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): December 15,
1994
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: 847-734-4275
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Matters.
(a) On December 15, 1994, the Registrant, a wholly owned
subsidiary of Navistar Financial Corporation ("NFC"), purchased a
pool of retail instalment sale contracts for, and retail loans
evidenced by notes secured by, medium and heavy-duty trucks,
buses and trailers with an aggregate outstanding principal
balance as of November 1, 1994 of $315,029,921.60 (collectively,
the "Receivables") from NFC for a purchase price equal to the
principal balance of the Receivables as of November 1, 1994. The
Registrant paid a portion of the purchase price from the net cash
proceeds of the issuance of the Securities (as described below)
and paid the remainder with an intercompany advance from NFC.
The Registrant immediately transferred the Receivables to
the Navistar Financial 1994-C Owner Trust (the "Trust"). The
Trust issued two classes of notes (the "Notes") and one class of
certificates (the "Certificates" and, together with the Notes,
the "Securities") backed by the Receivables. The net cash
proceeds of the issuance of the Securities were $313,866,981.72,
which, together with a Certificate with an initial certificate
balance of $110,921.60, were transferred to the Registrant. A
portion of the net cash proceeds were used to pay approximately
$450,000 of transaction fees and expenses and to fund a
$18,901,795.30 deposit into a reserve account as credit support
for the Receivables. The balance of the net cash proceeds were
paid to NFC as part of the purchase price for the Receivables.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
See attached Exhibit Index.
<PAGE>
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: January 8, 1997 By: /s/ R. Wayne Cain
Name: R. Wayne Cain
Title: Vice President
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1.1 Underwriting Agreement among the Registrant, NFC,
J.P. Morgan Securities Inc. and Chemical
Securities Inc., dated December 7, 1994
4.1 Indenture between the Trust and the Indenture
Trustee, dated December 15, 1994
4.2 Trust Agreement between the Registrant and the
Owner Trustee, dated December 15, 1994
10.1 Purchase Agreement between NFC and the Registrant,
dated December 15, 1994
10.2 Pooling and Servicing Agreement among the
Registrant, NFC and the Trust, dated December 15,
1994
10.3 Custodian Agreement between NFC and the
Registrant, dated December 15, 1994
10.4 Administration Agreement among NFC, the Trust and
the Indenture Trustee, dated December 15, 1994
<EX-1.1.1>
Exhibit 1.1
NAVISTAR FINANCIAL 1994-C OWNER TRUST
$304,000,000.00 Asset Backed Notes
$11,029,921.60 Asset Backed Certificates
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
December 7, 1994
J.P. MORGAN SECURITIES INC.
60 Wall Street
18th Floor
New York, New York 10260-0060
CHEMICAL SECURITIES INC.
270 Park Avenue
New York, New York 100017
Dear Sirs:
Navistar Financial Retail Receivables Corporation, a
Delaware corporation (the "Seller"), proposes to form an owner
trust, Navistar Financial 1994-C Owner Trust (the "Trust"),
pursuant to a Trust Agreement (the "Trust Agreement") to be dated
as of December 15, 1994 between the Seller and Chemical Bank
Delaware, as owner trustee (the "Owner Trustee"), which will
issue (i) $207,000,000.00 principal amount of its 7.65% Class A-1
Asset Backed Notes (the "Class A-1 Notes") and (ii)
$97,000,000.00 principal amount of its 8.00% Class A-2 Notes (the
"Class A-2 Notes"; and together with the Class A-1 Notes, the
"Notes") pursuant to an Indenture to be dated as of December 15,
1994 (the "Indenture") between the Trust and The Bank of New
York, as trustee (the "Indenture Trustee"), and (iii)
$11,029,921.60 principal amount of its 8.30% 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 November 1,
1994 (the "Cutoff Date"), security interests in the vehicles
financed thereby, certain accounts 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
<PAGE>
Receivables will be transferred to the Trust by the Seller in
exchange for the Securities and 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 December 15, 1994 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,
<PAGE>
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 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
<PAGE>
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 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 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, 99.921875% of the
principal amount thereof, (ii) with respect to the Class A-2
Notes, 99.781250% of the principal amount thereof and (iii) with
respect to the Certificates, 99.828125% 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.
<PAGE>
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 J.P. Morgan Securities Inc., as lead
Underwriter ("Morgan") and the Seller, at 10:00 A.M., New York
City time, on December 15, 1994, or at such other date or time,
not later than seven full business days thereafter, as shall be
agreed upon by the Underwriters 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 Morgan 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
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
Morgan 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 Underwriters 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
Underwriters; to advise the Underwriters 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 Underwriters
immediately thereof, and to promptly prepare and file with
the Commission, subject to paragraph (b) of this Section 4,
an amendment or a supplement 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 Underwriters
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
Underwriters such number of the following documents as the
Underwriters 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
Underwriters, 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 Underwriters may reasonably
request.
<PAGE>
(g) Promptly from time to time to take such action as
Morgan may reasonably request to qualify the Securities for
offering and sale under the securities laws of such
jurisdictions as Morgan 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
Underwriters.
(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.
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
Underwriters; and the
<PAGE>
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.
(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 Morgan
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 Morgan
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 Underwriters, 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) Morgan 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 Underwriters 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 Morgan 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
Morgan 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) Morgan 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 Underwriters verifying the accuracy of
such financial and statistical data contained in the
Prospectus as the Underwriters shall deem advisable. In
addition, if any amendment or supplement to the Prospectus
made after the date hereof contains financial or statistical
data, Morgan shall have
<PAGE>
received a letter dated the Closing Date confirming the
Procedures Letter and providing additional comfort on such
new data.
(i) Morgan 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 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, 1994,
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.
<PAGE>
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 Underwriters, 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 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,
Morgan may make arrangements for the purchase of such Securities
by other persons satisfactory to the Seller and Morgan, 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 2. If the foregoing maximums
are exceeded and the remaining Underwriters or other underwriters
satisfactory to Morgan 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 7,
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 Morgan or the Seller
<PAGE>
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 6 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 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 Morgan. If this
Agreement is terminated pursuant to Section 7 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
<PAGE>
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 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 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 Morgan shall have the
right to employ one counsel to represent jointly Morgan 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 Morgan, it is advisable for Morgan and those
<PAGE>
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.
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
<PAGE>
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 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 4(h) 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
<PAGE>
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 J.P.
Morgan Securities Inc., 60 Wall Street, New York, New York
10260-0060, Attention: Syndicate Desk, Telecopy Number:
(212) 648-5909;
(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 8(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 Morgan, which address will be
supplied to any other party hereto by Morgan 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 Morgan.
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>
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 ___________________________
Name: R.W. Cain
Title: Vice President and
Treasurer
NAVISTAR FINANCIAL CORPORATION
By ___________________________
Name: R.W. Cain
Title: Vice President and
Treasurer
Accepted:
J.P. MORGAN SECURITIES INC.
By ___________________________
Authorized Signatory
CHEMICAL SECURITIES INC.
By ___________________________
Authorized Signatory
<PAGE>
<TABLE> SCHEDULE 1
<CAPTION>
Principal Principal
Amount of Amount of Principal
Class A-1 Class A-2 Amount of
Underwriter Notes Notes Certificates
<S> <C> <C> <C>
J.P. Morgan
Securities Inc. $103,500,000.00 $48,500,000.00 $5,459,500.00
Chemical
Securities Inc. $103,500,000.00 $48,500,000.00 $5,459,500.00
</TABLE>
<EX-4.4.1>
EXHIBIT 4.1
NAVISTAR FINANCIAL 1994-C OWNER TRUST
Class A-1 7.650% Asset Backed Notes
Class A-2 8.000% Asset Backed Notes
INDENTURE
Dated as of December 15, 1994
The Bank of New York,
a New York banking corporation,
Indenture Trustee
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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
Note: This cross reference table shall not, for any purpose,
be deemed to be part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
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
SECTION 3.14 Guarantees, Loans, Advances and Other
Liabilities 21
SECTION 3.15 Servicer's Obligations 21
SECTION 3.16 Capital Expenditures 21
<PAGE>
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
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
<PAGE>
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
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
<PAGE>
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
Exhibit A - Locations of Schedule of Receivables
Exhibit B - Form of Asset Backed Note
Exhibit C - Form of Note Depository Agreement
<PAGE>
INDENTURE, dated as of December 15, 1994 between
NAVISTAR FINANCIAL 1994-C 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 Cutoff Date;
(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 2.03 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 and all proceeds thereof (other than the
Investment Earnings thereon) ((h) and (i), collectively, the
"Reserve Account Property"); and (j) 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 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
<PAGE>
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.
<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 and the Class A-2
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.
<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
$304,000.000.00, comprised of (i) Class A-1 Notes in the
aggregate principal amount of $207,000,000.00 and (ii) Class A-2
Notes in the aggregate principal amount of $97,000,000.00. The
aggregate principal amount of all Notes outstanding at any time
may not exceed $304,000,000.00 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
<PAGE>
surrender for cancellation of any one or more Temporary 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
<PAGE>
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
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
<PAGE>
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 (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
<PAGE>
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.), 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). 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.
<PAGE>
(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 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.
<PAGE>
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 sections
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;
(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
<PAGE>
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.
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
<PAGE>
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) 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 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
<PAGE>
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.
(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
<PAGE>
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
<PAGE>
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;
(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, 1995, 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
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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, 1996, 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
(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.
(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;
(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
<PAGE>
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.
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.
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 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,
<PAGE>
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.
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 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
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
<PAGE>
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
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
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
<PAGE>
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 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
<PAGE>
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
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
<PAGE>
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 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 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
<PAGE>
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;
<PAGE>
(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.
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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 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.
<PAGE>
(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 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
<PAGE>
(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
(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.
<PAGE>
(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.
(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
<PAGE>
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 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.
<PAGE>
(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 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.
(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 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
<PAGE>
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
<PAGE>
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, 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 section 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 section 310(b); provided,
however, that there shall be excluded from the operation of TIA
section 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 section 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims
Against Issuer. The Indenture Trustee shall comply with TIA
section 311(a), excluding any creditor relationship listed in TIA
section 311(b). A trustee who has resigned or been removed shall
be subject to TIA section 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
<PAGE>
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 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.
<PAGE>
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.
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
section 312(b) with other Noteholders with respect to their
rights under this Indenture or under the Notes.
<PAGE>
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA section 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 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 section 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 section 313(a), within 60 days
after each February 1, beginning with February 1, 1995, the
Indenture Trustee shall mail to each Noteholder as required by
TIA section 313(c) a brief report dated as of such date that
complies with TIA section 313(a). The Indenture Trustee also
shall comply with TIA section 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.
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) 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 (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:
<PAGE>
(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 and (2) thereafter, to the
Holders of the Class A-2 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.
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.
<PAGE>
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 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.
<PAGE>
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
Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any
of the following purposes:
(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
<PAGE>
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.
(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
<PAGE>
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
(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
<PAGE>
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.
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.
<PAGE>
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
(a) The Class A-2 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 have been paid
in full. The purchase price for the Class A-2 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-2 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-2 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. If amounts are to be so paid to the
Noteholders, 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.
(c) Within sixty days after the redemption in full
pursuant to this Section 10.1 of the Class A-2 Notes, the
Indenture Trustee shall provide each of the Rating Agencies with
written notice stating that all of the Class A-2 Notes have been
redeemed.
SECTION 10.2 Form of Redemption Notice.
(a) Notice of redemption of the Class A-2 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 Class A-2
Notes of record at such Noteholder's address appearing in the
Note Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
<PAGE>
(iii) the place where Class A-2 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-2 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-2 Note to be
redeemed shall not impair or affect the validity of the
redemption of any other Class A-2 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 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:
<PAGE>
(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 Officers' 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 Officers' 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 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 Officers' 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
<PAGE>
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.
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
<PAGE>
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
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.
<PAGE>
(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.
(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.
<PAGE>
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 sections 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.
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
<PAGE>
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:
(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
<PAGE>
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.
<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 1994-C
OWNER TRUST,
By: CHEMICAL BANK DELAWARE,
not in its individual
capacity but solely as
Owner Trustee,
By: __________________________
Name: John J. Cashin
Title: Senior Trust Officer
THE BANK OF NEW YORK,
as Indenture Trustee,
By: __________________________
Name: Patricia M.F. Russo
Title: Assistant Treasurer <PAGE>
<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 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 1994-C
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 ____
day of December, 1994.
___________________________________
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 ____
day of December, 1994.
___________________________________
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 $_________<F1>
No. R-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
Unless this Note is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name
of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an
interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
NAVISTAR FINANCIAL 1994-C OWNER TRUST
CLASS A-___ _____% ASSET BACKED NOTES
NAVISTAR FINANCIAL 1994-C OWNER TRUST, a business trust
organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to _______________, or registered assigns, the
principal sum of _______________ DOLLARS ($_________) 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 Notes pursuant to Sections
2.7, 3.1 and 8.2 of the Indenture; provided, however, that the
___________
<F1>
Denominations of $1,000 and integral multiples thereof.
</F1>
<PAGE>
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 __________, 1994. 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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this
instrument to be signed, manually or in facsimile, by its
Authorized Officer.
Date: NAVISTAR FINANCIAL 1994-C
OWNER TRUST,
By: CHEMICAL BANK DELAWARE
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement
By: ______________________
Name:
Title:
<PAGE>
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:
<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 ____________, 1994 (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.
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 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.
<PAGE>
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 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.
<PAGE>
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.
<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:__________________
____________________________<F2>
Signature Guaranteed:
_________________________ ____________________________
__________
<F2>
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.
</F2>
<PAGE>
EXHIBIT C
FORM OF NOTE DEPOSITORY AGREEMENT
<EX-4.4.2>
EXHIBIT 4.2
TRUST AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHEMICAL BANK DELAWARE
OWNER TRUSTEE
DATED AS OF DECEMBER 15, 1994
<PAGE>
TABLE OF CONTENTS
Page
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 4
2.9 Situs of Trust 4
2.10 Representations and Warranties of the Seller 4
2.11 Tax Treatment 5
ARTICLE III
THE CERTIFICATES 6
3.1 Initial Certificate Ownership 6
3.2 Form of the Certificates 6
3.3 Execution, Authentication and Delivery 6
3.4 Registration; Registration of Transfer and
Exchange of Certificates 7
3.5 Mutilated, Destroyed, Lost or Stolen Certificates 8
3.6 Persons Deemed Certificateholders 9
3.7 Access to List of Certificateholders' Names and
Addresses 9
3.8 Maintenance of Corporate Trust Office 9
3.9 Appointment of Paying Agent 10
3.10 Disposition by Seller 10
3.11 Book-Entry Certificates 11
3.12 Notices to Clearing Agency 12
3.13 Definitive Certificates 12
3.14 Seller as Certificateholder 12
ARTICLE IV
ACTIONS BY OWNER TRUSTEE 13
4.1 Prior Notice to Certificateholders with Respect to
Certain Matters 13
4.2 Action by Certificateholders with Respect to
Certain Matters 13
4.3 Action by Certificateholders with Respect to
Bankruptcy 14
4.4 Restrictions on Certificateholders' Power 14
4.5 Majority Control 14
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES 14
5.1 Establishment of Certificate Distribution Account 14
5.2 Application of Trust Funds 15
5.3 Method of Payment 16
5.4 Accounting and Reports to the Certificateholders,
the Internal Revenue Service and Others 16
5.5 Signature on Returns; Tax Matters Partner 17
<PAGE>
ARTICLE VI
THE OWNER TRUSTEE 17
6.1 Duties of Owner Trustee 17
6.2 Rights of Owner Trustee 18
6.3 Acceptance of Trusts and Duties 18
6.4 Action upon Instruction by Certificateholders 20
6.5 Furnishing of Documents 21
6.6 Representations and Warranties of Owner Trustee 21
6.7 Reliance; Advice of Counsel 22
6.8 Owner Trustee May Own Certificates and Notes 23
6.9 Compensation and Indemnity 23
6.10 Replacement of Owner Trustee 23
6.11 Merger or Consolidation of Owner Trustee 25
6.12 Appointment of Co-Trustee or Separate Trustee 25
6.13 Eligibility Requirements for Owner Trustee 26
ARTICLE VII
TERMINATION OF TRUST AGREEMENT 27
7.1 Termination of Trust Agreement 27
7.2 Dissolution upon Bankruptcy of the Seller 28
ARTICLE VIII
AMENDMENTS 29
8.1 Amendments Without Consent of Certificateholders
or Noteholders 29
8.2 Amendments With Consent of Certificateholders and
Noteholders. 30
8.3 Form of Amendments 30
ARTICLE IX
MISCELLANEOUS 31
9.1 No Legal Title to Owner Trust Estate. 31
9.2 Limitations on Rights of Others 31
9.3 Notices 32
9.4 Severability 32
9.5 Counterparts 32
9.6 Successors and Assigns 32
9.7 No Petition Covenant 32
9.8 No Recourse 32
9.9 Headings 33
9.10 Governing Law 33
9.11 Certificate Transfer Restrictions 33
9.12 [Reserved] 33
9.13 Administrator 33
9.14 Amended and Restated Trust Agreement 34
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
<PAGE>
TRUST AGREEMENT, dated as of December 15, 1994 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 1994-C 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 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;
<PAGE>
(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 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 consistent 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
<PAGE>
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 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.
<PAGE>
(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.
(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.
<PAGE>
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.
(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 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.
<PAGE>
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.
(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
<PAGE>
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.
(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
<PAGE>
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 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
<PAGE>
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. 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
<PAGE>
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.
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 therein after the termination of
the Indenture. The
<PAGE>
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 1994-C 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.
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 Section 4.06 of the Pooling and Servicing Agreement
with respect to such Distribution Date.
<PAGE>
(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 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
<PAGE>
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 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.
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
<PAGE>
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;
(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
<PAGE>
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
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
<PAGE>
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.
(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
<PAGE>
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 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
<PAGE>
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.
(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 or acts
are to be performed, the Owner Trustee shall be
<PAGE>
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.
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 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 and time periods described below, upon the occurrence
of an Insolvency Event with respect to the Seller, the Trust
shall terminate, subject to the liquidation, winding-up and
dissolution procedures described below, and 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).
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
<PAGE>
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.
(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.
<PAGE>
(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.
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
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).
<PAGE>
SECTION 9.12 [Reserved].
SECTION 9.13 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 9.14 Amended and Restated Trust Agreement.
This Trust Agreement is the amended and restated trust agreement
contemplated by the Trust Agreement dated as of December 2, 1994
between the Seller and the Owner Trustee.
<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: _____________________
Name: John J. Cashin
Title: Senior Trust Officer
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION, as Seller
By: ______________________
Name: Phyllis E. Cochran
Title: Vice President
Acknowledged and Accepted:
NAVISTAR FINANCIAL CORPORATION, as
Servicer
By: _________________________
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 1994-C Owner Trust
8.300% ASSET BACKED CERTIFICATE
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 1994-C Owner Trust (the
"Trust") formed by Navistar Financial Retail Receivables
Corporation, a Delaware corporation, (the "Seller").
<PAGE>
The Trust was created pursuant to a trust agreement,
dated as of December 2, 1994 (as amended and restated as of
December 15, 1994 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 "8.300% 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 20th day of each calendar month or, if such 20th day is
not a Business Day, the next succeeding Business Day, commencing
on January 20, 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 July, 2000 (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 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
<PAGE>
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
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.
<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 1994-C OWNER TRUST
CHEMICAL BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: _________________________
Name:
Title:
<PAGE>
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:_________________________
Authorized Officer By: ______________________
Authorized Officer
<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 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 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. 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 Initial Aggregate Receivables Balance.
<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.
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
Navistar Financial 1994-C Owner Trust
THIS Certificate of Trust of Navistar Financial 1994-C
Owner Trust (the "Trust"), dated as of Decemmber 2, 1994, 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. section
3801 et seq.).
1. Name. The name of the business trust formed
hereby is Navistar Financial 1994-C 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
December 2, 1994.
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
<EX-10.10.1>
EXHIBIT 10.1
PURCHASE AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
AND
NAVISTAR FINANCIAL CORPORATION
DATED AS OF DECEMBER 15, 1994
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables 1
SECTION 2.02. Receivables Purchase Price 2
SECTION 2.03. The Closing 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties as to the
Receivables 3
SECTION 3.02. Additional Representations and
Warranties of NFC 7
SECTION 3.03. Representations and Warranties of NFRRC 8
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Obligation of NFRRC 10
SECTION 4.02. Conditions To Obligation of NFC 11
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 12
SECTION 5.04. Repurchase Events 12
SECTION 5.05. Indemnification 12
SECTION 5.06. Further Assignments 13
SECTION 5.07. Pre-Closing Collections 13
SECTION 5.08. Limitation on Transfer of NITC Purchase
Obligations 13
SECTION 5.09. Sale Treatment 13
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Amendment 13
SECTION 6.02. Survival 13
SECTION 6.03. Notices 13
SECTION 6.04. Governing Law 14
SECTION 6.05. Waivers 14
SECTION 6.06. Costs and Expenses 14
SECTION 6.07. Confidential Information 14
SECTION 6.08. Headings 14
SECTION 6.09. Counterparts 14
SECTION 6.10. Severability of Provisions 14
SECTION 6.11. Further Assurances 14
SECTION 6.12. Third-Party Beneficiaries 15
SECTION 6.13. Merger and Integration 15
<PAGE>
Exhibit A
Form of Assignment
<PAGE>
PURCHASE AGREEMENT, dated as of December 15, 1994, between
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, a Delaware
corporation ("NFRRC"), and NAVISTAR FINANCIAL CORPORATION, a
Delaware corporation ("NFC").
WHEREAS, NFRRC desires to purchase 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 1994-C 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 shall be applicable to this Agreement.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables. On such
date as is acceptable to NFRRC and NFC by which the conditions
specified in Article IV have been satisfied (and in any event
immediately prior to consummation of the transactions
contemplated by the Further Transfer and Servicing Agreements, if
any), NFC shall sell, transfer, assign and otherwise convey to
NFRRC, without recourse, and NFRRC shall purchase, all right,
title and interest of NFC in, to and under:
(a) the Receivables listed on the Schedule of Receivables
and all monies paid thereon (including Liquidation Proceeds) and
due thereunder on and after the Cutoff Date;
(b) the security interests in the Financed Vehicles granted
by Obligors pursuant to the 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 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 5.08) and proceeds from any Guaranties of Receivables;
and
(f) any proceeds of the property described in clauses (a),
(b) and (c) above.
The property described in clauses (a) through (f) is
referred to herein collectively as the "Purchased Property."
SECTION 2.02. Receivables Purchase Price. In consideration
for the Purchased Property, NFRRC shall, at the Closing (as
defined below), pay to NFC an amount equal to the Initial
Aggregate Receivables Balance (the "Receivables Purchase Price")
and NFC shall execute and deliver to NFRRC an assignment (an
"Assignment") in the form attached hereto as Exhibit A. A
portion of the Receivables Purchase Price equal to approximately
$294,965,186.42 shall be paid to NFC in immediately available
funds, and the balance of the Receivables Purchase Price shall be
recorded as an advance from NFC to NFRRC.
SECTION 2.03. The Closing. The sale and purchase of the
Receivables shall take place at such a place, on a date and at a
time mutually agreeable to NFC and NFRRC (the "Closing"), and may
occur simultaneously with the closing of transactions
contemplated by the Further Transfer and Servicing Agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties as to the
Receivables. NFC makes the following representations and
warranties as to the Receivables on which NFRRC relies in
accepting the Receivables. Such representations and warranties
speak as of the date hereof, as of the Closing and as of the
closing under the Further Transfer and Servicing Agreements, and
shall survive the sale, transfer and assignment of the
Receivables to NFRRC and the subsequent assignment and transfer
pursuant to the Further Transfer and Servicing Agreements:
(a) Characteristics of Receivables. Each 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
<PAGE>
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;
(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) shall yield 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 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 Receivables, have been complied with in all
material respects, and each 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
<PAGE>
material respects with all legal requirements of the jurisdiction
in which it was originated or made;
(d) Binding Obligation. Each 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 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 Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle or, in the
event a Receivable was secured by more than one Financed Vehicle,
in each 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 Cutoff Date, in the
valid perfection of a first priority security interest in each
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 Receivable has been
satisfied, subordinated or rescinded, and no Financed Vehicle
securing any Receivable has been released from the Lien of the
related Receivable in whole or in part;
(g) No Waiver. Since the Cutoff Date, no provision of a
Receivable has been waived, altered or modified in any respect;
(h) No Amendments. Since the Cutoff Date, no Receivable
has been amended or otherwise modified such that the total number
of the Obligor's Scheduled Payments is increased or the Initial
Receivable Balance is increased;
(i) No Defenses. No right of rescission, setoff,
counterclaim or defense has been asserted or threatened with
respect to any 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 Receivable that are
or may be prior to, or equal or coordinate with, the security
interest in each Financed Vehicle granted by the 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
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
Receivable, and NFC has not waived any of the foregoing, in each
case except for payments on any Receivables which are not more
than 60 days past due (measured from the date of any Scheduled
Payment) as of the Cutoff Date;
(l) Insurance. Each Obligor 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;
(m) Good Title. No Receivable has been sold, transferred,
assigned or pledged by NFC to any Person other than NFRRC;
immediately prior to the
<PAGE>
conveyance of the 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 by NFC, NFRRC shall have all of the right, title and
interest of NFC in and to the Purchased Property, 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 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
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 Purchased Property (to the
extent it constitutes Code Collateral) shall have been made, and
the Receivables constitute Code Collateral;
(p) One Original. There is only one original executed copy
of each Receivable;
(q) No Documents or Instruments. No Receivable, or
constituent part thereof, constitutes a "negotiable instrument"
or "negotiable document of title" (as such terms are used in the
UCC);
(r) Maturity of Receivables. Each Receivable has an
original term to maturity of not less than 12 months and not
greater than 84 months and a remaining term to maturity of not
less than 12 months;
(s) Annual Percentage Rate. The Annual Percentage Rate of
each Receivable is not less than 6.500;
(t) Scheduled Payments; Delinquency. As of the Cutoff
Date, each Receivable had a first scheduled payment that was due
on or before November 30, 1994 and a final scheduled payment that
was due no later than October 31, 1999, and no Receivable had a
payment that was more than 60 days past due as of the Cutoff
Date; and as of the Closing Date, no Receivable will have a final
scheduled payment that is due later than June 30, 2000;
(u) Vehicles. Each Financed Vehicle was a new or used
medium or heavy duty truck, bus or trailer at the time the
related Obligor executed the Retail Note;
(v) Origin. Each Receivable was originated in the United
States;
(w) Beginning Receivable Balance. The Receivable Balance
of each Receivable as of the Cutoff Date shall be $1,000 or more;
(x) Concentration. The aggregate Initial Receivables
Balance of all Receivables from a single Obligor shall not be
more than 2% of the Initial Aggregate Receivables Balance;
(y) Selection Criteria. The Receivables included in the
Schedule of 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 Receivables
from those Retail Notes of NFC which meet the selection criteria
under this Agreement; and
<PAGE>
(z) No Government Contracts. No Obligor under any of the
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, as of the Closing and as of the 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 property
to be sold and assigned 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, when
duly executed and delivered, shall constitute a valid sale,
transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from NFC; and this Agreement, when
duly executed and delivered, shall constitute a legal, valid and
binding obligation of NFC enforceable against NFC 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;
(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 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, (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 NFC of
its obligations under, or the validity or enforceability of, this
Agreement; 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
the consummation by NFC of the transactions contemplated hereby
except as expressly contemplated herein.
SECTION 3.03. Representations and Warranties of NFRRC.
NFRRC hereby represents and warrants to NFC as of the date hereof
and as of the Closing:
(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;
(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 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, (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;
(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
<PAGE>
(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 the Receivables hereunder is
subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of NFC hereunder shall be true and
correct at the Closing 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 the Closing.
(b) No Repurchase Event. No Repurchase Event (as defined
in Section 5.04 below) shall have occurred on or prior to the
Closing.
(c) Computer Files Marked. NFC shall, at its own expense,
on or prior to the Closing, (i) indicate in its computer files
created in connection with the Receivables that the Receivables
have been sold to NFRRC pursuant to this Agreement and (ii)
deliver to NFRRC the Schedule of Receivables certified by an
officer of NFC to be true, correct and complete.
(d) Documents to be Delivered By NFC at the Closing.
(i) The Assignment. At the Closing, NFC shall execute
and deliver the Assignment.
(ii) Evidence of UCC Filing. On or prior to the
Closing, 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
the Purchased Property 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 the Purchased
Property (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 the Closing.
(iii) Other Documents. At the Closing, NFC shall
provide such other documents as NFRRC may reasonably
request.
(e) Other Transactions. The transactions contemplated by
the Further Transfer and Servicing Agreements shall be
consummated on or prior to the Closing to the extent that such
transactions are intended to be substantially contemporaneous
with the transactions hereunder.
SECTION 4.02. Conditions To Obligation of NFC. The
obligation of NFC to sell the Receivables to NFRRC hereunder 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 at the Closing with the same effect as if then made,
and NFRRC shall have performed all obligations to be performed by
it hereunder on or prior to the Closing.
<PAGE>
(b) Receivables Purchase Price. At the Closing, NFRRC
shall pay to NFC the Receivables 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 other Purchased Property 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 Purchased Property.
(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 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. 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 Purchased Property 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 against all claims of third parties claiming through
or under NFC.
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,
<PAGE>
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 the 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 the 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 the 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 Receivables and other Purchased
Property held by NFC at the time of the Closing and conveyed to
NFRRC 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 the
transfer and assignment described herein as a sale for accounting
and tax purposes.
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 V of this Agreement
shall remain in full force and
<PAGE>
effect and shall survive the Closing under Section 2.03 hereof
and the 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.
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.
* * * * *
<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: _____________________________
R. Wayne Cain
Vice President
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By: ____________________________
Phyllis E. Cochran
Vice President
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
For value received, in accordance with the Purchase
Agreement, dated as of December 15, 1994 (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 the Schedule of Receivables and all
monies paid thereon (including Liquidation Proceeds) and due
thereunder on and after the Cutoff Date; (ii) the security
interests in the Financed Vehicles granted by Obligors pursuant
to the 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
Receivables; (v) 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 5.08 of the Purchase Agreement) and proceeds
from any Guaranties of 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 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 December 15, 1994.
NAVISTAR FINANCIAL CORPORATION
By: ____________________________
Name:
Title:
<EX-10.10.2>
EXHIBIT 10.2
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
NAVISTAR FINANCIAL 1994-C OWNER TRUST
ISSUER
DATED AS OF DECEMBER 15, 1994
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions 1
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Receivables 1
SECTION 2.02. Custody of Receivable Files 2
SECTION 2.03. Acceptance by Issuer; Limitation on
Transfer of NITC Purchase Obligations 3
SECTION 2.04. Representations and Warranties as to the
Receivables 3
SECTION 2.05. Repurchase of Receivables Upon Breach of
Warranty 4
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer 4
SECTION 3.02. Collection of Receivables Payments 6
SECTION 3.03. [Reserved] 6
SECTION 3.04. Realization Upon Liquidating
Receivables 6
SECTION 3.05. Maintenance of Insurance Policies 6
SECTION 3.06. Maintenance of Security Interests in
Vehicles 7
SECTION 3.07. Covenants of the Servicer 7
SECTION 3.08. Purchase of Receivables Upon Breach of
Covenant 7
SECTION 3.09. Total and Supplemental Servicing Fees;
Payment of Certain Expenses by Servicer 8
SECTION 3.10. Servicer's Certificate 8
SECTION 3.11. Application of Collections 8
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 9
SECTION 4.02. Annual Independent Accountants' Report 9
SECTION 4.03. Access to Certain Documentation and
Information Regarding Receivables 10
SECTION 4.04. Amendments to Schedule of Receivables 10
SECTION 4.05. Assignment of Administrative Receivables
and Warranty Receivables 11
SECTION 4.06. Distributions 11
SECTION 4.07. Reserve Account 13
SECTION 4.08. Net Deposits 14
SECTION 4.09. Statements to Securityholders 14
<PAGE>
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts 16
SECTION 5.02. Collections 19
SECTION 5.03. Investment Earnings and Supplemental
Servicing Fees 19
SECTION 5.04. Monthly Advances 20
SECTION 5.05. Additional Deposits 20
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 20
SECTION 6.02. Liability of Seller 23
SECTION 6.03. Merger or Consolidation of, or
Assumption of the Obligations of, Seller;
Amendment of Certificate of Incorporation 23
SECTION 6.04. Limitation on Liability of Seller and
Others 24
SECTION 6.05. Seller May Own Securities 24
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.01. Liability of Servicer; Indemnities 24
SECTION 7.02. Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer 26
SECTION 7.03. Limitation on Liability of Servicer and
Others 26
SECTION 7.04. Delegation of Duties 27
SECTION 7.05. Servicer Not to Resign 27
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Defaults 28
SECTION 8.02. Consequences of a Servicer Default 29
SECTION 8.03. Indenture Trustee to Act; Appointment of
Successor 29
SECTION 8.04. Notification to Securityholders 30
SECTION 8.05. Waiver of Past Defaults 30
SECTION 8.06. Repayment of Advances 31
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables 31
SECTION 9.02. Sale of Assets; Termination 31
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment 33
SECTION 10.02. Protection of Title to Owner Trust
Estate 34
SECTION 10.03. Notices 36
SECTION 10.04. Governing Law 36
<PAGE>
SECTION 10.05. Severability of Provisions 36
SECTION 10.06. Assignment 37
SECTION 10.07. Third-Party Beneficiaries 37
SECTION 10.08. Separate Counterparts 37
SECTION 10.09. Headings and Cross-References 37
SECTION 10.10. Assignment to Indenture Trustee 37
SECTION 10.11. No Petition Covenants 37
SECTION 10.12. Limitation of Liability of the Trustees 38
SECTION 10.13. Business Day Certificate 38
EXHIBIT A
Form of Assignment
EXHIBIT B
Locations of Schedule of Receivables
APPENDIX A
Defined Terms and Rules of Construction
APPENDIX B
Notice Addresses and Procedures
<PAGE>
THIS POOLING AND SERVICING AGREEMENT is made as of December
15, 1994 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
1994-C Owner Trust, a Delaware business trust (the "Issuer").
WHEREAS, NFC has sold the Receivables to the Seller pursuant
to the Purchase Agreement.
WHEREAS, the Seller desires to sell the Receivables to the
Issuer in exchange for the Securities 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 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.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of 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 Receivables listed on the Schedule of Receivables
and all monies paid thereon (including Liquidation Proceeds) and
due thereunder on and after the Cutoff Date;
(b) the security interests in the Financed Vehicles granted
by Obligors pursuant to the 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 Financed Vehicles;
<PAGE>
(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 2.03) and proceeds from any Guaranties of 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
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 Agreement shall constitute a sale
of the Receivables from the Seller to the Issuer and the
beneficial interest in and title to the Purchased Property 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 Purchased Property 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 Agreement, and the Seller hereby grants
such security interest and (ii) the assets conveyed pursuant to
this Agreement 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 Agreement, 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 assets conveyed pursuant to this Agreement and
all other monies payable under the Receivables conveyed pursuant
to this Agreement, 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 Agreement. For
purposes of such grant, this Agreement shall constitute a
security agreement under the UCC.
SECTION 2.02. Custody of Receivable Files. In connection
with the sale, transfer and assignment of the Receivables to the
Seller 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 with respect to each Receivable:
(a) the fully executed original of the Retail Note for such
Receivable;
(b) documents evidencing or related to any Insurance
Policy;
<PAGE>
(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
indicating 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 Section 2.01(f), the rights of the Seller under the
Custodian Agreement are being assigned to the Issuer.
SECTION 2.03. Acceptance by Issuer; Limitation on Transfer
of NITC Purchase Obligations. The Issuer does hereby accept all
consideration conveyed by the Seller pursuant to Section 2.01,
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, the Indenture and the Trust Agreement
constitute the Further Transfer and Servicing Agreements for
purposes of the Purchase Agreement.
SECTION 2.04. Representations and Warranties as to the
Receivables. Pursuant to Section 2.01(f), 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. 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, 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.
SECTION 2.05. 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 2.04 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
<PAGE>
representations and warranties made by the Seller in Section 2.04
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 2.05.
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 to repurchase Warranty Receivables pursuant to
Section 5.04 of the Purchase Agreement.
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
<PAGE>
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.
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)(ii).
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
<PAGE>
own expense, take such steps as are 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. As of the Closing
Date, 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:
(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 the related
Receivable;
(b) No Impairment. The Servicer shall do nothing to impair
the rights of NFRRC or any Interested Party in and to the
Receivables; and
(c) No Modifications. The Servicer shall not amend or
otherwise modify any Receivable such that the Initial 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 June 20, 2000.
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 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
<PAGE>
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 5.04,
(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, 1996, an
officer's certificate signed by the President or any Vice
President 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, and (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. 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
<PAGE>
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.
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, 1996 with respect to the twelve months ended on the
immediately preceding October 31 (or, with respect to the first
such report, such period as shall have elapsed from the Closing
Date to the date of such certificate), 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.
(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. 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.
<PAGE>
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 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 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 5.04, 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; and
(ii) 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 Available Amount for such Distribution
Date.
(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 (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 (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 (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 (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 (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
1994-C Owner Trust Reserve Account (the "Reserve Account") to
include
the money and other property deposited and held therein pursuant
to this Section 4.07(a), Section 4.07(c), and Section 4.06(c).
On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit 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.
<PAGE>
(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 5.04, 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 5.04 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 5.02 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 with respect to
such Distribution Date or the preceding Monthly Period, as
applicable. 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:
(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;
<PAGE>
(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; and
(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.
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
<PAGE>
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.
(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 1994-C 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
1994-C 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 at Chemical Bank in the name of the Owner Trustee an
Eligible Deposit Account known as the Navistar Financial 1994-C
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) (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 5.02) 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 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. Investment
<PAGE>
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
(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 Securityholders.
(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
<PAGE>
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. 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, or (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., and (iii) a Servicer 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 5.03. 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
Supplemental Servicing Fees, and the Seller shall be entitled to
receive all Investment Earnings, when and as paid without any
<PAGE>
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 5.04. 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 5.05. Additional Deposits. The Servicer shall
deposit in the Collection Account the aggregate Monthly Advances
pursuant to Section 5.04. 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.
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 but shall survive the sale, transfer
and assignment of the Receivables to the Issuer.
(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
<PAGE>
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. The applicable Further
Transfer and Servicing Agreements, 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 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
<PAGE>
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 by the Seller, the Issuer
shall have all of the right, title and interest of the
Seller in, to and under the Purchased Property free of any
Lien (except for any Lien which may exist in accessions to
the Financed Vehicles not financed by NFC);
(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, when duly executed
and delivered, shall constitute a valid sale, transfer and
assignment of the 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.
<PAGE>
(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
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 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) 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.
<PAGE>
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 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]
(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
<PAGE>
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, at any time without notice or
consent, 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.
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":
(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
<PAGE>
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, 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 Navistar
<PAGE>
Financial Corporation 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.
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 5.04 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 Initial Aggregate
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
<PAGE>
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
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 5.04(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
<PAGE>
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 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
<PAGE>
binding on such Person and on all future holders of such 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.
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
<PAGE>
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.
(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.
<PAGE>
(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.
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.
<PAGE>
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 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.
SECTION 10.13. Business Day Certificate.
On the Closing Date (with respect to the remainder of
calendar year 1994) 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.
<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 FINANCIAL 1994-C OWNER TRUST
By: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust,
By: _________________________
Name: John J. Cashin
Title: Senior Trust Officer
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By: ______________________________
Name: Phyllis E. Cochran
Title: Vice President
NAVISTAR FINANCIAL CORPORATION, as
Servicer
By: ______________________________
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: ___________________________
Name: Patricia M.F. Russo
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
Form of Assignment
For value received, in accordance with the Pooling and
Servicing Agreement, dated as of December 15, 1994 (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 1994-C 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 Receivables listed on the
Schedule of Receivables and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the Cutoff
Date; (ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the 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 Receivables; (v) 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 2.03
of the Pooling and Servicing Agreement) and proceeds from any
Guaranties of 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 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 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.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of December 15, 1994.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: ______________________________
Name: R. Wayne Cain
Title: Vice President
<PAGE>
EXHIBIT B
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>
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, or, with respect to any
initial Distribution Date that occurs in the same calendar month
as the Closing Date, at the close of business on the Closing
Date.
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 Monthly Period, all payments
received by the Servicer from or for the account of the Obligor
on or after the Cutoff Date) except for any Overdue Payments or
Supplemental Servicing Fees.
Administration Agreement: That certain Administration
Agreement, dated as of December 15, 1994 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 5.04 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.
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
<PAGE>
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.
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.
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).
Available Amount: With respect to a Distribution Date, the
sum of the Collected Interest and the Collected Principal for
such Distribution Date.
Basic Documents: The Certificate of Trust, the Trust
Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement, 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 section 3801 et seq., as the same may
be amended from time to time.
Certificateholder: A Person in whose name a Certificate is
registered pursuant to the terms of the Trust Agreement.
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, (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, as of the Closing 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' 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
<PAGE>
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
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: Any one of the 8.300% Asset Backed
Certificates executed by the Owner Trustee and authenticated by
the Owner Trustee in substantially the form set forth in Exhibit
A to the Trust Agreement.
Certificate Balance: Initially, as of the Closing Date,
$11,029,921.60 (3.5% of the Initial Aggregate Receivables
Balance) 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, (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 7.650% Asset Backed Notes in
the aggregate principal amount of $207,000,000.00 issued pursuant
to the Indenture.
<PAGE>
Class A-2 Notes: The Class A-2 8.000% Asset Backed Notes in
the aggregate principal amount of $97,000,000.00 issued pursuant
to the Indenture.
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
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: December 15, 1994.
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 representing reimbursement for
Liquidation Expenses with respect to such Receivables pursuant to
subsection 4.06(a)(iii) 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
<PAGE>
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
December 15, 1994 between the Custodian and the Seller, as
amended or supplemented from time to time.
Cutoff Date: November 1, 1994.
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 Default.
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:
(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
<PAGE>
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
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
<PAGE>
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 and the Reserve Account, collectively.
Determination Date: The fifteenth day of each calendar
month, or if such fifteenth day is not a Business Day, the next
succeeding Business Day.
Distribution Date: With respect to a Monthly Period, the
20th day of the next succeeding calendar month or, if such 20th
day is not a Business Day, the next succeeding Business Day,
commencing January 20, 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.
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
<PAGE>
Agencies in the highest investment category 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 in the highest
investment category 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 in the
highest investment category 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.
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: December 22, 1997
Class A-2 Notes: July 20, 2000
Certificates: July 20, 2000
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.
Further Transfer and Servicing Agreements: The Pooling and
Servicing Agreement, 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 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 December 15, 1994
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 Aggregate Receivables Balance: $315,029,921.60,
which represents the aggregate of the Initial Receivable Balances
under all of the Receivables.
Initial Gross Receivable Balance: With respect to any
Receivable as of the Cutoff Date, the Initial 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 due on or after the Cutoff
Date.
Initial 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
allocable on the basis of the actuarial method to principal.
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, 7.650%
per annum, and with respect to the Class A-2 Notes, 8.000% 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.
<PAGE>
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.
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.
Monthly Advance: The amount, as of an Accounting Date,
which the Servicer is required to advance on the respective
Receivable pursuant to Section 5.04 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.
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.
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.
<PAGE>
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.
Noteholders' Percentage: 100% for each Distribution Date
occurring before the Distribution Date in June 1995, 96.5%
thereafter until the principal balance of the Class A-2 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 Initial Aggregate 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' 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 and the Class A-2
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.
Note Distribution Account: The account designated as such,
established and maintained pursuant to Section 5.01(a)(ii) of the
Pooling and Servicing Agreement.
<PAGE>
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.
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.
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
<PAGE>
(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.
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 5.04 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 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.
<PAGE>
Party: A Party as defined in Section 6.01 of the Pooling
and Servicing Agreement.
Pass Through Rate: 8.30 % 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 December 15, 1994, 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.
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
December 15, 1994, between NFC and the Seller, as amended and
supplemented from time to time.
<PAGE>
Purchased Property: The property described in Section 2.01
of the Purchase Agreement.
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
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 included in the Schedule of Receivables and all
rights and obligations thereunder.
Receivable Balance: With respect to any Receivable, as of
an Accounting Date, the Initial Receivable Balance 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.
Receivables Purchase Price: The amount described in Section
2.02 of the Purchase Agreement.
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: (A) 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 (B) 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 (A) above;
<PAGE>
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 Initial Gross Receivable Balance thereof minus the sum
of (i) the portion of all Actual Payments with respect to such
Receivable, (ii) any Warranty Payment or Administrative Purchase
Payment with respect to any such Receivable, (iii) any
Prepayments applied to reduce the Initial 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 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: Cash or Eligible
Investments having a value of at least $18,901,795.30, which
shall be deposited into the Reserve Account on the Closing Date
pursuant to Section 4.07(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 particular 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.
Retained Certificates: The Certificates retained by the
Seller pursuant to Section 3.10 of the Trust Agreement, with an
initial Certificate Balance of $110,921.60.
Schedule of Receivables: The schedule of all Receivables
originally held as part of the Trust, annexed to the Pooling and
Servicing Agreement and on file at the locations listed on
Exhibit B to the Pooling and Servicing Agreement, as it may be
amended from time to time in accordance with the Pooling and
Servicing Agreement.
<PAGE>
Scheduled Payment: A payment which (i) is in the amount
required under the terms of a Receivable in effect as of the
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 Monthly Period, the Scheduled Payment shall
include all such payments due from the Obligor on or after the
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 greater of:
(a) 6.0% of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period,
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 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 referred to in this clause (a) shall be equal
to 10%; and
(b) 2.1% of the Initial Aggregate Receivables Balance.
State: Any one of the 50 States of the United States of
America or the District of Columbia.
Supplemental Servicing Fee: All late fees, prepayment
charges and other administrative fees and expenses or similar
charges allowed by applicable law
<PAGE>
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 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 Trust Agreement, the
Indenture, the Administration Agreement and the Custodian
Agreement.
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 1994-C Owner Trust, a Delaware
business trust created by the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of December
15, 1994, 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 December 2, 1994 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.
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
December 7, 1994, among J.P. Morgan Securities Inc., Chemical
Securities Inc. and the Seller 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
<PAGE>
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 5.04 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 2.05 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
2.05 of the Pooling and Servicing Agreement or Section 5.04 of
the Purchase Agreement.
<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.
<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
(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 transmit
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.
<EX-10.10.3>
EXHIBIT 10.3
CUSTODIAN AGREEMENT
BETWEEN
NAVISTAR FINANCIAL CORPORATION
CUSTODIAN
AND
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
DATED AS OF DECEMBER 15, 1994
<PAGE>
THIS CUSTODIAN AGREEMENT, dated as of December 15, 1994
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 without recourse all of its right, title
and interest in and to the 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
<PAGE>
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 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 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
<PAGE>
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.
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
<PAGE>
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.
* * * * *
<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: ______________________________
Name: Phyllis E. Cochran
Title: Vice President
NAVISTAR FINANCIAL CORPORATION,
as Custodian
By: ______________________________
Name: R. Wayne Cain
Title: Vice President
<EX-10.10.4>
EXHIBIT 10.4
ADMINISTRATION AGREEMENT
AMONG
NAVISTAR FINANCIAL 1994-C OWNER TRUST
ISSUER
AND
NAVISTAR FINANCIAL CORPORATION
ADMINISTRATOR
AND
THE BANK OF NEW YORK
INDENTURE TRUSTEE
DATED AS OF DECEMBER 15, 1994
<PAGE>
ADMINISTRATION AGREEMENT, dated as of December 15, 1994
among NAVISTAR FINANCIAL 1994-C 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 December 15, 1994 (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.
(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
<PAGE>
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);
(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));
<PAGE>
(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);
(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);
<PAGE>
(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 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
<PAGE>
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
January 20, 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
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
<PAGE>
(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.
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 $1500.
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 construed 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.
<PAGE>
(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);
(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
<PAGE>
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 Issuer, either Trustee, the Administrator or the
Rating Agencies under this Agreement shall be delivered as
specified in Appendix B to the Pooling and Servicing Agreement.
13. Amendments.
(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:
(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 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.
<PAGE>
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 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 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 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. (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
<PAGE>
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.
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.
* * * * *
<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 1994-C OWNER TRUST
By: CHEMICAL BANK DELAWARE
not in its individual capacity,
but solely as Owner
Trustee on behalf of the Trust
By:
Name: John J. Cashin
Title: Senior Trust Officer
THE BANK OF NEW YORK, as Indenture Trustee
By:
Name: Patricia M.F. Russo
Title: Assistant Treasurer
NAVISTAR FINANCIAL CORPORATION,
as Administrator
By:
Name: R. Wayne Cain
Title: Vice President
