approval of the
board of directors of the Seller) unless the Owner Trustee reasonably believes
that the Trust is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
-----------------------------------------
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein,
----------------
any action that may be taken or consent that may be given or withheld by the
Certificateholders under this Agreement shall be effective if such action is
taken or such consent is given or withheld by the Holders of Certificates
evidencing not less than a majority of the Voting Interests thereof. Except as
expressly provided herein, any written notice, instruction, direction or other
document of the Certificateholders delivered pursuant to this Agreement shall be
effective if signed by Holders of Certificates evidencing not less than a
majority of the Voting Interests at the time of the delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution Account.
-------------------------------------------------
(a) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain at Chemical Bank in the name of the Owner Trustee an
Eligible Deposit Account known as the Navistar Financial 1995-B Owner Trust
Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(b) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise provided herein or in
the Pooling and Servicing Agreement, the Certificate Distribution Account shall
be under the sole dominion and control of the Owner Trustee for the benefit of
the Certificateholders. If, at any time, the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Certificate Distribution Account as
an Eligible Deposit Account and shall cause the Owner Trustee to transfer any
cash and/or any investments in the old Certificate Distribution Account to such
new Certificate Distribution Account.
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SECTION 5.2 Application of Trust Funds.
--------------------------
(a) On each Distribution Date, the Owner Trustee shall distribute to
the Certificateholders, on a pro rata basis, amounts deposited in the
Certificate Distribution Account pursuant to Sections 4.06 and 5.02(b) of the
Pooling and Servicing Agreement with respect to such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement described in Section 4.09(a) of the Pooling and
Servicing Agreement.
(c) If any withholding tax is imposed on the Trust's distributions
(or allocations of income) to a Certificateholder, such tax shall reduce the
amount otherwise distributable to the Certificateholder in accordance with this
Section 5.2. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Owner Trustee may in its sole discretion withhold such
amounts in accordance with this subsection 5.2(c). If a Certificateholder wishes
to apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any out-of-
pocket expenses incurred.
(d) If the Indenture Trustee holds escheated funds for payment to the
Trust pursuant to Section 3.3(e) of the Indenture, the Owner Trustee shall, upon
notice from the Indenture Trustee that such funds exist, submit on behalf of the
Trust an Issuer Order to the Indenture Trustee pursuant to Section 3.3(e) of the
Indenture instructing the Indenture Trustee to pay such funds to or at the order
of the Seller.
SECTION 5.3 Method of Payment. Subject to subsection 7.1(c),
-----------------
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the related Record Date (i)
by wire transfer, in immediately available funds, to the account of such Holder
at a bank or other entity having appropriate facilities therefor, if (x) the
Certificates are Definitive Certificates, such Certificateholder shall have
provided to the Certificate Registrar appropriate written instructions at least
five Business Days prior to such Record Date and the distribution required to be
made to such Holder on such Distribution Date exceeds $100,000 or (y) the
Certificates are Book-Entry Certificates, or, (ii) if neither clause (i)(x) nor
(i)(y) is applicable, by check mailed to such Certificateholder at the address
of such Holder appearing in the Certificate Register.
SECTION 5.4 Accounting and Reports to the Certificateholders, the
-----------------------------------------------------
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
- -----------------------------------
cause to be maintained) the books of
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the Trust on the basis of a fiscal year ending October 31 on the accrual method
of accounting, (b) deliver to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations or otherwise, such information as may
be required to enable each Certificateholder to prepare its federal income tax
returns, (c) file such tax returns relating to the Trust and make such elections
as may from time to time be required or appropriate under any applicable state
or federal statute or rule or regulation thereunder so as to maintain the
Trust's characterization as a partnership for federal income tax purposes, (d)
cause such tax returns to be signed in the manner required by law and (e)
collect or cause to be collected any withholding tax as described in and in
accordance with subsection 5.2(c) with respect to income or distributions to
Certificateholders. In preparing and filing tax returns for the Trust, the
Owner Trustee shall allocate taxable income of the Trust for each Monthly Period
in the following manner: (A) to the Certificateholders, in an amount equal to
the sum of (1) the product of the Pass Through Rate multiplied by the
Certificate Balance as of the last day of such month, (2) the amount specified
in clause (iii) of the definition of Certificateholders' Interest Distributable
Amount for such Monthly Period, (3) any Trust income attributable to discount on
the Receivables that corresponds to any excess of the principal amount of the
Certificates over their initial issue price, and (4) any Prepayment Surplus
payable to holders of the Certificates for such month; and (B) to the Seller, if
and to the extent that the taxable income of the Trust for each month exceeds
the amount computed under (A) above. Unless otherwise permitted or required by
any applicable law or regulation, the Owner Trustee shall allocate amounts of
taxable income of the Trust for a particular calendar month among the
Certificateholders in proportion to the principal amount of Certificates owned
by them as of the first Record Date following the end of such month.
SECTION 5.5 Signature on Returns; Tax Matters Partner. The Owner
-----------------------------------------
Trustee shall sign on behalf of the Trust any and all tax returns of the Trust,
unless applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the Seller. The Seller shall be
the "tax matters partner" of the Trust pursuant to the Code.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 Duties of Owner Trustee.
-----------------------
(a) The Owner Trustee undertakes to perform such duties, and only
such duties, as are specifically set forth in this Agreement, the Pooling and
Servicing Agreement and the other Basic Documents, including the administration
of the Trust in the interest of the Certificateholders, subject to the Basic
Documents and in accordance with the provisions of this Agreement and the
Pooling and Servicing Agreement. No implied covenants or obligations shall be
read into this Agreement, the Pooling and Servicing Agreement or any other Basic
Document against the Owner Trustee.
(b) Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall
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not be liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
(c) In the absence of bad faith on its part, the Owner Trustee may
conclusively rely upon certificates or opinions furnished to the Owner Trustee
and conforming to the requirements of this Agreement in determining the truth of
the statements and the correctness of the opinions contained therein; provided,
--------
however, that the Owner Trustee shall have examined such certificates or
- -------
opinions so as to determine compliance of the same with the requirements of this
Agreement.
(d) The Owner Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection 6.1(d) shall not limit the effect of
subsection 6.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Owner Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Owner Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 4.1, 4.2 or 6.4.
(e) Subject to Sections 5.1 and 5.2, monies received by the Owner
Trustee hereunder need not be segregated in any manner except to the extent
required by law or the Pooling and Servicing Agreement and may be deposited
under such general conditions as may be prescribed by law, and the Owner Trustee
shall not be liable for any interest thereon.
(f) The Owner Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3 or (ii)
would, to the actual knowledge of a Responsible Officer of the Owner Trustee,
result in the Trust's becoming taxable as a corporation for federal income tax
purposes.
(g) The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.1.
SECTION 6.2 Rights of Owner Trustee. The Owner Trustee is
-----------------------
authorized and directed to execute and deliver the Basic Documents and each
certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Trust is to be a party, in such form as the Seller
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Basic Documents. The Owner Trustee is further authorized from time to time
to take such action as the Administrator recommends with respect to the Basic
Documents.
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SECTION 6.3 Acceptance of Trusts and Duties. Except as otherwise
-------------------------------
provided in this Article VI, in accepting the trusts hereby created, Chemical
Bank Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be liable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own negligent action, its own negligent failure to act or its
own willful misconduct or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.6 and expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability
of any Receivable or the perfection and priority of any security interest
created by any Receivable in any Financed Vehicle or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of
the Owner Trust Estate or its ability to generate the distributions and
payments to be made to Certificateholders under this Agreement or to
Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence
and enforceability of any insurance thereon; the existence and contents of
any Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment;
the completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Seller or the Servicer with any warranty
or representation made under any Basic Document or in any related document
or the accuracy of any such warranty or representation or any action of the
Administrator, the Trustee or the Servicer or any subservicer taken in the
name of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Administrator or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document, if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or the Certificate
Balance of and interest on the Certificates;
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(e) the Owner Trustee shall not be responsible for or in respect of
and makes no representation as to the validity or sufficiency of any
provision of this Agreement or for the due execution hereof by the Seller
or for the form, character, genuineness, sufficiency, value or validity of
any of the Owner Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, the Notes, the Certificates (other than
the certificate of authentication on the Certificates) or of any
Receivables or any related documents, and the Owner Trustee shall in no
event assume or incur any liability, duty or obligation to any Noteholder
or to any Certificateholder, other than as expressly provided for herein
and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Indenture Trustee, the Seller or the
Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations of
the Trust under this Agreement or the Basic Documents that are required to
be performed by the Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture, the Servicer under the Pooling and
Servicing Agreement or NFC under the Purchase Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders
have offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby. The right of the Owner Trustee to
perform any discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its negligence or willful misconduct in the
performance of any such act.
SECTION 6.4 Action upon Instruction by Certificateholders.
---------------------------------------------
(a) Subject to Section 4.4, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Section 4.5.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, or is unsure as to the application, intent,
interpretation or meaning of any provision of this Agreement or the Basic
Documents, the Owner Trustee shall promptly give notice (in such form as shall
be
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appropriate under the circumstances) to the Certificateholders requesting
instruction as to the course of action to be adopted, and, to the extent the
Owner Trustee acts in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate instructions
within ten days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action which is consistent, in its view, with this Agreement or the
Basic Documents, and as it shall deem to be in the best interests of the
Certificateholders, and the Owner Trustee shall have no liability to any Person
for any such action or inaction.
SECTION 6.5 Furnishing of Documents. The Owner Trustee shall
-----------------------
furnish to the Certificateholders, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.
SECTION 6.6 Representations and Warranties of Owner Trustee. The
-----------------------------------------------
Owner Trustee hereby represents and warrants to the Seller, for the benefit of
the Certificateholders, that:
(a) It is a banking corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation. The
eligibility requirements set forth in Section 6.13 (a) - (c) are satisfied
with respect to it.
(b) It has full power, authority and legal right to execute, deliver
and perform this Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement.
(c) The execution, delivery and performance by it of this Agreement
(i) shall not violate any provision of any law or regulation governing the
banking and trust powers of the Owner Trustee or any order, writ, judgment
or decree of any court, arbitrator or governmental authority applicable to
the Owner Trustee or any of its assets, (ii) shall not violate any
provision of the corporate charter or by-laws of the Owner Trustee, or
(iii) shall not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust pursuant to
the provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien could
reasonably be expected to have a materially adverse effect on the Owner
Trustee's performance or ability to perform its duties as Owner Trustee
under this Agreement or on the transactions contemplated in this Agreement.
(d) The execution, delivery and performance by the Owner Trustee of
this Agreement shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of
any other action in respect of, any governmental authority or agency
regulating the corporate trust activities of Chemical Bank Delaware.
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(e) This Agreement has been duly executed and delivered by the Owner
Trustee and constitutes the legal, valid and binding agreement of the Owner
Trustee, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
SECTION 6.7 Reliance; Advice of Counsel.
---------------------------
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties and
need not investigate any fact or matter in any such document. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which
is not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee: (i) may act directly or through its agents,
attorneys, custodians or nominees pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or misconduct
of such agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Owner Trustee with
reasonable care; and (ii) may consult with counsel, accountants and other
skilled professionals to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this Agreement or any
Basic Document.
SECTION 6.8 Owner Trustee May Own Certificates and Notes. The
--------------------------------------------
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Seller, the
Administrator, the Indenture Trustee and the Servicer in transactions in the
same manner as it would have if it were not the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. The Owner Trustee shall
--------------------------
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Servicer for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, custodians, nominees,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. The Servicer shall indemnify the Owner Trustee
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and its successors, assigns, agents and servants in accordance with the
provisions of Section 7.01 of the Pooling and Servicing Agreement. The
compensation and indemnities described in this Section 6.9 shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement. Any amounts paid to the Owner Trustee pursuant to this Article VI
shall be deemed not to be a part of the Owner Trust Estate immediately after
such payment.
SECTION 6.10 Replacement of Owner Trustee.
----------------------------
(a) The Owner Trustee may give notice of its intent to resign and be
discharged from the trusts hereby created by written notice thereof to the
Administrator; provided that no such resignation shall become effective, and the
Owner Trustee shall not resign, prior to the time set forth in Section 6.10(c).
The Administrator may appoint a successor Owner Trustee by delivering a written
instrument, in duplicate, to the resigning Owner Trustee and the successor Owner
Trustee. If no successor Owner Trustee shall have been appointed and have
accepted appointment within 30 days after the giving of such notice, the
resigning Owner Trustee giving such notice may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee. The
Administrator shall remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 6.13 and shall fail to resign after written
request therefor by the Administrator;
(ii) the Owner Trustee shall be adjudged bankrupt or insolvent;
(iii) a receiver or other public officer shall be appointed or
take charge or control of the Owner Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
(b) If the Owner Trustee gives notice of its intent to resign or is
removed or if a vacancy exists in the office of Owner Trustee for any reason,
the Administrator shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate (one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the successor Owner Trustee)
and shall pay all fees owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment
of a successor Owner Trustee pursuant to any of the provisions of this Section
6.10 shall not become effective and no such resignation shall be deemed to have
occurred until a written acceptance of appointment is delivered by the successor
Owner Trustee to the outgoing Owner Trustee and the Administrator and all fees
and expenses due to the outgoing Owner Trustee are paid. Any successor Owner
Trustee appointed pursuant to this Section 6.10 shall be eligible to act in such
capacity in accordance with Section 6.13 and, following compliance with the
preceding sentence, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this Agreement, with like effect
as if originally named as Owner Trustee. The Administrator shall provide notice
of such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
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(d) The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement. The Administrator and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
(e) Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 6.10, the Administrator shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies.
SECTION 6.11 Merger or Consolidation of Owner Trustee. Any Person
----------------------------------------
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such Person shall be eligible pursuant to Section 6.13, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; provided, however, that the Owner Trustee shall mail notice
-------- -------
of such merger or consolidation to the Rating Agencies.
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust Estate or any Financed Vehicle may at the time
be located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee to act as co-trustee, jointly with the
Owner Trustee, or as separate trustee or trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 6.12, such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 6.13 and no notice of the appointment of any co-
trustee or separate trustee shall be required pursuant to Section 6.10.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act
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or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement
(unless such other trustee acts or fails to act at the direction of such
first trustee); and
(iii) the Administrator and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or co-
trustee.
(c) Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.
SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee shall at all times: (a) be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (b) be authorized to exercise
corporate trust powers; (c) have a combined capital and surplus of at least
$50,000,000 and be subject to supervision or examination by federal or state
authorities; and (d) have a long-term unsecured debt rating of at least Baa3 by
Moody's Investors Service, Inc. or be otherwise satisfactory to Moody's
Investors Service, Inc. If such corporation shall publish reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 6.13,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.13, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
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<PAGE>
ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
------------------------------
(a) This Agreement (other than Section 6.9) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i) the final
distribution by the Owner Trustee of all monies or other property or proceeds of
the Owner Trust Estate in accordance with the terms of the Indenture, the
Pooling and Servicing Agreement (including the exercise by the Servicer of its
option to purchase the Receivables pursuant to Section 9.01(a) of the Pooling
and Servicing Agreement) and Article V or (ii) at the time provided in Section
7.2. The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder, other than the Seller as described in Section 7.2, shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or the Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 7.1(a), neither the Seller nor any
Certificateholder shall be entitled to revoke or terminate the Trust or this
Agreement.
(c) Notice of any termination of the Trust, except as otherwise
provided in Section 7.2, specifying the Distribution Date upon which the
Certificateholders shall surrender their Certificates to the Paying Agent for
payment of the final distribution and cancellation, shall be given by the Owner
Trustee by letter to Certificateholders mailed within five Business Days of
receipt of notice of such termination from the Servicer given pursuant to
subsection 9.02(b) of the Pooling and Servicing Agreement, stating: (i) the
Distribution Date upon or with respect to which the final distribution on the
Certificates shall be made upon presentation and surrender of the Certificates
at the office of the Paying Agent therein designated; (ii) the amount of any
such final distribution; and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office of the Paying Agent
therein specified. The Owner Trustee shall give such notice to the Certificate
Registrar (if other than the Owner Trustee) and the Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2.
(d) If all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
written notice specified in Section 7.1(c), the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Subject to applicable laws with respect to
escheat of funds, any funds
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<PAGE>
remaining in the Trust after exhaustion of such remedies in the preceding
sentence shall be deemed property of the Seller and distributed by the Owner
Trustee to the Seller.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
(f) Within sixty days of the later of (i) the cancellation of all of
the Certificates pursuant to Section 7.1(c) or Section 7.1(d), or (ii) payment
to the Seller of funds remaining in the Trust pursuant to Section 7.1(d), the
Owner Trustee shall provide each of the Rating Agencies with written notice
stating that all Certificates have been so cancelled or such funds have been so
paid to the Seller.
SECTION 7.2 Dissolution upon Bankruptcy of the Seller. Subject to
-----------------------------------------
the liquidation, winding-up and dissolution procedures described below, upon the
occurrence of an Insolvency Event with respect to the Seller, the Trust shall
terminate, provided that the rights and obligations of the parties to this
Agreement shall not terminate during such liquidation, winding-up and
dissolution. Promptly after the occurrence of any Insolvency Event with respect
to the Seller: (i) the Seller shall give the Indenture Trustee and the Owner
Trustee written notice of such Insolvency Event, (ii) the Owner Trustee shall,
upon the receipt of such written notice from the Seller, give prompt written
notice to the Certificateholders and the Indenture Trustee of the occurrence of
such event and (iii) pursuant to Section 3.23 of the Indenture, the Indenture
Trustee shall, upon receipt of written notice of such Insolvency Event from the
Owner Trustee or the Seller, give prompt written notice to the Noteholders of
the occurrence of such event; provided, however, that any failure to give a
-------- -------
notice required by this sentence shall not prevent or delay in any manner a
termination of the Trust pursuant to the first sentence of this Section 7.2.
Ninety days after the date the Seller gives the notice described in the
preceding sentence, unless the Owner Trustee shall have received written
instructions from (a) Certificateholders whose Certificates evidence not less
than a majority of the Voting Interests as of the close of the preceding
Distribution Date and (b) Noteholders whose Notes evidence not less than a
majority of the Outstanding Amount of the Notes as of the close of the preceding
Distribution Date, to the effect that such Persons disapprove of the prospective
liquidation of the assets held by the Trust and the prospective termination of
the Trust and wish to reconstitute the Trust pursuant to terms corresponding to
the terms of this Agreement, the Owner Trustee shall direct the Indenture
Trustee to promptly sell, dispose of or otherwise liquidate or realize upon the
assets of the Trust (other than the Designated Accounts and the Certificate
Distribution Account) in a commercially reasonable manner and on commercially
reasonable terms (which may include continuing to hold the Receivables and
receiving collections thereon). The proceeds of any such sale, disposition or
liquidation of the assets of the Trust shall be treated as collections on the
Receivables and deposited in the Collection Account pursuant to Section 9.02(a)
of the Pooling and Servicing Agreement, and thereupon this Agreement and the
respective obligations and responsibilities of the Seller, the Servicer, the
Owner Trustee and the Indenture Trustee shall terminate (except as otherwise
expressly provided herein).
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<PAGE>
ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or
---------------------------------------------------
Noteholders. This Agreement may be amended by the Seller and the Owner Trustee
- -----------
without the consent of any of the Noteholders or the Certificateholders (but
with prior notice to each of the Rating Agencies) to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Agreement that may be defective
or inconsistent with any other provision in this Agreement or any other Basic
Document, (iii) add or supplement any credit enhancement for the benefit of the
Noteholders or the Certificateholders (provided that if any such addition
--------
shall affect any class of Noteholders or Certificateholders differently than any
other class of Noteholders or Certificateholders, then such addition shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any class of the Noteholders or the Certificateholders), (iv)
add to the covenants, restrictions or obligations of the Seller or the Owner
Trustee for the benefit of the Noteholders or Certificateholders, (v) evidence
and provide for the acceptance of the appointment of a successor trustee with
respect to the Owner Trust Estate and add to or change any provisions as shall
be necessary to facilitate the administration of the trusts hereunder by more
than one trustee pursuant to Article VI, or (vi) add, change or eliminate any
other provision of this Agreement in any manner that shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
the Noteholders or the Certificateholders.
SECTION 8.2 Amendments With Consent of Certificateholders and
-------------------------------------------------
Noteholders. This Agreement may be amended from time to time by the Seller and
- -----------
the Owner Trustee with the consent of Noteholders whose Notes evidence not less
than a majority of the Outstanding Amount of the Notes as of the close of
business on the preceding Distribution Date and the consent of
Certificateholders whose Certificates evidence not less than a majority of the
Voting Interests as of the close of business on the preceding Distribution Date
(which consent, whether given pursuant to this Section 8.2 or pursuant to any
other provision of this Agreement, shall be conclusive and binding on such
Person and on all future holders of such Notes or Certificates and of any Notes
or Certificates issued upon the transfer thereof or in exchange thereof or in
lieu thereof whether or not notation of such consent is made upon the Notes or
Certificates) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Noteholders or the Certificateholders; provided,
--------
however, that no such amendment shall (a) increase or reduce in any manner the
- -------
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made on any Note or
Certificate, the Pass Through Rate or the Specified Reserve Account Balance, (b)
reduce the aforesaid percentage required to consent to any such amendment or (c)
amend Section 4.3 or Section 7.2, without the consent of the Holders of all of
the Notes and all of the Voting Interests with respect to Certificates then
outstanding. The Administrator shall furnish notice of the substance of any
proposed amendment, supplement or consent under this Section 8.2 to each of the
Rating Agencies prior to obtaining consent thereto.
SECTION 8.3 Form of Amendments.
------------------
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<PAGE>
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 8.1 or 8.2, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(b) It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to Section 8.2 to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders and Noteholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe.
(c) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(d) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
such execution have been satisfied. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Legal Title to Owner Trust Estate. The
------------------------------------
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and VII. No transfer, by operation of law or otherwise, of any
right, title, and interest of the Certificateholders to and in their ownership
interest in the Owner Trust Estate shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 9.2 Limitations on Rights of Others. Except for Section 2.7
-------------------------------
and Section 9.12, the provisions of this Agreement are solely for the benefit of
the Owner Trustee, the Seller, the Certificateholders, the Administrator and, to
the extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
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<PAGE>
SECTION 9.3 Notices. All demands, notices and communications upon
-------
or to the Seller, the Servicer, the Administrator, the Indenture Trustee, the
Owner Trustee, the Rating Agencies or any Certificateholder under this Agreement
shall be delivered as specified in Appendix B to the Pooling and Servicing
----------
Agreement.
SECTION 9.4 Severability. If any one or more of the covenants,
------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed enforceable to the fullest extent permitted, and if not so
permitted, shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
SECTION 9.5 Counterparts. This Agreement may be executed by the
------------
parties hereto in separate counterparts (and by different parties on separate
counterparts), each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
SECTION 9.6 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, the Seller,
the Owner Trustee and each Certificateholder and their respective successors and
permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall bind
the successors and assigns of such Certificateholder.
SECTION 9.7 No Petition Covenant. Notwithstanding any prior
--------------------
termination of this Agreement, the Trust (or the Owner Trustee on behalf of the
Trust), and each Certificateholder or Certificate Owner, by accepting a
Certificate (or interest therein), hereby covenant and agree that they shall
not, prior to the date which is one year and one day after the termination of
this Agreement acquiesce, petition or otherwise invoke or cause the Seller to
invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Seller under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Seller or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Seller.
SECTION 9.8 No Recourse. Each Certificateholder or Certificate
-----------
Owner by accepting a Certificate (or interest therein) acknowledges that such
Person's Certificate (or interest therein) represents beneficial interests in
the Trust only and does not represent interests in or obligations of the Seller,
the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee or any
Affiliate thereof and no recourse, either directly or indirectly, may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Certificates or the Basic Documents. Except
as expressly provided in the Basic Documents, neither the Seller, the Servicer
nor the Owner Trustee in their respective individual capacities, nor any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns, shall be personally liable for, nor shall recourse be
had to any of them for, the distribution of Certificate Balance with respect to
or interest on the Certificates, or the Owner Trustee's
-27-
<PAGE>
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Certificates or this Agreement, it being
expressly understood that said covenants and obligations have been made by the
Owner Trustee solely in its capacity as the Owner Trustee. Each
Certificateholder or Certificate Owner by the acceptance of a Certificate (or
beneficial interest therein) shall agree that, except as expressly provided in
the Basic Documents, in the case of nonpayment of any amounts with respect to
the Certificates, it shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom.
SECTION 9.9 Headings. The headings of the various Articles and
--------
Sections herein are for purposes of reference only and shall not affect the
meaning or interpretation of any provision hereof.
SECTION 9.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.11 Certificate Transfer Restrictions. The Certificates may
---------------------------------
not be acquired by or for the account of (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 Code or (iii) 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 a
Certificate, the Holder thereof and the Certificate Owner shall each be deemed
to have represented and warranted that it is not a Benefit Plan and, if
requested to do so by the Seller, the Certificateholder and the Certificate
Owner shall execute and deliver to the Owner Trustee an Undertaking Letter in
the form set forth in Exhibit D. The Certificates are also subject to the
---------
minimum denomination specified in Section 3.2(a).
SECTION 9.12 Administrator. The Administrator is authorized to
-------------
execute on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust to
prepare, file or deliver pursuant to the Basic Documents. Upon request, the
Owner Trustee shall execute and deliver to the Administrator a power of attorney
appointing the Administrator its agent and attorney-in-fact to execute all such
documents, reports, filings, instruments, certificates and opinions.
SECTION 9.13 Amended and Restated Trust Agreement. This Trust
------------------------------------
Agreement is the amended and restated trust agreement contemplated by the Trust
Agreement dated as of October 18, 1995 between the Seller and the Owner Trustee.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CHEMICAL BANK DELAWARE
as Owner Trustee
By: /s/ John J. Cashin
---------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By: /s/ R. Wayne Cain
---------------------------------
Name: R. Wayne Cain
Title: Vice President
Acknowledged and Accepted:
NAVISTAR FINANCIAL CORPORATION,
as Servicer
By: /s/ R. Wayne Cain
----------------------------
Name: R. Wayne Cain
Title: Vice President
<PAGE>
EXHIBIT A
[FORM OF CERTIFICATE]
NUMBER $ __________
R- CUSIP NO. __________
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR DISTRIBUTION,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY DISTRIBUTION IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (i) AN
"EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("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 OF 1986, AS AMENDED (THE
"CODE"), OR (iii) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY. BY ACCEPTING AND HOLDING THIS
CERTIFICATE, THE HOLDER HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.
[PURSUANT TO THE TRUST AGREEMENT, NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION ("NFRRC") SHALL RETAIN BENEFICIAL AND RECORD
OWNERSHIP OF CERTIFICATES REPRESENTING AT LEAST 1% OF THE CERTIFICATE
BALANCE, AND ANY ATTEMPTED TRANSFER OF THIS CERTIFICATE THAT REDUCES THE
BENEFICIAL AND RECORD INTEREST OF NFRRC TO BELOW 1% OF THE CERTIFICATE
BALANCE SHALL BE VOID.]
Navistar Financial 1995-B Owner Trust
6.22% ASSET BACKED CERTIFICATE
<PAGE>
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail instalment sale contracts
for, and retail loans evidenced by notes secured by, new and used medium
and heavy duty trucks, buses and trailers, which contracts and loans have
been sold to the Trust by Navistar Financial Retail Receivables
Corporation.
(This Certificate does not represent an interest in or obligation of
Navistar Financial Retail Receivables Corporation, Navistar Financial
Corporation, Navistar International Transportation Corp., Navistar
International Corporation, the Owner Trustee or any of their respective
affiliates, except to the extent described below.)
THIS CERTIFIES THAT _________________________ is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in Navistar
Financial 1995-B Owner Trust (the "Trust") formed by Navistar Financial Retail
Receivables Corporation, a Delaware corporation, (the "Seller").
The Trust was created pursuant to a trust agreement, dated as of
October 18, 1995(as amended and restated as of November 1, 1995 and as further
amended, restated or supplemented from time to time, the "Trust Agreement"),
between the Seller and CHEMICAL BANK DELAWARE, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "6.22%Asset Backed Certificates" (the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, the terms of which are incorporated herein by reference and made a
part hereof, to which Trust Agreement the Holder of this Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Under the Trust Agreement, there shall be distributed on the 15th day
of each calendar month or, if such 15th day is not a Business Day, the next
succeeding Business Day, commencing on November 15, 1995 (each, a "Distribution
Date"), to the Person in whose name this Certificate is registered on the
related Record Date (as defined below), such Certificateholder's fractional
undivided interest in the amount of interest on and distributions in respect of
Certificate Balance to be distributed to Certificateholders on such Distribution
Date; provided, however, that the Certificateholder's Principal Distributable
-------- -------
Amount will be zero until the Notes have been paid in full. The entire unpaid
Certificate Balance on this Certificate shall be due and payable on the
Distribution Date in April 15, 2002 (the "Final Scheduled Payment Date"). The
"Record Date," with respect to any Distribution Date, means the close of
business on the day immediately preceding such Distribution Date, or if
Definitive Certificates are issued, the last day of the preceding Monthly
Period.
The distributions in respect of Certificate Balance and interest on
this Certificate are payable in such coin or currency of the United States of
America as at the time of distribution is legal tender for payment of public and
private debts. All distributions made by the Trust with
-2-
<PAGE>
respect to this Certificate shall be applied first to interest due and payable
on this Certificate as provided above and then to the unpaid distributions in
respect of Certificate Balance of this Certificate.
The Holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as and to the extent described in the Pooling and
Servicing Agreement and the Indenture.
It is the intention of the Seller, the Servicer and the
Certificateholders and Certificate Owners that, solely for purposes of federal
income, state and local income and franchise taxes and any other taxes imposed
upon, measured by or based upon gross or net income, the Trust shall be treated
as a partnership. Except as otherwise required by appropriate taxing
authorities, the Seller and the other Certificateholders and Certificate Owners
by acceptance of a Certificate (or interest therein), agree to treat, and to
take no action inconsistent with the treatment of, the Certificates for such tax
purposes as interests in such partnership.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate or, in the case of a Certificate Owner, a beneficial interest in a
Certificate, covenants and agrees that such Certificateholder or Certificate
Owner, as the case may be, shall not, prior to the date which is one year and
one day after the termination of the Trust Agreement, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
distributions shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate shall be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office maintained for such purpose by the Owner Trustee in
the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee by manual signature, this
Certificate shall not entitle the
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<PAGE>
Holder hereof to any benefit under the Trust Agreement or the Pooling and
Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
-4-
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
NAVISTAR FINANCIAL 1995-B OWNER
TRUST
CHEMICAL BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee
Dated: ___________________________ By: _________________________
Name:
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
CHEMICAL BANK DELAWARE CHEMICAL BANK DELAWARE,
not in its individual not in its individual
capacity but solely capacity but solely
as Owner Trustee OR as Owner Trustee
by Chemical Bank,
as Authenticating Agent
By:_________________________ By: _________________________
Authorized Officer Authorized Officer
-5-
<PAGE>
REVERSE OF CERTIFICATE
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, Navistar International Transportation Corp., Navistar
International Corporation, the Indenture Trustee, the Owner Trustee or any
affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Trust Agreement or the Basic Documents. In addition, this Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Trust Agreement and the Pooling and Servicing Agreement. A
copy of each of the Pooling and Servicing Agreement and the Trust Agreement may
be examined during normal business hours at the principal office of the Seller,
and at such other places, if any, designated by the Seller, by any
Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of (i) the Holders of
the Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and (ii) Certificateholders whose Certificates evidence not less than a
majority of the Voting Interests, each as of the close of the preceding
Distribution Date. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates or the Notes.
As provided in the Trust Agreement, the Certificates will be prepaid,
in part, on the Distribution Date on which the Funding Period ends (or on the
Distribution Date immediately following the last day of the Funding Period, if
the Funding Period does not end on a Distribution Date) in the event that the
Pre-Funded Amount exceeds $100,000 on such date, after giving effect to all
purchases of Subsequent Receivables including any such purchase on such date.
The aggregate principal amount of Certificates to be prepaid will equal the
Certificateholders' Pre-Funded Percentage of the remaining Pre-Funded Amount.
In addition, the Trust will be obligated to pay the Certificateholders'
Prepayment Premium to the Certificateholders in connection with any such
mandatory prepayment of Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the City of New York, accompanied by (i) a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing and (ii) if requested by the Seller, the
Undertaking Letter required by Section 9.11(a) of the Trust Agreement, and
thereupon one or more new Certificates of authorized denominations evidencing
the same aggregate interest
-6-
<PAGE>
in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Chemical Bank, New
York, New York.
The Certificates are issuable only as registered Certificates without
coupons (i) in denominations of $20,000 or (ii) integral multiples of $1,000 in
excess thereof, except for one Certificate which may be issued to the Seller in
any denomination. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same; provided,
--------
however, that no Certificate may be subdivided upon registration of transfer or
- -------
exchange in a manner such that the denomination of any resulting Certificate
would have been less than $20,000 if such Certificate had been issued in the
original distribution of Certificates. No service charge shall be made for any
such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Owner Trustee, the Certificate Registrar or any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Trust Agreement and the Pooling and Servicing Agreement and the disposition
of all property held as part of the Trust. The Servicer of the Receivables may
at its option purchase the assets of the Trust other than the Designated
Accounts and the Certificate Distribution Account at a price specified in the
Pooling and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust shall effect early retirement of the Certificates;
provided, however, that such right of purchase is exercisable only as of the
- -------- -------
last day of any Monthly Period as of which the Aggregate Receivables Balance is
10% or less of the Aggregate Starting Receivables Balance.
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________________________ Attorney to transfer
said Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated: _____________________________*
Signature Guaranteed:
_____________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
-8-
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
Navistar Financial 1995-B Owner Trust
-------------------------------------
THIS Certificate of Trust of Navistar Financial 1995-B Owner Trust
(the "Trust"), dated as of October 18, 1995 is being duly executed and filed by
CHEMICAL BANK DELAWARE, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. C. (S)3801 et
------- --
seq.).
- ---
1. Name. The name of the business trust formed hereby is Navistar
----
Financial 1995-B Owner Trust.
2. Delaware Trustee. The name and business address of the trustee
----------------
of the Trust in the State of Delaware is CHEMICAL BANK DELAWARE, 1201 Market
Street, Wilmington, Delaware 19801.
3. This Certificate of Trust shall be effective on October 18, 1995.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first-above
written.
CHEMICAL BANK DELAWARE, not in its individual
capacity but solely as trustee of the Trust.
By: _______________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
<PAGE>
EXHIBIT D
FORM OF UNDERTAKING LETTER
-2-
<PAGE>
EXHIBIT 10.1
PURCHASE AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
AND
NAVISTAR FINANCIAL CORPORATION
DATED AS OF NOVEMBER 1, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS......................................................................1
SECTION 1.01. Definitions..................................................1
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES.................................................1
SECTION 2.01. Purchase and Sale of Receivables.............................1
SECTION 2.02. Purchase Price...............................................2
SECTION 2.03. The Closings.................................................2
SECTION 2.04. Covenant Regarding Subsequent Receivables....................2
ARTICLE III
REPRESENTATIONS AND WARRANTIES...................................................3
SECTION 3.01. Representations and Warranties as to Receivables.............3
SECTION 3.02. Additional Representations and Warranties of NFC.............7
SECTION 3.03. Representations and Warranties of NFRRC......................8
ARTICLE IV
CONDITIONS.......................................................................9
SECTION 4.01. Conditions to Obligation of NFRRC............................9
SECTION 4.02. Conditions To Obligation of NFC.............................10
ARTICLE V
ADDITIONAL AGREEMENTS...........................................................11
SECTION 5.01. Conflicts With Further Transfer and Servicing Agreements....11
SECTION 5.02. Protection of Title.........................................11
SECTION 5.03. Other Liens or Interests....................................11
SECTION 5.04. Repurchase Events...........................................11
SECTION 5.05. Indemnification.............................................12
SECTION 5.06. Further Assignments.........................................12
SECTION 5.07. Pre-Closing Collections.....................................12
SECTION 5.08. Limitation on Transfer of NITC Purchase Obligations.........12
SECTION 5.09. Sale Treatment..............................................12
ARTICLE VI
MISCELLANEOUS PROVISIONS........................................................13
SECTION 6.01. Amendment...................................................13
SECTION 6.02. Survival....................................................13
SECTION 6.03. Notices.....................................................13
SECTION 6.04. Governing Law...............................................13
SECTION 6.05. Waivers.....................................................13
SECTION 6.06. Costs and Expenses..........................................13
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 6.07. Confidential Information....................................13
SECTION 6.08. Headings....................................................13
SECTION 6.09. Counterparts................................................13
SECTION 6.10. Severability of Provisions..................................14
SECTION 6.11. Further Assurances..........................................14
SECTION 6.12. No Third-Party Beneficiaries................................14
SECTION 6.13. Merger and Integration......................................14
</TABLE>
Exhibits
Exhibit A - Form of Initial Assignment
Exhibit B - Form of Subsequent Transfer Assignment
- ii -
<PAGE>
PURCHASE AGREEMENT, dated as of November 1, 1995, between NAVISTAR
FINANCIAL RETAIL RECEIVABLES CORPORATION, a Delaware corporation ("NFRRC"), and
NAVISTAR FINANCIAL CORPORATION, a Delaware corporation ("NFC").
WHEREAS, NFRRC desires to purchase from time to time during the Funding
Period a portfolio of retail instalment sale contracts for, and retail loans
evidenced by notes and secured by new and used medium and heavy duty trucks,
buses and trailers (collectively, the "RETAIL NOTES"), together with related
rights owned by NFC;
WHEREAS, NFC is willing to sell such Retail Notes and related rights to
NFRRC;
WHEREAS, NFRRC may wish to sell or otherwise transfer such Retail Notes and
related rights, or interests therein, to a trust, corporation, partnership or
other entity (any such entity being the "ISSUER"); and
WHEREAS, the Issuer may issue debentures, notes, participations,
certificates of beneficial interest, partnership interests or other interests or
securities (collectively, any such issued interests or securities being
"SECURITIES") to fund its acquisition of such Retail Notes and related rights.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used but not otherwise
-----------
defined in this Agreement shall have the respective meanings assigned them in
Part I of Appendix A to the Pooling and Servicing Agreement of even date
----------
herewith by and among NFC, NFRRC and Navistar Financial 1995-B Owner Trust, as
it may be amended, supplemented or modified from time to time. All references
herein to "the Agreement" or "this Agreement" are to this Purchase Agreement as
it may be amended, supplemented or modified from time to time, the exhibits
hereto and the capitalized terms used herein which are defined in such Appendix
--------
A, and all references herein to Articles, Sections and subsections are to
- -
Articles, Sections or subsections of this Agreement unless otherwise specified.
The rules of construction set forth in Part II of such Appendix A to the Pooling
----------
and Servicing Agreement shall be applicable to this Agreement.
- 1 -
<PAGE>
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables. Subject to the
--------------------------------
satisfaction of the conditions specified in Article IV, NFC agrees to sell,
transfer, assign and otherwise convey to NFRRC, without recourse, pursuant to a
------- --------
written assignment substantially in the form of Exhibit A (an "ASSIGNMENT"), and
---------
NFRRC agrees to purchase, on the Closing Date and, up to the Available Purchase
Amount, on any Subsequent Transfer Date (each, a "PURCHASE DATE"), all right,
title and interest of NFC in, to and under:
(a) the Retail Notes, secured by one or more Financed Vehicles, that are
identified in a schedule to the Assignment delivered to NFRRC on such Purchase
Date (the "DESIGNATED RECEIVABLES") and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the applicable Cutoff
Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Designated Receivables and, to the extent permitted by law, any
accessions thereto which are financed by NFC;
(c) the benefits of any lease assignments with respect to the related
Financed Vehicles;
(d) any proceeds from any Insurance Policies with respect to the
Designated Receivables;
(e) any proceeds from Dealer Liability with respect to the Designated
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Designated Receivables (subject to the limitations set forth in Section 5.08
hereof) and proceeds from any Guaranties of Designated Receivables; and
(f) any proceeds of the property described in clauses (a), (b) and (c)
above (the property described in clauses (b) through (f) hereof are referred to
as the "RELATED SECURITY").
SECTION 2.02. Purchase Price. In consideration for the purchase of
--------------
any Designated Receivables and the Related Security, NFRRC shall, on the related
Purchase Date, pay to NFC an amount equal to the Aggregate Starting Receivables
Balance for such Designated Receivables (the "PURCHASE PRICE") and NFC shall
execute and deliver to NFRRC an assignment in the form attached hereto as
Exhibit A (each, an "ASSIGNMENT"). On the Closing Date, a portion of the
- ---------
Purchase Price payable on such date equal to approximately $427,619,170.27 shall
be paid to NFC in immediately available funds, and the balance of the Purchase
Price shall be recorded as an advance from NFC to NFRRC. On each subsequent
Purchase Date, a portion of the Purchase Price payable on such date equal to the
amount received by NFRRC pursuant to Section 5.02(a) of the Pooling and
Servicing Agreement shall be paid to NFC in immediately available funds, and the
balance of the Purchase Price payable on such date shall be recorded as an
advance from NFC to NFRRC.
SECTION 2.03. The Closings. Each sale and purchase of the Designated
------------
Receivables (each, a "Closing"), shall take place at such a place, on a date and
at a time mutually agreeable to
- 2 -
<PAGE>
NFC and NFRRC, and may occur simultaneously with the closing of any related
transactions contemplated by the Further Transfer and Servicing Agreements.
SECTION 2.04. Covenant Regarding Subsequent Receivables. NFC
-----------------------------------------
covenants to deliver and sell to NFRRC pursuant to Section 2.01 on or prior to
the end of the Funding Period Subsequent Receivables with an aggregate Starting
Receivable Balance equal to $70,500,316.57. If on the Distribution Date on
which the Funding Period ends (or, if the Funding Period does not end on a
Distribution Date, the first Distribution Date following the end of the Funding
Period), the Pre-Funded Amount is equal to or greater than $100,000, NFC shall
be obligated to pay to NFRRC an amount equal to the sum of the Noteholders'
Prepayment Premium with respect to each class of Notes and the
Certificateholders' Prepayment Premium on the Transfer Date immediately
preceding the Distribution Date on which the Funding Period ends (or, if the
Funding Period does not end on a Distribution Date, on the first Distribution
Date following the end of the Funding Period); provided, however, that the
-------- -------
foregoing shall be the sole remedy of NFRRC, the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to a
failure of NFC to comply with this covenant.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties as to Receivables. NFC
------------------------------------------------
makes the following representations and warranties as to the Designated
Receivables on which NFRRC relies in accepting such Receivables. Such
representations and warranties speak as of the Purchase Date for such Designated
Receivables, and as of the related transfer of such Designated Receivables under
the Further Transfer and Servicing Agreements, and shall survive the sale,
transfer and assignment of such Designated Receivables to NFRRC and the
subsequent assignment and transfer thereof pursuant to the Further Transfer and
Servicing Agreements:
(a) Characteristics of Receivables. Each Designated Receivable:
------------------------------
(i) was originated by (A) a Dealer for the retail sale of one or more
Financed Vehicles in the ordinary course of such Dealer's business, was
fully and properly executed by the parties thereto, was purchased by NFC
from such Dealer under an existing agreement with NFC and was validly
assigned by such Dealer to NFC in accordance with its terms, (B) a
Distributor for the retail sale of one or more Financed Vehicles in the
ordinary course of such Distributor's business, and was fully and properly
executed by the parties thereto, was purchased by NFC from such Distributor
under an existing agreement with NFC and was validly assigned by such
Distributor to NFC in accordance with its terms, or (C) NFC to finance a
retail purchase by a retail customer or a refinancing of a Financed Vehicle
or Financed Vehicles by a retail customer and was fully and properly
executed by the parties thereto;
(ii) has created or shall create a valid, binding and enforceable
first priority security interest in favor of NFC in each Financed Vehicle
related thereto, which security interest will be validly assigned by NFC to
NFRRC and will be assignable by NFRRC to a subsequent purchaser;
- 3 -
<PAGE>
(iii) contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization
against the collateral of the benefits of the security;
(iv) yields interest at the Annual Percentage Rate; and
(v) comes from one of the following categories, which differ in their
provisions for the payment of principal and interest: Equal Payment Fully
Amortizing Receivables, Equal Payment Skip Receivables, Equal Payment
Balloon Receivables, Level Principal Fully Amortizing Receivables, Level
Principal Skip Receivables, Level Principal Balloon Receivables, or Other
Receivables. "Equal Payment Fully Amortizing Receivables" are Receivables
that provide for equal monthly payments that fully amortize the amount
financed over its original term to maturity. "Equal Payment Skip
Receivables" are Receivables that provide for equal monthly payments in
eleven or fewer months of each twelve-month period that fully amortize the
amount financed over its original term to maturity. "Equal Payment Balloon
Receivables" are Receivables that provide for equal monthly payments except
that a larger payment becomes due on the final maturity date for such
Receivables. "Level Principal Fully Amortizing Receivables" are
Receivables that provide for monthly payments consisting of level principal
amounts together with accrued and unpaid interest on the unpaid Receivable
Balances. "Level Principal Skip Receivables" are Receivables that provide
for monthly payments in eleven or fewer months of each twelve-month period
consisting of level principal amounts together with accrued and unpaid
interest on the unpaid Receivable Balances. "Level Principal Balloon
Receivables" are Receivables that provide for monthly payments consisting
of level principal amounts together with accrued and unpaid interest on the
unpaid Receivable Balances, except that a larger principal payment becomes
due on the final maturity date for such Receivables. "Other Receivables"
are Receivables not described above, including Receivables that provide for
level monthly payments in eleven or fewer months of each twelve-month
period that amortize a portion of the amount financed over its original
term to maturity with a larger payment that becomes due on the final
maturity date for such Receivables.
(b) Schedule of Receivables. The information set forth in the Schedule of
----------------------- -----------
Receivables (as supplemented by the schedules to the related Subsequent Transfer
- -----------
Assignment, if applicable) relating to such Designated Receivables is true and
correct in all material respects;
(c) Compliance With Law. All requirements of applicable federal, state and
-------------------
local laws, and regulations thereunder, including the Equal Credit Opportunity
Act, the Federal Reserve Board's Regulation "B", the Soldiers' and Sailors'
Civil Relief Act of 1940, and any applicable bulk sales or bulk transfer law and
other equal credit opportunity and disclosure laws, in respect of any of the
Designated Receivables, have been complied with in all material respects, and
each such Designated Receivable and the sale of the Financed Vehicle or Financed
Vehicles evidenced thereby complied at the time it was originated or made and
now complies in all material respects with all legal requirements of the
jurisdiction in which it was originated or made;
(d) Binding Obligation. Each Designated Receivable represents the genuine,
------------------
legal, valid and binding payment obligation in writing of the Obligor thereon,
enforceable against the Obligor by the holder thereof in accordance with its
terms, except as enforceability may be limited by
- 4 -
<PAGE>
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights in general and by equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(e) Security Interest in Financed Vehicle. Immediately prior to the sale,
-------------------------------------
transfer and assignment thereof pursuant hereto, each Designated Receivable was
secured by a validly perfected first priority security interest in the related
Financed Vehicle or, in the event any such Receivable was secured by more than
one Financed Vehicle, in each related Financed Vehicle, each in favor of NFC as
secured party, or all necessary and appropriate action had been commenced that
will result, within 100 days following the applicable Cutoff Date, in the valid
perfection of a first priority security interest in each related Financed
Vehicle in favor of NFC as secured party in each case (except for first priority
security interests which may exist in any accessions not financed by NFC);
(f) Receivables In Force. No Designated Receivable has been satisfied,
--------------------
subordinated or rescinded, and no Financed Vehicle securing any Designated
Receivable has been released from the Lien of the related Receivable in whole or
in part;
(g) No Waiver. Since the applicable Cutoff Date, no provision of any
---------
Designated Receivable has been waived, altered or modified in any respect;
(h) No Amendments. Since the applicable Cutoff Date, no Designated
-------------
Receivable has been amended or otherwise modified such that the total number of
the Obligor's Scheduled Payments is increased or the Starting Receivable Balance
thereof is increased;
(i) No Defenses. No right of rescission, setoff, counterclaim or defense
-----------
has been asserted or threatened with respect to any Designated Receivable;
(j) No Liens. There are, to NFC's knowledge, no Liens or claims that have
--------
been filed for work, labor or materials affecting any Financed Vehicle securing
any Designated Receivable that are or may be prior to, or equal or coordinate
with, the security interest in each Financed Vehicle granted by the Designated
Receivable (except for Liens or claims which may exist in any accessions to the
Financed Vehicles not financed by NFC);
(k) No Default. There has been no default, breach, violation or event
----------
permitting acceleration under the terms of any Designated Receivable, and no
event has occurred and is continuing that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Designated Receivable, and NFC has not waived any of the
foregoing, in each case except for payments on any Designated Receivables which
are not more than 60 days past due (measured from the date of any Scheduled
Payment) as of the applicable Cutoff Date;
(l) Insurance. Each Obligor on a Designated Receivable is required to
---------
maintain a physical damage insurance policy for each Financed Vehicle of the
type that NFC requires in accordance with its customary underwriting standards
for the purchase of medium and heavy duty truck, bus and trailer receivables,
unless NFC has in accordance with its customary procedures permitted an Obligor
to self-insure such Financed Vehicle;
- 5 -
<PAGE>
(m) Good Title. No Designated Receivable has been sold, transferred,
----------
assigned or pledged by NFC to any Person other than NFRRC; immediately prior to
the conveyance of any Designated Receivables pursuant to this Agreement, NFC had
good and marketable title thereto, free of any Lien (except for any Lien which
may exist in accessions to the Financed Vehicles not financed by NFC); and, upon
execution and delivery of this Agreement and the related Assignment by NFC, and
satisfaction of the conditions set forth in Section 4.02 hereof relating to such
Designated Receivables, NFRRC shall have all of the right, title and interest of
NFC in and to the Designated Receivables and the Related Security, free of any
Lien (except for any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC);
(n) Lawful Assignment. No Designated Receivable was originated in, or is
-----------------
subject to the laws of, any jurisdiction the laws of which would make unlawful
the sale, transfer and assignment of such Designated Receivable under this
Agreement or any Further Transfer and Servicing Agreements;
(o) All Filings Made. All filings necessary under the UCC in any
----------------
jurisdiction to give NFRRC a first priority perfected security or ownership
interest in the Designated Receivables and the Related Security (to the extent
it constitutes Code Collateral) shall have been made, and the Designated
Receivables constitute Code Collateral;
(p) One Original. There is only one original executed copy of each
------------
Designated Receivable;
(q) No Documents or Instruments. No Designated Receivable, or constituent
---------------------------
part thereof, constitutes a "negotiable instrument" or "negotiable document of
title" (as such terms are used in the UCC);
(r) Maturity. Each Designated Receivable has an original term to maturity
--------
of not less than 12 months and not greater than 84 months and, as of the related
Cutoff Date, had a remaining term to maturity of not less than 12 months and not
greater than 72 months;
(s) Annual Percentage Rate. The Annual Percentage Rate of each Designated
----------------------
Receivable is not less than 7.500%;
(t) Scheduled Payments; Delinquency. As of the applicable Cutoff Date,
--------------------------------
each Designated Receivable being purchased on the Closing Date had a first
scheduled payment that was due on or before October 31, 1995; as of the
applicable Cutoff Date, each Designated Receivable had a first scheduled payment
that was due on or before the last day of the Monthly Period next following the
Monthly Period in which such Cutoff Date occurs; as of the applicable Cutoff
Date, no Designated Receivable had a payment that was more than 60 days past
due; as of the related Purchase Date, no Designated Receivable had a final
scheduled payment that is due later than March 31, 2002.
(u) Vehicles. Each Financed Vehicle to which a Designated Receivable
--------
relates was a new or used medium or heavy duty truck, bus or trailer at the time
the related Obligor executed the Retail Note;
- 6 -
<PAGE>
(v) Origin. Each Designated Receivable was originated in the United
------
States;
(w) Beginning Receivable Balance. The Starting Receivable Balance of each
----------------------------
Designated Receivable as of its applicable Cutoff Date is not less than $1,000;
(x) Concentration. After giving effect to the transfer of such Designated
-------------
Receivables to the Trust under the Further Transfer and Servicing Agreements,
(i) the aggregate Receivables Balance of all Receivables from a single Obligor
is not more than 2% of the aggregate Receivables Balance of all Receivables in
the Trust, (ii) the weighted average Annual Percentage Rate of the Receivables
in the Trust shall not be less than 9.75% and (iii) the weighted average
remaining maturity of the Receivables in the Trust shall not be greater than 51
months
(y) Selection Criteria. The Designated Receivables were selected on a
------------------
random basis from all Retail Notes satisfying the selection criteria described
herein, and no selection procedures believed to be adverse to NFRRC or to
holders of the Securities issued under the Further Transfer and Servicing
Agreements were utilized in selecting the Designated Receivables from those
Retail Notes of NFC which meet the selection criteria under this Agreement; and
(z) No Government Contracts. No Obligor under any of the Designated
-----------------------
Receivables is a governmental authority of the United States or any state or
political subdivision thereof.
SECTION 3.02. Additional Representations and Warranties of NFC. NFC
------------------------------------------------
hereby represents and warrants to NFRRC as of the date hereof, and as of each
Purchase Date occurring hereunder and as of the related closing under the
Further Transfer and Servicing Agreements, in its capacity as the seller of the
Receivables hereunder, that:
(a) Organization and Good Standing. NFC has been duly organized and is
------------------------------
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire and own the Receivables;
(b) Due Qualification. NFC is duly qualified to do business as a foreign
-----------------
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business requires or shall require such qualification;
(c) Power and Authority. NFC has the power and authority to execute and
-------------------
deliver this Agreement and to carry out its terms; NFC has full power and
authority to sell and assign the Designated Receivables and the Related Security
to NFRRC, has duly authorized such sale and assignment to NFRRC by all necessary
corporate action; and the execution, delivery and performance of this Agreement
have been duly authorized by NFC by all necessary corporate action;
(d) Valid Sale; Binding Obligation. This Agreement, together with the
------------------------------
applicable Assignment, when duly executed and delivered, shall (upon
satisfaction of the conditions set forth in Section 4.02 hereof relating to the
related Designated Receivables) constitute a valid sale, transfer and assignment
of the such Designated Receivables and Related Security, enforceable against
- 7 -
<PAGE>
creditors of and purchasers from NFC; and this Agreement, together with the
applicable Assignment, when duly executed and delivered, shall (upon
satisfaction of the conditions set forth in Section 4.02 hereof relating to such
Designated Receivables) constitute a legal, valid and binding obligation of NFC
enforceable against NFC in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(e) No Violation. The consummation of the transactions contemplated by
------------
this Agreement, and the fulfillment of the terms of this Agreement, shall not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of NFC, or any indenture, agreement,
mortgage, deed of trust or other instrument to which NFC is a party or by which
it is bound, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than this Agreement, any Assignment or
any Further Transfer and Servicing Agreement), or violate any law or, to NFC's
knowledge, any order, rule or regulation applicable to NFC of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over NFC or any of its
properties;
(f) No Proceedings. There are no proceedings or, to NFC's knowledge,
--------------
investigations pending or, to NFC's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over NFC or its properties (i) asserting the
invalidity of this Agreement or any Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
Assignment, or (iii) seeking any determination or ruling that might materially
and adversely affect the perfor mance by NFC of its obligations under, or the
validity or enforceability of, this Agreement or any Assignment; and
(g) No Consent. No permit, consent, approval or authorization of, or
----------
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by NFC of this Agreement
or any Assignment or the consummation by NFC of the transactions contemplated
hereby or thereby except as expressly contemplated herein or therein.
(h) Financial Condition. NFC is, and after giving effect to the
-------------------
transactions contemplated to occur on the date as of which this representation
is being madel be, solvent.
SECTION 3.03. Representations and Warranties of NFRRC. NFRRC hereby
---------------------------------------
represents and warrants to NFC as of the date hereof and as of each Purchase
Date:
(a) Organization and Good Standing. NFRRC has been duly organized and is
------------------------------
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire and own the Receivables;
- 8 -
<PAGE>
(b) Due Qualification. NFRRC is duly qualified to do business as a
-----------------
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification;
(c) Power and Authority. NFRRC has the power and authority to execute and
-------------------
deliver this Agreement and to carry out its terms and the execution, delivery
and performance of this Agreement have been duly authorized by NFRRC by all
necessary corporate action;
(d) No Violation. The consummation by NFRRC of the transactions
------------
contemplated by this Agreement and the fulfillment of the terms of this
Agreement shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of NFRRC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which NFRRC is a party
or by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Agreement, any Assignment or any
Further Transfer and Servicing Agreement), or violate any law or, to NFRRC's
knowledge, any order, rule or regulation applicable to NFRRC of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over NFRRC or any of its
properties;
(e) No Proceedings. There are no proceedings or, to NFRRC's knowledge,
--------------
investigations pending or, to NFRRC's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over NFRRC or its properties (i) asserting
the invalidity of this Agreement or any Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by NFRRC of its obligations under, or the validity or
enforceability of, this Agreement or any Assignment;
(f) Binding Obligation. This Agreement shall constitute a legal, valid
------------------
and binding obligation of NFRRC enforceable against NFRRC in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
and
(g) No Consent. No permit, consent, approval or authorization of, or
----------
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by NFRRC of this
Agreement, or the consummation by NFRRC of the transactions contemplated hereby
except as expressly contemplated herein.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Obligation of NFRRC. The obligation of NFRRC
---------------------------------
to purchase Designated Receivables and the Related Security hereunder on any
Purchase Date is subject to the satisfaction of the following conditions:
- 9 -
<PAGE>
(a) Representations and Warranties True. The representations and
-----------------------------------
warranties of NFC in Section 3.01 regarding such Designated Receivables and the
Related Security being transferred on such Purchase Date, and the
representations and warranties of NFC in Section 3.02, shall be true and correct
as of such Purchase Date, with the same effect as if then made, and NFC shall
have performed all obligations to be performed by it hereunder on or prior to
such Purchase Date.
(b) No Repurchase Event. No Repurchase Event (as defined in Section 5.04
-------------------
below) shall have occurred on or prior to such Purchase Date with respect to any
of such Designated Receivables.
(c) Computer Files Marked. NFC shall, at its own expense, on or prior to
---------------------
such Purchase Date, (i) indicate in its computer files created in connection
with such Designated Receivables that such Designated Receivables have been sold
to NFRRC pursuant to this Agreement and the related Assignment and (ii) deliver
to NFRRC the Schedule of Receivables certified by an officer of NFC to be true,
-----------------------
correct and complete (as supplemented by the schedules to the related Subsequent
Transfer Assignment).
(d) Documents to be Delivered by NFC.
--------------------------------
(i) The Assignment. On such Purchase Date, NFC shall execute and
--------------
deliver to NFRRC the Assignment of the Designated Receivables and the
Related Security.
(ii) Evidence of UCC Filing. On or prior to such Purchase Date, NFC
----------------------
shall record and file, at its own expense, a UCC-1 financing statement in
each jurisdiction in which required by applicable law, executed by NFC as
seller or debtor, naming NFRRC as purchaser or secured party, naming such
Designated Receivables and Related Security as collateral, meeting the
requirements of the laws of each such jurisdiction and in such manner as is
necessary to perfect under the UCC the sale, transfer, assignment and
conveyance of such Designated Receivables and the Related Security (to the
extent it constitutes Code Collateral) to NFRRC. NFC shall deliver a file-
stamped copy, or other evidence satisfactory to NFRRC of such filing, to
NFRRC on or prior to such Purchase Date.
(iii) Other Documents. On such Purchase Date, NFC shall provide such
---------------
other documents as NFRRC may reasonably request.
(e) Funding Period. The Funding Period shall not have terminated.
--------------
(f) Other Transactions. The related transactions contemplated by the
------------------
Further Transfer and Servicing Agreements shall be consummated on or prior to
each Closing (and all conditions precedent thereto shall be satisfied) to the
extent that such transactions are intended to be substan tially contemporaneous
with the transactions hereunder.
SECTION 4.02. Conditions To Obligation of NFC. The obligation of NFC to
-------------------------------
sell the Designated Receivables to NFRRC hereunder on any Purchase Date is
subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
-----------------------------------
warranties of NFRRC hereunder shall be true and correct as of such Purchase
Date, with the same effect as if then made,
- 10 -
<PAGE>
and NFRRC shall have performed all obligations to be performed by it hereunder
on or prior to such Purchase Date.
(b) Purchase Price. On each Purchase Date, NFRRC shall pay to NFC the
--------------
Purchase Price, payable on such date as provided in Section 2.02 of this
Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
NFC agrees with NFRRC as follows:
SECTION 5.01. Conflicts With Further Transfer and Servicing Agreements.
--------------------------------------------------------
To the extent that any provision of Sections 5.02 through 5.04 of this Agreement
conflicts with any provision of the Further Transfer and Servicing Agreements,
the Further Transfer and Servicing Agreements shall govern.
SECTION 5.02. Protection of Title.
-------------------
(a) Filings. NFC shall execute and file such financing statements and
-------
cause to be executed and filed such continuation and other statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of NFRRC under this Agreement in the
Receivables and the Related Security and in the proceeds thereof. NFC shall
deliver (or cause to be delivered) to NFRRC file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Name Change. NFC shall not change its name, identity or corporate
-----------
structure in any manner that would, could or might make any financing statement
or continuation statement filed by NFC in accordance with Section 5.02(a)
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given NFRRC at least 60 days prior written notice thereof and
shall file such financing statements or amendments as may be necessary to
continue the perfection of NFRRC's security interest in the Receivables and the
Related Security.
(c) Executive Office; Maintenance of Offices. NFC shall give NFRRC at
----------------------------------------
least 60 days prior written notice of any relocation of its principal executive
office if, as a result of such reloca tion, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed financing
or continuation statement or of any new financing statement. NFC shall at all
times maintain each office from which it services Receivables and its principal
executive office within the United States of America.
SECTION 5.03. Other Liens or Interests. Except for the conveyances
------------------------
hereunder and as contemplated by the Further Transfer and Servicing Agreements,
NFC shall not sell, pledge, assign or transfer the Receivables and the Related
Security to any other Person, or grant, create, incur, assume or suffer to exist
any Lien (except any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC) on any interest therein, and NFC shall defend the right,
title and interest of NFRRC in, to and under the Receivables and Related
Security against all claims of third parties claiming through or under NFC.
- 11 -
<PAGE>
SECTION 5.04. Repurchase Events. By its execution of the Further Transfer
-----------------
and Servicing Agreements to which it is a party, NFC shall be deemed to
acknowledge the assignment by NFRRC of such of its right, title and interest in,
to and under this Agreement to the Issuer as shall be provided in the Further
Transfer and Servicing Agreements. NFC hereby covenants and agrees with NFRRC
for the benefit of NFRRC and the Interested Parties, that in the event of a
breach of any of NFC's representations and warranties contained in Section 3.01
hereof with respect to any Receivable (a "REPURCHASE EVENT") as of the second
Accounting Date following NFC's discovery or its receipt of notice of breach
(or, at NFC's election, the first Accounting Date following such discovery),
unless such breach shall have been cured in all material respects, NFC will
repurchase such Receivable from the Issuer (if the Issuer is then the Owner of
such Receivable) on the related Distribution Date for an amount equal to the
Warranty Payment, without further notice from NFRRC hereunder. Upon the
occurrence of a Repurchase Event with respect to a Receivable for which NFRRC is
the Owner, NFC agrees to repurchase such Receivable from NFRRC for an amount and
upon the same terms as NFC would be obligated to repurchase such Receivable from
the Issuer if the Issuer was then the Owner thereof, and upon payment of such
amount, NFC shall have such rights with respect to such Receivable as if NFC had
purchased such Receivable from the Issuer as the Owner thereof. It is understood
and agreed that the obligation of NFC to repurchase any Receivable as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against NFC for such breach available to NFRRC or any
Interested Party.
SECTION 5.05. Indemnification. NFC shall indemnify NFRRC for any
---------------
liability as a result of the failure of a Receivable to be originated in
compliance with all requirements of law and for any breach of any of its
representations and warranties contained herein. This indemnity obligation
shall be in addition to any obligation that NFC may otherwise have.
SECTION 5.06. Further Assignments. NFC acknowledges that NFRRC may,
-------------------
pursuant to the Further Transfer and Servicing Agreements, sell Receivables to
the Issuer and assign its rights hereunder to the Issuer, subject to the terms
and conditions of the Further Transfer and Servicing Agreements, and that the
Issuer may in turn further pledge, assign or transfer its rights in Receivables
and this Agreement. NFC further acknowledges that NFRRC may assign its rights
under the Custodian Agreement to the Issuer.
SECTION 5.07. Pre-Closing Collections. Within two Business Days after
-----------------------
each Closing, NFC shall transfer to the account or accounts designated by NFRRC
(or by the Issuer under the Further Transfer and Servicing Agreements) all
collections (from whatever source) on or with respect to the Designated
Receivables and the Related Security conveyed by NFC to NFRRC at the time of
such Closing pursuant to Section 2.01.
SECTION 5.08. Limitation on Transfer of NITC Purchase Obligations. NFRRC
---------------------------------------------------
acknowledges and agrees that the rights pursuant to the NITC Purchase
Obligations are personal to NFC, and only the proceeds of such rights have been
assigned to NFRRC. NFRRC is not and is not intended to be a third-party
beneficiary of such rights and, accordingly, such rights will not be exercisable
by, enforceable by or for the benefit of, or preserved for the benefit of,
NFRRC.
SECTION 5.09. Sale Treatment. NFC intends to treat each transfer and
--------------
assignment described herein as a sale for accounting and tax purposes.
- 12 -
<PAGE>
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Amendment. This Agreement may be amended from time to time
---------
(subject to any expressly applicable amendment provision of the Further Transfer
and Servicing Agreements) by a written amendment duly executed and delivered by
NFC and NFRRC. Prior to the execution of any such amendment, NFC shall furnish
written notification of the substance of such amendment to each of the Rating
Agencies.
SECTION 6.02. Survival. The representations, warranties and covenants of
--------
NFC set forth in Article III and Article V of this Agreement shall remain in
full force and effect and shall survive each Closing and each closing under the
Further Transfer and Servicing Agreements.
SECTION 6.03. Notices. All demands, notices and communications under
-------
this Agreement shall be delivered as specified in Appendix B to the Pooling and
----------
Servicing Agreement.
SECTION 6.04. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE ASSIGNMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT
PROVISION OR RULE (WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF ILLINOIS.
SECTION 6.05. Waivers. No failure or delay on the part of NFRRC in
-------
exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy.
SECTION 6.06. Costs and Expenses. NFC agrees to pay all reasonable out-
------------------
of-pocket costs and expenses of NFRRC, including fees and expenses of counsel,
in connection with the perfection as against third parties of NFRRC's right,
title and interest in, to and under the Receivables and the enforcement of any
obligation of NFC hereunder.
SECTION 6.07. Confidential Information. NFRRC agrees that it shall
------------------------
neither use nor disclose to any person the names and addresses of the Obligors,
except in connection with the enforcement of NFRRC's rights hereunder, under the
Receivables, under the Further Transfer and Servicing Agreements or as required
by law.
SECTION 6.08. Headings. The various headings in this Agreement are for
--------
purposes of reference only and shall not affect the meaning or interpretation of
any provision of this Agreement.
SECTION 6.09. Counterparts. This Agreement 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.
- 13 -
<PAGE>
SECTION 6.10. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed enforceable to the fullest extent permitted, and if not
so permitted, shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of any
Securities or rights of any Owner.
SECTION 6.11. Further Assurances. NFC and NFRRC agree to do and perform,
------------------
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION 6.12. No Third-Party Beneficiaries. This Agreement shall inure to
----------------------------
the benefit of and be binding upon the parties hereto, the Owners and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person shall have any right or obligation
hereunder.
SECTION 6.13. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
[END OF PAGE; SIGNATURE PAGE FOLLOWS]
- 14 -
<PAGE>
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
and year first above written.
NAVISTAR FINANCIAL CORPORATION
By: /s/ R. Wayne Cain
----------------------------------
R. Wayne Cain, Vice President
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: /s/ R. Wayne Cain
---------------------------------
R. Wayne Cain, Vice President
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
------------------
For value received, in accordance with the Purchase Agreement, dated as of
November 1, 1995 (the "Purchase Agreement"), between Navistar Financial
Corporation, a Delaware corporation ("NFC"), and Navistar Financial Retail
Receivables Corporation a Delaware corporation ("NFRRC"), NFC does hereby sell,
assign, transfer and otherwise convey unto NFRRC, without recourse, all right,
----------------
title and interest of NFC in, to and under (i) the Receivables listed on
Schedule I hereto, (having an aggregate Starting Receivables Balance of
$_______) (the "DESIGNATED RECEIVABLES") and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after _________________, 199_
(the "CUTOFF DATE"); (ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Designated Receivables and, to the extent
permitted by law, any accessions thereto which are financed by NFC; (iii) the
benefits of any lease assignments with respect to the Financed Vehicles; (iv)
any proceeds from any Insurance Policies with respect to the Designated
Receivables; (v) any proceeds from Dealer Liability with respect to the
Designated Receivables, proceeds from any NITC Purchase Obligations with respect
to the Designated Receivables (subject to the limitations set forth in Section
5.08 of the Purchase Agree ment) and proceeds from any Guaranties of Designated
Receivables; and (vi) any proceeds of the property described in clauses (i),
(ii) and (iii) above.
The foregoing sale does not constitute and is not intended to result in any
assumption by NFRRC of any obligation of the undersigned to the Obligors,
Dealers, insurers or any other Person in connection with the Designated
Receivables, the agreements with Dealers, any Insurance Policies or any
agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of November 1, 1995.
NAVISTAR FINANCIAL CORPORATION
By: _________________________________
Name:
Title:
- 2 -
<PAGE>
EXHIBIT 10.2
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
NAVISTAR FINANCIAL 1995-B OWNER TRUST
ISSUER
DATED AS OF NOVEMBER 1, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS..........................................................1
SECTION 1.01. Definitions....................................................1
-----------
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE
OF CERTIFICATES 2
SECTION 2.01. Conveyance of Initial Receivables..............................2
---------------------------------
SECTION 2.02. Conveyance of Subsequent Receivables...........................3
------------------------------------
SECTION 2.03. Custody of Receivable Files....................................6
---------------------------
SECTION 2.04. Acceptance by Issuer; Limitation on Transfer
--------------------------------------------
of NITC Purchase Obligations...................................6
----------------------------
SECTION 2.05. Representations and Warranties as to the Receivables...........7
----------------------------------------------------
SECTION 2.06. Repurchase of Receivables Upon Breach of Warranty..............7
-------------------------------------------------
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES..................................8
SECTION 3.01. Duties of the Servicer.........................................8
----------------------
SECTION 3.02. Collection of Receivables Payments.............................9
----------------------------------
SECTION 3.03. [RESERVED]. ...................................................9
SECTION 3.04. Realization Upon Liquidating Receivables.......................9
----------------------------------------
SECTION 3.05. Maintenance of Insurance Policies..............................9
---------------------------------
SECTION 3.06. Maintenance of Security Interests in Vehicles..................9
---------------------------------------------
SECTION 3.07. Covenants of the Servicer.....................................10
-------------------------
SECTION 3.08. Purchase of Receivables Upon Breach of Covenant...............10
-----------------------------------------------
SECTION 3.09. Total and Supplemental Servicing Fees; Payment of
-------------------------------------------------
Certain Expenses by Servicer..................................10
----------------------------
SECTION 3.10. Servicer's Certificate........................................11
----------------------
SECTION 3.11. Application of Collections....................................11
--------------------------
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS............................11
SECTION 4.01. Annual Statement as to Compliance: Notice of
--------------------------------------------
Servicer Default..............................................11
----------------
i
<PAGE>
SECTION 4.02. Annual Independent Accountants' Report....................... 12
--------------------------------------
SECTION 4.03. Access to Certain Documentation and Information
-----------------------------------------------
Regarding Receivables........................................ 13
---------------------
SECTION 4.04. Amendments to Schedule of Receivables........................ 13
-------------------------------------
SECTION 4.05. Assignment of Administrative Receivables and Warranty
-----------------------------------------------------
Receivables.................................................. 13
-----------
SECTION 4.06. Distributions................................................ 14
-------------
SECTION 4.07. Reserve Account.............................................. 15
---------------
SECTION 4.08. Net Deposits................................................. 16
------------
SECTION 4.09. Statements to Securityholders................................ 17
-----------------------------
SECTION 4.10. Information Provided to Rating Agencies...................... 18
---------------------------------------
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES............................ 19
SECTION 5.01. Establishment of Accounts.................................... 19
-------------------------
SECTION 5.02. Pre-Funding Account.......................................... 22
-------------------
SECTION 5.03. Negative Carry Account....................................... 22
----------------------
SECTION 5.04. Collections.................................................. 23
-----------
SECTION 5.05. Investment Earnings and Supplemental Servicing Fees.......... 23
---------------------------------------------------
SECTION 5.06. Monthly Advances............................................. 24
----------------
SECTION 5.07. Additional Deposits.......................................... 24
-------------------
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER............................................. 24
SECTION 6.01. Representations and Warranties of the Seller and the
----------------------------------------------------
Servicer..................................................... 24
--------
SECTION 6.02. Liability of Seller.......................................... 27
-------------------
SECTION 6.03. Merger or Consolidation of, or Assumption of the
-------------------------------------------------
Obligations of, Seller; Amendment of Certificate
------------------------------------------------
of Incorporation............................................. 27
----------------
SECTION 6.04. Limitation on Liability of Seller and Others................. 28
--------------------------------------------
SECTION 6.05. Seller May Own Securities.................................... 28
-------------------------
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS......................................... 28
SECTION 7.01. Liability of Servicer; Indemnities........................... 28
----------------------------------
SECTION 7.02. Merger or Consolidation of, or Assumption of the Obligations.of,
---------------------------------------------------------------
the Servicer................................................. 29
------------
SECTION 7.03. Limitation on Liability of Servicer and Others............... 30
----------------------------------------------
SECTION 7.04. Delegation of Duties......................................... 31
--------------------
SECTION 7.05. Servicer Not to Resign....................................... 31
----------------------
ii
<PAGE>
ARTICLE VIII
DEFAULT.....................................................................31
SECTION 8.01. Servicer Defaults.............................................31
-----------------
SECTION 8.02. Consequences of a Servicer Default............................32
----------------------------------
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor............32
--------------------------------------------------
SECTION 8.04. Notification to Securityholders...............................33
-------------------------------
SECTION 8.05. Waiver of Past Defaults.......................................33
-----------------------
SECTION 8.06. Repayment of Advances.........................................33
---------------------
ARTICLE IX
TERMINATION................................................................34
SECTION 9.01. Optional Purchase of All Receivables.........................34
------------------------------------
SECTION 9.02. Sale of Assets; Termination..................................34
---------------------------
ARTICLE X
MISCELLANEOUS PROVISIONS....................................................36
SECTION 10.01. Amendment....................................................36
---------
SECTION 10.02. Protection of Title to Owner Trust Estate....................37
-----------------------------------------
SECTION 10.03. Notices......................................................39
-------
SECTION 10.04. Governing Law................................................39
-------------
SECTION 10.05. Severability of Provisions...................................39
--------------------------
SECTION 10.06. Assignment...................................................39
----------
SECTION 10.07. Third-Party Beneficiaries....................................39
-------------------------
SECTION 10.08. Separate Counterparts........................................39
---------------------
SECTION 10.09. Headings and Cross-References................................39
-----------------------------
SECTION 10.10. Assignment to Indenture Trustee..............................40
-------------------------------
SECTION 10.11. No Petition Covenants........................................40
---------------------
SECTION 10.12. Limitation of Liability of the Trustees......................40
---------------------------------------
SECTION 10.13. Business Day Certificate.....................................40
------------------------
EXHIBIT A
Form of Initial Assignment..................................................43
EXHIBIT B
Form of Subsequent Assignment............................................... 3
EXHIBIT C
Locations of Schedule of Receivables........................................ 3
iii
<PAGE>
APPENDIX A
PART I - DEFINITIONS.........................................................1
PART II - RULES OF CONSTRUCTION.............................................27
APPENDIX B
NOTICE ADDRESSES AND PROCEDURES..............................................1
iv
<PAGE>
EXHIBIT A
Form of Initial Assignment
EXHIBIT B
Form of Subsequent Assignment
EXHIBIT C
Locations of Schedule of Receivables
APPENDIX A
Defined Terms and Rules of Construction
APPENDIX B
Notice Addresses and Procedures
v
<PAGE>
K&E DRAFT: 9/28/95
THIS POOLING AND SERVICING AGREEMENT is made as of November 1, 1995 by and
among Navistar Financial Corporation, a Delaware corporation ("NFC" and, in its
capacity as Servicer hereunder, the "SERVICER"), Navistar Financial Retail
Receivables Corporation, a Delaware corporation ("NFRRC" and, in its capacity as
the Seller hereunder, the "SELLER"), and Navistar Financial 1995-B Owner Trust,
a Delaware business trust (the "ISSUER").
WHEREAS, NFC has sold the Initial Receivables, and has agreed to sell
Subsequent Receivables, to the Seller pursuant to the Purchase Agreement.
WHEREAS, the Seller desires to sell the Initial Receivables, and
Subsequent Receivables (collectively, the "RECEIVABLES"), to the Issuer in
exchange for the Securities and the payment of such funds withdrawn from the
Pre-Funding Account pursuant to the terms of this Agreement, and the Servicer
desires to perform the servicing obligations set forth herein for and in
consideration of the fees and other benefits set forth in this Agreement.
WHEREAS, the Seller and the Issuer wish to set forth the terms pursuant to
which the Receivables are to be sold by the Seller to the Issuer and serviced by
the Servicer.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in the above
-----------
recitals and in this Agreement are defined in and shall have the respective
meanings assigned them in Part I of Appendix A to this Agreement. All
----------
references herein to "the Agreement" or "this Agreement" are to this Pooling and
Servicing Agreement as it may be amended, supplemented (whether by Subsequent
Transfer Assignment or otherwise) or modified from time to time, the exhibits
hereto and the capitalized terms used herein which are defined in such Appendix
--------
A, and all references herein to Articles, Sections and subsections are to
- -
Articles, Sections or subsections of this Agreement unless otherwise specified.
The rules of construction set forth in Part II of such Appendix A shall be
----------
applicable to this Agreement.
1
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of the
---------------------------------
Issuer's delivery of the Securities to, or upon the order of, the Seller, the
Seller does hereby enter into this Agreement and agree to fulfill all of its
obligations hereunder and to sell, transfer, assign and otherwise convey to the
Issuer, without recourse, pursuant to an assignment in the form attached hereto
------- --------
as Exhibit A, all right, title and interest of the Seller in, to and under:
---------
(a) the Initial Receivables and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the Initial Cutoff Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Initial Receivables and, to the extent permitted by law, any
accessions thereto which are financed by NFC;
(c) the benefits of any lease assignments with respect to the related
Financed Vehicles;
(d) any proceeds from any Insurance Policies with respect to the Initial
Receivables;
(e) any proceeds from Dealer Liability with respect to the Initial
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Initial Receivables (subject to the limitations set forth in Section 2.04) and
proceeds from any Guaranties of Initial Receivables;
(f) the Purchase Agreement and the Custodian Agreement, including the right
of the Seller to cause NFC to perform its obligations thereunder (including the
obligation to repurchase Initial Receivables under certain circumstances); and
(g) any proceeds of the property described in clauses (a), (b), (c) and (f)
above.
It is the intention of the Seller that the transfer and assignment contemplated
by this Section 2.01 shall constitute a sale of the Initial Receivables from the
Seller to the Issuer and the beneficial interest in and title to the assets
conveyed pursuant to this Section 2.01 shall not be part of the Seller's estate
in the event of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. Within two Business Days after the Closing Date, the
Seller shall cause to be deposited into the Collection Account all collections
(from whatever source) on or with respect to the assets conveyed pursuant to
this Section 2.01 received by the Seller pursuant to Section 5.07 of the
Purchase Agreement. The Seller and the Servicer intend to treat such transfer
and assignment as a sale for accounting and tax purposes. Notwithstanding the
foregoing, in the event a court of competent jurisdiction determines that such
transfer and assignment did not constitute such a sale or that such beneficial
interest is a part of the Seller's estate, then (i) the Seller shall be deemed
to have granted to the Issuer a first priority perfected security interest in
all of the Seller's right title and interest in, to and under the assets
conveyed pursuant to this Section 2.01, and the Seller hereby
2
<PAGE>
grants such security interest and (ii) the assets conveyed pursuant to this
Section 2.01 shall be deemed to include all rights, powers and options (but none
of the obligations, if any) of the Seller under any agreement or instrument
included in the assets conveyed pursuant to this Section 2.01, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Initial Receivables
included in the assets conveyed pursuant to this Section 2.01 and all other
monies payable under the Initial Receivables conveyed pursuant to this Section
2.01, to give and receive notices and other communications, to make waivers or
other agreements, to exercise all rights and options, to bring Proceedings in
the name of the Seller or otherwise and generally to do and receive anything
that the Seller is or may be entitled to do or receive under or with respect to
the assets conveyed pursuant to this Section 2.01. For purposes of such grant,
this Agreement shall constitute a security agreement under the UCC.
SECTION 2.02. Conveyance of Subsequent Receivables. (a) Subject to
-------------------------------------
satisfaction of the conditions set forth in Section 2.02(b) below, in
consideration of the Issuer's delivery on the related Subsequent Transfer Date
to or upon the order of the Seller of the amount described in Section 5.02(a) to
be delivered to the Seller, the Seller does hereby agree to sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse, pursuant
------- --------
to an assignment in substantially the form of Exhibit B (a "Subsequent Transfer
---------
Assignment"), all right, title and interest of the Seller in, to and under:
(i) the Subsequent Receivables described in such Subsequent Transfer
Assignment and all monies paid thereon (including Liquidation Proceeds) and due
thereunder on and after the applicable Cutoff Date;
(ii) the security interests in the Financed Vehicles granted by Obligors
pursuant to such Subsequent Receivables and, to the extent permitted by law, any
accessions thereto which are financed by NFC;
(iii) the benefits of any lease assignments with respect to the related
Financed Vehicles;
(iv) any proceeds from any Insurance Policies with respect to such
Subsequent Receivables;
(v) any proceeds from Dealer Liability with respect to such Subsequent
Receivables, proceeds from any NITC Purchase Obligations with respect to such
Subsequent Receivables (subject to the limitations set forth in Section 2.04)
and proceeds from any Guaranties of Subsequent Receivables;
(vi) the Purchase Agreement and the Custodian Agreement, including the
right of the Seller to cause NFC to perform its obligations thereunder
(including the obligation to repurchase Subsequent Receivables under certain
circumstances); and
(vii) any proceeds of the property described in clauses (i), (ii), (iii)
and (vi) above.
3
<PAGE>
It is the intention of the Seller that each transfer and assignment contemplated
by this Section 2.02 shall constitute a sale of the related Subsequent
Receivables from the Seller to the Issuer and the beneficial interest in and
title to the assets conveyed pursuant to the Subsequent Transfer Assignment
shall not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. Within
two Business Days after Subsequent Transfer Date, the Seller shall cause to be
deposited into the Collection Account all collections (from whatever source) on
or with respect to the assets conveyed pursuant to the related Subsequent
Transfer Assignment received by the Seller pursuant to Section 5.07 of the
Purchase Agreement. The Seller and the Servicer intend to treat each such
transfer and assignment as a sale for accounting and tax purposes.
Notwithstanding the foregoing, in the event a court of competent jurisdiction
determines that any such transfer and assignment did not constitute such a sale
or that such beneficial interest is a part of the Seller's estate, then (i) the
Seller shall be deemed to have granted to the Issuer a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the assets conveyed pursuant to the related Subsequent Transfer
Assignment, and the Seller hereby grants such security interest and (ii) the
assets conveyed pursuant to such Subsequent Transfer Assignment shall be deemed
to include all rights, powers and options (but none of the obligations, if any)
of the Seller under any agreement or instrument included in the assets conveyed
pursuant to such Subsequent Transfer Assignment, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Subsequent Receivables included in the
assets conveyed pursuant to such Subsequent Transfer Assignment and all other
monies payable under the Subsequent Receivables conveyed pursuant to such
Subsequent Transfer Assignment, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Seller or otherwise and
generally to do and receive anything that the Seller is or may be entitled to do
or receive under or with respect to the assets conveyed pursuant to such
Subsequent Transfer Assignment. For purposes of such grant, each such
Subsequent Transfer Assignment, together with this Agreement, shall constitute a
security agreement under the UCC.
(b) The Seller shall transfer to the Issuer Subsequent Receivables and
the other property and rights related thereto described in Section 2.02(a) above
only upon the satisfaction of each of the following conditions precedent on or
prior to the related Subsequent Transfer Date:
(i) the Funding Period shall not have terminated;
(ii) each of the representations and warranties made by the Seller
pursuant to Section 2.05 with respect to such Subsequent Receivables shall be
true and correct as of the related Subsequent Transfer Date with the same effect
as if then made, and the Seller shall have performed all obligations to be
performed by it hereunder on or prior to such Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Rating Agencies a duly executed Subsequent Transfer
Assignment, including a schedule of such Subsequent Receivables (which schedule
shall be deemed to supplement the Schedule of Receivables);
-----------------------
4
<PAGE>
(iv) the applicable Reserve Account Initial Deposit for such Subsequent
Transfer Date shall have been deposited in the Reserve Account pursuant to
Section 5.02(a)(ii);
(v) the Seller shall, at its own expense, on or prior to each Subsequent
Transfer Date indicate in its computer files that the Subsequent Receivables
conveyed on such date have been sold to the Issuer pursuant to this Agreement
and the related Subsequent Transfer Assignment;
(vi) the Seller shall have taken any action required to maintain the first
perfected ownership interest of the Issuer in the Owner Trust Estate and the
first perfected security interest of the Indenture Trustee in the Collateral;
(vii) The Receivables in the Trust (after giving effect to the conveyance
of the Subsequent Receivables to the Trust on such Subsequent Transfer Date)
shall meet the following criteria: (A) the weighted average Annual Percentage
Rate of the Receivables in the Trust shall not be less than 9.75% and (B) the
weighted average remaining maturity of the Receivables in the Trust shall not be
greater than 51 months;
(viii) the Seller shall have delivered to the Indenture Trustee and the
Owner Trustee an Officers' Certificate confirming the satisfaction of the
conditions specified in this Section 2.02(b);
(ix) the Seller shall have delivered to the Rating Agencies an Opinion of
Counsel with respect to the transfer of such Subsequent Receivables
substantially in the form of the Opinion of Counsel delivered to the Rating
Agencies on the Closing Date;
(x) The Seller shall have delivered to the Owner Trustee and the Indenture
Trustee written confirmation from an independent public accounting firm that, as
of the applicable Cutoff Date, such Subsequent Receivables satisfied the
eligibility criteria described in Sections 3.01(a)(v), (r), (s), (t), (w) and
(x) of the Purchase Agreement; and
(xi) Standard & Poor's Ratings Group ("S&P") shall have notified the Seller
in writing that, following the addition of all such Subsequent Receivables to
the Trust, the Notes and the Certificates will be rated by S&P in the same
rating category as they were rated by S&P prior to such addition.
(c) The Seller covenants to transfer to the Issuer pursuant to Section
2.02(a) before the termination of the Funding Period, Subsequent Receivables
with an aggregate Starting Receivable Balance equal to $70,500,316.57. If on
the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, the first Distribution Date
following the end of the Funding Period) the Pre-Funded Amount is equal to or
greater than $100,000, the Seller shall be obligated to pay to the Issuer on the
Transfer Date immediately preceding such Distribution Date an amount equal to
the sum of the Noteholders' Prepayment Premium with respect to each class of
Notes and the Certificateholders' Prepayment Premium or
5
<PAGE>
such lesser amount that the Seller actually receives from NFC under Section 2.04
of the Purchase Agreement in respect of NFC's breach thereof; provided, however,
-------- -------
that the foregoing shall be the sole remedy of the Issuer, the Owner Trustee,
the Indenture Trustee, the Noteholders or the Certificateholders with respect to
a failure of the Seller to comply with this covenant.
SECTION 2.03. Custody of Receivable Files. In connection with the sale,
---------------------------
transfer and assignment of Receivables to the Seller from NFC pursuant to the
Purchase Agreement, the Seller, simultaneously with the execution and delivery
of this Agreement, shall enter into the Custodian Agreement with the Custodian,
pursuant to which the Seller shall revocably appoint the Custodian, and the
Custodian shall accept such appointment, to act as the agent of the Seller as
Custodian of the following documents or instruments which shall be
constructively delivered to the Owner Trustee, as of the Closing Date with
respect to each Initial Receivable, and as of the related Subsequent Transfer
Date with respect to each Subsequent Receivable:
(a) the fully executed original of the Retail Note for such Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully executed by each
such Obligor on NFC's customary form, or on a form approved by NFC, for such
application;
(d) where permitted by law, the original certificate of title (when
received) and otherwise such documents, if any, that NFC keeps on file in
accordance with its customary procedures indicat ing that the Financed Vehicle
is owned by the Obligor and subject to the interest of NFC as first lienholder
or secured party; and
(e) any and all other documents that NFC keeps on file in accordance with
its customary procedures relating to the individual Receivable, Obligor or
Financed Vehicle.
Pursuant to Sections 2.01(f) and 2.02(a)(vi), the rights of the Seller under the
Custodian Agreement are being assigned to the Issuer.
SECTION 2.04. Acceptance by Issuer; Limitation on Transfer of NITC
----------------------------------------------------
Purchase Obligations. The Issuer does hereby accept all consideration conveyed
- --------------------
by the Seller pursuant to Sections 2.01 and 2.02, and declares that the Issuer
shall hold such consideration upon the trust set forth in the Trust Agreement
for the benefit of Certificateholders, subject to the terms and conditions of
the Trust Agreement, Indenture and this Agreement; provided, however, that the
-------- -------
Issuer acknowledges and agrees that (a) the rights pursuant to the NITC Purchase
Obligations are personal to NFC, and only the proceeds of such rights are being
assigned to the Issuer pursuant to the terms hereof, (b) the Issuer is not or is
not intended to be a third-party beneficiary of such rights, and (c) accordingly
such rights are not exercisable by, enforceable by or for the benefit of, or
preserved for the benefit of, the Issuer. The Issuer hereby agrees and accepts
the appointment and authorization of NFC as Servicer under Section 3.01. The
parties agree that this Agreement (including any
6
<PAGE>
Subsequent Transfer Assignments), the Indenture and the Trust Agreement
constitute the Further Transfer and Servicing Agreements for purposes of the
Purchase Agreement.
SECTION 2.05. Representations and Warranties as to the Receivables.
----------------------------------------------------
Pursuant to Sections 2.01(f) and 2.02(a)(vi), the Seller assigns to the Issuer
all of its right, title and interest in, to and under the Purchase Agreement.
Such assigned right, title and interest includes the representations and
warranties of NFC made to the Seller pursuant to Section 3.01 of the Purchase
Agreement. The Seller hereby represents and warrants to the Issuer that the
Seller has taken no action which would cause such representations and warranties
to be false in any material respect as of the Closing Date, in the case of the
Initial Receivables, and as of the related Subsequent Transfer Date, in the case
of Subsequent Receivables. The Seller further acknowledges that the Issuer
relies on the representations and warranties of the Seller under this Agreement
and of NFC under the Purchase Agreement in accepting the Receivables in trust
and executing and delivering the Securities. The foregoing representation and
warranty speaks as of the Closing Date, in the case of the Initial Receivables,
and as of the related Subsequent Transfer Date, in the case of Subsequent
Receivables, but shall survive the sale, transfer and assignment of such
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
SECTION 2.06. Repurchase of Receivables Upon Breach of Warranty. Upon
-------------------------------------------------
discovery by the Seller, the Servicer or either Trustee of a breach of any of
the representations and warranties in Section 3.01 of the Purchase Agreement
(and, with respect to subsection 3.01(j) of the Purchase Agreement, irrespective
of any limitation regarding knowledge of NFC) or in Section 2.05 or Section 6.01
of this Agreement that materially and adversely affects the interests of the
Securityholders in any Receivable, the party discovering such breach shall give
prompt written notice thereof to the others. As of the second Accounting Date
following its discovery or its receipt of notice of breach (or, at the Seller's
election, the first Accounting Date following such discovery), unless such
breach shall have been cured in all material respects, in the event of a breach
of the representations and warranties made by the Seller in Section 2.05 or
Section 6.01, the Seller shall repurchase such Receivable from the Issuer on the
related Distribution Date. The Owner Trustee shall have no affirmative duty to
conduct any investigation as to the occurrence of any event requiring the
repurchase of any Receivable pursuant to this Section 2.06.
The repurchase price to be paid by any Warranty Purchaser shall be an
amount equal to the Warranty Payment. It is understood and agreed that the
obligation of the Warranty Purchaser to repurchase any Receivable as to which a
breach has occurred and is continuing shall, if such repurchase obligations are
fulfilled, constitute the sole remedy against the Seller, the Servicer or NFC
for such breach available to any Interested Party. The Servicer acknowledges
its obligations to repurchase Administrative Receivables from the Issuer
pursuant to Section 3.08 hereof and NFC acknowledges its obligations to
repurchase Warranty Receivables pursuant to Section 5.04 of the Purchase
Agreement.
7
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer. The Servicer is hereby
----------------------
appointed and authorized to act as agent for the Owner of the Receivables and in
such capacity shall manage, service, administer and make collections on the
Receivables with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable medium and heavy duty truck,
bus and trailer receivables that it services for itself or others. The Servicer
hereby accepts such appointment and authorization and agrees to perform the
duties of Servicer with respect to the Receivables set forth herein. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information to
Obligors, policing the collateral, accounting for collections and furnishing
monthly and annual statements to the Owner of any Receivables with respect to
distributions, generating federal income tax information and performing the
other duties specified herein. Subject to the provisions of Section 3.02, the
Servicer shall follow its customary standards, policies and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner of the Receivables, pursuant to
this Section 3.01, to execute and deliver, on behalf of all Interested Parties,
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Receivables and the Financed Vehicles. The Servicer is hereby
authorized to commence in the name of the Owner of such Receivable or, to the
extent necessary, in its own name, a legal proceeding to enforce a Liquidating
Receivable as contemplated by Section 3.04, to enforce all obligations of NFC
and NFRRC, in its capacity as the Seller or otherwise, under each of the
Purchase Agreement and the Further Transfer and Servicing Agreements or to
commence or participate in a legal proceeding (including a bankruptcy
proceeding) relating to or involving a Receivable or a Liquidating Receivable.
If the Servicer commences or participates in such a legal proceeding in its own
name, the Owner of such Receivable shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant, the
Servicer is hereby authorized and empowered by the Owner of a Receivable to
execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. Any Owner of Receivables, upon the written
request of the Servicer, shall furnish the Servicer with any powers of attorney
and other documents and take any other steps which the Servicer may deem
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement and the other Further Transfer and
Servicing Agreements. Except to the extent required by the preceding two
sentences, the authority and rights granted to the Servicer in this Section 3.01
shall be nonexclusive and shall not be construed to be in derogation of the
retention by the Owner of a Receivable of equivalent authority and rights.
8
<PAGE>
SECTION 3.02. Collection of Receivables Payments. The Servicer shall
----------------------------------
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and shall
follow such collection practices, policies and procedures as it follows with
respect to comparable medium and heavy duty truck, bus and trailer receivables
that it services for itself or others. Except as provided in subsection
3.07(c), the Servicer is hereby authorized to grant extensions, rebates or
adjustments on a Receivable without the prior consent of the Owner of such
Receivable and to rewrite, in its ordinary course of business, a Receivable to
reflect the Full Prepayment of a Receivable with respect to any Financed Vehicle
without the prior consent of the Owner of such Receivable. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment charge
or any other fees that may be collected in the ordinary course of servicing such
Receivable.
SECTION 3.03. [RESERVED].
SECTION 3.04. Realization Upon Liquidating Receivables. The Servicer
----------------------------------------
shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise comparably convert the ownership of each
Financed Vehicle that it has reasonably determined should be repossessed or
otherwise converted following a default under the Receivable secured by each
such Financed Vehicle. The Servicer is authorized to follow such practices,
policies and procedures as it shall deem necessary or advisable and as shall be
customary and usual in its servicing of medium and heavy duty truck, bus and
trailer receivables that it services for itself or others, which practices,
policies and procedures may include reasonable efforts to realize upon or obtain
benefits of any lease assignments, proceeds from any Dealer Liability, proceeds
from any NITC Purchase Obligations, proceeds from any Insurance Policies and
proceeds from any Guaranties, in each case with respect to the Receivables,
selling the related Financed Vehicle or Financed Vehicles at public or private
sale or sales and other actions by the Servicer in order to realize upon such a
Receivable. The foregoing is subject to the provision that, in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with any repair or towards the repossession of such
Financed Vehicle unless it shall determine in its discretion that such repair
and/or repossession shall increase the proceeds of liquidation of the related
Receivable by an amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each
Liquidating Receivable at such time as the Receivable becomes a Liquidating
Receivable in accordance with subsection 4.06(b)(i).
SECTION 3.05. Maintenance of Insurance Policies. The Servicer shall,
---------------------------------
in accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering each Financed Vehicle as
of the execution of the related Receivable, unless the Servicer has in
accordance with its customary procedures permitted an Obligor to self-insure the
Financed Vehicle or Financed Vehicles securing such Receivable. The Servicer
shall, in accordance with its customary servicing procedures, monitor such
physical damage insurance with respect to each Financed Vehicle that secures
each Receivable.
SECTION 3.06. Maintenance of Security Interests in Vehicles. The
---------------------------------------------
Servicer shall, in accordance with its customary servicing procedures and at its
own expense, take such steps as are
9
<PAGE>
necessary to maintain perfection of the first priority security interest created
by each Receivable in the related Financed Vehicle or Financed Vehicles. The
Owner of each Receivable hereby authorizes the Servicer to re-perfect such
security interest as necessary because of the relocation of a Financed Vehicle
or for any other reason.
SECTION 3.07. Covenants of the Servicer. The Servicer hereby makes
-------------------------
the following covenants on which the Issuer is relying in acquiring the
Receivables hereunder and issuing the Securities under the other Further
Transfer and Servicing Agreements. The Servicer covenants that from and after
the Closing Date (with respect to the Initial Receivables) or the related
Subsequent Transfer Date (with respect to Subsequent Receivables):
(a) Liens in Force. Except as contemplated in this Agreement, the
--------------
Servicer shall not release in whole or in part any Financed Vehicle from the
security interest securing such related Receivable;
(b) No Impairment. The Servicer shall do nothing to impair the rights
-------------
of NFRRC or any Interested Party in and to such Receivables; and
(c) No Modifications. The Servicer shall not amend or otherwise
----------------
modify any such Receivable such that the Starting Receivable Balance, the Annual
Percentage Rate or the total number of Scheduled Payments is altered or such
that the final scheduled payment on such Receivable will be due later than March
31, 2002.
SECTION 3.08. Purchase of Receivables Upon Breach of Covenant. Upon
-----------------------------------------------
discovery by any of the Seller, the Servicer or any party under the Further
Transfer and Servicing Agreements of a breach of any of the covenants set
forth in Sections 3.06 and 3.07, the party discovering such breach shall give
prompt written notice thereof to the others. As of the second Accounting Date
following its discovery or receipt of notice of such breach (or, at the
Servicer's election, the first Accounting Date so following), the Servicer
shall, unless it shall have cured such breach in all material respects, purchase
from the Owner thereof any Receivable materially and adversely affected by such
breach as determined by such Owner and, on the related Distribution Date, the
Servicer shall pay the Administrative Purchase Payment. It is understood and
agreed that the obligation of the Servicer to purchase any Receivable with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Servicer for
such breach available to the Seller or any Interested Party. Each of the Owner
Trustee and the Indenture Trustee shall have no affirmative duty to conduct any
investigation as to the occurrence of any event requiring the repurchase of any
Receivable pursuant to this Section 3.08.
SECTION 3.09. Total and Supplemental Servicing Fees; Payment of
-------------------------------------------------
Certain Expenses by Servicer. The Servicer is entitled to receive the Total
- ----------------------------
Servicing Fee and Supplemental Servicing Fees out of collections in respect of
the Receivables as provided herein. Subject to any limitations on the
Servicer's liability hereunder, the Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including fees and disbursements of the Issuer, any trustees and independent
accountants, taxes imposed on the Servicer, expenses incurred
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in connection with distributions and reports to Securityholders and all other
fees and expenses not expressly stated under this Agreement to be for the
account of the Securityholders, but excluding federal, state and local income
and franchise taxes, if any, of the Issuer or any Securityholder).
SECTION 3.10. Servicer's Certificate. Not later than 10:00 a.m.
----------------------
(Chicago, Illinois time) on each Determination Date, the Servicer shall deliver
to each Trustee and the Rating Agencies a Servicer's Certificate with respect to
the immediately preceding Monthly Period executed by the President or any Vice
President of the Servicer containing all information necessary to each such
party for making the calculations, withdrawals, deposits, transfers and
distributions required by Section 4.06, and all information required to be
provided to Certificateholders and Noteholders under subsection 4.09(a).
Receivables to be purchased by the Servicer under Section 3.08 hereof or Section
5.04 of the Purchase Agreement as of the last day of any Monthly Period shall be
identified by Receivable number (as set forth in the Schedule of Receivables).
-----------------------
With respect to any Receivables for which the Seller is the Owner, the Servicer
shall deliver to the Seller such accountings relating to such Receivables and
the actions of the Servicer with respect thereto as the Seller may reasonably
request.
SECTION 3.11. Application of Collections. For the purposes of this
--------------------------
Agreement, as of each Accounting Date, all collections for the related Monthly
Period with respect to each Receivable shall be applied by the Servicer as
follows:
(a) All payments by or on behalf of the Obligor (excluding
Supplemental Servicing Fees and Investment Earnings) shall be applied (i) first
-----
to reduce Outstanding Monthly Advances, if any, with respect to such Receivable,
as described in Section 5.06, (ii) second, to the Scheduled Payment for such
------
Monthly Period with respect to such Receivable, and (iii) third, the remainder
-----
shall constitute, with respect to such Receivable, a Full Prepayment or Partial
Prepayment; and
(b) A Partial Prepayment made on a Receivable is applied to reduce the
final Scheduled Payment and will thereafter, to the extent the Partial
Prepayment exceeds the final Scheduled Payment, reduce Scheduled Payments in
reverse chronological order beginning with the penultimate Scheduled Payment.
The Rebate related to such Partial Prepayment will reduce the final Scheduled
Payment and will thereafter, to the extent the Rebate exceeds the final
Scheduled Payment, reduce Scheduled Payments in reverse chronological order
beginning with the penultimate Scheduled Payment.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance: Notice of Servicer
-----------------------------------------------------
Default.
-------
(a) The Servicer shall deliver to each Trustee, on or before February
1 of each year, beginning February 1, 1997, an officer's certificate signed by
the President or any Vice President
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of the Servicer, dated as of the immediately preceding October 31, stating that
(i) a review of the activities of the Servicer during the preceding 12-month
period (or, with respect to the first such certificate, such period as shall
have elapsed from the Closing Date to the date of such certificate) and of its
performance under this Agreement has been made under such officer's supervision,
(ii) to such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such period, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) the Servicer has complied with the requirements of subclauses
(z)(iii) and (iv) of Section 5.04 hereof. A copy of such certificate may be
obtained by any Noteholder or any Certificateholder by a request in writing to
the Issuer addressed to the Corporate Trust Office of the Indenture Trustee or
the Owner Trustee, respectively.
(b) The Servicer shall deliver to each Trustee and to the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Default under Section 8.01. The Seller shall
deliver to each Trustee, the Servicer and the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer Default
under clause (b) of Section 8.01.
(c) The Servicer shall deliver prior written notice to the Rating
Agencies of the name of the institution, which shall be an Eligible Institution,
issuing any standby letter of credit in accordance with clause (z) of Section
5.04 hereof.
SECTION 4.02. Annual Independent Accountants' Report.
--------------------------------------
(a) The Servicer shall cause a firm of independent accountants, who
may also render other services to the Servicer or the Seller, to deliver to each
Trustee and the Rating Agencies, on or before February 1 of each year, beginning
February 1, 1997 with respect to the twelve months ended on the immediately
preceding October 31, a report (the "ACCOUNTANTS' REPORT") addressed to the
board of directors of the Servicer and to each Trustee, to the effect that such
firm has audited the financial statements of the Servicer and issued its report
thereon and that such audit (i) was made in accordance with generally accepted
auditing standards, (ii) included tests relating to Retail Notes serviced for
others in accordance with the requirements of the Uniform Single Audit Program
for Mortgage Bankers (the "PROGRAM"), to the extent the procedures in the
Program are applicable to the servicing obligations set forth in this Agreement
and (iii) except as described in the report, disclosed no exceptions or errors
in the records relating to Retail Notes serviced for others that, in the firm's
opinion, paragraph four of the Program requires such firm to report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
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(c) A copy of the Accountants' Report may be obtained by any
Noteholder or any Certificateholder by a request in writing to the Issuer
addressed to the Corporate Trust Office of the Indenture Trustee or the Owner
Trustee, respectively.
SECTION 4.03. Access to Certain Documentation and Information
-----------------------------------------------
Regarding Receivables. The Servicer shall provide to each Trustee reasonable
- ---------------------
access to the documentation regarding the Receivables. The Servicer shall
provide such access to any Securityholder only in such cases where a
Securityholder is required by applicable statutes or regulations to review such
documentation. In each case, such access shall be afforded without charge but
only upon reasonable request and during normal business hours at offices of the
Servicer designated by the Servicer. Nothing in this Section 4.03 shall derogate
from the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding Obligors, and the failure of the Servicer to
provide access as provided in this Section 4.03 as a result of such obligation
shall not constitute a breach of this Section 4.03.
SECTION 4.04. Amendments to Schedule of Receivables. On or before
-------------------------------------
each Subsequent Transfer Date occurring during the Funding Period, the Seller
will deliver to each Trustee a schedule of the Subsequent Receivables being
transferred to the Trust (and such schedule shall be deemed to supplement the
Schedule of Receivables). If the Servicer, during a Monthly Period, assigns to
- -----------------------
a Receivable an account number that differs from the account number previously
identifying such Receivable on the Schedule of Receivables, the Servicer shall
-----------------------
deliver to the Seller and each Trustee on or before the Distribution Date
related to such Monthly Period an amendment to the Schedule of Receivables to
-----------------------
report the newly assigned account number. Each such amendment shall list all
new account numbers assigned to Receivables during such Monthly Period and shall
show by cross reference the prior account numbers identifying such Receivables
on the Schedule of Receivables.
-----------------------
SECTION 4.05. Assignment of Administrative Receivables and Warranty
-----------------------------------------------------
Receivables. Upon receipt of the Administrative Purchase Payment or the
- -----------
Warranty Payment with respect to an Administrative Receivable or a Warranty
Receivable, respectively, each Trustee shall assign, without recourse,
representation or warranty, to the Servicer or the Warranty Purchaser, as
applicable, all of such Person's right, title and interest in, to and under (a)
such Administrative Receivable or Warranty Receivable and all monies due
thereon, (b) the security interests in the related Financed Vehicle and, to the
extent permitted by law, any accessions thereto which are financed by NFC, (c)
benefits of any lease assignments with respect to the Financed Vehicles, (d)
proceeds from any Insurance Policies with respect to such Receivable, (e)
proceeds from Dealer Liability with respect to such Receivable, proceeds from
any NITC Purchase Obligations with respect to such Receivable and proceeds from
any Guaranties of such Receivable, (f) the interests of such Person or the
Issuer, as applicable, in certain rebates of premiums and other amounts relating
to the Insurance Policies and any document relating thereto and (g) the rights
of such Person under the Purchase Agreement and the Custodian Agreement with
respect to such Receivable, such assignment being an assignment outright and not
for security. Upon the assignment of such Receivable described in the preceding
sentence, the Servicer or the Warranty Purchaser, as applicable, shall own such
Receivable, and all such security and documents, free of any further
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obligations to either Trustee or the Securityholders with respect thereto. If
in any Proceeding it is held that the Servicer may not enforce a Receivable on
the ground that it is not a real party in interest or a holder entitled to
enforce the Receivable, the applicable Trustee shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Receivable,
including bringing suit in the name of such Person or the names of the
Securityholders.
SECTION 4.06. Distributions.
-------------
(a) On or before the day preceding each Determination Date, with
respect to the preceding Monthly Period and the related Distribution Date, the
Servicer shall calculate the Total Available Amount, Collected Interest,
Collected Principal, the Total Servicing Fee, the Aggregate Noteholders'
Interest Distributable Amount, the Aggregate Noteholders' Principal
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Certificateholders' Principal Distributable Amount and all other amounts
required to determine the amounts to be deposited in or paid from each of the
Collection Account, the Pre-Funding Account, the Negative Carry Account, the
Note Distribution Account, the Certificate Distribution Account and the Reserve
Account on the next succeeding Distribution Date.
(b) On or before the day preceding each Distribution Date, the
Indenture Trustee shall cause to be made the following withdrawals, deposits,
transfers and distributions in the amounts set forth in the Servicer's
Certificate for such Distribution Date pursuant to Section 3.10:
(i) from the Collection Account to the Servicer, in immediately
available funds, reimbursement of Outstanding Monthly Advances pursuant to
Section 5.06, payments of Liquidation Expenses with respect to Receivables which
became Liquidating Receivables during the related Monthly Period pursuant to
Section 3.04 and any unpaid Liquidation Expenses from prior periods;
(ii) from the Pre-Funding Account to the Collection Account, the
Investment Earnings on the Pre-Funding Account for the related Monthly Period;
(iii) from the Negative Carry Account to the Collection Account, the
Negative Carry Amount for such Distribution Date; and
(iv) from the Reserve Account to the Collection Account, the lesser
of (A) the amount of cash or other immediately available funds therein on the
day preceding such Distribution Date and (B) the amount, if any, by which (I)
the sum of the Total Servicing Fee, the Aggregate Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Aggregate Noteholders' Principal Distributable Amount and the
Certificateholders' Principal Distributable Amount exceeds (II) the sum of the
Available Amount for such Distribution Date plus the amounts deposited to the
Collection Account on such date pursuant to Sections 4.06(b)(ii) and
4.06(b)(iii) hereof.
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(c) Except as otherwise provided in Section 4.06(d), before 12:00
noon, New York City time, on the day preceding each Distribution Date, the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.10) shall make the following distributions from the Collection Account (after
the withdrawals, deposits and transfers specified in Section 4.06(b) have been
made) in the following order of priority:
(i) first, to the Servicer, to the extent of
the Total Available Amount, the Total Servicing Fee;
(ii) second, to the Note Distribution Account, to the extent
of the Total Available Amount (as such amount has been reduced by the
distributions described in clause (c) (i) above), the Aggregate Noteholders'
Interest Distributable Amount;
(iii) third, to the Certificate Distribution Account, to the
extent of the Total Available Amount (as such amount has been reduced by the
distributions described in clauses (c) (i) and (ii) above), the
Certificateholders' Interest Distributable Amount;
(iv) fourth, to the Note Distribution Account, to the extent
of the Total Available Amount (as such amount has been reduced by the
distributions described in clauses (c) (i), (ii) and (iii) above), the Aggregate
Noteholders' Principal Distributable Amount;
(v) fifth, to the Certificate Distribution Account, to the
extent of the Total Available Amount (as such amount has been reduced by the
distributions described in clauses (c) (i) through (iv), inclusive, above), the
Certificateholders' Principal Distributable Amount; and
(vi) sixth, to the Reserve Account, any portion of the Total
Available Amount remaining after the distributions described in clauses (c) (i)
through (v), inclusive, above.
(d) Notwithstanding the foregoing, at any time that the Notes have not
been paid in full and the principal balance of the Notes has been declared
immediately due and payable following the occurrence of an Event of Default
pursuant to Section 5.2 of the Indenture, then until such time as the Notes have
been paid in full and the Indenture has been discharged with respect to the
Notes or all Events of Default have been cured or waived as provided in Section
5.2(b) of the Indenture, no amounts shall be deposited in or distributed to the
Certificate Distribution Account. Any such amounts otherwise distributable to
the Certificate Distribution Account shall be deposited instead to the Note
Distribution Account as payments of principal on the Notes.
SECTION 4.07. Reserve Account.
---------------
(a) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 1995-B Owner Trust Reserve Account (the
"RESERVE ACCOUNT") to include the money and other
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property deposited and held therein pursuant to this Section 4.07(a), Section
4.07(c), Section 4.06(c) and Section 5.02(a). On the Closing Date, the Seller
shall deposit the Reserve Account Initial Deposit with respect to the Closing
Date into the Reserve Account. The Reserve Account shall be the property of the
Issuer subject to the rights of the Indenture Trustee in the Reserve Account
Property.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits therein or withdrawals
therefrom on such Distribution Date) exceeds the Specified Reserve Account
Balance for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute an amount equal to any such excess to the Seller. The
Seller may at any time, without consent of the Securityholders, sell, transfer,
convey or assign in any manner its rights to and interests in distributions from
the Reserve Account, including interest earnings thereon, provided that certain
conditions are satisfied, including: (i) such action will not result in a
reduction or withdrawal of the rating of any class of Notes or Certificates,
(ii) the Seller provides to the Owner Trustee and the Indenture Trustee an
opinion of independent counsel that such action will not cause the Trust to be
treated as an association (or publicly traded partnership) taxable as a
corporation for Federal income tax purposes, and (iii) such transferee or
assignee agrees to take positions for tax purposes consistent with the tax
positions agreed to be taken by the Seller.
(c) If the Servicer, pursuant to Section 5.06, determines on any
Determination Date that it is required to make a Monthly Advance and does not do
so from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.06 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Monthly Advances to the Collection
Account, and the Servicer shall within two Business Days replace any funds in
the Reserve Account so used. The Servicer shall not be entitled to
reimbursement for any such deemed Monthly Advances unless and until the Servicer
shall have replaced such funds in the Reserve Account.
SECTION 4.08. Net Deposits. At any time that (i) NFC shall be the
------------
Servicer and (ii) the Servicer shall be permitted by Section 5.04 to remit
collections on a basis other than a daily basis, the Servicer, the Seller and
each Trustee may make any remittances pursuant to this Article IV net of amounts
to be distributed by the applicable recipient to such remitting party.
Nonetheless, each such party shall account for all of the above described
remittances and distributions as if the amounts were deposited and/or
transferred separately.
SECTION 4.09. Statements to Securityholders.
-----------------------------
(a) On each Distribution Date, the Owner Trustee shall include with
each distribution to each Certificateholder, and the Indenture Trustee shall
include with each distribution to each Noteholder, a statement (which statement
shall also be provided to the Rating Agencies) based on information in the
Servicer's Certificate furnished pursuant to Section 3.10. Each such statement
to be delivered to Certificateholders shall set forth the following information
as to the Certificates
16
<PAGE>
with respect to such Distribution Date or the preceding Monthly Period, as
applicable, and each such statement to be delivered to Noteholders shall set
forth the following information as to the Notes with respect to such
Distribution Date or the preceding Monthly Period, as applicable:
(i) the amount of the distribution allocable to
interest on or with respect to each class of Securities;
(ii) the Aggregate Receivables Balance as of
the close of business on the last day of such Monthly Period;
(iii) the amount of Outstanding Monthly
Advances with respect to all Receivables on such Distribution Date;
(iv) the amount of the Total Servicing Fee paid
or payable to the Servicer with respect to the related Monthly Period;
(v) the amount of Aggregate Losses for the
related Monthly Period;
(vi) the Delinquency Percentage for the related
Monthly Period;
(vii) the sum of all Administrative Purchase
Payments and all Warranty Payments made for the related Monthly Period;
(viii) the amount of the distribution allocable to principal of
each class of Notes and to the Certificate Balance of each class of
Certificates;
(ix) the Note Principal Balance and the Note Pool Factor for
each class of Notes, and the Certificate Balance and the Certificate Pool Factor
for each class of Certificates, each after giving effect to all payments
reported under (viii) above on such date;
(x) the amounts, if any, paid to the Servicer or distributed
to Securityholders from amounts on deposit in the Reserve Account;
(xi) the amount of the Noteholders' Interest Carryover
Shortfall, the Noteholders' Principal Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall and the Certificateholders'
Principal Carryover Shortfall, if any, and the change in such amounts from the
preceding Distribution Date;
(xii) the balance (if any) of the Reserve Account on such
date, after giving effect to distributions, withdrawals, transfers and deposits
made on such date, and the change in such balance from that of the prior
Distribution Date:
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(xiii) the Negative Carry Amount and the Investment Earnings on
the Pre-Funding Account (if any) for the related Monthly Period and the balance,
if any, of the Negative Carry Account on such date, after giving effect to the
withdrawals made on such date;
(xiv) for Distribution Dates during the Funding Period, the
Starting Receivables Balance of all Subsequent Receivables transferred to the
Issuer since the preceeding Distribution Date and the remaining Pre-Funded
Amount; and
(xv) for the first Distribution Date occurring on or after
the last day of the Funding Period, the amount of any remaining Pre-Funded
Amount that has not been used to fund the purchase of Subsequent Receivables.
Each amount set forth pursuant to clauses (i), (iv), (viii), (x) and (xi) above
shall be expressed as a dollar amount per $1,000 of initial Note Principal
Balance or the initial Certificate Balance, as applicable. In lieu of preparing
and delivering a separate statement to Securityholders pursuant to this Section,
a Trustee may deliver a copy of the Servicer's Certificate furnished pursuant to
Section 3.10.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of this Agreement, the
Servicer shall prepare and execute and the Indenture Trustee and the Owner
Trustee shall mail to each Person who at any time during such calendar year
shall have been a holder of Notes or Certificates, respectively, and received
any payments thereon, a statement prepared and supplied by the Servicer
containing the sum of the amounts set forth in each of clauses (i), (iv),
(viii), (x) and (xi), for such calendar year or, if such Person shall have been
a Securityholder during a portion of such calendar year and received any
payments thereon, for the applicable portion of such year, for the purposes of
such Securityholder's preparation of federal income tax returns.
SECTION 4.10. Information Provided to Rating Agencies. In addition
---------------------------------------
to receiving any information or documents required to be delivered to any Rating
Agency pursuant to any Basic Document, each Rating Agency may request in writing
to the Servicer, and the Servicer shall deliver, reasonable additional
information necessary to the Rating Agencies to monitor the Securities.
Promptly, but in no event later than five Business Days, after obtaining
knowledge of an Insolvency Event with respect to the Servicer, the Seller or the
Trust, the Servicer shall deliver to each of the Ratings Agencies notice of such
Insolvency Event. Failure by the Servicer to comply with the terms of this
Section 4.10 shall not constitute a "Servicer Default", an "Event of Default" or
a default under any Basic Document.
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts.
-------------------------
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(a) (i) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 1995-B Owner Trust Collection Account
(the "COLLECTION ACCOUNT"), bearing an additional designation clearly indicating
that the funds deposited therein are held for the benefit of the
Securityholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 1995-B Owner Trust Note Distribution
Account (the "NOTE DISTRIBUTION ACCOUNT"), bearing an additional designation
clearly indicating that the funds deposited therein are held for the benefit of
the Noteholders.
(iii) Pursuant to the Trust Agreement, the Servicer, for the
benefit of the Certificateholders, shall establish and maintain in the name of
the Owner Trustee an Eligible Deposit Account known as the Navistar Financial
1995-B Owner Trust Certificate Distribution Account (the "CERTIFICATE
DISTRIBUTION ACCOUNT") bearing an additional designation clearly indicating that
the funds deposited therein are held for the benefit of the Certificateholders.
(iv) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account known as the Navistar Financial 1995-B Owner
Trust Pre-Funding Account (the "PRE-FUNDING ACCOUNT"), bearing an additional
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(v) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account known as the Navistar 1995-B Owner Trust
Negative Carry Account (the "NEGATIVE CARRY ACCOUNT") bearing an additional
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(b) (i) Each of the Designated Accounts shall be initially
established with the Indenture Trustee and shall be maintained with the
Indenture Trustee so long as (A) the short-term unsecured debt obligations of
the Indenture Trustee have the Required Deposit Rating or (B) each of the
Designated Accounts are maintained in the corporate trust department of the
Indenture Trustee. All amounts held in such accounts (including amounts, if
any, which the Servicer is required to remit daily to the Collection Account
pursuant to Section 5.03) shall, to the extent permitted by applicable laws,
rules and regulations, be invested, at the written direction of the Servicer, by
such bank or trust company in Eligible Investments; provided, that funds in the
Collection Account in an amount not in excess of 20% of the Aggregate
Receivables Balance as of the preceding Accounting Date may be invested in
investments which have a rating from Standard & Poor's Ratings Group of "A-1"
rather than "A-1+", if such investments otherwise constitute Eligible
Investments. Such written direction shall constitute certification by the
Servicer that any such investment is authorized by this Section 5.01. Funds
deposited in the Reserve Account, the
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Negative Carry Account and the Pre-Funding Account shall be invested in Eligible
Investments which mature prior to the next Distribution Date except, and then
only to the extent, as shall be otherwise permitted by the Rating Agencies.
Investments in Eligible Investments shall be made in the name of the Indenture
Trustee or its nominee, and such investments shall not be sold or disposed of
prior to their maturity. Should the short-term unsecured debt obligations of
the Indenture Trustee (or any other bank or trust company with which the
Designated Accounts are maintained) no longer have the Required Deposit Rating,
then the Servicer shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency shall consent), with
the Indenture Trustee's assistance as necessary, cause the Designated Accounts
(A) to be moved to a bank or trust company, the short-term unsecured debt
obligations of which shall have the Required Deposit Rating, or (B) to be moved
to the corporate trust department of the Indenture Trustee. Except with respect
to Investment Earnings on the Pre-Funding Account, Investment Earnings on funds
deposited in the Designated Accounts shall be payable to the Seller except when
the Indenture Trustee is acting as successor Servicer in which case such
Investment Earnings shall be payable to the Indenture Trustee as successor
Servicer.
(ii) With respect to the Designated Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Designated Account Property that is held in deposit accounts
shall be held solely in Eligible Deposit Accounts; and each such Eligible
Deposit Account shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole signature authority
with respect thereto;
(B) any Designated Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph (i) of
the definition of "Delivery" and shall be held, pending maturity or disposition,
solely by the Indenture Trustee or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely for the Indenture Trustee;
(C) any Designated Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph (ii) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such Designated
Account Property as described in such paragraph;
(D) any Designated Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (C)
above shall be delivered to the Indenture Trustee in accordance with paragraph
(iii) of the definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such security; and
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<PAGE>
(E) the Indenture Trustee shall maintain each item of Designated
Account Property in the particular Designated Account to which such item
originated and shall not commingle items from different Designated Accounts.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee (or by the Owner Trustee with the consent of the Indenture Trustee) to
instruct the Indenture Trustee to make withdrawals and payments from the
Designated Accounts for the purpose of permitting the Servicer or the Owner
Trustee to carry out its respective duties hereunder or permitting the Indenture
Trustee to carry out its duties under the Indenture.
(iv) The Indenture Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in the Designated
Accounts and in all proceeds thereof (except Investment Earnings). Except as
otherwise provided herein or in the Indenture, the Designated Accounts shall be
under the sole dominion and control of the Indenture Trustee for the benefit of
the Securityhol ders.
(v) The Servicer shall not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Designated
Accounts unless the security interest granted and perfected in such account
shall continue to be perfected in such investment or the proceeds of such sale,
in either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(c) Pursuant to the Trust Agreement, the Owner Trustee shall possess
all right, title and interest in and to all funds on deposit from time to time
in the Certificate Distribution Account and in all proceeds thereof. Except as
otherwise provided herein or in the Trust Agreement, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Deposit Account, the
Servicer shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Certificate Distribution Account as an Eligible Deposit Account and shall cause
the Owner Trustee to transfer any cash and/or any investments in the old
Certificate Distribution Account to such new Certificate Distribution Account.
(d) The Indenture Trustee, the Owner Trustee and each other Eligible
Deposit Institution with whom a Designated Account or the Certificate Deposit
Account is maintained waives any right of set-off, counterclaim, security
interest or bankers' lien to which it might otherwise be entitled.
SECTION 5.02. Pre-Funding Account. (a) On the Closing Date, the
-------------------
Owner Trustee will deposit, on behalf of the Seller, in the Pre-Funding Account
$70,500,316.57 from the net proceeds of the sale of the Notes and the
Certificates. On each Subsequent Transfer Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account an amount equal to
(i) the aggregate Starting Receivable Balance of the Subsequent Receivables
transferred to
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the Issuer on such Subsequent Transfer Date less the Reserve Account Initial
Deposit for such Subsequent Transfer Date and distribute such amount to or upon
the order of the Seller upon satisfaction of the conditions set forth in Section
2.02(b) with respect to such transfer, and (ii) the Reserve Account Initial
Deposit with respect to such Subsequent Transfer Date and, on behalf of the
Seller, deposit such amount in the Reserve Account.
(b) (i) If the Pre-Funded Amount has not been reduced to zero on or prior to
the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) and the Pre-Funded Amount is less than
or equal to $100,000, the Servicer shall instruct the Indenture Trustee to
transfer from the Pre-Funding Account on such Distribution Date any amount then
remaining in the Pre-Funding Account to the Note Distribution Account.
(ii) If the Pre-Funded Amount on the Distribution Date on which the
Funding Period ends (or, if the Funding Period does not end on a Distribution
Date, on the first Distribution Date following the end of the Funding Period) is
greater than $100,000, the Seller, on behalf of the Issuer, will (A) deposit
into the Note Distribution Account for each class of Notes (1) the Pre-Funded
Percentage for such class of Notes of the amount then remaining in the Pre-
Funding Account and (2) amounts equal to the Noteholders' Prepayment Premium for
such class of Notes and (B) deposit into the Certificate Distribution Account
(1) an amount equal to the Certificateholders' Pre-Funded Percentage of the
amount then remaining in the Pre-Funding Account and (2) an amount equal to the
Certificateholders' Prepayment Premium; provided, however, that the Issuer's
-------- -------
obligation to pay the Noteholders' Prepayment Premium and the
Certificateholders' Prepayment Premium shall be limited to funds which are
received by the Issuer from the Seller pursuant to Section 2.02(c) hereof as
liquidated damages for the failure to deliver the Subsequent Receivables, and no
other assets of the Trust will be available for making such payments. If the
amount of funds available for payment of the Noteholders' Prepayment Premium and
the Certificateholders' Prepayment Premium is less than the sum of the
Noteholders' Prepayment Premium for each class of Notes and the
Certificateholders' Prepayment Premium, then the available funds will be
allocated among each class of Notes and the Certificates in accordance with
their respective prepayment premiums.
SECTION 5.03. Negative Carry Account. (a) On the Closing Date, the
----------------------
Owner Trustee will deposit, on behalf of the Seller, in the Negative Carry
Account $508,924.16 (the "NEGATIVE CARRY ACCOUNT INITIAL DEPOSIT") from the net
proceeds of the sale of the Notes and Certificates. On or before the Transfer
Date preceding each Distribution Date occurring on or prior to the first
Distribution Date that occurs on or after the end of the Funding Period, the
Servicer will instruct the Indenture Trustee to withdraw from the Negative Carry
Account and deposit into the Collection Account an amount equal to the Negative
Carry Amount for such Monthly Period.
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(b) On each Distribution Date during the Funding Period, the Servicer
will instruct the Indenture Trustee to withdraw from the Negative Carry Account
an amount equal to the excess, if any, of the amount on deposit in the Negative
Carry Account over the Required Negative Carry Account Balance and release it to
the Seller, and on the Distribution Date on or immediately following the last
day of the Funding Period, the Servicer will instruct the Indenture Trustee to
withdraw from the Negative Carry Account all amounts remaining on deposit in the
Negative Carry Account and release them to the Seller.
SECTION 5.04. Collections. The Servicer shall remit to the
-----------
Collection Account all payments by or on behalf of the Obligors on the
Receivables, all Insurance Proceeds, all Liquidation Proceeds, proceeds from any
Dealer Liability, proceeds from any NITC Purchase Obligations and proceeds from
any Guaranties within two Business Days after receipt thereof. Notwithstanding
the foregoing, the Servicer shall not be required to remit such collections
within such two Business Days but may remit collections received during a
Monthly Period to the Collection Account in immediately available funds on the
Business Day immediately preceding the related Distribution Date but only for so
long as (i) NFC is the Servicer, (ii) (x) the Servicer satisfies the
requirements for monthly remittances established by the Rating Agencies
initially rating the Securities, and upon the satisfaction of such requirements,
the Rating Agencies which initially rated the Securities reaffirm the rating of
the Securities at the level at which they would be rated if collections were
remitted within two Business Days, (y) the short-term unsecured debt
obligations of NFC are rated at least A-1+ by Standard & Poor's Ratings Group
and P-1 by Moody's Investors Service, Inc., or (z) a standby letter of credit
has been issued by an Eligible Institution to the Indenture Trustee, which
letter of credit, as of each date during the period that Seller is making
monthly remittances of collections under this Section 5.06, (i) is in full force
and effect, (ii) has an expiry date that is at least 30 days after the next
succeeding Distribution Date, (iii) has an undrawn amount at least equal to 150%
of all Scheduled Payments due with respect to the latest Monthly Period ended
prior to the next succeeding Distribution Date, (iv) has an undrawn amount at
least equal to 111% of all unremitted collections held by the Servicer at any
time, and (v) is drawable by the Indenture Trustee on any Distribution Date upon
notice to the issuing Eligible Institution that the Servicer has failed to
deposit collections received during the related Monthly Period to the Collection
Account as required by this Section 5.04, and (iii) an Event of Default shall
not have occurred and be continuing. The Indenture Trustee shall not be deemed
to have knowledge of any event or circumstance under clause (iii) of the
immediately preceding sentence that would require remittance within two Business
Days by the Servicer to the Collection Account unless the Indenture Trustee has
received notice of such event or circumstance from the Seller or the Servicer in
an Officer's Certificate or from Noteholders whose Notes evidence not less than
25% of the Outstanding Amount of the Notes as of the close of the preceding
Distribution Date or from Certificateholders whose Certificates evidence not
less the 25% of the Voting Interests thereof or unless a Responsible Officer in
the Corporate Trust Office with knowledge hereof and familiarity herewith has
actual knowledge of such event or circumstance. For purposes of this Article V
the phrase "payments by or on behalf of Obligors" shall mean payments made by
Persons other than the Servicer.
SECTION 5.05. Investment Earnings and Supplemental Servicing Fees.
---------------------------------------------------
Except as otherwise provided in Section 5.01(b)(1) hereof, the Servicer shall be
entitled to receive all
23
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Supplemental Servicing Fees, and the Seller shall be entitled to receive all
Investment Earnings (other than Investment Earnings on the Pre-Funding Account),
when and as paid without any obligation to (a) either Trustee, (b) with respect
to the Supplemental Servicing Fees, the Seller or (c) with respect to the
Investment Earnings, the Servicer, in respect thereof. Neither the Servicer nor
the Seller will have any obligation to deposit any such amount in any account
established hereunder. To the extent that any such amount shall be held in any
account held by either Trustee, or otherwise established hereunder, such amount
will be withdrawn therefrom and paid to the Servicer or the Seller, as
applicable, upon presentation of a certificate signed by a Responsible Officer
of such Person setting forth, in reasonable detail, the amount of such
Supplemental Servicing Fees or such Investment Earnings, respectively.
SECTION 5.06. Monthly Advances. Subject to the following sentence,
----------------
as of each Accounting Date, if the payments during the related Monthly Period by
or on behalf of the Obligor on a Receivable (other than an Administrative
Receivable, a Warranty Receivable or a Liquidating Receivable) after application
under subsection 3.11(a) shall be less than the Scheduled Payment, whether as a
result of any extension granted to the Obligor or otherwise, then the Servicer
shall, subject to the following sentence, advance any such shortfall (such
amount, a "MONTHLY ADVANCE"). The Servicer shall be obligated to make a Monthly
Advance in respect of a Receivable only to the extent that the Servicer, in its
sole discretion, shall determine that such advance shall be recoverable (in
accordance with the two immediately following sentences) from subsequent
collections or recoveries on such Receivable. Subject to Section 4.07(c), the
Servicer shall be reimbursed for Outstanding Monthly Advances with respect to a
Receivable from the following sources with respect to such Receivable, in each
case as set forth in this Agreement: (i) subsequent payments by or on behalf of
the Obligor, (ii) collections of Liquidation Proceeds, (iii) the Administrative
Purchase Payment and (iv) the Warranty Payment. At such time as the Servicer
shall determine that any Outstanding Monthly Advances with respect to any
Receivable shall not be recoverable from payments with respect to such
Receivable, the Servicer shall be reimbursed from any collections made on other
Receivables held by the Issuer.
SECTION 5.07. Additional Deposits. The Servicer shall deposit in the
-------------------
Collection Account the aggregate Monthly Advances pursuant to Section 5.06. The
Servicer and the Seller shall deposit in the Collection Account the aggregate
Administrative Purchase Payments and Warranty Payments with respect to
Administrative Receivables and Warranty Receivables, respectively. All such
deposits with respect to a Monthly Period shall be made in immediately available
funds on the day before the Distribution Date related to such Monthly Period.
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ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER
SECTION 6.01. Representations and Warranties of the Seller and the
----------------------------------------------------
Servicer. The Seller and the Servicer each make the following representations
- --------
and warranties as to itself on which the Issuer is relying in acquiring the
Receivables hereunder and issuing the Securities under the other Further
Transfer and Servicing Agreements. The following representations and warranties
are made severally by each of the Seller and the Servicer (for purposes of this
Section 6.01, each, a "PARTY") and speak as of the Closing Date, in the case of
the Initial Receivables, and as of the applicable Subsequent Transfer Date, in
the case of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Representations and Warranties as to each Party.
-----------------------------------------------
(i) Organization and Good Standing. Such Party has been duly organized
------------------------------
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and now has, power,
authority and legal right (A) in the case of the Seller, to acquire and own the
Receivables and (B) in the case of the Servicer, to service the Receivables as
provided in this Agreement;
(ii) Due Qualification. Such Party is duly qualified to do business
-----------------
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including, in the case of the Servicer,
the servicing of the Receivables as required by this Agreement) requires or
shall require such qualification;
(iii) Power and Authority. Such Party (A) has the power and
-------------------
authority to execute and deliver the Further Transfer and Servicing Agreements
to which it is a party (as used in this Section 6.01(a), the "applicable Further
Transfer and Servicing Agreements") and to carry out the respective terms of
such agreements and, (B) in the case of the Seller, has the power and authority
to sell and assign the property to be sold and assigned to and deposited with
the Issuer as part of the Owner Trust Estate and has duly authorized such sale
and assignment to the Issuer by all necessary corporate action; and the
execution, delivery and performance by such Party of the applicable Further
Transfer and Servicing Agreements have been duly authorized by such Party by all
necessary corporate action;
(iv) Binding Obligations. Each applicable Further Transfer and
-------------------
Servicing Agreement, when duly executed and delivered, shall constitute a legal,
valid and binding obligation of such Party enforceable against such Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or
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<PAGE>
other similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(v) No Violation. The consummation by such Party of the transactions
-------------
contemplated by the applicable Further Transfer and Servicing Agreements and the
fulfillment of the terms of such agreements by such Party shall not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of such Party, or any indenture, agreement or other
instrument to which such Party is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument, other than the
applicable Further Transfer and Servicing Agreements, or violate any law or, to
such Party's knowledge, any order, rule or regulation applicable to such Party
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over such Party or any
of its properties; and
(vi) No Proceedings. There are no proceedings or, to such Party's
--------------
knowledge, investigations pending or, to such Party's knowledge, threatened
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over such Party or its
properties (i) asserting the invalidity of the applicable Further Transfer and
Servicing Agreements, any Securities issued pursuant thereto and, in the case of
the Seller, the Custodian Agreement or the Administration Agreement, (ii)
seeking to prevent the issuance of such Securities or the consummation of any of
the transactions contemplated by the applicable Further Transfer and Servicing
Agreements and, in the case of the Seller, the Custodian Agreement or the
Administration Agreement, or (iii) seeking any determination or ruling that
might materially and adversely affect the performance by such Party of its
obligations under, or the validity or enforceability of, such Securities, the
applicable Further Transfer and Servicing Agreements or, in the case of the
Seller, the Custodian Agreement or the Administration Agreement.
(b) Representations and Warranties of the Seller Only.
-------------------------------------------------
(i) Good Title. No Receivable has been sold, transferred, assigned or
----------
pledged by the Seller to any Person other than the Issuer; immediately prior to
the conveyance of the Receivables pursuant to this Agreement the Seller had good
and marketable title thereto, free of any Lien (except for any Lien which may
have existed in accessions to the Financed Vehicles not financed by NFC); and,
upon execution and delivery of this Agreement and each Subsequent Transfer
Assignment by the Seller, the Issuer shall have all of the right, title and
interest of the Seller in, to and under the applicable Purchased Property free
of any Lien (except for any Lien which may exist in accessions to the Financed
Vehicles not financed by NFC);
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(ii) All Filings Made. All filings (including UCC filings) necessary
----------------
in any jurisdiction to give the Issuer a first priority perfected security or
ownership interest in the Purchased Property (to the extent it constitutes Code
Collateral) shall have been made, and the Receivables constitute Code
Collateral; and
(iii) Valid Sale. This Agreement, and each Subsequent Transfer
----------
Assignment when duly executed and delivered, shall constitute a valid sale,
transfer and assignment of the applicable Purchased Property, enforceable
against creditors of and purchasers from the Seller.
(c) Representations and Warranties of the Servicer Only.
---------------------------------------------------
(i) Liquidation Expenses. The amounts defined as "Liquidation
--------------------
Expenses" are a reasonable estimate of such expenses, reasonably related to the
Servicer's experience for such expenses in servicing comparable medium and heavy
duty truck, bus and trailer receivables.
(ii) Purchase Agreement Representations. The representations and
----------------------------------
warranties in Sections 3.01 and 3.02 of the Purchase Agreement are true as of
the Closing thereunder.
SECTION 6.02. Liability of Seller. The Seller shall be liable in
-------------------
accordance with this Agreement only to the extent of the obligations in this
Agreement specifically undertaken by the Seller.
SECTION 6.03. Merger or Consolidation of, or Assumption of the
-------------------------------------------------
Obligations of, Seller; Amendment of Certificate of Incorporation.
- -----------------------------------------------------------------
(a) Any corporation (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Seller shall be a party, (iii) succeeding to the business of the Seller, or (iv)
more than 50% of the voting stock of which is owned directly or indirectly by
NIC, which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement, shall
be the successor to the Seller under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement. The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this Section 6.03 to the Rating
Agencies.
(b) The Seller hereby agrees that during the term of this Agreement it
shall not amend Articles Third, Fourth, Fifth, Twelfth or Fourteenth of its
Restated Certificate of Incorporation without obtaining the prior written
consent of the Rating Agencies or without obtaining the prior written consent of
Noteholders whose Notes evidence not less than a majority of the Outstanding
Amount of the Notes as of the close of the preceding Distribution Date and the
prior written consent of the Certificateholders whose Certificates evidence a
majority of the Voting Interests of such Certificates as of the close of the
preceding Distribution Date; provided, however, the Seller may
-------- -------
27
<PAGE>
amend the foregoing Articles of its Restated Certificate of Incorporation
without the prior written consent of the Rating Agencies, the Noteholders, the
Certificateholders or either Trustee for the purpose of:
(i) permitting the Seller (A) to enter into an addendum to the Tax
Allocation Agreement effective October 1, 1981 among NITC and certain of its
subsidiaries, as amended and supplemented (the "Tax Allocation Agreement"), such
addendum to be substantially similar to the Fourth Addendum to the Tax
Allocation Agreement effective April 26, 1993 among NITC, NFC and Navistar
Financial Securities Corporation and (B) to incur other indebtedness where (i)
the person to whom the indebtedness is owing has delivered to the corporation an
undertaking that it will not institute against, or join any other Person in
instituting against, the corporation any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law, and that it will not look to
property or assets of the corporation in respect to such obligations, and that
such obligations shall not constitute a claim against the corporation in the
event that the corporation's assets are insufficient to pay in full such
obligations, in each case for one year and one day after the date on which all
rated securities issued pursuant to Agreements (other than any such securities
held by the corporation) and (ii) the Seller has provided the Rating Agencies
prior written notice of the incurrence of such indebtedness; and
(ii) including within the meaning of "Receivables" as used in the
Restated Certificate of Incorporation any instalment sale contracts, loans,
notes, leases, accounts or other rights to payment from retail customers in
respect of trucks, buses, trailers and related equipment (including notes of
dealers and other persons that finance the acquisition by such dealer or other
person of a truck, bus, trailer or related equipment that is leased to a third
person or persons).
SECTION 6.04. Limitation on Liability of Seller and Others. The
--------------------------------------------
Seller and any director or officer or employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
obligations as Seller of the Receivables under this Agreement and that in its
opinion may involve it in any expense or liability.
SECTION 6.05. Seller May Own Securities. Each of the Seller and any
-------------------------
Person controlling, controlled by or under common control with the Seller may in
its individual or any other capacity become the owner or pledgee of Securities
with the same rights as it would have if it were not the Seller or an Affiliate
thereof except as otherwise specifically provided herein. Except as otherwise
provided herein, Securities so owned by or pledged to the Seller or such
controlling or commonly controlled Person shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference, priority or
distinction as among all of such Securities.
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ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.01. Liability of Servicer; Indemnities.
---------------------------------
(a) The Servicer shall be liable in accordance with this Agreement
only to the extent of the obligations in this Agreement specifically undertaken
by the Servicer. Such obligations shall include the following:
(i) The Servicer shall defend, indemnify and hold harmless each
Trustee, the Issuer and the Securityholders from and against any and all costs,
expenses, losses, damages, claims and liabilities arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate thereof of
any Financed Vehicle;
(ii) The Servicer shall indemnify, defend and hold harmless each
Trustee and the Issuer from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
in this Agreement, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the Securities,
or asserted with respect to ownership of the Receivables, or federal or other
income taxes arising out of distributions on the Securities, or any fees or
other compensation payable to any such Person) and costs and expenses in
defending against the same;
(iii) The Servicer shall indemnify, defend and hold harmless each
Trustee, the Issuer and the Securityholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon
such Trustee, the Issuer or the Securityholders through the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties under
this Agreement and any other Transfer and Servicing Agreements or by reason of
reckless disregard of its obligations and duties under any of the Transfer and
Servicing Agreements; and
(iv) The Servicer (other than the Indenture Trustee in its capacity as
successor Servicer pursuant to Section 8.02 hereof) shall indemnify, defend and
hold harmless each Trustee and their respective agents, officers, directors and
servants, from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with (x) in the case of the
Owner Trustee, the Indenture Trustee's performance of its duties under the Basic
Documents, (y) in the case of the Indenture Trustee, the Owner Trustee's
performance of its duties under the Basic Documents or (z) the acceptance,
administration or performance by, or action or inaction of, the applicable
Trustee of the trusts and duties contained in this Agreement, the Basic
Documents, the Indenture (in the case of the Indenture Trustee), including the
administration of the Trust Estate, and the Trust Agreement (in the case of the
Owner Trustee), including the administration of the Owner
29
<PAGE>
Trust Estate, except in each case to the extent that such cost, expense, loss,
claim, damage or liability: (A) is due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Person seeking to be
indemnified, (B) to the extent otherwise payable to the Indenture Trustee,
arises from the Indenture Trustee's breach of any of its representations or
warranties in Section 6.13 of the Indenture or (C) to the extent otherwise
payable to the Owner Trustee, arises from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 6.6 of the Trust
Agreement.
(b) Indemnification under this Section 7.01 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Servicer has made any indemnity
payments pursuant to this Section 7.01 and the recipient thereafter collects any
of such amounts from others, the recipient shall promptly repay such amounts
collected to the Servicer, without interest.
SECTION 7.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. Any corporation (a) into which the Servicer may
- ----------------------------
be merged or consolidated, (b) resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, (c) succeeding to the
business of the Servicer, or (d) more than 50% of the voting stock of which is
owned directly or indirectly by NIC and which is otherwise servicing the
Seller's receivables, which corporation in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Servicer under
this Agreement shall be the successor to the Servicer under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, notwithstanding anything in this Agreement
to the contrary. The Servicer shall provide notice of any merger, consolidation
or succession pursuant to this Section 7.02 to the Rating Agencies.
SECTION 7.03. Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Issuer
or the Securityholders, except as specifically provided in this Agreement, for
any action taken or for refraining from the taking of any action pursuant to the
Further Transfer and Servicing Agreements or for errors in judgment; provided,
--------
however, that this provision shall not protect the Servicer or any such Person
- -------
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of obligations and
duties under the Further Transfer and Servicing Agreements. The Servicer and
any director, officer or employee or agent of the Servicer may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement.
(b) [RESERVED]
30
<PAGE>
(c) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
- -------- -------
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement and the interests of the Securityholders
under this Agreement and the Noteholders and (to the extent expressly provided
therein) the Certificateholders under the Indenture and the interests of the
Certificateholders under the Trust Agreement. In such event, the legal expenses
and costs for such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuer and the Servicer shall be entitled
to be reimbursed therefor.
(d) The Applicable Trustee shall distribute out of the Collection
Account on a Distribution Date any amounts permitted for reimbursement pursuant
to subsection 7.03(c) which have not been previously reimbursed after any
deposit to the Reserve Account pursuant to Section 4.06(c)(vi) and before any
distribution to the Seller pursuant to Section 4.07(b); provided, however, that
-------- -------
the Applicable Trustee shall not distribute such amounts if the amount on
deposit in the Reserve Account (after giving effect to all deposits and
withdrawals pursuant to Sections 4.06(b) and (c) and Section 4.07(c), on such
Distribution Date) is greater than zero but less than the Specified Reserve
Account Balance for such Distribution Date.
SECTION 7.04. Delegation of Duties. So long as NFC acts as Servicer,
--------------------
the Servicer may delegate any duties under this Agreement to any corporation
more than 50% of the voting stock of which is owned, directly or indirectly, by
NIC. The Servicer may at any time perform specific duties as Servicer through
sub-contractors who are in the business of servicing medium and heavy duty
truck, bus and trailer receivables; provided, however, that no such delegation
-------- -------
shall relieve the Servicer of its responsibility with respect to such duties;
and provided, further, that NFC provides prior written notice to the Rating
-------- -------
Agencies of such delegation .
SECTION 7.05. Servicer Not to Resign. Subject to the provisions of
----------------------
Section 8.02, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement as Servicer except upon determination that the
performance of its duties under this Agreement is no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
each Trustee. No such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Defaults. Each of the following shall
-----------------
constitute a "SERVICER DEFAULT":
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(a) any failure by the Servicer to deliver to the Indenture Trustee
for deposit in any of the Designated Accounts or to the Owner Trustee for
deposit in the Certificate Distribution Account any required payment or to
direct the Indenture Trustee to make any required distributions therefrom, which
failure continues unremedied for a period of five Business Days after written
notice is received by the Servicer from the applicable Trustee or after
discovery of such failure by an officer of the Servicer;
(b) failure on the part of the Seller or the Servicer to duly observe
or perform in any material respect any other covenants or agreements of the
Seller or the Servicer set forth in the Purchase Agreement, this Agreement or
any of the other Further Transfer and Servicing Agreements which failure (i)
materially and adversely affects the rights of Securityholders, and (ii)
continues unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Seller or the Servicer, as applicable, by either Trustee, or to the
Seller or the Servicer, as applicable, and to either Trustee by Noteholders
whose Notes evidence not less than 25% of the Outstanding Amount of the Notes as
of the close of the preceding Distribution Date (or, if the Notes have been paid
in full, by Certificateholders whose Certificates evidence not less than 25% of
the Voting Interests as of the close of the preceding Distribution Date);
(c) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator for the Seller or the Servicer, in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of their respective
affairs, and the continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(d) the consent by the Seller or the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of or relating to
the Seller or the Servicer or of or relating to substantially all of their
respective property; or the Seller or the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
SECTION 8.02. Consequences of a Servicer Default. If a Servicer
----------------------------------
Default shall occur and be continuing, either the Indenture Trustee or the
Noteholders whose Notes evidence not less than a majority of the Outstanding
Amount of the Notes as of the close of the preceding Distribution Date (or, if
the Notes have been paid in full and the Indenture has been discharged in
accordance with its terms, by the Owner Trustee or Certificateholders whose
Certificates evidence not less than a majority of the Voting Interests as of the
close of the preceding Distribution Date) by notice then given in writing to the
Servicer and the Owner Trustee (and to the Indenture Trustee if given by the
Securityholders) may, in addition to other rights and remedies available in a
court of law or equity to damages, injunctive relief and specific performance,
terminate all of the rights and obligations of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice,
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all authority and power of the Servicer under this Agreement, whether with
respect to the Securities or the Receivables or otherwise, shall pass to and be
vested in the Indenture Trustee pursuant to and under this Section 8.02. The
Indenture Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The Servicer agrees to cooperate with either Trustee
in effecting the termination of the responsibilities and rights of the Servicer
under this Agreement, including the transfer to either Trustee for
administration by it of all cash amounts that shall at the time be held by the
Servicer for deposit, or that shall have been deposited by the Servicer in the
Collection Account, the Note Distribution Account or the Certificate
Distribution Account or thereafter received with respect to the Receivables that
shall at that time be held by the Servicer. In addition to any other amounts
that are then payable to the Servicer under this Agreement, the Servicer shall
be entitled to receive from the successor Servicer reimbursements for any
Outstanding Monthly Advances made during the period prior to the notice pursuant
to this Section 8.02 which terminates the obligation and rights of the Servicer
under this Agreement.
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor. On
--------------------------------------------------
and after the time the Servicer receives a notice of termination pursuant to
Section 8.02, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement, and shall be subject
to all the responsibilities, restrictions, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions of this Agreement;
provided, however, that the predecessor Servicer shall remain liable for, and
- -------- -------
the successor Servicer shall have no liability for, any indemnification
obligations of the Servicer arising as a result of acts, omissions or
occurrences during the period in which the predecessor Servicer was the
Servicer; and provided, further, that NFC shall remain liable for all such
-------- -------
indemnification obligations of the Servicer without regard to whether it is
still Servicer hereunder. As compensation therefor, the Indenture Trustee shall
be entitled to such compensation (whether payable out of the Collection Account
or otherwise) as the Servicer would have been entitled to under this Agreement
if no such notice of termination had been given including, but not limited to,
the Total Servicing Fee and Supplemental Servicing Fees and shall be entitled to
Investment Earnings as set forth in Section 5.01(b)(i) hereof. Notwithstanding
the above, the Indenture Trustee may, if it shall be unwilling so to act, or
shall, if it is legally unable so to act, appoint, or petition a court of
competent jurisdiction to appoint, a successor (i) having a net worth of not
less than $100,000,000 and (ii) whose regular business includes the servicing of
medium and heavy duty bus, truck and trailer receivables, as the successor to
the Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.
In connection with such appointment and assumption, the Indenture Trustee may
make such arrangements for the compensation of such successor out of payments on
Receivables as it and such successor shall agree; provided, however, that no
-------- -------
such compensation shall be in excess of that permitted the Servicer under this
Agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
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SECTION 8.04. Notification to Securityholders. Upon any termination
-------------------------------
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Indenture Trustee shall give prompt written notice thereof to the
Noteholders and the Rating Agencies and the Owner Trustee shall give prompt
written notice thereof to the Certificateholders.
SECTION 8.05. Waiver of Past Defaults. Noteholders whose Notes
-----------------------
evidence not less than a majority of the Outstanding Amount of the Notes as of
the close of the preceding Distribution Date (or, if all of the Notes have been
paid in full and the Indenture has been discharged in accordance with its terms,
Certificateholders whose Certificates evidence not less than a majority of the
Voting Interests as of the close of the preceding Distribution Date) may, on
behalf of all Securityholders, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from any of the accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 8.06. Repayment of Advances. If the identity of the Servicer
---------------------
shall change, the predecessor Servicer shall be entitled to receive, to the
extent of available funds, reimbursement for Outstanding Monthly Advances
pursuant to Section 5.06 in the manner specified in Section 4.06, with respect
to all Monthly Advances made by such predecessor Servicer.
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables. On the last day
------------------------------------
of any Monthly Period as of which the Aggregate Receivables Balance is 10% or
less of the Aggregate Starting Receivables Balance, the Servicer shall have the
option to purchase the assets of the Trust other than the Designated Accounts
and the Certificate Distribution Account. If the Servicer's long term unsecured
debt rating from Moody's Investors Service, Inc. is equal to or higher than Baa3
at the time that it seeks to exercise such option, then to exercise such option,
the Servicer shall deposit in the Collection Account an amount equal to the
aggregate Administrative Purchase Payments for the Receivables (including
Liquidating Receivables), plus the appraised value of any such other property
held by the Trust (less the Liquidation Expenses to be incurred in connection
with the recovery thereof), such value to be determined by an appraiser mutually
agreed upon by the Servicer and each Trustee. If the Servicer's long term
unsecured debt rating from Moody's Investors Service, Inc. is less than Baa3 at
the time that it seeks to exercise such option, then to exercise such option,
the Servicer shall deposit in the Collection Account an amount equal to the
appraised value of the Receivables (including Liquidating Receivables), plus the
appraised value of any such other property held by the Trust (less the
Liquidation Expenses to be incurred in connection with the recovery thereof),
such values to be determined by an appraiser mutually agreed upon by the
Servicer and each Trustee; provided, that such amount (when added to any funds
then on deposit in the Designated Accounts and the Certificate Distribution
Account) must be at least equal to the
34
<PAGE>
aggregate Redemption Price of the outstanding Notes to be redeemed with such
proceeds plus the sum of the Certificate Balance and the Certificateholders'
Interest Distributable Amount for the Distribution Date related to the Monthly
Period in which such option is exercised. Thereupon, the Servicer shall succeed
to all interests in and to the Trust (other than the Designated Accounts and the
Certificate Distribution Account).
SECTION 9.02. Sale of Assets; Termination.
---------------------------
(a) Upon any sale or other disposition of the assets of the Trust
pursuant to Section 7.2 of the Trust Agreement (an "Insolvency Sale") or Article
V of the Indenture (an "Event of Default Sale"), the Servicer shall instruct the
Applicable Trustee to deposit the proceeds from such Insolvency Sale or other
disposition after all payments and reserves therefrom have been made or, with
respect to an Event of Default Sale, the amount specified in clause SECOND of
Section 5.4(b) of the Indenture (in either case, the "INSOLVENCY PROCEEDS") in
the Collection Account. On the day preceding the Distribution Date on which the
Insolvency Proceeds are deposited in the Collection Account (or, if such
proceeds are not so deposited on the day preceding a Distribution Date, on the
day preceding the Distribution Date immediately following such deposit), the
Servicer shall instruct the Applicable Trustee to make the following deposits
(after the application on the day preceding such Distribution Date of the
Available Amount and funds on deposit in the Reserve Account pursuant to
Sections 4.06 and 4.07) from the Insolvency Proceeds and any funds remaining on
deposit in the Reserve Account (including the proceeds of any sale of
investments therein as described in the following sentence) in the following
priority:
(i) to the Note Distribution Account, any portion of the Aggregate
Noteholders' Interest Distributable Amount not otherwise deposited into the Note
Distribution Account on the day preceding such Distribution Date;
(ii) to the Note Distribution Account, the Aggregate Note Principal
Balance (after giving effect to the reduction in the Aggregate Note Principal
Balance to result from the deposits made in the Note Distribution Account on the
day preceding such Distribution Date and on the day preceding each prior
Distribution Date);
(iii) to the Certificate Distribution Account, any portion of the
Certificateholders' Interest Distributable Amount not otherwise deposited into
the Certificate Distribution Account on the day preceding such Distribution
Date; and
(iv) to the Certificate Distribution Account, the Certificate Balance
(after giving effect to the reduction in the Certificate Balance to result from
the deposits made in the Certificate Distribution Account on the day preceding
such Distribution Date).
Subject to Section 5.01(b), any investments on deposit in the Reserve Account
which shall not mature on or before the day preceding such Distribution Date
shall be sold by the Indenture Trustee at such time as shall result in the
Indenture Trustee receiving the proceeds from such sale not later
35
<PAGE>
than the day immediately preceding such Distribution Date. Any Insolvency
Proceeds remaining after the deposits described above shall be paid to the
Seller.
(b) Notice of any termination of the Trust shall be given by the
Servicer to each Trustee as soon as practicable after the Servicer has received
notice thereof.
(c) Following the satisfaction and discharge of the Indenture with
respect to the Notes, and the payment in full of the principal and interest on
the Notes, the Certificateholders shall succeed to the rights of the Noteholders
hereunder and the Owner Trustee shall succeed to the rights of, and assume the
obligations of, the Indenture Trustee pursuant to this Agreement (subject to the
continuing obligations of the Indenture Trustee set forth in Section 4.4 of the
Indenture).
(d) After payment to each Trustee, the Securityholders and the
Servicer of all amounts required to be paid under this Agreement, the Indenture
and the Trust Agreement, any amounts on deposit in the Reserve Account and the
Collection Account (after all other distributions required to be made from such
accounts have been made) shall be paid to the Seller and any other assets
remaining in the Trust shall be distributed to the Seller.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
---------
(a) This Agreement may be amended by the Seller, the Servicer and the
Owner Trustee with the consent of the Indenture Trustee, but without the consent
of any of the Securityholders, (i) to cure any ambiguity, (ii) to correct or
supplement any provision in this Agreement that may be defective or inconsistent
with any other provision in this Agreement or any other Basic Document, (iii) to
add or supplement any credit enhancement for the benefit of the Noteholders of
any class or the Certificateholders provided that if any such addition shall
affect any class of Noteholders or Certificateholders differently than any other
class of Noteholders or Certificateholders, respectively, then such addition
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any class of Noteholders or the
Certificateholders, (iv) add to the covenants, restrictions or obligations of
the Seller, the Servicer, or either Trustee or (v) add, change or eliminate any
other provision of this Agreement in any manner that shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
the Securityholders.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Owner Trustee with the consent of the Indenture
Trustee, the consent of Noteholders whose Notes evidence not less than a
majority of the Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and the consent of Certificateholders whose Certificates
evidence not less than a majority of the Voting Interests as of the close of the
preceding Distribution Date (which consent, whether given pursuant to this
Section 10.01 or pursuant to any other provision of this Agreement, shall be
conclusive and binding on such Person and on all future holders of such
36
<PAGE>
Security and of any Security issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Security) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Securityholders; provided, however, that no such
-------- -------
amendment shall (i)(a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made on any Security, the Interest
Rate for any class of Notes, the Pass Through Rate or the Specified Reserve
Account Balance or (b) reduce the aforesaid percentage required to consent to
any such amendment, without the consent of the holders of all Securities then
outstanding or (ii) amend any provision of this Agreement (including, Section
10.06) which requires actions taken under such provision to have the consent of
Noteholders whose Notes evidence greater than a majority of the Outstanding
Amount of the Notes as of the preceding Distribution Date or of
Certificateholders whose Certificates evidence greater than a majority of the
Voting Interests as of the close of the preceding Distribution Date, in each
case without the consent of the Indenture Trustee and the numbers of
Securityholders described in such Section.
(c) Prior to the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent to the Rating Agencies.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee shall
furnish written notification to each Noteholder.
(e) It shall not be necessary for the consent of Securityholders
pursuant to subsection 10.01(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Securityholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Securityholders shall be subject
to such reasonable requirements as either Trustee may prescribe, including the
establishment of record dates pursuant to paragraph number 2 of the Depository
Agreements.
(f) Prior to the execution of any amendment to this Agreement, each
Trustee shall be entitled to receive and rely upon the Opinion of Counsel
referred to in subsection 10.02(i) and an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery of such amendment
have been satisfied. Each Trustee may, but shall not be obligated to, enter
into any such amendment which affects such Trustee's own rights, duties or
immunities under this Agreement or otherwise.
(g) Each of NFC and the Seller agrees that such Person shall not amend
or agree to any amendment of the Purchase Agreement unless such amendment would
be permissible under the terms of this Section 10.01 as if this Section 10.01
were contained in the Purchase Agreement.
37
<PAGE>
SECTION 10.02. Protection of Title to Owner Trust Estate.
-----------------------------------------
(a) The Seller or the Servicer or both shall execute and file such
financing statements and cause to be executed and filed such continuation and
other statements, all in such manner and in such places as may be required by
law fully to preserve, maintain and protect the interest of the Securityholders
and the Trustees under this Agreement in the Receivables. The Seller or the
Servicer or both shall deliver (or cause to be delivered) to each Trustee file-
stamped copies of, or filing receipts for, any document filed as provided above,
as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given each Trustee at least 60 days prior
written notice thereof.
(c) Each of the Seller and the Servicer shall give each Trustee at
least 60 days prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Servicer shall at
all times maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and extensions of
any scheduled payments made not less than 45 days prior thereto, and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, the Note Distribution Account and the Certificate Distribution Account.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Issuer,
the Servicer's master computer records (including any back-up archives) that
refer to any Receivable indicate clearly that the Receivable is owned by the
Issuer. Indication of the Issuer's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable has been paid in full or repurchased by the Seller or purchased by
the Servicer.
(f) If at any time the Seller or the Servicer proposes to sell, grant
a security interest in, or otherwise transfer any interest in medium and heavy
duty truck, bus and trailer receivables to any prospective purchaser, lender or
other transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, records or print-outs (including any
restored from back-up archives) that, if they refer in any manner whatsoever to
any Receivable, indicate clearly that such Receivable has been sold and is owned
by the Issuer unless such Receivable has been paid in full or repurchased by the
Seller or purchased by the Servicer.
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(g) The Servicer shall permit each Trustee and their respective agents
at any time to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Receivables then or previously included in the
Owner Trust Estate.
(h) The Servicer shall furnish to each Trustee at any time upon
request a list of all Receivables then held as part of the Trust, together with
a reconciliation of such list to the Schedule of Receivables and to each of the
-----------------------
Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust. Upon request, the Servicer shall furnish a copy of
any such list to the Seller. Each Trustee and the Seller shall hold any such
list and the Schedule of Receivables for examination by interested parties
-----------------------
during normal business hours at their respective offices located at the
addresses set forth in Section 10.03.
(i) The Servicer shall deliver to each Trustee promptly after the
execution and delivery of this Agreement and of each amendment thereto, an
Opinion of Counsel either (a) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of each Trustee in
the Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no such action is necessary to preserve and protect
such interest.
(j) To the extent required by law, the Seller shall cause the
Securities to be registered with the Securities and Exchange Commission pursuant
to Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.03. Notices. All demands, notices and communications upon
-------
or to the Seller, the Servicer, either Trustee or the Rating Agencies under this
Agreement shall be delivered as specified in Appendix B hereto.
----------
SECTION 10.04. GOVERNING LAW. ALL QUESTIONS CONCERNING THE
-------------
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR
RULE (WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
ILLINOIS; PROVIDED, HOWEVER THAT THE DUTIES AND IMMUNITIES OF THE OWNER TRUSTEE
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
SECTION 10.05. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
39
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SECTION 10.06. Assignment. Notwithstanding anything to the contrary
----------
contained in this Agreement, this Agreement may not be assigned by the Seller
without the prior written consent of Noteholders whose Notes evidence not less
than 66% of the Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and of Certificateholders whose Certificates evidence not less
than 66% of the Voting Interests as of the close of the preceding Distribution
Date. The Seller shall provide notice of any such assignment to the Rating
Agencies.
SECTION 10.07. Third-Party Beneficiaries. This Agreement shall inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Securityholders
and the Trustees and their respective successors and permitted assigns. Except
as otherwise provided in Section 7.01 or in this Article X, no other Person
shall have any right or obligation hereunder.
SECTION 10.08. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.09. Headings and Cross-References. The various headings
-----------------------------
in this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement.
SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby
-------------------------------
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders and (only to the extent expressly
provided in the Indenture) the Certificateholders of all right, title and
interest of the Issuer in, to and under the Purchased Property and/or the
assignment of any or all of the Issuer's rights and obligations hereunder to the
Indenture Trustee.
SECTION 10.11. No Petition Covenants. Notwithstanding any prior
---------------------
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the final distribution with respect
to the Securities to the Note Distribution Account or the Certificate
Distribution Account, as applicable, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
SECTION 10.12. Limitation of Liability of the Trustees.
---------------------------------------
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by The Bank of New York not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or
40
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in any of the certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Issuer.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by Chemical Bank Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Chemical Bank Delaware in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI of the Trust Agreement.
41
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SECTION 10.13. Business Day Certificate.
------------------------
On the Closing Date (with respect to the remainder of calendar year
1995) and thereafter, within 15 days prior to the end of each calendar year
while this Agreement remains in effect (with respect to the next succeeding
calendar year), the Servicer shall deliver to either Trustee, following receipt
of a written request by such Trustee, an Officers' Certificate specifying the
days on which banking institutions in Chicago, Illinois are authorized or
obligated by law or executed order to be closed.
* * * * *
42
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
NAVISTAR FINANCIAL1995-B OWNER TRUST
By: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust,
By: /s/ John J. Cashin
------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By: /s/ R. Wayne Cain
-----------------------------------
Name: R. Wayne Cain
Title: Vice President
NAVISTAR FINANCIAL CORPORATION, as
Servicer
By: /s/ R. Wayne Cain
-----------------------------------
Name: R. Wayne Cain
Title: Vice President
Acknowledged and Accepted:
THE BANK OF NEW YORK, not in
its individual capacity
but solely as Indenture Trustee,
By: /s/ Patricia M.F. Russo
------------------------------
Name: Patricia M.F. Russo
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
FORM OF INITIAL ASSIGNMENT
For value received, in accordance with the Pooling and Servicing
Agreement, dated as of November 1, 1995 (the "Pooling and Servicing Agreement"),
among Navistar Financial Corporation, a Delaware corporation ("NFC"), Navistar
Financial Retail Receivables Corporation, a Delaware corporation (the "Seller"),
and Navistar Financial 1995-B Owner Trust (the "Issuer"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Issuer, without recourse,
----------------
all right, title and interest of the Seller in, to and under (i) the Initial
Receivables and all monies paid thereon (including Liquidation Proceeds) and due
thereunder on and after the Initial Cutoff Date; (ii) the security interests in
the Financed Vehicles granted by Obligors pursuant to the Initial Receivables
and, to the extent permitted by law, any accessions thereto which are financed
by NFC; (iii) the benefits of any lease assignments with respect to the related
Financed Vehicles; (iv) any proceeds from any Insurance Policies with respect to
the Initial Receivables; (v) any proceeds from Dealer Liability with respect to
the Initial Receivables, proceeds from any NITC Purchase Obligations with
respect to the Initial Receivables (subject to the limitations set forth in
Section 2.04 of the Pooling and Servicing Agreement) and proceeds from any
Guaranties of Initial Receivables; (vi) the Purchase Agreement and the Custodian
Agreement, including the right of the Seller to cause NFC to perform its
obligations thereunder (including the obligation to repurchase Initial
Receivables under certain circumstances) and (vii) any proceeds of the property
described in clauses (i), (ii), (iii) and (vi) above.
The foregoing sale does not constitute and is not intended to result
in any assumption by the Issuer of any obligation of the undersigned to the
Obligors, Dealers, insurers or any other Person in connection with the Initial
Receivables, the agreements with Dealers, any Insurance Policies or any
agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of November 1, 1995.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: ______________________________
Name: R. Wayne Cain
Title: Vice President
2
<PAGE>
EXHIBIT B
FORM OF SUBSEQUENT ASSIGNMENT
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of November 1, 1995 (the "Pooling and Servicing Agreement"), among
Navistar Financial Corporation, a Delaware corporation ("NFC"), Navistar
Financial Retail Receivables Corporation, a Delaware corporation (the "Seller")
and Navistar Financial 1995-B Owner Trust (the "Issuer"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Issuer, without recourse,
----------------
all right, title and interest of the Seller in, to and under (i) the Subsequent
Receivables, having an aggregate Receivable Balance equal to
$__________________, set forth on the schedule hereto (which shall supplement
the Schedule of Receivables) and all monies paid thereon (including Liquidation
-----------------------
Proceeds) and due thereunder on and after _________________ (the "Subsequent
Cutoff Date"); (ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and, to the extent permitted by
law, any accessions thereto which are financed by NFC; (iii) the benefits of any
lease assignments with respect to the related Financed Vehicles; (iv) any
proceeds from any Insurance Policies with respect to such Subsequent
Receivables; (v) any proceeds from Dealer Liability with respect to such
Subsequent Receivables, proceeds from any NITC Purchase Obligations with respect
to such Subsequent Receivables (subject to the limitations set forth in Section
2.04 of the Pooling and Servicing Agreement) and proceeds from any Guaranties of
such Subsequent Receivables; (vi) the Purchase Agreement and the Custodian
Agreement, including the right of the Seller to cause NFC to perform its
obligations thereunder (including the obligation to repurchase Initial
Receivables under certain circumstances) and (vii) any proceeds of the property
described in clauses (i), (ii), (iii) and (vi) above.
The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
Dealers, insurers or any other Person in connection with the Subsequent
Receivables assigned hereby, the agreements with Dealers, any Insurance Policies
or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of __________________, 199_.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: ______________________________
Name: Phyllis E. Cochran
Title: Vice President
2
<PAGE>
EXHIBIT C
LOCATIONS OF SCHEDULE OF RECEIVABLES
The Schedule of Receivables is
-----------------------
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
3
<PAGE>
APPENDIX A
PART I - DEFINITIONS
All terms defined in this Appendix shall have the defined meanings
when used in the Basic Documents, unless otherwise defined therein.
Accountants' Report: The report described in Section 4.02 of the
-------------------
Pooling and Servicing Agreement.
Accounting Date: With respect to a Distribution Date, the last day of
---------------
the related Monthly Period.
Act: An Act as specified in Section 11.3(a) of the Indenture.
---
Actual Payment: With respect to a Distribution Date and to a
--------------
Receivable, all payments received by the Servicer from or for the account of the
Obligor during the related Monthly Period (and, in the case of the first
Distribution Date occurring after the date such Receivable is transferred to the
Trust, all payments received by the Servicer from or for the account of the
Obligor on or after the applicable Cutoff Date) except for any Overdue Payments
or Supplemental Servicing Fees.
Administration Agreement: That certain Administration Agreement,
------------------------
dated as of November 1, 1995 among NFC, as Administrator, the Trust and the
Indenture Trustee, as amended and supplemented from time to time.
Administrative Purchase Payment: With respect to a Distribution Date
-------------------------------
and to an Administrative Receivable purchased as of the related Accounting Date,
a release of all claims for reimbursement of Monthly Advances made on such
Administrative Receivable plus a payment equal to the sum of (i) the sum of the
Scheduled Payments on such Administrative Receivable due after the Accounting
Date minus the Rebate, (ii) any reimbursement made pursuant to the last sentence
of Section 5.06 of the Pooling and Servicing Agreement with respect to such
Receivable, and (iii) all past due Scheduled Payments with respect to which a
Monthly Advance has not been made.
Administrative Receivable: A Receivable which the Servicer is
-------------------------
required to purchase as of an Accounting Date pursuant to Section 3.08 of the
Pooling and Servicing Agreement or which the Servicer has elected to repurchase
as of an Accounting Date pursuant to Section 9.01 of the Pooling and Servicing
Agreement.
Administrator: NFC or any successor Administrator under the
-------------
Administration Agreement.
Affiliate: With respect to any specified Person, any other Person
---------
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE>
Agency Office: The office of the Issuer maintained pursuant Section
-------------
3.2 of the Indenture.
Aggregate Losses: With respect to a Monthly Period, the sum of (i)
----------------
the aggregate of the Receivable Balances of all Receivables newly designated
during such Monthly Period as Liquidating Receivables, plus (ii) the aggregate
principal portion of Scheduled Payments due but not received with respect to all
such Receivables prior to the date any such Receivable was designated a
Liquidating Receivable minus (iii) Liquidation Proceeds collected during such
Monthly Period with respect to all Liquidating Receivables.
Aggregate Noteholders' Interest Distributable Amount: With respect to
----------------------------------------------------
a Distribution Date, the sum of the Noteholders' Interest Distributable Amounts
for all classes of Notes and the Noteholders' Interest Carryover Shortfall as of
the preceding Distribution Date.
Aggregate Noteholders' Principal Distributable Amount: With respect
-----------------------------------------------------
to a Distribution Date, the sum of the Noteholders' Principal Distributable
Amounts for all classes of Notes and the Noteholders' Principal Carryover
Shortfall as of the preceding Distribution Date.
Aggregate Note Principal Balance: With respect to the close of a
--------------------------------
Distribution Date, the sum of the Note Principal Balances for all classes of
Notes.
Aggregate Receivables Balance: As of any date, the sum of the
-----------------------------
Receivable Balances of all outstanding Receivables (other than Liquidating
Receivables) held by the Trust on such date.
Aggregate Starting Receivables Balance: As of any date of
--------------------------------------
determination, the sum of the Starting Receivable Balances of the Initial
Receivables as of the Initial Cutoff Date, which is $454,499,683.43, plus the
----
aggregate Starting Receivable Balances (as of the related Subsequent Cutoff
Date) for all Subsequent Receivables sold to the Issuer on or prior to such date
of determination.
Annual Percentage Rate: With respect to a Receivable, the annual rate
----------------------
of finance charges stated in such Receivable.
Applicable Trustee: So long as the Aggregate Note Principal Balance
------------------
is greater than zero and the Indenture has not been discharged in accordance
with its terms, the Indenture Trustee, and thereafter, the Owner Trustee.
Assignment: The Assignment described in Section 2.01 of the Purchase
----------
Agreement.
Authorized Officer: With respect to the Issuer, any officer of the
------------------
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on the list of
Authorized Officers delivered by the Administrator to the Indenture Trustee on
the Closing Date (as such list may be modified or supplemented from time to time
thereafter).
2
<PAGE>
Available Amount: With respect to a Distribution Date, the sum of the
----------------
Collected Interest and the Collected Principal for such Distribution Date.
Available Purchase Amount: As of any Subsequent Transfer Date, the
-------------------------
amount by which $525,000,000 exceeds the Aggregate Starting Receivables Balance
on (and before giving effect to any transfers of Receivables on) such Subsequent
Transfer Date.
Basic Documents: The Certificate of Trust, the Trust Agreement, the
---------------
Purchase Agreement, the Assignment, the Pooling and Servicing Agreement, the
Subsequent Transfer Assignments, the Custodian Agreement, the Administration
Agreement, the Indenture, the Note Depository Agreement, the Certificate
Depository Agreement and the other documents and certificates delivered in
connection therewith.
Basic Servicing Fee: With respect to a Monthly Period, the fee
-------------------
payable to the Servicer for services rendered during such Monthly Period, which
shall be equal to one-twelfth of the Basic Servicing Fee Rate multiplied by the
Aggregate Receivables Balance as of the first day of such Monthly Period.
Basic Servicing Fee Rate: 1.0% per annum.
------------------------
Book-Entry Certificates: A beneficial interest in the Certificates,
-----------------------
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 3.11 of the Trust Agreement.
Book-Entry Notes: A beneficial interest in the Notes, ownership and
----------------
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
Business Day: Any day other than a Saturday, a Sunday or any other
------------
day on which banking institutions in New York, New York or Chicago, Illinois
may, or are required to, remain closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
----------------------
12 Del. Code (S) 3801 et seq., as the same may be amended from time to time.
--------- -------
Certificate: Any one of the 6.22% Asset Backed Certificates executed
-----------
by the Owner Trustee and authenticated by or on behalf of the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.
---------
Certificateholder: A Person in whose name a Certificate is registered
-----------------
pursuant to the terms of the Trust Agre ement.
Certificateholders' Interest Carryover Shortfall: With respect to the
------------------------------------------------
close of any Distribution Date, the excess of (i) the Certificateholders'
Interest Distributable Amount for such Distribution Date, over (ii) the amount
that was actually deposited in the Certificate Distribution Account on the day
preceding such current Distribution Date in respect of interest on the
Certificates.
Certificateholders' Interest Distributable Amount: With respect to
-------------------------------------------------
any Distribution Date, the sum of (i) the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date,
3
<PAGE>
(ii) the Certificateholders' Interest Carryover Shortfall as of the close of the
preceding Distribution Date and (iii) one-twelfth of the Pass Through Rate
multiplied by the sum of (a) the Noteholders' Principal Carryover Shortfall as
of the preceding Distribution Date and (b) the Certificateholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date.
Certificateholders' Monthly Interest Distributable Amount: With
---------------------------------------------------------
respect to any Distribution Date, interest equal to one-twelfth of the Pass
Through Rate multiplied by the Certificate Balance as of the last day of the
related Monthly Period (or, in the case of the first Distribution Date, based on
the Certificate Balance as of the Closing Date and pro-rated for the number of
days from the Closing Date to but excluding such Distribution Date).
Certificateholders' Monthly Principal Distributable Amount: With
----------------------------------------------------------
respect to any Distribution Date, the lesser of (i) the Certificateholders'
Percentage of the Principal Distributable Amount for such Distribution Date and
(ii) the Certificate Balance as of the close of the preceding Distribution Date.
Certificateholders' Percentage: With respect to any Distribution
------------------------------
Date, 100% minus the Noteholders' Percentage for such Distribution Date.
Certificateholders' Prepayment Premium: An amount equal to the
--------------------------------------
excess, if any, discounted as described below, of (i) the amount of interest
that would have accrued on the Certificateholders' Pre-Funded Percentage of any
remaining Pre-Funded Amount (the "Certificate Prepayment Amount") at the Pass-
Through Rate during the period commencing on and including the Distribution Date
on which such Certificate prepayment amount is required to be deposited in the
Certificate Distribution Account pursuant to Section 5.02(b)(ii) of the Pooling
and Servicing Agreement to but excluding June 30, 1998, over (ii) the amount of
interest that would have accrued on such Certificate Prepayment Amount over the
same period at a per annum rate of interest equal to the bond equivalent yield
to maturity on the Determination Date preceding such Distribution Date on the
5.125 % U.S. Treasury Notes due June 30, 1998. Such excess shall be discounted
on a monthly basis to present value to such Distribution Date at the yield
described in clause (ii) above.
Certificateholders' Principal Carryover Shortfall: With respect to
-------------------------------------------------
the close of any Distribution Date, the excess of (i) the Certificateholders'
Principal Distributable Amount for such Distribution Date, over (ii) the amount
that was actually deposited in the Certificate Distribution Account on the day
preceding such current Distribution Date in respect of Certificate Balance.
Certificateholders' Principal Distributable Amount: With respect to
--------------------------------------------------
any Distribution Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Distribution Date and any outstanding
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date. In addition, on the Final Scheduled Distribution
Date, the amount required to be distributed to Certificateholders in respect of
the Certificate Balance shall include the lesser of (i) the sum of the principal
portion of any Scheduled Payments of principal due and remaining unpaid on each
Receivable, in each case in the Trust as of the last day of the related Monthly
Period, and (ii) the amount that is necessary (after giving effect to the other
amounts to be deposited in the Certificate Distribution Account on the day
preceding such Distribution Date and allocable to payments in respect of the
Certificate Balance) to reduce the Certificate Balance to zero, in either case
after giving effect to any required distribution of the Aggregate Noteholders'
Principal
4
<PAGE>
Distributable Amount to the Note Distribution Account. In addition, on any
Distribution Date on which, after giving effect to all distributions to the
Servicer and the Securityholders on such Distribution Date, (i) the outstanding
principal balance of the Notes is zero and (ii) the amount on deposit in the
Reserve Account is equal to or greater than the Certificate Balance, the
Certificateholders' Principal Distributable Amount shall include an amount equal
to such Certificate Balance.
Certificate Balance: Initially, as of the Closing Date,
-------------------
$18,375,000.00 (3.5% of the sum of the Initial Aggregate Receivables Balance and
the initial Pre-Funded Amount) and, on any Distribution Date thereafter, the
initial Certificate Balance, reduced by (i) all distributions in respect of
Certificate Balance actually made on or prior to such date to
Certificateholders, other than the Certificateholders' Prepayment Premium, (ii)
the Noteholders' Principal Carryover Shortfall as of the preceding Distribution
Date and (iii) the Certificateholders' Principal Carryover Shortfall as of the
preceding Distribution Date.
Certificate Depository Agreement: The Agreement, dated as of the
--------------------------------
Closing Date, among the Trust, the Administrator and The Depository Trust
Company (as the initial Clearing Agency), relating to the Certificates and
substantially in the form set forth in Exhibit C to the Trust Agreement, as the
---------
same may be amended and supplemented from time to time.
Certificate Distribution Account: The account designated as such,
--------------------------------
established and maintained pursuant to Section 5.1(a) of the Trust Agreement.
Certificate of Trust: The certificate of trust of the Issuer
--------------------
substantially in the form of Exhibit B to the Trust Agreement to be filed for
---------
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
Certificate Owner: With respect to a Book-Entry Certificate, the
-----------------
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an Indirect Participant, in each case in accordance with the rules of such
Clearing Agency).
Certificate Pool Factor: With respect to any Distribution Date, a
-----------------------
seven-digit decimal figure computed by the Servicer equal to the remaining
Certificate Balance as of the close of such Distribution Date divided by the
initial Certificate Balance.
Certificate Register: The register of Certificates specified in
--------------------
Section 3.4 of the Trust Agreement.
Certificate Registrar: The registrar at any time of the Certificate
---------------------
Register, appointed pursuant to Section 3.4(a) of the Trust Agreement.
Class A-1 Notes: The Class A-1 5.75% Asset Backed Notes in the
---------------
aggregate principal amount of $122,300,000.00 issued pursuant to the Indenture.
5
<PAGE>
Class A-2 Notes: The Class A-2 5.94% Asset Backed Notes in the
---------------
aggregate principal amount of $100,000,000.00 issued pursuant to the Indenture.
Class A-3 Notes: The Class A-3 6.05% Asset Backed Notes in the
---------------
aggregate principal amount of $284,325,000.00 issued pursuant to the Indenture.
Clearing Agency: An organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Exchange A ct.
Clearing Agency Participant: A securities broker, dealer, bank, trust
---------------------------
company, clearing corporation or other financial institution or other Person for
whom from time to time a Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
Closing Date: November 1, 1995.
------------
Code: The Internal Revenue Code of 1986, as amended from time to
----
time, and the Treasury Regulations promulgated thereunder.
Code Collateral: Any property a security interest in which may be
---------------
perfected by filing under the applicable UCC.
Collateral: The collateral specified in the Granting Clause of the
----------
Indenture.
Collected Interest: With respect to any Distribution Date, the sum of
------------------
the following amounts with respect to the related Monthly Period, in each case
computed in accordance with the actuarial method: (i) that portion of all
collections on Receivables (other than Liquidating Receivables) allocable to
interest or Prepayment Surplus, (ii) that portion of all Liquidation Proceeds
allocable to interest in accordance with the Servicer's customary servicing
procedures, (iii) that portion of all Monthly Advances allocable to interest and
(iv) that portion of all Warranty Payments, Administrative Purchase Payments or
the Optional Purchase Proceeds allocable to accrued interest or Prepayment
Surplus; less an amount equal to the sum of (x) all amounts received on any
Receivable (other than a Liquidating Receivable) to the extent of the aggregate
Outstanding Monthly Advances of interest with respect to such Receivable and (y)
Liquidation Proceeds with respect to a particular Receivable to the extent of
the Outstanding Monthly Advances of interest thereon.
Collected Principal: With respect to any Distribution Date, the sum
-------------------
of the following amounts with respect to the related Monthly Period in each case
computed in accordance with the actuarial method: (i) that portion of all
collections on Receivables (other than Liquidating Receivables) allocable to
principal, (ii) that portion of Liquidation Proceeds allocable to principal in
accordance with the Servicer's customary servicing procedures, (iii) that
portion of all Monthly Advances allocable to principal, (iv) that portion of all
Warranty Payments, Administrative Purchase Payments or the Optional Purchase
Proceeds allocable to principal, and (v) that portion of all Prepayments
allocable to principal; less an amount equal to the sum of (x) amounts received
on any Receivable (other than a Liquidating Receivable) to the extent of the
aggregate Outstanding Monthly Advances of principal with respect to such
Receivable and (y) Liquidation Proceeds with respect to a particular Receivable
to the extent of the Outstanding Monthly Advances of principal and amounts
6
<PAGE>
representing reimbursement for Liquidation Expenses with respect to such
Receivables pursuant to subsection 4.06(b)(i) of the Pooling and Servicing
Agreement.
Collection Account: The account designated as such, established and
------------------
maintained pursuant to Section 5.01(a)(i) of the Pooling and Servicing
Agreement.
Corporate Trust Office: With respect to the Indenture Trustee or the
----------------------
Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at The Bank of New York, 101
Barclay Street, New York, New York, 10286, Attn: Corporate Trust Administration,
and in the case of the Owner Trustee, at Chemical Bank Delaware, 1201 Market
Street, Wilmington, Delaware 19801, Attn: Corporate Trustee Administration.
Custodian: NFC, as Servicer, or another custodian named from time to
---------
time in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of November 1,
-------------------
1995 between the Custodian and the Seller, as amended or supplemented from time
to time.
Cutoff Date: With respect to an Initial Receivable, the Initial
-----------
Cutoff Date, and with respect to a Subsequent Receivable, the related Subsequent
Cutoff Date.
Dealer: (i) A Person with whom NITC has a valid dealer
------
sales/maintenance agreement to sell NITC vehicles, (ii) a Person with whom NFC
has an agreement to extend new or used truck floor plan financing terms or (iii)
a truck, bus, or trailer equipment manufacturer with whom NITC has a valid
agreement to sell NITC vehicles.
Dealer Liability: With respect to a Receivable, all rights, claims
----------------
and actions of NFC against the Dealer which originated the Receivable or which
sold the Financed Vehicles(s) which gave rise to such Receivable and any
successor Dealer for recourse or reimbursement of any losses, costs or expenses
arising as a result of a default by the Obligor on such Receivable.
Default: Any occurrence that is, or with notice or the lapse of time
-------
or both would become, an Event of D efault.
Definitive Certificates: The Certificates specified in Section 3.13 of
-----------------------
the Trust Agreement.
Definitive Notes: The Notes specified in Section 2.12 of the
----------------
Indenture.
Delinquency Percentage: With respect to a Distribution Date, the
----------------------
aggregate Remaining Gross Balances of all outstanding Receivables which are 61
days or more past due as of the last day of the related Monthly Period, as
determined in accordance with the Servicer's normal practices, expressed as a
percentage of the aggregate Remaining Gross Balances of all outstanding
Receivables on the last day of such Monthly Period.
Delivery: When used with respect to Designated Account Property,
--------
"Delivery" means:
7
<PAGE>
(i) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee or its nominee or
custodian by physical delivery to the Indenture Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer thereof
(a) by delivery of such certificated security endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313(4) of the UCC) and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian and the sending by such financial intermediary of a
confirmation of the transfer to the Indenture Trustee or its nominee or
custodian of such certificated security, or (b) by delivery thereof to a
"clearing corporation" (as defined in Section 8-102(3) of the UCC) and the
making by such clearing corporation of appropriate entries on its books reducing
the appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation's exclusive control,
the sending of a confirmation by the financial intermediary of the transfer to
the Indenture Trustee or its nominee or custodian of such securities and the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Designated Account Property to the
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof;
(ii) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or by the Federal National Mortgage Association
that is a book-entry security held through the Federal Reserve System pursuant
to Federal book-entry regulations, the following procedures, all in accordance
with applicable law, including applicable Federal regulations and Articles 8 and
9 of the UCC: book-entry registration of such Designated Account Property to an
appropriate book-entry account maintained with a Federal Reserve Bank by a
financial intermediary which is also a "depository" pursuant to applicable
Federal regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to the
Indenture Trustee or its nominee or custodian of the transfer to the Indenture
Trustee or its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging to the Indenture Trustee or its nominee or
custodian and indicating that such custodian holds such Designated Account
Property solely as agent for the Indenture Trustee or its nominee or custodian;
the
8
<PAGE>
making by the Indenture Trustee of entries in its books and records establishing
that it holds such Designated Account Property solely as Indenture Trustee under
the terms of Section 5.01 of the Pooling and Servicing Agreement; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Designated Account Property to
the Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(iii) with respect to any such Designated Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (ii) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the transfer to the Indenture Trustee or its nominee
or custodian of such uncertificated security and the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian.
Designated Account Property: The Designated Accounts, all amounts and
---------------------------
investments held from time to time in any Designated Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), including the Reserve Account Initial
Deposit, and all proceeds of the foregoing.
Designated Accounts: The Collection Account, the Note Distribution
-------------------
Account, the Reserve Account, the Negative Carry Account and the Pre-Funding
Account, collectively.
Determination Date: The day that is two Business Days prior to the
------------------
Distribution Date.
Distribution Date: With respect to a Monthly Period, the 15th day of the
-----------------
next succeeding calendar month or, if such 15th day is not a Business Day, the
next succeeding Business Day, commencing November 15, 1995.
Distributor: A distributor of vehicles and equipment not manufactured by
-----------
NITC.
Eligible Deposit Account: Either (i) a segregated account with an Eligible
------------------------
Institution or (ii) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account so long as any of the
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories for long-term unsecured debt
which signifies investment grade.
Eligible Institution: A depository institution organized under the laws of
--------------------
the United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (A) which has either (1) a
long-term unsecured debt rating of at least "AAA" from Standard & Poor's Ratings
Group and "A2" from Moody's Investors Service, Inc. or (2) a short-term
unsecured debt or certificate of deposit rating of at least "A-1+" from Standard
& Poor's Ratings Group and "P-1" from Moody's Investors Service, Inc., (B) whose
deposits are insured by the FDIC and (C) having a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition.
9
<PAGE>
Eligible Investments: Book-entry securities, negotiable instruments or
--------------------
securities represented by instruments in bearer or registered form which
evidence:
(i) direct obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
-------- -------
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies at its highest rating for short-term unsecured
debt obligations or certificates of deposit granted thereby;
(iii) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies at its highest rating for short-term unsecured debt obligations or
certificates of deposit granted thereby;
(iv) investments in money market or common trust funds having a rating from
each of the Rating Agencies at its highest rating for short-term unsecured debt
obligations or certificates of deposit granted thereby (including funds for
which the Indenture Trustee or the Owner Trustee or any of their respective
affiliates is investment manager or advisor, so long as such fund shall have
such rating);
(v) bankers' acceptances issued by any depository institution or trust
company referred to in clause (ii) above;
(vi) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (A) a depository institution or trust company (acting as principal)
described in clause (B) or (B) a depository institution or trust company the
deposits of which are insured by FDIC; and
(vii) any other investment permitted by each of the Rating Agencies.
in each case, other than as permitted by the Rating Agencies, maturing not later
than the Business Day immediately preceding the next Distribution Date.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
Event of Default: An event described in Section 5.1 of the Indenture.
----------------
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
10
<PAGE>
Executive Officer: With respect to any corporation, the Chief Executive
-----------------
Officer, Chief Operating Officer, Chief Financial Officer, President, Executive
Vice President, any Vice President, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
Expenses: The expenses described in Section 6.9 of the Trust Agreement.
--------
FDIC: Federal Deposit Insurance Corporation or any successor agency.
----
Final Scheduled Distribution Date: With respect to a class of Securities,
---------------------------------
the date set forth below opposite such Securities:
Class A-1 Notes: November 15, 1996
Class A-2 Notes: October 15, 1998
Class A-3 Notes: April 15, 2002
Certificates: April 15, 2002
Financed Vehicle: A new or used medium or heavy duty truck, bus or
----------------
trailer, together with any accessions thereto which were financed by NFC,
securing an Obligor's indebtedness under a Receivable. A Receivable may be
secured by one or more Financed Vehicles.
Full Prepayment: With respect to a Distribution Date, that portion of an
---------------
Actual Payment (other than the Scheduled Payment), which with respect to (i) any
Receivable, is sufficient to prepay such Receivable in full (after application
of the Scheduled Payment), or (ii) a Receivable secured by multiple Financed
Vehicles, equals the unpaid principal amount of the Receivable relating to any
Financed Vehicle, as determined by the Servicer in accordance with its customary
servicing procedures.
Funding Percentage: With respect to any Distribution Date, the percentage
------------------
derived from the fraction the numerator of which is the Pre-Funded Amount and
the denominator of which is the sum of the Aggregate Receivables Balance and the
Pre-Funded Amount, in each case, as of the last day of the related Monthly
Period.
Funding Period: The period beginning on and including the Closing Date and
--------------
ending on the first to occur of (a) the Distribution Date on which the amount on
deposit in the Pre-Funding Account (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Receivables to the
Issuer on such Distribution Date) is not greater than $100,000, (b) the date on
which an Event of Default or a Servicer Default occurs, (c) the date on which an
Insolvency Event occurs with respect to the Seller or NFC or (d) the close of
business on the January 1996 Distribution Date.
Further Transfer and Servicing Agreements: The Pooling and Servicing
-----------------------------------------
Agreement, including any Subsequent Transfer Assignments, the Trust Agreement
and the Indenture.
Grant: To mortgage, pledge, bargain, sell, warrant, alienate, remise,
-----
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement
11
<PAGE>
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Guaranties: With respect to any Receivable, personal or commercial
----------
guaranties of an Obligor's performance with respect thereto.
Holder: The Person in whose name a Note or Certificate is registered on
------
the Note Register or the Certificate Register, as applicable.
Indemnified Parties: The Persons specified in Section 6.9 of the Trust
-------------------
Agreement.
Indenture: The Indenture, dated as of November 1, 1995 between the Issuer
---------
and the Indenture Trustee, as amended and supplemented from time to time.
Indenture Trustee: The Bank of New York, a New York banking corporation,
-----------------
not in its individual capacity but solely as trustee under the Indenture, or any
successor trustee under the Indenture.
Independent: When used with respect to any specified Person, that the
-----------
Person (i) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (ii) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the
-----------------------
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company or
--------------------
other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Initial Cutoff Date. October 1, 1995.
-------------------
Initial Receivables: The Receivables transferred to the Trust on the
-------------------
Closing Date.
12
<PAGE>
Insolvency Event: With respect to a specified Person, (i) the entry of a
----------------
decree or order by a court, agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or liquidator for
such Person, in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of such
Person's affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days; (ii) the consent by such Person
to the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Person or of or relating to substantially all
of such Person's property, or (iii) such Person shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
Insurance Policy: With respect to a Receivable, an insurance policy
----------------
covering physical damage, credit life, credit disability, theft, mechanical
breakdown or similar event to each Financed Vehicle securing such Receivable.
Insurance Proceeds: With respect to any Receivable, proceeds of any
------------------
Insurance Policy with respect to such Receivable.
Interest Rate: With respect to the Class A-1 Notes, 5.75% per annum, with
-------------
respect to the Class A-2 Notes, 5.94% per annum, and with respect to the Class
A-3 Notes, 6.05% per annum.
Interested Parties: The Issuer and each other party identified or
------------------
described in the Purchase Agreement or the Further Transfer and Servicing
Agreements as having an interest as owner, trustee, secured party or
Securityholder with respect to the Purchased Property.
Investment Earnings: Investment earnings on funds deposited in the
-------------------
Designated Accounts, net of losses and investment expenses, during the
applicable Monthly Period.
Issuer: The party named as such in the Pooling and Servicing Agreement and
------
in the Indenture until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the Notes.
Issuer Order and Issuer Request: A written order or request signed in the
------------ --------------
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
Lien: Any security interest, lien, charge, pledge, equity or encumbrance
----
of any kind other than liens for taxes not yet due and payable, mechanics'
liens, any liens that attach by operation of law, and any liens being contested
by appropriate measures.
Liquidating Receivable: A Receivable (i) as to which the Servicer (a) has
----------------------
reasonably determined, in accordance with its customary servicing procedures,
that eventual payment of amounts owing on such Receivable is unlikely, or (b)
has repossessed the Financed Vehicle or all Financed Vehicles securing the
Receivable or (ii) as to which any related Scheduled Payment is at least 210
days overdue.
13
<PAGE>
Liquidation Expenses: With respect to a Liquidating Receivable, an amount
--------------------
not to exceed $750 (or such greater amount as the Servicer determines necessary
in accordance with its customary procedures to refurbish and dispose of a
repossessed Financed Vehicle) as an allowance for amounts charged to the account
of the Obligor, in keeping with the Servicer's customary procedures, for
repossession, refurbishment and disposition of the Financed Vehicle including
out-of-pocket costs related to the liquidation.
Liquidation Proceeds: With respect to a Liquidating Receivable, all
--------------------
amounts realized with respect to such Receivables, including benefits of any
lease assignments, Insurance Proceeds, proceeds from any Dealer Liability,
proceeds from any NITC Purchase Obligations and proceeds from any Guaranties,
net of amounts that are required to be refunded to the Obligor on such
Receivable.
Maximum Negative Carry Amount: With respect to any Distribution Date, the
-----------------------------
product of (i) the excess of (a) the weighted average of the Interest Rates on
the Notes and the Pass Through Rate on the Certificates over (b) 2.5%,
multiplied by (ii) the amount on deposit in the Pre-Funding Account as of the
last day of the related Monthly Period multiplied by (iii) the fraction of a
year represented by the number of days until the end of the Funding Period
(calculated on the basis of a 360-day year of twelve 30-day months).
Monthly Advance: The amount, as of an Accounting Date, which the Servicer
---------------
is required to advance on the respective Receivable pursuant to Section 5.06 of
the Pooling and Servicing Agreement.
Monthly Period: With respect to a Determination Date, a Record Date and a
--------------
Distribution Date, the calendar month preceding the month in which such date
occurs. With respect to an Accounting Date, the calendar month in which such
Accounting Date occurs.
Negative Carry Account: The account designated as such, established and
----------------------
maintained pursuant to Section 5.01(a)(v) of the Pooling and Servicing
Agreement.
Negative Carry Account Initial Deposit: Has the meaning set forth in
--------------------------------------
Section 5.03(a) of the Pooling and Servicing Agreement.
Negative Carry Amount: With respect to any Distribution Date, the excess
---------------------
(if any) between (i) the product of (a) the sum of the Noteholders' Interest
Distributable Amount with respect to each class of Notes and the
Certificateholders' Interest Distributable Amount for such Distribution Date
multiplied by (b) the Funding Percentage for such Distribution Date over (ii)
the Investment Earnings on the Pre-Funding Account during the related Monthly
Period.
NIC: Navistar International Corporation, a Delaware corporation, and its
---
successors.
NFC: Navistar Financial Corporation, a Delaware corporation, and its
---
successors.
NFRRC: Navistar Financial Retail Receivables Corporation, a Delaware
-----
corporation, and its successors.
14
<PAGE>
NITC: Navistar International Transportation Corp., a Delaware corporation,
----
and its successors.
NITC Purchase Obligations: Certain obligations of NITC, subject to
-------------------------
limitations, to purchase Financed Vehicles securing Liquidating Receivables
pursuant to Article VI, "NFC/NITC Retail Repossession Purchase and Remarketing
Agreement" and other provisions of the Master Intercompany Agreement by and
between NFC and NITC dated as of April 26, 1993, as such Master Intercompany
Agreement may be amended, supplemented, restated or otherwise modified.
Noteholders: Holders of record of the Notes pursuant to the Indenture and,
-----------
with respect to any class of Notes, holders of record of such class of Notes
pursuant to the Indenture.
Noteholders' Interest Carryover Shortfall: As of the close of any
-----------------------------------------
Distribution Date, the excess of the Aggregate Noteholders' Interest
Distributable Amount for such Distribution Date over the amount that was
actually deposited in the Note Distribution Account on the day preceding such
current Distribution Date in respect of interest.
Noteholders' Interest Distributable Amount: With respect to any class of
------------------------------------------
Notes and any Distribution Date, the product of (i) the outstanding principal
balance of such class of Notes on the preceding Distribution Date after giving
effect to all payments of principal in respect of such class of Notes on such
preceding Distribution Date (or, in the case of the first Distribution Date, the
outstanding principal balance on the Closing Date) and (ii) the product of the
Interest Rate for such class and a fraction, the numerator of which is 30, and
the denominator of which is 360 (but, in the case of the first Distribution
Date, pro-rated for the number of days from the Closing Date to but excluding
such Distribution Date).
Noteholders' Percentage: 100% for each Distribution Date occurring before
-----------------------
the Distribution Date in November, 1996, 96.5% thereafter until the principal
balance of the Class A-3 Notes is paid in full, and zero thereafter; provided,
--------
however, that if the amount on deposit in the Reserve Account is less than 1.00%
- -------
of the Aggregate Starting Receivables Balance on any Distribution Date, then the
Noteholders' Percentage shall mean 100% until all of the Notes are paid in full
or the amount on deposit in the Reserve Account equals the Specified Reserve
Account Balance.
Noteholders' Prepayment Premium: With respect to (i) the Class A-1 Notes,
-------------------------------
an amount equal to the excess, if any, discounted as described below, of (a) the
amount of interest that would have accrued on the Class A-1 Notes' Pre-Funded
Percentage of any remaining Pre-Funded Amount (the "Class A-1 Note Prepayment
Amount") at the Interest Rate of such class during the period commencing on and
including the Distribution Date on which such Class A-1 Note Prepayment Amount
is required to be deposited in the Note Distribution Account pursuant to Section
5.02(b)(ii) of the Pooling and Servicing Agreement to but excluding February 29,
1996, over (b) the amount of interest that would have accrued on such Class A-1
Note Prepayment Amount over the same period at a per annum rate of interest
equal to the bond equivalent yield to maturity on the Determination Date
preceding such Distribution Date on the United States Treasury Bill due February
29, 1996 (such excess to be discounted on a monthly basis to present value to
such Distribution Date at the yield described in clause (i)(b) above), (ii) the
Class A-2 Notes, an amount equal to the excess, if any, discounted as described
below, of (a) the amount of interest that would have accrued on the Class A-2
Notes' Pre-Funded Percentage of any remaining Pre-Funded Amount
15
<PAGE>
(the "Class A-2 Note Prepayment Amount") at the Interest Rate of such class
during the period commencing on and including the Distribution Date on which
such Class A-2 Note Prepayment Amount is required to be deposited in the Note
Distribution Account pursuant to Section 5.02(b)(ii) of the Pooling and
Servicing Agreement to but excluding October 31, 1996, over (b) the amount of
interest that would have accrued on such Class A-2 Note Prepayment Amount over
the same period at a per annum rate of interest equal to the bond equivalent
yield to maturity on the Determination Date preceding such Distribution Date on
the 6.875% United States Treasury Note due October 31, 1996 (such excess to be
discounted on a monthly basis to present value to such Distribution Date at the
yield described in clause (ii)(b) above), and (iii) the Class A-3 Notes, an
amount equal to the excess, if any, discounted as described below, of (a) the
amount of interest that would have accrued on the Class A-3 Notes' Pre-Funded
Percentage of any remaining Pre-Funded Amount (the "Class A-3 Note Prepayment
Amount") at the Interest Rate of such class during the period commencing on and
including the Distribution Date on which such Class A-3 Note Prepayment Amount
is required to be deposited in the Note Distribution Account pursuant to Section
5.02(b)(ii) of the Pooling and Servicing Agreement to but excluding April 30,
1998, over (b) the amount of interest that would have accrued on such Class A-3
Note Prepayment Amount over the same period at a per annum rate of interest
equal to the bond equivalent yield to maturity on the Determination Date
preceding such Distribution Date on the 5.125% United States Treasury Note due
April 30, 1998 (such excess to be discounted on a monthly basis to present value
to such Distribution Date at the yield described in clause (iii)(b) above).
Noteholders' Principal Carryover Shortfall: As of the close of any
------------------------------------------
Distribution Date, the excess of Aggregate Noteholders' Principal Distributable
Amount for such Distribution Date over the amount that was actually deposited in
the Note Distribution Account on the day preceding such current Distribution
Date in respect of principal.
Noteholders' Principal Distributable Amount: With respect to a class of
-------------------------------------------
Notes on a Distribution Date, the lesser of (i) the remainder of (A) the
Noteholders' Percentage of the Principal Distributable Amount minus (B) the
Noteholders' Principal Distributable Amount for each class of Notes then having
priority of payment and (ii) the Note Principal Balance with respect to such
class of Notes (after giving effect to the distribution to the Noteholders of
amounts deposited in the Note Distribution Account on the previous Distribution
Date). In addition, on the Final Scheduled Distribution Date for any class of
Notes, the Noteholders' Principal Distributable Amount for such Notes shall
include the amount necessary to reduce the Note Principal Balance for such class
of Notes to zero.
Notes: Collectively, the Class A-1 Notes, the Class A-2 Notes and the
-----
Class A-3 Notes.
Note Depository: The depositary from time to time selected by the
---------------
Indenture Trustee on behalf of the Trust in whose name the Notes are registered
prior to the issue of Definitive Notes. The first Note Depository shall be Cede
& Co., the nominee of the initial Clearing Agency.
Note Depository Agreement: The agreement, dated as of the Closing Date,
-------------------------
among the Issuer, the Indenture Trustee and The Depository Trust Company, as the
initial Clearing Agency relating to the Notes, substantially in the form of
Exhibit C to the Indenture, as the same may be amended and supplemented from
- ---------
time to time.
16
<PAGE>
Note Distribution Account: The account designated as such, established and
-------------------------
maintained pursuant to Section 5.01(a)(ii) of the Pooling and Servicing
Agreement.
Note Owner: With respect to a Book-Entry Note, the Person who is the
----------
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an Indirect
Participant, in each case in accordance with the rules of such Clearing Agency).
Note Pool Factor: With respect to any class of Notes and any Distribution
----------------
Date, a seven-digit decimal figure computed by the Servicer which is equal to
the Note Principal Balance for such class as of the close of such Distribution
Date divided by the initial Note Principal Balance for such class.
Note Principal Balance: With respect to any class of Notes and any
----------------------
Distribution Date, the initial aggregate principal balance of such class of
Notes, reduced by all previous payments to the Noteholders of such class in
respect of principal of such Notes, other than the Noteholders' Prepayment
Premium.
Note Register: With respect to any class of Notes, the register of such
-------------
Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note Register, appointed
--------------
pursuant to Section 2.4 of the Indenture.
Obligor: With respect to any Receivable, the purchaser or any co-purchaser
-------
of the related Financed Vehicle or Financed Vehicles or any other Person, other
than the maker of any Guaranty, who owes payments under a Receivable.
Officer's Certificate: A certificate signed by any Authorized Officer of
---------------------
the Issuer, under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.1 of the Indenture, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in the
Indenture to an officer's certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel, who may, except as
------------------
otherwise expressly provided, be an employee of the Seller or the Servicer. In
addition, for purposes of the Indenture: (i) such counsel shall be satisfactory
to the Indenture Trustee; (ii) the opinion shall be addressed to the Indenture
Trustee as Trustee and (iii) the opinion shall comply with any applicable
requirements of Section 11.1 of the Indenture and shall be in form and substance
satisfactory to the Indenture Trustee.
Optional Purchase Percentage: 10%.
----------------------------
Optional Purchase Proceeds: The amount specified in the second sentence
--------------------------
of subsection 9.01(a) of the Pooling and Servicing Agreement.
17
<PAGE>
Outstanding: With respect to the Notes, as of the date of determination,
-----------
all Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore cancelled by the Indenture Trustee or delivered
to the Indenture Trustee for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee or
any Paying Agent in trust for the Holders of such Notes; provided, however, that
-------- -------
if such Notes are to be redeemed, notice of such redemption has been duly given
pursuant to the Indenture or provision therefor, satisfactory to the Indenture
Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a bona
fide purchaser;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Indenture Trustee knows to be so
owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgor's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
Outstanding Amount: As of any date, the aggregate principal amount of all
------------------
Notes, or a class of Notes, as applicable, Outstanding at such date. Payment of
Noteholders' Prepayment Premium to Holders of Outstanding Notes will not reduce
the Outstanding Amount of such Notes.
Outstanding Monthly Advances: As of an Accounting Date with respect to a
----------------------------
Receivable, the sum of all Monthly Advances made as of or prior to such
Accounting Date minus all payments or collections as of or prior to such
Accounting Date which are specified in Section 5.06 of the Pooling and Servicing
Agreement as reducing Outstanding Monthly Advances with respect to such
Receivable.
Overdue Payment: With respect to a Distribution Date and to a Receivable,
---------------
all payments received during the related Monthly Period in excess of any
Supplemental Servicing Fees, to the extent of the Outstanding Monthly Advances
relating to such Receivable.
Owner: For purposes of the Purchase Agreement, the Custodian Agreement and
-----
the Pooling and Servicing Agreement, the "Owner" of a Receivable shall mean (i)
NFRRC until the execution and delivery of the Further Transfer and Servicing
Agreements and (ii) thereafter, the Issuer; provided, that NFC or NFRRC, as
applicable, shall be the "Owner" of any Receivable from and after the time that
such Person shall acquire such Receivable, whether pursuant to Section 5.04 of
the
18
<PAGE>
Purchase Agreement, Section 3.08 of the Pooling and Servicing Agreement, any
other provision of the Further Transfer and Servicing Agreements or otherwise.
Owner Trust Estate: All right, title and interest of the Trust in and to
------------------
the property and rights assigned to the Trust pursuant to Article II of the
Pooling and Servicing Agreement, all funds on deposit from time to time in the
Collection Account and the Certificate Distribution Account and all other
property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Pooling and Servicing Agreement and the
Administration Agreement.
Owner Trustee: Chemical Bank Delaware, a Delaware banking corporation, not
-------------
in its individual capacity but solely as trustee under the Trust Agreement, or
any successor trustee under the Trust Agreement.
Partial Prepayment: With respect to a Distribution Date and to any
------------------
Receivable, the portion of an Actual Payment in excess of the Scheduled Payment
which equals one or more future Scheduled Payments but does not constitute a
Full Prepayment and results in a Rebate in accordance with the Servicer's
customary procedures.
Party: A Party as defined in Section 6.01 of the Pooling and Servicing
-----
Agreement.
Pass Through Rate: 6.22% per annum.
-----------------
Paying Agent: With respect to the Indenture, the Indenture Trustee or any
------------
other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer. With respect to the Trust Agreement, any paying agent
or co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement that
meets the eligibility standards for the Owner Trustee specified in Section 6.13
of the Trust Agreement, and initially Chemical Bank.
Person: Any legal person, including any individual, corporation,
------
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Property: The property described as such in the definition of
-----------------
"Delivery."
Pooling and Servicing Agreement: The Pooling and Servicing Agreement,
-------------------------------
dated as of November 1, 1995, among NFC, the Seller and the Issuer, as amended
and supplemented from time to time.
Predecessor Note: With respect to any particular Note, every previous Note
----------------
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
19
<PAGE>
Pre-Funding Account: The account designated as such, established and
-------------------
maintained pursuant to Section 5.02(a) of the Pooling and Servicing Agreement.
Pre-Funding Account Property: As defined in the Granting Clause of the
----------------------------
Indenture.
Pre-Funded Amount: With respect to any Distribution Date, the amount on
-----------------
deposit in the Pre-Funding Account.
Pre-Funded Percentage: With respect to a class of Notes or the
---------------------
Certificates, the quotient (expressed as a percentage) of (i) the initial
principal balance of such class of Notes or the Certificate Balance as of the
Closing Date, as the case may be, and (ii) the sum of the initial principal
balance of each class of Notes and the Certificate Balance as of the Closing
Date.
Prepayment: With respect to a Distribution Date and to a Receivable, the
----------
portion of an Actual Payment in excess of the Scheduled Payment.
Prepayment Surplus: With respect to any Distribution Date on which a
------------------
Prepayment is to be applied with respect to a Receivable, that portion of such
Prepayment, net of any Rebate to the Obligor of the portion of the Scheduled
Payments attributable to unearned finance charges, which is not allocable to
principal in accordance with the actuarial method.
Principal Distributable Amount: With respect to any Distribution Date, the
------------------------------
sum of: (i) the principal portion of all Scheduled Payments due with respect to
the related Monthly Period on the Receivables held by the Trust (other than
Liquidating Receivables), (ii) the principal portion of all Prepayments received
during the related Monthly Period (except to the extent included in (i) above)
and (iii) the Receivable Balance of each Receivable that the Servicer purchased,
the Seller repurchased or that became a Liquidating Receivable during the
related Monthly Period (except to the extent included in (i) or (ii) above).
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Program: As defined in subsection 4.02(a) of the Pooling and Servicing
-------
Agreement.
Purchase Agreement: The Purchase Agreement, dated as of November 1, 1995,
------------------
between NFC and the Seller, as amended and supplemented from time to time.
Purchase Price: As defined in subsection 2.02 of the Purchase Agreement.
--------------
Purchased Property: As of any date, means all of the Receivables and
------------------
the Related Security transferred by NFC to NFRRC pursuant to Section 2.01 of the
Purchase Agreement as of such date.
Rating Agencies: As of any date, the nationally recognized statistical
---------------
rating organizations requested by the Seller to provide ratings on the
Securities which are rating the Securities on such date.
Rating Agency Condition: With respect to any action, the condition that
-----------------------
each Rating Agency shall have been given at least 10 days (or such shorter
period as is acceptable to each Rating
20
<PAGE>
Agency) prior notice thereof and that each of the Rating Agencies shall have
notified the Seller, the Servicer and the Issuer in writing that such action
shall not result in a downgrade or withdrawal of the then current rating of the
Securities.
Rebate: With respect to a given date and to a Receivable, the rebate under
------
such Receivable that is or would be payable to the Obligor for unearned finance
charges or any other charges that are or would be subject to a rebate to the
Obligor upon the payment of a Partial Prepayment or a Full Prepayment.
Receivable: A Retail Note secured by one or more Financed Vehicles that is
----------
transferred to the Trust pursuant to the Pooling and Servicing Agreement and all
rights and obligations thereunder.
Receivable Balance: With respect to any Receivable, as of an Accounting
------------------
Date, the Starting Receivable Balance thereof minus the sum of the following
amounts, in each case computed in accordance with the actuarial method: (i)
that portion of all Scheduled Payments allocated to principal due on or after
the Cutoff Date and on or prior to the Accounting Date, (ii) that portion of all
Warranty Payments or Administrative Purchase Payments allocated to principal,
(iii) that portion of all Prepayments allocated to principal, and (iv) that
portion of the following received and allocated to principal by the Servicer:
benefits of any lease assignments, proceeds from any Insurance Policies,
Liquidation Proceeds, proceeds from any Dealer Liability, proceeds from any NITC
Purchase Obligations and proceeds from any Guaranties.
Receivable File: The documents listed in Section 2.02 of the Pooling and
---------------
Servicing Agreement pertaining to a particular Receivable.
Record Date: (i) with respect to the Notes and with respect to any
-----------
Distribution Date, the close of business on the day immediately preceding such
Distribution Date, or if Definitive Notes are issued, the last day of the
preceding Monthly Period; and (ii) with respect to the Certificates and with
respect to any Distribution Date, the close of business on the day immediately
preceding such Distribution Date, or if Definitive Certificates are issued, the
last day of the preceding Monthly Period.
Redemption Date: The Distribution Date specified by the Servicer or the
---------------
Issuer pursuant to Section 10.1(a) or (b) of the Indenture, as applicable,.
Redemption Price: (i) in the case of a redemption of the Notes pursuant to
----------------
Section 10.1(a) of the Indenture, an amount equal to the aggregate of the
Outstanding Amount of the Notes, together with all accrued and unpaid interest
thereon as of the Redemption Date or (ii) in the case of a payment made to
Noteholders pursuant to Section 10.1(b) of the Indenture, the amount on deposit
in the Note Distribution Account, but not in excess of the amount specified in
clause (i) above.
Registered Holder: The Person in whose name a Note is registered on the
-----------------
Note Register on the applicable Record Date.
Remaining Gross Balance: With respect to any Receivable (other than a
-----------------------
Liquidating Receivable) and as of an Accounting Date, the Starting Gross
Receivable Balance thereof minus the sum of (i) the portion of all Actual
-----
Payments with respect to such Receivable, (ii) any Warranty
21
<PAGE>
Payment or Administrative Purchase Payment with respect to any such Receivable,
(iii) any Prepayments applied to reduce the Starting Gross Receivable Balance of
any such Receivable and (iv) proceeds from any Insurance Policies with respect
to such Receivable, plus for any Receivable not classified by the Servicer as a
----
"finance charge - included contract," the portion of the payments specified in
the preceding clauses (i), (ii), (iii) or (iv) above allocable in accordance
with the actuarial method to finance charges; provided, however, that the
Remaining Gross Balance of any Receivable that has been designated a Liquidating
Receivable during the related Monthly Period shall equal zero.
Repurchase Event: A Repurchase Event described in Section 5.04 of the
----------------
Purchase Agreement.
Required Negative Carry Account Balance: As of any Determination Date, an
---------------------------------------
amount equal to the lesser of (a) the Negative Carry Account Initial Deposit
minus all previous withdrawals from the Negative Carry Account (other than
Investment Earnings, if any, withdrawn to pay the Seller pursuant to Section
5.03(b) of the Pooling and Servicing Agreement) and (b) the Maximum Negative
Carry Amount as of such date.
Required Deposit Rating: A rating on short-term unsecured debt obligations
-----------------------
of P-1 by Moody's Investors Service, Inc. and A-1+ by Standard & Poor's Ratings
Group. Any requirement that short-term unsecured debt obligations have the
"Required Deposit Rating" shall mean that such short-term unsecured debt
obligations have the foregoing required ratings from each of such rating
agencies.
Reserve Account: The account designated as such, established and
---------------
maintained pursuant to Section 4.07(a) of the Pooling and Servicing Agreement.
Reserve Account Initial Deposit: (a) With respect to the Closing Date,
-------------------------------
cash or Eligible Investments having a value of at least $24,997,482.59, and (b)
with respect to each Subsequent Transfer Date, cash or Eligible Investments
having a value of at least equal to 5.50% of the aggregate Starting Receivable
Balance of the Subsequent Receivables transferred to the Issuer on such
Subsequent Transfer Date, which shall be deposited in the Reserve Account on
such Subsequent Transfer Date pursuant to Section 5.02(a) of the Pooling and
Servicing Agreement.
Reserve Account Property: As defined in the Granting Clause of the
------------------------
Indenture.
Responsible Officer: With respect to the Indenture Trustee or the Owner
-------------------
Trustee, any officer within the Corporate Trust Office of such trustee, and,
with respect to the Servicer, the President, any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer or assistant
officer of such Person customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the partic ular subject.
Retail Note: A retail instalment sale contract for, or retail loan
-----------
evidenced by a note and secured by, one or more new or used medium or heavy duty
trucks, buses or trailers.
22
<PAGE>
Retained Certificates: The Certificates retained by the Seller pursuant to
---------------------
Section 3.10 of the Trust Agreement, with an initial Certificate Balance of
$185,000.00.
Schedule of Receivables: The schedule of all Receivables transferred to
-----------------------
the Trust, annexed to the Pooling and Servicing Agreement and on file at the
locations listed on Exhibit C to the Pooling and Servicing Agreement, as it may
---------
be amended from time to time in accordance with any Subsequent Transfer
Assignment or the Pooling and Servicing Agreement.
Scheduled Payment: A payment which (i) is in the amount required under the
-----------------
terms of a Receivable in effect as of its applicable Cutoff Date, except, in the
case of any Receivable secured by more than one Financed Vehicle, including any
changes in the terms of such Receivable resulting from a Full Prepayment with
respect to any Financed Vehicle related thereto, (ii) is payable by the Obligor
and (iii) includes finance charges equivalent to the Annual Percentage Rate.
When Scheduled Payment is used with reference to a Distribution Date, it means
the payment which is due in the related Monthly Period; provided, however, that
-------- -------
in the case of the first Distribution Date after the date such Receivable is
transferred to the Trust, the Scheduled Payment shall include all such payments
due from the Obligor on or after its applicable Cutoff Date.
Secretary of State: The Secretary of State of the State of Delaware.
------------------
Securities: The Notes and the Certificates.
----------
Securities Act: The Securities Act of 1933, as amended.
--------------
Securityholder: Any of the Noteholders or Certificateholders.
--------------
Seller: The Person executing the Pooling and Servicing Agreement as the
------
Seller, or its successor in interest pursuant to Section 6.03 of the Pooling and
Servicing Agreement.
Servicer: The Person executing the Pooling and Servicing Agreement as the
--------
Servicer, or its successor in interest pursuant to Section 7.02 of the Pooling
and Servicing Agreement.
Servicer Default: An event described in Section 8.01 of the Pooling and
----------------
Servicing Agreement.
Servicer's Certificate: A certificate, completed by and executed on behalf
----------------------
of the Servicer, in accordance with Section 3.10 of the Pooling and Servicing
Agreement.
Specified Reserve Account Balance: with respect to any Distribution Date
---------------------------------
means the lesser of (i) the sum of the aggregate Note Principal Balance for all
classes of Notes and the Certificate Balance and (ii) the greater of:
(a) the sum of 5.50% of the Aggregate Receivables Balance as of the close
of business on the last day of the related Monthly Period plus 5.50% of the
aggregate Starting Receivables Balance of all Subsequent Receivables acquired
after the related Accounting Date and on or before such Distribution Date,
except that if on any Distribution Date (i) the product (expressed as a
- ------
percentage) of (A) twelve and (B) a fraction, the numerator of which
23
<PAGE>
is equal to the sum of the Aggregate Losses plus Liquidation Proceeds for each
of the Monthly Periods which are the fifth, fourth and third Monthly Periods
preceding the Monthly Period related to such Distribution Date, minus the sum of
the Liquidation Proceeds for the Monthly Periods which are the first, second and
third Monthly Periods preceding the Monthly Period related to such Distribution
Date, and the denominator of which is the sum of the Remaining Gross Balances of
all outstanding Receivables as of the last day of each of the sixth, fifth and
fourth Monthly Periods preceding the Monthly Period related to such Distribution
Date, exceeds 1.5% or (ii) the average of the Delinquency Percentages for the
preceding three months exceeds 2.0%, then the percentage of the Aggregate
Receivables Balance and of the aggregate Starting Receivables Balance of all
Subsequent Receivables acquired after the related Accounting Date and on or
before such Distribution Date, in each case as referred to in this clause (a),
shall be equal to 10%; and
(b) 2.1% of the Aggregate Starting Receivables Balance.
Starting Gross Receivable Balance: With respect to any Receivable as of
---------------------------------
the applicable Cutoff Date, the Starting Receivable Balance plus, in the case of
Receivables classified by the Servicer as "finance charge - included contracts,"
the finance charges included in the Scheduled Payments.
Starting Receivable Balance: With respect to a Receivable, the aggregate
---------------------------
principal amount advanced under such Receivable toward the purchase price of the
Financed Vehicle or Financed Vehicles, including insurance premiums, service and
warranty contracts, federal excise and sales taxes and other items customarily
financed as part of a Retail Note and related costs, less payments received from
the Obligor prior to the Cutoff Date with respect to such Receivable allocable
on the basis of the actuarial method to principal.
State: Any one of the 50 States of the United States of America or the
-----
District of Columbia.
Subsequent Cutoff Date: Any date designated by the Seller within the
----------------------
period beginning on the first day of the Monthly Period preceeding the Monthly
Period in which the related Subsequent Transfer Date occurs and ending on the
Subsequent Transfer Date.
Subsequent Receivables: The Receivables transferred from the Seller to
----------------------
the Issuer pursuant to Section 2.02 of the Pooling and Servicing Agreement,
which shall be listed on a schedule to the related Subsequent Transfer
Assignment.
Subsequent Receivables Purchase Price: The amount described in Section
-------------------------------------
2.02 of the Purchase Agreement.
Subsequent Transfer Assignment: With respect to Subsequent Receivables
------------------------------
transferred to the Issuer pursuant to Section 2.02 of the Pooling and Servicing
Agreement, has the meaning assigned thereto in Section 2.02(a) of the Pooling
and Servicing Agreement.
Subsequent Transfer Date: Any date during the Funding Period on which
------------------------
Subsequent Receivables are to be transferred to the Issuer and a related
Subsequent Transfer Assignment is
24
<PAGE>
executed and delivered to the Owner Trustee and the Indenture Trustee pursuant
to Section 2.02 of the Pooling and Servicing Agreement.
Supplemental Servicing Fee: All late fees, prepayment charges and other
--------------------------
administrative fees and expenses or similar charges allowed by applicable law
with respect to Receivables, collected (from whatever source) on the Receivables
held by the Trust during the applicable Monthly Period.
Temporary Notes: The Notes specified in Section 2.3 of the Indenture.
---------------
Total Available Amount: With respect to a Distribution Date, the sum of
----------------------
the Available Amount, all amounts deposited to the Collection Account pursuant
to Sections 4.06(b)(ii) and 4.06(b)(iii) of the Pooling and Servicing Agreement
for such Distribution Date and the amount of all cash and other immediately
available funds in the Reserve Account immediately prior to such date.
Total Servicing Fee: The sum of the Basic Servicing Fee and any unpaid
-------------------
Basic Servicing Fees from all prior Distribution Dates.
Transfer and Servicing Agreements: The Purchase Agreement, the Pooling and
---------------------------------
Servicing Agreement, the Subsequent Transfer Assignments, the Trust Agreement,
the Indenture, the Administration Agreement and the Custodian Agreement.
Transfer Date: With respect to any Distribution Date, the Business Day
-------------
immediately preceding such Distribution Date.
Treasury Regulations: The regulations, including proposed or temporary
--------------------
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust: Navistar Financial 1995-B Owner Trust, a Delaware business trust
-----
created by the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of November 1, 1995,
---------------
between the Seller and the Owner Trustee, as amended and supplemented from time
to time; such agreement being the Amended and Restated Trust Agreement
contemplated by the Trust Agreement dated October 18, 1995 between the Seller
and the Owner Trustee.
Trust Estate: All money, instruments, rights and other property that are
------------
subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Noteholders (including all property and
interests Granted to the Indenture Trustee), including all proceeds thereof, and
the Reserve Account and the Reserve Account Property pledged to the Indenture
Trustee pursuant to the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939 as in force on
------------------- ---
the date hereof, unless otherwise specifically provided.
25
<PAGE>
Trustees: The Owner Trustee and the Indenture Trustee.
--------
UCC: The Uniform Commercial Code as in effect in the relevant
---
jurisdiction.
Undertaking Letter: The Letter referred to in Sections 3.4 and 9.11 of the
------------------
Trust Agreement.
Underwriting Agreement: The Underwriting Agreement, dated October 18,
----------------------
1995, among the Seller and the several underwriters parties thereto with respect
to the sale of the Securities.
Voting Interests: As of any date, the aggregate Certificate Balance of all
----------------
Certificates outstanding; provided, however, that Certificates owned by the
-------- -------
Issuer, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Owner Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Certificates
that the Owner Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Owner Trustee
the pledgor's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, the Seller or any Affiliate of any of the foregoing
Persons.
Warranty Payment: With respect to a Distribution Date and to a Warranty
----------------
Receivable repurchased as of the related Accounting Date, the sum of (i) the sum
of all remaining Scheduled Payments on such Warranty Receivable due after the
Accounting Date, (ii) all past due Scheduled Payments with respect to which a
Monthly Advance has not been made, (iii) any reimbursement made pursuant to the
last sentence of Section 5.06 of the Pooling and Servicing Agreement with
respect to such Warranty Receivable, and (iv) all Outstanding Monthly Advances
made on such Warranty Receivable, minus (x) the rebate, calculated in accordance
with the actuarial method, that would be payable to the Obligor on such Warranty
Receivable were the Obligor to prepay such Receivable in full on such day and
(y) any Liquidation Proceeds (to the extent applied to reduce the Receivable
Balance of such Warranty Receivable) previously received with respect to such
Warranty Receivable.
Warranty Purchaser: Either (i) the Seller pursuant to Section 2.06 of the
------------------
Pooling and Servicing Agreement or (ii) NFC pursuant to Section 5.04 of the
Purchase Agreement.
Warranty Receivable: A Receivable which the Warranty Purchaser has become
-------------------
obligated to repurchase pursuant to Section 2.06 of the Pooling and Servicing
Agreement or Section 5.04 of the Purchase Agreement.
26
<PAGE>
PART II - RULES OF CONSTRUCTION
(a) Accounting Terms. As used in this Appendix or the Basic Documents,
----------------
accounting terms which are not defined, and accounting terms partly defined,
herein or therein shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or the Basic Documents will control.
(b) "Hereof," etc. The words "hereof," "herein" and "hereunder" and words
-------------
of similar import when used in this Appendix or any Basic Document will refer to
this Appendix or such Basic Document as a whole and not to any particular
provision of this Appendix or such Basic Document; and Section, Schedule and
Exhibit references contained in this Appendix or any Basic Document are
references to Sections, Schedules and Exhibits in or to this Appendix or such
Basic Document unless otherwise specified. The word "or" is not exclusive.
(c) Reference to Distribution Dates. With respect to any Distribution
-------------------------------
Date, the "related Monthly Period," and the "related Record Date," will mean the
Monthly Period and Record Date, respectively, immediately preceding such
Distribution Date, and the relationships among Monthly Periods and Record Dates
will be correlative to the foregoing relationships.
(d) Number and Gender. Each defined term used in this Appendix or the
-----------------
Basic Documents has a comparable meaning when used in its plural or singular
form. Each gender-specific term used in this Appendix or the Basic Documents
has a comparable meaning whether used in a masculine, feminine or gender-neutral
form.
(e) Including. Whenever the term "including" (whether or not that term is
---------
followed by the phrase "but not limited to" or "without limitation" or words of
similar effect) is used in this Appendix or the Basic Documents in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.
27
<PAGE>
APPENDIX B
----------
NOTICE ADDRESSES AND PROCEDURES
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon, given or furnished to or filed with the Seller, the Servicer,
the Administrator, the Indenture Trustee, the Issuer, the Owner Trustee or the
Rating Agencies shall be in writing, personally delivered, sent by facsimile
with a copy to follow via first class mail or mailed by certified mail-return
receipt requested, and shall be deemed to have been duly given upon receipt:
(a) in the case of the Seller, at the following address:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
with a copy to:
Navistar Financial Retail Receivables Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
(b) in the case of the Servicer or the Custodian, at the following
address:
Navistar Financial Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: Treasurer
with a copy to:
Navistar Financial Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
(c) in the case of the Indenture Trustee, at its Corporate Trust
Office
1
<PAGE>
(d) in the case of the Issuer or the Owner Trustee, to the Owner
Trustee at its Corporate Trust Office, with copies to:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
and:
Navistar Financial Retail Receivables Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall
likewise promptly t ransmit any notice received by it from the
Noteholders to the Issuer.
(e) in the case of Moody's Investors Service, Inc., to
Moody's Investors Service, Inc.
ABS Monitoring Department
99 Church Street
New York, New York 10007 and
(f) in the case of Standard & Poor's Ratings Group, to
Standard & Poor's Ratings Group
26 Broadway (15th Floor)
New York, New York 10004
Attention: Asset Backed Surveillance Department
or at such other address as shall be designated by such party in a written
notice to the other parties to this Agreement.
Where any Basic Document provides for notice to Securityholders of any
condition or event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if it is in writing and mailed, first-class, postage
prepaid to each Securityholder affected by such condition or event, at such
Person's address as it appears on the Note Register or Certificate Register, as
applicable, not later than the latest date, and not earlier than the earliest
date, prescribed in such Basic Document for the giving of such notice. If
notice to Securityholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Securityholder
shall affect the sufficiency of such notice with respect to other
Securityholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given regardless of whether
such notice is in fact actually received.
2
<PAGE>
EXHIBIT 10.3
================================================================================
CUSTODIAN AGREEMENT
BETWEEN
NAVISTAR FINANCIAL CORPORATION
CUSTODIAN
AND
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
DATED AS OF NOVEMBER 1, 1995
================================================================================
<PAGE>
THIS CUSTODIAN AGREEMENT, dated as of November 1, 1995 is made between
Navistar Financial Corporation, a Delaware corporation, as Custodian (the
"CUSTODIAN"), and Navistar Financial Retail Receivables Corporation, a Delaware
corporation (the "SELLER").
WHEREAS, simultaneously herewith Navistar Financial Corporation (in
its capacity as seller, "NFC") and the Seller are entering into a Purchase
Agreement of even date herewith (the "PURCHASE AGREEMENT"), pursuant to which
NFC shall sell, transfer and assign to the Seller from time to time without
recourse all of its right, title and interest in and to Receivables and certain
related rights and interests therein;
WHEREAS, the Purchase Agreement contemplates that the Seller may enter
into the Further Transfer and Servicing Agreements with the Issuer, pursuant to
which the Seller shall sell, transfer and assign to the Issuer without recourse,
all of the Seller's right, title and interest in, to and under, among other
things, (a) the Receivables and (b) the custodian agreement to be entered into
simultaneously with the Further Transfer and Servicing Agreements, pursuant to
which the Seller shall revocably appoint the Custodian as custodian of the
Receivables Files pertaining to the Receivables; and
WHEREAS, in connection with any such sale, transfer and assignment,
the Seller desires for the Custodian to act as custodian of the Receivables for
the benefit of the Issuer.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. Capitalized terms used but not otherwise
-------------------
defined herein shall have the respective meanings assigned them in Part I of
Appendix A to the Pooling and Servicing Agreement of even date herewith among
- ----------
the Issuer, the Seller and Navistar Financial Corporation, as Servicer (as it
may be amended, supplemented or modified from time to time, the "POOLING AND
SERVICING AGREEMENT"). All references herein to "the Agreement" or "this
Agreement" are to this Custodian Agreement as it may be amended, supplemented or
modified from time to time, the exhibits hereto and the capitalized terms used
herein which are defined in such Appendix A, and all references herein to
----------
Sections and subsections are to Sections and subsections of this Agreement
unless otherwise specified. The rules of construction set forth in Part II of
such Appendix A shall be applicable to this Agreement.
----------
2. Appointment of Custodian; Acknowledgement of Receipt. Subject to
----------------------------------------------------
the terms and conditions hereof, the Seller hereby appoints the Custodian, and
the Custodian hereby accepts such appointment, to act as agent of the Seller as
Custodian to maintain custody of the Receivable Files pertaining to the
Receivables for which from time to time the Seller is the Holder thereof. The
Custodian hereby acknowledges that the Seller may sell, transfer and assign all
of its right, title and interest under this Agreement to the Issuer pursuant to
the Further Transfer and Servicing Agreements. The Custodian hereby agrees, in
connection with any such sale, transfer and assignment, to act as Custodian for
the benefit of the Issuer with respect to those Receivables of which from time
to time the Issuer is the Holder. In performing its duties hereunder, the
Custodian agrees to act with reasonable care, using that degree of skill and
attention that the Custodian exercises with respect to receivable files relating
to comparable medium and heavy duty truck, bus
-1-
<PAGE>
and trailer receivables that the Custodian services and holds for itself or
others. The Custodian hereby acknowledges receipt of the Receivable File for
each Receivable listed on the Schedule of Receivables.
3. Maintenance at Office. The Custodian agrees to maintain each
---------------------
Receivable File at its principal office at Navistar Financial Corporation, 2850
West Golf Road, Rolling Meadows, Illinois 60008, or at such other office of the
Custodian as shall from time to time be identified to the Holder of the related
Receivable upon 30 days' prior written notice.
4. Duties of Custodian.
-------------------
(a) Safekeeping. The Custodian shall hold each Receivable File
-----------
described herein on behalf of the Holder of the related Receivable for the use
and benefit of such Holder and, if applicable, Interested Parties and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File described herein as shall enable the Seller
and the Issuer to comply with their respective obligations under the Purchase
Agreement and the Further Transfer and Servicing Agreements. Each Receivable
shall be identified as such on the books and records of the Custodian to the
extent the Custodian reasonably determines to be necessary to comply with the
terms and conditions of the Purchase Agreement and, if applicable, the Further
Transfer and Servicing Agreements. The Custodian shall conduct, or cause to be
conducted, periodic physical inspections of the Receivable Files held by it
under this Agreement, and of the related accounts, records and computer systems,
in such a manner as shall enable the Issuer and the Custodian to verify the
accuracy of the Custodian's inventory and record keeping. The Custodian shall
promptly report to the Holder of a Receivable any failure on its part to hold
the related Receivable File described herein and maintain its accounts, records
and computer systems as herein provided and promptly take appropriate action to
remedy any such failure.
(b) Access to Records. Subject only to the Custodian's security
-----------------
requirements applicable to its own employees having access to similar records
held by the Custodian, the Custodian shall permit the Holder of a Receivable or
its duly authorized representatives, attorneys or auditors to inspect the
related Receivable File described herein and the related accounts, records and
computer systems maintained by the Custodian pursuant hereto at such times as
such Holder may reasonably request.
(c) Release of Documents. The Custodian shall release any Receivable
--------------------
(and its related Receivable File) in the Receivable Files described herein to
the Seller, the Servicer or the Issuer, as appropriate, under the circumstances
provided in the Purchase Agreement and the Further Transfer and Servicing
Agreements.
(d) Administration; Reports. In general, the Custodian shall attend
-----------------------
to all non-discretionary details in connection with maintaining custody of the
Receivable Files described herein. In addition, the Custodian shall assist the
Issuer generally in the preparation of routine reports to the holders of
Securities, if any, or to regulatory bodies, to the extent necessitated by the
Custodian's custody of the Receivable Files described herein.
5. Instructions; Authority to Act. The Custodian shall be deemed to
------------------------------
have received proper instructions from the Issuer with respect to the Receivable
Files described herein
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<PAGE>
upon its receipt of written instructions signed by an Authorized Officer. A
certified copy of a by-law or of a resolution of the appropriate governing body
of the Issuer (or, as appropriate, the Owner Trustee on behalf of the Issuer)
may be received and accepted by the Custodian as conclusive evidence of the
authority of any such officer to act and may be considered as in full force and
effect until receipt of written notice to the contrary. Such instructions may
be general or specific in terms.
6. Indemnification By the Custodian. The Custodian agrees to
--------------------------------
indemnify the Issuer and each Trustee with respect to any Securities for any and
all liabilities, obligations, losses, damage, payments, costs or expenses of any
kind whatsoever that may be imposed on, incurred or asserted against the Issuer
or any such Trustee as the result of any act or omission in any way relating to
the maintenance and custody by the Custodian of the Receivable Files described
herein; provided, however, that the Custodian shall not be liable to the Issuer
-------- -------
or any such Trustee, respectively, for any portion of any such amount resulting
from the willful misfeasance, bad faith or gross negligence of the Issuer or any
such Trustee, respectively.
7. Advice of Counsel. The Custodian, the Seller and, upon execution
-----------------
of the Further Transfer and Servicing Agreements, the Issuer further agree that
the Custodian shall be entitled to rely and act upon advice of counsel with
respect to its performance hereunder and shall be without liability for any
action reasonably taken pursuant to such advice, provided that such action is
not in violation of applicable federal or state law.
8. Effective Period, Termination, and Amendment; Interpretive and
--------------------------------------------------------------
Additional Provisions. This Agreement shall become effective as of the date
- ---------------------
hereof, shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto
and may be terminated by either party by written notice to the other party, such
termination to take effect no sooner than sixty (60) days after the date of such
notice. Notwithstanding the foregoing, if Navistar Financial Corporation resigns
as Servicer under the Further Transfer and Servicing Agreements or if all of the
rights and obligations of the Servicer have been terminated under the Further
Transfer and Servicing Agreements, this Agreement may be terminated by the
Issuer or by any Persons to whom the Issuer has assigned its rights hereunder.
As soon as practicable after the termination of this Agreement, the Custodian
shall deliver the Receivable Files described herein to the Issuer or the
Issuer's agent at such place or places as the Issuer may reasonably designate.
9. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR RULE
(WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
ILLINOIS.
10. Notices. All demands, notices and communications upon or to the
-------
Custodian or the Seller under this Agreement shall be delivered as specified in
Appendix B to the Pooling and Servicing Agreement.
- ----------
11. Binding Effect. This Agreement shall be binding upon and shall
--------------
inure to the benefit of the Seller, the Issuer, the Custodian and their
respective successors and assigns, including the Issuer.
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<PAGE>
12. Severability of Provisions. If any one or more of the covenants,
--------------------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
13. Assignment. Notwithstanding anything to the contrary contained
----------
in this Agreement, this Agreement may not be assigned by the Custodian without
the prior written consent of the Seller or any Persons to whom the Seller has
assigned its rights hereunder, as applicable.
14. Headings. The headings of the various Sections herein are for
--------
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
15. Counterparts. This Agreement may be executed by the parties in
------------
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts shall together constitute but one and the
same instrument.
16. No Third-Party Beneficiaries. This Agreement shall inure to the
----------------------------
benefit of and be binding upon the parties hereto, the Owners and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person shall have any right or obligation
hereunder.
17. Merger and Integration. Except as specifically stated otherwise
----------------------
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be in its name and on its behalf by a duly authorized officer as of
the day and year first above written.
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
By: /s/ R. Wayne Cain
---------------------------------------------
Name: R. Wayne Cain
Title: Vice President
NAVISTAR FINANCIAL CORPORATION,
as Custodian
By: /s/ R. Wayne Cain
---------------------------------------------
Name: R. Wayne Cain
Title: Vice President
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<PAGE>
EXHIBIT 10.4
================================================================================
ADMINISTRATION AGREEMENT
AMONG
NAVISTAR FINANCIAL 1995-B OWNER TRUST
ISSUER
AND
NAVISTAR FINANCIAL CORPORATION
ADMINISTRATOR
AND
THE BANK OF NEW YORK
INDENTURE TRUSTEE
DATED AS OF NOVEMBER 1, 1995
================================================================================
<PAGE>
ADMINISTRATION AGREEMENT, dated as of November 1, 1995 among NAVISTAR
FINANCIAL 1995-B OWNER TRUST, a Delaware business trust (the "Issuer"), NAVISTAR
FINANCIAL CORPORATION, a Delaware corporation, as administrator (the
"Administrator"), and THE BANK OF NEW YORK, a New York banking corporation, not
in its individual capacity but solely as Indenture Trustee (the "Indenture
Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer is issuing Notes pursuant to an Indenture, dated
as of November 1, 1995 (as amended and supplemented from time to time, the
"Indenture"), between the Issuer and the Indenture Trustee;
WHEREAS, the Issuer has entered into (or assumed) certain agreements
in connection with the issuance of the Notes and the Certificates, including (i)
the Pooling and Servicing Agreement, (ii) the Note Depository Agreement, (iii)
the Certificate Depository Agreement and (iv) the Indenture;
WHEREAS, pursuant to the Basic Documents, the Issuer and Chemical Bank
Delaware, as Owner Trustee, are required to perform certain duties in connection
with (a) the Notes and the Collateral and (b) the Certificates;
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner Trustee
referred to in the preceding clause, and to provide such additional services
consistent with the terms of this Agreement and the Basic Documents as the
Issuer and the Owner Trustee may from time to time request;
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Certain Definitions. Capitalized terms used but not otherwise
-------------------
defined herein shall have the respective meanings assigned them in Part I of
Appendix A to the Pooling and Servicing Agreement of even date herewith among
- ----------
the Issuer, Navistar Financial Retail Receivables Corporation and Navistar
Financial Corporation, as Servicer (as it may be amended, supplemented or
modified from time to time, the "Pooling and Servicing Agreement"). All
references herein to "the Agreement" or "this Agreement" are to this
Administration Agreement as it may be amended, supplemented or modified from
time to time, the exhibits hereto and the capitalized terms used herein which
are defined in such Appendix A, and all references herein to Sections and
----------
subsections are to Sections and subsections of this Agreement unless otherwise
specified. The rules of construction set forth in Part II of such Appendix A
----------
shall be applicable to this Agreement.
2. Duties of the Administrator.
--------------------------
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<PAGE>
(a) Duties with Respect to the Depository Agreements and the
--------------------------------------------------------
Indenture. (i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee under the
Indenture and the Depository Agreements. In addition, the Administrator shall
consult with the Owner Trustee regarding the duties of the Issuer and the Owner
Trustee under the Indenture and the Depository Agreements. The Administrator
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the duties of the Issuer and the Owner
Trustee under the Indenture and the Depository Agreements. The Administrator
shall prepare for execution by the Issuer or the Owner Trustee or shall cause
the preparation by other appropriate persons of all such documents, reports,
filings, instruments, certificates, notices and opinions as it shall be the duty
of the Issuer or the Owner Trustee, as applicable, to prepare, file or deliver
pursuant to the Indenture and the Depository Agreements. In furtherance of the
foregoing, the Administrator shall take all appropriate action that it is the
duty of the Issuer or the Owner Trustee to take pursuant to the Indenture
including such of the foregoing as are required with respect to the following
matters under the Indenture (references are to sections of the Indenture):
(A) the preparation of or obtaining of the documents and instruments
required for authentication of the Notes and delivery of the same to the
Indenture Trustee (Section 2.2);
(B) causing the Note Register to be kept and giving the Indenture
Trustee notice of any appointment of a new Note Registrar and the location, or
change in location, of the Note Register (Section 2.4);
(C) the notification of Noteholders of the final principal payment on
their Notes (Section 2.7(e));
(D) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of collateral
(Section 2.9);
(E) the preparation of Definitive Notes and arranging the delivery
thereof (Section 2.12);
(F) the maintenance of an office in the Borough of Manhattan, the City
of New York, for registration of transfer or exchange of Notes (Section 3.2);
(G) causing newly appointed Paying Agents, if any, to deliver to the
Indenture Trustee the instrument specified in the Indenture regarding funds held
in trust (Section 3.3(c));
(H) the direction to the Indenture Trustee to deposit monies with
Paying Agents, if any, other than the Indenture Trustee (Section 3.3(b));
(I) the obtaining and preservation of the Issuer's qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Collateral and each other instrument and agreement included in the
Trust Estate (Section 3.4);
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<PAGE>
(J) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and other
instruments, in accordance with Section 3.5 of the Indenture, necessary to
protect the Trust Estate (Section 3.5);
(K) the delivery of the Opinion of Counsel on the Closing Date, in
accordance with Section 3.6(a) of the Indenture, as to the Trust Estate, and the
annual delivery of the Opinion of Counsel, the Officers' Certificate and certain
other statements, in accordance with Sections 3.6(b) and 3.9 of the Indenture,
as to compliance with the Indenture (Sections 3.6 and 3.9);
(L) the identification to the Indenture Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to perform its
duties under the Indenture (Section 3.7(b));
(M) the notification of the Indenture Trustee and the Rating Agencies
of a Servicer Default pursuant to the Pooling and Servicing Agreement and, if
such Servicer Default arises from the failure of the Servicer to perform any of
its duties under the Pooling and Servicing Agreement, the taking of all
reasonable steps available to remedy such failure (Section 3.7(d));
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the Indenture
(Section 3.11(b));
(O) the delivery of notice to the Indenture Trustee of each Event of
Default under the Indenture, each Servicer Default, any Insolvency Event with
respect to the Seller, each default by the Seller under the Pooling and
Servicing Agreement and each default by NFC under the Purchase Agreement
(Section 3.19);
(P) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an Officers' Certificate
and the obtaining of the Opinion of Counsel and the Independent Certificate
relating thereto (Section 4.1);
(Q) the compliance with any written directive of the Indenture Trustee
with respect to the sale of the Trust Estate in a commercially reasonable manner
if an Event of Default shall have occurred and be continuing (Section 5.4);
(R) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee (Section 6.8);
(S) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any written
instruments necessary in connection with the resignation or removal of any co-
trustee or separate trustee (Sections 6.8 and 6.10);
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<PAGE>
(T) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is not the
Note Registrar (Section 7.1);
(U) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable state agencies and the Indenture Trustee of
documents required to be filed on a periodic basis with, and summaries thereof
as may be required by rules and regulations prescribed by, the Commission and
any applicable state agencies and the transmission of such summaries, as
necessary, to the Noteholders (Section 7.3);
(V) the preparation of an Issuer Request and Officer's Certificate and
the obtaining of an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Trust Estate (Sections 8.4 and 8.5);
(W) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the mailing
to the Noteholders of notices with respect to such supplemental indentures
(Sections 9.1, 9.2 and 9.3);
(X) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(Y) the notification of Noteholders and the Rating Agencies of
redemption of the Notes or the duty to cause the Indenture Trustee to provide
such notification (Sections 10.1 and 10.2);
(Z) the preparation of all Officer's Certificates, Opinions of Counsel
and Independent Certificates with respect to any requests by the Issuer to the
Indenture Trustee to take any action under the Indenture (Section 11.1(a));
(AA) the preparation and delivery of Officers' Certificates and the
obtaining of Independent Certificates, if necessary, for the release of property
from the lien of the Indenture (Section 11.1(b));
(BB) the notice or other communication to the Rating Agencies, upon
the failure of the Indenture Trustee to give such notice or other communication
pursuant to Section 11.4 (Section 11.4);
(CC) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.6); and
(DD) the recording of the Indenture, if applicable (Section 11.15).
(ii) In addition, the Administrator will indemnify the Owner Trustee
and its agents for, and hold them harmless against, any losses, liability or
expense incurred without negligence or bad faith on their part, arising out of
or in connection with the acceptance or administration of the transactions
contemplated by the Trust Agreement, including the reasonable
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<PAGE>
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
under the Trust Agreement.
(b) Additional Duties.
-----------------
(i) In addition to the duties of the Administrator set forth above,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Owner Trustee or shall cause the preparation by
other appropriate persons of all such documents, reports, filings, instruments,
certificates, notices and opinions as it shall be the duty of the Issuer or the
Owner Trustee to prepare, file or deliver pursuant to the Basic Documents, and
at the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the Basic
Documents. Subject to Section 7 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Basic Documents
to the contrary, the Administrator shall be responsible for promptly notifying
the Owner Trustee if any withholding tax is imposed on the Trust's payments to a
Certificateholder as contemplated in Section 5.2(c) of the Trust Agreement. Any
such notice shall specify the amount of any withholding tax required to be
withheld by the Owner Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee set forth in Sections 5.2(d),
5.4(a), (b), (c) and (d) and the last two sentences of Section 5.4, and Section
5.5 of the Trust Agreement with respect to, among other things, accounting and
reports to Certificateholders; provided, however, that the Owner Trustee shall
-------- -------
retain responsibility for the distribution to the Certificateholders of the
Schedule K-1's necessary to enable each Certificateholder to prepare its federal
and state income tax returns.
(iv) The Administrator may satisfy any obligations it may have with
respect to clauses (ii) and (iii) above by retaining, at the expense of the
Trust payable by the Administrator, a firm of independent public accountants
acceptable to the Owner Trustee which shall perform the obligations of the
Administrator thereunder. Such accountants or the Administrator shall provide
the Owner Trustee on or before November 15, 1995 with a letter specifying
whether any withholding tax specified in the preceding clause (ii) is then
required and, if required, specifying the procedures to be followed to comply
with the Code. Such accountants or the Administrator shall update such letter
if and to the extent it shall no longer be accurate.
(v) The Administrator shall perform the duties of the Administrator
specified in Section 6.10 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Administrator under the Trust
Agreement.
(vi) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its
-5-
<PAGE>
Affiliates; provided, however, that the terms of any such transactions or
-------- -------
dealings shall be in accordance with any directions received from the Issuer and
shall be, in the Administrator's opinion, no less favorable to the Issuer than
would be available from Persons that are not Affiliates of the Administrator.
(vii) The Administrator hereby agrees to execute on behalf of the
Issuer all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare,
file or deliver pursuant to the Basic Documents.
(c) Non-Ministerial Matters.
----------------------
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any action
unless, within a reasonable time before the taking of such action, the
Administrator shall have notified the Owner Trustee of the proposed action and
the Owner Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer;
(C) the amendment, change or modification of any of the Basic
Documents;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of successor Administrators or successor Servicers, or the consent
to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of
its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments to
the Noteholders under the Basic Documents, (y) sell the Trust Estate pursuant to
Section 5.4 of the Indenture or (z) take any other action that the Issuer
directs the Administrator not to take on its behalf.
3. Successor Servicer and Administrator. The Issuer shall undertake,
------------------------------------
as promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 8.02 of the
Pooling and Servicing Agreement, to enforce the provisions of Sections 8.02,
8.03 and 8.04 of the Pooling and Servicing Agreement with respect to the
appointment of a successor Servicer. Such successor Servicer shall, upon
compliance with Sections 10(e)(ii) and (iii), become the successor Administrator
hereunder.
4. Records. The Administrator shall maintain appropriate books of
-------
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the Owner
Trustee and the Seller at any time during normal business hours.
-6-
<PAGE>
5. Compensation. As compensation for the performance of the
------------
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Servicer shall pay the Administrator a monthly fee
in the amount of $1,500.
6. Additional Information To Be Furnished to the Issuer. The
--------------------------------------------- ------
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
7. Independence of the Administrator. For all purposes of this
---------------------------------
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
8. No Joint Venture. Nothing contained in this Agreement (i) shall
----------------
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be con strued to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
9. Other Activities of Administrator. Nothing herein shall prevent
---------------------------------
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
10. Term of Agreement; Resignation and Removal of Administrator.
-----------------------------------------------------------
(a) This Agreement shall continue in force until the dissolution of
the Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 10(e), the Administrator may resign its duties
hereunder by providing the Issuer with at least 60 days' prior written notice.
(c) Subject to Section 10(e), the Issuer may remove the Administrator
without cause by providing the Administrator with at least 60 days' prior
written notice.
(d) Subject to Section 10(e), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its
duties under this Agreement and, after notice from the Issuer of such default,
shall not cure such default within ten days (or, if such default cannot be cured
in such time, shall not give within ten days such assurance of cure as shall be
reasonably satisfactory to the Issuer);
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<PAGE>
(ii) a court having jurisdiction in the premises shall enter a decree
or order for relief, and such decree or order shall not have been vacated within
60 days, in respect of the Administrator in any involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect or appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Administrator or any substantial part
of its property or order the winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official for
the Administrator or any substantial part of its property, shall consent to the
taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or
shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this Section 10(d) shall occur, it shall give written
notice thereof to the Issuer and the Indenture Trustee within seven days after
the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
Section 10 shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer, (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same manner
as the Administrator is bound hereunder, and (iii) the Rating Agency Condition
has been satisfied with respect to such proposed appointment.
11. Action upon Termination, Resignation or Removal. Promptly upon
-----------------------------------------------
the effective date of termination of this Agreement pursuant to Section 10(a) or
the resignation or removal of the Administrator pursuant to Section 10(b) or
(c), respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the effective date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 10(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
10(b) or (c), respectively, the Administrator shall cooperate with the Issuer
and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
12. Notices. All demands, notices and communications upon or to the
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Issuer, either Trustee, the Administrator or the Rating Agencies under this
Agreement shall be delivered as specified in Appendix B to the Pooling and
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Servicing Agreement.
13. Amendments.
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(a) This Agreement may be amended from time to time with prior notice
to the Rating Agencies by a written amendment duly executed and delivered by the
Issuer, the Administrator and the Indenture Trustee, with the written consent of
the Owner Trustee, without the consent of the Securityholders, for any of the
following purposes:
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<PAGE>
(i) to add provisions hereof for the benefit of the Securityholders or
to surrender any right or power herein conferred upon the Administrator;
(ii) to cure any ambiguity or to correct or supplement any provision
herein which may be inconsistent with any other provision herein or in any other
Basic Document;
(iii) to evidence and provide for the appointment of a successor
Administrator hereunder and to add to or change any of the provisions of this
Agreement as shall be necessary to facilitate such succession; and
(iv) to add any provisions to, or change in any manner or eliminate
any of the provisions of, this Agreement, or modify in any manner the rights of
the Securityholders; provided, however, that such amendment under this Section
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13(a)(iv) shall not, as evidenced by an Opinion of Counsel, materially and
adversely affect in any material respect the interest of any Securityholder.
Prior to the execution of any amendment pursuant to this Section 13(a), the
Administrator shall furnish written notification of the substance of such
amendment to each of the Rating Agencies.
(b) This Agreement may also be amended by the Issuer, the
Administrator and the Indenture Trustee with prior notice to the Rating Agencies
and with the written consent of the Owner Trustee and the holders of Notes
evidencing at least a majority in the Outstanding Amount of the Notes as of the
close of the immediately preceding Distribution Date and the holders of
Certificates evidencing at least a majority of the Voting Interests as of the
close of the immediately preceding Distribution Date for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of Securityholders;
provided, however, that no such amendment may (i) increase or reduce in any
- -------- -------
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that are required to be made for the
benefit of the Securityholders, (ii) reduce the percentage of the holders of
Securities which are required to consent to any amendment of this Agreement or
(iii) modify or alter any provision of this Section 13, except to provide that
certain additional provisions of this Agreement and the Basic Documents cannot
be modified or waived without the consent of each Securityholder affected
thereby, without, in any such case, the consent of the holders of all the
outstanding Securities.
(c) Notwithstanding Sections 13(a) and (b), the Administrator may not
amend this Agreement without the permission of the Seller, which permission
shall not be unreasonably withheld.
14. Successors and Assigns. This Agreement may not be assigned by
----------------------
the Administrator unless such assignment is previously consented to in writing
by the Issuer and the Owner Trustee and subject to the satisfaction of the
Rating Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement in
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<PAGE>
which such corporation or other organization agrees to be bound hereunder by the
terms of such assignment in the same manner as the Administrator is bound
hereunder. Subject to the foregoing, this Agreement shall bind any successors
or assigns of the parties hereto.
15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR RULE
(WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
ILLINOIS.
16. Headings. The section headings hereof have been inserted for
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convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
17. Separate Counterparts. This Agreement may be executed by the
---------------------
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
18. Severability of Provisions. If any one or more of the covenants,
--------------------------
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
19. Not Applicable to Navistar Financial Corporation in Other
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Capacities. Nothing in this Agreement shall affect any obligation Navistar
- ----------
Financial Corporation may have in any other capacity.
20. Limitation of Liability of Owner Trustee and Indenture Trustee.
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(a) Notwithstanding anything contained herein to the contrary, this instrument
has been executed on behalf of the Issuer by Chemical Bank Delaware, not in its
individual capacity but solely as Owner Trustee on behalf of the Trust and in no
event shall Chemical Bank Delaware have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
For all purposes of this Agreement, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by The Bank of New York, not in its individual
capacity but solely in its capacity as Indenture Trustee and in no event shall
The Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
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<PAGE>
21. Third-Party Beneficiary. Each of the Seller, only to the extent
-----------------------
provided in Section 13(c), and the Owner Trustee is a third-party beneficiary to
this Agreement and is entitled to the rights and benefits hereunder and may
enforce the provisions hereof as if it were a party hereto.
22. Merger and Integration. Except as specifically stated otherwise
----------------------
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers as of the day and year first above written.
NAVISTAR FINANCIAL 1995-B OWNER TRUST
By: CHEMICAL BANK DELAWARE, not in
its individual capacity, but
solely as Owner Trustee on
behalf of the Trust
By: /s/ John J. Cashin
-------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE BANK OF NEW YORK, as Indenture Trustee
By: /s/ Patricia M.F. Russo
------------------------------------
Name: Patricia M.F. Russo
Title: Assistant Treasurer
NAVISTAR FINANCIAL CORPORATION, as
Administrator
By: /s/ R. Wayne Cain
------------------------------------
Name: R. Wayne Cain
Title: Vice President
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